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2000-11-28
CITY COUNCIL WORK SESSION NOVEMBER 28, 2000 667 NORTH CARROLL AVENUE SOUTHLAKE, TEXAS NOTES COUNCILMEMBERS PRESENT: Mayor Rick Stacy; Mayor Pro Tem Gary Fawks; Deputy Mayor Pro Tem Ronnie Kendall. Members: Patsy DuPre, Greg Standerfer, and Rex Potter. COUNCILMEMBER ABSENT: Keith Shankland CITY STAFF PRESENT: City Manager Billy Campbell; Assistant City Manager Shana Yelverton; Assistant to the City Manager John Eaglen; Director of Economic Development Greg Last; Director of Planning Bruce Payne; Director of Community Service Kevin Hugman; Director of Finance Sharen Elam; and, City Secretary Sandra L. LeGrand. OTHERS PRESENT: Southwest Sport's Group, Mike Cramer; First Southwest Company, Jim Sabonis [city financial advisor]; Hughes & Luce Attorney Jeff Dorrill [assisting Mr. Cramer]; and Cross Timbers Capital, David Cunningham [potential developer]. Agenda Item #1, Call to Order The work session was called to order by Mayor Rick Stacy at 6:20 p.m. This work session was audiotape recorded for further reference and is available in the Office of the City Secretary. Agenda Item #2, Discussion: StarCenter Director of Economic Development Greg Last introduced everyone present and led the discussion regarding the StarCenter potential location in the City of Southlake. The discussion included: • The facility would cost $10 million dollars and the City would end up with the facility. • "4 -B transaction" was discussed - -do not use sales tax - -20 -year deal. • The StarCenter group will turn over the facility at the end of 30 years and it will be in good shape when they do. • The reward to the city will be that they get the facility in their community that they would otherwise not afford to get. City Council Work Session Notes November 28, 2000 page 1 • "4 -B transaction" will not effect property tax and it will address the school. • "380" Economic Development grant does not address the school. • The up -front cost to the city will be the land and parking spaces. Agenda Item #3, Adjournment The work session was adjourned at 8:30 p.m. by Mayor Rick Stacy Sandra L. LeGrand City Secretary City Council Work Session Notes November 28, 2000 page 2 StarCenter Discussion November 28, 2000 -11 -27 Attendees City Council: Rick Stacy, Mayor Gary Fawks, Mayor Pro Tem Ronnie Kendall, Deputy Mayor Pro Tem Rex Potter Keith Shankland Greg Standerfer Patsy DuPre Southlake Staff: Billy Campbell, City Manager Shana Yelverton, Assistant City Manager Greg Last, Director of Economic Development Sharen Elam, Director of Finance Kevin Hugman. Director of Community Services Bruce Payne. Director of Planning Others: Mike Cramer, COO, Southwest Sport's Group Jim Sabonis, First Southwest (Southlake's financial advisor) Jeff Dorrill, Hughes & Luce (Attorney assisting Mr. Cramer) David Cunningham, Cross Timbers Capital (potential developer) City of Southlake, Texas MEMORANDUM October 12, 2000 TO: Billy Campbell, City Manager FROM: Greg Last, Director of Economic Development SUBJECT: StarCenter - Potential Development in Southlake Action Requested: Discuss various aspects of the StarCenter concept as it relates to possible development in the City of Southlake. Background Information: The StarCenter concept is a community support program initiated and advocated by Southwest Sports Group, Inc. The intent of the program is to provide professional quality hockey facilities throughout the Dallas / Fort Worth market to assist communities with this recreational opportunity and maintain interest in hockey throughout the region. This might also provide an additional enhancement to our parks and recreation programs. BASIC PROGRAM The basic program proposal includes the following: • 95,000 square foot building with estimated value of $9 million • Requires 2.5 -3 acres with full utilization of shared parking • Requires 6 acres for stand alone facility • Requires approximately 225 -250 parking stalls • Two professional NHL size (85' x 200') sheets of ice • Bleacher seats for approximately 600 -700 people overlooking one ice sheet • Reception area • Retail store (Stars and Rangers apparel, equipment, other merchandise) • Concession area • Climate controlled viewing area Management: The StarCenter would be managed by a Southwest Sports Group full -time staff dedicated solely to the management of the facility. Programming will be implemented and overseen by divisional management to ensure uniformity and quality at all Star Centers. Potential Uses: The Basic Program would provide for the following potential uses. • Children's league hockey • Senior league hockey • High school hockey • Drop -in hockey • Ice Rental (Broomball, parties, hockey schools, team rentals, open skating, figure skating) • Trade shows 11A- 1 ENHANCED PROGRAM The potential for an enhanced program might include the following: • All items in the basic program • Increased seating in one rink (5,000 bleacher seats, 1,000 floor seat capacity) • Technology enhancements to accommodate multi -media events • Enhanced locker rooms, fitness room, etc. • Restaurant inside • Acreage yet undetermined but approximately 13 acres. • Cost of project approximately $16 -18 million Potential Uses: The Enhanced Program would provide for the following potential uses. • All uses noted in the Basic Program • Basketball games • Small venue concerts • Home facility for Texas Tornadoes Jr. Hockey Club Financial Considerations: Following are options related to financing the development of the StarCenter. Option One: (Stars prefer) City issues debt prior to the start of construction. SWSG controls the design, development and construction of the facility. Draws are made on the City- issued debt to fund the design and construction of the facility. Interest during construction is capitalized and rolled into the City- issued debt. SWSG enters into an operating lease and pays the City annual rent equal to the debt service (including all issuance costs and capitalized interest) incurred by the City. Option Two: City issues debt and purchases the facility upon completion of construction. Again, SWSG would enter into a long -term operating lease with annual rent equal to the debt service payments. SWSH would design, develop and construct the facility and would obtain interim construction financing, however, the City would enter into a purchase agreement prior to the start of construction, promising to purchase the project upon its completion. Citizen Input/ Board Review: None Legal Review: None Alternatives: Following are various alternatives for discussion. 1. City acquires site via SPDC, issues debt and constructs building per Stars criteria. Stars to lease from City. 2. City encourages and supports private development of the enhanced program. 3. No participation from City. Supporting Documents: The following are attached for reference. • Potential Sites Summary 11A -2 Staff Recommendation: Following is a summary of potential positives and negatives regarding the concept in the city of Southlake. Positives: • City image is enhanced, awareness of City is increased • An additional recreational facility is provided for residents at minimum cost, adds increased dimension to overall recreational programs • When combined with a commercial location, it would enhance the marketability and patronage for a commercial development. • Creates potential for several non -ice uses (with enhanced program) • Potential management expertise from Stars Negatives: • Financial risks • Inflexibility of building use once constructed • Lack of complete management control • Land Use Issues • Multi -party complexities • Traffic concerns / mitigation 11A -3 StarCenter / Tornadoes Facility Potential Sites Summary out C] e The following is an attempt to outline the positive and negative aspects of various Department of Economic Development potential sites for the StarCenter facility. Feel free to offer additions or revisions to the list. Ref Location Comments 1 NE portion of Town Square + Activity /revenue generator for Town Square + Potential shared parking - City does not own property - Diminished tax benefits - Developer not receptive to joint venture /financial support 2 CISD Stadium Tract + Potential shared parking + Joint buy -in / user support from Colleyville [or possibly an adjacent tract ?] + Complimentary land uses + School owns property (joint use ?) + Access to SH 26 - Not on FM 1709 or SH 114 - Unsure of timing issues - Utilities not immediately available (sewer) 3 Brightbill / Peebles Tracts + Good access N -S and E -W + Cooperative owners / broker / developer + Good visible location - Adjacent residential, although limited - Land Use Plan designations for office / residential - City does not own property 4 Terrabrook Tract II + Part of comprehensive master plan - City does not own property - Timing, availability of utilities 5 Terrabrook Tract III + Part of comprehensive master plan + Proximity to Town Square + Proximity to adjacent school (future) + Cooperative developer - Timing, availability of utilities - City does not own property 6 Scifres / Pigg Tracts + Proximity to future school + Access to light at Kimball available [SWC FM 1709 @ Kimball] + Would not need frontage tracts + Eventually good access to Colleyville + Fair access from west SH 114 - City does not own property - Opposition from adjacent residential - Controversy on E -W road connection to Kimball 7 SEC FM 1709 at Carroll + Proximity to Town Square + Good N -S and E -W access - Receptivity of developer - City does not own property 11A -4 8 Prade / Rucker Area + Proximity to Town Square + Access to light at Carroll [SWC FM 1709 @ Carroll] + Good N -S and E -W access - City does not own property - Large tracts, need comprehensive planning approach - Not immediately available 9 SWC FM 1709 at White Chapel + Good N -S and E -W access + Colleyville demographics, reasonable to Keller, NRH, [south portion of Reutlinger West SH 114 tract ?] + Potential off -corner location + Provide access from White Chapel - City does not own property 11A -5 SOUTHWEST SPORTS GROUP, INC. ) r ' e 1 K X T X DR PEPPER STARCENTER RECREATIONAL FACILITY DEVELOPMENT GUIDELINES [VI 200 Crescent Court, Suite 1065 • Dallas, Texas 75201 • 214- 965 -7979 • 214 -965 -7989 Fax EXECUTIVE SUMMARY Dr Pepper Star Center The following information summarizes a variety of topics related to the design, development and construction of a Dr Pepper Star Center recreational ice skating facility. STARCENTER CONCEPT The StarCenter concept is a community support program initiated and advocated by Southwest Sports Group LLC ( "SWSG "). The intent of the program is three -fold: (i) to provide professional quality hockey facilities throughout the Dallas - Fort Worth metropolitan area, (ii) to develop and foster interest in ice skating in general and hockey in particular and (iii) to assist communities in providing a high quality recreational facility to their residents. SWSG anticipates developing 5 -6 StarCenters in the Dallas — Fort Worth metropolitan area over the course of two to three years. The first two of these facilities will be located in Euless and Duncanville and will open in 2000. A StarCenter will attract 500,000 — 750,000 patrons each year and will generate valuable publicity and marketing opportunities for the host City as well as significant sales tax revenues. The Star Center will be sponsored by the Dr Pepper Bottling Company of North Texas and will be called Dr Pepper StarCenter — [City Name]. This partnership with Dr Pepper allows SWSG to construct the highest quality facility possible and to provide a wide variety of programs for the community. SOUTHWEST SPORTS GROUP LLC Southwest Sports Group LLC is a limited liability company formed to operate as the holding company for a variety of sports and entertainment related assets, including the Dallas Stars of the National Hockey League, the Texas Rangers Baseball Club, KXTX Channel 39, the Mesquite Rodeo and all Dr Pepper StarCenters. SWSG is responsible for overseeing the daily operations of each of these subsidiaries and for business development in these areas. TARGET MARKET SWSG is seeking to develop StarCenters in communities with the following characteristics: • Strong demographics in the City itself and surrounding communities, including many families who actively attend Stars games or are interested in participating in ice hockey or figure skating. • Location on or near a significant roadway of regional or arterial designation in order to serve entire area. • Strong participation in school related sports and recreational activities in general. • StarCenter — Executive Summary 10/14/99 DEVELOPMENT STANDARDS SUMMARY Land Requirements: The land requirements vary depending on the ability to utilize shared parking with an adjacent site. The minimum site size is approximately 2.5 - 3 acres with full utilization of shared parking and a maximum site size of approximately 6 acres for a stand alone facility with all necessary parking. Building Size: The building will be approximately 95,000 square feet with an estimated value of $9 million. This includes the following; • Two professional NHL —size (85' x 200') sheets of ice • Bleacher seats for approximately 600 -700 people overlooking one ice sheet • Reception area • Retail store (Stars and Rangers apparel, hockey and skating equipment, other merchandise) • Concession area • Climate - controlled viewing area • Sports Bar (certain locations) Building Construction: The primary building structure is a pre- fabricated metal building with tilt -wall facade. Some additional areas (i.e., portions of the lobby exterior) may utilize masonry or brick with a traditional retail store -front for the pro shop, which is located in the lobby area. Each Dr Pepper StarCenter will utilize appropriate finishes to compliment adjacent development and to comply with City zoning requirements. Required Parking: The facility requires approximately 225 -250 parking stalls. Signage: The facility will need to have a "Dr Pepper Star Center" sign on the facade (see attached logo). It is anticipated this sign will be back -lit, however, SWSG will work with the City to create mutually acceptable signage. Complimentary Adjacent Uses: The following uses would be complimentary to the location of a StarCenter: • Restaurants • Health club • Day care center • Retail stores • Entertainment such as movie theatres • Other recreational facilities OPERATIONAL ISSUES Management: The StarCenter will be managed by a full -time staff of individuals dedicated solely to the management of the StarCenter facilities. Programming will be implemented and overseen by divisional management to ensure uniformity and quality at all StarCenters. Page 2 of 6 StarCenter — Executive Summary 10/14/99 Additionally, each facility will be operated by an on -site staff of 10 -15 full -time and many additional part -time employees. Hours: The facility is typically operated 24 hours a day. However, traffic is heaviest in the evenings after 5:OOPM and during the day on weekends. Programming: Youth hockey leagues operate year -round for all skill levels ages 4 -17. Adult hockey leagues also exist for players of all skill levels aged 18 and older. There are learn -to -skate programs and other classes that teach both children and adults all aspects of ice skating, playing hockey and figure skating. There are also figure skating programs and training for people of all ages and skill levels, from the beginner to the national -level competitor. High school hockey is another significant aspect of the programming at a StarCenter. This program was started by the Stars in 1997 and there are currently over 40 teams from around Dallas - Fort Worth participating in the Southwestern Bell Metroplex High School Hockey League. Teams practice and play games at each of the area StarCenters. In addition, every week there are many opportunities for the general public to skate, play hockey or simply watch league play. Events: The facility will be host to holiday youth and adult hockey tournaments with teams participating from all over the United States and Canada, particularly from the Southwestern United States. Figure skating competitions are also held on a regular basis and many special corporate functions and other unique events are held each year. The meeting rooms and ice surfaces at the facility will be available for private rental as well. CONSTRUCTION ISSUES Duration: It takes approximately 8 months to construct a StarCenter. Design: SWSG has developed a prototype floor plan and building layout (copies of which are included herein) that will be utilized for all future StarCenters. This will allow SWSG to realize significant savings on design, engineering and construction materials with multiple facilities. However, there is some flexibility in the design of the reception / lobby area as well as with adjacent and ancillary development to tailor the project to best meet the needs of the City. FINANCIAL CONSIDERATIONS Land: SWSG prefers to operate the StarCenter facility on land owned by the city. Building: Typically the building is constructed by SWSG and owned by the City. SWSG would enter into an operational lease for 20 -30 years. Page 3 of 6 StarCen ter — Executive Summary 10/14/99 Financing: Option I (Preferred) City issues debt prior to the start of construction. SWSG controls the design, development and construction of the facility. Draws are made on the City- issued debt to fund the design and construction of the facility. Interest during construction is capitalized and rolled into the City- issued debt. SWSG enters into an operating lease and pays the City annual rent equal to the debt service (including all issuance costs and capitalized interest) incurred by the City. Option II City issues debt and purchases the facility upon completion of construction. Again, SWSG would enter into a long -term operating lease with annual rent equal to the debt service payments. SWSG would design, develop and construct the facility and would obtain interim construction financing, however, the City would enter into a purchase agreement prior to the start of construction, promising to purchase the project upon its completion. OTHER EXISTING DEVELOPMENTS Valley Ranch: The Valley Ranch StarCenter, 211 Cowboys Parkway, Irving, Texas 75063, was built in 1986 and purchased by the Dallas Stars in 1993. The Stars completely renovated the existing facility upon their arrival and added office space and a second ice sheet the following year. The following summarize various characteristics of that center: • Facilities: Two (2) NHL -size (85' X 200') ice sheets and related locker room facilities, a retail store with equipment and Stars merchandise, a reception area, 190 parking stalls, a small concession area, meeting space, a climate - controlled viewing area overlooking both ice sheets and office space for facility and team administration. • Building: The building is approximately 105,000 square feet, with construction consisting of a combination of tilt -wall and CMU block. • Financial: The building was constructed by the Stars and the land and the building itself are owned by the Stars. The facility generates approximately $200,000 annually in sales tax from program fees, ice rental and retail store sales. PENDING DEVELOPMENTS Euless: The StarCenter in Euless began construction in September of 1999 with anticipated opening in April 2000 and has the following characteristics: • Land: The City of Euless is providing land adjacent to the Parks at Texas Star athletic complex. • Facilities: This facility will contain two NHL -size sheets of ice, a sports bar, a retail store with Stars, Rangers and Texas Star merchandise and hockey and skating equipment, a concession area, meeting rooms and a climate - controlled viewing are overlooking both ice sheets. Page 4 of 6 StarCenter — Executive Summary 10/14/99 • Building: The building in Euless will be approximately 95,000 square feet with a foot -print of approximately 80,000 square feet and 15,000 square feet on the second floor. • Financial: The City of Euless will issue general obligation bonds and purchase the facility upon its completion. SWSG has entered into an operating lease with the City with annual rent equal to the debt service incurred by the City. The duration of the lease is 20 years, to coincide with the term of the debt, with two five -year renewal options. Duncanville: The StarCenter in Duncanville is anticipated to begin construction in December 1999 with anticipated opening in late summer of 2000 and has the following characteristics: • Land: The City of Duncanville is providing land at one of two potential locations. • Facilities: This facility will contain two NHL -size sheets of ice, a retail shop with Stars and Rangers merchandise and hockey and skating equipment, a concession area, meeting rooms, a climate- controlled viewing area overlooking both ice sheets and possibly a sports bar. • Building: The building in Duncanville will be approximately 95,000 square feet with a foot -print of approximately 80,000 square feet and 15,000 square feet on the second floor. • Financial: The Duncanville Community Economic Development Corporation will issue debt prior to the start of construction to finance the design, development and construction of the facility. SWSG will enter into an operating lease concurrent with the term of the debt with annual rent equaling annual debt service payments. It is anticipated the primary term will be 20 years with two five -year options. BENEFITS TO THE HOST CITY General: SWSG will construct and operate a high quality recreational facility in the community with no risks to the City with respect to the operation of such facility. Community Use: The host community will have access to complimentary use of the meeting rooms and ice surfaces at the StarCenter for community events and other functions. City residents will also receive discounts on the fees charged for the leagues, events and other programs at the facility. Marketing: SWSG will provide the host City with a variety of advertising and marketing opportunities with the Dallas Stars, Texas Rangers and Mesquite Rodeo. Further, SWSG will actively promote all StarCenters and the various programs at these facilities. Promotions: SWSG will work with the host City to schedule appearances by Dallas Stars and Texas Rangers personnel and other similar special events at the StarCenter. Page 5 of 6 StarCenter — Executive Summary 10/14/99 FLEXIBILITY SWSG is willing to work with each City that has a legitimate interest in bringing a StarCenter to its community to develop a facility that best meets the needs of the community and its residents. This includes tailoring the financing package used to fund construction of the facility, minor alterations in the floor plan and ancillary uses of and development adjacent to the StarCenter. CONTACTS The following contacts are familiar with the StarCenter project and can answer any questions you may have: Mike Cramer Chief Operating Officer Southwest Sports Group LLC PH: 214 - 965 -7980 EM: mcramer @hmtf. com Lance Lankford Corporate Counsel Southwest Sports Group LLC PH: 817- 273 -5267 EM: llankford@texasrangers.com Randy Locey General Manager — StarCenter Division Dr Pepper StarCenter PH: 972- 831 -2484 EM: rlocey @dallasstars.com Page 6 of 6 - �lt F� j �C }'M' 2 .I+4 t ' l 1 . j .� f ''::47,5"..''. r rt + y r`' f a - tr "- .., 'Gr` r t -::!..-: � s S xc ) .y� L i. U f 5� f . 3 J �` t 4 �4 _ 1 t ` t i { <f 'L '_ la �j�''kl !'$g� 1 '!i / 1 7 1( # , a. s nikk'.,{,,f 4tc^` ' -i, ( r# a 1 7 y1 t ivy§ t b , T¢S'# rn :' � 12 , P c' , . YF t t.y„�,;:X zr`sfT -. t!h4 ��� ! 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I! 1 I I 1 1 I 1 1 J .. ‘0 .....,.„ � 1 1 I I I I 1 1 I y . „_ .�1 1 I 1 I 1 1 I I I i ; r � � gi 1 1 1 I I I t I 1 gi, .. - Pa '; RI; I I i l l l l l l .�::• _ ' I 1 f r Q I I I I 1 1 I 1 ......1 I r il ' I 1 1 i / N ig spuali I: r.) 1 W II Mill Wm of IlldipStari / -:.-7 - r ® - _� 1, Y sk 4 ,�xr A.:. � _ .�. ^kk t h 2 , h ,t PURCHASE AND LEASE AGREEMENT THIS PURCHASE AND LEASE AGREEMENT (this "Lease ") is made this day of 1999, (the "Commencement Date ") by and between the City of Euless, Texas, a municipal corporation of the State of Texas and a home rule city (the "Lessor "), Dallas Stars, L.P., a Delaware limited partnership (the "Lessee "), and Centex /StarCenter Development Company I, L.P., a Delaware limited partnership (the "Ground Lessee "). Lessor, Lessee and Ground Lessee sometimes are referred to herein collectively as the "Parties" or singularly as a "Party ". RECITALS A. Lessor is the owner of the Land (hereinafter defined) and, pursuant to the terms and conditions set forth herein, will be the owner of the Facility (hereinafter defined), and Lessor is authorized to lease the Leased Premises (hereinafter defined) pursuant to such terms as it may deem advisable. B. Lessor desires to ground lease the Land to Ground Lessee until the completion of the Improvements (hereinafter defined) on the Land and Lessor's purchase of the Improvements from Ground Lessee as provided herein. C. Lessor desires to lease to Lessee, and Lessee desires to lease and take from Lessor, the Leased Premises on the terms set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the recitals set forth above and the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged and confessed by each of the parties hereto, the parties hereto have agreed and, intending to be legally bound, do hereby agree as follows: ARTICLE 1 Grant, Term of Lease and Certain Definitions 1.1 Leasing Clause. Upon and subject to the terms and provisions contained herein, Lessor does hereby lease, demise and let unto Lessee, and Lessee does hereby take and lease from Lessor, the Leased Premises, to have and to hold the Leased Premises, together with all the rights, privileges, easements and appurtenances belonging to or in any way pertaining to the Leased Premises, for the term hereinafter provided. The interest of Lessee in and to the Facility is and at all times prior to the Purchase Date shall be subordinate and inferior to the interest of Ground Lessee therein (and Lessee shall further be bound to Ground Lessee hereunder), and Lessee shall pay the Base Rental under this Lease to Ground Lessee prior to the Purchase Date for the use of the Facility as more particularly provided in Section 2.2 of this Lease. euless- 01.doc Page 2 of 38 10/17/00 1.2 Term. The term of this Lease shall be for a period commencing on the Commencement Date (hereinafter defined) and terminating on the twentieth (20` anniversary of the Operational Date (hereinafter defined) unless earlier terminated in accordance with the provisions of this Lease or extended as provided in Article 16 of this Lease. 1.3 Certain Definitions. The following terms shall have the meaning set forth in this Section 1.3: 1.3.1 Additional Project Development. Has the meaning set forth in Section 4.4 of this Lease. 1.3.2 Architect. Has the meaning set forth in Section 4.2 of this Lease. 1.3.3 AV Taxes. Any and all property taxes and ad valorem taxes assessed against the Leased Premises or Lessee's interest therein that accrue during and are applicable to the Term. 1.3.4 Base Rental. The rental for the Leased Premises provided in Section 2.1 hereof. 1.3.5 City. The City of Euless, Texas, a municipal corporation of the State of Texas and a home rule city. 1.3.6 City Improvements. Has the meaning set forth in Section 4.2 of this Lease. 1.3.7 Commencement Date. The date first set forth above in the introductory paragraph of this Lease. 1.3.8 Dallas Stars. Dallas Stars, L.P., a Delaware limited partnership owning the Dallas Stars, a member team of the National Hockey League, including any successor as owner of said hockey team and the franchise in the National Hockey League relating thereto. 1.3.9 Facility. The community -style recreational ice skating facility, consisting of two ice surfaces, locker room facilities, concession area, meeting rooms and retail store, together with all related infrastructure improvements, including, without limitation, landscaping, exterior lighting and walkways, to be constructed at the Parks at Texas Star in Euless, Texas. 1.3.10 General Contractor. Has the meaning set forth in Section 4.2 of this Lease. 1.3.11 Ground Lessee. Centex/StarCenter Development Company I, L.P. a Delaware limited partnership. 1.3.12 Impositions. Taxes and assessments against the Leased Premises or Lessee's interest therein that accrue during and are applicable to the Term. -2- euless- 01.doc Page 3 of 38 10/17/00 1.3.13 Improvements. All buildings (including the Facility), structures, equipment, improvements, fixtures and Related Infrastructure from time to time connected, installed or situated on the Land. 1.3.14 Land. The certain tract of land situated in the City of Euless, Tarrant County Texas, described in Exhibit A attached hereto and made a part hereof for all purposes. 1.3.15 Lease. This Lease Agreement by and between Lessor, as lessor, and Lessee, as lessee, covering the Leased Premises. 1.3.16 Lease Year. Each successive 12 -month period during the Term from and including the Operational Date. 1.3.17 Leased Premises. The Land, together with all present and future Improvements owned by Lessor and located on the Land, and other rights, privileges, easements and appurtenances benefiting, belonging to or in any way appertaining thereto, including, without limitation, (a) any and all rights, privileges, easements and appurtenances of Lessor as the owner of fee simple title to the Land now or hereafter existing, (b) subsurface rights below the surface of the Land, (c) reversions which may hereafter accrue to Lessor as owner of fee simple title to the Land by reason of the closing of any adjacent street, sidewalk or alley or the abandonment of any rights by any governmental authority, (d) any and all strips and gores relating to the Land and (e) any and all air rights over and above the Land. 1.3.18 Leasehold Mortgage. Any mortgage, deed of trust or other instrument in the nature thereof which encumbers any of Ground Lessee's or Lessee's rights, titles and interests in and to use the Leased Premises, including, without limiting the generality of the foregoing, its right to use and occupy the Leased Premises and all of its rights, titles and interests in and to any and all Improvements. 1.3.19 Leasehold Mortagee. Any mortagee, trustee or anyone that claims an interest by, through or under a Leasehold Mortgage. 1.3.20 Lessee. Dallas Stars, L.P., a Delaware limited partnership, or any assignee thereof as provided in Section 8.1 hereof. 1.3.21 Lessee's Indemnity Liability. Has the meaning set forth in Section 7.9 of this Lease. 1.3.22 Lessor. The City of Euless, Texas, a duly incorporated home rule city of the State of Texas located in Tarrant County, Texas. 1.3.23 Lessor's Indemnity Liability. Has the meaning set forth in Section 7.8 of this Lease. - 3 - euless- 01.doc Page 4 of 38 10/17/00 1.3.24 Lessor Entity. Lessor or any governmental body, agency or political subdivision to whom Lessor's power to levy, assess or collect ad valorem taxes is transferred by law or contract. 1.3.25 Letter of Credit. That certain letter of credit provided by Lessee to Lessor pursuant to Section 2.3 of this Lease. 1.3.26 Manager. Has the meaning set forth in Section 4.2 of this Lease. 1.3.27 Memorandum of Understanding. That certain memorandum of understanding dated March 5, 1999, by Lessor and Lessee, relating to the development of the Facility, a copy of which is attached hereto as Exhibit B attached hereto. 1.3.28 Mortgaged Premises. All of Lessee's leasehold estate under this Lease covered by a Leasehold Mortgage, or all of Ground Lessee's leasehold estate under this Lease covered by a Leasehold Mortgage, as applicable. 1.3.29 Name Sponsor. Each sponsor for which the Leased Premises (or portions thereof) is named from time to time. 1.3.30 NHL. National Hockey League. 1.3.31 Operational Date. The date on which the first event that is open to the general public takes place within the Facility. 1.3.32 Purchase Date. The date on which Lessor purchases the Improvements from Ground Lessee as provided in Section 4.5 of this Lease. 1.3.33 Project Scope Criteria. The design and development of the Facility in such a manner that the Facility shall assimilate into the Parks at Texas Star athletic complex and maintain its integrity through the use of compatible and complimentary architecture, materials and theme. 1.3.34 Related Infrastructure. Any store, restaurant, concession, automobile parking areas, road, street, water or sewer facility, plaza, pedestrian circulation area or other on -site or off -site improvement that relates to and enhances the use, value or appeal of the Facility, including, without limitation, areas adjacent to the Facility and any items reasonably necessary to construct, improve, renovate or expand the Facility, excluding environmental remediation. 1.3.35 Schedule. Has the meaning set forth in Section 4.2 of this Lease. 1.3.36 StarCenters. Those recreational ice skating facilities (including various other amenities) planned for development in Euless, Texas and other municipalities in the Dallas -Fort Worth Metropolitan area and similar in structure and operation to the Dr Pepper StarCenter located in Irving, Texas and currently owned and operated by the Dallas Stars. -4- euless- 01.doc Page 5 of 38 10/17/00 1.3.37 Sublessee. Any person or entity to whom or to which Lessee grants or licenses any rights to occupy, use, operate, manage, provide services in or the sale of food, beverages, services, merchandise or sporting goods within the Leased Premises, including, without limitation, any Name Sponsor. 1.3.38 Term. The term of this Lease as provided in Section 1.2 hereof. 1.3.39 Texas Star Athletic Complex. That recreational complex located in Euless, Texas currently including or to include multiple baseball, softball and soccer fields as well as other types of recreational facilities and amenities and known as the "Parks at Texas Star ". ARTICLE 2 Base Rental 2.1 Base Rental. (a) The amount of dollars ($ ) (the "Base Rental ") shall be paid by Lessee as annual rental for the use and occupancy of the Leased Premises during the Term; provided the interest rate applicable to the certificates of obligation issued by Lessor to finance the purchase of the Improvements as contemplated by Section 4.5 of this Lease is 6.5% annually. In the event such interest rate is not equal to 6.5 %, the Base Rental shall be based on the actual rate of such interest. The Base Rental shall encompass a Lease Year and shall be payable in monthly installments equal to one - twelfth (1/12) of the annual Base Rental set forth above; provided, that the first Base Rental payment due under this Section 2.1 shall be due on the first day of the first month after the Operational Date and that no Base Rental payments shall be due from the Commencement Date through the Operational Date. (b) It is intended by the Parties that the annual Base Rental due pursuant to Section 2.1 above shall be equal to the amount of the annual amortization of the sum of the following amounts: (i) principal and interest payments due on the debt issued by the City to fund the purchase of the Improvements from Ground Lessee pursuant to Section 4.5 hereof; (ii) the difference between the capitalized interest due on the debt issued by the City from the date such debt is issued to and though the Operational Date and any interest earned on such debt through investment of such debt by the City during such time; (iii) any and all reasonable expenses and costs incurred and associated with obtaining the financing described in subparagraph (i) above and any other financing associated with the construction or development of the Facility; and -5- euless- 01.doc Page 6 of 38 10/17/00 (iv) annual costs associated with the debt incurred by Lessor to purchase the Improvements pursuant to Section 4.5 hereof, including, without limitation, disclosure requirements and payments to the trustee. A schedule reflecting the anticipated amortization is attached hereto as Exhibit C. 2.2 Payment of the Base Rental. Provided Lessor fulfills its obligations to purchase the Improvements as contemplated in Section 4.5 of this Lease, the Base Rental shall be paid to Lessor at the address set forth in Section 14.6 hereof, unless Lessor notifies Lessee in writing, by no later than thirty (30) days before the next succeeding Base Rental due date, of another place of payment for the next succeeding Lease Year. In the event Lessor does not fulfill its obligations to purchase the Improvements as so contemplated by Section 4.5, the Base Rental shall be paid to Ground Lessee until such time as Lessor fulfills such obligations. 2.3 Letter of Credit. Prior to the first to occur of (i) the purchase of the Facility by Lessor or (ii) the Operational Date, Lessee shall provide Lessor with a letter of credit in an amount equal to twice the value of the Base Rental (the "Letter of Credit "), for the purpose of guaranteeing payment of the annual amounts due Lessor pursuant to this Lease. It is understood that the amount of the Letter of Credit shall be equal to two years rental payments due in accordance with this Lease. ARTICLE 3 Impositions and Utilities 3.1 Payment of Impositions. Except as provided elsewhere in this Article 3, Lessee shall pay all Impositions before the same become delinquent, and Lessee, at the request of Lessor, shall furnish to Lessor receipts or copies thereof showing payment of such Impositions. Lessee shall be entitled to pay any Impositions in installments as and to the extent the same may be permitted by the applicable taxing authority or claimant. Lessor agrees to cooperate with Lessee in seeking the delivery of all notices of Impositions to Lessee directly from the applicable taxing authorities. Lessor shall promptly deliver all notices of Impositions to Lessee which are delivered to Lessor. In no event shall Lessee be in default under this Lease for failure to pay any Impositions before the same become delinquent for which the notice of such Impositions shall have been delivered to Lessor and not forwarded or delivered to Lessee at least thirty (30) days before the date the same become delinquent. 3.2 Contest of Impositions. If the levy of any of the Impositions shall be deemed by Lessee to be improper, illegal or excessive, or if Lessee desires in good faith to contest the Impositions for any other reason, Lessee may, at Lessee's sole cost and expense, dispute and contest the same and file all such protests or other instruments and institute or prosecute all such proceedings for the purpose of contest as Lessee shall deem necessary and appropriate; provided, however, that Lessee shall not permit any lien which may be imposed against the Leased Premises for contested Impositions to be foreclosed and, within sixty (60) days after the commencement of such contest, Lessee shall provide to Lessor reasonable security therefor. Subject to the foregoing, any item of contested Imposition need not be paid until it is finally adjudged to be valid. Lessee shall be entitled to any refund of any Imposition (and the penalties or interest thereon) refunded by the levying authority pursuant to any -6- euless- 01.doc Page 7 of 38 10/17/00 such proceeding or contest, if such Imposition shall have been either (a) paid directly by Lessee, or (b) shall have been paid directly by Lessor and Lessor was reimbursed therefor by Lessee. 3.3 Standing. If Lessee determines that it lacks standing to contest any Impositions imposed by a governmental authority other than any Lessor Entity or to obtain an extended payment period for any such non - Lessor Entity Impositions, Lessor (to the maximum extent allowed by law) and at Lessee's expense shall join in such contest or otherwise provide Lessee with sufficient authority to obtain such standing. 3.4 Certain Provisions Related to AV Taxes and Special Impositions. (a) Lessor and Lessee acknowledge that the Leased Premises, other than Lessee's leasehold interest therein, presently are exempt from AV Taxes, and it is the intention of the Parties that during the Term, Lessee not incur any AV Taxes relating to the Leased Premises other than as such AV Taxes pertain to Lessee's leasehold interest in such Leased Premises. Lessor, at the request and expense of Lessee, agrees to jointly take and pursue such lawful actions with Lessee, including, if necessary, judicial actions, as may be available, to protect and defend the title of Lessor in and to the Leased Premises, against the levy, assessment or collection of AV Taxes. If, during the Term of this Lease, the Leased Premises, other than Lessee's leasehold interest in such Leased Premises, are no longer exempt from AV Taxes due to the act or omission of Lessor, Lessor agrees, to the extent permitted by applicable law, to indemnify Lessor from and against any and all expenses or losses incurred by Lessee as a result of the loss of such exemption. (b) If, for any reason, the Leased Premises or interest of Lessor or Lessee in and to any of the Leased Premises should no longer be exempt from AV Taxes by reason of a change of law or otherwise, or any Lessor Entity levies and assesses an AV Tax against the Leased Premises or the interest of Lessee in the Leased Premises, then (A) Lessee shall, to the extent required by Lessor, pay such AV Taxes before they become delinquent, subject to Lessee's right of contest as provided in Section 3.2 hereof; and (B) such AV Taxes shall be due and payable in a timely manner. 3.5 Utilities. Lessee shall pay all bills for utility service provided to the Leased Premises, excluding the utility services that are part of the cost of constructing the Additional Project Development and City Improvements to be paid by Lessor. All utilities furnished to the Leased Premises shall be metered in a manner that the quantities thereof used at the Facility are ascertainable independent from the other areas of the Texas Star Athletic Complex. ARTICLE 4 Construction and Purchase of Facility and other Improvements 4.1 Lease of Land to Lessee. Upon and subject to the terms and provisions contained herein, Lessor does hereby lease, demise and let unto Ground Lessee for one dollar ($1.00), the receipt and sufficiency thereof which is hereby acknowledged, and Ground Lessee does hereby take and lease from Lessor, the Land, together with all the rights, privileges, easements, and appurtances belonging to or in any way pertaining to the Land, from the Commencement Date until such time as the Facility is purchased by Lessor pursuant to Section 4.5 hereof. Pursuant to such lease, Ground Lessee, Lessee, -7- euless- 01.doc Page 8 of 38 10/17/00 the Architect, the engineers, the General Contractor and all other contractors shall have access to and the right to utilize the Land for any and all purposes necessary and appurtenant to the design, development and construction of the Facility. Until the purchase of the Improvements by Lessor from Ground Lessee on the Purchase Date, the Improvements (and all right, title and interest thereto) shall be owned by Ground Lessee, subject to the lien of Ground Lessee's Leasehold Mortgagee. Except as expressly provided in this Lease, no other person or entity shall have the right to use, possess or occupy the Land. 4.2 Construction. Lessee shall be responsible for the financing, planning, design, engineering, development and construction to completion of the Facility in substantial conformity with the preliminary site plans, floor plans and elevations as to which Lessor has given conceptual approval, and Ground Lessee consents to the foregoing. Such floor plans and elevations comprise the "Project Scope Criteria" and are attached hereto as Exhibit D. For such purposes, Ground Lessee hereby appoints Lessee as its construction manager with respect to the Facility. In construction and operation of the Facility, Lessee shall be responsible for meeting, either directly, indirectly or through contractual or other arrangements, any and all requirements of law applicable to the construction of the Facility (including, without limitation, if applicable, (i) United States Occupational Safety and Health Administration requirements, (ii) Americans with Disabilities Act requirements, (iii) requirements under Title VII of the Civil Rights Act of 1964, as amended, (iv) Age Discrimination in Employment Act requirements, (v) Texas Accessibility Standards Act requirements, (vi) prevailing wage rate requirements under Chapter 2258 of the Texas Government Code, (vii) building codes and zoning requirements and (viii) stormwater, utility and related requirements). Lessee shall have exclusive authority, control and rights in selecting, terminating and replacing the architect (the "Architect ") and the engineers for the development and construction of the Facility with the understanding that the structural elements of the Facility shall be engineered in accordance with generally accepted engineering practices which will result in a useful life of the structural elements of not less than twenty (20) years and shall have exclusive authority, control and rights in selecting, terminating and replacing the general contractor(s) (the "General Contractor ") for the development and construction of the Facility. In designing and constructing the Facility, Lessee shall contractually obligate the Architect, the engineers and the General Contractor to reasonably consult with Lessor's City Manager (the "Manager "), or the Manager's authorized designee, with respect to Lessee's satisfaction of the Lessor's code requirements applicable to the design and construction of the Facility. Lessee agrees to provide reasonable access to the Facility to the Manager or the Manager's authorized designee for the following purposes: (i) the enforcement of City code requirements applicable to the Facility Project, (ii) verifying that the design of the Facility Project conforms to applicable City codes, general construction ordinances and regulations, (iii) verifying that the Facility Project is constructed in accordance with the Project Scope Criteria, (iv) approving all connections and tie -ins between the Facility Project and existing City streets, storm sewers and utilities; (v) coordinating and overseeing all connections and tie -ins of the Facility and the Additional Project Development and the City Improvements; and (vi) approving the proposed vehicle access and circulation in order to maximize efficient and effective traffic flow to and from public streets. The Manager's participation in the design and construction of the Facility shall be limited to the purposes set forth in clauses (i) through (vi) above. -8- euless- 01.doc Page 9 of 38 10/17/00 To ensure that neither the design nor the construction of the Facility is delayed, the Manager, the Manager's authorized designees and other City personnel shall respond in a reasonably expeditious manner to all submissions and requests by Lessee, the Architect, the engineers, the General Contractor or other contractors. Lessee shall contractually obligate the Architect, the General Contractor and all other contractors to obtain all City permits, licenses and approvals required by law, rule, regulation or ordinance in connection with the construction of the Facility and all other permits or approvals, if any, issued by other governmental agencies, to the extent required by law. As soon as practicable after the date of execution of this Agreement, Lessor shall deliver to Lessee a schedule (the "Schedule ") of construction and permit fees that will be charged by the City, to the extent applicable, with respect to the design and construction of the Facility. In connection with the design, construction and occupancy during construction of the Facility, the City shall levy, charge or assess against Lessee, only the fees, in the amounts, set forth on the Schedule to the extent applicable to the Facility pursuant to City ordinances in existence as of the date hereof. Lessor agrees to timely respond to any request by Lessee to facilitate and expedite any such, permits, licenses and approvals. 4.3 Additional Requirements. In connection with the design and construction of the Facility, Lessee or Ground Lessee, as applicable, shall contractually obligate the following entities or persons to take the following actions and to undertake the following responsibilities: (a) the Architect shall provide to the Manager copies of schematic design, design development and construction plans and specifications for the Facility (including revisions) as such plans and specifications are completed and shall be available during regular business hours to discuss with the Manager comments the Manager may have concerning such plans and specifications (provided that Lessee shall have sole discretion and full right and authority to make decisions regarding such comments); (b) the Architect shall provide, in addition to the number for compliance with City permits and codes, at least two (2) sets of construction documents to the Manager; (c) promptly after it is prepared, the Architect shall provide the Manager with a copy of the detailed construction schedule outlining the major items of work of each major construction contractor, and any revisions to such schedule; (d) Lessee shall keep the Manager reasonably advised and informed regarding the design and construction of the Facility; (e) the General Contractor shall be responsible for maintaining reasonable vehicular and pedestrian access to property and buildings on the Land that abut City right - of -way, including the provision of temporary facilities, including pavements and utilities, until permanent facilities are in place or existing facilities are restored; (f) the General Contractor shall arrange for site security; -9- euless- 01.doc Page 10 of 38 10/17/00 (g) the General Contractor shall notify and obtain the Manager's approval (which shall not be unreasonably withheld or delayed) for all field changes that directly result in material changes to preexisting plans for Facility connections with City streets, storm sewers and utilities; (h) the appropriate engineers shall cause all appropriate soils and materials testing (other than any testing related to environmental remediation of the Land as set forth in Article 7 hereof) to be conducted by certified independent laboratories and, upon the City's written request, shall furnish to the City copies of reports of such testing otherwise prepared for such engineers; (i) the General Contractor shall promptly repair, restore or correct, on a commercially reasonable basis, all damage caused by the General Contractor or its subcontractors to property or facilities of Lessor, and shall reimburse Lessor for out -of- pocket costs actually incurred by the City that are directly related to Lessor's necessary emergency repairs of such damage; (j) the General Contractor shall provide reasonable advance notice to the Manager and shall allow the Manager to be present during pre -final and final inspection of the Facility following substantial completion of construction; (k) the General Contractor shall obtain correction of defective work, and shall perform warranty work (or shall cause such work to be performed); and (1) the General Contractor shall provide the Manager, in addition to the number required for compliance with City permits and codes, one complete set of as- built drawings for the Facility within a reasonable time following completion of construction. If any of the foregoing entities or persons shall fail in a material respect to perform any of its contractual obligations described above, Lessee shall use good faith efforts to enforce, to the extent practicable, such contractual obligations against such entities or persons. 4.4 Related City Improvements. (a) Lessor agrees, at its sole cost and expense, to develop and construct not more than three hundred (300) surface parking spaces (the "Additional Project Development ") immediately adjacent to the Facility. It is contemplated that such Additional Project Development shall be integrated with and constructed by Lessee in conjunction with the Facility. Any and all costs associated with the design, development and construction of such Additional Project Development shall be the sole responsibility of Lessor; provided, however, that the total costs to Lessor for such additional development shall not exceed five hundred thousand dollars ($500,000). In the event the cost of the Additional Project Development exceeds such amount, such additional costs shall be the responsibility of Lessee. - 10 - euless- 01.doc Page 11 of 38 10/17/00 (b) Lessor acknowledges that certain improvements to the Land and adjacent roadways (the "City Improvements ") are the obligation of Lessor in conjunction with the Facility. The City Improvements shall not constitute a portion of the Facility and the costs incurred by Lessor in designing, constructing, completing and making operational the City Improvements shall not be included in the purchase price of the Facility set forth in Section 4.5 hereof. The Additional Project Development and the City Improvements shall be indicated as such in Exhibit E attached hereto. (c) The Additional Project Development and the City Improvements are closely related to the Facility and, as such, shall be completed not less than two months prior to the date on which the Architect projects that the Facility will be substantially completed. 4.5 Lessor's Purchase of the Improvements. Upon the completion of the Improvements by Lessee in conformance with the provisions of this Lease, Lessor shall pay to Ground Lessee or such other entity designated in writing by Ground Lessee, the sum of ($ ); provided, however, that in the event the actual costs of constructing the Improvements is less than comtemplated by this Agreement, the purchase price set forth in this Section 4_5 shall be reduced by the amount by which such cost savings inure to Lessee. Such payment shall be made within ten (10) days of the issuance of a certificate of occupancy for the Facility by Lessor. Lessor, Ground Lessee and Lessee understand that such funds will be provided through certificates of obligation to be issued by Lessor. Lessee agrees to give Lessor written notice of not less than sixty (60) days prior to completion of the Improvements so as to provide Lessor appropriate time for issuance and sale of such debt obligation of Lessor. The completed Improvements shall be delivered to Lessor free and clear of any and all liens (except for permitted encumbrances shown on the title policy to be purchased by Ground Lessee) and Ground Lessee agrees to execute and deliver to Lessor a special warranty deed and such other documents reasonably necessary to evidence the conveyance to Lessor of the completed Improvements and Ground Lessee's leasehold interest in the Land. All items, including furniture and fixtures, purchased by Lessor pursuant to this Section 4.5 shall be fully enumerated and set forth in Exhibit F attached hereto. 4.6 Further Improvements, Removals and Replacements. Lessee shall have the right, at its option and expense (subject only to the express restrictions set forth in this Lease) to further develop any and all portions of the Leased Premises and to erect Improvements on the Leased Premises for any lawful purposes, as long as such development does not reasonably interfere with the development or use of the Facility. Any fixtures, materials or equipment installed in the Leased Premises by Lessee that have not been purchased by Lessor or that are not otherwise the property of Lessor may be removed by Lessee at any time (including, without limitation, upon the termination of this Lease), if such can be done without material damage to the remainder of the Improvements and Lessee agrees to repair any damage caused by such removal, including the patching of holes and the painting thereof. Any Improvements purchased by Lessor or that are otherwise the property of Lessor may not be removed unless they are replaced with reasonably comparable Improvements. Any such replaced or removed Improvements (and any proceeds realized from the sale or disposal thereof) shall belong to Lessee. Lessor shall not construct any Improvements on the Leased Premises during the Term that interfere with the development or use of the Facility primarily as a recreational ice skating facility. - 11 - euless- 01.doc Page 12 of 38 10/17/00 4.7 Right to Alter. After the Purchase Date, Lessee shall have the right, at its sole cost and in its sole discretion (subject only to the express restrictions set forth in this Lease), to alter, add to, reconstruct, reconfigure, remodel or rebuild as often as and whenever Lessee deems proper or desirable, any of the Improvements (other than the Facility), provided that the Leased Premises continues to be used primarily as a recreational ice skating facility. All furniture, movable trade fixtures and equipment installed by Lessee, and not owned by or otherwise the property of Lessor, may be removed by Lessee at the expiration or earlier termination of this Lease if Lessee so elects, and shall be so removed if required by Lessor, or if not so removed shall, at the option of Lessor, become the property of Lessor. 4.8 Zoning and Permits. In the event Lessee deems it necessary or appropriate to obtain, use, zoning, site plan approval or any permit from Lessor or any other governmental entity having jurisdiction over the Leased Premises or any part thereof, Lessor, from time to time on request of Lessee and to the extent necessary as fee owner of the Leased Premises, shall execute such documents or join in such petitions, applications and authorizations. 4.9 Personal Property. All personal property installed or situated from time to time in the Leased Premises and paid for by Lessee shall remain the property of Lessee (or any Sublessee installing same) except for such items of personal property as Lessor may purchase and own as part of the Leased Premises. 4.10 Conditions Precedent to Ground Lessee's and Lessee's Obligation to Construct the Improvements. Neither Ground Lessee nor Lessee shall have any obligation to construct the Improvements unless the following conditions have been satisfied: (i) Lessor shall have annexed the Land into the City of Euless proper on or before December 1, 1999, (ii) the Land shall have been rezoned to a use permitting the operation of the Facility as intended by the Parties, (iii) Lessor shall have entered into the agreements and contracts necessary to develop the Additional Project Development and the City Improvements and shall have taken commercially reasonable actions toward the completion thereof, (iv) Lessee, in its sole discretion, does not consider the level of environmental remediation to be performed by Lessor pursuant to Section 7.7 hereof to be excessive, and (v) the City Council has approved a resolution authorizing the issuance of the certificates of obligation by Lessor for the purposes of purchasing the Improvements pursuant to Section 4.5 above. 4.11 Conditions Precedent to Lessor's Obligation to Purchase the Improvements. Lessor shall have no obligation to purchase the Improvements pursuant to Section 4.5 above, unless the following conditions have been satisfied: (i) Lessee shall have completed construction of the Facility on or before September 1, 2001, (ii) Lessee shall have timely performed all of the material covenants, agreements and obligations required under this Lease to be performed by Lessee, (iii) Lessee is not in material default under the terms of this Lease, provided, however, if such default does not have a material adverse effect on Lessor's rights and benefits pursuant to this Lease, Lessee shall have the opportunity to cure such default in accordance with Section 10.2 hereof, (iv) an appraisal from an appraiser reasonably acceptable to Lessor and Ground Lessee's Leasehold Mortgagee verifying that the value of the Improvements are equal to or exceed the amount specified in Section 4.5 above and (v) the City Council has approved a resolution authorizing the issuance of the certificates of obligation by Lessor for the purposes of purchasing the Improvements pursuant to Section 4.5 above. - 12 - euless- 01.doc Page 13 of 38 10/17/00 4.12 Intellectual Property Rights. Lessee shall own all intellectual property rights in, to and relating to the Facility, whether now in existence or created in the future, including, without limitation, all copyrights, trademarks, trade dress and merchandising rights in the Facility, all names, logos and likenesses, and the Facility architectural drawings, renderings, designs, plans and specifications, as well as the rights to protect, enforce and license any or all of the foregoing. ARTICLE 5 Use of Premises 5.1 Use. Lessor and Lessee acknowledge and agree that the Facility will be designed and constructed primarily as a public recreational ice skating facility. Lessee (and as contemplated herein, until the Purchase Date, Ground Lessee) shall have the right to use the Leased Premises for the development, construction, maintenance and use of the Facility and for any other lawful purposes that do not unreasonably interfere with or interrupt the use or operation of the Facility primarily as a public recreational ice skating facility as provided above. Upon the request of Lessee, Lessor from time to time shall provide a written certification to Lessee, a Sublessee or a Leasehold Mortgagee as to whether or not a particular contemplated use of the Leased Premises, or any portion thereof, is a permitted use under this Section. 5.1. 5.2 Compliance with Laws. Lessee agrees not to use the Leased Premises for any use or purpose in violation of any valid and applicable law, regulation or ordinance of the United States, the State of Texas, the City of Euless or other lawful governmental authority having jurisdiction over the Leased Premises, including, without limitation, the Americans with Disabilities Act of 1990, as amended; provided, however, there shall be no violation by Lessee of this provision (a) (i) so long as Lessee shall, in good faith within a reasonable time after Lessee acquires actual knowledge thereof, by appropriate proceedings and with due diligence, contest the alleged violation or the validity or applicability of the law, regulation or ordinance; (ii) until Lessee has had a reasonable time after a final adjudication that such law, regulation or ordinance, in fact, has been violated; and (iii) so long as neither Lessor nor any portion of the Leased Premises, during the period of such contest, will be subject to any liability, loss, penalty or forfeiture; or (b) if such violation arises from the improper construction of the Facility. In the event any Lessor Entity adopts any law, regulation or ordinance that prevents the Leased Premises from being used as a recreational ice skating facility as intended in Section 5.1 herein, Lessee, at its election, shall have the right to terminate this Lease on a date designated by Lessee in written notice to Lessor not earlier than ninety (90) days following the date of such notice, and the Parties shall have no further liability or obligations one to the other except as may be expressly provided for herein. 5.3 Maintenance; Casualty. (a) Subject to (i) the rights of Lessee pursuant to Section 4.2 hereof, (ii) Lessee's obtaining all necessary governmental permits and (iii) the provisions of Section 5.3(b) below, Lessee shall keep all permanent Improvements that from time to time may be erected on the Leased Premises in a state of good repair on a regular and ongoing basis consistent with the standards of maintenance and repair of comparable facilities operated by Lessee, reasonable wear and tear, obsolescence, acts of God and loss by casualty (except to the extent Lessee is required under this Lease to repair casualty - 13 - euless- 01.doc Page 14 of 38 10/17/00 damage) excepted. Upon termination of this Lease, Lessee shall deliver up the Leased Premises then situated thereon in good condition, reasonable wear and tear, obsolescence, acts of God and loss by casualty (except to the extent Lessee is required under this Lease to repair casualty damage) excepted. (b) With regard to casualty damage to the Leased Premises, Lessee shall, as soon as reasonably practicable but in no event later than 180 days after the date of a casualty, commence the work of repair, reconstruction or replacement of the damaged Improvement. Notwithstanding the foregoing sentence, if the casualty occurs after the fifteenth (15 Lease Year and the extent of damage to the Leased Premises is greater than twenty percent (20 %) of the then replacement value thereof (exclusive of the value of the Land), Lessee shall have the option, within one hundred eighty (180) days from the date of the occurrence of such casualty damage, to terminate this Lease by giving written notice of such termination to Lessor within said 180 -day period, in which event (i) this Lease shall terminate as of the termination date specified in such notice to Lessor, which shall not be less than thirty (30) days after the date of such notice; (ii) Lessee shall be required to pay the Base Rental through the 20 anniversary of the Operational Date as contemplated by Section 2.1 hereof and all other payments due and owing as of the termination date; (iii) Lessee shall not be required to repair the damage; (iv) all insurance proceeds available as a result of such damage shall be paid to and be the property of Lessee; and (v) the Parties shall have no further liability or obligations one to the other except as may be expressly provided for herein. (c) Notwithstanding the obligations of Lessee pursuant to Section 5.3(a) above, Lessor shall, at its cost and expense, keep all landscaping, hardscape and parking areas adjacent to and part of the Facility in a state of good repair on a regular and ongoing basis consistent with the standards of maintenance and repair of other landscaping and similar facilities at the Texas Star Athletic Complex. 5.4 Operational Rights; Revenue. (a) Subject to the terms and provisions of this Lease, Lessee shall have full and exclusive control of the management and operation of the Leased Premises, including, without limitation, the Facility; provided, however, Lessor shall have the right to approve the location(s) within the Facility where alcohol sales shall be permitted, such approval not being unreasonably withheld or delayed. Without limiting the generality of the foregoing, (i) Lessee shall have the sole right to grant and enter into licenses, rights, subleases, management agreements, operating agreements and any and all other agreements of any nature relating to the Leased Premises or the name thereof on such terms as Lessee deems appropriate, and (ii) Lessee shall own all revenues of any source generated by or from the Leased Premises or the operation or management or the name thereof. (b) Lessee shall have exclusive authority, control and rights in selecting the name of the Facility, as well as the sponsor or sponsors for which the Facility (or portions thereof) will be named from time to time or for which signage and advertising will be sold within or without the Facility, including, without limitation, the right to retain all proceeds therefrom; provided, however, that the name given to the Facility shall include the location of the Facility in such name reflected in the phrase "at Texas Star ". (c) Notwithstanding anything in Section 5.4(a) or Section 5.4(b) above to the contrary, the name given to the ice skating facility constructed on the Leased Premises shall not - 14 - euless- 01.doc Page 15 of 38 10/17/00 include a reference to or the name of a company that produces alcoholic beverages or tobacco products or any such products. Subject to the foregoing, Lessee shall have the full and exclusive control and discretion as to the name of the Facility and all other Improvements. (d) Subject to the terms and provisions of this Lease, Lessee shall have full and exclusive control of any and all advertising signage displayed within the Facility and on the exterior roof or facade thereof; provided, however, the signage on the exterior of the Facility shall not include a reference to or the name of a company that produces alcoholic beverages or tobacco products or any such products. (e) Lessee shall own all rights, including intellectual property rights, in, to and relating to the Leased Premises, including, without limitation, the Facility, whether now in existence or created in the future, including, without limitation, all copyrights, trademarks, trade names, trade dress and merchandising rights of, in or relating to the Leased Premises and any and all names, logos or other likenesses of the Leased Premises as well as the rights to protect, enforce and license any or all of the foregoing (collectively, the "Likenesses "). Lessee shall own the Facility architectural drawings, renderings, designs, plans and specifications; provided, however, Lessor and its agents and contractors (such as the City of Euless Economic Development Corporation) shall have the right to use the Facility name, logo and image in connection with any Lessor - approved or Lessor - sponsored campaign marketing the City of Euless, Texas, subject to prior, reasonable approval by Lessee. 5.5 Use of Facility by Lessor. (a) Each Lease Year during the Term, Lessor shall be entitled to twenty -four (24) hours of free use of the meeting rooms at the Facility, based on availability of such rooms. Lessor shall be required to notify Lessee of its desire to use meeting room space pursuant to this Section 5.5(a) not later than three (3) business days prior to the date of such desired use. If sufficient space is available upon such notification, Lessor shall be entitled to use the space desired. In the event sufficient space is not available, Lessor shall not have access to the space as desired and Lessee shall have no liability therefor. (b) Each Lease Year during the Term, Lessor shall be entitled to twenty -four (24) hours of free ice time at the Facility, based on availability. Lessor shall be required to notify Lessee of its desire to use ice pursuant to this Section 5.5(b) not later than three (3) business days prior to the date of such desired use. If the desired ice is available upon such notification, Lessor shall be entitled to use the ice times desired. In the event such ice time is not available, Lessor shall not have access to the ice as desired and Lessee shall have no liability therefor. Use of one (1) sheet of ice at the Facility for one (1) hour shall constitute one (1) hour of ice usage for the purposes of this Section 5.5(b). Use of both sheets of ice at the Facility for one (1) hour shall constitute two (2) hours of ice usage for the purposes of this Section 5.5(b). (c) Lessee shall develop, at Lessor's expense, a mutually agreeable discount program for certain programs and events at the Facility for residents, employees and staff of Lessor. (d) Lessor and Lessee shall, at Lessor's expense, use commercially reasonable efforts to promote various community -type programs of Lessor. - 15 - euless- 01.doc Page 16 of 38 10/17/00 ARTICLE 6 Advertising and Promotions 6.1 Advertising. Each Lease Year during the Term, Lessee shall provide the following to Lessor: (a) one mention promoting the Facility on the jumbotron at each Dallas Stars NHL home game; (b) one mention promoting StarCenters (including the location owned by Lessor) on the jumbotron at each Dallas Stars NHL home game; (c) one mention promoting high school hockey at StarCenters (including the location owned by Lessor) on the jumbotron at each Dallas Stars NHL home game; (d) one advertisement promoting StarCenters (including the location owned by Lessor) in each of the following: (i) Dallas Stars Yearbook; (ii) Dallas Stars game night program (currently titled "Stars Tonight "); and (iii) Dallas Stars newsletter to season ticket holders (currently titled "Boards and Blades "); (d) one advertisement promoting birthday parties or similar activities at StarCenters (including the location owned by Lessor) in the Dallas Stars game night program (currently titled "Stars Tonight "); (e) one full -page, full -color advertisement to be used at Lessor's discretion, subject to prior approval by the Dallas Stars, in each of the following (Lessor shall provide art work for such advertisements at its sole cost and expense in accordance with specifications and deadlines established by the Dallas Stars in their sole discretion): (i) Dallas Stars Yearbook; and (ii) Dallas Stars game night program (currently titled "Stars Tonight "); (f) ten (10) mentions promoting StarCenters (including the location owned by Lessor) on the matrix panels at each Dallas Stars NHL home game; (g) one pair of dasherboard advertisements promoting StarCenters (including the location owned by Lessor) at each StarCenter operated by Lessee; (h) one banner advertisement to be used at the discretion of Lessor, subject to prior approval by the Dallas Stars, on the Dallas Stars official internet site. Lessor shall provide art work for such advertisement at its sole cost and expense in accordance with specifications and deadlines established by the Dallas Stars in their sole discretion; - 16 - euless- 01.doc Page 17 of 38 10/17/00 (i) two (2) promotional reads promoting StarCenters (including the location owned by Lessor) during each of the following: (i) radio broadcasts of Dallas Stars NHL regular season games; and (ii) television broadcasts of Dallas Stars NHL regular season games; (j) one (1) thirty- second (30:) advertisement promoting high school hockey at StarCenters (including the location owned by Lessor) during each of the following: (i) radio broadcasts of Dallas Stars NHL regular season games; and (ii) television broadcasts of Dallas Stars NHL regular season games; and (k) reasonable use of the Dallas Stars logos and trademarks to promote the Facility and for such other purposes as desired by Lessor; provided, however, that any and all uses of such logos and trademarks by Lessor shall be subject to prior written approval by the Dallas Stars, in their sole discretion. 6.2 Promotions. Each Lease Year during the Term, Lessee shall use commercially reasonable efforts to ensure that the following events occur at the Facility: (a) One practice by the Dallas Stars; and (b) Two (2) appearances by a Dallas Stars player or coach. ARTICLE 7 Insurance and Indemnity 7.1 Liability Insurance. Lessee agrees, at its sole expense, to obtain and maintain public liability insurance at all times during the Term hereof with reputable insurance companies authorized to transact business in the State of Texas for bodily injury (including death) and property damage with minimum limits of $5,000,000 Combined Single Limit protecting Lessor and Lessee against any liability, damage, claim or demand arising out of or connected with the condition or use of the Leased Premises. Such insurance shall include contractual liability, personal injury and advertising liability, business automobile (including owned, non -owned and hired) and independent contractor liability. Such insurance coverage must be written on an "occurrence" basis. It may be maintained by any combination of single policies and/or umbrella or blanket policies and may be obtained and maintained by a Sublessee with respect to that portion of the Leased Premises subleased to such Sublessee. Lessor shall be named as an additional insured on all insurance policies required by this Section 7.1, whether provided by Lessee or by any Sublessee, including policies providing higher limits of liability or other coverages. 7.2 Workers' Compensation Insurance. Lessee agrees, at its sole expense, to obtain and maintain workers' compensation insurance, as required by applicable law, during the Term. The policy will be endorsed to provide a waiver of subrogation as to Lessor. - 17- euless- 01.doc Page 18 of 38 10/17/00 7.3 Property Insurance. At all times during the Term of this Lease, Lessee shall, at its sole expense, keep all buildings and structures included in the Leased Premises insured against "all risk" of loss for full replacement cost coverage, to include direct loss by fire, windstorm, hail, explosion, riot, civil commotion, aircraft, vehicles, smoke, boiler and machinery and flood. Coverage must be written by reputable insurance companies authorized to transact business in the State of Texas. Lessor shall be named as an additional insured or additional loss payee, as appropriate. 7.4 Policies. All insurance policies required by this Article 7 shall provide for at least thirty (30) days written notice to Lessor before cancellation and certificates or copies of policies of insurance shall be delivered to Lessor upon request therefor by Lessor. If any blanket general insurance policy of Lessee complies with the terms of this Article 7, the naming of Lessor therein as an additional insured shall be deemed compliance with the requirements for the insurance coverage provided in any such blanket policy. Lessor and Lessee hereby waive all claims, rights of recovery and causes of action that either party or any party claiming by, through or under such party by subrogation or otherwise may now or hereafter have against the other party or any of the other party's present and future subsidiaries, affiliates, partners, officers, directors, employees, direct or indirect stockholders, agents, other representatives, successors and assigns for bodily injury (including death) to persons, or loss or damage to property of Lessor and Lessee whether caused by the negligence or fault of Lessor and Lessee or their partners, directors, officers, employees, agents or representatives or otherwise, to the extent that the injuries, losses or damages are covered by the proceeds of insurance policies maintained by either party. 7.5 Adjustment of Losses. At the request of Lessee at any time during the Term of this Lease, any Leasehold Mortgagee may be named as a mortgagee or an additional insured, as appropriate, under any of said insurance policies required under Section 7.3 hereof , as its interest may appear. Any loss under any such insurance policy required under Section 7.3 hereof shall be made payable to Lessee for the benefit of Lessee and Lessor, to the end that Lessee shall be entitled to collect all money due under such insurance policies payable in the event of and by reason of the loss of or damage to the Leased Premises, to be applied pursuant to Section 7.6 below. Any accumulation of interest on the insurance proceeds collected by Lessee shall be added to, and become a part of, the fund being held by Lessee for the benefit of Lessor and Lessee. The adjustment of losses with the insurer shall be made by Lessee. 7.6 Application of Proceeds of Property Insurance. All proceeds payable pursuant to the provision of any policies of property insurance required to be carried under the terms of this Lease (net of reasonable expenses of collection) shall be applied for the following purposes: (a) All such net proceeds shall first be used, subject to any other terms and conditions contained in this Lease, as a fund for the rebuilding, restoration and repair of the portion of the Leased Premises which have become destroyed or damaged for which such proceeds are payable; and (b) Following completion of all work under subsection (a) above, any proceeds not disbursed pursuant to subsection (a) above shall be applied, subject to the terms of any Leasehold Mortgage, to or as directed by Lessee in its sole discretion. 7.7 Environmental Investigation and Remediation. - 18 - euless- 01.doc Page 19 of 38 10/17/00 (a) Lessor represents and warrants that it has undertaken a reasonable investigation of the environmental condition of the Land, including a Phase I Environmental Site Assessment (the "Phase I ") by Garcia and Associates Engineering, Inc. or such other comparable entity as shall be agreed to by the Parties, and the results of Lessor's environmental investigation did not identify any condition relating to the environment that could reasonably be expected to materially and adversely impact Lessee's ability to conduct its operations at the Leased Premises. Except as provided in the Phase I, Lessor has no knowledge of the presence, release or migration of any Hazardous Materials (as hereinafter defined) onto, beneath, upon or about the Leased Premises. (b) Lessor shall be responsible, at its sole expense, for performing any environmental investigation and remediation work which may be required in connection with the use and occupancy of the Leased Premises and which is caused by the presence of Hazardous Materials on the Leased Premises, except and to the extent the presence thereof results solely from the act of Lessee or its officers, employees, agents or representatives. Such environmental investigation and remediation work shall be conducted in accordance with all applicable laws. Lessor shall notify and advise Lessee of the remediation Lessor will undertake and the procedures to be used. Lessor shall complete the remediation with due diligence and shall comply with, and shall cause its agents and contractors to comply with, all applicable laws regarding the use, removal, storage, transportation, disposal and remediation of Hazardous Materials. Lessor's obligation as provided herein to undertake environmental investigation and remediation of the Leased Premises shall be a continuing obligation of Lessor throughout the Term. All environmental investigation and remediation work by Lessor shall be conducted so as to cause the least possible interference with the operations of Lessee at the Leased Premises. (c) The term "Hazardous Materials" means any substance, material or waste which is now or hereafter classified or considered to be hazardous, toxic or dangerous under any federal, state or local laws, rules and regulations (collectively "Laws ") affecting the Leased Premises relating to pollution or the protection of human health, natural resources or the environment, but shall exclude any such items that are necessary for the ordinary performance of Lessee's or any Sublessee's business activities, provided that such are used, stored and disposed of in compliance with all Laws. If Lessor breaches its obligations under this Section 7.7 and such breach is not cured following notice and within the applicable cure period specified in Article 10 below, Lessee may take any and all action reasonably appropriate to remedy such breach and Lessor shall promptly pay all reasonable costs incurred by Lessee in connection therewith. (d) The provisions of this Section 7.7 shall survive the termination of this Lease and are solely for the benefit of Lessor, Lessee, Ground Lessee and Ground Lessee's Leasehold Mortgagee and shall not be deemed for the benefit of any other person or entity. 7.8. Indemnity by Lessor. (a) Lessor shall, to the extent allowed by applicable law, defend, indemnify and hold harmless Lessee, Ground Lessee and Ground Lessee's Leasehold Mortgagee, and their respective present and future subsidiaries, affiliates, partners, officers, directors, employees, direct or indirect stockholders, agents, other representatives, successors and assigns, from and against any and all claims, demands, liabilities, causes of action, suits, judgments, damages and expenses (including - 19- euless- 01.doc Page 20 of 38 10/17/00 reasonable attorneys' fees and cost of clean up and remediation) arising from (i) the presence of Hazardous Materials beneath, on, upon or about the Leased Premises as of the Commencement Date, (ii) as a result of the acts or omissions of Lessor (INCLUDING LESSEE'S, GROUND LESSEE'S AND GROUND LESSEE'S LEASEHOLD MORTGAGEE'S STRICT LIABILITY), (iii) the development, design and construction of the Additional Project Development and the City Improvements, (iv) any occurrence on the Additional Project Development or the City Improvements, except to the extent that such occurrence is caused by the act or omission of Lessee, Ground Lessee or their respective officers, agents, employees or representatives, (v) Lessor's breach of any provision of this Lease, (vi) the negligence of Lessor, its officers, agents, representatives, agents or contractors in the performance of this Agreement or (vii) as a result of Lessor's failure to comply with the provisions of Section 7.7 above. (b) Lessee shall give Lessor written notice of any claim filed, made or asserted against Lessee by any person or entity other than Lessor that could result in liability of Lessee under the provisions of Section 7.8(a) above, (collectively "Lessor's Indemnity Liability ") reasonably promptly after Lessee becomes aware that such claim has been filed, made or asserted against Lessee. Lessee, without the prior written consent of Lessor, shall not compromise or settle any claim that could result in Lessor's Indemnity Liability or take any action that could materially interfere with, jeopardize or adversely affect the defense by Lessee or Lessor against any such claim. Lessee, to the extent reasonably requested by Lessor, and at Lessor's expense, shall cooperate with Lessor in the defense against any such third party claim and shall assert (and authorizes Lessor to assert) any good faith defenses that Lessor or Lessee may have against such third party claim. Lessor shall be subrogated to any and all rights of Lessee to assert any claim, right or action related to any claim that could or does result in Lessor's Indemnity Liability. 7.9 Indemnity by Lessee and Ground Lessee. (a) During the Term, Lessee and Ground Lessee, as applicable, agree to defend, indemnify and hold harmless Lessor, its officers, employees, representatives and agents from and against any and all claims, injuries (including death), demands, liabilities, cause of action, suits, judgments, damages and expenses (including reasonable attorneys' fees) arising from (i) Lessee's or Ground Lessee's failure to perform its obligations under this Lease, including any insurance obligation, (ii) the development, design and construction of the Improvements, (iii) the negligence of Lessee, Ground Lessee or their respective officers, agents, employees, representatives or contractors or (iv) as to Lessee only, the use, possession, management and maintenance of the Leased Premises after the Commencement Date, except to the extent that such is caused by the breach of this Lease by Lessor or by act or omission of Lessor or its officers, employees, representatives, agents or contractors. (b) Lessor shall give Lessee written notice of any claim filed, made or asserted against Lessor by any person or entity other than Lessee that could result in liability of Lessee under the provisions of Section 7.9(a) above ( "Lessee's Indemnity Liability ") reasonably promptly after Lessor becomes aware that such claim has been filed, made or asserted against Lessor. Lessor, without the prior written consent of Lessee, shall not compromise or settle any claim that could result in Lessee's Indemnity Liability or take any action that could materially interfere with, jeopardize or adversely affect the defense by Lessee or Lessor against any such claim. Lessor, to the extent reasonably requested by Lessee, and at Lessee's expense, shall cooperate with Lessee in the defense against any such third party claim and shall assert (and authorizes Lessee to assert) any good faith defenses that - 20 - euless- 01.doc Page 21 of 38 10/17/00 Lessor or Lessee may have against such third party claim. Lessee shall be subrogated to any and all rights of Lessor to assert any claim, right or action related to any claim that could or does result in Lessee's Indemnity Liability. (c) The provisions of Section 7.8 above and of this Section 7.9 shall survive the termination of this Lease and are solely for the benefit of Lessor and Lessee and shall not be deemed for the benefit of any other person or entity. ARTICLE 8 Assignment and Subletting 8.1 Assignment. (a) Except as provided in Section 8.1(b) below, prior to the Purchase Date, neither Lessor nor Lessee may sell or assign its respective interest in this Lease. Subsequent to the Purchase Date, Lessee shall have the right at any time, with the consent of Lessor, such consent not to be unreasonably withheld, to sell or assign all of the leasehold estate created hereby in its entirety, and the rights of Lessee, or any successor, assignee or grantee of Lessee, may pass by operation of law. Upon any such assignment, the assignee shall execute and deliver to Lessor a written assumption, in form and substance reasonably satisfactory to Lessor, of all of the obligations of Lessee pertaining to the Leased Premises and accruing under this Lease after such assignment. Lessee shall thereafter be released of all liabilities or obligations thereafter accruing under this Lease if (i) such assignee is an entity created by Lessee to take assignment of and assume the obligations of Lessee under this Lease; (ii) such assignee is an entity owning a majority interest in Lessee; or (iii) Lessor otherwise consents in writing, such consent not to be unreasonably withheld. (b) In the event Lessor does not purchase the Improvements pursuant to Section 4.5 of this Lease, the rights of Lessor pursuant to this Lease shall inure and be assigned to Ground Lessee or such other entity as agreed to by Lessee and Ground Lessee (the "Assignee ") in writing sent to Lessor at the address set forth below. Lessor shall, within ten (10) days of receiving such notice, execute and deliver a written assignment, in form and substance satisfactory to Lessee and Assignee in their sole discretion, of all of the rights of Lessor pertaining to the Leased Premises and accruing under this Lease under such assignment. 8.2 Subletting. (a) Lessee shall have the right at any time, with consent of Lessor, such consent not being unreasonably withheld, to sublease or otherwise assign, all of the Leased Premises or the right to operate the Facility; provided, however, that no such subletting or assignment shall relieve Lessee of any of its obligations hereunder unless otherwise agreed in writing by Lessor, and all subleases shall be subject to the terms and provisions of this Lease. (b) Lessee shall have the right at any time, to sublease or otherwise assign the rights of use to concessions, retail areas, restaurants and other portions of the Leased Premises incident to the - 21 - euless- 01.doc Page 22 of 38 10/17/00 full use and operation thereof as and on such terms Lessee shall desire, including, but not limited to, scoreboards, signs and billboards located within or associated with the Facility. (c) No Sublessee shall have any right to sublease or otherwise assign or encumber its interest in the Leased Premises. (d) Notwithstanding the foregoing, Lessee shall have no right to sublease the Leased Premises prior to the Purchase Date. 8.3 Nondisturbance Agreement. Upon the written request of Lessee, Lessor will enter into a Nondisturbance Agreement (herein so called) with any Sublessee or Leasehold Mortgagee. Such Nondisturbance Agreement shall include such reasonable provisions as requested by a Sublessee or a Leasehold Mortgagee, subject to the reasonable approval of Lessor, but in any event shall (a) reaffirm Lessor's ownership of the Leased Premises, (b) confirm (if true) that this Lease is in full force and effect without default by Lessee (or, if a default exists, specifying the default and the remedy required by Lessor), (c) and, in the case of a Sublessee, provide, in substance, that, so long as the Sublessee complies with all of the terms of its sublease or other applicable agreement, Lessor, in the exercise of any of its rights or remedies under this Lease, shall not deprive the Sublessee of possession, or the right of possession, of the subleased property during the term of the sublease, deprive the Sublessee of any other rights under the sublease or other applicable agreement or join the Sublessee as a party in any action or proceeding to enforce or terminate this Lease or obtain possession of the property leased in the sublease for any reason other than a breach by the Sublessee of the terms of the sublease or other applicable agreement which would entitle Lessee to dispossess the Sublessee thereunder or otherwise terminate the Sublessee's rights thereunder. 8.4 General Provisions. Lessee shall, in connection with any assignment or sublease, provide notice to Lessor of the name and address of any assignee or Sublessee, together with a complete copy of the assignment agreement or sublease. ARTICLE 9 Leasehold Mortgages 9.1 Leasehold Mortgages Permitted. Lessee, from time to time and at any time, but only after the Purchase Date, and Ground Lessee, from time to time and at any time, but only prior to the Purchase Date, shall have the right to grant a Leasehold Mortgage, and in such event, upon Lessee's or Ground Lessee's written request to Lessor, Lessor will execute and deliver a reasonable estoppel certificate addressed to the Leasehold Mortgagee setting forth the information described in Section 14.2 of this Lease, confirming the terms of this Article 9, and providing Lessor's agreement to recognize the Leasehold Mortgagee or any purchaser of the Mortgaged Premises at foreclosure in the same manner as an assignee pursuant to Section 8.1 of this Lease. Lessor agrees to accept any amendments of this Lease which are requested by a Leasehold Mortgagee prior to the execution of its Leasehold Mortgage which are reasonably calculated to protect the Leasehold Mortgagee's interest in this Lease under its Leasehold Mortgage and do not, in the reasonable opinion of Lessor, materially diminish the rights of Lessor under this Lease. Notwithstanding the foregoing, no Leasehold Mortgagee shall acquire, by virtue of the Leasehold Mortgage, any greater right in the Mortgaged - 22 - euless- 01.doc Page 23 of 38 10/17/00 Premises and in any building or improvements thereon than Lessee then had under this Lease. In no event shall Lessee have the right to encumber, subordinate or render inferior in any way Lessor's fee simple title and reversionary interest in and to the Leased Premises. 9.2 Notices to Leasehold Mortgagees. If at any time after execution and recordation of any Leasehold Mortgage in the Real Property Records of Tarrant County, Texas, in accordance with the provisions of Section 9.1 hereof, the Leasehold Mortgagee shall notify Lessor in writing that the Leasehold Mortgage on the Mortgaged Premises has been given and executed by Lessee, and shall furnish Lessor at the same time with the address to which the Leasehold Mortgagee desires copies of notices to be mailed, or designates some person or corporation as its agent and representative for the purpose of receiving copies of notices, Lessor hereby agrees that it will thereafter deliver in the manner specified in Section 14.6 to the Leasehold Mortgagee and to the agent or representative so designated by the Leasehold Mortgagee, at the address so given, duplicate copies of any and all notices in writing which Lessor may from time to time give or serve upon Lessee and Ground Lessee under and pursuant to the terms and provisions of this Lease and any and all pleadings in suits filed by Lessor against Lessee or Ground Lessee, as applicable. No notice to Lessee or Ground Lessee shall be effective as to the Leasehold Mortgagee unless duplicate copies thereof are delivered to such Leasehold Mortgagee at the same time the notice is given or served upon Lessee. 9.3 Leasehold Mortgagee's Right to Cure. If Lessor shall ever be entitled to exercise a right hereunder to terminate this Lease after the giving of notice and/or the passage of time, as applicable, Lessor, subject to notification by Leasehold Mortgagee pursuant to Section 9.2 hereof, shall deliver additional written notice to Leasehold Mortgagee of Lessor's intention to so terminate this Lease and describing the existing defaults, and Leasehold Mortagee thereafter shall have thirty (30) days to cure the defaults described in such written notice. Notwithstanding the foregoing, but subject to the provisions of Section 10.2 hereof, in the event (a) such default is not capable of cure within such 30 -day period, this Lease may not be terminated if Leasehold Mortgagee shall deliver to Lessor, within such 30 -day period, written notice of Leasehold Mortgagee's intention to cure the specified defaults and shall commence and diligently pursue the cure of the specified defaults and such defaults are cured within 120 days of the date of such notice, or (b) any Leasehold Mortgagee is not in actual possession of the Mortgaged Premises on the date of the additional notice given the Leasehold Mortgagee under this Section 9.3, and possession is necessary in order to cure any default, then the time within which such Leasehold Mortgagee may commence to cure such default shall be extended for a reasonable time not to exceed 120 days until such Leasehold Mortgagee can obtain actual possession of the Mortgaged Premises. No purported termination of this Lease shall be effective until such written notice shall have been given to Leasehold Mortgagee and such 30 -day period, or additional time period as provided above, shall have expired without the described defaults having been cured. Leasehold Mortgagee may, at its option and at any time before the rights of Lessee under this Lease have been terminated, pay any of the Base Rental due hereunder, procure any insurance required hereunder, pay any Imposition required hereunder, make any repairs and improvements required hereunder, or do any other act or thing or make any other payment required of Lessee by the terms of this Lease or which may be necessary and appropriate to comply with the covenants and conditions of this Lease to prevent the termination of this Lease. All payments so made and all things so done and performed by any such Leasehold Mortgagee shall be as effective to prevent a forfeiture of the rights of Lessee hereunder as if performed by Lessee. - 23 - euless- 01.doc Page 24 of 38 10/17/00 9.4 New Lease. Notwithstanding anything to the contrary contained in this Lease or otherwise, in the event of termination of this Lease for any reason prior to the stated expiration date, Lessor shall promptly notify all Leasehold Mortgagees of such termination. If the Leasehold Mortgagee having the highest priority with respect to the Lease cures (subject to Section 9.5 hereof) all defaults giving rise to such termination as provided below, Lessor shall enter into a new lease of the Mortgaged Premises with such Leasehold Mortgagee or its designee for the remainder of the Term of this Lease, such new lease to be effective as of the date of termination of this Lease, at the Base Rental payable hereunder and upon all of the same terms, conditions, covenants, agreements, provisions and limitations contained herein, subject to the following: (a) the Leasehold Mortgagee entitled to the new lease shall make written request to Lessor for a new lease within sixty (60) days of receipt by the Leasehold Mortgagee of written notice from Lessor of the date of termination of this Lease; and (b) at the time of the execution and delivery of the new lease, the Leasehold Mortgagee or its designee shall pay to Lessor all amounts specified in the notice of termination delivered by Lessor which would have been due hereunder except for such termination and which are currently due except for such termination, and shall promptly cure (subject to Section 9.5 hereof) all other defaults giving rise to such termination. 9.5 Certain Cure Requirements. Notwithstanding the provisions of Section 9.4 above, a Leasehold Mortgagee's right to enter into a new lease with Lessor as provided in said Section 9.4 shall not be conditioned upon such Leasehold Mortgagee curing any default of Lessee not reasonably susceptible of being cured by such Leasehold Mortgagee or its designee. 9.6 Survival. The provisions of Section 9.4 and Section 9.5 shall survive the termination of this Lease and shall continue in full force and effect thereafter to the same extent as if said Section 9.4 and Section 9.5 were a separate and independent contract among Lessor, Lessee, Ground Lessee and any Leasehold Mortgagee. 9.7 Leasehold Mortgagees' Liability. Unless a new lease shall have been executed pursuant to Section 9.4 hereof, no Leasehold Mortgagee shall be or become personally liable to Lessor as an assignee of this Lease, for the payment or performance of any obligation of Lessee unless and until it expressly assumes by written instrument the payment or performance of such obligation, and no assumption of liability shall be inferred from or result from foreclosure or other appropriate proceedings in the nature thereof or as the result of any other action or remedy provided for by any Leasehold Mortgage, or from a conveyance or assignment pursuant to which any purchaser at foreclosure shall acquire the rights and interest of Lessee under the terms of this Lease; provided, however, any such assignee or purchaser must timely and diligently perform all obligations of Lessee hereunder. ARTICLE 10 Default of Lessee - 24 - euless- 01.doc Page 25 of 38 10/17/00 10.1 Base Rental Payment Defaults. Subject to the provisions of Section 10.3 below, in the event of a failure on the part of Lessee to pay 100% of the Base Rental when due and the continuation of such failure for fifteen (15) days after Lessor (or, prior to the Purchase Date, Ground Lessee) has provided to Lessee and to each Leasehold Mortgagee, in accordance with the provisions of Section 9.2 of this Lease, a written notice of such failure, then and in such event Lessor (or, prior to the Purchase Date, Ground Lessee) shall have all remedies available at law or in equity, including, without limitation, termination, injunction and specific performance, subject to the provisions of Article 9 of this Lease. 10.2 Other Defaults. Subject to the provisions of Section 10.3 below, in the event of any breach by Lessee of any covenant of Lessee under this Lease other than the failure to pay Base Rental when due, Lessor (and, prior to the Purchase Date, Ground Lessee) shall give to Lessee and, if Lessor is giving such notice prior to the Purchase Date, Ground Lessee, a written notice specifying such breach, and unless within thirty (30) days from and after the date such notice is so given Lessee shall have commenced to remove or to cure such breach and shall be proceeding with reasonable diligence to completely remove or cure such breach (provided such breach must be cured within 120 days after such notice), then Lessor (or, prior to the Purchase Date, Ground Lessee) shall have all remedies available at law or in equity, including, without limitation, termination, injunction and specific performance, subject to the provisions of Article 9 of this Lease. Notwithstanding the foregoing provisions of this Section 10.2, it is further provided that the following shall be events of default of Lessee hereunder entitling Lessor (or, prior to the Purchase Date, Ground Lessee), without notice, to take any of the remedies set forth in this Section 10.2 (subject to the provisions of Article 9 of this Lease): (a) the making of any general assignment for the benefit of creditors by Lessee; (b) the filing of a voluntary petition in bankruptcy or a voluntary petition for an arrangement or reorganization under the United States Federal Bankruptcy Act (or similar statute or law of any foreign jurisdiction) by Lessee; (c) the appointment of a receiver or trustee for all or substantially all of Lessee's interest in the Leased Premises or its leasehold estate hereunder if not removed with 120 days; and (d) the entry of a final judgment, order or decree of a court of competent jurisdiction adjudicating Lessee to be bankrupt, and the expiration without appeal of the period, if any, allowed by applicable law in which to appeal therefrom. All remedies of Lessor under this Lease shall be cumulative, and the failure to assert any remedy or the granting of any waiver (as provided in Section 14.18 hereof) of any event of default shall not be deemed to be a waiver of such remedy or any subsequent event of default. 10.3 Rights of Leasehold Mortgagees. Notwithstanding any other provision of this Article 10, all rights and remedies of Lessor under Section 10.1 and Section 10.2 above are subject to the provisions of Article 9 of this Lease. ARTICLE 11 Default of Lessor 11.1 Defaults and Remedies. In the event Lessee, for any reason, does not receive the payments referenced in Section 3.4 above when due, then and in such event Lessee shall have all remedies available at law or in equity, including, without limitation, termination, injunction and specific performance, subject to the provisions of Section 11.2 below. In the event of any breach by Lessor of any covenant of Lessor under this Lease, Lessee shall have the right to deliver to Lessor a - 25 - euless- 01.doc Page 26 of 38 10/17/00 written notice specifying such breach or non - payment, and unless within thirty (30) days from and after the date of delivery of such notice Lessor shall have commenced to remove or to cure such breach or occurrence and shall be proceeding with reasonable diligence to completely remove or cure such breach or occurrence (provided such breach or occurrence must be cured within 120 days after such notice), then Lessee shall have all remedies available at law or in equity, including, without limitation, termination, injunction and specific performance, subject to the provisions of Section 11.2 below. All remedies of Lessee under this Lease shall be cumulative, and the failure to assert any remedy or the granting of any waiver (as provided in Section 14.18 hereof) of any event of default shall not be deemed to be a waiver of such remedy or any subsequent event of default. 11.2 Certain Remedy Limitations. Notwithstanding the provisions of Section 11.1 above, Lessee shall have the remedy of a non judicial termination of this Lease only for the default of Lessor (subject to the notice and cure rights set forth in Section 11.1 above) of its obligations under Section 3.4(b), Section 13.1.6 or Article 15 of this Lease. ARTICLE 12 Condemnation 12.1 Definitions. Whenever used in this Article 12, the following words shall have the definitions and meanings hereinafter set forth: (a) "Condemnation Proceedings ". Any action brought for the purpose of any taking of the Leased Premises, or any part thereof or of any property interest therein (including, without limitation, the right to the temporary use of all or any portion of the Leased Premises), by competent authority as a result of the exercise of the power of eminent domain, including a voluntary sale to such authority either under threat of condemnation or while such action or proceeding is pending. (b) "Taking" or "Taken ". The event and date of vesting of title to the Leased Premises or any part thereof or any property interest therein (including, without limitation, the right to the temporary use of all or any portion of the Leased Premises), pursuant to a Condemnation Proceeding. 12.2 Efforts to Prevent Taking. Lessor shall use its best efforts to cause all other competent authorities with the power of eminent domain to refrain from instituting any Condemnation Proceedings or exercising any other powers of eminent domain with respect to the Leased Premises, or any part thereof or any interest therein, during the Term of this Lease. 12.3 Entire Taking. If all or substantially all of the Leased Premises shall be Taken in Condemnation Proceedings, Base Rental shall be fully abated from and after the date of such Taking and from and after such date Lessee and Lessor shall not have any other obligations under this Lease with respect to the Leased Premises, except for those obligations which expressly survive the termination hereof. 12.4Partial Taking. - 26 - euless- 01.doc Page 27 of 38 10/17/00 (a) If less than all of the Leased Premises shall be Taken in any Condemnation Proceeding, a fair and equitable portion of the Base Rental attributable to the portion of the Leased Premises Taken shall be abated from and after the date of such partial Taking, and from and after such date Lessee and Lessor shall not have any other obligations under this Lease with respect to the portion of the Leased Premises that has been Taken, except for those obligations which expressly survive the termination hereof. (b) If, following such Taking, Lessee determines that the remaining Leased Premises are not sufficient to operate a recreational ice skating facility as intended by the Parties hereto, then Lessee, at its election, may vacate the Leased Premises, whereupon the Base Rental shall be fully abated from and after the date of such partial Taking, and from and after such date Lessee and Lessor shall not have any other obligations under this Lease with respect to the Leased Premises, except for those obligations which expressly survive the termination hereof. Such election to vacate must be exercised no later than ninety (90) days after the date of such Taking. (c) If Lessee does not elect to vacate the Leased Premises upon any partial Taking, then (i) the Leased Premises shall be reduced by the portion thereof taken in the Condemnation Proceedings, and the Base Rental payable hereunder shall be equitably reduced during the unexpired portion of the Term as provided above, and (ii) Lessee shall commence and proceed with reasonable diligence to repair or reconstruct the remaining Improvements on the Leased Premises, if any; provided, however, Lessee's obligation to so repair or reconstruct the remaining Improvements shall be limited to the proceeds of the condemnation award actually received by Lessee. 12.5 Temporary Taking. If any right of temporary (hereinafter defined) possession or occupancy of all or any portion of the Leased Premises shall be Taken, the Base Rental shall be reduced during the duration of such Taking in a fair and equitable manner that reflects the inability of Lessee to use the affected portion of the Leased Premises. A Taking shall be considered "temporary" only if the period of time during which Lessee is deprived of usage of all or part of the Leased Premises as the result of such Taking does not materially interfere with the ability of Lessee to use and operate the Leased Premises as a recreational ice skating facility in the manner contemplated by the Parties hereto. Any other "Taking" that is not "temporary" as described above shall be treated as an entire Taking under Section 12.3 above or as a partial Taking under Section 12.4 above, as determined by Lessee. 12.6 Condemnation Award. (a) No Taking shall have the effect of terminating this Lease. None of the provisions of this Article 12 shall affect the right, title or interest of Lessee in the leasehold interest created by this Lease. For the purposes of determining the portion of any condemnation award to which Lessee is entitled to receive from the condemning authority as a matter of law, Lessee's right, title and interest in the Leased Premises shall be granted and arising under this Lease without consideration of this Article 12. This Article 12 pertains only to Lessee's and Lessor's continuing obligations under this Lease following a Taking and to the agreement between Lessor and Lessee regarding any condemnation awards. (b) At any time within ninety (90) days after an entire Taking or a partial Taking following which Lessee vacates the remaining Leased Premises as provided in Section 12.4(b) above, Lessee -27- euless- 01.doc Page 28 of 38 10/17/00 may terminate this Lease by delivering a written termination notice to Lessor specifying the effective date of such termination, in which event the Term shall terminate as of the date specified by Lessee in such notice and the condemnation award shall be divided between Lessor and Lessee in accordance with the relative amounts expended by each Party for costs pertaining to the Facility. Lessor shall deliver to Lessee that portion of any condemnation award that Lessor may receive to which Lessee is entitled as provided in this Section 12.6(b). The provisions of this Section 12.6(b) shall survive any such termination. 12.7 Settlement of Proceedings. Lessor shall not make any settlement with the condemning authority in any Condemnation Proceedings nor convey or agree to convey the whole or any portion of the Leased Premises to such authority in lieu of condemnation without first obtaining the written consent of Lessee and all Leasehold Mortgagees. ARTICLE 13 Representations, Warranties and Special Covenants 13.1 Lessor's Representations, Warranties and Special Covenants. Lessor hereby represents, warrants and covenants as follows: 13.1.1 Existence. Lessor is a home rule municipal corporation of the State of Texas duly incorporated and currently existing pursuant to the constitution and laws of the State of Texas, including the Texas Local Government Code and Texas Government Code. 13.1.2 Authority. Lessor has all requisite power and authority to own the Leased Premises, to execute, deliver and perform its obligations under this Lease and to consummate the transactions herein contemplated and, by proper action in accordance with all applicable law, has duly authorized the execution and delivery of this Lease, the performance of its obligations under this Lease and the consummation of the transactions herein contemplated. 13.1.3 Binding Obligation. This Lease is a valid and binding obligation of Lessor and is enforceable against Lessor in accordance with its terms. 13.1.4 No Defaults. The execution by Lessor of this Lease and the consummation by Lessor of the transactions contemplated hereby (i) do not, as of the Commencement Date, result in a breach of any of the terms or provisions of, or constitute a default, or a condition which upon notice or lapse of time or both would ripen into a default, under Lessor's charter or any resolution, indenture, agreement, instrument or obligation to which Lessor is a party or by which the Leased Premises or any portion thereof is bound; and (ii) do not, to the knowledge of Lessor, constitute, a violation of any law, order, rule or regulation applicable to Lessor or any portion of the Leased Premises of any court or of any federal, state or municipal regulatory body or administrative agency or other governmental body having jurisdiction over Lessor or any portion of the Leased Premises. 13.1.5 Consents. No permission, approval or consent by third parties or any other governmental authorities is required in order for Lessor to enter into this Lease, make the agreements - 28 - euless- 01.doc Page 29 of 38 10/17/00 herein contained or perform the obligations of Lessor hereunder other than those which have been obtained. 13.1.6 Quiet Enjoyment. During the Term of this Lease and subject to the terms of this Lease, Lessee shall have the quiet enjoyment and peaceable possession of the Leased Premises against hindrance or disturbance by Lessor or any person or entity acting by, through or under Lessor. From the Commencement Date through the Purchase Date and subject to the terms and conditions of this Lease, Ground Lessee shall have the quiet enjoyment and peaceable possession of the Land against any hindrance or disturbance by Lessor or any person or entity acting by, through or under Lessor. 13.1.7 Proceedings. There are no actions, suits or proceedings pending or, to the reasonable best knowledge of Lessor, threatened or asserted against Lessor affecting Lessor or any portion of the Leased Premises, at law or at equity or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign. 13.1.8 Impositions. Lessor has not received any notice of any condemnation actions, special assignments or increases in the assessed valuation of taxes or any Impositions of any nature which are pending or being contemplated with respect to the Leased Premises or any portion thereof. 13.1.9 Compliance with Laws. Lessor has not received any notice of any violation of any ordinance, regulation, law or statute of any governmental agency pertaining to the Leased Premises or any portion thereof. 13.1.10 Encumbrances. Lessor has good and marketable fee simple title to the Leased Premises, subject to no liens or security interests, and Lessor has not placed or granted any liens or security interests against the Leased Premises. There are no actions pending, to the knowledge of Lessor, which would result in the creation of any lien on any portion of the Leased Premises, including, without limitation, water, sewage, street paving, electrical or power improvements which give rise to any lien, completed or in progress. During the Term, Lessor shall not grant any liens or security interest on all or any portion of the Leased Premises. 13.1.11 Limitations. Except as otherwise expressly provided herein, this Lease is made by Lessor without representation or warranty of any kind, either express or implied, as to the condition of the Leased Premises, its merchantability, its condition or its fitness for Lessee's intended use or for any particular purpose. 13.2Lessee's Representations, Warranties and Special Covenants. 13.2.1 Existence. Lessee is duly organized and validly existing under the laws of the state of its organization and is authorized to do business in the State of Texas. 13.2.2 Authority. Lessee has all requisite power and authority to own its property, operate its business, enter into this Lease and consummate the transactions herein contemplated, and by proper action has duly authorized the execution and delivery of this Lease and the consummation of the transactions herein contemplated. - 29 - euless- 01.doc Page 30 of 38 10/17/00 13.2.3 Binding Obligation. This Lease is a valid and binding obligation of Lessee and is enforceable against Lessee in accordance with its terms, subject to (a) applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, rearrangement, moratorium, receivership, liquidation and similar laws affecting creditors rights or (b) general principles of equity. 13.2.4 No Default. The execution by Lessee of this Lease and the consummation by Lessee of the transactions contemplated hereby do not, as of the Commencement Date, result in a breach of any of the terms or provisions of, or constitute a default or condition which upon notice or the lapse of time or both would ripen into default under, the organizational documents of Lessee or under any indenture, agreement, instrument or obligation to which Lessee is a party or is bound. 13.2.5 Consents. No permission, approval or consent by third parties or any other governmental authorities is required in order for Lessee to enter into this Lease, make the agreements herein contained or perform the obligations of Lessee hereunder other than those which have been obtained. 13.2.6 As -Is. Except as provided for in Section 13.1.10 above, Lessee accepts the leasehold interest in the Land granted by this Lease on an "as -is" basis with all faults. ARTICLE 14 Miscellaneous 14.1 Inspection. Lessee shall permit Lessor and its agents, upon no less than twenty -four (24) hours prior written notice, to enter into and upon the Leased Premises during normal business hours for the purpose of inspecting the same on the condition that Lessee's and Lessee's tenants' and invitees' quiet enjoyment of the same is not interfered with; provided, however, such notice shall not be required for entry into and upon the Leased Premises for the purposes of enforcing City codes. 14.2 Estoppel Certificates. Lessee, Ground Lessee and Lessor shall, at any time and from time to time upon not less than ten (10) days' prior written request by the other Party, execute, acknowledge and deliver to Lessor, Ground Lessee or Lessee, as the case may be, a statement in writing certifying (a) its ownership of the interest of Lessor, Ground Lessee or Lessee hereunder, as the case may be, (b) that this Lease is unmodified and in full force and effect (or if there have been any modifications, that the same is in full force and effect as modified and stating the modifications), (c) the dates to which the Base Rental and any other charges have been paid, and (d) that, to the best knowledge of Lessor, Ground Lessee or Lessee, as the case may be, no default hereunder on the part of the other Party exists (except that if any such default does exist, the certifying Party shall specify such default.) Upon request by Lessee, Lessor's estoppel certificate also shall be addressed to the Leasehold Mortgagees, if any. 14.3 Release. If requested by Lessor, Lessee shall, upon termination of this Lease, execute and deliver to Lessor an appropriate release, in form proper for recording, of all Lessee's interest in the Leased Premises, and upon request of Lessee, Lessor will execute and deliver a written cancellation and termination of this Lease and release of all claims (if none are then outstanding) in proper form for recording to the extent such release is appropriate under the provisions hereof. - 30 - euless- 01.doc Page 31 of 38 10/17/00 14.4 Lessor's Right to Perform Lessee's Covenants. If Lessee shall fail in the performance of any of its covenants, obligations or agreements contained in this Lease, other than the obligation to pay Base Rental, and such failure shall continue without Lessee curing or commencing to cure such failure within all applicable grace and/or notice and cure periods, Lessor after ten (10) days additional written notice to Lessee specifying such failure (or shorter notice if any emergency [meaning that there is imminent danger to the safety of persons or of substantial damage to property] exists) may (but without any obligation to do so) perform the same for the account and at the expense of Lessee, and the amount of any payment made or other reasonable expenses (including reasonable attorneys' fees incurred by Lessor for curing such default), with interest thereon at the rate of twelve percent (12 %) per annum or the highest rate then allowed by law, shall be payable by Lessee to Lessor on demand, or, if not so paid, shall be treated at Lessor's option as a monetary default hereunder pursuant to and subject to all of the provisions of Section 10.2 hereof. 14.5 Lessee's Right to Perform Lessor's Covenants. If Lessor shall fail in the performance of any of its covenants, obligations or agreements contained in this Lease, and such failure shall continue without Lessor curing or commencing to cure such failure within all applicable grace and/or notice and cure periods, Lessee after ten (10) days additional written notice to Lessor specifying such failure (or shorter notice if any emergency [as defined in Section 14.4 above] exists) may (but without any obligation to do so) perform the same for the account and at the expense of Lessor, and the amount of any payment made or other reasonable expenses (including reasonable attorneys' fees incurred by Lessee for curing such default), with interest thereon at the rate of twelve percent (12 %) per annum or the highest rate then allowed by law, shall be payable by Lessor to Lessee upon demand. This provision is not in lieu of, but is in addition to, any other rights or remedies Lessor may have with respect to any such failure of performance to Lessor. 14.6 Notices. All notices, demands, payments and other communications required to be given or made hereunder shall be in writing and shall be duly given if delivered by hand, messenger, telecopy or reputable overnight courier or if mailed by certified or registered mail, first class postage prepaid, and shall be effectively received upon the date of such delivery or two (2) days after such mailing, to the respective parties hereto at the addresses set forth below, or to such other address furnished in writing to the other party hereto. If to Lessee: Dallas Stars, L.P. 211 Cowboys Parkway Irving, Texas 75063 Attn: Randy Locey With copies to: Southwest Sports Group LLC 1000 Ballpark Way, Suite 400 Arlington, Texas 76011 Attn: Lance Lankford and: Southwest Sports Group LLC 200 Crescent Court, Suite 1065 Dallas, Texas 75201 Attn: Michael Cramer - 31 - euless- 01.doc Page 32 of 38 10/17/00 If to Ground Lessee: Centex /StarCenter Development Company I, L.P. 2728 N. Harwood St. Dallas, Texas 75201 -1516 Attn: David Greenblatt If to Lessor: City of Euless 201 N. Ector Drive Euless, Texas 76039 -3595 Attn: City Manager With a copy to: Cribbs & McFarland 1000 W. Abrams Arlington, Texas 76013 Attn: Bob McFarland 14.7 Successors and Assigns. Except as expressly provided herein, this Agreement may not be assigned without the prior written consent of the other party hereto. Lessee may, without the City's consent, (i) mortgage, pledge, grant a security interest in, or otherwise hypothecate the Leased Premises or this Agreement and (ii) assign this Agreement in whole or in part to any affiliate, parent or other entity related to Lessee or any other person or entity who acquires the Dallas Stars hockey franchise or all or substantially all of Lessee's assets in connection with that party's acquisition and purchase of the Dallas Stars hockey franchise. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the parties and their permitted successors and assigns. 14.8 Amendment. Except as expressly provided herein, neither this Lease nor any term hereof may be amended, waived, discharged or terminated, except by a written instrument signed by the parties hereto. 14.9 Headings and Subheadings. The headings of the articles, sections, paragraphs and subparagraphs of this Lease are for convenience or reference only and in no way define, limit, extend or describe the scope of this Lease or the intent of any provisions hereof. 14.10 Unavoidable Default and Delays. After the date of execution of this Lease, the time within which any party to this Lease shall be required to perform any act under this Lease shall be extended by a period of time equal to the number of days during which performance of such act is delayed by casualty, damage, strikes or lockouts, acts of God, governmental restrictions, failure or inability to secure materials or labor, reason of priority or similar regulations or order of any governmental or regulatory body, enemy action, civil disturbance, fire, unavoidable casualties or any other cause beyond the reasonable control of the party seeking the extension. The provisions of this Section 14.10 shall not operate to excuse either Party from prompt payment of the Base Rental or any other payments required by the terms of this Lease. 14.11 Severability. In the event one or more of the terms or provisions of this Lease or the application thereof to any Party or circumstances shall, to any extent, be held invalid, illegal or unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be - 32 - euless- 01.doc Page 33 of 38 10/17/00 affected thereby, and each term and provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. 14.12 Governing Law. THIS LEASE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE UNITED STATES APPLICABLE THERETO AND THE LAWS OF THE STATE OF TEXAS APPLICABLE TO A LEASE EXECUTED, DELIVERED AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAW. 14.13 Venue for Actions. The venue for any legal action arising out of this Lease shall lie exclusively in Tarrant County, Texas. 14.14 Attorneys' Fees. Should either Party to this Lease engage the services of attorneys or institute legal proceedings to enforce its rights or remedies under this Lease, the prevailing Party to such dispute or proceedings shall be entitled to recover its reasonable attorneys' fees, court costs and similar costs incurred in connection with the resolution of such dispute or the institution, prosecution or defense in such proceedings from the other Party. 14.15 Relationship of Parties. Nothing contained herein shall be deemed or construed by the Parties hereto or by any third party as creating the relationship of principal and agent, partnership, joint venture or any association between the Parties hereto, it being understood and agreed that none of the provisions contained herein or any acts of the Parties in the performance of their respective obligations hereunder shall be deemed to create any relationship between the Parties hereto other than the relationship of Lessor and Lessee. It is understood and agreed that this Lease does not create a joint enterprise, nor does it appoint either Party as an agent of the other for any purpose whatsoever. Neither Party shall in any way assume any of the liability of the other for acts of the other or obligations of the other. Each Party shall be responsible for any and all suits, demands, costs or actions proximately resulting from its own individual acts or omissions. 14.16 Net Lease. It is the intention of Lessor and Lessee that the Base Rental payable under this Lease after the Operational Date and all Impositions and other costs related to Lessee's use or operation of the Leased Premises under this Lease (other than amounts as may be required to be paid by Lessor pursuant to specific provisions of this Lease) shall be absolutely net to Lessor, and that Lessee shall pay during the Term, without any offset or deduction whatsoever (except as may otherwise expressly provided in this Lease), all such Impositions and other costs due by Lessee under this Lease (other than amounts as may be required to be paid (directly or indirectly) by Lessor pursuant to specific provisions of this Lease). 14.17 Lessor's Lien Waiver. Lessor hereby waives all landlord's liens that Lessor might hold, statutory or otherwise, to any of Lessee's (or any Sublessee's) inventory, trade fixtures, equipment or other personal property now or hereafter placed on the Leased Premises. 14.18 Non - Waiver. No Party shall have or be deemed to have waived any default under this Lease by the other Party unless such waiver is embodied in a document signed by the waiving Party that describes the default that is being waived. Further, no Party shall be deemed to have waived its rights to pursue any remedies under this Lease, unless such waiver is embodied in a document signed by such Party that describes any such remedy that is being waived. - 33 - euless- 01.doc Page 34 of 38 10/17/00 14.19 Obligations to Defend Validity of Agreement. If litigation is filed by a third party against Lessee or Lessor in an effort to enjoin either Party's performance of this Lease, the Parties hereto who are named as parties in such action shall take all commercially reasonable steps to support and defend the validity and enforceability of this Lease. Either Party may intervene in any such matter in which the other Party hereto has been named as a defendant. Each Party shall be responsible for its attorneys' fees and costs of litigation. 14.20 Survival. Covenants in this Lease providing for performance after termination of this Lease shall survive the termination of this Lease. 14.21 Entire Agreement. This Lease (including the Exhibits attached hereto and incorporated herein, if any) and the other documents delivered pursuant to this Lease or referenced herein constitute the full and entire understanding and agreement between the Parties with regard to the subject matter hereof. There are no representations, promises or agreements of Lessor, Ground Lessee or Lessee regarding the subject matter of this Lease not contained in this Lease, the Exhibits attached hereto or the other documents delivered pursuant to this Lease or referenced herein. 14.22 Counterparts. This Lease may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. 14.23 Waiver of Consequential Damages. Notwithstanding anything in this Lease, to the contrary, Lessor hereby waives any consequential damages, compensation or claims for inconvenience, loss of business, rents or profits as a result of any injury or damage, whether or not caused by the willful or wrongful act of Lessee or its representatives, agents or employees. Anything to the contrary in this Lease notwithstanding, Lessee hereby waives any consequential damages, compensation or claims for inconvenience, loss of business, rents or profits as a result of any injury or damage, whether or not caused by the willful or wrongful act of Lessor or its representatives, agents or employees. 14.24 Memorandum of Lease Agreement. Upon either party's request, the other party shall execute and allow such party to record in Tarrant County, Texas a Memorandum of Lease Agreement with respect to this Lease. In the event such a memorandum is recorded, the parties agree that upon a termination of this Lease, the parties shall execute and record a termination of such Memorandum of Lease Agreement. 14.25 Memorandum of Ground Lease. Upon the execution of this Lease, Ground Lessee and Lessor shall execute and record in Tarrant County, Texas a Memorandum of Ground Lease with respect to the applicable provisions of this Lease. Upon the Purchase Date, Ground Lessee and Lessor shall execute and record a termination of such Memorandum of Ground Lease. ARTICLE 15 Limitations on Other City Facilities - 34 - euless- 01.doc Page 35 of 38 10/17/00 15.1 Limitations. During the Term (and any extension or renewal of the Term), neither Lessor nor any entity related to Lessor shall, without the prior written consent of Lessee, design, develop, construct or otherwise fund, provide economic or tax benefits to, or participate in the design, development, construction or financing of, any new recreational ice skating facility. Lessor acknowledges that Lessee would suffer irreparable injury as a result of a breach of this Section 15.1 and that Lessee would not have an adequate remedy at law in the event of such breach. Lessor agrees that Lessee may obtain an injunction to enforce this Section 15.1, without the necessity of proving irreparable injury or inadequate remedy at law. ARTICLE 16 Extensions of the Term 16.1 Extensions. Lessee, at its option, may extend the Term for two (2) successive five -year periods by delivering to Lessor a written notice of extension not later than one hundred eighty (180) days prior to the end of the Term or any then effective five -year extension of the Term, as the case may be. During any extension of the Term as provided above, the rights and obligations of Lessor and Lessee under this Lease shall continue throughout such extension period except that (i) the "Term" as used in this Lease shall be extended to include such applicable extension period and (ii) there shall be no Base Rental charged to Lessee during such period. - 35 - euless- 01.doc Page 36 of 38 10/17/00 WITNESS WHEREOF, the parties hereto have executed and delivered this Lease as of the date first set forth above. DALLAS STARS, L.P., by SSG PARTNERSHIP HOLDINGS, LLC, its managing general partner Joseph B. Armes Executive Vice President STATE OF TEXAS COUNTY OF This instrument was acknowledged before me on the day of 1999, by Joseph B. Armes, Executive Vice President of SSG Partnership Holdings, LLC, the managing general partner of Dallas Stars, L.P., a Delaware partnership, on behalf of said partnership. Notary Public in and for the State of Texas My Commission Expires: - 36 - euless- 01.doc Page 37 of 38 10/17/00 CENTEX/STARCENTER DEVELOPMENT COMPANY I, L.P., by CENTEX/STARCENTER GENERAL PARTNER, LLC, its sole general partner David A. Greenblatt Vice President STATE OF TEXAS COUNTY OF This instrument was acknowledged before me on the day of 1999, by David A. Greenblatt, Vice President of Centex/StarCenter General Partner, LLC, the sole general partner of Centex/StarCenter Development Company I, L.P., a Delaware partnership, on behalf of said partnership. Notary Public in and for the State of Texas My Commission Expires: -37- euless- 01.doc Page 38 of 38 10/17/00 CITY OF EULESS Mary Lib Saleh Mayor STATE OF TEXAS COUNTY OF This instrument was acknowledged before me on the day of 1999, by Mary Lib Saleh, Mayor, City of Euless, Texas, a duly incorporated home rule of the State of Texas, located in Tarrant County, Texas, on behalf of said city. Notary Public in and for the State of Texas My Commission Expires: - 38 - 1 ; ' City of Southlake Zoning Districts Y- -d+ 7 ,A.,,,2):40/ ♦y' { �y,J P. MROSE L INININi-1! • , //0/;(0/:fi / 0 7 7,4 4 71/,, - ,./#: yir ''''' 111 :.V, 0" ,, :;,...:4,1‘, , ./../e , '' .);,-4 ny ,P,T.,,,,, X . 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