HomeMy WebLinkAboutStadium Management Agreement - Original July 15, 2007 t`
STADIUM LICENSE, LEASE AND
MANAGEMENT AGREEMENT
BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE
AND
DIAMOND STADIUM GROUP LLC
July 15, 2007
TABLE OF CONTENTS
STADIUM LICENSE, LEASE AND
MANAGEMENT AGREEMENT
By and Between
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE
and
DIAMOND STADIUM GROUP LLC
A. PARTIES TO THE TRANSACTION
The Redevelopment Agency of the City of Lake Elsinore, "Agency"
a public body, corporate and politic
Diamond Stadium Group LLC "DSG"
a California limited partnership
B. DOCUMENTS
Tab No. Document Description
1. Stadium License, Lease and Management Agreement dated for identification
purposes only as of July 15, 2007, by and between Agency and DSG
2. Attornment and Second Amendment to Concession License Agreement by and
between the Agency and Golden State Concessions and Catering, Inc., dated for
identification purposes only as of July 15, 2007
3. Attornment and First Amendment to License Agreement by and between the
Agency and the Lake Elsinore Storm, LP dated for identification purposes only as
of July 15, 2007
4. Attornment and First Amendment to Stadium Field and Maintenance Agreement
by and between the Agency and the Lake Elsinore Storm, LP dated for
identification purposes only as of July 15, 2007
5. Guaranty and Agreement of Jacobs Investment Company, LLC dated for
identification purposes only as of July 15, 2007
6. Parking License dated as of July 15, 2007 by and among DSG, the City of Lake
Elsinore and the Agency
7. Memorandum of Lease, License and Management Agreement dated for
identification purposes as of July 15, 2007 by and between the Agency and DSG
TABLE OF CONTENTS
1. Definitions...............................................................................................................2
2. Effectiveness of Agreement.................................................................................11
2.1. Effective Date; Commencement Date.....................................................11
2.2. Deliveries by DSG on the Effective Date................................................12
2.3. Assignment and Attornment of Stadium Operations Contracts.........12
3. Term of Agreement..............................................................................................13
3.1. Initial Term...............................................................................................13
3.2. Extension...................................................................................................13
3.3. Exercise of Option to Extend..................................................................14
3.4. Right to Terminate...................................................................................14
4. License...................................................................................................................14
4.1. License Grant...........................................................................................14
4.2. Professional Baseball...............................................................................15
4.3. Name of the Team....................................................................................15
4.4. Intentionally Omitted. .............................................................................15
4.5. Use of Offices and Other Areas of the Stadium....................................15
4.6. Concourse Signage...................................................................................16
4.7. Agency Right of Entry.............................................................................16
4.8. Stadium Naming Rights ..........................................................................16
4.9. Licensed Merchandise Sales....................................................................18
4.10. Tickets to Storm Games ..........................................................................18
4.11. Agency Suite and Parking at Storm Games and Other Storm Events 18
4.12. Lehr Seats and Parking...........................................................................18
4.13. Broadcast Rights......................................................................................18
4.14. Marketing or Advertising of the Stadium .............................................19
4.15. Display of Lake Elsinore Logo and Other City Advertising................19
5. Concession Services at the Premises...................................................................19
5.1. The Stadium .............................................................................................19
5.2. Diamond Club ..........................................................................................19
5.3. The Parking Lot.......................................................................................20
5.4. City Merchandise.....................................................................................20
5.5. Quality of Service.....................................................................................21
5.6. Maintenance, Refuse and Hazardous Materials...................................21
5.7. Additional Duties .....................................................................................22
5.8. Proceedings Involving Licenses and Permits.........................................23
5.9. Mechanics Lien.........................................................................................24
5.10. Products and Prices .................................................................................24
5.11. Specialty Products....................................................................................25
5.12. Altering Facilities.....................................................................................25
5.13. Fair Wages and Hours.............................................................................25
TABLE OF CONTENTS
(continued)
6. Demise of Premises...............................................................................................25
6.1. Inspection..................................................................................................25
6.2. Lease..........................................................................................................26
6.3. Actions by the Agency Prior to the Lease Commencement Date ........26
6.4. Deliveries by Agency on the Lease Commencement Date....................26
7. Operating Income and Expenses........................................................................26
7.1. DSG Responsibility for Operating Expenses.........................................26
7.2. Agency Contribution for Operating Expense .......................................26
7.3. Operating Income....................................................................................27
7.4. DSG's Rights to Possession .....................................................................27
7.5. Off-Premises Parking ..............................................................................27
8. Alterations, Improvements and Capital Repairs..............................................27
8.1. DSG Responsibility..................................................................................27
8.2. Agency Responsibility..............................................................................28
9. Taxes, Assessments and Utility Charges and Fees; Right to Contest..............30
9.1. Taxes and Assessments............................................................................30
9.2. Utility Charges .........................................................................................30
9.3. Obligation to File Taxes...........................................................................30
9.4. Permit Fees ...............................................................................................31
9.5. Possessory Taxable Interest....................................................................31
9.6. Right to Contest........................................................................................31
10. Use, Management, Maintenance and Operation of the Premises....................32
10.1. Use of the Premises ..................................................................................32
10.2. Maintenance and Repair.........................................................................32
10.3. DSG Improvements and Alterations......................................................35
10.4. On-Site Office...........................................................................................36
10.5. Operation and Management...................................................................36
10.6. Freeway Sign ............................................................................................37
11. Agency Suite.........................................................................................................38
11.1. Storm Games and Other Storm Events .................................................38
11.2. Other Stadium Events .............................................................................38
11.3. Agency Access to Agency Suite...............................................................39
11.4. Relocation of Agency Suite......................................................................39
11.5. No Negative Changes...............................................................................39
12. Covenants, Representations and Warranties....................................................39
12.1. Covenants, Representations and Warranties of Agency......................39
12.2. Covenants, Representations and Warranties of DSG ..........................41
13. Compliance with Laws; Hazardous Materials..................................................43
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TABLE OF CONTENTS
(continued)
13.1. Compliance with Laws ............................................................................43
13.2. Hazardous Materials ...............................................................................43
14. Mechanics' Liens and Encumbrances; Title to Improvements; Surrender...45
14.1. Liens and Encumbrances........................................................................45
14.2. Title to DSG Improvements and Alterations.........................................47
14.3. Surrender..................................................................................................47
15. Damage and Destruction.....................................................................................47
15.1. Notice.........................................................................................................47
15.2. Restoration or Termination ....................................................................47
15.3. Application of Proceeds...........................................................................48
16. Insurance ..............................................................................................................48
16.1. Insurance to be Provided by DSG..........................................................48
16.3 Requirements............................................................................................50
16.4 Certificates; Cancellation of DSG's Insurance .....................................50
17. Indemnity..............................................................................................................51
18. Assignment; Nonsubordination to Leasehold ...................................................52
18.1. Assignment; Prior Consent.....................................................................52
18.2. Additional Transfers Requiring the Prior Written Consent of Agency53
18.3. Consent of Agency....................................................................................53
18.4. Effect of Consent; Release of DSG.........................................................54
18.5. Agency Costs of Assignment...................................................................54
18.6. Assignment by Agency.............................................................................55
19. Subleases, Licenses and Concession Agreements..............................................55
20. Default...................................................................................................................55
20.1. DSG Defaults............................................................................................55
20.2. Agency's Remedies...................................................................................56
20.3. Default by Agency....................................................................................57
20.4. DSG's Remedies.......................................................................................58
20.5. No Waiver.................................................................................................58
20.6. Cumulative Rights ...................................................................................58
21. DSG Holding Over...............................................................................................59
22. Condemnation......................................................................................................59
22.1. Total ..........................................................................................................59
22.2. Partial Taking...........................................................................................59
22.3. Allocation of Compensation....................................................................59
22.4. Temporary Taking...................................................................................60
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TABLE OF CONTENTS
(continued)
23. DSG Protection From Mortgage.........................................................................60
24. Agency's Entry on Premises................................................................................60
25. Non-Discrimination Covenants...........................................................................60
26. Attorneys' Fees.....................................................................................................61
27. Estoppel Certificates............................................................................................61
28. Covenant of Quiet Enjoyment............................................................................62
29. Notices...................................................................................................................62
30. Authority...............................................................................................................63
31. General..................................................................................................................63
31.1. Governing Law......................................................................................63
31.2. Covenants and Conditions ...................................................................63
31.3. Waiver....................................................................................................63
31.4. Brokers...................................................................................................63
31.5. Table of Contents; Headings................................................................63
31.6. Gender; Number...................................................................................64
31.7. Entire Agreement; Modification..........................................................64
31.8. Severability............................................................................................64
31.9. Successors ..............................................................................................64
31.10. Administration; Consent of Agency and DSG ...................................64
31.11. No Merger of Title ................................................................................65
31.12. Recordation of Memorandum of Agreement .....................................65
31.13. Execution in Counterparts...................................................................65
31.14. Time is of the Essence; Force Majeure Delays; Extension of Times of
Performance ..........................................................................................65
31.15. Confidentiality.......................................................................................66
-iv-
ATTACHMENTS
ATTACHMENT A DESCRIPTION OF LAND
ATTACHMENT B STADIUM OPERATIONS CONTRACTS
ATTACHMENT C ADVERTISING ELEMENTS
ATTACHMENT D OTHER CONTRACTS
ATTACHMENT E LICENSES AND PERMITS
ATTACHMENT F MAINTENANCE STANDARDS
ATTACHMENT G RESERVED
ATTACHMENT H EQUIPMENT
ATTACHMENTI GUARANTY
ATTACHMENT J PARKING LICENSE
ATTACHMENT K CONCESSION EQUIPMENT AND FACILITIES
ATTACHMENT L MEMORANDUM OF AGREEMENT
ATTACHMENT M SCHEDULE OF CONDITION OF PREMISES
ATTACHMENT N SCHEDULE OF AGENCY INSURANCE
ATTACHMENT O SCHEDULE OF DSG INSURANCE
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STADIUM LICENSE, LEASE AND MANAGEMENT AGREEMENT
THIS STADIUM LICENSE, LEASE AND MANAGEMENT AGREEMENT (this
"Agreement"), dated as of July 15, 2007 (the "Effective Date"), is made by and between the
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, a public body,
corporate and politic ("Agenc "), and DIAMOND STADIUM GROUP LLC, a California
limited liability company ("DSG").
RECITALS
The following recitals are a substantive part of this Agreement:
A. The Agency is a redevelopment agency existing pursuant to the provisions of the
California Community Redevelopment Law (California Health & Safety Code Section 33000, et
seq.) which has been authorized to transact business pursuant to action of the City of Lake
Elsinore (the "City").
B. The City Council of the City of Lake Elsinore adopted a redevelopment plan (the
"Redevelopment Plan") for an area within the City known as the Rancho Laguna Redevelopment
Project Area 3 (the "Project Area") by way of its approval of Ordinance No. 815 on September 8,
1987, as thereafter amended by Ordinance No. 987 adopted on November 22, 1994.
C. Agency is the owner of certain real property located within the East Lake Specific
Plan Area and the Rancho Laguna Redevelopment Project Area 3 of the City of Lake Elsinore,
County of Riverside, State of California, all as more fully described in Attachment "A", together
with all rights, privileges and easements appurtenant thereto (the "Land").
D. Many improvements are located on the Land, including a stadium, baseball field,
parking lot and related facilities commonly known as the "Lake Elsinore Diamond" (collectively,
the "Stadium"). The Land, the Stadium, the Personal Property (as defined below) and all other
Improvements (as defined below) located on the Land are referred to collectively as the
"Premises."
E. Agency has entered into certain agreements involving the Premises that are in
force as of the Effective Date and described in this Agreement as the "Stadium Operations
Contracts." Certain of the Stadium Operations Contracts have been entered into with the Storm,
LLC, a California limited liability company (the "Storm LLC"). The sole Member of Storm LLC
was Lake Elsinore Storm L.P., a California limited liability company (the "Storm LP"). Storm
LLC has been merged into Storm LP, with Storm LP being the surviving entity. Storm LP has
assumed all rights and obligations under the Stadium Operations Contracts by operation of law.
Pursuant to such Stadium Operations Contracts, Storm LP has been licensing the Stadium for
baseball games and maintaining the Stadium. An affiliate of the Storm LP, Golden State
Concessions and Catering, Inc., a California corporation ("Golden State"), has been operating the
concessions at the Stadium.
F. Storm LP is the owner and operator of the "Lake Elsinore Storm," a single "A"
baseball team which is a member of the California League of the National Association of
Professional Baseball. Storm LP and the Agency desire that the Lake Elsinore Storm continue to
play its home baseball games at the Stadium. For so long as this Agreement is in full force and
effect, the rights and obligations under the Stadium Operations Contracts in favor of the Agency
are assigned to DSG and assumed by DSG pursuant to the terms and conditions set forth herein.
During the term of this Agreement, Storm LP and Golden State shall attorn to DSG all of their
respective obligations under the Stadium Operations Contracts and Agency shall have no rights
or obligations of performance therein.
G. The owners of Storm LP have formed DSG for the purpose of managing the
Premises and entering into this Agreement. Storm LP and DSG share common controlling
ownership.
H. The Agency and DSG desire to enter into an agreement which provides for the
exclusive management, lease and operation of the Premises by DSG and the contribution by the
Agency to certain operating expenses and capital improvement costs.
I. The purpose of this Agreement is to effectuate the Redevelopment Plan by
granting to DSG all rights necessary to manage and operate the Premises in accordance with the
terms set forth herein.
J. The lease of the Premises and the management and operation thereof by DSG
under the conditions specified herein, and the fulfillment generally of this Agreement, are in the
vital and best interest of the Agency, the City and the health, safety, and welfare of its residents,
and in accord with the public purposes and provisions of the applicable federal, state and local
laws and requirements under which this action has been undertaken.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Agency and DSG hereby agree as follows:
1. Definitions
All references to Sections or Attachments refer to this Agreement. As used in this
Agreement, capitalized words and phrases set forth in the body of this Agreement shall have the
following meanings:
"Agency" means the Redevelopment Agency of the City of Lake Elsinore, a
public body, corporate and politic, and its successors and assigns.
"Agency Monetary Defauh"is defined in Section 20.3(a).
"Advertising Elements" means the elements set forth on the list attached as
Attachment "C" and incorporated herein by reference.
"Agency Parking" means the ten (10) parking spaces set aside in the Stadium's
reserved parking area as described in the Agency Suite License for use by the Agency in
conjunction with the Agency Suite.
"Agency Suite" shall mean the viewing suite located at the Stadium described in
the Agency Suite License.
Stadium Management Agt FINAL Q.doc -2-
"Agency Suite License" means the license entered into concurrently herewith
substantially in the form of Attachment "J".
"Alteration" means any material addition or modification of the Premises,
including (without limitation) fixtures, and permanently affixed equipment that constitutes, or
upon addition would constitute, a portion of the Premises.
"Amendments to Stadium Operations Contracts" means, collectively, the
following documents to be entered into by the Agency and the Storm Entities concurrently
herewith: (i) First Amendment to License Agreement; (ii) First Amendment to Stadium Field and
Maintenance Agreement; and (iii) Second Amendment to Concession License Agreement.
"Assignee's Assumption"is defined in Section 18.4.
"Assignment of Agreements" means the written assignment or transfer, to the
extent legally permissible, of all of Agency's right, title, interests, privileges, benefits and
remedies in, to and under Licenses and Permits and all warranties and guarantees relating to such
Improvements installed as of the Lease Commencement Date, for the duration of the Term, all in
a form reasonably acceptable to DSG to be duly executed and delivered by Agency.
"Assignment of Records and Plans" means a written assignment or transfer, to
the maximum extent legally permissible, of all of Agency's right, title, interest, privilege, benefit
and remedy in, to and under the Records and Plans in a form reasonably acceptable to DSG, to be
duly executed and delivered by Agency.
"Attornment Agreement" means the Assignment, Assumption, Attornment and
Nondisturbance Agreement, dated as of July 1, 2004 for identification purposes only, by and
between the Agency, Storm LP, Golden State Concessions and Catering, Inc., and Impact
Stadium, LLC, as amended by Amendment No. 1 thereto dated July 1, 2004.
"Award" means the amount of any award made, compensation paid, or damages
ordered as a result of a Taking.
"Best of Agency's Knowledge" shall mean the actual knowledge of the Agency's
Executive Director, after reasonable search and inquiry of other staff of City and Agency familiar
with the operation of the Premises and/or regarding the subject matter of the covenant,
representation and warranty.
"Best of DSG's Knowledge" shall mean to the actual knowledge of Gary Jacobs,
or the successor controlling owner of DSG, subject to the limitations on assignment contained
herein, after reasonable search and inquiry of DSG's staff familiar with the subject matter of the
covenant, representation and warranty.
"Broadcast Rights" shall mean the exclusive worldwide right, on a live or
delayed basis, to produce and distribute programming by means of the transmission or
retransmission of electronic signals by any manner or means now known or hereafter devised
including, without limitation, over-the-air VHF and UHF signals, cable (basic, premium and pay-
per-view), multi-channel distribution systems, wire, fiber, microwave, satellite, master antenna
and direct broadcast satellite, as well as recorded visual images with or without sound, including,
but not limited to, photographs, films, videotapes and cartridges.
Stadium Management Agt FINAL,vldoc -3-
"Capital Repair Fund"is defined in Section 8.2.
"Capital Repairs" means all labor and materials reasonably required to repair,
refurbish, modify, restore and/or replace, when reasonably necessary, the Improvements or
portions or components thereof, as may be generally required to maintain the integrity of the
existing Stadium facility and its infrastructure elements and including replacement of the
Equipment, but excluding new improvements and additions that enhance the revenue-generating
potential of the Stadium except as otherwise agreed to in this Agreement. Capital Repairs
include repairs to Stadium infrastructure damage or repairs due to earthquake, flood, acts of
terror, acts of God or any other deity, and similar catastrophic acts beyond the control of the
Parties, except that the Agency shall be required under this Agreement to make Capital Repairs
necessitated as a result of a flood or earthquake or other event beyond the control of the Agency
only to the extent of the insurance proceeds received the Agency.
Capital Repairs shall not include the following: (a) the cost of the replacement and
repositioning of field lighting, except for the Agency's obligations to relamp and reposition the
field lighting prior to the Lease Commencement Date; (b) repair and replacement (if necessary)
of the Stadium scoreboard, Video Message Boards and TriVisions; (c) repair and replacement (if
necessary) of the sound system, including amplifiers, control panels and speakers; (d)
regular/standard maintenance contracts with outside vendors performing recurring maintenance;
and (e) Routine Maintenance.
"Catering Services" means the sale of Refreshments within the Diamond Club,
and off-site events.
"City"means the City of Lake Elsinore, a municipal corporation.
"City Remnant Parcel"is defined in Section 10.6.
"Claims"is defined in Section 17.
"Community Redevelopment Law" means California Health & Safety Code
Sections 33000, et. seq., as the same now exists or may be hereinafter revised.
"Concession Agreement" means that certain Concession License Agreement
entered into on January 30, 2002 by and between the Agency and Golden State Concessions and
Catering, Inc., as amended by (i) that certain Amendment to Concession License Agreement,
dated November 1, 2002, (ii) the Attornment Agreement, and (iii) that certain Second
Amendment to Concession License Agreement entered into by the Agency and Golden State
Concessions and Catering, Inc. concurrently herewith.
"Concession Equipment" means all the equipment shown on Attachment "K" to
be used by DSG from time to time on the Premises pursuant to this Agreement.
"Concession Facilities" means all the facilities as shown on Attachment "K" to
be used by DSG or its licensee on the Premises pursuant to this Agreement.
"Concession License"is defined in Section 5.
Stadium Management Agt FINAL v2.doc -4-
"Concession Services" means the sale of Refreshments from fixed concession
stands, bars, booths, kiosks, and mobile stands on the Premises, sales made by roving vendors
and hawkers and Catering Services.
"Confidential Information"is defined in Section 31.15.
"Date of Taking" means the earlier of the date upon which title to the Premises,
an interest therein, or a portion thereof, or rights of DSG under this Lease, passes to and vests in
the condemnor, the date damage related to the exercise of the power of condemnation is suffered,
or the effective date of any order for possession if that order is issued prior to the date title vests
in the condemnor.
"DDA" means the Disposition and Development Agreement entered into on
December 26, 2002 by and between the Agency, Laing, and Civic Partners-Elsinore LLC
previously provided to DSG by the Agency and on file as a public record with the Agency
Secretary/City Clerk.
"Default by Agency"is defined in Section 20.3.
"Default by DSG"is defined in Section 20.1.
"Development Agreement" means that certain First Amended and Restated
Development Agreement entered into by Laing and City on August 24, 2004, covering certain
property, including Parking Lot C, which was recorded on December 17, 2004 as Document No.
1001282, in the Official Records of the Riverside County Recorder.
"DSG" means Diamond Stadium Group LLC, a California limited liability
company.
"DSG Liens"is defined in Section 14.1(a).
"DSG Taxes"is defined in Section 9.1.
"Effective Date"means July 15, 2007.
"Equipment" means the maintenance and other equipment used in connection
with the maintenance of the Stadium as identified in Attachment "H" hereto and incorporated
herein.
"Executive Director" means the Agency's Executive Director or her or his
designee.
"Expiration Date" means December 31, 2016, as such date may be extended
pursuant to Section 3.2.
"First Extension Term"is defined in Section 3.2.
"Force Majeure"is defined in Section 31.14.
"Force Majeure Extension"is defined in Section 31.14.
"Golden State"is defined in Recital E.
Stadium Management Agt FINAL vldoc -5-
"Governmental Regulations" means all local, state, and federal laws, ordinances,
rules, requirements, resolutions, policy statements and regulations (including, without limitation,
those relating to land use, subdivision, zoning, environmental, labor relations, prevailing wage,
notification of sale to employees, Hazardous Materials, occupational Health & Safety, water,
earthquake hazard reduction and building and fire codes) bearing on the alteration, replacement,
repair, refurbishment, improvement, rehabilitation, maintenance, management, use, or operation
of the Premises.
"Guaranty" means a Guaranty, substantially in the form of Attachment "I"
hereto, to be signed by Gary Jacobs and delivered to the Agency on the Effective Date.
"Hazardous Materials" means any hazardous or toxic substance, material or
waste, which is or becomes designated, classified or regulated by any local governmental
authority, any agency of the State of California or any agency of the United States Government.
The term "Hazardous Materials" includes (without limitation) any material or substance which
(1) contains petroleum or any petroleum by-products, (ii) contains asbestos, (iii) contains urea
formaldehyde foam insulation, (iv) constitutes a chlorinated solvent, (v) constitutes a
polychlorinated biphenyl, (vi) constitutes a flammable explosive, (vii) consists of aluminum and
aluminum compounds, (viii) is designated, classified or regulated as a "hazardous" or "toxic"
substance, material or waste pursuant the Federal Water Pollution Control Act (33 U.S.C.
Sections et seq. 1317), the Federal Resource Conservation and Recovery Act (42 U.S.C. Sections
6901 et seq.), the Comprehensive Environmental Response, Compensation and Liability Act, (42
U.S.C. Sections 9601 et seq.), under Sections 25115, 25117, 25122.7, and 2514, of the California
Health & Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), under
Section 25316 of the California Health & Safety Code, Division 20, Chapter 6.8 (Carpenter-
Presley-Tanner Hazardous Substance Account Act), under Section 25501 of the California
Health & Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans
and Inventory), under Section 25281 of the California Health & Safety Code, Division 20,
Chapter 6.7 (Underground Storage of Hazardous Substances), and under Article 11 of Title 22 of
the California Code of Regulations, Division 4, Chapter 20. Each reference to a statute or law in
this definition shall be deemed to include any amendments thereto which are enacted from time
to time.
"Improvements" means all structures, fixtures, and appurtenances of every type
and kind located on the Premises, including (but not limited to) buildings, outbuildings, and
structural components thereof, including walls, ceilings, roofs, floors, windows, and doors;
concrete components, including concourse, mezzanine, terrace and fun zone area; seats; suites;
fences; screening walls; retaining walls; walkways; curbing; paving; railings; stairs; elevator;
baseball field and turf; driveways; parking areas; parkways; poles; signs; tanks; equipment that is
affixed to the Premises; heating, air conditioning, ventilating, plumbing, and electrical systems;
fire and sprinkler systems, standpipes, hoses, alarm systems (fire and security); field and stadium
irrigation and drainage systems; stadium lighting system; scoreboard; sound system, antennas
and other equipment for the reception or transmission of radio, television, microwave,
electromagnetic, or other communication systems, and any device that alters the natural flow of
water from any property adjoining the Premises.
"Initial Term"is defined in Section 3.1.
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"Interest" means ten percent (10%) per annum from the date any amount is due
under this Lease until such payment is paid; provided however, that Interest will in no event
exceed the maximum interest rate permitted to be charged by applicable law.
"Laing" means Laing-CP Lake Elsinore LLC, a California limited liability
company.
"Lake Elsinore Diamond"is defined in Recital D.
"Lake Elsinore Storm"is defined in Recital F.
"Land"is described in Attachment "A."
"League"means the California League of Professional Baseball, Inc., a California
nonprofit corporation.
"Lease"means the lease of the Premises to DSG pursuant to Section 6.
"Lease Commencement Date"means August 1, 2007.
"Lehr Family Seats" shall mean and refer to the eight (8) box seats located at the
Stadium identified as Super Box 5.
"Lehr Agreement" shall mean the First Amendment to Amended and Restated
Option Agreement Under Threat of Condemnation dated August 5, 1993 and the attachments and
exhibits thereto, a copy of which has been provided to DSG and is on file with the City Clerk's
office as a public record.
"License"is defined in Section 4.1.
"Licenses and Permits" means all presently existing or subsequently obtained
governmental authorizations, approvals, permits, licenses, variances, tentative maps, final maps,
plans and specifications and environmental and land use entitlements and approvals held by
Agency relating to the construction, reconstruction, occupancy, management, operation,
maintenance, repair or use of any part of the Premises or the Personal Property (e.g., all building
permits, certificates of occupancy, and business licenses) as amended or reissued from time to
time, including but not limited to those Licenses and Permits that are set forth on Attachment
"License Agreement" means that certain License Agreement entered into on
March 15, 2001 by and between the Agency and Storm LP, as amended by (i) the Attornment
Agreement, and (ii) that certain First Amendment to License Agreement entered into
concurrently herewith.
"Lien" means any mortgages, deeds of trust, laborer's, mechanic's and
materialman's liens, indentures, bond issues, Taxes, special assessments, charges, or other
assessments or security interests related to public or private financing encumbering the Premises
or Agency's good, marketable, insurable and indefeasible, fee simple interest therein.
"Maintenance Agreement" means that certain Stadium Field and Maintenance
Agreement entered into on March 15, 2001 by and between the Agency and Storm LP, as
Stadium Management Agt FINAL v2.doc -7-
amended by (i) the Attornment Agreement, and (ii) that certain First Amendment to Stadium
Field and Maintenance Agreement entered into concurrently herewith.
"Maintenance Consultant"is defined in Section 10.2(b).
"Maintenance Standards" means the Maintenance Standards set forth in
Attachment"F".
"Memorandum of Agreement" means the Memorandum of Lease, License and
Management Agreement in substantially the form of Attachment "U.
"Mobile Stands" means all portable concession stands and bars, carts and kiosks
used for Concession Services.
"Naming Rights"means the naming rights to the Stadium.
"Naming Rights Agreement"is defined in Section 4.8(b) of this Agreement.
"Notice Address" means respectively the address of the DSG and Agency as
changed from time to time in accordance with Section 29.
"Off-Premises Parking" means the overflow parking provided in Parking Lot C
as of the Lease Commencement Date.
"Other Agency Events"is defined in Section 5.2(b).
"Other Contracts" means all service, management, equipment and maintenance
contracts, and other personal and real property contracts and leases, warranties, guarantees, and
bonds and any other similar obligations, commitments or arrangements in force as of the Lease
Commencement Date, to which Agency is a party together with all supplements, amendments
and modifications thereto, relating to the construction, maintenance, repair, refurbishing,
development, marketing, or management of the Premises, including but not limited to those set
forth on Attachment"D".
"Other Stadium Events" means any event held at the Stadium which is not a
Storm Event or Other Storm Event.
"Other Storm Events" means non-baseball related exhibitions or events held by
the Storm.
"NAPBL" means the National Association of Professional Baseball Leagues
(otherwise known as official "Minor League Baseball'') of which the League is a member.
"Parking Easement" means that certain Grant of Easements and Agreement
Regarding Interim Stadium Parking Replacement Plan between Laing, the Agency and the City
dated November 14, 2005, recorded as Instrument No. 1010706 on December 7, 2005 in the
official records of Riverside County, California.
"Parking License" means the license to use Parking Lot C substantially in the
form of Attachment "J".
"Parking Lot C"is defined in Recitals E of the Parking License.
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"Partial Taking" means a Taking of a portion of the Premises or of the rights of
DSG under this Lease so as not to prevent or materially impair the use by DSG of the Premises
as provided in this Lease.
"Partial Temporary Taking"means a Partial Taking for a temporary period.
"Party" means Agency or DSG; "Parties" means Agency and DSG or their
respective Permitted Assignees.
"Permitted Assignees"is defined in Section 18.1.
"Permitted Contest"is defined in Section 9.6.
"Permitted Use" means the management, use and operation of the Premises as a
baseball stadium and as a facility for hosting other events that are consistent with the
Redevelopment Plan and with an emphasis on a family-oriented theme. For example, but not by
way of limitation, Permitted Uses include restaurant and other food and beverage service, racing,
soccer, football and other spectator athletic events, concerts, conventions, conferences, meetings,
receptions, expos, fairs, displays, educational programs, seminars, sales and promotional events
and similar and related activities such as car, recreational vehicle and boat shows and home and
garden shows. DSG may permit complementary ancillary uses such as the sale of sports
paraphernalia, recorded music, videos, books, promotional clothing, souvenirs, food, liquor and
other retail items. Permitted Uses will not include any bankruptcy, fire, "lost our lease," "going
out of business sale," or similar sale or auction, nor will it include any used automobile sale,
except as may be approved by the Agency.
"Personal Property" means all equipment and other personal property owned or
leased by Agency and exclusively used in connection with the management, lease, use, repair,
maintenance and operation of the Premises and all such equipment and personal property, which
will be owned by Agency pursuant to the terms of any Leases and Contracts.
"Practices"is defined in Section 4.2(b) of this License.
"Premises"is defined in Recital D.
"Prior Agreements" means, collectively, the following agreements, to the extent
such agreements apply to the Premises after the Lease Commencement Date: (i) the DDA; and
(ii) the Lehr Agreement.
"Project Area"is defined in Recital B.
"Records and Plans" means all (i) books and records maintained in connection
with the ownership, development, construction, management, leasing, use, maintenance or
operation of the Stadium, (ii)preliminary, final and "as-built" plans and specifications for the
Stadium, and (iii) and all other documents such as structural reviews, architectural drawings, and
engineering, soil, environmental, seismic, geologic, hydrological, safety, and architectural
reports, studies, approvals, licenses, permits, certificates and other documents pertaining to the
Stadium (including those which include comments by any governmental agency with
jurisdiction, or building, fire or safety engineer, inspector or other person who regularly makes
such inspections) that are contained in the"Diamond Stadium" files in the possession of Agency.
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"Redevelopment Plan"is defined in Recital B.
"Refreshments" means all food, alcoholic and non-alcoholic beverage products,
including, but not limited to meals, snacks, confections, candies, vending items, soft drinks, beer
and cocktails.
"Replacement Parking Plan"is defined in Section 7.5.
"Retail Store" means the retail store at the Stadium depicted on the Site Map and
labeled "Retail Store."
"Roadside Electronic Billboard"is defined in Section 10.6.
"Routine Maintenance"means the provision of all labor and materials, which are
reasonably required to: (a) keep the Premises in first class condition and repair; and (b) keep the
Premises in accordance with the Maintenance Standards.
"Schedule of Agency Insurance" means the schedule set forth on Attachment
«N
"Schedule of Condition of Premises" means the schedule set forth on
Attachment "M."
"Schedule of DSG Insurance"means the schedule set forth on Attachment "O".
"Scoreboard"means the baseball scoreboard located in right field.
"Second Extension Term"is defined in Section 3.2.
"Stadium"is defined in Recital D.
"Stadium Operations Contracts"means, collectively: the License Agreement, the
Maintenance Agreement, and the Concession Agreement attached hereto as Attachment "B".
"Stadium Operations Director" shall mean the person or entity identified and
retained by the DSG to manage the Stadium.
"Storm" means the "Lake Elsinore Storm," a single "A" baseball team and a
member of the California League of the National Association of Professional Baseball that as of
the Effective Date plays its games at the Stadium pursuant to the terms of the License
Agreement. Subject to the prior written approval of the Agency, "Storm" shall include any
successor baseball team, which team shall be another single "A" or higher level baseball team
which is a member of the League
"Storm Entities" mean Storm LP and Golden State Concessions and Catering,
Inc., who are parties, along with the Agency and City, to the Stadium Operations Contracts. The
Storm Entities share common controlling ownership with DSG.
"Storm Games" is defined in Section 4.2(c) of this Agreement and, additionally,
shall include baseball games of any subsequent professional baseball team.
"Storm LLC"is defined in Recital E.
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"Storm LP" means the Lake Elsinore Storm LP, a California limited partnership.
Storm LP and DSG share common controlling ownership.
"Storm Office" means that office space at the Stadium depicted on the Site Map
and labeled "Storm Office."
"Storm Storage Areas" means the storage space at the Stadium depicted on the
Site Map and labeled "Storm Storage Area." In the event that mobile storage containers are
located on the Premises, the term "Storm Storage Areas" as utilized herein shall include such
mobile storage containers.
"Taking" means a taking of the Premises or an interest therein, or rights of DSG
under this Lease, pursuant to, or damage related to the exercise of, the power of condemnation or
any power of taking for public or quasi-public use, and includes a voluntary conveyance to any
agency, authority, public utility, person, corporation, or other entity empowered to condemn
property in lieu of court proceedings.
"Taxes" means taxes, assessments, license or permit fees, excises, imposts and
charges of every nature and classification, including (without limitation) real property taxes.
"Taxing Authorities"is defined in Section 9.1.
"Ticket Sales Office" means the ticket sales office depicted on the Site Map and
labeled "Ticket Sales Office."
"Term"means the Initial Term and any extensions as set forth in Section 3.2.
"Total Taking"means a Taking of the entire Premises or so much of the Premises
or of the rights of DSG under this Lease as to prevent or materially impair the use by DSG of the
Premises as provided in this Lease.
"Total or Partial Temporary Taking" means a Total or Partial Taking for a
temporary period of time.
"Underlying Claim" means a potential dispute concerning this Agreement
between the parties to the Lehr Agreement with respect to Exhibit C to the Lehr Agreement.
"Utility Charges" means all charges for all public or private utility services,
including (but not limited to) water, sewer, gas, light, heat and air conditioning, telephone,
electricity, cable television, trash removal, power and other utility and communications services.
"Video Message Boards" means the programmable video boards for the display
of advertising and player information which are located in left field and right center field.
2. Effectiveness of Agreement
2.1. Effective Date; Commencement Date
This Agreement shall become binding upon the Parties upon the Effective
Date. Notwithstanding the foregoing, except as set forth herein, the rights and obligations of the
Stadium Management Agt FINAL Q.doc
Parties with respect to the demise of the Premises and the occupation, license and management of
the Premises by DSG shall commence upon the Lease Commencement Date.
2.2. Deliveries by DSG on the Effective Date
On the Effective Date, DSG shall deliver to Agency the Amendments to
Stadium Operations Contracts, executed by the appropriate representatives of the Storm Entities,
which such amendments constitute a portion of the consideration for the Agency's entrance into
this Agreement.
2.3. Assignment and Attornment of Stadium Operations Contracts
Upon the Lease Commencement Date, Agency hereby assigns all of its
rights under the Stadium Operations Contracts to DSG, including the right to receive revenues or
license fees thereunder, for so long as this Agreement is in full force and effect. Because the
Storm Entities and DSG share common control, Agency has agreed that DSG and the Storm
Entities may determine among themselves how the rights under the Stadium Operations
Contracts will accrue to each of them and that DSG and the Storm Entities may determine how
the obligations and performances required by DSG and the Storm Entities under the Stadium
Operations Contracts shall be tendered by each of them. Notwithstanding the foregoing, no
course of dealing and/or waiver between DSG and the Storm Entities shall be binding upon the
Agency, and DSG shall not be permitted to amend the Stadium Operations Contracts without the
prior written consent of the Agency. Further, Agency shall retain (a) the right to declare a breach
by the Storm Entities under the Stadium Operations Contracts, provided that Agency shall
provide DSG with notice of such breach in accordance with the terms and conditions of this
Agreement (b) the right to seek any remedies for such breach by the Storm Entities permitted by
the Stadium Operations Contracts, (c) the right to approve or disapprove the assignment of any of
the Stadium Operations Contracts by any of the Storm Entities; and (d) the right to cure any
breach by DSG under the Storm Operations Contracts.
Upon the Lease Commencement Date, DSG hereby assumes all of the
Agency's rights and obligations under the Stadium Operations Contracts for so long as this
Agreement is in full force and effect. DSG agrees to enforce the rights of the Agency as against
the Storm Entities such that the rights of the Agency under the Stadium Operations Contracts
shall not suffer any diminution during the term of this Agreement. Though the Storm Entities
and DSG share common control, DSG agrees to preserve the value of the underlying rights and
obligations of the Agency under the Stadium Operations Contracts. DSG agrees to copy the
Agency on any notice of breach given to the Storm Entities, and agrees that it will not terminate
any of the Stadium Operations Contracts without the prior written consent of the Agency. DSG
shall promptly notify the Agency of the receipt of any notice of breach given by the Storm
Entities under the Stadium Operations Contracts and provide the Agency with a copy thereof.
DSG further agrees that, in the event of a breach by DSG under the Stadium Operations
Contracts, Agency shall have the right, but not the obligation, to cure such breach by DSG.
Pursuant to the Amendments to Stadium Operations Contracts, the Storm
Entities have accepted such assignment and assumption and have agreed to look exclusively to
DSG for performance of Agency's obligations under the Stadium Operations Contracts. DSG
covenants and agrees to pay, defend (with counsel reasonably acceptable to Agency), indemnify
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and save harmless Agency, its officers, employees, agents, and representatives, from and against
any and all Claims (including, without limitation, all attorneys' fees and litigation expenses),
including, without limitation, death of or injury to any person or damage to any property, based
upon, arising from or connected in any manner with any action or failure to act of DSG under the
Stadium Operations Contracts.
If the Lease and/or Licenses granted herein are terminated for any reason,
then (i) the assignment and assumption of the rights and obligations of the parties under the
Stadium Operations Contracts shall terminate, (ii) the rights and obligations of the parties
pursuant to the Stadium Operations Contracts, as amended by the Amendment to Stadium
Operations Contracts, shall resume in full force and effect between the Agency and the Storm
Entities; and (iii) DSG shall have no further rights under the Stadium Operations Contracts.
DSG's obligation to indemnify the Agency for its actions under the Stadium Operations
Contracts shall survive any termination of this Agreement or the Lease and/or Licenses granted
herein.
DSG shall have no right to assign its rights and obligations under the
Stadium Operations Contracts except with the prior written consent of the Agency. In the event
of any conflict between this Agreement and the Amendments to Stadium Operations Contracts,
the terms and conditions of this Agreement shall control.
3. Term of Agreement
3.1. Initial Term
The Initial Term shall commence upon the Effective Date or the Lease
Commencement Date, as applicable, and unless sooner terminated or extended under the terms
and conditions of this Agreement, shall continue thereafter until 11:59 p.m., Pacific Time, on
December 31, 2016 (the "Expiration Date").
3.2. Extension
(a) First Extension Term. If DSG validly exercises its option to
extend this Agreement pursuant to and in accordance with Section 3.3 hereof, then, on January 1,
2017, the term of this Agreement shall be extended for one (1) additional period of five (5) years
(the "First Extension Term"). All of the terms and conditions of this Agreement shall apply to
such First Extension Term, and a new Expiration Date shall automatically be established to be
11:59 p.m. Pacific Time on December 31, 2021.
(b) Second Extension Term. Provided that this Agreement remained
in full force and effect throughout the First Extension Term, if DSG validly exercises its option
to extend this Agreement pursuant to and in accordance with Section 3.3 hereof, then, on January
1, 2022, the term of this Agreement shall be automatically extended for another additional period
of five (5) years (the "Second Extension Term''). All of the terms and conditions of this
Agreement shall apply to such Second Extension Term, and a new Expiration Date shall
automatically be established to be 11:59 p.m. Pacific Time on December 31, 2026.
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3.3. Exercise of Option to Extend
If DSG desires to extend this Agreement for the First Extension Term,
then, prior to the October 1 preceding the Expiration Date, DSG shall notify the Agency in
writing of its desire to extend. Such notice shall be accompanied by a check or wire transfer in
the amount of Two Hundred Thousand Dollars ($200,000). If DSG's option to extend is not
exercised by October 1, 2016 in accordance herewith, then this Agreement shall terminate and be
of no further force and effect on the Expiration Date.
If DSG desires to extend this Agreement for the Second Extension Term,
then, prior to the October 1 preceding the Expiration Date, DSG shall notify the Agency in
writing of its desire to extend. Such notice shall be accompanied by a check or wire transfer in
the amount of Four Hundred Thousand Dollars ($400,000). If DSG's option to extend is not
exercised by October 1, 2021 in accordance herewith, then this Agreement shall terminate and be
of no further force and effect on the Expiration Date.
No extension shall become effective if DSG is in material breach of this
Agreement or if a DSG Default is ongoing.
3.4. Right to Terminate
The Agency and DSG shall have the right to terminate this Agreement as a
result of a Default hereunder. Any such termination shall be made in accordance with Section
20.
DSG shall have the right to terminate this Agreement without cause upon
not less than eighteen (18) months written notice; provided, however, that no termination without
cause shall be effective prior to December 31, 2010. If DSG elects to terminate this Agreement,
DSG shall provide written notice on or prior to July 1 in any calendar year during the Term. Any
termination shall be effective as of 11:59 p.m. Pacific Time on December 31 of the following
calendar year.
The Agency shall have the right, but not the obligation, to accelerate the
effective date of any such termination. The Agency may accelerate the effective date of a
termination by providing written notice to DSG within thirty (30) days of receipt of DSG's
written notice of termination. Agency may elect to have such termination become effective as of
January I of the calendar year following the date of DSG's written notice of termination.
Upon the effective date of any termination, (i) all Alterations and
Improvements made by DSG shall accrue to the benefit of the Agency without compensation to
DSG, and (ii) the suspension of the rights and obligations of the parties under the Amendments
to Stadium Operations Contracts shall terminate, and the rights and obligations of the parties
pursuant to the Stadium Operations Contracts shall resume in full force and effect.
4. License
4.1. License Grant
The Agency hereby grants DSG an exclusive license, with the right to
sublicense, to utilize the Premises during the Term for baseball games and other Permitted Uses
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(the "License"). In consideration of the grant of such License, DSG covenants to (i) enter into a
binding agreement with the Storm to play baseball at the Stadium, as set forth herein, and (ii) use
commercially reasonable efforts to market the Stadium and cause Other Stadium Events
constituting Permitted Uses to occur on the Premises. DSG further agrees and acknowledges
that, except as set forth herein, all costs and expenses of the utilization of the Premises pursuant
to the License shall be the sole financial responsibility of DSG. Agency further agrees that all
revenues generated by DSG pursuant to the License shall be retained by DSG.
4.2. Professional Baseball
(a) Covenant to Play Baseball. During the Term of the License,
DSG shall cause the Storm (or, subject to the prior written approval of the Agency, another single
"A" or higher level baseball team which is a member of the NAPBL) to play all of its home
baseball games at the Stadium, whether such games be designated:
l. Pre-season, post season and exhibition games as scheduled
by the League or the Storm;
2. Regular season baseball games as scheduled by the League;
3. All home playoff games of the Storm as scheduled by the
League; and/or
4. All hosted all star games.
(b) Practices. In addition to the foregoing and in connection with the
Storm Games, DSG shall grant the Storm the right to use the Stadium for a reasonable number of
baseball practices and workouts for members of the Storm, the San Diego Padres or other
professional baseball teams (the "Practices").
(c) Scheduling of the Storm Events, Other Stadium Events and
Other Stadium Events. Subject to the terms of the Stadium Operations Contracts with respect
to the rights of Storm LP and the rights of the Agency set forth in Section 5.2(b), DSG shall have
exclusive control over the scheduling of all Storm Events, Other Storm Events and Other
Stadium Events during the term of this Agreement. On a quarterly basis during the term, DSG
will provide the Executive Director with the schedule for all Storm Events, Other Storm Events
and Other Stadium Events. DSG shall grant the Storm the right to use the Stadium for all Storm
Events and Other Storm Events.
4.3. Name of the Team
The name of the baseball team which plays at the Stadium pursuant to this
License shall include the name "Lake Elsinore" and shall not include the name of any other city
or geographical designation.
4.4. Intentionally Omitted.
4.5. Use of Offices and Other Areas of the Stadium
In addition to the exclusive use of the Stadium but subject to Storm LP
and Golden State's rights under the Stadium Operations Contracts, DSG shall have the right, and
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may grant the Storm the right, to use the following areas of the Stadium during the Term at the
times set forth below:
(a) Storm Office. DSG shall be entitled to the exclusive use of the
Storm Office at all times during the Term.
(b) Ticket Sales Office. DSG shall have the exclusive use of the
Ticket Sales Office and shall be entitled to retain all revenues from ticket sales.
(c) Advertising Elements. DSG shall have the exclusive right to
utilize the Advertising Elements in connection with the Storm Games, Other Storm Events and
Other Stadium Events.
(d) Video Message Boards and Scoreboard. DSG shall have the
exclusive right to use the Video Message Boards and the Scoreboard. DSG shall be responsible
for maintaining and repairing the Video Message Boards and Scoreboard at its sole cost and
expense.
(f) Storage Areas. DSG will have the exclusive use of all Stadium
Storage Areas during the Term. DSG agrees that it shall not store any materials in any areas of
the Stadium in violation of any Governmental Regulations with respect to the storage of
Hazardous Materials. In addition, DSG may bring mobile storage containers onto the Premises.
The cost of any such mobile storage containers will be borne solely by DSG.
(g) Retail Store. DSG shall have the exclusive right to use the Retail
Store at all times during the Term and shall be entitled to retain all revenues therefrom.
4.6. Concourse Signage
DSG shall have the right to alter, replace, repair, remove and otherwise
change any and all signage on the concourse, including, without limitation, signs in connection
with bathrooms, directions, seating, identification and advertising. Any such changes to the
concourse signage shall be at the sole cost and expense of DSG and shall be done at such times
as not to interfere with the Storm's use of the Stadium for Storm Games and/or Other Storm
Events.
4.7. Agency Right of Entry
DSG acknowledges and agrees that the Agency may enter the Premises,
the Stadium and any part thereof in accordance with Article 24; provided, however, that the
Agency shall only enter during Storm Games or Other Storm Events in order to utilize the
Agency Suite or upon notice to the Storm of such entry or in the event of an emergency.
4.8. Stadium Naming Rights
(a) Marketing of Naming Rights. Subject to the terms and
conditions set forth herein, Agency hereby grants DSG the exclusive right to market the sale,
lease, sublicense or other transfer of the Naming Rights. DSG shall be entitled to retain all
revenues from such transfer of the Naming Rights. The Agency agrees to cooperate with DSG in
such endeavors provided, however, that any and all costs in connection therewith shall be borne
Stadium Management Agt FINAL v2.doc -1 6-
solely by DSG. DSG shall promptly reimburse Agency for any costs incurred by the Agency.
During the term of this Agreement, the Agency shall not entertain proposals or engage in
negotiations regarding the transfer of the Naming Rights.
(b) Naming Rights Agreement. DSG acknowledges and agrees that
it does not have the right to select the name of the Stadium or transfer the Naming Rights except
as set forth herein without the Agency's prior written approval, which approval shall not be
unreasonably withheld. Such approval shall be only for the proposed name of the Stadium and
not for the financial aspects of the proposed transaction. Any such transfer shall be accomplished
by way of a written agreement executed by the Executive Director following all requisite
approvals (the "Naming Rights Agreement"). The Executive Director and Agency Counsel shall
have the right to review and approve the Naming Rights Agreement, solely for the purpose of
determining compliance with this Agreement, prior to its execution by DSG and any other
party(ies) to the Naming Rights Agreement. DSG further acknowledges and agrees that the
approval of the Stadium name pursuant to any Naming Rights Agreement will be presented to the
Agency Board at a noticed public meeting. DSG shall not propose or enter into any Naming
Rights Agreement that (1) conflicts with the Storm's existing sponsorships; (2) conflicts with any
applicable standards established by the League and/or the NA; or (3) violates any Governmental
Regulation, including copyright laws. Both Parties acknowledge and agree that in no event shall
any Naming Rights Agreement include any right to name the playing field, currently named "Pete
Lehr Field."
(c) Term of Naming Rights Agreement. The term of the Naming
Rights Agreement shall expire no later than the end of the Initial Term (though such Naming
Rights Agreement may continue in force during the First Extension Term and Second Extension
Term if this Agreement is extended through one or both of those terms) unless the Agency
expressly agrees in writing to a longer term. Any Naming Rights Agreement shall provide that if
this Agreement is terminated during the term of the Naming Rights Agreement, the rights and
obligations of DSG under the Naming Rights Agreement shall be assigned to and assumed by the
Agency. Agency agrees to assume any such Naming Rights Agreement in the event of a
termination of this Agreement prior to the expiration of the Naming Rights Agreement.
(d) Name of Stadium. Unless otherwise agreed to by the Agency
Board in writing, any transfer of the Naming Rights shall require that:
1. If "Lake Elsinore" remains a component of any name
selected for the Stadium, "Lake Elsinore" must be used together, and not "Elsinore" without
"Lake";
2. The selected name shall not include the name of any other
city; county or other location or geographical description or designation other than "Lake
Elsinore" (for example, but not by way of limitation, any name shall not include "Southwestern
Riverside County" or"Temecula Valley") and
3. The selected name shall be appropriate as reasonably
determined by the Agency Board in light of the use of the Stadium.
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(e) Marketing. Any Naming Rights Agreement shall require that the
transferee of the Naming Rights shall comply with any applicable terms and conditions of this
Agreement, including, without limitation, Section 4.14 hereof. In addition, the terms of Section
4.14 shall be included in any Naming Rights Agreement.
4.9. Licensed Merchandise Sales
Subject to the rights of Storm LP or Golden State under the Stadium
Operations Contracts, DSG shall have the exclusive right to sell and shall be in control of the
sale of any and all licensed merchandise at the Stadium, including the right to grant third party
licenses for the sale of merchandise and memorabilia. The Agency shall be entitled to utilize the
Retail Store and/or set up a booth during Storm Games, Other Stadium Events and Other Storm
Events to sell Lake Elsinore related merchandise provided that: (i) DSG shall not incur any costs
in connection therewith; (ii) the sale of Lake Elsinore related merchandise does not interfere with
the sale of Storm and/or baseball merchandise; and (iii) the Agency shall obtain the written
approval of any licensee of DSG if necessary.
4.10. Tickets to Storm Games
The Agency or its designees will be entitled to request and receive up to
three hundred (300) tickets per season to the Storm Games, subject to reasonable availability,
with a maximum of thirty (30) tickets to any one Storm Game, at no cost to the Agency or its
designees.
4.11. Agency Suite and Parking at Storm Games and Other Storm Events
The Agency or its designees shall have the right to use the Agency Suite
during all of the Storm Games and Other Storm Events at no charge to the Agency or its
designees. In addition, the Storm shall reserve to the Agency or its designees up to ten (10)
reserved parking spaces for each Storm Game and each Other Storm Event, at no cost to the
Agency or its designees.
4.12. Lehr Seats and Parking
DSG shall continue the historical practice of providing the Lehr family
with the Lehr Family Seats and three (3) reserved parking spaces for each Storm Game.
4.13. Broadcast Rights
Subject to any rights of the Storm, DSG shall have exclusive ownership
and control over Broadcast Rights associated with all Storm Events, Other Storm Events and
Other Stadium Events. In the exercise of such ownership and control, however, (i) DSG shall
take all steps reasonably necessary to protect from diminution the sale of paid admission tickets
to Storm home baseball games; and (ii) DSG and its agents or assignees shall comply with all
copyright and other applicable laws. All revenue generated by DSG relating to such Broadcast
Rights shall be retained exclusively by DSG during the Term.
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4.14. Marketing or Advertising of the Stadium
DSG shall cause any and all marketing and advertising (including, without
limitation, advertising or marketing by print, radio, internet, cable, website, or broadcast or on
the Roadside Electronic Billboard, but excluding the sign on the Stadium or the Premises which
sets forth the name of the Stadium) for the Stadium or the Premises, or any events occurring at
the Stadium or on the Premises, to include a reference to "Lake Elsinore," or a phrase including
such term, such as "home of the Lake Elsinore Storm" or words to similar effect; provided,
however, that the words "Lake Elsinore" must be used together, and not "Elsinore" without
"Lake". Any and all such marketing and advertising shall not include the name of any other city;
county or other location or geographical description or designation other than "Lake Elsinore"
(for example, but not by way of limitation, any advertising or marketing for the Stadium and/or
the Premises, or any events occurring at the Stadium or on the Premises, shall not include
references to "Southwestern Riverside County" or "Temecula Valley"). A reference to
"Riverside County" may be included only if it refers to the location of Lake Elsinore.
4.15. Display of Lake Elsinore Logo and Other City Advertising
DSG shall provide the City, at no cost to the City, with the exclusive use
of the display window on the concourse of the Stadium being held for use by the City as of the
Effective Date. The display window consists of an approximately four foot by four foot area
indented approximately one foot and covered by glass. The City shall be entitled to display
therein the City logo "Dream Extreme" and any other City-related items or promotional
materials.
5. Concession Services at the Premises
Subject to any existing rights of Golden State under the Stadium Operations
Contracts, Agency hereby grants DSG the exclusive right and obligation to provide (or
sublicense for the provision of) Concession Services at the Premises (the "Concession License").
In connection with such Concession License, DSG shall be entitled to retain all revenues from
the provision of Concession Services. DSG hereby assumes the exclusive obligation to provide,
or cause to be provided, at its sole cost and expense, Concession Services at the Premises.
5.1. The Stadium
DSG shall have the exclusive right and obligation to provide Refreshments
in the Stadium during Storm Games, Other Storm Events and Other Stadium Events.
5.2. Diamond Club
(a) Exclusive Caterer Services. Throughout the Term, DSG shall
have the exclusive right and obligation to provide Refreshments in the Diamond Club during
Storm Games, Other Storm Events and Other Stadium Events.
(b) Existing City Reservations. DSG acknowledges and agrees that
the City has reserved the Diamond Club on the evenings of Saturday, December 8, 2007 and
Saturday, December 15, 2007 for the City and Sheriffs holiday parties.
Stadium Management Agt FINAL v2.doc -1 9-
(c) Other Agency Events. DSG acknowledges and agrees that the
City and Agency shall have the right to utilize the Diamond Club at least fifteen (15) times per
calendar year to host staff meetings, community organization meetings, the Annual Mayor's
Breakfast and such other similar gatherings for the benefit of the City, the Agency or other non-
profit community organizations (collectively, the "Other Agency Events"), with the following
restrictions: (i) the second Saturday night of December is to be reserved for the City holiday
party; provided, however, that DSG can upon ninety (90) days' notice reassign the City's party
to a different Saturday night in December prior to December 16; (ii) at least eight (8) of the
events shall be held during the day time; (iii) the City and/or Agency shall not be entitled to hold
more than three (3) events in any calendar month; and (iv) during the month of December, the
City and/or Agency shall not be entitled to hold more than two (2) evening events, one of which
shall be the City holiday party on a Saturday evening, and the other of which shall be on a Friday
evening. Agency and DSG agree and acknowledge that as of the Effective Date, Agency has
booked two (2) Other Agency Events for Saturdays in December 2007, one of which being the
City holiday party and the other being the Sheriff's holiday party.
DSG shall provide Refreshments to such Other Agency Events as
requested by the Agency. DSG shall provide Refreshments for such Other Agency Events at
DSG's cost and without profit to DSG, provided that DSG shall have no obligation to provide
Catering Services at cost for more than fifteen (15) of such Other Agency Events in each
calendar year during the Term. DSG's cost shall be reimbursed not later than fifteen (15) days
following the submission of such cost invoice to the Agency. To the extent that the Agency does
not utilize all fifteen (15) of the aforementioned Other Agency Events within each calendar year,
there shall be no carryover to the following year. Except for the City holiday party, the
scheduling of all Other Agency Events shall be made using the reservation system utilized by
DSG for scheduling events at the Stadium and shall be subject to (a) the scheduling control rights
granted to DSG under this Agreement, and (b) date availability.
5.3. The Parking Lot
(a) Exclusive Caterer for Storm Games, Other Storm Events and
Other Stadium Events. DSG shall have the exclusive right to sell Refreshments in the Parking
Lot during Storm Games and Other Storm Events. Notwithstanding the foregoing, this provision
is not intended to prevent "tailgating" or similar activities by patrons at the Premises.
5.4. City Merchandise
(a) City Merchandise. DSG agrees to sell City merchandise from the
Retail Store upon the request of the Agency. The Agency shall be entitled to rack and/or shelf
space in the Retail Store during Storm Games and Other Storm Events and/or set up a booth
during Other Stadium Events to sell City Merchandise provided that: (i) DSG shall not incur any
costs in connection therewith; and (ii) the sale of Lake Elsinore related merchandise does not
interfere with the sale of Storm Merchandise. The allocated floor area or shelf space for City
Merchandise in the Retail Store shall not exceed 25 square feet without the prior written consent
of DSG.
Stadium Management Agt FINAL vldoc -20-
(b) Third Party Merchandisers. No third party event promoter or
merchandiser may sell any merchandise or article or provide free samples of Refreshments,
merchandise or promotional materials without the prior approval of DSG.
5.5. Quality of Service
(a) Intent. It is the intent of the Agency and DSG under this
Agreement to provide the general public with the opportunity to enjoy first class Concession
Services at rates comparable to other "first-class" California League professional baseball
stadiums. The high level of quality and service offered to patrons at the Premises is of prime
concern to the Agency and is considered a part of the consideration for this License. Therefore,
DSG agrees to maintain such first-class standards of operating and managing the Concession
Services that will provide a "fan friendly" environment.
(b) Employees. DSG acknowledges the importance to the quality of
service at the Stadium as it relates to the selection, training, and supervision of its employees.
DSG's hiring and employment policies and practices shall not, however, provided the same are
lawful, be subject to the Agency's control. DSG agrees that a manager with decision-making
authority sufficient to handle emergencies and to coordinate the Stadium's response thereto with
State and local agencies shall be on the Premises during all Storm Games, Other Storm Events
and Other Stadium Events.
5.6. Maintenance, Refuse and Hazardous Materials
(a) Concession Equipment and Facilities. DSG shall be solely
responsible for maintenance and repair of the structural components of the Concessions
Facilities, including, without limitation, maintenance and repair to the "rollup doors" at the
concession stands and/or any damage at the Stadium caused by DSG's employees, agents or
contractors. DSG at its sole cost and expense will maintain and repair, if necessary, and replace
the Concession Equipment as needed, provided, however, that (i) if such damage or need for
repair is caused by the Agency, Agency shall be responsible for such repair, and (ii) DSG shall
have the right to be reimbursed or repaid for the remaining unamortized Federal tax basis cost of
such capital replacements by any successor concessions operator upon termination of this
Agreement, if, upon termination, the Concession Agreement is not required to resume in full
force and effect. Agency shall cooperate with DSG by making such reimbursement a condition
to entering into an agreement with such successor concessions operator, if, upon termination, the
Concession Agreement is not required to resume in full force and effect. With respect to
maintenance, DSG shall clean the grease interceptors at regular scheduled intervals using
designated repair techniques to protect warranties and respect supplier agreements.
(b) Mobile Stands. DSG shall locate any Mobile Stands in such a
manner as to not obstruct the safe passage of Stadium patrons and as approved or permitted
under all applicable building and fire codes and regulations and all directive of the local fire
department official.
(c) Concession Facilities. DSG shall keep the Concession Facilities
neat and clean. DSG shall pick up concession refuse in and about the Concession Facilities, the
Mobile Stands and the Diamond Club, and shall maintain adequate trash receptacles adjacent
Stadium Management Agt FINAL,v2.doc -21-
thereto. DSG will not permit its employees to dispose of or discharge waste, garbage or refuse in
any area in or outside the Premises other than in areas specifically designated therefor. All refuse
shall be removed by DSG's employees to the central refuse collection point as designated by the
Agency for the Premises on a regular basis. In addition, DSG shall be responsible, at its sole cost
and expense, for cleaning the Concession Facilities, the Mobile Stands and the Diamond Club
immediately following an event and for any and all necessary pest control and sanitation
activities, on a regular and continuing basis.
(d) Pest Control. DSG shall engage the services of an exterminator
reasonably acceptable to the Agency to control vermin and pests as necessary at DSG's sole cost
and expense without charge to the Agency. The areas to be serviced by the exterminator shall
include, but shall not be limited to, all of the Concession Facilities and all other areas from which
food is prepared, dispensed and stored at the Stadium and on the Premises.
5.7. Additional Duties
(a) Management of Operations
1. DSG agrees to manage and operate the Concessions
Facilities in a first-class and professional manner to ensure that it will maintain consistent,
prompt, and courteous service to the public.
2. DSG will pay promptly all authorized bills, payroll and
other expenses incurred in the operation and performance of its services and obligations under
and pursuant to this Agreement.
3. DSG shall pay when due all Taxes and any other charges
assessed on the products or services which DSG provides hereunder respectively, and all federal,
state and local taxes, workers' compensation payments, unemployment insurance, payroll and
other taxes with respect to services provided under this Agreement and all other taxes arising
from DSG's operations hereunder respectively. DSG acknowledges that this Agreement may
create a possessory interest subject to property taxation and if such an interest is created DSG
may be subject to the payment of property taxes levied on the interest.
4. DSG will provide all perishable and non-durable
inventories required for its operation including, but not limited to all Refreshments and
Merchandise.
(b) Personnel.
1. DSG will hire, train and supervise, discipline and, if need
be, dismiss, any and all persons necessary to conduct its operations hereunder and will use
reasonable efforts to assure that its employees continually practice high standards of cleanliness,
safety, courtesy and service customarily followed in the conduct of a first-class concession
operation. Such individuals shall be employees of DSG respectively and shall wear neat and
clean uniforms provided by DSG.
2. DSG covenants that in the conduct of its employment and
discipline practices and its operations hereunder, it will not discriminate or permit discrimination
Stadium Management Agt FINAL vldoc -22-
based on race, color, religion, creed, age, sex, disability, national origin, ancestry, or political
opinions.
3. DSG shall prepare training programs for all of its
employees working in the Stadium and on the Premises. The training programs will be
mandatory for all employees and will include alcohol management techniques in the content.
(c) Licenses and Permits. DSG represents that Golden State holds a
valid California license to serve alcoholic beverages at the Premises and that DSG and Golden
State will enter into an agreement permitting and requiring the sale of liquor pursuant to such
license at the Premises during the Term of this Agreement. DSG shall cause Golden State and
any other licensee to maintain in force during the Term, such liquor license and all food and other
licenses and permits and renewals thereof necessary to operate hereunder. Such licenses shall
include a City of Lake Elsinore business license. Upon the reasonable request of the Agency,
DSG shall furnish the Agency with copies of such licenses and permits and renewals thereof as
are physically maintained at the Stadium. The Agency agrees to cooperate with DSG in
connection with applications submitted by DSG or its licensees for any and all licenses and
permits and renewals thereof, all at no additional cost or expense to the Agency. Upon the
termination or expiration of this Agreement and the termination of the Stadium Operations
Agreements, if requested by the Agency or the Agency's designee, DSG will cooperate, and will
cause its licensees to cooperate, with the Agency and the Agency's designee in connection with
the transfer of any such licenses to the Agency or its designee and in such event the Agency or
the Agency's designee shall reimburse DSG for the original cost of acquiring such license and
any additional expenses actually incurred by DSG in connection with any such requested transfer.
(d) Compliance with Laws, Policies and Programs.
1. In connection with the sale of Refreshments hereunder and
the provision of all of the other services and performance of all of DSG's duties and obligations
hereunder, DSG shall in good faith comply with and faithfully observe, and cause all of its
employees, agents and contractors to comply with and faithfully observe, all laws (including
without limitation fire, building, health, sanitation and environmental codes and regulations and
liquor control laws and regulations).
2. DSG shall be solely responsible for:
W Enforcement of all California state laws, rules,
regulations or orders relating to premises licensed pursuant to and to enforce all rules, regulations
or orders of the California State Alcohol Beverage Control Board and other liquor authorities or
other regulatory agencies relating to the licenses.
(ii) To take any and all actions necessary to enable and
to ensure compliance with all laws, rules, regulations and orders concerning the sale and
consumption of alcoholic beverages in the Stadium and on the Premises.
5.8. Proceedings Involving Licenses and Permits
DSG shall advise the Agency in writing of any pending or threatened
actions against DSG, Golden State or any of its other licensees, whether by governmental
Stadium Management Agt FINAL vldoc -23-
authorities or otherwise, which seek, or could result in, the suspension or revocation of any
license or pen-nit necessary for its performance of this Agreement. In the event of any suspension
in excess of fifteen (15) days or revocation of Golden State's license to serve alcoholic
beverages, and if such suspension or revocation shall not be stayed or appealed in such manner
that will permit Golden State to continue to serve alcoholic beverages at the Stadium, then DSG
shall be obligated, subject to the prior approval of the Agency, to secure an interim licensed bar
manager at the Stadium to enable or permit the serving of alcoholic beverages. If DSG has not
secured an interim licensed bar manager or made other arrangements reasonably satisfactory to
the Agency, then upon the effectiveness of the suspension or revocation of Storm's liquor
license, Agency, without waiving any rights or remedies which it may otherwise have under or
pursuant to this Agreement, in law, in equity, or otherwise, shall have the right, but not the
obligation, to secure an interim licensed bar manager at DSG's sole cost and expense or to secure
its own liquor license to serve alcoholic beverages at the Stadium and on the Premises.
In such event, DSG will make available to the interim licensed bar
manager or the Agency, to the extent pennitted by applicable law, if any, all supplies of
applicable beverages then in its possession which were intended for sale or use at the Stadium or
on the Premises, will afford to such interim licensed bar manager or the Agency the benefit of
supply arrangements for beverages, and will make applicable personnel, and Concession
Facilities and Concession Equipment available to such interim licensed bar manager or the
Agency.
DSG shall be entitled to reimbursement from the interim licensed bar
manager or the Agency for its costs and expenses related to inventory, supplies and personnel
used by the interim licensed bar manager or the Agency. The foregoing shall not be construed to
imply that any such events shall result in additional costs that the Agency shall be required to
bear or to relieve DSG from its obligations hereunder. DSG and/or the Storm shall resume its
duties and the sale of alcoholic beverages at the Stadium upon restoration of the license(s) or
pen-nits to do so provided, however, that in the event that the Agency decided to secure its own
liquor license to serve alcoholic beverages at the Stadium and on the Premises, the Agency may
determine to continue to hold such license provided that it does not preclude DSG from holding
its license to provide alcoholic beverages.
5.9. Mechanics Lien
DSG shall at all time protect and keep the Concession Facilities and
Concession Equipment, the Stadium, the Premises and all other real and personal property, free
and clear of and from all mechanics and other liens, attachments, encumbrances, or claims
arising out of DSG's operations hereunder, its performance under this Agreement, and/or its use
of any of the foregoing. In the event any such lien is placed, or such encumbrances created, DSG
shall cause any such liens to be promptly removed, and if necessary, shall provide all necessary
performance bonds or other required security.
5.10. Products and Prices
DSG agrees that it will have available at all times sufficient quantities and
varieties of Refreshments. Prices, portions, product selection, and specific brands (except with
respect to alcoholic beverages to the extent required by applicable law) shall be at least generally
Stadium Management Agt FINAL v2.doc -24-
comparable to those appearing in other California League baseball stadium of similar size and
nature. DSG shall be entitled to use and promote any "private brand products" DSG or its
licensees may own or control. DSG will post menus, with prices, in conspicuous places within
or adjacent to the Concession Facilities. Pricing and quality of baseball merchandise shall be
determined by DSG and shall be comparable to other California League or NAPBL baseball
merchandise. DSG shall also adhere to all rules and regulations of Major League Baseball
Properties, the California League and the NAPBL that govern the sale of licensed merchandise
products of the Storm.
5.11. Specialty Products
DSG shall have the right to sublet or sublicense Concession Facilities and
the Concession Equipment related thereto to third party vendors (including both private and
charitable and not-for-profit organizations) for the purpose of selling specialty products and any
other purpose permitted hereby.
5.12. Altering Facilities
Except as set forth herein, DSG shall not materially alter, add to or vary
the Concession Facilities, Concession Equipment, the Stadium or the Premises, or make any
material alterations or installations thereto, without having first obtained the consent in writing of
the Agency, which the Agency may give or withhold in its sole discretion.
5.13. Fair Wages and Hours
DSG shall comply, and shall cause its licensees to comply, with all laws of
the government of the State of California, the County of Riverside, the City of Lake Elsinore and
the United States, and shall also comply with all law governing employment and conditions of
employment. DSG will comply with the terms of the Workers' Compensation Act of the State of
California and any other laws now in existence or hereafter enacted, as well as amendments
thereto, insofar as they are applicable to DSG's operations under or pursuant to this Agreement.
DSG covenants and agrees to pay, defend (with counsel reasonably acceptable to Agency),
indemnify and save harmless Agency, its officers, employees, agents, and representatives, from
and against any and all Claims (including, without limitation, all attorneys' fees and litigation
expenses), including, without limitation, death of or injury to any person or damage to any
property, based upon, arising from or connected in any manner with respect to any breach of
DSG's obligations under this Section.
6. Demise of Premises
6.1. Inspection
Prior to the Lease Commencement Date, DSG and Agency shall jointly
conduct a walk-through inspection of the Premises to document and evaluate the physical and
mechanical condition of the Premises, including (without limitation) the ceilings, roofs, interior
and exterior walls, stairways, floors, and other components of the Premises, and the heating, air
conditioning, plumbing, ventilation, elevator, utility, sprinkler and other water, mechanical and
electrical systems, apparatus and appliances located on or about the Premises. The Parties shall
document the walk-through inspection in such format as is reasonably acceptable to both DSG
Stadium Management Agt FINAL Q.doc -25-
and Agency. Subject to the Agency's obligations throughout the term of this Agreement with
respect to Capital Repairs and without limiting such obligations, DSG acknowledges and agrees
that Agency shall have no obligation to make any corrections or repairs and that the Premises
shall be let to DSG pursuant to this Agreement in "as is" condition.
6.2. Lease
Subject to the terms, covenants and conditions contained in this Lease,
beginning on the Lease Commencement Date, Agency leases the Premises to DSG, and DSG
leases the Premises from Agency.
6.3. Actions by the Agency Prior to the Lease Commencement Date
Prior to the Lease Commencement Date, Agency shall provide DSG the
opportunity to review the Records and Plans and request an assignment thereof if necessary for
the performance of this Agreement.
6.4. Deliveries by Agency on the Lease Commencement Date
On the Lease Commencement Date, Agency shall deliver to DSG the
following:
(a) Keys to all doors on any Improvements situated on, or constituting
a portion of the Premises, and keys to all Personal Property located on the Premises, which keys
shall be properly tagged for identification;
(b) Possession of the Premises, subject to the Prior Agreements and
Stadium Operations Contracts; and
(c) Assignment of Agreements .
7. Operating Income and Expenses
7.1. DSG Responsibility for Operating Expenses
In consideration of the Agency's lease of the Premises to DSG as set forth
herein, DSG agrees that, commencing on the Lease Commencement Date, subject to the
contributions of the Agency required hereby, all operating expenses associated with the Premises
shall be the sole financial responsibility of DSG.
7.2. Agency Contribution for Operating Expense
Agency shall retain financial responsibility for all Stadium operating
expenses through June 30, 2007. Thereafter, the Agency shall contribute a total of Eight
Hundred Thousand Dollars ($800,000) to the operating expenses of the Premises, as follows:
Fiscal Year Agency Contribution
2007-08 $300,000
2008-09 $250,000
2009-10 $175,000
Stadium Management Agt FINAL Q.doc -26-
2010-11 $ 75,000
The Agency's contribution to operating expenses shall be payable to
DSG in equal monthly installments via check or wire transfer on the first of each month.
7.3. Operating Income
Beginning on the Lease Commencement Date, and continuing throughout
the remainder of the Term, all royalties, license fees, revenues and other income of what ever
kind and nature, from the operation of the Premises shall belong to DSG.
7.4. DSG's Rights to Possession
DSG shall have possession of the Premises as of the Lease
Commencement Date, subject to the Prior Agreements and the Stadium Operations Contracts,
and the rights and obligations to operate, manage, maintain, use, sublease and license the use of,
and quietly enjoy the Premises as set forth in this Lease. Subject to the Agency's obligations
throughout the term of this Agreement with respect to Capital Repairs and without limiting such
obligations, DSG will be deemed to have accepted the Premises in its "as-is" condition, as
documented by the Parties during the joint inspection performed pursuant to Section 6.1. DSG
may at its sole discretion and at its sole cost undertake any tests, analyses, inquiries, and
investigation of any matters it deems appropriate to lease, manage, operate and use the Premises
as contemplated in this Lease, including, without limitation, the physical and environmental
condition of the Premises, matters affecting the present and future operation of the Premises, and
matters related to the economic viability of the same to DSG. Except as set forth herein, when
this Lease is terminated, DSG shall repair or restore the Premises such that the Premises are in at
least the same condition as prior to such tests, analyses, inquiries and/or investigations.
7.5. Off-Premises Parking
Agency shall provide DSG with the use of the Off-Premises Parking
during the Term pursuant to and in accordance with the Parking License. The property
constituting the Off-Premises Parking is owned by Laing. DSG acknowledges that it has been
provided with a copy of the DDA and informed that, in accordance with Section 402 of the DDA,
Laing may submit a plan for replacement parking for the Off-Premises Parking ("Replacement
Parking_Plan"), which such plan shall comply with the terms and conditions of the DDA, the
Development Agreement and the Parking Easement and be subject to the approval of the Agency.
If Laing submits a Stadium Parking Replacement Plan during the term of this Agreement, the
Agency shall meet and confer with DSG and provide DSG an opportunity to comment on the
proposed Stadium Parking Replacement Plan and least fifteen (15) days prior to the Agency's
formal consideration and approval thereof. Agency approval of any proposed Stadium Parking
Replacement Plan shall be made by the Agency Board at a public meeting and shall comply with
the terms and conditions of the DDA, the Development Agreement and the Easement.
8. Alterations, Improvements and Capital Repairs
8.1. DSG Responsibility
By December 31, 2007, DSG shall cause to be completed, at its sole cost
and expense, renovation and enhancement of the Premises totaling approximately Six Hundred
Stadium Management Agt FINAL Q.doc -27-
Thousand Dollars ($600,000) as follows: (1) one-half of the cost of the relocation of the
Diamond Club bar (at a cost of approximately One Hundred Thousand Dollars ($100,000)), (2)
improvements to the Storm suite (at a cost of approximately Thirty Thousand Dollars ($30,000)),
(3) new plasma TVs in the suites (at a cost of approximately Twenty Thousand Dollars
($20,000)), (4) field equipment (at a cost of approximately Ten Thousand Dollars ($10,000)), (5)
replace the Left-Field Matrix Board (at a cost of approximately Three Hundred Thousand Dollars
($300,000)), (6) expand the picnic and Fun Zone area (at a cost of approximately Twenty
Thousand Dollars ($20,000)), (7) replace suite speakers (cost of approximately Twenty Thousand
Dollars ($20,000)) and (8) renovation of concession stand no. 3 (at a cost of approximately One
Hundred Thousand Dollars ($100,000) or in lieu thereof, such other project as may be mutually
determined between Agency and DSG. If DSG determines to pursue another renovation project
or projects in lieu of renovation of concession stand 3, subject to Agency's approval of such
alternate project, DSG shall have until April 1, 2008 to complete such alternate project(s).
Agency shall have the right to inspect the foregoing renovations and
enhancements to determine that they have been appropriately completed in the reasonable
discretion of the Agency. DSG shall be responsible for contracting for, implementing and
completing the construction or installation of the foregoing renovation and enhancement projects
at its sole cost and expense.
8.2. Agency Responsibility
Notwithstanding the foregoing, except as set forth herein, Capital Repairs
shall remain the financial responsibility of the Agency during the Term. Agency shall fulfill its
obligation to fund Capital Repairs in accordance with the terms and conditions of this
Agreement. Agency shall be responsible for contracting for and implementing any Capital
Repairs performed by it at its sole cost and expense.
Prior to the Lease Commencement Date, Agency agrees to cause to be
completed, at its sole cost and expense, renovation and enhancement of the Premises as follows:
(1) installation of purse shelves in the women's restrooms, and (2) repairing holes and damage
resulting from the entry of birds into the press box. Agency shall further complete the HVAC
repairs and the relamping and repositioning the field lighting to NAPBL standards already
budgeted for by the Agency for fiscal 2006/07 at its sole cost and expense prior to the Lease
Commencement Date. DSG shall have the right to inspect the foregoing renovations and
enhancements to determine that they have been appropriately completed in the reasonable
discretion of DSG.
In addition, Agency agrees to contribute one-half the cost of relocation of
the bar at the Diamond Club being constructed by DSG as provided in Section 8.1 above.
Notwithstanding the foregoing, Agency's share of such cost of relocation shall not exceed One
Hundred Thousand Dollars ($100,000). Prior to funding such contribution, Agency shall have
the right to inspect the relocation of the Diamond Club bar to determine that it has been
appropriately completed, in the reasonable discretion of the Agency, in accordance with the plans
provided to the Agency prior to the Effective Date.
Subsequent to July 1, 2007, the Agency shall commence to make annual
cumulative deposits into a Stadium capital repair and improvement fund (a bank account to be
Stadium Management Agt FINAL vldoc -28-
opened and maintained in the Agency's name) in the aggregate amount of Three Hundred
Thousand Dollars ($300,000) per fiscal year of the Agency (the "Capital Repair Fund"). Monies
on deposit in the Capital Repair Fund shall be used during the Term for Capital Repairs and
replacements and for Stadium enhancements which are mutually approved by the Agency and
DSG. Agency shall have the right, but not the obligation, to contribute additional funds to the
Capital Repair Fund in its reasonable discretion. Agency's obligation to make annual
contributions to the Capital Repair Fund and the amounts on deposit in such fund, shall in no
way limit the Agency's obligation to make Capital Repairs during the term of this Agreement.
Notwithstanding the foregoing, DSG acknowledges and agrees that the Agency cannot be
required to make Capital Repairs hereunder in an amount exceeding the amount of funds
available to the Agency in the Capital Repair Fund and its general operating budget subject to
prior obligations and other applicable legal constraints governing the use of such funds.
If the Agency is unable to make a Capital Repair during the term of this
Agreement because of unavailability of funds, it shall notify DSG in writing and include a
projected time frame as to when it will have funds available to make such Capital Repair. DSG
shall have the option, within sixty (60) calendar days of the date of the Agency's notice, to elect
to (i) terminate this Agreement effective as of the end of the calendar year in which the Agency
has provided its written notice of election to not make such Capital Repairs due to lack of funds,
or (ii) advance to the Agency the cost of such Capital Repair, in which case, the Agency shall be
obligated to reimburse DSG the costs of such Capital Repair, plus interest until paid at the annual
rate of interest equal to the lesser of actual interest rate paid by DSG or the prime rate as
published in the Wall Street Journal. Agency shall use commercially reasonable efforts to
reimburse DSG for such costs from the first available funds from its general operating budget
which are in excess of the Agency's prior obligations and other applicable legal constraints
governing the use of such funds, or from the proceeds of a sale or refinance of the Stadium.
Agency shall complete all such Capital Repairs in a diligent manner from the funds provided by
DSG for such purpose. If DSG does not elect to either terminate this Agreement or fund such
Capital Repairs on behalf of Agency, Agency agrees that it will use commercially reasonable
efforts to fund such Capital Repairs from the first available funds from its general operating
budget which are in excess of the Agency's prior obligations and other applicable legal
constraints governing the use of such funds.
During the Agency's fiscal year of 2007/08, the Parties agree that
irrigation and outfield sod replacement costs of approximately Two Hundred Fifty Thousand
Dollars ($250,000) shall be funded from the Capital Repair Fund and will be completed on or
before April 1, 2008. Other Capital Repairs shall be funded from the Capital Repair Fund in
accordance with a mutually agreed upon schedule.
By December, 2007, the Parties agree to cause to be performed a capital
facilities audit and replacement reserve analysis the cost of which will be divided equally
between DSG and the Agency. The Parties agree to perform periodic updates of such audits not
less frequently than once every five (5) years during the term. If the Parties mutually agree the
cost of such audits may be paid from the Capital Repair Fund. The Parties agree to use the
results of capital facilities audit and replacement reserve analysis as a guide for the expenditure
of funds from the Capital Repair Fund.
Stadium Management Agt FINAL Q.doc -29-
9. Taxes, Assessments and Utility Charges and Fees; Right to Contest
9.1. Taxes and Assessments
DSG shall pay, when due, all taxes imposed at any time during the Term
upon the leasehold estate of DSG in the Premises, including the DSG's possessory interest as set
forth herein (collectively, "DSG Taxes"). DSG shall not be obligated to pay any tax imposed on
Agency or any Permitted Assignee of the Agency or the fee interest in the Premises, nor any
amounts levied upon Agency or any Permitted Assignee of the Agency as an income, franchise,
estate, gift, inheritance, succession, transfer, or capital levy/tax. Notwithstanding the foregoing,
if at any time after the execution of this Lease the methods of taxation prevailing at the execution
of this Lease shall be altered so that any DSG Taxes become levied instead on Agency or
Agency's fee interest in the Premises, then DSG shall pay and discharge such taxes as if the tax
had been levied directly upon the DSG and before any fine, penalty, or interest may be added for
nonpayment unless the DSG has determined to contest such charge in accordance with relevant
Governmental Regulations and Section 9.6. Agency shall pay directly to any governmental
authority with jurisdiction over the Premises or the operation thereof ("Taxing Authorities")
when due all Taxes that are levied, assessed, charged or imposed upon the Premises for any
period prior to the Lease Commencement Date (regardless of whether such Taxes are assessed
before or after the Lease Commencement Date).
9.2. Utility Charges
DSG shall pay all Utility Charges for services provided to the Premises at
any time commencing on the Effective Date and thereafter through the Term. If Agency, prior to
the Lease Commencement Date, has been receiving any utility services, including trash services
or services under the terms of the Other Contracts, at favorable or reduced rates, Agency shall
use reasonable efforts to request such services continue to be provided to DSG during the Term
at the same favorable or reduced rates. Notwithstanding the foregoing, the Agency makes no
representation or warranty as to the continuation of any such favorable or reduced rates.
9.3. Obligation to File Taxes
DSG shall file all reports and returns required by law and Governmental
Regulations with respect to any DSG Taxes and DSG shall promptly forward to Agency copies
of any DSG Tax related bill promptly upon DSG's receipt. Likewise, Agency shall promptly
furnish to DSG copies of any bill or assessment respecting any Taxes on the Premises upon
Agency's receipt. Upon written request of Agency, DSG will deliver to Agency receipts
evidencing the payment of any DSG Taxes payable by DSG. If the DSG Taxes include any
special assessments for improvements, which may be paid in installments, DSG shall be
obligated to pay only such installments, which become due and payable after the Lease
Commencement Date and prior to the expiration or earlier termination of the Term. DSG Taxes
for the year in which the Term commences and terminates or expires shall be prorated on a daily
basis between Agency and DSG. Subject to the tenant right to make a Permitted Contest as set
forth herein, if DSG fails to pay any DSG Taxes (or any installment thereof) prior to delinquency,
Agency, without declaring a default hereunder and without relieving DSG of any liability
hereunder, may (but shall not be obligated to), upon written notice to DSG, pay any such DSG
Taxes or Utility Charges (or any installment thereof), and any amount so paid by Agency,
Stadium Management AD FINAL Q.doc -30-
together with all costs and expenses incurred by Agency in connection therewith, shall be paid
immediately by DSG to Agency on demand. DSG's obligation to pay DSG Taxes that accrue
during the Term shall survive any termination of this Agreement.
9.4. Permit Fees
DSG shall be solely responsible for and shall pay any charges in the nature
of permit fees or other fees or charges arising after the Lease Commencement Date and related to
DSG's management, use and operation of the Premises or in connection with obtaining a
building permit for any DSG Improvements, or Alterations of the Premises.
9.5. Possessory Taxable Interest
DSG acknowledges that this Lease creates a possessory interest in public
property that may be taxable and DSG shall pay any real property taxes levied against the
Premises as a result of such possessory interest taxes, which may be imposed on DSG's interest
in the Premises. This provision constitutes written notice to DSG pursuant to California
Revenue and Taxation Code Section 107.6.
Pursuant to California Health & Safety Code Section 33673, as a result of
this Agreement, the Premises may likely be assessed and taxed in the same manner as privately
owned property, and DSG shall pay taxes upon the assessed value of the entire property and not
merely the assessed value of its leasehold interest. Further, pursuant to California Health &
Safety Code Section 33673.1, DSG acknowledges and agrees that Agency shall provide notice to
the local assessor within thirty (30) days of the Lease Commencement Date. The notice shall
provide the date on which DSG acquires the beneficial use of the leased property. The notice
shall be accompanied by the Memorandum of Agreement and a map of the Premises.
9.6. Right to Contest
DSG, at its sole cost and expense, may contest by appropriate legal
proceedings conducted in good faith ("Permitted Contest(s)"), the method of assessment,
amount, validity or application, in whole or in part, of any DSG Taxes or Utility, any
Governmental Regulation, or any Lien; provided, however, that (a) DSG shall give Agency prior
written notice of each such contest, (b) to the extent required by the law, the DSG shall first
(i) make all contested payments (under protest if it desires) unless such DSG Taxes, Utility
Charges or Liens may not be lawfully levied upon or collected from Agency, or (ii) in lieu of
such payments, DSG shall have furnished any security required or permitted by law in such
proceeding or under this Lease or reasonably requested by Agency to ensure payment of any
DSG Taxes, Utility Charges, Liens or compliance with any Governmental Regulation, (c) no part
of the Premises or any interest therein shall be subjected thereby to sale, forfeiture, foreclosure or
interference should DSG fail in its challenge of the amount claimed, and (d) Agency shall not be
exposed by reason of DSG's challenge to any civil or criminal liability for failure to comply with
any Governmental Regulation.
Stadium Management Agt FINAL v2.doc -31-
10. Use, Management, Maintenance and Operation of the Premises
10.1. Use of the Premises
DSG shall (a) use and occupy the Premises only for Permitted Uses; (b)
apply for, secure, maintain and comply with all licenses or permits required for any Permitted
Use undertaken by DSG; (c) conduct each Permitted Use in accordance with the highest
standards for cleanliness and quality; (d) comply with all Governmental Regulations in
connection with the operation of each Permitted Use; (e) comply with all applicable terms and
conditions of this Agreement, the Prior Agreements and the Stadium Operations Contracts; (f)
use commercially reasonable efforts to cause any users of the Premises to report and pay sales
taxes as generated within the City in accordance with all applicable Governmental Regulations;
and (g) comply with all Governmental Regulations in connection with the promotion and
operation of special activities and events, including but not limited to (i) compliance with and
obtaining all required special event permits in accordance with Chapter 5.73 of the Lake Elsinore
Municipal Code, as now exists or as may hereafter be amended, including submittal of an
application not less than sixty (60) days prior to the event and compliance with applicable
conditions of approval, and (ii) if applicable, including the provision to the City and/or Agency
of evidence of insurance for fireworks and pyrotechnics in accordance with the terms of this
Agreement and any other applicable Governmental Regulation.
10.2. Maintenance and Repair
(a) DSG's Obligation to Maintain Premises. Subject to the
Agency's obligations herein with respect to Capital Repairs, throughout the Term and subject to
the terms and conditions of the Stadium Operations Contracts, DSG shall take all necessary
actions, whether foreseen or unforeseen, to maintain the Premises and all components thereof, of
whatever kind or nature, as may be necessary to keep the Premises in a first class condition and a
good state of appearance and repair, ordinary wear and tear excepted, which shall be substantially
the condition in which the Premises are received on the Lease Commencement Date as
documented in accordance with the inspection of the Premises. DSG shall not be obligated to
maintain or repair any concession equipment, which is owned by a concession operator (e.g. the
Storm Entities) or any other third party, whether located on the Premises on the Lease
Commencement Date or thereafter placed on the Premises. Without limiting the generality of the
foregoing and in accordance with the terms and conditions of this Section, DSG shall be solely
responsible for completing all Routine Maintenance.
Agency shall be entitled to audit and inspect the Routine Maintenance
performed by DSG as it deems necessary and appropriate to ensure compliance with this
Agreement. From time to time, additional items of Routine Maintenance which are not identified
in the Maintenance Standards may be reasonably required to maintain the Premises in a first class
condition. DSG shall conduct those activities at its sole cost and expense.
Subject to the Agency's obligations with respect to Capital Repairs, DSG's
obligation to take such actions as are reasonably required to maintain the Premises in a first class
condition shall include (without limitation) the following:
(i) DSG shall, in the exercise of its sole and reasonable
discretion and in accordance with the requirements of this Section, manage and supervise the
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design, purchase of materials for, implementation, permitting, construction, performance and
completion of all actions necessary to maintain, repair, replace, refurbish, modify and restore the
Premises.
(ii) DSG shall, in its sole discretion, select and contract with all
advisors, consultants, specialists, architects, designers, engineers, maintenance personnel and
other professionals and contractors (including contractors for labor, materials and supplies)
necessary to maintain, repair, replace,refurbish, modify, restore and improve the Premises.
(iii) DSG shall remove refuse and promptly and strictly comply
with all health, sanitary or other laws, Governmental Regulations and ordinances pertaining to
the depositing and removal of refuse from or about the Premises including as necessary the use of
vermin-proof receptacles for DSG's own use with respect to refuse temporarily stored outside of
buildings.
(iv) DSG shall perform all Maintenance Standards.
(v) All Routine Maintenance shall be conducted in a good and
workmanlike manner and with all reasonable efforts made to preserve the aesthetic look of the
Stadium and shall be of at least equal quality and class to the original work.
(b) Disputes Regarding Routine Maintenance. In the event that a
dispute arises regarding any material failure by DSG to properly conduct Routine Maintenance,
subject to the Stadium Operations Contracts, the Parties shall use the following procedures to
resolve such dispute. The Agency shall give written notice to DSG of the alleged material
failures in performance, which shall include a detailed explanation of the ways in which DSG's
performance is inadequate and of the terms and conditions of this Lease that such performance
fails to meet.
Within fifteen (15) business days of such notice, the Agency and DSG
shall meet and confer and attempt in good faith to resolve any such disagreements with respect to
the routine maintenance. If within fifteen (15) business days thereafter, the Agency and DSG are
unable to resolve such dispute or disagreement to each Parties' mutual satisfaction, the Agency
and DSG shall jointly engage an independent third party familiar with stadium facilities,
operations, improvements, maintenance, repair, management and uses to which the Premises are
subject (the "Maintenance Consultant'). Agency and DSG shall share equally the costs of
engaging the Maintenance Consultant. In the event that the Parties cannot agree upon a single
Maintenance Consultant in the fifteen (15) business day period described above, then within five
(5) days thereafter each of Agency and DSG shall, at its own cost and expense, appoint a
Maintenance Consultant. The Maintenance Consultants so engaged by Agency and DSG shall
within ten (10) days thereafter select and appoint a third, objective Maintenance Consultant by
giving written notice of the appointment to Agency and DSG. The third Maintenance Consultant
shall not have acted in any capacity on behalf of, or for the benefit of either Agency or DSG, and
shall be independent of both Parties. The Agency and the DSG each shall pay one-half of the
costs and expenses of the Maintenance Consultant.
Within thirty (30) days of such selection, the Maintenance Consultant shall
objectively review, with the input of both the Agency and DSG, the performance and/or non-
performance alleged to be improper, and shall prepare an opinion and recommendation regarding
Stadium Management Agt FINAL_vldoc -33-
proper performance of the Routine Maintenance at issue, which shall bind both Agency and
DSG. Subject to the Stadium Operations Contracts, DSG shall at its sole expense then perform
such Routine Maintenance in accordance with the Maintenance Consultant's opinion and
recommendation.
(c) Compliance with League Standards. It is the intent of the
Parties that the maintenance to be performed by DSG with respect to the Premises pursuant
hereto shall be consistent with the Standards set forth by the League and the NAPBL and should
result in the Stadium being maintained in "first class" condition. The Agency and DSG
acknowledge and agree that those items set forth in the Maintenance Standards are a list of the
minimum items which DSG has agreed to perform in order to satisfy its maintenance obligations
hereunder and that there may be additional items of maintenance which are not identified.
(d) Supplies. DSG shall provide all supplies necessary to perform its
obligations hereunder at its sole cost and expense.
(e) Equipment.
1. Use by DSG. DSG shall be entitled to use the Agency's
Equipment in connection with the performance of its obligations hereunder. All other items of
equipment which are necessary for DSG to meet its obligations hereunder shall be supplied by
DSG at its sole cost and expense.
2. Maintenance of Equipment. DSG shall be responsible for
providing the routine maintenance in connection with its use of the Equipment.
3. Repair and Replacement of Equipment. DSG shall be
responsible for repairing, maintaining and replacing the equipment used in connection with the
operation and maintenance of the Stadium, which DSG determines in its sole and absolute
discretion is in need of repair, maintenance and replacement, provided, however, the replacement
of the Equipment shall be deemed to be a Capital Repair and shall be the obligation of the
Agency.
(f) Notice. In the course of its performance of the maintenance and
upkeep of the Stadium, DSG may learn of items or facilities in need of Capital Repairs. DSG
agrees to notify the Agency of such items which are in need of capital repairs within five working
days of any such discovery.
(g) Safety Precautions. In the event that during the course of
performing the maintenance required pursuant to this Agreement, DSG discovers a condition
which may require Capital Repair but which may result in injury to person or property prior to
such repair, DSG shall immediately notify the Agency of such condition and shall take such steps
as are reasonably necessary to secure the area and prevent the occurrence of any injury or
damage. The Agency shall reimburse DSG for reasonable costs incurred by DSG under this
Section within ten (10) business days of the receipt by the Agency of documentation reasonably
satisfactory to the Executive Director evidencing the costs incurred by DSG.
(h) DSG Responsibilities.
Stadium Management Agt FINAL Q.doc -34-
1. Video Message Boards. DSG shall be responsible for and
shall undertake any and all maintenance and Capital Repairs in connection with the Video
Message Boards at its sole cost and expense.
2. Tri-Visions. DSG shall be responsible for and shall
undertake any and all maintenance and Capital Repairs in connection with the Tri-Visions.
(i) Insurance. In the event that any item in need of Capital Repair is
covered by any insurance maintained by DSG, DSG agrees that it shall submit whatever claims
are necessary and shall immediately upon receipt provide the Agency with any insurance
proceeds collected by DSG in connection with such Capital Repair or cause the same to be
repaired or replaced at the sole cost and expense of DSG but only to the extent of such insurance.
10.3. DSG Improvements and Alterations
(a) DSG may from time to time, at its sole cost and expense, make
Improvements and Alterations, including but not limited to the addition of additional viewing
suites and refurbishment of the Diamond Club provided that (i) the market value and utility of
the Premises shall not be reduced by reason thereof; (ii) any such action shall be expeditiously
completed in a good and workmanlike manner in compliance with all applicable Governmental
Regulations, insurance policies and agreements to which DSG is a party or by which it is bound,
then in effect; (iii) DSG shall have procured and paid for all permits and licenses required in
connection therewith; and (iv) such DSG Improvements and Alterations will not materially affect
the exterior appearance of the Stadium and shall be aesthetically consistent and of like quality or
class equal to the Stadium design as of the Lease Commencement Date.
(b) DSG shall have the right to make Improvements and Alterations
without further approval by Agency if such Improvements and Alterations (i) involve the
replacement of like for like; (ii) do not significantly alter the exterior appearance of the Stadium;
(iii) do not cost more than Fifty Thousand Dollar ($50,000); and (iv) do not require issuance of a
building permit by the City, or another permit or approval requiring design review issued by the
City in accordance with applicable Governmental Regulations.
(c) DSG shall have the right to make Improvements and Alterations
(whether or not such Improvements and Alterations change the exterior appearance of the
Stadium) with the prior written approval of the Agency, which approval shall not be
unreasonably withheld or delayed if such Improvements: (i) involve expenditures of less than
One Hundred Thousand Dollars ($100,000), or (ii) require issuance of a building permit by the
City, or another permit or approval requiring design review issued by the City in accordance with
applicable Governmental Regulations.
(d) Improvements and Alterations made by DSG other than the
foregoing shall require prior submission to and written approval of the Agency Board, which
approval shall not be unreasonably withheld or delayed. The Agency shall cooperate with DSG
to secure all necessary permits for Improvements and Alterations approved by the Agency under
this Section; provided, however, the Agency shall not be required to incur any costs in providing
such cooperation.
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(e) In each instance that Agency Approval of an Improvement or
Alteration is required, prior to installation, DSG shall submit to the Agency a written request for
such approval along with information reasonably requested by Agency, such as descriptions,
plans, or specifications to enable the Agency to review the proposed DSG Improvements or
Alterations. The Executive Director or the Agency Board, as the case may be, shall have thirty
(30) days to review and approve, conditionally approve, or deny in writing the proposed DSG
Improvements including specific reasons for denial if that is the case. Failure by the Executive
Director or the Agency Board, as the case may be, to act within said thirty (30) days will be
deemed to be approval by the Executive Director or the Agency Board of the proposed DSG
Improvements and Alterations. DSG may in all instances have the right to accept
communications from the Executive Director as being made on behalf of the Agency Board.
10.4. On-Site Office
Throughout the Term and subject to availability of suitable space and the
terms and conditions of the Stadium Operations Contracts, DSG shall maintain an office at the
Premises which office shall be used during regular business hours by at least one representative
of DSG.
10.5. Operation and Management
Throughout the Term, subject to and in accordance with the operational
requirements of the Lehr Agreement (ie. field name and season ticket requirements) and Other
Contracts, DSG shall manage and operate the Stadium as a first-class facility for the Permitted
Uses in a professional and businesslike manner. Except as expressly set forth herein and subject
to the Stadium Operations Contracts, the DSG shall manage and operate the Stadium at its sole
cost and expense.
(a) DSG's obligation to manage and operate the Stadium shall include
(without limitation) the following rights and responsibilities subject to and as limited by the
Stadium Operations Contracts and applicable Governmental Regulations:
1. DSG shall exclusively control the scheduling and use of the
Premises as permitted by this Agreement, and shall maximize usage and revenues from the
Stadium consistent with the reasonable commercial practices of other managers of comparable
facilities in comparable markets.
2. DSG shall provide or cause its subtenants, licensees and
other users to provide appropriate security, crowd and parking control services necessary for the
safe and proper operation of events.
3. DSG shall provide or cause the provision of all employees,
advisors, contractors, consultants, specialists, management companies, professionals and other
personnel required for the proper operation, management and promotion of the Stadium
including (without limitation) operation of concessions, parking lots, any Stadium club, suite
catering, and on-site advertising consistent with the requirements of this Lease and reasonable
commercial practices of other managers of comparable facilities in comparable markets.
Stadium Management Agt FINAL v2.doc -36-
4. DSG shall advertise and promote baseball games (including
through the efforts of any baseball subtenant) and non-baseball events to be conducted at the
Stadium. DSG acknowledges the importance of promoting the City and its image in connection
with such advertising, and shall use its commercially reasonable best efforts to cause the City to
be identified in connection with such advertising and promotion.
5. Any contracts, engagements and other agreements and
arrangements entered into by DSG under this Section shall be subject to and limited by the
provisions of the Stadium Operations Contracts, while they continue in effect.
6. DSG shall not, without prior written approval by Agency,
enter into any contracts, engagements, or other agreements or arrangements under this Section
that cannot be terminated without default or penalty upon the expiration of the Term.
7. DSG shall cause the "Lake Elsinore Storm" or, subject to
the prior written approval of the Agency, another single "A" or higher level baseball team which
is a member of the NAPBL, to play their home baseball games at the Stadium.
S. DSG shall be responsible for the operation and staffing of
the Stadium scoreboard, the public address system, the box office, security within the Stadium
necessary to assure the reasonable safety of attendees, all ticket booths and ushering services,
first-aid room, janitorial services for the Premises, and the opening and closing of the Stadium,
pre-event preparation of the Premises and the operation of all Stadium facilities at all events,
which such activities shall be performed in a professional and business like manner.
(b) The Parties acknowledge that Agency is interested in the
management and operation of the Stadium and in the reputation, qualifications and experience of
DSG and any person or entity retained by the DSG for that purpose ("Stadium Operations
Director"). In the event that the proposed Stadium Operations Director is an entity rather than a
natural person, DSG shall identify and provide the qualifications not only of the entity, but also
of the individual or individuals who will be assigned by the Stadium Operations Director to
manage the Stadium. Subject to the provisions of this Section, the Parties acknowledge and
agree that DSG may select and engage a Stadium Operations Director to form an interim
management team to manage and operate the Stadium in the first Lease Year.
(e) DSG shall perform background checks of the Stadium Operations
Director, any management level employees of DSG, and any other employees of DSG for which
industry best practices for minor league baseball would indicate that such a background check
should be obtained. In addition, DSG shall obtain a LiveScan on all management employees and
employees for which industry best practices would dictate that such a test be obtained. The
LiveScan results shall be forwarded to Gary Jacobs or such other party as may be reasonably
designated by DSG and approved by Agency. DSG shall use commercially reasonable business
judgment and discretion and comply with all Governmental Regulations in acting on the results
of any LiveScan.
10.6. Freeway Sign
In connection with DSG's obligations to operate and promote the Stadium,
DSG desires to construct and operate a "Roadside Electronic Billboard" near Diamond Drive and
Stadium Management Agt FINAL v2.doc -37-
the Interstate 15 interchange at is sole expense and subject to all Governmental Regulations and
required permits and approvals for such signage. Agency and DSG shall use commercially
reasonable best efforts to identify a suitable parcel owned by the City or the Agency for the
Roadside Electronic Billboard (the "City Remnant Parcel"). Agency shall work with the City to
provide for the use of any City Remnant Parcel by DSG at no cost to DSG. Notwithstanding the
foregoing, DSG shall bear the sole cost and expense of permitting, constructing and maintaining
the Roadside Electronic Billboard. At DSG's request, Agency shall cooperate with DSG's
efforts to acquire from the City or Agency an interest in all or a portion of the City Remnant
Parcel sufficiently large to be used as the location of the Roadside Electronic Billboard.
DSG and Agency shall enter into an agreement, the terms of which shall
be mutually acceptable to Agency and DSG, setting forth the Agency's rights with respect to
advertising on the Roadside Electronic Billboard. Notwithstanding the foregoing, the agreement
shall include, without limitation, terms requiring that (i) DSG shall provide, at no cost to the City
or Agency, at least fifteen (15) minutes per day of advertising time, at such times and intervals as
may be reasonably agreed to by the Agency, which may be used by the Agency, the City or such
other not for profit community organizations as may be approved by the City; and (ii) DSG shall
use commercially reasonable efforts to maximize advertising time for Lake Elsinore businesses
and shall cooperate with the City and the Agency to insure that a reasonable percentage of
advertising time is used for community-oriented and community service based advertisers.
11. Agency Suite
11.1. Storm Games and Other Storm Events
Pursuant to the Agency Suite License, DSG hereby grants and reserves to
Agency the right to occupy the Agency Suite and use the Agency Parking for all Storm Games
and Other Storm Events free of charge. The Agency may not assign or otherwise transfer its
rights to the Agency Suite and/or Agency Parking to any third party and may not use the Agency
Suite for third-party attendees other than Agency invitees and may not charge any third party to
use the Agency Suite or Agency Parking. In the event that Agency elects not to use the Agency
Suite for a Storm Game or Other Storm Event, DSG, including its representatives and invitees,
may use the Agency Suite. Any Agency Parking not used by persons using the Agency Suite in
accordance with this Section 11.1 may be used by DSG. DSG shall hold the Agency and the City
harmless from any loss, cost or expense or damage to Agency property associated with use of the
Agency Suite by third parties.
11.2. Other Stadium Events
DSG further grants and reserves to Agency the right to occupy the Agency
Suite and use the Agency Parking in conjunction with use of the Agency Suite, for Other
Stadium Events, so long as Agency pays face value for admission to the Stadium and use of the
Suite for such Other Stadium Events. In the event that Agency elects not to use the Agency Suite
for any Other Stadium Event, DSG, including its representatives and invitees, may use the
Agency Suite. Any Agency Parking not used by persons using the Agency Suite in accordance
with this Section11.2 may be used by DSG. DSG shall hold the Agency and the City harmless
from any loss, cost or expense or damage to Agency property associated with use of the Agency
Suite by third parties.
Stadium Management Agt FFNAL Q.doc -38-
11.3. Agency Access to Agency Suite
For all Storm Games and Other Storm Events, free of any charge to
Agency, DSG shall (i) secure and deliver to the Agency tickets and parking passes for use of the
Agency Suite, or (ii) provide reasonable alternative methods of access to the Agency Suite and
Agency Parking. For all Other Stadium Events, DSG shall use commercially reasonable efforts
to make or cause tickets to the Agency Suite to be available for purchase by the Agency.
11.4. Relocation of Agency Suite
DSG may not relocate the Agency Suite without the prior written approval
of the Agency.
11.5. No Negative Changes
DSG shall not take nor permit any action on the Premises, which
materially and negatively impacts (i) the Agency Suite, or (ii) Agency's use of the Agency Suite.
Negative Impacts shall include, but are not be limited to, interference with lines of sight from the
Agency Suite to the baseball field, failure to provide customary services accorded to other suite
patrons, and interference with ingress and egress to the Agency Suite.
12. Covenants, Representations and Warranties
12.1. Covenants, Representations and Warranties of Agency
Agency makes the following representations, covenants, and warranties to
DSG, which DSG has relied upon in entering into this Agreement and will continue to rely upon
during the Term, all of which are true as of the Effective Date and the Lease Commencement
Date and shall continue to be true at all times during the Term:
(a) Organization. Agency is a public body, corporate and politic,
existing pursuant to the Community Redevelopment Law, which has been authorized to transact
business pursuant to action of the City. The execution and delivery by Agency of this Agreement
and the other documents contemplated in this Agreement, and the performance by Agency of the
obligations under this Agreement and the other documents contemplated in this Agreement
(i) are within the power of Agency; (ii) have been duly authorized by all requisite action; and
(iii) will not violate any Governmental Regulation, any order of any court or agency of
government, or any indenture, agreement or any other instrument to which Agency is a party.
This Agreement and each of the other documents described in this Agreement when executed
and delivered to DSG will constitute legal, valid and binding obligations enforceable against
Agency in accordance with the terms of such documents.
(b) Fee Property Owner. Agency has and will have during the Term,
good, marketable, insurable and indefeasible fee simple title in and to the Premises with only
those exceptions identified in the Underlying Claim.
(c) No Liens, Encumbrances, or Prior Rights. Except for the
Underlying Claim, or liens or encumbrances resulting from Storm LP's activities on the Premises
prior to the Lease Commencement Date, there will be no mortgages, deeds of trust, liens
(including, without limitation, laborer's, mechanic's and materialman's liens), indentures, bond
Stadium Management Agt FINAL vldo -39-
issues, Taxes, special assessments, charges, or other assessments or security interests related to
public or private financing encumbering the Premises or Agency's good, marketable, insurable
and indefeasible fee simple interest therein, and Agency has not and will not enter into or grant
any deed, lease, option, purchase, assignment, contract, license, or other right or interest relating
to the purchase, use, possession, operation, or management of the Premises or any part thereof in
derogation of its obligations under this Agreement.
(d) No Adverse Parties in Possession. Other than the parties using
the Premises under the Stadium Operations Contracts, no other parties, adverse or otherwise, are
in possession of or occupy the Premises or any part thereof.
(e) Agreements.
1. There are no leases, licenses, or other agreements and
arrangements to which Agency is a party, or of which Agency is aware, currently in effect for use
of the Stadium, other than the Stadium Operations Contracts, as amended, the Licenses and
Permits, and the Lehr Agreement.
2. There are no management, service, maintenance, brokerage,
real or personal property, or equipment contracts, agreements, obligations, commitments, leases,
warranties, guarantees or arrangements, written or oral, to which the Agency is a party with
respect to the Stadium except for the Prior Agreements, the Stadium Operations Contracts and
the Other Contracts. To the extent legally permissible and pursuant to Agency's discretion, the
Other Contracts may be assigned to DSG or terminated as of the Lease Commencement Date.
To the Best of Agency's Knowledge, there are no defaults, or events, which with the passage of
time or notice or both, could constitute a default by Agency, or by the other parties under any of
the Prior Agreements.
(f) No Litigation. Except for claims that may be made under the
Underlying Claim and threatened litigation under the Lehr Agreement, there (i) are no actual, or,
to the Best of Agency's Knowledge, threatened, suit, action or legal, administrative, arbitration or
other proceeding or governmental investigation involving or affecting the Premises, and (ii) are
no judgments, decrees, or orders against Agency involving or affecting the Premises, this
Agreement or the DSG's rights under this Agreement. To the Best of Agency's Knowledge,
there are no plans, studies or efforts by any governmental authorities or agencies or by any other
persons or entities that in any way could affect the use of the Premises or any portion thereof in
accordance with this Agreement. During the Term of this Agreement, Agency will not propose
any such study.
(g) Notice of Violations. Agency has not received notice of any
outstanding violations, past or present, of any Governmental Regulations, and to the Best of
Agency's Knowledge, no condition affects the Premises, which constitutes, or may constitute,
such a violation.
(h) Use Permits and Other Approvals. The Licenses and Permits
that are required for the present and proposed use and operation of the Premises are all in full
force and effect and are all of the licenses, permits, easements and rights of way required from all
governmental authorities having jurisdiction over the Premises or from private parties for the use
Stadium Management Agt FINAL v2.doc -40-
and operation of the Premises. The use and occupancy of the Premises as presently developed
and as contemplated under this Agreement is in accordance with all applicable zoning, general
plan and specific plan designations, building, fire, earthquake, environmental and other safety
codes. To the extent that such Permits and Approvals are in the name of the Agency and must be
held during the Term by DSG, the Agency will use its best efforts in a timely manner to cause
such Permits and Approvals to be transferred to the DSG in a form and substance sufficient to
permit DSG to possess and operate the Premises as contemplated by this Agreement.
(i) Insolvency, Foreclosure. There are no attachments, execution
proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization,
foreclosure, public financing or bond default or other proceedings pending or threatened against
Agency or the Premises, nor are any such proceedings anticipated or contemplated by Agency.
0) Condition of Premises. To the Best of Agency's Knowledge,
except as set forth on the Schedule of Condition of Premises, there are no physical or mechanical
defects or deficiencies in the physical or environmental condition of the Premises, whether latent
or patent, structural or nonstructural, including (without limitation) defects affecting the ceilings,
roofs, interior and exterior walls, stairways, floors, and other components of the Premises, and
the heating, air conditioning, plumbing, ventilation, elevator, utility, sprinkler and other water,
mechanical and electrical systems, apparatus and appliances located on or about the Premises,
and each of the same is in good operating order and condition, ordinary wear and tear excepted.
To the Best of Agency's Knowledge, there are no defects, faults or other problems in connection
with the soil, subsoil, grading, or compaction, construction, design or other elements of the
Premises.
(k) Condemnation Proceedings. To the Best of Agency's
Knowledge, there are no condemnation or eminent domain proceeding pending or threatened
against the Premises or any part thereof, and, there is no condition existing with respect to the
Premises that would result in the termination of the current access from the Land to any presently
existing highways, roads, utility, sewer, or drainage facilities servicing, adjoining or situated on
the Premises.
(1) Labor Issues. There are no employees of Agency who, by reason
of operation of law, or any provisions of any employment contracts with or employee benefit
plans of the City or Agency, or otherwise would become employees of DSG as a result of the
lease, management, operation or use of the Premises by DSG pursuant to this Agreement.
(m) Deliveries and Information. The Agency has provided DSG with
all information or access to information in its possession regarding the Premises, design,
construction current physical status and operation and no information that would if provided give
cause to DSG to not enter into this Agreement has been knowingly withheld by the Agency. All
such information provided by Agency to DSG both prior to and pursuant to this Agreement is, as
of the date supplied, to the Best of Agency's Knowledge, true and correct in all respects.
12.2. Covenants, Representations and Warranties of DSG
DSG makes the following representations, covenants, and warranties to
Agency, which Agency has relied upon in entering into this Agreement and will continue to rely
Stadium Management Agt FINAL vldoc -41-
upon during the Term, all of which are true as of the Effective Date and the Lease
Commencement Date and shall continue to be true at all times during the Term:
(a) Organization. DSG is duly established and in good standing
under the laws of the State of California. The execution and delivery of this Agreement and the
other documents contemplated in this Agreement by DSG, and the performance by DSG of the
obligations under this Agreement and the other documents contemplated in this Agreement
(i) are within the legal power of DSG; (ii) have been duly authorized by all requisite actions on
the part of the DSG; and (iii) will not violate any Governmental Regulation, any order of any
court or agency of government, the organizational documents of DSG or any indenture,
agreement or any other instrument to which DSG is a party. This Agreement and each of the
other documents described in this Agreement when executed and delivered to Agency, will
constitute legal, valid and binding obligations enforceable against DSG in accordance with the
terms of such documents. As of the Effective Date, Gary Jacobs is the duly appointed sole
manager of DSG and has full authority to execute this Agreement on behalf of DSG.
(b) No Litigation. There is no actual or, to the Best of DSG's
Knowledge, past or threatened suit, action or legal, administrative, arbitration or other
proceeding or governmental investigation involving or affecting DSG, its managing member,
investors, or any party directly or indirectly controlling DSG which could adversely affect the
ability of DSG to carry out its obligations hereunder.
(c) Insolvency. There are no attachments, execution proceedings,
assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other
proceedings pending or threatened against DSG, nor are any such proceedings contemplated by
DSG. DSG is able to pay its debts as they become due.
(d) Notice of Violations. DSG has not received notice of any
outstanding violations, past or present, of any Governmental Regulations, and to the Best of
DSG's Knowledge, no condition affects the Premises, which constitutes, or may constitute, such
a violation.
(e) Deliveries and Information. All information provided by DSG to
Agency both prior to the and pursuant to this Agreement is, as of the date supplied, to the Best of
DSG's Knowledge, true and correct in all respects.
(f) Use Permits and Other Approvals. To the Best of DSG's
Knowledge, the Licenses and Permits used by Storm LP and Golden State that are required for
the present and proposed use and operation of the Premises are all in full force and effect and are
all of the licenses, permits, easements and rights of way required from all governmental
authorities having jurisdiction over the Premises or from private parties for the use and operation
of the Premises. To the extent that such Permits and Approvals are in the name of the Storm LP
and must be held during the Term by DSG, DSG will use its best efforts in a timely manner to
cause such Permits and Approvals to be transferred to the DSG in a form and substance sufficient
to permit DSG to possess and operate the Premises as contemplated by this Agreement.
(g) Condition of Premises. To the Best of DSG's Knowledge except
as set forth on the Schedule of Condition of Premises, after inquiry of Storm LP and its
Stadium Management Agt FINAL vldoc -42-
employees, there are no physical or mechanical defects or deficiencies in the physical or
environmental condition of the Premises, whether latent or patent, structural or nonstructural,
including (without limitation) defects affecting the ceilings, roofs, interior and exterior walls,
stairways, floors, and other components of the Premises, and the heating, air conditioning,
plumbing, ventilation, elevator, utility, sprinkler and other water, mechanical and electrical
systems, apparatus and appliances located on or about the Premises, and each of the same is in
good operating order and condition, ordinary wear and tear excepted. To the Best of DSG's
Knowledge, after inquiry of Storm LP and its employees, there are no defects, faults or other
problems in connection with the soil, subsoil, grading, or compaction, construction, design or
other elements of the Premises.
13. Compliance with Laws; Hazardous Materials
13.1. Compliance with Laws
DSG shall comply with and cause the Premises to comply with (a) all
Governmental Regulations affecting the Premises or any part thereof, or the use thereof,
including, without limitation, those which apply to DSG Improvements and Alterations, whether
or not any such Governmental Regulations involve a change of policy on the part of the
governmental body enacting the same, and (b) all rules, orders and regulations of the National
Board of Fire Underwriters or other bodies exercising similar functions and responsibilities in
connection with the prevention of fire or the correction of hazardous conditions which apply to
the Premises. DSG shall pay all costs and expenses of DSG's performance under this Section 13.
13.2. Hazardous Materials
(a) Any use, generation, disposal, release or discharge by DSG of
Hazardous Materials in connection with any maintenance, improvement, management or other
use whatsoever of the Premises by DSG, including, without limitation, any agent, employee, or
contractor of DSG, shall be carried out at all times during the Term and in all respects in
compliance with all applicable Governmental Regulations regulating Hazardous Materials.
(b) During the Term, DSG shall, at its own expense, procure, maintain
in effect and comply with all conditions of any and all applicable permits, licenses and
Governmental Regulations affecting the use, occupancy, maintenance or other activity involving
the Premises by DSG under the authority of this Agreement including (without limitation)
discharge of materials or wastes into or through any sanitary sewer serving the Premises. Except
as otherwise properly discharged in strict accordance with all applicable Governmental
Regulations, DSG shall cause any and all Hazardous Materials to be removed from the Premises
in accordance with applicable permit(s) and removed and transported solely by duly licensed
haulers to duly licensed facilities for final disposal of such materials and wastes. DSG shall in all
respects handle, treat, deal with and manage any and all Hazardous Materials used on the
Premises by DSG in total conformity with all applicable Governmental Regulations and prudent
industry practices regarding management of such Hazardous Materials. Upon the expiration or
earlier termination of the Term, DSG shall cause all Hazardous Materials introduced by DSG or
its agents, employees, sublessees or contractors to be removed from the Premises in accordance
with all applicable Governmental Regulations. During the Term, DSG shall not take or permit
any remedial action in response to the presence of any Hazardous Materials in or about the
Stadium Management Agt FINAL vldoc -43-
Premises, nor enter into any settlement agreement, consent decree or other compromise with
respect to any claims relating to any Hazardous Materials in any way connected with the
Premises, without first notifying Agency of DSG's intention to do so and affording Agency
ample opportunity to appear, intervene or otherwise appropriately assert and protect Agency's
interest with respect thereto.
(c) During the Term, DSG shall promptly notify Agency in writing of:
(1) any Hazardous Materials enforcement, cleanup, removal or other governmental or regulatory
action that DSG becomes aware is instituted, completed or threatened pursuant to any
Governmental Regulations with respect to the Premises; (ii) any claim of which DSG is aware
that is made or threatened by any person against DSG or the Premises relating to damage,
contribution, cost recovery compensation, loss or injury resulting from or claimed to result from
any Hazardous Materials; and (iii) any reports made by DSG or of which DSG is aware to any
environmental agency arising out of or in connection with any Hazardous Materials in or
removed from the Premises, including any complaints, notices, warnings or asserted violations in
connection therewith. DSG shall also supply to Agency as promptly as possible, and in any event
within five (5) business days after DSG first receives or sends the same, copies of all claims,
reports, complaints, notices, warnings or asserted violations, relating in any way to Hazardous
Materials in or about the Premises. DSG shall promptly deliver to Agency copies of any
hazardous waste manifests required by applicable Governmental Regulations for the legal and
proper disposal of Hazardous Materials removed from the Premises.
(d) DSG shall indemnify, defend (with counsel reasonably acceptable
to Agency), protect, and hold Agency, its officers, employees and agents harmless from and
against any and all claims, actions, administrative proceedings, liabilities, penalties, forfeitures,
judgments, suits, demands, losses or expenses (including remediation costs, attorneys' fees and
litigation expenses), or death of or injury to any person or damage to any property whatsoever,
arising from or caused in whole or in part, directly or indirectly, by (i) DSG's or its employees',
agents', sublicensees', contractors' or sublessees' or any party claiming through DSG, improper
or unlawful use, analysis, storage, transportation, or generation of Hazardous Materials to, in,
about or from the Premises during the Term of this Agreement; or (ii) DSG's failure to comply
with any Governmental Regulations regarding Hazardous Materials in connection with DSG's
use, operation, maintenance or management of the Premises during the Term of this Agreement.
DSG's obligations hereunder shall include (without limitation), whether foreseeable or
unforeseeable, all costs of any required or necessary repair, cleanup, remediation, detoxification
or decontamination of the Premises, or the preparation and implementation of any closure,
remedial action or other required plans in connection therewith, and shall survive the expiration
or earlier termination of the Agreement. For purposes of the indemnity provisions hereof, any
acts or omissions of DSG, or by employees, agents, assignees, subtenants, sublicensees,
contractors or subcontractors of DSG or others acting for or on behalf of DSG (whether or not
they are negligent, intentional, willful or unlawful) shall be attributable to DSG.
(e) Agency shall indemnify, defend (with counsel reasonably
acceptable to DSG), protect, and hold DSG, its partners, officers, members, agents, employees
and contractors, and each of their members, partners, officers, directors, shareholders, employees,
agents, assignees, subtenants and contractors, harmless from and against any and all claims,
actions, administrative proceedings, liabilities, penalties, forfeitures, judgments, suits, demands,
Stadium Management Agt FINAL vldoc -44-
losses or expenses (including remediation costs, attorneys' fees and litigation expenses), or death
of or injury to any person or damage to any property whatsoever, arising from or caused in whole
or in part, directly or indirectly, by (i) the presence of any Hazardous Materials on the Premises
as of the Lease Commencement Date; or (ii) Agency's failure to comply with any Governmental
Regulations regarding Hazardous Materials applicable to Agency's use, operation, maintenance
or management of the Premises prior to the Lease Commencement Date in connection with such
Hazardous Materials. Agency's obligations hereunder shall include, without limitation, whether
foreseeable or unforeseeable, all costs of any required or necessary repair, cleanup, remediation,
detoxification or decontamination of the Premises, or the preparation and implementation of any
closure, remedial action or other required plans in connection therewith, and shall survive the
expiration or earlier termination of this Agreement. For purposes of the indemnity provisions
hereof, any acts or omissions of Agency, or by employees, agents, assignees, subtenants,
contractors or subcontractors of Agency or others acting for or on behalf of Agency (whether or
not they are negligent, intentional, willful or unlawful) shall be attributable to Agency.
The indemnification provisions of this Section 13 shall survive the
cancellation, termination or expiration of this Agreement.
14. Mechanics' Liens and Encumbrances; Title to Improvements; Surrender
14.1. Liens and Encumbrances
(a) Subject to the provisions concerning Permitted Contests, DSG
shall not create or permit to be created or to remain any laborer's, mechanic's, materialman's or
other such lien, encumbrance or charge upon the Premises, that arises from the use, management
or occupancy of the Premises by DSG or its agents or sublicensees, or by reason of any labor,
service or material furnished or claimed to have been furnished to or for the benefit of DSG, or
by reason of any construction, DSG Improvements, Alterations, or Routine Maintenance
performed at the direction of DSG (all of which are hereinafter referred to as "DSG Liens").
DSG shall promptly discharge any such DSG Liens (at DSG's election, by posting a bond with a
reputable corporate surety in an amount at least equal to one hundred and twenty percent (120%)
of the amount of such DSG Lien), or by conditional payment of such DSG's Liens at DSG's sole
cost and expense, or by way of Permitted Contest.
(b) Agency shall not be liable for the cost and expense of any labor,
services or materials furnished or to be furnished with respect to the Premises at the direction of
DSG or anyone holding the Premises or any part thereof by, through or under DSG, and no DSG
Liens shall attach to or affect the interest of Agency in and to the Premises. Nothing contained in
this Agreement shall be deemed or construed in any way as constituting the consent or request of
Agency, express or implied, by inference or otherwise, to any contractor, subcontractor, laborer
or materialman for the performance of any labor or the furnishing of any materials for any
construction, improvements, DSG Improvements, Alterations, or Routine Maintenance, to or of
the Premises or any part thereof, nor as giving-DSG any right, power or authority on behalf of
Agency to contract for or permit the rendering of any services or the furnishing of any materials
that would give rise to the filing of any DSG Lien against the Premises or any part thereof.
(c) If DSG fails to discharge any DSG Lien in violation of this Section
or fails to comply with any Governmental Regulation as required in this Agreement, and if such
Stadium Management Agt FINAL v2.doc -45-
failure continues for a period of twenty (20) days after receipt by DSG of notice of the existence
of the DSG Lien or twenty (20) days after receipt by the non-complying DSG of notice of failure
to comply with any Governmental Regulation, and provided such DSG Lien or Governmental
Regulation is not being contested by DSG, then without declaring a default hereunder and
without relieving DSG of any liability hereunder, Agency may (but shall not be obligated to)
discharge or pay such DSG Lien (either by paying the amount claimed to be due or by procuring
the discharge of such lien by deposit or by bonding proceedings) or cause compliance with such
Governmental Regulation, and any amount so paid by the Agency and all costs and expenses
incurred by Agency in connection therewith shall be paid by the DSG to the Agency within thirty
(30) days after demand therefore, with Interest thereon from the date of demand. All amounts
owed by the DSG to Agency as a consequence of the Agency exercising its rights to cure any
DSG Lien or DSG failure to comply with a Governmental Regulation under this subsection shall
be payable by DSG to Agency upon demand.
(d) Subject to the provisions concerning Permitted Contests, Agency
shall not create or permit to be created or to remain any laborer's, mechanic's, materialman's or
other such lien, encumbrance or charge upon the Premises, that arises from Agency's obligations
to provide for Capital Repairs or any other Agency obligations under this Agreement or its agents
or sublicensees, or by reason of any labor, service or material furnished or claimed to have been
furnished to or for the benefit of Agency, or by reason of any construction or Capital Repairs
performed at the direction of Agency (all of which are hereinafter referred to as "Agency Liens").
Agency shall promptly discharge any such Agency Liens (at Agency's election, by posting a bond
with a reputable corporate surety in an amount at least equal to one hundred and twenty percent
(120%) of the amount of such Agency Lien), or by conditional payment of such Agency's Liens
at Agency's sole cost and expense, or by way of Permitted Contest.
(e) DSG shall not be liable for the cost and expense of any labor,
services or materials furnished or to be furnished with respect to the Premises at the direction of
the Agency or anyone holding the Premises or any part thereof by, through or under Agency, and
no Agency Liens shall attach to or affect the interest of DSG in and to the Premises. Nothing
contained in this Agreement shall be deemed or construed in any way as constituting the consent
or request of DSG, express or implied, by inference or otherwise, to any contractor,
subcontractor, laborer or materialman for the performance of any labor or the furnishing of any
materials for any construction, improvements or Capital Repairs to or of the Premises or any part
thereof, nor as giving Agency any right, power or authority on behalf of DSG to contract for or
permit the rendering of any services or the furnishing of any materials that would give rise to the
filing of any Agency Lien against the Premises or any part thereof.
(f) If Agency fails to discharge any Agency Lien in violation of this
Section or fails to comply with any Governmental Regulation as required in this Agreement, and
if such failure continues for a period of twenty (20) days after receipt by Agency of notice of the
existence of the Agency Lien or twenty (20) days after receipt by the non-complying Agency of
notice of failure to comply with any Governmental Regulation, and provided such Agency Lien
or Governmental Regulation is not being contested by Agency, then without declaring a default
hereunder and without relieving Agency of any liability hereunder, DSG may (but shall not be
obligated to) discharge or pay such Agency Lien (either by paying the amount claimed to be due
or by procuring the discharge of such lien by deposit or by bonding proceedings) or cause
Stadium Management Agt FINAL v2.doc -46-
compliance with such Governmental Regulation, and any amount so paid by DSG and all costs
and expenses incurred by DSG in connection therewith shall be paid by the Agency to DSG
within thirty (30) days after demand therefore, with Interest thereon from the date of demand.
All amounts owed by the Agency to DSG as a consequence of DSG exercising its rights to cure
any Agency Lien or Agency failure to comply with a Governmental Regulation under this
subsection shall be payable by Agency to DSG upon demand.
14.2. Title to DSG Improvements and Alterations
Title to all DSG Improvements and Alterations (other than trade fixtures)
shall, during the Term, vest in and become the full and absolute property of Agency without need
of any further action being taken by DSG or Agency. Notwithstanding such Agency title, the
terms and conditions of this Agreement shall govern the occupancy, construction, use, operation
and exercise of DSG's rights with respect the DSG Improvements and Alterations. DSG's right,
title, interest, and estate in and to such DSG Improvements and Alterations shall not be separable
from the leasehold estate granted DSG in this Agreement. Upon the termination or expiration of
this Agreement, DSG shall immediately surrender possession of all DSG Improvements and
Alterations as provided herein.
14.3. Surrender
Upon any termination of this Agreement, DSG shall peaceably quit and
surrender the Premises, including any and all DSG Improvements and Alterations to Agency.
Except as otherwise provided in this Agreement, DSG shall surrender the Premises, including
any and all DSG Improvements and Alterations in good order, condition, and appearance,
ordinary wear and tear excepted. DSG shall have the right upon a termination of this Agreement
to remove from the Premises all records, furniture, inventory, trade fixtures, signs and advertising
devices (but not any pylon signs permanently affixed to the Premises), vehicles, equipment, tools
and all other personal property of DSG; provided, however, that, subject to the provisions below,
DSG shall repair, at its sole cost and expense, any damage to the Premises caused by such
removal. In no event shall DSG remove any DSG Improvements and Alterations, unless
promptly replaced with comparable or better Premises Improvements.
15. Damage and Destruction
15.1. Notice
DSG will promptly give written notice to Agency of any material damage
to or destruction of all or any part of the Premises, which notice shall generally describe the
nature and extent of such damage or destruction.
15.2. Restoration or Termination
In the event of any damage to or destruction of all or any part of the
Premises that is covered by the insurance required to be maintained by DSG or Agency, Agency
shall rebuild, repair, restore and replace the damaged portion of the Premises, if and only if(i) the
amount of insurance proceeds available to Agency are equal to or exceed the cost of such
rebuilding, repair, restoration and replacement; provided, however, that Agency shall be required
to fund any deductible amounts applicable to such insured event; and (iii) such rebuilding,
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restoration, repair or replacement is then permissible under applicable Governmental Regulations
to be done in such a manner as to return the damaged or destroyed portion of the Premises to
substantially its condition immediately prior to the damage or destruction, subject to
Governmental Regulations in effect at the time of reconstruction. DSG acknowledges that it has
been informed that Agency does not and will not carry flood or earthquake insurance on the
Premises. In the event of any damage or destruction of all or any part of the Premises caused by
earthquake or flood that is not covered by insurance required to be maintained by DSG or
Agency hereunder, or that otherwise does not meet any condition of this Section, Agency shall
not be obligated to repair, replace, restore or rebuild the damaged or destroyed portions of the
Premises, and Agency shall have the right, by written notice given to DSG within ninety (90)
days after such damage and destruction, to terminate this Agreement effective as of the date of
the damage or destruction.
DSG shall assign, pay and otherwise make available to Agency all
proceeds of insurance held by DSG on the Premises for any damage or destruction of all or any
part of the Premises. If such event of damage or destruction occurs during the last two (2) years
of the Initial Term, the First Extension Term or Second Extension Term, Agency shall have no
obligation to restore such damage or destruction, unless, with respect to the Initial Term and/or
the First Extension Term, DSG provides written notice to Agency of its election to extend the
Term for the applicable Extension Term within ninety (90) calendar days of the date of
occurrence of such damage or destruction event.
15.3. Application of Proceeds
Except as otherwise provided herein, insurance proceeds received on
account of any damage to or destruction of the Premises or any part thereof shall be applied to
pay for the costs of repair, replacement, restoration and rebuilding of same to the extent required
to restore the Premises substantially to its condition immediately prior to the damage or
destruction. All insurance proceeds in excess of that so required shall be the sole property of the
insuring party.
16. Insurance
16.1. Insurance to be Provided by DSG
Commencing on the Lease Commencement Date and at all times thereafter
through and during the Term, DSG shall keep the Premises insured against risks and hazards as
follows:
(a) Insurance against the risks customarily included under "all-risks"
policies (excluding earthquake and flood, with respect to improved properties similar to the
Premises) in an amount not less than the "full insurable value" (which as used herein shall mean
the full replacement value, including the costs of debris removal, which amount shall be
determined annually) of the aggregate value of the personal property of DSG located on the
Premises, and DSG Improvements and Alterations. DSG shall be entitled to carry a deductible of
up to One Hundred Thousand Dollars ($100,000.00) in connection with said coverage, provided
that DSG self-insures for the amount of the deductible.
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(b) Commercial general liability or comprehensive general liability (on
an occurrence basis), including (but not limited to) coverage for any construction, reconstruction
or alteration by or at the instance of DSG on or about the Premises covering the legal liability of
DSG against all claims for any personal injury or death of persons and for damage to or
destruction of property occurring on, in or about the Premises in combined single limits for both
property damage and personal injury and in the minimum amount of Two Million Dollars
($2,000,000.00) in connection with any single occurrence (provided that if liability coverage is
provided by a general liability policy the general aggregate limit shall apply separately and in
total to this location only) and excess or umbrella insurance in an amount of at least Five Million
Dollars ($5,000,000.00) all of which shall be subject to a deductible of up to One Hundred
Thousand Dollars ($100,000.00), provided that DSG self-insures for the amount of the
deductible. The commercial general liability or comprehensive general liability insurance shall
include extensions of coverage for premises and operations, products and completed operations,
and blanket contractual liability (including coverage for DSG's indemnity obligations under this
Lease).
(c) Workers' compensation insurance coverage in the amount and with
the scope of coverage required by California law.
(d) Excess liability insurance covering fireworks and pyrotechnics and
covering the legal liability for all claims for bodily injury, personal injury, property damage and
product liability, with a minimum coverage amount of Five Million Dollars ($5,000,000) per
occurrence, or shall contract with a fireworks/pyrotechnic vendor who obtains the required
insurance for the particular event. The insurance shall include extensions of coverage for
premises and operations, products and completed operations, and blanket contractual liability
(including coverage for DSG's indemnity obligations under this Lease). Unless DSG carries
such insurance itself, DSG shall require and insure that that the fireworks and/or pyrotechnics
vendor provide a Certificate of Liability Insurance for bodily injury, personal injury, property
damage and product liability for $5,000,000 per occurrence, listing the date(s) of the coverage
and/or event, as applicable, and including the Stadium's name as the location where the
fireworks or pyrotechnics will be displayed, and listing the City, the Agency, and their respective
boards, employees and agents as additionally insureds.
Agency acknowledges receipt of proof of insurance on the Premises in
such amounts and covering those risks indicated herein in the form attached as the Schedule of
DSG Insurance.
16.2. Insurance To Be Provided by Agency
Commencing on the Lease Commencement Date and at all times thereafter
through and during the Term, Agency shall maintain insurance against the risks customarily
included under "all-risks" policies (excluding earthquake and flood) in an amount not less than
the "full insurable value" (which as used herein shall mean the full replacement value, which
amount shall be determined annually by the Agency's insurer) of the aggregate value of the real
property constituting the Premises, excluding the Personal Property owned by DSG or those
portions of the Improvements required to be insured by DSG as set forth herein. Agency shall be
entitled to carry a deductible of up to One Hundred Thousand Dollars ($100,000.00) in
connection with said coverage, provided that Agency self-insures for the amount of the
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deductible. DSG acknowledges receipt of proof of insurance on the Premises in such amounts
and covering those risks indicated herein in the form attached as the Schedule of Agency
Insurance.
16.3. Requirements
All insurance required under to be maintained under Section 16.1 or 16.2
shall be written by a company or companies with a current A.M. Best's rating of at least A:VIII
which is authorized to do insurance business in the State of California; (ii) shall name the other
party as an additional insured party and contain a provision that the insurance provided by such
policy is primary insurance and any insurance carried by the other party, if any, is excess over
and non-contributing with the party who is obligated to carry such insurance under this
Agreement; (iii) shall be reasonably satisfactory to the other party in all respects; and (iv) shall
expressly provide (a) an effective waiver by the insurer of all rights of subrogation against any
named insured, including the other party, and against such insured's interest in the Premises and
against any income derived therefrom, (b) that no cancellation, reduction in amount or material
change in coverage thereof shall be effective until at least thirty (30) days after delivery to the
DSG and the Agency of written notice thereof, and (c) that during construction, repair,
restoration, rebuilding, reconstruction, alteration or material remodeling of any Improvements on
the Premises such policies shall be in "builder's risk' form if there would be an exclusion of
coverage under the DSG's policy as a result of such construction, repair, restoration, rebuilding
reconstruction, alteration or material remodeling. A copy of each policy or of an acceptable
certificate of insurance in force, issued by the insurer as set forth in Section 16.4 below, shall be
delivered by the insuring party to the other party on or before the date such party is required to
obtain the applicable insurance, and with respect to renewal or replacement policies, not less than
ten (10) days prior to expiration of the policy being renewed or replaced. The insuring party may
obtain the insurance required hereunder by endorsement on its blanket insurance policies,
provided that such policies fulfill the requirements of this Section 16, that such policies reference
the Premises, and the other party receives satisfactory written proof of coverage. Each party shall
permit the other to examine all policies evidencing the insurance required to be maintained by it
under this Agreement.
16.4. Certificates; Cancellation of Insurance
On or prior to the Lease Commencement Date, and thereafter within
fifteen (15) days after receipt of written request from either the Agency or DSG (but in no event
more often than once annually), the party required to provide insurance hereunder ("Insuring
Party") shall deliver to the other party a certificate addressed to such party, signed by Insuring
Party and dated within thirty (30) days prior to the delivery thereof, which (i) lists the insurers
and policy numbers evidencing all the insurance then required to be maintained by the Insuring
Party hereunder, and which warrants that such insurance is in full force and effect and that such
insurance and the policies evidencing the same comply with the requirements of this Lease, and
(ii) states that the Insuring Party is self-insured with respect to the deductibles as required under
this Section 16, and certifies to such party that the Insuring Party has the requisite liquidity so as
to permit the Insuring Party to self-insure with respect to such deductibles as provided in
Section 16 above. In the event that the Insuring Party fails to obtain, maintain or renew any
insurance provided for in this Section 16 or to pay the premiums therefor, or to deliver to the
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Agency or DSG any of such certificates, Insuring Party shall be deemed to be in material default
of this Lease and the other party may, at its option, terminate this Agreement. The other party
may (but shall not be obligated to) procure such insurance, pay the premiums therefor or obtain
such certificates and any costs or expenses incurred by the other party for such purposes shall be
reimbursed by the Insuring Party to the other party immediately upon demand, with interest
thereon from the date of demand.
17. Indemnity
DSG covenants and agrees to pay, defend (with counsel reasonably acceptable to
Agency), indemnify and save harmless Agency, its officers, employees, agents, and
representatives, from and against any and all liability, action, proceeding, loss, damage, cost,
expense (including, without limitation, all attorneys' fees and litigation expenses), causes of
action, suits, claims, demands or judgments of any nature whatsoever (collectively "Claims"),
including, without limitation, death of or injury to any person or damage to any property, based
upon, arising from or connected in any manner with (a) DSG's or its agents, contractors,
subtenants, licensees, sublicensees, or employees' lease, design, construction, management,
operation or use of the Premises and any Improvements or Alterations thereto, including, without
limitation, any activities engaged in pursuant to the License and/or Concession License granted
herein, (b) the use, occupancy, or enjoyment of the Premises by DSG or DSG's agents,
employees, contractors, subtenants, licensees, sublicensees, invitees, or customers prior to and/or
after the Lease Commencement Date and prior to expiration of the Term, (c) the violation by
DSG or its agents, contractors, subtenants, licensees, sublicensees, or employees of any
Governmental Regulations, (d) any negligence or reckless or intentional misconduct of the DSG
or its agents, contractors, subtenants, licensees, sublicensees, or employees, (e) any breach or
default in performance by DSG or its agents, contractors, subtenants, licensees, sublicensees, or
employees of any obligation, covenant, representation or warranty contained in this Agreement,
or (f) the Underlying Claim.
Agency covenants and agrees to pay, defend (with counsel reasonably acceptable
to DSG), indemnify and save harmless DSG, its officers, employees, agents, and representatives,
from and against any and all Claims based upon, arising from or connected in any manner with
(a) the ownership, construction, leasing or use of the Premises prior to the Lease Commencement
Date (except to the extent any claim results from any action or inaction of the Storm Entities
pursuant to the Stadium Operations contracts or otherwise), (b) the use, occupancy, or enjoyment
of the Premises by Agency or Agency's agents, employees, contractors, subtenants, licensees,
invitees, or customers prior to the Lease Commencement Date (except to the extent any claim
results from any action or inaction of the Storm Entities pursuant to the Stadium Operations
contracts or otherwise), (c) the violation by Agency or its agents, contractors, or employees of
any Governmental Regulations, (c) any negligence or reckless or intentional misconduct of the
Agency or its agents, contractors, or employees, or (d) the breach or default in performance by
Agency of any obligation, covenant, representation or warranty contained in this Lease.
If any action or proceeding should be brought against either Party based upon any
such Claim and if the indemnified Party, upon notice from the indemnifying Party, shall cause
such action or proceeding to be defended at the indemnifying Party's expense by counsel
reasonably satisfactory to the indemnified Party, without any disclaimer of liability by the
Stadium Management Agt FINAL vldoc -51-
indemnified Party in connection with such Claim, the indemnified Party shall not be required to
indemnify the indemnifying Party for reasonable attorney's fees and expenses in connection with
such action or proceeding. The agreement of indemnification set forth in this Section 17 shall
not extend to Claims arising prior to the Lease Commencement Date.
Should DSG, its agents, sublicensees, contractors, employees, invitees or guests
use or allow the use of any composition, work or material, DSG agrees to indemnify and save the
Agency harmless from any and all Claims arising from any claim of infringement of such
copyright or the use of any licensed or unlicensed composition, work or material.
The obligations of the Parties under this Section 17 shall commence to accrue on
the Effective Date and shall survive any termination of this Agreement.
18. Assignment; Nonsubordination to Leasehold
18.1. Assignment; Prior Consent
Except as provided in this Section 18 and in Section 19 (regarding
subletting and use), neither this Agreement nor any portion of or the entire interest of DSG under
this Agreement or in the Premises, shall be sold, assigned, mortgaged, pledged or hypothecated,
or otherwise transferred by DSG, whether by operation of law or otherwise, without the express
prior written consent of Agency. Except as otherwise set forth in this Section 18, the transfer of
(i) the voting capital stock of, or membership interests in, DSG, or (ii) the voting capital stock of,
or any membership interests in any entity which directly or indirectly controls DSG, which
transfer results in a change in the direct or indirect control of DSG (whether such transfer occurs
at one time or at intervals so that, in the aggregate, such a transfer shall have occurred) shall be
deemed to be an assignment controlled by the provisions of this Section 18.1. For so long as
DSG, the managing member of DSG, or any successor in interest to DSG or its managing
member is a limited liability company, DSG, its managing member, or their successors may not,
without the express prior written consent of Agency (which consent shall not be unreasonably
withheld or delayed), (i) change the identity of the managing member of DSG or any party
directly or indirectly controlling such managing member such that Gary Jacobs (or any successor
controlling party that is approved in connection with a prior transfer) is no longer the managing
member of DSG, (ii) change the ownership structure of DSG such that Gary Jacobs (or any
successor controlling party that is approved in connection with a prior transfer)is no longer owns
a majority of the outstanding membership interests, or (ii) amend its operating agreement in a
manner that affects the powers exercised by the managing member, except that nothing contained
herein shall limit the ability of the managing member to appoint officers to manage the day to
day business affairs of DSG. DSG shall have a right to engage in the following sales,
assignments, mortgages, pledges, hypothecations, or other transfers without the express prior
written consent of Agency, but otherwise subject to the provisions of this Section 18 ("Permitted
Assignees"):
(a) any transfer of the membership interests in DSG, or of the
membership interests in any entity which directly or indirectly controls DSG, by gift, bequest or
inheritance or other estate planning process, provided that there is no change in the identity of the
managing member of DSG or any party which directly or indirectly controls DSG;
Stadium Management Agt FINAL,vlda; -52-
(b) any transfer of the membership interests in DSG, or the
membership interests in any entity which directly or indirectly controls DSG when the identity of
the managing member of the DSG or any party which directly or indirectly controls DSG is not
changed;
(c) a change in the name of DSG;
(d) any transfer of the Lease, or DSG's interest in and to the Premises
to an entity into which DSG is merged, provided however, that DSG's managing member or any
entity directly or indirectly controlling DSG retains the rights to directly or indirectly control
such new entity; and
(e) any transfer of the Lease or DSG's interest in and to the Premises
to an entity controlled by, or under common control with DSG, or any entity directly or indirectly
controlling DSG provided that subsequent to such transfer, the managing member of DSG or
other party directly or indirectly controlling DSG or its managing member remains in control of
the transferee entity.
18.2. Additional Transfers Requiring the Prior Written Consent of Agency
If DSG or any party directly or indirectly controlling DSG are not limited
liability companies, neither DSG nor any party directly or indirectly controlling DSG shall
engage in any sale, assignment, mortgage, pledge, hypothecation, or other transfer which results
in a change of control in DSG or any party directly or indirectly controlling DSG without the
express prior written consent of Agency, which consent shall be given in the sole discretion of
the Agency. If DSG, any party directly or indirectly controlling DSG, or any successor in interest
to DSG, is not a limited liability company, provided that such transfer does not result in a change
in the direct or indirect control from that of DSG or any party directly or indirectly controlling
DSG prior to such transfer, DSG or any party directly or indirectly controlling DSG may engage
in the following transactions without the written consent of Agency but otherwise subject to the
provisions of this Section 18:
(a) a conversion of the form of entity of DSG or any party directly or
indirectly controlling DSG;
(b) any transfer of the interests in or voting stock of DSG, or the
interests in or voting stock of any entity which directly or indirectly controls DSG, by gift,
bequest or inheritance or other estate planning process, provided that Gary Jacobs still exercises
control over the voting interests of DSG; and
(c) any transfer of the Lease, or DSG's interest in and to the Premises,
to an entity into which DSG is merged or an entity which purchases substantially all of the assets,
outstanding stock or other outstanding interests of DSG, provided that Gary Jacobs still exercises
control over the voting interests of DSG.
18.3. Consent of Agency
Should DSG desire to consummate any transfer that requires Agency's
prior consent under this Section 18, DSG shall give Agency written notice of such desire, which
notice shall contain (i) the name and address of the proposed assignee and its form of
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organization, (ii) information regarding the experience of such proposed assignee in operating a
use that is similar to the Permitted Use then being operated from the Premises, (iii) the material
terms and conditions of the proposed assignment related to the assignee's assumption of the
DSG's obligations under the Lease (including, without limitation, the financial capability of the
assignee to complete the obligations of the DSG and the proposed commencement date of the
proposed assignment), and (iv) a description of proposed remodeling or renovation to the exterior
of the Improvements to be conducted by the proposed assignee at the time of transfer, if any,
together with the request that Agency approve such assignment. In the event the proposed
assignment is not approved or disapproved by Agency in writing to DSG within thirty (30) days
following receipt of such request, the proposed assignment shall be deemed disapproved.
Agency shall have a period of thirty (30) days following receipt of such written notice within
which to notify DSG in writing that Agency elects either (a) to deny DSG the right to
consummate such assignment or statement specifying the reasons for such denial, or(b) to permit
DSG to assign this Lease and the Premises. Any consent given hereunder by Agency to any sale,
assignment, mortgage, pledge, hypothecation or other transfer shall apply only to the specific
transaction thereby authorized and shall not relieve DSG or any approved successor of DSG from
the requirement of obtaining the prior written consent of Agency to any further transfer.
18.4. Effect of Consent; Release of DSG
(a) No assignment of this Agreement or of DSG's entire interest under
this Agreement or in the Premises pursuant to this Section 18 shall be effective unless and until
there shall have been delivered to Agency a written agreement ("Assignee's Assumption"), in a
form reasonably acceptable to the Executive Director executed by DSG and the proposed
assignee whereby the assignee legally binds itself to observe and perform all of the other terms,
conditions and provisions of this Lease on the part of DSG to be observed or performed.
(b) In the event that Agency approves any assignment of this Lease or
of DSG's entire interest under this Lease or in the Premises requiring Agency's consent pursuant
to this Section 18, if Agency shall have received the fully executed Assignee's Assumption, then
upon DSG's request, Agency shall in the exercise of its reasonable discretion approve and
execute such documents, and instruments as are necessary to release DSG from its obligation
under this Lease.
(c) Any person who, by operation of law or otherwise, becomes an
assignee of this Lease or becomes vested with a leasehold interest hereunder shall be bound by
and be liable under all the terms, covenants, provisions and conditions contained in this Lease
during the Term, whether or not of the nature of covenants ordinarily running with the land, but
neither DSG nor any subsequent DSG whose interest is assigned or divested shall be relieved of
liability hereunder, unless or until Agency grants an express release from liability executed in
writing in accordance with subsection (b) above. Likewise, no course of dealing with any
assignee, or any other party vested with a leasehold interest hereunder shall release or relieve
DSG from liability under this Lease.
18.5. Agency Costs of Assignment
DSG shall promptly reimburse Agency for Agency's actual costs incurred
in reviewing and effecting any sale, assignment, mortgage, pledge, hypothecation or transfer
Stadium Management Agt FINAL v2.doc -54-
requested by DSG pursuant to this Section 18, including, without limitation, any attorneys' fees
and costs incurred by Agency.
18.6. Assignment by Agency
Agency may assign or transfer any of its rights or obligations under this
Lease with the prior written approval of DSG, which approval shall not be unreasonably withheld
or delayed; provided, however, that the Agency may assign or transfer any of its interests
hereunder to the City at any time without the consent of DSG. Any assignee of Agency under
this Lease (whether by operation of law or otherwise) or any party who becomes vested with
Agency's interest hereunder shall be bound by and be liable under all the terms, covenants,
provisions and conditions contained in this Agreement during the Term, whether or not of the
nature of covenants ordinarily running with the land, but neither Agency nor any subsequent
assignee of Agency whose interest is assigned or divested shall be relieved of liability hereunder,
unless or until DSG grants an express release from liability executed in writing. Likewise, no
course of dealing with any assignee, or any other party vested with a leasehold interest hereunder
shall release or relieve Agency from liability under this Agreement.
19. Subleases, Licenses and Concession Agreements
DSG may enter into subleases, sublicenses, licenses, concession and other
agreements respecting use and operation of the Premises which are for a period no longer than
the Term and provided that such agreements are consistent with the Permitted Use, the Prior
Agreements and the Stadium Operations Contracts.
20. Default
20.1. DSG Defaults
For the purpose of this Agreement, the term "Default by DSG" shall mean
the occurrence of any one or more of the following events:
(a) Failure by DSG to pay when due any sum of money payable under
this Agreement, whether required for operation of the Premises or otherwise, provided that such
failure shall continue for a period of thirty (30) calendar days after the date DSG receives written
notice of such failure;
(b) Failure by DSG to pay any premium for insurance required under
this Agreement, or any other sum to be paid by DSG pursuant to this Agreement provided that
such failure shall continue for a period of thirty (30) calendar days after DSG receives written
notice from Agency of such failure or failure by DSG to maintain any insurance required under
this Agreement;
(c) Abandonment of the Premises which, for purposes of this Section,
means any failure of DSG to take any actions to manage, operate, maintain, sublease, license or
use the Premises for thirty (30) consecutive days or longer;
(d) Commencement of any action or proceeding by or against DSG
under any federal or state bankruptcy or insolvency law or other debtors relief law, whether now
or hereafter in force, including (but not limited to) any action or proceeding to have DSG
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declared bankrupt and any action or proceeding seeking reorganization of DSG or seeking an
arrangement with all or some of DSG's creditors, whether or not a trustee or receiver is
appointed, provided that such action or proceeding continues without dismissal for a period of
ninety(90) days after its commencement;
(e) Appointment, either voluntarily or involuntarily, of a receiver,
trustee, keeper, or other person to take possession of all or substantially all of the assets of DSG,
if such appointment and possession continues without dismissal for a period of ninety (90) days
after commencement;
(f) Execution by DSG of an assignment for the benefit of its creditors
of all or substantially all of its assets that is available by law for the satisfaction of claims of
judgment by creditors of DSG; or
(g) Failure by DSG or its agents, contractors, subtenants, licensees,
sublicensees, or employees to perform or comply with any other term, covenant, or provision of
this Agreement including, but not limited to, the obligation to operate and manage the Premises
in accordance herewith, not cured within thirty (30) days after DSG receives written notice from
Agency of the default (which notice shall specify the particulars of such default), or, in the case
of a default reasonably requiring more than thirty (30) days to cure, not cured within a reasonable
time after the giving of such notice, provided that the curing of the default is commenced within
the thirty (30) day period after Agency gives DSG notice of such default and is diligently and in
good faith prosecuted to completion.
20.2. Agency's Remedies
In the event of any Default by DSG under this Agreement that is not cured
by DSG within any applicable cure period, and in addition to any and all other rights or remedies
of Agency hereunder, or as provided by law or in equity, Agency may exercise the following
remedies at its sole option:
(a) Termination. In the event of any Default by DSG, Agency shall
have the right to terminate this Agreement by giving DSG written notice of termination. No act
by or on behalf of Agency (such as entry onto the Premises by Agency to perform maintenance
and repairs and efforts to relet the Premises), other than giving DSG written notice of
termination, shall terminate this Agreement. If Agency gives such notice, this Agreement and the
License granted hereunder, as well as the right, title and interest of DSG under the Lease granted
herein, shall wholly cease and expire in the same manner and with the same force and effect
(except as to DSG's liability) on the date specified in such notice as if such date were the
expiration date of the Initial Term or Extension Term (as the case may be) without the necessity
of re-entry or any other act on Agency's part. Upon any termination of this Agreement, DSG
shall promptly quit and surrender the Premises to Agency. Agency shall not by any re-entry or
other act be deemed to have accepted any surrender by DSG of the Premises or DSG's interest
therein, or deemed to have terminated this Agreement, or to have relieved DSG of any obligation
hereunder, unless Agency shall have given DSG express written notice of Agency's election to
do so as set forth in this Agreement.
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If this Agreement is terminated, Agency shall be entitled to recover from
DSG as damages the following:
1. The worth at the time of award of unpaid expenses which
had been earned at the time of termination; plus
2. The worth at the time of award of the amount by which the
unpaid expenses for the balance of the Term after the time of award exceeds the amount of any
income from the operation of the Premises to which Agency becomes entitled; plus
3. Any other amount necessary to compensate Agency for all
the detriment proximately caused by DSG's failure to perform its obligations under this
Agreement, or which in the ordinary course of things would be likely to result therefrom,
including, without limitation, attorneys' fees and costs; provided, however, the Agency shall
have no right to consequential damages; less
4. The aggregate value of the unamortized DSG
Improvements.
(b) Right to Continue the Agreement. Agency has the right to
continue this Agreement in effect after Default by DSG, and may recover any and all of its
expenses in doing so from DSG for so long as Agency does not terminate DSG's right to
possession. Upon Default by DSG, Agency's acts of maintenance or preservation, efforts to relet
the Premises, or the appointment of a receiver to protect its interest under this Agreement shall
not constitute a termination of DSG's right to possession. Agency shall have the right to enforce
specific performance of this Agreement.
(c) Reletting the Premises. Without terminating this Agreement, or
otherwise relieving DSG of any obligation hereunder, Agency shall use its commercially
reasonable best efforts to operate or relet the Premises or any portion thereof at any time or from
time to time and for such terms and upon such conditions and rental as Agency in its sole
discretion may deem proper, and apply such rents first to the payment of such costs and expenses
as Agency may have paid, assumed or incurred in recovering possession of the Premises and
reletting the same, second to the payment of other monetary obligations of DSG due and unpaid
hereunder, and third to the payment of other damages arising from Default by DSG. Following a
Default by DSG, Agency shall not unreasonably withhold its consent to an assignment of this
Agreement, unless Agency shall also elect to terminate this Agreement and DSG's right to
possession of the Premises. If Agency relets the Premises or any portion thereof, such reletting
shall not relieve DSG of any obligation hereunder, except that Agency shall apply the rent or
other proceeds actually collected by Agency from such reletting against amounts due from DSG
as set forth herein. Agency may execute any lease made pursuant hereto in its own name and the
tenant thereunder shall be under no obligation to see to the application by Agency of any
proceeds to DSG, nor shall DSG have any right to collect any such proceeds.
20.3. Default by Agency
For the purpose of this Agreement, the term "Default by Agency" shall
mean the occurrence of any one or more of the following events:
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(a) Failure by Agency to pay or to disburse any sums to be paid and/or
disbursed by Agency under this Agreement, or to make any deposit to be made by Agency
pursuant to this Agreement provided that such failure continues for a period of thirty (30)
calendar days after Agency receives written notice from DSG of such failure ("Agency Monetary
Default"),
(b) Failure by the Agency to deliver and continue to provide
possession of the Premises to the DSG for the Permitted Uses, except in accordance with the
terms of this Agreement;
(c) Failure by the Agency to deliver and continue to provide the Off-
Premises Parking in accordance herewith, or
(d) Default or breach by Agency of any other term, covenant, or
provision of this Agreement, other than providing possession of the Premises to the DSG, not
cured within thirty (30) days after Agency receives written notice from DSG of the default
(which notice shall specify the particulars of such default), or, in the case of a default reasonably
requiring more than thirty (30) days to cure, not cured within a reasonable time after the giving of
such notice, provided that the curing of the default is commenced within the thirty (30) day
period after DSG gives Agency notice of such default and is diligently and in good faith
prosecuted to completion.
20.4. DSG's Remedies
In the event of any Default by Agency under this Agreement that is not
cured by Agency within any applicable grace period, DSG shall have all other rights and
remedies available hereunder, or as provided by law or in equity, including the right to terminate
this Agreement or continue this Agreement in effect, and collect all damages directly and
indirectly caused by the Default by Agency (provided, however, DSG shall have no right to
consequential damages) and the right to enforce specific performance of this Agreement.
20.5. No Waiver
No delay or omission of any Party in exercising any right or remedy shall
be construed as a waiver of any such right or remedy or of any breach by the defaulting Party
hereunder. The acceptance by either Party of a defaulting Party's performance shall not be a
waiver of any preceding breach or default by such Party of any provision hereof, other than the
failure of such Party to perform the obligation accepted, but only to the extent actually performed
regardless of the non-defaulting Party's knowledge of such preceding breach or default at the
time of acceptance of such performance, or a waiver of the non-defaulting Party's right to
exercise any remedy available to the non-defaulting Party under this Agreement, or at law or at
equity.
20.6. Cumulative Rights
The rights and remedies reserved to the Parties in this Section 20,
including those not specifically described, shall be cumulative, and except as otherwise may be
provided by California statutory law in effect at the time, each Party may pursue any or all of
such rights or remedies, at the same time or separately.
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21. DSG Holding Over
If DSG or any person claiming through DSG shall not immediately surrender
possession of the Premises at the expiration or earlier termination of the Term, Agency shall be
entitled to recover compensation for such use and occupancy. Agency shall also continue to be
entitled to retake or recover possession of the Premises as provided in case of default on the part
of DSG, and DSG shall be liable to Agency for any loss or damage it may sustain by reason of
DSG's failure to surrender possession of the Premises immediately upon the expiration or earlier
termination of the Term. DSG hereby agrees that all the obligations of DSG and all rights of
Agency applicable during the Term shall be equally applicable during such period of subsequent
occupancy.
22. Condemnation
22.1. Total
If a Total Taking occurs, this Agreement shall automatically terminate as
of the Date of Taking.
22.2. Partial Taking
If a Partial Taking occurs, this Agreement shall automatically terminate
only as to the portion of the Premises so taken as of the Date of Taking. With respect to a Partial
Taking, Agency shall, at Agency's sole cost and expense, make any alterations, Capital Repairs
or Improvements necessary and reasonably approved by DSG to allow DSG to continue its
occupation and use of the Premises under this Agreement.
If DSG at any time during the Term is deprived of twenty-five percent
(25%) or more of the Premises or deprived of access to the Premises, by reason of a Taking, or if
the remaining area of the Premises is not reasonably adequate for DSG to continue operation of
its business (e.g., reduction of parking areas below those reasonably required) or the access is not
restored, then DSG, at DSG's option, may deem the taking to be a Total Taking and terminate
this Agreement by giving Agency notice to that effect within thirty (30) days after the date when
DSG makes the determination that its operations will be impeded. Upon termination pursuant to
this Section, the Parties hereto shall be released from all further obligations under the Agreement.
22.3. Allocation of Compensation
If any compensation is awarded in connection with any Taking of any
portion of the Premises, or if the Premises are sold under threat of a Taking, the compensation
(including proceeds of any sale under threat of a Taking) shall be the property of Agency except
to the extent that any such compensation or sale proceeds (a) relates to the loss of earnings by the
DSG, its subtenants and concessionaires (b) relates to temporary or permanent relocation
expenses for and DSG, its subtenants and concessionaires including trade fixtures and/or
personal property including rent in temporary substitute facilities, (c)relates to the unamortized
cost (which shall be calculated based on DSG's book basis depreciated on a straight line basis
over the useful life of the item being depreciated, such useful life to be calculated in accordance
with federal tax law); of any improvements to the Premises made, paid for or installed by DSG,
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its subtenants, or at DSG's request, (d) relates to one hundred percent (100%) of the remaining
leasehold value of this Agreement.
22.4. Temporary Taking
If either a Total Temporary Taking or a Partial Temporary Taking occurs,
this Agreement shall remain in full force and effect and DSG shall continue to perform all terms,
conditions and covenants of this Agreement. If a Temporary Total Taking exceeds 30 days in
one instance or one or more Total Takings exceed 60 days in one calendar year, or if the
Temporary Taking causes material economic hardship to the DSG which is not compensated by
the governmental authority that exercises the Taking, the DSG shall have the right to terminate
the Agreement in the same manner provided for a Partial Taking.
23. DSG Protection From Mortgage
Agency shall not execute, enter into or permit, by operation of law of otherwise,
the creation of any mortgage, deed of trust, pledge, security interest or other encumbrance of its
interest in the Premises, which would be prior to or impair the rights of DSG pursuant to this
Agreement. DSG agrees to subordinate its interest under the Agreement to, and/or attom to any
secured party under, any mortgage, deed of trust, pledge, security interest or other encumbrance
of Agency's interest in the Premises, only if the secured party enters into a non-disturbance
agreement with DSG confirming that, notwithstanding any judicial or nonjudicial foreclosure,
trustee sale, deed in lieu of foreclosure or merger of title, and for so long as there is no Default by
DSG, all of DSG's rights and interests under this Agreement shall remain in effect for the full
Term. Any proposed non-disturbance agreement shall be acceptable to DSG and Agency in the
exercise of their respective reasonable discretion.
24. Agency's Entry on Premises
During the Term, Agency and its authorized representatives shall have the right to
enter the Premises, provided that such entry only occurs during business hours, and upon at least
forty-eight (48) hours written notice (except for emergencies) for any of the following purposes:
(a) To determine whether the Premises are in good condition and
whether DSG is complying with its obligations under this Agreement, provided, however that
Agency shall make no invasive inspection and shall not interfere materially with the DSG's
possession or use of the Premises; and
(b) To serve, post, or keep posted any notices required or allowed
under the provisions of this Agreement.
25. Non-Discrimination Covenants
DSG herein covenants by and for itself and any successors in interest that it shall
not discriminate against or segregate any person or group of persons on account of race, color,
creed, religion, sex, marital status, handicap, national origin or ancestry in the sale, rental,
license, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Premises, nor shall
DSG itself or any person claiming under or through it establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location, number, use
or occupancy of tenants, subtenants, or vendees of the Premises. All such leases, subleases,
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licenses or contracts shall contain or be subject to substantially the following nondiscrimination
or nonsegregation clauses:
(a) In leases, subleases and licenses: "The tenant herein covenants by
and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons
claiming under or through him or her, and this instrument is made and accepted upon and subject
to the following conditions: Subtenant shall not discriminate against or segregate any person or
group of persons on account of race, color, creed, religion, sex, marital status, handicap, ancestry
or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of
the premises herein leased nor shall the tenant himself or herself, or any person claiming under or
through him or her, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants,
subtenants or vendees in the premises herein leased."
(b) In contracts: "Contractor shall not discriminate against or
segregate any person or group of persons on account of race, color, creed, religion, sex, marital
status, handicap, ancestry or national origin, in the lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the premises, nor shall the contracting party himself or herself or any
person claiming under or through him or her, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenant, subtenants, or vendees of the premises."
26. Attorneys' Fees
Should any Party engage an attorney, whether or not the Party proceeds to
institute any action or proceeding at law or in equity, or in connection with an arbitration, to
enforce any provision of this Agreement, including an action for declaratory relief, or for
damages by reason of an alleged breach of any provision of this Agreement, or otherwise in
connection with this Agreement, or any provision thereof, the prevailing Party shall be entitled to
recover from the losing Party reasonable attorneys' fees and costs (including fees for experts) for
services rendered to the prevailing Party in such action or proceeding. The obligations of the
Parties under this Section 26 shall survive any termination of this Agreement.
As used in this Agreement, the terms "attorneys' fees" or "attorneys' fees and
costs" means the fees and expenses of counsel to the Parties hereto (including, without
limitation, in-house or other counsel employed by Agency) which may include printing,
duplicating and other expenses, air freight charges, and fees billed for law clerks, paralegals and
others not admitted to the bar but performing services under the supervision of an attorney. The
terms "attorneys' fees" or "attorneys' fees and costs" shall also include, without limitation, all
such fees and expenses incurred with respect to appeals, arbitrations and bankruptcy proceedings,
and whether or not any action or proceeding is brought with respect to the matter for which said
fees and expenses were incurred.
27. Estoppel Certificates
At any time and from time to time, within twenty (20) days after notice of request
by either Party, the other Party shall execute, acknowledge, and deliver to the requesting Party, or
to such other recipient as the notice shall direct, a statement certifying that this Agreement is
Stadium Management Agt FINAL,v2doc -6 1-
unmodified and in full force and effect, or, if there have been modifications, that it is in full force
and effect as modified in the manner specified in the statement and acknowledging that there are
no uncured defaults or failures to perform any covenant or provision of this Agreement on the
part of the requesting Party or specifying any such defaults or failures which are claimed to exist.
The statement shall be such that it can be relied on by any auditor, creditor, commercial banker,
and investment banker of either Party and by any prospective purchaser or mortgagee of the
Premises or all or any part or parts of DSG's or Agency's interests under this Agreement.
DSG's or Agency's failure to execute, acknowledge, and deliver, on request, the
certified statement described above within the specified time shall constitute acknowledgment by
DSG or Agency, as the case may be, to all persons entitled to rely on the statement that this
Agreement is unmodified and in full force and effect and that the rent and other charges have
been duly and fully paid up to and including the respective due dates immediately preceding the
date of the notice of request.
28. Covenant of Quiet Enjoyment
Agency covenants that, subject to DSG's performance of DSG's covenants and
obligations in accordance with the terms and conditions of this Agreement, DSG may quietly
have, hold and enjoy the Premises during the Term of this Agreement, without hindrance or
interruption by Agency or any other persons or entities lawfully or equitably claiming by, through
or under Agency. Notwithstanding the foregoing, DSG acknowledges and agrees that its rights
hereunder are subject to, the terms and conditions of the Prior Agreements and the Stadium
Operations Contracts.
29. Notices
All notices, requests, demands or documents which are required or permitted to be
given or served hereunder shall be in writing and delivered personally or delivered by United
States mail, postage prepaid, certified return receipt requested, or a national or regional overnight
courier addressed as follows:
To Agency at: Redevelopment Agency of the City of Lake Elsinore
130 S. Main Street
Lake Elsinore, California 92530
Attn: Executive Director
with a copy to: Barbara Zeid Leibold, Esq.
Leibold McClendon & Mann, P.C.
23422 Mill Creek Drive, Suite 105
Laguna Hills, California 92653
To DSG at: Diamond Stadium Group, LLC
500 Diamond Drive
Lake Elsinore, California 92531
Attn: Gary Jacobs
Stadium Management Agt FINAL.v2.doc -62-
with a copy to: Robert B. Lapidus
Law Office of Robert B. Lapidus
3366 North Torrey Pines Court, Suite 210
La Jolla, CA 92037
Notice shall be deemed to have been delivered only upon actual delivery to the
intended addressee in the case of either personal service or courier. The addresses for purposes
of this Section 29 may be changed by giving written notice of such change in the manner
provided herein for giving notices. Unless and until such written notice is delivered, the latest
address stated by written notice, or provided herein if no written notice of change has been
delivered, shall be deemed to continue in effect for all purposes hereunder.
30. Authority
Each person executing this Agreement on behalf of DSG and Agency hereby
represents and warrants to the other (a) his or her authority to do so on behalf of that Party, and
(b) that DSG or Agency (as appropriate) has full right and authority to enter into this Agreement,
and such Agreement is binding on each such Party in accordance with its terms.
31. General
31.1. Governing Law
This Agreement shall be construed and interpreted in accordance with the
laws of the State of California.
31.2. Covenants and Conditions
All provisions, whether covenants or conditions, on the part of DSG shall
be deemed to be both covenants and conditions.
31.3. Waiver
The waiver by Agency or DSG of any breach by the other Party of any
term, covenant, or condition contained in this Agreement shall not be deemed to be a waiver of
such term, covenant, or condition or any subsequent breach of the same or any other term,
covenant, or condition contained in this Agreement.
31.4. Brokers
Each Party warrants to and for the benefit of the other that (1) it has had no
dealings with any real estate broker or other agent (attorneys excepted) in connection with the
negotiation or making of this Agreement; and (ii) no commissions are due any real estate broker
or other agent in connection with this Agreement or any transactions contemplated by this
Agreement.
31.5. Table of Contents; Headings
The Table of Contents of this Agreement and the captions of the various
Sections of this Agreement are for convenience and ease of reference only and do not define,
Stadium Management Agt FINAL vldoc -63-
limit, augment, or describe the scope, content, or intent of this Agreement or of any part or parts
of this Agreement.
31.6. Gender; Number
The neuter gender includes the feminine and masculine, the masculine
includes the feminine and neuter, and the feminine includes the neuter, and each includes
corporation, partnership, or other legal entity whenever the context so requires. The singular
number includes the plural whenever the context so requires.
31.7. Entire Agreement; Modification
This Agreement and Attachments "A" through "O" each of which is
incorporated herein by reference, contain the entire agreement between the Parties regarding the
subject matter hereof. No verbal agreement or implied covenant shall be held to vary the
provisions hereof, any statements, law or custom to the contrary notwithstanding. No promise,
representation, warranty, or covenant not included in this Agreement has been or is relied on by
either Party. Each Party has relied on its own inspection of the Premises and examination of this
Agreement, the counsel of its own advisors, and the warranties, representations, and covenants in
this Agreement itself. The failure or refusal of either Party to inspect the Premises, to read this
Agreement or other documents, or to obtain legal or other advice relevant to this transaction
constitutes a waiver of any objection, contention, or claim that might have been based on such
reading, inspection, or advice. No provision of this Agreement may be amended or varied except
by an agreement in writing signed by the Parties hereto or their respective successors.
31.8. Severability
The invalidity or illegality of any provision shall not affect the remainder
of this Agreement and all remaining provisions shall, notwithstanding any such invalidity or
illegality, continue in full force and effect.
31.9. Successors
Subject to the provisions of this Agreement on assignment, each and all of
the covenants and conditions of this Agreement shall be binding on and shall inure to the benefit
of the Parties and their respective heirs, successors, executors, administrators, assigns, and
personal representatives.
31.10. Administration; Consent of Agency and DSG
The Executive Director be charged with the administration of this
Agreement on behalf of the Agency and DSG shall be entitled to rely upon the written decisions,
directions, and consents granted by the Executive Director in connection with this Agreement.
Whenever a reference is made herein to an action, finding, approval or consent to be undertaken
by Agency, then such action, finding, approval or consent to be given by Agency under this
Agreement may be given as an administrative action on behalf of Agency by the Executive
Director, or his/her designee, unless specifically provided otherwise or the context should require
otherwise and provided that such action, finding, approval or consent is pursuant to and not
inconsistent with the terms of this Agreement. Notwithstanding the foregoing, the Executive
Director may in his sole and absolute discretion refer any matter to the Agency Board for action,
Stadium Management Agt FINAL v2.doc -64-
direction or approval. Neither Agency's execution of this Agreement nor any consent or
approval given by Agency hereunder in its capacity as Agency shall waive, abridge, impair or
otherwise affect Agency's powers and duties as a governmental body.
Any consent or approval to be given by DSG under this Agreement may be
given by a writing executed on behalf of DSG by any officer or manager of DSG. Any
requirements under this Agreement that DSG obtain consents or approvals of Agency are in
addition to and not in lieu of any requirements of applicable Governmental Regulations that DSG
obtain approvals or permits.
Any approval, acceptance or consent of any Party required or permitted
under this Agreement, unless expressly provided otherwise, shall not be unreasonably withheld
or delayed.
31.11. No Merger of Title
No merger of the leasehold estate created by this Agreement with the fee
estate of Agency shall occur notwithstanding the fact that the same person may own or hold both
the leasehold estate created by this Agreement or any interest therein and the fee estate in the
Premises or any interest therein. No such merger shall occur unless and until all persons or
entities (including any mortgagee with respect to the fee estate of Agency) having any interest in
the leasehold estate created by this Agreement or the fee estate in the Premises shall join in a
written instrument effecting such merger and shall duly record the same.
31.12. Recordation of Memorandum of Agreement
This Agreement shall not be recorded. The Memorandum of Agreement
shall be recorded as required by this Agreement.
31.13. Execution in Counterparts
This Agreement, the Memorandum of Agreement, and all other
documents, agreements, assignments and instruments to be executed under this Agreement, may
be executed in two or more counterparts, each of which shall be an original, but all of which shall
together shall constitute one and the same instrument.
31.14. Time is of the Essence; Force Majeure Delays; Extension of Times of
Performance
(a) Time is of the essence in the performance of each of the Parties'
respective obligations set forth in this Agreement. In addition to specific provisions of this
Agreement providing for extensions of time, no Party shall be deemed to be in default and times
for performance hereunder shall be extended where delays are due to war insurrection or
terrorism; any form of labor dispute; lockouts; riots: floods; earthquakes; fires; acts of God or
any other deity; third party litigation; acts of a public enemy; referenda; acts of or failures to act
by governmental authorities (except that the failure of Agency to act as required hereunder shall
not excuse its performance); moratoria; epidemics; quarantine restrictions; freight embargoes;
unusually severe weather; inability to secure necessary insurance, labor, materials, or tools; or
other similar causes beyond the control and without the fault of the Party claiming an extension
of time to perform (collectively, a "Force Majeure" delay); provided, however, that the Party
Stadium Management Agt FINAL vldoc -65-
claiming the existence of a Force Majeure delay and an extension of its obligation to perform
shall notify the other Party of the nature of the matter causing the delay within thirty (30) days
from the occurrence thereof, and, provided further, that the extension of time (the "Force
Maieure Extension") shall be only for the period of the Force Majeure delay, and in no event
shall exceed one hundred eighty (180) days.
DSG expressly assumes the risk of general market conditions, interest
rates, and other similar economic and other circumstances that may make management and/or
operation of the Premises unprofitable, impossible, impracticable, or infeasible, whether or not
such events or causes are foreseeable as of the date of this Agreement, and such events shall not
constitute a Force Majeure hereunder.
The provisions of this Section 31.14 shall not operate to excuse DSG from
prompt payment of any payments required under the provisions of this Agreement. Unless
agreed to by the Parties, no Force Majeure Extension shall operate to extend the Term.
31.15. Confidentiality
If the performance by any Party of any provision of this Agreement
requires that a Party deliver confidential or proprietary documents and/or information
("Confidential Information") to the other Party, then the Party receiving such Confidential
Information shall protect its confidentiality to the maximum extent permitted by law. Without
limiting the generality of the foregoing, the Parties shall use their best efforts, after consultation
with each other, to develop and implement procedures and policies to protect Confidential
Information to the maximum extent permitted by law including, without limitation, procedures
limiting the distribution of such Confidential Information and/or providing for the return of
Confidential Information after the receiving Party has completed its review thereof.
[Signatures on following page]
Stadium Management Agt FINAL vldo -66-
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.
"AGENCY"
REDEVELOPMENT AGENCY OF THE
CITY OF LAKE ELSINORE, a public
body corporate and politic
Ch ' erson
ATTEST:
AGENCYSECRETARY
By:
APPROVED AS TO FORM:
LEIBOLD McCLENDON & MAN C.
Agency, ounsel
By:
Barbara Z 'd Leibold
"DSG"
DIAMOND STADIUM GROUP, LLC, a
California limite liabili ompany
By: '
Gary Jacobs, Nfanager
Stadium Management Agt FINAL%2.doc -67-
ATTACHMENT "A"
DESCRIPTION OF LAND
PARCEL A:
PARCEL 2, AS SHOWN BY PARCEL MAP 27852, ON FILE IN BOOK 182 PAGES 19
THROUGH 24, INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY,
CALIFORNIA.
ATTACHMENT "A''
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ATTACHMENT "B"
STADIUM OPERATIONS CONTRACTS
IATTACHEDI
1. Concession License Agreement entered into on January 30, 2002 by and between the Agency
and Golden State Concessions and Catering, Inc., as amended by (i) that certain Amendment
to Concession License Agreement, dated November 1, 2002, and (ii) that certain Second
Amendment to Concession License Agreement entered into by the Agency and Golden State
Concessions and Catering, Inc. concurrently herewith.
2. License Agreement entered into on March 15, 2001 by and between the Agency and Storm
LP, as amended by that certain First Amendment to License Agreement entered into
concurrently herewith.
3. Stadium Field and Maintenance Agreement entered into on March 15, 2001 by and between
the Agency and Storm LP, as amended by that certain First Amendment to Stadium Field and
Maintenance Agreement entered into concurrently herewith.
ATTACHMENT `B"
Page I of I
1
CONCESSION LICENSE AGREEMENT
by and between
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE.
"Agency,,,
and
GOLDEN STATE CONCESSIONS AND CATERING, INC.
"Concessionaire"
Y
TABLE OF CONTENTS
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Term of License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1. Initial Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2. Option to Extend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3. Concession Services at the Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1. The Stadium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2. Diamond Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(a) Exclusive Caterer Services for Storm Games and Other Storm Events 8
(b) Exclusive Caterer Services for Other Stadium Events . . . . . . . . . . . . . . . . 8
(c) Other Agency Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(d) Food Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(e) Coordination with Other Caterers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(f) Reservations for Use of the Diamond Club . . . . . . . . . . . . . . . . . . . . . . . 10
3.3. The Parking Lot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(a) Exclusive Caterer for Storm Games and other Storm Events . . . . . . . . . 11
(b) Non-Exclusive Caterer for Other Stadium Events . . . . . . . . . . . . . . . . . . 11
4. Merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II
(a) Exclusive Merchandiser for Storm Games and Other Storm Events . . . . . . . . . . 11
(b) Lake Elsinore Merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(c) Third Party Merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5. Quality of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(a) Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(b) Review Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(c) Complaints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(d) Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(e) Promotional Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6. Concession Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.1. Percentage Fee Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.2. Payment to Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.3. Expedited Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.4. Concession Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7. Maintenance, Refuse and Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.1 Concession Equipment and Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.2 Mobile Stands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.3 Concession Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.4 Pest Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.5 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . .„ . . . . . . . . . . . . . . . . . . . 15
8. Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.1 Utility Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.2 Service Interruption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Final Conccssion Agreement 4015.009 —1— 02/05/02
9. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.1 Maintenance-of Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.2 Gross Receipts Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.3 Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(a) Home Stand Sales Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(b) Expedited Sales Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) Monthly Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.4 Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.1 Classes of Insurance to be Provided by Concessionaire . . . . . . . . . . . . . . . . . . . 19
(a) Workers' Compensation Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(b) General Liability Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(c) Automobile Liability Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.2 Endorsements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.3 Deductibles and Self-Insured Retentions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.4 Certificates of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
10.5 Utilization of Insurance Under the License Agreement . . . . . . . . . . . . . . . . . . . . 20
11. Additional Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.1 Management of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.2 Personnel . . . . . . . . . . . . . . . . . . . . . . . . .`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.3 Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.4 Compliance with Laws, Policies and Programs . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.5 Proceedings Involving Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.6 Hours of Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.7 Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.8 Mechanics Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.9 Products and Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.10 Specialty Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.11 Altering Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.12 Fair Wages and Hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12. Breach of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
13. Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
14. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
15. [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
16. Controlling Law Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
17. Litigation Expenses and Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
18. Mediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
19. Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
20. Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
21. Indemnification and Hold Harmless . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . 26
22. Entire Agreement, Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 26
23. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
24. Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
25. Non-Discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Final Conccssion Agreement 4015.009 -11- 02/05/02
26. Notice .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
27. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
28. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
EXIMITS:
Exhibit A Site Map
Exhibit B Guaranty
Exhibit C Concession Equipment List
Exhibit D Concession Facilities
Final Concession Agreement 4015.009 -lll- 02/05/02
CONCESSION LICENSE AGREEMENT
This CONCESSION LICENSE AGREEMENT (this "Agreement"), dated as of
January 30, 2002 for identification purposes, by and between the REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE, a public body corporate and politic (the
"Agency"), and the GOLDEN STATE CONCESSIONS AND CATERING, INC., a
California corporation (the"Concessionaire')with regard to the following:
RECITALS
The following Recitals are a substantive part of this Agreement:
A. The Agency is the owner of that certain real property located within the Rancho
Laguna Redevelopment Project Area III of the City of Lake Elsinore, County of Riverside, State
of California(the "Land"). A number of improvements are located on the Land, including a
professional baseball field, stadium and ancillary parking and related facilities commonly known
as the"Lake Elsinore Diamond" (collectively, the "Stadium") and depicted on the Site Map
attached hereto as Exhibit "A"and incorporated herein by reference. The Stadium and the Land
shall be referred to collectively herein as the Site.
B. The Agency previously entered into that certain Final and Fully Executed
Stadium Property and Facility Lease, dated April 2, 1998 (the "Stadium Lease')with Lakeside
Sports & Entertainment,LLC ("Lakeside").
C. Pursuant to that certain letter by and between Lakeside and Mandalay Sports
Entertainment LLC ("Mandalay") dated March 17, 1999, the parties thereto set forth the terms
and conditions regarding the use of the Stadium by Storm Baseball which was a wholly owned
subsidiary of Mandalay.
D. Lakeside and Mandalay as the"Landlord"and Goldenstate Sports Service, Inc.
("Sports Service") as the "Tenant" entered into that certain Concession License Agreement dated
March 15, 1999 (the "Prior Concession Agreement") in order to provide for concessions and
related services at the Stadium.
E. On or about August 22, 2000, general counsel for the Agency received a letter
from counsel for Lakeside indicating that Lakeside was financially unable to continue to meet its
obligations under the Stadium Lease and would abandon its operation and maintenance of the
Stadium in September or October, 2000.
F. On or about October 31, 2000, Lakeside terminated its employees responsible for
maintenance of the Stadium. By letter dated October 11, 2000, counsel for Lakeside stated that
Lakeside would no longer fulfill any of its contractual obligations as of November 15, 2000.
1
G. The Agency and the Storm LLC, a California limited liability company("Storm
Baseball") have incurred damages as a result of Lakeside's repudiation of the Stadium Lease and
the Prior Concession Agreement and abandonment of the Stadium.
H. The Agency and the Storm Baseball have entered into that certain License
Agreement dated March 15, 2001 (the "License Agreement')pursuant to which the Storm
Baseball has agreed to license the use of the Site for recreation, sporting and entertainment uses
and events, and for other purposes as more fully described therein.
I. Pursuant to that certain Membership Interest Purchase Agreement dated May 16,
2001, as amended, between Lake Elsinore Storm LP, a California limited partnership ("Storm
Partnership") and Mandalay, Storm Partnership acquired all right, title and interest in Storm
Baseball, such transaction having been approved by the California League and the National
Association of Professional Baseball Leagues. The owners of Storm Baseball have formed
Concessionaire for the purpose of providing for the concessions operations at the Stadium for
Storm Games ,Other Storm Events and Other Stadium Events. "Storm"is sometimes referred to
in this Agreement to mean Storm Baseball and Concessionaire, collectively.
J. The parties hereto desire to enter into this Agreement in order to provide for the
concessions operation and food and beverage service at the Site and for the provision of
concession services and the use of the concession facilities at the Site as set forth herein.
NOW THEREFORE,in consideration of the terms contained herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties do hereby agree as follows:
1. Definitions. Capitalized terms used herein shall have the meanings set forth in
this Section 1 unless the context would clearly indicate otherwise.
"Agreement"means this Concession License Agreement by and between the
Agency and Concessionaire.
"Agency"means the Redevelopment Agency of the City of Lake Elsinore, a
public body, corporate and politic.
"Catering Services"means the sale of Refreshments within the Diamond Club,
and off-site events as set forth in Section 3.2(b)(vii).
"City"means the City of Lake Elsinore, a municipal corporation.
"Commencement Date"means January 1,2002.
a
"Concession Equipment"means all the equipment as will be shown on Exhibit
"C"to be used by Concessionaire from time to time at the Stadium under this Agreement.
2
FINALConccssion Av=mcnt2_401 5-009 02/05/02
"Concession Facilities"means the areas of the Stadium as will be shown on
Exhibit"D" attached hereto and incorporated herein by reference. The term "Concession
Facilities" as used herein shall also include Mobile Stands.
"Concession Services',means the sale of Refreshments from fixed concession
stands, bars, booths, kiosks, and Mobile Stands in the Stadium, sales made by roving vendors
and hawkers and Catering Services.
"Diamond Club"shall mean the Diamond Club restaurant located at the Stadium.
"Event"means Storm Games, Other Storm Events and Other Stadium Events.
designee. "Executive Director"means the Executive Director of the Agency or his/her
"Expiration Date"is defined in Section 2 of this Agreement.
"Force Majeure"shall be defined as an Act of God, riot,invasion, fire, other
casualty event, accident, strike, lock-out, or walk-out, or government interference, regulation,
appropriation or rationing or inability to secure goods and materials or shipments or any other
event or condition similar to those enumerated above, beyond the control of the party obligated
to perform hereunder.
"GRCS"means the Gross Receipts from Concessionaire's operation and
provision of the Concession Services.
"Governmental Regulations"means any local, state, and federal laws,
ordinances, rules, requirements, resolutions,policy statements and regulations.
"Gross Receipts"shall mean the total amounts received by Concessionaire from
operations conducted by Concessionaire at the Site hereunder whether such sales or fees
evidenced by cash, check, credit, charge account or otherwise and shall include the amounts
received from the sale of all such items at the Site, together with the amount received from all
orders taken or received at the Site, whether such orders be filled from there or elsewhere, less
only:
(i) Any Taxes collected in connection with such sale, as payable to the
appropriate governmental entity;
(ii) Sales made to the Agency or third parties at the request of the Agency"at
cost"or, if such sales are made at a reduced price, Concessionaire's actual
cost of such sales, or sales of Merchandise at cost (but Gross Receipts
shall include any excess revenues over and above such costs);
3
FINALConcession Agrcenxnt2_4015-009 02/05/02
(iii) Refreshments consumed by Concessionaire's or Storm Baseball's on-duty
personnel without charge to such personnel or, if such Refreshments are
provided to Concessionaire's or Storm Baseball's on-duty personnel at a
reduced price, Concessionaire's actual cost of such Refreshments(but
Gross Receipts shall include any revenues over and above such costs);
(iv) Payments from purveyors for returns of goods, "chargebacks" for returned
checks, disallowed credit charges and returned items
(v) Manufacturers' and distributors' rebates and awards;
(vi) The amount of cash and quantity discounts received from sellers, suppliers
and manufacturers; and
(vii) Receipts from Consignment Sales;
(viii) Offsite sales of Merchandise, including sales under baseball licensing
agreements, Internet and phone sales;
(ix) Service charges and gratuities collected by Concessionaire in an amount
not to exceed 18%of the charges for Refreshments for Catering Services
and Refreshments for the Suites and reported as taxable income to
employees and food service providers;
(x) Receipts from the rental of furniture, equipment, linens, china, cutlery and
decorations rented or purchased by Storm and resold to customers without
mark-up and from the resale of flowers (without mark up);
(xi) Receipts from any vending machines located within Storm Baseball
offices at the Stadium.
In no event shall there be deducted from Gross Receipts any taxes imposed upon the
operations or existence of Concessionaire (such as, without limitation, income taxes (whether
federal, state or municipal and franchise taxes), nor shall there be deducted any bank charges or
service charges for credit or credit card sales.
"Hazardous Materials"means any hazardous or toxic substance,material or
waste which is or becomes designated, classified or regulated by any local governmental
authority, any agency of the State of California or any agency of the United States Government.
The tern"Hazardous Materials" includes (without limitation) any material or substance which
(i) contains petroleum or any petroleum by-products, (ii)contains askestos,:(iii)contains urea
formaldehyde foam insulation, (iv)constitutes a chlorinated solvent, (v)constitutes a
polychlorinated biphenyl, (vi) constitutes a flammable explosive, (vii)consists of aluminum and
aluminum compounds, (viii) is designated, classified or regulated as a"hazardous"or`toxic"
substance, material or waste pursuant the Federal Water Pollution Control Act(33 U.S.C. §§ et
4
FiNALConcession Agreement2 4015-009 02/05/02
seq.1317), the Federal Resource Conservation and Recovery Act(42 U.S.C.§§.6901 et seq.), the
Comprehensive Environmental Response, Compensation and Liability Act, (42 U.S.C. §§ 9601
et seq.), under Sections 25115, 25117, 25122.7, and 2514, of the California Health and Safety
Code,Division 20, Chapter 6.5 (Hazardous Waste Control Law),under Section 25316 of the
California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner
Hazardous Substance Account Act),under Section 25501 of the California Health and Safety
Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory),
under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7
(Underground Storage of Hazardous Substances), and under Article 11 of Title 22 of the
California Code of Regulations, Division 4, Chapter 20. Each reference to a statute or law in this
definition shall be deemed to include any amendments thereto which are enacted from time to
time.
"Informal Gatherings"means meetings initiated by Concessionaire and held in
the Diamond Club that may consist of one or more of the following baseball related groups:
Concessionaire/Storm Baseball employees and officials, season and mini-plan ticket holders,
advertisers, and/or Concessionaire's purveyors.
"Interest"means interest calculated at an annual rate equal to the prime rate
published from time to time by the Wall Street Journal plus two percent(2%), or the maximum
legal rate, whichever is less, calculated from the due date of any payment until paid in full.
"Lakeside"means Lakeside Sports &Entertainment, LLC, a California limited
liability company (also known as "Diamond Sports & Entertainment, LLC').
"License Agreement"means that certain License Agreement entered into as of
March 15, 2001 by and between the Agency and Storm Baseball.
"Maintenance Agreement"means that certain Stadium Field and Maintenance
Agreement entered into as of March 15, 2001 by and between the Agency and Storm Baseball.
"Mandalay"means Mandalay Sports Entertainment, LLC, a California limited
liability company.
"Merchandise"means all novelties,toys, souvenirs, clothing, gifts, memorabilia,
retail merchandise of any kind or nature to be sold to the public at the Site by Concessionaire
hereunder.
"Mobile Stands"means all portable concession stands and bars, carts and kiosks
used for Concession Services.
f
"Other Agency Events"shall mean any event held at the Site, or any portion
thereof(such as use of the Diamond Club), sponsored by the Agency or the City.
5
FrNALConcession Agreen=L2 4015-009 02/05/02
"Other Stadium Events"shall mean any event (including Other Agency Events),
held at the Site, or any portion thereof, other than Storm Games and Other Storm Events.
"Other Storm Events"shall have the meaning set forth in the License Agreement.
"Parking Lot"shall mean the paved parking lots adjacent to the Stadium
commonly identified as "Parking Lot A" and"Parking Lot B."
"Prior Concession Agreement"means the Concession License Agreement
entered into by and among Lakeside, Mandalay and Golden States Sportservice, Inc. as of March
15, 1999.
"Refreshments"means all food, alcoholic and nonalcoholic beverage products
including, but not limited to meals, snacks, confections, candies,vending items, soft drinks, beer
and cocktails, and any other food or beverage products.
"Retail Store"means the Concession Facility dedicated for the sale of
Merchandise.
"Stadium"is defined in Recital A hereof.
"Site"is defined in Recital A hereof.
"Storm Baseball"means The Storm LLC, a California limited liability company,
and wholly owned subsidiary of Storm Partnership.
"Storm Games"shall have the meaning set forth in the License Agreement.
"Storm Merchandise"means merchandise bearing the logo of the Storm and
baseball and other Merchandise customarily sold at the Retail Store.
"Suites"mean the twelve (12)private boxes located at the Stadium and the press
box or other areas hereinafter designated under the License Agreement as "Suites."
"Taxes"means license fees, taxes on sales, excise taxes or value-added taxes or
other similar taxes or assessments now in existence or that may hereafter be assessed including
any taxes, charges and/or fees on Concessionaire's Gross Receipts.
"Term"is the Initial Term and, if applicable,the Extension Term as defined in
Section 2 of this Agreement .
"Utility Systems"means any water, sewage(including but not limited to all
permits, fees and tap fees),refuse disposal, gas,plumbing and general lighting, sprinkler and fire
safety, telephone and telecommunication and security facilities,piping (including drains and
grease traps for sewage and all lines, drops and heads for sprinklers), ductwork, conduit, fiber
optic lines, wiring (including all electrical panel boards and transformers), outlets and
6
FrNALConcession Agreement,2_4015-009 02/05/02
connections and mechanicals (as applicable); and heating, ventilating, and air conditioning
equipment, ductwork and electrical components and all applicable elevators and escalators. As
used herein, water shall mean water fit for human consumption and in compliance with all
applicable laws, rules, regulations and orders.
"Vending Machine Receipts"means receipts from the sale of Refreshments from
vending machines (net of cost of goods) and all rental fees received from third party
subcontractors for permitting such subcontractors to operate Vending Machines in the Stadium
or on the Site. Concessionaire understands and agrees that the existing Vending Machine in the
Storm locker room shall be exempt from Concessionaire's control and this Agreement.
2. Term of Agreement.
2.1 Initial Term. The initial term of this Agreement (hereinafter referred to
as the"Initial Term") shall commence upon the Commencement Date and, unless sooner
terminated or extended under the terms and conditions of this Agreement, shall continue
thereafter for six (6) years until 11:59 p.m., Pacific Time, on December 31, 2007 (the
"Expiration Date").
2.2 Option to Extend. Upon the express condition precedent that Storm LLC
has exercised its option to extend pursuant to Section 2.2 of the License Agreement,
Concessionaire is hereby granted the option to extend the Term of this Agreement (the "Option
to Extend") for one (1) additional period of five (5)years (the"Extension Term"), which Option
to Extend may be exercised in the sole and absolute discretion of Storm as set forth in this
Section 2.2. Upon Concessionaire's exercise of the Option to Extend for the Extension Term, all
of the terms and conditions of this Agreement shall apply to such Extension Term, and a new
Expiration Date shall automatically be established to be 11:59 p.m. Pacific Time on December
31, 2012. The Storm may exercise its Option to Extend by delivering written notice thereof to the
Executive Director on or before the close of business on July 31, 2007. The exercise by Storm
LLC of its option to extend pursuant to Section 2.2 of the License Agreement, shall also
constitute an election by Concessionaire of its election to extend the Term of this Agreement
unless the extension notice under the License Agreement indicates otherwise or a separate
written notice by Concessionaire of its election not to extend the term is provided to the
Executive Director on or before the close of business on July 31, 2007.
3. Concession Services at the Site.
3.1 The Stadium
Except as provided in Sections 3.2 and 3.3, Concessionaire shall have the
exclusive right and obligation to provide Refreshments in the Stadium during Storm Games,
Other Storm Events and Other Stadium Events.
7
FINALConcession AgrexmenL2 4015-009 OV05102
3.2 Diamond Club.
(a) Exclusive Caterer Services for Storm Games and Other Storm Events.
Throughout the Term, Concessionaire shall have the exclusive right and obligation to provide
Refreshments in the Diamond Club during Storm Games and Other Storm Events.
(b) Exclusive Caterer Services for Other Stadium Events. Concessionaire
shall have the exclusive right and obligation to provide Refreshments in the Diamond Club
during Other Stadium Events (the"Other Stadium Event Diamond Club Catering) as follows:
(i) Initial Diamond Club Catering Term. The initial term for
Concessionaire to provide Other Stadium Event Diamond Club Catering shall commence on the
Commencement Date and, unless sooner terminated or extended under the terms and conditions
of this Agreement, shall continue thereafter for one year until 11:59 p.m. Pacific Time,
December 31, 2002.
(H) First Option to Extend. The parties may mutually agree to
extend the term of the Other Stadium Event Diamond Club Catering until 11:59 p.m. Pacific
Time, December 31, 2004 (the"First Diamond Club Catering Extension Term'). Either party
may notify the other party of its desire to enter into a First Diamond Club Catering Extension
Term by delivering written notice thereof to the other party on or before September 30,2002.
Within thirty (30) days of receiving such notice, the other party shall indicate whether or not it
agrees to the extension. All of the terms and conditions of this Agreement shall apply to the First
Diamond Club Catering Extension Term. In the event that the parties do not agree to extend the
term of the Other Stadium Event Diamond Club Catering within the time set forth herein, this
Section 3.2 shall terminate and be of no further force and effect upon December 31,2002.
(iii) Second Option to Extend. The parties may mutually agree to
extend the term of the Other Stadium Event Diamond Club Catering until 11:59 p.m. Pacific
Time, December 31, 2006 (the"Second Diamond Club Catering Extension Term'). Either party
may notify the other party of its desire to enter into the Second Diamond Club Catering
Extension Term by delivering written notice thereof to the other party on or before September
30, 2004. Within thirty(30)days of receiving such notice, the other party shall indicate whether
or not it agrees to the extension. All of the terms and conditions of this Agreement shall apply to
the Second Diamond Club Catering Extension Term. In the event that the parties do not agree to
extend the term of the Other Stadium Event Diamond Club Catering within the time set forth
herein, this Section 3.2 shall terminate and be of no further force and effect upon December 31,
2004.
(iv) Third Option to Extend. The parties may mutually agree to
extend the term of the Other Stadium Event Diamond Club Catering until 11:59 p.m. Pacific
Time, December 31, 2007 (the"Third Diamond Club Catering Extension Term"). In the event
that Concessionaire validly exercises the Option to Extend pursuant to Section 2.2 herein, the
parties hereby agree that the expiration date of the Third Diamond Club Catering Extension
Term shall be automatically extended to 11:59 p.m. Pacific Time, December 31, 2008., Either
8
FINAL.Concession AgretmcnL2 4015-009 OV05102
party may notify the other party of its desire to enter into a Third Diamond Club Catering Mutual
Extension Term by delivering written notice thereof to the other party on or before September
30, 2006. Within thirty(30) days of receiving such notice, the other party shall indicate whether
or not it agrees to the extension. All of the terms and conditions of this Agreement shall apply to
the Third Diamond Club Catering Extension Term. In the event that the parties do not agree to
extend the term of the Other Stadium Event Diamond Club Catering within the time set forth
herein, this Section 3.2 shall terminate and be of no further force and effect upon December 31,
2006.
(v) Fourth Option to Extend. In the event that the Third Diamond
Club Catering Term is automatically extended to December 31,2008, the parties may mutually
agree to extend the term of the Other Stadium Event Diamond Club Catering until 11:59 p.m.
Pacific Time, December 31, 2010(the"Fourth Diamond Club Catering Extension Term').
Either party may notify the other party of its desire to enter into the Fourth Diamond Club
Catering Extension Terns by delivering written notice thereof to the other party on or before
September 30, 2008. Within thirty(30) days of receiving such notice, the other party shall
indicate whether or not it agrees to the extension. All of the terms and conditions of this
Agreement shall apply to the Fourth Diamond Club Catering Extension Term. In the event that
the parties do not agree to extend the term of the Other Stadium Event Diamond Club Catering
within the time set forth herein, this Section 3.2 shall terminate and be of no further force and
effect upon December 31,2008.
(vi) Fifth Option to Extend. The parties may mutually agree to
extend the term of the Other Stadium Event Diamond Club Catering until 11:59 p.m. Pacific
Time, December 31, 2012 (the"Fifth Diamond Club Catering Extension Term'). Either party
may notify the other party of its desire to enter into the Fifth Diamond Club Catering Extension
Term by delivering written notice thereof to the other party on or before September 30, 2008.
Within thirty (30) days of receiving such notice, the other party shall indicate whether or not it
agrees to the extension. All of the terms and conditions of this Agreement shall apply to the
Fifth Diamond Club Catering Extension Term. In the event that the parties do not agree to
extend the term of the Other Stadium Event Diamond Club Catering within the time set forth
herein, this Section 3.2 shall terminate and be of no further force and effect upon December 31,
2010.
(vii) Off-Site Events. So long as Concessionaire is the exclusive
caterer pursuant to Section 3.2(b) herein, Concessionaire may use the Concession Equipment to:
(1)provide Catering Services to events held off-Site within the territorial jurisdiction of the City
of Lake Elsinore; and(2)provide Catering Services to events held off-Site and outside of the
territorial jurisdiction of the City of Lake Elsinore, provided that Concessionaire first obtains
written permission from the Executive Director. For purposes of this Agreement, Catering
Services to such off-Site events shall be included within the definition of Other Stadium Event
Diamond Club Catering.
(c) Other Agency Events. The parties acknowledge that the City and
Agency will utilize the Diamond Club from time to time to host staff meetings, community
9
FtNALConcession Agreement2 4015-009 02/05/02
organization meetings, the Annual Mayor's Breakfast and such other similar gatherings for the
benefit of the City, the Agency or other non-profit community organizations. Concessionaire
shall provide Refreshments to such Other Agency Events as requested by the Agency.
Concessionaire shall provide Refreshments for such Other Agency Events at Concessionaire'
cost and without profit to Concessionaire, provided that Concessionaire shall have no obligation
to provide Catering Services at cost for more than twelve (12) of such Other Agency Events in
each calendar year during the Term. Concessionaire's cost shall be reimbursed not later than
fifteen(15) days following the submission of such cost invoice to the Agency. To the extent that
the Agency does not utilize all 12 of the aforementioned Other Stadium Events under which
Concessionaire is providing Catering Services at cost within each calendar year, there shall be no
carryover to the following year. With respect to Other Agency Events involving attendance by
not more than 25 people, the Agency may elect to provide Refreshments prepared and sold off-
Site by another vendor and such events shall not count towards the 12 events under which
Concessionaire is providing Catering Services at cost. Such other vendor(s) shall have no right
to use of the Concessions Facilities for such Other Agency Event other than for short term
storage of Refreshments subject to prior coordination with Concessionaire.
(d) Food Selection. The parties acknowledge groups utilizing the Diamond
Club during Other Stadium Events may require a wider range of food selections. Accordingly,
Concessionaire shall offer a selection of food for the Diamond Club during Other Stadium
Events that is comparable to facilities of similar size and character and other independent
catering businesses which service off-site weddings and other formal gatherings.
(e) Coordination with Other Caterers. In the event that at any time during
the Term, Concessionaire is no longer the exclusive caterer at the Diamond Club, the Parties
shall mutually agree on procedures and policies to be implemented prior to allowing outside
caterers or food service providers access to the Concessions Facilities, as well as coordination of
such use by outside caterers with Storm Games and Other Storm Events. As Concessionaire will
be the licensed provider of alcoholic beverages, any service of alcoholic beverages in the
Diamond Club by the Agency or outside caterers shall be in conformance with all applicable
rules and regulations governing service of alcoholic beverage. No such service will be permitted
that impairs or impacts the service by Concessionaire of alcoholic beverages for Storm Games
and Other Storm Events. Concessionaire agrees to provide for the sale of alcoholic beverages for
Other Agency Events and Other Stadium Events, within the Diamond Club, if requested by the
Agency. Except for Other Agency Events, the provision of alcoholic beverages shall be in
accordance with Concessionaire's standard markup,rates and charges then in effect.
Concessionaire may continue to provide Catering Services with the Diamond Club on a non-
exclusive basis with other caterers, subject to the provisions set forth above, in the event the
exclusivity period in the Diamond Club has terminated as set forth above. Any charges or fees
imposed by the Agency upon Concessionaire for right to provide Catering Services within the
Diamond Club on a non-exclusive basis shall be the same as those charges and fees imposed on
other non-exclusive caterers.
(f) Reservations for Use of the Diamond Club. Except for use of the
Diamond Club during Storm Games and Other Storm Events and Informal Gatherings on Storm
10
FINALConcession Agreement 24015-009 02/05/02
Game days, all parties interested in utilizing the Diamond Club, including Concessionaire and
Storm Baseball shall be subject to a reservation system maintained and managed by the Agency.
The Agency may establish a facility use fee and other charges for reservation and use of the
Diamond Club as it shall determine from time to time in its sole discretion provided that such
rates and charges are consistent. The Agency shall provide Concessionaire and Storm Baseball
information on Diamond Club reservations within seven(7)days of such event being booked.
The Agency shall not reserve the Diamond Club for any Other Stadium Events that will conflict
with Storm Games or previously scheduled Other Storm Events. The parties acknowledge that
Stone Baseball and Concessionaire will utilize the Diamond Club from time to time to host
Informal Gatherings. Such Informal Gatherings shall not constitute Other Storm Events
provided, however that use of the Diamond Club for Informal Events shall not interfere with
other events scheduled by the Agency. To the extent that such Informal Gatherings are on the
same day as Storm Games or Other Storm Events, the Agency agrees that there will be no
additional charge by the Agency to Storm Baseball or Concessionaire for these events. Informal
Gatherings held on days other than Storm Games and Other Storm Events are subject to
reimbursement to the Agency of the Agency's actual costs, if any, for such Informal Gatherings.
In all other respects, reservations for Other Storm Events and Informal Gatherings on days other
than Storm Game days shall be consistent with Section 3.3 of the License Agreement.
3.3 The Parking Lot.
(a) Exclusive Caterer for Storm Games and Other Storm Events.
Concessionaire shall have the exclusive right to sell Refreshments in the Parking Lot during
Stone Games and Other Storm Events. Notwithstanding the foregoing, this provision is not
intended to prevent"tailgating"or similar activities by patrons at the Site.
(b) Non-Exclusive Caterer for Other Stadium Events. Upon the mutual
consent of the parties on an event by event basis, the Agency may grant Concessionaire a non-
exclusive right to provide Refreshments in the Parking Lot during Other Stadium Events.
4. Merchandise.
(a) Exclusive Merchandiser for Storm Games and Other Storm Events.
Except as provided in Section 4(b)herein, Concessionaire shall have the exclusive right to sell
Merchandise at the Stadium during Storm Games and Other Storm Events.
(b) Lake Elsinore Merchandise. Concessionaire also agrees to sell City
Merchandise from the Retail Store upon the request of the Agency.The Agency shall be entitled
to rack and/or shelf space in the Retail Store during Storm Games and Other Storm Events and/or
set up a booth during Other Stadium Events to sell City Merchandise provided that: (i)
Concessionaire shall not incur any costs in connection therewith, and,(ii) the sale of Lake
Elsinore related merchandise does not interfere with the sale of Storm Merchandise. The
allocated floor area or shelf space for City Merchandise in the Retail Store shall not exceed 25
square feet without the prior written consent of Concessionaire.
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HNALConcession Agreement2_4015-009 02/05/02
(c) Third Party Merchandisers. The parties agree that nothing in this
Agreement shall prohibit third party event promoters at the Site from selling any merchandise or
articles or from dispensing free samples of Refreshments in connection with Other Stadium
Events. Accordingly, Concessionaire shall have no right to sale of Merchandise, except Storm
Merchandise, during Other Stadium Events. No third party event promoter shall have the right
to sell any merchandise from the Retail Store unless it obtains the prior consent and approval of
Concessionaire.
5. Quality of Service.
(a) Intent. It is the intent of the Agency and Concessionaire under this
Agreement to provide the general public with the opportunity to enjoy first class Concession
Services at rates comparable to other"first-class" California League professional baseball
stadiums. The high level of quality and service offered to patrons at the Site is of prime concern
to the Agency and is considered a part of the consideration for this Agreement. Therefore,
Concessionaire agrees to maintain such first-class standards of operating and managing the
Concession Services that will provide a"fan friendly"environment.
(b) Review Meetings. As often as necessary,but in no event less than
quarterly during the Term, representatives of Concessionaire and the Executive Director, or
his/her designee, shall meet at a mutually agreed upon time and place in order to discuss
Concession Services, the performance of Concessionaire hereunder and any other applicable
issues. Such Review Meetings may be held in conjunction with the meetings held pursuant to
Section 2.5 of the Maintenance Agreement.
(c) Complaints. The Agency shall have the right to confer with
Concessionaire at Review Meetings, or as otherwise needed as a result of complaints to the City
or Agency regarding Concessionaire's schedule of prices and rates for goods sold and/or services
rendered. The Agency and Concessionaire's representatives shall keep minutes of such meetings
and document all incidents of complaint in writing at such meetings and how such complaints
have been addressed or resolved. The Agency further reserves the right to object to the
provision of Concession Services which it deems of inferior quality, and Concessionaire shall
take the Agency's objections under consideration and make reasonable adjustments as requested.
(d) Employees. Concessionaire acknowledges the importance to the quality
of service at the Stadium as it relates to the selection, training, and supervision of its employees.
Concessionaire's hiring and employment policies and practices shall not, however, provided the '
same are lawful,be subject to the Agency's control. Concessionaire agrees that a manager with
decision-making authority sufficient to handle emergencies and to coordinate the Stadium's
response thereto with State and local agencies shall be on the Premises during all Storm Games
and Other Storm Events and, additionally, Other Stadium Events in which Concessionaire is
providing Concession Services.
(e) Promotional Efforts. It is in each of the parties' best interests to
maximize the use of the Stadium through additional bookings of Other Stadium Events. Agency
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4
recognizes that Concessionaire has or will make a substantial capital outlay in contemplation of
being the exclusive concessionaire at the Stadium to the extent provided herein. Concessionaire
recognizes that Agency has and continues to make substantial expenditures in the Stadium.
Agency and Concessionaire will, to the extent feasible, cooperate and undertake commercially
reasonable efforts (for example, enhancing Internet based information and written promotional
materials)to promote the Stadium for other"full service"Other Stadium Events for each parties
mutual benefit. Notwithstanding the foregoing, this Section 5(d) shall not obligate either party to
make any specific monetary contributions to such promotional efforts. In conjunction with the
Review Meetings, the parties shall meet and confer no less than once annually to discuss and
explore opportunities and cost sharing for Stadium promotion.
6. Concession Fee.
6.1 Percentage Fee Schedule. Concessionaire shall pay to the Agency the
following percentage of Concessionaire's Gross Receipts derived from the Concession Services:
Gross Receipts Applicable
From Concession Services ("GRCS") Percentage
GRCSs derived from Storm Games and Other 5% of first$1,500,000
Storm Events of GRCS; 7%of any
incremental amount
over $1,500,000
GRCSs derived from Other Stadium Events,
except as provided below 36%
GRCS derived from Other Stadium Event
Diamond Club Catering during such time as
Concessionaire is the exclusive caterer and/or
the exclusive provider of alcoholic beverages for
the Diamond Club 15%
GRCSs derived at cost from Catering Services
for Other Agency Events in the Diamond Club
pursuant to Section 3.2(c)of this Agreement 0%
GRCS derived from sale of City Merchandise 90%
6.2 Payment to Agency. Except as required by Section 6.3 of this
Agreement, payment shall be made to the Agency on or before the fifteenth (15th) day of the
calendar month following each calendar quarter of the Term of this Agreement. Payment shall
be by check or draft and made payable to the Redevelopment Agency of the City of Lake
Elsinore. Payment shall be mailed or otherwise delivered to the Redevelopment Agency, Attn:
Executive Director, 130 South Main Street, Lake Elsinore, California 92530. A late payment
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FinalConcession Agmement.2_4015-009 02/05/02
charge of one percent(1%)per month shall be added to any late payment received after the last
day of the calendar month in which payment is due. However, the late payment charge herein
provided may be waived, whenever the Executive Director of the Agency finds the late payment
excusable by reason of extenuating circumstances. At no time during the Term of this
Agreement shall the Agency be obligated to notify Concessionaire of the accumulation of late
payment charges. Concessionaire shall provide Agency of an accounting and detailed description
of such offsets with any reporting information of GRCS required to be provided by
Concessionaire to Agency under this Agreement.
6.3 Expedited Payment. Concessionaire and Agency acknowledge that in
order to attract promoters and/or sponsors of Other Stadium Events, the Agency may find it
necessary to agree to pay such promoter or sponsor a percentage of GRCS immediately upon
conclusion of such event. When the Agency deems that such agreement is necessary,
Concessionaire shall pay to the Agency its share of GRCS upon submittal of the expedited sales
reports prepared by Concessionaire pursuant to Section 9.3 of this Agreement.
6.4 Concession Fee. In consideration of the exclusive rights granted herein to
Concessionaire, Concessionaire shall pay the Agency the sum of Fifty Thousand Dollars
($50,000.00) as provided below(the"Concession Fee'). The payment of such Concessionaire
Fee shall be fully guaranteed by a guaranty substantially in the form of Exhibit `S" attached
hereto.
(i) $10,000.00 upon execution of the Agreement by Concessionaire;
(ii) $20,000.00 payable no later than January 1,2003;
(iii) $20,000.00 payable no later that January 1,2004.
7. Maintenance, Refuse and Hazardous Materials.
7.1 Concession Equipment and Facilities. Agency shall be responsible for
maintenance and repair of the structural components of the Concessions Facilities subject to and
in accordance with applicable provisions of the License Agreement. Notwithstanding the
foregoing, Concessionaire shall be responsible for maintenance and repair to the"rollup doors"
at the concession stands and/or any damage at the Stadium caused by Concessionaire's
employees, agents or contractors. Concessionaire at its sole cost and expense will maintain and
repair, if necessary, and replace the Concession Equipment as needed,provided,however, that(i)
if such damage or need for repair is caused by the Agency or a third party authorized by the
Agency to use the Concession Equipment, such party shall be responsible for such repair, and (ii)
Concessionaire shall have the right to be reimbursed or repaid for the remaining unamortized
Federal tax basis cost of such capital replacements by any successor concessions operator upon
termination of this Agreement. Agency shall cooperate with Concessionaire by making such
reimbursement a condition to entering into an agreement with such successor concessions
operator. The parties further agree that,,within 60 days following the approval of this Agreement
by the Agency, Agency and Concessionaire shall have established a mutually agreed to inventory
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FinalCancession Agreement.2_4015-009 02/05/02
Est of Concession Equipment and description of the Concession Facilities which shall be
attached as Exhibit"C" and Exhibit"D,"respectively, to this Agreement and incorporated
herein. With respect to maintenance, Concessionaire shall clean the grease interceptors at
regular scheduled intervals using designated repair techniques to protect warranties and respect
supplier agreements.
7.2 Mobile Stands. Concessionaire shall locate any Mobile Stands in such a
manner as to not obstruct the safe passage of Stadium patrons and as approved or permitted
under all applicable building and fire codes and regulations and all directive of the local fire
department official.
7.3 Concession Facilities. Concessionaire shall keep the Concession
Facilities neat and clean. Concessionaire shall pick up concession refuse in and about the
Concession Facilities, the Mobile Stands and the Diamond Club, and shall maintain adequate
trash receptacles adjacent thereto. Concessionaire will not permit its employees to dispose of or
discharge waste, garbage or refuse in any area in or outside the Site other than in areas
specifically designated therefor. All refuse shall be removed by Concessionaire's employees to
the central refuse collection point as designated by the Agency for the Site on a regular basis. In
addition, Concessionaire shall be responsible for cleaning the Concession Facilities, the Mobile
Stands and the Diamond Club immediately following an event and for any and all necessary pest
control and sanitation activities, on a regular and continuing basis.
7.4 Pest Control. Concessionaire shall engage the services of an
exterminator reasonably acceptable to the Agency to control vermin and pests as necessary at
Concessionaire's sole cost and expense without charge to the Agency. The areas to be serviced
by the exterminator shall include, but shall not be limited to, all of the Concession Facilities and
all other areas from which food is prepared, dispensed and stored at the Stadium and on the Site.
7.5 Hazardous Materials.
(a) Any use, generation, disposal,release or discharge by
Concessionaire of Hazardous Materials in connection with any use of the Site by Concessionaire
including,without limitation, any agent, employee, or contractor of Concessionaire, shall be
carried out at all times and in all respects in compliance with all applicable Governmental
Regulations regulating Hazardous Materials.
(b) Concessionaire shall, at its own expense, procure,maintain in
effect and comply with all conditions of any and all applicable permits, licenses and
Governmental Regulations affecting the use,occupancy,maintenance or other activity involving
the Site by Concessionaire, under the authority of this Agreement including(without limitation)
discharge of(appropriately treated)materials or wastes into or through any sanitary sewer
serving the Site. Except as otherwise properly discharged in strict accordance with all applicable
Governmental Regulations, Concessionaire shall cause any and all Hazardous Materials to be
removed from the Site in accordance with applicable permit(s) and removed and transported
solely by duly licensed haulers to duly licensed facilities for final disposal of such materials and
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FinalConcession AgmenrnL2_4015-009 02/05/02
wastes. Concessionaire shall in all respects handle, treat, deal with and manage any and all
Hazardous Materials used on the Site by Concessionaire in, on, under or about the Site in
connection with its operations in total conformity with all applicable Governmental Regulations
and prudent industry practices regarding management of such Hazardous Materials. Upon the
expiration or earlier termination of the Term, Concessionaire shall cause all Hazardous Materials
introduced by Concessionaire or its agents, employees, or contractors to be removed from the
Site in accordance with all applicable Governmental Regulations. Concessionaire shall not take
or permit any remedial action in response to the presence of any Hazardous Materials in or about
the Site, nor enter into any settlement agreement, consent decree or other compromise with
respect to any claims relating to any Hazardous Materials in any way connected with the Site,
without first notifying the Agency of Concessionaire's intention to do so and affording the
Agency ample opportunity to appear, intervene or otherwise appropriately assert and protect the
Agency's interest with respect thereto.
(c) Concessionaire shall immediately notify the Agency in writing of:
(1) any enforcement, cleanup, removal or other governmental or regulatory action that
Concessionaire becomes aware is instituted, completed or threatened pursuant to any
Governmental Regulations with respect to the Site; (ii) any claim of which Concessionaire is
aware that is made or threatened by any person against Concessionaire or the Site relating to
damage, contribution, cost recovery compensation, loss or injury resulting from or claimed to
result from any Hazardous Materials; and (iii) any reports made by Concessionaire or of which
Concessionaire is aware to any environmental agency arising out of or in connection with any
Hazardous Materials in or removed from the Site, including any complaints,notices,warnings or
asserted violations in connection therewith. Concessionaire shall also supply to the Agency as
promptly as possible, and in any event within five(5)business days after Concessionaire first
receives or sends the same, copies of all claims, reports, complaints, notices, warnings or
asserted violations, relating in any way to Hazardous Materials in or about the Site.
Concessionaire shall promptly deliver to the Agency copies of any hazardous waste manifests
required by applicable Governmental Regulations for the legal and proper disposal of Hazardous
Materials removed from the Site.
(d) Concessionaire shall indemnify, defend(by counsel reasonably
acceptable to the Agency),protect, and hold the Agency,its officers, employees and agents
harmless from and against any and all claims, actions, administrative proceedings, liabilities,
penalties, forfeitures,judgments, suits, demands, losses or expenses (including remediation costs,
attorneys' fees and litigation expenses), or death of or injury to any person or damage to any
property whatsoever, arising from or caused in whole or in part, directly or indirectly,by
(i)Concessionaire's or its employees', agents', contractors' or any party claiming through
Concessionaire's, improper or unlawful use, analysis, storage, transportation, generation of
Hazardous Materials to, in, about or from the,Site; or(ii) Concessionaire' failure to comply with
any Hazardous Materials laws in connection with Concessionaire' use,operation,maintenance or
management of the Site. Concessionaire' obligations hereunder shall include(without
limitation) and whether foreseeable or unforeseeable, all costs of any required or necessary
repair, cleanup or detoxification or decontamination of the Site,or the preparation and
implementation of any closure, remedial action or other required plans in connection therewith,
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FinalConcession Agreement.2_4015-009 02/05/02
and shall survive the expiration or earlier termination of the Term. For purposes of the release
and indemnity provisions hereof, any acts or omissions of Concessionaire, or by employees,
agents, assignees, contractors or subcontractors of Concessionaire or others acting for or on
behalf of Concessionaire(whether or not they are negligent, intentional, willfiil or unlawful)
shall be attributable to Concessionaire.
This Section 7.5 shall survive cancellation, termination or expiration of this
Agreement.
S. Utilities.
8.1 Utility Services. Except as described in Section 8.2 below,
Concessionaire shall be furnished at no cost with access to all necessary and appropriate Utility
Systems as required for the conduct of its operations hereunder. As used herein,water shall
mean water fit for human consumption and in compliance with all applicable laws,rules,
regulations and orders. Concessionaire shall be furnished hot water for general use at not less
than 1407 and not more than 180°F for dishwashing, or at such higher temperatures as may
from time to time be required under any applicable governmental,rule,regulation or order.
8.2 Service Interruption. Under no circumstances shall the Agency be liable
to Concessionaire in damages or otherwise for any interruption of Utility Services. However, the
Agency shall use all reasonable efforts to restore immediately to full service any Utility Service
that is interrupted.
9. Books and Records.
9.1 Maintenance of Books and Records. Concessionaire will keep at the
Stadium, or at such other location as the parties hereto may otherwise agree upon, adequate and
accurate accounting books and records prepared in accordance with Generally Acceptable
Accounting Principles, consistently applied, of all business and transactions conducted under this
Agreement, for the Term, said records to include without limitation the daily receipts, the daily
bank deposits,the daily sales and business done by Concessionaire and shall preserve and make
available for audit and examination by the Agency and Concessionaire all of such records
relating to Gross Receipts made. Such records will be maintained in the Stadium or other agreed
upon location for two years following the end of the Term. Concessionaire shall maintain such
accounting records on its standard fiscal year basis, from January 1 through December 31.
9.2 Gross Receipts Report Concessionaire shall submit to the Agency,
within ninety(90) days after the end of the last Storm Game, Other Storm Event or Other
Stadium Event during the Term for which Concessionaire provides services hereunder, a report
of all Gross Receipts for the Term (including a statement of the sours;and calculation of all such
Gross Receipts by category),reviewed by a Certified Public Accountant. In the event that the
Agency is not satisfied with the statements presented therein, the Agency shall have the right to
conduct a special audit(by an independent national or"regional"accounting firm,at Agency's
cost and expense) of Concessionaire's books and records related to its Gross Receipts and
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FinalConcession Agmement.l 4015-009 02/05/02
operations at the Stadium and the Site and otherwise under this Agreement, provided it does so
within six (6) months following receipt of the above described financial statement. Should such
audit(s) uncover a deficiency or deficiencies in payments to the Agency and/or Concessionaire
for any period covered, then in addition to and without waiver of any other rights or remedies to
which the Agency and Concessionaire may be entitled hereunder,in law, in equity or otherwise,
Concessionaire shall pay to the Agency and/or Concessionaire the amount of such payment
deficiency within twenty(20) days following of receipt of the audit report, together with Interest.
In addition, if any such payment deficiency is in excess of five percent(5%) of the aggregate
amount reported on the statement pursuant to which such payment was due to Concessionaire
and/or the Agency, all costs and expenses of any such audit shall be immediately due and
payable by Concessionaire, and shall bear Interest until paid in full by Concessionaire. If
Concessionaire disputes the accuracy of such audit and the parties proceed to mediation,
arbitration or civil action to resolve such dispute, no such payment or late charge (described
below) shall be due until the matter is finally resolved through such mediation, arbitration or
civil proceeding but any final determination on the matter shall be retroactive to the date such
amount was determined to be due and owing.
In addition to and without waiver of any and all other rights and remedies to which the
Agency and Concessionaire may be entitled under this Agreement, in law, in equity or otherwise,
if Concessionaire fails to provide to the Agency and/or Concessionaire any statement or report
required under or pursuant to this Agreement, such failure shall also result in Concessionaire
being required to pay to Agency and/or Concessionaire, as a penalty, the amount of Two
Hundred Fifty Dollars ($250)or one percent(1%) of the outstanding balance computed on a
thirty(30) day basis, whichever is greater, for each and every week exceeding the ninety (90)
day deadline for such payment. Such penalty shall apply fifteen(15)calendar days after the
Agency and/or Concessionaire have given notice in writing to Concessionaire of non-receipt of
any statement or report.
9.3 Additional Information. Concessionaire shall submit the following
information to the Agency:
(a) Home Stand Sales Report. Sales reports of Gross Receipts for
Events held at the Stadium within seventy-two(72)hours following completion of each"home
stand" for all Events occurring during that"home stand", except as may be required earlier in
accordance with Section 9.3(b). Such information may be submitted to the Agency by way of a
fax sent to the Executive Director and may utilize the same format as that used for
Concessionaire's internal reporting and accounting procedures, if applicable.
(b) Expedited Sales Reports. Concessionaire and Agency
acknowledge that promoters and/or sponsors of Other Stadium Events may require sales reports
of Gross Receipts on an expedited basis within four(4)hours following the conclusion of such
events. Concessionaire shall provide such sales reports of Gross Receipts as may be reasonably
required in order to accommodate those promoters and/or sponsors.
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FinalConcession AgreemenL2_4015-009 02/05/02
(c) Monthly Report. Monthly, by the fifteenth (15'') of each month,
a report showing Gross Receipts in the categories described in Section 6.
9.4 Change. Concessionaire will not permit any of its employees (with the
exception of roving vendors, hawkers and Mobile Stand operators)to make change from pockets
of clothing, boxes or containers in the Concession Facilities or otherwise at the Stadium or on the
Site.
10. Insurance.
10.1 Classes of Insurance to be Provided by Concessionaire. Commencing
on the Commencement Date and at all times thereafter through and during the Initial Term and
the Extension Term, if applicable, Concessionaire at its own cost and expense, shall procure and
maintain, for the duration of this Agreement, the following insurance:
(a) Workers' Compensation Coverage. Concessionaire shall
maintain Workers' Compensation Insurance and Employer's Liability Insurance for its employees
in accordance with the laws of the State. In addition, Concessionaire shall require each
subcontractor to similarly maintain Workers' Compensation Insurance and Employer's Liability
Insurance in accordance with the laws of the State for all of the subcontractor's employees. Any
notice of cancellation or non-renewal of all Workers' Compensation policies must be received
by the Agency at least thirty(30) days prior to such change. The insurer shall agree to waive all
rights of subornation against the Agency, the City, their officers, agents, employees and
volunteers for losses arising from activities performed by Concessionaire.
(b) General Liability Coverage. Concessionaire shall maintain
commercial general liability insurance in an amount not less than Two Million Dollars
($2,000,000)per occurrence for bodily injury,personal injury and property damage with an
aggregate minimum limitation liability in an amount not less than Five Million Dollars
($5,000,000).
(c) Automobile Liability Coverage. Concessionaire shall maintain
automobile liability insurance covering bodily injury and property damage for all activities of
Concessionaire arising out of or in connection with the work to be performed under this
Agreement, including coverage for owned,hired and non-owned vehicles, in an amount of not
less than One Million Dollars ($1,000,000) combined single limit for each occurrence with an
aggregate minimum limitation liability in an amount not less than Five Million Dollars
($5,000,000).
10.2 Endorsements. Each general liability and automobile liability insurance
policy shall be with insurers possessing a Best's rating of no less than ANH and shall be
endorsed with the following specific language:
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finalConcession Agrcenrnt2 4015-009 02/05/02
(a) The Agency, the City, their elected or appointed officers, officials,
employees, agents and volunteers are to be covered as additional insureds with respect to liability
arising out of work performed by or on behalf of Concessionaire, including materials,parts or
equipment furnished in connection with such work or operations.
(b) This policy shall be considered primary insurance as respects the
Agency, its elected or appointed officers, officials, employees, agents and volunteers. Any
insurance maintained by the Agency, including any self-insured retention the Agency may have,
shall be considered excess insurance only and shall not contribute with it.
(c) This insurance shall act for each insured and additional insured as
though a separate policy had been written for each, except with respect to the limits of liability of
the insuring company.
(d) The insurer waives all rights of subornation against the Agency
and the City, their elected or appointed officers, officials, employees or agents.
(e) Any failure to comply with reporting provisions of the policies
shall not affect coverage provided to the Agency, its elected or appointed officers,officials,
employees, agents, or volunteers.
(f) The insurance provided by this Policy shall not be suspended,
voided, canceled, or reduced in coverage or in limits except after thirty(30) days written notice
has been received by the Agency.
10.3 Deductibles and Self-Insured Retentions. Any deductibles or self-
insured retentions must be declared to and approved by the Agency. At the Agency's option,
Concessionaire shall demonstrate financial capability for payment of such deductibles or self-
insured retentions.
10.4 Certificates of Insurance. Concessionaire shall provide certificates of
insurance with original endorsements to the Agency as evidence of the insurance coverage
required herein. Certificates of such insurance shall be filed with the Agency on or before the
Commencement Date. Current certification of insurance shall be kept on file with the Agency at
all times during the Term.
10.5 Utilization of Insurance Under. the License Agreement.
Notwithstanding the foregoing, Concessionaire may satisfy the insurance coverage requirements
of this Section 10 by establishing with proof reasonably acceptable to the Agency's Executive
Director or his designee that Concessionaire is a named co-insured to that insurance carried by
the Storm LLC pursuant to Section 13 of the License Agreement.
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FinalConcession Agreement2 4015.009 02/05/02
11. Additional Duties.
11.1 Management of Operations.
(a) Concessionaire agrees to manage and operate the Concessions
Facilities in a first-class and professional manner to ensure that it will maintain consistent,
prompt, and courteous service to the public.
(b) Concessionaire will pay promptly all authorized bills,payroll and
other expenses incurred in the operation and performance of its services and obligations under
and pursuant to this Agreement.
(c) Concessionaire shall pay when due all Taxes and any other charges
assessed on the products or services which Concessionaire provides hereunder respectively, and
all federal, state and local taxes, workers' compensation payments, unemployment insurance,
payroll and other taxes with respect to services provided under this Agreement and all other
taxes arising from Concessionaire's operations hereunder respectively. Concessionaire
acknowledge that this Agreement may create a possessory interest subject to property taxation
and if such an interest is created Concessionaire may be subject to the payment of property taxes
levied on the interest.
(d) Concessionaire will provide all perishable and non-durable
inventories required for its operation including, but not limited to all Refreshments and
Merchandise.
11.2 Personnel.
(a) Concessionaire will hire, train and supervise, discipline and, if
need be, dismiss, any and all persons necessary to conduct its operations hereunder and will use
reasonable efforts to assure that its employees continually practice high standards of cleanliness,
safety, courtesy and service customarily followed in the conduct of a first-class concession
operation. Such individuals shall be employees of Concessionaire respectively and shall wear
neat and clean uniforms provided by Concessionaire. Such uniforms shall bear Concessionaire's
name and/or logo.
(b) Concessionaire covenants that in the conduct of its employment
and discipline practices and its operations hereunder, it will not discriminate or permit
discrimination based on race, color,religion, creed, age, sex,disability,national origin, ancestry,
or political opinions.
(c) Concessionaire shall prepare training programs for all of its
employees working in the Stadium and on the Site. The training programs will be mandatory for
all employees and will include alcohol management techniques in the content. The programs
shall be prepared and conducted by personnel specialists,using modern audio-visual aids and
other techniques to maintain employee interest.
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11.3 Licenses and Permits. Concessionaire covenants to diligently apply for
and obtain a valid California license to serve alcoholic beverages at the Site and to do all acts
necessary or appropriate to acquire such license by April 1, 2002. Concessionaire shall obtain,
and maintain in force during the Term, such liquor license and all food and other licenses and
permits and renewals thereof necessary to operate hereunder. Such licenses shall include a City
of Lake Elsinore business license. Concessionaire shall furnish the Agency with copies of such
licenses and permits and renewals thereof as are physically maintained at the Stadium, as
applicable. The Agency agrees to cooperate with Concessionaire in connection with applications
submitted by Concessionaire for any and all licenses and permits and renewals thereof, all at no
additional cost or expense to the Agency. Upon the termination or expiration of this Agreement,
if requested by the Agency or the Agency's designee, Concessionaire will cooperate with the
Agency and the Agency's designee in connection with the transfer of any such licenses to the
Agency or its designee and in such event the Agency or the Agency's designee shall reimburse
Concessionaire for the original cost of acquiring such license and any additional expenses
actually incurred by Concessionaire in connection with any such requested transfer.
11.4 Compliance with Laws, Policies and Programs.
(a) In connection with the sale of Refreshments hereunder and the
provision of all of the other services and performance of all of Concessionaire's duties and
obligations hereunder, Concessionaire shall in good faith comply with and faithfully observe,
and cause all of its employees, agents and contractors to comply with and faithfully observe, all
laws (including without limitation fire,building, health, sanitation and environmental codes and
regulations and liquor control laws and regulations).
(b) Concessionaire shall be solely responsible for:
(i) Enforcement of all California State laws, rules,regulations
or orders relating to premises licensed pursuant to and to enforce all rules,regulations or orders
of the California State Alcohol Beverage Control Board and other liquor authorities or other
regulatory agencies relating to the licenses.
(ii) To take any and all actions necessary to enable and to
ensure compliance with all laws, rules, regulations and orders concerning the sale and
consumption of alcoholic beverages in the Stadium and on the Site.
11.5 Proceedings Involving Licenses and Permits. Concessionaire shall
advise the Agency in writing of any pending- or threatened actions against Concessionaire,
whether by governmental authorities or otherwise,which seek,or could result in, the suspension
or revocation of any license or permit necessary for its performance of this Agreement. In the
event of any suspension in excess of fifteen(15)days or revocation of Concessionaire' license to
serve alcoholic beverages, and if such suspension or revocation shall not be stayed or appealed in
such manner that will permit Concessionaire to continue to serve alcoholic beverages at the
Stadium, then Concessionaire shall be obligated, subject to the prior approval of the Agency, to
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secure an interim licensed bar manager at the Stadium to enable or permit the serving of
alcoholic beverages. If Concessionaire has not secured an interim licensed bar manager or made
other arrangements reasonably satisfactory to the Agency, then upon the effectiveness of the
suspension or revocation of Concessionaire' liquor license, Agency, without waiving any rights
or remedies which it may otherwise have under or pursuant to this Agreement, in law, in equity,
or otherwise, shall have the right, but not the obligation, to secure an interim licensed bar
manager at Concessionaire' sole cost and expense or to secure its own liquor license to serve
alcoholic beverages at the Stadium and on the Site.
In such event, Concessionaire will make available to the interim licensed
bar manager or the Agency,to the extent permitted by applicable law, if any, all supplies of
applicable beverages then in its possession which were intended for sale or use at the Stadium or
on the Site, will afford to such interim licensed bar manager or the Agency the benefit of supply
arrangements for beverages,and will make applicable personnel, and Concession Facilities and
Concession Equipment available to such interim licensed bar manager or the Agency.
Concessionaire shall be entitled to reimbursement from the interim
licensed bar manager or the Agency for its costs and expenses related to inventory, supplies and
personnel used by the interim licensed bar manager or the Agency. The foregoing shall not be
construed to imply that any such events shall result in additional costs that the Agency shall be
required to bear or to relieve Concessionaire from its obligations hereunder. Concessionaire
shall resume its duties and the sale of alcoholic beverages at the Stadium upon restoration of the
license(s)or permits to do so provided, however, that in the event that the Agency decided to
secure its own liquor license to serve alcoholic beverages at the Stadium and on the Site, the
Agency may determine to continue to hold such license provided that it does not preclude
Concessionaire from holding its license to provide alcoholic beverages. .
11.6 Hours of Operation. Concessionaire shall open the Concession Facilities
sufficiently prior to each Event to allow time for patrons to purchase Refreshments and
Merchandise and will continue to provide services until each such Event ends or such further
time as may be reasonably necessary to adequately meet public demand, subject to restrictions
imposed on the sale of alcoholic beverages imposed by applicable governmental authorities or
policies reasonably implemented by Concessionaire to regulate alcoholic beverage consumption.
During the season, the Retail Store will be open on game days and on non-game days will be
opened to service a customer upon request of any such customer during normal business hours.
During the off-season, the Retail Store shall be open on such days and for such times as
Concessionaire detemunes economically reasonable and appropriate to meet public demand.
11.7 Deliveries. All deliveries of Refreshments and Merchandise and other
items used or sold by Concessionaire at the Stadium or on the Site shall be made only during
normal operating hours (7:00 am. to 6:00 p.m.) and shall be made through a gate or gates
designated by the Agency. Concessionaire shall use reasonable efforts to prevent the entry of
any unauthorized persons into the Stadium through such gate or gates when open for purpose of
such deliveries.
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FinalConcession Agmemcnt2 4015-009 02/05/02
11.8 Mechanics Lien. Concessionaire shall at all time protect and keep the
Concession Facilities and Concession Equipment, the Stadium, the Site and all of Agency's other
real and personal property, free and clear of and from all mechanics and other liens, attachments,
encumbrances, or claims arising out of Concessionaire' operations hereunder,its performance
under this Agreement, and/or its use of any of the foregoing. In the event any such lien is placed,
or such encumbrances created, Concessionaire shall cause any such liens to be promptly
removed, and if necessary, shall provide all necessary performance bonds or other required
security.
11.9 Products and Prices. Concessionaire agrees that it will have available at
all times sufficient quantities and varieties of wholesome Refreshments. Prices,portions,
product selection, and specific brands (except with respect to alcoholic beverages to the extent
required by applicable law) shall be at least generally comparable to those appearing in other
California League baseball stadium of similar size and nature. Concessionaire shall consult with
the Agency on matters relating to prices,portions, product selection and product brands.
Concessionaire shall also be entitled to use and promote any`private brand products"
Concessionaire may own or control. Concessionaire will post menus, with prices,in conspicuous
places within or adjacent to the Concession Facilities. Merchandise shall be selected by
Concessionaire, and shall include all standard Merchandise bearing the Storm's logo. Pricing and
quality shall be determined by Concessionaire and shall be comparable to other California
League baseball merchandise. Concessionaire shall also adhere to all rules and regulations of
Major League Baseball Properties, the California League and the NAPBL that govern the sale of
licensed merchandise products of the Storm.
11.10 Specialty Products. Subject to the Agency's prior written approval, in
the Agency's reasonable discretion, Concessionaire shall have the right, to sublet or license
Concession Facilities and the Concession Equipment related thereto to third party vendors
(including both private and charitable and not-for-profit organizations) for the purpose of selling
specialty products. No approval shall be required for"naming or branding" licenses of specialty
products sold at the Stadium exclusively by Concessionaire's employees.
11.11 Altering Facilities. Concessionaire shall not materially alter, add to or in
any material way vary the Concession Facilities, Concession Equipment, the Stadium or the Site,
or make any material alterations or installations thereto,without having first obtained the consent
in writing of the Agency, which the Agency may give or withhold in its sole discretion.
11.12 Fair Wages and Hours. Concessionaire shall comply with all laws of the
government of the State of California, the County of Riverside, the City of Lake Elsinore and the
United States, and shall also comply with all law governing employment and conditions of
employment, and shall indemnify, defend and hold the Agency harmless with respect thereto.
Concessionaire will comply with the terms of the Workers' Compensation Act of the State of
California and any other laws now in existence or hereafter enacted, as well as amendments
thereto, insofar as they are applicable to Concessionaire' operations under or pursuant to this .
Agreement.
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FinalConeession AgeemenL2 4015-009 02/05/02
12. Breach of Agreement. Each of the following shall constitute a material breach
of this Agreement:
(a) Either parry's failure to pay or fulfill any monetary obligation as and when
due, and such failure shall not have been cured within thirty (30)days following receipt of
written notice thereof from the Agency or Concessionaire, as the case may be;
(b) The failure of either party to perform any of its non-monetary obligations
under this Agreement, and such failure shall have continued for sixty(60) days following receipt
of written notice from the non-defaulting party specifying the nature of such non-monetary
default; provided, however, that if the nature of the non-monetary default is the result of a force
majeure event or is otherwise such that the default cannot be fully cured within sixty(60) days,
then the party in default shall have such additional time as it reasonably necessary to cure the
default, so long as such party is proceeding diligently to complete the cure;
(c) Any failure to correct violations of State and local health regulations if
uncorrected for more than thirty(30) days; provided, however,that if the nature of such violation
is the result of a force majeure event or is otherwise such that the violation cannot be fully cured
within thirty(30) days, then the party in default shall have such additional time as it reasonably
necessary to cure the default, so long as such party is proceeding diligently to complete the cure;
and
(d) Concessionaire being adjudged bankrupt either voluntarily or
involuntarily, or a receiver is appointed for Concessionaire' property with authority to take
possession of the Site and operate concession in accordance with the terms of this Agreement,
and the adjudication or appointment is not vacated, dismissed, or set aside within one hundred
twenty(120) days from its entry.
13. Access. Concessionaire's on-duty personnel shall be provided access to and from
the Stadium through a gate or gates designated for such purposes, without charge, at all times
necessary to enable Concessionaire to prepare for such events and fulfill the other
responsibilities hereunder. Concessionaire's on-duty staff shall be entitled to free parking(on
event days and regular business days) at specific locations in the parking lots designated by
Concessionaire in connection with Storm Games and Other Storm Events and by the Agency in
connection with Other Stadium Events.
14. Assignment. A party may assign this Agreement only with the written consent of
the other party hereto. Subject to the foregoing, this Agreement shall be binding upon the
successors and assigns of the parties hereto.
15. [Reserved]
25
FinalConcession Agreen rnt2 4015-M 02/05/02
16. Controlling Law Venue. This Agreement and all matters relating to it shall be
governed by the laws of the State of California and any action brought relating to this Agreement
shall be held exclusively in a state court in the County of Riverside.
17. Litigation Expenses and Attorneys' Fees. If any party to this Agreement
commences any legal action against any other party arising out of this Agreement, the prevailing
party shall be entitled to recover its reasonable litigation expenses, including court costs, expert
witness fees, discovery expenses, and attorneys' fees.
18. Mediation. The parties agree to make a good faith attempt to resolve any
disputes arising out of this Agreement through mediation prior to commencing litigation. The
parties shall mutually agree upon the mediator and share the costs of mediation equally. If the
parties are unable to agree upon a mediator, the dispute shall be submitted to
JAMS/ENDISPUTE ("JAMS") or its successor in interest. JAMS shall provide the parties with
the names of seven qualified mediators. Each party shall have the option to strike two of the
seven mediators selected by JAMS and thereafter the mediator remaining shall hear the dispute.
If the dispute remains unresolved after mediation, either party may commence litigation.
19. Execution. This Agreement may be executed in several counterparts, each of
which shall constitute one and the same instrument and shall become binding upon the parties
when at least one copy hereof shall have been signed by all the parties hereto. In approving this
Agreement, it shall not be necessary to produce or account for more than one such counterpart.
20. Status. At all times during the Term, Concessionaire, their respective agents,
contractors and employees,shall be and remain independent contractors, and shall not be
considered to be agents, employees, partners or joint venturers of the Agency or its affiliates or
designees.
21. Indemnification and Hold Harmless. Concessionaire shall indemnify, defend
and hold harmless, the Agency, and its respective agents, officers, members, managers,
employees, contractors and affiliated and related entities from any and all losses or damage and
from any and all liability, suits, actions or claims brought or made by any person or persons
arising or resulting from any and all activities and operations relating to its performance of this
Agreement and/or the provision of Concessions and Catering Services, including the acts or
omissions of its agents, employees, contractors,members, managers, affiliates, successors and
assigns, in and about the Site or arising out of the use of the Site, for any injury or damage to the
person of property in about or at the Site while the applicable party or its agents, employees,
contractors,members, managers, affiliates, successors or assigns are occupying the Site, or any
part thereof,to the maximum extent permitted by law.
22. Entire Agreement, Modification. Subject only to applicable provisions of the
License Agreement and the Maintenance Agreement, this Agreement consisting of 29 pages and
Exhibits A through D contains the entire agreement between the parties regarding the subject
matter hereof. No verbal agreement or implied covenant shall be held to vary the provisions
hereof, any statements, law or custom to the contrary notwithstanding. No promise,
26
FinilConcession Ageement.2 4015-009 02/05/02
representation, warranty, or covenant not included in this Agreement has been or is relied on by
either party. Each party has relied on its own inspection of the Site, examination of this
Agreement,the counsel of its own advisors, and the warranties, representations, and covenants in
this Agreement itself. The failure or refusal of either party to inspect the Site,to read this
Agreement or other documents, or to obtain legal or other advice relevant to this transaction
constitutes a waiver of any objection, contention, or claim that might have been based on such
reading, inspection, or advice. No provision of this Agreement may be amended or varied except
by an agreement in writing signed by the parties hereto or their respective successors.
23. Authority. The Agency and Concessionaire each represent and warrant to the
other parties that they have all necessary right, power and authority to enter into this Agreement,
and to fully perform each and all of their respective obligations hereunder.
24. Other Claims. The agreement herein is not intended to deprive any party of any
claims it may have against Lakeside or any related entity nor shall it obligate either party to
assume any of Lakeside's liabilities under the Prior Concessions Agreement.
25. Non-Discrimination. Concessionaire herein covenants by and for itself and any
successors in interest that there shall be no discrimination against or segregation of; any person,
or group of persons on account of race, color, creed,religion, sex,marital status, handicap,
ancestry or national origin, in the lease, sublease, transfer, use, occupancy,tenure or enjoyment
of the premises, nor shall the transferee himself or herself or any person claiming under or
through him or her, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location,number, use or occupancy of tenant,
subtenants, or vendees of the premises.
26. Notice. All notices,requests, demands or documents which are required or
permitted to be given or served hereunder shall be in writing and delivered personally or
delivered by United States mail, postage prepaid, certified return receipt requested, or a national
or regional overnight courier(e.g., FedEx, Overnight Express, etc.) addressed as follows:
To the Agency at: Redevelopment Agency of the City of Lake Elsinore
130 S. Main Street
Lake Elsinore, California 92530
Attn: Executive Director
Tel: (909) 674-3124
Fax: (909) 674-2392
with a copy to: Barbara Zeid Leibold,Esq.
Van Blarcom, Leibold, McClendon &Mann, PC
307 E. Chapman
Orange, Califomia 92866
Tel: (714) 639-6700.
Fax: (714) 639-7212
27
FinalConcession Agreement2 4015-M 02/05/02
To Concessionaire: Golden State Concessions and Catering, Inc.
500 Diamond Drive
Lake Elsinore, California 92531
Attn: General Manager
Tel: (909) 245-4487
Fax: (909)245-0308
with a copy to: Robert B. Lapidus, Esq.
Sherman&Lapidus LLP
760 B Street, Suite 2330
San Diego, California 92101
Tel: (619) 338-4932
Fax: (619)231-8770
Notice shall be deemed to have been delivered only upon actual delivery to the intended
addressee in the case of either personal service or courier. The addresses for purposes of this
Section 26 may be changed by giving written notice of such change in the manner provided
herein for giving notices. Unless and until such written notice is delivered, the latest information
stated by written notice, or provided herein if no written notice of change has been delivered,
shall be deemed to continue in effect for all purposes hereunder.
27. Severability. The invalidity or illegality of any provision shall not affect the
remainder of this Agreement and all remaining provisions shall, notwithstanding any such
invalidity or illegality, continue in full force and effect.
28. Administration. Unless clearly indicated otherwise, any action, decision,
direction, notice or approval to be given by the Agency hereunder may be given by the Executive
Director,provided, however that the Executive Director, in his/her absolute discretion may
determine that such matter must be submitted to the Agency Board. Unless clearly indicated
otherwise, any action, decision, direction,notice or approval to be given by Concessionaire
hereunder may be given by Concessionaire's General Manager, provided,however that the
General Manager in his/her absolute discretion may determine that such matter must be
submitted to Concessionaire'Board of Directors.
IN WITNESS WHEREOF, the parties have executed this Agreement on the respective
dates set forth below.
GOLDEN STATE CONCESSIONS AND
CATERING, INC., a California
corporation
DATED: b ► , 2002 By:
Printed Name: S �_
Its:
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FinalConcession Agn:emenL2 4015-009 02/05/02
REDEVELOPMENT AGENCY OF THE
CITY OF LAKE ELSINORE, a public
body, corporate and politic
DATED: . 12 , 2002 By:
e a erson
A T:
Agency Clerk
APPROVED AS TO FORM:
VAN BLARcoK LEMOLD,
MCCLENDON& ,
Ajincy Ge 1 CdYmel
29
FINALConcession Agreement2_4015-009 02/05/02
EXHIBIT"B"
3. With the exception of: 1)being provided with notices under the Concession
Agreement; and 2) Civil Code Sections 2810 and 2839, the undersigned hereby waives all of the
suretyship provisions of the California Civil Code Sections 2788 through 2855.
4. Guarantor hereby waives and agrees not to assert or take advantage of(a) any
right to require Agency to proceed against Concessionaire(or any guarantor other than the
undersigned) or to pursue any other remedy in the Agency's power before proceeding against the
Guarantor, and (b) any duty on the part of Agency to disclose to Guarantor any facts Agency or
City now or hereafter know about the Concession Agreement,or Concessionaire, regardless of
whether Agency has reason to believe that any such facts materially increase the risks beyond
that which Guarantor intends to assume or has reason to believe that such facts are unknown to
Guarantor or has a reasonable opportunity to communicate such facts to Guarantor, it being
understood and agreed that Guarantor is fully responsible for being and keeping informed of all
circumstances regarding the Concession Agreement, the License, the obligations of
Concessionaire, the financial condition of Concessionaire,and of all circumstances bearing on
the risk of any obligation by Concessionaire hereby guaranteed.
5. The obligations of Guarantor hereunder are independent of the obligations of
Concessionaire and, in the event of default hereunder, a separate action or actions may be
brought and prosecuted against Guarantor (or any other guarantor)whether or not
Concessionaire (or any other guarantor) is joined therein or a separate action or actions are
brought against Concessionaire.
6. In the event of any litigation between Agency and Guarantor arising out of this
Guaranty, the prevailing party shall be entitled to recover its reasonable costs and attorneys fees.
7. No provisions of this Guaranty can be waived nor can Guarantor be released from
the obligations hereunder except by a writing duly executed by the Agency. This Guaranty may
not be revoked by Guarantor or, if Guarantor dissolves, becomes insolvent, bankrupt, or
otherwise ceases to do business, the trustee or administrator of Guarantor, and any attempted
revocation by Guarantor or such trustee or administrator, shall be null and void and shall not in
any manner release or discharge Guarantor or such trustee or administrator from liability under
this Guaranty.
8. The Agency may assign this Guaranty in connection with an assignment of
Agency's rights under the Concession Agreement upon a transfer or sale of the Stadium. When
so assigned, Guarantor shall be bound as above to the assignees without in any manner affecting
Guarantor's liability hereunder. The Agency shall give Guarantor thirty(30)days notice prior to
any assignment of this Guaranty.
EXHIBIT "B"
9. This Guaranty shall remain in effect notwithstanding any bankruptcy,
reorganization or insolvency of Concessionaire or any successor or assignee thereof or any
disafl7rmance by a trustee of the Concessionaire.
10. This Guaranty shall inure to the benefit of and bind the successors and assigns of
Agency and Guarantor.
11. Guarantor agrees that jurisdiction and venue with respect to any matter pertaining
to the Guaranty or acts or omissions hereunder shall lie exclusively with the Superior Court of
the County of Riverside, State of California, in an appropriate municipal court of that county, or
in the Federal District Court in the Central District of California. Guarantor irrevocably waives
any and all defenses based upon venue or forum non conveniens.
12. The laws of the State of California shall govern the interpretation and
enforcement of this Guaranty.
13. Guarantor represents and warrants that it has all necessary right, power and
authority to enter into this Guaranty and to fully perform its obligations hereunder and that the
party executing this Guaranty on behalf of Guarantor is fully authorized to do so and has all
necessary authority to bind the Guarantor hereto.
14. If any provision of this Guaranty shall be determined to be illegal or
unenforceable by any court of competent jurisdiction, then such determination shall not affect
any other provision of this Guaranty or the License and all such other provisions shall remain in
full force and effect; and if any provision of this Guaranty is capable of two constructions, only
one of which would render the provision valid, then the provision shall have the meaning which
renders it valid.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty this day of
. 2002.
JACOBS INVESTMENT COMPANY,
LLC a California limited liability company
By:
Gary Jacobs
Its: Manager
EXHIBIT"C"
CONCESSION EQUIPMENT LIST
(To Be Inserted)
1
FiNALConcession Agreement2 4015-M 02/OY02
EXHIBIT"D"
CONCESSION FACILITIES
(To Be Inserted)
1
FINALConcession Agrw=L2_4015-W9 02/05/02
AMENDMENT TO CONCESSION LICENSE AGREEMENT
This AMENDMENT TO CONCESSION LICENSE AGREEMENT (this
"Amendment"), dated as of November 1, 2002 for identification purposes,by and
between the REDEVELOPMENT AGENCY OF THE CITY OF LAKE
ELSINORE, a public body corporate and politic (the "Agency"), and GOLDEN
STATE CONCESSIONS AND CATERING, INC., a California corporation
("Concessionaire") with regard to the following:
RECITALS
The following Recitals are a substantive part of this Amendment and are
incorporated herein.
A. Agency and Concessionaire have entered into that certain Concession
License Agreement dated January 30, 2002 in order to provide for the concessions
operations and food and beverage service at the Site and for the provision of concession
services and the use of the concession facilities at the Site(the"Concession Agreement").
Capitalized terms used herein which are not otherwise defined herein shall have the
meaning ascribed to them in the Concession Agreement.
B. Concessionaire has an application pending for a transfer of On Sale
stadium license ("License")pending with the Department of Alcohol and Beverage
Control of the Business, Transportation and Housing Agency of the State of California
("ABC"). In order for Concessionaire to be approved as the holder of the License and to
serve alcoholic beverages at the Stadium as the concession provider, in accordance with
the terms of the Concession Agreement, the ABC is requiring the amendment of certain
provisions of the Concession Agreement as required in order to bring the Concession
Agreement into conformance with ABC regulations.
C. In order to satisfy the requirements of the ABC and in order for
Concessionaire to be issued the License and in furtherance of the purpose and intentions
of the parties with respect to the Concession Agreement,the parties hereto agree to
amend the Concession Agreement as provided herein.
NOW THEREFORE, in consideration of the terms contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:
1. Section 1, entitled"Definitions," of the Concession Agreement is hereby
amended to include the following definition:
"Non-alcoholic Refreshments"has the same meaning as Refreshments but
specifically excludes all alcoholic beverages, including beer, wine or cocktails, or any
other alcoholic beverage or product regulated by the Alcohol Beverage Control Board.
2. Section 6.1, entitled"Percentage Fee Schedule,"of the Concession
Agreement, is hereby amended in its entirety to read as follows:
"6.1 Percentage Fee Schedule. Concessionaire shall pay to the Agency the
following percentage of Gross Receipts derived from the designated Concession Service:
Gross Receipts Applicable
From Concession Services ("GRCS") Percentage
GRCSs derived from the sale of
Non-alcoholic Refreshments at Storm Games
and Other Storm Events 6.11%
GRCSs derived from the sale of Non-alcoholic
Refreshments at Other Stadium Events,
except as provided above and except
for Other Stadium Events for which no alcoholic
beverages are sold 42.68%
GRCSs derived from the sale of Non-alcoholic
Refreshments at Other Stadium Events,
at which alcoholic beverages are not sold
(e.g.,High School events) 36%
GRCSs derived from the sale of Non-alcoholic
Refreshments at Other Stadium Event Diamond Club
Catering during such time as Concessionaire is the
exclusive caterer 38%
GRCSs derived at cost from Catering Services
For Other Agency Events in the Diamond Club
Pursuant to Section 3.2(c) of this Agreement 0%
GRCS derived from sale of Merchandise at the Site
(which shall not include City Merchandise) 5%
GRCS derived from sale of City Merchandise 90%
*If, during the course of any calendar year,the sum of"GRCSs derived from the
sale of Non-alcoholic Refreshments at Storm Games and Other Storm Events" and the
"GRCS derived from sale of Merchandise at the Site(which shall not include City
Merchandise)" exceeds $1,298,700, then the percentage applicable to any additional
"GRCSs derived from the sale of Non-alcoholic Refreshments at Storm Games and Other
Storm Events" shall be 8.55% and the percentage applicable to any additional"GRCS
derived from sale of Merchandise at the Site(which shall not include City Merchandise)"
shall be 7% for the remainder of that calendar year.
3. Section 11.5, entitled"Proceedings Involving Licenses and Permits," is
hereby amended in its entirety to read as follows:
"l1.5 Proceedings Involving Licenses and Permits. Concessionaire shall
advise the Agency in writing of any pending or threatened actions against
Concessionaire, whether by governmental authorities or otherwise, which seek, or could
result in, the suspension or revocation of any license or permit necessary for tis
performance of this Agreement."
4. Except as expressly amended and modified by this Amendment, the
Concession Agreement remains in full force and effect.
[Balance of page left intentionally blank, signatures on following page]
IN WITNESS WHEREOF,the parties have executed this Agreement on the
respective dates set forth below.
GOLDEN STATES CONCESSIONS AND
CATERING, INC., a California corporation
DATED: 52002 By:
Printed Name:
Its:
REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE, a public body, corporate
and politic
DATED: 12002 By:
Dick Watenpaugh, Executive Director
ATTEST:
Agency Clerk
APPROVED AS TO FORM:
Van Blarcom, Leibold
McClendon&Mann, P.C.
Agency General Counsel
ATTORNMENT AND
SECOND AMENDMENT TO
CONCESSION LICENSE AGREEMENT
This ATTORNMENT AND SECOND AMENDMENT TO CONCESSION
LICENSE AGREEMENT (this "Second Amendment"), dated for identification
purposes only as of July 15, 2007, is made by and between the REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE, a public body corporate and politic
(the "Agency"), and GOLDEN STATE CONCESSIONS AND CATERING, INC., a
California corporation ("Concessionaire")with regard to the following:
RECITALS
The following Recitals are a substantive part of this Second Amendment:
A. Agency and Concessionaire entered into that certain Concession License
Agreement dated January 30, 2002 in order to provide for (i) concessions operations and
food and beverage service at the Site, and (ii) the provision of concession services and the
use of the concession facilities at the Site. As of November 1, 2002, the Concession
License Agreement was amended by that certain Amendment to Concession License
Agreement, which amended certain provisions of the Concession License Agreement to
bring the Concession License Agreement into conformance with regulations promulgated
by the Department of Alcohol and Beverage Control of the Business, Transportation and
Housing Agency of the State of California. The term of the Concession License
Agreement was extended pursuant to that certain Assignment, Assumption, Attornment
and Nondisturbance Agreement dated as of July 1, 2004 for identification purposes by
and between the Agency, Concessionaire, the Storm, LLC, and Impact Stadium, LLC, as
amended by Amendment No. 1 thereto dated July 1, 2004 (collectively, the "Attornment
Agreement"). The Concession License Agreement, as amended by the Amendment to
Concession License Agreement, the Attornment Agreement, and this Second Amendment
shall be referred to herein as the "Concession Agreement."
B. Capitalized terms used herein which are not otherwise defined herein shall
have the meaning ascribed to them in the Concession Agreement.
C. The owners of Storm Baseball and Concessionaire have formed Diamond
Stadium Group, LLC, a California limited liability company ("DSG"), for the purpose of
managing the Site. Concurrently herewith, Agency and DSG are entering into that
certain Stadium License, Lease and Management Agreement ("Management
Agreement"). The Management Agreement provides that DSG shall operate the Site
through December 31, 2016, and provides for two five (5) year options to extend such
term. The Management Agreement further provides for the assignment of the
Concession Agreement to DSG during the term thereof, subject to certain conditions and
restrictions.
D. It is a condition precedent to the Agency's entry into the Management
Agreement that the Concession Agreement shall be amended such that (i) its term runs
concurrently with that of the Management Agreement; (ii) Concessionaire shall attorn to
DSG with respect to is performance under the Concession Agreement and with respect to
all of the rights and obligations under the Concession Agreement so long as the
Management Agreement is in full force and effect, and (iii) in the event of a termination
of the Management Agreement, Concessionaire, attornment to DSG and Agency's
assignment of the Concession Agreement shall terminate and be of no further force and
effect.
E. It is to the mutual benefit of the parties hereto that the Agency enter into
the Management Agreement, and, accordingly, Concessionaire is willing to attorn to
DSG and amend the Concession Agreement as described herein.
F. In furtherance of the purpose and intentions of the parties with respect to
the Concession Agreement, the parties hereto agree to amend the Concession Agreement
as provided herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing Recitals and the terms
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:
1. Termination of Attornment Agreement Provisions. The Parties hereby
agree and acknowledge that, notwithstanding the language in Section 9 of the Attornment
Agreement stating that certain provisions of the Stadium Amendments (as defined in the
Attornment Agreement) shall survive the termination of the Master Lease (as defined in
the Attornment Agreement), the Parties now intend and agree to terminate any and all of
the provisions of the Attornment Agreement and/or the Stadium Amendments currently
in effect, such that any and all provisions of the Attornment Agreement and/or the
Stadium Amendments shall be of no further force and effect from and after the date of
this Second Amendment.
Accordingly, from and after the Effective Date of this Second
Amendment, the Concession Agreement is hereby amended to delete any and all
provisions effected by the Attornment Agreement and/or the Stadium Amendments,
including, without limitation, the provisions of Section 9 of the Attornment Agreement
which state that they survive the termination of the Master Lease. As a result, from and
after the Effective Date of this Second Amendment, the terms and conditions of the
Concession Agreement shall consist solely of the terms and conditions of the Concession
License Agreement, as amended by the Amendment to Concession License Agreement
and this Second Amendment.
2. Definitions. Section 1 of the Concession Agreement, entitled
"Definitions," is hereby amended to add, or delete and replace in their entirety, as
appropriate, the following definitions:
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"Attornment Agreement" means that certain Assignment, Assumption,
Attornment and Nondisturbance Agreement dated as of July 1, 2004 for
identification purposes by and between the Agency, Concessionaire, the Storm,
LLC, and Impact Stadium, LLC, as amended by Amendment No. 1 thereto dated
July 1, 2004.
"Attornment Period"is defined in Section 29 of this Agreement.
"DSG" means Diamond Stadium Group, LLC, a California limited
liability company.
"Expiration Date" means December 31, 2016, or such later date as may
be determined in accordance with Section 2 of this Agreement.
"First Extension Term"is defined in Section 2.2 of this Agreement.
"Initial Term"is defined in Section 2.1 of this Agreement.
"Management Agreement" means that certain Stadium License, Lease
and Management Agreement between the Agency and DSG dated for
identification purposes only as of July 15, 2007.
"Parties" means the Agency and Concessionaire; "Party" means either
the Agency or Concessionaire.
"Second Extension Term"is defined in Section 2.3 of this Agreement.
"Term" is the Initial Term and, if applicable, the First Extension Term;
and, if applicable, the Second Extension Term.
3. Term of Concession Agreement. Section 2 of the Concession
Agreement, entitled "Term of Agreement," is hereby deleted in its entirety and replaced
with the following:
2.1 Initial Term. The initial term of this Agreement
(hereinafter referred to as the "Initial Term") shall commence upon the
Commencement Date and, unless sooner terminated or extended under the
terms and conditions of this Agreement, shall continue thereafter until
11:59 p.m., Pacific Time, on December 31, 2016 (the "Expiration Date").
2.2 First Extension Term. Upon the commencement of the
First Extension Term (as defined in the Management Agreement)pursuant
to and in accordance with Section 3.2 of the Management Agreement,
Concessionaire and Agency hereby agree that the term of this Agreement
shall be automatically extended for one (1) additional period of five (5)
years (the "First Extension Term"). All of the terms and conditions of this
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Agreement shall apply to such First Extension Term, and a new Expiration
Date shall automatically be established to be 11:59 p.m. Pacific Time on
December 31, 2021.
2.3 Second Extension Term. Upon the commencement of the
Second Extension Term (as defined in the Management Agreement)
pursuant to and in accordance with Section 3.3 of the Management
Agreement, Concessionaire and Agency hereby agree that the term of this
Agreement shall be automatically extended for another additional period
of five (5) years (the "Second Extension Term"). All of the terms and
conditions of this Agreement shall apply to such Second Extension Term,
and a new Expiration Date shall automatically be established to be 11:59
p.m. Pacific Time on December 31, 2026.
4. Other Stadium Events. Section 3.2(b) of the Concession Agreement is
hereby deleted and replaced with the following:
(b) Exclusive Caterer Services for Other Stadium Events.
Concessionaire shall not have the exclusive right and/or obligation to
provide Refreshments in the Diamond Club during Other Stadium Events
(the"Other Stadium Event Diamond Club Catering").
5. Notice. Section 26 of the Concession Agreement is hereby deleted and
replaced in its entirety with the following:
26. Notice. All notices, requests, demands or documents
which are required or permitted to be given or served hereunder shall be in
writing and delivered personally or delivered by United States mail,
postage prepaid, certified return receipt requested, or delivered by a
national or regional overnight courier (e.g., FedEx, Overnight Express,
etc.) addressed as follows:
To the Agency at: The Redevelopment Agency of the City of Lake
Elsinore
130 S. Main Street
Lake Elsinore, California 92530
Attn: Executive Director
with a copy to: Barbara Zeid Leibold, Esq.
Leibold, McClendon &Mann, PC
23422 Mill Creek Drive, Suite 105
Laguna Hills, California 92653
To the Concessionaire: Golden State Concessions and Catering, Inc.
500 Diamond Drive
Lake Elsinore, California 92531
Attn: General Manager
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Amd No.2 to Concession Agreement FINAL.doc
with a copy to: Robert B. Lapidus, Esq.
Law Office of Robert B. Lapidus
3366 North Torrey Pines Court, Suite 210
La Jolla, CA 92037
Notice shall be deemed to have been delivered only upon actual
delivery to the intended addressee in the case of either personal service or
courier. The addresses for purposes of this Section 26 may be changed by
giving written notice of such change in the manner provided herein for
giving notices. Unless and until such written notice is delivered, the latest
information stated by written notice, or provided herein if no written
notice of change has been delivered, shall be deemed to continue in effect
for all purposes hereunder.
6. Attornment during Performance of Management Agreement. The
Concession Agreement shall be amended to add a Section 29, as follows:
29. Attornment during Performance of Management
Agreement.
(a) Pursuant to the Management Agreement, the
Concession Agreement has been assigned to DSG during the Attornment
Period, and DSG has assumed the rights and obligations of the Agency
under the Concession Agreement during the Attornment Period.
Concessionaire acknowledges and represents that it is the intent of DSG
and Concessionaire that Concessionaire will continue, pursuant to the
Concession Agreement, to perform its obligations under the Concession
Agreement during the term of the Management Agreement.
Concessionaire further acknowledges and represents that it shares
controlling ownership with DSG.
(b) The Parties agree that, so long as the licenses and lease
granted to DSG in the Management Agreement are effective (the
"Attornment Period"), except for the rights and obligations set forth in this
Section 29, Concessionaire shall attorn to and tender all performances
under the Concession Agreement to DSG and shall look to DSG
exclusively for all of the rights and benefits accruing under the Concession
Agreement. Concessionaire further agrees that the Agency shall have no
liability or obligation to Concessionaire under the Concession Agreement
during the Attornment Period for any default by DSG under the
Concession Agreement. No amendment of the Concession Agreement,
nor waiver or delay in enforcement of any failure to perform nor other
breach of the Concession Agreement by either DSG or the Concessionaire
during the Attornment Period shall be binding upon the Agency; nor shall
any course of dealing established between DSG and the Concessionaire be
binding upon the Agency. If the Management Agreement is terminated,
then the attornment provided for in this Section 29 shall be rescinded and
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Amd No.2 to Concession Agreement FINAL.doc
Concessionaire shall again be responsible to Agency for its performance
under the Concession Agreement and shall look to Agency with respect to
all rights and benefits accruing thereunder.
(c) Notwithstanding the foregoing, during the Attornment
Period, Concessionaire acknowledges and agrees that Agency reserves the
right to declare a breach under the Concession Agreement by the
Concessionaire and pursue any legal remedies to which it may be entitled.
Further, Concessionaire agrees to provide Agency with prompt written
notice of any breach by DSG under the Concession Agreement. Agency
shall have the right,-but not the obligation, to cure any default of DSG
during the Attornment Period. Concessionaire agrees to afford Agency
the right to cure any such default. Concessionaire shall not be permitted to
terminate the Agreement during the Attornment Period as a result of
uncured breach or breaches by DSG unless Concessionaire has provided
Agency with notice and an opportunity to cure in accordance with this
Agreement.
(d) Concessionaire covenants and agrees to maintain its
operations and corporate formation in such force and good standing such
that it shall be able to resume its obligations hereunder at any time during
and after the Attornment Period. Failure to so maintain its operations and
corporate formation, and/or failure to resume performance of its
obligations hereunder upon any termination of the Management
Agreement shall constitute a material breach of this Agreement.
(e) Concessionaire shall, to the maximum extent permitted
by law, indemnify, defend and hold harmless the Agency and its directors,
officers, members, managers, employees, agents, and other representatives
from any and all liability, demands, claims, costs, losses, damages,
settlements, recoveries and expenses (including, without limitation,
interest, penalties, expert witness fees, accounting fees and attorneys' fees
and costs) incurred by any of the foregoing, known or unknown,
contingent or otherwise, directly or indirectly arising from or related to
any misrepresentations or breach of any of the provisions of this Section
29.
(f) Concessionaire shall not in any event be entitled to, and
hereby waives, any right to seek damages for loss of profits or any special
or consequential damages of any kind or nature from the Agency arising
out of or in connection herewith, and in connection with such waiver
Concessionaire is familiar with and hereby waives the provision of§ 1542
of the California Civil Code which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
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Amd No.2 to Concession Agreement FINAL.doc
EXECUTING THE RELEASE WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR."
(g) Concessionaire acknowledges and agrees that it has
been informed that DSG may not assign its rights under the Agreement
without the prior written consent of the Agency.
7. Accuracy of Recitals. The Parties acknowledge the accuracy of the
foregoing Recitals, which are incorporated herein by this reference.
8. Authority; Priority of Amendment. This Second Amendment is
executed by the Parties' authorized representatives. Except as expressly modified herein,
all of the terms of the Concession Agreement shall remain unchanged and in full force
and effect, and the Parties shall continue to fulfill their respective obligations under the
Concession Agreement as amended by this Second Amendment. To the extent of any
conflict between the terms of the Concession Agreement and the terms of this Second
Amendment,the terms of this Second Amendment shall control.
9. Captions. The captions appearing in this Second Amendment are for
convenience only and are not a part of this Second Amendment and do not in any way
limit, amplify, define, construe, or describe the scope or intent of the terms or provisions
of this Second Amendment.
10. Counterparts. This Second Amendment may be executed in
counterparts, each of which shall be deemed an original, and all of which together shall
constitute but one and the same document.
11. Effective Date. The effective date of this Second Amendment is July 15,
2007.
[BALANCE OF PAGE LEFT INTENTIONALLY BLANK, SIGNATURES ON
FOLLOWING PAGE]
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Amd No.2 to Concession Agreement FINAL.doc
IN WITNESS WHEREOF, the parties have executed this Second Amendment
as of the date first written above.
GOLDEN STATES CONCESSIONS AND
CATERING, INC., a California corporation
By:
Printed Name:
Its:
REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE,a public body, corporate
and politic
By:
Chairperson
ATTEST:
Agency Clerk
APPROVED AS TO FORM:
LEIBOLD MCCLENDON & MANN, P.C.,
Agency General Counsel
By:
Barbara Zeid Leibold
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Amd No.2 to Concession Agreement FINAL.doc
LICENSE AGREEMENT
by and between
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE
"Agency"
and
STORM LLC
"Storm"
TABLE OF CONTENTS
I Definitions 2
2. Tenn of License 6
2.1. Initial Term 6
2.2. Option to Extend 6
3. The Storm's Right to Use the Stadium 6
3.1. Professional Baseball 6
3.2. Name of the Team 7
3.3. Other Storm Events 7
3.4. Use of Offices and Other Areas of the Stadium 8
3.5. Concourse Signage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 9
3.6. Agency Right of Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.7. Hazardous Materials 9
4. License Fees 11
4.1. Initial Term 11
4.2. Extension Tenn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.3. Deferral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.4. Annual License Fee Due Dates 14
4.5. Maintenance and Operations of Stadium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.6. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5. Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1. Admissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2. Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3. Concessions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.4. Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.5. Stadium Naming Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.6. Licensed Merchandise Sales 18
6. Imposition of Admissions Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1. Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2. Admissions Tax Credit Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3. Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.4. No Excess Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7. Other Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8. Tickets to Storm Games . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9. Agency Suite and Parking at Storm Games and Other Storm Events . . . . . . . . . . . . . . . 20
10. Lehr Seats and Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11. Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
12. Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .x . . . . . . . . . . . . . . . . . . . 22
13. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
13.1. Classes of Insurance to be Provided by the Storm . . . . . . . . . . . . . . . . . . . . . . . . 22
13.2. Endorsements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
13.3. Deductibles and Self-Insured Retentions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
13.4. Certificates of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
14. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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14.1. Assignment by the Storm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
14.2 Assignment by the Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
15. Controlling Law Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
16. Litigation Expenses and Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
17. Mediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
18. Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
19. Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
20. Indemnification and Hold Harmless . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
21. Destruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
21.1. Restoration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
21.2. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
21.3. Baseball Season . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
22. Events of Default, Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
22.1. Events of Default by the Storm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
22.2. No Waiver-Annual License Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
22.3. No Other Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
22.4. Agency Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
23. Events of Default by the Agency and the Storm's Remedies . . . . . . . . . . . . . . . . . . . . . 29
23.1. Events of Default by the Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
23.2. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
23.3. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
23.4. Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
23.5. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
24. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
25. Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
26. Entire Agreement, Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
27. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
28. Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
29. Non-Discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
30. Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
31. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
32. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
EXHIBITS:
Exhibit A Site Legal Description
Exhibit B Site Map
Exhibit C Advertising Elements
Exhibit D Guaranty
Exhibit E Stadium Field and Maintenance Agreement
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LICENSE AGREEMENT
This LICENSE AGREEMENT(this"License")is made and hereby entered into as of the
15th day of March,2001 by and between the REDEVELOPMENT AGENCY OF THE CITY OF
LAKE ELSINORE, a public body corporate and politic (the "Agency") and STORM LLC, a
California limited liability company (the "Storm").
RECITALS
The following Recitals are a substantive part of this License:
A. The Agency is the owner of that certain real property located within the Rancho
Laguna Redevelopment Project Area III of the City of Lake Elsinore, County of Riverside, State of
California all as more fully described in the Site Legal Description attached hereto as Exhibit"A"
and incorporated herein by reference(the "Land"). A number of improvements are located on the
Land, including a professional baseball field, stadium and ancillary parking and related facilities
commonly known as the"Lake Elsinore Diamond"(collectively,the"Stadium")and depicted on the
Site Map attached hereto as Exhibit`B"and incorporated herein by reference. The Stadium and the
Land shall-be referred to collectively herein as the"Site".
B. The Agency previously entered into that certain Final and Fully Executed Stadium
Property and Facility Lease, dated April 2, 1998 (the "Stadium Lease") with Lakeside Sports &
Entertainment LLC ("Lakeside").
C. Pursuant to that certain letter by and between Lakeside and Mandalay Sports
Entertainment LLC("Mandalay")dated March 17, 1999,the parties thereto set forth the terms and
conditions regarding the use of the Stadium by the Storm.
D. On or about August 22, 2000, general counsel for the Agency received a letter from
counsel for Lakeside indicating that Lakeside was financially unable to continue to meet its
obligations under the Stadium Lease and would abandon its operation and maintenance of the
Stadium in September or October, 2000.
E On or about October 31, 2000, Lakeside terminated its employees responsible for
maintenance of the Stadium. By letter dated October 11, 2000, counsel for Lakeside stated that
Lakeside would no longer fulfill any of its contractual obligations as of November 15, 2000.
F. The Agency and the Storm have incurred damages as a result of Lakeside's
repudiation of the Stadium Lease and abandonment of the Stadium.
r
G. The Agency and the Storm desire to enter into this License in order to clarify the
relationship between the parties and ensure the Storm's continued use of the Stadium.
H. Subject to the terms and conditions of this License, the Storm desires to use the
Stadium for baseball games and for other purposes as more fully described herein, and the Agency
FINALLicenseAgreementStadium.15_4015-009 1 04I12101
desires to allow the use of the Stadium for such purposes in accordance with the terms and
conditions set forth in this License.
NOW THEREFORE, in consideration of the terms contained herein, and for other good
and valuable consideration,the receipt and sufficiency of which are hereby acknowledged,the parties
do hereby agree as follows:
1. Definitions. Capitalized terms used herein and not otherwise defined shall have the
meaning set forth in this Section 1 unless the context would clearly indicate otherwise.
"Admissions Tax"means so-called"ticket taxes"or any entertainment, event, admissions,
use or licensing tax, fee,assessment or charge imposed by the City which is applicable to the Storm
Games and which is required to be paid by the Storm to the City or to be collected by the Storm and
paid to the City.
"Admissions Tax Credits"is defined in Section 6.2 of this License.
"Admissions Tax Credits Demand"is defined in Section 6.2 of this License.
"Advertising Elements"means the elements set forth on the list attached hereto as Exhibit
"C" and incorporated herein by reference.
"Agency"means the Redevelopment Agency of the City of Lake Elsinore, a public body
corporate and politic.
"Agency Suite"means the luxury suite located at the Stadium identified as Suite 1.
"Annual License Fee"means the amount to be paid by the Storm to the Agency annually
for the Storm's use of the Stadium for the Storm Games and Other Storm Events in accordance with
the terms of this License.
"City"means the City of Lake Elsinore, a municipal corporation.
"Commencement Date"shall mean March 15, 2001.
"Concession Agreement"means the Concession License Agreement by and among
Lakeside, Mandalay, and Golden State Sportservice, Inc., a California corporation dated March
15, 1999.
"Conference Room"means the conference room at the Stadium depicted on the Site Map
and labeled"Conference Room."
"CPI"means the Consumer Price Index for Los Angeles - Riverside - Orange County—
All Urban Consumers, 1982-1984 equal to 100.
"Date of this License"means March 15, 2001.
FINALLicenseAgreementStadium.15_4015-009 2 04/12/01
"Deferral"is defined in Section 4.3 of this License.
"Electricity Base"is defined in Section 11 of this License.
"Electronic Message Board"means the programable electronic panel for the display of
advertising and player information which is located in left field.
"Executive Director"means the Executive Director of the Agency or his/her designee.
"Expiration Date"shall have the meaning set forth in Section 2.1 of this License subject
to the extension of the Expiration Date in accordance with Section 2.2 of this License.
"Extension Term"shall have the meaning set forth in Section 2.2 of this License.
"Event of Default by the Agency"is defined in Section 23.1 of this License.
"Event of Default by the Storm"is defined in Section 22.1 of this License.
"Field"means the playing field at the Stadium which is depicted on the Site Map and
designated as the"Field."
"Governmental Regulations"means any local, state, and federal laws, ordinances, rules,
requirements, resolutions, policy statements and regulations.
"Gross Ticket Revenues"means all amounts actually received by the Storm through
sales of tickets for admission to the Storm Games.
"Gross Ticket Revenues Base"means the amount of Gross Ticket Revenues up to the
amount of Two Million Dollars ($2,000,000.00).
"Guaranty"means the Guaranty to be provided by Mandalay in accordance with the
terms of this License which is attached hereto as Exhibit "D" and incorporated herein by
reference.
"Hazardous Materials"means any hazardous or toxic substance,material or waste
which is or becomes designated, classified or regulated by any local governmental authority, any
agency of the State of California or any agency of the United States Government. The term
"Hazardous Materials" includes (without limitation) any material or substance which(i) contains
petroleum or any petroleum by-products, (ii) contains asbestos, (iii) contains urea formaldehyde
foam insulation, (iv) constitutes a chlorinated solvent, (v)constitutes a polychlorinated biphenyl,
(vi) constitutes a flammable explosive, (vii)consists of aluminum and aluminum compounds,
(viii) is designated, classified or regulated as a"hazardous"or"toxic"substance, material or
waste pursuant the Federal Water Pollution Control Act (33 U.S.C. §§ et seq.1317), the Federal
Resource Conservation and Recovery Act(42 U.S.C.§§.6901 et seq), the Comprehensive
Environmental Response, Compensation and Liability Act, (42 U.S.C. §§ 9601 et seq.), under
Sections 25115, 25117, 25122.7, and 2514, of the California Health and Safety Code,
FINALLicenseAgreementStadium.15_4015-009 3 04/12/01
Division 20, Chapter 6.5 (Hazardous Waste Control Law), under Section 25316 of the California
Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous
Substance Account Act), under Section 25501 of the California Health and Safety Code,
Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), under
Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground
Storage of Hazardous Substances), and under Article I I of Title 22 of the California Code of
Regulations, Division 4, Chapter 20. Each reference to a statute or law in this definition shall be
deemed to include any amendments thereto which are enacted from time to time.
"Initial Naming Rights Period"is defined in Section 5.5(c) of this License.
"Initial Term"shall have the meaning set forth in Section 2.1 of this License.
"Interest"means two percent(2%) plus the Prime Rate.
"Lakeside"means Lakeside Sports & Entertainment LLC, a California limited liability
company(also known as"Diamond Sports & Entertainment LLC").
"Land"is defined in Recital A hereto.
"League"means the California League of Professional Baseball, Inc., a California
nonprofit corporation.
"Lehr Family Seats"shall mean and refer to the eight(8) box seats located at the
Stadium identified as Super Box 5.
"Letter Agreement"means that certain letter by and between Lakeside and Mandalay
dated March 17, 1999 setting forth the terms and conditions of the use of the Stadium by the
Storm.
"License"means this License Agreement by and between the Agency and the Storm.
"License Fee Installment Payment"is defined in Section 4.4 of this License.
"Maintenance Agreement"shall mean the Stadium Field and Maintenance Agreement
which the parties intend to enter into effective March 15, 2001 in substantially the form attached
hereto as Exhibit"E." A copy of the executed Maintenance Agreement shall be kept on file with
the Agency Secretary and shall be available for public review during normal business hours of
the Agency.
"Mandalay"means Mandalay Sports Entertainment LLC, a California limited liability
company.
"NA"means the National Association of Professional Baseball Leagues, Inc.
"Naming Rights"means the naming rights to the Stadium.
FINALLicenseAgreementStadium.15_4015-009 4 04/12/01
"Naming Rights Agreement"is defined in Section 5.5(b) of this Agreement.
"Naming Rights Revenues"is defined in Section 5.5(c) of this Agreement.
"Other Storm Events"is defined in Section 3.3(a) of this Agreement.
"Option to Extend"shall have the meaning set forth in Section 2.2 of this License.
"Practices"is defined in Section 3.1(b) of this License.
"Prime Rate"means the rate of interest per annum announced from time to time by Bank
of America N.T. & S.A., Los Angeles, or its successor organization, as its prime commercial
lending or reference rate.
"Repayment Amount"is defined in Section 4.3 of this Agreement.
"Retail Store"means the retail store at the Stadium depicted on the Site Map and labeled
"Retail Store."
"Scoreboard"means the baseball scoreboard located in right field.
"Site"means the Land and the Stadium.
"Site Legal Description"means the legal description of the Site attached hereto as
Exhibit"A" and incorporated herein by reference.
"Site Map"means the Site Map attached hereto as Exhibit "B" and incorporated herein
by reference.
"Stadium"is defined in Recital A hereto.
"Stadium Lease"means the Final and Fully Executed Stadium Property and Facility
Lease, dated April 2, 1998 by and between the Agency and Lakeside.
"State"means the State of California.
"Storm"means Storm LLC, a California limited liability company the owner and
operator of a professional Class A baseball team and a member of the League.
"Storm Games"is defined in Section 3.1(c) of this License.
F
"Storm Office"means that office space at the Stadium depicted on the Site Map and
labeled "Storm Office."
"Storm Storage Areas"means the storage space at the Stadium depicted on the Site Map
and labeled "Storm Storage Area." In the event that mobile storage containers are located on the
FINALLicenseAgreementstadium.15_4015-009 5 04/12/01
Site in accordance with the provisions of Section 3.4 (f) hereof, the term "Storm Storage Areas"
as utilized herein shall include such mobile storage containers.
"Term"means the term of this License which commences on the Commencement Date
and continues until the Expiration Date. Upon the Storm's proper exercise of the Option to
Extend, the word "Term"as utilized herein shall also include and mean the Extension Term.
"Ticket Sales Office"means the ticket sales office depicted on the Site Map and labeled
"Ticket Sales Office."
"Utilities"is defined in Section 11 of this License.
2. Term of License.
2.1. Initial Term. The initial term of this License (hereinafter referred to as
the"Initial Term") shall commence upon the Commencement Date and, unless sooner terminated
or extended under the terms and conditions of this License, shall continue thereafter for seven(7)
years until 11:59 p.m., Pacific Time, on December 31, 2007 (the "Expiration Date").
2.2. Option to Extend. The Storm is hereby granted the option to extend the
Term of this License (the"Option to Extend") for one (1) additional period of five (5) years (the
"Extension Term"), which Option to Extend may be exercised in the sole and absolute discretion
of the Storm as set forth in this Section 2.2. Upon the Storm's exercise of the Option to Extend
for the Extension Term, all of the terms and conditions of this License shall apply to such
Extension Term, and a new Expiration Date shall automatically be established to be 11:59 p.m.
Pacific Time on December 31, 2012. The Storm shall pay the Annual License Fee during the
Extension Term in accordance with the provisions of Section 4 of this License. The Storm may
exercise its Option to Extend by delivering written notice thereof to the Executive Director on or
before the close of business on June 30, 2007.
3. The Storm's Right to Use the Stadium.
3.1. Professional Baseball.
(a) Covenant to Play Baseball. During the Term of this License, the
Storm shall play its home baseball games at the Stadium;provided,
however, that the number of such games during anyone year shall
not exceed:
1. Ten (10)pre-season and exhibitign games as scheduled by
the League or the Storm;
2. Seventy one (71)regular season baseball games as
scheduled by the League; provided however, that the
Agency will allow for a reasonable increase in this number
FINALLicenseAgreementStadium.15_4015-009 6 04/12/01
in the event that the League increases the number of regular
season baseball games to be played by the Storm; and
3. All home playoff games of the Storm as scheduled by the
League.
(b) Practices. In addition to the foregoing and in connection with the
Storm Games, the Storm shall have the right to use the Stadium for
a reasonable number of baseball practices and workouts for
members of the Storm, the San Diego Padres and other
professional baseball teams with the prior written approval of the
Executive Director which approval will not be unreasonably
withheld(the "Practices"). No admissions or other charges may be
imposed by the Storm in connection with the Practices and all costs
and expenses in connection with the Practices, including without
limitation, any costs for security, staffing and Utilities shall be
borne solely by the Storm. The Agency will not schedule any other
events on the Field during Practices without the prior written
approval of the Storm which approval will not be unreasonably
withheld.
(c) Scheduling of the Storm Games. Upon receipt from the League,
but in no event later than the 15'of November of each year during
the Term the Storm will provide the Executive Director with the
written, proposed schedule for all professional baseball games
involving the Storm for the coming baseball season including all
pre-season games, a reasonable number of dates to be held for
playoff games, as required by the League, and Practices (the
"Storm Games"). The Storm shall have the right to use the
Stadium on the days set forth in the schedule for the Storm Games.
The Agency will not schedule any other events at the Stadium on
the day of a Storm Game if such event would interfere with the
Storm's use of the Stadium. In addition,the Agency agrees that it
will not schedule, conduct or allow any events involving games or
exhibitions of professional baseball without the prior written
approval of the Storm which approval will not be unreasonably
withheld.
3.2. Name of the Team. The name of the baseball team which plays at the
Stadium pursuant to this License shall include the name "Lake Elsinore."
3.3. Other Storm Events.
(a) In addition to the use of the Stadium for the Storm Games, the
Storm shall have the right to use the Stadium for up to ten(10)non-baseball related exhibitions
or events during each calendar year during the Term (the"Other Storm Events"). The Agency
FINALLimnseAgreementstadium.15_4015-009 7 04/12/01
will also consider proposals from the Storm for use of the Stadium for promotion and
presentation of any other events by the Storm which are not part of the Other Storm Events,
including co-promotion of such events, use of the Stadium for such other events or other
proposals; provided that such proposed uses and events do not unreasonably interfere with other
events scheduled by the Agency.
(b) The Storm will not be required to pay any additional Annual
License Fee to the Agency for use of the Stadium for the Other Storm Events. In addition, the
Agency will not be required to reimburse the Storm any portion of the Annual License Fee in the
event that the Storm uses the Stadium for less than ten (10) Other Storm Events per year. The
Storm agrees to reimburse the Agency for any and all direct costs and expenses incurred by the
Agency in connection with the Other Storm Events, including without limitation costs for
Utilities, security, cleanup and maintenance, within ten(10) business days of the Storm's receipt
from the Agency of reasonable written documentation evidencing such costs and expenses.
(c) The Storm shall repair or restore the Stadium to the condition
existing prior to the Other Storm Event.
(d) Scheduling of Other Storm Events will be subject to the written
approval of the Executive Director, which approval will not be unreasonably withheld.
3.4. Use of Offices and Other Areas of the Stadium. In addition to the use
of the Stadium during Storm Games and Other Storm Events, the Storm shall have the right to
use.the following areas of the Stadium during the Term at the times set forth below:
(a) Storm Office. The Storm shall be entitled to the exclusive use of
the Storm Office at all times during the Term.
(b) Conference Room. The Storm may use the Conference Room on
a non-exclusive, as needed basis; provided that this use does not interfere with the use of the
Conference Room by the Agency and upon the prior written approval of the Executive Director
which approval will not be unreasonably withheld. The Storm and the Agency acknowledge and
agree that the Conference Room shall not be used for storage of any materials whatsoever.
(c) Ticket Sales Office. The Storm shall have the exclusive use of the
Ticket Sales Office on the days of the Storm Games and Other Storm Events. In addition,the
Agency shall allow the Storm reasonable access to the Ticket Sales Office at other times as
necessary in connection with the Storm's use of the Stadium in accordance with the terms and
provisions of this License. The Storm and the Agency may agree to mutually conduct ticket sales
should technology be compatible.
(d) Advertising Elements. The Storm shall have the right to utilize
the Advertising Elements in connection with the Storm Games and Other Storm Events and the
Agency agrees that the advertising placed on the Advertising Elements by the Storm will not be
removed following each Storm Game or Other Storm Event but will be left in place during the
Term. Except on days of a Storm Game or Other Storm Event, the Agency shall have the right to
FINALLicenseAgreementStadium.15_4015-009 8 04/12/01
remove and/or to cover the Storm's advertising on the Advertising Elements, provided that such
advertising is not damaged and that the Agency shall return the Advertising Elements to their
previous condition prior to a Storm Game or Other Storm Event. The Executive Director will
have the right to approve any and all signage or other physical advertising elements in any Storm
advertising on the Advertising Elements, which approval will not be unreasonably withheld. All
Storm advertising on the Advertising Elements in existence as of the Date of this License is
hereby deemed to be approved by the Executive Director.
(e) Electronic Message Board and Scoreboard. The Storm shall
have the exclusive right to use the Electronic Message Board and the Scoreboard during Storm
Games and Other Storm Events. The Storm shall be responsible for maintaining and repairing
the Electronic Message Board at its sole cost and expense.
(f) Storm Storage Areas. The Storm will have the exclusive use of
the Storm Storage Areas during the Term. The Storm agrees that it shall not store any materials
in any areas of the Stadium other than the Storm Storage Areas and that the Storm Storage Areas
will not be used for the storage of Hazardous Materials. In addition, the Agency will allow the
Storm to bring mobile storage containers onto the Site subject to the Executive Director's written
approval which approval will not be unreasonably withheld. The cost of any such mobile storage
containers will be borne solely by the Storm. The location and color of any such mobile storage
containers will be in the sole and absolute discretion of the Executive Director.
(g) Retail Store. Except as provided in Section 5.6 of this Agreement,
the Storm shall have the exclusive right to use the Retail Store at all times during the Term.
3.5. Concourse Signage. The Storm acknowledges and agrees that the
Agency reserves the right to alter, replace, repair, remove and otherwise change any and all
signage on the concourse, including, without limitation, signs in connection with bathrooms,
directions, seating, identification and advertising. Any such changes to the concourse signage
shall be at the sole cost and expense of the Agency and shall be done at such times as not to
interfere with the Storm's use of the Stadium for Storm Games and/or Other Storm Events. In
the event that the Agency alters any advertising on any Advertising Elements on the concourse,
the Agency (at its sole cost and expense) shall return the Advertising Element to the condition
which existed prior to such alteration prior to any Storm Games and/or Other Storm Events.
3.6. Agency Right of Entry. The Storm acknowledges and agrees that the
Agency may enter the Site, the Stadium and any part thereof at any time and for any purpose;
provided, however, that the Agency shall only enter during Storm Games or Other Storm Events
in order to utilize the Agency Suite or upon notice to the Storm of such entry or in the event of an
emergency.
3.7. Hazardous Materials.
(a) Any use, generation, disposal, release or discharge by the Storm of
Hazardous Materials in connection with any use of the Site by the Storm, including, without
limitation, any agent, employee, or contractor of the Storm, shall be carried out at all times and in
FINALLicenseAgreementStadium.15_4015-009 9 04/12/01
all respects in compliance with all applicable Governmental Regulations regulating Hazardous
Materials.
(b) The Storm shall, at its own expense, procure, maintain in effect
and comply with all conditions of any and all applicable permits, licenses and Governmental
Regulations affecting the use, occupancy, maintenance or other activity involving the Site by the
Storm, under the authority of this License including (without limitation) discharge of
(appropriately treated) materials or wastes into or through any sanitary sewer serving the Site.
Except as otherwise properly discharged in strict accordance with all applicable Governmental
Regulations, the Storm shall cause any and all Hazardous Materials to be removed from the Site
in accordance with applicable permit(s) and removed and transported solely by duly licensed
haulers to duly licensed facilities for final disposal of such materials and wastes. The Storm shall
in all respects handle,treat, deal with and manage any and all Hazardous Materials used on the
Site by the Storm in, on, under or about the Site in connection with its operations in total
conformity with all applicable Governmental Regulations and prudent industry practices
regarding management of such Hazardous Materials. Upon the expiration or earlier termination
of the Term, the Storm shall cause all Hazardous Materials introduced by the Storm or its agents,
employees, or contractors to be removed from the Site in accordance with all applicable
Governmental Regulations. The Storm shall not take or permit any remedial action in response
to the presence of any Hazardous Materials in or about the Site, nor enter into any settlement
agreement, consent decree or other compromise with respect to any claims relating to any
Hazardous Materials in any way connected with the Site, without first notifying the Agency of
the Storm's intention to do so and affording the Agency ample opportunity to appear, intervene
or otherwise appropriately assert and protect the Agency's interest with respect thereto.
(c) The Storm shall immediately notify the Agency in writing of.
(i) any enforcement, cleanup, removal or other governmental or regulatory action that the Storm
becomes aware is instituted, completed or threatened pursuant to any Governmental Regulations
with respect to the Site; (ii) any claim of which the Storm is aware that is made or threatened by
any person against the Storm or the Site relating to damage, contribution, cost recovery
compensation, loss or injury resulting from or claimed to result from any Hazardous Materials;
and (iii) any reports made by the Storm or of which the Storm is aware to any environmental
agency arising out of or in connection with any Hazardous Materials in or removed from the Site,
including any complaints, notices, warnings or asserted violations in connection therewith. The
Storm shall also supply to the Agency as promptly as possible, and in any event within five (5)
business days after the Storm first receives or sends the same, copies of all claims,reports,
complaints, notices, warnings or asserted violations,relating in any way to Hazardous Materials
in or about the Site. The Storm shall promptly deliver to the Agency copies of any hazardous
waste manifests required by applicable Governmental Regulations for the legal and proper
disposal of Hazardous Materials removed from the Site.
(d) The Storm shall indemnify, defend (by counsel reasonably
acceptable to the Agency), protect, and hold the Agency, its officers, employees and agents
harmless from and against any and all claims, actions, administrative proceedings, liabilities,
penalties, forfeitures,judgments, suits, demands, losses or expenses (including remediation costs,
attorneys' fees and litigation expenses), or death of or injury to any person or damage to any
FINALLicenseAgreementStadium.15_4015-009 10 04/12/01
property whatsoever, arising from or caused in whole or in part, directly or indirectly, by (i)the
Storm's or its employees', agents', contractors' or any party claiming through the Storm,
improper or unlawful use, analysis, storage, transportation, generation of Hazardous Materials to,
in, about or from the Site; or(ii)the Storm's failure to comply with any Hazardous Materials
laws in connection with the Storm's use, operation, maintenance or management of the Site. The
Storm's obligations hereunder shall include (without limitation) and whether foreseeable or
unforeseeable, all costs of any required or necessary repair, cleanup or detoxification or
decontamination of the Site, or the preparation and implementation of any closure, remedial
action or other required plans in connection therewith, and shall survive the expiration or earlier
termination of the Term. For purposes of the release and indemnity provisions hereof, any acts
or omissions of the Storm, or by employees, agents, assignees, contractors or subcontractors of
the Storm or others acting for or on behalf of the Storm(whether or not they are negligent,
intentional, willful or unlawful) shall be attributable to the Storm.
This Section 3.7 shall survive cancellation,termination or expiration of this
License.
4. License Fees.
4.1. Initial Term. During the Initial Term, the Storm shall pay to the Agency
an Annual License Fee in the following amounts:
(a) Year 1 (January 1, 2001 -December 31,2001): Three Hundred
Seventy Five Thousand Dollars ($375,000.00) less the Deferral for
a total payment of Three Hundred Fifty Thousand Dollars
($350,000.00) (the"Year 1 Annual License Fee");
(b) Year 2 (January 1,2002 - December 31,2002): Three Hundred
Seventy Five Thousand Dollars ($375,000.00)plus payment of the
Repayment Amount for a total of Three Hundred Eighty Seven
Thousand Five Hundred Dollars ($387,500.00) (the"Year 2
Annual License Fee");
(c) Year 3 (January 1,2003 -December 31,2003): Three Hundred
Seventy Five Thousand Dollars ($375,000.00)plus payment of the
Repayment Amount for a total of Three Hundred Eighty Seven
Thousand Five Hundred Dollars ($387,500.00) (the"Year 3
Annual License Fee");
(d) Year 4 (January 1,2004-December 31,2004): Three Hundred
Seventy Five Thousand Dollars ($375,000.00) adjusted for any
percentage increase in CPI for Years 1, 2 and 3, but in no event to
exceed Four Hundred Twelve Thousand Five Hundred Dollars
($412,500.00) or be less than Three Hundred Seventy Five
Thousand Dollars ($375,000.00) (the "Year 4 Annual License
Fee"); -
FINALLicenseAgreementStadium.15_4015-009 11 04/12/01
Example: Thus, and by way of example only, in the event that the
CPI for the month of December 2003 was 180 and the CPI For
January 2001 was 170 the Year 4 Annual License Fee would be
calculated as follows:
1. December 2003 CPI less January 2001 CPI = Index
Point Change:
180 - 170 = 10.
2. Index Point Change divided by January 2001 CPI=
Percentage Change
10/170 = 0.058.
3. Percentage Change multiplied by $375,000.00=
Year 4 Additional Amount
0.058 x $375,000.00 =$21,750.00
4. $375,000.00 + Year 4 Additional Amount= Year 4
Annual License Fee
$375,000.00 + $21,750.00=$396,750.00
Under this example the calculated amount of$396,750.00
is less than$412,500.00 and would be the Year 4 Annual
License Fee.
(e) Year 5 (January 1, 2005 -December 31,2005): The Year 4
Annual License Fee adjusted for any percentage increase in the CPI
for Year 4, but in no event to exceed a four percent(4%) increase
and in no event to be less than the Year 4 Annual License Fee (the
"Year 5 Annual License Fee");
Example: Thus, and by way of example only, in the event that the
CPI for the month of December 2004 was 185, the CPI For January
2004 was 180 and the Year 4 Annual License Fee was $396,750.00
the Year 5 Annual License Fee would be calculated as follows:
1. December 2004 CPI less January 2004 CPI =Index
Point Change:
185 - 180 = 5.
FINALLicenseAgreementStadium.15_4015-009 12 04/12/01
2. Index Point Change divided by January 2004 CPI =
Percentage Change
5/180 =0.028.
3. Percentage Change multiplied by the Year 4 Annual
License Fee = Year 5 Additional Amount
0.028 x $396,750.00 = $11,109.00
4. Year 4 Annual License Fee+ Year 5 Additional
Amount= Year 5 Annual License Fee
$396,750.00 + $11,109.00 =$407,859.00
Under this example the calculated amount of$407,859.00
is less than a 4% increase over the Year 4 Annual License
Fee and would be the Year 5 Annual License Fee.
(f) Year 6 (January 1,2006 - December 31,2006): The Year 5
Annual License Fee adjusted for any percentage increase in the CPI
for Year 5, but in no event to exceed a four percent (4%) increase
and in no event to be less than the Year 5 Annual License Fee (the
"Year 6 Annual License Fee"); and
(g) Year 7 (January 1,2007 - December 31, 2007): The Year 6
Annual License Fee adjusted for any percentage increase in the CPI
for Year 6, but in no event to exceed a four percent(4%) increase
and in no event to be less than the Year 6 Annual License Fee(the
"Year 7 Annual License Fee").
4.2. Extension Term. During the Extension Term, if any, the Storm shall pay
to the Agency an Annual License Fee as follows:
(a) Year 8 (January 1,2008 -December 31, 2008): The Year 7
Annual License Fee adjusted for any percentage increase in the CPI
for Year 7, but in no event to exceed a four percent(4%) increase
and in no event to be less than the Year 7 Annual License Fee(the
"Year 8 Annual License Fee");
a
(b) Year 9 (January 1,2009 - December 31,2009): The Year 8
Annual License Fee;
(c) Year 10 (January 1, 2010- December 31,2010): The Year 8
Annual License Fee;
FINALLicenseAgreementStadium.15_4015-009 13 04/12/01 4
(d) Year 11 (January 1, 2011 - December 31, 2011): The Year 8
Annual License Fee; and
(e) Year 12 (January 1, 2012 - December 31,2012): The Year 8
Annual License Fee.
4.3. Deferral. Payment of Twenty Five Thousand Dollars ($25,000.00) of the
Year 1 Annual License Fee shall be deferred to Year 2 and Year 3 (the "Deferral"). The Deferral
shall be paid in two equal installments of Twelve Thousand Five Hundred Dollars ($12,500.00)
each(the "Repayment Amount"). The Storm shall pay the Agency the Repayment Amount on
March 1, 2002 and March 1, 2003.
4.4. Annual License Fee Due Dates.
(a) With the exception of the payment of the Repayment Amount
which shall be paid as set forth in Section 4.3 above, the Storm will pay the Agency the Annual
License Fee in installments each year during the Term as follows:
1. Ten percent(10%) of the applicable Annual License Fee
will be paid by the Storm to the Agency on or before March 1 st each year during the Term; and
2. Fifteen percent(15%) of the applicable Annual License Fee
will be paid by the Storm to the Agency on or before April 15th, May 15th,June 15th, July 15th,
August 15th, and September 15th of each year during the Term.
(b) Each payment described in this Section 4.4 shall be referred to
herein as a"License Fee Installment Payment."
4.5. Maintenance and Operations of Stadium.
(a) Offset of Annual License Fees. The Agency and the Storm are
negotiating and intend to enter into the Maintenance Agreement concurrently with the execution
of this License, however, the parties acknowledge and agree that this License is not conditioned
upon the execution of the Maintenance Agreement and that the parties intend to enter into this
License regardless of whether or not they enter into the Maintenance Agreement. In the event
that the parties do enter into the Maintenance Agreement, the Agency agrees that the amount of
each License Fee Installment Payment may be offset by such amounts as are due and owing to
the Storm by the Agency under the terms and conditions of the Maintenance Agreement. In the
event that the parties do not enter into the Maintenance Agreement or upon the expiration or
earlier termination of the Maintenance Agreement, the Storm shall pay,the full amount of each
License Fee Installment Payment to the Agency without offset.
(b) Maintenance and Repair. The parties obligations regarding
maintenance and repair of the Stadium shall be as set forth in the Maintenance Agreement.
Except for the maintenance and repair of the Electronic Message Board which shall be the
obligation of the Storm as set forth in Section 3.4(e)of this License, in the event that the parties
r
FINALLicenseAgreementstadium.15_4015-009 14 04/12/01 '
do not enter into the Maintenance Agreement or upon its termination, the Agency shall be
responsible for maintaining and repairing the Stadium by providing (or causing to be provided)7
all of the services, equipment, maintenance and repairs (including capital repairs)that the Agency
was either obligated to provide under the Maintenance Agreement or which the Storm was
providing thereunder and for which it was receiving the Annual Maintenance Fee (as that term is
defined in the Maintenance Agreement").
4.6. Interest. In the event that the Storm fails to make any payment when due
under the terms of this License, including without limitation,the payment of each License Fee
Installment Payment and any payments under Section 3.3(b) of this License, the Storm agrees to
pay Interest to the Agency from the date which is five (5) days after the date any such payment is
due until paid.
5. Revenues.
5.1. Admissions. The Storm will receive and retain all revenues generated
from the sale of admissions to all Storm Games and the Other Storm Events.
5.2. Parking. The Storm will receive and retain all revenues generated from
parking at the Stadium for all Storm Games and the Other Storm Events. The Storm shall be
responsible for providing the proper personnel to operate and secure the parking facilities and all
other such cost related to parking during the Storm Games and Other Storm Events. In addition,
the Storm acknowledges and agrees that the indemnification and hold harmless provisions of this
License set forth in Section 20 hereof specifically apply to the operation of parking by the Storm.
5.3. Concessions. Concession revenues shall be distributed according to the
Concession Agreement to the extent that the Concession Agreement remains in effect. Upon the
expiration or earlier termination of the Concession Agreement the parties agrees to cooperate to
negotiate a mutually acceptable concession services agreement.
5.4. Advertising. The Storm shall be entitled to 100%of any revenues
generated from the Storm's use of the Advertising Elements and the Electronic Message Board.
5.5. Stadium Naming Rights.
(a) Marketing of Naming Rights. Except as set forth herein, the
Storm has the exclusive right to market the sale, lease, license or other transfer of the Naming
Rights and the Agency agrees to cooperate with the Storm in such endeavors provided, however,
that any and all costs in connection therewith shall be borne solely by the Storm and the Agency
shall not incur any costs. Nothing herein shall prevent the Agency from entertaining proposals or
engaging in negotiations regarding the transfer of the Naming Rights trom/with entities other
than the Storm.
(b) Naming Rights Agreement. The Storm acknowledges and agrees
that it does not have the right to select the name of the Stadium or transfer the Naming Rights
without the Agency Board's prior written approval which approval shall not be unreasonably
FINALLicenseAgreementStadium.15_4015-009 15 04/12/01
withheld and that such transfer shall be accomplished by way of a written agreement executed by
the Agency Chairperson following all requisite approvals (the "Naming Rights Agreement"). The
Storm further acknowledges and agrees that the approval of any Naming Rights Agreement will
be presented to the Agency Board at a noticed public meeting. The Agency agrees that it shall
not enter into any Naming Rights Agreement during the Term without the prior written approval
of the Storm which approval shall not be unreasonably withheld. Notwithstanding the foregoing,
the Storm acknowledges and agrees that it shall only have the right to disapprove any Naming
Rights Agreement proposed by the Agency based upon: (1) financial considerations of such
agreement; (2) a conflict with the Storm's existing sponsorships; or(3)a conflict with any
applicable standards established by the League and/or the NA. Both parties acknowledge and
agree that in no event shall any Naming Rights Agreement include any right to name the playing
field, currently named "Pete Lehr Field."
(c) Commission from Sale or License of Naming Rights. In the
event that the Agency enters into a Naming Rights Agreement during the Term of this License,
the Storm shall be entitled to the following revenues from the transfer of the Naming Rights,
irrespective of whether the purchaser was found by the Agency or the Storm (the "Naming Rights
Revenues"):
l. First Two Years of Naming Rights. Commencing on the
commencement date of a Naming Rights Agreement and
ending on the date which is the second anniversary thereof
(the "Initial Naming Rights Period"), the Storm shall be
entitled to receive one hundred percent (100%) of Naming
Rights Revenues;
2. Third Year of Naming Rights Through End of Term.
Following the Initial Naming Rights Period, the Storm shall
be entitled to receive seventy five percent(75%) of Naming
Rights Revenues and the Agency shall be entitled to receive
the other twenty five percent(25%)of Naming Rights
Revenues; and
3. Expiration/Termination of Term. Notwithstanding
anything herein to the contrary, following the expiration or
earlier termination of the Term of this License, the Agency
shall be entitled to receive one hundred percent(100%)of
Naming Rights Revenues and the Storm shall not be
entitled to receive any Naming Rights Revenues.
4. Multiple Naming Rights Agreements. The parties
acknowledge and agree that separate Naming Rights
Agreements may be entered into in connection with
different parts of the Stadium (for example, a Naming
Rights Agreement may be entered into for the name of the
Stadium as a whole and a separate Naming Rights
FINALLicenseAgreementStadium.15_4015-009 16 04/12/01
Agreement may be entered into regarding right field). In
the case of different Naming Rights Agreements for
different portions of the Stadium, the allocation of Naming
Rights Revenues set forth in this Section 5.5(c) shall apply
to each Naming Rights Agreement as of the
commencement of each such Naming Rights Agreement.
However, in the event that multiple Naming Rights
Agreements are entered into regarding the same portion of
the Stadium, the allocation of Naming Rights Revenues set
forth in this Section 5.5(c) shall commence on the date of
the initial Naming Rights Agreement (for example in the
event that a Naming Rights Agreement is entered into on
January 1, 2002 for the name of the Stadium and the
agreement has a three year term -the Storm would be
entitled to one hundred percent (100%)of the Naming
Rights Revenues for the first two (2)years of the Naming
Rights Agreement and the Naming Rights Revenues for the
third year would be split seventy five (75%) to the Storm
and twenty five percent(25%)to the Agency. If another
Naming Rights Agreement was entered into on January 1,
2006 for the name of the Stadium all Naming Rights
Revenues under such agreement during the Term of this
License would be split seventy five percent(75%) to the
Storm and twenty five percent(25%)to the Agency and
following the end of the Term of this License the Agency
would be entitled to one hundred percent(100%) of the
Naming Rights Revenues.)
(d) Allocation of Lump Sum or Uneven Payments. To the extent
the Naming Rights Agreement calls for the "front loading" of Naming Rights Revenues, the
Agency and the Storm agree that for purposes of calculating the Naming Rights Revenues for
distribution to the Agency and the Storm pursuant to this License, such Naming Rights Revenues
shall be allocated fairly between the Agency and the Storm as agreed to in writing by the parties
with the intention to evenly apply the payment over the term of the Naming Rights Agreement.
(e) Term of Naming Rights Agreement. The term of the Naming
Rights Agreement shall expire no later than the end of the Term unless the Agency expressly
agrees to a longer term.
(f) Name of Stadium. Unless otherwise agreed to by the Agency
Board in writing, any transfer of the Naming Rights shall require that:
1. "Lake Elsinore"remain as a component of any name
selected for the Stadium;
FINALLicenseAgreementstadium.15_4015-009 17 04/12/01 `
2. The name of the City shall appear not more than four(4)
words or seven (7) syllables from the front of the selected
name, for example the name "Widgets Corporation Field at
Lake Elsinore"would not meet this criteria as the name of
the City is more than both four(4) words and (7) syllables
from the front of the name but the name"Widgets Field at
Lake Elsinore"would meet this criteria;
3. The selected name shall be appropriate as reasonably
determined by the Agency in light of the use of the
Stadium.
5.6. Licensed Merchandise Sales. Subject to the terms and conditions of the
Concession Agreement, and/or any such other concession agreement entered into by the parties
hereto,the Storm has the right to sell its own licensed merchandise during Storm Games and
Other Storm Events. The Agency shall be entitled to utilize the Retail Store and/or set up a
booth during Storm Games and Other Storm Events to sell Lake Elsinore related merchandise
provided that: (i) the Storm shall not incur any costs in connection therewith; (ii)the Sale of Lake
Elsinore related merchandise does not interfere with the sale of Storm and/or baseball
merchandise; and (iii)the Agency shall obtain the written approval of the concessionaire if
necessary.
6. Imposition of Admissions Taxes.
6.1. Credit. If the Storm is required to pay Admission Taxes at any time
during the Term of this License, then the Storm shall be entitled to a credit against the Annual
License Fee in the following amounts:
(a) During the Initial Term of this License, the Storm shall be entitled
to a credit in an amount equal to any and all Admissions Taxes remitted by the Storm to the City;
and
(b) During the Extension Term, if any,the Storm shall be entitled to a
credit in an amount equal to:
1. Any and all Admissions Taxes remitted by the Storm to the
City calculated on Gross Ticket Revenues up to the Gross
Ticket Revenue Base; and
2. An amount, if any, of Admissiogs Taxes remitted by the
Storm to the City in excess of ten percent(10%) of Gross
Ticket Revenues which exceed the Gross Ticket Revenues
Base.
Thus, and by way of example only, assuming that during Year 9: i) an
Admissions Tax of 15% of Gross Ticket Revenues is in place; ii)the
FINALLicenseAgreementstadium.15_4015-009 18 04/12/01
Storm has Gross Ticket Revenues of Three Million Dollars
($3,000,000.00); and iii) the Storm actually remitted to the City Four
Hundred Fifty Thousand Dollars ($450,000.00) in Admissions Taxes, the
Storm would be entitled to a total credit during Year 9 of Three Hundred
Fifty Thousand Dollars ($350,000.00). The amount of the credit is
determined as follows:
1. All Admissions Taxes calculated on Gross Ticket Revenues
up to the Gross Ticket Revenues Base:
15%of$2,000,000.00 = $300,000; and
2. Admissions Taxes remitted by the Storm to the City in
excess of ten percent(10%) of Gross Ticket Revenues
which exceed the Gross Ticket Revenues Base.
Gross Ticket Revenues ($3,000,000.00) - Gross Ticket
Revenues Base($2,000,000.00)=$1,000,000.00
10% of$1,000,000.00 = $100,000.00
Storm remitted Admissions Tax equal to 15% of
$1,000,000.00= $150,000.00
$150,000.00 - $100,000.00= $50,000.00.
6.2. Admissions Tax Credit Demand. The credits set forth in Sections 6.1(a)
and 6.1(b) above are hereinafter collectively referred to as "Admissions Tax Credits." From time
to time, but no more than four (4) times in any year during the Term, the Storm may request an
offset against any then due and owing License Fee Installment Payments in the amount of the
Admissions Tax Credits ("Admissions Tax Credit Demand"). Notwithstanding the foregoing, in
the event the Agency has a good faith dispute with the amount of Admission Tax Credit
demanded based upon the documentation submitted or lack thereof, the Agency and the Storm
shall exercise their best efforts to resolve the dispute and the Storm shall be entitled to a credit in
the amount of the agreed upon Admissions Tax Credit within not less than sixty(60) days from
the date of receipt of the written Admissions Tax Credit Demand. The Agency acknowledges
and agrees that the Admissions Tax will be collected by the taxing authorities and not the Agency
and, accordingly, that the Agency will be required to make the Admissions Tax Credit(s)
regardless of whether the Agency actually receives the Admissions Taxes.
6.3. Documentation. The Storm's Admissions Tax'Credit Demand shall be in
writing and shall include financial records certified by the Storm, setting forth the amount of
Admissions Taxes collected and remitted to the City in connection with the Storm's operation of
the Site and shall specify the amount of Admissions Tax Credits demanded by the Storm and the
applicable time period. Upon the Agency's demand, the Storm shall provide the Agency with
such other documents reasonably requested by the Executive Director. In addition, the Agency
FINALLicenseAgreementStadium.15_4015-009 19 04/12/01
shall have the right, upon reasonable notice, to inspect the Storm's books and records relating to
such statements and records.
6.4. No Excess Amount. Notwithstanding anything herein to the contrary, in
no event shall the amount to be credited by the Agency to the Storm under this Section 6 exceed
the amount of Admissions Taxes actually remitted by the Storm to the City.
7. Other Taxes. With respect to any taxes that may be charged or imposed
(including, but not limited to, ad valorem taxes, sales taxes, income taxes, etc.), the Agency will
indemnify the Storm to the extent any such taxes result from the Agency's operations and the
Storm will indemnify the Agency to the extent any such taxes result from its operations. In
addition,to the extent possible, the Agency and the Storm will each obtain indemnity from its
contractors such as the concessionaire, restaurant operator, and contractors. The Storm
acknowledges that this License may create a possessory interest subject to property taxation and
if such an interest is created the Storm may be subject to the payment of property taxes levied on
the interest.
8. Tickets to Storm Games. The Agency or its designees will be entitled to request
and receive up to three hundred (300)tickets per season to the Storm Games, subject to
reasonable availability, with a maximum of thirty (30) tickets to any one Storm Game, at no cost
to the Agency or its designees.
9. Agency Suite and Parking at Storm Games and Other Storm Events. The
Agency or its designees shall have the right to use the Agency Suite during all of the Storm
Games and Other Storm Events at no charge to the Agency or its designees. In addition, the
Storm shall reserve to the Agency or its designees up to ten (10)reserved parking spaces for each
Storm Game and each Other Storm Event, at no cost to the Agency or its designees.
10. Lehr Seats and Parking. The Storm shall continue the historical practice of the
Agency and Lakeside of providing the Lehr family with the Lehr Family Seats and three (3)
reserved parking spaces for each Storm Game.
11. Utilities. The Agency shall provide, or cause to be provided, all utilities,
including water, sewer, telephone, gas, refuse and electricity (the "Utilities") necessary for all
Storm Games at the Stadium, including such cost attributed to the use of the Storm Office,
except for telephone charges incurred by the Storm which shall be paid for by the Storm.
Notwithstanding the foregoing, the Agency shall only be required to pay for electricity, including
without limitation electrical charges for the Electronic Message Board, in connection with Storm
Games in the amount as follows:
(a) Year 1 (January 1,2001 -December 31,2001): One Hundred Ten
Thousand Dollars ($110,000.00) (the `Electricity Base");
(b) Year 2 (January 1,2002 - December 31,2002): The Electricity Base;
(c) Year 3 (January 1, 2003 - December 31,2003): The Electricity Base;
FINALLicenseAgreementstadium.15_4015-009 20 04/12/01
(d) Year 4 (January 1,2004 - December 31,2004): The Electricity Base
adjusted for any Percentage Increase in CPI for Years 1, 2 and 3, but in no
event to exceed One Hundred Twenty One Thousand Dollars
($121,000.00) or be less than the Electricity Base(the "Year 4 Electricity
Base");
Example: For an example of the calculation of the percentage
increase in CPI for Years 1, 2, and 3 refer to Section 4.1(d) of this
License.
(e) Year 5 (January 1,2005 - December 31, 2005): The Year 4 Electricity
Base adjusted for any percentage increase in the CPI for Year 4, but in no
event to exceed a four percent(4%) increase and in no event to be less
than the Year 4 Electricity Base (the"Year 5 Electricity Base");
Example: For an example of the percentage increase in CPI for
Year 4 please refer to Section 4.1(e) of this License.
(f) Year 6 (January 1, 2006 - December 31, 2006): The Year 5 Electricity
Base adjusted for any percentage increase in the CPI for Year 5, but in no
event to exceed a four percent(4%) increase and in no event to be less
than the Year 5 Electricity Base (the"Year 6 Electricity Base");
(g) Year 7 (January 1, 2007 - December 31, 2007): The Year 6 Electricity
Base adjusted for any percentage increase in the CPI for Year 6, but in no
event to exceed a four percent (4%) increase and in no event to be less
than the Year 6 Electricity Base (the "Year 7 Electricity Base");
(h) Year 8 (January 1,2008 - December 31, 2008): The Year 7 Electricity
Base adjusted for any percentage increase in the CPI for Year 7, but in no
event to exceed a four percent(4%) increase and in no event to be less
than the Year 7 Electricity Base(the "Year 8 Electricity Base");
(i) Year 9 (January 1, 2009 - December 31, 2009): The Year 8 Electricity
Base;
(j) Year10 (January 1, 2010 - December 31,2010): The Year 8 Electricity
Base;
(k) Year 11 (January 1,2011 -December 31,2011): The Year 8 Electricity
Base; and
(1) Year 12 (January 1, 2012 -December 31,2012): The Year 8 Electricity
Base:
FINALLicenseAgreementStadium.15_4015-009 21 04/12/01
12. Alterations. The Storm will not make any improvements or alterations, whether
structural or non-structural, to the Stadium without first obtaining the prior written approval of
the Executive Director which approval will not be unreasonably withheld. Any agreed upon
improvements or alterations, including any signage, will be made or installed only through the
Agency. Any alterations made by the Storm in existence as of the Date of this License are hereby
deemed to be approved by the Executive Director. The Storm acknowledges and agrees that as
of the Date of this License the Agency shall not be required to make any changes or alterations to
the Stadium in order to comply with any standards established by the League or the NA for
facilities utilized for playing professional baseball. In the event that the standards established by
the League and/or the NA require future changes or alterations to the Stadium, the Agency and
the Storm agree to meet in good faith to discuss such changes or alterations including any
allocation of costs between the parties.
13. Insurance.
13.1. Classes of Insurance to be Provided by the Storm. Commencing on the
Commencement Date and at all times thereafter through and during the Term, the Storm at its
own cost and expense, shall procure and maintain, for the duration of this License, the following
insurance:
(a) Workers' Compensation Coverage. The Storm shall maintain
Workers' Compensation Insurance and Employer's Liability Insurance for its employees in
accordance with the laws of the State. In addition, the Storm shall require each subcontractor to
similarly maintain Workers' Compensation Insurance and Employer's Liability Insurance in
accordance with the laws of the State for all of the subcontractor's employees. Any notice of
cancellation or non-renewal of all Workers' Compensation policies must be received by the
Agency at least thirty (30) days prior to such change. The insurer shall agree to waive all rights of
subornation against the Agency, the City, their officers, agents, employees and volunteers for
losses arising from activities performed by the Storm.
(b) General Liability Coverage. The Storm shall maintain
commercial general liability insurance in an amount not less than Two Million Dollars
($2,000,000)per occurrence for bodily injury, personal injury and property damage with an
aggregate minimum limitation liability in an amount not less than Five Million Dollars
($5,000,000).
(c) Automobile Liability Coverage. The Storm shall maintain
automobile liability insurance covering bodily injury and property damage for all activities of the
Storm arising out of or in connection with the work to be performed under this License,
including coverage for owned, hired and non-owned vehicles, in an amount of not less than One
Million Dollars ($1,000,000) combined single limit for each occurrence with an aggregate
minimum limitation liability in an amount not less than Five Million Dollars ($5,000,000).
13.2. Endorsements. Each general liability and automobile liability insurance
policy shall be with insurers possessing a Best's rating of no less than A:VII and shall be
endorsed with the following specific language:
FINALLicenseAgreementStadium.15_4015-009 22 04/12/01
(a) The Agency, the City, their elected or appointed officers, officials,
employees, agents and volunteers are to be covered as additional insureds with respect to liability
arising out of work performed by or on behalf of the Storm, including materials, parts or
equipment furnished in connection with such work or operations.
(b) This policy shall be considered primary insurance as respects the
Agency, its elected or appointed officers, officials, employees, agents and volunteers. Any
insurance maintained by the Agency, including any self-insured retention the Agency may have,
shall be considered excess insurance only and shall not contribute with it.
(c) This insurance shall act for each insured and additional insured as
though a separate policy had been written for each, except with respect to the limits of liability of
the insuring company.
(d) The insurer waives all rights of subornation against the Agency and
the City, their elected or appointed officers, officials, employees or agents.
(e) Any failure to comply with reporting provisions of the policies
shall not affect coverage provided to the Agency, its elected or appointed officers, officials,
employees, agents, or volunteers.
(f) The insurance provided by this Policy shall not be suspended,
voided, canceled, or reduced in coverage or in limits except after thirty (30)days written notice
has been received by the Agency.
13.3. Deductibles and Self-Insured Retentions. Any deductibles or self-
insured retentions must be declared to and approved by the Agency. At the Agency's option,the
Storm shall demonstrate financial capability for payment of such deductibles or self-insured
retentions.
13.4. Certificates of Insurance. The Storm shall provide certificates of
insurance with original endorsements to the Agency as evidence of the insurance coverage
required herein. Certificates of such insurance shall be filed with the Agency on or before the
Commencement Date. Current certification of insurance shall be kept on file with the Agency at
all times during the Term.
14. Assignment.
14.1. Assignment by the Storm. The Storm may assign this License, provided,
however, that any assignment of this License by the Storm will be subject to the Executive
Director's reasonable written approval based upon the demonstrated ability of any such assignee
to meet all of the obligations of the Storm under this License. Any approved assignee will be
subject to all of the terms and conditions of this License and the continuing Guaranty will remain
in full force and effect. Notwithstanding the foregoing,the Agency will release the Guaranty
upon the demonstrated ability of the proposed assignee to provide the Agency with equal
assurances of protection that the proposed assignee can meet all of the obligations of the Storm
FINALLicenseAgreementStadium.15_4015-009 23 04/12/01
udder this Agreement including without limitation the covenant to play baseball and to pay the
Annual License Fee; such release, if any will be made in the sole and absolute discretion of the
Agency.
14.2 Assignment by the Agency.
(a) Notice of Assignment. The Agency is currently entertaining offers
for the sale of the Stadium. Any sale or other transfer of the Agency's interest in the Stadium
may be made in the sole and absolute discretion of the Agency and shall be subject to the terms
and conditions of this License and the Maintenance Agreement. The Agency shall give the
Storm not less than thirty (30) days written notice prior to any proposed transfer of the Stadium
and assignment of this License. Concurrently with the notice of the assignment, the Agency shall
Provide the Storm with all documentation received by the Agency regarding the ability of any
proposed transferee to meet the Agency's obligations under this License and the Maintenance
Agreement. In the event that such information is not a matter of public record, the Storm agrees
to execute a mutually acceptable confidentiality or non-disclosure agreement. The Storm shall
submit written comments regarding the proposed transferee to the Executive Director within
thirty(30) days of receipt of the documentation from the Agency.
(b) Agency Obligations Upon Transfer. The Agency agrees to
transfer the Stadium only to a bona fide transferee for value and to include in any agreement for
the transfer of the Stadium obligations for the maintenance, repair and operation of the Stadium
(the "Stadium Obligations") including a provision for specific performance of the Stadium
_Obligations by the transferee in the event of a default and giving the Agency the ability to cure
any such default following applicable notice and cure periods. The Stadium Obligations and the
Agency's cure rights shall remain in effect for the Term of this License and shall name the Storm
as an intended third parry beneficiary.
(c) Release of the Agency.
(i) If at the time of the transfer of the Agency's interest in the
Stadium,the Storm is reasonably satisfied that the proposed transferee has the ability to meet the
Agency's obligations under this License and the Maintenance Agreement, the Storm shall so
indicate in writing to the Executive Director and the Agency shall have no further obligations
under this License and/or the Maintenance Agreement.
(ii) If at the time of the transfer of the Agency's interest in the
Stadiurn,the Storm is not reasonably satisfied that the proposed transferee has the ability to meet
the Agency's obligations under this License and the Maintenance Agreement, the parties hereto
agree as follows: 1)the Storm shall provide the Agency with a copy df any notice of default
given by the Storm to the transferee and any notices of default received by the Storm from the
transferee under this License and/or the Maintenance Agreement; and 2) in the event of an
uncured default of the transferee during the Initial Term, and provided that the Storm is not in
default of its obligations under this License and/or the Maintenance Agreement, the Agency shall
upon written request by the Storm exercise its rights to cure. Notwithstanding the foregoing, in
FFINALLicenseAgreementstadium.15_4015-009 24 04/12/01
no event shall the Agency be obligated to expend more than a total amount of Three Hundred
Thousand Dollars ($300,000.00) to cure any defaults of the transferee (the "Cure Limit"). In
addition to the foregoing, in the event that at the time of the transfer of the Agency's interest in
the Stadium, the Storm is not reasonably satisfied that the proposed transferee has the ability to
meet the Agency's obligations under this License and the Maintenance Agreement, the Storm
shall have the right to terminate this License and the Maintenance Agreement: 1)at any time
during the two year period following the transfer of the Agency's interest in the Stadium such
termination being effective at the end of the second full baseball season following the transfer of
the Agency's interest in the Stadium, and 2) in the event that the Agency cures a default by
transferee of the Stadium Obligations such termination being effective at the end of the second
full baseball season following the cure by the Agency. The Storm shall provide the Agency and
the transferee with written notice of termination. In the event that the Storm is not reasonably
satisfied with the transferee of the Agency's interest in the Stadium, the Agency shall have no
further obligations under this License and/or the Maintenance Agreement upon the earlier to
occur of. 1) the expenditure by the Agency of the Cure Limit; or 2) the expiration or earlier
termination of the Initial Term.
(d) Transfer to the City. The provisions of this Section 14.2 shall not
apply to a transfer to the City which the Agency may do freely and in its sole and absolute
discretion provided that the Agency shall give the Storm written notice of such transfer and that
such transfer shall be subject to the terms and conditions of this License and the Maintenance
Agreement.
15. Controlling Law Venue. This License and all matters relating to it shall be
governed by the laws of the State and any action brought relating to this License shall be held
exclusively in a state court in the County of Riverside.
16. Litigation Expenses and Attorneys' Fees. If either party to this License
commences any legal action against the other party arising out of this License, the prevailing
party shall be entitled to recover its reasonable litigation expenses, including court costs, expert
witness fees, discovery expenses, and attorneys' fees.
17. Mediation. The parties agree to make a good faith attempt to resolve any
disputes arising out of this License through mediation prior to commencing litigation. The parties
shall mutually agree upon the mediator and share the costs of mediation equally. If the parties are
unable to agree upon a mediator, the dispute shall be submitted to JAMS/ENDISPUTE
("JAMS") or its successor in interest. JAMS shall provide the parties with the names of five
qualified mediators. Each party shall have the option to strike two of the five mediators selected
by JAMS and thereafter the mediator remaining shall hear the dispute. If the dispute remains
unresolved after mediation, either party may commence litigation.
t
18. Execution. This License may be executed in several counterparts, each of which
shall constitute one and the same instrument and shall become binding upon the parties when at
least one copy hereof shall have been signed by both parties hereto. In approving this License, it
shall not be necessary to produce or account for more than one such counterpart.
FINALLicenseAgreementStadium.15_4015-009 25 04112/01
19. Status. At all times during the Term, the Storm, its agents, contractors and
employees, shall be and remain independent contractors, and shall not be considered to be agents,
employees, partners or joint venturers of the Agency or its affiliates or designees.
20. Indemnification and Hold Harmless. The Agency and the Storm shall each
indemnify, defend and hold harmless,the other party, and their respective agents, officers,
members, managers, employees, contractors and affiliated and related entities from any and all
losses or damage and from any and all liability, suits, actions or claims brought or made by any
person or persons arising or resulting from any and all activities and operations of a particular
party, that party's agents, employees, contractors, members, managers, affiliates, successors and
assigns, in and about the Stadium or arising out of the use of the Stadium, or any part thereof by
the applicable party,that party's agents, employees, contractors, members, managers, affiliates,
successors and assigns and for any injury or damage to the person of property in about or at the
Stadium while the applicable party or its agents, employees, contractors, members, managers,
affiliates, successors or assigns are occupying the Stadium, or any part thereof, for any reason or
in any fashion to the maximum extent permitted by law.
21. Destruction.
21.1. Restoration. If, during the Term,the Stadium is totally or partially
destroyed from any cause covered by insurance of the City, the Agency or the Storm, which
renders the facility totally or partially inaccessible or unusable and, if under the existing laws, the
restoration can reasonably be completed using such insurance proceeds by the earlier of(i) within
one hundred eighty (180) days after the destruction, or(ii)thirty (30)days prior to the opening
day of the upcoming baseball season, the Agency shall cause the Stadium to be restored to
substantially the same condition as it was in immediately before destruction, and such destruction
shall not terminate the License
21.2. Termination. If the restoration cannot be made in the time stated above
in subsection 21.1, then within fifteen(15)business days after the parties determine that the
restoration cannot be made in said time,the Storm may terminate this License immediately by
giving notice to the Agency. If the Storm fails to terminate this License, the Agency, at its
election, may either terminate this License, or restore the facility within a reasonable time, and
this License shall continue in full force and effect.
21.3. Baseball Season. When such destruction occurs during the baseball
season, the Storm may conduct the remainder of its home games during that season within some
other facility without impairment of any of its rights hereunder and the Annual License Fee for
that season due hereunder shall be equitable adjusted
22. Events of Default,Remedies. '
22.1. Events of Default by the Storm. The following events are hereinafter
referred to as "Events of Default by the Storm":
FINALLicenseAgreementstadium.15_4015-009 26 04/12/01
(a) The Storm's failure to keep, perform and observe each and every
promise, covenant, condition and agreement set forth in this License on its part to be kept,
performed or observed within thirty (30) days after written notice of default thereunder from the
Agency, except where fulfillment of the Storm's obligation requires activity over a period of time
and the Storm shall have commenced to perform whatever may be required to cure the particular
default within ten(10) days after such notice and continues such performance diligently and
without interruption except for causes beyond its control.
(b) The Storm's failure to duly and punctually make any payments to
the Agency as required hereunder, including, without limitation, payment of any Annual License
Fee and/or Installment Payment when due to the Agency within thirty (30) days after written
notice from the Agency for nonpayment thereof.
(c) The happening of any act which results in the suspension or
revocation of the rights, powers, licenses, permits and authorizations, including, without
limitation, the Storm's franchise from professional baseball necessary for the conduct of the
Storm operations authorized herein, which causes an interruption in the playing of games for a
period of thirty (30) days or more.
(d) The interest or estate of the Storm under this License by operation
of law, being assigned or transferred to,passed to or revolved upon, any other person, firm or
corporation, except as specifically permitted in this License.
(e) The Storm, without the prior written approval of the Agency,
becoming a participant corporation in a merger(whether or not surviving), a constituent
corporation in a consolidation, or a corporation in dissolution, except as specifically permitted
hereunder.
(f) The levy of any attachment or execution, or the appointment of any
receiver, or the execution of any other process of any court of competent jurisdiction which does
or as a consequence of such process will prevent the Storm's use and occupancy hereunder or
otherwise interfere with its operations hereunder, and which attachment,execution, receivership,
or other process of such court is not vacated, dismissed, or set aside within a period of sixty (60)
days.
(g) The Storm becoming insolvent, or taking the benefit of any present
or future insolvency statute, or making a general assignment for the benefit of creditors, or filing
a voluntary petition in bankruptcy, or a petition or answer seeking an arrangement for its
reorganization, or the readjustment of its indebtedness under the federal bankruptcy laws or
under any other law of statute of the United States, or of any state law, or consent to the
appointment of a receiver, trustee or liquidator, and such act prevents the Storm from conducting
games at the Stadium for a period of thirty (30) days or more.
(h) By order or decree of a court,the Storm being adjudged bankrupt,
or an order made approving a petition filed by any of the creditors seeking its reorganization or
the readjustment of its indebtedness under the federal bankruptcy laws, or under any law or
FINALLicenseAgreementStadium.15_4015-009 27 04/12/01
statute of the United States, or any state thereof and such act prevents the Storm from conducting
games at the Stadium for a period of thirty (30) days or more.
(i) A petition under any part of the federal bankruptcy laws, or an
action under any present or future solvency law or statute shall be filed against the Storm which
is not dismissed within ninety (90) days after the filing thereof and which prevents the Storm
from conducting games at the Stadium for a period of thirty (30)days or more.
0) By or pursuant to, or under authority of any legislative act,
resolution or rule or any order or decree of any court, governmental board, agency, or officer
having jurisdiction, a receiver, trustee, or liquidator taking possession or control of all or
substantially all of the property of the Storm, and such possession or control shall continue in
effect for a period of ninety (90) days and prevents the Storm from conducting games at the
Stadium for a period of thirty (30) days or more.
(k) Any lien(including,without limitation, mechanic's and
materialmen's liens) is filed against the Stadium because of any act or omission of the Storm and
is not removed or bonded against within ninety (90) days. Nothing in this section shall require
the Storm to monitor, observe or pay any tax, lien, claim, charge or demand so long as the
validity or enforceability thereof shall be contested in good faith to the extent appropriate.
22.2. No Waiver- Annual License Fee. No acceptance by the Agency of the
Annual License Fee or other payments, for any period or periods after a default of any of the
terms, covenants and conditions to be performed, kept or observed by the Storm(other than the
non-payment of the Annual License Fee) shall be deemed a waiver of any right on the part of the
Agency to terminate this License on account of such default.
22.3. No Other Waiver. No waiver by The Agency of any default on the part
of the Storm in the performance of any of the terms, covenant, or conditions hereof to be
performed, kept or observed by the Storm shall be or be construed to be a waiver by the Agency
of any other or subsequent default in performance of any of said terms, covenants and conditions.
22.4. Agency Remedies. If any of the Events of Default by the Storm
enumerated in this section occur subsequent to the Storm's entering into use and occupancy of
the Stadium or any part thereof, and after due notice as provided herein, the Storm has failed to
cure or correct such default, then, in addition to any and all rights and remedies of the Agency
hereunder and/or by law provided,the Agency shall have the right:
(a) To declare the Term hereof ended as to the Stadium licensed
hereunder and to re-enter such Stadium and take possession thereof and remove all persons
connected with the Storm therefrom and the Storm shall have no further claim thereon or
hereunder.
(b) To request in writing a written report from the Storm concerning
all of its debts and obligations, financial status and prospective income. If such report is not
delivered to the Agency within one month thereafter, prepared by the Storm's accountants, it
FINALLicenseAgreementStadium.15_4015-009 28 04/1VO1
shall be the right of the Agency's representatives and accountants to inspect all books of accounts
and records of the Storm for the purpose of obtaining such information. From the date of such
request, the Storm shall not make any further arrangements for the presentation of any such event
in the Stadium unless authorized in writing by the Agency to do so. The Storm shall be
permitted to continue to present any event that is under contract at such time to take place in the
Stadium. The Storm shall also be permitted to finish out all or part of the remainder of its
season. Upon receiving the financial information above specified and examining the same, it
shall be the right, but not the obligation, of the Agency to declare the Term hereof ended, to
specify the termination date, and on said termination date to re-enter the Stadium and remove all
persons connected with the Storm therefrom and the Storm shall have no further claim thereon or
hereunder.
(c) The remedies given to the Agency in this Section 22.4 shall be in
addition and supplement to all other rights or remedies which the Agency may have under the
laws then in force.
(d) The Storm hereby waives any and all rights of redemption granted
by or under any present or future law, or statute, arising in the event it is evicted or dispossessed
for any cause or in the event the Agency obtains or retains possession of the Stadium or any part
thereof in any lawful manner.
(e) If the Event of Default of the Storm enumerated in Section 22.1
can be cured, corrected or mitigated by the Agency, the Agency may take such action as it deems
necessary and appropriate to cure, correct or mitigate such default, but without any obligation to
do so.
23. Events of Default by the Agency and the Storm's Remedies.
23.1. Events of Default by the Agency. The Agency's failure to keep, perform
and observe each and every promise, covenant, condition and agreement set forth in this License
on its part to be kept, performed or observed within thirty (30) days after written notice of default
thereunder from the Storm, except where fulfillment of the Agency's obligation requires activity
over a period of time and the Agency shall have commenced to perform whatever may be
required to cure the particular default within ten (10) days after such notice and continues such
performance diligently and without interruption except for causes beyond its control shall be
hereinafter referred to as an "Event of Default by the Agency."
23.2. No Waiver. No waiver by the Storm of any default on the part of the
Agency in the performance of any of the terms, covenants, or conditions hereof to be performed,
kept or observed by the Agency shall be or be construed to be a waiver by the Storm of any other
or subsequent default in performance of any of said terms, covenants and conditions.
23.3. Termination. If the Event of Default by Agency enumerated in Section
23.1 of this License occur subsequent to the Storm's entering into the use and occupancy of the
Stadium or the Storm Office, or any part thereof, and after notice as provided herein, the Agency
has failed to cure or correct,then in addition to any and all rights and remedies of the Storm
FINALLicenseAgreementstadium.15_4015-009 29 04/12/01
hereunder and/or by law provided, it shall be the right of the Storm to declare the Term hereof
terminated by written notice to the Agency and to surrender the Stadium and the Agency shall
have no further claim upon the Storm thereon or hereunder; provided, however, the Storm shall
remove all of its equipment, supplies, furnishings, inventories, removable fixtures and other
personal property at the Agency's expense and without damage to the Stadium.
23.4. Mitigation. if the Event of Default of the Agency enumerated in Section
23.1 can be cured, corrected or mitigated by the Storm, the Storm may take such action as it
deems necessary and appropriate to cure, correct or mitigate such default, but without any
obligation to do so.
23.5. Remedies. The remedies given to the Storm in this Section 23 shall be in
addition to and supplemental to all other rights or remedies which the Storm may have under the
laws then in force.
24. Further Assurances. The Agency and the Storm will each take any and all other
actions, and execute and deliver any and all other documents, as may be required or reasonably
requested in order to effectuate the terms and provisions set forth in this License.
25. Guaranty. The Storm is a wholly owned subsidiary of Mandalay and under the
Guaranty Mandalay agrees to guaranty each and every obligation of the Storm incurred pursuant
to or in furtherance of this License. The execution and delivery of the Guaranty by Mandalay is a
condition precedent to the Agency entering into this License. But for the provision of the
Guaranty, the Agency would not be entering into this License with the Storm and the Agency is
.materially relying on such Guaranty.
26. Entire Agreement, Modification. This License consisting of 33 pages and
Exhibits "A" through"E" each of which is incorporated herein by reference contains the entire
agreement between the parties regarding the subject matter hereof. No verbal agreement or
implied covenant shall be held to vary the provisions hereof, any statements, law or custom to
the contrary notwithstanding. No promise,representation, warranty, or covenant not included in
this License has been or is relied on by either party. Each party has relied on its own inspection
of the Site, examination of this License, the counsel of its own advisors, and the warranties,
representations, and covenants in this License itself. The failure or refusal of either party to
inspect the Site,to read this License or other documents, or to obtain legal or other advice
relevant to this transaction constitutes a waiver of any objection, contention, or claim that might
have been based on such reading, inspection, or advice. No provision of this License may be
amended or varied except by an agreement in writing signed by the parties hereto or their
respective successors.
27. Authority. The Agency and the Storm each represent and warrant to the other
party that they have all necessary right,power and authority to enter into this License, and to
fully perform each and all of their respective obligations hereunder.
FINALLicenseAgreementstadium.15_4015-009 30 04/12/01
28. Other Claims. The agreement herein is not intended to deprive either party of
any claims it may have against Lakeside or any related entity nor shall it obligate either party to
assume any of Lakeside's liabilities under the Letter Agreement or the Stadium Lease.
29. Non-Discrimination. The Storm herein covenants by and for itself and any
successors in interest that there shall be no discrimination against or segregation of, any person
or group of persons on account of race, color, creed, religion, sex, marital status, handicap,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Stadium, nor shall the Storm itself or any person claiming under or through it
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of tenants, subtenants, or vendees of the
Stadium. The foregoing covenants shall run with the land and shall survive the termination of
this Agreement, and any contracts, subleases, agreements, licenses or other instiaments entered
into pursuant to this Agreement. The Storm shall refrain from restricting the rental, lease or
license of the Stadium on the basis of race, color, creed, religion, sex, marital status, handicap,
national origin or ancestry of any person. All such leases, subleases, licenses or contracts shall
contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:
(a) In leases, subleases and licenses: "The tenant herein covenants by and for
himself or herself, his or her heirs, executors, administrators and assigns, and all persons
claiming under or through him or her, and this instrument is made and accepted upon and subject
to the following conditions: "There shall be no discrimination against or segregation of, any
person or group of persons on account of race, color, creed, religion, sex,marital status,
handicap, ancestry or national origin in the leasing, subleasing, transferring, use,occupancy,
tenure or enjoyment of the premises herein leased nor shall the tenant himself or herself, or any
person claiming under or through him or her, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location,number, use or occupancy
of tenants, subtenants or vendees in the premises herein leased."
(b) In contracts: "There shall be no discrimination against or segregation of,
any person, or group of persons on account of race, color, creed,religion, sex,marital status,
handicap, ancestry or national origin, in the lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the premises, nor shall the transferee himself or herself or any person claiming
under or through him or her, establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use or occupancy of tenant,
subtenants, or vendees of the premises."
30. Notice. All notices, requests, demands or documents which are required or
permitted to be given or served hereunder shall be in writing and delivered personally or
delivered by United States mail, postage prepaid, certified return receipt requested, or a national
or regional overnight courier(e.g., FedEx, Overnight Express, etc.)addressed as follows:
To the Agency at: The Redevelopment Agency of the City of Lake Elsinore
130 S. Main Street
Lake Elsinore, California 92530
Attn: Executive Director
FINALLicenseAgreementStadium.15_4015-009 31 04/12/01
Tel: (909) 674-3124
Fax: (909) 674-2392
with a copy to: Barbara Zeid Leibold, Esq.
Van Blarcom, Leibold, McClendon& Mann, PC
307 E. Chapman
Orange, California 92866
Tel: (714) 639-6700
Fax: (714) 639-7212
To the Storm: Storm
500 Diamond Drive
Lake Elsinore, California 92531
Tel: (909) 245-4487
Fax: (909) 245-0308
Attn: General Manager
with a copy to: Loyd E. Wright, Esq.
Law Offices of Loyd E. Wright III
3991 MacArthur Boulevard, Suite 175
Newport Beach, California 92660
Tel: (949) 833-8844
Fax: (949) 833-8898
with a copy to: Paul Schaeffer c/o Mandalay Pictures
Mandalay Sports Entertainment LLC
5555 Melrose Avenue, Lewis Building
Hollywood, California 90038
Tel: (323)956-8759
Fax: (323)862-2233
Notice shall be deemed to have been delivered only upon actual delivery to the intended
addressee in the case of either personal service or courier. The addresses for purposes of this
Section 31 may be changed by giving written notice of such change in the manner provided
herein for giving notices. Unless and until such written notice is delivered,the latest information
stated by written notice, or provided herein if no written notice of change has been delivered,
shall be deemed to continue in effect for all purposes hereunder.
31. Severability. The invalidity or illegality of any provision shall not affect the
remainder of this License and all remaining provisions shall, notwith§tanding any such invalidity
or illegality, continue in full force and effect.
32. Administration. Unless clearly indicated otherwise, any action, decision,
direction, notice or approval to be given by the Agency hereunder may be given by the Executive
Director,provided, however that the Executive Director, in his/her absolute discretion may
determine that such matter must be submitted to the Agency Board. Unless clearly indicated
FINALLicenseAgreementstadium.15_4015-009 32 04/12/01
otherwise, any action, decision, direction, notice or approval to be given by the Storm hereunder
may be given by the Storm's General Manager, provided, however that the General Manager in
his/her absolute discretion may determine that such matter must be submitted to the Storm's
Board of Directors.
IN WITNESS WHEREOF, the parties have executed this License on the respective
dates set forth below.
STORM, LLC, a California limited liability
corporatio
DATED: , 2001 By:
Paul Schaeffer, ' e Chairman
REDEVELOPMENT AGENCY OF THE
CITY OF LAKE ELSINORE,a public
body, corporate and politic
DATED: April 19, , 2001 B '
Y�
enie Kelley, Ch an
A T:
Deputy A r;ncy Cleric
APPROVED AS TO FORM:
VAN BLARCOM, LEIBOLD,
MCCLENDON & MANN, P.
ency GenO Counsel
FINALLicenseAgreementstadium.15_4015-009 33 04/12/01
ATTORNMENT AND
FIRST AMENDMENT TO
LICENSE AGREEMENT
This ATTORNMENT AND FIRST AMENDMENT TO LICENSE
AGREEMENT (this "Amendment"), dated for identification purposes only as of July
15, 2007, is made by and between the REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE, a public body corporate and politic (the "A enc '), and the
LAKE ELSINORE STORM, LP, a California limited partnership (the "Storm") with
regard to the following:
RECITALS
The following Recitals are a substantive part of this Amendment:
A. Agency and Storm's predecessor in interest (Storm, LLC, a California
limited liability company) entered into that certain License Agreement dated March 15,
2001 (the "License Agreement") to provide for the use by the Storm of the Stadium for
baseball games and other activities, as more fully described therein. The term of the
License Agreement was extended pursuant to that certain Assignment, Assumption,
Attornment and Nondisturbance Agreement dated as of July 1, 2004 for identification
purposes only by and between the Agency, the Storm, Golden State Concessions and
Catering, Inc., and Impact Stadium, LLC, as amended by Amendment No. 1 thereto dated
July 1, 2004 (collectively, the "Attornment Agreement"). In addition, the Attornment
Agreement provided for certain changes to the Parties' rights to the Naming Rights to the
Stadium and the corresponding Annual License Fee Payable to the Agency.
B. The License Agreement, as amended by the Attornment Agreement and
this Amendment, shall be referred to herein as the "License." Capitalized terms used
herein which are not otherwise defined herein shall have the meaning ascribed to them in
the License.
C. The owners of the Storm have formed Diamond Stadium Group, LLC, a
California limited liability company ("DSG"), for the purpose of managing the Site.
Concurrently herewith, Agency and DSG are entering into that certain Stadium License,
Lease and Management Agreement ("Management Agreement"). The Management
Agreement provides that DSG shall operate the Site through December 31, 2016, and
provides for two five (5) year options to extend such term. The Management Agreement
further provides for the assignment of the License to DSG during the term thereof,
subject to certain conditions and restrictions.
D. It is a condition precedent to the Agency's entry into the Management
Agreement that the License shall be amended such that(i) its term runs concurrently with
First Arad to License Agt FINAL
that of the Management Agreement; (ii) Storm shall attorn to DSG with respect to its
performance under the License and with respect to all of its rights and obligations under
the License so long as the Management Agreement is in full force and effect.; and (iii) in
the event of a termination of the Management Agreement, (a) the Storm's attornment to
DSG and Agency's assignment of the License shall terminate and be of no further force
and effect, and (b) the provisions relating to the naming rights and corresponding Annual
License Fee payable revert to those in the original License Agreement, subject to the
amendments set forth herein.
E. It is to the mutual benefit of the parties hereto that the Agency enter into
the Management Agreement, and, accordingly, the Storm is willing to attorn to DSG and
amend the License as described herein.
F. In furtherance of the purpose and intentions of the parties with respect to
the License, the parties hereto agree to amend the License as provided herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing Recitals and the terms
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:
1. Termination of Attornment Agreement Provisions. The Parties hereby
agree and acknowledge that, notwithstanding the language in Section 9 of the Attornment
Agreement stating that certain provisions of the Stadium Amendments (as defined in the
Attornment Agreement) shall survive the termination of the Master Lease (as defined in
the Attornment Agreement), the Parties now intend and agree to terminate any and all of
the provisions of the Attornment Agreement and/or the Stadium Amendments currently
in effect, such that any and all provisions of the Attornment Agreement and/or the
Stadium Amendments shall be of no further force and effect from and after the date of
this Amendment.
Accordingly, from and after the Effective Date of this Amendment, the
License is hereby amended to delete any and all provisions of the License effected by the
Attornment Agreement and/or the Stadium Amendments, including, without limitation,
the provisions of Section 9 of the Attornment Agreement which state that they survive the
termination of the Master Lease. As a result, from and after the Effective Date of this
Amendment, the terms and conditions of the License shall consist solely of the terms and
conditions of the License Agreement, as amended by this Amendment.
2. Definitions. Section 1 of the License, entitled "Definitions," is hereby
amended to add, or delete and replace in its entirety, as appropriate, the following
definitions:
"Attornment Agreement" means that certain Assignment, Assumption,
Attornment and Nondisturbance Agreement dated as of July 1, 2004 for
identification purposes by and between the Agency, Concessionaire, the Storm,
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First Amd to License Agt FINAL
LLC, and Impact Stadium, LLC, as amended by Amendment No. 1 thereto dated
July 1, 2004.
"Attornment Period"is defined in Section 33 of this License Agreement.
"DSG" means Diamond Stadium Group, LLC, a California limited
liability company.
"Expiration Date" means December 31, 2016, or such later date as may
be determined in accordance with Section 2 of this License.
"First Extension Term"is defined in Section 2.2 of this License.
"Initial Term"is defined in Section 2.1 of this License.
"Management Agreement" means that certain Stadium License, Lease
and Management Agreement between the Agency and DSG dated for
identification purposes only as of July 15, 2007.
"Parties"means the Agency and Storm; "Party"means either the Agency
or Storm.
"Second Extension Term"is defined in Section 2.3 of this License.
"Term" is the Initial Term and, if applicable, the First Extension Term;
and, if applicable, the Second Extension Term.
3. Term of License. Section 2 of the License, entitled "Term of License" is
hereby deleted in its entirety and replaced with the following:
2.1 Initial Term. The initial term of this License (hereinafter
referred to as the "Initial Term") shall commence upon the
Commencement Date and, unless sooner terminated or extended under the
terms and conditions of this License, shall continue thereafter until 11:59
p.m., Pacific Time, on December 31, 2016 (the"Expiration Date").
2.2 First Extension Term. Upon the commencement of the
First Extension Term (as defined in the Management Agreement) pursuant
to and in accordance with Section 3.2 of the Management Agreement,
Storm and Agency hereby agree that the term of this License shall be
automatically extended for one (1) additional period of five (5) years (the
"First Extension Term"). All of the terms and conditions of this License
shall apply to such First Extension Term, and a new Expiration Date shall
automatically be established to be 11:59 p.m. Pacific Time on December
31, 2021. The Storm shall pay the Annual License Fee during the First
Extension Term in accordance with Section 4 of this License.
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First Amd to License Agt FINAL
2.3 Second Extension Term. Upon the commencement of the
Second Extension Term (as defined in the Management Agreement)
pursuant to and in accordance with Section 3.3 of the Management
Agreement, Storm and Agency hereby agree that the term of this License
shall be automatically extended for another additional period of five (5)
years (the "Second Extension Term"). All of the terms and conditions of
this License shall apply to such Second Extension Term, and a new
Expiration Date shall automatically be established to be 11:59 p.m. Pacific
Time on December 31, 2026. The Storm shall pay the Annual License Fee
during the Second Extension Term in accordance with Section 4 of this
License.
4. License Fees. Sections 4.1 and 4.2 of the License are hereby deleted and
replaced in their entirety with the following:
4.1. Initial Term. During the Initial Term, the Storm shall pay
to the Agency an Annual License Fee in the following amounts:
(a) Year 1 (January 1, 2001 - December 31, 2001): Three
Hundred Seventy Five Thousand Dollars ($375,000.00)
less the Deferral for a total payment of Three Hundred Fifty
Thousand Dollars ($350,000.00) (the "Year 1 Annual
License Fee");
(b) Year 2 (January 1, 2002 - December 31, 2002): Three
Hundred Seventy Five Thousand Dollars ($375,000.00)
plus payment of the Repayment Amount for a total of
Three Hundred Eighty Seven Thousand Five Hundred
Dollars ($387,500.00) (the "Year 2 Annual License Fee");
(c) Year 3 (January 1, 2003 - December 31, 2003): Three
Hundred Seventy Five Thousand Dollars ($375,000.00)
plus payment of the Repayment Amount for a total of
Three Hundred Eighty Seven Thousand Five Hundred
Dollars ($387,500.00) (the "Year 3 Annual License Fee");
(d) Year 4 (January 1, 2004 - December 31, 2004): Three
Hundred Seventy Five Thousand Dollars ($375,000.00)
adjusted for any percentage increase in CPI for Years 1, 2
and 3, but in no event to exceed Four Hundred Twelve
Thousand Five Hundred Dollars ($412,500.00) or be less
than Three Hundred Seventy Five Thousand Dollars
($375,000.00) (the "Year 4 Annual License Fee");
Example: Thus, and by way of example only, in the event
that the CPI for the month of December 2003 was 180 and
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First Amd to License Agt FINAL
the CPI For January 2001 was 170 the Year 4 Annual
License Fee would be calculated as follows:
1. December 2003 CPI less January 2001 CPI
=Index Point Change:
180 - 170 = 10.
2. Index Point Change divided by January
2001 CPI=Percentage Change
10/170 = 0.058.
3. Percentage Change multiplied by
$375,000.00=Year 4 Additional Amount
0.058 x $375,000.00=$21,750.00
4. $375,000.00 + Year 4 Additional Amount =
Year 4 Annual License Fee
$375,000.00+ $21,750.00= $396,750.00
Under this example the calculated amount of
$396,750.00 is less than $412,500.00 and would be
the Year 4 Annual License Fee.
(e) Year 5 (January 1, 2005 - December 31, 2005): The Year
4 Annual License Fee adjusted for any percentage increase
in the CPI for Year 4, but in no event to exceed a four
percent (4%) increase and in no event to be less than the
Year 4 Annual License Fee (the "Year 5 Annual License
Fee");
Example: Thus, and by way of example only, in the event
that the CPI for the month of December 2004 was 185, the
CPI for January 2004 was 180 and the Year 4 Annual
License Fee was $396,750.00 the Year 5 Annual License
Fee would be calculated as follows:
1. December 2004 CPI less January 2004 CPI
=Index Point Change:
185 - 180 = 5.
-5 -
First Amd to License Agt FINAL
2. Index Point Change divided by January
2004 CPI=Percentage Change
5/180 =0.028.
3. Percentage Change multiplied by the Year 4
Annual License Fee = Year 5 Additional
Amount
0.028 x $396,750.00=$11,109.00
4. Year 4 Annual License Fee + Year 5
Additional Amount = Year 5 Annual
License Fee
$396,750.00+ $11,109.00= $407,859.00
Under this example the calculated amount of
$407,859.00 is less than a 4% increase over the
Year 4 Annual License Fee and would be the Year 5
Annual License Fee.
(f) Year 6 (January 1, 2006 - December 31, 2006): The Year
5 Annual License Fee adjusted for any percentage increase
in the CPI for Year 5, but in no event to exceed a four
percent (4%) increase and in no event to be less than the
Year 5 Annual License Fee (the "Year 6 Annual License
Fee"); and
(g) Year 7 (January 1, 2007- December 31, 2007): The Year
6 Annual License Fee adjusted for any percentage increase
in the CPI for Year 6, but in no event to exceed a four
percent (4%) increase and in no event to be less than the
Year 6 Annual License Fee (the "Year 7 Annual License
Fee").
(h) Year 8 (January 1, 2008 - December 31, 2008): The Year
7 Annual License Fee adjusted for any percentage increase
in the CPI for Year 7, but in no event to exceed a four
percent (4%) increase and in no event to be less than the
Year 7 Annual License Fee (the "Year 8 Annual License
Fee");
(i) Year 9 (January 1, 2009 - December 31, 2009): The Year
8 Annual License Fee adjusted for any percentage increase
in the CPI for Year 8, but in no event to exceed a four
-6-
First Amd to License Agt FINAL
percent (4%) increase and in no event to be less than the
Year 8 Annual License Fee (the "Year 9 Annual License
Fee");
(j) Year 10 (January 1, 2010 - December 31, 2010): The
Year 9 Annual License Fee adjusted for any percentage
increase in the CPI for Year 9, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 9 Annual License Fee (the "Year 10 Annual
License Fee");
(k) Year 11 (January 1, 2011 - December 31, 2011): The
Year 10 Annual License Fee adjusted for any percentage
increase in the CPI for Year 10, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 10 Annual License Fee (the "Year 11 Annual
License Fee"); and
(1) Year 12 (January 1, 2012 - December 31, 2012): The
Year 11 Annual License Fee adjusted for any percentage
increase in the CPI for Year 11, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 11 Annual License Fee (the "Year 12 Annual
License Fee").
(m) Year 13 (January 1, 2013 - December 31, 2013): The
Year 12 Annual License Fee adjusted for any percentage
increase in the CPI for Year 12, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 12 Annual License Fee (the "Year 13 Annual
License Fee");
(n) Year 14 (January 1, 2014 - December 31, 2014): The
Year 13 Annual License Fee adjusted for any percentage
increase in the CPI for Year 13, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 13 Annual License Fee (the "Year 14 Annual
License Fee");
o) Year 15 (January 1, 2015 - December 31, 2015): The
Year 14 Annual License Fee adjusted for any percentage
increase in the CPI for Year 14, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 14 Annual License Fee (the "Year 15 Annual
License Fee"); and
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(p) Year 16 (January 1, 2016 - December 31, 2016): The
Year 15 Annual License Fee adjusted for any percentage
increase in the CPI for Year 15, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 15 Annual License Fee (the "Year 16 Annual
License Fee").
4.2. Extension Terms. During the First Extension Term, if
any, and the Second Extension Term, if any, the Storm shall annually pay
to the Agency in accordance with the terms and conditions of this License
the previous year's Annual License Fee adjusted for any percentage
increase in the CPI for the previous, but in no event to exceed a four
percent (4%) increase and in no event to be less than the previous year's
Annual License Fee.
5. Utilities. Section 11 is hereby deleted and replaced in its entirety with the
following:
11. Utilities. The Agency shall provide, or cause to be provided, all
utilities, including water, sewer, telephone, gas, refuse and electricity (the
"Utilities") necessary for all Storm Games at the Stadium, including such cost
attributed to the use of the Storm Office, except for telephone charges incurred by
the Storm which shall be paid for by the Storm. Notwithstanding the foregoing,
the Agency shall only be required to pay for actual electricity costs, including
without limitation electrical charges for the Electronic Message Board, in
connection with Storm Games in the an amount not to exceed the following:
(a) Year 1 (January 1, 2001 - December 31, 2001): One
Hundred Ten Thousand Dollars ($110,000.00) (the
"Electricity Base");
(b) Year 2 (January 1, 2002 - December 31, 2002): The
Electricity Base;
(c) Year 3 (January 1, 2003 - December 31, 2003): The
Electricity Base;
(d) Year 4 (January 1, 2004 - December 31, 2004): The
Electricity Base adjusted for any Percentage Increase in
CPI for Years 1, 2 and 3, but in no event to exceed One
Hundred Twenty One Thousand Dollars ($121,000.00) or
be less than the Electricity Base (the "Year 4 Electricity
Base");
Example: For an example of the calculation of the
percentage increase in CPI for Years 1, 2, and 3 refer to
Section 4.1(d) of this License.
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First Amd to License Agt FINAL
(e) Year 5 (January 1, 2005 - December 31, 2005): The Year
4 Electricity Base adjusted for any percentage increase in
the CPI for Year 4, but in no event to exceed a four percent
(4%) increase and in no event to be less than the Year 4
Electricity Base (the "Year 5 Electricity Base");
Example: For an example of the percentage increase in
CPI for Year 4 please refer to Section 4.1(e) of this
License.
(f) Year 6 (January 1, 2006 -December 31, 2006): The Year
5 Electricity Base adjusted for any percentage increase in
the CPI for Year 5, but in no event to exceed a four percent
(4%) increase and in no event to be less than the Year 5
Electricity Base(the "Year 6 Electricity Base");
(g) Year 7 (January 1, 2007- December 31, 2007): The Year
6 Electricity Base adjusted for any percentage increase in
the CPI for Year 6, but in no event to exceed a four percent
(4%) increase and in no event to be less than the Year 6
Electricity Base (the "Year 7 Electricity Base");
(h) Year 8 (January 1, 2008 - December 31, 2008): The Year
7 Electricity Base adjusted for any percentage increase in
the CPI for Year 7, but in no event to exceed a four percent
(4%) increase and in no event to be less than the Year 7
Electricity Base(the "Year 8 Electricity Base");
(i) Year 9 (January 1, 2009 - December 31, 2009): The Year
8 Electricity Base adjusted for any percentage increase in
the CPI for Year 8, but in no event to exceed a four percent
(4%) increase and in no event to be less than the Year 8
Electricity Base(the "Year 9 Electricity Base");
(j) Year10 (January 1, 2010 - December 31, 2010): The
Year 9 Electricity Base adjusted for any percentage
increase in the CPI for Year 9, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 9 Electricity Base(the "Year 10 Electricity Base");
(k) Year 11 (January 1, 2011 - December 31, 2011): The
Year 10 Electricity Base adjusted for any percentage
increase in the CPI for Year 10, but in no event to exceed a
four percent (4%) increase and in no event to be less than
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First Arad to License Agt FINAL
the Year 10 Electricity Base (the "Year 11 Electricity
Base");
(1) Year 12 (January 1, 2012 - December 31, 2012): The
Year 11 Electricity Base adjusted for any percentage
increase in the CPI for Year 11, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 11 Electricity Base (the "Year 12 Electricity
Base");
(m) Year 13 (January 1, 2013 - December 31, 2013): The
Year 12 Electricity Base adjusted for any percentage
increase in the CPI for Year 12, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 12 Electricity Base (the "Year 13 Electricity
Base");
(n) Year 14 (January 1, 2014 - December 31, 2014): The
Year 13 Electricity Base adjusted for any percentage
increase in the CPI for Year 13, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 13 Electricity Base (the "Year 14 Electricity
Base");
(o) Year 15 (January 1, 2015 - December 31, 2015): The
Year 14 Electricity Base adjusted for any percentage
increase in the CPI for Year 14, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 14 Electricity Base (the "Year 15 Electricity
Base");
(p) Year 16 (January 1, 2016 - December 31, 2016): The
Year 15 Electricity Base adjusted for any percentage
increase in the CPI for Year 15, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 15 Electricity Base (the "Year 16 Electricity
Base"); and
(q) Each Year during the First Extension Term, if any, and
the Second Extension Term, if any: The previous year's
Electricity Base adjusted for any percentage increase in the
CPI for the previous year, but in no event to exceed a four
percent (4%) increase and in no event to be less than the
previous year's Electricity Base.
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First Arad to License Agt FINAL
6. Notice. Section 30 of the Agreement is hereby deleted and replaced in its
entirety with the following:
30. Notice. All notices, requests, demands or documents
which are required or permitted to be given or served hereunder shall be in
writing and delivered personally or delivered by United States mail,
postage prepaid, certified return receipt requested, or delivered by a
national or regional overnight courier (e.g., FedEx, Overnight Express,
etc.) addressed as follows:
To the Agency at: The Redevelopment Agency of the City of Lake
Elsinore
130 S. Main Street
Lake Elsinore, California 92530
Attn: Executive Director
with a copy to: Barbara Zeid Leibold, Esq.
Leibold,McClendon&Mann, PC
23422 Mill Creek Drive, Suite 105
Laguna Hills, California 92653
To the Storm: Storm
500 Diamond Drive
Lake Elsinore, California 92531
Attn: General Manager
with a copy to: Robert B. Lapidus, Esq.
Law Office of Robert B. Lapidus
3366 North Torrey Pines Court, Suite 210
La Jolla, CA 92037
Notice shall be deemed to have been delivered only upon actual
delivery to the intended addressee in the case of either personal service or
courier. The addresses for purposes of this Section 30 may be changed by
giving written notice of such change in the manner provided herein for
giving notices. Unless and until such written notice is delivered, the latest
information stated by written notice, or provided herein if no written
notice of change has been delivered, shall be deemed to continue in effect
for all purposes hereunder.
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First Amd to License Agt FINAL
7. Attornment during Performance of Management Agreement. The
License shall be amended to add a Section 33, as follows:
33. Attornment during Performance of Management
Agreement.
(a) Pursuant to the Management Agreement, the License
has been assigned to DSG during the Attornment Period, and DSG has
assumed the rights and obligations of the Agency under the License during
the Attornment Period. Storm acknowledges and represents that it is the
intent of DSG and Storm that Storm will continue, pursuant to the License,
to perform its obligations under the License during the term of the
Management Agreement. Storm further acknowledges and represents that
it shares controlling ownership with DSG.
(b) The Parties agree that, so long as the licenses and lease
granted to DSG in the Management Agreement are effective (the
"Attornment Period"), except for the rights and obligations set forth in this
Section 33, Storm shall attorn to and tender all performances under the
License Agreement to DSG and shall look to DSG exclusively for all of
the rights and benefits accruing under the License Agreement. Storm
further agrees that the Agency shall have no liability or obligation to
Storm under the License Agreement during the Attornment Period for any
default by DSG under the License Agreement. No amendment of the
License Agreement, nor waiver or delay in enforcement of any failure to
perform nor other breach of the License Agreement by either DSG or the
Storm during the Attornment Period shall be binding upon the Agency;
nor shall any course of dealing established between DSG and the Storm be
binding upon the Agency. If the Management Agreement is terminated,
then the attornment provided for in this Section 33 shall be rescinded and
Storm shall again be responsible to Agency for its performance under the
License Agreement and shall look to Agency with respect to all rights and
benefits accruing thereunder.
(c) Notwithstanding the foregoing, during the Attornment
Period, Storm acknowledges and agrees that Agency reserves the right to
declare a breach under the License by the Storm and pursue any legal
remedies to which it may be entitled. Further, Storm agrees to provide
Agency with prompt written notice of any breach by DSG under the
License. Agency shall have the right, but not the obligation, to cure any
default of DSG during the Attornment Period. Storm agrees to afford
Agency the right to cure any such default. Storm shall not be permitted to
terminate the Agreement during the Attornment Period as a result of
uncured breach or breaches by DSG unless Storm has provided Agency
with notice and an opportunity to cure in accordance with this Agreement.
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First Amd to License Agt FINAL
(d) Storm covenants and agrees to maintain its operations
and limited partnership organization in such force and good standing at all
times during and after the Attornment Period. Failure to so maintain its
operations and legal organization, and/or failure to resume performance of
its obligations hereunder upon any termination of the Management
Agreement, shall constitute a material breach of this License.
(e) Storm shall, to the maximum extent permitted by law,
indemnify, defend and hold harmless the Agency and its directors,
officers, members, managers, employees, agents, and other representatives
from any and all liability, demands, claims, costs, losses, damages,
settlements, recoveries and expenses (including, without limitation,
interest, penalties, expert witness fees, accounting fees and attorneys' fees
and costs) incurred by any of the foregoing, known or unknown,
contingent or otherwise, directly or indirectly, arising from or related to
any misrepresentations or breach of any provision of this Section 33.
(f) Storm shall not in any event be entitled to, and hereby
waives, any right to seek damages for loss of profits or any special or
consequential damages of any kind or nature from the Agency arising out
of or in connection with this Section 33, and in connection with such
waiver Storm is familiar with and hereby waives the provision of § 1542
of the California Civil Code which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR."
(g) Storm agrees that the assignment of the License
Agreement by the Agency to DSG does not constitute an assignment by
the Agency which is subject to the terms and conditions of Section 14.2 of
the License Agreement. Storm further acknowledges and agrees that it has
been informed that DSG may not assign its rights under the License
Agreement without the prior written consent of the Agency.
8. Accuracy of Recitals. The Parties acknowledge the accuracy of the
Recitals set forth herein, which are incorporated by this reference.
9. Authority; Priority of Amendment. This Amendment is executed by the
Parties' authorized representatives. Except as expressly modified herein, all of the terms
of the License shall remain unchanged and in full force and effect, and the Parties shall
continue to fulfill their respective obligations under the License as amended by this
Amendment. To the extent of any conflict between the terms of the License and the
terms of this Amendment, the terms of this Amendment shall control.
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First Amd to License Agt FINAL
10. Captions. The captions appearing in this Amendment are for convenience
only and are not a part of this Amendment and do not in any way limit, amplify, define,
construe, or describe the scope or intent of the terms or provisions of this Amendment.
11. Counterparts. This Amendment may be executed in counterparts, each
of which shall be deemed an original, and all of which together shall constitute but one
and the same document.
12. Effective Date. The effective date ("Effective Date") of this Amendment
is July 15, 2007.
[BALANCE OF PAGE LEFT INTENTIONALLY BLANK, SIGNATURES ON
FOLLOWING PAGE]
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First Amd to License Agt FINAL
IN WITNESS WHEREOF, the parties have executed this Second Amendment
as of the date first written above.
LAKE ELSINORE STORM, LP, a California
limited partnership
By:
Printed Name:
Its:
REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE, a public body, corporate
and politic
By:
Chairperson
ATTEST:
Agency Clerk
APPROVED AS TO FORM:
LEIBOLD MCCLENDON & MANN, P.C.,
Agency General Counsel
By:
Barbara Zeid Leibold
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First Amd to License Agt FINAL.doc
rt f I
STADIUM FIELD AND MAINTENANCE AGREEMENT
by and between
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE
"Agency"
and
STORM LLC
"Storm"
r
TABLE OF CONTENTS
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Maintenance and Upkeep . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Storm Games and Other Storm Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Routine Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Compliance with League Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Maintenance Supervisor and Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.5 Review Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.1 Use by the Storm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.2 Maintenance of Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.3 Repair and Replacement of Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. Term of Agreement; Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.1 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.2 Rights of Termination Prior to Termination or Expiration of the License Agreement
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.1 Annual Maintenance Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6.2 Annual Maintenance Fee Due Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.3 Offset of Annual License Fees For Maintenance and Operations of Stadium . . . . 9
7. Capital Repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7.1 Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7.2 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7.3 Safety Precautions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7.4 Storm Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8. Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
9. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
10. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
10.1 Assignment by the Storm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
10.2 Assignment by the Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
11. Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
12. Controlling Law Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
13. Litigation Expenses and Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
14. Mediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
15. Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
16. Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
17. Indemnification and Hold Harmless . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
18. Destruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
18.1 Restoration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
18.2 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
18.3 Baseball Season . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
19. Events of Default by the Storm and the Agency's Remedies . . . . . . . . . . . . . . . . . . . . . 12
19.1 Event of Default by the Storm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
19.2. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
FINALMaintenanceAgreementStadium.9 4015.009 -1- 04/12/01
19.3. Agency Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
19.4. Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
20. Events of Default by the Agency and the Storm's Remedies . . . . . . . . . . . . . . . . . . . . . 13
20.1. Event of Default by the Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
20.2. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
20.3. Storm Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
20.4. Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
20.5. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
21. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
22. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
23. Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
24. Non-Discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
25. Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
26. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
27. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
FINALMaintenanceAgreementStadium.9-4015.009 04/12/01
EXHIBITS:
Exhibit A Site Legal Description
Exhibit B Site Map
Exhibit C Scope of Services - Routine Maintenance
Exhibit D Scope of Services - Storm Games and Other Storm Events
Exhibit E Guaranty
P
FINALMaintenanceAgreementStadium.9 4015.009 -111- 04/12/01
STADIUM FIELD AND MAINTENANCE AGREEMENT
This STADIUM FIELD AND MAINTENANCE AGREEMENT (this "Agreement") is
made and hereby entered into as of the 15' day of March,2001 (the"Commencement Date")by and
between the REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE,a public
body corporate and politic(the"Agency")and STORM LLC,a California limited liability company
(the"Storm") with regard to the following:
RECITALS
The following Recitals are a substantive part of this Agreement:
A. The Agency is the owner of that certain real property located within the Rancho
Laguna Redevelopment Project Area III of the City of Lake Elsinore,County of Riverside, State of
California all as more fully described in the Site Legal Description attached hereto as Exhibit"A"
and incorporated herein by reference(the"Land"). A number of improvements are located on the
Land, including a professional baseball field, stadium and ancillary parking and related facilities
commonly known as the"Lake Elsinore Diamond"(collectively the"Stadium")and depicted on the
Site Map attached hereto as Exhibit`B"and incorporated herein by reference. The Stadium and the
Land shall be referred to collectively herein as the "Site".
B. The Agency previously entered into that certain Final and Fully Executed Stadium
Property and Facility Lease, dated April 2, 1998 (the "Stadium Lease") with Lakeside Sports &
Entertainment LLC ("Lakeside").
C. Pursuant to that certain letter by and between Lakeside and Mandalay Sports
Entertainment LLC ("Mandalay")dated March 17, 1999, the parties thereto set forth the terms and
conditions regarding the use of the Stadium by the Storm.
D. On or about August 22,2000, general counsel for the Agency received a letter from
counsel for Lakeside indicating that Lakeside was financially unable to continue to meet its
obligations under the Stadium Lease and would abandon its operation and maintenance of the
Stadium in September or October, 2000.
E. On or about October 31, 2000, Lakeside terminated its employees responsible for
maintenance of the Stadium. By letter dated October 11, 2000, counsel for Lakeside stated that
Lakeside would no longer fulfill any of its contractual obligations as of November 15, 2000.
F. The Agency and the Storm have incurred damages as a result of Lakeside's
repudiation of the Stadium Lease and abandonment of the Stadium.
G. The Agency and the Storm have previously or concurrently herewith entered into the
License Agreement(which is defined in Section 1 hereof)pursuant to which the Storm has the right
to use the Stadium for baseball games,and for other purposes as more fully described therein.
FINALMaintenanceAgreementStadium.9_4015.009 1 04/12/01
H. As set forth in the License Agreement, the Agency and the Storm contemplated
entering into this Agreement by which the Storm shall perform certain field and facility maintenance
services at the Stadium in accordance with the terms and conditions set forth herein.
I. The parties hereto desire to enter into this Agreement in order to set out and clarify
the obligations of the Storm and the Agency regarding the maintenance and repair of the Stadium.
NOW THEREFORE, in consideration of the terms contained herein, and for other good
and valuable consideration,the receipt and sufficiency of which are hereby acknowledged,the parties
do hereby agree as follows:
1. Definitions. Capitalized terms used herein shall have the meanings set forth in this
Section 1 unless the context would clearly indicate otherwise. All capitalized terms used herein and
not otherwise defined shall have the meaning set forth in the License Agreement.
"Agreement"means this Stadium Field and Maintenance Agreement by and between
the Agency and the Storm.
"Agency"means the Redevelopment Agency of the City of Lake Elsinore, a public
body corporate and politic, having its principal office at 130 South Main Street, Lake Elsinore,
California 92530.
"Annual Maintenance Fee"means the amount to be credited by the Agency to the
Storm annually in accordance with the terms and conditions of this Agreement.
"Capital Repairs"means all activities, and the provision of all labor and materials
which are reasonably required to improve, repair, refurbish, modify, restore and/or replace, when
reasonably necessary, the Stadium, or portions or components thereof, and the costs and expenses
of which equal or exceed Five Hundred Dollars($500.00). Notwithstanding the foregoing,the term
Capital Repairs as used herein does not include those items set forth in the Scope of Services -
Routine Maintenance and/or the Scope of Services- Storm Games and Other Storm Events.
"City"means the City of Lake Elsinore.
"Commencement Date"shall mean March 15, 2001.
"CPI"means the Consumer Price Index for Los Angeles-Riverside-Orange County
—All Urban Consumers, 1982-1984 equal to 100.
"Electronic Message Board"means the programable electronic panel for the display
of advertising and player information which is located in left field.
"Equipment"means the equipment owned by the Agency and located at the Stadium
which is utilized to maintain the Field, including the field mower, Cushmans, a tractor, edgers and
weed eaters.
FINALMaintenanceAgreementStadium.9_4015.009 2 04/12/01
P
"Event of Default by the Agency"is defined in Section 20.1 of this Agreement.
"Events of Default by the Storm "is defined in Section 19.1 of this Agreement.
"Executive Director" means the Executive Director of the Agency or his/her
designee.
"Field"means the playing field at the Stadium.
"General Manager"means the General Manager of the Storm.
"General Manager Trial Period"means the ninety (90) day period following the
Agency's receipt of notice from the Storm pursuant to Section 2.4 of this Agreement that there has
been a change in the identity of the General Manager.
"Guaranty"means the Guaranty to be provided by Mandalay in accordance with the
terms of this Agreement which is attached hereto as Exhibit "E" and incorporated herein by
reference.
"Lakeside" means Lakeside Sports & Entertainment LLC, a California limited
liability company(also known as "Diamond Sports &Entertainment LLC").
"League"means the California League of Professional Baseball, Inc., a California
nonprofit corporation.
`LetterAgreement"means that certain letter by and between Lakeside and Mandalay
dated March 17, 1999 setting forth the terms and conditions of the use of the Stadium by the Storm.
"LicenseAgreement"means that certain License Agreement entered into as of March
15,2001 by and between the Agency and the Storm.
"Maintenance Fee Installment Credit"is defined in Section 6.2 of this Agreement.
"Maintenance Term"is defined in Section 5.1 of this Agreement.
"Mandalay" means Mandalay Sports Entertainment LLC, a California limited
liability company.
"NA"means the National Association of Professional Baseball Leagues, Inc.
"Scope of Services-Routine Maintenance"-means the scope of services attached
hereto as Exhibit"C"and incorporated herein by reference.
"Scope of Services-Storm Games and Other Storm Events"means the scope of
services attached hereto as Exhibit"D" and incorporated herein by reference.
FINALMaintenanceAgreementStadium.9_4015.009 3 04/12/01
"Stadium Lease"means the Final and Fully Executed Stadium Property and Facility
Lease, dated April 2, 1998 by and between the Agency and Lakeside.
"Standards"means the standards established by the League and/or the NA for the
maintenance of facilities utilized for playing professional baseball.
"Storm"means Storm LLC a California limited liability company, the owner and
operator of a professional baseball team and member of the League.
"Tri-Visions"means the Tri-vision advertising panels located at field level and in the
outfield.
2. Maintenance and Upkeep.
2.1 Storm Games and Other Storm Events. During the Maintenance Term,the
Storm hereby covenants and agrees to provide the personnel and to perform at its sole cost and
expense all items of maintenance in connection with all Storm Games and Other Storm Events in
accordance with and as set forth in the Scope of Services- Storm Games and Other Storm Events.
2.2 Routine Maintenance. In addition to performing the maintenance for the
Storm Games and Other Storm Events as set forth in Section 2.1 of this Agreement, the Storm
hereby covenants and agrees to provide the personnel and perform the routine maintenance of the
Stadium in accordance with and as set forth in the Scope of Services - Routine Maintenance.
2.3 Compliance with League Standards. It is the intent of the parties that the
services to be performed by the Storm pursuant to Sections 2.1 and 2.2 of this Agreement shall be
consistent with the Standards set forth by the League and the NA and should result in the Stadium
being maintained in"first class"condition. The Agency and the Storm acknowledge and agree that
those items set forth in the Scope of Services-Storm Games and Other Storm Events and Scope of
Services - Routine Maintenance are a list of the minimum items which the Storm has agreed to
perform in order to satisfy its maintenance obligations hereunder and that there may be additional
items of maintenance which are not identified.
2.4 Maintenance Supervisor and Personnel. In entering into this Agreement,
the Agency is relying upon the identity of the General Manager of the Storm as of the
Commencement Date and his personal supervision ofthe Storm's obligations hereunder. The Storm
shall notify the Executive Director in writing of any change in the identity of the General Manager
at any time during the Maintenance Term. Provided,however,that nothing in this Section 2.4 shall
relieve the Storm from performing its obligations hereunder despite the change in the identity of the
General Manager.
t
2.5 Review Meetings. As often as necessary,but in no event less than two times
per month during the Maintenance Term, the General Manager, or his/her designee, and the
Executive Director,or his/her designee,shall meet at a mutually agreed upon time and place in order
to discuss the condition of the Stadium and the performance of the Storm hereunder and any other
applicable issues.
FINALMaintenanceAgreementStadium.9_4015.009 4 04/12/01
3. Supplies. The Agency shall provide the Storm with the supplies which the Agency
determines in its sole and absolute discretion are necessary for the Storm to perform its obligations
hereunder. In the event that the Storm believes that additional or different supplies are required it
shall so notify the Executive Director in writing. If the Executive Director agrees that such
additional or different supplies are necessary,the Agency will provide the Storm with the requested
supplies at the Agency's cost and expense. In the event that the Executive Director does not believe
such additional or different supplies are necessary the Storm may acquire and utilize such supplies
at its sole cost and expense and only with the Executive Director's prior written approval. In the
event that the Agency is providing the Storm with a particular supply item and the Storm requests
that the Agency provide a more expensive brand or type of that supply item which the Agency agrees
to provide,the Storm shall reimburse the Agency for the additional costs incurred by the Agency in
supplying the more expensive brand or type. Notwithstanding the foregoing, the Storm shall be
responsible for providing all chalk and Field paint at its sole cost and expense.
4. Equipment.
4.1 Use by the Storm. The Storm shall be entitled to use the Agency's
Equipment in connection with the performance of its obligations hereunder;provided,however,that
the Storm shall only be entitled to utilize the Cushman purchased by the Agency in March,2001 in
order to "drag"the Field on the days of Storm Games and Other Storm Events. All other items of
equipment which are necessary for the Storm to meet its obligations hereunder shall be supplied by .
the Storm at its sole cost and expense.
4.2 Maintenance of Equipment. The Agency shall be responsible for providing
the routine maintenance in connection with the Equipment.
4.3 Repair and Replacement of Equipment. The Storm shall notify the
Executive Director in writing of any items of Equipment in need of repair or replacement. The
Agency shall be responsible for repairing and/or replacing Equipment which the Agency determines
in its sole and absolute discretion is in need of repair or replacement; provided, however, that the
Storm shall repair and/or replace any Equipment which is damaged by the intentional or negligent
act(s) of the Storm, its employees, agents and/or contractors. In addition in the event that any
Equipment in need of repair or replacement is covered by any insurance held by the Storm,the Storm
shall submit any necessary claims and shall immediately upon receipt provide the Agency with any
such insurance proceeds or cause the Equipment to be repaired or replaced at the sole cost and
expense of the Storm.
5. Term of Agreement; Termination.
5.1 Term. The term of this Agreement (hereinafter the "Maintenance Term")
shall commence on the Commencement Date and shall,unless earlier terminated in accordance with
Sections 5.2, 18.2, 19 or 20 hereof, automatically terminate and be of no further force and effect
upon the termination or earlier expiration of the License Agreement.
5.2 Rights of Termination Prior to Termination or Expiration of the License
Agreement.
FINALMaintenanceAgreementStadium.9_4015.009 5 04/12/01
(a) End of Season. Either parry may terminate this Agreement,with or
without cause, by giving written notice thereof to the other party within forty-five (45) days of the
last regular season Storm Game.
(b) General Manager Trial Period. Either party may terminate this
Agreement with or without cause during the General Manager Trial Period upon written notice
thereof to the other party.
(c) Party's Property and Offset. Upon termination of this Agreement
under this Section 5.2,all materials and equipment purchased by either party hereunder in connection
with this Agreement shall remain that party's property. In addition, the Storm shall be entitled to
an offset for all of the Storm's services rendered hereunder through the effective date of any such
termination.
(d) Effect of Termination. Upon termination of this Agreement pursuant
to this Section 5.2, the provisions of Section 4.5(b) of the License shall apply to the continued
maintenance, repair and operation of the Stadium.
6. Compensation
6.1 Annual Maintenance Fee. During the Maintenance Term,the Storm shall
compensated for the performances of the services set forth herein through the credit of the Annual
Maintenance Fee which shall be in the amounts as follows:
(a) Year 1(Commencement Date-December 31,2001): One Hundred
Fifty One Thousand Two Hundred Thirty Eight Dollars
($151,238.000) (the "Year 1 Annual Maintenance Fee");
(b) Year 2 (January 1, 2002 - December 31, 2002): One Hundred
Seventy Five Thousand Dollars ($175,000.00) (the "Year Two
Annual Maintenance Fee");
(c) Year 3 (January 1, 2003 - December 31, 2003): One Hundred
Seventy Five Thousand Dollars ($175,000.00) (the "Year 3 Annual
Maintenance Fee");
(d) Year 4 (January 1, 2004 - December 31, 2004): One Hundred
Seventy Five Thousand Dollars ($175,000.00) adjusted for any
Percentage Increase in CPI for Years 1, 2 and 3, but in no event to
exceed One Hundred Ninety Two Thousand Five Hundred Dollars
($192,500.00) or be less than One Hundred Seventy Five Thousand
Dollars ($175,000.00) (the"Year 4 Annual Maintenance Fee");
Example: Thus, and by way of example only, in the event that the
CPI for the month of December 2003 was 180 and the CPI For
FINALMaintenanceAgreementStadium.9_4015.009 6 04/12/01
January 2001 was 170 the Year 4 Annual Maintenance Fee would be
calculated as follows:
1. December 2003 CPI less January 2001 CPI = Index Point
Change:
180 - 170 = 10.
2. Index Point Change divided by January 2001 CPI =
Percentage Change
10/170 =0.058.
3. Percentage Change multiplied by $175,000.00 = Year 4
Additional Amount
0.058 x $175,000.00 = $10,150.00
4. $175,000.00 + Year 4 Additional Amount = Year 4 Annual
Maintenance Fee
$175,000.00 + $10,150.00= $185,150.00
Under this example the calculated amount of$185,150.00 is less than
$192,500.00 and would be the Year 4 Annual Maintenance Fee.
(e) Year 5 (January 1, 2005 - December 31, 2005): The Year 4 Annual
Maintenance Fee adjusted for any percentage increase in the CPI for Year 4,
but in no event to exceed a four percent(4%)increase and in no event to be
less than the Year 4 Annual Maintenance Fee (the "Year 5 Annual
Maintenance Fee");
Example: Thus, and by way of example only, in the event that the
CPI for the month of December 2004 was 185,the CPI For January
2004 was 180 and the Year 4 Annual Maintenance Fee was
$185,150.00 the Year 5 Annual Maintenance Fee would be calculated
as follows:
1. December 2004 CPI less January 2004 CPI = Index Point
Change:
185 - 180 = 5.
2. Index Point Change divided by January 2004 CPI =
Percentage Change
FINALMaintenanceAgreementStadium.9_4015.009 7 _ 04/12/01
5/180 =0.028.
3. Percentage Change multiplied by the Year 4 Annual
Maintenance Fee = Year 5 Additional Amount
0.028 x$185,150.00 =$5,184.20
4. Year 4 Annual Maintenance Fee+Year 5 Additional Amount
=Year 5 Annual Maintenance Fee
$185,150.00 + $5,184.20 = $190,334.20
Under this example the calculated amount of$190,334.20 is
less than a 4%increase over the Year 4 Annual Maintenance
Fee and would be the Year 5 Annual Maintenance Fee.
(f) Year 6(January 1,2006-December 31,2006): The Year 5 Annual
Maintenance Fee adjusted for any percentage increase in the CPI for
Year 5, but in no event to exceed a four percent(4%)increase and in
no event to be less than the Year 5 Annual Maintenance Fee (the
"Year 6 Annual Maintenance Fee"); and
(g) Year 7(January 1,2007-December 31,2007):The Year 6 Annual
Maintenance Fee adjusted for any percentage increase in the CPI for
Year 6,but in no event to exceed a four percent(4%)increase and in
no event to be less than the Year 6 Annual Maintenance Fee (the
"Year 7 Annual Maintenance Fee").
(h) Year 8(January 1,2008-December 31,2008): The Year 7 Annual
Maintenance Fee adjusted for any percentage increase in the CPI for
Year 7,but in no event to exceed a four percent(4%)increase and in
no event to be less than the Year 7 Annual Maintenance Fee (the
"Year 8 Annual Maintenance Fee");
(i) Year 9(January 1,2009-December 31,2009):The Year 8 Annual
Maintenance Fee;
(j) Year10(January 1,2010-December 31,2010):The Year 8 Annual
Maintenance Fee;
(k) Year 11 (January 1, 2011 - December 31, 2011): The Year 8
Annual Maintenance Fee; and
(1) Year 12 (January 1, 2012 - December 31, 2012): The Year 8
Annual Maintenance Fee.
FINALMaintenanceAgreementStadium.9_4015.009 8 04/12/01 =_
6.2 Annual Maintenance Fee Due Dates.
(a) The Storm shall be entitled to the credit of the Annual Maintenance
Fee in installments each year during the Maintenance Term as follows:
1. Ten percent(10%)of the applicable Annual Maintenance Fee
will be credited to the Storm on or before March 1 st each year during the Maintenance Term; and
2. Fifteen percent(15%)of the applicable Annual Maintenance
Fee will be credited to the Storm on or before April 15th, May 15th, June 15th, July 15th,August
15th, and September 15th of each year during the Maintenance Term.
(b) Each credit described in this Section 6.2 shall be referred to herein as
a"Maintenance Fee Installment Credit."
6.3 Offset of Annual License Fees For Maintenance and Operations of
Stadium. Pursuant to Section 4.5 of the License Agreement,the Storm shall be entitled to offset its
obligation to pay each License Fee Installment Payment due under the terms of the License
Agreement by an amount equal to any Maintenance Fee Installment Credit to which the Storm is
entitled hereunder. The Storm acknowledges and agrees that it shall be "paid" the Annual
Maintenance Fee through the credit of the Annual License Fee and that in no event will the Agency
be required to provide the Storm with any other form of payment.
7. Capital Repairs.
7.1 Responsibility. Except as set forth in Section 7.4 below, the Agency shall
be responsible for the cost of all Capital Repairs.
7.2 Notice. In the course of its performance of the maintenance and upkeep of
the Stadium,the Storm may learn of items or facilities in need of Capital Repairs. The Storm agrees
-to notify the Agency of such items which are in need of capital repairs within five working days of
any such discovery. The Agency, at its sole option, may cause the Capital Repair to be remedied,
within a reasonable time, or may request that such Capital Repair be remedied by the Storm upon
mutually agreeable terms and conditions.
7.3 Safety Precautions. In the event that during the course of performing the
services required pursuant to this Agreement the Storm discovers a condition which may require
Capital Repair but which may result in injury to person or property prior to such repair, the Storm
shall immediately notify the Agency of such condition and shall take such steps as are reasonably
necessary to secure the area and prevent the occurrence of any injury or damage. The Agency shall
reimburse the Storm for reasonable costs incurred by the Storm under this Section 7.3 within ten(10)
business days of the receipt by the Agency of documentation reasonably satisfactory to the Executive
Director evidencing the costs incurred by the Storm.
7.4 Storm Responsibilities.
FINALMaintenanceAgreementStadium.9_4015.009 9 04/12/01
(a) Electronic Message Board. The Storm shall be responsible for and
shall undertake any and all maintenance and Capital Repairs in connection with the Electronic
Message Board at its sole cost and expense.
(b) Tri-Visions. The Storm shall be responsible for and shall undertake
any and all maintenance and Capital Repairs in connection with the Tri-Visions.
(c) Insurance. In the event that any item in need of Capital Repair is
covered by any insurance maintained by the Storm, the Storm agrees that it shall submit whatever
claims are necessary and shall immediately upon receipt provide the Agency with any insurance
proceeds collected by the Storm in connection with such Capital Repair or cause the same to be
repaired or replaced at the sole cost and expense of the Storm.
8. Alterations. The Storm will not make any improvements or alterations, whether
structural or nonstructural, to the Stadium without first obtaining the prior written approval of the
Executive Director, which approval shall not be unreasonably withheld. Any agreed upon
improvements or alterations,will be made or installed only with the written permission and through
the Agency. Any alterations made by the Storm prior to the Commencement Date are deemed
approved by the Executive Director.
9. Insurance. The Storm shall maintain insurance as set forth in Section 13 of the
License Agreement at all times during the term of this Agreement.
10. Assignment.
10.1 Assignment by the Storm. Neither this Agreement nor any part hereof may
be assigned by the Storm without the prior written consent of the Executive Director which consent
may not be unreasonably withheld. Any approved assignee will be subject to all of the terms and
conditions of this Agreement and the continuing Guaranty will remain in full force and effect.
Notwithstanding the foregoing,the Agency will release the Guaranty upon the demonstrated ability
of the proposed assignee to provide the Agency with equal assurances of protection of the proposed
assignee's ability to perform the obligations of the Storm hereunder; such release, if any will be
made in the sole and absolute discretion of the Agency.
10.2 Assignment by the Agency. The Agency may assign this Agreement
concurrently with an assignment of the License;provided,however,that in the event that the Agency
assigns the License and this Agreement to an entity who is not reasonably approved by the Storm
as set forth in Section 14.2 (c) of the License, the termination provisions of Section 5.2 of this
Agreement shall no longer remain in effect.
11. Guaranty. The Storm is a wholly owned subsidiary'of Mandalay and under the
Guaranty Mandalay agrees to guaranty each and every obligation of the Storm incurred pursuant to
or in furtherance of this Agreement. The execution and delivery of the Guaranty by Mandalay is a
condition precedent to the Agency entering into this Agreement. But for the provision of the
Guaranty,the Agency would not be entering into this Agreement with the Storm and the Agency is
materially relying on such Guaranty.
FINALMaintenanceAgreementStadium.9_4015.009 10 04/12/01
12. Controlling Law Venue. This Agreement and all matters relating to it shall be
governed by the laws of the State of California and any action brought relating to this Agreement
shall be held exclusively in a state court in the County of Riverside.
13. Litigation Expenses and Attorneys' Fees. If either party to this Agreement
commences any legal action against the other party arising out of this Agreement, the prevailing
party shall be entitled to recover its reasonable litigation expenses, including court costs, expert
witness fees, discovery expenses, and attorneys' fees.
14. Mediation. The parties agree to make a good faith attempt to resolve any disputes
arising out of this Agreement through mediation prior to commencing litigation. The parties shall
mutually agree upon the mediator and share the costs of mediation equally. If the parties are unable
to agree upon a mediator, the dispute shall be submitted to JAMS/ENDISPUTE ("JAMS") or its
successor in interest. JAMS shall provide the parties with the names of five qualified mediators.
Each party shall have the option to strike two of the five mediators selected by JAMS and thereafter
the mediator remaining shall hear the dispute. If the dispute remains unresolved after mediation,
either party may commence litigation.
15. Execution. This Agreement may be executed in several counterparts,each of which
shall constitute one and the same instrument and shall become binding upon the parties when at least
one copy hereof shall have been signed by both parties hereto.In approving this Agreement,it shall
not be necessary to produce or account for more than one such counterpart.
16. Status. At all times during the term of this Agreement, the Storm, its agents,
contractors and employees, shall be and remain independent contractors,and shall not be considered
to be agents, employees,partners or joint venturers of the Agency or its affiliates or designees.
17. Indemnification and Hold Harmless. The Agency and the Storm shall each
indemnify,defend and hold harmless,the other party,and their respective agents,officers,members,
managers, employees, contractors and affiliated and related entities from any and all losses or
damage and from any and all liability, suits, actions or claims brought or made by any person or
persons arising or resulting from any and all activities and operations of a particular party,that parry's
agents,employees,contractors,members,managers,affiliates,successors and assigns arising out of
the performance of this Agreement to the maximum extent permitted by law.
18. Destruction.
18.1 Restoration. If,during the Term,the Stadium is totally or partially destroyed
from any cause covered by insurance of the City,the Agency or the Storm,which renders the facility
totally or partially inaccessible or unusable and, if under the existing laws, the restoration can
reasonably be completed using such insurance proceeds by the earlier of(i) within one hundred
eighty (180) days after the destruction, or (ii) thirty (30) days prior to the opening day of the
upcoming baseball season, the Agency shall cause the Stadium to be restored to substantially the
same condition as it was in immediately before destruction,and such destruction shall not terminate
this Agreement.
FINALMaintenanceAgreementStadium.9_4015.009 11 04/12/01
18.2 Termination. If the restoration cannot be made in the time stated above in
subsection 18.1,then within fifteen(15)business days after the parties determine that the restoration
cannot be made in said time,the Storm may terminate this Agreement immediately by giving notice
to the Agency. If the Storm fails to terminate this Agreement,the Agency,at its election,may either
terminate this Agreement,or restore the facility within a reasonable time,and this Agreement shall
continue in full force and effect.
18.3 Baseball Season. When such destruction occurs during the baseball season,
the Storm may conduct the remainder of its home games during that season within some other
facility without impairment of any of its rights hereunder and the Annual Maintenance Fee for that
season due hereunder shall be equitably adjusted.
19. Events of Default by the Storm and the Agency's Remedies.
19.1 Event of Default by the Storm. The following events are hereinafter referred
to as "Events of Default by the Storm:"
(a) The Storm's failure to keep, perform and observe each and every
promise, covenant, condition and agreement set forth in this Agreement on its part to be kept,
performed or observed within thirty (30) days after written notice of default thereunder from the
Agency, except where fulfillment of the Storm's obligation requires activity over a period of time
and the Storm shall have commenced to perform whatever may be required to cure the particular
default within ten(10)days after such notice and continues such performance diligently and without
interruption except for causes beyond its control; and
(b) Any Event of Default by the Storm as set forth in Section 22 of the
License Agreement.
19.2. No Waiver. No waiver by the Agency of any default on the part of the Storm
in the performance of any of the terms, covenant, or conditions hereof to be performed, kept or
observed by the Storm shall be or be construed to be a waiver by the Agency of any other or
subsequent default in performance of any of said terms, covenants and conditions.
19.3. Agency Remedies. If any of the Events of Default by the Storm enumerated
in this Section occur and after due notice as provided herein,the Storm has failed to cure or correct
such default,then, in addition to any and all rights and remedies of the Agency hereunder and/or by
law provided, the Agency shall have the right:
(a) To declare the Term hereof ended and to terminate this Agreement.
(b) To request in writing a written report from the Storm concerning all
of its debts and obligations, financial status and prospective income. If such report is not delivered
to the Agency within one month thereafter,prepared by the Storm's accountants,it shall be the right
of the Agency's representatives and accountants to inspect all books of accounts and records of the
Storm for the purpose of obtaining such information. From the date of such request,the Storm shall
not make any further arrangements for the presentation of any such event in the Stadium unless
FINALMaintenanceAgreementStadium.9 4015.009 12 04/12/01
authorized in writing by the Agency to do so. The Storm shall be permitted to continue to present
any event that is under contract at such time to take place in the Stadium. The Storm shall also be
permitted to finish out all or part of the remainder of its season. Upon receiving the financial
information above specified and examining the same,it shall be the right,but not the obligation, of
the Agency to declare the Term hereof ended,to specify the termination date,and on said termination
date to re-enter the Stadium and remove all persons connected with the Storm therefrom and the
Storm shall have no further claim thereon or hereunder.
(c) The remedies given to the Agency in this section shall be in addition
and supplement to all other rights or remedies which the Agency may have under the laws then in
force.
(d) The Storm hereby waives any and all rights of redemption granted by
or under any present or future law,or statute,arising in the event it is evicted or dispossessed for any
cause or in the event the Agency obtains or retains possession of the Stadium or any part thereof in
any lawful manner.
19.4. Mitigation. If the Event of Default of the Storm enumerated in Section 19.1
can be cured, corrected or mitigated by the Agency, the Agency may take such action as it deems
necessary and appropriate to cure,correct or mitigate such default,but without any obligation to do
SO.
20. Events of Default by the Agency and the Storm's Remedies.
20.1. Event of Default by the Agency. The Agency's failure to keep,perform and
observe each and every promise, covenant, condition and agreement set forth in this Agreement,
including without limitation the credit of the Annual Maintenance Fee, on its part to be kept,
performed or observed within thirty (30) days after written notice of default thereunder from the
Storm, except where fulfillment of the Agency's obligation requires activity over a period of time
and the Agency shall have commenced to perform whatever may be required to cure the particular
default within ten(10)days after such notice and continues such performance diligently and without
interruption except for causes beyond its control is hereinafter referred to as an"Event of Default
by the Agency:"
20.2. No Waiver. No waiver by the Storm of any default on the part of the Agency
in the performance of any of the terms, covenants, or conditions hereof to be performed, kept or
observed by the Agency shall be or be construed to be a waiver by the Storm of any other or
subsequent default in performance of any of said terms, covenants and conditions.
20.3. Storm Remedies. If the Event of Default by Agency enumerated in Section
20.1 of this Agreement occurs and after notice as provided herein,the'Agency has failed to cure or
correct, then in addition to any and all rights and remedies of the Storm hereunder and/or by law
provided, it shall be the right of the Storm to declare the Term ended and to terminate this
Agreement by written notice to the Agency.
F[NALMaintenanceAgreementStadium.9_4015.009 13 04/12/01
20.4. Mitigation. Ifthe Event ofDefault ofthe Agency enumerated in Section 20.1
can be cured, corrected or mitigated by the Storm, the Storm may take such action as it deems
necessary and appropriate to cure,correct or mitigate such default, but without any obligation to do
so.
20.5. Other Remedies. The remedies given to the Storm in this section shall be
in addition to and supplemental to all other rights or remedies which the Storm may have under the
laws then in force.
21. Further Assurances. The Agency and the Storm will each take any and all other
actions, and execute and deliver any and all other documents, as may be required or reasonably
requested in order to effectuate the terms and provisions set forth in this Agreement.
22. Authority. The Agency and the Storm each represent and warrant to the other party
that they have all necessary right, power and authority to enter into this Agreement, and to fully
perform each and all of their respective obligations hereunder.
23. Other Claims. The agreement herein is not intended to deprive either party of any
claims it may have against Lakeside or any related entity nor shall it obligate either party to assume
any of Lakeside's liabilities under the Letter Agreement or the Stadium Lease.
24. Non-Discrimination. The Storm herein covenants by and for itself and any
successors in interest that there shall be no discrimination against or segregation of, any person or
group of persons on account of race, color, creed, religion, sex,marital status, handicap, national
origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
Stadium,nor shall the Storm itself or any person claiming under or through it establish or permit any
such practice or practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, subtenants, or vendees of the Stadium. The foregoing
covenants shall run with the land and shall survive the termination of this Agreement, and any
contracts, subleases, agreements, licenses or other instruments entered into pursuant to this
Agreement. The Storm shall refrain from restricting the rental, lease or license of the Stadium on
the basis of race, color, creed,religion, sex,marital status,handicap,national origin or ancestry of
any person. All such leases, subleases, licenses or contracts shall contain or be subject to
substantially the following nondiscrimination or nonsegregation clauses:
(a) In leases, subleases and licenses: "The tenant herein covenants by and for
himself or herself,his or her heirs, executors, administrators and assigns, and all persons claiming
under or through him or her, and this instrument is made and accepted upon and subject to the
following conditions: "There shall be no discrimination against or segregation of, any person or
group of persons on account of race,color,creed,religion,sex,marital status,handicap,ancestry or
national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the
premises herein leased nor shall the tenant himself or herself, or any person claiming under or
through him or her, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection,location,number,use or occupancy of tenants,subtenants
or vendees in the premises herein leased."
FINALMaintenanceAgreementStadium.9 4015.009 14 04/12/01
(b) In contracts: "There shall be no discrimination against or segregation of,any
person, or group of persons on account of race, color,creed,religion, sex,marital status,handicap,
ancestry or national origin, in the lease, sublease,transfer, use,occupancy,tenure or enjoyment of
the premises,nor shall the transferee himself or herself or any person claiming under or through him
or her, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location,number, use or occupancy of tenant, subtenants, or vendees of
the premises."
25. Notice. All notices,requests,demands or documents which are required or permitted
to be given or served hereunder shall be in writing and delivered personally or delivered by United
States mail, postage prepaid, certified return receipt requested, or a national or regional overnight
courier(e.g., FedEx, Overnight Express, etc.)addressed as follows:
To the Agency at: The Redevelopment Agency of the City of Lake Elsinore
130 S. Main Street
Lake Elsinore, California 92530
Attn: Executive Director
Tel: (909) 674-3124
Fax: (909) 674-2392
with a copy to: Barbara Zeid Leibold, Esq.
Van Blarcom, Leibold, McClendon& Mann, PC
307 E. Chapman
Orange, California 92866
Tel: (714) 639-6700
Fax: (714) 639-7212
To the Storm: Storm
500 Diamond Drive
Lake Elsinore, California 92531
Tel: (909) 245-4487
Fax: (909) 245-0308
Attn: General Manager
with a copy to: Loyd E. Wright III, Esq.
Law Offices of Loyd E. Wright III
3991 MacArthur Boulevard, Suite 175
Newport Beach, California 92660
Tel: (949) 833-8844
Fax: (949) 833-8898
with a copy to: Paul Schaeffer c/o Mandalay Pictures
Mandalay Sports Entertainment LLC
5555 Melrose Avenue, Lewis Building
Hollywood, California 90038
Tel: (323)956-8759
FINALMaintenanceAgreementStadium.9_4015.009 15 04/12/01
Fax: (323)862-2233
Notice shall be deemed to have been delivered only upon actual delivery to the intended addressee
in the case of either personal service or courier. The addresses for purposes of this Section 23 may
be changed by giving written notice of such change in the manner provided herein for giving notices.
Unless and until such written notice is delivered,the latest information stated by written notice, or
provided herein if no written notice of change has been delivered, shall be deemed to continue in
effect for all purposes hereunder.
26. Severability. The invalidity or illegality of any provision shall not affect the
remainder of this Agreement and all remaining provisions shall,notwithstanding any such invalidity
or illegality, continue in full force and effect.
27. Administration. Unless clearly indicated otherwise,any action,decision,direction,
notice or approval to be given by the Agency hereunder may be given by the Executive Director,
provided, however that the Executive Director, in his/her absolute discretion may determine that
such matter must be submitted to the Agency Board. Unless clearly indicated otherwise,any action,
decision, direction, notice or approval to be given by the Storm hereunder may be given by the
Storm's General Manager,provided,however that the General Manager in his/her absolute discretion
may determine that such matter must be submitted to the Storm's Board of Directors.
IN WITNESS WHEREOF, the parties have executed this Agreement on the respective
dates set forth below.
STORM LLC, a California limited liability
corporation
DATED: r/ , 2001 By:
Pau Schaeffer, Vice Ch an
FINALMaintenanceAgreementStadium.9_4015.009 16 04/12/01
REDEVELOPMENT AGENCY OF THE
CITY OF LAKE ELSINORE, a public
body, corporate and politic
DATED: April 19, , 2001 $
7elly, Chairpers
ATTEST:
Deputy4Ae4ncyCler,.
APPROVED AS TO FORM:
VAN BLARCOM, LEIBOLD,
MCCLENDON & MANN, P.
ency Ger(ejk Counsel
a
FINALMaintenanceAgreementStadium.9_4015.009 17 04/12/01
EXHIBIT "A"
SITE LEGAL DESCRIPTION
PARCEL A:
PARCEL 3, AS SHOWN BY PARCEL MAP 27852, ON FILE IN BOOK 182 PAGES 19
THROUGH 24, INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY,
CALIFORNIA.
PARCEL B:
PARCEL 2, AS SHOWN BY PARCEL MAP 27852, ON FILE IN BOOK 182 PAGES 19
THROUGH 24, INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY,
CALIFORNIA.
FINALMaintenanceAgreementStadium.9_4015.009 Exhibit "A" 04/12/01 `
EXHIBIT "B"
SITE MAP
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FINALMaintenanceAgreementStadium.9_4015.009 Exhibit "B" 04/12/01
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EXHIBIT "C"
SCOPE OF SERVICES -ROUTINE MAINTENANCE
The following items of Routine Maintenance shall be performed by the Storm on an ongoing
periodic basis as often as necessary in order to ensure that the Stadium is maintained in a first-class
condition as required by the License:
(a) groundskeeping and maintenance of the surface of the playing field, including
mowing, seeding, fertilizing, marking lines, installing and removing bases and the
pitcher's mound,resodding and adding brick dust and infield amendments including
Turfus.
(b) grounds keeping and maintenance of all other grasses, shrubs, flowers and trees,
inside the Stadium bowl and potted plant materials on mezzanine;
(c) painting the Storm Office and re-application of protective materials to the Stadium
seats;
(d) cleaning all portions of the Stadium immediately after each event held at the
Stadium;
(e) maintenance of the scoreboards Tri-Visions, the Electronic Message Board and/or
advertising panels,including but not limited to the replacement of isolated bulbs in
connection therewith;
(f) maintenance of the public address system, amplifiers and control panels;
(g) readying the playing field each year during the Term for the upcoming baseball
season;
(h) readying the playing field for events other than baseball games and converting the
field back to its normal condition after it has been used for such events;
(i) clean out all drains;
(j) maintain,repair and replace(if necessary)the sound system with the exception of the
speakers which shall be the responsibility of the Agency;
(k) wipe Stadium seats; a
(1) tighten hardware;
(m) perform all items of baseball field routine maintenance in accordance with the
schedule entitled "Lake Elsinore Diamond Stadium Baseball Field Routine
Maintenance"which is attached hereto as Attachment No. 1.
FINALMaintenanceAgreementStadium.9_4015.009 Exhibit "C" 04/12/01
Attachment No. 1
to Exhibit "C"
LAKE ELSINORE DIAMOND STADIUM
BASEBALL FIELD ROUTINE MAINTENANCE
DAILY WEEKLY MONTHLY QUARTERLY ANNUALLY
FIRST DAY OF EACH HOME STAND
Paint foul lines
Repaint Storm Logo
Add infield dirt mix
"GAME DAY"
Cut grass X
Clean dug-outs X
Repair bullpen mounds X
Drag &water warning track X
Repair pitcher's mound and home plate X
Clean dirt off grass edges with shovel x 3
Rake infield dirt X
Nail drag X
Roll soft areas X
Screen drag X
Water dirt at night X
Screen drag before batting practice
X
Water dirt areas X 4
Clean two sets of bases X
Set Geo-tex around batting cage and pitcher's
mound X
Hand water all dry areas in the grass X '
Chalk Base lines and batter's box X
Drag and rake infield after 5th inning X
Raise flags X
"NON-GAME DAY"
Fertilize Grass 2X!week
FINALMaintenanceAgreementStadium.9_4015.009 Exhibit_"C" 04/12/01
DAILY WEEKLY MONTHLY QUARTERLY ANNUALLY
Aerate X
Verticut As
needed
Top Dress infield turf X
Edge turf 2X/week
"ALL STAR BREAK"
*Perform As Soon As Possible "
Re-sod all bad areas
Fertilize
Aerate
Top dress
Add brick dust clay for pitcher's mound
a
FINALMaintenanceAgreementStadium.9_4015.009 Exhibit "C" 04/12/01
EXHIBIT "D"
SCOPE OF SERVICES
STORM GAMES AND OTHER STORM EVENTS
The Storm will provide the following services:
A. STADIUM BOWL/FUN ZONE AREA.
FOLLOWING EACH EVENT:
Seating and Concourse Area:
(a) Collect and remove all major debris
(b) Hose down floors and seats
(c) Wipe down all stadium seats
(d) Squeegee floor of stadium bowl
(e) Sweep concourse
(f) Spot mop concourse floor
(g) Wipe down counter tops at concession stands
(h) Wipe down turnstiles and entry gates
(i) Wipe down all hand rails
0) Clean restrooms
Restroom Services:
(a) Empty and wipe out all waste paper receptacles
(b) Empty sanitary napkin containers and replace insert
(c) Polish all metal and mirrors
(d) Clean and disinfect wash basins, toilet bowls and urinals
(e) Disinfect underside and tops of toilet seats
(f) Spot clean tile walls and toilet partitions
(g) Spot clean walls around wash basins
(h) Clean floors with a germicidal solution
(i) Refill soap, towel,tissue and seat cover dispensers
SEMI-WEEKLY SERVICE:
(a) Pour clean water down floor drains to prevent sewer gases from escaping
WEEKLY SERVICES:
A. Wash down ceramic tile walls and toilet compartment partitions
B. Perform high dusting
MONTHLY SERVICES:
FINALMaintenanceAgreementStadium.9_4015.009 Exhibit "D" 04/12/01
(i) Brush down door and ceiling vents
(ii) Machine scrub and reapply finish to all hard surface floors
(iii) Clean light fixtures on concourse and in restrooms
2. LUXURY BOXES AND PRESS BOX.
FOLLOWING EACH EVENT:
1. Collect and remove trash
2. Vacuum carpets
3. Wipe down counter tops and chairs
4. Clean inside windows
5. Police and clean stairwell and elevators(including polishing of elevator doors)
6. Clean restroom- see restroom specifications (paragraph A)
3. LOWER LEVEL. (Includes Clubhouse areas, umpire room, tunnels, stairways, dugouts,
training room, coaches room, stadium office, etc.)
FOLLOWING EACH EVENT:
l. Collect and remove trash
2. Vacuum carpeted areas
3. Sweep and wet mop hard surface floors
4. Clean restroom and shower rooms (see restroom detail specification).
D. PARKING LOT A B. AND C.
FOLLOWING EACH EVENT:
l. Police parking lots—remove all major debris
E. RETAIL STORE.
FOLLOWING EACH EVENT:
l. Collect and remove all trash
2. Vacuum floors
3. Spot clean glass display cases
4. Dust as necessary
r
F. DIAMOND CLUB. (Seating Area and Restrooms Only).
l. Collect and remove trash
2. Vacuum carpeted areas
3. Sweep and wet mop hard surfaces floors
4. Knock down cobwebs
FINALMaintenanceAgreementStadium.9_4015.009 Exhibit "D" 04/12/01
5. Wipe down entry doors, door jambs
6. Wipe down tables and chairs
7. Dust pictures and fixtures
Restrooms:
1. Empty and wipe out all waste paper receptacles
2. Empty sanitary napkin containers and replace insert
3. Polish all metal and mirrors
4. Clean and disinfect wash basins, toilet bowls and urinals
5. Disinfect underside and tops of toilet seats
6. Spot clean tile walls and toilet partitions
7. Spot clean walls around wash basins
8. Clean floors with a germicidal solution
9. Refill soap, towel, tissue and seat cover dispensers
G. MISCELLANEOUS TASKS -ALL AREAS. (AS REQUIRED)
1. Knock down cobwebs
2. Clean air registers
3. Wipe down entry doors,door jambs
4. Wipe down display signage
WEEKLY:
1. Machine scrub and re-coat hard surface floors (Does not include concrete
floors).
H. DURING STORM GAMES AND OTHER STORM EVENTS.
The "game shift crew" will provide the following services between the hours of 3:00 p.m. through
11:00 p.m.during Storm Games and Other Storm Events. The game shift crew will include female employee
to clean women's restroom and male employee to clean men's restrooms. This is necessary so that restroom
inspections and cleaning can take place without closing the restrooms during game time. (NOTE:hours may
vary depending on game and schedule).
1. Remove trash as required
2. Sweep debris from concourse and stadium bowl
3. Police restrooms
4. Re-stock restrooms
5. Perform minor maintenance to toilets, urinals, and sinks
6. Remove spills
7. Wipe down hand rails
8. Police stairwells and elevators
9. Police luxury boxes and press box
10. Spot clean glass
11. Perform preliminary cleaning of restrooms upon departure of crowd _
FINALMaintenanceAgreementStadium.9_4015.009 Exhibit "D" 04/12/01
I. ADMINISTRATIVE OFFICES 5 DAY SERVICE -
MONDAY THROUGH FRIDAY
DAILY SERVICES:
1. Sweep hard surface floors with chemically treated dust mop
2. Vacuum all carpeted areas
3. Spot clean composition floors and carpets
4. Dust desks, chairs and all other office furniture
5. Clean glass desk tops
6. Dust desk accessories
7. Properly position furniture in offices
8. Empty all waste baskets and carry trash to pick up area
9. Spot clean door, door frames and counters
10. Spot clean partition and door glass
11. Spot clean around wall switches
12. Clean and polish drinking fountains
13. Check doors and windows upon completion of work assignments
WEEKLY SERVICES:
1. Dust horizontal surfaces
2. Fully vacuum all carpets
3. Maintain janitor's closet
MONTHLY SERVICES:
1. Perform high dusting i.e., door sashes and tops of partitions
2. Dust picture frames and clean glass
3. Brush down wall and ceiling vents
4. Thoroughly vacuum upholstered furniture as needed
5. Dust Venetian blinds
6. Machine scrub and reapply finish to all hard surface floors
a
FINALMaintenanceAgreementStadium.9_4015.009 Exhibit "D" 04/12/01
EXHIBIT "E"
GUARANTY AND AGREEMENT
OF
MANDALAY SPORTS ENTERTAINMENT LLC
THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, a public body
corporate and politic(the"Agency")and STORM LLC,a California limited liability company(the"Storm")
have entered or will enter into that certain Stadium Field and Maintenance Agreement (the "Agreement"),
which Agreement provides in part that MANDALAY SPORTS ENTERTAINMENT LLC, a California
limited liability company(the"Guarantor")shall make and deliver a guaranty as provided in said Agreement.
Except as expressly defined herein, all terms shall have the same meanings as used in the Agreement.
RECITALS
A. The Storm is a wholly owned subsidiary of Guarantor.
B. The Guarantor's execution of this Guaranty is a condition precedent but for which the Agency
would not execute the Agreement.
NOW THEREFORE, in consideration of the execution of the Agreement, and of other valuable
consideration, receipt of which is hereby acknowledged:
1. Guarantor guarantees to Agency the full,timely and faithful performance by the Storm of all
of its obligations, duties, promises, covenants and agreements as set forth in the Agreement.
2. This Guaranty is unconditional and may be enforced directly against the undersigned. No
extensions,modifications or changes to the Agreement shall release the undersigned or affect this Guaranty
in any way, and the undersigned waives notification thereof. Notwithstanding the foregoing,this Guaranty
may be released in the sole and absolute discretion of the Agency as set forth in Section 10.1 of the
Agreement.
3. With the exception of: 1)being provided with notices under the Agreement;and 2) Civil Code
Sections 2810 and 2839,the undersigned hereby waives all ofthe suretyship provisions ofthe California Civil
Code Sections 2788 through 2855.
4. Guarantor hereby waives and agrees not to assert or take advantage of(a)any right to require
Agency to proceed against the Storm (or any guarantor other than the undersigned) or to pursue any other
remedy in the Agency's power before proceeding against the Guarantor, and (b) any duty on the part of
Agency to disclose to Guarantor any facts Agency or City now or hereafter know about the Site, the
Agreement,or the Storm,regardless of whether Agency has reason to believe that any such facts materially
increase the risks beyond that which Guarantor intends to assume or has reason to believe that such facts are
unknown to Guarantor or has a reasonable opportunity to communicate such facts to Guarantor, it being
understood and agreed that Guarantor is fully responsible for being and keeping informed of all circumstances
regarding the Site,the Agreement,the obligations of the Storm,the financial condition of the Storm, and of
all circumstances bearing on the risk of any obligation by Storm hereby guaranteed.
FINALMaintenanceAgreementStadium.9_4015.009 Exhibit "E" 04/12/01
5. The obligations of Guarantor hereunder are independent of the obligations of the Storm and,
in the event of default hereunder, a separate action or actions may be brought and prosecuted against
Guarantor(or any other guarantor) whether or not the Storm (or any other guarantor) is joined therein or a
separate action or actions are brought against Storm.
6. In the event of any litigation between Agency and Guarantor arising out of this Guaranty, the
prevailing party shall be entitled to recover its reasonable costs and attorney's fees.
7. No provisions of this Guaranty can be waived nor can Guarantor be released from the
obligations hereunder except by a writing duly executed by the Agency. This Guaranty may not be revoked
by Guarantor or,if Guarantor dissolves,becomes insolvent,bankrupt,or otherwise ceases to do business,the
trustee or administrator of Guarantor, and any attempted revocation by Guarantor or such trustee or
administrator, shall be null and void and shall not in any manner release or discharge Guarantor or such
trustee or administrator from liability under this Guaranty.
8. The Agency may assign this Guaranty. When so assigned,Guarantor shall be bound as above
to the assignees without in any manner affecting Guarantor's liability hereunder.
The Agency shall give Guarantor thirty (30) days notice prior to any assignment of this Guaranty.
9. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or
insolvency of the Storm or any successor or assignee thereof or any disaffirmance by a trustee of the Storm.
10. This Guaranty shall inure to the benefit of and bind the successors and assigns of Agency and
Guarantor.
11. Guarantor agrees that jurisdiction and venue with respect to any matter pertaining to the
Guaranty or acts or omissions hereunder shall lie exclusively with the Superior Court of the County of
Riverside, State of California, in an appropriate municipal court of that county, or in the Federal District
Court in the Central District of California. Guarantor irrevocably waives any and all defenses based upon
venue or forum non conveniens.
12. The laws of the State of California shall govern the interpretation and enforcement of this
Guaranty.
13. Guarantor represents and warrants that it has all necessary right,power and authority to enter
into this Guaranty and to fully perform its obligations hereunder and that the party executing this Guaranty
on behalf of Guarantor is fully authorized to do so and has all necessary authority to bind the Guarantor
hereto.
14. If any provision of this Guaranty shall be determined to be illegal or unenforceable by any
court of competent jurisdiction,then such determination shall not affect any other provision of this Guaranty
or the Agreement and all such other provisions shall remain in full force and effect; and if any provision of
this Guaranty is capable of two constructions,only one of which would render the provision valid,then the
provision shall have the meaning which renders it valid.
FINALMaintenanceAgreementStadium.9_4015.009 Exhibit "E" 04/12/01
IN WITNESS WHEREOF, Guarantor has executed this Guaranty this day of
) 2001.
MANDALAY SPORTS ENTERTAINMENT LLC,
a California limited liability company
By:
Paul Schaeffer, Vice Chairman
r
FLNALMaintenanceAgreementStadium.9_4015.009 Exhibit "E" 04/12/01
ATTORNMENT AND FIRST AMENDMENT TO
STADIUM FIELD AND MAINTENANCE AGREEMENT
This ATTORNMENT AND FIRST AMENDMENT TO STADIUM FIELD
AND MAINTENANCE AGREEMENT (this "Amendment"), dated for identification
purposes only as of July 15, 2007, is made by and between the REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE, a public body corporate and politic
(the "Agenc "), and the LAKE ELSINORE STORM, LP, a California limited
partnership (the "Storm")with regard to the following:
RECITALS
The following Recitals are a substantive part of this Amendment:
A. Agency and Storm's predecessor in interest (Storm, LLC, a California
limited liability company) entered into that certain Stadium Field and Maintenance
Agreement dated March 15, 2001 (the "Maintenance Agreement") to provide for the
performance by the Storm of certain field and facility maintenance services at the Site.
The term of the Maintenance Agreement was extended pursuant to that certain
Assignment, Assumption, Attornment and Nondisturbance Agreement dated as of July 1,
2004 for identification purposes by and between the Agency, Concessionaire, the Storm,
and Impact Stadium, LLC, as amended by Amendment No. 1 thereto dated July 1, 2004
(collectively, the"Attornment Agreement").
B. The Maintenance Agreement, as amended by the Attornment Agreement
and this Amendment, shall be referred to herein as the "Agreement." Capitalized terms
used herein which are not otherwise defined herein shall have the meaning ascribed to
them in the Agreement.
C. The owners of the Storm have formed Diamond Stadium Group, LLC, a
California limited liability company ("DSG"), for the purpose of managing the Site.
Concurrently herewith, Agency and DSG are entering into that certain Stadium License,
Lease and Management Agreement ("Management Agreement"). The Management
Agreement provides that DSG shall operate the Site through December 31, 2016, and
provides for two five (5) year options to extend such term. The Management Agreement
further provides for the assignment of the Maintenance Agreement by the Agency to
DSG during the term thereof, subject to certain conditions and restrictions.
D. It is a condition precedent to the Agency's entry into the Management
Agreement that the Agreement shall be amended such that (i) its term runs concurrently
with that of the Management Agreement; (ii) the Storm shall attom to DSG with respect
to its performance under the Agreement and with respect to all of its rights and
obligations under the Agreement so long as the Management Agreement is in full force
and effect; and (iii) in the event of a termination of the Management Agreement, the
Storm's attornment to DSG and Agency's assignment of the Agreement shall terminate
and be of no further force and effect.
E. It is to the mutual benefit of the parties hereto that the Agency enter into
the Management Agreement, and, accordingly, the Storm is willing to attorn to DSG and
amend the Agreement as described herein.
F. In furtherance of the purpose and intentions of the parties with respect to
the Agreement, the parties hereto agree to amend the Agreement as provided herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing Recitals and the terms
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:
1. Termination of Attornment Agreement Provisions. The Parties hereby
agree and acknowledge that, notwithstanding the language in Section 9 of the Attornment
Agreement stating that certain provisions of the Stadium Amendments (as defined in the
Attornment Agreement)shall survive the termination of the Master Lease (as defined in
the Attornment Agreement), the Parties now intend and agree to terminate any and all of
the provisions of the Attornment Agreement and/or the Stadium Amendments currently
in effect, such that any and all provisions of the Attornment Agreement and/or the
Stadium Amendments shall be of no further force and effect from and after the date of
this Amendment.
Accordingly, from and after the Effective Date of this Amendment, the
Agreement is hereby amended to delete any and all provisions effected by the Attornment
Agreement and/or the Stadium Amendments, including, without limitation,the provisions
of Section 9 of the Attornment Agreement which state that they survive the termination
of the Master Lease. As a result, from and after the Effective Date of this Amendment,
the terms and conditions of the Agreement shall consist solely of the terms and conditions
of the Maintenance Agreement, as amended by this Amendment.
2. Definitions. Section 1 of the Agreement, entitled "Definitions," is hereby
amended to add, or delete and replace in their entirety, as appropriate, the following
definitions:
"Attornment Agreement" means that certain Assignment, Assumption,
Attornment and Nondisturbance Agreement dated as of July 1, 2004 for
identification purposes by and between the Agency, Concessionaire, the Storm,
LLC, and Impact Stadium, LLC, as amended by Amendment No. 1 thereto dated
July 1, 2004.
"Attornment Period" is defined in Section 28 of this Maintenance
Agreement.
-2 -
First Amd to Maintenance Agt FINAL.doc
"DSG" means Diamond Stadium Group, LLC, a California limited
liability company.
"Expiration Date" means December 31, 2016, or such later date as may
be determined in accordance with Section 2 of this Agreement.
"First Extension Term"is defined in Section 5.2 of this Agreement.
"Maintenance Term" means the Maintenance Term defined in Section
5.1, as extended by, if applicable, the First Extension Term; and, if applicable, the
Second Extension Term.
"Management Agreement" means that certain Stadium License, Lease
and Management Agreement between the Agency and DSG dated for
identification purposes only as of July 15, 2007.
"Parties"means the Agency and Storm; "Party"means either the Agency
or Storm.
"Second Extension Term"is defined in Section 2.3 of this Agreement.
"Term" means the Maintenance Term and, if applicable, the First
Extension Term; and, if applicable, the Second Extension Term.
3. Term of Agreement. Section 5 of the Agreement, entitled "Term of
Agreement; Termination," is hereby deleted in its entirety and replaced with the
following:
5.1 Term. The term of this Agreement (hereinafter, the
"Maintenance Term") shall commence on the Commencement Date and
shall, unless earlier terminated in accordance with Sections 5.4, 18.2, 19 or
20 hereof, continue thereafter until 11:59 p.m.,Pacific Time, on December
31, 2016(the "Expiration Date").
5.2 First Extension Term. Upon the commencement of the
First Extension Term (as defined in the Management Agreement) pursuant
to and in accordance with Section 3.2 of the Management Agreement,
Storm and Agency hereby agree that the term of this Agreement shall be
automatically extended for one (1) additional period of five (5) years (the
"First Extension Term"). All of the terms and conditions of this
Agreement shall apply to such First Extension Term, and a new Expiration
Date shall automatically be established to be 11:59 p.m. Pacific Time on
December 31, 2021.
5.3 Second Extension Term. Upon the commencement of the
Second Extension Term (as defined in the Management Agreement)
-3 -
First Amd to Maintenance Agt FINAL.doc
pursuant to and in accordance with Section 3.3 of the Management
Agreement, Storm and Agency hereby agree that the term of this
Agreement shall be automatically extended for another additional period
of five (5) years (the "Second Extension Term"). All of the terms and
conditions of this Agreement shall apply to such Second Extension Term,
and a new Expiration Date shall automatically be established to be 11:59
p.m. Pacific Time on December 31, 2026.
5.4 Rights of Termination.
(a) End of Season. Either party may terminate this
Agreement, with or without cause, by giving written notice thereof to the
other party within forty-five (45) days of the last regular season Storm
Game.
(b) General Manager Trial Period. Either party may
terminate this Agreement with or without cause during the General
Manager Trial Period upon written notice thereof to the other party.
(c) Party=s Property and Offset. Upon termination
of this Agreement under this Section 5.4, all materials and equipment
purchased by either party hereunder in connection with this Agreement
shall remain that party=s property. In addition, the Storm shall be entitled
to an offset for all of the Storm=s services rendered hereunder through the
effective date of any such termination.
(d) Effect of Termination. Upon termination of this
Agreement pursuant to this Section 5.4, the provisions of Section 4.5(b) of
the License shall apply to the continued maintenance, repair and operation
of the Stadium.
4. Annual Maintenance Fee. Section 6.1 of the Agreement is hereby
deleted and replaced in its entirety with the following:
6.1 Annual Maintenance Fee. During the Maintenance Term, the
Storm shall be compensated for the performances of the services set forth herein through
the credit of the Annual Maintenance Fee which shall be in the amounts as follows:
(a) Year 1 (Commencement Date - December 31, 2001):
One Hundred Fifty One Thousand Two Hundred Thirty
Eight Dollars ($151,238.000) (the AYear 1 Annual
Maintenance Fee@);
(b) Year 2 (January 1, 2002 - December 31, 2002): One
Hundred Seventy Five Thousand Dollars (S175,000.00)
(the AYear Two Annual Maintenance Fee@);
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First Amd to Maintenance Agt FINAL.doc
(c) Year 3 (January 1, 2003 - December 31, 2003): One
Hundred Seventy Five Thousand Dollars ($175,000.00)
(the AYear 3 Annual Maintenance Fee@);
(d) Year 4 (January 1, 2004 - December 31, 2004): One
Hundred Seventy Five Thousand Dollars ($175,000.00)
adjusted for any Percentage Increase in CPI for Years 1, 2
and 3, but in no event to exceed One Hundred Ninety Two
Thousand Five Hundred Dollars ($192,500.00) or be less
than One Hundred Seventy Five Thousand Dollars
($175,000.00) (the AYear 4 Annual Maintenance Fee@);
Example: Thus, and by way of example only, in the event
that the CPI for the month of December 2003 was 180 and
the CPI For January 2001 was 170 the Year 4 Annual
Maintenance Fee would be calculated as follows:
1. December 2003 CPI less January 2001 CPI = Index
Point Change:
180 - 170 = 10.
2. Index Point Change divided by January 2001 CPI =
Percentage Change
10/170 =0.058.
3. Percentage Change multiplied by $175,000.00 =
Year 4 Additional Amount
0.058 x $175,000.00=$10,150.00
4. $175,000.00 + Year 4 Additional Amount = Year 4
Annual Maintenance Fee
$175,000.00 + $10,150.00=$185,150.00
Under this example the calculated amount of $185,150.00
is less than $192,500.00 and would be the Year 4 Annual
Maintenance Fee.
(e) Year 5 (January 1, 2005 - December 31, 2005): The Year 4
Annual Maintenance Fee adjusted for any percentage increase in
the CPI for Year 4, but in no event to exceed a four percent (4%)
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First Amd to Maintenance Agt FINAL.doc
increase and in no event to be less than the Year 4 Annual
Maintenance Fee (the AYear 5 Annual Maintenance Fee@);
Example: Thus, and by way of example only, in the event
that the CPI for the month of December 2004 was 185, the
CPI For January 2004 was 180 and the Year 4 Annual
Maintenance Fee was $185,150.00 the Year 5 Annual
Maintenance Fee would be calculated as follows:
1. December 2004 CPI less January 2004 CPI = Index
Point Change:
185 - 180 = 5.
2. Index Point Change divided by January 2004 CPI =
Percentage Change
5/180= 0.028.
3. Percentage Change multiplied by the Year 4 Annual
Maintenance Fee=Year 5 Additional Amount
0.028 x $185,150.00=$5,184.20
4. Year 4 Annual Maintenance Fee + Year 5
Additional Amount = Year 5 Annual Maintenance
Fee
$185,150.00 + $5,184.20 = $190,334.20
Under this example the calculated amount of
$190,334.20 is less than a 4% increase over the
Year 4 Annual Maintenance Fee and would be the
Year 5 Annual Maintenance Fee.
(f) Year 6 (January 1, 2006 - December 31, 2006): The Year
5 Annual Maintenance Fee adjusted for any percentage
increase in the CPI for Year 5, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 5 Annual Maintenance Fee (the AYear 6 Annual
Maintenance Fee@); and
(g) Year 7 (January 1, 2007- December 31, 2007): The Year
6 Annual Maintenance Fee adjusted for any percentage
increase in the CPI for Year 6, but in no event to exceed a
four percent (4%) increase and in no event to be less than
-6 -
First Amd to Maintenance Agt FINAL.doc
the Year 6 Annual Maintenance Fee (the AYear 7 Annual
Maintenance Fee@).
(h) Year 8 (January 1, 2008 - December 31, 2008): The Year
7 Annual Maintenance Fee adjusted for any percentage
increase in the CPI for Year 7, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 7 Annual Maintenance Fee (the AYear 8 Annual
Maintenance Fee@);
(i) Year 9 (January 1, 2009 - December 31, 2009): The Year
8 Annual Maintenance Fee adjusted for any percentage
increase in the CPI for Year 8, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 8 Annual Maintenance Fee (the AYear 9 Annual
Maintenance Fee@);
(j) Year 10 (January 1, 2010 - December 31, 2010): The
Year 9 Annual Maintenance Fee adjusted for any
percentage increase in the CPI for Year 9, but in no event
to exceed a four percent (4%) increase and in no event to be
less than the Year 9 Annual Maintenance Fee (the AYear
10 Annual Maintenance Fee@);
(k) Year 11 (January 1, 2011 - December 31, 2011): The
Year 16 Annual Maintenance Fee adjusted for any
percentage increase in the CPI for Year 10, but in no event
to exceed a four percent (4%) increase and in no event to be
less than the Year 10 Annual Maintenance Fee (the AYear
11 Annual Maintenance Fee@); and
(1) Year 12 (January 1, 2012 - December 31, 2012): The
Year 11 Annual Maintenance Fee adjusted for any
percentage increase in the CPI for Year 11, but in no event
to exceed a four percent (4%) increase and in no event to be
less than the Year 11 Annual Maintenance Fee (the AYear
12 Annual Maintenance Fee@)
(m) Year 13 (January 1, 2013 - December 31, 2013): The
Year 12 Annual Maintenance Fee adjusted for any
percentage increase in the CPI for Year 12, but in no event
to exceed a four percent(4%) increase and in no event to be
less than the Year 12 Annual Maintenance Fee (the AYear
13 Annual Maintenance Fee@);
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(n) Year 14 (January 1, 2014 - December 31, 2014): The
Year 13 Annual Maintenance Fee adjusted for any
percentage increase in the CPI for Year 13, but in no event
to exceed a four percent (4%) increase and in no event to be
less than the Year 13 Annual Maintenance Fee (the AYear
14 Annual Maintenance Fee@);
(o) Year 15 (January 1, 2015 - December 31, 2015): The
Year 14 Annual Maintenance Fee adjusted for any
percentage increase in the CPI for Year 14, but in no event
to exceed a four percent(4%) increase and in no event to be
less than the Year 14 Annual Maintenance Fee (the AYear
15 Annual Maintenance Fee@); and
(p) Year 16 (January 1, 2016 - December 31, 2016): The
Year 15 Annual Maintenance Fee adjusted for any
percentage increase in the CPI for Year 15, but in no event
to exceed a four percent(4%) increase and in no event to be
less than the Year 15 Annual Maintenance Fee (the AYear
16 Annual Maintenance Fee@);
(q) Extension Terms. During the First Extension Term, if
any, and the Second Extension Term, if any, the Storm
shall be credited the Annual Maintenance Fee in
accordance with the terms and conditions of this
Agreement in the amount of the previous year's Annual
Maintenance Fee, adjusted for any percentage increase in
the CPI for the previous year, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the previous year's Annual Maintenance Fee.
5. Notice. Section 25 of the Agreement is hereby deleted and replaced in its
entirety with the following:
25. Notice. All notices, requests, demands or documents
which are required or permitted to be given or served hereunder shall be in
writing and delivered personally or delivered by United States mail,
postage prepaid, certified return receipt requested, or delivered by a
national or regional overnight courier (e.g., FedEx, Overnight Express,
etc.) addressed as follows:
To the Agency at: The Redevelopment Agency of
the City of Lake Elsinore
130 S. Main Street
Lake Elsinore, California 92530
- 8 -
First Amd to Maintenance Agt FINAL.doc
Attn: Executive Director
with a copy to: Barbara Zeid Leibold, Esq.
Leibold, McClendon &Mann, PC
23422 Mill Creek Drive, Suite 105
Laguna Hills, California 92653
To the Storm: Storm
500 Diamond Drive
Lake Elsinore, California 92531
Attn: General Manager
with a copy to: Robert B. Lapidus, Esq.
Law Office of Robert B. Lapidus
3366 North Torrey Pines Court, Suite 210
La Jolla, CA 92037
Notice shall be deemed to have been delivered only upon actual
delivery to the intended addressee in the case of either personal service or
courier. The addresses for purposes of this Section 25 may be changed by
giving written notice of such change in the manner provided herein for
giving notices. Unless and until such written notice is delivered, the latest
information stated by written notice, or provided herein if no written
notice of change has been delivered, shall be deemed to continue in effect
for all purposes hereunder.
6. Attornment during Performance of Management Agreement. The
Agreement shall be amended to add a Section 28, as follows:
28. Attornment during Performance of Management
Agreement.
(a) Pursuant to the Management Agreement, the
Agreement has been assigned to DSG during the Attornment Period, and
DSG has assumed the rights and obligations of the Agency under the
Agreement during the Attornment Period. Storm acknowledges and
represents that it is the intent of DSG and Storm that Storm continue,
pursuant to an arrangement with DSG, to provide the services described in
this Agreement to DSG during the term of the Management Agreement.
Storm further acknowledges and represents that it shares common
controlling ownership with DSG.
(b) The Parties agree that, so long as the licenses and lease
granted to DSG in the Management Agreement are effective (the
"Attornment Period"), except for the rights and obligations set forth in this
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First Amd to Maintenance Agt FINAL.doc
Section 28, Storm shall attom to and tender all performances under the
Agreement to DSG and shall look to DSG exclusively for all of the rights
and benefits accruing under the Agreement during the term of the
Management Agreement. Storm further agrees that the Agency shall have
no liability or obligation to Storm under the Agreement during the
Attornment Period for any default by DSG under the Agreement. No
amendment of the Agreement, or waiver or delay in enforcement of any
failure to perform or other breach of the Agreement by either DSG or the
Storm during the Attornment Period shall be binding upon the Agency;
nor shall any course of dealing established between DSG and the Storm be
binding upon the Agency. If the Management Agreement is terminated,
then the attornment provided for in this Section 28 shall be rescinded and
Storm shall again be responsible to Agency for its performance under the
Agreement and shall look to Agency with respect to all rights and benefits
accruing thereunder.
(c) Notwithstanding the foregoing, during the Attornment
Period, Agency reserves the right to declare a breach under the Agreement
by the Storm and pursue any legal remedies to which it may be entitled.
In addition, Storm agrees to provide Agency with prompt written notice of
any breach by DSG under this Agreement. Agency shall have the right,
but not the obligation, to cure any default of DSG during the Attornment
Period. Storm agrees to afford Agency the right to cure any such default.
Storm shall not be permitted to terminate the Agreement during the
Attornment Period as a result of uncured breach or breaches by DSG
unless Storm has provided Agency with notice and an opportunity to cure
in accordance with Section 20 of this Agreement.
(d) Storm covenants and agrees to maintain its operations
and limited partnership formation and organization in full force and good
standing at all times during and after the Attornment Period. Failure to so
maintain its operations and legal organization, and/or failure to resume
performance of its obligations hereunder upon any termination of the
Management Agreement shall constitute a material breach of this
Agreement.
(e) Storm shall, to the maximum extent permitted by law,
indemnify, defend and hold harmless the Agency and its directors,
officers, members, managers, employees, agents, and other representatives
from any and all liability, demands, claims, costs, losses, damages,
settlements, recoveries and expenses (including, without limitation,
interest, penalties, expert witness fees, accounting fees and attorneys' fees
and costs) incurred by any of the foregoing, known or unknown,
contingent or otherwise, directly or indirectly arising from or related to
any misrepresentations or breach of any provision of this Section 28.
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First Amd to Maintenance Agt FINAL.doc
(f) Storm shall not in any event be entitled to, and hereby
waives, any right to seek damages for loss of profits or any special or
consequential damages of any kind or nature from the Agency arising out
of or in connection with this Section 28, and in connection with such
waiver Storm is familiar with and hereby waives the provision of § 1542
of the California Civil Code which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR."
(g) Storm agrees that the assignment of the Agreement by
the Agency to DSG does not constitute an assignment by the Agency
which is subject to the terms and conditions of Section 10.2 of the
Agreement. Storm further acknowledges and agrees that it has been
informed that DSG may not assign its rights under the Agreement without
the prior written consent of the Agency.
6. Accuracy of Recitals. The Parties acknowledge the accuracy of the
foregoing Recitals, which are incorporated herein by this reference.
7. Authority; Priority of Amendment. This Second Amendment is
executed by the Parties' authorized representatives. Except as expressly modified herein,
all of the terms of the Agreement shall remain unchanged and in full force and effect, and
the Parties shall continue to fulfill their respective obligations under the Agreement as
amended by this Amendment. To the extent of any conflict between the terms of the
Agreement and the terms of this Amendment, the terms of this Amendment shall control.
8. Captions. The captions appearing in this Amendment are for convenience
only and are not a part of this Amendment and do not in any way limit, amplify, define,
construe, or describe the scope or intent of the terms or provisions of this Amendment.
9. Counterparts. This Amendment may be executed in counterparts, each
of which shall be deemed an original, and all of which together shall constitute but one
and the same document.
10. Effective Date. The effective date of this Amendment is July 15, 2007.
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First Amd to Maintenance Agt FINAL.doc
IN WITNESS WHEREOF,the parties have executed this Second Amendment
as of the date first written above.
LAKE ELSINORE STORM, LP, a California
limited partnership
By:
Printed Name:
Its:
REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE, a public body, corporate
and politic
By:
Chairperson
ATTEST:
Agency Clerk
APPROVED AS TO FORM:
LEIBOLD MCCLENDON & MANN, P.C.,
Agency General Counsel
By:
Barbara Zeid Leibold
- 12 -
First Amd to Maintenance Agt FINAL.doc
ATTACHMENT "C"
ADVERTISING ELEMENTS
Starting Lineup Board Outfield Tri-Visions
Smoking Section Field Level Tri-Visions
Backlit Concourse Signs Foul Poles
"Standing"Board Turnstile Ad Sleeves
"Attendance"Board Freestanding Boards-Upcoming Events
Autograph Booth Concession Signage
Information Booth Picnic Area Signage
Haircut Station Message Center Back-light
Outfield Billboards Billboard extensions
Message Center Tri-Visions On-deck Circles
Exterior to Main Entrance Cupholders in Stadium Bowl(Std Seating)
Outfield Fence(if available) Below and Above Press Box&Luxury Suite
Sound System and Scaffolding Top of Dugouts
Freestanding Sign Beyond Fence Bathroom Signage
Entry Gates and Field Gates Inside of Dugouts
Left-Field Bullpen Retaining Wall Coaches Boxes
First Aid Room(related sponsor only-for Signage Behind Home Plate
example hospital)
Changing Tables
Video Message Boards(left field and right center
field) Shed rooftop
Pennants from parking lot light poles and main
entrance light poles
Alumni Board,pennants,banners, flags
(concourse area from concourse columns/angle
iron structure)exclusively for baseball related
honoraria
ATTACHMENT "C"
Page 1 of 1
ATTACHMENT "D"
OTHER CONTRACTS
1. City of Lake Elsinore Contract Agreement By and Between City of Lake Elsinore and
Robbins Pest Management, Inc. dated March 29, 2004.
2. Commercial Maintenance Contract By and Between City of Lake Elsinore and Lake Air
Company dated July 11, 2002.
3. Contractor's Services Agreement By and Between City of Lake Elsinore and D&S
Electric dated April 27, 2004.
4. Preventive Maintenance Agreement By and Between City of Lake Elsinore and Elite
Elevators dated July 1, 1993.
5. Security Services Agreement By and Between City of Lake Elsinore and Executive Event
Services, Inc. dated March 29, 2004.
6. Services Contract By and Between City of Lake Elsinore and Morrow Plumbing, Inc.
dated May 30, 2000.
7. Security System Agreement By and Between City of Lake Elsinore and Central Security
Services, Inc. dated November 12, 2000.
8. Maintenance Service Agreement By and Between City of Lake Elsinore and Service One
Services dated March 25, 2003.
9. Service Agreement By and Between City of Lake Elsinore and La Sierra Fire Equipment
dated August 16, 2002.
ATTACHMENT "D"
Page I of 1
ATTACHMENT "E"
LICENSES AND PERMITS
Permit No. 95-205 scoreboard
Permit No. 97-427 sign
Permit No. 97-249 sign
Permit No. 94-728 sign
Permit No. 96-208 electrical
Permit No. 96-170 mechanical
Permit No. 96-293 electrical
Permit No. 95-300 electrical
Permit No. 93-1104 main permit for building
Permit No. 93-1105 electrical
Permit No. 93-1106 mechanical
Permit No. 93-1107 plumbing
Permit No. 93-780 building permit
Permit No. 93-782 electrical
Miscellaneous Special Event Permits for past events
ATTACHMENT "E"
Page 1 of I
ATTACHMENT "F"
MAINTENANCE STANDARDS
Routine Maintenance shall include, without limitation, the following activities to be
performed on an ongoing periodic basis as often as necessary, but not less frequent than specified
in the Schedules attached hereto as Exhibit No. I and Exhibit No. 2, in order to ensure that the
Premises are maintained in a first-class condition and in accordance with NAPBL standards:
(a) readying the playing field each year during the Term for the upcoming baseball
season;
(b) grounds keeping and maintenance of the surface of the playing field, including
mowing; verticutting; aerating; seeding; fertilizing; resodding; marking lines;
raking; screen and nail dragging; installing and removing bases, the pitcher=s
mound and bullpen mounds; and adding brick dust and infield amendments
including Turfus.
(c) readying the playing field for events other than baseball games and converting the
field back to its normal condition after it has been used for such other events;
(d) clean dug-outs, bullpens, batting cage and all improvements located within the
field and playing area
(e) grounds keeping and maintenance of all grasses, shrubs, flowers and trees, inside
and outside the Stadium bowl to the curbline of the public streets along the
perimeter of the Land, including without limitation maintenance of the potted
plant materials on mezzanine and the landscaping maintenance items in
accordance with the schedule entitled "Landscaping Outside Stadium" which is
attached hereto as Exhibit No. 1;
(f) perform all building maintenance activities in accordance with the schedule
entitled "Lake Elsinore Diamond Stadium Building Maintenance" which is
attached hereto as Exhibit No. 1;
(g) ordinary maintenance of the Improvements in accordance with manufacturer's
recommendations or, in the absence of such recommendations, as necessary to
maintain the Premises in first-class condition and in accordance with NAPBL
standards;
(h) painting walls, fences, railings and all other painted surfaces and re-application of
protective materials to the Stadium seats and maintaining all exterior, painted
surfaces in a clean and presentable manner, free from chipping, cracking and
defacing marks, including prompt removal of all graffiti and defacement of any
type;
ATTACHMENT "F"
Page 1 of 9
(i) cleaning all portions of the Premises and removing all trash and debris promptly
after each event held at the Stadium and replacing the light bulbs in the
administrative offices, stores, food and beverage concession areas, and locker
room;
(j) maintenance, repair and replace (if necessary) the scoreboard, Tri-Visions, the
Video Message Boards and/or advertising panels, including but not limited to the
replacement of isolated bulbs/panels in connection therewith;
(k) maintain, repair and replace (if necessary) the sound system, including amplifiers,
control panels and speakers;
(1) slurry and stripe Parking Lots A, B and C and the access road to the maintenance
area, as necessary, but not less than every 5 years.
ATTACHMENT "F"
Page 2 of 9
Exhibit No. 1
to Attachment "F"
LAKE ELSINORE DIAMOND STADIUM
ROUTINE MAINTENANCE
LANDSCAPE OUTSIDE STADIUM
DAILY WEEKLY MONTHLY QUARTERLY ANNUALLY AS
NEEDED
Mow and edge all turf X
Fertilize x
Replace flowers X
Trim shrubs X
Trim trees x
Fertilize Slopes x
Maintain irrigation X
Booster Pump Service
Back flows
Service
BUILDING MAINTENANCE
DAILY WEEKLY MONTHLY QUARTERLY ANNUALLY AS
NEEDED
Test hot water heater pumps X
Clean Dugouts x
Fill, Rinse &Test Dugout Sump Pump & x Service
Sump Pumps 1 & 3rd base
Outfield clarifier(sump pump) X Service
Fill & Rinse, Test
Air conditioners, heaters, vents &filters X
Elevator X
Pest control X
Repair& Paint Home Run fence X
Fire Sprinklers Service
Overhead oven hoods
ATTACHMENT "F"
Page 3 of 9
DAILY WEEKLY MONTHLY QUARTERLY ANNUALLY AS
NEEDED
Service
Oil all doors X
Electrical panels X
Stadium Seats / X
Apply UV protection
Paint hand rails X
Clean out all drains X
Press box windows X
Sound System X
Roof drains X
Exhaust Fans, vents &filters X
Gates "oil' X
Alarms X
Stadium Seating X
Back flows Service
Concession roll-up doors X
Emergency Generator Testice/Load
Paint all black poles X
Paint all security lights X
Paint all gates X
Paint Fountain X
Clean &Service Fountain X
Replace lights X
Tighten Hardware X
PARKING LOT MAINTENANCE
DAILY WEEKLY MONTHLY QUARTERLY ANNUALLY AS
NEEDED
Slurry Seal & Restripe X
Repair& Replace Lights X
Repair, Replace Lights Sidewalk Historic X
Lights
ATTACHMENT "F"
Page 4 of 9
DAILY WEEKLY MONTHLY QUARTERLY ANNUALLY AS
NEEDED
Repaint Historic Sidewalk Lights X
Repaint Gates X
LOWER MAINTENANCE SHOP AREA BEHIND HOME RUN WALL
Remove All Inoperable Equipment & X
Vehicles
Maintain Fire Access X
Maintain Maintenance Building X
ATTACHMENT "F"
Page 5 of 9
ROUTINE MAINTENANCE SCHEDULE
Exhibit No. 2 to Attachment "F"
l. STADIUM BOWL/FUN ZONE AREA.
A. FOLLOWING EACH EVENT:
Seating and Concourse Area:
(i) Collect and remove all major debris and trash
(ii) Hose down floors and seats
(iii) Wipe down all stadium seats
(iv) Squeegee floor of stadium bowl
(v) Sweep concourse
(vi) Spot mop concourse floor
(vii) Wipe down counter tops at concession stands
(viii) Wipe down turnstiles and entry gates
(ix) Wipe down all hand rails
(x) Clean restrooms
Restroom Services:
(xi) Empty and wipe out all waste paper receptacles
(xii) Empty sanitary napkin containers and replace insert
(xiii) Polish all metal and mirrors
(xiv) Clean and disinfect wash basins, toilet bowls and urinals
(xv) Disinfect underside and tops of toilet seats
(xvi) Spot clean tile walls and toilet partitions
(xvii) Spot clean walls around wash basins
(xviii) Clean floors with a germicidal solution
(xix) Refill soap, towel, tissue and seat cover dispensers
B. SEMI-WEEKLY SERVICE:
Pour clean water down floor drains to prevent sewer gases from escaping
C. WEEKLY SERVICES:
(i) Wash down ceramic the walls and toilet compartment partitions
(ii) Perform high dusting
D. MONTHLY SERVICES:
(i) Brush down door and ceiling vents
ATTACHMENT "F"
Page 6 of 9
(ii) Machine scrub and reapply finish to all hard surface floors
(iii) Clean light fixtures on concourse and in restrooms
2. LUXURY BOXES AND PRESS BOX.
A. FOLLOWING EACH EVENT:
(i) Collect and remove trash
(ii) Vacuum carpets
(iii) Wipe down counter tops and chairs
(iv) Clean inside windows
(v) Polish and clean stairwell and elevators (including polishing of
elevator doors)
(vi) Clean restroom - see restroom specifications (paragraph A)
3. LOWER LEVEL. (Includes Clubhouse areas, umpire room, tunnels,stairways,
dugouts, training room, coaches room, stadium office, etc.)
A. FOLLOWING EACH EVENT:
(i) Collect and remove trash and debris
(ii) Vacuum carpeted areas
(iii) Sweep and wet mop hard surface floors
(iv) Clean restroom and shower rooms (see restroom detail
specification—Paragraph A).
4. PARKING LOT A, B, AND C.
A. FOLLOWING EACH EVENT:
Police parking lots and remove all major debris
5. RETAIL STORE.
A. FOLLOWING EACH EVENT:
(i) Collect and remove all trash
(ii) Vacuum floors
(iii) Spot clean glass display cases
(iv) Dust as necessary
ATTACHMENT"F"
Page 7 of 9
6. DIAMOND CLUB. (Seating Area and Restrooms Only).
A. FOLLOWING EACH EVENT:
Seating Area
(i) Collect and remove trash
(ii) Vacuum carpeted areas
(iii) Sweep and wet mop hard surfaces floors
(iv) Knock down cobwebs
(v) Wipe down entry doors, door jambs
(vi) Wipe down tables and chairs
(vii) Dust pictures and fixtures
Restrooms:
(i) Empty and wipe out all waste paper receptacles
(ii) Empty sanitary napkin containers and replace insert
(iii) Polish all metal and mirrors
(iv) Clean and disinfect wash basins, toilet bowls and urinals
(v) Disinfect underside and tops of toilet seats
(vi) Spot clean tile walls and toilet partitions
(vii) Spot clean walls around wash basins
(viii) Clean floors with a germicidal solution
(ix) Refill soap, towel, tissue and seat cover dispensers
7. MISCELLANEOUS TASKS - ALL AREAS.
A. (AS REQUIRED)
(i) Knock down cobwebs
(ii) Clean air registers
(iii) Wipe down entry doors, door jambs
(iv) Wipe down display signage
8. DURING STORM GAMES AND OTHER STADIUM EVENTS.
A. The "game shift crew" will provide the following services between the hours of
3:00 p.m. through 11:00 p.m. during Storm Games and Other Stadium Events. The game shift
crew will include female employee to clean women's restroom and male employee to clean
men's restrooms. This is necessary so that restroom inspections and cleaning can take place
without closing the restrooms during game time. (NOTE: hours may vary depending on game
and schedule).
(i) Remove trash promptly after each event
(ii) Sweep debris from concourse and stadium bowl
(iii) Police restrooms
(iv) Re-stock restrooms
(v) Perform minor maintenance to toilets, urinals, and sinks
ATTACHMENT "F"
Page 8 of 9
(vi) Remove spills
(vii) Wipe down hand rails
(viii) Police stairwells and elevators
(ix) Police luxury boxes and press box
(x) Spot clean glass
(xi) Perform preliminary cleaning of restrooms upon departure of
crowd
9. ADMINISTRATIVE OFFICES 5 DAY SERVICE -
MONDAY THROUGH FRIDAY
A. DAILY SERVICES:
(i) Sweep hard surface floors with chemically treated dust mop
(ii) Vacuum all carpeted areas
(iii) Spot clean composition floors and carpets
(iv) Dust desks, chairs and all other office furniture
(v) Clean glass desk tops
(vi) Dust desk accessories
(vii) Properly position furniture in offices
(viii) Empty all waste baskets and carry trash to pick up area
(ix) Spot clean door, door frames and counters
(x) Spot clean partition and door glass
(xi) Spot clean around wall switches
(xii) Clean and polish drinking fountains
(xiii) Check doors and windows upon completion of work assignments
B. WEEKLY SERVICES:
(i) Dust horizontal surfaces
(ii) Fully vacuum all carpets
(iii) Maintain janitor=s closet
C. MONTHLY SERVICES:
(i) Perform high dusting i.e., door sashes and tops of partitions
(ii) Dust picture frames and clean glass
(iii) Brush down wall and ceiling vents
(iv) Thoroughly vacuum upholstered furniture as needed
(v) Dust Venetian blinds
(vi) Machine scrub and reapply finish to all hard surface floors
ATTACHMENT "F"
Page 9 of 9
ATTACHMENT "G"
RESERVED
ATTACHMENT G
ATTACHMENT "H"
EQUIPMENT
Item Serial# Hrs Condition
Jacobson Cushman Turf-Truckster- Manual Shift 2319605 476 Good
Jacobson Cushman Turf-Truckster-Automatic Shift 2372832 390 Good
Jacobson Groom Master II 8800901663 286 Good
Ransom 5 Gang Fairway Mower 94501400168 2011 Goor
Toro Reelmaster 5100D N/A 2737 Poor
Kubota LA450A Tractor 20955 1395 Unsatisfactory
Toro Turf Sweeper 540OHL worn off 277 Fair
Geramore Rototiller attachment - - Fair
Toro Topdresser 2300 4450140338 - Fair
Lily Spreader 9990386 - Fair
Toro Greensmaster 1000 Walk Behind Mowers (2
total) - - Fair
Power Trim Edgers - - Fair
Jr. Sod Cutter - - Fair
Prol-ine 44 Rotary Mower - - Fair
Toro Boom Sprayer - - Poor
Field Lazer Striper - - Excellent
STHL Hand Blower - - Poor
Air Compressor - - Fair
Battery Charger - - Fair
Jacobson Cushman Turf-Truckster-Automatic Shift City N/A Excellent
Security Cart N/A N/A Fair
Cab Cushman for Cleaning Crew N/A N/A Poor
Cushman for Cleaning Crew N/A N/A Poor
6', 8', 22'extension ladders - _
Office Furniture ( 2 Desks, 3 Chairs) - - _
De WALT Drill Set with Batteries - - Poor
Skill Saw Warm Drive 7 '/ - - Good
Skill Jig Saw - - Good
Hand Saw - - Good
Miter Box and Saw - - Good
Misc. Screwdrivers and Drill Bits - - Good
Misc. Hand Wrenches - - Good
Tap and Dye Set - - Good
Power Hand Drill 3/8 Drive - - Good
New Copy Machine and Fax for Office - - Good
Refrigerator and Microwave Oven - - Good
ATTACHMENT "H"
Page I of 1
ATTACHMENT "I"
GUARANTY
[ATTACHED]
ATTACHMENT "I"
GUARANTY AND AGREEMENT
OF
JACOBS INVESTMENT COMPANY, LLC
This GUARANTY AND AGREEMENT OF JACOBS INVESTMENT COMPANY,
LLC (this "Guaranty') is being entered into pursuant to and in furtherance of that certain
STADIUM LICENSE, LEASE AND MANAGEMENT AGREEMENT (the "Agreement"),
dated for identification purposes only as of July 15, 2007, by and between the
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, a public body,
corporate and politic ("Agenc "), and DIAMOND STADIUM GROUP LLC, a California
limited liability company ("DSG"). Except as expressly defined herein, all terms shall have the
same meanings as used in the Agreement.
RECITALS
The following Recitals are a substantive part of this Guaranty.
A. The Agency is a redevelopment agency existing pursuant to the provisions of the
California Community Redevelopment Law (California Health and Safety Code Section 33000,
et seq.) which has been authorized to transact business pursuant to action of the City of Lake
Elsinore (the "City'
B. The City Council of the City of Lake Elsinore adopted a redevelopment plan (the
"Redevelopment Plan") for an area within the City known as the Rancho Laguna Redevelopment
Project Area III (the "Project Area") by way of its approval of Ordinance No. 815 on September
8, 1987, as thereafter amended by Ordinance No. 987 adopted on November 22, 1994.
C. Agency is the owner of certain real property located within the East Lake Specific
Plan Area and the Rancho Laguna Redevelopment Project Area III of the City of Lake Elsinore,
County of Riverside, State of California, together with all rights, privileges and easements
appurtenant thereto (the "Land"), as defined in the Agreement.
D. Many improvements are located on the Land, including a stadium, baseball field,
stadium, parking and related facilities commonly known as the "Lake Elsinore Diamond"
(collectively, the "Stadium"). The Land, the Stadium, the Personal Property (as defined in the
Agreement) and all other Improvements (as defined in the Agreement) located on the Land are
referred to collectively as the "Premises."
E. Agency has entered into certain agreements involving the Premises that are in
force as of the Effective Date and described in the Agreement as the "Stadium Operations
Contracts." Certain of the Stadium Operations Contracts have been entered into with the Storm,
LLC, a California limited liability company (the "Storm LLC"). The sole Member of Storm LLC
was Lake Elsinore Storm L.P., a California limited liability company (the "Storm LP"). Storm
LLC has been merged into Storm LP, with Storm LP being the surviving entity. Storm LP has
assumed all rights and obligations under the Stadium Operations Contracts by operation of law.
ATTACHMENT "I"
Page I
Pursuant to such Stadium Operations Contracts, Storm LP has been licensing the Stadium for
baseball games and maintaining the Stadium. An affiliate of the Storm LP, Golden State
Concessions and Catering, Inc., a California corporation ("Golden State"), has been operating the
concessions at the Stadium. Jacobs Investment Company LLC, a California limited liability
company ("Guarantor") controls DSG, Storm LP and Golden State.
F. Storm LP is the owner and operator of the "Lake Elsinore Storm," a single "A"
baseball team which is a member of the California League of the National Association of
Professional Baseball. Storm LP and the Agency desire that the Lake Elsinore Storm continue to
play its home baseball games at the Stadium. Concurrently herewith, the rights and obligations
under the Stadium Operations Contracts in favor of the Agency are assigned to DSG and
assumed by DSG pursuant to the terms and conditions set forth in the Agreement. During the
term of the Agreement, Storm LP and Golden State will attorn to DSG all of their respective
obligations under the Stadium Operations Contracts and Agency shall have no rights or
obligations of performance therein pursuant to certain amendments to the Stadium Operations
Contracts being executed concurrently herewith.
G. The owners of Storm LP have formed DSG for the purpose of managing the
Premises and entering into the Agreement. Storm LP and DSG share common controlling
ownership.
H. Guarantor's execution of this Guaranty is a condition precedent but for which the
Agency would not enter into the Agreement.
NOW THEREFORE, in consideration of the receipt of good and valuable consideration,
receipt of which is hereby acknowledged:
1. Guarantor guarantees to Agency the payment and performance obligations with
respect to full, timely and faithful performance by DSG of the obligations, duties, promises,
covenants and agreements with respect to the following provisions of the Agreement: operating
expenses set forth in Section 7.1; alterations and improvements set forth in Section 8.1; taxes,
assessments and utilities charges set forth in Article 9; maintenance, repair and alteration
obligations set forth in Section 10.2(a), (c), (d), (e) and (h), and the payment obligations set forth
in 10.5; alterations and improvements set forth in Section 10.3; mechanics liens set forth in
Section 14.1; the purchase of insurance required to be carried by DSG and payment of premiums
therefore in accordance with Section 16; and DSG's assumption of the Stadium Operations
Contracts pursuant thereto, including, without limitation, any payment and performance
obligations of DSG under the Stadium Operations Contracts for so long as the Agreement is in
effect.
2. This Guaranty is unconditional and may be enforced directly against the
undersigned. No extensions, modifications or changes to the Agreement or the Stadium
Operations Contracts shall release the undersigned or affect this Guaranty in any way.
3. With the exception of: (a) being provided with notices under the Concession
Agreement; and (b) Civil Code Sections 2810 and 2839, the undersigned hereby waives all of the
suretyship provisions of the California Civil Code Sections 2788 through 2855.
ATTACHMENT "I"
Page 2
4. Guarantor hereby waives and agrees not to assert or take advantage of (a) any
right to require Agency to proceed against DSG (or any guarantor other than the undersigned) or
to pursue any other remedy in the Agency's power before proceeding against the Guarantor, and
(b) any duty on the part of Agency to disclose to Guarantor any facts Agency or City now or
hereafter know about the Agreement, or DSG, regardless of whether Agency has reason to
believe that any such facts materially increase the risks beyond that which Guarantor intends to
assume or has reason to believe that such facts are unknown to Guarantor or has a reasonable
opportunity to communicate such facts to Guarantor, it being understood and agreed that
Guarantor is fully responsible for being and keeping informed of all circumstances regarding the
Agreement, the Stadium Operations Contracts, the obligations of DSG, the financial condition of
DSG, and of all circumstances bearing on the risk of any obligation by DSG hereby guaranteed.
5. The obligations of Guarantor hereunder are independent of the obligations of DSG
and, in the event of default hereunder, a separate action or actions may be brought and prosecuted
against Guarantor (or any other guarantor) whether or not DSG (or any other guarantor) is joined
therein or a separate action or actions are brought against DSG.
6. In the event of any litigation between Agency and Guarantor arising out of this
Guaranty, the prevailing party shall be entitled to recover its reasonable costs and attorney's fees.
7. No provisions of this Guaranty can be waived nor can Guarantor be released from
the obligations hereunder except by a writing duly executed by the Agency. This Guaranty may
not be revoked by Guarantor or, if Guarantor dissolves, becomes insolvent, bankrupt, or
otherwise ceases to do business, the manager, trustee or administrator of Guarantor, and any
attempted revocation by Guarantor or such manager, trustee or administrator, shall be null and
void and shall not in any manner release or discharge Guarantor or such manager, trustee or
administrator from liability under this Guaranty.
8. The Agency may assign this Guaranty in connection with an assignment of
Agency's rights under the Agreement. When so assigned, Guarantor shall be bound as above to
the assignees without in any manner affecting Guarantor's liability hereunder. The Agency shall
give Guarantor thirty(30) days notice prior to any assignment of this Guaranty.
9. This Guaranty shall remain in effect notwithstanding any bankruptcy,
reorganization or insolvency of DSG or any successor or assignee thereof or any disaffirmance by
a trustee of DSG.
10. This Guaranty shall inure to the benefit of and bind the successors and assigns of
Agency and Guarantor.
11. To the extent permitted by law, Guarantor agrees that jurisdiction and venue with
respect to any matter pertaining to the Guaranty or acts or omissions hereunder shall lie
exclusively with the Superior Court of the County of Riverside, State of California, in an
appropriate municipal court of that county, or in the Federal District Court in the Central District
of California. To the extent permitted by law, Guarantor irrevocably waives any and all defenses
based upon venue or forum non conveniens.
ATTACHMENT "I"
Page 3
12. The laws of the State of California shall govern the interpretation and enforcement
of this Guaranty.
13. Guarantor represents and warrants that it has all necessary right, power and
authority to enter into this Guaranty and to fully perform its obligations hereunder and that the
party executing this Guaranty on behalf of Guarantor is fully authorized to do so and has all
necessary authority to bind the Guarantor hereto.
14. If any provision of this Guaranty shall be determined to be illegal or
unenforceable by any court of competent jurisdiction, then such determination shall not affect
any other provision of this Guaranty or the Agreement and all such other provisions shall remain
in full force and effect; and if any provision of this Guaranty is capable of two constructions,
only one of which would render the provision valid, then the provision shall have the meaning
which renders it valid.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date first
written above.
JACOBS INVESTMENT COMPANY,
LLC a California limited liability company
By:
Gary Jacobs
Its: Manager
ATTACHMENT "I"
Page 4
ATTACHMENT "J"
PARKING LICENSE
[ATTACHED]
ATTACHMENT "F
PARKING LICENSE
This PARKING LICENSE (this "License"), dated as of July 15, 2007, by and between
DIAMOND STADIUM GROUP LLC, a California limited liability company ("DSG" or
"Licensee"), the CITY OF LAKE ELSINORE, a municipal corporation ("City'), and the
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, a public body,
corporate and politic ("Agency"). Agency and City shall be collectively referred to herein as
"Licensor." DSG, City and Agency are hereinafter sometimes referred to individually as a
"Party" and collectively as the "Parties."
RECITALS
The following recitals and all Exhibits to this License are substantive parts of this
License:
A. Licensee is a California limited liability company that, as of the Effective Date,
holds a leasehold interest in certain real property (the "Stadium Property") located in the City of
Lake Elsinore, County of Riverside, California, more particularly described as follows:
Stadium Property
PARCEL 2, AS SHOWN BY PARCEL MAP 27852, ON FILE IN BOOK 182
PAGES 19 THROUGH 24, INCLUSIVE, OF PARCEL MAPS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA.
B. The terms of DSG's Lease of the Stadium Property is more particularly described
in that certain Stadium License, Lease and Management Agreement of even date herewith
between DSG and the Agency (the "Lease"). All capitalized terms not defined herein shall have
the meaning set forth in the Lease.
C. The Stadium Property is the location of an approximately 7,500 fixed seat, open-
air ballpark that is a venue for Baseball Events as well as Other Permitted Uses and includes
ancillary parking and related facilities commonly known as the "Lake Elsinore Diamond."
D. The Agency is a redevelopment agency duly established by action of the City
Council of the City of Lake Elsinore and exercising governmental functions and powers pursuant
to Chapter 2 of California Community Redevelopment Law (California Health & Safety Code
§ 33000, et seg.) (the "Community Redevelopment Law"). The Agency is the fee owner of the
Property.
E. Laing-CP Lake Elsinore LLC ("Laing") is the fee owner of certain real property
("Parkin Lot C") located in the City of Lake Elsinore, County of Riverside, California, more
particularly described as follows:
Parkin Lot of C.
LOT 1, AS SHOWN BY TRACT MAP 31920-1, ON FILE IN BOOK 394
PAGES 41 THROUGH 51 INCLUSIVE, OF MAPS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA.
ATTACHMENT "J"
Page l
F. Parking Lot C is located adjacent to the Lake Elsinore Diamond and is generally
utilized for parking during Baseball Events as well as Other Storm Events and Other Stadium
Events.
G. On or about December 26, 2002, the Agency, Laing, and Civic Partners-Elsinore
LLC entered into a Disposition and Development Agreement (the "DDA"). Section 402 of the
DDA granted Laing an option to acquire Parking Lot C subject to the terms and conditions
provided therein (the "Stadium Parking Lot Option").
H. On August 24, 2004, Laing and City entered into that certain First Amended and
Restated Development Agreement covering certain property, including Parking Lot C, which was
recorded on December 17, 2004 as Document No. 1001282 in the Official Records of the
Riverside County Recorder ("Development Agreement"). Section 12.15 of the Development
Agreement sets forth additional provisions and obligations of Laing with regard to Parking Lot
C.
I. On November 14, 2005, title to Parking Lot C was transferred to Laing (by a
Grant Deed recorded as Instrument No. 1010705 on December 7, 2005 in the Official Records of
Riverside County) pursuant to its exercise of the Stadium Parking Lot Option. Concurrently
therewith, Laing, the City and the Agency entered into a Grant of Easements and Agreement
Regarding Interim Stadium Parking Replacement Plan dated November 14, 2005, (recorded as
Instrument No. 1010706 on December 7, 2005 in the official records of Riverside County) (the
"Easement") whereby Laing granted the Agency the right to use Parking Lot C for overflow
parking for the Lake Elsinore Diamond.
J. Licensor desires to grant Licensee the right to use Parking Lot C in connection
with its lease of the Stadium Property. The Lease provides for certain parking rights to be
evidenced by this License.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Licensor hereby grants to Licensee the license and other rights
set forth herein in accordance with the terms and conditions of this License.
1. Effective Date; Term. This License shall become effective upon the Lease
Commencement Date and shall continue during the term of the Lease unless earlier terminated
pursuant to Section 5.
2. License Grant. Subject to the terms and conditions set forth herein, Licensor
hereby grants to Licensee a nonexclusive license to use Parking Lot C for the purpose of
providing up to 1,500 parking spaces for overflow parking for the Lake Elsinore Diamond along
with related pedestrian and vehicular access, ingress and egress. Except as set forth herein, the
license herein granted shall be at no cost to DSG, and Licensor acknowledges that Licensee may
charge or cause to be charged fees to Stadium Property patrons for parking on Parking Lot C.
Licensee shall be entitled to retain and dispose of all revenues in connection therewith.
The parking described above to be used for purposes of overflow patron parking
for attendees of Storm Games, Other Storm Events and Other Stadium Events shall be referred to
herein as the "Licensed Area."
ATTACHMENT "J"
Page 2
3. The DDA and the Easement.
A. DDA and Easement. Pursuant to the DDA and the Easement, Laing has
agreed to (i) continue to allow parking on Parking Lot C consistent with its existing use, or (ii)
provide replacement parking ("Replacement Parking") pursuant to a "Stadium Parking
Replacement Plan" (as defined in the DDA). Licensee shall have the right to comment on any
Stadium Parking Replacement Plan proposed during the term of this License, as set forth in
Section 6 below.
B. Entry by Laing. Licensee acknowledges and agrees that any entry by
Laing onto Parking Lot C as permitted by the Easement and the performance by Laing of any of
the activities contemplated by the Easement with respect to Parking Lot C shall not be a breach
of this License.
4. Maintenance Costs.
DSG shall be responsible for paying all actual and reasonable common area
maintenance costs incurred with respect to the use of the Licensed Area, based upon a fair
allocation of usage pursuant to Section 2.4 of the Easement, which such costs to include, without
limitation, normal sweeping and restriping, lighting and electrical costs, costs for operation and
security, repairs, capital replacement and issuance.
5. Early Termination of License. The License granted herein shall continue during
the term of the Lease unless any of the following shall occur prior to the expiration of any term of
the Lease: (i) the Easement terminates as a result of Agency approval of the Stadium
Replacement Parking Plan, following completion by Laing of all required Improvements related
to the Stadium Replacement Parking Plan; (ii) the Easement is terminated for any other reason,
(iii) the Lease is terminated prior to the expiration of its term; or (iv) an event of default by DSG
occurs hereunder and is not cured within thirty (30) days of notice thereof. Upon the occurrence
of any of the foregoing, the license granted herein shall automatically terminate and be of no
further force and effect. DSG shall cease any use of the Licensed Area hereunder immediately
upon any termination of this License.
Notwithstanding the foregoing, if the termination of this License occurs during the
term of the Lease as a result of Agency approval of the Stadium Replacement Parking Plan,
Agency shall use commercially reasonable efforts to provide Licensee a license to use any
Replacement Parking provided to Agency pursuant to Section 12.15 of the Development
Agreement.
6. Stadium Parking Replacement Plan. If Laing submits a Stadium Parking
Replacement Plan during the term of this License, the Agency shall meet and confer with DSG
and provide DSG an opportunity to comment on the proposed Stadium Parking Replacement
Plan and least fifteen (15) days prior to the Agency's formal consideration and approval thereof.
Agency approval of any proposed Stadium Parking Replacement Plan shall comply with the
terms and conditions of the DDA, the Development Agreement and the Easement.
7. Senior Rights. DSG acknowledges and agrees that its rights hereunder with
respect to the Licensed Area are subordinate and subject to the rights and obligations contained
ATTACHMENT "J"
Page 3
in (i) the Stadium Operations Contracts, (ii) the Easement, (iii) the DDA, and (iv) the
Development Agreement.
8. Licensed Area Rules. Licensee acknowledges and agrees that Licensor retains
the right to establish, post and enforce reasonable rules regarding the use of Parking Lot C,
including without limitation, the prohibition of overnight parking. Such rules shall be consistent
with City Municipal Code requirements.
9. Condition of Licensed Area- No Licensee Alterations. Licensee shall be
deemed to have: (a) inspected the Licensed Area and (b) accepted the Licensed Area "as is" with
no representation or warranty by Licensor as to the condition of the Licensed Area. The Licensee
shall not materially alter, add to or in any material way change or make alterations or installations
to the Licensed Area without the prior consent of Licensor, which may be given or withheld in
Licensor's sole discretion.
10. Conduct. Licensee shall keep the Licensed Area in good, clean and safe
condition and observe all Governmental Regulations. Licensor shall provide such services to the
Licensed Area in a manner and practice similar to that provided to other parking areas within the
Stadium, including maintenance, lighting and security. Licensee shall conduct activities within
the Licensed Area in accordance with Licensee's rules and regulations pertaining to all patrons
utilizing the Lake Elsinore Diamond and specific rules and regulations related to patrons using
parking.
11. Assignment. Licensee shall have the right to sell, assign or otherwise transfer this
License to its successor in interest, if any, to the Stadium Lease and/or the Lake Elsinore
Diamond, provided that any applicable terms and conditions of such transfer set forth in the
Stadium Lease shall have been complied with. Other than such transfer to such successor in
interest, Licensee shall not sell, assign, mortgage, pledge or in any manner transfer this License
or any interest herein, nor sublet or license all or any part of the Licensed Area, by operation of
law or otherwise, without Licensor's prior written approval, which approval may be withheld in
Licensor's sole and absolute discretion.
12. Indemnification. For purposes of this License, "Claims" means any and all
liabilities, actions, proceedings, losses, damages, costs, expenses (including, without limitation,
all attorneys' fees and litigation expenses), causes of action, suits, claims, demands or judgments
of any nature whatsoever, including, without limitation, death of or injury to any person or
damage to any property.
Licensee covenants and agrees to pay, defend (with counsel reasonably acceptable
to Agency), indemnify and save harmless Agency, its officers, employees, agents, and
representatives, from and against any and all Claims based upon, arising from or connected in
any manner with (a) Licensee's use, maintenance, or entry on the Licensed Area arising after the
Commencement Date, (b) the use of the Licensed Area by Licensee or Licensee's agents,
employees, contractors, subtenants, licensees, invitees, or customers prior to and/or after the
Commencement Date, (c) the violation by the Licensee or its agents, contractors, or employees of
any Governmental Regulations, (d) any negligence or reckless or intentional misconduct of the
Licensee or its agents, contractors, or employees, or (e) the breach or default in performance by
Licensee of any obligation, covenant, representation or warranty contained in this License.
ATTACHMENT "J"
Page 4
Agency covenants and agrees to pay, defend (with counsel reasonably acceptable
to Licensee), indemnify and save harmless Licensee, its officers, employees, agents, and
representatives, from and against any and all Claims based upon, arising from or connected in
any manner with (a) the use, maintenance, or entry on the Licensed Area prior to the
Commencement Date, (b) the use of the Licensed Area by Agency or Agency's agents,
employees, contractors, subtenants, licensees, invitees, or customers prior to and/or after the
Commencement Date, (c) the violation by Agency or its agents, contractors, or employees of any
Governmental Regulations, (c) any negligence or reckless or intentional misconduct of the
Agency or its agents, contractors, or employees, or (d) the breach or default in performance by
Agency of any obligation, covenant, representation or warranty contained in this License.
If any action or proceeding should be brought against either Party based upon any
such Claim and if the indemnified Party, upon notice from the indemnifying Party, shall cause
such action or proceeding to be defended at the indemnifying Party's expense by counsel
reasonably satisfactory to the indemnifying Party, without any disclaimer of liability by
indemnified Party in connection with such Claim, the indemnified Party shall not be required to
indemnify the indemnifying Party for reasonable attorney's fees and expenses in connection with
such action or proceeding. The agreement of indemnification set forth in this Section 13 shall
not extend to Claims arising prior to the Commencement Date. The obligations of the Parties
under this Section 13 shall commence to accrue on the Commencement Date and shall survive
any termination of this License.
13. Default; Remedies. In the event of any default by a Party under this License that
is not cured within fifteen (15) days of written notice to the defaulting Party, the Party claiming a
default shall have all other rights and remedies provided by law or in equity, and collect all
damages directly and indirectly caused by the default (provided, however, that the Party claiming
a default shall have no right to consequential damages, as set forth in Section 15 below) and the
right to enforce specific performance of this License.
14. Limitation on Damages. Without limiting the generality of the foregoing
Section 14, neither Party hereto shall be entitled to, and each Party hereto waives, any right to
seek special or consequential damages of any kind or nature from the other Party arising out of or
in connection with this License and in connection with such waiver each Party is familiar with
and hereby waives the provision of Section 1542 of the California Civil Code which provides as
follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
15. Attorneys' Fees. Should either Party institute any action or proceeding at law or
in equity to enforce any provision of this License, or for damages by reason of an alleged breach
of any provision of this License, or otherwise in connection with this License, the prevailing
Party shall be entitled to recover from the losing Party reasonable attorneys' fees and costs,
including but not limited to fees for experts for services rendered to the prevailing Party in such
action or proceeding.
ATTACHMENT "J"
Page 5
16. Severability. The invalidity or illegality of any provision shall not affect the
remainder of this License and all remaining provisions shall, notwithstanding any such invalidity
or illegality, continue in full force and effect.
17. Successors. Subject to the provisions of this License on assignment, each and all
of the covenants and conditions of this License shall be binding on and shall inure to the benefit
of the Parties and their respective heirs, successors, executors, administrators, assigns, and
personal representatives.
18. Waiver. The waiver by either Party of any term, covenant, or condition contained
in this License shall not be deemed to be a waiver of any subsequent breach of the same or any
other term, covenant, or condition.
19. General Provisions. This License shall become valid and effective only when
executed by the Licensee as well as the Licensor. This License supersedes all prior discussions
and agreements of the Parties relating to the transaction contained in this License. The License
may be modified only by a written instrument executed by both Parties. Neither Party shall, by
the execution of this License, in any way or for any purpose, become a partner or a member of a
joint enterprise, with the other.
20. Counterparts. This License may be executed by the Parties hereto in any number
of counterparts, each of which shall be deemed to be an original and all of which together shall
constitute one and the same agreement.
21. Governing Law and Venue. This License shall be governed by, and construed
and interpreted in accordance with, the laws of the state of California. In the event that either
Party institutes an action at law or equity to cure, correct or remedy any default under this
License to the extent permissible by law, such legal actions shall be instituted in the Superior
Court of the County of Riverside, State of California, in an appropriate municipal court in that
County, or in the Federal District Court in the Central District of California.
22. Administration. The Executive Director of the Agency is authorized to act
on behalf of the Agency with respect to all actions to be undertaken by the Agency under this
License.
[SIGNATURE PAGE FOLLOWS]
ATTACHMENT "J"
Page 6
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
written above.
"AGENCY"
REDEVELOPMENT AGENCY OF THE
CITY OF LAKE ELSINORE, a public
body corporate and politic
By:
Chairperson
ATTEST:
AGENCYSECRETARY
By:
APPROVED AS TO FORM:
LEIBOLD McCLENDON & MANN, P.C.
Agency Counsel
By:
BARBARA ZEID LEIBOLD
[SIGNATURES CONTINUED ON NEXT PAGE]
ATTACHMENT "J"
Page 7
"CITY„
CITY OF LAKE ELSINORE, a
municipal corporation ("City")
By:
Its:
ATTEST:
CITY CLERK
By:
APPROVED AS TO FORM:
LEIBOLD McCLENDON & MANN, P.C.
City Attorney
By:
BARBARA ZEID LEIBOLD
[SIGNATURES CONTINUED ON NEXT PAGE]
ATTACHMENT"J"
Page 8
"LICENSEE (DSG)"
DIAMOND STADIUM GROUP LLC, a
California limited liability company
By:
Gary Jacobs, Manager
[END OF SIGNATURES]
ATTACHMENT "J"
Page 9
ATTACHMENT "K"
CONCESSION FACILITIES AND EQUIPMENT
[TO BE INSERTED]
ATTACHMENT "K"
Attachment K
Concession Facilities and Equipment
Subsequent to the execution of the Management Agreement,the Parties elected not to prepare
an exhaustive list of Concession Facilities and Equipment. The Parties intend that the Concession
Facilities and Equipment shall consist of those facilities and equipment located on the Premises and
used in the ordinary course of provision of Concession Services.
ATTACHMENT "L"
MEMORANDUM OF AGREEMENT
IATTACHEDI
ATTACHMENT "L"
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO: )
Redevelopment Agency of the )
City of Lake Elsinore )
130 S. Main Street )
Lake Elsinore, California 92530 )
Attn: City Clerk )
(Space above for Recorder's Use Only)
This document is exempt from the payment of a recording fee
pursuant to Government Code Section 6103.
MEMORANDUM OF LEASE, LICENSE AND MANAGEMENT AGREEMENT
This Memorandum of Lease, License and Management Agreement (this "Memorandum")
is dated for identification purposes as of this 15th day of July, 2007, by and between the
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, a public body
corporate and politic or (the "Agency'') and DIAMOND STADIUM GROUP LLC, a California
limited liability company ("Tenant").
This Memorandum is made with reference to the following:
1. Agency is the owner in fee of that certain real property located in the City of Lake
Elsinore, County of Riverside, State of California, more particularly described in the legal
description attached hereto as Exhibit "A" and incorporated herein by this reference (the
"Property").
2. Agency and Tenant have entered into that certain Stadium Lease, License and
Management Agreement (the "Lease"), made and effective as of July 15, 2007, that provides for
the lease and management of the Property to Tenant pursuant to the terms and conditions set
forth in the Lease. The Lease is a public record and is available for public inspection in the
office of the City Clerk of the City of Lake Elsinore at 130 S. Main Street, Lake Elsinore,
California 92530.
3. The purpose of this Memorandum is to provide notice to all persons of the
existence of the Lease. This Memorandum is prepared for the purpose of recordation and in no
way modifies the provisions of the Lease.
ATTACHMENT "L"
Page 1
IN WITNESS WHEREOF, Agency and Tenant have executed this Memorandum as of
the date first set forth above.
"AGENCY"
REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE, a public body corporate
and politic
By:
Chairperson
ATTEST:
AGENCY SECRETARY
By:
APPROVED AS TO FORM:
LEIBOLD, McCLENDON & MANN, P.C.
Agency Counsel
By:
BARBARA ZEID LEIBOLD
"TENANT"
DIAMOND STADIUM GROUP LLC, a
California limited liability company
By: Gary E. Jacobs
Its: Managing Member
ATTACHMENT "L"
Page 2
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
STATE OF CALIFORNIA )
)ss
COUNTY OF )
On , before me, personally
appeared who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the state of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
SIGNATURE OF NOTARY
OPTIONAL
Although the data below is OPTIONAL,it may prove valuable to persons relying on the document and could prevent fraudulent
reattachment of this form.
Capacity claimed by signer: Description of Attached Document:
Q Individual
Q Corporate Officer(s) Title or Type of Document
Q Partner(s)
Q General Q Limited
Q Attorney-in-fact Number of Pages
Q Trustee(s)
Q Guardian/Conservator
Q Other: Date of Document
Signer is representing:
Name of Person(s)or Entity(ies) Signer(s)Other Than Named Above
ATTACHMENT "L"
Page 3
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
STATE OF CALIFORNIA )
)ss
COUNTY OF )
On , before me, personally
appeared , who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the state of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
SIGNATURE OF NOTARY
OPTIONAL
Although the data below is OPTIONAL,it may prove valuable to persons relying on the document and could prevent fraudulent
reattachment of this form.
Capacity claimed by signer: Description of Attached Document:
Q Individual
Q Corporate Officer(s) Title or Type of Document
Q Partner(s)
Q General Q Limited
Q Attorney-in-fact Number of Pages
Q Trustee(s)
Q Guardian/Conservator
Q Other: Date of Document
Signer is representing:
Name of Person(s)or Entity(ies) Signer(s)Other Than Named Above
ATTACHMENT"L"
Page 4
EXHIBIT"A"
LEGAL DESCRIPTION
PARCEL A:
PARCEL 3, AS SHOWN BY PARCEL MAP 27852, ON FILE IN BOOK 182 PAGES 19
THROUGH 24, INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY,
CALIFORNIA.
EXHIBIT "A" TO ATTACHMENT"L"
ATTACHMENT "M"
SCHEDULE OF CONDITION OF PREMISES
Diamond Club Restaurant—Holes in wall where pay telephones existed. (Plate covered installed
over conduit. Bolt holes status quo.)
Diamond Club Fountain—Brick is oxidized due to normal leeching. (No action required.)
Structure is damaged along entrance as result of actions taken by patrons of a Storm event. (To
be repaired by Storm pursuant to Maintenance Agreement.)
Concourse—Various cracks in concrete, (No action required.) Holes in brick where pay
telephones existed. (Plate covered installed over conduit. Bolt holes status quo.)
Bird netting coming loose in areas along first base side. (Repairs completed by Agency.)
Laminate coming loose or completely off in sink areas outside of restrooms. (Repairs completed
by Agency.) Angle iron detached from wall. (No action required; structurally safe.) Insulation
on pipes starting to deteriorate in various locations. (Rewrapping completed by Agency.)
Concourse restrooms —Missing latch on ADA stall in women's restroom on third base side.
Loose sink in men's restroom on first base side. (Repairs completed by Agency.)
Souvenir Store—Water damage on ceiling tiles. (Repairs completed by Agency.)
Home Clubhouse—Laminate on sink needs to be replaced. (Repairs completed by Agency.)
Seating Bowl —Corner breaks in concrete near superbox sections on both sides. Exposed rebar
in 4 rows in Section 115. (Repairs completed by Agency.)
Suite Level—Base tile coming off in various locations along exterior of suites. (Repairs
completed by Agency.) Insulation on pipes starting to deteriorate in various locations.
(Rewrapping completed by Agency.) Carpet in Print Media Room needs to be replaced.
(Repaired by Storm pursuant to Maintenance Agreement.) Laminate on countertop has peeled
off. (Repairs completed by Agency.)
Exterior Landscaping of Stadium —Areas along exterior lacking grass and shrubs. Trees,
including Palms, need to be trimmed. Curb splitting away from sidewalk near exterior entrance
to clubhouse. (Repairs completed by Agency; DSG to maintain pursuant to this Agreement.)
ATTACHMENT "M"
ATTACHMENT "N"
SCHEDULE OF AGENCY INSURANCE
(ATTACHEDI
ATTACHMENT "N"
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THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS BEEN ISSUED, IS IN FORCE,AND CONVEYS ALL
THE RIGHTS AND PRIVILEGES AFFORDED UNDER THE POLICY.
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ALLIAN INSURANCE SERVICES,INC. Lexington Insurance Company--Primary Company
Newport
Boxx 645dport Beach, CA 92658-&45d Excess Carriers on Schedule on File with California JPIA
N �
(949)756.0271 f
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INiUM o-•.•.•_� -- -- LOAN NUMBER ---- POLICY NOWER--^•----.—•1,,....�•---
California JPIA and its Member: 07PYOM0346
CItyof Lake Street e
130 t.EFFECWA DATE tu►i;ijiiTrrl•""exrwAnoN DATE lwarwNn CONT.UNTIL
13d S.Main Street --^-•�-.,-._....._._.__.._.�
TERMMIATW
Lake Elsinore,CA 92530 i 01/01/07 01/01/08 IFCNECKEO
� �RIPLACI�i PEtlpR QV10tXIC�DAreD; �•_._..........1_._------ �..-...
Attn: Risk Manager
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+• ::>•' -..,.:n,:fir:'{Ji..v,J.,'l�Y.?;;:a:!..'.v::i'T.•,f�:y.tF.ti'Jf'1.:�2:: M1y'•'•!•.Yr�•r,•�•,!'r.•!r� •.v:'•?:>r:�•?i:;S:..?' 1r_
LOCATION I D r.+•, 1+.r....r.,..PRo en r.. NO a AJ.:.•r.:r/r.{�?{<d:ii';b::::;•'.:;:>
R$CII�'I1ON(AS pltiaECTe,NMEN APPLICABLE,R6PUlCf]V�.#fT COST APPLIp$70 ALL REAL ANO PHRSONAL PROPERTY,AIIQ>n''AY1;0 VKt�APPLES TO Ak.L
VEMCL"OR EMERGENCY VEHICLES.).
Evidence of Property Insurance Coverage as respects location fl22 described as the Stadium/Amphitheatre situated at 500 Diamond
Drive,Lake Elsinore,CA 92530 on property schedule on file with the company.
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OF IHaUtuwOE� _,—oEDUCTI6LC
All Risk Property Insurance—Urnits Per Occurrence•Replacement Coat ^^I $500,000,000
Su*ct to Polley Exdusiru i
(Eatttl ioake and Flood are Exdtlded*)
Sub-Limits apply as follows(but not limited to):
$50,000,000 Courme of Oonaftl'.6on
S 2,500,000 NeAYAOquired Property(not reponed In 120 days)unnamW locations
$ 250,000 Newly Acquked Flne Arts
$ 500,000 Animals
S 10,000 Limped Mold-$100,00 Limited#+bid AgWepate Limp
EARTHQUAKE AND FLOOD ARE COVERED ONLY IF INDICATED ABOVE,AND APPLIES PER PROPERTY
SCHEDULE ON FILE WITH INSURANCE COMPANY,
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Deductibles:
Earthquake-5%of carnblrfed•totel venues per Coveted location subject to•mtnlawm daducdbfs of$100.000
Flood-$100,000 per Qcewreno
Vehlcie CDmprehenalve and Collision-$1,000 Per Occurrence
EmrryerKV Vehicle Cornprehenslve and Collision•$5.000 Per OcwTnnces
Ali Other Perils-1e,0m Par OCCUMMOe
NOTE: SUSAICT TO POLICY TEAMS.CONDITIONS AND EXCLUSIONS.
. ::ar'f..?%.?:K{:r.�ri:�.f.::�5}:;5:,^'.h:f`i:'jrrS'•:-:"i'W::?��f.r::� �?r{ir r{' :v.•Yr �'v�'1 •:n•i°: :ri-lyre,•%r'JJS+ •:NJi'r�{.rA�.• ti°•.:'.{%i•};::;;. .,,J.rtr...,..J...�n>ny,.�::.,r.a:q..r. $✓$�..;.�i r.,r....,:.i...,.;1,.�..fi,....,y,.f.b:.;r...,.r.r,..�..
THE POLICY IS SUBJECT TO THE PREMIUMS,FORMS,AND RULES IN EFFECT FOR EACH POLICY PERIOD. SHOULD THE POLICY 9E TERMINATED,
THE COMPANY WILL CWE THE ADDITIONAL INTEREST IDENTIFMD BELOW 9Q GAYS WRITTFN NOTICE,AND WILL SEND NOTIFICATION OF ANY
CHANGES TO THE POLICY THAT WOULD AFFECT THAT INTEREST,IN ACCORDANCE WITH THE POLICY PROVISIONS OR AS REQUIRED BY LAW.
SOBJECT Y010 DAYS NOTICE OF CANCELLATION FOR NONPAYMENT OF PREMIUM,
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NATURE Of NMRE MITEREST
MCATGAGEE -�..�i ADOMONAL INSURED
rr `
To Whom it may Concern ?. LOSS PAYEE
a .4,,MSFU )( l (OTHER)Evidence Only
i. --
:J;• SIGNATURE OF AUTHORIZED AGENT OF COMPANY
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California JPIA Al ffiant
January 1,2007 to January 1,2008
ALL RISK PROPERTY
INSURANCE SUMMARY
NAMED INSUED: California JPIA and its Member Agencies
PRIMARY COMPANY: Lexington Insurance Company (See Schedule of Insurers)
POLICY TERM: January 1,2007 to January 1,2008
LIMITS AND COY>ERAGES:
$500,000,000 Per Occurrence—All Risk Limit
Total Insured Value: Refer to Property Schedule
I. PROPERTY AMOUNT OF INSURANCE
A. Reel Property Per reported values
1. All Risk(excluding Earthquake and Flood)
2. Replacement Cost
3. Agreed Amount
B. Personal Property Per reported values
1. All Risk(excluding Earthquake and Flood)
2. Replacement Cost
3. Agreed Amount
C. Business Income Per reported values
1. All Risk(excluding Earthquake and Flood)
2, Actual Loss Sustained
3. Extra Expense to Reduce Loss
D. Rental Income Per reported values
1. All Risk(excluding Earthquake and Flood)
2. Actual Loss Sustained
E. Extra Expense Per reported values
1. All Risk(excluding Earthquake and Flood)
2. Actual Loss Sustained
F. Bond Revenue Payments Per reported values
1. All Risk(excluding Earthquake and Flood)
2. Actual Loss Sustained
GNPL'nitkIPtAVropenyQ0074008Wofebook�c;e�fo 0o '41-019-nu nlnr rropr ,-S a yAw
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California JPILA I1art
January 1,2007 to January 1,2008
G. Business Continuation Expense Per reported values
i. All Risk(excluding Earthquake and Flood)
2. Actual Loss Sustained
H. Electronic Data Processing(EDP)Equipment Per reported values
1. All Risk(excluding Earthquake and)Flood)
2. EDP Media(Included with Valuable Papers)
3. Replacement Cost
4. Agreed Amount
I. Mobile&Scheduled Equipment Per reported values
1. All Risk(excluding Earthquake and Flood)
2. Replacement Cost
J. Course of Construction(Builder's Risk) Per reported values
1. All Risk(excluding Earthquake and Flood)
2. Replacement Cost.
K. Building Ordinance,Demolition/ Per reported values
Undamaged Building(s)
i. Increased Cost of Construction
L. Newly Acquired or Constructed Buildings Per reported values
1. All Risk(excluding Earthquake and Flood)
2. Replacement Cost
M. Accounts Receivable Per reported values
1. All Risk(excluding Earthquake and Flood)
2. Actual Loss Sustained
N. Valuable Papers Per reported values
1. All Risk(excluding Earthquake and Flood)
2. Actual Loss Sustained
O. Fine Arts Per reported values
1. All Risk(excluding Earthquake and Flood)
2. Agreed Value
II. AUTOMOBILE PHYSICAL DAMAGE AMOUNT OF INSURANCE
A. On-Premises Only—Non-Scheduled Per reported values
1. All Risk(excluding Earthquake and Flood)
2. Replacement Cost
B. Of-Premises—Scheduled Per reported values
1. All Risk(excluding Earthquake and Flood)
2. Stated Value
G:VFttdAC)1IAWropeay.:U07.:00BWaabodt.�;analc Daoo'U7.8B-nu ttlsn eropat>-s�r�nmY.ea�
2
California JPXA 4411ant
January 1,2007 to January 1,2008
C. Emergency Vehicles—Scheduled Per reported values
1. All Risk(excluding Earthquake and Flood)
2. Stated Value
3, Including Equipment within or on Vehicles
ill. EARTHQUAKE&FLOOD
(PER SCHEDULE OF REPORTED VALUES)
A. Earthquake and Flood Per reported values
1. Primary Coverage
2. Replacement Cost
3. Agreed Amount
IV. EXTENSIONS OF COVERAGE MAXIMUM SUB-LIMIT
A. Limited Accidental Contamination $ 25,000
B. Animals subject to maximum per animal of$25,000 $ 500,000
C. Newly acquired Fine Arts $ 250,000
D. Limited Mold,Mildew,Fungus$10,000 per occurrence $ 100,000
V. DEDUCTIBLES M UNT
A. Real Property,Personal Property,Electronic Date Processing $5,000 Per Occurrence
(EDP)Equipment,Mobile and
Scheduled Equipment,On-Premises Vehicles,
Course of Construction,Fine Arts,Business
Income and Extra Expense
B. Vehicles,Auto Physical Damage—Comprehensive $1,000 Per Occurrence
and Collision,Radio&Telephone Equipment in
Vehicles(Optional Coverage)
C. Emergency Vehicles(Optional Coverage) $5,000 Per Occurrence
V. DEDUCTIBLES(Continkol MAXrMJJaJRQUNT
D. Earthquake(Optional Coverage) 5%of the Combined Total Values for
Building,Personal Property and
Business Income Per Premise Per
Occurrence(Schedule on File)
$100,000 Minimum Per Loss
E. Flood(Optional Coverage) $ 100,000 Per Occurrence except
$ 250,000 Flood Zones A&V
$ 500,000 Per Occurrence
Flood and/or Wave Wash Per Pier
VI. MAJOR EXCLUSIONS(BUT NOT LIMITED TO)
aVMmtWJPIA9'vv -+20D7-2('Og Nohbookr,enw c Dou 0749-All WsY Piopwy-S ,n y,,kK
3
California JPIA AAffia t
January 1,2007 to January 1,2008
(NOTE: The following definitions and descriptions are abbreviated and are to be used only as a
quick reference of coverage. Please refer to the policy on file with the California JPIA for complete
terms,conditions and exclusions.)
A. PERILS NOT COVERED
1. Earth movement and water/flood
(Scheduled earthquake and flood insurance is available as an optional coverage.)
2. Nuclear Hazard
3. War and Military Action
4. Power Failure/Service Interruption
5. Dishonest Acts of Employees
6. Developing Defects—Wear and Tear
7. Hazardous Substance—Pollutants/Contaminants
8. Explosion of steam powered equipment,but resultant fire is covered(NOTE: boiler
and machinery insurance provides this coverage and is available as an option.)
9. Electrical arcing and/or rupture caused by centrifugal force(NOTE:boiler and machinery
insurance provides this coverage and is available as an option.)
10. Acts or Decisions
11. Contamination/Contents Loss
12. Design,Manufacturing,and Workmanship Errors,faulty,inadequate or defective
13. Environment
14. Mysterious Disappearance
15. Penalties
16. Biological or Chemical Materials
17. Micro Organisms
18. Costs incurred by a Public Adjuster
19, Terrorism
B. PROPERTY NOT COVERED
I. Money and Securities
2. Land
3, Tees,Greens,Fairways,Landscaping, Standing Timber,Bodies of Water,Growing Crops,
Danis(unless declared)
4. Piers(unless declared),Bridges(unless declared),Retaining Walls,Docks and Wharves
5, Vehicles(unless declared)(Physical Damage coverage is available as an option.)
6. Aircraft and Watercraft
This document is for information purposes only and does not alter the policy in any way.
Please refer to the policy form for complete coverage and exclusion information.
c;vrv..a�cmwr,o�.c.trvoo�-sroaw,rcbookA.n�c D=V-06-nu Rik vmpagy-sumwwy.&w
4
California JPIA AAftnt
January 1,2007 to January 1,2008
Commissions are aatomarily paid by the insurance carriers to their agents and to brokers as a percentage of premiums.
In addition to the commissions that Alliant Insurance Services, Inc., receives, its related entity, Alliant Underwriting
Services(A US)may receive compensation from Alliant Insurance and/or the carrier for providing underwriting services.
The financial impact of the compensation received by AUS is a cost included in the premium. Additionally, the related
entities of.411iant Business Services(ABS)and/or Strategic HR may receive compensation,from Alliant Insurance and/or
the carrier for providing designated. value-added services. Services contracted for by the client directly will he irnriiced
accordingly_ Otherwise, services will be provided at the expense of Alliant Insurance and/or the carrier. Except as
specifically directed by the client, AIS and its affiliates may also receive income as a result of contingent income
agreements with Insurance carriers. Further information is available upon written request directed to: .Alliant
Insurance Services,Attention:Chief Operating Officer, 1301 Dove Street,Suite 200, Newport Beach, CA 92660.
Analr.ing insurers'over--all performance and flnancial strength is a task that requires specialized skills and in-depth
technical understanding of all aspects of insurance company finances and operations.
Insurance brokerages such as Alliant Insurance typically rely upon rating agencies for this type of market analysis_ Both
A.M.Best and Standard and Poor'.s have been industry leaders in this area for many decades. utilizing a combination of
quantitative and qualitative analysis ofthe information available in formulating their ratings.
A.M. Best has an extensive database of nearly 6,000 Life/Health, Property Casualty and International companies. You
can visit them at wivw.ambest.com
For additional information regarding Insurer financial strength ratings visit Standard and Poor's website at
www.standardandnoors.com
To learn more about companies doing business in California, vrsil the California Department of Insurance website at
www.inctlra nce.Ca.Qo v
q:�7Pt t„au'mu�pRt>�00?-10RPWoabaacY6m:ic De '07-09411 Risk Hopnty-smmnry.ax
5
ATTACHMENT "O"
SCHEDULE OF DSG INSURANCE
(ATTACHED]
ATTACHMENT "O"
LEXINGTON INSURANCE COMPANY
Administrative Offices: 100 Summer Street, Boston,Massachusetts 02110
COMMERCIAL GENERAL LIABILITY POLICY
DECLARATIONS
PYROTECHNICS PROGRAM
Policy No. 6990162 Renewal Of: 7410455
Item 1. Named Insured and Address: (No,Street,Town or City,County,State)
FIREWORKS&STAGE FX AMERICA,INC.
P.Q.BOX 488
LAKESIDE,CA 92040
Item 2. Policy Period: (Mo Day Yr) From: January 11, 2007 To:January 11, 2008
12:01 AM., standard time at the address of the Named Insured as stated herein.
The Named Insured is:CORPORATION
Business of the Named Insured is: Pyrotechnic Displays
Item 3. LIMITS OF INSURANCE
N UMN IN TH NAYEW Of M PIMM AMN 311IT TIl AILTUTM ff TM PWCY, STATO NI Try
Few.
EACH OCCURRENCE LIMIT $1,000,000.00
PERSONAL AND ADVERTISING INJURY LIMIT $1,000,000.00
PRODUCTS—COMPLETED OPERATIONS AGGREGATE $2,000,000.00
GENERAL AGGREGATE $2,000,000.00
FIRE DAMAGE LIMIT $ 50,000.00 ANYONE FIRE
MEDICAL PAYMENTS EXCLUDED
Item 4. Location of all premises owned by,rented to or controlled by the Named Insured: As per application on file with Company
Interest of Named Insured In such premises:As per application on file with Company
Part occupied by Named Insured: As per application on file with Company
Item 5. PREMIUM
HAZARD DESCRIPTION PREMIUM BASIS RATE ADVANCE PREMIUM
SALES
Pyrotechnic Displays $2,600,000 5.60%OF SALES $140,040.00
*Terrorism$ 1,400.00
Total Advance Premium for this Policy: 141440.00
Minimum Annual Premium for this Policy:$141,440.00
Minimum Earned Premium at Inception for this Policy:$35,360.00
Item 6 Deductible: $2,500 Per occurrence
Item 7,Audit Period:ANNUAL
Item 8 Forms and Endorsements attached hereto:As per Schedule attached.
Date Issued:February 12,2007 By
At Boston,Massachusetts 02110 AUTHORIZED REPRESENTATIVE OR
COUNTERSIGNATURE(in states where applicable)
PRG 3076 Ed.10-03
FORMS SCHEDULE
Named Insured : FIREWORKS & STAGE FX AMERICA, INC.
Policy Number 6990162
Effective Date January 11, 2007
Form Number Title
PRG 3076 10/03 DECLARATIONS
LEX-PYRO-SCHED FORMS SCHEDULE
PRG 3144 05/05 POLICY TEXT
LEX-FWE-OCC-BG 01/00 FIREWORKS ENDORSEMENT
PRG 3083 01/07 WORKERS EXCLUSION
EMPLOYEE BENEFITS LIABILITY INSURANCE
PRG CC 02 04/99 25%MINIMUM EARNED EMPLOYEE BENEFITS
PRG 1003 12/02 TERRORISM RISK INSURANCE ACT
89644 07/05 COVERAGE TERRITORY ENDORSEMENT
1 Fx-avRn-gruGn
LcXINGTON INSURANCE CON., ANY
Administrative Offices: 100 Summer Street Boston, Massachusetts 02110
NOTICE: DEFENSE COSTS AND CLAIMS EXPENSES ARE OUTSIDE OF THE LIMITS OF
INSURANCE UP TO ONE MILLION ($1,000,000) DOLLARS. THEREAFTER, ANY AMOUNTS
INCURRED FOR DEFENSE COSTS AND CLAIMS EXPENSES IN EXCESS OF ONE MILLION
($1,000,000) DOLLARS REDUCE THE APPLICABLE LIMIT OF INSURANCE.
COMMERCIAL GENERAL LIABILITY COVERAGE FORM
Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties and what is
and is not covered Throughout this policy the words "you" and "your" refer to the Named Insured shown in the
Declarations, and any other person or organization qualifying as a Named Insured under this policy. The words "we," "us"
and 'bur"refer to the company providing this insurance.
The word "insured"means any person or organization qualifying as such under WHO IS AN INSURED(SECTION 11).
Other words and phrases that appear in quotation marks have special meaning Refer to DEFINITIONS(SECTION V).
SECTION I-COVERAGES
COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY
1. Insuring Agreement.
a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury'
or "property damage" to which this insurance applies. We will have the right and duty to defend the insured
against any"suit" seeking those damages. However, we will have no duty to defend the insured against any"suit"
seeking damages for"bodily injury"or"property damage"to which this insurance does not apply. We may, at our
discretion, investigate any 'occurrence"and settle any claim or"suit"that may result. But:
(1) The amount we will pay for damages is limited as described in LIMITS OF INSURANCE(SECTION Ili);and
(2) Our right and duty to defend end when we have used up the applicable limit of Insurance in the payment of
judgments, settlements, and/or, to the extent they exceed one million ($1,000,000)dollars, DEFENSE COSTS
AND CLAIMS EXPENSES under Coverages A or B.
DEFENSE COSTS AND CLAIMS EXPENSES are outside of the limits of insurance up to one million ($1,000,000)
dollars. Thereafter, any amounts incurred for DEFENSE COSTS AND CLAIMS EXPENSES in excess of one
million ($1,000,000) dollars reduce the applicable limit of insurance. No other obligation or liability to pay sums or
perform acts or services is covered unless explicitly provided for under DEFENSE COSTS AND CLAIM
EXPENSES-COVERAGES A AND B.
b. This insurance applies to"bodily injury"and "property damage"only if:
(1) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage
territory"; and
(2) The"bodily injury"or"property damage"occurs during the policy period.
c. Damages because of "bodily injury" include damages claimed by any person or organization for care, loss of
services or death resulting at any time from the"bodily injury."
PRG 3144(Ed 05105) 1 OF 22
2. Exclusions.
This insurance does not apply to:
a. Expected or Intended Injury
"Bodily injury' or "property damage" expected or intended from the standpoint of the insured. This exclusion does
not apply to`bodily injury"resulting from the use of reasonable force to protect persons or property.
b. Contractual Liability
"Bodily injury"or"property damage"for which the insured Is obligated to pay damages by reason of the assumption
of liability in a contract or agreement. This exclusion does not apply to liability for damages:
(1) That the insured would have in the absence of the contract or agreement; or
(2) Assumed in a contract or agreement that is an "insured contract," provided the "bodily injury' or "property
damage" occurs subsequent to the execution of the contract or agreement Solely for the purposes of liability
assumed in an"insured contract,"reasonable attorney fees and necessary litigation expenses incurred by or for
a party other than an insured are deemed to be damages because of "bodily injury' or "property damage,"
provided:
(a) Liability to such party for, or for the cost of, that party's defense has also been assumed in the same
"insured contract";and
(b) Such attorney fees and litigation expenses are for defense of that party against a civil or alternative dispute
resolution proceeding in which damages to which this insurance applies are alleged.
c. Liquor Liability
"Bodily injury"or"property damage"for which any insured may be held liable by reason of:
(1) Causing or contributing to the intoxication of any person;
(2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol;
or
(3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages.
This exclusion applies only if you are in the business of manufacturing, distributing, selling, serving or furnishing
alcoholic beverages.
d. Workers Compensation and Similar Laws
Any obligation of the insured under a worker's compensation, disability benefits or unemployment compensation
law or any similar law.
e. Employer's Liability
"Bodily injury"to:
(1) An"employee"of the insured arising out of and in the course of:
(a) Employment by the insured; or
(b) Performing duties related to the conduct of the insured's business;or
PRG 3144(Ed 05/05) 2 OF 22
(2) The spouse, child, parent, brother or sister of that"employee"as a consequence of paragraph(1)above
This exclusion applies:
(1) Whether the insured may be liable as an employer or in any other capacity; and
(2) To any obligation to share damages with or repay someone else who must pay damages because of the injury.
This exclusion does not apply to liability assumed by the insured under an"insured contract."
f. Pollution
(1) "Bodily injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal,
seepage, migration, release or escape of pollutants:
(a) At or from any premises, site or location which is or was at any time owned or occupied by, or rented or
loaned to, any insured;
(b) At or from any premises,site or location which is or was at any time used by or for any insured or others for
the handling,storage,disposal, processing or treatment of waste;
(c) Which are or were at any time transported, handled, stored, treated, disposed of, or processed as waste by
or for any insured or any person or organization for whom you may be legally responsible;or
(d) At or from any premises, site or location, on which any insured or any contractors or subcontractors
working directly or indirectly on any insured's behalf are performing operations:
(i) If the pollutants are brought on or to the premises, site or location in connection with such operations
by such insured, contractor or subcontractor;or
(ii) if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in
any way respond to, or assess the effects of pollutants.
Subparagraph (d)(i) does not apply to "bodily injury" or "property damage" arising out of the escape of
fuels, lubricants or other operating fluids which are needed to perform the normal electrical, hydraulic or
mechanical functions necessary for the operation of "mobile equipment" or its parts, if such fuels,
lubricants or other operating fluids escape from a vehicle part designed to hold, store or receive them.This
exception does not apply if the fuels, lubricants or other operating fluids are intentionally discharged,
dispersed or released, or if such fuels, lubricants or other operating fluids are brought on or to the
premises, site or location with the intent to be discharged, dispersed or released as part of the operations
being performed by such insured,contractor or subcontractor..
Subparagraphs (a)and (d)(i)do not apply to"bodily injury"or"property damage"arising out of heat, smoke
or fumes from a hostile fire.
As used in this exclusion, a hostile fire means one which becomes uncontrollable or breaks out from where
it was intended to be
(2) Any loss, cost or expense arising out of any:
(a) Request, demand or order that any insured or others test for, monitor, clean up, remove, contain, treat,
detoxify or neutralize,or in any way respond to, or assess the effects of pollutants;or
(b) Claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring,
cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or
assessing the effects of pollutants
Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke,vapor, soot,
fumes, acids, alkalis, chemicals and waste Waste includes materials to be recycled, reconditioned or
reclaimed.
PRG 3144(Ed.05/05) 3 OF 22
g. Aircraft,Auto or Watercraft
"Bodily injury"or"property damage"arising out of the ownership, maintenance, use or entrustment to others of any
aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and
"loading or unloading."
This exclusion does not apply to:
(1) A watercraft while ashore on premises you own or rent;
(2) A watercraft you do not own that is:
(a) Less than 26 feet long; and
(b) Not being used to carry persons or property for a charge;
(3) Parking an "auto"on, or on the ways next to; premises you own or rent, provided the "auto"is not owned by or
rented or loaned to you or the insured;
(4) Liability assumed under any"insured contract" for the ownership, maintenance or use of aircraft or watercraft;
or
(5) "Bodily injury" or"property damage" arising out of the operation of any of the equipment listed in paragraph f..
(2)or f. (3)of the definition of"mobile equipment."
h. Mobile(Equipment
"Bodily injury"or"property damage"arising out of:
(1) The transportation of"mobile equipment"by an"auto"owned or operated by or rented or loaned to any insured;
or
(2) The use of"mobile equipment"in, or while in practice for, or while being prepared for, any prearranged racing,
speed, demolition, or stunting activity
i. War
"Bodily injury" or "property damage" due to war, whether or not declared, or any act or condition incident to war
War includes civil war, insurrection, rebellion or revolution. This exclusion applies only to liability assumed under a
contract or agreement.
J. Damage to Property
"Property damage"to:
(1) Property you own, rent or occupy;
(2) Premises you sell, give away or abandon, if the"property damage"arises out of any part of those premises;
(3) Property loaned to you;
(4) Personal property in the care, custody or control of the insured;
(5) That particular part of real property on which you or any contractors or subcontractors working directly or
indirectly on your behalf are performing operations, if the"property damage"arises out of those operations;or
(6) That particular part of any property that must be restored, repaired or replaced because "your work" was
incorrectly performed on it.
PRG 3144(Ed.05/05) 4 OF 22
Paragraph (2) of this exclusion does not apply if the premises are"your work" and were never occupied, rented or
held for rental by you.
Paragraphs (3), (4), (5)and (6)of this exclusion do not apply to liability assumed under a sidetrack agreement.
Paragraph (6) of this exclusion does not apply to "property damage" included in the "products-completed
operations hazard."
k. Damage to Your Product
"Property damage"to"your product"arising out of it or any part of it.
I. Damage to Your Work
"Property damage" to "your work" arising out of it or any part of it and included in the "products- completed
operations hazard."
This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on
your behalf by a subcontractor.
m. Damage to Impaired Property or Property Not Physically Injured
"Property damage"to"impaired property'or property that has not been physically injured, arising out of:
(1) A defect, deficiency, inadequacy or dangerous condition in "your product"or"your work";or
(2) A delay or failure by you or anyone acting on your behalf to perform a contract or agreement in accordance with
Its terms.
This exclusion does not apply to the loss of use of other property arising out of sudden and accidental physical
injury to"your product"or "your work"after It has been put to its intended use.
n. Recall of Products,Work or Impaired Property
Damages claimed for any loss, cost or expense incurred by you or others for the loss of use, withdrawal, recall,
inspection, repair, replacement, adjustment, removal or disposal of:
(1) "Your product"; (2) "Your work"; or (3) "Impaired property; if such product, work or property is withdrawn or
recalled from the market or from use by any person or organization because of a known or suspected defect,
deficiency, inadequacy or dangerous condition in it.
Exclusions c. through n. do not apply to damage by fire to premises while rented to you or temporarily occupied by
you with permission of the owner.A separate limit of insurance applies to this coverage as described in LIMITS OF
INSURANCE(Section lli).
o. Employment Related Practices
Any claim alleging or asserting in any respect loss, injury, or damage(including consequential bodily injury)in
connection with"Wrongful Termination"of your employee and/or Discrimination involving your employee and/or
"Sexual Harassment"of your employee.
The following definitions apply to this exclusion:
"wrongful termination"means termination of an employment relationship in a manner which is against the law
and wrongful,or in breach of an implied agreement to continue employment.
PRG 3144(Ed 05/05) 5 OF 22
"discrimination" means termination of an employment relationship or a demotion, or a failure or refusal to hire
or promote or otherwise to take any action against any individual with respect to his or her compensation,
terms, conditions, privileges or opportunities of employment because of race, color, religion, age, sex,
disability, pregnancy, natural origin, sexual orientation or other protected category or characteristic established
pursuant to any applicable United States federal, state or local statute or ordinance,
"sexual harassment" means unwelcome sexual advances and/or requests for sexual favors and/or other verbal
or physical conduct of a sexual nature that (1) are made a condition of employment and/or (2) are used as a
basis for employment decisions and/or(3)create a work environment that interferes with performance
p. Securities and Financial Interests
Any claim alleging or asserting in any respect loss, injury or damage, in connection with the purchase or sale, the
offer, solicitation, or advertising for the purchase or sale, or the depreciation or decline in price or value, of any
security, debt,deposit, or financial interest or instrument.
q. Asbestos
To "bodily injury" or "property damage" from sickness, disease, occupational disease, disability, shock, death,
mental anguish, or mental injury, at any time arising out of the manufacture of, mining of, use of, sale of, removal of,
distribution of, or exposure to asbestos, asbestos products, asbestos fibers or asbestos dust;or
To any obligation of the insured to indemnify any party because of damages arising out of such "property damage",
"bodily injury", sickness, disease, occupational disease, disability, shock, death, mental anguish or mental injury, at
any time as a result if the manufacture of, mining of, use of, sale of, removal of, distribution of, or exposure to
asbestos, asbestos products, asbestos fibers or asbestos dust;or
To any obligation to defend any suit or claim against the insured alleging ""bodily injury", sickness, disease,
occupational disease, disability, shock, death, mental anguish or mental injury or"property damage" resulting from
or contributed to, by any and all manufacture of, mining of, use of, sale of, removal of, distribution of,or exposure to
asbestos, asbestos products, asbestos fibers or asbestos dust;
r. Nuclear
1 The insurance does not apply:
A. Under any Liability Coverage, to"bodily injury"or"property damage"
(1) With respect to which an"insured"under the policy is also an insured under a nuclear energy liability
policy issued by Nuclear Energy Liability Insurance Association, Mutual Atomic Energy Liability
Underwriters, Nuclear Insurance Association of Canada, any of their successors, or would be an
insured under any such policy but for its termination upon exhaustion of its limit of liability or
(2) Resulting,from the"hazardous properties"of"nuclear material"and with respect to which(a)any
person or organization is required to maintain financial protection pursuant to the Atomic Energy Act of
1954,or any law amendatory thereof, or(b)the"insured"is, had this policy not been issued would be,
entitled to indemnity from the United States of America,or any agency thereof, under an agreement
entered into by the United States of America,or any agency thereof,with any person or
organization
B. Under any Liability Coverage, to"bodily injury"or"property damage" resulting from"hazardous properties"
of"nuclear material"if:
(1) The"nuclear material"(a)is at any"nuclear facility"owned by,or operated by or on behalf of, an
"insured"or(b)has been discharged or dispersed therefrom;
(2) The"nuclear material"is contained in"spent fuel"or"waste"at any time possessed, handled, used,
processed, stored, transported or disposed of, by or on behalf of an"insured"; or
PRG 3144(Ed 05105) b OF 22
(3) The"bodily injury"or"property damage"arises out of the furnishing by an "insured" of services,
materials, parts or equipment connection with the planning, construction, maintenance, operation or use
of any"nuclear facility", but if such facility is located within the United States of America, its territories or
possessions or Canada, this exclusion(3)applies only to"property damage"such"nuclear facility"and
any property thereat
2. As used in this endorsement:
A. "Hazardous properties"includes radioactive, toxic or explosive properties.
B. "Nuclear material"means"Source material", "Special nuclear material"or"By-product material
C. "Source material", Special nuclear material"and"by-product material"have the meanings given them in the
Atomic Energy Act of 1954 or in any law amendatory thereof.
D. "Spent fuel"means any fuel element or fuel component, sold or liquid,which has been used or exposed to
radiation in a"nuclear reactor".
E "Waste"means any waste material(a)containing"by-product material"other than the tailings or wastes
produced by the extraction or concentration of uranium or thorium from any one processed primarily its
"source material"content,and(b)resulting from the operation by any person or organization of any
"nuclear facility"included under the first two paragraphs of this definition of"nuclear facility"means:
(1) Any"nuclear reactor";
(2) Any equipment or device designed or used for(1)separating the isotopes of uranium or plutonium, (2)
processing or utilizing"spent fuel", or(3)handling, processing or packaging"waste";
(3) Any equipment or device used for the processing,fabricating or alloying of"special nuclear material" if
at any time the total amount of such material in the custody of the"insured"at the premises where
such equipment or device is located consists of or contains more than 25 grams of plutonium or
uranium 233 or any combination thereof,or more than 250 grams of uranium 235;
(4) Any structure, basin,excavation, premises or place prepared or used for the storage or disposal of
"waste";
And includes the site on which any of the foregoing is located,all operations conducted on such site and all
premises used for such operations.
F. "Nuclear reactor"means any apparatus designed or used to sustain nuclear fission in a self-supporting
chain reaction or to contain a critical mass of fissionable material.
G. "Property damage"includes all forms of radioactive contamination of property,
COVERAGE B. PERSONAL_AND ADVERTISING INJURY LIABILITY
1. insuring Agreement.
a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "personal
injury"or"advertising injury"to which this insurance applies. We will have the right and duty to defend the insured
against any"suit" seeking those damages. However, we will have no duty to defend the insured against any"suit"
seeking damages for "personal injury" or "advertising injury' to which this insurance does not apply. We may, at
our discretion, investigate any"occurrence"or offense and settle any claim or"suit"that may result. But:
(1) The amount we will pay for damages is limited as described in LIMITS OF INSURANCE(SECTION 111); and
PRG 3144(Ed 05/05) 7 OF 22
(2) Our right and duty to defend end when we have used up the applicable limit of insurance in the payment of
judgments, settlements, and/or, to the extent they exceed one million ($1,000,000)dollars, DEFENSE COSTS
AND CLAIMS EXPENSES under Coverages A or B,
DEFENSE COSTS AND CLAIMS EXPENSES are outside of the limits of insurance up to one million ($1,000,000)
dollars Thereafter, any amounts incurred for DEFENSE COSTS AND CLAIMS EXPENSES in excess of one
million ($1,000,000) dollars reduce the applicable limit of insurance. No other obligation or liability to pay sums or
perform acts or services is covered unless explicitly provided for under DEFENSE COSTS AND CLAIM
EXPENSES-COVERAGES A AND B_
b. This insurance applies to:
(1) "Personal injury" caused by an offense arising out of your business, excluding advertising, publishing,
broadcasting or telecasting done by or for you;
(2) "Advertising injury"caused by an offense committed in the course of advertising your goods, products or
services; but only if the offense was committed in the"coverage territory"during the policy period.
2. Exclusions.
This insurance does not apply to:
a. "Personal injury"or"advertising injury":
(1) Arising out of oral or written publication of material, if done by or at the direction of the insured with knowledge
of Its falsity;
(2) Arising out of oral or written publication of material whose first publication took place before the beginning of
the policy period;
(3) Arising out of the willful violation of a penal statute or ordinance committed by or with the consent of the
insured;
(4) For which the insured has assumed liability in a contract or agreement.This exclusion does not apply to liability
for damages that the insured would have in the absence of the contract or agreement; or
(5) Arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of
pollutants at any time.
b. (1)"Personal Injury"or"advertising injury"arising out of the actual, alleged or threatened discharge, dispersal,
seepage, migration,release or escape of pollutants:
(a) At or from any premises, site or location which is or was at any time owned or occupied by, or rented or
loaned to,any insured;
(b) At or from any premises, site or location which is or was at any time used by or for any insured or others for
the handling, storage, disposal, processing or treatment of waste;
(c) Which are or were at any time transported, handled, stored, treated, disposed, of, or processed as waste
by or for any insured or any person or organization for whom you may be legally responsible; or
(d) At or from premises, site or location on which any insured or any contractors or subcontractors working
directly or indirectly on any insured's behalf are performing operations:
0) If the pollutants are brought on or to the premises, site or location in connection with such
operations by such insured, contractor or subcontractor; or
(ii) If the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or
in any way respond to, or assess the effects of pollutants
PRG 3144(Ed 05105) 8 OF 22
Subparagraphs (a) and (d) (i) do not apply to "personal injury" or "advertising injury" arising out of heat,
smoke or fumes from a hostile fire
As used in this exclusion, a hostile fire means one which becomes uncontrollable or breaks out from where
it was intended to be.
(2)Any toss, cost or expense arising out of any:
(a) Request,demand or order that any insured or others test for, monitor,clean up, remove, contain,treat,
detoxify or neutralize, or in any way respond to, or assess the effects of pollutants; or
(b) Claim or"suit"by or on behalf of a governmental authority for damages because of testing for,
monitoring, cleaning up, removing, containing,treating, detoxifying or neutralizing, or in any way
responding to, or assessing the effects of pollutants.
c. (1)"Personal Injury"or"Advertising Injury arising out of, resulting from, caused or contributed by asbestos
or exposure to asbestos; or
(2)The costs of abatement, mitigation, removal or disposal of asbestos.
This exclusion also includes:
(a) Any supervision, instruction, recommendations,warnings or advice given or which should have been
given in connection with the above; and
(b) Any obligation to share damages with or repay someone else who must pay damages because of
such injury or damage.
d. "Advertising Injury"arising out of:
(1) Breach of contract,other than misappropriation of advertising ideas under an implied contract;
(2) The failure of goods, products or services to conform with advertised quality or performance;
(3) The wrong description of the price of goods, products or services;or
(4) An offense committed by an insured whose business is advertising, broadcasting, publishing or telecasting.
e. Any obligation to defend or indemnify with respect to any claim or"suit"alleging or asserting in any respect loss,
injury or damage(including consequential bodily injury)on connection with"Wrongful Termination"of your
employees and/or"Discrimination"involving your employees and/or"Sexual Harassment"of your employees
The following definitions apply to the foregoing:
"Wrongful Termination"means termination of an employment relationship in a manner which is
against the law and wrongful or in breach of an implied agreement to continue employment_
"Discrimination"means termination of an employment relationship or a demotion or a failure or
refusal to hire or promote any individual because of race, color, religion, age, sex, disability,
pregnancy or natural origin,.
"Sexual Harassment"means unwelcome sexual advances and/or requests for sexual favors
and/or other verbal or physical conduct of a sexual nature that(1)are made a condition of
employment and/or(2)are used as a basis for employment decisions and/or(3)create a work
environment that interfaces with performance.
f. Any obligation to defend or indemnify with respect to any claim or"suit"alleging or asserting in any respect loss,
injury or damage in connection with the purchase or sale, the offer, solicitation,or advertising for the purchase or
sale, or the depreciation or decline in price or value, of any security, debt, bank deposit, or financial interest or
Instrument.
PRG 3144(Ed.O5/05) 9 OF 22
DEFENSE COSTS AND CLAIM EXPENSES-COVERAGES A AND B
We will pay, with respect to any claim we investigate or settle, or any"suit"against an insured we defend:
1 All expenses we incur, including legal fees and other defense expenses, but not including the salaries of our claim
adjusters.
2 Up to$250 for cost of bail bonds required because of accidents or traffic law violations arising out of the use of any
vehicle to which the Bodily Injury Liability Coverage applies. We do not have to furnish these bonds.
3 The cost of bonds to release attachments, but only for bond amounts within the applicable limit of insurance. We
do not have to furnish these bonds.
4. All reasonable expenses incurred by the insured at our request to assist us in the investigation or defense of the
claim or"suit,"including actual loss of earnings up to$250 a day because of time off from work.
5. All costs taxed against the insured in the"suit"
6. Prejudgment interest awarded against the insured on that part of the judgment we pay. If we make an offer to pay
the applicable limit of insurance, we will not pay any prejudgment interest based on that period of time after the
offer.
7.. All interest on the full amount of any judgment that accrues after entry of the judgment and before we have paid,
offered to pay, or deposited in court the part of the judgment that is within the applicable limit of insurance.
These payments will reduce the applicable limit of insurance once these payments exceed one million($1,000,000)dollars.
If we defend an insured against a "suit" and an indemnitee of the insured is also named as a party to the "suit," we will
defend that indemnitee if all of the following conditions are met:
a. The"suit"against the indemnitee seeks damages for which the insured has assumed the liability of the
indemnitee in a contract or agreement that is an"insured contract";
b. This insurance applies to such liability assumed by the insured;
c. The obligation to defend, or the cost of the defense of,that indemnitee, has also been assumed by the
insured in the same"insured contract";
d. The allegations in the"suit"and the information we know about the"occurrence"are such that no conflict
appears to exist between the interests of the insured and the interests of the indemnitee;
e. The indemnitee and the insured ask us to conduct and control the defense of that indemnitee against such
"suit"and agree that we can assign the same counsel to defend the insured and the indemnitee;and
f. The indemnitee:
(1) Agrees in writing to:
(a) Cooperate with us In the investigation,settlement or defense of the"suit';
(b) Immediately send us copies of any demands, notices, summonses or legal papers received in
connection with the"suit";
(c) Notify any other insurer whose coverage is available to the indemnitee;and
(d) Cooperate with us with respect to coordinating other applicable insurance available to the
indemnitee; and
PRG 3144(Ed 05105) 10 OF 22
(2) Provides us with written authorization to:
(a) Obtain records and other information related to the"suit"; and
(b) Conduct and control the defense of the indemnitee in such "suit."
So long as the above conditions are met, attorneys fees incurred by us in the defense of that indemnitee, necessary
litigation expenses incurred by us and necessary litigation expenses incurred by the indemnitee at our request will be paid
as DEFENSE COSTS AND CLAIMS EXPENSES. Notwithstanding the provisions of paragraph 2.b.(2)of COVERAGE A-
BODILY INJURY AND PROPERTY DAMAGE LIABILITY(Section 1 -Coverages), such payments will not be deemed to be
damages for"bodily injury" and "property damage" but will nevertheless reduce the limits of insurance once such payments
exceed one million($1,000,000)dollars
Our obligation to defend an insured's indemnitee and to pay for attorneys' fees and necessary litigation expenses as
DEFENSE COSTS AND CLAIM EXPENSES ends when:
a We have used up the applicable limit of insurance in the payment of judgments,settlements, and/or, to the
extent they exceed one million($1,000,000)dollars, DEFENSE COSTS AND CLAIMS EXPENSES;or
b. The conditions set forth above, or the terms of the agreement described in paragraph f.above, are
no longer met
SECTION II-WHO IS AN INSURED
1. If you are designated in the Declarations as:
a. An individual,you and your spouse are insureds, but only with respect to the conduct of a business of which
you are the sole owner.
b. A partnership or joint venture,you are an insured. Your members,your partners, and their spouses are also
insureds, but only with respect to the conduct of your business.
c_ A limited liability company,you are an insured. Your members are also insureds, but only with respect to the
conduct of your business. Your managers are insureds, but only with respect to their duties as your
managers.
d. An organization other than a partnership,joint venture or limited liability company,you are an insured.Your
"executive officers"and directors are insureds, but only with respect to their duties as your officers or
directors.Your stockholders are also insureds, but only with respect to their liability as stockholders.
2. Each of the following is also an insured:
a. Your"employees,"other than either your"executive officers"(if you are an organization other than a
partnership,joint venture or limited liability company)or your managers(if you are a limited liability
company), but only for acts within the scope of their employment by you or while performing duties related to
the conduct of your business However, none of these"employees"is an insured for:
(1) "Bodily injury"or"personal injury":
(a) To you,to your partners or members(if you are a partnership or joint venture), to your members(if
you are a limited liability company), or to a co-"employee"while that co-"employee"is either in the
course of his or her employment or performing duties related to the conduct of your business;
(b) To the spouse, child, parent, brother or sister of that co-"employee"as a consequence of paragraph
(1)(a)above;
(c) For which there is any obligation to share damages with or repay someone else who must pay
damages because of the injury described in paragraphs(1)(a)or(b)above;or
(d) Arising out of his or her providing or failing to provide professional health care services.
PRG 3144(Ed.05/05) 11 OF 22
(2) "Property damage"to property:
(a) Owned, occupied or used by;or
(b) Rented to, in the care, custody or control of, or over which physical control is being exercised for any
purpose by you,any of your"employees,"any partner or member(if you are a partnership or joint
venture),or any member(if you are a limited liability company).
b. Any person (other than your"employee"),or any organization while acting as your real estate manager.
c. Any person or organization having proper temporary custody of your property if you die, but only-
(1) With respect to liability arising out of the maintenance or use of that property,and
(2) Until your legal representative has been appointed..
d.Your legal representative if you die, but only with respect to duties as such-That representative will have all
your rights and duties under this Coverage Part.
3. With respect to"mobile equipment"registered In your name under any motor vehicle registration law, any person
is an insured while driving such equipment along a public highway with your permission.Any other person or
organization responsible for the conduct of such person is also an insured, but only with respect to liability arising
out of the operation of the equipment,and only if no other insurance of any kind is available to that person or
organization for this liability. However, no person or organization is an insured with respect to:
a. "Bodily injury"to a co-"employee"of the person driving the equipment;or
b. "Property damage"to property owned by, rented to, in the charge of or occupied by you or the employer of
any person who is an insured under this provision.
4. Any organization you newly acquire or form, other than a partnership,joint venture or limited liability company,
and over which you maintain ownership or majority interest,will qualify as a Named Insured if there is no other
similar insurance available to that organization. However:
a. Coverage under this provision is afforded only until the 90th day after you acquire or form the organization or
the end of the policy period, whichever is earlier;
b. Coverage A does not apply to"bodily Injury"or"property damage"that occurred before you acquired or
formed the organization; and
c. Coverage B does not apply to"personal injury"or"advertising injury'arising out of an offense committed
before you acquired or formed the organization.
No person or organization is an insured with respect to the conduct of any current or past partnership, joint venture or
limited liability company that is not shown as a Named Insured in the Declarations.
SECTION III-LIMITS OF INSURANCE
1. The Limits of Insurance shown in the Declarations and the rules below fix the most we will pay for damages regardless
of the number of:
a. Insureds;
b. Claims made or"suits"brought;or
a. Persons or organizations making claims or bringing"suits."
2. The General Aggregate Limit is the most we will pay for the sum of:
a. Damages and/or, to the extent they exceed one million ($1,000,000) dollars, DEFENSE COSTS AND CLAIMS
EXPENSES under Coverage A, except damages because of "bodily injury' or "property damage" included in the
"products-completed operations hazard";and
PRG 3144(Ed.05/05) 12 OF 22
b. Damages and/or, to the extent they exceed one million($1,000,000)dollars, DEFENSE COSTS AND CLAIMS
EXPENSES under Coverage B.
3. The Products-Completed Operations Aggregate Limit is the most we will pay under Coverage A for damages and/or , to
the extent they exceed one million ($1,000,000) dollars, DEFENSE COSTS AND CLAIMS EXPENSES because of
"bodily injury"and"property damage"included in the"products-completed operations hazard."
4. Subject to 2, above, the Personal and Advertising Injury Limit is the most we will pay under Coverage B for the sum of
all damages and/or, to the extent they exceed one million ($1,000,000) dollars, DEFENSE COSTS AND CLAIMS
EXPENSES because of all"personal injury"and all"advertising injury"sustained by any one person or organization.
5. Subject to 2. or 3. above, whichever applies, the Each Occurrence Limit is the most we will pay for the sum of
Damages and/or, to the extent they exceed one million ($1,000,000) dollars, DEFENSE COSTS AND CLAIMS
EXPENSES under Coverage A.
6. Subject to 5, above, the Fire Damage Limit is the most we will pay under Coverage A for damages because of
"property damage" to premises, while rented to you or temporarily occupied by you with permission of the owner,
arising out of any one fire. We will not pay DEFENSE COSTS AND CLAIMS EXPENSES associated with "property
damage"to premises,while rented to you or temporarily occupied by you with permission of the owner.
The Limits of Insurance of this Coverage Part apply separately to each consecutive annual period and to any remaining
period of less than 12 months, starting with the beginning of the policy period shown in the Declarations, unless the policy
period is extended after issuance for an additional period of less than 12 months. In that case, the additional period will be
deemed part of the last preceding period for purposes of determining the Limits of Insurance.
SECTION IV-CONDITIONS
1. Bankruptcy.
Bankruptcy or insolvency of the insured or of the insured's estate will not relieve us of our obligations under this policy.
2. Duties In The Event Of Occurrence,Offense, Claim or"Suit".
a. You must see to it that we are notified as soon as practicable of an"occurrence"or an offense which may result in
a claim.To the extent possible, notice should include:
(1) How,when and where the"occurrence"or offense took place;
(2) The names and addresses of any injured persons and witnesses;and
(3) The nature and location of any injury or damage arising out of the"occurrence"or offense.
b. If a claim is made or"suit"is brought against any insured;you must:
(1) Immediately record the specifics of the claim or"suit"and the date received; and
(2) Notify us as soon as practicable- You must see to it that we receive written notice of the claim or"suit"as soon
as practicable.
c- You and any other involved insured must:
(1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with
the claim or"suit'
(2) Authorize us to obtain records and other information;
(3) Cooperate with us in the investigation or settlement of the claim or defense against the"suit'; and
(4) Assist us, upon our request, in the enforcement of any right against any person or organization which may be
liable to the insured because of injury or damage to which this insurance may also apply.
PRG 3144(Ed.05/05) 13 OF 22
d. No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation, or incur any
expense, other than for first aid,without our consent.
3. Legal Action Against Us.
No person or organization has a right under this policy
a, To join us as a parry or otherwise bring us into a "suit"asking for damages from an insured; or
b. To sue us on this Coverage Part unless all of its terms have been fully compiled with.
A person or organization may sue us to recover on an agreed settlement or on a final judgment against an insured
obtained after an actual trial; but we will not be liable for damages that are not payable under the terms of this
Coverage Part or that are in excess of the applicable limit of insurance.An agreed settlement means a settlement and
release of liability signed by us,the insured and the claimant or the claimant's legal representative.
4. Other Insurance.
If other valid and collectible insurance is available to the insured for a loss we cover under Coverages A or B of this
Coverage Part, our obligations are limited as follows:
a. Primary Insurance
This insurance is primary except when b, below applies. If this insurance is primary, our obligations are not affected
unless any of the other insurance is also primary.Then,we will share with all that other insurance by the method
described c. below.
b. Excess insurance
This insurance is excess over any of the other insurance,whether primary,excess, contingent or on any other
basis:
(1) That is Fire, Extended Coverage, Builder's Risk, Installation Risk or similar coverage for"your work'
(2) That is Fire insurance for premises rented to you or temporarily occupied by you with permission of the owner;
or
(3) If the loss arises out of the maintenance or use of aircraft, "autos" or watercraft to the extent not subject to
Exclusion g. of Coverage A(Section 1).
When this insurance is excess, we will have no duty under Coverages A or B to defend the insured against any
"suit" if any other insurer has a duty to defend the insured against that "suit." If no other insurer defends, we will
undertake to do so, but we will be entitled to the insured's rights against all those other insurers.
When this insurance is excess over other insurance, we will pay only our share of the amount of the loss, if any,
that exceeds the sum of:
(1) The total amount that all such other insurance would pay for the loss in the absence of this insurance;and
(3) The total of all deductible and self-insured amounts under all that other insurance..
We will share the remaining loss, if any, with any other insurance that is not described in this Excess Insurance
provision and was not bought specifically to apply in excess of the Limits of Insurance shown in the Declarations of
this Coverage Part.
c. Method of Sharing
If all of the other insurance permits contribution by equal shares, we will follow this method also. Under this
approach each insurer contributes equal amount until it has paid its applicable limit of insurance or none of the loss
remains,whichever comes first
PRG 3144(Ed.05/05) 14 OF 22
If any of the other insurance does not permit contribution by equal shares, we will contribute by limits. Under this
method, each insurer's share is based on the ratio of its applicable limit of insurance to the total applicable limits of
insurance of all insurers.
5. Premium Audit.
a_ We will compute all premiums for this policy in accordance with our rules and rates.
b. Premium shown in this policy as advance premium is a deposit premium only. At the close of each audit period we
will compute the earned premium for that period.
Audit premiums are due and payable on notice to the first Named Insured. If the sum of the advance and audit
premiums paid for the policy tern is greater than the earned premium, we will return the excess to the First Named
Insured, but not if such audit premium is less than the minimum annual premium shown in the Policy Declarations.
c, If the premium for this policy is a flat premium, it is not subject to adjustment, except that additional premiums may
be required for any additional Insureds or as provided for in Condition 9. Cancellation.
d. The first Named Insured must keep records of the information we need for premium computation, and send us
copies at such times as we may request.The first Named insured shown on the Declarations is responsible for the
payment of all premiums and will be the payee for any return premiums we pay.
6. Representations.
By accepting this policy, you agree:
a. The statements in the Declarations are accurate and complete;
b. Those statements are based upon representations you made to us;and
c. We have issued this policy in reliance upon your representations
7. Separation Of Insureds.
Except with respect to the Limits of Insurance, and any rights or duties specifically assigned in this policy to the first
Named Insured,this insurance applies:
a. As if each Named Insured were the only Named Insured;and
b. Separately to each insured against whom claim is made or"suit"is brought.
B. Transfer Of Rights Of Recovery Against Others To Us.
If the insured has rights to recover all or part of any payment we have made under this Coverage Part, those rights are
transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring "suit" or
transfer those rights to us and help us enforce them.
9. Deductible Liability
Our obligation under Coverage A and Coverage B to pay damages, including all SUPPLEMENTARY
PAYMENTS, if any, applies only to the amount of damages and SUPPLEMENTARY PAYMENTS in excess of
any deductible amounts stated in the Commercial General Liability Coverage Part Declarations as applicable
to such coverages.
The deductible amounts stated in the Commercial General Liability Coverage Part Declarations apply as
follows:
(a) PER CLAIM BASIS—if the deductible is on a"per claim"basis, the deductible amount applies under
Coverage A and Coverage B to all damages, SUPPLEMENTARY PAYMENTS because of: bodily
injury", property damage", "personal injury", and"advertising injury", and"advertising injury"sustained
by one person or organization as the result of any one"occurrence".
PRG 3144(Ed. 05/05) 15 OF 22
(b) PER OCCURRENCE BASIS—if the deductible is on a"per occurrence" basis, the deductible amount
applies under Coverage A and Coverage B to all damages, SUPPLEMENTARY PAYMENTS
because of"bodily injury","property damage","personal injury'and"advertising injury'as the result of
any one"occurrence"regardless of the number of persons or organizations who sustain damages
because of that"occurrence".
(c) The terms of this insurance, including those with respect to:
1. Our right and duty to defend any"suit"seeking those damages; and
2. Your duties in the event of an"occurrence", claim,or"suit"; apply irrespective of the application of
the deductible amount.
(d) We may pay any part or all of the deductible amount to effect settlement of any claim or"suit'and, upon
notification of the action taken, you shall promptly reimburse us for such part of the deductible amount
as has been paid by us.
10. Cancellation
(a) The first Named Insured shown in the Declarations may cancel this policy by mailing or delivering to us advance
written notice of cancellation,.
(b) We may cancel this policy by mailing or delivering to the first Named Insured written notice of cancellation at least:
1. 10 days before the effective date of cancellation if we cancel for nonpayment of premium; or
2. 30 days before the effective date of cancellation if we cancel for any other reason.
(c) We will mail or deliver our notice to the first Named Insured's last mailing address known to us:.
(d) Notice of cancellation will state the effective date of cancellation.The policy period will end on that date.
(e) If this policy is canceled,we will send the first Named Insured any premium refund due. If we cancel,the refund will
be pro rata. If the first Named Insured cancels, earned premium will be calculated in accordance with the
customary short-rate table and procedure, or the Minimum Earned Premium stated in the Declarations,which ever
is greater.The cancellation will be effective even if we have not made or offered a refund.
(f) If notice is mailed, proof of mailing will be sufficient proof of notice.
11. When We Do Not Renew.
If we decide not to renew this Coverage Part, we will mail or deliver to the first Named Insured shown in the
Declarations written notice of the nonrenewal not less than 30 days before the expiration date.
If notice is mailed, proof of mailing will be sufficient proof of notice.
SECTION V-DEFINITIONS
1 "Advertising injury" means injury arising out of one or more of the following offenses:
a. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or
organization's goods, products or services;
b. Oral or written publication of material that violates a person's right of privacy;
c Misappropriation of advertising ideas or style of doing business;or
d. Infringement of copyright, title or slogan.
PRG 3144(Ed.05105) 16 OF 22
2. "Auto" means a land motor vehicle, trailer or semi trailer designed for travel on public roads, including any attached
machinery or equipment. But"auto"does not include"mobile equipment."
1 "Bodily injury' means bodily injury, sickness or disease sustained by a person, including death resulting from any of
these at any time.
4. "Coverage territory'means:
a. The United States of America(including its territories and possessions),Puerto Rico and Canada;
b. International waters or airspace, provided the injury or damage does not occur in the course of travel or
transportation to or from any place not included in a.above;or
c. All parts of the world if:
(1) The injury or damage arises out of:
(a) Goods or products made or sold by you in the territory described in a.above;or
(b) The activities of a person whose home is in the territory described in a. above, but is away for a short time
on your business; and
(2) The insured's responsibility to pay damages is determined in a"suit"on the merits, in the territory described in
a.,above or in a settlement we agree to.
5. "Employee"includes a"leased worker.""Employee"does not include a"temporary worker."
6. "Executive officer" means a person holding any of the officer positions created by your charter, constitution, by-laws or
any other similar governing document.
T "Impaired property" means tangible property, other than "your product" or "your work,"that cannot be used or is less
useful because:
a It incorporates "your product" or "your work' that is known or thought to be defective, deficient, inadequate or
dangerous;or
b. You have failed to fulfill the terms of a contract or agreement; if such property can be restored to use by:
a.The repair, replacement, adjustment or removal of"your product"or"your work";or
c. Your fulfilling the terms of the contract or agreement.
8, "Insured contract"means:
a. A contract for a lease of premises. However, that portion of the contract for a lease of premises that indemnifies
any person or organization for damage by fire to premises while rented to you or temporarily occupied by you with
permission of the owner is not an"insured contract";
b. A sidetrack agreement;
c. Any easement or license agreement, except in connection with construction or demolition operations on or within
50 feet of a railroad;
d An obligation, as required by ordinance, to indemnify a municipality, except in connection with work for a
municipality;
e. An elevator maintenance agreement;
PRG 3144(Ed 05/05) 17 OF 22
f. That part of any other contract or agreement pertaining to your business (including an indemnification of a
municipality in connection with work performed for a municipality) under which you assume the tort liability of
another party to pay for "bodily injury" or"property damage"to a third person or organization. Tort liability means a
liability that would be imposed by law in the absence of any contract or agreement.
Paragraph f, does not include that part of any contract or agreement:
(1) That indemnifies a railroad for "bodily injury" or "property damage" arising out of construction or demolition
operations, within 50 feet of any railroad property and affecting any railroad bridge or trestle, tracks, roadbeds,
tunnel, underpass or crossing;
(2) That indemnifies an architect,engineer or surveyor for injury or damage arising out of:
(a) Preparing, approving, or failing to prepare or approve, maps, shop drawings, opinions, reports, surveys,
field orders, change orders or drawings and specifications;or
(b) Giving directions or instructions, or failing to give them, if that is the primary cause of the injury or damage;
or
(3) Under which the insured, if an architect, engineer or surveyor, assumes liability for an injury or damage arising
out of the insured's rendering or failure to render professional services, including those listed in (2) above and
supervisory, inspection, architectural or engineering activities.
9. "Leased worker" means a person leased to you by a labor leasing firm under an agreement between you and the labor
leasing firm, to perform duties related to the conduct of your business. "Leased worker" does not include a"temporary
worker."
10. "Loading or unloading" means the handling of property:
a. After it is moved from the place where it is accepted for movement into an aircraft, watercraft or"auto";
b. While it is in or on an aircraft,watercraft or"auto'; or
c. While it is being moved from an aircraft, watercraft or"auto"to the place where it is finally delivered; but"loading or
unloading" does not include the movement of property by means of a mechanical device, other than a hand truck,
that is not attached to the aircraft,watercraft or"auto."
11. "Mobile equipment"means any of the following types of land vehicles, including any attached machinery or equipment:
a. Bulldozers,farm machinery,forklifts and other vehicles designed for use principally off public roads;
b. Vehicles maintained for use solely on or next to premises you own or rent;
c. Vehicles that travel on crawler treads;
d. Vehicles,whether self-propelled or not, maintained primarily to provide mobility to permanently mounted:
(1) Power cranes, shovels, loaders,diggers or drills;or
(2) Road construction or resurfacing equipment such as graders, scrapers or rollers;
e. Vehicles not described in a., b., c. or d, above that are not self-propelled and are maintained primarily to provide
mobility to permanently attached equipment of the following types:
(1) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical
exploration, lighting and well servicing equipment;or
(2) Cherry pickers and similar devices used to raise or lower workers;
PRG 3144(Ed.05/05) 18 OF 22
f Vehicles not described in a., b., c. or d.. above maintained primarily for purposes other than the transportation of
persons or cargo.
However, self-propelled vehicles with the following types of permanently attached equipment are not "mobile
equipment" but will be considered"autos":
(1 ) Equipment designed primarily for:
(a) Snow removal;
(b) Road maintenance, but not construction or resurfacing;or
(c) Street cleaning;
(2)Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers;
and
(3)Air compressors, pumps and generators, including spraying,welding, building cleaning, geophysical exploration,
lighting and well servicing equipment.
12. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful
conditions.
13_ "Personal injury" means injury,other than'bodily Injury,"arising out of one or more of the following offenses:
a. False arrest, detention or Imprisonment;
b. Malicious prosecution;
c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or
premises that a person occupies by or on behalf of its owner,landlord or lessor;
d. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or
organization's goods, products or services; or
e. Oral or written publication of material that violates a person's right of privacy.
14. "Products-completed operations hazard":
a. Includes all "bodily injury' and "property damage"occurring away from premises you own or rent and arising out of
"your product"or"your work"except:
(1) Products that are still in your physical possession;or
(2) Work that has not yet been completed or abandoned. However, "your work"will be deemed completed at the
earliest of the following times:
(a) When all of the work called for in your contract has been completed.;
(b) When all of the work to be done at the job site has been completed if your contract calls for work at more
than one job site; or
(c) When that part of the work done at a job site has been put to its intended use by any person or
organization other than another contractor or subcontractor working on the same project.
Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete,
will be treated as completed.
PRG 3144(Ed 05105) 19 OF 22
b. Does not include"bodily injury"or"property damage"arising out of:
(1) The transportation of property, unless the injury or damage arises out of a condition in or on a vehicle not
owned or operated by you, and that condition was created by the"loading or unloading" of that vehicle by any
insured;
(2) The existence of tools, uninstalled equipment or abandoned or unused materials;or
(3) Products or operations for which the classification, listed in the Declarations or in a policy schedule, states that
products-completed operations are subject to the General Aggregate Limit
15. "Property damage"means:
a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be
deemed to occur at the time of the physical injury that caused it; or
b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the
time of the"occurrence"that caused it.
16. "Suit" means a civil proceeding in which damages because of "bodily injury," "property damage," "personal injury" or
"advertising injury"to which this insurance applies are alleged. "Suit"includes:
a.. An arbitration proceeding in which such damages are claimed and to which the insured must submit or does submit
with our consent;or
b. Any other alternative dispute resolution proceeding in which such damages are claimed and to which the insured
submits with our consent.
17. 'Temporary worker" means a person who is furnished to you to substitute for a permanent "employee" on leave or to
meet seasonal or short-term workload conditions..
18. "Your product" means:
a Any goods or products, other than real property, manufactured, sold, handled,distributed or disposed of by:
(1) You;
(2) Others trading under your name;or
(3) A person or organization whose business or assets you have acquired;and
c. Containers (other than vehicles), materials, parts or equipment furnished in connection with such goods or
products.
"Your product"includes:
a. Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use
of"your product";and
b. The providing of or failure to provide warnings or instructions,
"Your product"does not include vending machines or other property rented to or located for the use of others but not
sold
19. "Your work"means:
a. Work or operations performed by you or on your behalf;and
c. Materials, parts or equipment furnished in connection with such work or operations.
PRG 3144(Ed 05/05) 20 OF 22
"Your work"includes:
a. Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use
of"your work'; and
b The providing of or failure to provide warnings or instructions
SECTION VI. OTHER CONDITIONS
CHANGES
This policy contains all the agreements between you and us concerning the insurance afforded. The first Named
Insured shown in the Declarations is authorized to make changes in the terms of this policy with our consent.This
policy's terms can be amended or waived only by endorsement issued by us and made a part of this policy,.
EXAMINATION OF YOUR BOOKS AND RECORDS
We may examine and audit your books and records as they relate to this policy at any time during the policy period
and up to three years afterward.
INSPECTIONS AND SURVEYS
We have the right but are not obligated to:
1. Make inspections and surveys at any time;
2. Give you reports on the conditions we find;and
3. Recommend changes.
Any inspections,surveys, reports or recommendations only apply to insurability and the premiums to be charged. We do
not make safety inspections We do not undertake to perform the duty of any person or organization to provide the health or
safety of workers or the public. And we do not warrant that conditions:
1. Are safe or healthful;or
2. Comply with laws, regulations,codes or standards.This condition applies not only to us, but also to any rating
advisory, rate service or similar organization which make insurance inspections, surveys, reports or
recommendations.
TRANSFER OF YOUR RIGHTS AND DUTIES UNDER THIS POLICY
Your rights and duties under this policy may not be transferred without our written consent except in the case death of an
individual named insured. If you die,your rights and duties will be transferred to your legal representative but only while
acting within the scope of duties as your legal representative. Until your legal representative is appointed, anyone having
proper temporary custody of your property will have your rights and duties but only with respect to that property.
SERVICE OF SUIT
In the event of our failure to pay any amount claimed to be due hereunder,we, at your request will submit to the jurisdiction
of a court of competent jurisdiction within the United States. Nothing in this condition constitutes or should be understood to
constitute a waiver of our rights to commence an action in any court of competent jurisdiction in the United States to
remove an action to a United States District Court or to seek a transfer of a case to another court as permitted by the laws
of the United States or of any state in the United States. It is further agreed that service of process in such suit may be
made upon Counsel, Legal Department, Lexington Insurance Company, 200 State Street, Boston, Massachusetts, 02109
or his or her representative, and that in any suit instituted against us upon this policy, we will abide by the final decision of
such court or of any appellate court in the event of an appeal.
PRG 3144(Ed.05/05) 21 OF 22
Further, pursuant to any statute of any state, territory, or district of the United States which makes provision therefor, we
hereby designates the Superintendent, Commissioner or Director of Insurance, or other officer specked for that purpose in
the statute, or his or her successor or successors in office as its true and lawful attorney upon whom may be served any
lawful process in any action, "suit", or proceeding instituted by you or on your behalf or any beneficiary hereunder arising
out of this policy of insurance, and hereby designates the above named Counsel as the person to whom the said officer is
authorized to mail such process or a true copy thereof.
ARBITRATION
Notwithstanding the Service of Suit clause above, in the event of a disagreement as to the interpretation of this policy, it is
mutually agreed that such dispute shall be submitted to binding arbitration before a panel of three(3)Arbitrators, consisting
of two (2) party- nominated (non-impartial) Arbitrators and a third (impartial) Arbitrator (hereinafter "umpire") as the sole
and exclusive remedy.
The party desiring arbitration of a dispute shall notify the other party, said notice including the name, address and
occupation of the Arbitrator nominated by the demanding party. The other party shall within 30 days following receipt of the
demand, notify in writing the demanding party of the name, address and occupation of the Arbitrator nominated by it. The
two (2) Arbitrators so selected shall, within 30 days of the appointment of the second Arbitrator, select an umpire. If the
Arbitrators are unable to agree upon an umpire, each Arbitrator shall submit to the other Arbitrator a list of three (3)
proposed individuals, from which list each Arbitrator shall choose one (1 ) individual. The names of the two (2) individuals
so chosen shall be subject to a draw,whereby the individual drawn shall serve as umpire.
The parties shall submit their cases to the panel by written and oral evidence at a hearing time and place selected by the
umpire. Said hearings shall be held within thirty(30)days of the selection of the umpire. The panel shall be relieved of all
judicial formality, shall not be obligated to adhere to the strict rules of law or of evidence, shall seek to enforce the intent of
the parties hereto and may refer to, but are not limited to, relevant legal principles. The decision of at least two (2) of the
three (3) panel members shall be binding and final and not subject to appeal except for grounds of fraud or gross
misconduct by the Arbitrators. The award will be issued within 30 days of the close of the hearings. Each party shall bear
the expenses of its designated Arbitrator and shall jointly and equally share with the other the expense of the umpire and of
the arbitration proceeding.
The arbitration proceeding shall take place in or in the vicinity of Boston, Massachusetts.The procedural rules applicable to
this arbitration, shall, except as provided otherwise herein, be in accordance with the Commercial Rules of the American
Arbitration Association.
IN WITNESS WHEREOF, the Company has caused this policy to be executed and attested, but this policy shall not be
valid unless countersigned in the Declarations by a duly authorized representative of the Company.
Secretary President
PRG 3144(Ed.05/05) 22 OF 22
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
FIREWORKS ENDORSEMENT
This endorsement modifies insurance provide by this policy:
Amended Pollution Exclusion
1. Subparagraph f.(t)of paragraph 2., Exclusions, Coverage A—BODILY INJURY AND PROPERTY
DAMAGE LIABILITY(Section 1—Coverages)is deleted and replaced with
the following subparagraph:
f Pollution
(1) "Bodily injury"or"property damage"arising out of the actual,alleged or threatened discharge,
dispersal, seepage, migration, release or escape of pollutants:
(a) At or from any premises,site or location which is or was at any time owned or occupied
by, or rented or loaned to,any insured;
(b) At or from any premises,site or location which is or was at any time used by or for any
insured or others for the handling,storage,disposal, processing or treatment of waste;
(c) Which are or were at any time transported, handled, stored, treated, disposed of, or
processed as waste by or for any insured or any person or organization for whom you
may be legally responsible;or
(d) At or from any premises, site or location on which any insured or any contractors or
subcontractors working directly or indirectly on any insured's behalf are performing
operations:
(i) If the pollutants are brought on or to the premises,site or location in connection
with such operations by such insured,contractor or subcontractor; or
(ii) If the operations are to test for, monitor, clean up,remove, contain, treat, detoxify
or neutralize,or in any way respond to, or assess the effects of pollutants.
Subparagraph(a)and(d)(i)do not apply to"bodily injury"or"property damage" arising out of
heat, smoke or fumes from a hostile fire or arising out of the use of any firework or
pyrotechnic materials used in connection with the insured's operations. This above stated
exception does not apply to"bodily injury"or"property damage"which results from any
firework or pyrotechnic material being transported,stored, treated,disposed of or processed
as waste; or transported or stored for others
As used in this exclusion, a hostile fire means one which becomes uncontrollable or breaks
out from where it was intended to be or the effects resulting from the Named Insured testing
pyrotechnic materials.
Non-Owned Watercraft Coverage
2. Subparagraph g.(2)of paragraph 2, Exclusions, Coverage A—BODILY INJURY AND PROPERTY
DAMAGED LIABILITY(Section I—Coverages)is deleted and replaced with the following paragraph:
(2) A watercraft you do not own that is not being used to carry persons or property for a charge;
Additional Insured Vendors
3, Paragraph 5 is added to Section I1—WHO IS AN INSURED as follows:
LEX-EWE-OCC-BG I
5. Any person or organization acting as a vendor, but only with respect to "bodily injury" or "property
damage" arising out of "your products" which are distributed or sold in the regular course of the
vendor's business; however, the insurance afforded to a vendor does not apply to:
a. "Bodily injury"or"property damage"for which the vendor is obligated to pay damages by reason of
the assumption of liability in a contract or agreement. This subparagraph does not apply to liability
for damages that the vendor would have in the absence of the contract or agreement;
b. Any express warranty unauthorized by you;
c. Any physical or chemical change in the product made intentionally by the vendor;
d Repackaging unless unpacked solely for the purpose of inspection, demonstration, testing,
or the substitution of parts under instructions from the manufacturer, and then repackaged
in the original container;
e. Any failure to make such inspections, adjustments, tests or servicing as the vendor has
agreed to make or normally undertakes to make in the usual course of business, in
connection with the distribution or sale of the products;
f. Demonstration, installation,servicing or repair operations,except such operations
performed at the vendor's premises in connection with the sale of the product;
g. Products which, after distribution or sale by you, have been labeled or relabeled or
used as a container,or any other thing or substance by or for the vendor.
This insurance does not apply to any insured person or organization,from whom you have acquired
such products,or any ingredient, part or container,entering into, accompanying or containing such
products.
Additional Insured—Blanket
4 Paragraph 6. is added to Section 11—WHO 1S AN INSURED as follows:
6. Notwithstanding any term or condition of this policy to the contrary, any person or organization
required by written contract to have liability coverage for operations performed by the Named
Insured on behalf of such person or organization will qualify as an additional insured for such
coverage as is provided under Coverage A.
In addition, a lessor who leases a location to the Named Insured and is required by written contract
to have liability coverage for operations performed by the Named Insured on behalf of such lessor
will qualify as an additional insured for such coverage as is provided under Coverage A,
Amendment—Aggregate Limits of Insurance per Display/Locations
5. Paragraph 2.of Section III—LIMITS OF INSURANCE is deleted and replaced with the following
paragraph:
2. The General Aggregate Limit is the most we will pay for the sum of:
a. Medical Expenses under Coverage C;
b. Damages under Coverage A,except damages because of"bodily injury"or"property
damage"included in the"products-completed operations hazard"; and
c. Damages under Coverage B.
The General Aggregate Limit applies separately to each location owned or rented by you and to
fireworks displays which take place away from locations owned or rented by you.
Exclusion: Cross Suits
6. The following additional Exclusion is added to the policy and applies both to Coverage A—BODILY
INJURY AND PROPERTY DAMAGE LIABILITY(Section I—Coverages)and Coverage B—PERSONAL
AND ADVERTISING INJURY LIABILITY(Section 1—Coverages):
This insurance does not apply to any claim or suit by any insured against any other insured because of
"bodily injury,""property damage,""personal Injury"or"advertising injury.'
LEX-FWE-OCC-BG 2
Exclusion: Injury to Leased and Temporary Workers.
7. Subparagraph s. is added to paragraph 2., Exclusions, Coverage A—BODILY INJURY AND
PROPERTY DAMAGE LIABILITY(Section I---Coverages)as follows:
s. "Bodily injury'to:
(1) Any"leased worker"or"temporary worker"or:
(2) The spouse, child, parent, brother or sister of that"leased worker"or"temporary worker"as
a consequence of(1)above
This exclusion applies:
(1) Whether the insured may be liable as an employer or in any other capacity;
(2) To any obligation to share damages with or repay someone else who must pay damages
because of the injury; and
(3) To liability assumed by the insured under an"insured contract"
The following additional definitions apply to this exclusion:
(1) "Leased worker"means a person leased to the insured by a labor leasing firm under an
agreement between you and the labor leasing firm, to perform duties related to the conduct
of your business.
(2) "Temporary worker"means a person who is furnished to you for a period of time of less
than one year, to support or supplement your work force in special work situations such as
employee absences, temporary skill shortages and seasonal workloads.
All other terms, conditions,exclusions remain unchanged.
Authorized Representative
SEX-FWE-OCC-BG 3
This endorsement, effective 12:01 A.M., 01/11/2007
Forms a part of Policy No.: 6990162
Issued to: Fireworks & Stage FX America, Inc
By: LEXINGTON INSURANCE COMPANY
AMENDMENT TO EXCLUSIONS d. AND e. EXCLUDING INJURY TO
ANY WORKER OF ANY INSURED
This endorsement modifies insurance provided by the policy:
Subparagraphs d. and e. of Paragraph 2., Exclusions of COVERAGE A. BODILY INJURY
AND PROPERTY DAMAGE LIABILITY(SECTION I—COVERAGES) are deleted and replaced
with the following:
d. Workers' Compensation And Similar Laws
Any obligation of any insured under a workers' compensation, disability benefits or
unemployment compensation law or any similar law.
e. Employer's Liability
"Bodily injury"to:
(1) Any "worker of any insured arising out of and in the course of:
(a) Employment by any insured; or
(b) Performing duties related to the conduct of any insured's business; or
(2) The spouse, child, parent, brother or sister of such "worker" as a consequence of
Paragraph (1) above..
This exclusion applies:
(1) Whether such insured may be liable as an employer or in any other capacity; and
(2) To any obligation to share damages with or repay someone else who must pay
damages because of the injury.
The following additional definitions apply to this endorsement and supersede any contrary
definitions in the policy:
1. "Worker" means a "leased worker, "temporary worker", "employee", "independent
contractor", or"volunteer" or the spouse, child, parent, brother or sister of such"worker'.
2. "Leased worker' means a person leased to any insured, any affiliated entity, or any
"independent contractor" by a labor leasing firm under an agreement between any insured,
any affiliated entity, or any "independent contractor' and the labor leasing firm, to perform
duties related to the conduct of any insured's business, any affiliated business, or any
"independent contractors" business.
3. "Temporary worker' means a person who is furnished to any insured, any affiliated entity, or
any "independent contractor" for a period of time of less than one year, to support or
supplement any insured's work force or any affiliated entity's, or any independent
contractors work force in special work situations such as employee absences, temporary
skill shortages and seasonal workloads.
PRG 3083 (1/07) Page 1 of 2
4. "Employee" means a person who performs duties related to the conduct of any insured's
business, any affiliated business or any "independent contractor's" business for
compensation, salary, or any kind of consideration or item of value and includes you, your
members, your partners, your managers, your officers (including all "executive officers"),
your directors, and any other insured
5. "Independent contractor" means any person or entity that, by written or verbal contract with
any insured or any person or entity performing duties on any insured's behalf, performs
duties related to the conduct of any insured's business, any affiliated business, or any
"independent contractor's" business and includes such person or entity's 'leased workers",
"temporary workers", "employees", "independent contractors", and/or"volunteers
6. "Volunteer" means a person who performs duties related to the conduct of any insured's
business, any affiliated business, or any "independent contractor's" business without any
compensation, salary, payment or "in-kind payment" or with minimal compensation, salary,
payment, or "in-kind payment". "in-kind payment" means anything given or offered in
exchange for work performed including, but not limited to, free food or clothing, or free
tickets or admission to any event
All other terms and conditions of the policy remain the same.
Authorized Representative
PRG 3083(1/07) Page 2 of 2
ENDORSEMENT
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
MINIMUM EARNED PREMIUM ENDORSEMENT
This endorsement modifies insurance provided by the policy. The Common Policy
Conditions are modified as follows:
1. Paragraph 5 of Condition A---Cancellation is deleted and replaced with the following paragraph:
5) If this policy is cancelled, we will send the first Named Insured any premium refund due.
If we cancel, the refund will be pro rata. If the first Name Insured cancels, earned
premium will be computed according to the customary short-rate table and procedure,
subject to a Minimum Earned Premium of$ 35,360.00 The cancellation will be effective
even if we have not made or offered a refund.
Authorized Representative OR
Countersignature(in state where applicable)
PRG CC 02 04 99 Page 1 of 1
® AMERICAN INTERNATIONAL COMPANIES°
POLICYHOLDER DISCLOSURE STATEMENT
UNDER
TERRORISM RISK INSURANCE ACT OF 2002
You are hereby notified that under the federal Terrorism Risk Insurance Act of 2002 (the "Act") effective
November 26, 2002, you now have a right to purchase insurance coverage for losses arising out of an Act
of Terrorism, which is defined in the Act as an act certified by the Secretary of the Treasury(i)to be an act
of terrorism, (ii) to be a violent act or an act that is dangerous to (A) human life; (B) property or (C)
infrastructure, (III) to have resulted in damage within the United States, or outside of the United States in
case of an air carrier or vessel or the premises of a U.S, mission and (iv) to have been committed by an
individual or individuals acting on behalf of any foreign person or foreign interest, as part of an effort to
coerce the civilian population of the United States or to influence the policy or affect the conduct of the
United States Government by coercion. You should read the Act for a complete description of its
coverage. The Secretary's decision to certify or not to certify an event as an Act of Terrorism and thus
covered by this law is final and not subject to review. There is a $100 billion dollar annual cap on all
losses resulting from Acts of Terrorism above which no coverage will be provided under this policy and
under the Act unless Congress makes some other determination.
For your information, coverage provided by this policy for losses caused by an Act of Terrorism may be
partially reimbursed by the United States under a formula established by the Act. Under this formula the
United States pays 90% of terrorism losses covered by this law exceeding a statutorily established
deductible that must be met by the insurer, and which deductible is based on a percentage of the insurer's
direct earned premiums for the year preceeding the Act of Terrorism.
Coverage for Acts of Terrorism is already included in your current policy. The portion of your annual
premium that is attributable to coverage for Acts of Terrorism covered by the Act is$, 1.400.00
Policy No. 6990162
Named Insured: FIREWORKS&STAGE FX AMERICA INC
PRG 1003(12/02) Copyright 0 2002 American International Group,Inc
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
EMPLOYEE BENEFITS LIABILITY INSURANCE
PROVIDES CLAIMS MADE COVERAGE-Please read carefully
ADDITIONAL DECLARATIONS
LIMIT OF LIABILITY
$1,000,000,00 Each Wrongful Act or series of related Wrongful acts
$1,000,000.00 Each Annual Aggregate
DEDUCTIBLE: $1,000 Each Wrongful Act or series of related Wrongful Acts
COVERAGE: Employee Benefits Liability Insurance
No.of Employees: Employees of the Named Insured,as per application on file with the Company.
Flat Annual Premium: $ INCLUDED
INSURING AGREEMENTS
EMPLOYEE BENEFITS LIABILITY
We will pay the"Insured"for those sums which the"Insured"shall become legally obligated to pay as damages because of any
claim against the"Insured"due to any"Wrongful Act"of the"Insured", or any other person for whose acts the"Insured"is
legally liable, in the "Administration" of the "Insured's Employee Benefits Programs", as these terms are defined in the
Definitions section of this endorsement.This insurance applies only if a claim for damages covered by this endorsement is first
made against the "Insured" during the policy period. We have the right and duty to defend any suit against the "Insured"
seeking damages on account of such "Wrongful Act" even if any of the allegations of the suit are groundless, false or
fraudulent,and we may make such investigation and settlement of any claim or suit as we deem expedient.
DEFINITIONS
DEFINITION OF"Insured":
With respect to the insurance afforded by this endorsement the unqualified word"Insured" includes you,provided that(a) if the you
are designated as an individual, the insurance applies only to the conduct of a business of which he is the sole proprietor and (b) the
unqualified word"Insured"also includes the following:
A If you are or include a partnership or joint venture,any partner or member thereof by only
with respect to his liability as such;
B Any of your executive officers,director or stockholders while acting within the scope of his/her duties
as such;
C. Any employee,provided such employee is authorized to act in the"Administration"of the your
"Employee Benefits Program"
DEFINITION OF"Employee Benefits Programs";
The term "Employee Benefits Programs" means: (a) group life insurance, group accident or health insurance, profit sharing plans,
pension plans, employee stock subscription plans, workmen's compensation, unemployment insurance, social benefits, disability
benefits, and (b) any other similar employee benefits instituted after the effective date of this endorsement provided we are notified
within thirty(30)days after the institution of such benefits.
DEFINITION OF"Administration":
The unqualified word"Administration"wherever used shall mean;
A. Giving counsel to employees with respect to the"Employee Benefits Programs";
B Interpreting the"Employee Benefits Program';
C. Handling of records in connection with the"Employee Benefits Programs";
D. Effective enrollment,termination or cancellation of employees under the"Employee Benefits Programs",
provided all are acts which are authorized by the"Named Insured".
DEFINITION OF"Wrongful Act":
"Wrongful Act"means any actual or alleged negligent act,error or omission in the"Administration"of the"Employee Benefits Plan".
DEFINITION OF"Related Wrongful Acts"
"Related Wrongful Acts" mean"Wrongful Acts"which are the same,related or continuous, or"Wrongful Acts"which arise from a
common nexus of facts. Claims can allege`Related Wrongful Acts"regardless of whether such claims involve the same or different
claimants,insureds or legal causes of action.
EXCLUSIONS
This endorsement does not apply to:
l.. Any dishonest,fraudulent,criminal or malicious act,libel,slander,discrimination or humiliation;
2. Bodily injury to or sickness,disease or death,of any person,or to injury to or destruction of any tangible property,including
the loss of use thereof;
3. Any claim for failure of performance of contract by an insurer;
4. Any claim based upon the"Insured's"failure to comply with any law concerning workmen's compensation,unemployment
insurance,social security or disability benefits;
5. Any claim based upon:
A. failure of any investment(s)including but not limited to stock to perform as represented by an"Insured";
B.advice given by an"Insured"to an employee to participate in any investment plan including but not limited to stock
subscription plans.
6 All sums which the"Insured"shall become legally obligated to pay as loss because of any"Breach of Fiduciary
Duty"(as defined below)or because of any"Breach of Fiduciary Duty"by any person for which the"Insured"is
legally responsible and arising out of the"Insured's"activity as a fiduciary of any Plan covered by this
endorsement.The term,`Breach of Fiduciary Duty"shall mean the violation of any of the responsibilities
obligations of duties imposed upon fiduciaries by the EMPLOYEE RETIREMENT INCOME SECURITY ACT of
1974 or amendments thereto with respect to any Plan covered by this endorsement.
7. Any claim made against the"Insured"based on or attributable to any failure or omission on the part of the
"Insured"to effect and maintain insurance or bonding for Plan Property or Assets.
CONDITIONS
LIMITS OF LIABILITY
The"Each Annual Aggregate" limit stated in the ADDITIONAL DECLARATIONS is the most we will pay for all claims first made
against the "Insured"which are covered by this endorsement and made during the period that this endorsement is in€orce. Subject to
the"Each Annual Aggregate" limit as described above, the "Wrongful Act"or series of"Related Wrongful Acts"limit stated in the
ADDITIONAL, DECLARATIONS is the most we will pay for all claims made on account of each "Wrongful Act" or series of
"Related Wrongful Acts" covered by this endorsement regardless of the number of(a) "Insured's" covered by this endorsement, (b)
persons who sustain damage,or(c)claims made or suits brought for such damages..
DEDUCTIBLE
The deductible amount indicated in the ADDITIONAL DECLARATIONS shall be subtracted from the total amount of all sums
which we are obligated to pay or incur on behalf of the"Insured"on account of each"Wrongful Act"or series of"Related Wrongful
Acts"as stated in the ADDITIONAL DECLARATIONS.
The terms of this endorsement including those with respect to notice of claim or suit and our right to investigate and negotiate any such
claim or suit,apply irrespective of the application of the deductible amount.
OPTIONAL EXTENDED REPORTING PERIOD ENDORSEMENT
The coverage under the Employee Benefits Liability Endorsement may end because on of us chooses to cancel it or not renew it.If this
is not the result of non-payment of the premium you have the right to buy a reporting endorsement. It extends the time to report
covered claims. The claim must first be made against an "Insured" and reported to us within 3 years after the Employee Benefits
Liability Endorsement ends and while the reporting endorsement is in effect.To obtain this reporting endorsement you must request in
writing and pay this additional premium within 30 days after this agreement ends. If we don't receive written notice and payment within
this period,you may not exercise this right at a later date.
We'll sell you this endorsement for an additional premium. This additional premium will not exceed 200%of the annual premium for
the Employee Benefits Liability Endorsement. Once you pay the premium we can't cancel the endorsement We will determine the
additional premium taking into account the following:
a. The exposure"Insured"
b. Previous types and amounts of insurance;
C. Limits of liability available under the Employee Benefit Liability Insurance for future payment of
damages;and
d Other related factors
The optional Extended Reporting Period Endorsement does not reinstate or increase the Limits of Liability applicable to any claim to
which the Employee Benefits Liability Endorsement applies.
CONFORMITY WITH STATUTE
Terms of this endorsement which are in conflict with the statute of the state wherein this endorsement is issued are hereby amended to
confirm to such statutes
OTHER TERMS OF POLICY
All other teens,conditions and exclusions contained in this policy remain unchanged
Authorized Representative or Countersignature
(In states where applicable)
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT
CAREFULLY.
This endorsement,effective 12:01 A.M. 1/11/2007
forms a part of Policy No. 6990162
issued to: FIREWORKS&STAGE FX AMERICA,INC.-
by LEXINGTON INSURANCE COMPANY
COVERAGE TERRITORY ENDORSEMENT
This endorsement modifies insurance provided under the.following
Payment of loss under this policy shall only be made in full compliance with all United
States of America economic or trade sanction laws or regulations, including,but not
limited to, sanctions, laws and regulations administered and enforced by the U.S.
Treasury Department's Office of Foreign Assets Control ("OFAC").
AUTH REPRESENTATIVE
89644 (7/05)
ATTORNMENT AND
SECOND AMENDMENT TO
CONCESSION LICENSE AGREEMENT
This ATTORNMENT AND SECOND AMENDMENT TO CONCESSION
LICENSE AGREEMENT (this "Second Amendment"), dated for identification
purposes only as of July 15, 2007, is made by and between the REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE, a public body corporate and politic
(the "Agency"), and GOLDEN STATE CONCESSIONS AND CATERING, INC., a
California corporation ("Concessionaire") with regard to the following:
RECITALS
The following Recitals are a substantive part of this Second Amendment:
A. Agency and Concessionaire entered into that certain Concession License
Agreement dated January 30, 2002 in order to provide for (i) concessions operations and
food and beverage service at the Site, and(ii) the provision of concession services and the
use of the concession facilities at the Site. As of November 1, 2002, the Concession
License Agreement was amended by that certain Amendment to Concession License
Agreement, which amended certain provisions of the Concession License Agreement to
bring the Concession License Agreement into conformance with regulations promulgated
by the Department of Alcohol and Beverage Control of the Business, Transportation and
Housing Agency of the State of California. The term of the Concession License
Agreement was extended pursuant to that certain Assignment, Assumption, Attornment
and Nondisturbance Agreement dated as of July 1, 2004 for identification purposes by
and between the Agency, Concessionaire, the Storm, LLC, and Impact Stadium, LLC, as
amended by Amendment No. 1 thereto dated July 1, 2004 (collectively, the "Attornment
Agreement"). The Concession License Agreement, as amended by the Amendment to
Concession License Agreement, the Attornment Agreement, and this Second Amendment
shall be referred to herein as the "Concession Agreement."
B. Capitalized terms used herein which are not otherwise defined herein shall
have the meaning ascribed to them in the Concession Agreement.
C. The owners of Storm Baseball and Concessionaire have formed Diamond
Stadium Group, LLC, a California limited liability company ("PSG), for the purpose of
managing the Site. Concurrently herewith, Agency and DSG are entering into that
certain Stadium License, Lease and Management Agreement ("Management
Agreement"). The Management Agreement provides that DSG shall operate the Site
through December 31, 2016, and provides for two five (5) year options to extend such
term. The Management Agreement further provides for the assignment of the
Concession Agreement to DSG during the term thereof, subject to certain conditions and
restrictions.
D. It is a condition precedent to the Agency's entry into the Management
Agreement that the Concession Agreement shall be amended such that (1) its term runs
concurrently with that of the Management Agreement; (ii) Concessionaire shall attorn to
DSG with respect to is performance under the Concession Agreement and with respect to
all of the rights and obligations under the Concession Agreement so long as the
Management Agreement is in full force and effect, and (iii) in the event of a termination
of the Management Agreement, Concessionaire, attornment to DSG and Agency's
assignment of the Concession Agreement shall terminate and be of no further force and
effect.
E. It is to the mutual benefit of the parties hereto that the Agency enter into
the Management Agreement, and, accordingly, Concessionaire is willing to attorn to
DSG and amend the Concession Agreement as described herein.
F. In furtherance of the purpose and intentions of the parties with respect to
the Concession Agreement, the parties hereto agree to amend the Concession Agreement
as provided herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing Recitals and the terms
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:
1. Termination of Attornment Agreement Provisions. The Parties hereby
agree and acknowledge that, notwithstanding the language in Section 9 of the Attornment
Agreement stating that certain provisions of the Stadium Amendments (as defined in the
Attornment Agreement) shall survive the termination of the Master Lease (as defined in
the Attornment Agreement), the Parties now intend and agree to terminate any and all of
the provisions of the Attornment Agreement and/or the Stadium Amendments currently
in effect, such that any and all provisions of the Attornment Agreement and/or the
Stadium Amendments shall be of no further force and effect from and after the date of
this Second Amendment.
Accordingly, from and after the Effective Date of this Second
Amendment, the Concession Agreement is hereby amended to delete any and all
provisions effected by the Attornment Agreement and/or the Stadium Amendments,
including, without limitation, the provisions of Section 9 of the Attornment Agreement
which state that they survive the termination of the Master Lease. As a result, from and
after the Effective Date of this Second Amendment, the terms and conditions of the
Concession Agreement shall consist solely of the terms and conditions of the Concession
License Agreement, as amended by the Amendment to Concession License Agreement
and this Second Amendment.
2. Definitions. Section I of the Concession Agreement, entitled
"Definitions," is hereby amended to add, or delete and replace in their entirety, as
appropriate, the following definitions:
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Amd No.2 to Concession Agreement FINAL.doc
"Attornment Agreement" means that certain Assignment, Assumption,
Attornment and Nondisturbance Agreement dated as of July 1, 2004 for
identification purposes by and between the Agency, Concessionaire, the Storm,
LLC, and Impact Stadium, LLC, as amended by Amendment No. 1 thereto dated
July 1, 2004.
"Attornment Period"is defined in Section 29 of this Agreement.
"DSG" means Diamond Stadium Group, LLC, a California limited
liability company.
"Expiration Date" means December 31, 2016, or such later date as may
be determined in accordance with Section 2 of this Agreement.
"First Extension Term"is defined in Section 2.2 of this Agreement.
"Initial Term"is defined in Section 2.1 of this Agreement.
"Management Agreement" means that certain Stadium License, Lease
and Management Agreement between the Agency and DSG dated for
identification purposes only as of July 15, 2007.
"Parties" means the Agency and Concessionaire; "Parry" means either
the Agency or Concessionaire.
"Second Extension Term"is defined in Section 2.3 of this Agreement.
"Term" is the Initial Term and, if applicable, the First Extension Term;
and, if applicable, the Second Extension Term.
3. Term of Concession Agreement. Section 2 of the Concession
Agreement, entitled "Term of Agreement," is hereby deleted in its entirety and replaced
with the following:
2.1 Initial Term. The initial term of this Agreement
(hereinafter referred to as the "Initial Term") shall commence upon the
Commencement Date and, unless sooner terminated or extended under the
terms and conditions of this Agreement, shall continue thereafter until
11:59 p.m., Pacific Time, on December 31, 2016 (the `Expiration Date").
2.2 First Extension Term. Upon the commencement of the
First Extension Term (as defined in the Management Agreement) pursuant
to and in accordance with Section 3.2 of the Management Agreement,
Concessionaire and Agency hereby agree that the term of this Agreement
shall be automatically extended for one (1) additional period of five (5)
years (the "First Extension Term"). All of the terms and conditions of this
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Amd No.2 to Concession Agreement FINAL.doc
Agreement shall apply to such First Extension Term, and a new Expiration
Date shall automatically be established to be 11:59 p.m. Pacific Time on
December 31, 2021.
2.3 Second Extension Term. Upon the commencement of the
Second Extension Term (as defined in the Management Agreement)
pursuant to and in accordance with Section 3.3 of the Management
Agreement, Concessionaire and Agency hereby agree that the term of this
Agreement shall be automatically extended for another additional period
of five (5) years (the "Second Extension Term"). All of the terms and
conditions of this Agreement shall apply to such Second Extension Term,
and a new Expiration Date shall automatically be established to be 11:59
p.m. Pacific Time on December 31, 2026.
4. Other Stadium Events. Section 3.2(b) of the Concession Agreement is
hereby deleted and replaced with the following:
(b) Exclusive Caterer Services for Other Stadium Events.
Concessionaire shall not have the exclusive right and/or obligation to
provide Refreshments in the Diamond Club during Other Stadium Events
(the "Other Stadium Event Diamond Club Catering").
5. Notice. Section 26 of the Concession Agreement is hereby deleted and
replaced in its entirety with the following:
26. Notice. All notices, requests, demands or documents
which are required or permitted to be given or served hereunder shall be in
writing and delivered personally or delivered by United States mail,
postage prepaid, certified return receipt requested, or delivered by a
national or regional overnight courier (e.g., FedEx, Overnight Express,
etc.) addressed as follows:
To the Agency at: The Redevelopment Agency of the City of Lake
Elsinore
130 S. Main Street
Lake Elsinore, California 92530
Attn: Executive Director
with a copy to: Barbara Zeid Leibold, Esq.
Leibold, McClendon&Mann, PC
23422 Mill Creek Drive, Suite 105
Laguna Hills, California 92653
To the Concessionaire: Golden State Concessions and Catering, Inc.
500 Diamond Drive
Lake Elsinore, California 92531
Attn: General Manager
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with a copy to: Robert B. Lapidus, Esq.
Law Office of Robert B. Lapidus
3366 North Torrey Pines Court, Suite 210
La Jolla, CA 92037
Notice shall be deemed to have been delivered only upon actual
delivery to the intended addressee in the case of either personal service or
courier. The addresses for purposes of this Section 26 may be changed by
giving written notice of such change in the manner provided herein for
giving notices. Unless and until such written notice is delivered, the latest
information stated by written notice, or provided herein if no written
notice of change has been delivered, shall be deemed to continue in effect
for all purposes hereunder.
6. Attornment during Performance of Management Agreement. The
Concession Agreement shall be amended to add a Section 29, as follows:
29. Attornment during Performance of Management
Agreement.
(a) Pursuant to the Management Agreement, the
Concession Agreement has been assigned to DSG during the Attornment
Period, and DSG has assumed the rights and obligations of the Agency
under the Concession Agreement during the Attornment Period.
Concessionaire acknowledges and represents that it is the intent of DSG
and Concessionaire that Concessionaire will continue, pursuant to the
Concession Agreement, to perform its obligations under the Concession
Agreement during the term of the Management Agreement.
Concessionaire further acknowledges and represents that it shares
controlling ownership with DSG.
(b) The Parties agree that, so long as the licenses and lease
granted to DSG in the Management Agreement are effective (the
"Attornment Period"), except for the rights and obligations set forth in this
Section 29, Concessionaire shall attorn to and tender all performances
under the Concession Agreement to DSG and shall look to DSG
exclusively for all of the rights and benefits accruing under the Concession
Agreement. Concessionaire further agrees that the Agency shall have no
liability or obligation to Concessionaire under the Concession Agreement
during the Attornment Period for any default by DSG under the
Concession Agreement. No amendment of the Concession Agreement,
nor waiver or delay in enforcement of any failure to perform nor other
breach of the Concession Agreement by either DSG or the Concessionaire
during the Attornment Period shall be binding upon the Agency; nor shall
any course of dealing established between DSG and the Concessionaire be
binding upon the Agency. If the Management Agreement is terminated,
then the attornment provided for in this Section 29 shall be rescinded and
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Concessionaire shall again be responsible to Agency for its performance
under the Concession Agreement and shall look to Agency with respect to
all rights and benefits accruing thereunder.
(c) Notwithstanding the foregoing, during the Attornment
Period, Concessionaire acknowledges and agrees that Agency reserves the
right to declare a breach under the Concession Agreement by the
Concessionaire and pursue any legal remedies to which it may be entitled.
Further, Concessionaire agrees to provide Agency with prompt written
notice of any breach by DSG under the Concession Agreement. Agency
shall have the right,•but not the obligation, to cure any default of DSG
during the Attornment Period. Concessionaire agrees to afford Agency
the right to cure any such default. Concessionaire shall not be permitted to
terminate the Agreement during the Attornment Period as a result of
uncured breach or breaches by DSG unless Concessionaire has provided
Agency with notice and an opportunity to cure in accordance with this
Agreement.
(d) Concessionaire covenants and agrees to maintain its
operations and corporate formation in such force and good standing such
that it shall be able to resume its obligations hereunder at any time during
and after the Attornment Period. Failure to so maintain its operations and
corporate formation, and/or failure to resume performance of its
obligations hereunder upon any termination of the Management
Agreement shall constitute a material breach of this Agreement.
(e) Concessionaire shall, to the maximum extent permitted
by law, indemnify, defend and hold harmless the Agency and its directors,
officers, members, managers, employees, agents, and other representatives
from any and all liability, demands, claims, costs, losses, damages,
settlements, recoveries and expenses (including, without limitation,
interest, penalties, expert witness fees, accounting fees and attorneys' fees
and costs) incurred by any of the foregoing, known or unknown,
contingent or otherwise, directly or indirectly arising from or related to
any misrepresentations or breach of any of the provisions of this Section
29.
(f) Concessionaire shall not in any event be entitled to, and
hereby waives, any right to seek damages for loss of profits or any special
or consequential damages of any kind or nature from the Agency arising
out of or in connection herewith, and in connection with such waiver
Concessionaire is familiar with and hereby waives the provision of§ 1542
of the California Civil Code which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
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EXECUTING THE RELEASE WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR."
(g) Concessionaire acknowledges and agrees that it has
been informed that DSG may not assign its rights under the Agreement
without the prior written consent of the Agency.
7. Accuracy of Recitals. The Parties acknowledge the accuracy of the
foregoing Recitals,which are incorporated herein by this reference.
8. Authority; Priority of Amendment. This Second Amendment is
executed by the Parties' authorized representatives. Except as expressly modified herein,
all of the terms of the Concession Agreement shall remain unchanged and in full force
and effect, and the Parties shall continue to fulfill their respective obligations under the
Concession Agreement as amended by this Second Amendment. To the extent of any
conflict between the terms of the Concession Agreement and the terms of this Second
Amendment, the terms of this Second Amendment shall control.
9. Captions. The captions appearing in this Second Amendment are for
convenience only and are not a part of this Second Amendment and do not in any way
limit, amplify, define, construe, or describe the scope or intent of the terms or provisions
of this Second Amendment.
10. Counterparts. This Second Amendment may be executed in
counterparts, each of which shall be deemed an original, and all of which together shall
constitute but one and the same document.
11. Effective Date. The effective date of this Second Amendment is July 15,
2007.
[BALANCE OF PAGE LEFT INTENTIONALLY BLANK, SIGNATURES ON
FOLLOWING PAGE]
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Amd No.2 to Concession Agreement FINAL.doc
IN WITNESS WHEREOF, the parties have executed this Second Amendment
as of the date first written above.
GOLDEN STATES CONCESSIONS AND
CATERING,INC., a California corporation
By: _
Printed Ny Je: L G c
Its: V1(V3� C�'(-
REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE, a public body, corporate
and politi
Chairperson
ATTEST:
�
Agency Clerk
APPROVED AS TO FORM:
LEIB )LD CCLEND & ' A , P.C.,
Agency G era C
By:
arbara Zei Leib d
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Amd No.2 to Concession Agreement FINAL
ATTORNMENT AND
FIRST AMENDMENT TO
LICENSE AGREEMENT
This ATTORNMENT AND FIRST AMENDMENT TO LICENSE
AGREEMENT (this "Amendment"), dated for identification purposes only as of July
15, 2007, is made by and between the REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE, a public body corporate and politic (the "A_gency'), and the
LAKE ELSINORE STORM, LP, a California limited partnership (the "Storm") with
regard to the following:
RECITALS
The following Recitals are a substantive part of this Amendment:
A. Agency and Storm's predecessor in interest (Storm, LLC, a California
limited liability company) entered into that certain License Agreement dated March 15,
2001 (the "License Agreement") to provide for the use by the Storm of the Stadium for
baseball games and other activities, as more fully described therein. The term of the
License Agreement was extended pursuant to that certain Assignment, Assumption,
Attornment and Nondisturbance Agreement dated as of July 1, 2004 for identification
purposes only by and between the Agency, the Storm, Golden State Concessions and
Catering, Inc., and Impact Stadium, LLC, as amended by Amendment No. I thereto dated
July 1, 2004 (collectively, the "Attornment Agreement"). In addition, the Attornment
Agreement provided for certain changes to the Parties' rights to the Naming Rights to the
Stadium and the corresponding Annual License Fee Payable to the Agency.
B. The License Agreement, as amended by the Attornment Agreement and
this Amendment, shall be referred to herein as the "License." Capitalized terms used
herein which are not otherwise defined herein shall have the meaning ascribed to them in
the License.
C. The owners of the Storm have formed Diamond Stadium Group, LLC, a
California limited liability company ("DSG"), for the purpose of managing the Site.
Concurrently herewith, Agency and DSG are entering into that certain Stadium License,
Lease and Management Agreement ("Management Agreement"). The Management
Agreement provides that DSG shall operate the Site through December 31, 2016, and
provides for two five (5) year options to extend such term. The Management Agreement
further provides for the assignment of the License to DSG during the term thereof,
subject to certain conditions and restrictions.
D. It is a condition precedent to the Agency's entry into the Management
Agreement that the License shall be amended such that (i) its term runs concurrently with
First Amd to License Agt FINAL
that of the Management Agreement; (ii) Storm shall attorn to DSG with respect to its
performance under the License and with respect to all of its rights and obligations under
the License so long as the Management Agreement is in full force and effect.; and (iii) in
the event of a termination of the Management Agreement, (a) the Storm's attornment to
DSG and Agency's assignment of the License shall terminate and be of no further force
and effect, and (b) the provisions relating to the naming rights and corresponding Annual
License Fee payable revert to those in the original License Agreement, subject to the
amendments set forth herein.
E. It is to the mutual benefit of the parties hereto that the Agency enter into
the Management Agreement, and, accordingly, the Storm is willing to attorn to DSG and
amend the License as described herein.
F. In furtherance of the purpose and intentions of the parties with respect to
the License, the parties hereto agree to amend the License as provided herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing Recitals and the terms
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:
1. Termination of Attornment Agreement Provisions. The Parties hereby
agree and acknowledge that, notwithstanding the language in Section 9 of the Attornment
Agreement stating that certain provisions of the Stadium Amendments (as defined in the
Attornment Agreement) shall survive the termination of the Master Lease (as defined in
the Attornment Agreement), the Parties now intend and agree to terminate any and all of
the provisions of the Attornment Agreement and/or the Stadium Amendments currently
in effect, such that any and all provisions of the Attornment Agreement and/or the
Stadium Amendments shall be of no further force and effect from and after the date of
this Amendment.
Accordingly, from and after the Effective Date of this Amendment, the
License is hereby amended to delete any and all provisions of the License effected by the
Attornment Agreement and/or the Stadium Amendments, including, without limitation,
the provisions of Section 9 of the Attornment Agreement which state that they survive the
termination of the Master Lease. As a result, from and after the Effective Date of this
Amendment, the terms and conditions of the License shall consist solely of the terms and
conditions of the License Agreement, as amended by this Amendment.
2. Definitions. Section 1 of the License, entitled "Definitions," is hereby
amended to add, or delete and replace in its entirety, as appropriate, the following
definitions:
"Attornment Agreement" means that certain Assignment, Assumption,
Attornment and Nondisturbance Agreement dated as of July 1, 2004 for
identification purposes by and between the Agency, Concessionaire, the Storm,
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First Amd to License Agt FINAL
LLC, and Impact Stadium, LLC, as amended by Amendment No. 1 thereto dated
July 1, 2004.
"Attornment Period"is defined in Section 33 of this License Agreement.
"DSG" means Diamond Stadium Group, LLC, a California limited
liability company.
"Expiration Date" means December 31, 2016, or such later date as may
be determined in accordance with Section 2 of this License.
"First Extension Term"is defined in Section 2.2 of this License.
"Initial Term"is defined in Section 2.1 of this License.
"Management Agreement" means that certain Stadium License, Lease
and Management Agreement between the Agency and DSG dated for
identification purposes only as of July 15, 2007.
"Parties"means the Agency and Storm; "Party"means either the Agency
or Storm.
"Second Extension Term"is defined in Section 2.3 of this License.
"Term" is the Initial Term and, if applicable, the First Extension Term;
and, if applicable, the Second Extension Term.
3. Term of License. Section 2 of the License, entitled "Term of License" is
hereby deleted in its entirety and replaced with the following:
2.1 Initial Term. The initial term of this License (hereinafter
referred to as the "Initial Term") shall commence upon the
Commencement Date and, unless sooner terminated or extended under the
terms and conditions of this License, shall continue thereafter until 11:59
p.m., Pacific Time, on December 31, 2016 (the "Expiration Date").
2.2 First Extension Term. Upon the commencement of the
First Extension Term (as defined in the Management Agreement) pursuant
to and in accordance with Section 3.2 of the Management Agreement,
Storm and Agency hereby agree that the term of this License shall be
automatically extended for one (1) additional period of five (5) years (the
"First Extension Term"). All of the terms and conditions of this License
shall apply to such First Extension Term, and a new Expiration Date shall
automatically be established to be 11:59 p.m. Pacific Time on December
31, 2021. The Storm shall pay the Annual License Fee during the First
Extension Term in accordance with Section 4 of this License.
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First Amd to License Agt FINAL
2.3 Second Extension Term. Upon the commencement of the
Second Extension Term (as defined in the Management Agreement)
pursuant to and in accordance with Section 3.3 of the Management
Agreement, Storm and Agency hereby agree that the term of this License
shall be automatically extended for another additional period of five (5)
years (the "Second Extension Term"). All of the terms and conditions of
this License shall apply to such Second Extension Term, and a new
Expiration Date shall automatically be established to be 11:59 p.m. Pacific
Time on December 31, 2026. The Storm shall pay the Annual License Fee
during the Second Extension Term in accordance with Section 4 of this
License.
4. License Fees. Sections 4.1 and 4.2 of the License are hereby deleted and
replaced in their entirety with the following:
4.1. Initial Term. During the Initial Term, the Storm shall pay
to the Agency an Annual License Fee in the following amounts:
(a) Year 1 (January 1, 2001 - December 31, 2001): Three
Hundred Seventy Five Thousand Dollars ($375,000.00)
less the Deferral for a total payment of Three Hundred Fifty
Thousand Dollars ($350,000.00) (the "Year 1 Annual
License Fee");
(b) Year 2 (January 1, 2002 - December 31, 2002): Three
Hundred Seventy Five Thousand Dollars ($375,000.00)
plus payment of the Repayment Amount for a total of
Three Hundred Eighty Seven Thousand Five Hundred
Dollars ($387,500.00) (the "Year 2 Annual License Fee");
(c) Year 3 (January 1, 2003 - December 31, 2003): Three
Hundred Seventy Five Thousand Dollars ($375,000.00)
plus payment of the Repayment Amount for a total of
Three Hundred Eighty Seven Thousand Five Hundred
Dollars ($387,500.00) (the "Year 3 Annual License Fee");
(d) Year 4 (January 1, 2004 - December 31, 2004): Three
Hundred Seventy Five Thousand Dollars ($375,000.00)
adjusted for any percentage increase in CPI for Years 1, 2
and 3, but in no event to exceed Four Hundred Twelve
Thousand Five Hundred Dollars ($412,500:00) or be less
than Three Hundred Seventy Five Thousand Dollars
($375,000.00) (the "Year 4 Annual License Fee");
Example: Thus, and by way of example only, in the event
that the CPI for the month of December 2003 was 180 and
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First Amd to License Agt FINAL
the CPI For January 2001 was 170 the Year 4 Annual
License Fee would be calculated as follows:
1. December 2003 CPI less January 2001 CPI
=Index Point Change:
180 - 170 = 10.
2. Index Point Change divided by January
2001 CPI=Percentage Change
10/170 = 0.058.
3. Percentage Change multiplied by
$375,000.00=Year 4 Additional Amount
0.058 x $375,000.00 =$21,750.00
4. $375,000.00 + Year 4 Additional Amount =
Year 4 Annual License Fee
$375,000.00+ $21,750.00=$396,750.00
Under this example the calculated amount of
$396,750.00 is less than $412,500.00 and would be
the Year 4 Annual License Fee.
(e) Year 5 (January 1, 2005 - December 31, 2005): The Year
4 Annual License Fee adjusted for any percentage increase
in the CPI for Year 4, but in no event to exceed a four
percent (4%) increase and in no event to be less than the
Year 4 Annual License Fee (the "Year 5 Annual License
Fee");
Example: Thus, and by way of example only, in the event
that the CPI for the month of December 2004 was 185, the
CPI for January 2004 was 180 and the Year 4 Annual
License Fee was $396,750.00 the Year 5 Annual License
Fee would be calculated as follows:
1. December 2004 CPI less January 2004 CPI
=Index Point Change:
185 - 180 = 5.
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First Amd to License Agt FINAL
2. Index Point Change divided by January
2004 CPI=Percentage Change
5/180=0.028.
3. Percentage Change multiplied by the Year 4
Annual License Fee = Year 5 Additional
Amount
0.028 x $396,750.00= $11,109.00
4. Year 4 Annual License Fee + Year 5
Additional Amount = Year 5 Annual
License Fee
$396,750.00+ $11,109.00= $407,859.00
Under this example the calculated amount of
$407,859.00 is less than a 4% increase over the
Year 4 Annual License Fee and would be the Year 5
Annual License Fee.
(f) Year 6 (January 1, 2006 - December 31, 2006): The Year
5 Annual License Fee adjusted for any percentage increase
in the CPI for Year 5, but in no event to exceed a four
percent (4%) increase and in no event to be less than the
Year 5 Annual License Fee (the "Year 6 Annual License
Fee"); and
(g) Year 7 (January 1, 2007 - December 31, 2007): The Year
6 Annual License Fee adjusted for any percentage increase
in the CPI for Year 6, but in no event to exceed a four
percent (4%) increase and in no event to be less than the
Year 6 Annual License Fee (the "Year 7 Annual License
Fee").
(h) Year 8 (January 1, 2008 - December 31, 2008): The Year
7 Annual License Fee adjusted for any percentage increase
in the CPI for Year 7, but in no event to exceed a four
percent (4%) increase and in no event to be less than the
Year 7 Annual License Fee (the "Year 8 Annual License
Fee");
(i) Year 9 (January 1, 2009 - December 31, 2009): The Year
8 Annual License Fee adjusted for any percentage increase
in the CPI for Year 8, but in no event to exceed a four
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First Amd to License Agt FINAL
percent (4%) increase and in no event to be less than the
Year 8 Annual License Fee (the "Year 9 Annual License
Fee");
(j) Year 10 (January 1, 2010 - December 31, 2010): The
Year 9 Annual License Fee adjusted for any percentage
increase in the CPI for Year 9, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 9 Annual License Fee (the "Year 10 Annual
License Fee");
(k) Year 11 (January 1, 2011 - December 31, 2011): The
Year 10 Annual License Fee adjusted for any percentage
increase in the CPI for Year 10, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 10 Annual License Fee (the "Year 11 Annual
License Fee"); and
(1) Year 12 (January 1, 2012 - December 31, 2012): The
Year 11 Annual License Fee adjusted for any percentage
increase in the CPI for Year 11, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 11 Annual License Fee (the "Year 12 Annual
License Fee").
(m) Year 13 (January 1, 2013 - December 31, 2013): The
Year 12 Annual License Fee adjusted for any percentage
increase in the CPI for Year 12, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 12 Annual License Fee (the "Year 13 Annual
License Fee");
(n) Year 14 (January 1, 2014 - December 31, 2014): The
Year 13 Annual License Fee adjusted for any percentage
increase in the CPI for Year 13, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 13 Annual License Fee (the "Year 14 Annual
License Fee");
o) Year 15 (January 1, 2015 - December 31, 2015): The
Year 14 Annual License Fee adjusted for any percentage
increase in the CPI for Year 14, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 14 Annual License Fee (the "Year 15 Annual
License Fee"); and
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First Amd to License Agt FINAL
(p) Year 16 (January 1, 2016 - December 31, 2016): The
Year 15 Annual License Fee adjusted for any percentage
increase in the CPI for Year 15, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 15 Annual License Fee (the "Year 16 Annual
License Fee").
4.2. Extension Terms. During the First Extension Term, if
any, and the Second Extension Term, if any, the Storm shall annually pay
to the Agency in accordance with the terms and conditions of this License
the previous year's Annual License Fee adjusted for any percentage
increase in the CPI for the previous, but in no event to exceed a four
percent (4%) increase and in no event to be less than the previous year's
Annual License Fee.
5. Utilities. Section 11 is hereby deleted and replaced in its entirety with the
following:
11. Utilities. The Agency shall provide, or cause to be provided, all
utilities, including water, sewer, telephone, gas, refuse and electricity (the
"Utilities") necessary for all Storm Games at the Stadium, including such cost
attributed to the use of the Storm Office, except for telephone charges incurred by
the Storm which shall be paid for by the Storm. Notwithstanding the foregoing,
the Agency shall only be required to pay for actual electricity costs, including
without limitation electrical charges for the Electronic Message Board, in
connection with Storm Games in the an amount not to exceed the following:
(a) Year 1 (January 1, 2001 - December 31, 2001): One
Hundred Ten Thousand Dollars ($110,000.00) (the
"Electricity Base");
(b) Year 2 (January 1, 2002 - December 31, 2002): The
Electricity Base;
(c) Year 3 (January 1, 2003 - December 31, 2003): The
Electricity Base;
(d) Year 4 (January 1, 2004 - December 31, 2004): The
Electricity Base adjusted for any Percentage Increase in
CPI for Years 1, 2 and 3, but in no event to exceed One
Hundred Twenty One Thousand Dollars ($121,000.00) or
be less than the Electricity Base (the "Year 4 Electricity
Base");
Example: For an example of the calculation of the
percentage increase in CPI for Years 1, 2, and 3 refer to
Section 4.1(d) of this License.
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First Amd to License Agt FINAL
(e) Year 5 (January 1, 2005 - December 31, 2005): The Year
4 Electricity Base adjusted for any percentage increase in
the CPI for Year 4,but in no event to exceed a four percent
(4%) increase and in no event to be less than the Year 4
Electricity Base(the "Year 5 Electricity Base");
Example: For an example of the percentage increase in
CPI for Year 4 please refer to Section 4.1(e) of this
License.
(f) Year 6 (January 1, 2006 - December 31, 2006): The Year
5 Electricity Base adjusted for any percentage increase in
the CPI for Year 5, but in no event to exceed a four percent
(4%) increase and in no event to be less than the Year 5
Electricity Base (the "Year 6 Electricity Base");
(g) Year 7 (January 1, 2007 - December 31, 2007): The Year
6 Electricity Base adjusted for any percentage increase in
the CPI for Year 6, but in no event to exceed a four percent
(4%) increase and in no event to be less than the Year 6
Electricity Base (the "Year 7 Electricity Base");
(h) Year 8 (January 1, 2008 - December 31, 2008): The Year
7 Electricity Base adjusted for any percentage increase in
the CPI for Year 7, but in no event to exceed a four percent
(4%) increase and in no event to be less than the Year 7
Electricity Base (the "Year 8 Electricity Base");
(i) Year 9 (January 1, 2009 - December 31, 2009): The Year
8 Electricity Base adjusted for any percentage increase in
the CPI for Year 8, but in no event to exceed a four percent
(4%) increase and in no event to be less than the Year 8
Electricity Base (the "Year 9 Electricity Base");
(j) Year10 (January 1, 2010 - December 31, 2010): The
Year 9 Electricity Base adjusted for any percentage
increase in the CPI for Year 9, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 9 Electricity Base (the "Year 10 Electricity Base");
(k) Year 11 (January 1, 2011 - December 31, 2011): The
Year 10 Electricity Base adjusted for any percentage
increase in the CPI for Year 10, but in no event to exceed a
four percent (4%) increase and in no event to be less than
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First Amd to License Agt FINAL
the Year 10 Electricity Base (the "Year 11 Electricity
Base");
(1) Year 12 (January 1, 2012 - December 31, 2012): The
Year 11 Electricity Base adjusted for any percentage
increase in the CPI for Year 11, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 11 Electricity Base (the "Year 12 Electricity
Base");
(m) Year 13 (January 1, 2013 - December 31, 2013): The
Year 12 Electricity Base adjusted for any percentage
increase in the CPI for Year 12, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 12 Electricity Base (the "Year 13 Electricity
Base");
(n) Year 14 (January 1, 2014 - December 31, 2014): The
Year 13 Electricity Base adjusted for any percentage
increase in the CPI for Year 13, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 13 Electricity Base (the "Year 14 Electricity
Base");
(o) Year 15 (January 1, 2015 - December 31, 2015): The
Year 14 Electricity Base adjusted for any percentage
increase in the CPI for Year 14, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 14 Electricity Base (the "Year 15 Electricity
Base");
(p) Year 16 (January 1, 2016 - December 31, 2016): The
Year 15 Electricity Base adjusted for any percentage
increase in the CPI for Year 15, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 15 Electricity Base (the "Year 16 Electricity
Base"); and
(q) Each Year during the First Extension Term, if any, and
the Second Extension Term, if any: The previous year's
Electricity Base adjusted for any percentage increase in the
CPI for the previous year, but in no event to exceed a four
percent (4%) increase and in no event to be less than the
previous year's Electricity Base.
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First Amd to License Agt FINAL
6. Notice. Section 30 of the Agreement is hereby deleted and replaced in its
entirety with the following:
30. Notice. All notices, requests, demands or documents
which are required or permitted to be given or served hereunder shall be in
writing and delivered personally or delivered by United States mail,
postage prepaid, certified return receipt requested, or delivered by a
national or regional overnight courier (e.g., FedEx, Overnight Express,
etc.) addressed as follows:
To the Agency at: The Redevelopment Agency of the City of Lake
Elsinore
130 S. Main Street
Lake Elsinore, California 92530
Attn: Executive Director
with a copy to: Barbara Zeid Leibold, Esq.
Leibold, McClendon&Mann, PC
23422 Mill Creek Drive, Suite 105
Laguna Hills, California 92653
To the Storm: Storm
500 Diamond Drive
Lake Elsinore, California 92531
Attn: General Manager
with a copy to: Robert B. Lapidus, Esq.
Law Office of Robert B. Lapidus
3366 North Torrey Pines Court, Suite 210
La Jolla, CA 92037
Notice shall be deemed to have been delivered only upon actual
delivery to the intended addressee in the case of either personal service or
courier. The addresses for purposes of this Section 30 may be changed by
giving written notice of such change in the manner provided herein for
giving notices. Unless and until such written notice is delivered, the latest
information stated by written notice, or provided herein if no written
notice of change has been delivered, shall be deemed to continue in effect
for all purposes hereunder.
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First Amd to License Agt FINAL
7. Attornment during Performance of Management Agreement. The
License shall be amended to add a Section 33, as follows:
33. Attornment during Performance of Management
Agreement.
(a) Pursuant to the Management Agreement, the License
has been assigned to DSG during the Attornment Period, and DSG has
assumed the rights and obligations of the Agency under the License during
the Attornment Period. Storm acknowledges and represents that it is the
intent of DSG and Storm that Storm will continue,pursuant to the License,
to perform its obligations under the License during the term of the
Management Agreement. Storm further acknowledges and represents that
it shares controlling ownership with DSG.
(b) The Parties agree that, so long as the licenses and lease
granted to DSG in the Management Agreement are effective (the
"Attornment Period"), except for the rights and obligations set forth in this
Section 33, Storm shall attorn to and tender all performances under the
License Agreement to DSG and shall look to DSG exclusively for all of
the rights and benefits accruing under the License Agreement. Storm
further agrees that the Agency shall have no liability or obligation to
Storm under the License Agreement during the Attornment Period for any
default by DSG under the License Agreement. No amendment of the
License Agreement, nor waiver or delay in enforcement of any failure to
perform nor other breach of the License Agreement by either DSG or the
Storm during the Attornment Period shall be binding upon the Agency;
nor shall any course of dealing established between DSG and the Storm be
binding upon the Agency. If the Management Agreement is terminated,
then the attornment provided for in this Section 33 shall be rescinded and
Storm shall again be responsible to Agency for its performance under the
License Agreement and shall look to Agency with respect to all rights and
benefits accruing thereunder.
(c) Notwithstanding the foregoing, during the Attornment
Period, Storm acknowledges and agrees that Agency reserves the right to
declare a breach under the License by the Storm and pursue any legal
remedies to which it may be entitled. Further, Storm agrees to provide
Agency with prompt written notice of any breach by DSG under the
License. Agency shall have the right, but not the obligation, to cure any
default of DSG during the Attornment Period. Storm agrees to afford
Agency the right to cure any such default. Storm shall not be permitted to
terminate the Agreement during the Attornment Period as a result of
uncured breach or breaches by DSG unless Storm has provided Agency
with notice and an opportunity to cure in accordance with this Agreement.
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First Arad to License Agt FINAL
(d) Storm covenants and agrees to maintain its operations
and limited partnership organization in such force and good standing at all
times during and after the Attornment Period. Failure to so maintain its
operations and legal organization, and/or failure to resume performance of
its obligations hereunder upon any termination of the Management
Agreement, shall constitute a material breach of this License.
(e) Storm shall, to the maximum extent permitted by law,
indemnify, defend and hold harmless the Agency and its directors,
officers, members, managers, employees, agents, and other representatives
from any and all liability, demands, claims, costs, losses, damages,
settlements, recoveries and expenses (including, without limitation,
interest, penalties, expert witness fees, accounting fees and attorneys' fees
and costs) incurred by any of the foregoing, known or unknown,
contingent or otherwise, directly or indirectly, arising from or related to
any misrepresentations or breach of any provision of this Section 33.
(f) Storm shall not in any event be entitled to, and hereby
waives, any right to seek damages for loss of profits or any special or
consequential damages of any kind or nature from the Agency arising out
of or in connection with this Section 33, and in connection with such
waiver Storm is familiar with and hereby waives the provision of § 1542
of the California Civil Code which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR."
(g) Storm agrees that the assignment of the License
Agreement by the Agency to DSG does not constitute an assignment by
the Agency which is subject to the terms and conditions of Section 14.2 of
the License Agreement. Storm further acknowledges and agrees that it has
been informed that DSG may not assign its rights under the License
Agreement without the prior written consent of the Agency.
8. Accuracy of Recitals. The Parties acknowledge the accuracy of the
Recitals set forth herein, which are incorporated by this reference.
9. Authority; Priority of Amendment. This Amendment is executed by the
Parties' authorized representatives. Except as expressly modified herein, all of the terms
of the License shall remain unchanged and in full force and effect, and the Parties shall
continue to fulfill their respective obligations under the License as amended by this
Amendment. To the extent of any conflict between the terms of the License and the
terms of this Amendment, the terms of this Amendment shall control.
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First Amd to License Agt FINAL
10. Captions. The captions appearing in this Amendment are for convenience
only and are not a part of this Amendment and do not in any way limit, amplify, define,
construe, or describe the scope or intent of the terms or provisions of this Amendment.
11. Counterparts. This Amendment may be executed in counterparts, each
of which shall be deemed an original, and all of which together shall constitute but one
and the same document.
12. Effective Date. The effective date ("Effective Date") of this Amendment
is July 15, 2007.
[BALANCE OF PAGE LEFT INTENTIONALLY BLANK, SIGNATURES ON
FOLLOWING PAGE]
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First Amd to License Agt FINAL
IN WITNESS WHEREOF, the parties have executed this Second Amendment
as of the date first written above.
LAKE ELSINORE STORM, LP, a California
limited partnership
by(k 4-2)
B
Y•
Printed Name: (I
Its:
REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE,a public body, corporate
and politic
Chairp Oly
ATTEST:
Agency Clerk
APPROVED AS TO FORM:
LEIBOLD MCCLENDON , P.0 ,
Agency nera Cou
By:
arbara Zeid eibold
- 15 -
First Amd to License Agt FINAL
ATTORNMENT AND FIRST AMENDMENT TO
STADIUM FIELD AND MAINTENANCE AGREEMENT
This ATTORNMENT AND FIRST AMENDMENT TO STADIUM FIELD
AND MAINTENANCE AGREEMENT (this "Amendment"), dated for identification
purposes only as of July 15, 2007, is made by and between the REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE, a public body corporate and politic
(the "Agenc_y"), and the LAKE ELSINORE STORM, LP, a California limited
partnership (the "Storm")with regard to the following:
RECITALS
The following Recitals are a substantive part of this Amendment:
A. Agency and Storm's predecessor in interest (Storm, LLC, a California
limited liability company) entered into that certain Stadium Field and Maintenance
Agreement dated March 15, 2001 (the "Maintenance Agreement") to provide for the
performance by the Storm of certain field and facility maintenance services at the Site.
The term of the Maintenance Agreement was extended pursuant to that certain
Assignment, Assumption, Attornment and Nondisturbance Agreement dated as of July 1,
2004 for identification purposes by and between the Agency, Concessionaire, the Storm,
and Impact Stadium, LLC, as amended by Amendment No. 1 thereto dated July 1, 2004
(collectively, the"Attornment Agreement").
B. The Maintenance Agreement, as amended by the Attornment Agreement
and this Amendment, shall be referred to herein as the "Agreement." Capitalized terms
used herein which are not otherwise defined herein shall have the meaning ascribed to
them in the Agreement.
C. The owners of the Storm have formed Diamond Stadium Group, LLC, a
California limited liability company ("DSG"), for the purpose of managing the Site.
Concurrently herewith, Agency and DSG are entering into that certain Stadium License,
Lease and Management Agreement ("Management Agreement"). The Management
Agreement provides that DSG shall operate the Site through December 31, 2016, and
provides for two five (5) year options to extend such term. The Management Agreement
further provides for the assignment of the Maintenance Agreement by the Agency to
DSG during the term thereof, subject to certain conditions and restrictions.
D. It is a condition precedent to the Agency's entry into the Management
Agreement that the Agreement shall be amended such that (i) its term runs concurrently
with that of the Management Agreement; (ii) the Storm shall attorn to DSG with respect
to its performance under the Agreement and with respect to all of its rights and
obligations under the Agreement so long as the Management Agreement is in full force
and effect; and (iii) in the event of a termination of the Management Agreement, the
Storm's attornment to DSG and Agency's assignment of the Agreement shall terminate
and be of no further force and effect.
E. It is to the mutual benefit of the parties hereto that the Agency enter into
the Management Agreement, and, accordingly, the Storm is willing to attorn to DSG and
amend the Agreement as described herein.
F. In furtherance of the purpose and intentions of the parties with respect to
the Agreement, the parties hereto agree to amend the Agreement as provided herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing Recitals and the terms
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:
1. Termination of Attornment Agreement Provisions. The Parties hereby
agree and acknowledge that, notwithstanding the language in Section 9 of the Attornment
Agreement stating that certain provisions of the Stadium Amendments (as defined in the
Attornment Agreement)shall survive the termination of the Master Lease (as defined in
the Attornment Agreement), the Parties now intend and agree to terminate any and all of
the provisions of the Attornment Agreement and/or the Stadium Amendments currently
in effect, such that any and all provisions of the Attornment Agreement and/or the
Stadium Amendments shall be of no further force and effect from and after the date of
this Amendment.
Accordingly, from and after the Effective Date of this Amendment, the
Agreement is hereby amended to delete any and all provisions effected by the Attornment
Agreement and/or the Stadium Amendments, including, without limitation, the provisions
of Section 9 of the Attornment Agreement which state that they survive the termination
of the Master Lease. As a result, from and after the Effective Date of this Amendment,
the terms and conditions of the Agreement shall consist solely of the terms and conditions
of the Maintenance Agreement, as amended by this Amendment.
2. Definitions. Section 1 of the Agreement, entitled "Definitions," is hereby
amended to add, or delete and replace in their entirety, as appropriate, the following
definitions:
"Attornment Agreement" means that certain Assignment, Assumption,
Attornment and Nondisturbance Agreement dated as of July 1, 2004 for
identification purposes by and between the Agency, Concessionaire, the Storm,
LLC, and Impact Stadium, LLC, as amended by Amendment No. 1 thereto dated
July 1, 2004.
"Attornment Period" is defined in Section 28 of this Maintenance
Agreement.
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First Amd to Maintenance Agt FINAL.doc
"DSG" means Diamond Stadium Group, LLC, a California limited
liability company.
"Expiration Date" means December 31, 2016, or such later date as may
be determined in accordance with Section 2 of this Agreement.
"First Extension Term"is defined in Section 5.2 of this Agreement.
"Maintenance Term" means the Maintenance Term defined in Section
5.1, as extended by, if applicable, the First Extension Term; and, if applicable, the
Second Extension Term.
"Management Agreement" means that certain Stadium License, Lease
and Management Agreement between the Agency and DSG dated for
identification purposes only as of July 15, 2007.
"Parties"means the Agency and Storm; "Party"means either the Agency
or Storm.
"Second Extension Term"is defined in Section 2.3 of this Agreement.
"Term" means the Maintenance Term and, if applicable, the First
Extension Term; and, if applicable, the Second Extension Term.
3. Term of Agreement. Section 5 of the Agreement, entitled "Term of
Agreement; Termination," is hereby deleted in its entirety and replaced with the
following:
5.1 Term. The term of this Agreement (hereinafter, the
"Maintenance Term") shall commence on the Commencement Date and
shall, unless earlier terminated in accordance with Sections 5.4, 18.2, 19 or
20 hereof, continue thereafter until 11:59 p.m., Pacific Time, on December
31, 2016 (the "Expiration Date").
5.2 First Extension Term. Upon the commencement of the
First Extension Term (as defined in the Management Agreement) pursuant
to and in accordance with Section 3.2 of the Management Agreement,
Storm and Agency hereby agree that the term of this Agreement shall be
automatically extended for one (1) additional period of five (5) years (the
"First Extension Term"). All of the terms and conditions of this
Agreement shall apply to such First Extension Term, and a new Expiration
Date shall automatically be established to be 11:59 p.m. Pacific Time on
December 31, 2021.
5.3 Second Extension Term. Upon the commencement of the
Second Extension Term (as defined in the Management Agreement)
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First Amd to Maintenance Agt FINAL.doc
pursuant to and in accordance with Section 3.3 of the Management
Agreement, Storm and Agency hereby agree that the term of this
Agreement shall be automatically extended for another additional period
of five (5) years (the "Second Extension Term"). All of the terms and
conditions of this Agreement shall apply to such Second Extension Term,
and a new Expiration Date shall automatically be established to be 11:59
p.m. Pacific Time on December 31, 2026.
5.4 Rights of Termination.
(a) End of Season. Either party may terminate this
Agreement, with or without cause, by giving written notice thereof to the
other party within forty-five (45) days of the last regular season Storm
Game.
(b) General Manager Trial Period. Either party may
tenninate this Agreement with or without cause during the General
Manager Trial Period upon written notice thereof to the other party.
(c) Party=s Property and Offset. Upon termination
of this Agreement under this Section 5.4, all materials and equipment
purchased by either party hereunder in connection with this Agreement
shall remain that party=s property. In addition, the Storm shall be entitled
to an offset for all of the Storm=s services rendered hereunder through the
effective date of any such termination.
(d) Effect of Termination. Upon termination of this
Agreement pursuant to this Section 5.4, the provisions of Section 4.5(b) of
the License shall apply to the continued maintenance, repair and operation
of the Stadium.
4. Annual Maintenance Fee. Section 6.1 of the Agreement is hereby
deleted and replaced in its entirety with the following:
6.1 Annual Maintenance Fee. During the Maintenance Term, the
Storm shall be compensated for the performances of the services set forth herein through
the credit of the Annual Maintenance Fee which shall be in the amounts as follows:
(a) Year 1 (Commencement Date - December 31, 2001):
One Hundred Fifty One Thousand Two Hundred Thirty
Eight Dollars ($151,238.000) (the AYear 1 Annual
Maintenance Fee @);
(b) Year 2 (January 1, 2002 - December 31, 2002): One
Hundred Seventy Five Thousand Dollars ($175,000.00)
(the AYear Two Annual Maintenance Fee@);
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First Amd to Maintenance Agt FINAL.doc
(c) Year 3 (January 1, 2003 - December 31, 2003): One
Hundred Seventy Five Thousand Dollars ($175,000.00)
(the AYear 3 Annual Maintenance Fee@);
(d) Year 4 (January 1, 2004 - December 31, 2004): One
Hundred Seventy Five Thousand Dollars ($175,000.00)
adjusted for any Percentage Increase in CPI for Years 1, 2
and 3, but in no event to exceed One Hundred Ninety Two
Thousand Five Hundred Dollars ($192,500.00) or be less
than One Hundred Seventy Five Thousand Dollars
($175,000.00) (the AYear 4 Annual Maintenance Fee@);
Example: Thus, and by way of example only, in the event
that the CPI for the month of December 2003 was 180 and
the CPI For January 2001 was 170 the Year 4 Annual
Maintenance Fee would be calculated as follows:
1. December 2003 CPI less January 2001 CPI = Index
Point Change:
180 - 170 = 10.
2. Index Point Change divided by January 2001 CPI =
Percentage Change
10/170 =0.058.
3. Percentage Change multiplied by $175,000.00 =
Year 4 Additional Amount
0.058 x $175,000.00= $10,150.00
4. $175,000.00 + Year 4 Additional Amount = Year 4
Annual Maintenance Fee
$175,000.00+ $10,150.00 = $185,150.00
Under this example the calculated amount of $185,150.00
is less than $192,500.00 and would be the Year 4 Annual
Maintenance Fee.
(e) Year 5 (January 1, 2005 - December 31, 2005): The Year 4
Annual Maintenance Fee adjusted for any percentage increase in
the CPI for Year 4, but in no event to exceed a four percent (4%)
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First Amd to Maintenance Agt FINAL.doc
increase and in no event to be less than the Year 4 Annual
Maintenance Fee(the AYear 5 Annual Maintenance Fee@);
Example: Thus, and by way of example only, in the event
that the CPI for the month of December 2004 was 185, the
CPI For January 2004 was 180 and the Year 4 Annual
Maintenance Fee was $185,150.00 the Year 5 Annual
Maintenance Fee would be calculated as follows:
1. December 2004 CPI less January 2004 CPI = Index
Point Change:
185 - 180 =5.
2. Index Point Change divided by January 2004 CPI =
Percentage Change
5/180=0.028.
3. Percentage Change multiplied by the Year 4 Annual
Maintenance Fee = Year 5 Additional Amount
0.028 x $185,150.00= $5,184.20
4. Year 4 Annual Maintenance Fee + Year 5
Additional Amount = Year 5 Annual Maintenance
Fee
$185,150.00+ $5,184.20= $190,334.20
Under this example the calculated amount of
$190,334.20 is less than a 4% increase over the
Year 4 Annual Maintenance Fee and would be the
Year 5 Annual Maintenance Fee.
(1) Year 6 (January 1, 2006 - December 31, 2006): The Year
5 Annual Maintenance Fee adjusted for any percentage
increase in the CPI for Year 5, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 5 Annual Maintenance Fee (the AYear 6 Annual
Maintenance Fee@); and
(g) Year 7 (January 1, 2007 - December 31, 2007): The Year
6 Annual Maintenance Fee adjusted for any percentage
increase in the CPI for Year 6, but in no event to exceed a
four percent (4%) increase and in no event to be less than
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First Amd to Maintenance Agt FINAL.doc
the Year 6 Annual Maintenance Fee (the AYear 7 Annual
Maintenance Fee@).
(h) Year 8 (January 1, 2008 - December 31, 2008): The Year
7 Annual Maintenance Fee adjusted for any percentage
increase in the CPI for Year 7, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 7 Annual Maintenance Fee (the AYear 8 Annual
Maintenance Fee@);
(i) Year 9 (January 1, 2009 - December 31, 2009): The Year
8 Annual Maintenance Fee adjusted for any percentage
increase in the CPI for Year 8, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the Year 8 Annual Maintenance Fee (the AYear 9 Annual
Maintenance Fee@);
(j) Year 10 (January 1, 2010 - December 31, 2010): The
Year 9 Annual Maintenance Fee adjusted for any
percentage increase in the CPI for Year 9, but in no event
to exceed a four percent (4%) increase and in no event to be
less than the Year 9 Annual Maintenance Fee (the AYear
10 Annual Maintenance Fee@);
(k) Year 11 (January 1, 2011 - December 31, 2011): The
Year 10 Annual Maintenance Fee adjusted for any
percentage increase in the CPI for Year 10, but in no event
to exceed a four percent (4%) increase and in no event to be
less than the Year 10 Annual Maintenance Fee (the AYear
11 Annual Maintenance Fee@); and
(1) Year 12 (January 1, 2012 - December 31, 2012): The
Year I Annual Maintenance Fee adjusted for any
percentage increase in the CPI for Year 11, but in no event
to exceed a four percent(4%) increase and in no event to be
less than the Year 11 Annual Maintenance Fee (the AYear
12 Annual Maintenance Fee@)
(m) Year 13 (January 1, 2013 - December 31, 2013): The
Year 12 Annual Maintenance Fee adjusted for any
percentage increase in the CPI for Year 12, but in no event
to exceed a four percent (4%) increase and in no event to be
less than the Year 12 Annual Maintenance Fee (the AYear
13 Annual Maintenance Fee@);
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(n) Year 14 (January 1, 2014 - December 31, 2014): The
Year 13 Annual Maintenance Fee adjusted for any
percentage increase in the CPI for Year 13, but in no event
to exceed a four percent (4%) increase and in no event to be
less than the Year 13 Annual Maintenance Fee (the AYear
14 Annual Maintenance Fee@);
(o) Year 15 (January 1, 2015 - December 31, 2015): The
Year 14 Annual Maintenance Fee adjusted for any
percentage increase in the CPI for Year 14, but in no event
to exceed a four percent(4%) increase and in no event to be
less than the Year 14 Annual Maintenance Fee (the AYear
15 Annual Maintenance Fee@); and
(p) Year 16 (January 1, 2016 - December 31, 2016): The
Year 15 Annual Maintenance Fee adjusted for any
percentage increase in the CPI for Year 15, but in no event
to exceed a four percent (4%) increase and in no event to be
less than the Year 15 Annual Maintenance Fee (the AYear
16 Annual Maintenance Fee @);
(q) Extension Terms. During the First Extension Term, if
any, and the Second Extension Term, if any, the Storm
shall be credited the Annual Maintenance Fee in
accordance with the terms and conditions of this
Agreement in the amount of the previous year's Annual
Maintenance Fee, adjusted for any percentage increase in
the CPI for the previous year, but in no event to exceed a
four percent (4%) increase and in no event to be less than
the previous year's Annual Maintenance Fee.
5. Notice. Section 25 of the Agreement is hereby deleted and replaced in its
entirety with the following:
25. Notice. All notices, requests, demands or documents
which are required or permitted to be given or served hereunder shall be in
writing and delivered personally or delivered by United States mail,
postage prepaid, certified return receipt requested, or delivered by a
national or regional overnight courier (e.g., FedEx, Overnight Express,
etc.) addressed as follows:
To the Agency at: The Redevelopment Agency of
the City of Lake Elsinore
130 S. Main Street
Lake Elsinore, California 92530
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First Amd to Maintenance Agt FINAL.doc
Attn: Executive Director
with a copy to: Barbara Zeid Leibold, Esq.
Leibold, McClendon & Mann, PC
23422 Mill Creek Drive, Suite 105
Laguna Hills, California 92653
To the Storm: Storm
500 Diamond Drive
Lake Elsinore, California 92531
Attn: General Manager
with a copy to: Robert B. Lapidus, Esq.
Law Office of Robert B. Lapidus
3366 North Torrey Pines Court, Suite 210
La Jolla, CA 92037
Notice shall be deemed to have been delivered only upon actual
delivery to the intended addressee in the case of either personal service or
courier. The addresses for purposes of this Section 25 may be changed by
giving written notice of such change in the manner provided herein for
giving notices. Unless and until such written notice is delivered, the latest
information stated by written notice, or provided herein if no written
notice of change has been delivered, shall be deemed to continue in effect
for all purposes hereunder.
6. Attornment during Performance of Management Agreement. The
Agreement shall be amended to add a Section 28, as follows:
28. Attornment during Performance of Management
Agreement.
(a) Pursuant to the Management Agreement, the
Agreement has been assigned to DSG during the Attornment Period, and
DSG has assumed the rights and obligations of the Agency under the
Agreement during the Attornment Period. Storm acknowledges and
represents that it is the intent of DSG and Storm that Storm continue,
pursuant to an arrangement with DSG, to provide the services described in
this Agreement to DSG during the term of the Management Agreement.
Storm further acknowledges and represents that it shares common
controlling ownership with DSG.
(b) The Parties agree that, so long as the licenses and lease
granted to DSG in the Management Agreement are effective (the
"Attornment Period"), except for the rights and obligations set forth in this
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First Amd to Maintenance Agt FINAL.doc
Section 28, Storm shall attorn to and tender all performances under the
Agreement to DSG and shall look to DSG exclusively for all of the rights
and benefits accruing under the Agreement during the term of the
Management Agreement. Storm further agrees that the Agency shall have
no liability or obligation to Storm under the Agreement during the
Attornment Period for any default by DSG under the Agreement. No
amendment of the Agreement, or waiver or delay in enforcement of any
failure to perform or other breach of the Agreement by either DSG or the
Storm during the Attornment Period shall be binding upon the Agency;
nor shall any course of dealing established between DSG and the Storm be
binding upon the Agency. If the Management Agreement is terminated,
then the attornment provided for in this Section 28 shall be rescinded and
Storm shall again be responsible to Agency for its performance under the
Agreement and shall look to Agency with respect to all rights and benefits
accruing thereunder.
(c) Notwithstanding the foregoing, during the Attornment
Period, Agency reserves the right to declare a breach under the Agreement
by the Storm and pursue any legal remedies to which it may be entitled.
In addition, Storm agrees to provide Agency with prompt written notice of
any breach by DSG under this Agreement. Agency shall have the right,
but not the obligation, to cure any default of DSG during the Attornment
Period. Storm agrees to afford Agency the right to cure any such default.
Storm shall not be permitted to terminate the Agreement during the
Attornment Period as a result of uncured breach or breaches by DSG
unless Storm has provided Agency with notice and an opportunity to cure
in accordance with Section 20 of this Agreement.
(d) Storm covenants and agrees to maintain its operations
and limited partnership formation and organization in full force and good
standing at all times during and after the Attornment Period. Failure to so
maintain its operations and legal organization, and/or failure to resume
performance of its obligations hereunder upon any termination of the
Management Agreement shall constitute a material breach of this
Agreement.
(e) Storm shall, to the maximum extent permitted by law,
indemnify, defend and hold harmless the Agency and its directors,
officers, members, managers, employees, agents, and other representatives
from any and all liability, demands, claims, costs, losses, damages,
settlements, recoveries and expenses (including, without limitation,
interest, penalties, expert witness fees, accounting fees and attorneys' fees
and costs) incurred by any of the foregoing, known or unknown,
contingent or otherwise, directly or indirectly arising from or related to
any misrepresentations or breach of any provision of this Section 28.
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First Amd to Maintenance Agt FINAL.doc
(f) Storm shall not in any event be entitled to, and hereby
waives, any right to seek damages for loss of profits or any special or
consequential damages of any kind or nature from the Agency arising out
of or in connection with this Section 28, and in connection with such
waiver Storm is familiar with and hereby waives the provision of§ 1542
of the California Civil Code which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR."
(g) Storm agrees that the assignment of the Agreement by
the Agency to DSG does not constitute an assignment by the Agency
which is subject to the terms and conditions of Section 10.2 of the
Agreement. Storm further acknowledges and agrees that it has been
informed that DSG may not assign its rights under the Agreement without
the prior written consent of the Agency.
6. Accuracy of Recitals. The Parties acknowledge the accuracy of the
foregoing Recitals, which are incorporated herein by this reference.
7. Authority, Priority of Amendment. This Second Amendment is
executed by the Parties' authorized representatives. Except as expressly modified herein,
all of the terms of the Agreement shall remain unchanged and in full force and effect, and
the Parties shall continue to fulfill their respective obligations under the Agreement as
amended by this Amendment. To the extent of any conflict between the terms of the
Agreement and the terms of this Amendment, the terms of this Amendment shall control.
8. Captions. The captions appearing in this Amendment are for convenience
only and are not a part of this Amendment and do not in any way limit, amplify, define,
construe, or describe the scope or intent of the terms or provisions of this Amendment.
9. Counterparts. This Amendment may be executed in counterparts, each
of which shall be deemed an original, and all of which together shall constitute but one
and the same document.
10. Effective Date. The effective date of this Amendment is July 15, 2007.
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IN WITNESS WHEREOF, the parties have executed this Second Amendment
as of the date first written above.
LAKE ELSINORE STORM, LP, a California
limited partnership
By:
Printed Name: c 5
Its: �w,r< �, `\C
REDEVELOPMENT AGENCY OF THE CITY
OF LAKE ELSINORE, a public body, corporate
and poli
Chairperson
ATTEST:
Agency C er
APPROVED AS TO FORM:
F.
LEIBOLD MCCLENDON
Agency neral Cou I/
By:
arbara Zeid eibold
- 12 -
First Amd to Maintenance Agt FINAL
GUARANTY AND AGREEMENT
OF
JACOBS INVESTMENT COMPANY,LLC
This GUARANTY AND AGREEMENT OF JACOBS INVESTMENT COMPANY,
LLC (this "GIwan ") is being entered into pursuant to and in furtherance of that certain
STADIUM LICENSE, LEASE AND MANAGEMENT AGREEMENT (the "Agreement'),
dated for identification purposes only as of July 15, 2007, by and between the
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, a public body,
corporate and politic ("Agency"), and DIAMOND STADIUM GROUP LLC, a California
limited liability company ("DSG"). Except as expressly defined herein, all terms shall have the
same meanings as used in the Agreement.
RECITALS
The following Recitals are a substantive part of this Guaranty.
A. The Agency is a redevelopment agency existing pursuant to the provisions of the
California Community Redevelopment Law (California Health and Safety Code Section 33000,
et seq.) which has been authorized to transact business pursuant to action of the City of Lake
Elsinore (the"City").
B. The City Council of the City of Lake Elsinore adopted a redevelopment plan (the
"Redevelopment Plan') for an area within the City known as the Rancho Laguna Redevelopment
Project Area III (the "Project Area") by way of its approval of Ordinance No. 815 on September
8, 1987, as thereafter amended by Ordinance No. 987 adopted on November 22, 1994.
C. Agency is the owner of certain real property located within the East Lake Specific
Plan Area and the Rancho Laguna Redevelopment Project Area III of the City of Lake Elsinore,
County of Riverside, State of California, together with all rights, privileges and easements
appurtenant thereto(the"Land"), as defined in the Agreement.
D. Many improvements are located on the Land, including a stadium, baseball field,
stadium, parking and related facilities commonly known as the "Lake Elsinore Diamond"
(collectively, the "Stadium"). The Land, the Stadium, the Personal Property (as defined in the
Agreement) and all other Improvements (as defined in the Agreement) located on the Land are
referred to collectively as the "Premises."
E. Agency has entered into certain agreements involving the Premises that are in
force as of the Effective Date and described in the Agreement as the "Stadium Operations
Contracts." Certain of the Stadium Operations Contracts have been entered into with the Storm,
LLC, a California limited liability company (the "Storm LLC"). The sole Member of Storm
LLC was Lake Elsinore Storm L.P., a California limited liability company (the "Storm LP").
Storm LLC has been merged into Storm LP,with Storm LP being the surviving entity. Storm LP
has assumed all rights and obligations under the Stadium Operations Contracts by operation of
law. Pursuant to such Stadium Operations Contracts, Storm LP has been licensing the Stadium
for baseball games and maintaining the Stadium. An affiliate of the Storm LP, Golden State
Concessions and Catering, Inc., a California corporation("Golden State"), has been operating the
concessions at the Stadium. Jacobs Investment Company LLC, a California limited liability
company ("Guarantor')controls DSG, Storm LP and Golden State.
F. Storm LP is the owner and operator of the "Lake Elsinore Storm," a single "A"
baseball team which is a member of the California League of the National Association of
Professional Baseball. Storm LP and the Agency desire that the Lake Elsinore Storm continue to
play its home baseball games at the Stadium. Concurrently herewith, the rights and obligations
under the Stadium Operations Contracts in favor of the Agency are assigned to DSG and
assumed by DSG pursuant to the terms and conditions set forth in the Agreement. During the
term of the Agreement, Storm LP and Golden State will attorn to DSG all of their respective
obligations under the Stadium Operations Contracts and Agency shall have no rights or
obligations of performance therein pursuant to certain amendments to the Stadium Operations
Contracts being executed concurrently herewith.
G. The owners of Storm LP have formed DSG for the purpose of managing the
Premises and entering into the Agreement. Storm LP and DSG share common controlling
ownership.
H. Guarantor's execution of this Guaranty is a condition precedent but for which the
Agency would not enter into the Agreement.
NOW THEREFORE, in consideration of the receipt of good and valuable
consideration,receipt of which is hereby acknowledged:
1. Guarantor guarantees to Agency the payment and performance obligations with
respect to full, timely and faithful performance by DSG of the obligations, duties, promises,
covenants and agreements with respect to the following provisions of the Agreement: operating
expenses set forth in Section 7.1; alterations and improvements set forth in Section 8.1; utilities
charges set forth in Section 9.2; maintenance, repair and alteration obligations set forth in
Section 10.2(a), (c), (d), (e) and(h), and the payment obligations set forth in 10.5; alterations and
improvements set forth in Section 10.3; mechanics liens set forth in Section 14.1;the purchase of
insurance required to be carried by DSG and payment of premiums therefore in accordance with
Section 16; and DSG's assumption of the Stadium Operations Contracts pursuant thereto,
including, without limitation, any payment and performance obligations of DSG under the
Stadium Operations Contracts for so long as the Agreement is in effect.
2. This Guaranty is unconditional and may be enforced directly against the
undersigned. No extensions, modifications or changes to the Agreement or the Stadium
Operations Contracts shall release the undersigned or affect this Guaranty in any way.
3. With the exception o£ (a) being provided with notices under the Concession
Agreement; and(b) Civil Code Sections 2810 and 2839,the undersigned hereby waives all of the
suretyship provisions of the California Civil Code Sections 2788 through 2855.
4. Guarantor hereby waives and agrees not to assert or take advantage of (a) any
right to require Agency to proceed against DSG (or any guarantor other than the undersigned) or
to pursue any other remedy in the Agency's power before proceeding against the Guarantor, and
Jacobs Guaranty FINALv2.doc 2
(b) any duty on the part of Agency to disclose to Guarantor any facts Agency or City now or
hereafter know about the Agreement, or DSG, regardless of whether Agency has reason to
believe that any such facts materially increase the risks beyond that which Guarantor intends to
assume or has reason to believe that such facts are unknown to Guarantor or has a reasonable
opportunity to communicate such facts to Guarantor, it being understood and agreed that
Guarantor is fully responsible for being and keeping informed of all circumstances regarding the
Agreement, the Stadium Operations Contracts, the obligations of DSG, the financial condition of
DSG, and of all circumstances bearing on the risk of any obligation by DSG hereby guaranteed.
5. The obligations of Guarantor hereunder are independent of the obligations of
DSG and, in the event of default hereunder, a separate action or actions may be brought and
prosecuted against Guarantor (or any other guarantor) whether or not DSG (or any other
guarantor) is joined therein or a separate action or actions are brought against DSG.
6. In the event of any litigation between Agency and Guarantor arising out of this
Guaranty,the prevailing party shall be entitled to recover its reasonable costs and attorney's fees.
7. No provisions of this Guaranty can be waived nor can Guarantor be released from
the obligations hereunder except by a writing duly executed by the Agency. This Guaranty may
not be revoked by Guarantor or, if Guarantor dissolves, becomes insolvent, bankrupt, or
otherwise ceases to do business, the manager, trustee or administrator of Guarantor, and any
attempted revocation by Guarantor or such manager, trustee or administrator, shall be null and
void and shall not in any manner release or discharge Guarantor or such manager, trustee or
administrator from liability under this Guaranty.
8. The Agency may assign this Guaranty in connection with an assignment of
Agency's rights under the Agreement. When so assigned, Guarantor shall be bound as above to
the assignees without in any manner affecting Guarantor's liability hereunder. The Agency shall
give Guarantor thirty (30)days notice prior to any assignment of this Guaranty.
9. This Guaranty shall remain in effect notwithstanding any bankruptcy,
reorganization or insolvency of DSG or any successor or assignee thereof or any disaffirmance
by a trustee of DSG.
10. This Guaranty shall inure to the benefit of and bind the successors and assigns of
Agency and Guarantor.
11. To the extent permitted by law, Guarantor agrees that jurisdiction and venue with
respect to any matter pertaining to the Guaranty or acts or omissions hereunder shall lie
exclusively with the Superior Court of the County of Riverside, State of California, in an
appropriate municipal court of that county, or in the Federal District Court in the Central District
of California. To the extent permitted by law, Guarantor irrevocably waives any and all defenses
based upon venue or forum non conveniens.
12. The laws of the State of California shall govern the interpretation and
enforcement of this Guaranty.
Jacobs Guaranty FINALv2.doc 3
13. Guarantor represents and warrants that it has all necessary right, power and
authority to enter into this Guaranty and to fully perform its obligations hereunder and that the
party executing this Guaranty on behalf of Guarantor is fully authorized to do so and has all
necessary authority to bind the Guarantor hereto.
14. If any provision of this Guaranty shall be determined to be illegal or
unenforceable by any court of competent jurisdiction, then such determination shall not affect
any other provision of this Guaranty or the Agreement and all such other provisions shall remain
in full force and effect; and if any provision of this Guaranty is capable of two constructions,
only one of which would render the provision valid, then the provision shall have the meaning
which renders it valid.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date first
written above.
JACOBS INVESTMENT COMPANY,
LLC a Califo imit liability company
By:
Gary Jacob
Its: Manager
Jacobs Guaranty FINALv2.doc 4
PARKING LICENSE
This PARKING LICENSE (this "License"), dated as of July 15, 2007, by and among
DIAMOND STADIUM GROUP LLC, a California limited liability company ("DSG" or
"Licensee"), the CITY OF LAKE ELSINORE, a municipal corporation ("City'), and the
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, a public body,
corporate and politic ("Agency"). Agency and City shall be collectively referred to herein as
"Licensor." DSG, City and Agency are hereinafter sometimes referred to individually as a
"Party" and collectively as the"Parties."
RECITALS
The following recitals and all Exhibits to this License are substantive parts of this
License:
A. Licensee is a California limited liability company that, as of the Effective Date,
holds a leasehold interest in certain real property (the "Stadium Property") located in the City of
Lake Elsinore, County of Riverside, California, more particularly described as follows:
Stadium Property:
PARCEL 2, AS SHOWN BY PARCEL MAP 27852, ON FILE IN BOOK 182 PAGES
19 THROUGH 24, INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE
COUNTY, CALIFORNIA.
B. The terms of DSG's Lease of the Stadium Property is more particularly described
in that certain Stadium License, Lease and Management Agreement of even date herewith
between DSG and the Agency(the "Lease"). All capitalized terms not defined herein shall have
the meaning set forth in the Lease.
C. The Stadium Property is the location of an approximately 7,500 fixed seat, open-
air ballpark that is a venue for Baseball Events as well as Other Permitted Uses and includes
ancillary parking and related facilities commonly known as the "Lake Elsinore Diamond."
D. The Agency is a redevelopment agency duly established by action of the City
Council of the City of Lake Elsinore and exercising governmental functions and powers pursuant
to Chapter 2 of California Community Redevelopment Law (California Health & Safety Code
§ 33000, et seq.) (the "Community Redevelopment Law"). The Agency is the fee owner of the
Property.
E. Laing-CP Lake Elsinore LLC ("Laing") is the fee owner of certain real property
("Parking Lot C") located in the City of Lake Elsinore, County of Riverside, California, more
particularly described as follows:
Parking Lot C:
LOT 1, AS SHOWN BY TRACT MAP 31920-1, ON FILE IN BOOK 394 PAGES 41
THROUGH 51 INCLUSIVE, OF MAPS, RECORDS OF RIVERSIDE COUNTY,
CALIFORNIA.
F. Parking Lot C is located adjacent to the Lake Elsinore Diamond and is generally
utilized for parking during Baseball Events as well as Other Storm Events and Other Stadium
Events.
G. On or about December 26, 2002, the Agency, Laing, and Civic Partners-Elsinore
LLC entered into a Disposition and Development Agreement (the "DDA"). Section 402 of the
DDA granted Laing an option to acquire Parking Lot C subject to the terms and conditions
provided therein (the "Stadium Parking Lot Option").
H. On August 24, 2004, Laing and City entered into that certain First Amended and
Restated Development Agreement covering certain property, including Parking Lot C, which
was recorded on December 17, 2004 as Document No. 1001282 in the Official Records of the
Riverside County Recorder ("Development Agreement"). Section 12.15 of the Development
Agreement sets forth additional provisions and obligations of Laing with regard to Parking Lot
C.
1. On November 14, 2005, title to Parking Lot C was transferred to Laing (by a
Grant Deed recorded as Instrument No. 1010705 on December 7, 2005 in the Official Records of
Riverside County) pursuant to its exercise of the Stadium Parking Lot Option. Concurrently
therewith, Laing, the City and the Agency entered into a Grant of Easements and Agreement
Regarding Interim Stadium Parking Replacement Plan dated November 14, 2005, (recorded as
Instrument No. 1010706 on December 7, 2005 in the official records of Riverside County) (the
"Easement'") whereby Laing granted the Agency the right to use Parking Lot C for overflow
parking for the Lake Elsinore Diamond.
J. Licensor desires to grant Licensee the right to use Parking Lot C in connection
with its lease of the Stadium Property. The Lease provides for certain parking rights to be
evidenced by this License.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Licensor hereby grants to Licensee the license and other
rights set forth herein in accordance with the terms and conditions of this License.
1. Effective Date; Term. This License shall become effective upon the Lease
Commencement Date and shall continue during the term of the Lease unless earlier terminated
pursuant to Section 5.
2. License Grant. Subject to the terms and conditions set forth herein, Licensor
hereby grants to Licensee a nonexclusive license to use Parking Lot C for the purpose of
providing up to 1,500 parking spaces for overflow parking for the Lake Elsinore Diamond along
with related pedestrian and vehicular access, ingress and egress. Except as set forth herein, the
license herein granted shall be at no cost to DSG, and Licensor acknowledges that Licensee may
charge or cause to be charged fees to Stadium Property patrons for parking on Parking Lot C.
Licensee shall be entitled to retain and dispose of all revenues in connection therewith.
The parking described above to be used for purposes of overflow patron parking
for attendees of Storm Games, Other Storm Events and Other Stadium Events shall be referred to
herein as the "Licensed Area."
DSG Parking License FINAL - 2 -
3. The DDA and the Easement.
A. DDA and Easement. Pursuant to the DDA and the Easement, Laing has
agreed to (i) continue to allow parking on Parking Lot C consistent with its existing use, or (ii)
provide replacement parking ("Replacement Parking") pursuant to a "Stadium Parking
Replacement Plan" (as defined in the DDA). Licensee shall have the right to comment on any
Stadium Parking Replacement Plan proposed during the term of this License, as set forth in
Section 6 below.
B. Entry y Laing. Licensee acknowledges and agrees that any entry by
Laing onto Parking Lot C as permitted by the Easement and the performance by Laing of any of
the activities contemplated by the Easement with respect to Parking Lot C shall not be a breach
of this License.
4. Maintenance Costs.
DSG shall be responsible for paying all actual and reasonable common area
maintenance costs incurred with respect to the use of the Licensed Area, based upon a fair
allocation of usage pursuant to Section 2.4 of the Easement, which such costs to include, without
limitation, normal sweeping and restriping, lighting and electrical costs, costs for operation and
security, repairs, capital replacement and issuance.
5. Early Termination of License. The License granted herein shall continue during
the term of the Lease unless any of the following shall occur prior to the expiration of any term
of the Lease: (i) the Easement terminates as a result of Agency approval of the Stadium
Replacement Parking Plan, following completion by Laing of all required Improvements related
to the Stadium Replacement Parking Plan; (ii) the Easement is terminated for any other reason,
(iii) the Lease is terminated prior to the expiration of its term; or (iv) an event of default by DSG
occurs hereunder and is not cured within thirty (30) days of notice thereof. Upon the occurrence
of any of the foregoing, the license granted herein shall automatically terminate and be of no
further force and effect. DSG shall cease any use of the Licensed Area hereunder immediately
upon any termination of this License.
Notwithstanding the foregoing, if the termination of this License occurs during
the term of the Lease as a result of Agency approval of the Stadium Replacement Parking Plan,
Agency shall use commercially reasonable efforts to provide Licensee a license to use any
Replacement Parking provided to Agency pursuant to Section 12.15 of the Development
Agreement.
6. Stadium Parking Replacement Plan. If Laing submits a Stadium Parking
Replacement Plan during the term of this License, the Agency shall meet and confer with DSG
and provide DSG an opportunity to comment on the proposed Stadium Parking Replacement
Plan and least fifteen (15) days prior to the Agency's formal consideration and approval thereof.
Agency approval of any proposed Stadium Parking Replacement Plan shall comply with the
terms and conditions of the DDA, the Development Agreement and the Easement.
7. Senior Rights. DSG acknowledges and agrees that its rights hereunder with
respect to the Licensed Area are subordinate and subject to the rights and obligations contained
DSG Parking License FINAL - 3 -
in (i) the Stadium Operations Contracts, (ii) the Easement, (iii) the DDA, and (iv) the
Development Agreement.
8. Licensed Area Rules. Licensee acknowledges and agrees that Licensor retains
the right to establish, post and enforce reasonable rules regarding the use of Parking Lot C,
including without limitation, the prohibition of overnight parking. Such rules shall be consistent
with City Municipal Code requirements.
9. Condition of Licensed Area- No Licensee Alterations. Licensee shall be
deemed to have: (a) inspected the Licensed Area and (b) accepted the Licensed Area "as is" with
no representation or warranty by Licensor as to the condition of the Licensed Area. The
Licensee shall not materially alter, add to or in any material way change or make alterations or
installations to the Licensed Area without the prior consent of Licensor, which may be given or
withheld in Licensor's sole discretion.
10. Conduct. Licensee shall keep the Licensed Area in good, clean and safe
condition and observe all Governmental Regulations. Licensor shall provide such services to the
Licensed Area in a manner and practice similar to that provided to other parking areas within the
Stadium, including maintenance, lighting and security. Licensee shall conduct activities within
the Licensed Area in accordance with Licensee's rules and regulations pertaining to all patrons
utilizing the Lake Elsinore Diamond and specific rules and regulations related to patrons using
parking.
11. Assignment. Licensee shall have the right to sell, assign or otherwise transfer
this License to its successor in interest, if any, to the Stadium Lease and/or the Lake Elsinore
Diamond, provided that any applicable terms and conditions of such transfer set forth in the
Stadium Lease shall have been complied with. Other than such transfer to such successor in
interest, Licensee shall not sell, assign, mortgage, pledge or in any manner transfer this License
or any interest herein, nor sublet or license all or any part of the Licensed Area, by operation of
law or otherwise, without Licensor's prior written approval, which approval may be withheld in
Licensor's sole and absolute discretion.
12. Indemnification. For purposes of this License, "Claims" means any and all
liabilities, actions, proceedings, losses, damages, costs, expenses (including, without limitation,
all attorneys' fees and litigation expenses), causes of action, suits, claims, demands or judgments
of any nature whatsoever, including, without limitation, death of or injury to any person or
damage to any property.
Licensee covenants and agrees to pay, defend (with counsel reasonably acceptable
to Agency), indemnify and save harmless Agency, its officers, employees, agents, and
representatives, from and against any and all Claims based upon, arising from or connected in
any manner with (a) Licensee's use, maintenance, or entry on the Licensed Area arising after the
Commencement Date, (b) the use of the Licensed Area by Licensee or Licensee's agents,
employees, contractors, subtenants, licensees, invitees, or customers prior to and/or after the
Commencement Date, (c) the violation by the Licensee or its agents, contractors, or employees
of any Governmental Regulations, (d) any negligence or reckless or intentional misconduct of
the Licensee or its agents, contractors, or employees, or (e) the breach or default in performance
by Licensee of any obligation, covenant, representation or warranty contained in this License.
DSG Parking License FINAL - 4 -
Agency covenants and agrees to pay, defend (with counsel reasonably acceptable
to Licensee), indemnify and save harmless Licensee, its officers, employees, agents, and
representatives, from and against any and all Claims based upon, arising from or connected in
any manner with (a) the use, maintenance, or entry on the Licensed Area prior to the
Commencement Date, (b) the use of the Licensed Area by Agency or Agency's agents,
employees, contractors, subtenants, licensees, invitees, or customers prior to and/or after the
Commencement Date, (c) the violation by Agency or its agents, contractors, or employees of any
Governmental Regulations, (c) any negligence or reckless or intentional misconduct of the
Agency or its agents, contractors, or employees, or (d) the breach or default in performance by
Agency of any obligation, covenant, representation or warranty contained in this License.
If any action or proceeding should be brought against either Party based upon any
such Claim and if the indemnified Party, upon notice from the indemnifying Party, shall cause
such action or proceeding to be defended at the indemnifying Party's expense by counsel
reasonably satisfactory to the indemnifying Party, without any disclaimer of liability by
indemnified Party in connection with such Claim, the indemnified Party shall not be required to
indemnify the indemnifying Party for reasonable attorney's fees and expenses in connection with
such action or proceeding. The agreement of indemnification set forth in this Section 13 shall
not extend to Claims arising prior to the Commencement Date. The obligations of the Parties
under this Section 13 shall commence to accrue on the Commencement Date and shall survive
any termination of this License.
13. Default; Remedies. In the event of any default by a Party under this License that
is not cured within fifteen (15) days of written notice to the defaulting Party, the Party claiming a
default shall have all other rights and remedies provided by law or in equity, and collect all
damages directly and indirectly caused by the default (provided, however, that the Party claiming
a default shall have no right to consequential damages, as set forth in Section 15 below) and the
right to enforce specific performance of this License.
14. Limitation on Damages. Without limiting the generality of the foregoing
Section 14, neither Party hereto shall be entitled to, and each Party hereto waives, any right to
seek special or consequential damages of any kind or nature from the other Party arising out of
or in connection with this License and in connection with such waiver each Party is familiar with
and hereby waives the provision of Section 1542 of the California Civil Code which provides as
follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
15. Attorneys' Fees. Should either Party institute any action or proceeding at law or
in equity to enforce any provision of this License, or for damages by reason of an alleged breach
of any provision of this License, or otherwise in connection with this License, the prevailing
Party shall be entitled to recover from the losing Party reasonable attorneys' fees and costs,
including but not limited to fees for experts for services rendered to the prevailing Party in such
action or proceeding.
DSG Parking License FINAL - 5 -
16. Severability. The invalidity or illegality of any provision shall not affect the
remainder of this License and all remaining provisions shall, notwithstanding any such invalidity
or illegality, continue in full force and effect.
17. Successors. Subject to the provisions of this License on assignment, each and all
of the covenants and conditions of this License shall be binding on and shall inure to the benefit
of the Parties and their respective heirs, successors, executors, administrators, assigns, and
personal representatives.
18. Waiver. The waiver by either Party of any term, covenant, or condition
contained in this License shall not be deemed to be a waiver of any subsequent breach of the
same or any other term, covenant, or condition.
19. General Provisions. This License shall become valid and effective only when
executed by the Licensee as well as the Licensor. This License supersedes all prior discussions
and agreements of the Parties relating to the transaction contained in this License. The License
may be modified only by a written instrument executed by both Parties. Neither Party shall, by
the execution of this License, in any way or for any purpose, become a partner or a member of a
joint enterprise, with the other.
20. Counterparts. This License may be executed by the Parties hereto in any
number of counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same agreement.
21. Governing Law and Venue. This License shall be governed by, and construed
and interpreted in accordance with, the laws of the state of California. In the event that either
Party institutes an action at law or equity to cure, correct or remedy any default under this
License to the extent permissible by law, such legal actions shall be instituted in the Superior
Court of the County of Riverside, State of California, in an appropriate municipal court in that
County, or in the Federal District Court in the Central District of California.
22. Administration. The Executive Director of the Agency is authorized to act
on behalf of the Agency with respect to all actions to be undertaken by the Agency under this
License.
[SIGNATURE PAGE FOLLOWS]
DSG Parking License FINAL - 6 -
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
written above.
"AGENCY"
REDEVELOPMENT AGENCY OF THE
CITY OF LAKE ELSINORE, a public
body corporate and politic
!qBy:
Chaff e son
ATTEST:
i
AGENCY SECRETARY
i
B
APPROVED AS TO FORM:
LEIBOLD McCLENDON & MANN, P.C.
Agency Counsel
[SIGNATURES CONTINUED ON NEXT PAGE]
DSG Parking License FINAL - 7 -
"CITY"
CITY OF LAKE ELSINORE, a municipal
corporatio "C ty'
By:
Its: ( "<
ATTEST:
CITY CL
By:
APPROVED AS TO FORM:
LEIBOLD McCLENDON & MANN, P.C.
City Attorney
By:
RBARA AID L IBOLD
[SIGNATURES CONTINUED ON NEXT PAGE]
DSG Parking License FINAL - 8 -
"LICENSEE (DSG)"
DIAMOND STADIUM GROUP LLC, a
California limited liability company
By:
Gary Jacobs, M r
[END OF SIGNATURES]
DSG Parking License FINAL - 9 -