HomeMy WebLinkAboutContracts & Agreements_49-2002_CCv0001.pdf CITY OF REDLANDS
LICENSE AGREEMENT
THIS LICENSE AGREEMENT(the"Agreement")is entered effective April 16,2002 by
and between the CITY OF REDLANDS,a municipal corporation (the "City"),and BIG LEAGtJF
DREAMS USA, LLC, a California limited liability company ("BLD").
RECITALS
A. The City owns approximately 23 acres of real property located at the northwest
corner of San Bernardino Avenue and Wabash Avenue in the City of Redlands(the "Property")on
which the City intends to construct a high quality, multi-purpose recreational sports complex to be
known as the "Redlands Sports Complex, a Big League Dreams operated facility" (the "Sports
Complex"). The Sports Complex is presently anticipated to include (1) at least three fully lighted
youth baseball/adult softball fields,
,(2)acovered structure for indoor soccer,indoor volleyball.inline
hockey,basketball and other group event uses,(3)a children's playground and picnic area,(4)a nine
station. batting cage combined with an instructional academy area, (5) three sand/beach volleyball
courts. (6) a maintenance facility, (7) parking for 250 cars, (8) walkways and other public
ingress/euess and access areas,(9)restrooms,(10)a sports-themed,family style Stadium Club food
and beverage concession facility and(11)administrative offices, including a retail pro shop for the
primary benefit of the citizens of Redlands.
B. To enhance the enjoyment of participants at, and to attract them to,the Sports Park,
the City desires to license from BLD the non-exclusive right to use the Big League Dreams
"Concession Design and Park Layout" and a non-exclusive right to use the Big Lea
r.) gse Dreams
"Name and Marks",as both terms are defined in Section 1,in connection with the Sports Park. (The
"Concession Design and Park Layout"and the"Name and Marks"are sometimes herein collectively=
referred to as the "BLD Intellectual Property.") BLD has invested significant financial and
management resources to develop, protect and create value in the BLD Intellectual Property. In
return for the License Fee(as hereinafter defined), BLD shall grant the City a non-exclusive I icense
to use the BLD Intellectual Property on the terms and conditions set forth in this Agreement.
C. The City, to protect the uniqueness and appeal of the Sports Park, also wishes to
receive assurances that BLD Will not license the BLD Intellectual Property to another city or County
for use at another sports park within a specified distance from the Sports Park. Further,to protect
the value created in the BLD Intellectual Property, BLD wishes to license the BLD Intellectual
Property only in connection with sport parks which it,through an affiliated operating entitvl,has the
right to operate and maintain. Thus, in return for payment of the License Fee to BLD by the City,
BLD shall refrain from licensing the BLD Intellectual Property to any city or count-y- for use at
another sports park within a specified distance from the Sports Park during the Term(as hereinafter
defined).
D. Concurrently with the execution ofthis Agreement, Big League Dreams Redlands,
LLC, in Affiliate of BLD("BLD Redlands"), shall enter a Maintenance and Operations Agreement
to maintain and operate the Sports Park (the "MOA Agreement") with the City. "Affiliate" shall
mean any- entity which owns or controls, or which is owned or controlled by, or which is under
common control with, BLD.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, and for other good and valuable consideration, the parties agree as follows:
1. BLD INTELLECTUAL PROPER'ry
BLD represents that it has a proprietary,interest and intellectual property rights in the
look,design,style,shape,color scherne and architecture of sport parks as to which it(or an Affiliate)
lends planning,design and construction consulting services expertise,Including,without limitation,
the Stadium. Club family style, sports-themed concession facility design. and the overall layout of
such sport parks(collectively the"Concession Design and Park Layout"). Further.BLD represents
that it has a proprietary interest and intellectual property rights in the name "Big League Dreams"
and in the Big League Dreams logo attached as Exhibit A (the "Big League Dreams Logo") and
other marks used in the operation and marketing of sport parks (collectively, the "Name and,
Marks"). For purposes of its use in connection with this license, BLD may drop the words "Sports
Park" from the Big League Dreams Logo. The Concession Design and Park Layout and the Name
and Marks are sometimes herein collectively referred to as the "BLD Intellectual Property.'*
2. LICENSE
During the Term, and except as limited herein, BLD grants to the City a non-
exclusive ticensetorise the Concession Design and Park Layout and.,subjectto the limitations herein
set forth, the Name and Marks in connection with the development, construction, marketing and
operation of the Sports Park. The Sports Park shall be referred to as the"Redlands Sports Complex.
a Big League Dreams operated facility." The Sports Park shall not be identified as a Big League
Dreams Sports Park. Wherever and whenever the phrase"a Big League Drearns operated fac]I ity"
is used, the Big League Dreams Logo may be used. Employee uniforms will feature the name
"Redlands Sports Complex" with the Big League Dreams Logo. The same combination shall be
used in signs and in other uses incorporating the printed word where the entire phrase "Redlands
Sports Complex,a Big League Dreams operated facility"is impractical to include. All.specific uses
by the City of the licenses granted hereby must be approved by BLD in �writjng in advance. BLDs
approval shall not be unreasonably withheld or delayed. The City shall not have the right to
sublicense or otherwise permit or transfer the use of the BLD Intellectual Property to any other
person, entity or group other than the Redlands Redevelopment Agency, including, without
limitation,anymerchandiser,wholesaler,distributor,manufacturer or retailer in connection with the
promotion, sale or distribution of any merchandise or other goods or services, except upon the
express prior written approval of BLD.
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3. NON-EXCLUSIVE RIGHTS
Subject to the terms of this section, the license granted the City is a non-exclusive
right. BLD shall have the right to enter similar licensing agreements with other entities or persons
provided. that BLD shall not use the BLD Intellectual Property, either alone or by joint venture.
partnership, lease,maintenance or operation agreement or otherwise, in connection with any other
sports park or sports facility located within a radius often (10)files of the Sports Park. Subject to
the limitations of this section and the MOA Agreement, BLD and BLD Redlands ma-y. however,
during the Term, use the Name and Marks in conjunction with the words "City of Redlands".
"Redlands Sports Complex"or"Redlands"consistent with the provisions of Section 2 above as part
of, or in connection with, the maintenance, operation and marketing of the Sports Park by BLD
Redlands, including,without limitation,the right,either alone,or by Contract,license,joint venture
or otherwise, to manufacture, distribute and/or sell merchandise bearing the Name and Marks in
conj unction with the words"City of Redlands","Redlands Sports Complex"or"Redlands",-,vhether
sold at the Sports Park, over the Internet or from any- other place.
4. LICENSE FEE
In return for the license to use the BLD Intellectual Property granted in Section 1,
the City shall pay BLD the sum of Three Hundred Thousand Dollars ($300,000) on or before May
31, 2002 (the "License Fee"). In the event the City terminates the MOA Agreement pursuant to
Section 13.5 thereof as a result of a failure of State Funding (as that term is defined in the MOA
Agreement),then BLD shall repay the License Fee to the City within sixty(60)days of the effective
date of the termination of the MOA Agreement,
5. PROPERTY OF BLD
The Concession Design and Park Layout and the Name and Marks are and shall
remain the property of BLD, subject to the non-exclusive license granted the City pursuant to this
Agreement. In the event BLD obtains(or renews)new or additional copyrights,patents,trademarks,
trade names or other forms of protective rights in any of the BLD Intellectual Property,or any aspect
thereof,those rights shall remain the property of BLD subject to the license granted the City hereby.
6. TER'_N11
6.1 Duration Unless earlier terminated in accordance with Section 10, the terns
of this Agreement (the "Term'*) shall commence on the payment of the License Fee and shall
terminate as of the effective date of the termination of the MOA Agreement.
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6.2 Effect of Termination on Licenses Granted Notwithstanding the
termination of this Agreement or the termination of the license herein granted.the City may retain
and continue to use in the operation of the Sports Park the Concession Design and Park Layout
features constructed by the City pursuant to the MOA Agreement, but not the Name and the Marks
(which the City shall forthwith remove from the Sports Park and cease using in any respect related
to the Sports Park), for as long as the Sports Park is operated as a recreational sports complex. The
territorial restriction provisions of Section 3 above shall remain in full force and effect for a period
equal to the original term of the MOA Agreement unless the MOA Agreement is terminated (a)by
BLD Redlands due to a default of the City or(b)by the City for reasons other than a default by BLD
Redlands or BLD Redlands' surrender of the MOA Agreement or abandonment of the Sports Park,
in either of which cases such territorial restrictions of Section 3) binding upon BLD shall terminate
upon termination of the MOA Agreement.
7. NO PARTNERSHIP, JOINT VENTURE OR GUARANTOR
Nothing contained in this Agreement shall be deemed to create any type of
partnership,joint venture, principal-agent or similar relationship between BLD and the City, nor
shall BLD be deemed a guarantor of the obligations or liabilities of any other person or entity. BLD
shall at all times be deemed an independent contractor and licensor hereunder.
8. DEFENSE AND HOLD HARMLESS
BLD, at its own expense, shall defend, or at its option, settle, any claim brought
against the City or its council members, other officials and employees, challenging the City's right
to use the BLD Intellectual Property as herein provided, or in connection with the infringement of
any copyright. service mark or trade mark of any third party by virtue of the City's use of the BI,,D
Intellectual Property pursuant to this Agreement; provided, however, the City shall provide BLD
with(i)prompt xwitten notice of any such claim-, (11)control over the defense and settlement of such
claim; and (iii) proper and full information and assistance to settle and/or defend any such claim.
9. REPRESENTATIONS
BLD warrants and represents to the City as follows:
(a) BLD is a validly existing limited liability company organized and in good
standing in the State of California.
(b) The execution of this Agreement and completion of the transactions
contemplated hereby will not result in or constitute a default tinder any agreement or instrument to
which BLD is a party.
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1.0. TERMINATION
This Agreement and the license granted herein shall be terminated upon the
occurrence of any of the following:
(a) At the option of BLD,exercisable on written notice to the City, in the event
of a material breach by the City pursuant to the terms or conditions ofthis Agreement,of the MCRA
Agreement or of any other agreement between the City and BLD or any Affiliate of BLD relating
to the Sports Park, which material breach is not cured within thirty- (30) days after written notice
from BLD (or, as applicable, BLD Redlands) to the City of such breach.
(b) At the option of BLD, exercisable on vNTitten notice to the City, in the event
of the City's failure to pay the amount due under Section 4 above within ten(10)days after written
notice from BLD to the City of such breach.
(c) The mutual written agreement of the parties to terminate this Agreement.
(d) At the option of the City, exercisable on written notice to BLD, in the event
of a material breach by BLD pursuant to the terms or conditions of this Agreement, of the MOA
Agreement or of any other agreement between the City and BLD or any Affiliate of BLD relating
to the Sports Park, which material breach is not cured within thirty (30) days after written notice
from the City to BLD (or, as applicable, BLD Redlands) of such breach.
I1. REMEDIES
In the event either party terminates this Agreement under the provisions of Sections
I 0(a),(b),or(d)above,then in addition to such termination,that party shall be entitled to pursue any
and all other remedies available at law or in equity under the laws of the State of California.
12. MISCELLANEOUS PROVISIONS
12.1 Assignment The City shall have the right to assign its rights and obligations
under this Agreement to the Redlands Redevelopment Agency or to any governmental or quasi-
governmental agency controlled by the City of Redlands. BLL} shall have the right to assign its
rights and obligations ur der this Agreement to any Affiliate of BLD or to any party= or entity to
which BLD Redlands is allowed to assign its rights and obligations under the MOA Agreement.
Except as set forth in the preceding sentences, the rights and obligations hereunder may not be
assigned by either party withOUt the express prior written consent of the other.
12.2 No "Waiver No failure to exercise, and no dlav in exercising, any right.
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fewer or privilege under this Agreement on the part of either part} shall operate as a waiver of any
right., power or privilege hereunder. No waiver of any right,power or privilege hereunder shall be
effective unless contained in a writing signed by the waiving party.
12.3 Entire Agreement This Agreement contains the entire agreement of the
parties relating to the subject matter of this Agreement. Any oral representations or modifications
concerning this Agreement shall be of no force or effect;excepting a subsequent modification signed
by the party to be charged.
12.4 Severability In the event any, provision of this Agreement shall be held to
be invalid, the same shall not affect in any respect whatsoever the validity of the remainder of this
Agreement, unless such invalidity would defeat the very purpose of this Agreement.
12.5 Attorneys' Fees In the event of a dispute regarding the interpretation,
enforcement or breach of this Agreement, the prevailing parte shall be entitled to reasonable
attorneys' fees and all other expenses (including fees and costs related to discovery) reasonably
incurred in conjunction with such dispute. If the successful party recovers judgment in any legal
action or proceeding,the attorneys' fees and all other expenses of litigation shall be included in and
made a part of any such judgment.
12.6 Applicable Latin This Agreement is made in and shall be governed by the
laws of the State of California.
12.7 Modifications This Agreement may only be amended by a written
amendment signed by both parties.
[S I GNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF,the}parties have executed this Agreement and made it
effective on the date first appearing above.
CITY OF REDLANDS
By: Karl N. ("Kasey") Haws
N/layor
ATTEST:
By: �rrie Pow
City Clerk
BIG LEAGUE DREAMS LISA, LLC
By: Scott Parrs TaeTellier
Chief Executive Officer
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i EXHIBIT A
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MAINTENANCE AND OPERATIONS AGREEMENT
(REDLANDS SPORTS COMPLEX)
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THIS MAINTENANCE AND OPERATIONS AGREEMENT (the "A�c reement")
is entered effective April 16, 2002 (the "Effective Date") by and between the CITY OF
REDLANDS, a municipal corporation (the "qCid"), and BIG LEAGUE DREAMS
REDLANDS, LLC, a California limited liability company ("PtD Redlands").
RECITALS
A. The City owns approximately 23 acres of real property located at
the northwest corner of San Bernardino Avenue and Wabash Avenue in the City of
Redlands (the "PEo
peM') on which the City intends to construct a high quality, multi-
purpose recreational sports complex to be known as the "Redlands Sports Complex,
a Big League Dreams operated facility" (the "Sports Com lex"). The Sports Complex
is presently anticipated to include (1) at least three fully lighted youth baseball/adult
softball fields, (2) a covered structure for indoor soccer, indoor volleyball, inline
hockey, basketball and other group event uses, (3) a children's playground and picnic
area, (4) a nine station batting cage combined with an instructional academy area, (5)
three sand/beach volleyball courts, (6) a maintenance facility, (7) parking for 250
cars, (8) walkways and other public ingress/egress and access areas, (9) restrooms,
(10) a sports-themed, family style Stadium Club food and beverage concession
facility and (11) administrative offices, including a retail pro shop for the primary
benefit of the citizens of Redlands.
B. The City wishes to contract the maintenance and operation of
the Sports Complex to an experienced company. BLD Redlands has such
experience. Accordingly, the City and BLD Redlands wish to enter this Agreement to
provide for a long term maintenance and operations agreement with respect to the
Sports Complex and the Sports Complex Improvements by which BLD Redlands
shall (1) maintain the Sports Complex and the Sports Complex Improvements, (2)
program sports and recreational play on the fields and courts to be constructed at the
Sports Complex and (3) operate the Sports Complex, including the food and
beverage concession facilities, in return for an annual maintenance and operations
fee and a percentage of revenues fee.
IT IS AGREED AS FOLLOWS;
1. Definitions. The following terms used in this Agreement shall have the
meanings given unless expressly provided to the contrary:
Accounts means the Imprest Account, the Operating Account and the
Depreciation Reserve Account.
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Musted EBITDA Loss means, for any Operating Year, the EBITDA
Loss reported on an Annual P&L Statement minus the Maintenance and Operations
Fee paid by the City during such Operating Year.
Adjusteq I BITD�A Loss..Recovery Payments are defined in Section 8.4.
Affiliate means Richard Odekirk, Jeffrey Odekirk or any entity other
than BLD USA or BLD Sports in which Messrs. Odekirk and Odekirk, individually or
collectively, or BLD USA or BLD Sports, owns at least a fifty percent (50%) capital or
voting interest of the common stock, partnership units or limited liability company
interests, as applicable.
Agreement means this Maintenance and Operations Agreement.
Annual P&L Statement means a profit and loss statement in the form of
Exhibit B that sets forth Gross Revenues, Sports Complex Expenses, EBITDA Profits
or Losses and Below EBITDA Line Expenses for the Operating Year just concluded,
Below EBITDA Vipe Expenses means those line items set forth below
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the EBITDA line in the profit and loss statement attached as Exhibit B, specifically (a)
interest and loan fees, (b) franchise and income taxes (o�h-erthan' limited liability
company taxes based on gross revenues), (c) depreciation, (d) amortization and (e)
the Percentage Fee.
BLD Redlands means Big League Dreams Redlands, LLC.
BLP Sponsorships is defined in Section 7.3(c).
BLD Sports means Big League Dreams Sports, LLC, a California
limited liability company.
BLD USA means Big League Dreams USA, LLC, a California limited
liability company.
Capital Improvement means, subsequent to the completion of the
of the Sports Complex Improvements, any new construction, improvement or addition
(as opposed to a repair or replacement of Sports Complex Improvements) to the
Sports Complex costing more than $10,000 in any one instance and having a
projected useful life of at least six (6) months.
gtty means the City of Redlands, an incorporated municipality within the
County of San Bernardino, State of California.
City Activities is defined in Section 24.
City Income, is defined in Section 8.3.
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City Manager means the City Manager of the City of Redlands.
Completion Date is defined in Section 3.
Controlling Eerq a e means the ownership of, or the right to vote,
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fifty-one percent (51%) or more of the total combined voting shares, units or
membership interests of a corporation, partnership or limited liability company, as
applicable.
De Reserve Account is defined in Section 6.3.
EBITDA means the earnings before interest, income or franchise taxes,
depreciation and amortization line of the Monthly and Annual P&L Statements.
EBITDA Loss means that the EBITDA line entry for any Monthly or
Annual P&L Statement, representing Gross Revenues less Sports Complex
Expenses, is a negative amount,
EBITDA Profit means that the EBITDA line entry for any Monthly or
Annual P&L Statement, representing Gross Revenues less Sports Complex
Expenses, is a positive amount.
Effective Date is the date set forth in the introductory paragraph.
Force Majeure Event means declared or undeclared war, sabotage,
revolutions, riot or acts of terrorism or civil disobedience, acts or omissions of
governmental agencies; accidents, fires or explosions; floods, earthquakes or other
acts of God; strikes or labor disputes; shortages of materials; or any other event not
within the control of BLD Redlands and not caused by the gross negligence or
intentional wrongful conduct of BLD Redlands. Any disruption to the operation of the
Sports Complex caused by a Capital Improvement project shall also constitute a
Force Majeure Event.
FF+E means all furniture, furnishings, trade fixtures, apparatus and
equipment, including without limitation maintenance vehicles and equipment, cash
registers, sports equipment, benches, uniforms, kitchen equipment, appliances,
glassware, silverware, office equipment, computers, copy machines, facsimile
machines, telephone systems (not including pay telephones) and other personal
property used in or held in storage for use in the operation of the Sports Complex,
other than Operating Inventory. Initially, FF+E shall include, without limitation, those
items listed on Exhibit A.
Gross Revenues is defined in Section 7.1.
Impositions means all taxes and assessments (other than Real
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Property Taxes), water, sewer or other similar rents, rates and charges, levies,
license fees, permit fees, inspection fees and other authorization fees and charges,
which at any time may be assessed, levied, confirmed or imposed on BLD Redlands,
the Sports Complex or the operation of the Sports Complex. All assessments, taxes,
fees, levies and charges imposed by governmental agencies for services such as fire
protection, street, sidewalk and road maintenance, refuse removal and other public
services generally provided without charge to owners or occupants prior to the
adoption of Proposition 13 by the voters of the State of California in the June 1978
election, also shall be deerned Impositions.
Imprest Account is defined in Section 6.1.
Indemnitees is defined in Section 15.1.
Insurance means all requirements of each insurance
policy, and all orders, rules, regulations and other requirements of the National Board
of Fire Underwriters (or any other body exercising similar functions) applicable to the
Sports Complex.
Legal Challenge means any action or other legal proceeding (including,
without limitation, any California Environmental Quality Act (CEQA) challenge)
brought by any third party seeking to block construction of the Sports Complex
Improvements or to contest the validity of this Agreement.
Legal Rpqqkp�ments means all laws, statutes, ordinances, orders, rules,
regulations, permits, licenses, authorizations, directives and requirements of all
governments and governmental authorities, which now or hereafter may be
applicable to BLD Redlands, the Sports Complex or the operation of the Sports
Complex.
Maintenance and QRe�rations Fee is defined in Section 8.1.
Monthly P&L Statement means a profit and loss statement in the form
of Exhibit B that sets forth Gross Revenues, Sports Complex Expenses, EBITDA
Profits or Losses and Below EBITDA Line Expenses for the calendar month just
concluded.
Opping ratAccount is defined in Section 6.2.
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Pper19 c ti gjn r
y means consumable items used or held in
storage for use in the operation of the Sports Complex, including lineup cards, retail
pro shop merchandise, food and beverage inventory, kitchen supplies, paper and
plastic ware, bathroom supplies, paper towels, fuel, cleaning materials, fertilizers,
pesticides, seed, maintenance parts and supplies, office supplies and other similar
items.
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0gerpting_y_Qor means any twelve (12) month period during the Term
commencing on January I and continuing through and including the following
December 31.
PDQ Agreement means the Planning, Design and Construction
Consulting Services Agreement entered effective December 4, 2001 by and between
the City and BLD USA, which agreement subsequently has been assigned effective
January 1, 2002 to Big League Dreams Consulting, LLC, a California limited liability
company.
Percentage Fee is defined in Section 8.2.
property means the approximately [1201 acres of real property located
at the northwest corner of San Bernardino Avenue and Wabash Avenue in the City of
Redlands.
Real Propert Taxes shall include all real property and possessory
interest taxes, charges or assessments which are levied, assessed or imposed by
any governmental authority or political subdivision thereof with respect to the
Property, the Sports Complex or the Sports Complex Improvements, or the use,
occupancy or operation of the Sports Complex or the Sports Complex Improvements
by the City, BLD Redlands or any other person or entity, and any taxes, charges or
assessments levied, assessed or imposed in addition to or in lieu of such real
property or possessory interest taxes, charges or assessments,
Senior Staff means the general manager, assistant general manager,
sports director, assistant sports director, food and beverage director, assistant food
and beverage director, maintenance director and assistant maintenance director.
Services Commencement Date is defined in Section 3.
Sessums Drive Soccer Facilitv means the approximately 15 acre site on
the southwest corner of the Property on which the City intends to construct soccer
fields for the American Youth Soccer Organization.
Spqrts_qqMpjex means the high quality, multi-purpose recreational
sports complex to be known as the "Redlands Sports Complex, a Big League
Dreams operated facility" to be constructed on approximately 30 acres of the
Property.
Spqrts_Complex_Ev nses means (unless provided otherwise in this
Agreement) all costs and expenses incurred by or imposed on BLD Redlands in the
operation and maintenance of the Sports Complex, including (a) all expenditures
incurred by or imposed on BLD Redlands in the performance of its obligations under
this Agreement; (b) the Maintenance and Operations Fee; (c) all expenses
specifically identified as "Sports Complex Expenses" in this Agreement; (d) all costs
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(e.g., cost of goods or cost of revenues) incurred by or imposed on BLD Redlands in
generating Gross Revenues; (e) all funds paid into the Depreciation Reserve Account
by the City; and (f) all other expenses incurred by or imposed on BLD Redlands in
connection with the Sports Complex or this Agreement, which expenses if assumed
by BLD Redlands would be consistent with the role of a sports complex operations
and maintenance service provider, Sports Complex Expenses shall not include any
expenses of BLD USA's or BLD Sports' headquarters offices or the compensation of
any employee of BLD USA, BLD Sports or any other Affiliate except as otherwise
provided in this Agreement. Real Property Taxes, payments from the Depreciation
Reserve Account, costs or expenses of Capital Improvement projects and Below
EBITDA Line Expenses are not Sports Complex Expenses.
Sports Complex lmp-ovements means the buildings, fields, structures,
advertising displays, landscaping, infrastructure, utilities, FF&E (as herein defined)
and other improvements or facilities listed in Recital A or constructed or installed or to
be constructed or installed on the Property by the City, except Capital Improvements.
State Funding means a grant or appropriation (or combination of grants
or appropriations) to the City from the State of California in the aggregate amount of
$5,208,750 for the construction of recreational facilities within the City, which grants
or appropriations are authorized to be used in connection with the construction of the
Sports Complex and the Sports Complex Improvements.
Term is defined in Section 3.
2. Operating Covenant. The City hereby contracts with BLD Redlands to
maintain and operate the Sports Complex pursuant to the terms of this Agreement,
and BLD Redlands covenants and agrees to maintain and operate the Sports
Complex pursuant to the terms of this Agreement throughout the Term.
3. Term. The term of this Agreement ("Term") shall commence on the
Effective Date and expire on December 31 of the fortieth (40th) full Operating Year
after the Services Commencement Date. The "QoMpjetion Date" shall be the first
day of the first calendar month following the issuance of a notice of completion by the
City with respect to the Sports Complex Improvements. The "Services
Commencement Date," shall be the first day of the month that is three months prior to
the Completion Date. At such time as a contract is awarded by the City for the
construction of all or a significant portion of the Sports Complex Improvements, the
parties shall estimate (and set forth in a written addendum hereto) the Completion
Date for purposes of establishing the Services Commencement Date.
Notwithstanding anything herein to the contrary, substantial completion of the Sports
Complex Improvements shall be a condition precedent to BLD Redlands' obligations
hereunder.
4. Development Obligations of the City.
4.1 Construction of Sports Complex Improvements. As soon as
practicable after the Effective Date, the City shall develop the Sports Complex by
improving the Property with the Sports Complex Improvements without undue
interruption or delay, with due diligence and in a good, workmanlike manner, using
first class quality construction practices and materials, all as contemplated by the
PDC Agreement. If the City fails to complete the Sports Complex Improvements on
or before June 1, 2004, BLD Redlands shall have the option to terminate this
Agreement, without further obligation or liability, on thirty (30) days written notice.
4.2 FF+E. Not later than the Completion Date, the City shall procure
and install at the Sports Complex the FF+E, including, without limitation, those items
identified on Exhibit A.
4.3 Utilities and Services. The City shall install all utilities and
services necessary for the operation of the Sports Complex, including without
limitation gas, electrical, water, telephone, communications, cable television lines or
sources and sewer and storm drainage (including all connections necessary to
enable BLD Redlands to activate the relevant service with only an activation charge,
not a charge to connect the source to existing service points).
4.4 State Funding. The City is relying on receiving the State
Funding to cover a substantial part of the development costs. The City represents it
has taken all necessary and appropriate steps to be eligible for the State Funding,
has not taken any action (or failed to take any action) that would jeopardize its
eligibility to receive the State Funding and is not aware of any facts or circumstances
that would prevent the State Funding. Further, the City covenants that it shall
continue to take all necessary steps to be eligible for and to receive the State
Funding, refrain from taking any action that would jeopardize the State Funding and
comply with all guidelines applicable to application for, the receipt of and the use of
the State Funding in connection with the Sports Complex.
5. Subject to the terms of this
Agreement, BLD Redlands shall have the responsibility to: (a) determine, establish,
and implement the policies, standards, fees and schedules for the operation and
maintenance of the Sports Complex and all matters affecting customer relations,
(b) hire, train, and supervise all employees; (c) supervise and direct advertising, sales
and business promotion; and (d) establish accounting and payroll procedures and
functions. The City shall cooperate with BLD Redlands to permit and assist BLD
Redlands to carry out its duties. Without in any way limiting BLD Redlands' right to
operate the Sports Complex in accordance with the terms of this Agreement, BLD
Redlands shall perform the following operations and maintenance services, or cause
the same to be performed for the Sports Complex, and all expenditures of BLD
Redlands and costs and expenses incurred by BLD Redlands in performing these
services shall be Sports Complex Expenses:
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5-1 General Responsibilities, BLD Redlands shall have the following
general rights and responsibilities:
(a) program recreational sports to be offered at the Sports
Complex, which may include adult and youth softball, baseball, indoor soccer,
volleyball, basketball, inline hockey and flag football, recognizing that demand
for some of the sports varies and it may not be commercially reasonable to
offer programs for all of the above listed sports in any or all seasons. The
foregoing shall not restrict BLD Redlands from offering recreational programs
in sports not here enumerated;
(b) consummate arrangements with concessionaires,
licensees, tournament promoters, contractors or other intended users of the
Sports Complex;
(c) enter contracts for the furnishing of utilities and
maintenance and other services to the Sports Complex-,
(d) incur such expenses as shall be necessary for the proper
operation of the Sports Complex, including without limitation rental expenses
for leased FF+E as necessary,
(e) maintain a level of Operating Inventory deemed
appropriate by BLD Redlands for supplying the needs of the Sports Complex
and its customers;
(f) apply for, and use commercially reasonable efforts to
obtain and maintain, all licenses and permits required of BLD Redlands in
connection with the operation of the Sports Complex, including beer, wine and
liquor licenses. The City shall execute any and all applications and such other
documents as shall be reasonably required and otherwise cooperate, in all
reasonable respects, with BLD Redlands in the application for, and obtaining
and maintenance of, such licenses and permits;
(g) use commercially reasonable efforts to do, or cause to be
done, all such acts in and about the Sports Complex as shall be reasonably
necessary to comply with Insurance Requirements and Legal Requirements;
(h) pay, subject to reimbursement by the City through the
creation, replenishment and use of the Imprest Account as herein provided, all
Sports Complex Expenses when due-,
(i) implement a marketing, advertising and promotional plan
for the Sports Complex-,
0) purchase additional FF+E as necessary to operate and
maintain the Sports Complex-,
(k) pay initial connection charges for utilities and services for
the Sports Complex;
(1) in accordance, as applicable, with defense and
indemnification rights contained in contracts of insurance procured and
maintained by BLD Redlands, defend and settle claims, lawsuits and demands
relating to the Sports Complex (other than any Legal Challenge) and retain
legal counsel (and pay legal fees and costs) who under the direction of BLD
Redlands or the insurance carrier will represent the City, BLD Redlands and
the Sports Complex on all questions relating to Legal Requirements, will
defend any claims or actions brought against BLD Redlands or the City
relating to the Sports Complex and will institute and defend any and all legal
actions or proceedings as shall be reasonably necessary to collect charges,
fees or other income for the Sports Complex, or to cancel or terminate any
license, vendor or concession agreement or other contract on the grounds of
default. BLD Redlands shall notify the City of any claims or lawsuits relating to
the Sports Complex. The City shall have the right to approve any legal
counsel retained by BLD Redlands to represent or defend the City; and
(m) prepare annually, on or before October 15 of each year,
for the City's use in forecasting payments it shall make to the Imprest and
Depreciation Reserve Accounts and City Income and Adjusted EBITDA Loss
Recovery Payments it shall receive from the Operating Account, an operations
budget forecasting Gross Revenues, Sports Complex Expenses and EBITDA
Profits/Losses for the next Operating Year.
5.2 Maintenance Services. Subject to the terms and conditions of
this Agreement, BLD Redlands shall maintain the Sports Complex Improvements in a
safe and first class condition and in good repair (damage by casualty or
condemnation excepted) and in accordance with all applicable Legal Requirements
and Insurance Requirements. All expenditures of BLD Redlands and costs and
expenses incurred by BLD Redlands in performing the foregoing services shall be
Sports Complex Expenses.
5.3 Personnel.
(a) General. Except for employees of vendors or contractors,
all employees working at the Sports Complex shall be full or part time
employees of BLD Redlands, BLD USA, BLD Sports or an Affiliate. Only
salaries or wages, benefits and commissions of employees of BLD Redlands
shall be Sports Complex Expenses except as otherwise provided in this
section. The number of employees working at the Sports Complex, and the
compensation (salaries or wages, benefits and commissions) paid to them,
shall be reasonably established by BLD Redlands, but shall be comparable to
staffing levels and compensation paid by Affiliates at Big League Dreams
Sports Parks in Southern California, BLD Redlands shall recruit, hire, train,
discharge, promote and supervise the Senior Staff of the Sports Complex, and
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supervise through the Senior Staff the recruiting, hiring, training, discharge,
promotion and work of all other full or part-time employees. The
compensation (including benefits) of the Senior Staff and all other Sports
Complex employees shall be a Sports Complex Expense.
(b) Pension and Benefit Plans. BLD Redlands shall have the
right to provide eligible employees of the Sports Complex with pensions and
other employee retirement benefits and disability, health and welfare benefits,
and other benefit plans now or hereafter available to employees of Big League
Dreams Sports Parks operated by Affiliates in California. The allocable share
of such employee benefits accrued by employees of BLD Redlands while
working at the Sports Complex shall be a Sports Complex Expense.
(c) Temporary Assignment of Cather Personnel. If Senior
Staff positions of the Sports Complex are not filled for whatever reason, BLD
Redlands may temporarily assign to these positions Senior Staff of Big League
Dreams Sports Parks operated by Affiliates in California or other senior
employees of BLD USA, BLD Sports or other Affiliates. During such time as
these employees are temporarily assigned to the Sports Complex, all such
employees will be paid their regular compensation. The pro rata share of such
employees' compensation (including benefits) equal to the time such
employees work at the Sports Complex shall be a Sports Complex Expense. If
the annualized salary of the temporarily assigned Senior Staff employee
exceeds the annualized salary of the individual last employed in the Senior
Staff position then not filled (or, if no such individual has ever been employed
at the Sports Complex, the annualized salary of the Senior Staff employee
holding the same Senior Staff position at the Big League Dreams Sports Park
nearest the Sports Complex), then the annualized salary of the temporarily
assigned employee shall be deemed to be the lower annualized salary for
purposes of calculating the amount of the salary of the temporarily assigned
employee to be considered a Sports Complex Expense.
(d) Special Provisions.
(1) Bookkeeper. Without limiting the foregoing, the
salary and benefits of one bookkeeper working from the BLD USA
headquarters with other accounting staff shall constitute a Sports
Complex Expense.
(2) Group Business Director. BLD Redlands may
employ a group business director for the Sports Complex, which
director may have responsibility for group business at Big League
Dreams Sports Parks or other sports parks maintained and operated by
Affiliates as well. The group business director need not be a full time
employee of BLD Redlands and may be an employee of an Affiliate.
The percentage of such director's base salary (i.e., excluding
commissions) and benefits which shall constitute, or be allocated as, a
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Sports Complex Expense shall equal the percentage obtained by
dividing (A) one, as the numerator, by (B) the number (including the
Sports Complex) of Big League Dreams Sports Parks or sports parks
maintained and operated by an Affiliate for which such person is
assigned to promote and schedule group business events, as the
denominator. As an illustration, if the group business director were
assigned to promote and schedule group business events at Big
League Dreams Sports Parks in Colton and Mira Loma in addition to
the Sports Complex, 33% of his or her base salary and benefits would
constitute or be allocated as a Sports Complex Expense. In addition,
all commissions paid to such group business director for group
business events scheduled at the Sports Complex shall also constitute,
or be allocated as, a Sports Complex Expense.
5.4 Specific Operating Procedures. In addition to the more general
responsibilities of BLD Redlands for operations of the Sports Complex as provided
herein, BLD Redlands shall operate the Sports Complex in accordance with the
following operating procedures:
(a) Sports Complex Operating Nours. BLD Redlands shall
operate the Sports Complex on days and at hours consistent with Big League
Dreams Sports Parks operated by Affiliates in California subject to closure due
to inclement weather, casualty, condemnation, Force Majeure Events or other
causes beyond the reasonable control of BLD Redlands.
(b) Fees and Charges. All fees, charges and prices for
services at the Sports Complex shall be set by BLD Redlands and shall be
comparable to those of Big League Dreams Sports Parks operated by
Affiliates in Southern California.
5.5 Contracts and Agreements. All leases and financing agreements
for additional FF+E beyond those items listed on Exhibit A, and all contracts and
agreements relating to the operation and maintenance of the Sports Complex
(including without limitation contracts for maintenance and repair services, pest
control, supplies and landscaping services, and agreements for tournaments,
banquets and other group functions), entered during the Term shall be entered by
BLD Redlands as the contracting party. BLD Redlands shall not enter any contract
or agreement which extends beyond the Term of this Agreement. Upon the earlier
termination (for whatever reason) of this Agreement, the City agrees to assume all
contracts and agreements entered in accordance with this section.
5.6 Contract Administration. The City Manager shall administer this
Agreement on behalf of the City. The City Manager may designate any member or
members of his or her staff to carry out such responsibilities. Except as otherwise
expressly provided herein, the City Manager has the authority, subject to, as
necessary, City Council approval or ratification, to approve or consent to those
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matters requiring the City's approval or consent and to make all other decisions on
behalf of the City.
5-7 Compliance with Environmental Laws. BLD Redlands shall
comply with all federal, state, and local laws and regulations pertaining to the
storage, use and disposal of"hazardous or toxic wastes, substances, or materials" as
defined by applicable law. All expenditures of BLD Redlands and costs and
expenses incurred by BLD Redlands in performing the foregoing services shall be
Sports Complex Expenses. Expenditures, costs and expenses made, incurred or
paid by BLD Redlands in remediating damage to the Property caused by the
negligence or willful misconduct of BLD Redlands in storing, using or disposing of
such hazardous or toxic wastes, substances or materials shall, however, not be
considered Sports Complex Expenses and shall be paid or borne solely by BLD
Redlands.
5.8 Permitted Operations. BLD Redlands shall have the right to use
and occupy the Sports Complex to perform maintenance and repair services and to
operate the Sports Complex as provided herein without further consent or approval of
the City except as otherwise expressly stated in this Agreement. Without limiting the
foregoing, BLD Redlands shall have the right to do the following without the City's
consent or prior authorization (such consent and prior authorization being deemed to
have been given by this Section 5.8):
(a) Establish a token redemption policy and charge token and
admission fees to users of the Sports Complex;
(b) Engage in the sale of beer, wine and, during corporate or
other group business events for which no individual gate admission is
charged, liquor from the Sports Complex (subject to obtaining and maintaining
required or appropriate licenses or permits from the Department of Alcoholic
Beverage Control and compliance with Legal Requirements)-,
(c) Not allow customers of the Sports Complex to bring
outside food or beverage into the Sports Complex-,
(d) Establish operating hours and hours during which the
fields and courts may be lighted for evening play-, and
(e) Establish all fees, charges and commissions for the use of
the Sports Complex, the sale of food, beverage and merchandise from the
Sports Complex and admissions and other services or activities at or from the
Sports Complex, all without limitation, provided the same are consistent with
fees, charges and commissions at Big League Dreams Sports Parks operated
by Affiliates in California.
6. Accounts. The following bank accounts shall be established:
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6.1 tMp st Account. Not later than thirty (30) days prior to the
Services Commencement Date, the City shall establish an interest bearing account
with a financial institution of its choice in the initial amount of $150,000 (the "Imprieqt
Account") to be used as a reserve to cover expenses incurred in the operation of the
Sports Complex. Commencing with the second full Operating Year, the maximum
amount the City shall maintain in the Imprest Account shall be $75,000.
Commencing on the earlier of (i) the Services Commencement Date or (ii) the first
day of the first month after the date BLD Redlands begins performing maintenance
and operations services for the Sports Complex, but not prior thereto, BLD Redlands
shall have the right and authority to transfer funds from the Imprest Account to the
Operating Account, when and to the extent it deems necessary, to pay Sports
Complex Expenses, including the Maintenance and Operations Fee. The City shall
be entitled to all interest accruing on the Imprest Account, which shall be paid to the
City by BLD Redlands at the end of each Operating Year by January 15 of the
following year.
(a) Deposits Into the Imprest Account With Respect to the
First Ten Full Operating Years. If, with respect to any month during the first
ten full Operating Years of the Term, BLD Redlands reports an EBITDA Loss
on any Monthly P&L Statement to be provided by BLD Redlands to the City,
then not later than fourteen (14) days after the City's receipt of such Monthly
P&L Statement the City shall deposit into the Imprest Account an amount
equal to such EBITDA Loss. The City's obligation to replenish the Imprest
Account shall be limited to such EBITDA Loss payments.
(b) p
Deposits Into theim rest Account After the nth Full
�_ - _ Te
Operatinq Year. Commencing with the first day of the second month of the
eleventh full Operating Year (allowing for an Imprest Account payment by the
City with respect to the last month of the tenth (10th) full Operating Year) and
continuing thereafter, the City shall have no obligation to replenish the Imprest
Account or make any additional deposits into the Imprest Account.
6.2 Qperat(M_Aqqount. Once the City has established the Imprest
Account, and prior to the Services Commencement Date, BLD Redlands shall
establish an interest bearing account with a financial institution of its choice (the
"Orating Account") to be used in the operation of the Sports Complex. The initial
deposit into the Operating Account shall be a transfer from the Imprest Account in
whatever amount BLD Redlands determines is needed to commence operations of
the Sports Complex under this Agreement. All Gross Revenues from the operations
of the Sports Complex shall be paid into the Operating Account and all Sports
Complex Expenses shall be paid from the Operating Account, BLD Redlands shall
have check writing authority. The City shall be entitled to all interest accruing on the
Operating Account, which interest shall be paid to the City by BLD Redlands at the
end of each Operating Year. No payments from the Operating Account to Affiliates
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(other than the allocations to BLD USA or BLD Sports set forth in Section 7.3 below)
shall be permitted without the City's prior written consent.
6.3 Depreciation Reserves Ac n . At the time it opens the
Operating Account, BLD Redlands also shall establish a separate interest bearing
account with a financial institution of its choice (the ""Depreciation Reserve Account")
to fund needed repairs to and replacements of Sports Complex Improvements
throughout the Term. On a monthly basis, the City shall pay directly into the
Depreciation Reserve Account an amount equal to depreciation calculated for that
month on the Sports Complex Improvements in accordance with a Depreciation
Reserve Account contribution schedule to be developed by BLD Redlands, reviewed
and approved by the City and attached to this Agreement as Exhibit C not later than
thirty (30) days after a contract for construction of the Sports Complex Improvements
is entered by the City. Payments by the City to the Depreciation Reserve Account
shall be considered "above the EBITDA line" Sports Complex Expenses. Payments
from the Depreciation Reserve Account for repairs or replacements shall not be.
Interest on this account shall remain in the account. Except as provided herein,
funds in this account may only be disbursed with signatures from BLD Redlands and
the City for repairs to or replacements of Sports Complex Improvements. Funds in
the Depreciation Reserve Account shall not be used for Capital Improvements,
7. Gross Revenues and Sports Complex Expenses. Gross Revenues and
Sports Complex Expenses shall be calculated as provided in this section.
7.1 Gross Revenues "Gross Revenues" means and includes all
revenues received by BLD Redlands or any Affiliate relating to or derived from the
Sports Complex unless such item of revenue is specifically excepted or excluded
under Sections 7.2, 7,3 or 7.4 below. Without limiting the foregoing, Gross Revenues
shall include the gross receipts, less taxes and other adjustments set forth below,
received by BLD Redlands (or any Affiliate) from each line item set forth Linder the
heading "Revenues" on Exhibit B, The line item "Other Revenue" may include the
following additional items:
(a) commissions, fees or profit shares received by BLD
Redlands (or any Affiliate) from revenues generated from sales by
concessionaires at the Sports Complex where the gross revenues from such
sales are not received by or payable to BLD Redlands or any Affiliate,
including, for example, vending machine commissions, ATM commissions,
etc.;
(b) all finance charges to customers, in case of sales on
credit, whether or not payment is actually made, at, in, on or from the Sports
Complex-,
(c) revenues from the sale of gift certificates, when such
revenues are received;
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(d) all service fees or other consideration paid to BLD
Redlands as compensation for BLD Redlands' sale or distribution of lottery
tickets, hunting and fishing licenses or in connection with any other local, state
or federal lottery or licensing program similar to the foregoing;
(e) all charges for services, alterations or repairs made
at, in, on or from the Sports Complex-,
(f) the proceeds of business interruption insurance, if
applicable, received by BLD Redlands with respect to the Sports Complex-,
and
(g) lease or rent payments or other compensation from
any lessee or tenant of all or part of the Sports Complex, unless the revenues
derived by such lessee's or tenant's operations from the Sports Complex have
already been included in the calculation of Gross Revenues.
7.2 Items Not Included in Gross Revenues. The following
shall not be included in Gross Revenues (or shall be deducted from Gross Revenues,
as the case may be):
(a) the amount of all sales tax receipts required to be
accounted for by BLD Redlands and paid to any government or governmental
agency, but not the amount of any excise tax (except a consumer excise tax)
or other governmental obligation in the nature of a tax on the privilege of doing
business;
(b) the amount of any sales initially included in Gross
Revenues that are subsequently subject to refund or credit;
(c) the amount of any revenues received by any licensee,
contractor or concessionaire (unless such licensee, contractor or
concessionaire is an Affiliate) operating in or from the Sports Complex which
are not paid or required to be paid to BLD Redlands, provided that such
revenues are not derived from the sale of food, beverages or liquor;
(d) the amount of any revenues received by non-Affiliate
special or corporate or group business events promoters, tournament
promoters, impresarios, outside catering companies or similar third party
independent contractors (including revenues derived from the sale of food,
beverages or liquor) involved in the promotion or conduct of special events,
group business events or tournaments, which revenues are not paid or
required to be paid to BLD Redlands:
(e) the amount of sponsorship or advertising revenues
generated from the Sports Complex which are received by BLD Redlands from
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sponsors or advertisers but are paid to advertising agencies or brokers as
commissions,
gratuities paid or given by customers to employees of
BLD Redlands or food and beverage service charges billed to group business
clients;
(g) proceeds of insurance other than business interruption
insurance applicable to the Sports Complex;
(h) loan proceeds, if any;
(i) credits or refunds received from vendors or other third
parties as a result of damage claims made by BLD Redlands with respect to
defective goods or services previously purchased;
0) checks or other instruments returned for insufficient funds;
and
(k) late charges or interest assessed and received on
delinquent accounts receivables.
7.3 BLD USA/Sports Allocations. BLD Sports owns and organizes
tournaments played and camps/clinics held at various Big League Dreams Sports
Parks and contracts with hotels to receive commissions on room nights reserved by
participants in tournaments held at the various Big League Dreams Sports Parks.
BLD USA sells sponsorships to entities interested in having a commercial
identification with the various Big League Dreams Sports Parks. Both BLD Sports
and BLD USA shall have the right to do all of the foregoing with respect to the Sports
Complex. Except as otherwise provided in the remainder of this Section 7.3,
revenues derived by BLD Sports or BLD USA from such activities shall not be
considered Gross Revenues. Notwithstanding, the following amounts paid to BLD
Redlands by BLD Sports or BLD USA in connection with the foregoing activities shall
be included in Gross Revenues:
(a) Except during the first three Operating Years, during
which field rental charges may be waived to promote and encourage the
development of new tournaments and camps/clinics, in connection with each
BLD Sports tournament held at the Sports Complex, BLD Sports shall pay to
BLD Redlands a field rental charge of (A) not less $500 per day for each day a
BLD Sports tournament is held at the Sports Complex and (B) not less than
$100 per day for each full day or $50 for each half day a BLD camp/clinic is
held at the Sports Complex,
(b) BLD Sports shall pay to BLD Redlands fifty percent
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(50%) of all hotel commissions received by BLD Sports or BLD USA for room
nights reserved by participants in tournaments held at the Sports Complex.
(c) "BLD Sponsorships" means any agreement entered by
BLD USA or BLD Sports with any entity by which such entity is given the right
to identify commercially with Big League Dreams Sports Parks (or any sports
park maintained and operated by an Affiliate) as a sponsor, preferred
company or other designation of similar import and where such commercial
identification rights extend to more than one Big League Dreams Sports Park
or sports park maintained and operated by an Affiliate. BLD Sports or BLD
USA shall pay to BLD Redlands fifty percent (50%) of the cash revenues
received by BLD Sports or BLD USA from BLD Sponsorships divided by the
number of Big League Dreams Sports Parks or sport parks maintained and
operated by an Affiliate to which the BLD Sponsorship applies and may retain
the balance. As to any advertising or sponsorship sales applicable to the
Sports Complex made by BLD Sports or BLD Redlands which do not
constitute BLD Sponsorships, BLD USA or BLD Sports shall pay to BLD
Redlands eighty percent (80%) of the cash revenues received from such non-
BLD Sponsorship and may retain the balance.
7.4 Accountinq for Sports Complex Expenses. All Sports Complex
Expenses shall appear on the P&L Statements above the EBITDA line. All expenses
incurred by BLD Redlands which are not "Sports Complex Expenses" shall appear on
the P&L Statement below the EBITDA line and be considered Below EBITDA Line
Expenses. BLD Redlands is responsible for the payment of all Below EBITDA Line
Expenses (or, in the case of the Percentage Fees, is entitled to retain such), which is
defined to consist of:
(a) Interest expense on debt incurred by BLD Redlands, if
any;
(b) Franchise or income taxes, except limited liability
company taxes payable by BLD Redlands to the California Franchise Tax
Board calculated on a percentage of gross revenues basis, which taxes shall
be treated as an above the EBITDA line Sports Complex Expense-,
(c) Depreciation expense on furniture, furniture or equipment
(other than Sports Complex Improvements or FF&E) owned by BLD Redlands;
(d) Amortization of assets owned by BLD Redlands, if
applicable-, and
(e) Any Percentage Fees.
Real Property Taxes, if assessed and not challenged or unsuccessfully challenged,
are payable by the City directly to the County or other taxing authority, would not be
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v
paid out of any of the Accounts, are not reimbursable to the City by BLD Redlands
and are neither Sports Complex Expenses nor Below EBITDA Line Expenses.
Funds paid into the Depreciation Reserve Account to establish reserves are Sports
Complex Expenses. Funds paid from the Depreciation Reserve Account for repairs
or replacements to Sports Complex Improvements and funds paid by the City for
Capital Improvements are neither Sports Complex Expenses nor Below EBITDA Line
Expenses.
1
t 8. Fees, Cityr Income and I\ usted EBITDA_ Loss Recover Payments.
BLD Redlands shall receive a fixed Maintenance and Operations Fee and a
Percentage Fee, and the City shall receive City Income and Adjusted EBITDA Loss
Recovery Payments, computed and payable as provided in this section.
8.1 Maintenance a_nd Qperations Fee. Commencing on the earlier of
(i) the Services Commencement Date or (ii) the first day of the first month after the
date BLD Redlands begins performing maintenance and operations services for the
Sports Complex, and continuing on the first day of each month of the Term
thereafter, BLD Redlands shall be entitled to be disbursed a maintenance and
operations fee (the "Maintenance and Operations Fee") in the amount of$25,000 per
month throughout the Term.
(a) First Ten Full Operating Years. During the first ten full
Operating Years of the Term and on the first day of the first month of the
eleventh (11th) full Operating Year, BLD Redlands shall be entitled to disburse
to itself the Maintenance and Operations Fee from the Operating Account on a
monthly basis. This Fee shall be treated as a Sports Complex Expense and
shall be payable whether or not the Sports Complex is operating at an EBITDA
Profit or Loss.
(b) After the Tenth Full Operating Year. Commencing with
the first day of the second month of the eleventh full Operating Year and
continuing thereafter, BLD Redlands shall be entitled to disburse to itself the
Maintenance and Operations Fee from the Operating Account only if the most
recent Monthly P&L Statement shovers an EBITDA Profit, and then only to the
extent of the EBITDA Profit if the EBITDA Profit is less than the amount of the
monthly Maintenance and Operations Fee then otherwise due. For purposes
of determining EBITDA Profits or Losses on the Monthly P&L Statement after
the tenth full Operating Year for purposes of the foregoing sentence, the
Maintenance and Operations Fee shall not be treated as a Sports Complex
Expense. For purposes of determining the Percentage Fee and calculating
EBITDA Profits or Losses under Section 8.2, however, the Maintenance and
Operations Fee shall, as it is by definition for all other purposes, be treated as
a Sports Complex Expense. Notwithstanding anything herein to the contrary,
the Maintenance and Operations Fee shall be paid to BLD Redlands before
any other distribution of EBITDA Profits.
1
8.2 Percents Fee, In addition to the Maintenance and Operations
Fee, BLD Redlands shall be entitled to a "Percentage Fee" equal to fifty percent
(50%) of any EBITDA Profits from the operation of the Sports Complex., The
Percentage Fee shall be paid from the Operating Account, but shall not be treated as
a Sports Complex Expense. The Percentage Fee shall be calculated and paid as
follows:
(a) First Partial and First Three Full Oaeratinq Years During
the first partial and the first three full Operating Years, BLD Redlands shall not
be entitled to receive Percentage Fees on a monthly basis. If, during these
Operating Years, any Annual P&L Statement reflects an EBITDA Profit, BLD
Redlands shall be entitled to disburse to itself fifty percent (50%) of such
amount, which distributions may be made from the Operating Account thirty
(30) days after the Annual P&L Statement is furnished to the City.
(b) Fourth Full Operating Year 'and Thereafter During the
fourth full Operating Year and each Operating Year thereafter, the Percentage
Fee shall be calculated and paid on a monthly basis, with an annual
reconciliation, as follows:
On each Monthly P&L Statement BLD Redlands shall calculate
Operating Year to date EBITDA Profits or Losses. The Percentage Fee
distributable to BLD Redlands each month shall equal one half of the
Operating Year to date EBITDA Profits, if any, less Percentage Fees
previously paid during such Operating Year. EBITDA Losses from one
Operating Year will not be carried forward to subsequent Operating Years.
The above formula shall work as follows. If the Monthly P&L
Statement for a given January shows a $50,000 EBITDA Profit, the Operating
Year to date EBITDA Profit will be $50,000. Since there will have been no
prior Percentage Fees paid to BLD Redlands for the Operating Year, BLD
Redlands shall be entitled to distribute to itself $25,000 from the Operating
Account. If the Monthly P&L Statement for February shows a $20,000
EBITDA Loss, Operating Year to date EBITDA Profits would be $30,000. The
Percentage Fee would be one half of that amount (i.e., $15,000) less the
aggregate amount of Percentage Fees previously paid during the Operating
Year. Since BLD Redlands would already have received a $25,000
Percentage Fee for the Operating Year, there would be no additional
Percentage Fee distributable to BLD Redlands for the month of February- If
the Monthly P&L Statement for March shows an EBITDA Profit of$60,000, the
Operating Year to date EBITDA Profits would be $90,000. The Percentage
Fee would be one half of that amount (i.e., $45,000) less the $25,000 already
paid for the Operating Year, or $20,000.
Upon the City's receipt of the Annual P&L Statement, the parties
shall make any final adjustments to the Percentage Fee for the past Operating
Year, using the formula and methods above, to the extent required.
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8-3 City Income. If, after payment of the Maintenance and
Operations Fee, all Sports Complex Expenses, the Percentage Fee (if applicable)
and provided there are sufficient funds available in the Operating Account to satisfy
the daily working capital needs of the Sports Complex, then any excess funds in the
Operating Account shall be disbursed by BLD Redlands to the City ("City. __!pcgrqe"),
BLD Redlands shall maintain at all times, in its reasonable judgment, sufficient funds
in the Operating Account to satisfy the daily working capital needs of the Sports
Complex for the thirty days following the disbursement, including the timely payment
of Sports Complex Expenses, the Maintenance and Operations Fee and the
Percentage Fee, if applicable. If available, these excess funds shall be disbursed to
the City monthly within ten (10) days after the delivery to the City of the Monthly P&L
Statements. Upon the expiration or earlier termination of this Agreement, all funds
remaining in the Operating Account after payment of the Sports Complex Expenses,
the Maintenance and Operations Fee and the Percentage Fee (if applicable) shall be
disbursed by BLD Redlands to the City within ten (10) days after BLD Redlands
delivers to the City the final Annual P&L Statement.
8.4 City y Ad
_ ljuste�d EBITDA Loss Recovery Pments Provided this
Agreement shall not sooner have been terminated, commencing on February 15,
May 15, August 15 and November 15 of the thirty-first (31st) full Operating Year, and
continuing thereafter on February 15, May 15, August 15 and November 15 of each
full Operating Year thereafter through the fortieth (40th) full Operating Year (for a
total of forty (40) such quarterly payments), BLD Redlands shall pay to the City on a
quarterly basis an Adjusted EBITDA Loss recovery payment (the "Adjusted EBITIDA
Loss calculated by dividing the sum of Adjusted EBITDA Losses
for the first three full Operating Years by forty (40).
9. Records., Reports and Audits.
9.1 Sales Recording and Records. BLD Redlands shall record at the
time of sale, in the presence of the customer, receipts from sales or other
transactions, whether cash or credit, in a cash register or registers, or a point of sale
terminal or terminals, having a tape that accumulates and consecutively numbers all
transactions. A receipt from any transaction showing the correct amount of purchase
shall be offered to the customer at the time of any transaction, including any cash
sale. Transactions not ordinarily recorded in a cash register or point of sale terminal
shall be noted on and kept in a ledger format, BLD Redlands shall keep:
(a) full and accurate books of account and records including,
without limitation, a sales journal, general ledger and all bank account
statements showing deposits of Gross Revenues,-
(b) all cash register or point of sale terminal receipts with
regard to the Gross Revenues, credits, refunds and other pertinent
transactions made from or on the Sports Complex-, and
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(c) detailed original records of any exclusions or deductions
from Gross Revenues.
9.2 Monthly and Annual P&L Statements.
(a) Monthly P&L Statement. Within twenty-two (22) days
after the end of each month during the Term, commencing with the Services
Commencement Date, BLD Redlands shall furnish the City with a Monthly
P&L Statement certified as correct by an authorized officer of BLD Redlands,
(b) Annual P&L Statement. Within forty-five (45) days
following the end of each Operating Year, including the last Operating Year of
the Term, BLD Redlands shall furnish the City with an Annual P&L Statement
certified as correct by an authorized officer of BLD Redlands.
(c) Form and Content. Each Monthly P&L Statement and
Annual P&L Statement shall be in the form of the financial statement attached
as Exhibit B. The parties may change the form of the P&L Statements from
time to time by mutual agreement. The P&L Statements shall be prepared on
a cash or accrual basis, provided the method chosen for a particular Operating
Year shall be consistently used throughout such Operating Year.
9.3 Audit and Examination Rights.
(a) Audit Procedures. The City shall be entitled at any time
and from time to time during the Term, until two (2) years after the end of the
Operating Year for which any Annual P&L Statement relates, to question the
sufficiency or accuracy of such Annual P&L Statement. At any time during the
Term and within one (1) year after the end of the Term, the City may cause an
audit of BLD Redlands' books and records by an independent accountant of
the City's own selection for any Operating Year. If any Annual P&L Statement
for such Operating Year delivered by BLD Redlands to the City reports
EBITDA Profits that are found to be greater than the amount of BLD Redlands'
actual EBITDA Profits, BLD Redlands shall immediately refund to the City
such unearned portion of the Percentage Fee received. If the audit reveals an
overstatement of EBITDA Profits for such Operating Year by more than five
percent (5%), BLD Redlands shall immediately pay to the City the cost of the
audit. Otherwise, the cost of the audit shall be paid by the City. If, ten (10)
days after written request therefor specifying BLD Redlands' failure to comply
with the reporting obligations hereunder, BLD Redlands fails to provide to the
City any Monthly P&L Statement or Annual P&L Statement in the manner
specified in this Agreement, this failure shall constitute a default under this
Agreement. In Such an event, the City shall have the right, in addition to any
other rights or remedies it may have under this Agreement, to conduct an audit
to enable the City independently to determine the EBITDA Profits/Losses for
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the Sports Complex, BLD Redlands shall reimburse the City for the cost of
such audit on written demand by the City.
(b) Examination of Books. BLD Redlands shall, for a period
of seven (7) years following the delivery of each Annual P&L Statement,
including the seven (7) year period following the end of the Term, keep and
maintain, safe and intact, all of the records, books and accounts required
under this Section 9, and shall from time to time, upon request, make these
records available to the City, the City's auditor, representative or agent for
examination at any reasonable time on five (5) days advance written notice.
The City shall also have the right to make abstracts from the records, to make
copies of any or all of the records and to examine and make copies of any or
all contracts, leases, licenses and concession agreements. In addition, on
request of the City or the City's representatives, BLD Redlands agrees to
furnish copies of the BLD Redlands' state and local sales and use tax returns.
(c) City Staff Inspections City staff shall have the right, from
time to time during normal business hours, to visit and inspect the operations
of the Sports Complex to confirm compliance with this Agreement.
10. Capital Improvements; Repairs and Replacements.
10.1 Capital Improvements. BLD Redlands shall, on an annual basis
(or more frequently if circumstances require), recommend that specified Capital
Improvement projects be undertaken and estimate the cost of doing so. All Capital
Improvement projects shall require the City's prior authorization. All costs and
expenses of Capital Improvement projects approved by the City shall be paid from
City funds directly to the applicable contractors or vendors. The costs and expenses
of Capital Improvement projects shall not be considered Sports Complex Expenses.
10.2 Repairs and Replacements. BLD Redlands may make periodic
repairs to and replacements of Sports Complex Improvements as necessary to fulfill
its maintenance and operations obligations hereunder. Funds may be disbursed
from the Depreciation Reserve Account with the signature only of BLD Redlands to
the extent the use of such funds is for repairs and replacements to Sports Complex
Improvements as contemplated herein. Routine repairs and maintenance
expenditures shall be paid by BLD Redlands from the Operating Account. The cost
of any repairs to or replacement of Sports Complex Improvements shall be a Sports
Complex Expense, whether funded from the Depreciation Reserve Account or the
Operating Account.
%3 QppLq
ciation--Reserve -Account Schedule. The City shall
authorize sufficient funds to be deposited into the Depreciation Reserve Account to
enable the Sports Complex to be and remain a first quality sports and recreational
park throughout the Term. Exhibit_
C shall set forth a schedule of anticipated
Depreciation Reserve Account expenditures over the Term and the annual City
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contributions required to fund them, The useful life of the various Sports Complex
Improvements to be included in the Exhibit C schedule shall be the useful life of the
Sports Complex Improvements if BLD Redlands were a corporation obliged to pay
federal taxes and owned the Sports Complex Improvements.
11. Real Prones Taxes and IMpp§itiqn§.
11.1 Real Property'Taxes. The parties do not believe Real Property
Taxes are properly assessable against the Property, the Sports Complex, the Sports
Complex Improvements or BLD Redlands by virtue of this Agreement. To the extent
any Real Property Taxes are assessed, regardless of whether the tax bill is
presented to BLD Redlands or to the City or whether the tax is assessed against the
Property, the Sports Complex, the Sports Complex Improvements, BLD Redlands or
the City, the City shall pay when due directly to the appropriate taxing authorities all
Real Property Taxes from City funds, not the Accounts, the payment of such Real
Property Taxes shall not be a Sports Complex Expense and such payments shall not
be reimbursable to the City by BLD Redlands. The City shall have the right, in such
an instance, to contest the assessment of any such Real Property Taxes and shall be
entitled to any refunds resulting.
11.2 impositions. BLD Redlands shall account for and pay, as a
Sports Complex Expense, all Impositions.
12. Default.
12.1 BLD Redlands' Default. The occurrence of any of the following
shall constitute a default by BLD Redlands:
(a) Default Under this Agreement. BLD Redlands' failure to
perform any covenant or provision of this Agreement, if the failure to perform is
not cured within thirty (30) days after delivery by the City to BLD Redlands of
written notice of default specifying with particularity the nature of the default. If
the failure to perform cannot reasonably be cured within thirty (30) days, BLD
Redlands shall not be in default of this Agreement if BLD Redlands
commences to cure the failure to perform within the thirty (30) day period and
thereafter diligently and in good faith prosecutes the cure to completion.
(b) insolven _Qqeediqg. If BLD Redlands applies for or
M_Fr
consents to the appointment of a receiver, trustee or liquidator of itself or of all
or a substantial part of its assets; files a voluntary petition in bankruptcy or
commences a proceeding seeking reorganization, liquidation, or an
arrangement with creditors; files an answer admitting the material allegations
of a bankruptcy petition, reorganization proceeding or insolvency proceeding
filed against it; admits in writing its inability to pay its debts as they come due;
makes a general assignment for the benefit of creditors; or an order, judgment
or decree is entered by a court of competent jurisdiction, on the application of
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creditor, adjudicating BLD Redlands a bankrupt or insolvent or approving a
petition seeping reorganization of BLD Redlands or appointing a receiver,
trustee or liquidator of BLD Redlands or of all or a substantial part of its
assets, and such order, judgment or decree continues unstayed and in effect
for any period of sixty 66) consecutive clays.
12.2 City's Default. 'The occurrence of the following shall constitute a
default by the City;
(a) Default Under this A r eme t. The City's failure to
perform any covenant or provision of this Agreement, if the failure to;perform is
not cured within thirty 30) days after delivery by BLU Redlands to the City of
written notice of default specifying;with particularity the nature of the default. I
the failure to perform cannot reasonably be cured within thirty {36} days,;the
City shall not be in default of this Agreement if the City commences to cure the
failure to perform within the thirty 36) day period and thereafter diligently and
n goad faith prosecutes the cure to completion.
13_ Remedies and Early Termination=
13.1 City's Remedies. If any default by BLS Redlands under Section
12.1(a) shall continue uncured, following notice of default as required by this
Agreement, for the period applicable to the default under the applicable provision of
this Agreement, the City may at its election terminate this Agreement by giving BLID
Redlands written notice of termination and this Agreement shall terminate effective
thirty t gj days after the date such written notice is received by BLD Redlands. Upon
the occurrence of any of the events specified under Section 12.1(b), the City may at
its election terminate this Agreement by giving BLID Redlands written notice of
termination and this Agreement shall terminate immediately ippon receipt of such
written``notice by BLID Redlands. The foregoing remedies are in addition to all other
rights and remedies provided by law or equity, to which the City may resort
cumulatively or in the alternative.
13,2 BLID Redlands' Remedies. If any default by the City under
Section 12. (a) shall continue uncured, following notice of default as required by this
Agreement, for the period applicable to the default under the applicable provision of
this Agreement, BILD Redlands may at its election terminate this Agreement by giving
the City written notice of termination and this Agreement shall terminate thirty tai )
days after the date such written notice is received by the City. The foregoing
remedies are in addition to all other rights and remedies provided by law or equity, to
which BILD Redlands may resort cumulatively or in the alternative,
13.3 EarjyTermination, If the Mate Funding is revoked or withdrawn,
provided the City is not in breach of any covenant or representation contained in this
Agreement,nt, the City, in its sole discretion, shall have the right to terminate this
Agreement and all further rights and obligations of the parties hereunder by giving
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written notice of such termination (which shall specify a date not less than thirty (30)
days thereafter on which such termination shall become effective) to BLD Redlands.
The foregoing early termination right shall be effective only if exercised on or before
the date that is ninety (90) days after a contract is awarded for the construction of all
or a significant portion of the Sports Complex Improvements. The foregoing early
termination right shall also cease and no longer be of force or effect any time after
the State Funding is received by the City.
14. Insurance.
14.1 Liability insurance. BLD Redlands shall procure and thereafter
keep in effect at all times until the end of the Term, as a Sports Complex Expense,
commercial general liability insurance which shall include broad form contractual
liability insurance coverage insuring all of BLD Redlands' indemnity obligations under
this Agreement. Such coverage shall have a minimum combined single limit of
liability of at least $2,000,000 and shall be written on a per occurrence basis. If
commercial general liability insurance or other form with a general aggregate limit is
used, the general aggregate limit shall be twice the required occurrence limit. BLD
Redlands' public liability insurance shall include dram shop liability insurance or liquor
liability insurance. All of BLD Redlands' public liability insurance policies shall be
written to apply to all bodily injury, property damage, personal injury and other
covered loss, however occasioned, occurring during the policy term. The City shall
be reflected as an additional insured on such policy or policies of insurance.
14.2 Workers' Compensation Insurance. BLD Redlands shall
maintain, as a Sports Complex Expense, and its concessionaires shall maintain,
workers' compensation insurance in accordance with California law and an
employer's liability insurance endorsement with customary limits,
14.3 Property Insurance.
(a) All Risk Coverage. BLD Redlands shall obtain and keep
in force during the Term, as a Sports Complex Expense, a policy of insurance
covering loss or damage to the Sports Complex, the Sports Complex
Improvements and all FF+E in the amount of the full replacement value
thereof, as the same may exist from time to time, against all perils included
within the classification of fire, extended coverage, vandalism, malicious
mischief and special extended perils ("all risk," as that term is known in the
insurance industry), including damage due to earthquake but excluding
damage due to flood. If such insurance coverage has a deductible clause, the
deductible amount shall not exceed $20,000 per occurrence. BLD Redlands
shall obtain such endorsements as are recommended by the City's risk
manager, including, without limitation, an endorsement for changes in building
codes, provided such endorsements may be obtained on commercially
reasonable terms. The City shall be the loss payee on such policy. The City
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shall receive and retain all insurance proceeds to the extent they are not used
to rebuild the Sports Complex Improvements following an insured casualty.
(b) Replacement Value. The "full replacement value" of the
property to be insured under this section shall be determined by the company
issuing the insurance policy at the time the policy is initially obtained. Not
more frequently than once every two (2) years, either party shall have the right
to notify the other that it elects to have the replacement value redetermined by
an insurance company. The redetermination shall be made promptly and in
accordance with the rules and practices of the insurance company. Each
party shall be promptly notified of the results by the company. The insurance
policy shall be adjusted according to the redetermination.
14.4 Insurance Policies,
(a) Coverage Re-Evaluation. Not more frequently than once
every five (5) years, if in the reasonable opinion of the City the amount or type
of any insurance at that time is not adequate or not provided for herein, BLD
Redlands shall either acquire or increase the insurance coverage as required
by the City provided BLD Redlands may obtain such increased coverage on
commercially reasonable terms.
(b) Policy and Company Requirements. BLD Redlands shall
deliver to the City copies of policies of such insurance or certificates with
attached original endorsements evidencing the existence and amounts of such
insurance with loss payable clauses as required by this Section 14. BLD
Redlands shall, prior to the expiration of such policies, furnish the City with
renewals or binders thereof. Insurance is to be placed with insurers with a
current A.M. Best's rating of no less than A-VII and licensed to do business in
the State of California. All policies of insurance must (other than the property
insurance, which shall name the City as the loss payee) be endorsed to
contain the following:
(1) The City, its council members, officers, employees
and volunteers shall be shown as additional insureds. The coverage
shall contain no special limitations on the scope of protection afforded
the City.
(2) The insurance coverage shall be primary insurance
as respects the City, its council members, officers, employees and
volunteers. Any insurance or self-insurance maintained by the City, its
council members, officers, employees and volunteers shall be excess of
the insurance and shall not contribute with it.
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(3) No such policy shall be cancelable or subject to
reduction of coverage or other modification except after thirty (30) days
prior written notice to the City.
(4) As respects workers' compensation insurance, the
policy shall be endorsed with a waiver of subrogation clause for the
City, its respective council members, officers, employees and
volunteers.
(c) Policy Com ptiance. BLD Redlands shall not use the
Sports Complex in any manner, even if the use is for the purposes permitted
herein, that will result in the cancellation of any insurance required Linder this
Agreement. BLD Redlands shall not keep on the Sports Complex or permit to
be kept, used or sold thereon, anything prohibited by any fire or other
insurance policy covering the Sports Complex.
(d) Failure to Obtain Insurance. If, after written notice and a
fifteen (15) day opportunity to cure, BLD Redlands shall fall to obtain any
insurance required under this Agreement, the City may, at its election, obtain
such insurance. If BLD Redlands fails or refuses to maintain insurance as
required hereunder, or fails to provide proof of insurance, the City shall,
subject to the notice and cure provisions of Section 12, have the right to
declare this Agreement in default, and the City shall be entitled to exercise the
legal remedies set forth in this Agreement.
14.5 Waiver of Subrogation, BLD Redlands and the City each hereby
release and relieve each other, and waive their right of recovery against the other, for
loss or damage arising out of or incident to the perils insured against under this
section, which perils occur in, on or about the Sports Complex, whether due to the
negligence of the City or BLD Redlands or their agents, employees, contractors
and/or Invitees, but only to the extent of insurance coverage. BLD Redlands shall,
upon obtaining the policies of insurance required hereunder, give notice to the
insurance carrier or carriers that the foregoing mutual waiver of subrogation is
contained in this Agreement and obtain the insurance carrier's written consent
thereto.
14.6 Insurance Related Expenses, The cost of any insurance
premium, amounts paid on any deductible and any loss, damage, liability or expense
that may not be covered by any of the insurance specified in this Section 14 shall be
a Sports Complex Expense.
15, Indemnity.
15.1 BLD Redlands Indemnity, BLD Redlands shall indemnify,
defend, protect and hold harmless the City and its council members, officers,
employees and volunteers (collectively the "Indemnitees") from and against any and
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all claims, losses, proceedings, damages, causes of action, liability, costs and
expenses (including reasonable attorneys' fees), arising from or in connection with, or
caused by (i) any act, omission or negligence of BLD Redlands or any
concessionaire of BLD Redlands, or their respective contractors, licensees, invitees,
agents or employees; (ii) any use of the Sports Complex, or any accident, injury,
death or damage to any person or property occurring in, on or about the Sports
Complex, or any part thereof, or from the conduct of BLD Redlands' business or from
any activity, work or thing done, permitted or suffered by BLD Redlands or its
contractors, employees or invitees in, on or about the Sports Complex (other than
when arising as a result of defective construction or workmanship by the City or its
contractors or agents, or the negligence or intentional misconduct of an Indemnitee);
and (iii) any breach or default in the performance of any obligations on BLD
Redlands' part to be performed under the terms of this Agreement, or arising from
any negligence of BLD Redlands, or any such claim or any action or proceeding
brought thereon. In case any action or proceeding be brought against an Indemnitee
by reason of any such claim, BLD Redlands, upon notice from the City, shall defend
the same at BLD Redlands' expense by counsel reasonably satisfactory to the City.
The City shall give BLD Redlands prompt notice of any event triggering the foregoing
indemnity and shall cooperate with BLD Redlands in the defense of any cause of
action to which the foregoing indemnity relates. BLD Redlands shall have no duty to
defend or indemnify the City or any other Indemnitee from any Legal Challenge. BLD
Redlands, as a material part of the consideration to the City, hereby assumes, except
as provided herein, all risk of damage to property or injury to person in, on or about
the Sports Complex arising from any cause other than defective construction or
workmanship by the City or its contractors or agents or the negligence or intentional
misconduct of an Indemnitee. These provisions are in addition to, and not in lieu of,
the insurance required under Section 14
15.2 City Indemnity. The City shall indemnify, protect, hold harmless
and defend BLD Redlands, BLD USA, BLD Sports, Affiliates and their officers,
directors, members and employees from and against any and all liability (including
reasonable attorneys' fees), directly or indirectly arising from the presence or use,
generation, storage, release, threatened release or disposal of any "hazardous or
toxic wastes, substances, or materials" as defined by applicable law on or with
respect to the Property, provided the same is not the result of a breach of Section 5.7
by BLD Redlands. In case any action or proceeding is brought against BLD
Redlands or any other indemnitee referenced in this Section 15.2 by reason of any
such claim, the City upon notice from BLD Redlands shall defend the same at the
City's expense by counsel reasonably satisfactory to BLD Redlands.
15.3 Indemnity Related Expenses. Any amounts paid pursuant to the
indemnity provisions in Section 15,1 shall be a Sports Complex Expense. Any
amounts paid pursuant to the indemnity provisions of Section 15.2 shall not.
16. Damage or Destruction. Should the Sports Complex be substantially
damaged by a Force Majeure Event, either the City or BLD Redlands, by written
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notice to the other given within sixty (60) days following the occurrence of such
Event, shall have the right to terminate this Agreement. If either does so, neither
party shall have any further obligation to the other party under this Agreement, except
with respect to liabilities accruing, or based upon events occurring, prior to the
effective date of such termination. The Sports Complex shall be deemed to have
been "substantially damaged" if (1) the cost of restoring the Sports Complex to its
condition immediately before such damage, after applying any insurance proceeds
and funds in the Depreciation Reserve Account, is fifty percent (50%) or more of the
replacement cost of the Sports Complex Improvements or (2) the Term has less than
ten (10) years remaining. If this Agreement is not terminated in the event of damage
to the Sports Complex either because the damage does not amount to "substantial
damage" as described above, or notwithstanding substantial damage to the Sports
Complex, neither party elects to terminate this Agreement, then the City shall
proceed, at the City's own expense (after application of any insurance proceeds and
funds in the Depreciation Reserve Account), with all due diligence to commence and
complete restoration of the Sports Complex to its condition and character just prior to
the occurrence of such casualty.
17. Condemnation. If all of the Sports Complex (or such a substantial
portion of the Sports Complex so as to make it unfeasible, in the reasonable opinion
of the City or of BLD Redlands, to restore and continue to operate the remaining
portion of the Sports Complex for the purposes contemplated in this Agreement) shall
be taken through the exercise (or by agreement in lieu of the exercise) of the power
of eminent domain by an entity other than the City or its Redevelopment Agency,
then upon the date that the City shall be required to surrender possession of the
Sports Complex or of that substantial portion of the Sports Complex, this Agreement
shall terminate and neither party shall have any further obligation to the other party
under this Agreement except with respect to liabilities accruing, or based upon events
occurring, prior to the effective date of such termination. If such taking of a portion of
the Sports Complex shall not make it unfeasible, in the reasonable opinion of the City
or of BLD Redlands, to restore and continue to operate the remaining portion of the
Sports Complex for the purposes contemplated in this Agreement, then this
Agreement shall not terminate, and the City shall proceed, at the City's own expense,
with all due diligence to alter or modify the Sports Complex so as to render it a
complete architectural unit which can be operated as a sports complex of
substantially the same type and character as before.
18. Assignment. BLD Redlands shall have the right to assign this
Agreement to an entity as to which a Controlling Percentage is owned by BLD USA
or by BLD Redlands or which shall have purchased all or substantially all of the
assets of BLD USA or BLD Redlands. BLD Redlands shall not otherwise assign or
transfer all or any portion of its interest in this Agreement without the City's prior
written consent, which consent shall not be unreasonably withheld, delayed or
conditioned. The City shall not assign this Agreement to any entity other than a
political subdivision of the City or its Redevelopment Agency without BLD Redlands'
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prior written consent, which consent shall not be unreasonably withheld, delayed or
conditioned.
19. BLD represents that it (or its
Affiliates) has proprietary rights in the Big League Dreams name and marks and in
the concession facility design and overall sports park layout which will be utilized in
the construction of the Sports Complex. This Agreement does not grant to the City
any rights to use such name or marks nor the concession facility design or overall
sports park layout. A separate License Agreement to be entered by the City and BLD
USA concurrently herewith shall license the City with respect to such use.
20. Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed to be delivered three (3) days after having been deposited in
the United States mail, postage prepaid, certified mail, return receipt requested,
addressed to the parties at the respective addresses set forth below or at such other
addresses as may have been theretofore specified by written notice delivered in
accordance herewith:
If to the City: City of Redlands
35 Cajon Street, P.O. Box 3005
Redlands, California 92373
Attention: John Davidson
City Manager
If to BLD: Big League Dreams Redlands, LLC
10550 Galena Street
Mira Loma, California 91752
Attention- Scott Parks LeTellier
Chief Executive Officer
Either party may change its address for notice purposes by notifying the other party
of such change in accordance with the provisions of this section.
21. Independent Contractor. BLD Redlands shall at all times be considered
an independent contractor under this Agreement. Nothing contained in this
Agreement shall be construed to be or create a partnership or joint venture between
City and its successors and assigns, on the one part, and BLD Redlands and its
successors and assigns, on the other part.
22. Covenants Against Discrimination. BLD Redlands shall not
discriminate against any person on account of race, color, creed, religion, sex, marital
status, national origin or ancestry in its performance under the terms of this
Agreement.
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23. Non-Com petition. The City shall not compete with BLD Redlands by
itself organizing, or by contracting with third parties to organize, adult softball leagues
or tournaments elsewhere in the City.
24. City Activities The City shall have the right to use the Sports Complex
for City sponsored activities for the benefit of citizens of the community or non-profit
community organizations ("City Activities"). No more than one City Activity may be
held during any calendar month and no more than six shall involve the use of a
baseball/softball field during any Operating Year. City Activities shall be scheduled at
mutually agreeable times that do not restrict BLD Redlands from scheduling revenue
producing league or tournament games or group business events. The City shall
propose dates for City Activities to BLD Redlands at least three months in advance.
The Sports Complex shall be made available to the City free of any facility rental or
admission charge for City Activities. The City shall reimburse BLD Redlands (at the
then current hourly salary or wage) for the cost of all personnel (other than Senior
Staff and food and beverage personnel) employed to service City Activities and other
third party out of pocket expenses BLD Redlands incurs which are attributable to the
City Activities. The City may, however, elect to use its own employees or volunteers
to staff City Activities events rather than employees of BLD Redlands, provided that
only employees of BLD Redlands may engage in food handling activities requiring a
license or permit. Participants wishing to purchase or consume food or beverages
during or in connection with City Activities shall do so only at the concession facilities
operated by BLD Redlands, which shall not charge more than its regular food and
beverage prices then in effect. On a not to exceed once in six months basis,
however, the City may sponsor a City Activity which includes the sale or giveaway of
food (but not beverages) as part of the City Activity or which permits participants to
bring in their own food. (if such once in six months City Activity is an event primarily
for City council members or employees, such as a staff picnic, attendees may bring
their own beverages.) Examples of City Activities include junior high school all star
games, a police versus fire softball game, an Easter egg hunt, etc. No for profit
company or organization shall be entitled to use the Sports Complex as part of a City
Activity for the benefit of its own employees or customers. The City or City
designated promoter of each City Activity shall, at the City's or such promoter's
expense, furnish BLD Redlands with a certificate of insurance naming BLD Redlands
as an additional insured for claims or damages arising from the City Activity in an
amount and on terms comparable to the insurance promoters must furnish BLD
Redlands to organize sport tournaments at the Sports Complex.
25. Force Majeure Events. Both parties shall be excused from
performance hereunder to the extent such party is unable to perform its obligations
due to a Force Majeure Event. If, as a result of the occurrence of a Force Majeure
Event, the responsibilities of BLD Redlands under this Agreement are substantially
changed or the revenue potential of the Sports Complex is potentially impaired, then
the parties shall meet and discuss in good faith appropriate modifications to this
Agreement. If such good faith discussions do not result in an agreement as to
appropriate modifications of this Agreement, then BLD Redlands shall have the right,
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effective on thirty days' written notice to the City, to terminate this Agreement and to
be free of all obligations or liabilities except with respect to liabilities accruing, or
based upon events occurring, prior to the effective date of such termination.
26. Sessums Drive Soccer Facility. The City has requested that BLD
Redlands provide maintenance services for the Sessums Drive Soccer Facility at
BLD Redlands actual cost. BLD Redlands is willing to do so in accordance with the
terms of this section.
26.1 Initial Period Maintenance Services. Commencing on the
Completion Date, BLD Redlands shall, if requested by the City, mow, water, fill holes
in and fertilize the fields and grounds of the Sessums Drive Soccer Facility, maintain
its restrooms and furnish other comparable maintenance services at the Facility the
City reasonably may request during the initial partial Operating Year and the first full
Operating Year. Once the final size and configuration of the Sessums Drive Soccer
Facility is known, the City shall so advise BLD Redlands. Not later than sixty (60)
days thereafter, BLD Redlands shall furnish to the City a monthly fee quotation to
provide such services. If the City accepts the fee quoted, BLD Redlands shall
provide the services requested and the City shall pay BLD Redlands the agreed
monthly fee on the first day of each month. During this initial maintenance period,
BLD Redlands shall calculate its actual cost to provide the Sessums Drive Soccer
Facility maintenance services.
26.2 Subsequent Years. Not less than thirty (30) days before the last
day of the first full Operating Year, and by the same day for each Operating Year
thereafter if the City continues to use BLD Redlands to maintain the Sessums Drive
Soccer Facility, BLD Redlands shall notify the City in writing of the amount to be
charged the City by BLD Redlands for the next Operating Year to maintain the
Sessums Drive Soccer Facility at BLD Redland's actual cost.
26.3 Election Not to Continue. The City may, by written notice served
on BLD Redlands not later than December 15th of the applicable Operating Year, so
advise BLD Redlands in writing that it elects not to use BLD Redlands to provide the
Sessums Drive Soccer Facility maintenance services. Once the City opts not to use
BLD Redlands for the Sessums Drive Soccer Facility maintenance services, BLD
Redlands shall have no obligation to render such services in subsequent Operating
Years or to furnish the notice specified in Section 26.2.
27. Miscellaneous Provisions.
27.1 Modification and Changes. This Agreement may be amended or
modified only by a writing signed by both parties.
27.2 Understandings and Agreements. This Agreement constitutes
ail of the understandings and agreements of whatever nature or kind existing
between the parties with respect to BLD Redlands' maintenance and operation of the
Sports Complex. This Agreement supersedes all prior understandings and
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agreements, whether written or oral, between the City and BLD Redlands pertaining
to the maintenance and operation of the Sports Complex.
27.3 Survival of Covenants. Any covenant, term or provision of this
Agreement which in order to be effective must survive the termination of this
i Agreement shall survive any such termination.
i
h 27.4 Third Parties. Done of the obligations under this Agreement of
either party shall run to or be enforceable by any third party other than a permitted
assignee of this Agreement.
27.5 Waivers. No failure by BLD Redlands or the City to insist upon
the strict performance of any covenant, agreement, term or condition of this
Agreement or to exercise any right or remedy consequent upon the breach of this
Agreement shall constitute a waiver of any such breach or any subsequent breach of
the same covenant, agreement, term or condition. No covenant, agreement, term or
condition of this Agreement and no breach of this Agreement shall be waived, altered
or modified except by a written instrument. A waiver of any breach of this Agreement
shall only affect this Agreement to the extent of the specific waiver.
27.6 Applicable Law. This Agreement shall be construed and
interpreted in accordance with, and shall be governed by, the laws of the State of
California. The Superior Court of the State of California, County of San Bernardino
shall have jurisdiction of any litigation between the parties relating to this Agreement..
27.7 No Presumption Regarding Drafter. The terms and provisions of
this Agreement have been extensively negotiated and discussed between the City
and BLD Redlands. This Agreement reflects their mutual agreement regarding the
subject matter of this Agreement. Because of the nature of such negotiations and
discussions, neither the City nor BLD Redlands shall be deemed or construed to be
the drafter of this Agreement. Therefore, no presumption for or against the drafter
shall be applicable in interpreting or enforcing this Agreement.
27.8 Bnforceabilit of Any Provision. If any term, condition, covenant
or obligation of this Agreement shall be determined to be unenforceable, invalid or
void, such determination shall not affect, impair, invalidate or render unenforceable
any other term, condition, covenant or obligation of this Agreement.
27.9 Attorneys' __Pees. In the event of a dispute involving the
non-performance by a party of its obligations under this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees and all other expenses (including
fees and costs related to discovery) reasonably incurred in connection with such
dispute, whether or not litigation is commenced, in addition to all other relief to which
the party is entitled. If the successful party recovers judgment in any legal action or
proceeding, the attorneys' fees and all other expenses of litigation shall be included
in and made a part of any such judgment.
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27.1 U Time of the Essence. Time is of the essence of this Agreement.
The time for performance of each obligation has been the subject of negotiation by
the parties.
IN WITNESS WHEREOF the parties have caused this Agreement to be
executed the day and year first above written.
CITY OF REDLANDS
Karl N. ("Kaley") Haws, Mayor
ATTEST:
Lorrie P yzer, Ci k
BIG LEAGUE DREAMS REDLANDS, LLC
Scott arks LeTellier, Chief Executive Officer
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MAINTENANCE AND OPERATIONS AGREEMENT
(REDLANDS SPORTS COMPLEX)
EXHIBIT A
ECt K'-1=E.EU SH1NGS AND EQIMMEn
A. Restaurant
13 Booth Stools 2,500 15 30"x 48"Tables 2.650
26 Swivel Bat°Stools 4.300 12 30"x 30"Tables 1.640
110 Arm Chess 15,600 27 Table Base 1.500
3 60"Television Secs 3.300 9 36"Television Sets 6,300
1 Wall Clerk 300 1 Safe,Model#VSP32124 1,160
1 Baby Changing Counter 400 Flags,Art,Graphics 3.000
Totals S !G650
B. Qfllce
2 Copy Machines 9,000 2 Printers,scanner 2,540
10 Computerslinstsllation 22,500 1 Safe 1,560
2 Fax Machines 600 1 Conference Table.chairs 2,000
Desks,Chairs.File Cab 6,800 Wastc Baskets,miss. 2.000
Totals S 47,0001
C. Corporateffly-g dal Event
Tables,Chairs 10,000 30 Baseball Gloves 200
2 Portable Uars 2,000 2 10'x 10'Party Tents 2,000
1 20'x 20'Party Tent 2,000 2 Portable Barbecues 400
3 Portable Food Warmers 9000 1 Barbecue Wagon 2,000
Totak S 20,0110
D. Maintenance
i 5 Gang Mower 28,600 1 Triplex Mower 16,000
1 Toro#3160 Vehicle 12,250 1 Utility Vehicle 5.000
1 John Deere Groomer 9,000 1 Front-Load Tractor 17.800
1 Sweeper 5,000 1 Sodcutter 3,000
1 aerator 5,000 1 Topdresser 7,000
1 Fertilizer Spreader 3,000 4 Golf Carts/Utility Beds 16,000
1 Floor Scrubber 6,000 1 Tom 22"Mower 1,00()
1 Verticuttes 5,600 2 Backpack Blowers 400
1 Air Compressor 150 1 Rotary Spreader 300
1 Drop Spreader 400 2 McClane Edgers 400
2 Pressors Washer 400 1 Chemical Sprayer 200
l Roto Tiller 500 3 Weedeaters 700
Subtotal peeper equip. 143,700
Hand Tools
4 Laadscape Rakes 4 Leaf Rakes
4 Sguarc-Nosed Shovels 4 Pointed.Shovels
2 Large Shovels 2 6"Trenching Shovels
4 24":Quash 13roomc 4 50'ptoses
2 Regular Brooms 2 Weed Hoes
1 T'o 1 Tree Pruner
2 'free Hand Saws I Power Chairs Saw
1 Pitch Fork 1 farad Pump
Subtotal bind tools 700
1
#Ea, Descrioft Cast IEst #Ea. Descri tiort Coat Eat
D. Mgintanan SlCUrrrred
Irrigation tools
Wmches,assorted kary-outs.assorted
2 Pipe S&V" I PSl Gauge
5 Quick Coupler Keys 4 2.5 03allon 08.4 Cans
Subtotal Irrigation 700
Tftfield toots
2 Nail Drags 2 lnfteld Drags
2 Chalk-ars 2 Batters Box Frmnex
2 100'Tam 2 400'Siring Reels
Suhtatal infold tools 1,500
Maintenance tools
1 Electric Hammer 1 114"Portable Drill
I "Cool Box 1 4 "Grinder
1 7"Power Saw 1 Impact Wrench Set
1 Electric Multi-Tester Puns Tools,assorted
4 Extension Cords 1 ,Electric Pump
2 Vacuum Cleaners Trash Receptacles,asst..
G Hand Held Radios Storage Shelves,asst
1 Spray Rig i Welding Equipment
Subtotal snaint tools 4,0�
Total All Maintenance S 1501"t)
D. Spnrb/Mlscellaneous
1000' Sport Fence 10,000 7 Portable Mounds 8,000
I Portable P.A.System 1.500 1 Video CameMplaycr 1,000
4 Bulb Boards 2.500 Batting Cage Kit 3,100
30 Picnic Tables 21,000 1 Misc.Ash Trays,Urns 8(X)
1 Change Machine 2,000 135 uniforms 1,500
Totals $ S 400
Subtotal All S 311.650
Contingency 11% S 34,282
Total Furniture,Furaishin s&Equipment S 345,432
2
Construction Contractitems
Purchased and installed hz contractor
Kitchcri/Concession fixtures and equipment will be furnished and installed as per the construction documcnts.
and sMU include bar/ftntain equipracnt,storage shelving,public address and point-of-sale systems_
AL Restaurant
5 Booths I Credit Card MOChine vendor
1 ATM Machine vendor 3 Menu Board/Signs Vendor
Window1cluvers I Music and P.A.Systc;qL___
D. 2fas I Credit Card Machine vendor
Ltarag Cabuwts I PA/Music Syst=
C. R—eftil
I Point-of-We System Storage Racks
I Counter/Fixtures Display Shelves
D. Batting Caffe
I Master Pjtqh Equipment 15 Bats vendor
L SP—OrgMsedlaneous
4 Volleyball NetstPoIcs 2 Hockey GWs
7 Pitching Rubbers Player Benches
23 single Bases 4 Basketball Backboards
90 Uwe Mounts 7 Home Plates
2 Bvikethall Scoreboards 9 Double Bases
Backstop Netting 14 Bat Racks
6 Portable Bleachers 6 Baseball Scoreboards
2 Mist Symms 10 Scoreboard Controllem.
Playground Equipment Safety Netting
Parking Netting Dnnking Fountains
Pan Shade Nets I Entry Turnstile
I Tel erne Systems I Bike Rack
3
EXHIBIT B FORM OF REDLANDS SPORTS COMPLEX PROFIT AND LOSS STATEMENT
BIG LEAGUE DREAMS REDLANDS,LLC
JANUARY FEBRUARY MARCH APRIL MAY JUNES JULY AUGUST SEPTEMBER OCTOSER NOVEMBER DECEMBER YTO
R15tF.M.
Diamond Sports
Leagues
Tou"ramepts
Court Sports
Field&$and$Ports
Bralling Ong"
Food A Sevetsoa
R05tA4f2r1f00"s*8$kss3
Group Bulnisolls/Spesdal Events
Geos4p aped apasdaV Events
Gets Admissions
Morchiandising
Atcadeftftriq
Campo&Clinics
HOW corrvnssions
Other Revenue
Total Gross Revenue
Diamond Sports
Leagues
Tournaments
Court spods
Fend&Earn Spoofs
Batting cage
Food&Beverage
Group SusinesoSpecralt Event,,
Group Business/Speciat Events
Gate Admissions
Sponsorship/AdvadWng
Merchandising
Arcade/Vending
comps&ofinics
Home Conirritsword
Other Revenue
Refunds
Total Cost of Revenue
Gross Margin
Leave 4 Use
Littaboas&Fees
security
WON*$
Electric
Trash
Water
Other
Subtotal
Maintenance&Rap*
k,',qurdyvont RepaiORental
Maintenance'Lanisr,aping
JAN06io SeNicevsuppiies
Facifity Repair&tvepEacemant
Subtotal
q. r 2 041012002127 PM SGS
EXHIBIT B FORM OF REDLANDS SPORTS COMPLEX PROFIT AND LOSS STATEMENT
JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NovemeER DECEMBER YTO
Human Resources
Salaries
Wages
oveftune
Bonuses
Payroll Taxes
Payroll Proceamno
HeallinfL060sahility Insurance
Worker's
Compensation
corami sees
Ternporary Services
r
'onsoftfng Fees
uniforms
Subtotal
General&Administrative
AdvertstruPPR
Automobile
Sank&Seruce Charges
f3usmess Development
Dues&SubscripWns
F&B Suirptms)Smali Wares
Office SUPPItes
Over/Short Gash Sates
Postage&ShriRCliq
fermbrig&CopyTiq
Repairs,
Research
Technology
Tseecommunicasurns
Trade ShowsiSarnwars
Travel&Lodging
Mace4anoous
Subtotal
Net Operating Income
Insurance
Uability
Sanction Fees
Property&Casualty
Clarms Paid
Subtotal
Non-Operating Expenses
impos,Uons
LLC Taxes
Professionat Fees
AcCOLoting Fees
Legal Fees
Majotenarice,and Operations Fee
Subtotal
City Pymts to Deter Res Acct
Total Expense —------
ESITIDA
nterest&Loan Fees
'.ixes(othK than LLC}
Depreciation
Amorturrtnw
SLD Percentage Fee
Subtotal
NET INCOMEI(LOSS),
06/j J%,IOQ2 2 r71,10 SGN
EXHIBIT C
DEPRECIATION RESERVE ACCOUNT CONTRIBUTION SCHEDULE
To be prepared in accordance with Section 6.3 not later than thirty (30) days after a
contract for construction of the Sports Complex Improvements is entered by the City.