SPORTSPLEX USAEIGHTH AMENDMENT TO LEASE AGREEMENT
THIS EIGHTH AMENDMENT TO LEASE AGREEMENT ("Eighth Amendment") is made and
entered into effective this 9th day of June 2020 ("Amendment Effective Date") by and between the
City of Poway, a municipal corporation ("City"), and SPORTSPLEX, USA, Inc., an Illinois Corporation
("SPORTSPLEX"), collectively referred to herein as the "Parties." In consideration of the mutual
covenants contained herein, City and Sportsplex hereby agree to amend the South Poway Sports
Park Lease Agreement dated November 11, 1992 ("Lease") as set forth below.
RECITALS
WHEREAS, the City owns the property located at 12349 Mclvers Court, Poway, California,
which is known as the South Poway Sports Park (the "Premises");
WHEREAS, in November 1992, the City entered into the original Lease Agreement (the
"Lease") for the Premises with Sportsparks/Kajima;
WHEREAS, in December 1993, the City entered into an amendment to the Agreement with
the original Lessee's assignor, Sportsparks of California (the "First Amendment");
WHEREAS, in July 1996, the City and Sportsparks of California entered into a second
amendment to the Agreement (the "Second Amendment"), which extended the term of the
Agreement until December 31, 1998, and modified the rent;
WHEREAS, in December 1996, the City consented to the assignment of the lease to
Sportsplex, and entered into a third amendment to the Agreement with Sportsplex in October 1997
(the "Third Amendment") whereby the term of the Agreement was extended until December 31,
2006, and the rent was modified;
WHEREAS, in September 2002, the City and Sportsplex entered into a fourth amendment to
the Agreement (the "Fourth Amendment"), whereby the term was extended until December 31,
2016, and the rent was modified;
WHEREAS, in September 2007, the City and Sportsplex entered into a fifth amendment to
the Agreement (the "Fifth Amendment"), which modified the description of the Premises covered by
the Agreement, and extended the term of the Agreement until December 31, 2023; and
WHEREAS, in December 2009, the City and Sportsplex entered into a sixth amendment to
the Agreement (the "Sixth Amendment"), by which Sportsplex assumed additional landscape
maintenance responsibilities for the Premises in exchange for a reduced rent payment;
WHEREAS, in October 2011, the City and Sportsplex entered into a seventh amendment to
the Agreement (the "Seventh Amendment"), by which the City agreed to reduce rent in exchange for
the completion of certain improvements;
WHEREAS, in March 2020, the Sportsplex facility temporarily closed in light of the ongoing
COVID-19 pandemic, and in May 2020, Sportsplex reached out to the City requesting renegotiation
of the lease;
WHEREAS, on May 30, 2020, the owner of Sportsplex during the entirety of the Lease,
William Berghoff, executed a Stock Sale and Purchase Agreement with Sean Melvin, the longtime
manager of Sportsplex's operations at the Premises, whereby 100% of stock in Sportsplex was sold
1
from Mr. Berghoff to Mr. Melvin, contingent on City approval;
WHEREAS, the Parties agree that the Stock Sale and Purchase Agreement must be
approved by the City pursuant to Section II(H) of the Lease;
WHEREAS, based on evidence provided that the Premises will continue to be operated to
the satisfaction of the City, the City desires to approve the Stock Sale and Purchase Agreement;
and
WHEREAS, for good and adequate consideration, the Parties desire to amend certain
provisions of the Lease to allow continued operation of the Premises by Sportsplex following the
ongoing COVID-19 pandemic.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
Section 1. Defined Terms. All capitalized terms used herein shall have the same
meaning as in the Lease, unless specifically defined in this Eighth Amendment. The term Lease, as
used herein, shall mean the Lease as amended by the seven amendments described in the
foregoing Recitals.
Section 2. Consent to Assignment. The City hereby approves and consents to the Stock
Sale and Purchase Agreement, pursuant to Section II(H) of the Lease, and confirms that Sportsplex,
as now owned by Sean Melvin, is the Lessee under the Lease. This approval and consent is given
on the condition and based on express representation by Sportsplex that previous ownership of
Sportsplex, specifically including but not limited to William Berghoff and Paul Berghoff, has no
ownership, financial, or any other interest in Sportsplex or the Premises, except as set expressly
forth in the Stock Sale and Purchase Agreement. If the City discovers that this foregoing
representation is not accurate, the Parties agree that the City shall have the right to immediately
terminate the Lease.
Section 3. Suspension of Rent. In light of the ongoing COVID-19 pandemic and the
resulting closure of Sportsplex's operation on the Premises, the City agrees that Sportsplex's
obligation to pay Rent under Section (I)C of the Lease, as amended, is hereby temporarily waived as
of the Amendment Effective Date until Sportsplex's operation at the Premises has been reopened
for two calendar months, after which time, Sportsplex's obligation to pay all Rent (including both the
Minimum Rent and Annual Percentage Rent) shall recommence, without obligation to pay Rent for
months during which Sportsplex's operation was closed as a result of the COVID-19 pandemic. By
way of example, if Sportsplex's operation at the Premises reopens on July 15, 2020, Sportsplex's
Rent obligations shall recommence effective September 1, 2020.
Section 4. Utilities. The Parties hereby acknowledge and agree that Section II(G)(1) of
the Lease obligates Sportsplex to pay all charges for water and sewer services at the Premises, and
the First Amendment obligates the City to pay for water costs incurred for all turf, groundcover,
trees, and shrubs. Consistent with the foregoing provisions, the Premises' two water meters that
measure indoor water use shall be placed in Sportsplex's name, and commencing on the
Amendment Effective Date, Sportsplex shall be invoiced by the City on a bi-monthly basis for all
water and sewer charges related thereto, in the same manner on all other water and sewer
customers in the City. The Premises' other two water meters, which measure outdoor water use,
shall remain in the City's name, and the City shall be responsible for paying all water charges related
thereto. Due to the fact that sewer service relates only to indoor water use, Sportsplex is
responsible for paying all sewer charges for the Premises.
2
Section 5. Accounting of Gross Receipts/Expenses. Sportsplex hereby agrees to provide
the City with monthly financial statements, as described in Section I(C)(3) of the Lease, on the first
of each calendar month following the Amendment Effective Date.
Section 6. Section 11 of the Lease is hereby amended to add Section 11(1), as follows:
1. Priorities for Expenditure of Revenue
Lessee agrees to use its revenue and other funds to pay its expenses
relating to its operation on the Premise in the following order:
1. Employee Payroll
2. Insurance
3. City of Poway
4. Utilities
5. Food and Beverage Vendors
6. IT/Computer Services
7. Stock Sale and Purchase Agreement
8. Accounting
9. Misc. Expenses
Section 7. Except as otherwise amended by this Eighth Amendment, all other terms and
conditions of the Lease and amendments thereto shall remain in full force and effect.
[Signatures on Following Page]
3
IN WITNESS WHEREOF, the parties hereto have caused this Eighth Amendment to be
executed the day and year first above written.
CITY OF POWAY
By
Chris Hazeltine, City Manager
ATTEST:
Faviola Medina, City Clerk
J
APPROVED AS TO FORM:
alis4
Alan Fenstermacher, City Attorney
SPORTSPLEX
By
Sears ( Fvin, President
4
South Poway Sports Park
Lease Agreement Amendment No. 7
THIS LEASE AGREEMENT AMENDMENT (the "Amendment") is entered into
this 4 th day of October, 2011 by and between the CITY OF POWAY, a municipal
corporation ( "City") and SPORTSPLEX, USA ( "Sportsplex "), an Illinois corporation.
In consideration of the mutual covenants contained herein, City and
Sportsplex hereby agree to amend the South Poway Sports Park Lease Agreement
dated November 11, 1992 as follows.
WHEREAS, the City owns the property located at 12349 Mclvers Court,
Poway California, that is known as the South Poway Sports Park (the "Premises ");
and
WHEREAS, in November 1992, the City entered into the original Lease
Agreement (the "Agreement") for the Premises with Sportsparks /Kajima; and
WHEREAS, in December 1993, the City entered into an amendment to the
Agreement with the original Lessee's assignor, Sportsparks of California (the "First
Amendment"); and
WHEREAS, in July 1996, the City and Sportsparks of California entered into
a second amendment to the Agreement (the "Second Amendment"), which
extended the term of the Agreement until December 31, 1998, and modified the
rent; and
WHEREAS, in December 1996, the City consented to the assignment of the
lease to Sportsplex, and entered into a third amendment to the Agreement with
Sportsplex in October 1997 (the "Third Amendment ") whereby the term of the
Agreement was extended until December 31, 2006, and the rent was modified;
and
WHEREAS, in September 2002, the City and Sportsplex entered into a
fourth amendment to the Agreement (the "Fourth Amendment"), whereby the
term was extended until December 31, 2016, and the rent was modified; and
WHEREAS, in September 2007, the City and Sportsplex entered into a fifth
amendment to the Agreement (the "Fifth Amendment"), which modified the
description of the Premises covered by the Agreement, and extended the term of
the Agreement until December 31, 2023; and
WHEREAS, in December 2009, the City and Sportsplex entered into a sixth
amendment to the Agreement (the "Sixth Amendment "), by which Sportsplex
assumed additional landscape maintenance responsibilities for -the Premises in
exchange for a reduced rent payment; and
WHERAS the parties wish to amend the agreement by lowering the rent for
eight years to amortize the cost of specific improvements to the Premises funded
by Sportsplex.
NOW, THEREFORE, the parties amend the Agreement as follows:
1. Section C. Rent is modified by adding clause 11, to read as follows:
C. Rent
11. Rent Reduction for Facility Improvements
Effective January 1, 2012, the City will credit the Minimum Monthly
Rent due from Sportsplex by an amount of $600 per month for a
term of eight years, until December 31, 2019. Such rent reduction is
subject to the completion of the following improvements to the
City's satisfaction prior to December 31, 2011:
a. Batting Cage Improvements;
b. Purchase of Portable Homerun Fences;
c. Purchase of Portable Pitching Mounds;
d. Installation of new Dugout Roofs;
e. Completion of the Sports Pub Remodel; and
f. Installation of Restroom Hand dryers.
Sportsplex will provide the City with receipts for these
improvements. The total cost of these improvements is estimated to
be $57,975. If the total cost varies from this estimate, or should any
of these improvements not be completed to the City's satisfaction,
the rent reduction will be adjusted accordingly, more or less, by the
City.
2. Except as otherwise modified by this Seventh Amendment, by the Sixth
Amendment, by the Fifth Amendment, by the Fourth Amendment, by
the Third Amendment, by the Second Amendment, and the by First
Amendment, the Agreement, and each and every term contained
therein, shall remain in full force and effect.
[Signatures on Following Page]
t }
IN WITNESS WHEREOF, the Parties have caused this Amendment to be
signed and executed the day and year first above written.
City of Poway
By.
�enny
C" Manager
�,
APPROVED AS TO FORM:
By:
M rga Fo[
City Attorney
Sportsplex, USA
� I l- 7v-.jdj,
South Poway Sports Park
A endment No. 6 to Lease Agreeme
This Lease Amendment is entered into this 15th day of December, 2009
by and between the CITY OF POWAY ( "City ") and SPORT.SPLEX, USA
( "Sportsplex "), an Illinois corporation.
In consideration of the mutual covenants contained herein, City and
Sportsplex hereby agree to amend the South Poway Sports Park Lease
Agreement dated November 11, 1992 as follows.
WHEREAS, the City owns the property located at 12349 Mclvers Court,
Poway, California, that is known as the South Poway Sports Park ( "Premises ");
, and
WHEREAS, in November 1992, the City entered into the original Lease
Agreement ( "Agreement ") for the Premises with Sportsparks/Kajima; and
WHEREAS, in .December 1993, the City entered into an amendment to
the Agreement with the original Lessee's assignor, Sportsparks of California; and
WHEREAS, in July 1996, the City and Sportsparks of California entered
into a second amendment to the Agreement, which extended the term of the
Agreement until December 31, 1998, and modified the rent; and
WHEREAS, in December 1996, the City consented to the assignment of
the lease to Sportsplex, and entered into a third amendment to the Agreement
with Sportsplex in October '1997, whereby the term of the Agreement was
extended until December 31, 2006, and the rent was modified; and
WHEREAS, in September 2002, the City and Sportsplex entered into a
fourth amendment to, the Agreement, whereby the term was extended until
December 31, 2016, and the rent was modified; and
WHEREAS, in September 2007, the City and Sportsplex entered into a
fifth amendment to the Agreement, which modified the description of the
Premises covered by the Agreement, and extended the term of the Agreement
until December 31, 2023.
WHEREAS, the parties wish to modify: the Agreemenfto clarifythe parties'
respective maintenance responsibilities, and to allow Sportsplex to assume
additional landscape maintenance responsibilities for the Premises, in exchange
for a reduced rent payment.
- c South Poway Spor�rk
Amendment No. 6 ase Agreement
Page 2
0
NOW, THEREFORE, the parties amend the Agreement as follows:
1. Section C(10) is modified by adding the following language
C. Rent
10. Citv Pavment for Landscaoe Facilities
Effective January 1, 2010, the City will credit the Minimum Monthly
Rent due from Sportsplex by an amount of $1,100 per month for
the term of the Agreement, as consideration for landscape
maintenance in all turf areas, slopes, and parking lot areas of the
Premises, inside and outside of the fence, which were previously
maintained by the City_ The landscape „maintenance- required. by
'- this provision shall include maintenance to irrigation systems but
does not :include maintenance or repair of water system
infrastructure, which is the responsibility of the City. All landscape
maintenance required by this provision shall be performed
according to the standards set forth in the Maintenance Guidelines
attached to the original Agreement.
The maintenance required by this section shall not include the
inspection, maintenance and repairs of playground areas, and the
trimming of eucalyptus trees outside the fence, which shall be the
responsibility of the City.
2. These provisions contained in this Sixth Amendment shall
supersede all conflicting provisions in the original Agreement, and
First through Fifth Amendments to the Agreement. All other terms
and conditions in the original Agreement and First through Fifth
Amendments to the Agreement remain in full force and effect.
IN WITNESS WHEREOF, the Parties have caused this Amendment to be
signed and executed the day and year first above written.
City of 'Poway Sportsplex, USA
- r� t wj
Rod Gould Bill Berghoff
City Manager President
APPROVED AS TO FORM:
By: O L- c o A
Lisa A. Foster
City Attorney
0
South Poway Sports Park
Amendment No. 5 to Lease Agreement
This Lease Amendment is entered into this 11 t h day of September , 2007 by
and between the City of Poway ("City") and Sportsplex USA, Inc. an Illinois corporation
( "Lessee ").
In consideration of the mutual covenants contained herein, City and Lessee
hereby agree to amend the South Poway Sports Park Lease Agreement by and
between City and Lessee's assignor dated November 11, 1992, Lessee's interest in
which was assigned to Lessee by Assignment of Lessee's interest in Lease dated
August 31, 1993 and consented to by City on December 6, 1993.
The sections specified are amended as follows:
I(A) Lease of Premises. A new third paragraph is added to Section I(A), as
follows:
"Excluded from the scope of this Lease is the vacant property known as the "Upper
Pad ", located at the comer of Crosthwaite Circle and Stowe Drive, as delineated on
Exhibit A. The Upper Pad is City property and cannot be altered or used for any
purpose by the Lessee without prior written permission of the City."
I(B) Term. Section I(B) is amended to read as follows:
1. Initial Term. The term of the Lease Agreement shall be revised to
approximately thirty years commencing January 14, 1994 and ending December 31,
2023.
If the Lessee fails to convert the in -line hockey rink at the South Poway Sports Park
to a multi -use sports rink, to the satisfaction of the City Manager or designee, within 12
months of the date of this Amendment No. 5, the Lease term reverts to a term of twenty -
three years commencing January 14, 1994 and ending December 31, 2016.
All other provisions of the Lease and Amendment Nos. 1 through 4 shall remain in
full force and effect.
0 0
IN WITNESS WHEREOF, the parties hereto have caused this Lease Agreement
Amendment to be duly executed on the respective dates set forth opposite their
signatures.
Dated: September 11 , . 2007
Dated: 107
CITY OF POWAY
By:
Rod Gould, City Manager
SPORTSPLEX USA
B 'VL
Bill Berghoff, President
•
L
Exhibit A
'ld9 *p THE 2002 ANNUAL xMING OF
BOARD OF DIRECTORS
OF
SVORTSPLEX USA
The annual meeting of the Board of Directors of. SpoMlex USA Inc., a
Corporation organized under the laws of the State of nuwi% wad hold in Glenview,
on December 20, 2002, at the hour of 1 O:OOAM.
I
The following
Dimctom- constituting a quorum were presoat:
P&W Berglwff President
i
William Berooff S%Mtaty/Treesurer i
lion, Paul Berghoff, ca the meeting o order and
1 t
The President of the Corpora '
William 13erglwff, the Secretary' of the corporation,
prided as Chshman thwe� j
acted as Secretary of the meeting and kept the minutes thereof.
I
The preliminary Year end results
were discussed and amongst other l33ue3 it Was
de
cidod that year end profit sharing would be delayed until the final financial results
were in.
The final f meneing for the con version of the basketball courts to an arena soccer rink
were decided and it was ymanimously approved to move forward With the cw mt Plan•
William Berghoff
[,astly, Paul Berghoff'decided to resign as )siderttiof d�D 31, 2002. _
was uaauimously approved to take ova P�
becama the sole shareholder of 3portsplox USA by
Also at thed time William 8elBhoff �
F
acquiring Paul Bwghoft"s shares.
t 9r2
I
i
Tltm being too pather
budissyss to oomc before the nseehng, on motion duly '
was adjourned.
made, seconded and caMed, flue moo
i
►
Dected: 1 a► duo �
QI/lUl�it Ber ahO�P
i
/31W6t: �
►
Paul Berooff
prudent
i
I
2 of 1
• f CI= T Y`.OF_POWAY DOCUMENT
South Poway Sports Park
Amendment No. 4 to Lease Agreement
This Lease Amendment is entered into this 17th day of September , 2002 by
and between the City of Poway ( "City ") and Sportsplex USA, Inc. an Illinois corporation
( "Lessee ").
In consideration of the mutual covenants contained herein, City and Lessee
hereby agree to amend the South Poway Sports Park Lease Agreement by and
between City and Lessee's assignor dated November 11, 1992, Lessee's interest in
which was assigned to Lessee by Assignment of Lessee's interest in Lease dated
August 31, 1993 and consented to by City on December 6, 1993.
The sections specified are amended as follows:
B. Term
1. Initial Term. The term of the Lease Agreement shall be revised to
approximately twenty -three years commencing January 14, 1994 and ending
December 31, 2016.
If the Lessee fails to convert the basketball courts at the South Poway Sports Park to
a multi -use sports rink, to the satisfaction of the City Manager or designee, within 12
months of the date of this Amendment No. 4, the Lease term reverts to an initial term of
thirteen years commencing January 14, 1994 and ending December 31, 2006. ,
C. Rent
1. Minimum Monthly Rent Lessee shall pay City monthly, within ten (10)
days of month -end, without deduction, offset, prior notice or demand, a
Minimum Monthly Rent of the South Poway Sports Park. The Minimum
Monthly Rent shall be $4,000.
2. Annual Percentage Rent In addition to the Minimum Monthly Rent,
Lessee shall pay City an Annual Percentage Rent, which shall be due and
payable by March 1 of each year, for the prior calendar year:
a. Lease Years 2002 through December 31, 2008 The Annual
Percentage Rent shall be seven percent (7 %) of total annual
gross revenues, less the total Minimum Monthly Rent paid to
City for that calendar year.
b. Lease Years 2009 through December 31, 2018 (including two
extension periods): The Annual Percentage Rent shall be
eight percent (8 %) of total annual gross revenues, less the
total Minimum Monthly Rent paid to City for that calendar year.
South Poway Sports F -ark
Amendment No. 4 to Lease Agreement
Page 2
C. Annual Gross Revenue Exceeding $2,500,000 In the event
total annual gross revenues exceed $2,500,000 during the
term of this Lease or any extension period, Lessee will pay the
Minimum Monthly Rent, the applicable Annual Percentage
Rent for revenues up to $2,500,000, and Annual Percentage
Rent of ten percent (10 %) of total annual gross revenues
above $2,500,000.
All other provisions of the Lease and Amendment Nos. 1 through 3 shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Lease Agreement
Amendment- to be duly executed on the respective dates set forth opposite their
signatures.
Dated: l iq D2 CITY OF POWAY
0
Jame-8. L. Bowersox, City Manager
Dated: _i 2 6 (DZ-
SPORTSPLEX USA
As
South Poway Sports Park
Amendment No. 3 to Lease Agreement
This Lease Amendment is entered into this 7th day of October 1997, by and
between the City of Poway ( "City ") and Sportsplex USA, Inc., an Illinois corporation
(Lessee ").
In consideration of the mutual covenants contained herein, City and Lessee
hereby agree to amend the South Poway Sports Park Lease Agreement by and
between City and Lessee's assignor dated November 11, 1992; Lessee's interest in
which was assigned to Lessee by Assignment of Lessee's interest in Lease dated
August 31, 1993 and consented.to by City on December 6, 1993. The City also hereby
acknowledges the change in the Lessee's corporate identity from Sportsparks of
California to Sportsplex USA.
The sections specified are amended as follows:
I. Conveyance of Premises
Delete Section B(1) and B(2) and replace with the following:
B. Term
1 . . Initial-Term. The Term of the Lease Agreement shall be revised to
approximately thirteen (13) years commencing January 14, 1994 and ending
December 31, 2006.
If the Lessee fails to convert the volleyball courts at the South Poway
Sports Park at an estimated cost of $200,000 within 12 months of the date of this
Amendment No. 3, the Lease term reverts to an initial term of five years commencing
January 14, 1994 and ending December 31, 1998.
2. Re.new.al Options.. At the end of the Initial Term of this Agreement, the
Lessee has the option to renew this Agreement for two additional and successive one -
year periods, provided that Lessee is not in default hereof as of the date of the exercise
of the option and as of the expiration of the current term. These options may be
exercised by providing written notice to the City at least one hundred eighty (180) days
prior to the expiration of the term or renewal period of this Agreement. Any and all
options provided hereunder shall be subject to the approval of the City Council. Said
approval shall not be unreasonably withheld.
J..
Add the following to Section C(2):
C. Rent
2. An nual-P_er_centage_Rent
e. The Lessee will pay additional percentage rent of total annual gross
revenues which are above the following amounts in the following lease
years:
Lea se_Y_ear
Amount
P_er_centage Rent
2001
$1,150,000
20%
2002
$1,200,000
20%
2003
$1,250,000
20%
2004
$1,300,000
20%
2005
$1,350,000
20%
2006
$1,400,000
20%
2007
$1,450,000
20%
2008
$1,500,000
20%
IN WITNESS WHEREOF, the parties hereto have caused this Lease Agreement to
be duly executed on the respective dates set forth opposite their signatures.
CITY OF POWAY
Dated: _( 0� 6 , 1997
Dated: 042 l5 , 1997
James . Bowersox, City Manager
SPORTSPLEX USA
By V�'� . &J
Y•
Paul Berghoff, President
Sportsplex USA
SOUTH POWAY SPORTS PARK
AMENDMENT NO. 2 TO (LEASE AGREEMENT
This Lease Amendment Is entered Into this -3o day o 996 by and between
the City of Poway ( "City") and Sportsparks of California, a California General
Partnership, ( "Lessee ").
In consideration of the mutual covenants contained herein, City and Lessee hereby
agree to amend the South Poway Sports Park Lease Agreement by and between City
and Lessee's assignor dated November 11, 1992, Lessee's interest in which was
assigned to Lessee by Assignment of Lessee's Interest in Lease dated August 31,
1993 and consented to by City on December 6, 1993. The sections specified are
amended as follows:
I. CONVEYANCE OF PREMISES
Delete Section B(l)and B(2) and replace with the following:
B. Term
1. Initial Term The Term'of the lease agreement shall be revised to approximately
five (5) years commencing January 1 4, 1994 and ending 'December 31, 1998
2. Renewal Options At the end of the Initial Term of this Agreement, the Lessee
has the option to renew this Agreement for two additional and successive one -
year periods, provided that Lessee is not in default hereof as of the date of the
exercise of the option and as of the expiration of the current term. These
options may be exercised by providing written notice to the City at least one
hundred and eighty (180) days prior to the expiration of the term or renewal
period of this Agreement. Any and all options provided hereunder shall be
subject to the approval of the City Council. Said approval shall not be
unreasonably withheld.
C. RENT
Delete Sections 1 and 2, in their entirety, and the first paragraph of Section 10.
Replace with the following Sections 1, 2a -d,10 and add Section 14.
1. Minimum Monthly Rent Lessee shall pay City monthly, within ten (10) days of
month -end, without deduction, offset, prior notice or demand, a Minimum
Monthly Rent of the South Poway Sports Park. The Minimum .Monthly Rent
shall be $5,000.
Lease Amendment 2
South Poway Sports Park
Page 2
•
2. Annual Percentage Rent In addition to the Monthly Minimum Rent, Lessee
shall pay City an Annual Percentage Rent (which shall be due and payable
within 60 days of the close of the calendar year) which is to be calculated as
follows:
a. The Lessee will pay a percentage rent of 8% of total annual gross
revenues between $750,001 and $800,000.
b. The Lessee will pay a percentage rent of 9% of that portion of total
annual gross revenues between $800,001 and $850,000.
C. The Lessee will pay a percentage rent of 9.5% of that portion of total
annual gross revenues between $850,001 and $900,000.
d. The Lessee will pay a percentage rent of 10% of total annual gross
revenues which are above $900,001.
10. City Payment for Landscape Facilities The City will credit the Monthly Minimum
Rent due from Lessee by an amount of $2,500 per month for the term of the
agreement as consideration for maintenance of all ballfield turf and related
irrigation systems in a manner consistent with the Maintenance Guidelines. If it
is determined that the requirements of the Maintenance Guidelines have not
been met, the aforementioned credit will be withheld.
14. Notwithstanding the foregoing, the City accepts payments in the amount of
$77,502 as compensation for past rent due in calendar year 1995. The City
waives any breach relating to rent payments which may have occurred prior to
the date of Amendment No. 2.
Lease Amendment 2
South Poway Sports Park
Page 3
II. OPERATION AND MAINTENANCE OF PREMISES; ASSIGNMENT OF
LEASE
H. Assignments and Subleases
Add the following to the last paragraph of Section H(1):
Notwithstanding the foregoing, the City accepts the current composition of the
Lessee partnership and waives any breach which may have occurred prior to
the date of Amendment No. 2 as the result of change in that composition.
IN WITNESS WHEREOF, the parties hereto have caused this Lease Amendment to
be duly executed on the respective dates set forth opposite their signatures.
CITY OF POWAY
Dated: 30 , 1996 By: M034&�o
Ja es L. Bowersox
i Manager
SPORTSPARK OF CALIFORNIA
Dated: RJ , 1996
By: V%&
Paul Berghoff, Aresid hf
Sportspark of California
c: \data \wpfiles \tory\sprtprk
SOUTH POWAY SPORTS PARK
AMENDMENT NO. 1 TO LEASE AGREEMENT
This Lease Amendment is entered into this 6th day of December, 1993, by and
between the City of Poway (hereinafter referred to as °City°) and Sportsparks
of California, a California General Partnership, (hereinafter referred to as
"Lessee").
In consideration of the mutual covenants contained herein, City and Lessee
hereby agree to amend the South Poway Sports Park Lease Agreement by and
between City and Lessee's assignor dated November 11, 1992, Lessee's interest
in which was assigned to Lessee by Assignment of Lessee's Interest in Lease
dated August 31, 1993 and consented to by City on December 6, 1993. The
sections specified are amended as follows:
I. CONVEYANCE OF PREMISES
B. Term
1. Initial Term. The term of the lease agreement shall be ten (10) years
commencing on January 14. 1994 (hereinafter the "Commencement Date ").
C. Rent
10. City Payment for Landscape Facilities. The City will credit the Annual
Minimum Rent due from Lessee by an amount of $2,500 per month as
consideration for maintenance of the following facilities, provided that
the facilities are maintained by Lessee in accordance with the
Maintenance Guidelines.
1. All ballfield turf and related irrigation systems.
During the First Lease Year, when no Annual Minimum Rent is paid, the
City will pay $2,500.00 per month directly to the Lessee upon
determination by City that the facilities have been maintained in
accordance with the Maintenance Guidelines, but no later than the 15th
of each month, unless City has notified Lessee that Lessee has not
maintained the facilities in accordance with the Maintenance Guidelines.
The City's obligation to make such payments shall commence with the
first calendar month following issuance of City's notice of final
completion of all improvements, including conclusion of construction
contractors landscape maintenance establishment period.
The City will contract separately for maintenance of all ground cover,
trees, shrubs, and related irrigation systems and will be responsible
for water costs for all turf, groundcover, trees, and shrubs consistent
with the Maintenance Guidelines.
II. OPERATION AND MAINTENANCE OF PREMISES; ASSIGNMENT OF LEASE
H. Assignments and Subleases
1. Lessee shall not voluntarily or by operation of law assign, transfer,
.mortgage, sublet or otherwise transfer or encumber all or any part of
its interest in the Lease or the Premises without City's prior written
consent, which consent shall not be unreasonably withheld.
If Lessee desires to assign or sublet all or any part of its interest in
this Lease, Lessee shall submit in writing to City 1) the name�of the
proposed sublessee or assignee; 2) the nature of the proposed
sublessee's or assignee's business and experience with same; 3) the
proposed sublease or assignment; and 4) such financial and other
information as City may reasonably request concerning the proposed
sublessee or assignee. If and only if City determines in its reasonable
discretion that the proposed sublessee or assignee has suitable
financial strength, experience and character for operation and control
of the Premises will City agree to grant consent to such proposed
sublease or assignment. Simultaneously with an assignment, the assignee
shall execute an agreement among assignee, Lessee and City, assuming all
of Lessee's obligations under this Lease which arise after the date.of
such assignment (the "Assumption Agreement "). If City accepts such
assignment and approves the Assumption Agreement, Lessee shall remain
fully obligated under this Lease for only those obligations (including,
without limitation, accrued amounts due City) arising prior to the date
of such assignment, unless released in writing by City. City shall not
be required to release Lessee from its obligations under this Lease upon
the assignment thereof by Lessee. As used throughout this Lease, the
term "Lessee" shall also include any permitted sublessee or assignee or
Lessee.
The consent of City given pursuant to the terms hereof shall not act as
a waiver of the requirement that such consent be obtained to any
subsequent sublease or assignment.
Nothing contained herein shall be deemed to prohibit Lessee from
assigning its interest in the Premises or the rents and other sums to be
received therefrom to a Lender permitted or approved pursuant to Section
V hereof. The rights of the holder of any mortgage, or of any
beneficiary, mortgagee, or secured party under such loan shall be as set
forth in Section V.
Any attempted assignment, transfer, mortgage, encumbrance, or subletting
of Lessee's interest in the Lease or the Premises in violation hereof
shall be void and shall constitute a material breach'of this Lease.
A transfer between general partners of Lessee, or a transfer of said
general partner's interests in this Lease to a third party, provided the
general partners maintain management and control of the Lease, or a
transfer to a corporation in which the Lessee or the general partners of
Lessee own not less than seventy -five percent (75 %) of the corporation's
outstanding shares, assuming the general partners of Lessee have full
management and control of the corporation and the City is provided with
0 0
adequate assurance that the corporation is sufficiently capitalized and
has and maintains sufficient net worth to perform Lessee's obligations
under this Lease, shall not be deemed to be assignments within the
meaning of this Lease and shall not require the prior written consent of
City.
Lessee covenants that the Lessee's partnership will remain intact and
will not be dissolved or altered for a minimum period of three years
from the Commencement Date of the Lease, or until such time as the net
operating cash flow exceeds the minimum annual lease payment by a ratio
of 1.2 to 1. "Net operating cash flow" is defined as gross income less
costs of sales and operating expenses (excluding rent payments to the
City). A dissolution of the partnership prior to this time period will
be considered a material breach of this Lease.
2. The Lessee shall deposit $50,000 with the City of Poway to be held in
the name of the City as performance security for the operation of the
South'Poway Sports Park until such time as the net operating cash flow
in a fiscal year from the operation exceeds the minimum annual lease
payment by a ratio of 1.2 to 1, whereupon said deposit shall be released
to Lessee. "Net operating cash flow" is defined as gross income less
costs of sales and operating expenses (excluding rent payments to the
City). The deposited funds will earn interest at the same rate of return
as the City's Investment Pool. In the event of any breach by Lessee of
a performance obligation hereunder, the City may draw upon the deposit
to obtain performance.
Funds within the deposit account may be drawn upon by the City to meet
the operating needs of the South Poway Sports Park in the sole
discretion of the City after notice to Lessee and an opportunity to
cure, as set forth in Section VI of the Lease. Any funds withdrawn from
the $50,000 deposit account shall be replenished by Lessee within 90
days from the date of withdrawal. Failure to replenish the funds shall
constitute an event of default by Lessee. City shall have no duty to
withdraw funds at any time that the balance in the account is less than
$50,000.
As additional security, the Lessee does hereby collaterally assign to
City its interest in that startup equipment purchased by Lessee.. A
listing of said equipment is contained in Exhibit A. City shall release
its collateral interest in the start -up equipment upon the expiration of
the initial term of the Lease Agreement or upon mutually acceptable
termination of the Lease. Any replacement equipment purchased during
this period will automatically be substituted for the original equipment
under the collateral assignment.
III. TIME OF ACCEPTANCE OF LEASE AMENDMENT BY CITY
This Lease Amendment, when executed by Lessee and delivered to City,
must be authorized, executed, and delivered by City within thirty (30)
days after the latest date of signature by Lessee or this Lease
Amendment shall be void, except to the extent that Lessee shall consent
in writing to further extensions of time for the authorization,
execution and delivery of this Lease Amendment.
t ' • EXHIBIT A
SPORTSPARK AT POWAY
9/18/93
CAPITAL NEEDS DETAIL
CONCESSION BLDG
BY OTHERS BY US
KITCHEN
Popcorn Machine
8450.00
Hot Dog Machine
8500.00
Nacho & Cheese Machine
8400.00
Pretzel Machine
$0.00
Soda Dispensers & Ice Bins
80.00
Cash Registers
$7,500.00
Coffee Machines
80.00
Juice Machines
80.00
Kitchen Utensils
82,000.00
Taco Bar Equip
82,500.00
Snack Racks
80.00
Signs
82,000.00
Trash Receptacles
8400.00
Retrofit Costs
83,000.00
Microwave Oven
8400.00
INDOOR DINING AREA
Tables & Chairs
85,000.00
TV Sets
8600.00
Decoration
82,000.00
Trash & Service Area
8500.00
Cleaning Equip
8500.00
OUTDOOR DECKS
Table & Bench Upgrade
84,000.00
Condiment Service
8500.00
Oue Rails
82,250.00
Trash Receptacles
8600.00
Door Mats
8200.00
TOTAL CONCESSION BLDG COSTS
80.00 835,300.00
Page 1
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SPORTSPARK AT POWAY
ICON'T)
OTHER EQUIPMENT BY OTHERS BY US
GROUP EVENT EQUIPMENT
Tents
$3,000.00
Games
$500.00
Bar BQ Equipment
$2,500.00
Folding Tables
$300.00
Food Serving Equip
$1,000.00
OFFICE EQUIPMENT
Desks & Chairs
$1,500.00
Computers
$4,000.00
File Cabinets
$400.00
Safe
$800.00
Telephone System
$3,100.00
Time Clock
$300.00
Supplies.
$200.00
Copier
$1,000.00
CUSTOMER SERVICE EQUIPMENT
First Aid
$150.00
Cash Register
$2,500.00
Counters, Racks
$ 500.00
MAINTENANCE EQUIPMENT
Tractor
$10,000.00
$0.00
Attachments
$4,000.00
$0.00
Infield /Drag Vehicle
$2,500.00
$0.00
Hoses,Rakes, Shovels
$500.00
$0.00
Small Tools
$1,000.00
$0.00
Buckets, Mops, Blowers
$500.00
$0.00
Rototiller
$1,200.00
$0.00
Edgers & Liners
$700.00
$0.00
OTHER EQUIPMENT
Batting Cage Needs $2,500.00
Tape Deck $100.00
Restroom Equip $300.00
TOTAL CAPITAL STARTUP COSTS $20,400.00 $59,950.00
Page 2
The date of this Lease Amendment shall be the date when the Lease
Amendment shall have been signed by City which date is the date set
forth next to the signature on behalf of the City.
THE CITY OF POWAY
Date 1993
By
a s L. Bowersox, City Wager
ATTEST:
LESSEE
SPORTSPARKS OF CALIFORNIA, A CALIFORNIA GENERAL PARTNERSHIP
Date f Z-/ / }./ , 1993
SPORTSP A E ICA, INC., A General Partner
By
mes Hi em yer, Pr si ent
FREDCON, INC., er P tner
By
E arl E. Segerda
NE 0, NC. , 1 A�Ge al a
By ��
P aul . Berg ho esi t
- c: \wpfiles \lease.doc
\ Y -1 _
ASSIG OF LESSEE'S INTEREST 14�SE
Agreement made August 3/, 1993, between Sportsparks /Kajima, a California
Joint Venture ("Assignor ' and Sportsparks of California, a California
General Partnership ( "Assignee ").
RECITALS
1. Assignor entered into a Lease, as lessee, on November 12, 1993,
(the "Lease ") with City of Poway, as lessor ( "Lessor "). A copy of this Lease
is attached as Exhibit A and incorporated herein.
2. Assignor desires to assign, and Assignee desires to assume, the
rights, duties, and liabilities of lessee under the Lease.
Now, therefore, in consideration of $10.00 and other good 'and valuable
consideration, receipt of which is acknowledged by Assignor, Assignor assigns
all of its right, title and interest in and to the Lease to Assignee
effective on the date of acceptance hereof by the City of Poway, for the
Lease term of ten (10) years provided in the Lease, plus two five (5) year
options, as set forth in the Lease.
Assigner represents and warrants that the Lease has not been amended or
modified; that neither Lessor or Lessee is in default thereof; that no event
which, with passage of time, giving of notice, or both, could constitute a
default has occurred; and that as of the date hereof, the Lease has not
commenced.
Assignee assumes all rights and obligations of lessee under the Lease,
including the obligation to pay rent and the right to receive all payments,
and agrees to comply with all terms and condition of the Lease.
Dated: August 31 1993
ASSIGNOR:
ASSIGNEE:
Sportsparks /Kajima, a Sportsparks of California, a
California Joint Venture California General Partnership
By: Sportspar s ku rica, Inc., By: Sportsparks America, Inc.
a t e a gene 1 pa tner
By: �— By
Its: /ie Its:
By: Kajima Engineering, and By: Fredcon, I nera
and Construction, Inc. partne
a Joint Venturer
By: ) � f u By Its:
I s: `
By: o, Inc.,
g e p
Y the
B �-
Its: WhA
Being all of the general partners of
Sportsparks of California
F: \HOME\SSH \80359 \ASSIGN4.MNT
CONSENT OF LESSOR of
City of Poway, lessor in the above - described Lease ( "Lessor "), consents
to the assignment to and assumption by Assignee of the Lease, including all
rights and obligations thereof, to Assignee. Lessor represents and warrants
that the attached copy of the Lease is true and correct, and has not been
amended or modified; that neither Lessor nor Assignor, as lessee, is in
default thereof; that to the best of Lessor's knowledge, no event which with
passage of time, giving of notice, or both, would constitute a default has
occurred; and that as of the date hereof, the Lease has not commenced.
Lessor agrees that Assignor is released from any and all obligations accruing
pursuant to the Lease on or after the date hereof.
Accepted this ,,to/ of , 1993.
City of Poway
M 4��j
RAM
By: Imo.
Marjori.e X. Wahlsten, City Cler
en /i. xcki s, Ul ty Attorney
F AHOME\SSH \80359 \ASSIGN4 .MNT
F: \80[Z \SS8\80359 \PRTNM4.AGR
SPORTSPARKS OF CALIFORNIA
PARTNERSHIP
AGREEMENT
As of October 6, 1993
TABLE OF CONTENTS
ARTICLE AND SECTION
PAGE
Recitals
. . . . . . . . . . . . . . . .
2
ARTICLE I
- Organization . . . . . . . . . . .
3
1.1
Formation . . . . . . . . . . . . . .
3
1.2
Name . . . . . . . . . ... . . . . . .
4
1.3
Consents . . . . . . . . . . . . . . .
4
1.4
Purpose of Business . . . ... . . . .
5
1.5
Place of Business . . . . . . . . . .
6
1.6
Effective Dates and Term . . . . . . .
6
1.7
Names and Addresses of Partners . . .
6
1.8
Organizational Obligations . . . . . .
6
ARTICLE II
- Capital Contributions and Other
Funding . . . . . . . . . . . . .
7
2.1
Capital Contribution of Partners . . .
7
2.2
Additional Capital Contributions . . .
8
2.3
Additional Capital Funding . . . . . .
8
2.4
Capital Accounts, Adjustments,
Substantial Economic Effect . . . .
9
2.5
Interest . . . . . . . . . . . . . . .
10
2.6
Withdrawals . . . . . . . . . . . . .
10
2.7
Partner Loans . . . . . . . . . . . .
10
ARTICLE III
- Profits, Losses, Distributions
and Expenses . . . . . . . . . . .
11
3.1
Cash Flow . . . . . . . . . . . . . .
11
3.2
Net Capital Proceeds . . . . . . . . .
12
3.3
Partnership Allocations
13
3.4
Distribution of Cash Flow . . . . . .
17
3.5
Distribution of Net Capital Proceeds
18
3.6
Management and Certain Other Expenses
18
3.7
Taxes on the Partnership . . . . . . .
19
3.8
Default Remedies and Readjustments . .
20
ARTICLE IV
- Powers, Duties, Liabilities, Compensa-
tion and Decisions of Partners
25
4.1
Authority of Partners . . . . .
25
4.2
Management and Control of Partnership
26
- i -
- ii -
ARTICLE AND
SECTION
PAGE
4.3
Certain Dealings of the Partners with
the Partnership
32
4.4
Additional Duties and�Obligations
of Partner . . . . . . . . . . . .
33
4.5
Indemnification . . . . . . . . . . .
34
4.6
Liability of Partners; Standard of
Care . . . . . . . . . . . . . . .
35
4.7
Permitted Transfers . . . . . . . . . .
35
4.8
Required Approvals . . . . . . . . . .
37
ARTICLE V
- Hooks of Account, Records and
R eports . . . . . . . . . . . . . .
39
5.1
Accounting . . . . . . . . . . . . . .
39
5.2
Reports . . . . . . . . . . . . . . .
40
5.3
Additional Reports . . . . . . . . . .
41
5.4
Further Investigations . . . . . . . .
41
ARTICLE VI
- Meetings and Amendments . . . . . .
42
6.1
Meetings of the Partnership . . . . .
42
.6.2
Amendments . . . . . . . . . . . . . .
42
ARTICLE VIZ
- Termination of the Partnership . .
43
7.1
Termination . . . . . . . . .
43
7.2
Payment of Debts; Distributions . . .
44
7.3
Reserve . . . . . . . . . . . . . . .
46
7.4
Final Accounting . . . . . . . . . . .
46
ARTICLE VIII
- Tax Matters . . . . . . . . . . . .
46
8.1
Tax Information . . . . . . . . . . .
46
8.2
Returns . . . . . . . . . . . . . . .
47
8.3
Elections . . . . . . . . . . . . . .
47
8.4
Consistency of Tax Treatment . . . . .
48
8.5
Tax Matters Partner . . . . . . . . .
48
8.6
Survival of Tax Obligations
49
ARTICLE I%
- Fiscal Matters . . . . . . . . . .
50
9.1
Fiscal Year . . . . . . . . . . . . .
50
9.2
Partnership Funds . . . . . . . . _
50
- ii -
ARTICLE AND SECTION
P i
PAGE
ARTICLE S
- capacity and Authority; Registration
and Investment Decision; No
Broker . . . . . . . . . . . . . .
51
10.1
Capacity and Authority . . . . . . .
51
10.2
Registration . . . . . . . . . . . . .
51
10.3
Investment Decision . . . . . . .
52
10.4
No Broker, Fees or Commissions
53
ARTICLE %I
- Miscellaneous . . . . . . . . . . .
53
11.1
Governing Law . . . . . . . . . . . .
53
11.2
Notices . . . . . . . . . . . . . . .
53
11.3
Counterparts . . . . . . . . . . . . .
55
11.4
Agreement for Further Execution . . .
56
11.5
Entire Agreement . . . . . . . . . . .
56
11.6
Severability . . . . . . . . . . . . .
57
11.7
Captions . . . . . . . . . . . . . . .
57
11.8
Number and Gender . . . . . . . . . .
57
11.9
Holidays . . . . . . . . . . . . . . .
58
ARTICLE %3I
- certain Proprietary information
and Rights . . . . . . . . . . . .
58
12.1
Trademarks and Trade Names . . . . . .
58
12.2
No License of Partner Property . . . .
58
Exhibit A -
Table of Defined Terms
Exhibit B -
Names, Addresses and Interests of Partners
Exhibit C -
Ratified Obligations and Agreements
- iii -
0 1 0
AGREEMENT
THIS AGREEMENT OF GENERAL PARTNERSHIP ( "Agreement ") is made
and executed as of this 6th day of October, 1993, by and among the
following parties:
(i) Newco Enterprises, Inc. ( "Newco") , an Illinois
corporation, with its principal corporate offices
at 225 West Washington Street, Suite 400, Chicago,
Illinois, 60606;
(ii) Fredcon, Inc. ( "Fredcon ") , an Illinois corporation,
with its principal corporate offices at 225 West
Washington Street, Suite 400, Chicago, Illinois,
60606; and,
(iii) Sportspark of America, Inc. ( "SPA "), an Arizona
corporation, with its principal corporate offices
at 6901 North Casa*Grande Highway, Tucson, Arizona,
85243.
The parties are collectively, referred to herein as the "Partners"
or individually as a "Partner."
• •
RECITALS:
WHEREAS, the parties are each parties to an Agreement of
General Partnership of the Sportspark at San Clemente, dated
February 28, 1993, and each of them desire to enter into a new
partnership agreement to amend and restate the agreement among
themselves and to rename the Partnership; and,
WHEREAS, the Partnership has executed an agreement as a
successor lessee under a Lease dated August 1, 1991 (the "San
Clemente Lease "), between the City of San Clemente, California, as
Lessor, and San Clemente Sportspark, Ltd., the original Lessee, to
operate a sports complex located in San Clemente (the "San Clemente
Property "), California and maintain, manage and operate the
Property; and,
WHEREAS, the Partnership has accepted or will accept an
Assignment of Lessee's Interest in a lease dated November 11, 1992,
by and between Sportspark /Kajima Joint Venture (in which SPA is a
joint venturer), as lessee, and the City of Poway, as lessor, (the
"Poway Lease "), and intends to operate a sports complex in Poway,
California (the "Poway Property "), and maintain, manage and operate
the Poway Property.
- 2 -
C7
•
WHEREAS, the Partners desire to enter into other leases, and
engage in additional business at additional locations, maintaining,
managing and operating sports complexes for use by the public for
ballparks, basketball courts, volleyball courts, and other sports
activities, and sale of concessions at such complexes and desire to
enter into this Agreement in order to amend and restate the
Agreement of General Partnership of the Sportspark at San Clemente,
and to set forth the entire agreement and the relationships as now
intended among the Partners; and,
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants, conditions and agreements herein set forth, the
Partners agree as follows:
ARTICLE I
organization
SECTION 1.1 - Formation
The partnership is formed as a general partnership under and
subject to the California Uniform Partnership Act (the "Partnership
Act "). Except as is expressly herein stipulated to the contrary,
the rights and obligations of the Partners and the administration
- 3 -
9 0
and termination of the Partnership shall be governed by the
Partnership Act, as amended and in effect on the date of this
Agreement.
SECTION 1.2 - Name
The name of the Partnership shall be "Sportsparks of
California." The Partnership shall execute and file such documents
as may be required to change its name to Sportsparks of California.
In addition, the Partnership may adopt such trade names and trade
styles, as the Partners may from time to time consider appropriate.
The Partners shall execute all assumed or fictitious name
certificates required by law to be published or filed, in
connection with the formation and operation of the Partnership.
SECTION 1.3 - Consents
The Partners each hereby consent and agree to file such
certificates as may be necessary to effect this Agreement and any
amendments approved pursuant to the terms hereof, and do hereby
constitute the Managing General Partner as their lawful attorney-
in-fact to execute and file such certificates on their behalf.
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0 0
SECTION 1.4 - Purpose of Business
The purpose for which the Partnership has been formed and the
powers which it may exercise, all being in the furtherance of and
not in limitation of the general powers conferred on general
partnerships under the Partnership Act, are as follows:
(a) to invest in, develop, improve, finance, refinance, hold,
maintain, renovate, sub -lease and otherwise operate and manage
recreational facilities, including, specifically, the San Clemente.
Lease, the Poway Lease, the San Clemente Property and the Poway
Property, plus such additional properties as the Partners may agree
to lease or otherwise acquire (collectively, the "'Projects"), and
to engage in any and all activities related to or incidental
thereto; and
(b) to carry on any and all other activities necessary,
convenient or incidental to accomplishing any of the foregoing
purposes and powers or to protecting and benefiting the
Partnership, including, without limitation: (i) entering into
contracts and sub- contracts and otherwise do all things necessary
to maintain and prepare the Projects and improvements; (ii)
providing for financing the Projects on such terms as may be
necessary or beneficial; and (iii) entering into one or more
agreements to manage and operate the Projects.
- 5 -
0
SECTION 1.5 - Place of Business
•
The Partnership's principal office shall be located at 247
Avenida de la Pata, San Clemente, California, or any other location
within or outside California chosen by the Partners. All
Partnership meetings shall take place at the offices of the
Partnership, or at such other place specified in the notice of
meeting.
SECTION 1.6 - Effective Dates and Term
The Partnership commenced on March 1, 1993. The Partnership
shall continue for a term ending December 31, 2043, unless
terminated earlier pursuant to this Agreement.
SECTION 1.7 - Names and Addresses of Partners
The names and addresses of the Partners are set forth in
Exhibit B as attached to this Agreement and made a part hereof.
SECTION 1.8 - Organizational Obligations
The Partners recognize and specifically ratify, as valid
obligations of the Partnership, certain agreements set forth on
Exhibit C which were entered into prior to or contemporaneously
- 6 -
0 0
with this Agreement and to further the Partnership's goals and
objectives.
ARTICLZ II
Capital Contributions and Other Funding
SECTION 2.1 - Capital. Contribution of Partners
(a) On the date hereof, each of Newco and Fredcon shall have
made or shall make a cash contribution to the capital of the
Partnership in the amount of $104,000.
(b) On the date hereof, SPA shall have canceled, or shall
cancel certain indebtedness owing to it as shown on Exhibit D, and
shall have contributed or assigned, or shall contribute or assign
its interest in the Poway Lease to the Partnership. Fifty Thousand
Dollars ($50,000) shall be credited to the Capital Account of SPA
in connection with the cancellation of debt pursuant to this
subsection, and $50,000 shall be credited to the Capital Account of
SPA in connection with the contribution or assignment of SPA's
interest in the Poway Lease pursuant to this subsection.
- 7 -
•
•
SECTION 2.2 - Additional capital Contributions
Except as otherwise provided in Sections 2.1, 2.3, and 7.2 of
this Agreement or by law, in no event shall any Partner be required
to contribute additional capital to or for the benefit of the
Partnership.
SECTION 2.3 - Additional capital Funding
(a)
The Partnership
shall, as soon as
practicable, obtain
additional
funding through
LaSalle National
Bank (the "Bank ") in
such amount (net of expenses incurred in connection with the
funding) as will, in the Partners' judgment, assure the Project's
operation. The Partnership shall take all actions necessary to
relieve the Partners of any obligation to guaranty or provide
security in support of any additional funding, including without
limitation granting security interests in Partnership assets.
(b) At any time, if the Partners determine that the
Partnership requires additional capital. funding to assure the
continued development or operation of the Projects, then any
Partner may provide notice of the requirement to each Partner. At
such time, if the Partners are unwilling or unable to cause the
Partnership to borrow such funds from a commercial lender on terms
acceptable to the Partners, and a majority in. interest of the
Partners have agreed that the additional funds shall be contributed
- 8 -
0 i 0
as capital and not Partner Loans, as set forth in Section 2.7, then
the Partners shall contribute such additional capital to the
Partnership's capital ( "Additional Contributions ") in proportion to
each Partner's Percentage Interest in the Partnership. Any
contributions made pursuant to this subsection which are not in
proportion to each Partner's Proportionate Interest in the
Partnership shall be subject to the provisions cf Section 3.8.
SECTION 2.4 - Capital Accounts, Adjustments, Substantial Economic
Effect
The Partnership shall establish and maintain a capital account
( "Capital Account ") for each Partner. The Partners intend that the
Capital Accounts shall be determined and maintained throughout the
full term of the Partnership in accordance with the rules of
Section 704 of the Internal Revenue Code of 1986, as amended (the
"Code") *and Treasury Regulations S 1. 704-1 (b) (2) (iv) or any
subsequent similar provisions (including the rules of Treasury
Regulations S 1.704 -1(b) (2) (iv) (g) with respect to reflection of
differences between the basis and fair market value of contributed
property in the Partners' Capital Accounts) . Accordingly, the
Partners understand and agree that the amounts of profits and
losses allocated to each Partner as provided in Article III hereof
will be credited or debited to the Partners' Capital Accounts and
will affect the amounts received by the Partners upon liquidation.
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•
SECTION 2.5 - Interest
.7
No interest shall be paid on the Capital Account of any
Partner, provided that nothing contained in this Section shall
affect the obligation of the Partnership to pay interest on the
unpaid balance of any Partner Loan or other loans to the
Partnership made by any Partner.
SECTION 2.6 - Withdrawals
The Partnership's capital shall not be withdrawn by any
Partner except as provided in this Agreement.
SECTION 2.7 - Partner Loans
(a) If -at any time any Partner determines that the
Partnership requires additional funding to assure the continued
development or operation of the Projects, then any Partner may
provide notice of the requirement to each Partner. At such time,
if the Partners are unwilling or unable to cause the Partnership to
borrow such funds from a commercial lender on terms acceptable to
the Partners, the Partners shall loan such funds as the Partners
shall determine, by majority vote, shall be required, in proportion
to each Partner's Proportionate Interest in the Partnership,
( "Partner Loan(s) "), to the Partnership. Any advances made
pursuant to this subsection which are not in proportion to each
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Partner's Proportionate Interest in the Partnership shall be
subject to the provisions of Section 3.8.
(b) Any Partner Loans made pursuant to this Section shall
bear interest quarterly at that per annum percentage rate which is
equal to the prime lending rate of LaSalle National Bank (the
"Bank "), as posted and in effect at the beginning of each quarter
for which interest is determined plus two (2) additional percentage
points.
ARTICLE III
Profits, Losses, Distributions and Expenses
SECTION 3.1 - Cash Flow
The term "Cash Flow" means the operating revenues received in
cash or cash equivalents for the Partnership's account (but not
including Net Capital Proceeds), less the sum of:
(a) the cash expenditures by or on behalf of the Partnership
in operating the Project and the Partnership including legal and
accounting expenses, administrative expenses (including fees to be
paid to the Partners or Affiliates pursuant to the Agreements
described in Exhibit C or approved pursuant to Section 4.3),
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0 0
payments to Partners for property or services provided pursuant to
Section 4.2(f), any reserves required by the lender of any
financing secured in whole or in part by a lien on the Project or
any portion thereof, or required by generally accepted accounting
principles to be established from operating revenues, and
(b) the aggregate of all scheduled cash payments with respect
to discharging Partnership indebtedness including debt secured in
whole or in part by a lien on the Project or any portion thereof.
Cash Flow shall be determined on a cash basis in a consistent
manner without distortions.
SECTION 3.2 - Net Capital Proceeds
The term "Net Capital Proceeds" means the proceeds of a
capital transaction ( "Capital Transaction ") , including any proceeds
resulting from: (i) the sale (including, without limitation, a cash
sale, land contract or installment sale) , condemnation or other
disposition of the Project or any part thereof or interest therein,
less the expenses of the disposition, and less the portion of such
proceeds utilized to discharge, in whole or in part, any debt
secured by a lien on the Project or any portion thereof; (ii) any
loan secured by or obtained with respect to the Project or any part
thereof; and (iii) collecting under any insurance policy covering
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• •
the Project or any portion thereof to the extent not used for
repairing or restoring the Project.
SECTION 3.3 - Partnership Allocations
(a) The Partners intend that the allocations of profits and
losses provided by this Section are for Federal income tax purposes
as well as financial accounting purposes. All profits and losses
of the Partnership, including all items of income, gain, deduction,
loss, allowance, or credit, shall be allocated as provided in the
following subsections.
(b) Each Partner's proportionate interest ( "Proportionate
Interest ") in the Partnership and "interest in the partnership ",
within the meaning of § 704 of the Code shall be the Proportionate
Interest set forth below. Except as provided in subsection (c),
(d) and (e) all Partnership items shall be allocated pursuant to
the Partners' respective Proportionate Interests.
(i) The Proportionate Interests of the Partners are as
follows:
(A) Newco 1/3
(B) Fredcon 1/3
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•
(C) SPA 1/3
•
(ii) Each Partner's Proportionate Interest for purposes
of voting and in Partnership items allocable to or
distributable to the Partners shall be adjusted in accordance
with subsection (e) and Section 3.8.
(c) Allocations of gain or loss attributable to Capital
Transactions:
(i) The net income and /or gain from each Capital
Transaction which results in income or gain to the Partnership
shall be allocated among the Partners as provided in this
subsection:
(A) First, to all Partners with a deficit Capital
Account balance in such amounts as are required to
eliminate such deficits, provided that in the event
there is insufficient income or gain to restore the
balance of all Partners' Capital Accounts to zero, the
allocation shall be made to each Partner in proportion to
the Proportionate Interests set forth in subsection (b)
(except as such percentages have been modified by
subsection (e)) and provided that no Partner shall be
allocated income or gain under this subsection in excess
of the amount required to restore such Partner's Capital
- 14 -
•
Account balance to zero. Any amount otherwise allocable
to a Partner under this subsection and in excess of the
deficit in such Partner's Capital Account shall be
reallocated among the Partners with remaining Capital
Account deficits (in the same proportions as the initial
allocations) until all remaining deficits have been
eliminated.
(B) Second, to each Partner's Capital Account until
the positive balance in such Partner's Capital Account is
the lowest positive number which bears the same ratio to
the positive balance of each other Partner as the
Partners' respective Proportionate Interests;
(C) Thereafter, to all Partners in proportion to
the Proportionate Interests of each Partner (except as
such percentages may have been modified by subsection
(e)) until all such income or gain has been exhausted.
(ii) The net loss from each Capital Transaction which
results in a loss to the Partnership shall be allocated among
the Partners as provided in this subsection:
(A) First, to all Partners with a positive Capital
Account balance in such amounts as are required to reduce
such positive account balances to zero, provided that in
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the event there is insufficient loss to reduce the
balance of all Partners' Capital Accounts to zero, the
allocation shall be made to each Partner in a manner
which best accomplishes the goal of reducing specific
Partner Capital Accounts to that positive balance which
when compared with the total of all such remaining
positive balances bears the same proportion to the
balance in each other account as the Partnership
Proportionate Interests of such Partner (except as such
percentages may have been modified by subsection (e))
bears to that of all other Partners.
(B) Second, to each Partner's Capital Account until
the negative balance in such Partner's Capital Account is
the smallest negative balance which bears the same ratio
to the negative balance of each other Partner as the
Partners' respective Proportionate Percentages;
(C) Thereafter, to all Partners in proportion to
the Proportionate Interests set forth in subsection (b)
(except as such percentage interest of each Partner may
have been modified by subsection (e)) until all such
losses have been exhausted.
(d) Allocations of gain or loss required for Federal income
tax purposes: In accordance with Code § 704 and Treasury
- 16 -
Regulations § 1.704- 1(c) (2), all Partnership items of income, gain,
loss or deduction with respect to the Property contributed by any
Partner (including depreciation, depletion, or gain or loss with
respect to such Property) shall be allocated among the Partners so
as to take account of any variation between the adjusted basis of
such property to the Partnership for federal income tax purposes
and the initial agreed value of such property for purposes of the
contributing Partner's capital contribution.
(e) If a Partner shall have become a Defaulting Partner by
failing to timely make any contribution or advance, then the
Proportionate Interest and total percentage of all Partnership
items otherwise allocable to the Defaulting Partner shall be
adjusted as provided in Section 3.8.
SECTION 3.4 - Distribution of Cash Flow
Cash Flow shall be invested or reinvested as provided herein
for the account of the Partnership, if the Partners so agree, or,
if no such agreement is reached, shall be distributed not less
frequently than annually. Any Cash Flow distributed annually shall
be distributed to all of the Partners, in accordance with their
Proportionate Interests.
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SECTION 3.5 - Distribution of Net Capital Proceeds
Net Capital Proceeds shall be invested or reinvested as
provided herein for the account of the Partnership or, in the sole
discretion of the Partners, may be distributed. Except as may be
required by Section 7:2, in the event such Net Capital Proceeds are
realized in connection with winding up the Partnership and
disposing of its assets, if such proceeds are distributed they
shall be distributed to the Partners in proportion to the Partners'
respective Proportionate Interests.
SECTION 3.6 - Management and Certain Other Expenses
(a) The Partnership shall reimburse each Partner for all
reasonable costs and expenses paid or incurred by it for or on
behalf of the Partnership and which are directly related to the
Partnership's business including (a) legal and accounting fees and
expenses, (b) costs and expenses relating to the Partnership's
organization and operation (except wages and other compensation of
its own office staff and other ordinary office overhead) , and, when
applicable, (c) the costs and expenses of performing the duties of
the Tax Matters Partner, including accountants, attorneys and other
professional fees. Reimbursement to Partner hereunder shall be
subject to (a) with respect to any costs or expenses with respect
to any activity described in Section 4.8, the Managing General
Partner's having obtained in advance the approval of all of the
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Partners; (b) the tither Partners consenting to the reimbursement;
and (c) the items subject to reimbursement being itemized in a
statement which identifies the purpose and recipient of the
expenditures and, in the case of any travel or entertainment
expense, the date, form, place, amount, any persons present,
substance of the Partnership business discussed and purpose of the
expense and otherwise substantiates such expense in such detail as
will satisfy the requirements for deductibility under the Code as
may be in effect from time to time. In addition, each Partner
shall be entitled to reimbursement for those expenses incurred by
each of them before entering into this Agreement which are set
forth on Exhibit C hereto.
(b) SPA shall be reimbursed by the Partnership. for all
reasonable costs and expenses paid or incurred by it for or on
behalf of the Partnership and relating to acquiring and
transferring the San Clemente or the Poway Lease to the
Partnership.
SECTION 3.7 - Taxes on the Partnership
To the extent any taxes are imposed on the Partnership, rather
than the Partners, such amounts shall be treated in all respects as
expenses of the Partnership.
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0 0
SECTION 3.8 - Default Remedies and Readiustments
If any Partner shall fail to timely contribute or loan to the
Partnership any amount required to be contributed or loaned under
this Agreement ( "Defaulting Partner "), such failure shall be an
event of default ( "Default ") and the Defaulting Partner shall be
subject to the remedies and readjustments of Partnership interest
provided by this Section.
(a) Any amount which the Defaulting Partner shall have failed
to contribute or loan shall be deemed to constitute a loan of an
equal amount from the Partnership to the Defaulting Partner
effective from the date the contribution or loan was required to
have been made and continuing until the earlier of the Partnership
receiving a payment on behalf of the Defaulting Partner pursuant to
subsection (e) or the Partnership interest of the Defaulting
Partner being permanently reduced pursuant to subsections (d) or
(e). Such loan shall bear interest monthly at that percentage rate
per annum which is equal to the prime lending rate of the Bank as
posted and in effect at the beginning of each month for which
interest is determined plus three (3) additional percentage points.
In addition, any Default and the resulting loan deemed made
pursuant to this subsection shall be subject to the Partnership
exercising appropriate collection remedies.
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(b) During the period beginning with the date of the failure
to contribute or loan and continuing until the earlier of the
Partnership receiving a payment on the Defaulting Partner's behalf
pursuant to subsection (e) or the Defaulting Partner's Partnership
interest being permanently reduced pursuant to subsection (d) or
(e) , the Defaulting Partner's Partnership Interest shall be treated
as though it had been reduced in the proportion determined under
subsection (d) or (e) for purposes of exercising any management or
voting rights (including Managing General Partner management
rights) provided by this Agreement and for purposes of determining
the amount of any distribution to the Defaulting Partner pursuant
to Sections 3.4, 3.5 or 7.2. A Defaulting Partner shall have no
right to require reconsideration of any decision taken during the
period when such Defaulting Partner's voting rights were
proportionally reduced pursuant to this subsection and shall have
no right to the proportion of any distributions made during the
period when the distribution allocable to such Defaulting Partner
was proportionally reduced pursuant to this subsection.
(c) The amount of reduction which a Defaulting Partner may
sustain (and the corresponding increase in the interest of each
non - Defaulting Partner) shall be determined as follows: First, the
amount of capital committed to the Partnership by the Defaulting
Partner ( "Committed Capital ") shall be determined. Such amount
shall be the sum, as of the date on which the determination is
made, of all capital contributions made by the Defaulting Partner
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• 0
pursuant to Section 2.1 or 2.2 (including the amount credited to
any Partner's Capital Account with respect to contributing property
to the Partnership), plus the amount of all Additional
Contributions and /or Partner Loans made by the Defaulting Partner
pursuant to Sections 2.3(b) or 2.7. Next, the Defaulting Partner's
Proportionate Interest in the Partnership and all Partner items
shall be redetermined by multiplying the Defaulting Partner's
Proportionate Interest by the ratio of the Defaulting Partner's
Committed Capital to the sum as of the date on which the
determination is to be made of (i) all capital contributions
required to have been made by such Defaulting Partner pursuant to
Section 2.1 or 2.2 (including any amount credited to such
Defaulting Partner's Capital Account with respect to contributing
property to the Partnership) plus (ii) the amount of all Additional
Contributions or Partner Loans required to have been made by such
Defaulting Partner. The proportionate increase in the
Proportionate Interest of each Partner which is not a Defaulting
Partner shall be the difference between the Defaulting Partner's
Proportionate Interest before the event of Default and such
Proportionate Interest determined again after such Default under
this subsection allocated among the non - Defaulting Partners in
proportion to such non - Defaulting Partner's relative Proportionate
Interests.
(d) If a Default shall continue for a period of six (6)
months without all amounts initially required to be contributed or
- 22 -
advanced by the Defaulting Partner being paid, together with all
interest due thereon pursuant to subsection (a), the Defaulting
Partner's Proportionate Interest shall be permanently reduced by a
percentage which reflects the proportionate reduction determined
under subsection (c).
(e) In the event of a Default, a Partner which is not itself
a Defaulting Partner shall have the right to advance to the
Partnership the amount which a Defaulting Partner. has failed to
contribute or loan subject to the terms and conditions provided in
this subsection.
(i) Unless the Partner making an advance pursuant to
this subsection ( "Advancing Partner ") shall elect as provided
in subsection (iii) , any advance pursuant to this subsection
shall be treated as a payment to the Partnership by the
Defaulting Partner and accordingly shall be treated by the
Partnership as a capital contribution or loan made by the
Defaulting Partner consistently with the character of the
required capital contribution or Partner Loan with respect to
which the Default arose, and the Capital Account or
outstanding Partner Loan balance of the Defaulting Partner
shall be adjusted to reflect the contribution or advance. In
addition, the advance by the Advancing Partner shall be deemed
to create a loan from the Advancing Partner to the Defaulting
- 23 -
Partner subject to the interest as provided in section 2.7(b)
equal to the amount advanced to the Partnership.
(ii) Notwithstanding subsection (i) , during the period
beginning with the date of an advance by an Advancing Partner
and continuing until the Defaulting Partner's Proportionate
Interest has been permanently reduced pursuant to subsection
(d), the Partners recognize that any Partner management or
voting rights provided by this Agreement (including Managing
General Partner management rights) to a Defaulting Partner
with respect to the funding advanced by an Advancing Partner
shall be exercised by the Advancing Partner.
(iii) If the loan deemed made by the Advancing Partner is
not repaid within six (6) months after the advance, following
written notice to the Defaulting Partner and a period of
thirty (30) days accruing after such notice during which the
deemed loan (and accrued interest thereon) may be repaid, the
Advancing Partner may, but shall not be required to, elect to
apply the provisions of subsection (c) (except for the
provisions reallocating the reduction in the Defaulting
Partner's Proportionate Interest). If the Advancing Partner
so elects, as of the effective date of the election, the
amount of the advance theretofore treated by the Partnership
as having been contributed or loaned by the Defaulting Partner
shall be deemed to have been distributed or repaid to the
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• W
Defaulting Partner and such amount shall further be treated as
having been contributed or loaned by the Advancing Partner on
its own account as of the same date, and the Proportionate
Interests of the Defaulting and Advancing Partners and their
interests for purposes of voting and in any Partner items and
the Capital Accounts and any outstanding Partner Loan balances
shall all be adjusted accordingly.
ARTICLE IV
Powers, Duties, Liabilities,
Compensation and Decisions of Partners
SECTION 4.1 - Authority of Partners
(a) Subject to the limitations imposed by the Partnership Act
and this Agreement, the Partners shall have full and exclusive
authority to manage and control the business affairs of the
Partnership and to make all decisions regarding the business of the
Partnership.
(b) The Partners shall exercise the authority provided in
subsection (a) as provided in Section 4.2, and except as otherwise
expressly provided in this Agreement, or authorized by the Partners
in writing, no Partner, acting alone, shall exercise any authority
- 25 -
to act for, undertake or assume any obligations or responsibility
on behalf of the other Partners or the Partnership.
SECTION 4.2 - Management and Control of Partnership
(a) The Partners shall direct, manage, control and conduct
the business of the Partnership, and shall devote such time to the
Partnership business as may be necessary to adequately and properly
manage and supervise the Partnership business and affairs in an
efficient manner and discharge their obligations hereunder, but
nothing in this Agreement shall preclude any agent or third party
being employed, at the Partnership's expense, to manage or provide
other services in respect of the Partnership properties or
administrative matters.
(b) Except as required under Subsection (d) , and Section 4.8,
all decisions to be made by the Partners shall be mutually agreed
to by two - thirds (2/3) of the Partners (voting in proportion to
their respective Proportionate Interests) and except to the extent
the Partners shall have delegated authority to the Managing General
Partner in writing, all documents to be executed and delivered by
or on behalf of the Partnership shall be executed by two (2)
Partners, provided, however, that in the event of a default by a
Partner as described in Section 3.8, in which event all decisions
shall be made and all documents shall be executed and delivered by
a two - thirds (2/3) vote of the non - defaulting Partner(s) . Each
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• •
Partner shall designate a representative who shall vote that
Partner's Proportionate Interest in all Partnership matters
requiring a vote of the Partners.
(c) The Partners, including the Managing General Partner,
shall not be required to manage the Partnership as their sole and
exclusive function and (except as limited by Section 4.8(i)) they
may have other business interests and may engage in other
activities in addition to those relating to the Partnership.
Neither the Partnership nor any Partner shall have any right, by
virtue of this Agreement or the Partnership relationship created
hereby, in or to such other ventures or activities or to the income
or proceeds derived therefrom. Pursuing such activities or
ventures, (except as limited by Section 4.8(i)) even if competitive
with the business of the Partnership, shall not be deemed wrongful
or improper.
(d) SPA shall be the Partnership's initial managing general
partner ( "Managing General Partner ") and shall perform or cause to
be performed at the Partnership's expense the following
administrative duties:
(i) preparing the Partnership's operating budget, if so
required by the Partners;
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(ii) preparing and completing all tax, accounting and
clerical functions of the Partnership as detailed herein, and
employing such accountants and attorneys as may be required
from time to time to carry on the Partnership's business;
(iii) procuring and maintaining with responsible companies
such insurance and fidelity bonds as may be available in such
amounts and covering such risks as the Partners may deem
appropriate;
(iv) establishing and maintaining. the bank accounts
required for Partnership purposes as set forth in Section 9.2
herein;
(v) commencing, defending and settling any litigation
involving the Partnership;
(vi) performing or completing any other activities
incidental to the Partnership's management and operation as
delegated by the Partners.
The Managing General Partner may be removed from such position
and one or more other Partners designated as the Managing General
Partners) by the unanimous vote of all Partners except any Partner
then serving as Managing General Partner.
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(e) In addition to the administrative duties set forth in (d)
above, SPA, as Managing General Partner, shall have complete and
exclusive authority to manage and •control the day to day operating
affairs and business of the Partnership and to make day -to -day
decisions regarding operating affairs and business. Without
limiting the generality of the above statement, the specific
operational duties of the 'Managing General Partner shall include:
(i) remitting lease payments, with respect to the
Projects;
(ii) rendering for and paying all of the taxes, levies,
and assessments against the Projects or the Partnership;
(iii) acquiring such tangible personal property and
intangible personal property as may be necessary or desirable
to carry on the business of the Partnership and selling,
exchanging or otherwise disposing of such personal properties;
(iv) administering leases of the Partnership;
(v) altering, improving, repairing, replacing, or
rebuilding any property of the Partnership;
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(vi) repairing or replacing all furniture, furnishings,
and fixtures situated on or constituting a part of the
Projects;
(vii) obtaining, paying for, and administering a policy or
policies or insurance, insuring the Partnership against any
liability to the public, landlords, or any other perscns and
risks to its property, incident to the operation of the
Projects, in such amounts and upon such terms as the Partners
deem necessary or appropriate under the circumstances. Such
policies of insurance may name the Partnership as the sole
party insured or as a party co- insured; provided that, in the
event the Partnership is co- insured with another party'under
any of such policies, the Partnership shall be required to pay
only a prorata part of the cost of any such insurance;
(viii) employing, terminating the employment of,
supervising and compensating such persons, firms or
corporations as may be employed in connection with the
operation, maintenance, management and other related business
of the Partnership; provided however that the Managing
General Partner shall have no power to:
(A) do any act in contravention of this Partnership
Agreement (or any amendment hereto) or any act prohibited
by the Act;
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(B) do any act which will cause the Partnership to
be treated for federal income tax purposes as an
association taxable as a corporation.
(C) make any expenditure in excess of $25,000 on
behalf of the Partnership which is not included in an
operating budget contemplated by Section 4.2(d)(i) and
approved by the Partners; or, with respect to
discretionary expenditures in furtherance of its
functions as Managing General Partner, make any
expenditure on behalf of the Partnership in excess of the
lesser of $25,000 or the reasonable limitations with
respect to the applicable category of expenditure which
may be established by the Partners; or,
(D) Take any action independently which pursuant to
the terms of this Agreement is to be taken only upon
approval of the Partners, pursuant to law or any
provision of this Agreement including, without
limitation, the actions set forth in Section 4.8.
SPA agrees to provide such services to the Partnership as are
set out in subsection (d) above and this section (e) to the best of
its ability and to complete its obligations as Managing General
Partner in a careful and prudent manner and in accordance with good
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industry practice. The Partners agree that SPA may contract with
an Affiliate of SPA (as hereinafter defined) to perform the
operational duties set forth hereinabove in this subsection (e),
and that upon such assignment or delegation, the affiliate shall
receive the fee set forth in subsection (f) below for such
services.
(f) SPA shall receive a fee for performing its operational
duties as Managing General Partner in the amount of 2.5% of the
gross revenues of the Partnership, as defined in the various leases
for Projects which the Partnership May undertake, such amount
payable monthly in arrears. in addition to the percentage of gross
revenues to be paid to Managing General Partner, if cash flow shall
be distributed to the Partners pursuant to Section 3.4 above, at
such time as the Partners shall have received $75,000 in any one
year, and provided additional cash flow shall be available, SPA
shall be paid such cash flow until SPA shall have received an
additional $25,000 in any one year or a total of $125,000 in the
aggregate, over five (5) or more years, such amount payable to SPA
even if SPA is removed as Managing General Partner pursuant to
paragraph 4 -Z, hereof, unless SPA has been removed as Managing
General Partner for cause, in which event such payments shall cease
effective on the date of removal. For purposes of this paragraph,
cause shall be defined as gross misconduct, criminal activity
(whether related to the Partnership or otherwise) , or gross neglect
of the Managing General Partner's duties hereunder.
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•
SECTION 4.3 - Certain Dealings of Partners with the Partnership
(a) In addition to those agreements described in Section 1. 8,
the Partners are expressly authorized on the Partnership's behalf
to enter into contracts with or pay fees to any Partner or any
person or entity which is owned or controlled by any Partner
("Affiliate") upon satisfying subsection (b) hereof.
(b) Any agreement with any Partner (or any Affiliate) to
provide materials or services shall be in writing and fully
disclosed to all Partners. Moreover, the compensation to be paid
pursuant to any such agreement may not exceed the fair market value
of, or the range of compensation customarily charged in arms- length
transactions by others or by the Partners or any Affiliates to
third parties as an on -going activity for, the materials provided
or the services rendered.
SECTION 4.4 - Additional Duties and Obligations of Managing
Partner.
(a) The Managing General Partner shall direct the
Partnership's affairs prudently and in the best interest of the
Partnership, including safekeeping all Partnership funds and assets
and using them for the Partnership's benefit.
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• • .
(b) The Managing General Partner shall take all actions which
may be necessary or appropriate to continue the Partnership's valid
existence as a general partnership under the Partnership Act and
the laws of the State of Illinois.
(c) The Managing General Partner shall prepare and file any
documents which are required by law to be filed and /or recorded
under the laws of California or any other jurisdiction in which the
Partnership is or may become qualified to transact business.
(d) The Managing General Partner shall use its best effort to
meet all current and future Federal income tax requirements to
assure that the Partnership will not fail to be classified for
Federal income tax purposes as a partnership rather than as an
association taxable as a corporation.
SECTION 4.5 - Indemnification
(a) The Partnership shall defend, indemnify and hold harmless
the Partners from and against any loss, expense, damage or injury
suffered or sustained by them by reason of any acts, omissions or
alleged acts or omissions arising out of in its activities on or
reasonably believed by such Partner to be on behalf of the
Partnership or reasonably believed by such Partner to be in
furtherance of the Partnership's interest in their capacity as a
- 34 -
• •
Partner, including but not limited to any judgment, award,
settlement, reasonable attorney's fees and other costs or expenses
incurred in connection with defending any actual or threatened
action, proceeding or claim if the acts, omissions or alleged acts
or omissions upon which such actual or threatened actions,
proceedings or claims are based were not performed or omitted
fraudulently or in bad faith by the Partners and did not violate
the Partners' fiduciary obligation to the Partnership. Any such
indemnification shall only be from the assets of the Partnership
(and may include advances of amounts contemplated by this Section
if approved by the Partner(s) not subject to a claim proposed to be
indemnified) .
(b) Any and all indemnity obligations with respect to any
Partner shall survive any termination of the Partnership.
SECTION 4.6 - Liability of Partners; Standard of Care
The Partners shall not be liable, responsible or accountable
in damages or otherwise to the Partnership or any Partner for any
action taken or failure to act on behalf of the Partnership within
the scope of the authority conferred on the Partners by this
Agreement or by law unless such action or omission was performed or
omitted fraudulently, negligently, or in bad faith, or in violation
of a Partner's fiduciary obligations to the Partnership.
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• •
SECTION 4.7 - Permitted Transfers
(a) For whatever. reason, upon written notice to the other
Partners, a Partner may demand purchase of his Proportionate
Interest in the Partnership by the other Partners. Within ninety
(90) days after receipt of such notice, the other Partners shall
purchase all of the Partnership interest of the Partner making such
demand for a price determined in accordance with the provisions of
section 4.7(d) hereof. Each Partner agrees that, during his
lifetime, he will not sell or transfer any of his Partnership
interest without first offering it to the other Partners, as set
forth in this Section 4.7.
(b) Two - thirds (2/3) of the Partners, as determined either by
vote at a meeting of Partners, or by written consent thereto, shall
have the right at any time to purchase all of the Partnership
interests owned by any other Partner or Partners by tendering to
them pursuant to subsection (a) , at any time after date of said
meeting or consent, the purchase price of such Partnership
interests as herein set forth. The purchase price pursuant to this
subsection (b) shall be determined in accordance with the
provisions of Section 4.7(d) hereof, except that the purchase price
shall be 115% of the value calculated in accordance with such
subsection.
(c) The closing of the purchase or sale shall be 90 days
after the date of the demand notice. At the closing, the
- 36 -
Partner(s) whose intOest is being sold or purceed, as the case
may be, shall deliver to the other Partner(s) an Assignment of his
Partnership interest and the other Partner(s) shall deliver the
purchase price to be paid to the Partner, by cashiers or certified
check.
(d) For purposes of this Section 4.7, the value of the
Partnership shall be the greaser of the following values: (i) the
book value of the Partnership, determined by analyzing the balance
sheet of the Partnership as of the close of the month next
preceding the month in which the right or obligation to purchase a
Partner's Partnership interest arises; provided however that
there shall be excluded from the applicable balance sheet, for
purposes of determining the book value of the Partnership, the
value of any goodwill or intangible assets, if any; (ii) (A) the
agreed value of the Partnership, if all of the Partners have
executed a certificate setting forth the value of the Partnership
within the previous three (3) years; or (B) if no certificate has
been executed within the previous three (3) years, four (4) times
the average annual Cash Flow for the three (3) calendar years
immediately prior to the date of closing. The Partners agree to
negotiate in good faith annually to attempt to determine the value
of the Partnership so that a certificate of value may be executed.
(e) In the event that the remaining Partners do not fulfill
their obligation to purchase a Partner's Partnership interest as
set forth in subsection (a) or (b) of this Section 4.7, by closing
in accordance with subsection (c), the Partners agree to take all
steps necessary to liquidate the Partnership, in which case the
- 37 -
assets of the Partoship remaining after pant of all other
obligations of the Partnership, shall be distributed in accordance
with Section VII hereof.
SECTION 4.8 - Required Approvals
Notwithstanding the authority of the Managing General Partner
as provided in Sections 4.1, 4.2 and 4.3, any of the actions
specified below may be undertaken only after the Partnership shall
have obtained the approval of all Partners possessing outstanding
Proportionate Interests:
(a) Merging the Partnership with another partnership or
entity or acquiring the stock or assets of any other business;
(b) Liquidating the Partnership's assets or dissolving the
Partnership;
(c) Engaging in any transaction involving an actual or
potential conflict of interest between a Partner and the
Partnership;
(d) Constructing any material additional capital
improvements, or replacing any material existing improvements,
which construction or replacement would substantially alter the
Project's character;
(e) Acquiring any additional completed, partially improved or
unimproved properties by purchase, installment sale, lease, or
otherwise;
- 38 -
(f) Borrowing any funds on a non - recourse basis;
(g) Becoming personally liable for, or guaranteeing, any loan
mortgage or other financing for the Project;
(h) Bringing, adjusting, settling or compromising any claim,
obligation, debt, demand, suit or judgment against the Partnership
or any Partner (with respect to Partnership activities) involving
more than Fifty Thousand Dollars ($50,000); or
(i) Financing, refinancing, selling, conveying or mortgaging
the Project or any portion thereof or any other material
Partnership asset or leasing all or any material portion thereof or
terminating any previously- approved agreement providing for or
contemplating any such financing, selling, conveying, mortgaging or
leasing.
ARTICLE D
Books of Account, Records and Reports
SECTION 5.1 - Accounting
The Managing General Partner shall keep proper and complete
records and books of account in which shall be entered all
transactions and other matters relating to the Partnership's
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0 0
business as are usually entered into records and books of account
maintained by persons engaged in businesses of like character. The
Partnership books and records shall be maintained on a cash basis
and, except as the Code may require to the contrary, shall be
prepared in accordance with generally accepted accounting
principles consistently applied. The Partnership's books and
records shall at all times be maintained at the principal office of
the Partnership and shall be open to the inspection and examination
of the Partners or their duly authorized representatives during
regular business hours.
SECTION 5.2 - Reports
(a) As soon as practicable, but not later than seventy -five
(75) days after the end of each fiscal year, the Managing General
Partner shall send to each person who was a holder of a Partnership
interest in the Partnership at any time during the fiscal year then
ended: (i) a balance sheet as of the end of the such fiscal year
and statements of income, Partners' equity and changes in financial
position for such fiscal year, all of which shall be prepared in
accordance with Section 5.1; (ii) a cash flow statement; (iii) a
report summarizing the fees, distributions and other compensation
paid by the Partnership for such fiscal year to any Partners; (iv)
a report of the Partnership's activities during such fiscal year;
and (v) a statement showing all distributions to holders of
Partnership Interests in respect of such year.
- 40 -
(b) All such annual statements shall be unaudited unless two-
thirds (2/3) of the Partners shall agree to the contrary. If so
required, the accounting firm shall be appointed by the Managing
General Partner and consented to by the other Partners, which
consent shall not be unreasonably withheld.
SECTION 5.3 - Additional Reports
The Partnership shall provide to each Partner such additional
reports as the Partners deem to be helpful or appropriate or as a
particular Partner may reasonably request.
SECTION 5.4 - Further Investigations
Each of the Partners shall have the further right at its own
expense to examine upon reasonable notice and at any reasonable
time, any properties, records or operations of the Partnership, and
such examination and inspection may be conducted by its own
employees and /or by its own counsel, independent certified public
accountants, or other representatives; provided however that such
examination or inspection shall not unreasonably interfere with the
operations of the Partnership.
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0 0
ARTICLE VI
Meetings and Amendments
SECTION 6.1 - Meetings of the Partnershi .
(a) The Partnership shall schedule a meeting of the Partners
for purposes of reviewing Partnership operations and results not
less frequently than semi- annually.
(b) Any Partner may, at any time, upon three (3) days' prior
written notice, call a meeting of the Partners for informational
purposes or for the purpose of taking any action requiring the
consent or approval of the Partners under this Agreement.
(c) All meetings of the Partnership shall be held at
reasonable times at the Partnership's principal office or such
other place (including specifically any location in or near
Chicago, Illinois) as may be reasonably requested by one Partner
and agreed to by a majority of the Partners.
SECTION 6.2 - Amendments
This Agreement may be amended only by 'a written amendment
approved pursuant to Section 4.8 and executed by or on behalf of
each Partner.
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ARTICLE VII
Termination of the Partnership
SECTION 7.1 - Termination.
(a) The Partnership shall be dissolved upon the earliest to
occur of (i) the expiration of the term specified in Section 1.6;
(ii) the withdrawal or Bankruptcy of any Partner (unless continued
pursuant to subsection (c) ; (iii) the written consent of all
Partners; (iv) a decree being entered by a court which results in
the Partners or Partnership being unable to meet the Partnership's
obligations (unless such decree is being duly appealed); (v)
substantially all of the Partnership's assets being sold; or (vi)
the failure of the remaining Partners to fulfill their purchase
obligation pursuant to Section 4.7(e). Upon any such termination,
the Partners (or the remaining Partners) shall proceed with the
winding up of the Partnership and its assets shall be applied and
distributed as herein provided.
(b) For purposes of this Agreement, the "Bankruptcy" of a
Partner shall be deemed to have occurred sixty (60) days after the
happening of any of the following: (i) filing an application by a
Partner for, or consenting to a trustee being appointed for, its
assets; (ii) a Partner's statutory bankruptcy or filing a pleading
in any court of record admitting.in writing its inability to pay
its debts as they come due; (iii) a Partner making a general
assignment for the benefit of creditors; (iv) a Partner filing an
- 43 -
• •
answer admitting the material allegations of, or its consenting to,
or defaulting in answering, a bankruptcy petition filed against it
in any bankruptcy proceeding; or (v) an order, judgment or decree
being entered by any court of competent jurisdiction adjudicating
a Partner a bankrupt or appointing a trustee of its assets, and
such order, judgment or decree continuing unstayed and in effect
for such period of sixty (60) days.
(c) If any Partner shall withdraw or experience Bankruptcy,
the Partnership shall not dissolve, if, within ninety (90) days
after such withdrawal or adjudication, all the Partners agree in
writing to continue the business of the Partnership.
(d) Any Partner who dissolves the Partnership in
contravention of this Agreement shall, in addition to any
forfeiture required by Section 4.7 (b) , be liable, to the Partnership
and to the other Partners for any and all damages, losses and
reasonable expenses (including, without limitation, any adverse tax
consequences resulting from such dissolution).
SECTION 7.2 - Payment of Debts; Distributions
(a) Upon the winding up of the Partnership, the remaining
Partners shall proceed to orderly liquidate the assets and
terminate the Partnership, and the proceeds, together with other
available proceeds, shall be applied and distributed in the
- 44 -
following order: (i) to the expenses of liquidation; (ii) to the
payment or provision for payments of all the Partnership's debts
and liabilities, including any Partner Loans; and (iii) to
establishing any reserves which the remaining Partners deem
reasonable or necessary to provide for any contingent or unforeseen
liabilities of the Partnership or the Partners in connection with
the Partnership.
(b) After making or providing for the payments described in
subsection (a), the amount of liquidating proceeds distributable
shall next be determined as follows:
A tentative balance for each Partner's Capital Account shall
be determined, taking into account the profits and losses of the
Partnership for its final period (including expenses of
liquidation), and profits and losses from the sale or disposition
of the Project and other Partnership items allocated to each
Partner pursuant to Section 3.3(c) and (d).
Any additional capital contributions required to be made by
any Partner shall be available first to discharge the Partnership's
obligations described in subsection (a) of this section.
Thereafter, any such contributions, together with any remaining
proceeds determined pursuant to subsection (a) , shall be the total
proceeds available for distribution to the Partners in accordance
with subsection (c) of this section. Any such further discharge or
- 45 -
SECTION 7.3 - Reserve
•
After the expiration of such period of time as the Partners
may deem advisable, the balance of any reserve, established
pursuant to the authority in Section 7.2(a) and remaining after
such contingencies have been paid, shall be distributed in the
manner set forth in Section 7.2. Any such reserve may, in the
discretion of the Partners, be paid over to a national banking or
other financial institution with trust authority as escrow agent,
to be held by it for the discharge of the Partnership's
liabilities. Any such amounts, when and if subsequently
distributable to the Partners, shall be distributed in accordance
with Section 7.2.
SECTION 7.4 - ' Final Accounting
Each- of the Partners shall be furnished with a statement
setting forth the assets and liabilities of the Partnership as of
the date of the complete liquidation. Upon the Partners complying
with the distribution plan set forth in Sections 7.2 and 7.3, the
Partnership shall cease to be and the remaining Partner(s) shall
execute and cause to be filed a Notice of Dissolution.
ARTICLE VIII
Tax Matters
SECTION 8.1 - Tax Information
As soon as practicable but not later than Seventy -five (75)
days after the end of each fiscal year, the Tax Matters Partner
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0 0
shall send to each Partner a copy of the Partnership's annual
Federal income tax return, a Form K -1 and such other tax
information as shall be appropriate for the preparation by such
Partner of Federal, California, Illinois, and other state or local
income or other tax returns.
SECTION 8.2 - Returns
The Tax Matters Partner shall cause to be prepared and filed
on or before the due date (or any extension thereof) Federal,
California, Illinois and other state or local tax or information
returns required to be filed by the Partnership. The Tax Matters
Partner, to the extent that Partnership funds are available, shall
cause the Partnership to pay any taxes payable by the Partnership
provided that the Tax Matters Partner shall not be required to
cause the Partnership to pay any tax so long as the Tax Matters
Partner is in good faith and by appropriate administrative or legal
proceedings contesting the validity, applicability or amount
thereof and such contest does not materially endanger any right or
interest of the Partnership.
SECTION 8.3 - Elections
To the extent that the Partnership may be or is required to
make elections for Federal, California, Illinois, and other state
or local income or other tax purposes, and to the extent that
Partners may be or are required to make such elections concerning
the Project or the business of the Partnership, such elections
- 47 -
shall be made in a manner as is best calculated, in the opinion of
the Partners to minimize the cash requirements of the Partnership
and the Partners.
SECTION 8.4 - Consistency of Tax Treatment
No Partner shall treat a Partnership item on its Federal,
California, Illinois, or other state or local income or other tax
returns or permit an Affiliate to treat a Partnership item on such
Affiliate's tax returns in a manner inconsistent with the treatment
of such Partnership item on the Partnership's Federal, California,
Illinois, or other state or local tax returns.
SECTION 8.5 - Tax Matters Partner
(a) Pursuant to Code §6231(a) (7) or any subsequent similar
provision, SPA is hereby designated as the "Tax Matters Partner ",
and shall assume and be responsible for duties provided in the Code
and this Agreement.
(b) The Tax Matters Partner shall keep the other Partners
informed of all administrative and judicial proceedings for the
adjustment at the Partnership level of Partnership items, and shall
make available to the other Partners copies of any notices or
communications received from the Internal Revenue Service, the
United States Departments of Treasury or Justice, or any state or
local tax authorities.
- 48 -
• •
(c) Each other Partner shall promptly provide to the Tax
Matters Partner copies of all correspondence to or from, or
summaries of any other communications with, the Internal Revenue
Service or the United States Departments of Treasury or Justice or
with California, Illinois, or other state or local tax authorities
regarding any tax matter or issue relating to the Partnership or
any Partnership tax items.
(d) No Partner other than the Tax Matters, Partner shall enter
into settlement negotiations with the Internal Revenue Service or
the United States Departments of the Treasury or Justice or with
any state or focal tax authorities with respect to any income tax
treatment of Partnership items. The Tax Matters Partner shall be
responsible for all such negotiations. Further, no Partner other
than the Tax Matters Partner shall file (i) a request for an
administrative adjustment of Partnership items under Code §6227(a),
(ii) a petition for readjusting of Partnership items under Code
§6226(b), or (iii) civil action for refund under Code §6228(b)(2)
without first giving reasonable advance written notice of such
intended action (including the proposed treatment of the
Partnership item(s) and the proposed court, if applicable) to the
Tax Matters Partner.
SECTION 8.6 - Survival of Tax obligations
The provisions of this Article regarding tax matters shall
survive the termination of the Partnership Agreement and the
termination or transfer of any Partner's interest under the
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• •
Partnership Agreement and shall remain binding on any terminating
or transferring Partner for a period of time necessary to resolve
with the Internal Revenue Service, the United States Department of
Treasury or Justice, and any state or local tax authority any and
all matters regarding the Federal, state or local income tax or
other matters relating to the taxation of the Partnership and
present or previous Partners.
ARTICLE IX
Fiscal Matters
SECTION 9.1 - Fiscal Year
The fiscal year of the Partnership shall be the calendar year
unless the Partnership shall be required to operate on a different
fiscal year to conform with the requirements of Code 5706 and the
Regulations thereunder.
SECTION 9.2 - Partnership Funds
The funds of the Partnership shall be deposited in such
account or accounts or certificates of deposit which are selected
by the Partners. All withdrawals from any such accounts shall be
made by the Managing General Partner or a duly authorized agent.
Partnership funds shall not be commingled with those of any other
person.
- 50 -
ARTICLE %
Capacity and Authority,
Registration and Investment Decision, No Broker
SECTION 10.1 - Capacity and Authority
The Partners each represent and warrant that: (i) purchasing
a Partnership interest and entering into this Agreement have been
duly authorized in accordance with its respective governing
instruments or otherwise and (ii) the consummation of the
transactions contemplated by this Agreement will not result in a
breach of, or a default under, their charter, bylaws, or any
agreement by which they or any of their properties is bound or any
statute, regulation, order or any other law to which they are
subject.
SECTION 10.2 - Registration
(a) Each Partner acknowledges that the acquired interests in
the Partnership have not been registered under the Securities Act
of 1933, as amended, or under the securities laws of any state, in
reliance upon applicable exemptions under said laws and may not be
assigned or otherwise transferred without registration or an
exemption therefrom.
- 51 -
(b) Each Partner acknowledges that, notwithstanding any
provisions contained in this Agreement, no Partnership interest may
be offered or sold and no transfer of such interest will be made
either by the Partnership or the Partners unless:
(i) Such interest is registered under the Securities Act
of 1933 and any applicable state securities laws; or
(ii) An opinion of counsel for the Partnership is
obtained to the effect that such registration is not
necessary.
SECTION 10.3 - Investment Decision
Each Partner acquiring an interest hereby further acknowledges
and represents that:
(a) Such Partner is acquiring its interest in the Partnership
solely for investment purposes and not with the view to any
distribution or resale thereof; and,
(b) Such Partner has made an independent investment analysis
in deciding to become a Partner, has had full opportunity to
investigate the business of the Partnership, the qualifications of
the other Partners, and the tax and financial implications of an
investment in the Partnership and has made such investigation as it
has deemed appropriate for such purpose.
= *41C
0
SECTION 10.4 - No Broker, Fees or Commissions
0
Each Partner hereby further represents and warrants that there
are no known claims for brokerage or other commissions or finder's
or other similar fees in connection with the transactions covered
by this Agreement insofar as such claims shall be based on actions,
arrangements or agreements taken or made by or on its behalf, and
each Partner hereby agrees to indemnify and hold harmless the
Partnership and each other Partner from and against any
liabilities, costs, and damages, with respect to expenses from any
party making any such claims with respect to such transactions.
ARTICLE XI
Miscellaneous
SECTION 11.1 - Governing Law
This agreement entered into in the State of California and
this Agreement and the Partnership's formation and operation shall
be governed by and construed in accordance with the laws thereof,
without regard to the provisions thereof with respect to conflicts
of . law.
SECTION 11.2 - Notices
(a) Any notice, request, consent, offer or demand required or
permitted to be given under this Partnership Agreement shall be in
- 53 -
writing and shall either be delivered in person or mailed by
registered or certified first class mail, postage prepaid, or sent
by telex, telecopy or telegram, addressed to the party intended as
the recipient as follows unless a Partner shall have requested the
Partnership in writing at least five (5) days before the date of a
notice to use a different address:
If to the Partnership:
Sportspark of California
6901 North Casa Grand Highway
Tucson, Arizona 85743
With a copy to:
Robert E. Neiman, Esq.
Dickinson, Wright, Moon,
Van Dusen & Freeman
225 West Washington Street
Suite 400
Chicago, Illinois 60606 -3418
If to Newco:
Newco Enterprises, Inc.
225 West Washington Street
Suite 400
Chicago, Illinois 60606 -3418
With a copy to:
Robert E. Neiman, Esq.
Dickinson, Wright, Moon,
Van Dusen & Freeman
225 West Washington Street
Suite 400
Chicago, Illinois 60606 -3418
If to Fredcon:
Fredcon, Inc.
225 West Washington Street
Suite 400
Chicago, Illinois 60606 -3418
- 54 -
With a copy to:
Robert E. Neiman, Esq.
Dickinson, Wright, Moon,
Van Dusen & Freeman
225 West Washington Street
Suite 400
Chicago, Illinois 60606 -3418
If to SPA:
Sportspark of America, Inc.
6901 North Casa Grande Highway
Tucson, Arizona 85243
With a copy to:
Linda A. King
710 West Ivy
San Diego, California 92101
(b) Any such notice, request, consent, offer or demand shall
be deemed received, given or served, if mailed by first class mail,
on.the third (3rd) day after the day of mailing, and, if sent by
'telex, telecopy'or telegram, twenty -four (24) hours after the time
of dispatch, provided customary confirmation of delivery or receipt
has been received.
SECTION 11.3 - Counterparts
This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original and all of which shall
constitute one Agreement, and the signature of any party to any
counterpart shall be deemed to be a signature to, and may be
appended to, any other counterpart.
- 55 -
•
SECTION 11.4 - Agreement for Future Execution
At any time or times upon the request of any Partner, the
Partners agree to sign, swear to, or acknowledge any certificate
required by the Partnership Act, to sign, swear to, or acknowledge
any amendment or cancellation as required by law, to sign, swear
to, or acknowledge similar certificates or affidavits or
certificates of fictitious firm name, trade name or the like (and
any amendments or cancellations thereof) required by the laws of
California, or any other jurisdiction in which the Partnership
does, cr proposes to do, business, and cause the filing of any of
the same for record wherever such filing shall be required by law.
SECTION 11.5 - Entire Agreement
This Agreement supercedes and replaces the Partners' prior
Agreement of General Partnership dated February 28, 1993, and this
Agreement (including the Exhibits hereto) and certain related
agreements referred to herein including specifically those set
forth on Exhibit C and the Ancillary Agreements now constitute the
entire understanding between the parties and also supersedes any
prior discussions, correspondence, understandings and agreements
between them respecting the within subject matter. There are no
representations, agreements, arrangements or understandings, oral
or written, between or among the parties hereto relating to the
subject matter of this Agreement which are not fully expressed
herein, except that the parties acknowledge the following ancillary
agreements ( "Ancillary Agreements ") being entered into
- 56 -
simultaneously with this Agreement: the LaSalle National Bank
Agreement.
SECTION 11.6 - Severability
This Agreement is intended to be performed in accordance with,
and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations of the jurisdictions in which the
Partnership does business. If any provision of this Agreement or
the application thereto to any person or circumstance shall, for
any reason and to any extent, be invalid or unenforceable, the
remainder of the Agreement and the application of such provision to
any other person or circumstances shall not be affected thereby,
but rather shall be enforced to.the greatest extent permitted by
law.
SECTION 11.7 - Captions
Any Section titles or captions contained in this Agreement are
for convenience only and shall not be deemed part of the context of
this Agreement.
SECTION 11.8 - Number and Gender
All of the terms and words used in this Agreement regardless
of the number and gender in which they are used, shall be deemed
and construed to include any other number singular or plural, and
any other gender, masculine, feminine or neuter, as the context or
- 57 -
0 0
sense of this Agreement or any paragraph or clause herein may
require, the same as if such work had been fully and properly
written in such number and gender.
SECTION 11.9 - Holidays
In the event that the date on which any act or performance
required or permitted hereunder shall be a Saturday, Sunday or
other day on which banking institutions in the State of Illinois
are authorized to remain closed, such act or performance may be
taken or made on the next succeeding business day.
ARTICLE %II
Certain Proprietary Information and Rights
SECTION 12.1 - Trademarks and Tradenames
No Partner shall have any right to use the trademark or trade
name of the Partnership except to identify products or services of
the Partnership, unless such use shall be approved by the Partners.
However, nothing herein shall prevent any Partner, or Affiliate
thereof, from identifying its affiliation with the Partnership. No
Partner shall have any right to use the trademarks or trade name of
any other Partner.
SECTION 12.2 - No License of Partner Property
Nothing in the Agreement shall grant, imply or constitute a
license or obligation to license by any Partner, any individually-
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a 0
owned intellectual or industrial property of the Partner to the
Partnership or any other Partner.
IN WITNESS WHEREOF, the undersigned corporations, by their
duly authorized officers, have each caused this Agreement to be
executed all as of the day first written above.
PARTNER:
NEWCO TERPRISES, INC.
{
By:
Paul Bergho
Its: President
PARTNER:
FREDCON, INC.
ByL -,-" -
Earl Segerdahl
Its: President
PARTNER:
SPORTSPARK PF AMERICA, INC.
James Hlixemeyer
Its: President
- 59 -
•
EXHIBIT A
Table of Defined Terms
Term
Additional Contributions
Advancing Partner
Affiliate
Agreement
Appraisal
Ancillary Agreements
Bank
Bankruptcy
Capital Account
Capital Transaction
Cash Flow
Code
Committed Capital
Default
Defaulting Partner
Information
Managing General Partner
Net Capital Proceeds
Other Partner
Option
Partner(s)
Partner Loan(s)
Partnership
Location
Section 2.3(b)
Section 3.8(e)
Section 4.3(a)
Preamble
Section 4.7(d)(ii)
Section 11.5
Section 2.7(b)
Section 7.1(b)
Section 2.4
Section 3.2
Section 3.1
Section 2.4
Section 3.8(c)
Section 3.8
Section � 3 .8
Section 12.1(a)(i)
Section 4.2(d)
Section 3.2
Section 4.7(d)(i)
Section 4.7(d)(ii)
Preamble
Section 2.7(a)
Recitals
Ex -A -1
Fable of Defined Terms
(continued)
T_ erm Location
Partnership Act Section 1.1
Poway Lease Recitals
Poway Property Recitals
Proportionate T_ntarest Section 3.3(b)
Project Section 1.4(a)
San Clemente Lease Recitals
San Clemente Property Recitals
Tax Matters Partner Section 8.5
Transfer Notice Section 4.7(d)(i)
Transferring Partner Section 4.7(d)(i)
Ex -A -2
� a
EXHIBIT B
Names, Addresses and Interests of Partners
Partner Name Partner Address
Newco Enterprises, Inc.
Fredcon, Inc.
Sportspark of America, Inc.'
Proportionate
Interest
1/3
1/3
1/3
Ex -B -1
• t
EXHIBIT C
List of Ratified Obligations and Agreements
Ex -C -1
ri
LEASE AGREEMENT
BY AND BETWEEN
THE CITY OF POWAY
and
SPORTSPARRS /KAJIMA
A CALIFORNIA JOINT VENTURE
1 0 9
EXHIBIT A
LEASE AGREEMENT
TABLE OF CONTENTS
I. CONVEYANCE OF PREMISES
A . Lease of Premises ..............................1
B. Term ............. ..............................1
1. Initial Term ..............................1
2. Renewal Options ...........................1
3. Holdover .... .:....:.......................2
4. Quitclaim of Lessee's Interest ............ 2
C. Rent ............. ..............................2
1 .
Annual Minimum Rent .......................2
2 .
Annual Percentage Rent ....................3
3.
Accounting Gross Receipts/Expenses ........ 4
4.
Maintenance and Inspection of Adequate
C.
BusinessRecords.. ....... .............5
5.
Late Payment.. ..... .......................6
6.
Employee.Fidelity Bond ; ...................6
7.
Cash and Record Handling Requirements ..... 6
8.
Additional Rent ...........................7
9 .
Net Rent ...................... .. .......7
10..
City Payment for Landscape Facilities ..... 8
11 .
Quiet Enjoyment ...........................9
12 .
Surrender ... ..............................9
13 .
As -Is Condition ...........................9
II. OPERATION AND'MAINTENANCE OF PREMISES; ASSIGNMENT OF
LEASE
A .
Type of Use ..................... ...............9
B.
Commencement of Operations; Continuous Use
Hours of Operation ..........................10
C.
Operational Standards ..... ...................11
D.
Maintenance Repair of Premises ......
E.
.........12
Alterations or Improvements ...................
14
F .
Personnel ........ .............................14
1. Names and Addresses .......................14
2. Complex Manager /Caretaker .................14
3. Other Employees ...........................14
4. Wage Rates ... .............................15
G.
Utilities, Taxes and Assessments ..............17
1. Payment by Lessee .........................
17
2. Lessee's Right to Contest Taxes ...........
17
H.
Assignments and Subleases ............... .:...19
I
0 0
III. INSURANCE AND INDEMNITY; CASUALTY DAMAGE
A . Insurance ........ .............................20
B. Indemnity ...... ........ ... ................22
C. Exemption of City from Liability ..............23
D. Casualty Damage . .............................23
1.' Destruction by Risk Covered by Insurance..23
2. Damage Not Covered by Insurance ........... 23.
3. Replacement of Lessee's Property .......... 24
4. Damage Near End of Lease Term .............. 24
5. Abatement of Rent .........................24
IV. CONDEMNATION
A . Total Taking ..... .............................25
B. Partial Taking ... .............................25
C. Temporary Taking . .............................27
D. Miscellaneous .... .............................27
V. LEASEHOLD FINANCING; RIGHTS OF LEASEHOLD LENDER
A. Mortgage of Lease .............................28
B. Estoppel Certificates .........................29
VI. DEFAULTS, REMEDIES, AND TERMINATION
A. Lessee's Default . .............................30
B. Notice of Default .............................31
C. City's Remedies .. .............................32
D. City's Termination Rights Upon
Lessee's Default .............................33
E. City's Default ............ :................ .34
F. Effect of Waiver of Default ...................34
G. Settlement of disputes ........................35.
VII. MISCELLANEOUS PROVISIONS
A.
Notices, Demands and Communications ...........
35
B.
Nonliability of City Officials and Employees..36
C.
Enforced Delay: Extension of Time
Performance ..... .............................36
D.
Covenant Not to Compete .......................
36
E.
Approvals by City. ........ .....................37
F.
Litigation Expenses ............. .... ....,.37
G.
Severability ...... ...............'.............37
H .
Further Assurances .. .........................38
I.
Entire Agreement, Waivers and Amendments ......
38
J.
Nondiscrimination .............................38
K.
Time of Essence .. .............................39
L .
Successors ....... .............................39
M . ,
Counterparts ..... .............................39
VIII. TIME FOR ACCEPTANCE OF LEASE BY CITY.......... 39
EXHIBIT A - Maintenance Guidelines
II
SOUTH POWAY SPORTS PARK
LEASE AGREEMENT
This Lease Agreement, entered into this 16th day of November ,
1992, by and between the City of Poway (hereinafter referred to
as• "City ") and Sportsparks /Kajima, a California Joint Venture,
(hereinafter referred.to as "Lessee ").
In consideration of the mutual covenants contained herein, City
and Lessee hereby agree as follows:
I. CONVEYANCE OF PREMISES
A. Lease of Premises
City hereby leases to Lessee and Lessee hereby hires from City,
pursuant to the terms and conditions set forth in this Lease,
that certain real property "Premises ") located within the
City of Poway, California, and as'more particularly described in
Exhibit A attached hereto and incorporated herein by this
reference.
The premises are improved with three regulation softball fields,
a concession building, four sand volleyball courts, two
basketball courts, batting.cages, tot lot area, group picnic
area, concrete amphitheater seating, parking lots, lighting
facilities, landscaping, a ticket booth, a smaller remote
concession building, and 'a maintenance building.
B. Term
1. Initial Term The term of the lease agreement shall be
ten (10) years commencing on the date of the
Certificate of Occupancy issued by the City of Poway
(hereinafter the "Commencement Date ").
2. Renewal Options At the end of the initial term of
this Agreement, the Lessee has the option to renew this
Agreement for two additional and successive five (5)
year periods, provided that Lessee is not in default
hereof as of the date of the exercise of the option and
as of-the date of the expiration of the current term.
These options may be exercised by providing written
notice to the City at least one hundred and eighty
(180) days prior to the expiration of the term or
renewal period of this Agreement. Any and all options
provided hereunder shall be subject to the approval of
the City Council. Said approval shall not be
.unreasonably withheld.
3. Holdover Any holding over by Lessee after expiration
or termination shall not be considered-as a renewal or
extension of this Lease. The occupancy of the premises
after the expiration or termination of this Agreement
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constitutes a month -to -month tenancy, and all other
terms and conditions of this Agreement shall continue
in full force and effect; provided, however, City shall
have the right to apply a reasonable increase in-rent
to bring the rent to fair market value and to terminate
the holdover tenancy at: will.
4. Ouitclaim of Lessee's Interest On termination of this
Lease for any reason, Lessee shall deliver to City a
quitclaim deed in recordable form quitclaiming all its
rights in and to'the premises. Lessee or its successor
in interest shall deliver the same within five (5) days
after receiving written demand therefor. City may
record such deed only on the expiration or earlier
termination of this Lease. If Lessee fails or refuses
to deliver the required deed, the City may prepare and
record a notice reciting Lessee's failure to execute
this lease provision and the notice will be conclusive
evidence of the termination of this Lease and all
Lessee's rights to the premises.
C. Rent
1. Annual Minimum Rent Lessee shall pay City.monthly, in
advance, without deduction, offset; prior notice or
demand, a fixed Annual Minimum Rent for capital
financing by the City for design and construction of
the South Poway Sports Park. The Annual - Minimum Rent
shall be as follows:
First Lease Year of the Initial Term $ -0-
Second Lease Year of the Initial Term 155,000
Third Lease Year of the Initial Term 165,000
Annually thereafter 175,155
The Annual Minimum Rent is payable in equal monthly
amounts on the first day of each month, as follows:
First Lease Year of the Initial Term $ -0- /month
Second Lease Year of the Initial Term- 12,916.66 /month
Third Lease Year of the Initial Term 13,750.00 /month
Annually thereafter 14,59.6.25/month
In the event the amount of the capital expenditure by
the City for the construction of the South Poway Sports
Park by Kajima Engineering and Construction, Inc., is
below the contract amount of $2 ',656,324 (two million
six hundred fifty -six thousand three hundred twenty -.
four dollars), the Annual Minimum Rent payment
beginning in the Second Lease Year of the Initial Term
will be reduced by an' amount equal to $7,666 (seven
thousand six hundred sixty -six dollars) per $100,000
(one hundred thousand dollars) of savings in
construction costs.
F
2. Annual Percentage Rent In addition to the Annual
Minimum Rent, Lessee shall pay City an Annual
Percentage Rent, as follows:
a. First Lease Year of the Initial Term One
(1) percent of all Gross Revenues collected
in the First Lease Year. The payment shall
be made within thirty (30) days after the end
of the First Lease Year.
b. Second Lease Year of the Initial Term If
Gross Revenues are less than $950,000 for the
Second Lease Year, Lessee will not pay an
Annual Percentage Rent, If Gross Revenues
are equal to or greater than $950,000 for the
Second Lease Year, Lessee will pay an Annual
Percentage Rent equal to one (1) percent of
all Gross Revenues for the year. The payment -
shall be made within thirty (30) days after
the end of the Second Lease Year.
C. Third Lease Year of Initial Term If Gross
Revenues are less than $950,000 for the Third
Lease Year, Lessee will not pay an Annual
Percentage Rent. If Gross Revenues are equal
to or greater than $950,000 for the Third
Lease Year, Lessee will pay an Annual
Percentage Rent equal to one (1) percent of
all Gross.Revenues for the year. The payment
shall be made within thirty (30)* days after
the end of the Third Lease Year.
d. All Subsequent Lease Years Lessee shall pay
Annual Percentage Rent to the City on a
monthly basis for each month of each
Subsequent Lease Year. Lessee shall pay City
the Annual Percentage Rent within thirty (30)
days after the end of the month during which
Gross Receipts on which said Percentage Rent
was computed were received.
The amount of each monthly payment of Annual
Percentage Rent will be calculated as follows
for the 12 -month period of each Lease Year:
One (1) percent of the Gross Receipts for the
month until the total Gross Receipts for the
Lease Year are equal to or less than
$950,000.
Eleven and one -half percent•(11.5 %) of that
portion of the Gross Receipts for the month
which are between $950,000 and $1,050,000 for
the Lease Year.
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•
Thirteen and one -half percent
portion of the Gross Receipts
which are between $1,050,000
for the Lease Year.
Fifteen and one -half percent
portion of the Gross Receipts
which are between $1,150,000
for the Lease Year. '
Seventeen and one -half percent.(17.5 %) of
that portion of the Gross.Receipts for the
month which are between $1,250,000 and
$1,350,000 for the Lease Year.
Nineteen and one -half percent (19.5 %) of that
portion of Gross Receipts for the month which
exceed $1,350,000 for the Lease Year.
Example:
(13.5 %) of that
for the month
and $1,150,000
(15.5 %) of that
for the month
and $1,250,000
•
Total $1,400,000
$1,400,000
% $77,250
3. Accountina of Gross Receipts/Expenses. At such time as
Lessee submits to City the Percentage Rent, such
payment shall be accompanied by a monthly financial
statement showing the Gross Receipts derived from all
operations at the Premises during the preceding month,
together with a detailed itemization of the goods and
services provided, and all costs and expenses incurred
as well as all deductions-or exclusions therefrom.
Lessee shall also provide to City within thirty (30)
days after the-end of each calendar year a financial
4
Monthly
Year -to -Date
Percentage
Month
Gross Revenue
Gross Revenue
Rent Due
1
$ 90,000
$ 90,000
$ 900
2
110,000
200,000
1,100
3
100,000
300,000
1,000
4
150,000
450,000
1,500
5
150,000
600,000
1,500
6
150,000
750,000
1,500
7
150,000
900,000
1,500
8
50,000
500
50,000
1,000,000
5,750
9
50,000
5,750
50,000
1,100,000
6,750
10
50,000
6,750
50,000
1,200,000
7,750
11
50,000
7,750
50,000
1,300,000
•8,750
12
50,000
8,750
50,000
1,400,000
9,750
Total $1,400,000
$1,400,000
% $77,250
3. Accountina of Gross Receipts/Expenses. At such time as
Lessee submits to City the Percentage Rent, such
payment shall be accompanied by a monthly financial
statement showing the Gross Receipts derived from all
operations at the Premises during the preceding month,
together with a detailed itemization of the goods and
services provided, and all costs and expenses incurred
as well as all deductions-or exclusions therefrom.
Lessee shall also provide to City within thirty (30)
days after the-end of each calendar year a financial
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statement showing the Gross Receipts derived from all
operations at the Premises for the preceding calendar
year, together with a detailed itemization of the goods
and services provided, and all costs and expenses
incurred as well as all deductions or exclusions
therefrom.
If Lessee shall fail to prepare and deliver any such
written statement and itemization within the required
time, and such failure shall continue after thirty (30)
days notice thereof by City to Lessee, then City may
cause, but shall not be obligated to cause, an audit to
be made of all books, records, and accounts of the
operations at the Premises for such delinquent
accounting period and may prepare the statement or
statements which Lessee shall have failed to prepare
and deliver. Lessee shall pay on demand all expenses
of such audit and the preparation of any such
statements and all sums as may be shown by such audit
to be due as rent together with interest on the past
due amounts at the rate of two (2) percent overthe
Federal Reserve Bank of San Francisco prime rate.
4. Maintenance and Inspection of Adeauate Business
Records Lessee shall maintain at the Premises or at
its office in 247 Avenide La Pata, San Clemente,
California 92672, full, complete, and accurate books,
records, and accounts of, all daily Gross Receipts and
other records used in calculating the Gross Receipts.
Lessee shall keep all such records for three (3) years.
Lessee shall also maintain detailed records on the
utilization of.the facilities, schedules of teams,
contact information for teams, and other pertinent
information on the operation and management of the
facility. Lessee shall submit hard copies or computer
disk copy of these records to the City on a quarterly
basis.
City and its agents shall have the right at reasonable
times upon request, no more than four times in any
calendar year, to examine and inspect all of the books
and records of Lessee pertaining to Lessee's operations
at the Premises, for the purpose of investigating and
verifying the accuracy of any statement of Gross
Receipts. In addition, City may once in any calendar
year cause an audit of the operations of Lessee-to be
made by an independent certified accountant mutually
agreed to by City and Lessee and if the statement of
gross receipts previously made to City shall be found
to be inaccurate, then and in that event, there shall
be an adjustment and one party shall pay to the other
on demand such sums as may be necessary to settle in
full the accurate amount of said rent payments that
should have been paid for the period or periods covered
5
by such inaccurate statement or statements, together
with interest on past due amounts at the rate of two
(2) percent over the Federal Reserve Bank of San
Francisco prime rate: In the event City and Lessee are
unable to agree upon an independent certified
accountant within thirty (30) days of City's election
to cause an audit, the parties agree that any
accountant selected from the "Big 6 accounting firms
shall be acceptable to both. If said audit shall
disclose an inaccuracy in favor of City, of greater
than a five percent (5 %) error with respect to the
amount of Gross Receipts reported by Lessee for the
period of said report, then Lessee shall immediately
pay to City the cost of such audit; otherwise, the cost
of such audit shall be paid by City. If such audit
shall disclose any willful inaccuracy with respect to
Gross Receipts reported by Lessee, Lessee shall pay
triple the amount due as a result of the audit.
5. Late Payment Fee Failure of Lessee to pay any of the
rental payments required herein on time is a breach of
this Agreement for which City may terminate same or
take such other legal action as it deems necessary.
City expects all compensation to be paid on time and
Lessee agrees to pay on time.
Without waiving any rights available at law, in equity
or under this Agreement, in the event of late or
delinquent payments by Lessee, the latter recognizes
that City will incur certain expenses as a result
thereof, the amount of which.is difficult to ascertain.
Therefore, in addition to monies owing, Lessee agrees
to pay the City a late fee set forth below to
compensate City for all expenses and /or damages and
loss resulting from said late or delinquent payments.
The charges for late or delinquent payments shall be
$50.00 plus interest calculated at the rate of two
percent (2) over the Federal Reserve Bank of San
Francisco prime rate, assessed monthly on the balance
of the unpaid amount. The postmarked date on the
letter containing the rental statement and payment will
be considered proof of late or delinquent payments.
6. Employee Fidelity Bonds Lessee shall maintain
adequate employee fidelity bonds covering all its
employees who handle money.
7. Cash and Record Handling Requirements Lessee shall
prepare a description of its cash handling and sales
recording systems and equipment which shall be
submitted to the City for approval. When approved by
the City, such systems and equipment, including any
revisions thereto approved by the City, shall be
utilized by Lessee in its operation hereunder.
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Lessee shall be required to maintain a method of
accounting of all the receipts and disbursements in
connection with the subject concession, which shall
correctly acid accurately reflect the Gross Receipts and
disbursements received or made by Lessee from the
operation of said concession. The method of
accounting, including bank accounts, established for
the subject concession shall be separate from the
accounting systems used for any other business operated
by Lessee or for recording Lessee's personal financial
affairs. Such method shall include the keeping of the
following documents:
a. Regular books of accounting such as general
ledgers.
b. Journals including supporting and underlying
documents such as vouchers, checks, tickets,
bank statement, etc.
C. State and Federal income tax returns and
sales tax returns and checks'and other
documents proving payment of sums shown.
d. Cash register tapes shall be retained so that
day -to -day sales can be identified. A cash
register must be used in public view, which
prints in a dated double tape, indicating
each sale and the daily total.
e. Any other accounting records that City, in
its sole discretion, deems necessary for
proper reporting of receipts.
Lessee shall use and maintain a cash register(s) on which it
shall record all Gross Sales. The cash register shall be
nonresetable and sufficient to supply an accurate recording of
all sales on tape. Lessee shall not purchase or install the cash
register before obtaining the City's written approval of the
specific register to be purchased. All cash registers shall have
a price display, which is visible to the public.
8. Additional Rent Taxes, property and liability
insurance premiums, and utilities payable by the Lessee
pursuant to the provisions of this Lease shall
constitute Additional Rent and upon the failure of
Lessee to pay any of such amounts, City shall have the
same rights and remedies as otherwise provided in this
Lease for the failure to pay rent_.
9. Net Rent It is the intention of the parties that the
rent payments herein specified shall be net to City in
each year during the term of this Lease, that all
costs, expenses, and.obligations of every kind relating
7
to the Premises (except as may be otherwise
specifically provided in this Lease), which may arise
or become due during the term of this Lease, shall be
paid by Lessee, and Lessee shall indemnify, defend and
hold City harmless against such costs, expenses and
obligations.
10. City Payment for Landscape Facilities The City will
pay the Lessee monthly an amount of $8,000 for
maintenance of the following facilities, provided that
the facilities are maintained in accordance with the
Maintenance Guidelines:
1. All ballfield turf and related irrigation systems.
2. All ground cover, trees, shrubs, and related
irrigation systems.
The Lessee shall submit invoices for the above amount
by the 15th of the month for the previous month's
maintenance. The invoice shall be due and payable by
the 30th of the month in which it is received, provided
that the above referenced facilities are being
maintained consistent with the performance standards
detailed in Exhibit'B, Maintenance Guidelines. The
City's obligation to make such payments shall commence
with the first calendar month following issuance of
City's notice of final completion of all improvements.
The amount of the City's payment shall'be fixed for the
first five (5) years of this Agreement. Beginning in
the sixth year, the total annual landscape payment
shall be calculated as follows:
Sportspark bid to maintain landscape $96,000 /year
facilities on a per acre basis - 15 acres
_ $6,400 /acre
City's FY 91-92-average cost per acre
to maintain LMD areas $8,000 /acre
Percentage of bid to City's cost Bid is 80% of
City's cost.
O
Eighty percent (80 %) of the City's prior year's average
cost per acre to maintain LMD areas throughout the City
x 15 acres = .total annual landscape payment to Lessee.
The Lessee will maintain records of all costs related
to the maintenance of the facilities in accordance with
Section 5 of this Agreement.
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11. Ouiet Enjoyment
City agrees that, subject to the limitations expressly
set forth herein, Lessee, upon paying the rent and .
performing the covenants in this Lease required to be
performed by Lessee, may quietly have, hold, and enjoy
the Premises during the term of this Lease and any
extended term hereof, without hindrance or interruption
by City or any party claiming by, through, or under
City.
12. - Surrender
Upon the termination of this Lease all buildings,
structures, improvements, and trade fixtures
permanently affixed to the Premises together with all
records and computer disks provided to the City shall
become the property of City. Lessee covenants to
peaceably yield up and surrender the Premises to City,
including all such improvements and trade fixtures in
good order, repair and condition, reasonable wear and
tear, and damage by casualty excepted. At the option
of Lessor, Lessee shall further surrender to Lessor all
personal property and equipment to operate
the facilities; Lessor shall pay to Lessee within sixty
(60) days of such 'surrender the Fair Market value or
Fair Rental value of..such personal property, subject to
setoff against rent arrearage.
13. As -Is Condition
The Premises are leased in an as -is physical condition
only. By taking possession of the Premises, Lessee
acknowledges the Premises are in good and tenantable
condition for the purposes intended and does•not hold
the City responsible for any repairs improvements
thereon. Notwithstanding the foregoing, the City
represents and-warrants that the.uses currently
conducted on the Premises at the time of execution of
this Lease are permitted by local ordinance and are not
in violation of any_applicable ordinances or other
laws, orders, permits, rules, regulations and
requirements of any governmental authority.
II. OPERATION AND MAINTENANCE OF PREMISES; ASSIGNMENT OF LEASE
A. Type of Use
The Premises are being leased to Lessee for the operation and
maintenance of a Sports Park, in substantial accordance with this
Agreement, or such other commercial recreation and sports
activities and related support functions as may be approved by
City in its sole discretion. The Sports Park and related
facilities shall be operated on a nondiscriminatory basis for
9'
general public use and in compliance with all applicable federal,
state, and-local laws and regulations. Lessee shall not permit
overnight camping or sleeping on the Premises.
Lessee shall not use or suffer to be used the Premises for any
other purpose or purposes without in each instance obtaining
City's prior written consent.
In the event City agrees to permit the facilities to be used for
other commercial recreation and'sports. activities and related
support functions, Lessee understands that City may request a
modification of the terms of this Lease, including without
limitation, modified provisions regarding the payment of-rent.
H. Commencement of Operations; Continuous Use; Hours of
operation
Lessee shall commence operating the facilities as of
the Commencement Date of this Lease.
Thereafter, during the remaining term of this Lease,
except as provided below, Lessee agrees to cause the
facilities to be continuously open and operated to the
extent permitted by law and consistent with prudent
business practice. Notwithstanding the foregoing,
Lessee may cease continuous operation of the facilities
for those periods of time identified in the Maintenance
Guidelines as "maintenance intervals." If any of the
improvements constructed on the Premises are partially
destroyed and this Lease remains in effect, Lessee
shall continue such business operations to the extent
reasonably practical from the standpoint of good
business judgment during the period of restoration.
In the event Lessee fails to carry on business as
herein provided, except as provided under Section
VII(C), entitled Enforced Delay: 'Extension of Time of
Performance, Lessee shall pay City, in addition to
Annual Minimum Rent, an additional charge at the daily
rate of one hundred seventy five dollars ($175) (the
"non- Operation Charge ") for each and every day or
partial day that Lessee fails to carry on business on
the Premises as herein provided. The non - Operation
Charge shall not commence until thirty (30) days after
City has provided written demand to Lessee to resume
continuous operation the Premises. If Lessee fails
to adequately assume and continue operation of the
Premises within fifteen (15) days after the
Commencement Date, City shall have the right to
terminate this Lease without the necessity for any
legal proceedings and without prejudice to any other
rights or remedies. City's right to collect the
non - Operation Charge shall not affect any of City's
10
M
C .
. •
other rights and remedies pursuant to this Lease,
including City's right to terminate this Lease upon a
default under Section II (C) below.
Prior to the Commencement Date, Lessee shall notify
City of Lessee's operating schedule, and shall
thereafter notify City sixty (60) days in advance of
any change in said schedule. At the commencement of
operations, normal hours of operation shall be 7 a.m.
to 11 p.m. The park shall close by 12 midnight. The
City retains the authority, after consultation with
Lessee, to impose reasonable restrictions on hours of
operation (not more restrictive than 7 a.m. to 11 p.m.)
in the event•City determines the operation on the
Premises interferes with the use and quiet enjoyment of
nearby properties or for law enforcement or other
public health or safety reasons.
Operational standards
Sixty (60) days prior to the commencement of
operations, and annually thereafter and sixty (60) days
prior to the commencement of each Lease Year, Lessee
shall submit to City a "Facility Operation Plan." Said
plan shall contain a description of planned events,
including league play and tournaments, as well as hours
of operation. The plan shall provide at a minimum for
the accommodation of the City sponsored adult softball
leagues. The plan shall also contain a schedule of
fees for program participants, entry fees, and
admission fees. Lessee shall also include in the plan
the proposed use of the facility by the general public.
This section shall detail facilities available for
general public use, hours available for public use, and
fees for general public use of facilities. The
Facility Operation Plan shall include a description of
the proposed marketing and advertising program.
Approval of the Facility Operation Plan shall not be
unreasonably upheld.
Lessee shall comply with all laws, rules, and
regulations and governmental authorities having
jurisdiction over the Premises and the business and
recreational activities thereon. All law enforcement
and security measures undertaken by Lessee•on the
Premises shall be subject to the prior approval of the
Sheriff's Department. Lessee shall provide to City a
"Law Enforcement and Security Plan" at the Commencement
Date,•and annually throughout the term of this Lease,
detailing law enforcement and security procedures to be
followed by Lessee on the Premises.
All fees and charges for goods and services provided by
Lessee at the Premises shall be reasonable and shall be
prominently posted. In addition, Lessee shall provide
11
to City a schedule of fees and charges for all goods
and services purveyed at the Premises at least two (2)
weeks in advance of any initial implementation or
proposed change. All fees and charges established by
Lessee for activities provided on the Premises shall be
subject to the * prior approval of the City Manager,
which approval shall not be unreasonably withheld.
Lessee shall operate the South.Poway Sports Complex in
a competent and professional manner equal to or
exceeding that specified in the Facility Operation
Plan. City,shall have the right at reasonable times to
inspect the premises. Should City find Operational
Standards, including but not limited to, site security,
have fallen below a minimum acceptable level in any
area, Lessor shall notify Lessee in writing of the
specified subject areas requiring correction. Lessee
shall than have a period not exceeding thirty (30) days
to correct said deficiency.
D. Maintenance Repair of Premises
At all times during the term of this Lease, Lessee
shall, at its expense, maintain the Premises and all
improvements constructed thereon in a first -class
condition, and in good order and repair, free of litter
and trash, reasonable wear and tear and casualty damage
excepted. Maintenance and repairs shall be accomplished
on a regular basis in accordance with the "Maintenance
Guidelines" promulgated by the City and attached hereto
and incorporated herein by'this reference as Exhibit B.
The Maintenance Guidelines may be amended from time to
time in the reasonable discretion of the City. At all
times during this Lease, Lessee agrees to comply with
the Maintenance Guidelines with respect to the
Premises. 'City shall have no responsibility for
maintenance or repair of the Premises or any
improvements constructed thereon. Lessee shall obtain
and maintain throughout the term of this Lease a State
of California C -27 license for all landscape
maintenance activities performed on the Premises. If
maintenance operations are to be handled by an'outside
landscaping firm or contractor, such firm or contractor
shall be licensed in the same manner as required by
Lessee above. Lessee shall provide a list of all such
firms or contractors to the City prior to start of
work.
Prior ' to the Commencement Date, and prior to any •
substantial changes being made, Lessee shall provide to
City a "Maintenance and Operational Plan" in compliance
with the Maintenance Guidelines, detailing the time and
manner in which grounds maintenance shall be
accomplished.. In addition, Lessee shall have the
responsibility for all grounds maintenance on the
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Premises including trimming, mowing, litter control,
replacement of.landscaping including plant and tree
replacement as necessary, lawn fertilization and
aeration, repair and replacement of slopes and
irrigation system components as needed and all other
practices normally required to maintain the Premises in
a safe, orderly, neat, clean.manner, and to maintain
all landscaping in a good and healthy condition'in
accordance with the Maintenance Guidelines.
Additionally, Lessee shall be responsible for all major
structural maintenance and repairs during the Lease
Term. Within thirty (a0) days of the Commencement
Date, Lessee shall provide to City'a schedule of .
proposed major structural repairs and maintenance to be
performed by Lessee on the Premises at regular
intervals during the Lease Term. These major repairs
shall include, but not be limited to, repaving and /or
re- asphalting all parking and driveway areas,
re- roofing all buildings, and fence replacement. City
shall have the right to require Lessee to effect major
structural repairs at any time during the term of this
Lease, if, in City's reasonable judgment, the repair is
required to maintain the required level and quality of
operations and activities conducted on the Premises in
accordance with Section II(C) above; provided, that, if
during the last five (5) years of the twenty (20) year
lease Term such major structural maintenance or repairs
are capital improvements and /or capital equipment in
excess of one hundred thousand dollars ($100,000) in
the aggregate, Lessee shall bear only its pro rata
share of the annual amortization over the useful life
with a reasonable salvage value on a straight line
basis of the costs of any such major repairs, and City
shall be responsible for the excess above such amount.
Lessee shall maintain the South Poway Sports Complex in
a competent and professional manner equal to or `
exceeding the standards as identified in the
Maintenance Guidelines. City shall have the right at
reasonable times to inspect the Premises. Should City
find maintenance standards, have fallen below a minimum
acceptable level in any area, Lessor shall notify
Lessee in writing of the specific subject areas
requiring correction. Lessee shall then have a period
not exceeding thirty (30) days or a lessor time frame
determined by City if the repair affects health,
safety, or loss of plant life, in which to effect the
needed corrections. Should the Lessee not perform the
scheduled maintenance tasks within the required time
period, the lessee will not be paid for these tasks.
At the City's sole option, the City has the right to
grant an extension of time should Lessee fail to
complete the corrections, but are diligently being
pursued. The City may enter the Premises and effect
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F.
any correction, subject to the above conditions and
notification to the Lessee of existing default (under
Section VI(A)), Lessee agrees to promptly reimburse
City the cost thereof, plus interest of 2% over the
Feaeral Reserve Bank of San Francisco prime rate. In
the event that Lessee fails to so reimburse the City,
the City has the right to deduct all maintenance and
repair cost from annual maintenance payment.
Alterations or Improvements
In the event that any alteration, addition, or change
or otherwise to the improvements, or any portion
thereof, is required during the term hereof by law or
regulation or rule, the same shall be made by Lessee at
Lessee's sole cost and expense.
Except as provided in Section I.I(C), Lessee shall not
make or permit any material structural or exterior
alterations, additions or improvements to be made to or
upon the Premises without first obtaining the written
consent of City. City shall not arbitrarily withhold
consent to any requested alteration, additions, or
improvements to the Premises. Any alterations,
additions, or improvements made by Lessee shall be
diligently constructed, at no cost or expense to City
and in a good and workmanlike manner according to and
in conformity.with any laws, rules and regulations of
all governmental bodies and agencies.
Personnel
1. Names and Addresses Lessee shall keep City
informed, in writing, of the names, mailing
addresses, and phone numbers of the joint'
venturers and the general manager of the
Premises.
2. Complex Manager /Caretaker An experienced
general full -time manager for the facilities
shall be employed at all times by Lessee.
Said manager shall not reside further than
one hour's travel time from the Premises. The
manager shall be of good moral character with
no felony convictions and shall be authorized
and available to confer with City or City's
representatives at all reasonable times.
3. Other Employees At all times after the
commencement of operations, Lessee shall
provide sufficient staff with the skills and
experience necessary to reasonably provide
for the services envisioned and the safety,
good conduct and good order of its customers.
Lessee shall comply with the provisions of
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Section VII(J) with.respect to the hiring of
employees.
All employees of Lessee shall be of good
moral character and shall present a pleasant
appearance and pleasing manner to the public.
City shall'have the right to request the
removal of any employee for cause when any
such employee reflects discredit upon City
for whatever reason. Removal of such
employee shall be subject, to the approval of
the Lessee, which approval shall not be
unreasonably withheld.
4. Wage Rates This section applies only to
those employees or subcontractors of the
Lessee whose responsibilities include
maintenance of landscape facilities for which
the Lessee is being reimbursed by the City of
Poway.
Pursuant to Division 2, Part 7, Chapter 7,
Article 2, of the Labor Code of the State of
California or local laws applicable thereto,
the City has ascertained the general
prevailing rates for legal holiday and
overtime work in the locality in which this
work is to be performed for each craft,
classification or type of workman needed.to
execute contracts for public work. 'The
Lessee is responsible for paying the
prevailing wage to those workers who are
eligible to be paid prevailing wage by law,
otherwise paying at least minimum wage.
The City Council has obtained from the
Director of the California Department of
Industrial Relations a determination of the
general prevailing rate of per diem wages and
the general prevailing rate for legal holiday
and overtime work in the locality in which
said work is to be performed for each craft,
classification, or type of worker needed.
Not less than the determined rates shall be
paid to all workers employed in the
performance of the contract, pursuant to
Section 1774, 1773, and 1773.2 of the
California Labor code. Such rates of wages
are on file with the Department of Industrial
Relations and in the office of the City and
are available to any interested party upon
request.
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Attention is directed to the provisions of
Sections 1774, 1775, 1776, 1777.5, and .1777.6
of the State Labor Code, excerpt copies of
which are appended to the Specifications.
Sections 1774 and 1775 require the Lessee and
all sub - Lessee to pay not less than the
prevailing wage rates to all workmen employed
in the execution of the Contract and specify
forfeitures and penalties for failure to do
so. The minimum wages to be paid are those
determined by the State Director of the
Department of Industrial Relations.. Section
1776 requires the Lessee and all sub - Lessee
to keep accurate payroll records, specifies
the contents thereof, their inspection and
duplication procedures, and certain notices
required of the Lessee pertaining to their
location.
APPRENTICES - Section 1777.5 requires the
Lessee or employing tradesmen in
any apprenticeable occupation to apply to the
Joint Apprenticeship Committee nearest the
site of the public works project and which
administers the apprenticeship program in
that trade for a certificate of approval.
The certificate will also fix the ratio of
apprentices to journeymen to be used in the
performance of the Contract.
The Lessee is required to make contributions
to funds established for the administration
of apprenticeship program in that trade for . a
certificate of approval. The certificate
will also fix the ratio of apprentices to
journeymen to be used in the performance of
the Contract.
Information relative to apprenticeship
standards, contributions, wage schedules and
other requirements may be obtained from the
State Director of Industrial Relations or
from the Division of Apprenticeship .
Standards.
CLAYTON ACT AND CARTWRIGHT ACT - Section 4551
of the State Government Code specifies that
in executing a public works contract with the
City to supply goods, services or materials,
the Lessee or sub - Lessee offers and agrees to
assign to the City all rights, title and
interest in and to all causes of action it
may have under Section 4 of the Clayton Act
(15 U.S.C. Sec. 15)_ or under the Cartwright
Act (Chapter 2 commencing with Sec. 16700) of
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s •
Part 2 of Division 7 of the Business and
Professional Code, arising from purchase of
goods, services or material pursuant to the
Contract or subcontract. This assignment
shall become effective when the City tenders
payment to the Lessee without further
acknowledgement by the parties.
PAYROLL RECORDS - The City retains the right
to examine the Lessee's..payroll records and
to consult with the Lessee's employees to
determine if legal minimum wage rates are
being paid.* These records must be available
within the City limits of the City of Poway.
G. utilities. Taxes and Assessments
1. Payment by Lessee In addition to the rents and other
payments required to be paid under this Lease, Lessee
shall.pay any and all taxes, (including possessory
interest tax, personal property tax, leasehold
improvements, and sales tax) assessments, and other
charges of any description levied or assessed from the
Commencement Date until the termination of this Lease,
imposed by any governmental agency or entity on or
against the Premises and any portion thereof, or on or
against any interest. in the Premises (including the
leasehold interest created by this Lease), or any
Improvements or other property in or on the Premises.
Further, Lessee shall pay when due all charges for
water, gas, electricity, sewer, and trash collection
services to the Premises.
2. Lessee's Right to Contest-Taxes Lessee may at any
time, in good faith and upon reasonable grounds,
dispute or contest the validity of the whole or any
part of taxes upon the Premises, the improvements
thereon, or any personal property utilized or situated
on the Premises, defend the same, or may in good faith
diligently conduct any necessary proceedings to prevent
or void or reduce the same. It is understood that
Lessee'shall not, in the event of and during the bona
fide and diligent prosecution of such proceeding, be
- deemed to be in default in respect to the payment of
any disputed taxes or similar impositions so long as
Lessee complies with the provisions of this Section.
Lessee further agrees that any such contest shall be
prosecuted to a final conclusion as speedily as is
reasonably possible.
Lessee shall have the right to contest or protest
payment of such taxes so long as:
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a. Neither the Premises or any part thereof
would by reason of such postponement or
deferment be in the reasonable judgment of
the City in danger of being forfeited, lost,
or materially affected; and,
b. Lessee shall have deposited with City or at
the election of Lessee a bank or trust
company ( "Escrow Agent ") situated in San
Diego County, California, mutually acceptable
to City and Lessee, cash or an irrevocable
letter of credit or a bond in the amount so
contested and unpaid, together with all
interest and penalties in connection
therewith, and all charges that may or might
be assessed against or become a charge on the
Premises or any part thereof•in•such
proceedings (to the extent that amounts of
all such interest, penalties and charges are
then ascertainable).
City shall cooperate reasonably in any such
context permitted by this Section and shall
execute any documents or pleadings reasonably
required for such purpose. Any such
proceedings to contest the validity or amount
of any imposition or to recover any
imposition paid by Lessee shall be prosecuted
by Lessee at Lessee's sole cost.and expense;
and Lessee shall indemnify and hold City
harmless against any and all loss, cost or
expense of any kind, including, but not
limited to, reasonable attorneys' fees and
expenses, which may be imposed upon or
incurred by City in connection therewith.
Upon the termination of any proceedings it
shall be the obligation of Lessee to pay the
amount of such taxes or part thereof as are
finally determined in such proceedings,
payment of which may be deferred during the
prosecution of such proceedings, together
with all costs, fees, interest, Penalties or
other liabilities in connection therewith,
and, upon such payment, City shall direct-the
Escrow Agent to return any amount deposited
with it, not theretofore expended, with
respect to such taxes; provided, however,
City, if requested by Lessee, shall direct
that the Escrow Agent disburse the monies on
deposit with it directly to the taxing
authority to whom the taxes are payable.
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H. Assignments and Subleases
Lessee shall not voluntarily or-by operation of law
assign, transfer, mortgage, sublet or otherwise
transfer or encumber all or any part of its interest in
the Lease or the Premises without City's prior written
consent, which consent shall not be unreasonably
withheld. •
If Lessee desires to assign or sublet -all or any part
of its interest in this Lease, Lessee shall submit in
writing to City 1) the name of the proposed sublessee
or assignee; 2) the nature of the proposed sublessee's
or assignee's business and experience with same; 3) the
proposed sublease or assignment; and 4) such financial
and other information as City may reasonably request
concerning the proposed sublessee or assignee. If and
.only if City determines in its reasonable discretion
that the proposed sublessee assignee has suitable
financial strength, experience and character for
operation and control of the Premises will City agree
to grant consent to such proposed sublease or
assignment. Simultaneously with an assignment, the
assignee shall execute an agreement among assignee,
Lessee and City assuming all of Lessee's obligations
under. this Lease which arise after the date of such
assignment (the "Assumption Agreement "). If City
accepts such assignment and approves the Assumption
Agreement, Lessee shall remain fully obligated under
this Lease for only those obligations (including,
without limitation, accrued amounts due City)- arising
prior to the date of such assignment, unless released
in writing by City. City.shall not be required to
release Lessee from its obligations under this Lease
upon the assignment thereof by Lessee unless City
accepts the assignment. As used throughout this Lease,
the term "Lessee" shall also include any permitted
sublessee or assignee of Lessee.
The consent of City given pursuant to the terms hereof
shall not act as a waiver of the requirement that such
consent be obtained to any subsequent sublease or
assignment.
Nothing contained herein shall be deemed to prohibit
Lessee from assigning its interest in the or
the rents and other sums to be received therefrom to a
Lender permitted or approved pursuant to Article VI
hereof. The rights of the holder of any mortgage, or
of any beneficiary, mortgagee, or secured party under
such loan.shall be as set forth in Section V.
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Any attempted assignment, transfer, mortgage,
encumbrance, or subletting of Lessee's interest in the
Lease or the Premises in violation hereof shall be void
and shall constitute a material breach of this Lease.
A transfer between general partners of Lessee, or a
transfer of said general partner's interests in this
Lease to a third party, provided the general partners
maintain management and control of the Lease, or a
transfer to a corporation in which the Lessee or the
general partners of Lessee own not less than
seventy -five percent (75 %) of the corporation's
outstanding shares, assuming the general partners of
Lessee have full management and control of the
corporation and the City is provided with adequate
assurance that the corporation is sufficiently
capitalized and has and maintains sufficient net worth
to perform Lessee's obligations under this Lease, shall
not be deemed to be assignments within the meaning of
this Lease and shall not require the prior written
consent of'City.
Lessor and Lessee contemplate that Lessee may assign
its interest herein to Sportsparks of America, Inc. at
the end of the third Lease Year of the Initial Term or
such time as the net operating cash flow in a fiscal
year from the operation exceeds the minimum annual
lease payment by a ratio of 1.2 to 1, whichever occurs
first. "Net operating cash flow" is defined as gross
income less costs of sales and operating expenses
(excluding rent payments to the City). City will
consent to such assignment.
III. INSURANCE AND INDEMNITY; CASUALTY DAMAGE
A. Insurance
Lessee shall, at its sole expense, procure during the
term of this Lease and maintain in.effect, a policy or
policies of comprehensive general liability, automobile
liability, and property damage insurance (or an
equivalent blanket polidy) in a good and solvent
insurance company or companies for the benefit of
Lessee, City, City's officers and employees, and other
parties with an insurable interest that may be
designated by City and under and by the terms of which
City and such other designed parties are protected from
and insured against any and all loss, damage or
liability of whatsoever nature arising out of or in
connection-with the use of or operations on or from the
Premises during the term hereof. The co
general liability insurance shall inclu a dram shop
liability insurance.j The limits of liab any`
(policy of general liability insurance upon they
commencement of this Lease shall not be less than THREE
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.LMILLION DOLLARS ($3,000,000) for injury or death of one/
for more persons and ONE MILLION DOLLARS ($1,000,000),'
property damage, or such greater amount based on
inflation, as may be required by City's Risk Manager.
The limits of liability on the automobile liability
insurance shall be not less than one million dollars
($1,000,000) combined single limits. Such policies
shall be written as primary policies and not
contributory with or in excess of any policies which
, City.or other insureds may carry and shall cover and
insure the City, its officers and employees, and the
other parties designated by City as additional.
,insureds., Any such policies shall provide that any
loss shall-be jointly payable to City and any other
named insureds designated by them, notwithstanding any
act or negligence of Lessee which may otherwise result
in a forfeiture of said insurance. Any such policies
shall further require thirty (30) days written notice
to City prior to cancellation. The limits of liability
covered by such policies shall be adjusted for "adequate
protection of the interests of'City and Lessee as
deemed reasonably appropriate by City on advice of
their insurance agent(s) and based upon recreation
industry standards not more frequently than once every
three (3) years. Lessee shall name Lender'as an
additional insured on any and all policies required
under this Lease as required by Lender.
Further, Lessee shall, at its sole expense, procure and
maintain a policy or policies of standard fire and
extended coverage insurance,'with vandalism and
malicious mischief endorsements, covering all
improvements to the Premises and Lessee's trade
fixtures, furnishings and equipment on the Premises in
an amount equal to one hundred percent (100 %) of the
replacement cost thereof.
Further, Lessee shall, at its sole expense, procure and
maintain a or policies of business interruption
insurance in sufficient amounts to cover the Annual
Minimum Rent hereunder for a period of not less than
one (1) year during ariy casualty loss and restoration
of the Premises while this Lease remains in force.
Further, Lessee shall procure and maintain in effect
during the term hereof a policy of worker's_
;compensation insurance covering all of its employees
employed at-the Premises.
Lessee shall, within ten (10) days of the execution of
this Lease, provide City with and file with the City
Clerk a certificate of insurance _of all such required
policies issued by the insurer or its authorized agent
on forms approved by City which shall provide evidence
of the insurance coverage required herein, including
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contractual liability coverage for the obligation
created in Section III(B) except for uninsurable
liabilities. Such certificate shall state the
provisions of the policies whereby no material change
or reduction in coverage or cancellation of said
policies shall be effective unless at least thirty (30)•
days written notice in advance of the date thereof
shall be given to City.
City and Lessee each hereby waive any and all rights of
recovery against the other, or against the employees,
agents, and representatives of the other, for loss of
or damage to such waiving party or its property or the
property of others under its control, where such loss
or damage is insured against under any insurance policy
in force at the time of such loss or damage. City and
Lessee shall, upon obtaining such insurance, give
notice to the insurance carrier or carriers that the
foregoing mutual waiver of subrogation is contained in
this Lease. The Insurer shall meet the requirements of
the City Council standards as adopted by resolution.
B. Indemnity
Lessee indemnifies and agrees to hold City harmless
-from and against any and all claims arising from
Lessee's business or from any activity, work or things
/done, permitted or suffered by Lessee in or about the
Premises, and shall further indemnify and hold harmless,
`City from and against any and all claims arising from
any breach or default in the performance of any
obligation on Lessee's part to be performed under the
'terms of this Lease, or arising from any negligence of
Lessee, or any of the Lessee's agents, contractors or
eemployees and from and against all costs, attorneys'
fees, expenses and liabilities incurred in the defense
of any such claim or any action or proceeding brought
thereon, including acts or occurrences involving the
negligence of City's; and in case any action or
proceedings be brought against City by reason of any
such claim, Lessee, upon notice from City, shall defend,
the same at Lessee's expense by counsel satisfactory to
City'.' Except as set forth below,(Lessee; as a material
part of the consideration to City, assumes all risk of,
damage to property or injury to persons in, upon or
about the Premises and the Perime arising from any
cause; and Lessee waives all claims in respect thereof
against City, except for damage or injury caused
intentionally or negligently by City or its agents or
employees.
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Notwithstanding the foregoing,
Lessee from any and all claims
the negligence or intentional
agents, contractors, employees
•
City shall indemnify
arising directly from
misconduct of City, its
or officials.
C. Exemption of City from Liability
Lessee agrees that City shall not be liable for injury
to Lessee's business or any loss of income therefrom or
for damage to the goods, wares, merchandise or other
property of Lessee, Lessee's employees, invitees,
customers or any person in or about the Premises, nor
shall City be liable for personal injury to Lessee's
employees, agents or contractors, whether such damage
or injury is caused by or results from fire, steam,
electricity, gas, water or rain or from the breakage,
leakage, obstruction or other defects of pipes;
sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures or from any other
cause relating to the physical condition or location of
the Premises, or utility.services provided thereto.
D. Casualty Dams e
1. Destruction by Risk Covered _ by Insurance. If the
Premises are totally or partially destroyed by a risk .
covered by insurance carried by Lessee, rendering the
Premises totally or partially inaccessible or unusable,
Lessee shall utilize the insurance proceeds and other
necessary funds to restore the Premises to
substantially the same condition as they were in
immediately prior to such destruction. Restoration
shall be commenced soon as reasonably practicable,
and in no event later than ninety -(90) days after such
destruction, and shall be diligently pursued.to
completion.
2. Damage Not Covered by Insurance If the improvements
to the Premises are totally or partially destroyed by a
risk not covered by, or if the replacement cost
(independent of Lessee's personal property and tenant
improvements) exceeds the limits of the insurance
coverage by more than ten percent (10 %),,then Lessee
may at its option elect to terminate this Lease by
giving written notice to City within fifteen (15) days
after determining the replacement cost. Provided, that
in such event,.this Lease shall not terminate if City
shall, within thirty (30) days after receipt of such
notice give written notice to Lessee of its election to
cause the repair and restoration of the Premises. The
party electing to cause the repair and restoration
shall, at its sole expense, provide-the funds necessary
therefor and shall thereafter promptly and diligently
repair and restore the Premises. To the same extent
required in Section III(D)1, Lessee agrees in such
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event to assign all insurance proceeds to the party
electing to make the repairs. In the event Lessee
terminates this Lease pursuant to this Section, Lessee
shall, at the option of City, demolish and clear all
improvements from the Premises. In the event City
requires Lessee to demolish and remove the
improvements, the cost of such demolition shall be-paid
from available insurance proceeds, if any.
In. the event of termination when insurance proceeds are
insufficient, such proceeds as are available shall be
divided between City and Lessee, with Lessee receiving
a proportionate amount of the proceeds in the ratio
which the unexpired portion of the Term of this Lease
bears to the total Term of this.Lease, and City shall
receive the balance of such insurance proceeds.
3. Replacement of Lessee's Property In the event of the
damage or destruction of improvements located on the
Premises not giving rise to a termination of this
Lease, Lessee shall, at its own expense, replace and
repair all Lessee's trade fixtures, equipment,
machinery, furnishings, furniture and inventory as soon
as possible to permit the prompt continuation of
Lessee's business from the Premises.
4. Damage Near End of Lease Term In the event more than
fifty percent (50 %) in value of the improvementsto the
Premises are totally destroyed during the last six (6)
months of the Lease Term, Lessee and City shall each
have the option to terminate this Lease on written
notice to the other of exercise thereof within thirty
(30) days after such destruction.
5. Abatement of Rent In the event that a partial damage
or destruction of the improvements on the Premises
occurs and this Lease is not terminated, there shall be
no abatement of rent for a period of one (1) year (the
period of the business interruption insurance, which
Lessee is required to maintain pursuant to Section
III(A)), and Lessee shall continue to utilize the
improvements for the operation of its business to the
extent it may be practicable to do so. If, after and
despite diligent effort, Lessee is unable to fully
repair and restore the Premises during said one year
period, the minimum rent shall abate from the end of
the one year period until the improvements-on the
Premises are fully repaired or restored, but only by
that proportion that the unusable part of the
improvements bears to the whole thereof.
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IV.
A. Total Taking
If the entire Premises are taken for any public or
quasi- public use under any statute by right of eminent
domain, or by purchase by public authority in lieu
thereof, this,Lease shall terminate as of the date that
possession of the Premises is taken by the public
authority or Lessee is deprived of its practical use of
the Premises, whichever date is earlier. The net
proceeds of the award shall be distributed in the
following order of priority:
1. City shall receive that portion of the award
which shall constitute compensation for the
value of its fee interest in the Premises as
encumbered by this Lease.
2. If there are any outstanding leasehold
mortgages on the Premises, the leasehold
mortgagees shall receive whatever amounts are
due under said leasehold mortgages.
3. Lessee shall be compensated for its interest
in the Premises, including direct loss of
investment in improvements constructed on the
Premises, the cost of removal of any fixtures
and equipment, and the loss of the economic
benefit of Lessee's leasehold estate. '
4. The remainder of the award, if any, shall be
divided between City and Lessee.
B. Partial Taking
If any portion of the Premises is taken for any public
or quasi- public use under, any statute by right of
eminent domain, or by purchase by public authority in
lieu thereof, and if the taking or purchase does not,
in Lessee's reasonable judgment, substantially impair
the operation of the facilities, then:
1. The Lease shall continue in full force and
effect, except.that the Annual Minimum Rent
(but not the Percentage Rent) shall be
reduced in the same proportion as the land
area of the Premises taken bears to the total
area of the Premises immediately prior to
such taking; and,
2. The net proceeds of the award shall be
allocated in the following order of priority:
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a. the payment of the costs of prompt
restoration by Lessee, subject to
the rights of any leasehold
mortgagees, of the improvements
located on the Premises to
substantially the same character
and condition as prior to such
taking, to the•extent physically
possible;
b. compensation to City for the value
of its fee interest in the portion
of the Premises taken as encumbered
by this Lease;
C. the payment of all amounts due to
any leasehold mortgagee as a result
of such taking;
d. compensation to Lessee for its
interest in the portion of the
Premises taken, including without
limitation, the value of the
leasehold estate, loss of
investment in improvements
constructed on the Premises, the
cost of removal and reinstallation
of any fixtures and equipment, and
the loss of the economic benefit of
that portion of Lessee's leasehold
estate; and
e. the remainder.of the award, if any,
shall be divided equally between
City and Lessee.
If any portion of the Premises is taken for any public
or quasi - public use under any statute by right of
eminent domain, or by purchase-by public authority in
lieu hereof, and if the taking or purchase, in Lessee's
reasonable judgment, renders it impractical to operate
the remainder of the Premises, or substantially impairs
the operation of Lessee's business thereon, Lessee
shall have the option of terminating this Lease without
further liability hereunder. If Lessee so elects to
terminate, it shall do so by written notice to City no
later than sixty (60) days after the date when
possession of (a portion of) the Premises shall be
taken by the condemnor or Lessee is deprived of its
practical use thereof, which notice will specify the
effective date of such termination (no earlier than
sixty (60) days after the date of said notice). If
Lessee does not elect to terminate this Lease, the
provisions of Section IV(B) shall govern.
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C. Temporary Taking
If all or a portion of the Premises shall be taken for
any public or quasi- public use on a temporary basis,
then:
1. This Lease shall continue in full force and
effect without reduction of the Annual
Minimum Rent and Percentage Rent; and
2. Lessee shall be entitled to claim, recover
and retain any award with respect to such
taking, except that if such taking shall be
for a period extending beyond the expiration
of the term of the Lease, as the Lease may
have been extended, City shall be entitled to
receive such portion of the award as shall be
attributable to the period occurring after
such expiration.
In the event, however, that any such taking on a
temporary basis (or any other act of God, war, civil
disorder, prolonged strike, adverse governmental action
or other cause beyond the control of Lessee, rendering,
in Lessee's reasonable judgment, the Premises
impractical to operate, or substantially impairing the
operation of Lessee's business thereon) continues for a
period in excess of one (1) year, then Lessee shall
have the right to tdrminate this Lease upon written
notice to City, without further liability hereunder.
D. Miscellaneous
1. City and Lessee each agree to promptly notify
the other party, and any leasehold mortgagee,
upon receipt of any notice from a condemning
authority or agency expressing an intention
to commence a taking or condemnation of any
part of the Premises. The foregoing shall
include not only a formal service of legal
process received by either City or Lessee,
but also any preliminary indication of such
intent. Thereafter, City and Lessee shall
keep each other and any leasehold mortgagee
fully informed as to all aspects of such
proceedings and /or negotiations.
2. City, Lessee, and all leasehold mortgagees
shall each have the right to represent their
respective interests in each proceeding or
negotiation with respect.to a taking or .
intended taking and to make full proof of
their respective claims. No agreement,
settlement, sale, or transfer to or with the
condemning authority shall be made without
27
the consent of City, Lessee and each
leasehold mortgagee. City and Lessee each
agree to execute and deliver to the other any
instruments that may be required to
effectuate or facilitate the provisions of
this Lease relating to condemnation.
3. So long as Lessee is not in default under the
terms of this Lease, or has commenced'and is
diligently proceeding to cure such default in
accordance herewith, City agrees to forego
and waive its legal right to acquire by
eminent domain the estate conveyed by this
Lease.
4. A leasehold mortgagee shall have the right,.
at its own expense, to participate in any
proceedings involving a total or partial
taking of the Premises. Leasehold mortgagees
shall have the right to receive proceeds
otherwise payable to Lessee pursuant to
Sections IV(A) and IV(B) above to be paid
towards the satisfaction of any outstanding
obligations secured by a leasehold mortgage
on Lessee's leasehold interest.
V. LEASEHOLD FINANCING; RIGHTS OF LEASEHOLD LENDER
A. Mortgage of Lease
1. Lessee shall have the right to encumber at any time,
and from time to time, the estate created by this Lease
(but not the City's interest in the Premises) by a
mortgage, deed of trust or other security instrument,
including, without limitation, an assignment of the
rents, issues and profits from the Premises, to secure
repayment of any loan, and associated obligations, to
Lessee from an institutional lender (which, for
purposes of this Section, shall mean any national or
state bank, foreign bank agency licensed in California,
federal or state savings and loan association, trust
company, insurance company, educational institution,
pension, retirement, or welfare fund, charitable
foundation, real estate investment trust or any person,
firm, or corporation engaged in the commercial finance
business or other mortgagee approved in writing by
City, such approval not to be unreasonably withheld).
Upon request, City shall cooperate with Lessee and
promptly execute appropriate documents that may
reasonably be required by a• prospective Lender
certifying as to whether the leasehold mortgage
complies with the restrictions in this paragraph.
28
2. •In the event Lender requires any modification to the
provisions of this Section in order to secure its loan,
City agrees not to unreasonably withhold consent to
such modifications-so long as the interests of City are
not materially adversely affected thereby.
B. Estoppel Certificates
Lessee and City,shall, without charge, at any time and
from time to time within fifteen (15) days of.the
receipt of the request'of the other party or•the Lender
certified by instrument duly executed and acknowledged:
1. That the Lease is unmodified and in full
force and effect, or if there have been any
modifications, that the same are in full
force and effect as modified and stating the
modifications;
2. Whether or not there are then any known
existing setoffs or defenses against the
enforcement of any of the agreements, terms,
covenants or conditions hereof or any
modifications hereof upon the part of any
party to be performed or complied with and if
so, specifying the same;
3. The dates, if any, to which the Annual
Minimum Rent, Percentage Rent, and Additional
Rent have been paid, and a statement as to
the advance payment of such.sums, if any;
4. The date of expiration of the current Term of
this Lease;
5. The amount of the Annual Minimum Rent,
Percentage Rent, and Additional Rent, then
payable under this Lease; and,
6. Such other matters as may reasonably be
requested.
Any such certificate may be relied upon by any party to
whom the certificate is directed. However, no party
shall be estopped thereafter from asserting that a
default has occurred, if at the time of making of the
aforesaid certificate, such party had no knowledge of
such default.
29
0 a
VI. DEFAULTS, REMEDIES, AND TERMINATION
A. Lessee's Default
The occurrence of any one of the following shall
constitute an event of default by Lessee:
1. Failure to pay any installment of Annual
Minimum Rent, Percentage Rent, and any
r• Additional Rent when due if the failure .
continues for a period of ten (10) days after
such payment is due and payable.'
2. Abandonment of the Premises (failure to
operate the facilities for thirty (30)
consecutive days without the prior written
consent of City shall be deemed an
.abandonment except in the event of an
occurrence described in Section III(C) or
Section V or except during maintenance
intervals as provided in Section II(B)
above) .
3. Failure to provide service to the public in
accordance with the current approved Facility
Operation Plan, failure to maintain the
landscaping in conformance with the
Maintenance Guidelines or to perform any
other provision of this Lease if the failure
to perform is not cured within thirty (30)
days after written notice has been given by
City to Lessee. If the default cannot
reasonably be within thirty (30) days,
then it shall not be deemed a default of this
Lease if Lessee commences to cure the default
within said thirty (30) day period and
thereafter diligently and in good faith
continues to cure the default.
4. The interest or estate of Lessee under this
Lease shall be transferred to, passed to or
devolve upon, by operation of law, any other
person, firm or corporation except pursuant
to Section II(G), Section IV, or Section V.
5. The levy of any attachment or execution or
the appointment of any receiver or the
execution of any other process, of any court
which directly or indirectly substantially
interferes with Lessee's operations under
this Lease and which attachment,
execution, receivership, or other process of
such court (or the effect thereof) is not
vacated, dismissed or set aside within a
period of one hundred twenty (120) days.
30
0 . a
6. Lessee shall become insolvent and shall take
the benefit of any present or future
insolvency statute by making a general
assignment for the benefit of creditors, - or
filing a voluntary petition in bankruptcy or
a petition or answer seeking an arrangement
for reorganization or the readjustment of
indebtedness under the•Federal bankruptcy
laws or under any other law or statute of the
United States or of any state law, or consent
to the appointment of a receiver, trustee or
liquidator of all or substantially all of
their property, if same is not vacated,
dismissed or set aside within a period of
sixty (60) days.
7. By order or decree of a court, Lessee shall
be adjudged bankrupt, or an order be made
approving a petition filed any of-the
creditors, seeking the readjustment of its
indebtedness under Federal bankruptcy laws,
or any laws or statutes of the United States,
or any state thereof, if same is not vacated,
dismissed or set aside within a period of
ninety (90) days.
S. A petition under any part of the Federal
bankruptcy laws or an action under any
present or future insolvency law or statute
shall be filed against Lessee and shall not
be dismissed within one hundred twenty (120)
days after the filing thereof.
9. Any lien is filed against City's interest in
the Premises because of any act or omission
of Lessee and is not removed within one
hundred twenty (120) days.
10. Any other event described in this Lease as
"default" or as giving Lessor the right to
terminate this Lease.
B. Notice of Default
Notices given under this Section shall specify the
alleged default and the applicable provisions of this
Lease and shall demand that Lessee perform the
provisions of this Lease or pay the rent or other sum
that is in arrears, as the case may be, within the
applicable period of time, or quit the Premises. No
such notice.shall be deemed a forfeiture or termination
of Lessee's rights under this Lease except as provided
in Section VI(C). City shall send copies of all
notices given under this Article to Lender at the
address provided to City by Lessee.
31
0
C. City's Remedies
Subject to the provisions of Section V,
the following remedies if Lessee commits
These remedies are not exclusive; they a
in addition to any remedies now or later
law.
•
City shall have•
a default.
re cumulative
allowed by
1. City may continue Lessee's interest in the
Lease and Premises in full force and effect
and City shall have the right to collect any
Annual Minimum Rent, Percentage Rent or
Additional Rent (collectively referred to
hereinafter as "Rent ") payable to City when
due. During the period Lessee is in default,
unless Lessee is.diligently proceeding to
cure the default,.City may enter the Premises
and relet them or any part of them to third
parties for City's account. Lessee shall be
liable immediately to City for all costs City
incurs in reletting the Premises. Reletting
can be for a period shorter or longer than
the remaining term of this Lease. Lessee
shall pay to City the Rent due under this
Lease on.the date such-Rent is due-which
payment sha•11 be adjusted by the amount of
Rent City receives from any reletting. No
act of malfeasance, effort to relet or any
other act by City allowed by this paragraph
shall terminate Lessee's interest in the
Lease unless City notifies Lessee that City
elects to terminate Lessee's interest in this
Lease.
2. City may terminate Lessee's right to
possession of the Premises at any time while
an-event of default is outstanding, provided
'that Lessee is not diligently proceeding to
cure such default, by giving notice to Lessee.
(with a copy to Lessee's Lender of whose name
and address City shall have been given
notice) specifying the default and a date
consistent with the provisions of Section
V(A) but not less than ten (10) days after
the giving of such notice on which Lessee's
interest in this Lease shall terminate, and
unless Lessee or Lessee's Lender shall cure
such default within the period of time
allowed therefor, Lessee's interest in this
Lease shall terminate on the date specified
therein as fully and completely as if such
date were the date originally fixed for the
expiration of the Term and Lessee shall then
quit and surrender the Premises. No act by
City, other than giving such notice to
32
Lessee, shall terminate Lessee's interest in
this Lease. On termination, City shall have
the rights described in Section VI(D).
3. City shall have the right to have a receiver
appointed to collect Rent and conduct
Lessee's'business while an event of default
is outstanding provided Lessee's has not
commenced to cure and is not diligently
proceeding to cure said default. Neither the
filing of a petition for the appointment of a
receiver nor the appointment thereof shall
constitute an election by City to terminate
this Lease.
4. City may, at any time after Lessee commits a
default, cure such default at Lessee's
expense. If City at any time, by reason of
Lessee's default, pays any sum or does any
act that requires the payment of any sum, the
sum paid by City shall be due immediately
from Lessee to City at the time the sum is
paid, and if paid at a later date, shall bear
interest at the rate of two (2) percent over
the Federal Reserve Bank of San Francisco
prime rate per annum from the date the sum is
paid by Agency until City is reimbursed by
Lessee.
D. City's Termination Rights Upon Lessee's Default
On termination of Lessee's interest in this Lease under
the provisions of Section VI(D), City has the right to
receive from Lessee:
1. The worth, as established by a judicial award
of the unpaid rent that has been earned at
the time of termination.
2. The worth, at the time
of the amount by which
would have been earned
termination until the
the amount of the loss
proves could have been
of the judicial.award,
the unpaid rent that
after the date of
time of award, exceeds
of rent that Lessee
reasonably avoided.
3. The worth, at the time of the judicial award,
of the amount by which the unpaid rent for a
period of three (3) years after the time of
the award or the balance of the Term after
the time of the award, whichever is less,
exceeds the amount of the loss of rent that
Lessee proves could have been reasonably
avoided.
33
. W - 0
4. Any other amount and judicial costs necessary
to compensate City for all detriment
proximately caused by Lessee's default.
5. "The worth, at the time of the award" as used
in paragraphs 1 and 2 is to be computed by
allowing interest at the rate of two (2)
percent over the Federal Reserve Bank of San
Francisco prime rate. "The worth, at the
time of the award," as referred to in
paragraph 3 above is to be computed by
discounting the amount in accordance with
accepted financial practice at the discount
rate of the Federal Reserve Bank of San
Francisco at the time of the award, plus one
percent (1 %) per year.
E. City's Default
City shall be in default of this Lease if it fails or
refuses to perform any provision of this Lease that it
is obligated to perform if the failure to perform is
not cured within thirty (30) days after written notice
of default has been received by City from Lessee. If
such default cannot be reasonably cured within thirty
(30) days, City shall not be in default of this Lease
if City commences to cure the default within the thirty
(30) day period and thereafter diligently and in good
faith continues to cure the default. Lessee at any
time after City commits a default can cure the.default
at City's expense. If Lessee at any time by reason of
City's default pays any sum or does any act that
requires payment of any sum, the sum paid by Lessee
shall be due immediately from City to Lessee at the
time the sum is paid, and if paid at a later date shall
bear interest at the rate of two (2) percent over the
Federal Reserve Bank of San Francisco prime rate per
annum from the date the sum is paid by Lessee until
Lessee is reimbursed by City.
F. Effect of Waiver of Default
No consent or waiver express or implied by either party
to or of any breach of any covenant, condition or duty
of the other party shall be construed as a consent or
waiver to or of any other breach of the same or any
other covenant, condition or duty unless in writing
signed by the aggrieved party. No delay or omission in
the exercise of any right or remedy of either party on
any default by the other party shall impair such right
or remedy or be construed as a waiver. The receipt and
acceptance by City of delinquent rent shall not
constitute a waiver of any other default but shall
constitute only a waiver of timely payments for that
particular rent payment involved.
34
G. Settlement of Disputes
Any controversy or claim arising out of or relating to this
Lease Agreement, or the breach thereof, shall be settled by
arbitration, alternative dispute resolution, mediation or
JAMS as agreed to in advance by the parties. The award
rendered by the Arbitrators shall be final and binding, and
judgement upon it may be entered in any Court having
jurisdiction hereof.
The parties to this Agreement consent to the use of
discovery proceedings to the full extent provided for under
the California Code of Civil Procedure, Section 1283.05, in
the event of arbitration. Such discovery proceedings may
include, but not be limited to, depositions,
interrogatories, requests for admission, and orders for the
production and examination of documents, person, and things.
In the event of any dispute arising over the scope or nature
of discovery, the arbitrator(s) shall set the terms and
conditions of discovery. Such orders shall be binding on the
parties.
VII. MISCELLANEOUS PROVISIONS
A. Notices, Demands and Communications
Formal notices, demands and communications between City and
Lessee hereunder shall be sufficiently given if dispatched
by registered or certified mail, postage prepaid, return
receipt requested, to the following principal offices of
City and Lessee:
LESSOR
City of Poway
13325 Civic Center Drive
Poway, CA 92064
LESSEE
Kajima Engineering and Construction, Inc.
200 S. Los Robles Avenue, Suite 400
Pasadena, CA 91101 -2431
LESSEE
Sportsparks of America, Inc.
6901 North Casa Grande Highway
Tucson, AZ 85743
Such written notices, demands and communications may be sent
in the same manner to such other addresses as either party
may -from time to time designate by mail as provided in this
Section VII(A). Such notices, etc. shall be deemed received
within forty- eight (48) hours'
35
f
•
after mailing.
B .
C .
D.
Nonliability of City officials and Employees
No member, official or employee of City shall be
personally liable to Lessee in the event of any default
or breach by City or for any amount which may become
due to Lessee under the terms of this Lease.
Enforced Delay: Extension of Time of Performance
In addition to specific provisions of this Lease,
performance by either party hereunder shall not be
deemed to be in default where delays or defaults are
due to war, insurrection, strikes, lockouts, riots,
floods, earthquakes, fires, casualties, supernatural
causes, acts of the public enemy, epidemic, quarantine
restrictions, freight embargoes, lack of
transportation, governmental restrictions or priority,
litigation, usually severe weather, inability to secure
necessary labor, materials, or tools, delays of any
contractor, subcontractor, or supplier, acts of the
other party, acts or failure to act of any or
governmental agency or entity (other than the acts or
failure to act of City) inability to obtain adequate
water supply to maintain the Premises in accordance
with the Maintenance Guidelines; where such inability
is caused by drought- induced water restrictions or any
other causes beyond the reasonable control or without
the fault of the party claiming an extension of time to
perform. Inability of Lessee to obtain financing shall
not be grounds for an extension of time. An extension
of time for any-such cause shall only be for the period
of the enforce delay, which period shall commence to
run from the time of the commencement of the cause.
If, however, notice by the party claiming such*
extension is sent to the other parties more than thirty
(30) days after the commencement of the cause, the
period shall commence to run only thirty'(30) days
prior to the giving of such notice. Times of
performance under this Lease may also be extended in
writing by the parties.
Covenant Not to Compete
During the term of this lease, City agrees that prior
to operating or permitting to be operated in any other
public park in the City.in competition with Lessee's
contemplated use of the Premises (a) a commercial
softball business for adult softball leagues, adult
softball tournaments or other comparable commercial
adult softball events or (b) an outdoor commercial
volleyball business for adult volleyball leagues, adult
volleyball tournaments or other commercial volleyball
adult events, City shall orally and in writing notify
36
s �
E.
F.
G.
Lessee and provide Lessee an opportunity to accommodate
the proposed activity on the Premises. If Lessee
declines to do so, or fails to respond within ten (10)
days after receipt of notice from City, City shall be
free to accommodate the activity without regard to the
restriction in this Section VII(D). Lessee agrees that
City shall have the unrestricted right to arrange and
operate other children's /youth softball, volleyball and
related activities in the City without the prior
consent of Lessee.
In addition to the foregoing, City agrees that prior to
operating in any other public park in the City any
Group Outing (as such term is defined below) for which
the City is providing recreational programming and
event planning (including, without limitation, catering
services and organization, and supervision of
recreational activities), City shall orally and in
writing notify'Lessee and provide Lessee an opportunity
to accommodate the proposed activity on the Premises.
If Lessee declines to do so or fails to respond to City
within ten (10) days after receipt of notice from City,
City shall be free to accommodate the activity without
regard to the restriction set forth herein. "Group
Outing" shall mean and refer to corporate picnics,
private parties, and private recreational functions,
-but shall exclude all City- sponsored activities and
events on all City -owned property. This restriction
also excludes private individuals, groups or entities
who intend to provide their own recreational
programming and /or catering services in connection with
the use of a public park in the City.
Approvals by City
Except as elsewhere specifically provided herein,
wherever this Lease requires City to approve any
contract, document, plan, specification, drawing'or-
other matter, such approval shall not be unreasonably
withheld.
Litigation Expenses
In any litigation arising out of any disputes regarding
this Lease by either party, the prevailing party shall.
be entitled to recover its reasonable litigation
expenses, including attorneys' fees and costs.
Severability
If any provision of this Lease is held to be
unenforceable or invalid by a court of competent
jurisdiction, then the remaining provisions of this
Lease shall not be affected thereby and shall remain in
full force and effect.
37
H .
I .
J .
1 6
Further Assurances
rl
Each of the parties hereto agree to do any further acts
which may be reasonably necessary to carry out the
purposes of this Lease. In connection therewith, the
parties hereto agree that within a reasonable time
after execution of this Lease, they each will execute a
memorandum of this Lease to be recorded in the County
Recorder's office of the County of San Diego.
Notwithstanding anything contained in the Joint Venture
Agreement between Kajima and Sportsparks, each Joint
Venturer shall be jointly and severally liable for any
and all obligations under this Lease Agreement. .
Entire Agreement, waivers and Amendments
This Lease includes 40 pages and one Exhibit, which
constitutes the entire understanding and agreement of
the parties.
This Lease integrates all of the terms and conditions
mentioned herein or incidental hereto, and supersedes
all negotiations or previous agreements between the
parties with respect to all or any part of the subject
matter hereof.
All waivers of the provisions of this Lease must be in
writing and signed by the appropriate officials of both
parties, and all amendments hereto must be in writing
and signed by the appropriate officials of both
parties.
Nondiscrimination
Lessee herein covenants by and for itself, its heirs,
executors, administrators, and assigns, and all persons
claiming under or through it, and this Lease is made
and accepted upon and subject to the following
conditions: That there shall be no illegal
discrimination against or segregation of any person or
group of persons, on account of race, color, creed,
religion, sex, sexual preference, marital status,
national origin, or ancestry, in the leasing,
subleasing, transferring, use, occupancy, tenure, or
enjoyment of the Premises nor shall Lessee itself, or
any person claiming under or through it, establish or
permit any such practice or.practices of discrimination
or segregation with reference to the selection,
location, number, use, or occupancy, of licensees,
tenants, lessees, sublessees, subtenants, or vendees in
the Premises.
The foregoing provisions shall be binding upon and
shall obligate City and Lessee and any transferees or
38
s �
assignees of either of them.
R. Time of Essence
Time is of the essence of each provision of this Lease.
L. Successors
This Lease shall be binding on and inure to the benefit
of the parties and their successors except as may
otherwise be provided herein.
M. Counterparts ,
This Agreement may be signed by the parties in several
counterparts and each of the signature pages shall be
deemed to be an original copy and combined shall be a
document binding on all parties.
VIII. TIME FOR ACCEPTANCE OF LEASE BY'CITY
This Lease, when by Lessee and delivered to
City, must be authorized, executed, and delivered by
City within thirty (30) days after the latest date of
signature by Lessee or this Lease shall be void, except
to the extent that Lessee shall consent in writing to
further extensions of time for the authorization,
execution and delivery of this Lease.
The date of this Lease shall be the date when the Lease
shall have been signed by City which date is the date
set forth next to the signature on behalf of City.
39
THE CITY OF POWAY
Date October 27 , 1992
By
jll� . Bowersox, City Manager
ATTEST:.
Marjo ie K. Wahlsten, City Clerk
APPROVED AS'TO FORM:
Step n . Eckis, City Attorney
LESSEE
SPORTSPARKS /KAJIMA, A CALIFORNIA JOINT VENTURE
Date `/CBS / gyp 1992
By
James Hilkemeyerf President
A Joint Venturer
By L --- "
Koji Hayashi Exec. Vice Pres.
A Joint Vent rer
40
MAINTENANCE GIIIDELINES
41
EXHIBIT B
MAINTENANCE GUIDELINES
TABLE OF CONTENTS
SPECIAL CONDITIONS
1.
DESCRIPTION OF PROJECT AND INTENT .......................1
2 .
OBJECTIVES ................ ..............................1
3.
SCOPE OF WORK ..... ............................... .....2
4.
WORKING HOURS .............. ..............................3
5.
LEVEL OF MAINTENANCE ...... ..............................3
6.
SUPERVISION OF CONTRACT ... ..............................3
7.
SPECIFICATIONS ............ ..............................3
8.
COMPLIANCE WITH APPLICABLE LAWS .........................3
9.
EXAMINATION OF SITE WORK ... ..............................4
10.
QUALITY OF WORK AND MATERIAL ............................4
11.
WORKMANSHIP AND SUPERVISION .............................4
12.
RESPONSIBILITY FOR WORK ... ..............................5
13.
EQUIPMENT ............:.... ..............................5
14.
SAFETY REQUIREMENT ........ ..............................5
15.
STREET CLOSURES, DETOURS, BARRICADES ....................5
16.
RECORDS ...........*...... .......... ......................6
17.
EMERGENCY SERVICES ........ ..............................6
18.
SPECIALTY OPERATIONS ...... ..............................6
19.
SCHEDULES ................. ..............................6
20.
PERFORMANCE DURING INCLEMENT WEATHER ....................7
21.
UNDERGROUND EXCAVATIONS ................................... 7
22.
ACTS OF GOD, VANDALISM, AND LOSS DUE TO THEFT
RESPONSIBILITIES........... ..........................7
TECHNICAL MAINTENANCE SPECIFICATIONS
I. GENERAL LANDSCAPE /SITE MAINTENANCE REQUIREMENTS .......... 8
1. NATURAL AREA SLOPE' MAINTENANCE ..........................9
2. DRAINAGE FACILITIES ....... ..............................9
3. IRRIGATION MAINTENANCE .... .............................10
4. TREE MAINTENANCE .......... .............................12
A . Pruning .............. .............................12
B: Watering ............. .............................12
C. Fertilizer /Pest Control.... .....................13
D. Staking and Guying ... .............................13
5. SHRUB MAINTENANCE ......... .............................14
A . Pruning .............. .............................14
B. Fertilizer /Pest Control ...........................14
6. VINES MAINTENANCE ......... .............................14
7. GROUND COVER.... ........ .............................15
A. Trimming ........................ ................15
B. Fertilizer ............ .............................15
C. Pest Control .. ...... .............................15
D. Renovation / Replacements ...........................15
8 . TURF...... .............. .............................16
A. Watering .. ........... .............................16
B. Mowing /Edging.. .... .............................16
C. Renovation/ Verticut .. .............................16
D. Fertilizing .......... .............................17
E. Pest Control ......... .............................17
9.
HYDROSEED ......... i .. .............................17
10.
PEST CONTROL .............. .............................17
11.
WEED CONTROL .............. .............................18
12.
FERTILIZATION ............. .............................20
13.
REPLACEMENT OF PLANT MATERIAL ..........................22
14.
NEW LANDSCAPING ............ .............................22
15.
CLEANUP ..............
23
16.
HARDSCAPE MAINTENANCE ..... .............................23
17.
GENERAL GROUNDS POLICING .. .............................24
18.
BALLFIELD MAINTENANCE...... .........................
24
A. • ..................... ..................:..........25
.......... .... ... ... .............25
B. General. � �
C. Preparation of Ball Diamond asDoneby
Concessionaire's Personnel ......................25
D . Watering .............. .............................26
E. Dragging .................. ..... ................26
F. ' Repair of Home Plate and Pitcher's Mound Areas ....
27 °
G. Semi - Annual Special Maintenance ...................
27
II. LIGHTING AND OTHER ELECTRICAL SYSTEM MAINTENANCE ....... 27
III. WALLS, FENCES, AND GATES ... ............................28'
IV. BUILDINGS AND ANCILLARY STRUCTURES ..................... 29
V. MAINTENANCE FREQUENCY SUMMARY ..........................30
VI. STANDARD MATERIALS ........ .:...........................31
II
L
CITY OF POWAY
SOUTH POWAY SPORTS PARR
SPECIAL CONDITIONS
1. DESCRIPTION OF PROJECT AND INTENT
The intent of these specifications is to provide a full and
complete maintenance by the Lessee at South Poway Sports
Park, herein described, and that such park be kept in a
clean, aesthetically pleasing, healthy, vigorous, and well -
kept•state at all times.
2. OBJECTIVES
The objectives set forth herein are general results to
be achieved by the maintenance methods set forth in the -
Technical Maintenance Specifications.. The purpose of
these objectives is to allow the Lessee to assist in
interpreting the long -range appearance of the
landscaped areas and to- assure that the design criteria
and objectives established by the City are being met.
When it is obvious that the methods specified are not
adequate to meet the general appearance guidelines,
that additional frequencies or special pruning are
required, the Lessee shall adjust the schedule
accordingly, at no cost to the City.
The landscape goal for the South Poway Sports Complex
is to visually unify the various land uses and maintain
a standard of quality for community appearance and
safety. This will protect and enhance real estate
values, as well as intensifying the image of the City
of Poway as a pleasant and attractive place to live.
The overall effect of the shrub and tree plantings is
to establish an informal, natural effect. Therefore,
pruning and trimming practices should reflect this
natural feeling. Avoid pruning activities that would
create a formal hedge or topiary effect. Ground cover
areas should have sharply defined edges when meeting
the hardscape.
High visibility areas such as medians, parkway and
slope planting adjacent to streets, paths, and
sidewalks shall have a well groomed appearance. Dead
wood, branches, leaves, and flowers should be removed
1
from the plant material and surrounding area as soon as
practical after they occur. The maintenance personnel
should be constantly aware of the overall general
appearance of these critical areas.
Plant material (excepting ground covers) shall be
allowed to take on an informal edge whenever possible,
when meeting structures, masonry, or other landscape
elements.
Plant material has been selected for low water
requirements. In the event of a water shortage, a
gradual transition from normal water application to
reduce water application shall take place over a three
(3) to four (4) month period. Water only as required
to allow penetration into the soil and avoid excess run
off. Once plant material'is established, water only to
maintain healthy plant growth.
All.playing fields are to be maintained in aesthetic
and safe conditions. Water cycles will need to be
monitored to allow the turf areas not to be in a
condition to allow patron hazards. Playing fields will
also need to be monitored closely to abate all soil
depressions caused by rodents and users.
3. SCOPE OF WORK FOR LESSEE
A. Furnish all labor, equipment, materials, and
supervision to perform maintenance'as described
herein including, but not limited to, the
following:
1. Landscape /Site
a. Weeding, cultivating and brush control
both mechanically and with chemicals
b. Fertilizing
C. Shrub trimming, pruning,.training
d. Tree pruning and staking
e,. Irrigation control
f. General pest and rodent control
g. Mowing, verticutting,
h. General litter control and grounds policing
i. Irrigation system maintenance and repair
j. Plant replacement ,
k. Hardscape cleaning
1. overseeding
M. Access roadway clearance and visibility
maintenance
n. General drainage structure and system
maintenance
o. Ballfield preparation
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2. Lighting and.Other Electrical
Systems .
3. Walls, Fences, and Gates
4. Buildings and Ancillary Structures
4. WORKING HOURS
Normal working hours for maintenance purposes shall be an
eight -hour day between the hours of 7 a.m. and 6 p.m.,.
Monday through Friday. Care shall be made as to not making
excessive noise adjacent to residences before 8 a.m.
S. LEVEL OF MAINTENANCE
All work shall be performed in accordance with the
maintenance standard, as stated in the enclosed maintenance
specification description. Standards and frequencies may be
modified from time to time as deemed necessary by the City
for the proper maintenance of the site.
6. SUPERVISION OF CONTRACT
A. All work shall meet
Poway. There shall
Lessee and the City
progress and to est
monthly maintenance
writing to the City
with the approval of the City of
be a monthly meeting with the
representative to determine
3blish areas needing attention. A
schedule will be submitted in
at the beginning of each month.
B. Any specific problem -area which does not meet the
conditions of the specifications set forth herein shall
..be called to the attention of the Lessee.
7. SPECIFICATIONS
These specifications are intended to cover all labor,
material and standards of architectural, electrical,
landscaping,.and mechanical workmanship to be employed
in the work called for in these specifications or
reasonably implied by terms of same. Work or materials
of a minor nature which may not be specifically
mentioned, but which may be reasonably assumed as
necessary for the completion of this work shall be
performed by the Concessionaire as if described in the
specification.
S. COMPLIANCE WITH APPLICABLE LAWS
The Lessee shall have in his possession and be familiar with
all safety regulations issued by the State Division of
.Industrial Safety and shall comply with these and all other
applicable laws, ordinances, and regulations governing
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9 .
10.
11.
Affirmative Action programs and health and safety. The
Leesee shall provide all safeguards and protective devices
and take any other action necessary to protect the health
and safety of employees on the job and safety of the public
in connection with the performance of the work required by
this contract.
Nothing in these standards shall be construed to relieve the
Lessee from compliance with all applicable laws, whether
municipal, county, state, or federal.
EXAMINATION OF BITE AND WORK
City makes no representation about the order or condition of
the work area nor does the City warrant that the work area
will be free from defects, either apparent or hidden, at the
commencement of, or at any time during the term of the
agreement. Lessee must examine the location, physical
conditions, and surroundings of the work area and judge for
themselves the extent to which these factors will influence
the performance of the contract work. By entering into the
agreement, Lessee shall be deemed to-have agreed to accept
the condition of the work area in its "as is" condition with
the intent to upgrade or modify existing deficiencies to the
maintenance specifications.
QUALITY OF WORK AND MATERIAL
All material and equipment furnished by the.Lessee shall be
new, reasonable grade, and free from material defects and
imperfections, unless otherwise hereinafter specified.
Workmanship shall be in accord with the best standard
practices. Both materials and workmanship shall be subject
to the approval of the City of Poway. All materials used
shall be approved in advance by the City of Poway. Such
approval shall not be unreasonably withheld.
WORKMANSHIP AND SUPERVISION
A. The Concessionaire shall provide a work force
sufficient to complete the work as.it is specified.
B. Work shall be performed by competent and experienced
workers. Electrical, building, plumbing, irrigation,
mechanical maintenance and repairs shall be performed
by workers skilled and experienced in the appropriate
systems.
C. The work force shall include a skilled, experienced and
competent supervisor who shall responsible for
adherence to the specifications.
D. Pesticide operations, where required, be
performed by a California State Licensed pest control
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operator. The Lessee shall be responsible for
compliance with all local, state, and federal laws and
regulations regarding pesticide usage.
E. All personnel working at the park shall be of good
character, neat appearance, and in appropriate dress as
approved by the City of Poway. All personnel shall
wear identification badges or patches.
12. RESPONSIBILITY FOR WORK
The Lessee shall be responsible for all damages to people
and /or property that occur as a result of the fault or -
negligence of said Lessee or his employees in connection
with the performance of the work.
13. SAFETY REQUIREMENT
A. All work performed under this contract shall be
performed in such a manner as to provide maximum safety
to the public and where applicable, comply with all
safety standards required by CAL -OSHA. The City of
Poway reserves the right to issue restraint or cease
and desist orders to the Lessee when unsafe or harmful
acts are observed or reported relative to the
performance of the work under this contract.
B. The Lessee shall maintain the park to be reasonably
free of hazards to - persons and /or property resulting
from his operations.
14. STREET CLOSURES, DETOURS, BARRICADES
A. Warning signs, lights and devices shall be installed
and displayed in conformity with the "Manual of Warning
Signs, Lights and for use in performance of
work upon highways issued by the State of California,
Department of Transportation and as directed by City
staff.
B. If the Lessee fails to provide and install any of the
signs or traffic control devices required hereby or
ordered by the City staff, staff may cause such signs
or traffic control devices to be placed by others,
charge the costs therefore against the Lessee, and
deduct the same from the next progress payment.
15. RECORDS
A. The Lessee shall keep accurate records concerning all
of his employees or agents and provide the City with
names, addresses, and telephone numbers of employees to
be called in emergency.
B. The Lessee shall complete a monthly maintenance report
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indicating work performed and submit this completed
report monthly to the City of Poway.
16. EMERGENCY SERVICES
The Lessee will provide the City with names and telephone
numbers of at least two qualified persons who can be called
by City representatives when emergency maintenance
conditions occur during hours when the Lessee's normal work
force is-not present.' These Lessee representatives shall
respond to said emergency with 60 minutes from receiving
notification.
17. SPECIALTY OPERATIONS
Written notification of all "specialty type" maintenance
operations shall be given to the City in the monthly work
schedule unless -it is an emergency or nonroutine. In those
cases, 48 hours notice will be given prior to each of these
operations by the Lessee. "Specialty type ".maintenance
operations are generally defined as: (1) Landscape; pre -
emergence weed control, turf aerification, turf dethatching,
seeding, preventive and curative application for turf
fungicide and all pesticide applications; (2) Buildings;
painting, roofing, signage, facade modifications; (3)
•Hardscape; sidewalk replacements, parking lot overlays and
striping; (4) Fencing replacement; (5) Mechanical and
electrical equipment upgrading or replacement. In the event
of emergency work required to prevent hazard to persons
and /or property, notice will be given to the City within
twenty -four (24) hours of after commencement of such
emergency work.
18. SCHEDULES
A. Annual Schedule
1. The Lessee shall provide an annual maintenance
schedule indicating the time frames when items of
work shall be accomplished per the performance
requirements.
2. The annual schedule shall be submitted for City
approval upon the commencement date of
agreement.
3. The Lessee shall submit revised schedules when
actual performance differs substantially from
planned performance.
B. Performance on Schedule
1. The Lessee has been provided the maximum latitude
in estabiishing work schedules which correspond to
its manpower and equipment resources.
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19.
20.
21.
PERFORMANCE DURING INCLEMENT WEATHER
During the periods when inclement weather hinders normal
operations, the Lessee shall adjust his work force in order
to accomplish those activities that are not affected by
weather.
UNDERGROUND EXCAVATIONS
Lessee shall be responsible for locating all underground
utility lines to insure the safety of his work crew and to
protect in place existing utility equipment before
commencing any excavation. Lessee shall contract the City
and Underground Service Alert (1- 800 - 422 -4133) before
commencing any excavation to locate underground service
line.
ACTS OF GOD, VANDALISM, AND LOSS DUE TO THEFT
RESPONSIBILITIES
Repairs, and cost of repairs, to maintenance items
caused by acts of God, vandalism, and loss due to theft
shall be the responsibility of the Lessee.
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CITY OF POWAY
SOUTH POWAY SPORTS PARK
TECHNICAL MAINTENANCE SPECIFICATIONS
I. GENERAL LANDSCAPE /SITE MAINTENANCE REQUIREMENTS
A. . All maintenance functions shall be performed in
accordance with the following specifications and at the
frequencies indicated. Standards and frequencies may
be modified from time to time as deemed necessary by
the City for the proper maintenance of the park.
B. All operations will be conducted so as to provide
maximum safety for the public.
C. Lessee will keep all gutters, curbs, and walks adjacent
to contract areas free of weeds, trash, and other
debris.
D. Lessee will keep sidewalks free of algae where constant
runoff occurs.
E. Leaves, paper, weeds, and any other debris will be
removed from landscaped areas and disposed of off
operations.
F. Lessee will clean sidewalks, roadways, and any other
areas littered or soiled by his maintenance operations.
G. The Lessee shall maintain the premises clean of debris
at all times. Upon completion of any work project, the
Lessee shall remove remaining excess materials, waste,
rubbish, debris, and his construction and installation
equipment from the premises. Any dirt-or stains caused
by the work shall be removed.
H. Prune plant materials adjacent to roadway intersections
to provide adequate sight distance for vehicles
entering the intersection.
I. Prune plant materials so that all traffic control signs
are clearly visible to approaching drivers.
J. Immediately notify the City about any unusual and
hazardous conditions in the work site and rectify said
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conditions.
1. NATURAL AREA SLOPE MAINTENANCE
A. All natural slope areas shall be•maintained in a manner
to encourage natural desirable vegetation and protect a
site from erosion, while presenting a well groomed
appearance.
1. Desirable annual, biennial and perennial plants
shall be maintained at their natural heights..
Weed growth and grass plants shall be regularly
removed before they reach 6 in height.
2. Tree, wells shall be kept as bare soil unless
ground cover is present. Weeds shall be removed 3
before they reach " in height.
3. Growth of woody plants shall be encouraged except
where it interferes with circulation, maintenance
activities, roadways, drainage facilities, fence
lines, or other structures. Dead branches of
plants shall be removed regularly.
4. Trim plant material regularly adjacent to curbs,
sidewalks and roadways to provide for proper,
unobstructed circulation. .
B. Pest Control
1. All rodents, insects, and other pests shall be
reasonably controlled by the'Lessee. Particular
attention to burrowing rodents is necessary to
protect the site from slope failures. Any control
measures should be approved first by the City.
2. Pre - emergents and short -term soil sterilents may
be used, as approved, by the City.
2. DRAINAGE FACILITIES
A. All drainage structures shall be checked and cleaned
monthly or as needed to ensure consistent unrestricted
water flow.
B. Any damage to structures shall be noted immediately to
the City of Poway and repaired or replaced by the
Lessee. t-
3. IRRIGATION MAINTENANCE
A. The key to water conservation and maintaining a healthy
landscape is the use of intelligent irrigation
management•practices. Parkway soils are shallow, have
low permeability and low organic content. Therefore,
the Lessee shall exercise special care to use water
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effectively and avoid run -off. The Lessee will be
responsible for replacement of all plant materials that
die from over /under watering. In the event of a water
shortage and /or City, County, State, or Federally
imposed water restrictions, Lessee shall use his best
efforts to maintain the appearance set forth in Exhibit
C. Lessee will not be responsible for replacement of
plant materials that die from under watering during
periods of water shortages or water restrictions.
B. At least twice each month, the system shall be
physically observed while functioning to ensure
efficient operation. Proper coverage and working
capability shall be provided at all times.
C. Adjustments will be made to prevent excessive runoff
onto streets, sidewalks, right -of -way or other areas
not meant to be irrigated. Sprinkler heads shall be
maintained and adjusted, kept cleaned out and free from
overgrowth which may obstruct maximum operation.
Valves and heads will be adjusted to keep all systems
operating at manufacturer's pressure specifications,
provided that the City is able to provide such
pressure. Valve throttling and pressure gauging shall
be employed to prevent heads from fogging and allow
passage of effective sized droplets. All sprinkler
heads on each valve shall be of the same manufacture
(matched precipitation and spray pattern coverage).
D. The Lessee shall turn off all controllers when rainfall
has made it unnecessary to provide supplemental
irrigation.
E. Areas not provided with an irrigation system shall be
hand watered by the Lessee. This includes situations
where the automatic system is inoperable for any
reason. The Lessee shall be responsible for providing
all his own equipment, pumps, nozzles, hoses and
couplers to accomplish the task:
F. The Lessee is responsible for any loss of use due to
malfunctioning or the lack of water for any cause
except natural disasters, water shortages, or water
restrictions previously described above. The Lessee is
also responsible for irrigation water which impacts
surrounding properties or creates traffic hazards due
to excessive runoff.
G. Automatic valves shall not be operated manually except
for testing and periodic maintenance.
H.• In support of the City's strong endorsement of
water conservation as a result of better
management tools, moisture sensors shall be the
primary determinant for scheduling irrigation.
Sensors shall be maintained in accordance with
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manufacturer's'specifications. They will be used
to develop an irrigation scheduling pattern based
on need, rather than a fixed timetable. The
backup tool for irrigation decisions is the soil
probe, which shall be utilized to monitor sensor
performance. And, last, there are the trees that
will provide visual indicators when transpiration
needs are not being met. Through prudent use of
the first two tools, it is the Lessee's
responsibility to ensure that these symptoms do
not occur.
I. Newly planted areas shall receive special attention
until plants are established.* Adequate water shall be
applied to promote normal, healthy growth. Proper
berms or basins shall be maintained during the
establishment period.
J. All repairs to the irrigation system shall be made
according to the original details. The Lessee is
responsible for making repairs of the system and
keeping it functioning properly in every way.
K. The Lessee shall submit to the City's Representative or
his agent a copy of the irrigation schedule for each
controller. (See appendix.)
L. Lessee is responsible for adjusting the height of
sprinkler risers to compensate for'growth of the plant
materials.
M. Each system shall be flushed out annually as a
preventative maintenance measure.
N. Controller enclosures must be painted once annually to
keep from rusting. Color shall be.determined by the
City Representative.
O. When possible, all remote control valves shall-be
identified with a painted blue 3 x 3 x 3 triangle on
the sidewalk or curb nearest the valve to indicate its
location. The location of quick couplers will be
identified with a painted red two inch dot on the
sidewalk or curb nearest the quick coupler. The
location of sensor installation shall be identified
with a painted red two -inch dot on the curb opposite.
the sensors.
P. All irrigation shall be performed between the
hours of 10 p.m. and 6 a.m.
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4. TREE MAINTENANCE
A. Pruning
1. Evergreen trees shall be thinned out and shaped
when necessary to prevent wind and storm damage.
The primary pruning of deciduous trees shall be
done during the dormant season. Damaged trees or
those that constitute health or-safety hazards
shall be pruned at any time of the year as
required.
2. All pruning cuts shall be made to lateral
branches, or buds, or flush with the trunk.
"Stubbing" will not be permitted.
3. Remove no more than fifty percent (50 %) of a
plant's foliage during pruning operations.
4. Trees shall be pruned to allow eight foot (8
clearances for pedestrians, twelve foot (12
clearances above the curb gutter, and ten -foot
(10 clearance above trails.
5. Pruning the lower branches.of young trees will not
be permitted. Lower branches shall only be
"tipped back" to encourage caliper growth.
6. Surface roots that have become a maintenance or
appearance problem shall be removed, especially
those adjacent to paved areas. Surface roots
shall be properly severed, cuts painted, and roots
recovered without delay.
7. Any on site shall be maintained
according to specific.guidelines. Trees shall be
selectively pruned to remove unsightly or poorly
crotched limbs. Unsightly or interlacing growth
such a V- shaped branches or forks shall-be thinned
out. out of scale limbs shall be cut back to
bring tree into balance.
B. Watering
1. Trees shall not be watered until a moisture check
has been made or representative points in the
landscape. Use of a probe or other tool to check
the moisture in the root ball as well as the soil
surrounding the root ball. The need for water
shall dictate the frequency of watering by the
automatic sprinkler system.
2. Maintain a large enough water basin around plants
so that enough water can be applied to establish
moisture through the major root zone.
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C. Fertilizer /Pest Control
1. Fertilizer is to be a City approved balanced
commercial fertilizer, applied once annually or as
often as required to keep trees healthy.
Fertilizer is to be applied in the drip zone of the
tree, not to main stem or rootball area,.and shall
be gently cultivated and thoroughly watered in to
prevent burning the tree.
2. Ailing or stunted trees, which fail to meet City
standards, will receive additional supplements to
correct any deficiencies.
3. Control or prevent plant pests and diseases with
properly used insecticides, fungicides, and
herbicides. Weed around tree wells once a month.
D. Staking and Guying
1. Tree stakes, ties, and guys shall be checked
monthly and corrected as needed. Ties shall be
adjusted to prevent girdling. Broken stakes or
guy wires shall be replaced. Stakes, ties, and
guys shall be removed as needed.
2. All restaking shall be done with two inch (2 by
ten foot (10 ledge pole stakes treated with
copper naphthanate and pointed at one end. Adjust
length to fit tree. Tree supports shall be corded
rubber straps; nail to sides of stake with one
inch (1 roofing nail.
3. For Eucalyptus, remove stakes after first year or
at the beginning of the growing season, whichever
comes first.
4. For trees other than•Eucalyptus, consider removal
of the existing stakes and guys when the trees
attain a trunk caliper of four inches (4 If
unstable at this time, replacement shall be
decided by the City's Representative.
S .
SHRUB MAINTENANCE
All shrubs on the site shall be maintained so as to
guarantee their vigorous and healthy growth according to the
best horticultural practices, utilizing proper pruning
techniques, fertilizer applications, and pest control
procedures.
A. Pruning
1. Prune shrubs as required to maintain health and
safety, as well as for general containment and
appearance.
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2. The objectives of shrub pruning are the same as
for trees. Shrubs shall not be clipped into
bailed or boxed forms. Retain as much of the
natural characteristics or branching a's possible.
3. All pruning cuts shall be made to lateral branches
or. buds or flush with the trunk. "Stubbing" will
not be permitted.
4. Pruning shall be accomplished by removing woody
stems from the inside of shrubs at least twice a
year. Topping of shrubs shall be done only after
interior selective branch pruning has been
completed.
5. Remove dead flower stalks or spent blossoms to
present a neat, clean appearance.
B. Fertilizer /Pest Control
1. Apply a City approved balance commercial
fertilizer to provide optimum growth and health to
all shrubs. Water in well to prevent burning.
2. Apply insecticides, fungicides, and heras
necessary to control pests.
6. VINES MAINTENANCE
All vines shall be maintained so as to guarantee their
vigorous and healthy growth according to the best
horticultural standards, utilizing the proper watering,
tying, fertilizing and pest control procedures.
A. Deep water vines in pockets not provided with
sprinklers -to assure optimum growth.
B. Check espaliered vines and maintain properly.* Nails
shall not be used in masonry walls. Secure vines with
appropriate ties to promote directional growth.
C. Apply a City approved balanced commercial fertilizer to
provide optimum growth and health. Water in well to
prevent burning. .
7. GROUND COVER
Ground cover shall be maintained so as to guarantee its
vigorous and health growth according to the
horticultural standards, utilizing the proper trimming,
fertilizing, pest control, and renovation procedures.
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A. Trimming
1. Ground cover beds shall be maintained within their
intended bounds and shall not be permitted to
encroach into lawns, shrub beds, sidewalks, or
adjacent areas, or in any manner deemed
undesirable by the City's Representative.
2. Trim back ground cover from controller units,
valve boxes, quick.couplers, other
structures or walls, and walks. Keep trimmed back
approximately four inches (4 from walks for
appearance and containment.
B. Fertilizer
Apply a City approved, balanced, commercial fertilizer
at a minimum rate of six (6) pounds per one thousand
(1,000) square feet per year in six (6) applications
during year of new planting of ground cover.
All other areas will be fertilized a minimum of once
annually or as required by the City's Representative.
C. Pest Control
1. Ground cover areas shall be carefully cultivated
regularly and kept free of litter.
2. Control weeds, with pre- emergent
herbicides, but also with selective systemic
herbicides.
3. Employ chemical control to protect plantings from
insects, diseases and snails. ,
D. RenovationfReplacements
1. Ground cover shall be renovated in September by
cutting it back and applying one (1) application
of a City approved, balanced.commercial
fertilizer.
2. If replanting is required to maintain the
continuity of the ground cover area, replacements
shall be as approved by the City's Representative,
using cuttings from adjacent ground cover areas.
S. TURF
Turf shall be maintained so as to guarantee its vigorous and
healthy growth to the best horticultural standards,
utilizing the proper watering, mowing, renovation,
fertilizing, and pest control procedures.
Iq
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A. Watering
Turf shall be irrigated, as required, to maintain
horticulturally acceptable growth and color and to
encourage deep rooting. Generally, irrigation will be
applied at a rate to provide one inch (1 of water per
month. Daily water should be avoided whenever
possible, in favor of scheduling applications every
other night or twice each week. Additional irrigations
shall be performed in the event of unusually hot /dry
weather conditions (as are present during-winter Santa
Ana conditions, or other times of low humidity or high
winds, or during a prolonged high temperature period
during the summer months). Allow the lawn to be dry
before mowing. All irrigation is to be performed
between the hours of 10 p.m. and 6 a.m.
B. Mowing /Edging
1. The turf shall be mowed to a height of one inch
(1 to one and one -half inches (1 1/2 weekly
during the warm season. Frequency of mowing may
need to be adjusted during the cooler months. A
rotary mower with sharp blades shall be used..
Avoid removing more than one -half (1/2) of-the
grass blade at any one time.' Damage to trees,
obstacles, or lawn caused by wheel ruts shall be
repaired by the Lessee at his expense. The grass
clippings shall be: caught and disposed of legally
off -site.
2. Trimming and edging shall be performed weekly by
mechanical means. Frequency of trimming and
edging may need to be adjusted during the cooler
.months.
C. Renovation / Verticut
1. Renovate /verticut all lawn areas once per year at
a time when there will be the least amount of
stress to the lawn, preferably in winter. The
scheduling will be recorded on the-Maintenance.
Schedule Chart.
2. Lawns shall be mechanically aerated with a plug
J aerator with one -half inch (1/2 tines at least
once per year or more often as required to reduce
compaction and stress on the turf areas.
3. Shaded out areas of lawn shall be reseeded with an
approved shade tolerant grass seed.
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D. Fertilizing
9 .
10.
City approved, balanced,
be applied so as to keep
will vary seasonally in
management practices.
E. Pest Control
•
commercial fertilizers should
the lawn green. The types
accordance with good turf
1. Turf areas shall be inspected regularly for signs
of diseases and pests. The Lessee is responsible
. for applying the appropriate remedy at the
recommended amounts. The name of the product
applied and the treatment shall be entered on the
Maintenance Schedule.
2. Lessee shall maintain a weed -free lawn at all
times by either chemical or mechanical means. The
Lessee shall be especially careful if applying
chemicals to control weeds because of possible
damage to the lawn. Before such applications are
made,-the turf should be well established and in a
vigorous condition. Pre - emergent chemical control
is recommended to reduce weed seed germination.
All chemicals applied must be recorded on the
Maintenance Schedule Chart and coordinated with
the-City's Representative or his agent.
HYDROSEED
Existing hydroseeded areas
same manner as the ground
may be impractical (i.e.,
device may be used to cut
hydroseeded cover.
PEST CONTROL
on- site.shall be treated in the
cover areas. In areas where this
2:1 slope areas), a weed eating
down weeds taller than the
A. The Lessee shall provide complete and continuous
control and /or eradication of all plant pests and -
diseases, including weeds, and shall comply with all
City, county, state, and federal regulations or laws
regarding chemical controls.
B. The Lessee shall assume all liability and
responsibility for the use of all chemical controls.
1. Care shall
pesticides
the target
used which
the target
materials
be taken in transferring and mixing
to prevent contaminating areas outside
area. Application methods shall be
ensure that materials are confined to
area. Spray tanks containing leftover
shall not be drained on the site to
MG -17
prevent any contamination. Disposal of pesticides
shall be within the guidelines established in the
California Food and Agricultural Code.
2. Spray equipment shall be in good operating
conditions, quality,*and design to efficiently
apply materials the target area. Drift will be
minimized by avoiding.high pressure applications
and using water soluble drift agents.
3. Pesticides shall be selected from those materials
which characteristically have the lowest residual
persistence. Use of emulsifiable concentrates
shall be used when possible to limit windblown
particles. The use of adjuvants will be to*
increase pesticide efficiency thereby reducing the
total amount of technical material required to
gain control.
4. Pesticides shall be applied at times which limit
the possibility of contamination from climatic and
other factors. Early morning application shall be
used when possible to avoid contamination from
draft. Applicator shall monitor forecasted
weather conditions to avoid making applications
prior to inclement weather to eliminate potential
runoff of treated areas. Irrigation water applied
after treatment shall be reduced to increase
pesticide efficiency. It shall be applied only in
quantities of.which area is capable of
receiving without excessive runoff.
11. WEED CONTROL
A. Keep basins and areas between plants free of weed All
trees in ground cover areas shall have a•12" radius of
open soil maintained around the base of the trunk.
This will reduce damage to tree trunks and roots by
machinery and by excess water. Use recommended, legally
approved herbicides, such as Round -Up, whenever
possible to control growth in this open area. Use
mulches to help prevent weed seed germination. Weeds
that have germinated shall be eradicated either by
chemical or mechanical means, within three
(3) weeks of germination or before the plants
set seeds.
B. , Weeds shall be removed as needed from all shrub areas,
ground cover beds, and planters, and shall be removed
weekly from all cracks in paved areas, including
sidewalks, curbs, asphalt, all hardscape, and areas
covered with ornamental rocks. This means complete
removal of all weed growth. For the purpose of this
MG -18
Specification, a weed will be- considered as "any
undesirable or misplaced plant," including, but not
limited to, artichokes, tumbleweeds, etc. Weeds shall
be controlled either by hand, mechanical, or chemical
methods. The City's Representative may restrict the
use of chemical weed control in certain areas.
C. All plant materials within a four (4) foot area
adjacent to improved surfaces, such as concrete
sidewalks, service roads, and pathways will be
continuously controlled so that height does not exceed
twelve inches (12
D. Plant material normally classified as weeds will be
treated as wild flowers in the natural open space
areas, with the following exceptions:
1. Pampas grass, artichoke, and tumbleweed will be
continually controlled to reduce fire or safety
hazards.
2. Annual plants that attain a height of six inches
(6 11 ) inches or more in the seed stage will be
mechanically controlled upon completion of
cycle to reduce fire hazard in areas deemed
necessary by the City's Representative.
3.• Open space areas behind existing home shall be
kept free of weeds within one hundred feet (100
of the houses. If there is not 100' of clearance
available, notify the Poway Fire Department (679-
4338) to come out and make a field determination
of the allowable area for a fire break. The fire
break shall be created by mowing down weeds a
minimum of two (2) or three (3) times per year, or
as needed. All maintenance performed in ' open
space areas outside the scope of work is an extra.
12.
E. The Lessee shall maintain a ten foot (10 strip next
to planted areas free of weeds.
FERTILIZATION
A. The Lessee shall inform the City's Representative.al.
least forty -eight (48) hours before beginning any
fertilization and shall have previously submitted a
schedule of application showing the site, date, and
approximate time of application of the fertilizer.
Submission of the fertilizer schedule does not release
the Lessee from any of the other obligations described
in this paragraph, or in the following paragraph.
MG -19
0 a
The intensity of the fertilization schedule, i.e.,
timing, or the number of sites per day or week, cannot
be set up to preclude at -site requirement.
B. Fertilizers shall be inorganic, dry, pelletized
formulation. Application shall be in accordance with
manufacturer specifications.
C. The fertilizer shall be delivered to the site in the
original unopened containers bearing the manufacturer's
guaranteed analysis. Damaged packages will not be
accepted. The Lessee shall furnish the City's
Representative with duplicate signed, legible copies of
all certificates and invoices for all fertilizer to be
used in the execution of this Contract. The invoices
must state the grade, amount, and quantity received.
Both the copy to be retained by the City and the
Concessionaire's copy must be signed by the City's
Representative, on site, before any material may be
used. The Lessee may not begin the application
until the obligations in paragraph above have been
complied with.
D. Fertilizers used shall have the following guaranteed*
analysis and /or approved equivalent:
Area:
Total Nitrogen:
45%
Particle Size: Shall be a uniform pelletized material.
Complete:
Total Nitrogen:
16%
Available Phosphoric Acid
(P derived from
Ammonium Phosphate:
6%
Water Soluble Potash
(K,O) derived from
Sulfate of Potash:
8%
Sulfur (s) derived from
Ammonium Sulfate, Gypsum,'
and Sulfate of Potash:
17%
Iron (Fe)
1.5%
Potential acidity 1550 pounds
Calcium Carbonate per ton.
MG -20
E. Fertilizers shall be applied to shrubs, ground cover,
and small trees (3 caliper and smaller) at the rates
and times specified below. (Minimum)
Complete: .
15 -5 -8: 4 pounds per 1,000 square feet -
March 1 -15, July 1 -15
Complete:
15 -5 -8: 6 pounds per 1;000 square feet -
October 1 -15'
Adequate irrigation will precede and immediately follow
the application of fertilizer to force fertilizer
material to directly on the soil surface.
F. In making application of fertilizer granules, -
precautions shall be taken to contain these materials
in the planting areas. Caution should be used when
using.a cyclone spreader which tends to throw material
onto paved areas. The use of gravity flow spreaders
will keep materials contained in planting areas,
eliminating /reducing sidewalk stains.
G. When climatic factors cause problems of the general use
of• fertilizers, an adjustment of the fertilizer
schedule may be necessary. If possible, avoid
application'of fertilizers prior to forecasted windy
weather, heavy rain, which might affect stability.
After fertilizer application, monitor watering schedule
to eliminate runoff leaching of fertilizer materials.
H. Agriform 21 gram plant tablets shall be applied to
trees and shrubs that require supplemental.feeding.
Annual fall feeding shall be based on one (1) twenty -
one (21) gram table per one -half inch'(1 /2 caliper of
tree or shrub. Place tablets six (6) to eight (8)
inches deep at drip zone areas by using a soil probe to
make a hole for inserting tablets. Water in
_thoroughly.
13. REPLACEMENT OF PLANT MATERIAL
A. The Lessee shall notify the City's Representative
within two (2) days of the loss of plant material due
to any cause. Plant material not replaced within one
(1) week will be replaced by the City at the Lessee's
expense.
MG -21
1 0 0
B. The Lessee shall supply the labor and all materials to
replace any tree, shrub, ground cover, or other plant
which is damaged or lost as a result of
Concessionaire's faulty maintenance or negligence. The
size and species of replacement plant materials shall
be as directed by.the City's Representative.
C.- Any plant damaged or lost through acts of God,
vehicular damage, theft, or mysterious damage that does
not occur as a result of the performance of the work by
the Lessee shall be replaced in kind and size as
approved by the City's Representative. The Lessee may
supply and plant the replacement material as specified.
by the City's Representative and shall bill the total
replacement costs separately.
D. In order to ensure maximum healthy growth and overall
aesthetic appearance of plantings in the work area, it
may be desirable to replace certain plants. The
necessity or desirability of such plant replacement -
shall be determined by the City's Representative.
Where such plant replacements are to be made, all
plants may be provided and installed by the City at no
expense to the Lessee, or may be replaced by the Lessee
with cost negotiated at the time of occurrence.
E. All remedial landscaping will conform to the City of
Poway's Guidelines and specifications for Landscape
Development.
14. NEW LANDSCAPING
The Lessee shall pay particular attention to areas with new
landscaping with regard to irrigation, fertilizer,
replacement of plants and pruning practices. Newly
landscaped areas require more care during the establishment
period. The Lessee will be fully responsible for any loss
of new planting materials due to anything other than
vandalism or acts of God.
15. CLEANUP
A. The Lessee shall remove promptly, all debris generated
by his performance of.the operation or maintenance in
the specifications of this contract. Immediately after
working in areas of public streets and walks,
driveways, and paved areas, the Lessee shall clean them
with suitable equipment. All debris and clippings
shall be removed and disposed of legally off -site. No
debris will be allowed to remain on the site at the end
of the work day.
MG -22
0 0
B. In all areas covered by this Contract, litter,
including, but not limited to, bottles, animal
droppings, cans paper, cardboard, metallic items, and
other debris, including illegally dumped materials,
shall be removed from the site by the Lessee twice a
month.
C. Hazardous materials, including, but not limited to,
wire, broken glass,'jagged metal, and similar kinds of
litter.shall be picked up and removed from the site by
the Lessee upon notice or observation thereof.
D. Shrub areas not planted with ground cover shall be
raked and cultivated a minimum of twice per month.
E. All walks-shall be kept clean and free of debris,
weeds, and hazards'to foot traffic at all times during
all maintenance operations. Walks should be kept clean
and free of dirt and debris on an as- needed basis or on
a minimum of once weekly.
16. HARDSCAPE MAINTENANCE
A. On a daily basis, concrete and asphalt areas, including
driveways, parking areas, sidewalks, roadways, and
patios shall be checked and cleaned.
1. All expansion joints and cracks are to be
maintained free of weeds.
2. Dirt, litter,'and other debris must be removed on
a daily basis.
3. Inspect for safety hazards, including
tripping hazards, holes, or other conditions.
Immediately report such to the City of Poway.
B. Vacuums, air brooms, sweepers, or other approved means
may be used to clean hardscape areas. However, debris
shall not under any circumstance be blown or otherwise
swept onto adjacent streets or property. All.debris
must be picked up by the Concessionaire and removed
from the site.
C. All parking lots and roadways shall maintain striping
and other traffic control devices as required by the
City Traffic Engineer. Parking lots and roadways shall
be restriped every two years or as necessary-to
maintain safe vehicular movement.
D.. All on -site parking lot and roadway failures shall be
repaired by the Lessee.
MG -23
•
17., GENERAL GROUNDS POLICING
is
A. The Lessee shall provide general grounds policing and
inspection at a minimum of once daily.
1. Provide safety and facility inspection and
immediately report any deficiencies to the City of
Poway. Lessee shall be responsible to repair
below standard conditions of all structures and
fixtures, including, but not limited to:
a .
b.
C .
d.
• e.
f.
9•
Light standards and fixtures
Benches /tables
Fountains
Walls, fences, gates
Trash dumpsters /trash cans
Signage
Graffiti
16. BALLFIELD MAINTENANCE
A. The ballfield infields are to be maintained on a daily
basis, whenever play is expected. Outfield turf shall
be maintained in accordance with general turf
maintenance requirements. The outfield areas shall be
checked at least weekly for holes which should be
filled immediately.
This work shall be completed before the times scheduled
for use of the fields.
Baseball field maintenance includes watering, dragging,
filling in sunken areas, installing bases, burning and
maintaining lines, and raking all sand areas for
debris, and removing water puddles and mud holes.
Recognizing that baseball /softball diamonds are a high -
use facility and that their proper care and maintenance
is critical to the safety and well -being of the user -
public, as well as a deterrent to liability litigation,
it is necessary to establish . 'standards to ensure
adequate playing conditions.
B. General
The responsibility for the condition and maintenance of
baseball /softball diamonds under the supervision of the
Lessee shall be as follows:
1. The Lessee's employee responsible for the area in
which the diamond is located shall be charged with
the overall responsibility for the condition and
maintenance of the diamond.. This individual
MG -24
0 0
shall, on a daily basis, observe the conditions of
the diamond and take those measures necessary to
ensure the suitability of the diamond for play.
Definition: Suitability for play - A diamond
shall be deemed suitable for play when it is
smooth and free of debris, water, mud, rocks,
ruts, berms, low spots, and any unnamed condition
deemed hazardous. Field must be checked by 11
a.m. each day for-the above condition. Standing
water and wet mud must be removed prior to use.
2. Lessee shall be responsible for the installation
of base anchors, pitcher plate, and home plates.
Lessees personnel shall be responsible for the
burning of foul lines in advance of each playing
session.
The foul lines that extend on the grass and also
the out -of- bounds lines on the grass should be
burned in or delineated in an alternative fashion
as approved by the City.
In marking the diamond, a string should be,drawn
from the point of home plate to the outside edge
of first base, and then from the point of home
plate to the outside edge of first base, and then
from the point of home plate to the outside edge
of the third base to ensure straight lines and
ease of markings.
C.
Preparation of Ball Diamond as Done by concessionaire's
Personnel
1. During the baseball season, diamonds must be cared
for daily to provide continuing high standard of
condition. Such preparation is described
sequentially below.
2. Preliminary Watering
Home.plate and pitcher's mound will receive the
heaviest watering as these areas get the most use
during actual playing time. Slightly less water
will be applied to first, second, and third base
areas.
3. Leveling
Using a garden rake
welded to the back,
and pitcher's mound
shaped, leveled, and
present, the dimple
with a two -foot metal'strip
the soil in the batter's'box
should be loosened, raked,
tamped down firmly. If
at the pitcher's mound shall
MG -25
t 9
be maintained at a graduated elevation to 10"
above the playing surface with a diameter of eight
to ten feet, the center of which shall be 18" in
front of the pitcher's plate.
Soil, which has been worked away around each base,
must be replaced in the proper area and tamped
down firmly.
D.
Watering
1. The diamond shall now be watered thoroughly with Q
the proper amount of water to provide a suitable
condition for. dragging. As a rule, the appearance
of small water bubbles should indicate sufficient
watering.
A thin layer of water on the surface is not
sufficient. A fine spray of water shall be used.
E.
2. In all watering of the
procedure is to'water
hose to the rear. Do
areas.
Dragging
diamonds, the correct
away from yourself with the
not walk on the watered
1. Brick dust diamonds require moisture penetration
to prevent a hard, dry condition from developing.
It is, therefore, important that daily dragging to
break the crust be performed. Dragging shall not
be done without first watering the field to
prevent dust from rising with dragging. The speed
of the dragging vehicle shall not exceed 5 mph.
The drag used for this purpose should be a minimum
3' x 4' and have 2/3" protruding spikes.
2. Upon completion of the crust - breaking drag, a
smoothing drag shall be undertaken. The drag is
similar to a metal foot scraper, constructed of
heavy interwoven metal squares. The size of the
drag is 4' x 6 1 .
3. In all dragging, the correct procedure is to begin
in the area adjacent to the backstop and drag in
overlapping, concentric circles until the entire
skinned area is covered. Care should be exercised
to prevent build -up of brick dust, causing a
raised berm -under the inner edge of the outfield
and infield grasses, or against the backstop and
other fences.
MG -26
s •
F. Repair of Home Plate and Pitcher's Mound Areas
1. Heavy watering must be done to the home plate area
and pitcher's mound area after any holes have been
filled in. The amount of water applied should not
be so much as to prevent playability within 15 -30
minutes.
2. - Water should be applied with a mist spray.to the
point of saturation, then allowed to soak in.
Repeat this process until soil is damp all the way
through.
G. Semi - Annual Special Maintenance
1. A ballfield - infield mix shall be added to each
infield annually to restore it to original.
2. All fields shall be regraded and then rolled.
3. All base anchors, home plate and valve box heights
shall be adjusted when regraded..
4. Turf areas shall be cleared of any ball field
infield mix and the turf heights adjusted level
with the infield.
5. All drain boxes shall be cleaned and infield
grades adjusted for proper drainage'.
II.
LIGHTING AND OTHER ELECTRICAL SYSTEM MAINTENANCE
A. All lighting and electrical systems shall be maintained
in a manner that will allow said systems to function as
designed per manufacturer's specifications and provide
for a safe environment for al-1 park visitors.
1. All lighting and electrical systems shall be
checked weekly or as needed to ensure proper
operation and safety.
2. Sports lighting systems shall be tested annually
for proper footcandle lighting levels appropriate
to the type of sport played.
Softball
Infield 30
Outfield 20
Volleyball 20
footcandles minimum
footcandles minimum
footcandles minimum
MG -27
i •
Any deficiencies shall be rectified by the Lessee,
including but not limited to reaming of fixtures,
replacement of bulbs, ballasts, and other
equipment and cleaning of fixtures lenses.
3. All burned out lighting fixtures shall be replaced
by the Lessee within 72 hours of detection.
III. WALLS, FENCES, AND GATES
A. All fences and gates shall be maintained in a manner that
will allow said improvements to function as designed per
manufacturer's specifications and provide for a safe
environment for all park visitors.
1. All walls, fences, and gates shall be checked monthly
or as needed to ensure proper operation, safety, and to
identify potential failures.
2. All vandalism and graffiti shall be noted immediately
to the City of Poway and shall be repaired by the
Lessee-within seven calendar days of detection.
3. All wall, fence, or gate repairs within playing fields
or in public access areas shall be repaired by the
Lessee within 72 hours of detection.
4. All -repairs shall be to City standards utilizing the
same quality materials and equipment as originally
specified and /or installed.
IV. BUILDINGS AND ANCILLARY STRUCTURES
A. All buildings and ancillary structures shall be maintained
in a manner that will result in high quality, attractive
structures. Lessee is responsible for all maintenance and
repair of these buildings and ancillary structures.
B.- General Maintenance
1. General maintenance shall include painting; repair of
vandalism; pest /insect control; keeping premises in a
clean and sanitary condition free of debris; keeping
windows, doors, and cabinets, electrical, plumbing,
mechanical equipment, including concessionaire's trade
fixtures, and other fixtures operational and in good
repair.
2. All repairs shall be to City standards utilizing.the
same quality materials and equipment as originally
specified and /or installed.
MG -28
JOINT VENTURE AGREEMENT
FOR OPERATION AND MAINTENANCE
THIS AGREEMENT, made and entered into this day of
October, 1992 at
by and between Sportsparks of America., -Inc., an Arizona
corporation registered to do business in California hereinafter
called "Sportsparks" and Kajima Engineering and Construction, Inc.,
a California corporation hereinafter called "KAJIMA ".
WITNESSETH
WHEREAS, The City of Poway or Agency hereinafter called
"OWNER. ", has accepted a bid from the parties for the operation and
maintenance of a fifteen (15) acre sportspark facility as described
in a proposed Lease Agreement.
WHEREAS, the parties desire to enter into an agreement in
order to fix and define between themselves their respective
responsibilities, interests and liabilities in connection with the
operation of said facility;
NOW, THEREFORE; in consideration of the mutual promises and
agreements herein set forth, the parties hereby agree to constitute
themselves a joint venture, (hereinafter called the "Joint
Venture ") for the purpose of operating and maintaining the said
facility specif-ied in the contract above - described (hereinafter
referred to as the "Lease Agreement ").
1. NAME
The parties hereby constitute themselves a Joint Venture.
The name to be assumed by the parties in the conduct of all Joint
Venture affairs shall be Sportsparks / Kajima, a California Joint
Venture. All. money, equipment, materials, supplies, and other
property acquired by the Joint Venture shall be held jointly in
that name.
2. PURPOSE AND OBJECT
The purpose and 'object for which this Joint Venture is
constituted is -to perform the contract work set forth in the
recital clause above and for no other purpose. It shall not be
interpreted as creating any permanent partnership between the
parties and shall not limit either party in its right to carry on
its individual business for its own benefit.
3. INSURANCE
Sportsparks shall acquire endorsements to their existing
General Liability insurance policy and Automobile insurance policy
1
- • s
naming the Joint Venture and Kajima as additional insureds to
protect the-parties from claims arising out.of the performance
under this Agreement. The Joint Venture shall acquire any required
workers' compensation insurance. To the .extent that Sportsparks
incurs any additional costs for providing the endorsements for the
General Liability and Automobile coverage for the Joint Venture,
it shall be reimbursed for such costs. Sportsparks, upon request,
shall provide Kajima with copies of policies or certificates of
insurance evidencing these coverages.
4. PRINCIPAL OFFICE
The principal office of the Joint Venture shall be located
at 247 Avenida La Pata, San Clemente, CA 92672 or at such other
place or places as the parties shall agree upon.
5. TERM
The Joint Venture shall commence on the date set forth
above and shall continue until dissolved as hereinafter provided.
However, the terms, provisions and existence of the Joint Venture
shall not become effective until the Lease Agreement is let to the
Joint Venture.
6. FROFITS, LOSSES AND INDEMNITY
The interests of the parties in any profits and their
respective shares in any losses and liabilities that result from
the operations of the Joint Venture and their interest in all
property, equipment and all moneys received in connection with the
Joint Venture Agreement shall be as follows:
Sportsparks - Net Losses 100%
Sportsparks - Net Profit 88%
Kajima Net Profit 120
The terms "Net Profits" and "Net Losses" as used in this Agreement
shall mean the Net Profits or Net Losses of the Joint Venture as
finally determined under generally accepted• accounting principles.
The percentage Net Profit figures shall be referred to hereinafter
as the party's percentage of participation. No disbursements of
net profits - shall be made to either member of the Joint Venture
until the end of the third year of'operation, unless agreed to by
both parties of the Joint Venture. The net profits disbursed at
the end of the third year shall be based on the aggregate net
profits and net losses over this three year period._
It is.the intention of this Agreement, and the parties
hereby agree, that in the event of any losses arising out of or
arising from operations pursuant to this Joint Venture Agreement,
Sportsparks shall assume and pay all of such losses. To that end
2
Sportsparks•agrees to defend and indemnify Kajima against, and to
hold Kajima harmless from, any and all losses of said Joint
Venture.
Notwithstanding the above, allocation of the Net Profits and Net
Losses during the first three years of operations shall be
allocated on an annual basis between the parties subject to the
following provisions:
Net profits shall be allocated in the following order and priority:
First, each partner shall be allocated Net Profits up to the
amount of Cumulative Net Losses previously allocated-to it,
until the cumulative Net Profits so allocated are equal to the
cumulative Net Losses previously allocated;
Second, in proportion to the parties' percentages of
participation
Net Losses shall be allocated in the following order and priority:
First, to the extent Cumulative Net Profits have previously
been allocated to the parties, Net Losses shall be allocated
to each party proportionally up to the amount Cumulative Net
Profits were.previously allocated;
Second, the balance, entirely to Sportsparks;
EXAMPLE 1
Year 1 Net Loss
Year 2 Net Profit
Year 3 Net Profit
Total Allocation
Sportsparks KEC
(1000) (1000)
500 500
1000 940 60
EXAMPLE 2
Year 1 Net Profit
Year 2 Net Loss
Year 3 Net Loss
Total Allocation
Sportsparks KEC
1000 880 120
500 (440) (60)
.1000 (9 ( 60 )
Allocations of Net Profits and Net Losses shall be allocated
in accordance with Internal Revenue Code Section 704 and
related Treasury Regulations.
3
7. MANAGEMENT
The management of the Joint Venture shall be conducted
pursuant to policy established by the Joint Venture parties. For
the purpose of providing a forum for the exercise of such
management rights and for the further purpose of utilizing the
knowledge and• engineering and planning talents of the parties
hereto,' there is hereby established a "Policy Committee" which
shall determine general policy and handle other matters requiring•
the attention of the Joint Venture parties. Each party shall
delegate a representative to serve on the Policy Committee who
shall have the authority to act for the party on all matters with
respect to its participation in the Joint Venture. The Joint
Venture parties, acting through their Policy Committee
representatives, shall determine the policy for the management of
the Joint Venture by unanimous vote or, failing that, by the
majority vote of the Joint Venture parties by their respective
percentages of participation in the Joint Venture.
The Policy Committee shall determine the time and place of
holding its meeting and to establish procedures for conducting its
affairs.
Each party shall designate an alternate representative to
the Policy Committee who shall serve only when the representative
of that party is unable to serve.
Each of the parties hereto.may at any time replace either
the representative or his alternate designated by it, or both, by
a notice in writing served upon the other party.
No representative appointed by any party hereto shall be
liable to any such party or the other party by reason of his acts,
except in the case of his gross negligence or actual fraudulent or
dishonest conduct.
Except to the extent hereinafter stated, the salaries and
expenses of each member and alternate member of the Committee shall
be borne by the party hereto whom the member has been designated to
represent and shall not be an expense to the.Joint Venture..
Meetings of the Policy Committee may be called by any
representative or his alternate, or by the Operations Manager.
Reasonable notice of the time and place of any meeting shall be
given by the person calling the meeting. Such notice may be waived
by the written consent of the representative • or alternate of each
of the parties. All actions by the Policy Committee shall be taken
at a meeting to be duly held. In order for a meeting of the Policy
Committee to be' duly held, all representatives or their alternates
must be present, unless a written waiver is obtained from the
absent party."
4
Sportsparks appoints James Hilkemeyer as its
representative, and Lois Hilkemeyer as its alternate
representative.
Kajima appoints Koji Hayashi as its representative, and
Tetsuo Kimura its alternate representative.
Sportsparks will act as Managing Party under this
agreement and shall exercise general management and administration
of the Joint Venture. However, in the event that a) for any three
consecutive months the operation fails to show a net profit, or b)
in the event the Owner serves a Notice of Default under the Lease
Agreement, at the option of Kajima, Sportsparks shall cease to act
as the Managing Party and all actions and decisions with respect to
the Joint Venture and the Lease Agreement shall thereafter be taken
by Kajima as the Managing Party. At any time after assuming the
position of Managing Party, Kajima may, at its option, relinquish
that position to Sportsparks. The Managing Party, under the
authorization of the Policy Committee, shall take such other steps
necessary to permit the Joint Venture to properly and timely carry
out performance of the Lease Agreement consistent with the terms of
the Lease Agreement. The Managing Party shall act as an organizer
and coordinator of the Policy Committee. However, the non- Managing
Party must approve all budgets and the appointment of key employees
of the Joint Venture.
The Managing Party shall be governed by the policies
established and directives issued by the Policy Committee. The
Managing Party shall make such regular and special reports to the
Policy Committee as.the Policy Committee may require.
8. OPERATIONS MANAGER
The Policy Committee shall appoint Recreation
Technologists, Inc. as Operations Manager, who shall be in charge
and generally supervise all work and matters relating to the
operations and maintenance of the facility. However, the
Operations Manager's authority shall be subject to the approval of
the Policy Committee. The Policy Committee may appoint an
alternate Operations Manager, at its discretion. The Operations
Manager shall be compensated by payment of two and one -half percent
of the gross receipts, as defined in the Lease'Agreement.
9. BOOKS. RECORDS AND BANK ACCOUNT
Separate books of account shall be kept and maintained for
the entry of all transactions of the Joint Venture, the same to be
open t'o the examination of and availabl'e for making copies thereof
by any party hereto or to its auditor at all reasonable times. All
transactions by the Joint Venture, including all expenses incurred,
and all revenues received, shall by recorded in said books in
accordance with generally* accepted accounting principles. • The
5
Managing Party shall furnish on a monthly basis to each party a
balance sheet, a profit and loss statement reflecting the current
financial status of the Joint Venture, and a budget analysis which
compares revenues and expenses to date with budgeted revenues and
expenses. A periodic audit of such books shall be made by an
independent firm of accountants selected by the parties. The costs
of any such audits shall be a part of the operation cost of the
Lease Agreement
All persons authorized to draw against the funds of the Joint
Venture shall be bonded if and to the extent that the Policy
Committee shall determine.
10: FINAL ACCOUNTING
Kajima has the option of'dissolving the Joint Venture at the
end of the third year of operations or any time thereafter. T
the event of the dissolution of the Joint Venture, any undisbursed
net profits accrued through the date of dissolution shall be
divided in accordance with the parties respective. percentages of
participation provided above, and the Joint Venture Agreement shall
then-terminate.
11. INSOLVENCY - BANKRUPTCY
Upon the bankruptcy or insolvency of Sportsparks, or
should Sportsparks commit any act of bankruptcy or take advantage
of any bankruptcy, reorganization, composition, or arrangement
statute,' then, from and after such date, Sportsparks, its
successors or assigns (hereinafter referred to as the "insolvent
party ") and its representative(s) shall cease to have any role in
the management of this Joint Venture and the Lease Agreement
(anything in this Agreement to the contrary notwithstanding). All
actions and decisions with respect to the Joint Venture and the
Lease Agreement shall thereafter be taken solely by Kajima.
Notwithstanding the foregoing, Sportsparks shall remain
liable for any losses of the Joint Venture, and, provided it has
met and or
to meet all required advances of working capital,
shall be entitled to return of its working capital advances and to
receive its share of any profits, with such distribution to be made
at the time and in the manner provided in this.Agreement.
12. CAPITAL CONTRIBUTION
All initial working capital required by the Joint Venture
shall be advanced to the Joint Venture by Sportsparks. Advanced
capital shall be repaid to Sportsparks prior to any disbursement of
net profit.
0
13. ASSIGNMENT
No party hereto shall sell, assign or in any manner
transfer its interests, or any part thereof, in this Joint Venture,
without first obtaining the written consent to the other party
hereto. Consent need not be' obtained from a party which has lost
its role in the management of the Joint Venture as herein provided.
14. AUTHORITY
No party hereto nor any other person shall have the
authority to act for or bind a party to this Agreement by any act
or agreement except in connection with operations and maintenance
of the sportspark facility.
The Policy Committee sha•11 designate persons who have the
authority to sign documents required of the Joint Venture by the
Owner in connection with the Joint Venture.
15. FISCAL YEAR
The first fiscal year of the Joint Venture shall end as of
December 31, 1992 and the Joint Venture fiscal year thereafter
shall be the calendar year.
16. ARBITRATION
Any controversy or claim arising out of or relating to
this Joint Venture Agreement, or the breach thereof, shall be
settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (AAA),
administered by the Los Angeles office of the AAA. The award
rendered by the Arbitrators shall be final and binding, and
judgement upon it may be entered in any Court having jurisdiction
hereof.
The parties to this Agreement consent to the use of
discovery proceedings to the full extent provided for under the
California Code of Civil Procedure, Section 1283.05, in the event
of arbitration. Such discovery proceedings may include, but not be
limited to, depositions, interrogatories, requests for admission,
and orders for the production and examination of documents, person,
and things. In the event of any dispute arising over the scope or
nature of. discovery, the arbitrator(s) shall set the terms and
conditions of discovery. Such orders shall be binding on the
parties.
17. ENTIRE AGREEMENT _
This Agreement is the entire agreement between the parties
with respect to the subject matter hereof and supersedes in its
entirety all prior agreements which may exist between the parties
7
with respect hereto. -No alteration, modification, interpretation
or amendment of this Agreement shall be binding on the parties
unless in writing, designated as an amendment hereto and executed
with equal formality by each of the Joint Venturers.
In the event that any part, term or provision of this
Agreement is determined by a court of competent jurisdiction to be
unlawful or unenforceable, the validity and enforceability of the
remaining portions or provisions shall not be affected thereby.
18. MERGER OR CONSOLIDATION OF A PARTY
Notwithstanding any of the other provisions of this
Agreement, in• the event a party shall be merged into or
consolidated with another corporation or have substantially all of
its assets acquired by another corporation, then the consolidated
corporation, the surviving corporation or acquiring corporation, as
the case may be, shall be substituted 'for such party as a party to
this Joint Venture, and the terms and provisions of this Agreement
affecting such party shall inure to the benefit of and be binding
upon such consolidated survivor or acquiring corporation and the -
references in this Agreement to such party shall be deemed
references to such consolidated, survivor or acquiring corporation.
19'. NOTICES
Any notice, payment, demand, document or paper which
either party is'required or may desire to give or deliver to the
other party, shall be in writing and personally delivered to or
mailed by United States registered or certified mail addressed as
follows:
To Sportsparks: Attn: James Hilkemeyer
S,portsparks of America, Inc.
6901 N. Casa Grande Hwy.
Tucson, AZ 85743
To Kajima:. Attn: Koji Hayashi
Kajima Engineering and
Construction, Inc.
200 S. Los Robles Ave., Suite 400
Pasadena,'CA 91101 -2431
Either party may designate a different address for itself
by notice similarly given.
20. This Agreement and the rights of the parties hereto shall
be governed and entrusted under the laws of the State of
California.
;u�
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first hereinabove written.
Attest:
Sportsparks f America,
Inc.
By:
�• 5 l fi
Attest:
Kajima Engineering and
Construction, Inc.
0�_J_nl . By:
E
CORTY OF POWAY
JAN GOLDSMITH, Mayor
KATHY MCINTYRE, Deputy Mayor
DON HIGGINSON, Councilmember
B. TONY SNESKO, Councilmember
BOB EMERY, Councilmember
September 28, 1992
James Hilkemeyer
Sportspark of America, Inc.
P.O. Box 26706
Tucson, AZ 85726
Steve DeThomas
Larry D. Atwater
Kajima Engineering and Construction, Inc.
200 S. Los Robles Avenue, Suite 400
Pasadena, CA 91101 -2431
Re: South Poway Sports Park
Gentlemen:
In anticipation of the execution of a formal lease agreement, construction
contract, and any other documents necessary to carry out the intent of the
parties below for construction and operation of the South Poway Sports Park,
the undersigned have met and agreed to do the following:
1. The City of Poway and the Redevelopment Agency ( "City /Agency ") will
lend construction funds for the project from available excess Agency
tax increment. It is proposed that these funds will be reimbursed to
the Agency from a tax allocation bond financing within one year from
date of completion of construction of the project.
Lease payments will consist of a set minimum lease payment to cover
debt service and a percentage rent to be negotiated in terms
acceptable to both parties.
2. Kajima Engineering and Construction, Inc. (KEC) and Sportspark of
America, Inc. (Sportspark) will form a joint venture or other
arrangement acceptable to City /Agency, which organization will execute
a lease acceptable to the parties. All obligations under this letter
agreement are subject to KEC and Sportspark reaching agreement on the
terms of a joint venture or other arrangement acceptable to City/
Agency.
City Hall Located at 13325 Civic Center Drive
Mailing Address: P.O. Box 789, Poway, California 92074 -0789 • (619) 748 -6600, 695 -1400
® Primed on Recycled Paper
* - 0
Larry Atwater
Steve DeThomas
James Hilkemeyer
September 28, 1992
Page 2
3. KEC will remain as a joint venture lease partner at least until such
time as the net operating cash flow in a fiscal year from the
operation (Ref. Article 6g) exceeds the minimum annual lease payment
(debt service) by a ratio of 1.2 to 1.
4. If approved by City /Agency, award of bid for construction will be to
KEC /Sportspark in the amount of $2,656,324, contingent upon execution
of a lease agreement with KEC /Sportspark. City /Agency will issue a
Notice of Award contingent on lease.agreement by October 15.
5. The construction contract will contain incentives paid to
KEC /Sportspark totaling 15 percent of the value of deductive change
orders and KEC /Sportspark will provide "value engineering"
recommendations where possible for cost - savings in construction and
operation. All parties must agree on deductive change orders.'
6. The lease agreement will contain those general terms as provided in
the bid specifications and the draft copy on file in the office of the
City Clerk incorporated herein by reference. The lease will also
contain the following:
a. Length of the lease is to be ten years, plus two 5 -year options to
extend. The term of the lease is subject to City Council /Agency
determination.
b. Operator is to be responsible for all start -up costs including,
but not limited to, those in the bid specifications.
c. Maintenance and operational standards including accounting methods
and time periods.
d. A cancellation clause which reflects City /Agency as lender /owner.
e. City /Agency is to participate in the profits of the park-only as
outlined through lease payments asNdefined by Article 1 of the
Agreement.
Larry Atwater
Steve DeThomas
James Hilkemeyer
September 28, 1992
Page 3
f. The landscape maintenance district cost shall be segregated and
identified so as to allow separate maintenance agreements and
accounting for the LMD area. The LMD Agreement shall provide for
payments of $96,000 per year for the first five years for the LMD
maintenance.
The cost formula for maintenance costs after the first five years
shall be based on the ratio of bid (in the Sportspark submittal)
on a per acre basis divided by the City's current cost per acre to
maintain LMD areas through the City. The details will be
developed before the lease is executed.
The lease shall provide for breach.should the operator violate the
provisions concerning segregating LMD area costs.
g. The lease will permit assignment of its provisions upon approval
by City /Agency. The parties contemplate that KEC /Sportspark will
be party to the lease only during the construction of the park and
for that period of time necessary to secure its operation. (Ref.
Article 3)
7. Recreatidn Technologists, Inc., ( RECTECH), a sister company to
Sportspark, will receive a Value Engineering and Operation Impact
Review Fee to review "value engineering" recommendations and to assess
all operational impacts to each recommendation. RECTECH will be
compensated for this work task by a fee of $25,000 upon substantial
completion of construction.
All of the above are subject to approval by the City Council /Agency and
approval by the same of the final lease agreement. Following award of said
contract, KEC /Sportspark agree to execute the lease agreement within thirty
(30) days in essentially the terms stated herein.
0 1.
Larry Atwater
Steve DeThomas
James Hilkemeyer
September 28, 1992 '
Page 4
Please indicate your agreement to the above by acknowledging with your
signature below.
Very truly yours,
Stephen M. Eckis
Tamara A. Smith
dew
KAJIMA ENGINEERING & CONSTRUCTION, INC.
By:
Koji Hayashi
Executive Vic President
SPORTSPARK OF AM I INC.
By:
James Hilkemeyer
CITY OF POWAY
B. L N \) V � - - -/
Bowersox
nager
REDEVELOPMENT AGENCY
By.
JamerL. Bowersox Director
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