HomeMy WebLinkAboutFresno Sports & Events LLC 2nd Amendment To 2018 Amended & Restated Stadium Sublease Agreement - 12-14-23 DocuSign Envelope ID:7E575626-9A4D-4314-9923-F674C508C892
SECOND AMENDMENT TO
2018 AMENDED AND RESTATED
STADIUM SUBLEASE AGREEMENT
This SECOND AMENDMENT ("Second Amendment"), effective as of
December 14 , 2023 ("Amendment Effective Date"), to the 2018 Amended and Restated
Stadium Sublease Agreement ("Original Agreement") as amended by the First
Amendment to 2018 Amended and Restated Stadium Sublease Agreement dated
January 22, 2021 ("First Amendment"), is made by and between the City of Fresno, a
California municipal corporation ("City") and Fresno Sports and Events, LLC, a Delaware
limited liability company ("Tenant"). The Original Agreement and the First Amendment
shall together be referred to hereinafter as the "Agreement".
RECITALS
A. Tenant is the owner of the professional baseball team known as the Fresno
Grizzlies ("Club").
B. City leases Chukchansi Park, the Club's home Stadium, from the Fresno Joint
Powers Financing Authority pursuant to that certain Facility Lease dated as of May
15, 2001. The City subleases Chukchansi Park to Tenant pursuant to the
Agreement.
C. Tenant is a party to a transaction for the sale of the Club ("Sale") to DBH Fresno,
LLC, a Delaware limited liability company ("DBH").
D. The Sale will provide financial stability for the Club and benefit the City, its citizens
and non-profit organizations of the City and surrounding areas.
E. The Sale has been approved by MLB Professional Development Leagues, LLC
("MLB PDL").
F. The Sale requires the City's written approval, but as a condition of the Sale, DBH
requires certain additional amendments to the Agreement and the Parties wish to
make these additional amendments to the Agreement.
G. Capitalized terms used but not defined herein shall have the meanings ascribed to
such terms in the Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the Parties
hereby agree that as of the Amendment Effective Date the Agreement is hereby amended
as follows:
AMENDMENT
1. Sale of Assets. Section 10.2 is hereby deleted and replaced entirely with the
following:
Tenant may not sell or otherwise transfer all or substantially all of
its assets(including the club)to another entity without(a)the prior
written approval of the City (which approval shall not be
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unreasonably withheld) and MLB PDL, and (b)the acceptance of
an assignment and assumption of this Agreement by such
transferee; provided that the Parties expressly agree that the
transfer of Tenant's assets shall in no way entitle the transferee
to avoid performance of any term hereof, including but not limited
to the obligation of the Club to play its home games in the
Stadium as required by Article XIV hereof.
2. Maintenance Repair and Replacements: a new Section 4.2(d) is added
providing as follows:
2025 MLB PDL Requirements: Tenant agrees it shall be
responsible for all Capital Expenditures necessary to comply with
the 2025 MLB PDL mandatory facilities standards if such
expenditures exceed amounts in the Capital Reserve Fund and
all Sub-Accounts. Such Capital Expenditures shall include, but
are not limited to, a batting cage building, batting tunnels and all
related electrical, HVAC and permitting items required for such
batting cage building or batting tunnels.
3. Annual Contributions to Capital Reserve Fund: Section 4.4(a)(ii)(i) is hereby
deleted and replaced in its entirety by the following:
$100,000 annually, on or before October 1, by Tenant
commencing in 2024 and $50,000 annually, on or before
October 1, by City commencing in 2024 (collectively, the "Annual
Contribution"). The Annual Contributions required of each party
respectively shall escalate at two percent (2%) annually.
4. _Capital Transactions. Section 10.3(a) of the Agreement is deleted and replaced
in its entirety by the following:
Upon the standalone and direct sale or transfer by Tenant of (i)
all or substantially all of its assets or (ii) one hundred percent
(100%)of its then issued and outstanding equity interests, in each
case, to an unaffiliated third-party in a transaction not involving
the transfer of the assets or equity of any other entity (any such
sale or transfer pursuant to (i) or (ii) to be defined as a "Capital
Transaction"), the City shall be entitled to receive a share of the
Net Surplus as set forth below in this Section 10.3.
Notwithstanding the foregoing, this Section 10.3 shall not apply
to any indirect transfers involving any affiliates of Tenant.
Section 10.3(c) is deleted entirely and replaced with the following: "RESERVED"
Section 10.3(d) is deleted entirely and replaced with the following: "RESERVED"
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Section 10.3(e) is deleted and replaced entirely with the following:
Upon the consummation of a Capital Transaction, the City shall
receive ten percent (10%) of any Net Surplus ("Capital
Transaction Fee") between the Amendment Effective Date and
the expiration of the Term.
5. Affiliates. Section 14.3 of the Agreement is deleted and replaced in its entirety
by the following:
Any affiliates of Tenant that will conduct business in the Stadium
must be business entities in good standing with the State of
California (or the laws of their state of incorporation, formation or
organization). In the event that Tenant enters into any transaction
with an affiliate of Tenant for such affiliate to conduct business in
the Stadium (other than transactions with Diamond Baseball
Holdings, LLC for the provision of services to Tenant in the
ordinary course of business) involving payment by Tenant to such
affiliate in excess of $50,000.00, Tenant must notify the City in
writing (email being sufficient) of such affiliate's entity name and
available contact information for notices at least ten (10) business
days prior to the affiliate conducting business in the Stadium.
6. City Season Tickets and Luxury Suite. Section 13.1 of the Agreement is deleted
and replaced in its entirety by the following:
City shall be provided, free of charge, tickets for all seats in
Luxury Suite #23, commonly referred to as the Community Suite
at the Stadium for all events held at the Stadium during the Term,
subject to any agreement to the contrary. The City shall retain its
discretion whether to accept or use such tickets to ensure
compliance with applicable laws.
7. Profit-Sharing. For the avoidance of doubt, after the Amendment Effective Date,
DBH will be responsible for paying the (i) Annual City Share Amount not to
exceed the caps set forth pursuant to Section 2.5(a) and (ii) any Capital
Transaction Fee pursuant to Section 10.3. Subject to confidentiality obligations
and other similar restrictions that may be applicable to information furnished by
DBH and except for any information that is subject to attorney-client privilege or
other privilege from disclosure, DBH will provide the City with reasonable access
on an annual basis to financial and other information as reasonably requested
by the City and required in order to confirm the calculation of the Annual City
Share Amount and any Capital Transaction Fee; provided, that the City shall use
its reasonable best efforts to maintain the confidentiality of such information.
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8. Prior Agreement Confirmed. Except as otherwise expressly modified by the
terms hereof, all of the remaining terms of the Agreement remain in effect.
9. Counterparts. This Amendment may be executed in counterparts, each of which
when executed and delivered will be deemed an original, and all of which
together will constitute one instrument. Delivery of an executed counterpart of a
signature page to this Amendment by facsimile or other electronic means
(including in "PDF" format) shall be effective as delivery of a manually executed
counterpart of this Amendment. The use of electronic signatures and electronic
records (including any contract or other record created, generated, sent,
communicated, received, or stored by electronic means) shall be of the same
legal effect, validity and enforceability as a manually executed signature or use
of a paper-based record-keeping system to the fullest extent permitted by
applicable law, including the Federal Electronic Signatures in Global and National
Commerce Act, and any other applicable law, including any state law based on
the Uniform Electronic Transactions Act or the Uniform Commercial Code.
10. Conditions Precedent. The closing of the Sale of the Club by Tenant to DBH is
a condition precedent to the effectiveness of this Second Amendment.
[Signatures on Following Page]
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CITY OF FRESNO, FRESNO SPORTS AND EVENTS, LLC,
a California municipal corporation a California limited liability company
DocuSignod by: DoeuSigned by:
By] n�,� 1/10/2024 1 Aki&.at fad 1/9/2024
Y.
eargr?awye A. White 76495MB337E414..
City Manager Name: mi chael Baker
Title: Managing Partner
APPROVED AS TO FORM: (If corporation or LLC., Board Chair,
ANDREW JANZ Pres. or Vice Pres.)
City Attorney
DocuSigned by: By:
By ate, w 1/10/2024
ra dawINAB Collet Date Name:
Supervising Deputy City Attorney
Title:
(If corporation or LLC., CFO,Treasurer,
ATTEST: Secretary or Assistant Secretary)
TODD STERMER, CMC
City Clerk
By�QccuSigncd by
r 1/10/2024
6CA13W20H4E3 Date
Deputy
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F,)egular Council �'±ieeting RECEIVED
December 14, 2023 7013 OF" 13 A ,& 39
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Supplement Packet
ITEM(S)
3-6 (I❑ 23-17 Actions pertaining to the 2018 Amended and Restated
Stadium Sublease Agreement between the City of Fresno and Fresno
Sports and Events, LLC.:
1 . Approve the Second Amendment to the 2018 Amended and
Restated Stadium Sublease Agreement
Contents of Supplement: Second Amendment Sublease Agreement —
Revised (Changes include the addition of Paragraph 2 and Paragraph 6)
Supplemental Information:
Any agenda related public documents received and distributed to a majority of the City
Council after the Agenda Packet is printed are included in Supplemental Packets.
Supplemental Packets are produced as needed. The Supplemental Packet is available for
public inspection in the City Clerk's Office. 2600 Fresno Street, during normal business hours
(main location pursuant to the Brown Act, G.C. 54957.5(2). In addition, Supplemental
Packets are available for public review at the City Council meeting in the City Council
Chambers, 2600 Fresno Street. Supplemental Packets are also available on-line on the City
Clerk's website. _
Americans with Disabilities Act (ADA):
The meeting room is accessible to the physically disabled, and the services of a translator
can be made available. Requests for additional accommodations for the disabled, sign
language interpreters, assistive listening devices. or translators should be made one week
prior to the meeting. Please call City Clerk's Office at 621-7650. Please keep the doorways,
aisles and wheelchair seating areas open and accessible. If you need assistance with
seatingbecause of a disability, please see Security.