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SECOND AMENDMENT TO
2018 AMENDED AND RESTATED
STADIUM SUBLEASE AGREEMENT
This SECOND AMENDMENT (“Second Amendment”), effective as of September ___, 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 professi onal baseball team k nown as the Fresno Grizzlies (“Club”).
B. City leases Chukchansi Park, the Cl ub’s home Stadium, from the Fresno Joint Powers Financing Authority pursuant to t hat 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 fo r 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 the California League and the MLB PDL.
F. The Sale requires the City’s written approv al, 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 her eby deleted and replaced entirely with the following:
i. “Tenant may not sell or otherwise transfer all or substantially all of its assets (including the fr anchise) to another entity without (a) the prior written approval of the City (which approval shall not be unreasonably withheld), the California League and MLB
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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 Stad ium as required by Article XIV hereof.”
2. Annual Contributions to Capital Reserv e Fund: Section 4.4(a)(ii)(i) is hereby deleted and replaced in its entirety by the following:
i. “$100,000 annually, on or befo re 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.”
3. Capital Transactions.
Section 10.3(a) of the Agr eement is deleted and replaced in its entirety by the following:
i. “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 outs tanding 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”
Section 10.3(e) is deleted and replaced entirely with the following:
i. “Upon the consummation of a Capital Transaction, the City shall receive ten percent (10%) of any Net Surplus between the Amendment Effective Date and the expiration of the Term.”
1. Affiliates. Section 14.3 of the Agreement is deleted and replaced in its entirety by the following:
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i. “Any affiliates of Tenant t hat will conduct business in the Stadium must be business entit ies 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 fo r 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 pr ior to the affiliate conducting business in the Stadium.”
2. Prior Agreement Confirmed. Except as otherwise expressly modified by the terms hereof, all of the remaining terms of the Agreement remain in effect.
3. 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, generat ed, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signat ure or use of a paper-based record- keeping system to the fullest extent per mitted 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.
4. 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,
a California municipal corporation
By:
Georgeanne White
City Manager
APPROVED AS TO FORM:
ANDREW JANZ
City Attorney
By:
Brandon M. Collet Date
Supervising Deputy City Attorney
ATTEST:
TODD STERMER, CMC
City Clerk
By:
Date
Deputy
FRESNO SPORTS AND EVENTS, LLC,
a California limited liability company
By:
Name:
Title:
(If corporation or LLC., Board Chair,
Pres. or Vice Pres.)
By:
Name:
Title:
(If corporation or LLC., CFO, Treasurer,
Secretary or Assistant Secretary)