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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 t he 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 MLB Professional Development Leagues, LLC (“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 trans fer all or substant ially all of its assets (including the club) to another entity without (a) the prior written approval of the City (which approval shall not be unreasonably withheld)
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and MLB PDL, and (b) the acceptance of an assignment and assumption of this Agreement by such trans feree; 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:
i. “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 elec trical, HVAC and permitting items required for such batting cage building or batting tunnels."
3. Annual Contributions to Capital Reserve Fund: Sect ion 4.4(a)(ii)(i) is hereby deleted and replaced in its entirety by the following:
i. “$100,000 annually, on or before Octo ber 1, by Tenant commencing in 2024 and $50,000 annually, S 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:
i. “Upon the standalone and direct sale or transfer by Tenant of (i) all or substantially all of its assets or (ii) one hundred perc ent (100%) of its then issued and outstanding equity inte rests, in each case, to an unaffiliated third-party in a transaction not involvi ng 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 “C apital 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:
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i. “Upon the consummation of a Capita l Transaction, the City shall receive ten percent (10%) of any Net Su rplus (“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:
i. “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 tr ansaction with an affiliate of Tenant for such affiliate to conduct business in the Stadium (other than transactions with Diamond Baseball Hold ings, LLC for the provision of services to Tenant in the ordinary course of business) involving payment by Tenant to such affiliate in e xcess 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. Profit-Sharing. For t he 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 conf irm 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.
7. Prior Agreement Confirmed. Except as otherwise expressly modified by the terms hereof, all of the remaining terms of the Agreement remain in effect.
8. Counterparts. This Amendment may be executed in counterparts, each of which when executed and delivered will be deem ed an original, and all of which together will constitute one instrument. Delivery of an executed counterpart of a signature page to this Amend ment 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 creat ed, generated, sent, communicated, received, or stored by el ectronic 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
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Commerce Act, and any other applicable law, including any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
9. Conditions Precedent. The closing of t he 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)