Ontario City Council
August 20, 2024

John Loomis, Principal in Charge
c. (949) 274-1092
Historian Daly and Associates
Portland, Oregon
Structural Engineer Grimm & Chen
Contact info… Irvine, CA
Mechanical, NV5
Electrical and Irvine, CA
Plumbing
Engineering
LiDAR Consultant Precision Property Measurements
Los Angeles, CA
The following services/consultants are not included in this Agreement and shall be provided by the Owner if needed:
 Geotechnical Engineering
 Hazardous Materials Study
 Termite Study
 Mold and Mildew Report
190

Scope of Work
Phase I, Field Reconnaissance
The Preservation Architect, Architectural Historian, Structural and MEP Engineers shall review the existing construction drawing and other miscellaneous documents.

The Preservation Architect, Architectural Historian, Structural and MEP Engineers shall conduct an intense on-site field reconnaissance to assess conditions of the existing building including:

Identification of character defining and historically significant features, materials and finishes
Sequence of Construction and Change
Prior uses of the buildings
Evaluation of the Condition of Exterior and Interior Finishes and Features
Review of structural condition and determination if there is any evidence of prior seismic retrofit improvements.

Identification of existing MEP building systems and their age and condition
Evaluation of historic significance
Condition of historic fabric
The Architect shall photo document existing conditions.

The Team shall summarize in writing its findings from the Field Reconnaissance.

Phase I Products
Field Notes
Photo Documentation
191

Summary of Field Recon
Phase I Products
Written summary of findings
Phase II, Evaluation of Existing Conditions and Make Repair Treatment Recommendations
Based on the Field Reconnaissance, the Team shall assess and evaluate existing conditions and make protection, maintenance and repair treatment recommendations for the proposed adaptive reuse project as prepared by the LAB including:

Code Compliance
ADA Compliance
Exiting and Life Safety
Identification of Hazardous Conditions
MEP systems recommendations
Evaluation of Condition of Exterior and Interior Finishes and Features Existing Hazards
Fire ratings of wall, floor and roof assemblies
Accessibility Improvements
Seismic Retrofit
Energy Efficiency Improvements
The Team shall summarize its findings and recommendations in writing.

The Team shall prepare a Statement of Probable Cost for Repair Treatment Recommendations
192

Phase II Products
Written summary of evaluation of existing conditions and maintenance and repair treatment recommendations.

Statement of Probable Cost for Repair Treatment Recommendations III, Preparation of “As-Builts”
Drawings
The Team shall engage a LiDAR Consultant to prepare CAD as built drawings of all three buildings including:

A site plan
Floor plans of all levels
Roof plan
Exterior elevation of all façades
Two building Sections, one N/S and one E/W
Phase III Products
As-Built CAD drawings

ADDITIONAL SERVICES
The following services are not included in Basic Services.

Providing services and consultants for other than normal Architectural, Architectural Historian and MEP and Structural Engineering Services.

Hazardous Material Study, Mold and Mildew Inspection and Termite 193

Inspection, Civil and Geotechnical Engineering are also not a part of this Agreement.

Providing detailed estimates or analysis of owning and operating costs, or detailed quantity surveys or inventories of material, equipment and labor.

Providing legal services for the preparation of partywall agreements, easements or right of ways.

Preparing to serve or serving as an expert witness in connection with any public hearing, arbitration proceeding or legal proceeding.

Providing any other services not otherwise included in this Agreement or not customarily furnished in accordance with generally accepted Architectural practice.

OWNER'S RESPONSIBILITIES
The Owner shall provide full information regarding his requirements for the Project. The Owner shall designate, when necessary, a representative authorized to act in his behalf with respect to the Project.

The Owner or his representative shall examine documents submitted by the Architect and shall render decisions pertaining thereto promptly, to avoid unreasonable delay in the progress of the Architect.

COST ESTIMATE
Construction Cost does not include the fees of the Architect and consultants, the cost of land, rights of way, or other costs, which are the responsibility of the Owner.

Cost Estimates prepared by the Architect represent his best judgment as a design professional familiar with the construction industry. It is 194

recognized, however, that neither the Architect nor the Owner has any control over the cost of labor, materials, or equipment, over the Contractor's methods of determining bid prices, or over competitive bidding or market conditions. Accordingly, the Architect cannot and does not guarantee that bids will not vary from any cost estimate prepared by him.

PROFESSIONAL FEES
The Professional Fees for Phase I through III shall be as listed below, plus reimbursable expenses.

Phase Fee
Base Services
Phase I, Field Reconnaissance A lump sum of $25,000
Phase II Evaluation of Existing
Conditions and Make Repair Treatment
Recommendations.

A lump sum of $50,000
Phase III, Preparation of As-Builts A lump sum of $20,000 Total: $95,000
Reimbursable Allowance: $5,000 Max
195

Additional Services, if requested by the Owner in writing, shall be billed at the following hourly rates:

HOURLY FEE SCHEDULE:

ARCHITECT
Principal $225/hr.

Licensed Architect $190/hr.

Draftsperson $155/hr.

Architectural Historian
Structural Engineer $240/hr.

MEP Engineer $220/hr.

Lydar Technician $155/hr.

Once the contract is approved, we will begin work immediately.

Billings shall be made to the Owner monthly in proportion to the Work completed plus reimbursable expenses.

Reimbursable expenses include blueprinting and any unusual expenses incurred and shall be in addition to any fees above. Reimbursable expenses shall be billed at the multiple of 1.1 times cost to cover processing and bookkeeping per the following reimbursable schedule:

Reimbursable Cost Schedule
Item Cost
Blueprinting Invoice
Copying .25/page
196

In-house Blueprints $1/sheet
In-house color copies $1/sheet
Other Expenses* Cost
The the hourly rates listed are subject to a cost of living increase two years from the date of this Agreement.

Time of Performance
We estimate the following time frames to complete each phase of work:

Phase Time to Complete
Base Services
Phase I, Field Reconnaissance 2-3week
Phase II Evaluation of Existing
Conditions and Make Repair Treatment
Recommendations. 4-8 weeks
Phase III Preparation of As-Builts Concurrent with Phase II Total 6-11 weeks
197

No deductions shall be made from the Architect's compensation on account of penalty, liquidated damages or other sums withheld from payments to Contractors.

If the Project is suspended by the Owner or abandoned in whole or in part, the Architect shall be paid his compensation for services performed prior to receipt of written notice from the Owner of such suspension or abandonment, together with reimbursable expenses then due.

DEFAULT
In the event Owner fails to pay the Architect within thirty (30) days after invoices are rendered, Owner agrees that the Architect shall have the right to consider said default a total breach of this Agreement and, upon written notice, the duties, obligations and responsibilities of the Architect under this Agreement are terminated. In such event, Owner shall then promptly pay the Architect all of the fees and charges for services rendered by the Architect.
198

DELAYS
Neither party shall hold the other responsible for damages or delay in performance caused by acts of God, strikes, lockouts, accidents, or other events beyond the other's control.

TERMINATION
This Agreement may be terminated by either party upon seven days written notice should the other party fail substantially to perform in accordance with its terms through no fault of the other. In the event of termination due to the fault of others than the Architect, the Architect shall be paid his compensation for services performed to termination date, including reimbursable expenses then due and all terminal expenses.

OWNERSHIP OF DRAWINGS
Drawings and Specifications as Instruments of Service are and shall remain the property of the Architect whether the Project for which they are made is executed or not. They are not to be used by the Owner on other projects or extensions to this Project except by agreement in writing and with appropriate compensation to the Architect. The Owner has rights to blueprint copies or sepias.

TERMITE DAMAGE, MOLD/MILDEW AND HAZARDOUS

MATERIALS ABATEMENT
The Owner hereby assumes all responsibility for the discovery, identification and abatement of all termite damage, mold, mildew or 199

hazardous materials in the existing structure. The Owner shall hold he Architect harmless from any and all liabilities resulting from same.

SEISMIC
Structural Engineering services are observational only and intended to identify Seismic Retrofit issues and make general recommendations for repairs. The preparation of construction documents and structural calculations is not included.

SUCCESSORS AND ASSIGNS
The Owner and Architect each binds himself, his partners, successors, assigns and legal representatives to the other party to this Agreement.

Neither the Owner or the Architect shall assign, sublet, or transfer his interest in this Agreement without the written consent of the other.

LIMITATION OF LIABILITY
The Owner agrees to limit the Architect’s liability to the Owner and to all Contractors and Subcontractors on the Project, due to professional negligent acts, errors or omissions of the Architect, to the sum of $50,000. or the Architect’s fee, whichever is smaller.

CLAIMS BY PARTIES
All claims, disputes, and other matters in question arising out of or relating to, this Agreement or the breach thereof, shall be decided by arbitration in accordance with the Construction Industry Arbitration 200

rules of the American Arbitration Association then obtaining. This Agreement so to arbitrate shall be specifically enforceable under the prevailing arbitration law.

Notice of the demand for arbitration shall be filed in writing with the other party to the contract and with the American Arbitration Association. The demand shall be made within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall the demand for arbitration be made after institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations.

Should arbitration occur between the two parties relating to the provisions of this Agreement, or any act arising out of the performance of this Agreement, all expenses, collection expenses, witness fees, court costs and attorney's fees shall be paid by the non-prevailing party to the prevailing party.

The Owner agrees that the Architect can not be joined with any other person that is not a party to this Agreement either by joiner or consolidation except by the Architect's written consent. 201

APPLICABLE LAW
Unless otherwise specified, this Agreement shall be governed by the law of the principal place of business of the Architect.

WARRANTY OF AUTHORITY TO SIGN
The person signing this Agreement warrants he has authority to sign as, and on behalf of, the Owner for whom or for whose benefit Thirtieth Street Architect's services are rendered. If such person does not have such authority, he agrees that he is personally liable for all breaches of this Agreement, and that in any action against him for breach of such warranty a reasonable attorney's fee shall be included in any judgment rendered.

The undersigned hereby acknowledges that he or she has reviewed and accepts all provisions of this Agreement including the payment schedule.

The confirmation is valid for a period of thirty (30) days from the date shown above. If not accepted within thirty (30) days it is void.

This Agreement executed on the day and year first written above.

OWNER THIRTIETH
STREET ARCHITECTS, INC.

202

Authorized Agent John C. Loomis Lic#C8684
President
James C. Wilson Lic. #C8994
Secretary/C.F.O.
203
204
Thousand Six Hundred Dollars ($806,000) ("Total
Compensation"). This Total Compensation amount shall be based upon, and may be adjusted according to, the fee schedule and related terms and conditions attached hereto as Exhibit "A" and incorporated herein by reference. The Total Compensation, as may be adjusted upon mutual agreement, shall constitute complete and adequate payment for Services under this Agreement."
Exhibit A is hereby deleted in its entirety and replaced with Attachment A attached hereto and incorporated herein by reference.

3.2 Continuing Effect of Agreement. Except as amended by this Amendment No. 6, all other provisions of the Agreement remain in full force and effect and shall govern the actions of the parties under this Amendment No. 6. From and after the date of this Amendment No. 6, whenever the term "Agreement" appears in the Agreement, it shall mean the Agreement as amended by this Amendment No. 6.

3.3 Adequate Consideration. The Parties hereto irrevocably stipulate and agree that they have each received adequate and independent consideration for the performance of the obligations they have undertaken pursuant to this Amendment No. 6.

3.4 Severability. If any portion of this Amendment No. 6 is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

3.5 Integration. This Amendment represents the entirety of the Parties' understanding relating to the subject of this Amendment, including written or verbal communications between the Parties, which shall have no relevance unless expressly incorporated herein. This is an integrated amendment.

BB&K2020
46700.00100\33287662.1
[SIGNATURES ON FOLLOWING PAGE]

205
206
Department: Planning
Prepared By: Edmelynne V Hutter
Department:

Prepared By: Edmelynne V Hutter
Staff Member Presenting: Scott Murphy,
Executive Director Community Development
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 7
SUBJECT: AN AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH KIMLEYHORN AND ASSOCIATES, INC., TO PROVIDE ENVIRONMENTAL SERVICES FOR PHASE 2 OF THE ONTARIO ARENA ENTERTAINMENT DISTRICT PROJECT

CITY OF ONTARIO
Agenda Report
August 20, 2024
SECTION:

CONSENT CALENDAR
RECOMMENDATION: That the City Council approve and authorize the City Manager or designee to execute Amendment No. 1 to a Professional Services Agreement with Kimley-Horn and Associates, Inc., of Riverside, California, to increase the project funding by $152,000 for a total authorized expenditure of $264,000, to provide environmental services for Phase 2 of the Ontario Arena Entertainment District Project.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
Invest in the Growth and Evolution of the City's Economy Encourage, Provide or Support Enhanced Recreational, Educational, Cultural and Healthy City Programs, Policies and Activities
FISCAL IMPACT: Any potential long-term fiscal impact and project expenditures to the City will be offset by revenue sources such as development impact fees and property and sales tax revenues generated by future developments. If approved, additional zero impact appropriations will be requested at the first quarter budget adjustment.

BACKGROUND & ANALYSIS: On June 11, 2024, the City executed a Professional Services Agreement with Kimley-Horn and Associates, Inc., for the preparation of an Environmental Impact Report (EIR) Addendum to the Certified Ontario Center Specific Plan EIR. The approved budget for this project was $112,000. An amendment to the executed Professional Services Agreement with Kimley-Horn and Associates, Inc., is proposed in the amount of $128,000, plus ten percent (10%) contingency of Twenty-four Thousand Dollars ($24,000), for a total authorized expenditure amount of $264,000. The additional funds will be used to prepare additional studies including: [1] Traffic Impact Study, and [2] Parking Study for the Ontario Center Entertainment District. 207
46700.00100\33287662.1

BB&K 2020
AMENDMENT NO. 1 TO THE PROFESSIONAL SERVICES AGREMEENT

BETWEEN THE CITY OF ONTARIO AND
KIMLEY-HORN AND ASSOCIATES, INC.

1. Parties and Date.

This Amendment No. 1 to the Agreement (as defined herein) is made and entered as of ____________, by and between the City of Ontario (“City”) and Kimley Horn and Associates, Inc., a corporation. The City and Kimley Horn and Associates, Inc. are sometimes individually referred to as “Party” and collectively as “Parties.”

2. Recitals.

2.1 Agreement. The City and Kimley Horn and Associates, Inc. have entered into an agreement entitled “Professional Services Agreement” dated June 11, 2024, (“Agreement”).

2.2 Amendment Purpose. The City and Kimley Horn and Associates, Inc. desire to amend the Agreement to revise the scope of services for the Environmental Impact Report (EIR) Addendum in the amount of $112,000., to amend the Certified Ontario Center Specific Plan EIR and the not-toexceed compensation amount by One Hundred Twenty-Eight Thousand Dollars ($128,000) for a total contract amount not-to-exceed Two Hundred Forty Thousand Dollars ($240,000).

2.3 Amendment Authority. This Amendment No. 1 is authorized pursuant to Section

3.7.14 of the Agreement.

3. Terms.

3.1 Amendment. Section 3.2.1 of the Agreement is hereby amended in its entirety to read as follows:
"Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit “C” attached hereto and incorporated in by reference. The total compensation shall not exceed Two Hundred Forty Thousand Dollars ($240,000.00) without written approval of the City Council or City Manager, or designee, as applicable. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement."
Exhibit A is hereby deleted in its entirety and replaced with Attachment A attached hereto and incorporated herein by reference.

Exhibit B is hereby deleted in its entirety and replaced with Attachment B attached hereto and incorporated herein by reference.
208
46700.00100\33287662.1

BB&K 2020
Exhibit C is hereby deleted in its entirety and replaced with Attachment C attached hereto and incorporated herein by reference.

3.2 Continuing Effect of Agreement. Except as amended by this Amendment No. 1, all other provisions of the Agreement remain in full force and effect and shall govern the actions of the parties under this Amendment No. 1. From and after the date of this Amendment No. 1, whenever the term “Agreement” appears in the Agreement, it shall mean the Agreement as amended by this Amendment No. 1.

3.3 Adequate Consideration. The Parties hereto irrevocably stipulate and agree that they have each received adequate and independent consideration for the performance of the obligations they have undertaken pursuant to this Amendment No. 1.

3.4 Severability. If any portion of this Amendment No. 1 is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

3.5 Integration. This Amendment represents the entirety of the Parties’ understanding relating to the subject of this Amendment, including written or verbal communications between the Parties, which shall have no relevance unless expressly incorporated herein. This is an integrated amendment.
[SIGNATURES ON FOLLOWING PAGE]
209
46700.00100\33287662.1

BB&K 2020
SIGNATURE PAGE FOR AMENDMENT NO. 01 TO PROFESSIONAL SERVICES

AGREEMENT BETWEEN THE CITY OF ONTARIO
AND KIMLEY-HORN AND ASSOCIATES, INC.

IN WITNESS WHEREOF, the Parties have entered into this Amendment No. 1 as of the day and year first above written.

CITY OF ONTARIO KIMLEY-HORN AND ASSOCIATES,
INC.

By:

Its:

Printed Name:

By:

Its:

Printed Name:

Approved By:

Scott Ochoa
City Manager
Approved as to Form:
_____________________________________
Best Best & Krieger LLP
City Attorney
Attested By:

City Clerk
210
kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 July 23, 2024
Rudy Zeledon
Community Development Assistant Director
City of Ontario
303 East B Street
Ontario, CA 91764
RE: Preparation of a California Environmental Quality Act (CEQA) Environmental Impact Report (EIR) Addendum to Amend the Adopted Certified Ontario Center Specific Plan EIR Previously Approved for the Phase 2 of the Ontario Arena Entertainment District Project
Dear Mr. Zeledon:

Kimley-Horn and Associates, Inc. (Kimley-Horn) appreciates the opportunity to submit this proposal to provide environmental services to the City of Ontario (“Client” or "City"), for the preparation of an EIR Addendum to the Adopted Certified Ontario Center Specific Plan EIR (“the Project”). The EIR Addendum will be prepared in accordance with City policy and procedures as directed by City staff, for compliance with the California Environmental Quality Act (CEQA). Based on direction provided by the City, it is assumed that an EIR Addendum is the appropriate CEQA document for this Project.

Background
The City of Ontario approved the Ontario Center Specific Plan (Specific Plan) in August 1981. As adopted in 1981, the Specific Plan provided for up to 1,530 residential units, close to seven million square feet of commercial development, and nearly two million square feet of industrial uses on approximately 600 acres. Several amendments to the 1981 Specific Plan, along with appropriate environmental review, have been approved by the City since its adoption.

Project Understanding
The proposed Project consists of the amendment of the Piemonte Overlay for the Ontario Center Specific Plan EIR for the Phase 2 portion of the Project. The scope of the project for Phase 2 will include the addition of 402,500 square feet (350,000 SF, plus 15%) of commercial entertainment uses, plus a 300-room hotel, 2,500 seat performance arts theater. Phase 2 will be located within Subareas 4 (proposed parking structure) and 19 (currently developed with parking lot) of the Piemonte Overlay of the Ontario Center Specific Plan (see attached conceptual site plan). Phase 2 does not require an Amendment to the Piemonte Overlay; however, the Piemonte Overlay states that future development within improved parking of Subarea 19, will require additional environmental review.

EXHIBIT "A"

SCOPE OF SERVICES
211

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 We have also made certain assumptions noted below regarding the frequency and nature of internal team meetings, internal/legal team review, and City staff coordination and review processes. Although City staff could provide much of the CEQA administrative support, we have included typical CEQA administrative support tasks in this proposal.

ADDENDUM EIR SCOPE OF WORK
Task 1: Mobilization
The Kimley-Horn environmental team will utilize available project information, plans and will utilize the technical studies prepared by Kimley-Horn, as well as other available relevant information. Kimley-Horn will confirm the overall approach and schedule with the City. KimleyHorn will conduct a site visit to review existing conditions on the property and surrounding environment.

Task 2: Prepare Project Description
The Kimley-Horn environmental team will use information obtained in Task 1 and work closely with City staff and Applicant to prepare a draft Project Description (PD) for the CEQA document.

The PD will be prepared to the level of detail required by the City for the entitlement approvals being sought. The draft PD will be sent to the City for review and will be used as the basis for the EIR Addendum.

Task 3:Prepare EIR Addendum
This task assumes preparation of the EIR Addendum and incorporation of findings from the technical studies. State CEQA Guidelines Section 15164 provides general guidance regarding Addendums; however, it defers to Section 15162 to determine whether circumstances warrant preparation of a Subsequent EIR. In other words, if the project fails to meet Section 15162 criteria, an Addendum may be appropriate. This finding must consider factors such as changes in the scope of the proposed Project relative to the approved Project, changes in surrounding circumstances that have occurred since the Final EIR was certified, and the discovery of new information that was not known at the time the previous EIR was prepared. The Addendum test is the ability to provide substantial evidence showing that the proposed Project would not create new significant adverse impacts or increase the severity of a significant adverse impact identified in the previous EIR.

For the environmental analysis, it is important to demonstrate that adequate consideration has been given to all the environmental topics previously analyzed as part of the Certified Ontario Center Specific Plan EIR and sufficient documentation is provided to support the determination that the Addendum is the appropriate CEQA documentation. Therefore, Kimley-Horn proposes to use the CEQA Environmental Checklist as the basis for the analysis. For each topic on the checklist, a summary of the findings from the Final EIR will be provided. Kimley-Horn anticipates 212

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 that the results of the technical studies will conclude that the proposed Project’s impacts are consistent with the Certified Ontario Center Specific Plan EIR. The EIR Addendum will rely upon graphics provided by the Applicant or others.

The State CEQA Guidelines do not specify the content or format for an EIR Addendum. KimleyHorn recommends the Addendum consist of the following: (1) Purpose of the Addendum; (2) Project Background; (3) Project Description, which would provide a project setting discussion; (4) Environmental Analysis; and (5) Conclusions. A Mitigation Monitoring and Reporting Plan (MMRP) will be provided as an Appendix to the Addendum. The MMRP will identify those measures from the Specific Plan Final EIR that would be applicable to the proposed Project as well as any modifications to measures and standard conditions of approval that are applicable based on regulatory and City requirements. The MMRP is assumed to be simply an update of the existing approved MMRP.

Task 4:Address City Comments on Admin Draft Addendum EIR This task assumes up to two (2) rounds of comments from the City. Once comments have been addressed, Kimley-Horn will prepare a final EIR Addendum for the City’s records. If necessary, up to 5 hard copies of the Addendum will be printed with all technical studies on CD. Per CEQA Guidelines Section15164 (c), an EIR Addendum does not need to be circulated for public review.

This task excludes preparation of updated findings, all public notices, or other administrative CEQA support services, which could be provided on a time and materials basis if desired.

Task 5: Project Meetings
The Kimley-Horn Project Manager will attend meetings on a time and materials (T&M) basis, assumed to be up to three (3) meetings with the Client or City staff. If desired by the City, KimleyHorn will make a presentation of CEQA findings to the City at one public meeting.

Task 6: Project Management
The Kimley-Horn team will be led by Mr. Ruben Salas, with support by Mr. Kevin Thomas, CEP, ENV SP. Ruben has over 9 years of experience and Kevin has over 35 years of experience in CEQA/NEPA compliance. Kevin will personally review the CEQA documentation and related analyses for compliance with CEQA. Ruben and Kevin will provide regular updates to the Client.

TECHNICAL STUDIES
Task 7: Air Quality and Greenhouse Gas Emissions Analysis The project specific technical analysis will evaluate air quality impacts associated with the proposed project relative to impacts identified in the Ontario Center Specific Plan EIR. The 213

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 significance of air quality and greenhouse gas impacts will be determined in comparison to applicable significance thresholds and to the findings of the Specific Plan EIR.

Kimley-Horn will assess air quality emissions in accordance with the South Coast Air Quality Management District’s (SCAQMD’s) recommended methodologies set forth in the SCAQMD CEQA Air Quality Handbook. The analysis will be prepared in accordance with the criteria, standards, and provisions of the California Environmental Quality Act (CEQA) and will respond to the applicable checklist items within Appendix G of the CEQA Guidelines. The analysis will evaluate if the project would result in any new or substantially more severe significant environmental impacts as compared to the conclusions discussed in the certified EIR. The analysis will include the following:
• Construction emissions (equipment exhaust and fugitive dust) will be quantitatively evaluated using the California Emissions Estimator Model (CalEEMod). • Operational emissions (i.e., area, mobile, and energy source) will be quantified with CalEEMod.
• Modeled construction and operational emissions will also be compared to the SCAQMD Localized Significance Thresholds to determine whether the localized impacts would occur. Construction health risks will be evaluated qualitatively. If necessary, a construction health risk can be provided under a separate scope and fee. • Project consistency with the SCAQMD’s latest Air Quality Management Plan (AQMP) will be addressed.
• Kimley-Horn will provide a qualitative odor analysis from the construction and operation of the proposed project.

Kimley-Horn will analyze the project’s consistency with the City of Ontario Community Climate Action Plan (CCAP). The analysis will use the CCAP Screening Tables to determine if the project can garner 100 points by including enough GHG reduction strategies in order to be consistent with the CCAP and result in a less than significant GHG impact. The analysis will evaluate if the project would result in any new or substantially more severe significant environmental impacts as compared to the conclusions discussed in the certified EIR. The significance of GHG impacts will be determined in comparison to applicable significance thresholds and to the findings of the Specific Plan EIR.

Task 8: Noise and Vibration Assessment
Kimley-Horn will prepare a noise and vibration assessment that will quantify both construction and operational noise levels. Pursuant to CEQA Guidelines Section 15164, the noise analysis will compare the potential impacts of the current proposal with the previous impacts identified for 214

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 the Specific Plan EIR. The analysis will examine whether the project noise would generate a substantial temporary or permanent increase in ambient noise levels in the vicinity of the project in excess of applicable standards. The following outlines our approach:
• Existing Conditions and Regulatory Setting. Noise standards regulating noise impacts will be discussed for land uses on and adjacent to the project site. A site visit will be conducted, and short-term noise level measurements will be taken along the project area.

Up to six short-term (10-minute) noise measurements will be taken at various locations to establish ambient noise levels at various land uses and areas in the project vicinity. • Construction Noise. Noise impacts from construction sources will be analyzed based on the anticipated equipment to be used, length of a specific construction task, equipment power type (gasoline or diesel engine), horsepower, load factor, and percentage of time in use. The construction noise impacts will be evaluated in terms of maximum levels (Lmax) and hourly equivalent continuous noise levels (Leq) and the frequency of occurrence at adjacent sensitive locations.
• Vibration. An analysis of construction vibration impacts will be based on the Federal Transit Administration’s (FTA’s) vibration analysis guidance. Analysis requirements will be based on the sensitivity of the area, specific construction activities, and Noise Ordinance specifications. The analysis will examine whether the project would generate excessive groundborne vibration.
• Operational Noise. On-site noise generating activities will be addressed and analyzed for potential impacts to the adjacent uses and will be assessed against the applicable Land Use Noise and Compatibility Matrix and Interior/Exterior Noise Guidelines. Stationary noise sources will be quantitatively assessed. On- and off-site noise impacts from vehicular traffic will be assessed using the U.S. FHWA Traffic Noise Prediction Model (FHWA-RD-77-108). The 24-hour weighted Community Noise Equivalent Levels (CNEL) will be presented in a tabular format.

Noise and vibration effects during construction and operation will be compared to the applicable significance criteria, and then compared to the findings of the Specific Plan EIR. Applicable mitigation consistent with the Specific Plan EIR will be identified.

Task 9: Water Supply Assessment
Kimley-Horn will prepare the Phase II of the Original Model Colony Adept Project WSA. The WSA will demonstrate if there will be a sufficient water supply for the proposed developments detailed in Phase 2 of the Ontario Arena Entertainment District. A WSA is required to prepare in compliance with the California Environmental Quality Act (CEQA). The Phase II WSA will be a full, 215

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 comprehensive assessment, building on the findings from the Phase l WSA conducted by Placeworks, Inc.

Kimley-Horn will provide the services specifically set forth below.

Data Collection
This task assumes consultant will research and acquire the following data:
• 2020 City of Ontario Urban Water Management Plan,
• 2020 Chino Basin Desalter Authority Urban Water Management Plan, • 2020 Inland Empire Utilities Agency Urban Water Management Plan, • 2020 San Antonio Water Company Urban Water Management Plan, • Water System Master Plan,
• Water Distribution System Computer Model (if available), • Information on water supply sources including water supplies available during normal, single dry, and multiple dry water years during a 20-year period, and • Water infrastructure in the Phase 2 of the Ontario Arena Entertainment District Project Plan
Water Demand Projections
Based on the land use information provided by the Client, Kimley-Horn will project water demand using acceptable unit water demand duty factors per the local standards, for the proposed development. The developed water demand information will form the basis for the WSA.

Water Supply Assessment
Kimley-Horn will perform a WSA using information presented in the UWMP that examines existing water supply entitlements, water rights, and water service contracts relevant to the water supply for the proposed Specific Plan, as well as water received in prior years pursuant to those entitlements and any proposed additional water supplies planned by the City to assess whether sufficient water supplies would be available for the future project.

The WSA will address whether the City of Ontario’s water system’s total projected water supplies available during normal, single dry, and multiple dry water years during a 20-year projection would meet the projected water demand associated with the proposed Project in addition to the public water system’s existing and planned future uses.

Draft and Final Report Presentation
Following the WSA analysis, Kimley-Horn will prepare Draft and Final reports that includes the following:
216

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868

1. Introduction

2. Project Description

3. Project Location

4. Existing Land Uses

5. Proposed Land Uses

6. Identification of Public Water System

7. Project Water Demand

8. Urban Water Management Plan Review which addresses the following:
a. Recycled Water Use
b. Groundwater
c. Water Conservation Act of 2009
d. Water Supply Reliability
e. Water Shortage Contingency Planning
f. Demand Management Measures

9. Conclusions and Recommendations
Kimley-Horn will submit the Draft Report to the Client for review and comments. Kimley-Horn will incorporate two rounds of review comments and prepare a Final Report.

Task 10: Traffic Impact Study
Kimley-Horn will prepare a Traffic Study based on the City of Ontario traffic study requirements and the San Bernardino County Transportation Authority (SBCTA) Recommended Traffic Impact Analysis Guidelines for Vehicle Miles Traveled (VMT) and Level of Service (LOS) Assessment (SBCTA Guidelines; February 2020).

Sub-Task 10.1: Scoping Agreement and VMT Screening
Kimley-Horn will obtain a copy of the Project site plan for the proposed Project, including building square footages and uses, site layout, site driveways, parking supply, and any other site features that will affect the traffic analysis.

Kimley-Horn will prepare a Traffic Study Scoping Agreement, identifying the Project trips, trip distribution, and recommended study locations for submittal to City of Ontario Traffic Engineering staff. One (1) conference call with City staff is assumed; to discuss and resolve the Scoping Agreement.

Kimley-Horn will run initial VMT screening based the City of Ontario VMT requirements and the San Bernardino County Transportation Authority (SBCTA)Guidelines. Kimley-Horn will coordinate with the lead agency regarding their planned approach to establishing thresholds and methodologies for the VMT analysis. Should the City require a quantitative VMT analysis, a quantitative VMT scope is provided below.
217

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 Sub-Task 10.2: LOS Analysis
Kimley-Horn will conduct a site visit to observe and document existing traffic conditions in the Project vicinity, including site access points, surrounding street system and traffic control, and surrounding land uses.

Based on discussion with City Staff, Kimley-Horn assumes that the traffic analysis will evaluate Project-related effects at up to twenty-seven (27) study intersections and up to twenty-four (24) roadway segments, as noted below:

1. Fourth Street at Haven Avenue

2. Fourth Street at Shopping Center Driveway

3. Fourth Street at Duesendberg Drive/Utica Avenue

4. Fourth Street at Via Asti

5. Fourth Street at Via Piemonte

6. Fourth Street at Empire Court

7. Fourth Street at Milliken Avenue

8. Fourth Street at Franklin Avenue

9. Fourth Street at I-15 SB Ramps/Ontario Mills Drive

10. Fourth Street at I-15 NB Ramps

11. Concours Street at Haven Avenue

12. Concours Street at Shopping Center Driveway

13. Concours Street at Mercedes Lane/Ontario Center (West)

14. Concours Street at Mian Driveway

15. Concours Street at Ferrari Lane

16. Concours Street at Ontario Center (East)

17. Concours Street at Milliken Avenue

18. Inland Empire Boulevard at Haven Avenue

19. Inland Empire Boulevard at Porsche Way/Mercedes Lane

20. Inland Empire Boulevard at Ferrari Lane

21. Inland Empire Boulevard at Milliken Avenue

22. Haven Avenue at I-10 WB Ramps

23. Haven Avenue at I-10 EB Ramps

24. Milliken Avenue at I-10 WB Ramps/Ontario Mills Parkway

25. Milliken Avenue at I-10 EB Ramps

26. Ontario Center at Via Asti

27. Ontario Center at Via Piemonte (West)
Study Roadway Segments:

1. Fourth Street: West of Haven Avenue
218

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868

2. Fourth Street: Haven Avenue to Duesendberg Drive/Utica Avenue

3. Fourth Street: Duesendberg Drive/Utica Avenue to Via Asti

4. Fourth Street: Via Piemonte to Milliken Avenue

5. Fourth Street: Milliken Avenue to Franklin Avenue

6. Fourth Street: Franklin Avenue to I-15 SB Ramps/Ontario Mills Drive

7. Concours Street: Haven Avenue to Mercedes Lane/Ontario Center (West)

8. Concours Street: Mercedes Lane/Ontario Center (West) to Main Driveway

9. Concours Street: Main Driveway to Ferrari Lane

10. Concours Street: Ferrari Lane to Ontario Center (East)

11. Concours Street: Ontario Center (East) to Milliken Avenue

12. Inland Empire Boulevard: Haven Avenue to Porsche Way/Mercedes Lane

13. Inland Empire Boulevard: Porsche Way/Mercedes Lane to Ferrari Lane

14. Inland Empire Boulevard: Ferrari Lane to Milliken Avenue

15. Haven Avenue: North of Fourth Street

16. Haven Avenue: Fourth Street to Concours Street

17. Haven Avenue: Concours Street to Inland Empire Boulevard

18. Haven Avenue: Inland Empire Boulevard to I-10 WB Ramps

19. Haven Avenue: I-10 WB Ramps to I-10 EB Ramps

20. Milliken Avenue: North of Fourth Street

21. Milliken Avenue: Fourth Street to Concours Street

22. Milliken Avenue: Concours Street to Inland Empire Boulevard

23. Milliken Avenue: Inland Empire Boulevard to I-10 WB Ramps

24. Milliken Avenue: I-10 WB Ramps to I-10 EB Ramps
Kimley-Horn will collect weekday daily, morning, and evening peak hour traffic count data for the agreed upon study locations.

Kimley-Horn will develop Project trip generation estimates, using the Institute of Transportation Engineers (ITE) Trip Generation Manual (11th Edition) trip rates.

Kimley-Horn will develop trip distribution assumptions for the Project traffic, based on likely origins and destinations of employees and patrons, as well as current traffic patterns in the area. Project traffic will be distributed through the study intersections, and the Project traffic contribution to each intersection will be identified.

Kimley-Horn will summarize operating conditions at the study intersections for the following scenarios:

1. Existing Conditions

2. Opening Year Cumulative (Existing Plus Ambient Growth Plus Cumulative Projects

3. Opening Year Cumulative Plus Project
219

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868

4. Horizon Year 2050

5. Horizon Year 2050 Plus Project
Kimley-Horn will work with City staff and surrounding cities to identify approved and pending projects and ambient growth rates, to develop cumulative conditions traffic forecasts for the Project Opening Year.

Kimley-Horn will develop Horizon Year forecast volumes based on SBTAM model plots and the Bturns methodology.

Kimley-Horn will identify Project-related effects and recommended improvements, if necessary.

Sub-Task 10.3: Documentation and Response to Comments
Kimley-Horn will prepare a stand-alone traffic study to document the methods and results of the analyses performed in Tasks 10.1 and 10.2.

Kimley-Horn will revise the traffic study to respond to one (1) round of City review comments, to the extent that the revisions are within the approved scope of services and that no new data collection or additional analysis is required.

The traffic study will address the impacts of a single development scenario. Analysis of Project alternatives, phased development, additional analysis scenarios, or revised analysis to address revisions to the site plan will require fee augmentation.

Task 11: Shared Parking Study
Kimley-Horn will prepare a shared parking study for the proposed Project.

Kimley-Horn will obtain a copy of the Project site plan showing the site layout, with proposed building uses and square footages, and all parking areas with the number of parking spaces enumerated.

Kimley-Horn will prepare a parking summary table for the Project, showing the City’s parking requirements based on the Project land uses and the City’s parking code. The table will provide the square footage of each of the uses associated with the Project, and the parking requirement per the City’s municipal code. The table will compare the parking requirement based on the City’s code to the proposed parking supply and will determine if there is a parking surplus or deficit.

Kimley-Horn will obtain and review existing parking information from the applicant regarding parking occupancy in different existing parking lots for both an Event and Non-Event days. 220

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 Kimley-Horn will conduct a shared parking analysis for the development, using the latest Urban Land Institute (ULI) Shared Parking (3rd Edition) procedures to identify the amount of parking relief that can be justified due to mixed-use shared parking synergies within the overall property.

Kimley-Horn will evaluate the parking demand based on the following two (2) scenarios:

1. Event Day

2. Non-Event Day
Kimley-Horn will prepare a parking study summarizing the findings, regarding the adequacy of the parking supply for the proposed Project based on the shared parking analysis.

Kimley-Horn will revise the parking study to respond to one (1) round of comments, to the extent that the revisions are within the approved scope of services and that no new data collection or additional analysis is required.

The shared parking study will address the parking for a single development phase. If analysis of Project alternatives, a phased development, revised development plans is requested, a fee augmentation will be necessary.

Kimley-Horn will attend up to two (2) conference calls with City staff and/or applicant is assumed to discuss methodology and results of the shared parking analysis.

Task 12: Quantitative VMT Analysis
Kimley-Horn will code land use into the Project’s representative Traffic Analysis Zone (TAZ) within the SBTAM travel demand model (TDM). The SBTAM TDM uses the SCAG TransCad model. The resultant VMT output and interim model files will be used to determine the Home-based VMT per service population for the proposed Project. Note that this will require deconstructing the model output sufficiently so that both the trip purposes and trip lengths for each contributing part of the Project’s VMT from other sources can be completed. The process undertaken will be consistent with OPR guidance as described in the most recent release of its guidance.

Kimley-Horn will identify applicable mitigation measures for reducing VMT impacts determined to be potentially significant, if necessary.

Kimley-Horn will prepare a VMT Study summarizing the results of the quantitative VMT analysis.

Kimley-Horn will revise the VMT Study to respond to up-to one (1) round of City review comments, to the extent that the revisions are within the approved scope of services and that no new data collection or additional analysis is required. 221

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 Assumptions/Limitations
Air Quality/GHG/Noise Assumptions
• Kimley-Horn will be provided the following project detail to support the analysis:
o Site plans and grading plans.
o Project narrative identifying type of development, land use designations, off-site improvements, and any other relevant project details.
o Traffic data will include daily trip generation and VMT data for the currently entitled land use and the proposed project.
o Construction phasing and grading/excavation/paving quantities. o Energy/water conservation measures and sustainable project features that will be incorporated into the design.
• This scope accommodates revisions based on one consolidated set of comments.

Additional comments can be addressed on a time and materials basis. • This scope assumes the baseline conditions, project description, and approach will not change once Client issues the Authorization to Proceed (ATP). • Revisions or changes to the project that require re-analysis are excluded. • We will provide our services as expeditiously as practicable with the goal of providing a draft report within six weeks of receipt of the requested data. • Deliverables will be provided electronically.
• This scope excludes meetings/hearings.
• Fees and timeframes stated herein are valid for sixty (60) days after the date of this scope of work.

WSA Assumptions
• No water system modeling included within the WSA scope. • Up to one (1) review cycle with the City of Ontario
• Up to one (1) meeting with the City of Ontario
• Project description and proposed uses are based on the City of Ontario and the subsequent new developments proposed in the Phase 2 of the Ontario Arena Entertainment District Project.
• Phase I WSA prepared by Placeworks, Inc, has been approved and does not require verification of findings.
• The City of Ontario is the only agency reviewing the WSA and requiring coordination with. • Preparation of this WSA assumes the City of Ontario has adequate supply planned for in the UWMP. This Project will not require a demand greater than allowable within the UWMP. If demand is in excess of the available supply in the UWMP and a new supply is required - research/meetings/and coordination pertaining to develop a new supply are not included within this scope of work.
• A Draft WSA can be anticipated within twelve weeks of receiving notice to proceed. 222

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 Traffic Study/VMT/and Parking Analysis Assumptions
• Attendance at project team meetings and attendance at public meetings and public hearings will be extra services and will be billed on a time-and-materials basis in accordance with the standard hourly billing rate schedule in effect at the time the meetings are requested.
• Services not outlined above would constitute extra effort, to be performed for an additional fee, to be agreed upon prior to performing the work.

Addendum EIR Schedule
Kimley-Horn can submit the Project Description within three weeks of receipt of the Project information including the site plan and requested City approval applications. The Administrative Draft Addendum EIR can be submitted within three weeks of completion of all necessary technical studies.

The schedule is highly dependent on timely review and responses from City staff. If a separate review process by the applicant or City third party CEQA reviewer or legal counsel is desired, the schedule and fee estimate may be increased to allow for additional coordination and review/revision time. Kimley-Horn will expedite the schedule to the extent practical. 223

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 Fees and Expenses
Kimley-Horn will perform the Scope of Services outlined above on a labor fee plus expense basis with the maximum labor fee shown on the Fee and Expenses Table presented below, except those additional efforts associated with Tasks 4, 5 and 6 which will be performed on a T&M basis. Kimley-Horn will not exceed the total maximum labor fee shown without authorization from the Client. Individual Task amounts are provided for budgeting purposes only. Kimley-Horn reserves the right to reallocate amounts among Tasks, as necessary.

Labor fee will be billed on an hourly basis according to our then-current rates. As to these Tasks, direct reimbursable expenses such as express delivery services, fees, air travel, and other direct expenses will be billed at 1.10 times cost. A percentage of labor fee will be added to each invoice to cover certain other expenses as to these Tasks such as telecommunications, in-house reproduction, postage, supplies, project related computer time, and local mileage.

Administrative time related to the project may be billed hourly. All permitting, application, and similar Project fees will be paid directly by the City. Should the City request Kimley-Horn to advance any such Project fees on City’s behalf, a separate invoice for such fees, with a ten percent (10%) markup, will be immediately issued to and paid by the City.

Task 1: Mobilization $2,000
Task 2: Project Description $3,000
Task 3: Preparation of Addendum EIR $24,000
Task 4: Address Comments on Admin Draft (T&M) $8,000
Task 5: Project Meetings (T&M) $6,000
Task 6: Project Management (T&M) $6,000
Task 7: Air Quality and GHG Studies $18,000
Task 8: Noise and Vibration Study $15,000
Task 9: Water Supply Assessment $30,000
Task 10: Traffic Impact Study $86,000
Task 11: Parking Study $13,500
Task 12: Quantitative VMT Analysis and Coord. $18,000
Expenses $10,500
Total Labor Fee $240,000
Note:
• A 4.6% percentage of labor fee is added to each invoice to cover certain other expenses such as telecommunications, in-house reproduction, postage, supplies, project related computer time, and local mileage.
• Total fee estimate excludes reimbursable expenses, which will be invoiced at cost plus 15%.
• Hourly tasks will be invoiced using then current hourly rates. • Lump sum tasks will be invoiced on a percentage complete basis. • Kimley-Horn reserves the right to reallocate budgets among tasks. 224

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 Closure
We look forward to the opportunity to work with the City of Ontario on this Project. Should you have any questions or require additional information, please contact Project Manager Ruben Salas at (951) 335-8282 or via email at [email protected] and or Project Director Kevin Thomas can be reached at (951) 543-9875, or [email protected].

Sincerely,
KIMLEY-HORN AND ASSOCIATES, INC.

By: Ruben Salas Kevin Thomas
Project Manager Project Director
Ruben Salas, Project Manager
Cc: Kevin Thomas, Kimley-Horn
Attachment: Standard Agreement Provisions
Approved:

City of Ontario
By:
(signature) _______________________________ Title:____________________________ (print name) _______________________________ Date:____________________________ 225

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 KIMLEY-HORN AND ASSOCIATES, INC.

STANDARD PROVISIONS
1) Kimley-Horn's Scope of Services and Additional Services. Kimley-Horn will perform only the services specifically described in this Agreement. If requested by the Client and agreed to by Kimley-Horn, KimleyHorn will perform Additional Services, which shall be governed by these provisions. Unless otherwise agreed to in writing, the Client shall pay Kimley-Horn for any Additional Services an amount based upon Kimley-Horn’s then-current hourly rates plus an amount to cover certain direct expenses including telecommunications, in-house reproduction, postage, supplies, project related computer time, and local mileage. Other direct expenses will be billed at 1.15 times cost. 2) Client's Responsibilities. In addition to other responsibilities herein or imposed by law, the Client shall:
a. Designate in writing a person to act as its representative, such person having complete authority to transmit instructions, receive information, and make or interpret the Client's decisions. b. Provide all information and criteria as to the Client's requirements, objectives, and expectations for the project and all standards of development, design, or construction. c. Provide Kimley-Horn all available studies, plans, or other documents pertaining to the project, such as surveys, engineering data, environmental information, etc., all of which Kimley-Horn may rely upon. d. Arrange for access to the site and other property as required for Kimley-Horn to provide its services. e. Review all documents or reports presented by Kimley-Horn and communicate decisions pertaining thereto within a reasonable time so as not to delay Kimley-Horn. f. Furnish approvals and permits from governmental authorities having jurisdiction over the project and approvals and consents from other parties as may be necessary. g. Obtain any independent accounting, legal, insurance, cost estimating, and feasibility services required by Client.
h. Give prompt written notice to Kimley-Horn whenever the Client becomes aware of any development that affects Kimley-Horn's services or any defect or noncompliance in any aspect of the project. 3) Period of Services. Unless otherwise stated herein, Kimley-Horn will begin work after receipt of a properly executed copy of this Agreement. This Agreement assumes conditions permitting continuous and orderly progress through completion of the services. Times for performance shall be extended as necessary for delays or suspensions due to circumstances that Kimley-Horn does not control. If such delay or suspension extends for more than six months, Kimley-Horn’s compensation shall be renegotiated. 4) Method of Payment. Client shall pay Kimley-Horn as follows:
a. Invoices will be submitted periodically for services performed and expenses incurred. Payment of each invoice will be due within 25 days of receipt. The Client shall also pay any applicable sales tax. All retainers will be held by Kimley-Horn and applied against the final invoice. Interest will be added to accounts not paid within 25 days at the maximum rate allowed by law. If the Client fails to make any payment due under this or any other agreement within 30 days after Kimley-Horn's transmittal of its invoice, Kimley-Horn may, after giving notice to the Client, suspend services and withhold deliverables until all amounts due are paid. b. If the Client relies on payment or proceeds from a third party to pay Kimley-Horn and Client does not pay Kimley-Horn’s invoice within 60 days of receipt, Kimley-Horn may communicate directly with such third party to secure payment.
226

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 c. If the Client objects to an invoice, it must advise Kimley-Horn in writing giving its reasons within 14 days of receipt of the invoice or the Client’s objections will be waived, and the invoice shall conclusively be deemed due and owing. If the Client objects to only a portion of the invoice, payment for all other portions remains due.
d. If Kimley-Horn initiates legal proceedings to collect payment, it may recover, in addition to all amounts due, its reasonable attorneys' fees, reasonable experts' fees, and other expenses related to the proceedings. Such expenses shall include the cost, at Kimley-Horn's normal hourly billing rates, of the time devoted to such proceedings by its employees.
e. The Client agrees that the payment to Kimley-Horn is not subject to any contingency or condition. KimleyHorn may negotiate payment of any check tendered by the Client, even if the words “in full satisfaction” or words intended to have similar effect appear on the check without such negotiation being an accord and satisfaction of any disputed debt and without prejudicing any right of Kimley-Horn to collect additional amounts from the Client.
5) Use of Documents. All documents and data prepared by Kimley-Horn are related exclusively to the services described in this Agreement and may be used only if the Client has satisfied all of its obligations under this Agreement. They are not intended or represented to be suitable for use or reuse by the Client or others on extensions of this project or on any other project. Any modifications by the Client to any of KimleyHorn’s documents, or any reuse of the documents without written authorization by Kimley-Horn will be at the Client's sole risk and without liability to Kimley-Horn, and the Client shall indemnify, defend and hold Kimley-Horn harmless from all claims, damages, losses and expenses, including but not limited to attorneys' fees, resulting therefrom. Kimley-Horn’s electronic files and source code remain the property of KimleyHorn and shall be provided to the Client only if expressly provided for in this Agreement. Any electronic files not containing an electronic seal are provided only for the convenience of the Client and use of them is at the Client’s sole risk. In the case of any defects in the electronic files or any discrepancies between them and the hardcopy of the documents prepared by Kimley-Horn, the hardcopy shall govern.
6) Intellectual Property. Kimley-Horn may use or develop its proprietary software, patents, copyrights, trademarks, trade secrets, and other intellectual property owned by Kimley-Horn or its affiliates (“Intellectual Property”) in the performance of this Agreement. Unless explicitly agreed to in writing by both parties to the contrary, Kimley-Horn maintains all interest in and ownership of its Intellectual Property and conveys no interest, ownership, license to use, or any other rights in the Intellectual Property to Client. Any enhancements of Intellectual Property made during the performance of this Agreement are solely owned by Kimley-Horn and its affiliates. If Kimley-Horn’s services include providing Client with access to or a license for Kimley-Horn’s (or its affiliates’) proprietary software or technology, Client agrees to the terms of the Software License Agreement set forth at https://www.kimley-horn.com/khts-software-licenseagreement (“the License Agreement”) which terms are incorporated herein by reference. 7) Opinions of Cost. Because Kimley-Horn does not control the cost of labor, materials, equipment or services furnished by others, methods of determining prices, or competitive bidding or market conditions, any opinions rendered as to costs, including but not limited to the costs of construction and materials, are made solely based on its judgment as a professional familiar with the industry. Kimley-Horn cannot and does not guarantee that proposals, bids or actual costs will not vary from its opinions of cost. If the Client wishes greater assurance as to the amount of any cost, it shall employ an independent cost estimator.

Kimley-Horn's services required to bring costs within any limitation established by the Client will be paid for as Additional Services.
8) Termination. The obligation to provide further services under this Agreement may be terminated by either party upon seven days' written notice in the event of substantial failure by the other party to perform in accordance with the terms hereof, or upon thirty days’ written notice for the convenience of the terminating party. Kimley-Horn shall be paid for all services rendered and expenses incurred to the effective date of termination, and other reasonable expenses incurred by Kimley-Horn as a result of such termination. 227

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 9) Standard of Care. The standard of care applicable to Kimley-Horn’s services will be the degree of care and skill ordinarily exercised by consultants performing the same or similar services in the same locality at the time the services are provided. No warranty, express or implied, is made or intended by Kimley-Horn's performance of services, and it is agreed that Kimley-Horn is not a fiduciary with respect to the Client. 10) LIMITATION OF LIABILITY. In recognition of the relative risks and benefits of the Project to the Client and Kimley-Horn, the risks are allocated such that, to the fullest extent allowed by law, and notwithstanding any other provisions of this Agreement or the existence of applicable insurance coverage, that the total liability, in the aggregate, of Kimley-Horn and Kimley-Horn's officers, directors, employees, agents, and subconsultants to the Client or to anyone claiming by, through or under the Client, for any and all claims, losses, costs or damages whatsoever arising out of or in any way related to the services under this Agreement from any causes, including but not limited to, the negligence, professional errors or omissions, strict liability or breach of contract or any warranty, express or implied, of Kimley-Horn or Kimley-Horn's officers, directors, employees, agents, and subconsultants, shall not exceed twice the total compensation received by Kimley-Horn under this Agreement or $50,000, whichever is greater. Higher limits of liability may be negotiated for additional fee. This Section is intended solely to limit the remedies available to the Client or those claiming by or through the Client, and nothing in this Section shall require the Client to indemnify Kimley-Horn.
11) Mutual Waiver of Consequential Damages. In no event shall either party be liable to the other for any consequential, incidental, punitive, or indirect damages including but not limited to loss of income or loss of profits.
12) Construction Costs. Under no circumstances shall Kimley-Horn be liable for extra costs or other consequences due to unknown conditions or related to the failure of contractors to perform work in accordance with the plans and specifications. Kimley-Horn shall have no liability whatsoever for any costs arising out of the Client’s decision to obtain bids or proceed with construction before Kimley-Horn has issued final, fully approved plans and specifications. The Client acknowledges that all preliminary plans are subject to substantial revision until plans are fully approved and all permits obtained. 13) Certifications. All requests for Kimley-Horn to execute certificates, lender consents, or other third-party reliance letters must be submitted to Kimley-Horn at least 14 days prior to the requested date of execution.

Kimley-Horn shall not be required to execute certificates, consents, or third-party reliance letters that are inaccurate, that relate
to facts of which Kimley-Horn does not have actual knowledge, or that would cause Kimley-Horn to violate applicable rules of professional responsibility.
14) Dispute Resolution. All claims arising out of this Agreement or its breach shall be submitted first to mediation in accordance with the American Arbitration Association as a condition precedent to litigation.

Any mediation or civil action by Client must be commenced within one year of the accrual of the cause of action asserted but in no event later than allowed by applicable statutes. 15) Hazardous Substances and Conditions. Kimley-Horn shall not be a custodian, transporter, handler, arranger, contractor, or remediator with respect to hazardous substances and conditions. Kimley-Horn's services will be limited to analysis, recommendations, and reporting, including, when agreed to, plans and specifications for isolation, removal, or remediation. Kimley-Horn will notify the Client of unanticipated hazardous substances or conditions of which Kimley-Horn actually becomes aware. Kimley-Horn may stop affected portions of its services until the hazardous substance or condition is eliminated. 16) Construction Phase Services.
a. If Kimley-Horn prepares construction documents and Kimley-Horn is not retained to make periodic site visits, the Client assumes all responsibility for interpretation of the documents and for construction observation, and the Client waives any claims against Kimley-Horn in any way connected thereto. 228

kimley-horn.com 3801 University Avenue, Suite 300, Riverside, CA 92501 951 543 9868 b. Kimley-Horn shall have no responsibility for any contractor's means, methods, techniques, equipment choice and usage, equipment maintenance and inspection, sequence, schedule, safety programs, or safety practices, nor shall Kimley-Horn have any authority or responsibility to stop or direct the work of any contractor. Kimley-Horn's visits will be for the purpose of endeavoring to provide the Client a greater degree of confidence that the completed work of its contractors will generally conform to the construction documents prepared by Kimley-Horn. Kimley-Horn neither guarantees the performance of contractors, nor assumes responsibility for any contractor’s failure to perform its work in accordance with the contract documents.
c. Kimley-Horn is not responsible for any duties assigned to it in the construction contract that are not expressly provided for in this Agreement. The Client agrees that each contract with any contractor shall state that the contractor shall be solely responsible for job site safety and its means and methods; that the contractor shall indemnify the Client and Kimley-Horn for all claims and liability arising out of job site accidents; and that the Client and Kimley-Horn shall be made additional insureds under the contractor’s general liability insurance policy.
17) No Third-Party Beneficiaries; Assignment and Subcontracting. This Agreement gives no rights or benefits to anyone other than the Client and Kimley-Horn, and all duties and responsibilities undertaken pursuant to this Agreement will be for the sole benefit of the Client and Kimley-Horn. The Client shall not assign or transfer any rights under or interest in this Agreement, or any claim arising out of the performance of services by Kimley-Horn, without the written consent of Kimley-Horn. Kimley-Horn reserves the right to augment its staff with subconsultants as it deems appropriate due to project logistics, schedules, or market conditions. If Kimley-Horn exercises this right, Kimley-Horn will maintain the agreed-upon billing rates for services identified in the contract, regardless of whether the services are provided by in-house employees, contract employees, or independent subconsultants.
18) Confidentiality. The Client consents to the use and dissemination by Kimley-Horn of photographs of the project and to the use by Kimley-Horn of facts, data and information obtained by Kimley-Horn in the performance of its services. If, however, any facts, data or information are specifically identified in writing by the Client as confidential, Kimley-Horn shall use reasonable care to maintain the confidentiality of that material.
19) Miscellaneous Provisions. This Agreement is to be governed by the law of the State where the Project is located. This Agreement contains the entire and fully integrated agreement between the parties and supersedes all prior and contemporaneous negotiations, representations, agreements, or understandings, whether written or oral. Except as provided in Section 1, this Agreement can be supplemented or amended only by a written document executed by both parties. Any conflicting or additional terms on any purchase order issued by the Client shall be void and are hereby expressly rejected by Kimley-Horn. If Client requires Kimley-Horn to register with or use an online vendor portal for payment or any other purpose, any terms included in the registration or use of the online vendor portal that are inconsistent or in addition to these terms shall be void and shall have no effect on Kimley-Horn or this Agreement. Any provision in this Agreement that is unenforceable shall be ineffective to the extent of such unenforceability without invalidating the remaining provisions. The non-enforcement of any provision by either party shall not constitute a waiver of that provision nor shall it affect the enforceability of that provision or of the remainder of this Agreement.
229
EXHIBIT “B”

SCHEDULE OF SERVICES
230
EXHIBIT “C”

COMPENSATION
231
Department: Housing
Prepared By: Katryna Gonzalez
Staff Member Presenting: Helen McAlary,
Executive Director Community Life and Culture
Reviewed By: Lacey A Rightmer
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 8
SUBJECT: A RESOLUTION AUTHORIZING THE SETTLEMENT AGREEMENT WITH KROGER CO.

CITY OF ONTARIO
Agenda Report
August 20, 2024
SECTION:

CONSENT CALENDAR
RECOMMENDATION: That the City Council take the following actions:

A. Adopt a Resolution authorizing the City Manager to opt into a Settlement Agreement with opioid distributor, Kroger Co.;
B. Authorize the City Manager, or his designee, to execute any documents or agreements needed to implement the action; and
C. Ratify the previous actions taken by the City Manager in order to opt into the Kroger Settlement.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Invest in the Growth and Evolution of the City's Economy Maintain the Current High Level of Public Safety
Operate in a Businesslike Manner
FISCAL IMPACT: The City of Ontario will receive approximately $125,000 in additional funding if it opts into the Settlement Agreement as recommended. The funds will be paid over a period of 11 years.

BACKGROUND & ANALYSIS: Many states and cities across the United States have sued the three largest opioid painkiller distributors (Amerisource Bergen, Cardinal Health, and McKesson) and the opioid manufacturer Janssen (owned by Johnson & Johnson). These lawsuits resulted in two settlements totaling approximately $26 billion. Additional parties joined these settlements in late 2022. The City of Ontario has opted into every round of opioid settlements and has begun receiving payments as of November 2022.

On June 7, 2024, Kroger Co. reached a tentative $1.2 billion settlement for opioid distribution claims, payable over 11 years. California is scheduled to receive roughly $122 million. The State will distribute 15% of the funds to the State Fund, 70% to the California Abatement Accounts Fund, and 15% to the California Subdivision Fund.
232
Local subdivisions, such as the City of Ontario, will receive their share from the California Abatement Accounts Fund. Ontario will receive approximately $125,000 distributed over 11 years, starting in late 2024. Cities can use the funds directly, following State reporting requirements, or allow the county to use the funds. Cities can also opt out and pursue independent legislation.

Funds received from this settlement must be used for future opioid remediation or abatement efforts. Currently, the City is using other opioid settlement funds to help support the COAST team, providing education, and providing treatment to prevent overdose. Any funds that remain unused or uncommitted within five years of receipt must be returned to the State. The City must complete an annual report that details fund usage until fully expended, plus one additional year. The California Department of Health Care Services ("DHCS") has the authority to review these reports for compliance.

Staff recommends that the City Council opt into the settlement and elect to receive payments directly by releasing its claims against Kroger Co. The attached Resolution authorizes the City Manager to execute the necessary agreements to opt in.
233
RESOLUTION NO. ____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,

CALIFORNIA, AUTHORIZING THE CITY MANAGER TO ENTER INTO
THE SETTLEMENT AGREEMENT WITH KROGER CO., AGREE TO THE

TERMS OF THE STATE-SUBDIVISION AGREEMENT, AUTHORIZE

ENTRY INTO THE STATE-SUBDIVISION AGREEMENT WITH THE

ATTORNEY GENERAL, AND RATIFY PREVIOUS ACTIONS TAKEN BY

THE CITY MANAGER WITH RESPECT TO THE KROGER SETTLEMENT
WHEREAS, the United States is facing an ongoing public health crisis of opioid abuse, addiction, overdose, and death, forcing the State of California and California counties and cities to spend billions of dollars each year to address the direct consequences of this crisis; and,
WHEREAS, pending in the U.S. District Court for the Northern District of Ohio is a multidistrict litigation (“MDL”) being pursued by numerous public entity plaintiffs against the manufacturers and distributors of various opioids based on the allegation that the defendants’ unlawful conduct caused the opioid epidemic; and, WHEREAS on or about June 7, 2024, a proposed nationwide tentative settlement was reached between the plaintiffs in the MDL and Kroger Co. (“Kroger”); and, WHEREAS, Kroger shall be referred in this Resolution as the “Settling Defendant”; and
WHEREAS, as part of the settlement with the Settling Defendant, local subdivisions, including certain cities, that are not plaintiffs in the MDL may participate in the Settlement in exchange for a release of the Settling Defendants; and, WHEREAS, copies of the proposed terms of this proposed nationwide settlement have been set forth in the Master Settlement Agreements with the Settling Defendant; and,
WHEREAS, copies of the Master Settlement Agreement are on file with the City Clerk; and,
WHEREAS, the Settlement Agreement provides, among other things, for the payment of a certain sum to settling government entities in California including to the State of California and Participating Subdivisions upon occurrence of certain events as defined in the Settlement Agreement (“California Opioid Funds”); and, WHEREAS, California local governments in the MDL have engaged in extensive discussions with the State Attorney General’s Office (“AGO”) as to how the California Opioid Funds will be allocated, which has resulted in the Proposed California StateSubdivision Agreements Regarding Distribution and Use of Settlement Funds (“Allocation Agreement”) from the Settlement with the Settling Defendant; and, 234
WHEREAS, the Allocation Agreements allocate the California Opioid Funds as follows: 15% to the State Fund; 70% to the Abatement Accounts Fund; and 15% to the Subdivision Fund. For the avoidance of doubt, all funds allocated to California from the Settlement shall be combined pursuant to the Allocation Agreements, and 15% of the total from the Settlement shall be allocated to the State of California (the “State of California Allocation”), 70% to the California Abatement Accounts Fund (“CA Abatement Accounts Fund”), and 15% to the California Subdivision Fund (“CA Subdivision Fund”); and,
WHEREAS, under the Master Settlement Agreement, certain local subdivisions that did not file a lawsuit against the Settlement Defendant may qualify to participate in the Settlement and obtain funds from the Abatement Account Fund; and, WHEREAS, the City is eligible to participate in the Settlement and become a CA Participating Subdivision; and,
WHEREAS, the funds in the CA Abatement Accounts Fund (the 70% allocation) will be allocated based on the allocation model developed in connection with the proposed negotiating class in the National Prescription Opiate Litigation (MDL No. 2804), as adjusted to reflect only those cities and counties that are eligible, based on population or litigation status, to become a CA Participating Subdivision (those above 10,000 in population). The percentage from the CA Abatement Accounts Fund allocated to each CA Participating Subdivision is set forth in Appendix 1 to the Allocation Agreements. The City’s share of the CA Abatement Accounts Fund will be a product of the total in the CA Abatement Accounts Fund multiplied by the City’s percentage set forth in Appendix 1 of the Allocation Agreements (the “Local Allocation”); and, WHEREAS, a CA Participating Subdivision that is a city will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision. The Local Allocation share for a city that is a CA Participating Subdivision will be paid to the county in which the city is located, unless the city elects to take a direct election of the settlement funds, so long as: (a) the county is a CA Participating Subdivision, and (b) the city has not advised the Settlement Fund Administrator that it requests direct payment at least 60 days prior to a Payment Date; and,
WHEREAS, it the intent of this Resolution is to authorize the City to enter into the Master Settlement Agreement with the Settling Defendant by executing the Participation Agreement and to enter into the Allocation Agreement by executing the signature pages to those agreements.

NOW THEREFORE, be it resolved by the City Council of the City of Ontario hereby finds, determines, and resolves as follows:

SECTION 1. The above recitals are true and correct and are incorporated herein by this reference.
235
SECTION 2. The City Manager is authorized to settle and release the City’s claims against the Settling Defendant in exchange for the consideration set forth in the Settlement Agreement and Allocation Agreement. The following actions of the City Manager are hereby ratified by the City Council:

1. The execution of the Participation Agreement with the Settling Defendant and any and all documents ancillary thereto.

2. The execution of the Proposed California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds with the Settling Defendant by executing the signature pages to the Allocation Agreement.

3. Notification of the Settlement Fund Administrator that the City requests a direct payment under the Allocation Agreement at least 60 days prior to the Payment Date in the Settlement Agreement.

SECTION 3. CEQA. That the City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

SECTION 4. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

SECTION 5. Effective Date. This Resolution shall become effective immediately.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED this 20th day of August, 2024. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
236
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
237

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

CITY OF ONTARIO )
I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that foregoing Resolution No. 2024- was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held August 20, 2024 by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
The foregoing is the original of Resolution No. 2024- duly passed and adopted by the Ontario City Council at their regular meeting held August 20, 2024. _____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
238
Proposed California State-Subdivision Agreement
Regarding Distribution and Use of
Settlement Funds – Kroger Settlement

1. Introduction
Pursuant to the Kroger Settlement Agreement, dated as of March 22, 2024, and any revision thereto as well as any modification thereto entered into by the State of California and Kroger (the “Kroger Settlement Agreement”), including Section V and Exhibit O, the State of California proposes this agreement (the “CA Kroger Allocation Agreement”) to govern the allocation, distribution, and use of Settlement Fund payments made to California pursuant to Sections IV and V of the Kroger Settlement Agreement. For the avoidance of doubt, this agreement does not apply to payments made pursuant to Section IX of the Kroger Settlement Agreement.

Pursuant to Exhibit O, Paragraph 4, of the Kroger Settlement Agreement, acceptance of this CA Kroger Allocation Agreement is a requirement to be an Initial Participating Subdivision.

2. Definitions
a) CA Participating Subdivision means a Participating Subdivision that is also (a) a Plaintiff Subdivision and/or (b) a Primary Subdivision with a population equal to or greater than 10,000. For the avoidance of doubt, eligible CA Participating Subdivisions are those California subdivisions listed in Exhibit C (excluding Litigating Special Districts) and/or Exhibit I to the Kroger Settlement Agreement. b) Allergan Settlement Agreement means the Allergan Settlement Agreement dated November 22, 2022, and any revision thereto.
c) CVS Settlement Agreement means the CVS Settlement Agreement dated December 9, 2022, and any revision thereto as well as any modification thereto entered into by the State of California and CVS.
d) Distributor Settlement Agreement means the Distributor Settlement Agreement dated July 21, 2021, and any revision thereto.
e) Janssen Settlement Agreement means the Janssen Settlement Agreement dated July 21, 2021, and any revision thereto.
f) Teva Settlement Agreement means the Teva Settlement Agreement dated November 22, 2022, and any revision thereto.
g) Walgreens Settlement Agreement means the Walgreens Settlement Agreement dated December 9, 2022, and any revision thereto.
h) Walmart Settlement Agreement means the Walmart Settlement Agreement dated November 14, 2022, and any revision thereto.
i) CA Litigating Special District means a Litigating Special District located in California. CA Litigating Special Districts include Downey Unified School District, 1 239

Elk Grove Unified School District, Kern High School District, Montezuma Fire Protection District (located in Stockton, California), Santa Barbara San Luis Obispo Regional Health Authority, Inland Empire Health Plan, Health Plan of San Joaquin, San Leandro Unified School District, Pleasant Valley School District Board, and LA Care Health Plan.
j) Plaintiff Subdivision means a Subdivision located in California, other than a CA Litigating Special District, that filed a lawsuit, on behalf of the Subdivision and/or through an official of the Subdivision on behalf of the People of the State of California, against one or more Opioid Defendants prior to October 1, 2020. k) Opioid Defendant means any defendant (including but not limited to Kroger Co., Walgreen Co., Teva Pharmaceutical Industries Ltd., Allergan Finance, LLC, Allergan Limited, CVS Health Corporation, CVS Pharmacy, Inc., Walmart Inc., Johnson & Johnson, Janssen Pharmaceuticals, Inc., Purdue Pharma L.P., Cardinal Health, Inc., AmerisourceBergen Corporation, and McKesson Corporation) named in a lawsuit seeking damages, abatement, or other remedies related to or caused by the opioid public health crisis in any lawsuit brought by any state or local government on or before October 1, 2020.

3. General Terms
This agreement is subject to the requirements of the Kroger Settlement Agreement, as well as applicable law, and the Kroger Settlement Agreement governs over any inconsistent provision of this CA Kroger Allocation Agreement. Terms used in this CA Kroger Allocation Agreement have the same meaning as in the Kroger Settlement Agreement unless otherwise defined herein.

Pursuant to Section V(D)(1) of the Kroger Settlement Agreement, (a) all Settlement Fund payments will be used for Opioid Remediation, except as allowed by Section V(B)(2) of the Kroger Settlement Agreement; and (b) at least seventy percent (70%) of Settlement Fund payment amounts will be used solely for future Opioid Remediation.

4. State Allocation
The Settlement Fund payments to California,1
pursuant to the Kroger Settlement Agreement,
shall be allocated as follows: 15% to the State Fund; 70% to the Abatement Accounts Fund; and 15% to the Subdivision Fund. For the avoidance of doubt, all funds allocated to California from the Settlement Fund shall be combined pursuant to this CA Kroger Allocation Agreement, and 15% of that total shall be allocated to the State of California (the “State of California Allocation”), 70% to the California Abatement Accounts Fund (“CA Abatement Accounts Fund”), and 15% to the California Subdivision Fund (“CA Subdivision Fund”). 1 For purposes of clarity, use of the term “California” refers to the geographic territory of California and the state and its local governments therein. The term “State” or “State of California” refers to the State of California as a governmental unit. 2 240

A. State of California Allocation
Fifteen percent of the total Settlement Fund payments will be allocated to the State and used by the State for future Opioid Remediation.

B. CA Abatement Accounts Fund
i. Allocation of CA Abatement Accounts Funds
a) Seventy percent of the total Settlement Fund payments will be allocated to the CA Abatement Accounts Fund. The funds in the CA Abatement Accounts Fund will be allocated based on the allocation model developed in connection with the proposed negotiating class in the National Prescription Opiate Litigation (MDL No. 2804), as adjusted to reflect only those cities and counties that are eligible, based on population or litigation status, to become a CA Participating Subdivision. The percentage from the CA Abatement Accounts Fund allocated to each CA Participating Subdivision is set forth in Appendix 1 in the column entitled abatement percentage (the “Local Allocation”). For the avoidance of doubt, CA Litigating Special Districts and California towns, cities, and counties with a population less than 10,000 are not eligible to receive an allocation of CA Abatement Accounts Funds.
b) A CA Participating Subdivision that is a county, or a city and county, will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision, and will receive payments as provided in the Kroger Settlement Agreement. c) A CA Participating Subdivision that is a city will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision. The Local Allocation share for a city that is a CA Participating Subdivision will be paid to the county in which the city is located, rather than to the city, so long as: (a) the county is a CA Participating Subdivision, and (b) the city did not elect to receive its share of funds in the National Opioids Settlement with Distributors AmerisourceBergenCorporation, Cardinal Health, Inc., and McKesson Corporation (the “Distributors Settlement”). If a city later changes or has already changed its distribution election in the Distributors Settlement, that change in election will apply here, provided that the change in election is received by the settlement administrator at least 60 days prior to a Payment Date. A Local Allocation share allocated to a city but paid to a county is not required to be spent exclusively for abatement activities in that city, but will become part of the county’s share of the CA Abatement Accounts Funds, which will be used in accordance with Section 4.B.ii (Use of CA Abatement Accounts Funds) and reported on in accordance with Section 4.B.iii (CA Abatement Accounts Fund Oversight).
d) A city within a county that is a CA Participating Subdivision may opt in or out of direct payment at any time, and it may also elect direct payment of only a portion of its share, with the remainder going to the county, by providing notice to the Settlement Fund Administrator at least 60 days prior to a Payment Date. For purposes of this CA Kroger Allocation Agreement, the Cities of Los Angeles, Oakland, San Diego, San Jose and 3 241

Eureka will be deemed to have elected direct payment if they become Participating Subdivisions.
e) The State will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision.
f) Funds received by a CA Participating Subdivision, and not expended or encumbered within five years of receipt and in accordance with the Kroger Settlement Agreement and this CA Kroger Allocation Agreement shall be transferred to the State; provided however, that CA Participating Subdivisions have seven years to expend or encumber CA Abatement Accounts Funds designated to support capital outlay projects before they must be transferred to the State. This provision shall not apply to the Cost Reimbursement Funds, which shall be controlled by Appendix 2.
ii. Use of CA Abatement Accounts Funds
a) The CA Abatement Accounts Funds will be used for future Opioid Remediation in one or more of the areas described in the List of Opioid Remediation Uses, which is Exhibit E to the Kroger Settlement Agreement.
b) In addition to this requirement, no less than 50% of the funds received by a CA Participating Subdivision from the Abatement Accounts Fund in each calendar year will be used for one or more of the following High Impact Abatement Activities:
(1) the provision of matching funds or operating costs for substance use disorder facilities within the Behavioral Health Continuum Infrastructure Program; (2) creating new or expanded Substance Use Disorder (“SUD”) treatment infrastructure; (3) addressing the needs of communities of color and vulnerable populations (including sheltered and unsheltered homeless populations) that are disproportionately impacted by SUD;
(4) diversion of people with SUD from the justice system into treatment, including by providing training and resources to first and early responders (sworn and non-sworn) and implementing best practices for outreach, diversion and deflection, employability, restorative justice, and harm reduction;
(5) interventions to prevent drug addiction in vulnerable youth, including but not limited to, youth in foster care, juvenile justice-impacted youth, youth experiencing adversities related to socioeconomic status, and unhoused youth; and/or (6) the purchase of naloxone for distribution and efforts to expand access to naloxone for opioid overdose reversals.
4 242

c) The California Department of Health Care Services (“DHCS”) may add to this list (but not delete from it) by designating additional High Impact Abatement Activities. DHCS will make reasonable efforts to consult with stakeholders, including the CA Participating Subdivisions, before adding additional High Impact Abatement Activities to this list. d) For the avoidance of doubt, and subject to the requirements of the Kroger Settlement Agreement and applicable law, CA Participating Subdivisions may form agreements or ventures, or otherwise work in collaboration with, federal, state, local, tribal or private sector entities in pursuing Opioid Remediation activities funded from the CA Abatement Accounts Fund. Further, provided that all CA Abatement Accounts Funds are used for Opioid Remediation consistent with the Kroger Settlement Agreement and this CA Kroger Allocation Agreement, a county and any cities or towns within the county may agree to reallocate their respective shares of the CA Abatement Accounts Funds among themselves, provided that any direct distribution may only be to a CA Participating Subdivision and any CA Participating Subdivision must agree to their share being reallocated.
iii. CA Abatement Accounts Fund Oversight
a) Pursuant to Section 5 below, CA Participating Subdivisions receiving settlement funds must prepare and file reports annually regarding the use of those funds. DHCS may regularly review the reports prepared by CA Participating Subdivisions about the use of CA Abatement Accounts Funds for compliance with the Kroger Settlement Agreement and this CA Kroger Allocation Agreement.
b) If DHCS determines that a CA Participating Subdivision’s use of CA Abatement Accounts Funds is inconsistent with the Kroger Settlement Agreement or this CA Kroger Allocation Agreement, whether through review of reports or information from any other sources, DHCS shall send a request to meet and confer with the CA Participating Subdivision. The parties shall meet and confer in an effort to resolve the concern. c) If the parties are unable to reach a resolution, DHCS may conduct an audit of the Subdivision’s use of the CA Abatement Accounts Funds within one year of the request to meet and confer, unless the parties mutually agree in writing to extend the meet and confer time frame.
d) If the concern still cannot be resolved, the State may bring a motion or action in the court where the State has filed its Consent Judgment to resolve the concern or otherwise enforce the requirements of the Kroger Settlement Agreement or this CA Kroger Allocation Agreement. However, in no case shall any audit be conducted, or motion be brought, as to a specific expenditure of funds, more than five years after the date on which the expenditure of the funds was reported to DHCS, in accordance with this agreement.
5 243

e) Notwithstanding the foregoing, this Agreement does not limit the statutory or constitutional authority of any state or local agency or official to conduct audits, investigations, or other oversight activities, or to pursue administrative, civil, or criminal enforcement actions.

C. CA Subdivision Fund
i. Fifteen percent of the total Settlement Fund payments will be allocated to the CA Subdivision Fund. All funds in the CA Subdivision Fund will be allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions. The funds will be used, subject to any limits imposed by the Kroger Settlement Agreement and this CA Kroger Allocation Agreement, to fund future Opioid Remediation and reimburse past opioidrelated expenses, which may include fees and expenses related to litigation, and to pay the reasonable fees and expenses of the Special Master as set forth in Appendix 2.

The CA Subdivision Funds will be allocated as follows:
a) First, funds in the CA Subdivision Fund shall be used to pay the Special Master’s reasonable fees and expenses in accordance with the procedures and limitations set forth in Appendix 2 to this document;
b) Second, funds will be allocated to Plaintiff Subdivisions that are Initial Participating Subdivisions that have been awarded Costs, as defined by and in accordance with the procedures and limitations set forth in Appendix 2 to this document. c) Funds remaining in the CA Subdivision Fund, which shall consist of no less than 50% of the total CA Subdivision Fund received in any year pursuant to Appendix 2, Section 2.c.v, will be distributed to Plaintiff Subdivisions that are Initial Participating Subdivisions, in relative proportion to the Local Allocation. These funds shall be used to fund future opioid-related projects and to reimburse past opioid-related expenses, which may include fees and expenses related to litigation against any Opioid Defendant.

D. Provision for State Back-Stop Agreement
On August 6, 2021, Judge Dan Polster of the U.S. District Court, Northern District of Ohio, Eastern Division, issued an order (ECF Docket Number 3814) (“MDL Fees Order”) in the National Prescription Opiate Litigation (MDL No. 2804) “cap[ping] all applicable contingent fee agreements at 15%.” Private counsel representing Plaintiff Subdivisions should seek its contingency fees and costs from the Attorney Fee Fund or Cost Funds under the Kroger Settlement Agreement, and, if applicable, the Teva Settlement Agreement, Allergan Settlement Agreement, CVS Settlement Agreement, Distributor Settlement Agreement, Janssen Settlement Agreement, and Walmart Settlement Agreement.

A Plaintiff Subdivision may separately agree to use its share of the CA Subdivision Fund to pay for fees or costs incurred by its contingency-fee counsel (“State Back-Stop Agreement”), 6 244

pursuant to Exhibit R, section I(CC), of the Kroger Settlement Agreement and the MDL Fees Order, so long as such contingency fees do not exceed a total contingency fee of 15% of the total gross recovery of the Plaintiff Subdivision pursuant to the Kroger Settlement, inclusive of contingency fees from the national Attorney Fee Fund and this State Back-Stop Agreement.

Before seeking fees or litigation costs and expenses from a State Back-Stop Agreement, private counsel representing Plaintiff Subdivisions must first seek contingency fees and costs from the Attorney Fee Fund or Cost Funds created under the Kroger Settlement Agreement. Further, private counsel may only seek reimbursement for litigation fees and costs that have not previously been reimbursed through prior settlements or judgments.

To effectuate a State Back-Stop Agreement pursuant to this section, an agreement in the form of Appendix 3 may be entered into by a Plaintiff Subdivision, private counsel, and the California Office of the Attorney General. The California Office of the Attorney General shall, upon the request of a Plaintiff Subdivision, execute any agreement executed by a Plaintiff Subdivision and its private counsel if it is in the form of Appendix 3. The California Office of the Attorney General will also consider requests from Plaintiff Subdivisions to execute and enter into agreements presented in other forms.

For the avoidance of doubt, this agreement does not require a Plaintiff Subdivision to request or enter into a State Back-Stop Agreement, and no State Back-Stop Agreement shall impose any duty or obligation on the State of California or any of its agencies or officers, including without limitation the Attorney General.

5. State and Subdivision Reporting
a) DHCS will prepare an annual written report regarding the State’s use of funds from the settlement until those funds are fully expended and for one year thereafter. These reports will be made publicly available on the DHCS web site.
b) Each CA Participating Subdivision that receives payments of funds from the settlement will prepare written reports at least annually regarding the use of those funds, until those funds are fully expended and for one year thereafter. These reports will also include a certification that all funds that the CA Participating Subdivision has received through the settlement have been used in compliance with the Kroger Settlement Agreement and this CA Kroger Allocation Agreement. The report will be in a form reasonably determined by DHCS. Prior to specifying the form of the report DHCS will confer with representatives of the Plaintiff Subdivisions.
c) The State and all CA Participating Subdivisions receiving CA Abatement Accounts Funds will track all deposits and expenditures. Each such subdivision is responsible solely for the CA Abatement Accounts Funds it receives. A county is not responsible for oversight, reporting, or monitoring of CA Abatement Accounts Funds received by a city within that county that receives direct payment. Unless otherwise exempt, Subdivisions’ expenditures and uses of CA Abatement Accounts Funds and other Settlement Funds will be subject to the normal budgetary and expenditure process of the Subdivision. 7 245

d) Each Plaintiff Subdivision receiving CA Subdivision Funds will track all deposits and expenditures, as required by the Kroger Settlement Agreement and this CA Kroger Allocation Agreement. Among other things, Plaintiff Subdivisions using monies from the CA Subdivision Fund for purposes that do not qualify as Opioid Remediation must identify and include in their annual report, the amount and how such funds were used, including if used to pay attorneys’ fees, investigation costs, or litigation costs. Pursuant to Section V(B)(2) of the Kroger Settlement Agreement, such information must also be reported to the Settlement Fund Administrator and Kroger. e) In each year in which DHCS prepares an annual report DHCS will also host a meeting to discuss the annual report and the Opioid Remediation activities being carried out by the State and Participating Subdivisions.

6. Miscellaneous
a) The State or any CA Participating Subdivision may bring a motion or action in the court where the State has filed its Consent Judgment to enforce the requirements of this CA Kroger Allocation Agreement. Before filing such a motion or action the State will meet and confer with any CA Participating Subdivision that is the subject of the anticipated motion or action, and vice versa.
b) Except as provided in the Kroger Settlement Agreement, this CA Kroger Allocation Agreement is not enforceable by any party other than the State and the CA Participating Subdivisions. It does not confer any rights or remedies upon, and shall not be enforceable by, any third party.
c) Except as provided in the CA Kroger Allocation Agreement, if any provision of this agreement or the application thereof to any person, entity, or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this agreement, or the application of such provision to persons, entities, or circumstances other than those as to which it is invalid or unenforceable, will not be affected thereby, and each other provision of this agreement will be valid and enforceable to the fullest extent permitted by law. d) Except as provided in the Kroger Settlement Agreement, this agreement shall be governed by and interpreted in accordance with the laws of California. 8 246
APPENDIX 1
DISCLAIMER: The allocation percentages herein are estimates only and should not be relied on for decisions regarding legal rights, releases, waivers, or other decisions affecting current or potential legal claims. Percentages shown in the Plaintiff Subdivision Percentage column may change pursuant to Section 4.C. of the California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds—Kroger Settlement, whereas the percentages shown in the Abatement Percentage column should not change. Participating Subdivisions, underlying calculations, and the calculated allocation percentages are subject to change. Regarding the column herein entitled “Abatement Percentage,” pursuant to Section 4.B.e., the State of California will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision. Regarding the column herein entitled “Plaintiff Subdivision Percentage,” payments allocated to a Plaintiff Subdivision, which is not an Initial Participating Subdivision, will be re-allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions.

Regarding the column herein entitled “Abatement Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Abatement Account Funds received, pursuant to Section 4.B. Regarding the column herein entitled “Plaintiff Subdivision Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Subdivision Funds received, pursuant to Section 4.C. Regarding the column herein entitled “Weighted Allocation Percentage,” the annotation of “100%” refers to onehundred percent (100%) of the combined and weighted allocation of the Abatement Percentage and the Plaintiff Subdivision Percentage. 247
APPENDIX 1
100.000% 100.000% 100.000%
Participating
Subdivision
Classification
Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage County  Alameda County Alameda  2.332%  2.853%  2.4237952% City  Alameda  Alameda  0.069%  0.0570162%
City  Albany  Alameda  0.013%  0.0107768% City  Berkeley  Alameda  0.152%  0.1249656% City  Dublin  Alameda  0.033%  0.040%  0.0338810%
City  Emeryville  Alameda  0.023%  0.0185765%
City  Fremont  Alameda  0.108%  0.0888576% City  Hayward  Alameda  0.117%  0.0966218% City  Livermore  Alameda  0.054%  0.0446740% City  Newark  Alameda  0.026%  0.0217626% City  Oakland  Alameda  0.486%  0.595%  0.5055601% City  Piedmont  Alameda  0.014%  0.0114064%
City  Pleasanton  Alameda  0.067%  0.0554547%
City  San Leandro  Alameda  0.039%  0.0321267%
City  Union City  Alameda  0.043%  0.0352484%
County  Amador County Amador  0.226%  0.277%  0.2349885% County  Butte County Butte  1.615%  1.975%  1.6783178%
City  Chico  Butte  0.216%  0.264%  0.2246499%
City  Oroville  Butte  0.079%  0.0646595%
County  Calaveras County Calaveras  0.226%  0.277%  0.2351644% County  Colusa County Colusa  0.059%  0.0489221% County  Contra Costa County Contra Costa  2.102%  2.571%  2.1844585% City  Antioch  Contra Costa  0.037%  0.0301879% City  Brentwood  Contra Costa  0.026%  0.0215339% City  Clayton  Contra Costa  0.002%  0.0018060%
City  Concord  Contra Costa  0.055%  0.0456676%
City  Danville  Contra Costa  0.010%  0.0082255%
City  El Cerrito  Contra Costa  0.023%  0.0189024% City  Hercules  Contra Costa  0.010%  0.0078273% 248 1 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City  Lafayette  Contra Costa  0.006%  0.0046030% City  Martinez  Contra Costa  0.012%  0.0098593% City  Moraga  Contra Costa  0.004%  0.0031007% City  Oakley  Contra Costa  0.010%  0.0079416% City  Orinda  Contra Costa  0.005%  0.0038157% City  Pinole  Contra Costa  0.013%  0.0110909% City  Pittsburg  Contra Costa  0.053%  0.0436369% City  Pleasant Hill  Contra Costa  0.013%  0.0106309% City  Richmond  Contra Costa  0.146%  0.1201444% City  San Pablo  Contra Costa  0.018%  0.0148843% City  San Ramon  Contra Costa  0.021%  0.0176459% City  Walnut Creek  Contra Costa  0.026%  0.0212132% County  Del Norte County Del Norte  0.114%  0.140%  0.1189608% County  El Dorado County El Dorado  0.768%  0.939%  0.7980034% City  Placerville  El Dorado  0.015%  0.0127642%
City  South Lake Tahoe  El Dorado  0.081%  0.0665456%
County  Fresno County Fresno  1.895%  2.318%  1.9693410% City  Clovis  Fresno  0.065%  0.0536211% City  Coalinga  Fresno  0.012%  0.0098554% City  Fresno  Fresno  0.397%  0.3270605% City  Kerman  Fresno  0.005%  0.0042534% City  Kingsburg  Fresno  0.008%  0.0066167% City  Mendota  Fresno  0.002%  0.0019387% City  Orange Cove  Fresno  0.004%  0.0035607% City  Parlier  Fresno  0.008%  0.0069755% City  Reedley  Fresno  0.012%  0.0098804% City  Sanger  Fresno  0.018%  0.0146135% City  Selma  Fresno  0.015%  0.0127537%
County  Glenn County Glenn  0.107%  0.131%  0.1116978%
County  Humboldt County Humboldt  1.030%  1.260%  1.0703185% 249 2 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City  Arcata  Humboldt  0.054%  0.0447660%
City  Eureka  Humboldt  0.117%  0.143%  0.1216284%
City  Fortuna  Humboldt  0.032%  0.0266837%
County  Imperial County Imperial  0.258%  0.315%  0.2679006% City  Brawley  Imperial  0.011%  0.0087986% City  Calexico  Imperial  0.019%  0.0152799% City  El Centro  Imperial  0.158%  0.1302522% City  Imperial  Imperial  0.006%  0.0048791% County  Inyo County Inyo  0.073%  0.089%  0.0754413% County  Kern County Kern  2.517%  3.079%  2.6159145% City  Arvin  Kern  0.006%  0.0046425% City  Bakersfield  Kern  0.212%  0.1747198% City  California City  Kern  0.009%  0.0070820% City  Delano  Kern  0.030%  0.0249316%
City  McFarland  Kern  0.003%  0.0025644%
City  Ridgecrest  Kern  0.015%  0.0120938% City  Shafter  Kern  0.013%  0.0103417% City  Tehachapi  Kern  0.009%  0.0073580% City  Wasco  Kern  0.008%  0.0069861% County  Kings County Kings  0.293%  0.2413469%
City  Avenal  Kings  0.007%  0.0056335% City  Corcoran  Kings  0.013%  0.0107032% City  Hanford  Kings  0.027%  0.0226038% City  Lemoore  Kings  0.016%  0.0131900% County  Lake County Lake  0.795%  0.6545389%
City  Clearlake  Lake  0.041%  0.050%  0.0426253%
City  Lakeport  Lake  0.021%  0.026%  0.0222964%
County  Lassen County Lassen  0.319%  0.391%  0.3320610% City  Susanville  Lassen  0.027%  0.0219295%
County  Los Angeles County Los Angeles  13.896%  16.999%  14.4437559% 250 3 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City  Agoura Hills  Los Angeles  0.005%  0.0040024%
City  Alhambra  Los Angeles  0.042%  0.0343309% City  Arcadia  Los Angeles  0.033%  0.0267718% City  Artesia  Los Angeles  0.001%  0.0005100%
City  Azusa  Los Angeles  0.026%  0.0210857% City  Baldwin Park  Los Angeles  0.027%  0.0218520% City  Bell  Los Angeles  0.008%  0.0068783% City  Bellflower  Los Angeles  0.002%  0.0014485% City  Bell Gardens  Los Angeles  0.014%  0.0114301% City  Beverly Hills  Los Angeles  0.065%  0.0534897% City  Burbank  Los Angeles  0.100%  0.0823132% City  Calabasas  Los Angeles  0.006%  0.0048948% City  Carson  Los Angeles  0.019%  0.0159805% City  Cerritos  Los Angeles  0.005%  0.0039682% City  Claremont  Los Angeles  0.010%  0.0082584% City  Commerce  Los Angeles  0.000%  0.0002971% City  Compton  Los Angeles  0.044%  0.0361882% City  Covina  Los Angeles  0.028%  0.0229127%
City  Cudahy  Los Angeles  0.001%  0.0006020%
City  Culver City  Los Angeles  0.055%  0.0449894% City  Diamond Bar  Los Angeles  0.001%  0.0006993% City  Downey  Los Angeles  0.052%  0.0429994% City  Duarte  Los Angeles  0.003%  0.0027261% City  El Monte  Los Angeles  0.031%  0.038%  0.0318985% City  El Segundo  Los Angeles  0.033%  0.0268020%
City  Gardena  Los Angeles  0.034%  0.0278088%
City  Glendale  Los Angeles  0.166%  0.1366586%
City  Glendora  Los Angeles  0.016%  0.0134411%
City  Hawaiian Gardens  Los Angeles  0.005%  0.0040549% City  Hawthorne  Los Angeles  0.050%  0.0407833%
251 4 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City  Hermosa Beach  Los Angeles  0.018%  0.0145307% City  Huntington Park  Los Angeles  0.023%  0.0190667% City  Inglewood  Los Angeles  0.059%  0.0489195% City  La Cañada Flintridge  Los Angeles  0.003%  0.0025565% City  Lakewood  Los Angeles  0.005%  0.0039971%
City  La Mirada  Los Angeles  0.010%  0.0081572% City  Lancaster  Los Angeles  0.045%  0.0369689% City  La Puente  Los Angeles  0.002%  0.0012999% City  La Verne  Los Angeles  0.024%  0.0194190% City  Lawndale  Los Angeles  0.002%  0.0017731% City  Lomita  Los Angeles  0.004%  0.0031940% City  Long Beach  Los Angeles  0.439%  0.3614151% City  Los Angeles  Los Angeles  2.715%  3.321%  2.8218811% City  Lynwood  Los Angeles  0.016%  0.0134345% City  Malibu  Los Angeles  0.002%  0.0019269% City  Manhattan Beach  Los Angeles  0.032%  0.0260686% City  Maywood  Los Angeles  0.004%  0.0035528% City  Monrovia  Los Angeles  0.031%  0.0254455% City  Montebello  Los Angeles  0.030%  0.0250670% City  Monterey Park  Los Angeles  0.031%  0.0256677% City  Norwalk  Los Angeles  0.031%  0.0258228% City  Palmdale  Los Angeles  0.046%  0.0375827% City  Palos Verdes Estates  Los Angeles  0.006%  0.0053102% City  Paramount  Los Angeles  0.011%  0.0091483% City  Pasadena  Los Angeles  0.146%  0.1200524% City  Pico Rivera  Los Angeles  0.022%  0.0183333% City  Pomona  Los Angeles  0.111%  0.0911933% City  Rancho Palos Verdes  Los Angeles  0.002%  0.0012645% City  Redondo Beach  Los Angeles  0.062%  0.0506992% City  Rosemead  Los Angeles  0.003%  0.0028260% 252 5 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City  San Dimas  Los Angeles  0.003%  0.0022016%
City  San Fernando  Los Angeles  0.013%  0.0104837% City  San Gabriel  Los Angeles  0.018%  0.0147726% City  San Marino  Los Angeles  0.009%  0.0073791% City  Santa Clarita  Los Angeles  0.022%  0.0178167% City  Santa Fe Springs  Los Angeles  0.031%  0.0257531% City  Santa Monica  Los Angeles  0.158%  0.1298513% City  Sierra Madre  Los Angeles  0.006%  0.0048646% City  Signal Hill  Los Angeles  0.010%  0.0084884% City  South El Monte  Los Angeles  0.005%  0.0039603% City  South Gate  Los Angeles  0.020%  0.0166272% City  South Pasadena  Los Angeles  0.012%  0.0095334%
City  Temple City  Los Angeles  0.005%  0.0039498% City  Torrance  Los Angeles  0.112%  0.0919820% City  Walnut  Los Angeles  0.006%  0.0047305% City  West Covina  Los Angeles  0.049%  0.0404521% City  West Hollywood  Los Angeles  0.013%  0.0108517% City  Whittier  Los Angeles  0.032%  0.0260581%
County  Madera County Madera  0.349%  0.427%  0.3630669% City  Chowchilla  Madera  0.012%  0.0097332% City  Madera  Madera  0.039%  0.0318441% County  Marin County Marin  0.564%  0.690%  0.5861325%
City  Larkspur  Marin  0.015%  0.0124697%
City  Mill Valley  Marin  0.020%  0.0168401% City  Novato  Marin  0.028%  0.0229824% City  San Anselmo  Marin  0.009%  0.0078062%
City  San Rafael  Marin  0.089%  0.0729823%
County  Mariposa County Mariposa  0.084%  0.103%  0.0876131% County  Mendocino County Mendocino  0.439%  0.536%  0.4558394% City  Ukiah  Mendocino  0.039%  0.0317153%
253 6 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage County  Merced County Merced  0.551%  0.674%  0.5724262% City  Atwater  Merced  0.024%  0.0195846%
City  Livingston  Merced  0.006%  0.0045873%
City  Los Banos  Merced  0.020%  0.0165142%
City  Merced  Merced  0.061%  0.0500762%
County  Modoc County Modoc  0.065%  0.080%  0.0678250%
County  Mono County Mono  0.023%  0.029%  0.0242606% County  Monterey County Monterey  0.908%  1.111%  0.9437083% City  Greenfield  Monterey  0.006%  0.0050552% City  King City  Monterey  0.005%  0.0037355% City  Marina  Monterey  0.017%  0.0144098%
City  Monterey  Monterey  0.041%  0.0336540%
City  Pacific Grove  Monterey  0.009%  0.0074842% City  Salinas  Monterey  0.094%  0.0776576% City  Seaside  Monterey  0.023%  0.0191772%
City  Soledad  Monterey  0.007%  0.0060870%
County  Napa County Napa  0.288%  0.352%  0.2994325%
City  American Canyon  Napa  0.017%  0.0136869%
City  Napa  Napa  0.078%  0.0642783%
County  Nevada County Nevada  0.441%  0.539%  0.4579827% City  Grass Valley  Nevada  0.024%  0.0197805%
City  Truckee  Nevada  0.003%  0.0023843%
County  Orange County Orange  4.364%  5.339%  4.5363576% City  Aliso Viejo  Orange  0.014%  0.0113841%
City  Anaheim  Orange  0.554%  0.678%  0.5759282%
City  Brea  Orange  0.086%  0.0708897%
City  Buena Park  Orange  0.087%  0.0714352%
City  Costa Mesa  Orange  0.124%  0.152%  0.1288366%
City  Cypress  Orange  0.033%  0.0271937%
City  Dana Point  Orange  0.001%  0.0005560%
254 7 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City  Fountain Valley  Orange  0.055%  0.0455980% City  Fullerton  Orange  0.137%  0.168%  0.1425744% City  Garden Grove  Orange  0.213%  0.1752482% City  Huntington Beach  Orange  0.247%  0.302%  0.2568420% City  Irvine  Orange  0.139%  0.170%  0.1442350% City  Laguna Beach  Orange  0.047%  0.058%  0.0493043% City  Laguna Hills  Orange  0.014%  0.0115457% City  Laguna Niguel  Orange  0.001%  0.0007071% City  Laguna Woods  Orange  0.001%  0.0006546% City  La Habra  Orange  0.060%  0.073%  0.0621049% City  Lake Forest  Orange  0.012%  0.0101249%
City  La Palma  Orange  0.012%  0.0095439% City  Los Alamitos  Orange  0.008%  0.0069190% City  Mission Viejo  Orange  0.014%  0.0117560% City  Newport Beach  Orange  0.179%  0.1470134%
City  Orange  Orange  0.150%  0.1231320% City  Placentia  Orange  0.029%  0.035%  0.0298912% City  Rancho Santa Margarita  Orange  0.001%  0.0006296% City  San Clemente  Orange  0.008%  0.010%  0.0086083%
City  San Juan Capistrano  Orange  0.008%  0.0065510%
City  Santa Ana  Orange  0.502%  0.614%  0.5213866%
City  Seal Beach  Orange  0.020%  0.0165891%
City  Stanton  Orange  0.035%  0.0291955%
City  Tustin  Orange  0.073%  0.0600341%
City  Westminster  Orange  0.104%  0.127%  0.1082721%
City  Yorba Linda  Orange  0.044%  0.0362223%
County  Placer County Placer  1.045%  1.278%  1.0861002% City  Auburn  Placer  0.017%  0.0141114%
City  Lincoln  Placer  0.031%  0.0255599% City  Rocklin  Placer  0.076%  0.0625485% 255 8 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City  Roseville  Placer  0.196%  0.1616559%
County  Plumas County Plumas  0.205%  0.251%  0.2128729% County  Riverside County Riverside  4.534%  5.547%  4.7128296% City  Banning  Riverside  0.017%  0.0143848% City  Beaumont  Riverside  0.021%  0.0171135% City  Blythe  Riverside  0.012%  0.0096714%
City  Canyon Lake  Riverside  0.000%  0.0001761%
City  Cathedral City  Riverside  0.067%  0.0553614% City  Coachella  Riverside  0.021%  0.0173054% City  Corona  Riverside  0.147%  0.1207083% City  Desert Hot Springs  Riverside  0.024%  0.0200433% City  Eastvale  Riverside  0.000%  0.0002747% City  Hemet  Riverside  0.051%  0.0421792% City  Indio  Riverside  0.056%  0.0457794% City  Jurupa Valley  Riverside  0.001%  0.0008991% City  Lake Elsinore  Riverside  0.021%  0.0172949% City  La Quinta  Riverside  0.063%  0.0516732% City  Menifee  Riverside  0.032%  0.0260909%
City  Moreno Valley  Riverside  0.137%  0.1130348%
City  Murrieta  Riverside  0.048%  0.059%  0.0497423%
City  Norco  Riverside  0.016%  0.0134542% City  Palm Desert  Riverside  0.083%  0.0682465% City  Palm Springs  Riverside  0.076%  0.0629862% City  Perris  Riverside  0.009%  0.0076774% City  Rancho Mirage  Riverside  0.052%  0.0431098% City  Riverside  Riverside  0.268%  0.2206279%
City  San Jacinto  Riverside  0.010%  0.0085936%
City  Temecula  Riverside  0.022%  0.0180086% City  Wildomar  Riverside  0.008%  0.0062500% County  Sacramento County Sacramento  3.797%  4.645%  3.9465887% 256 9 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City  Citrus Heights  Sacramento  0.057%  0.0465312% City  Elk Grove  Sacramento  0.130%  0.1066994% City  Folsom  Sacramento  0.108%  0.0890850% City  Galt  Sacramento  0.017%  0.0143704% City  Rancho Cordova  Sacramento  0.008%  0.0067679% City  Sacramento  Sacramento  0.721%  0.882%  0.7496530% County  San Benito County San Benito  0.106%  0.130%  0.1101417% City  Hollister  San Benito  0.027%  0.0225355%
County  San Bernardino County San Bernardino  3.259%  3.987%  3.3878124% City  Adelanto  San Bernardino  0.008%  0.0066640%
City  Apple Valley  San Bernardino  0.025%  0.0207360%
City  Barstow  San Bernardino  0.015%  0.0122056% City  Chino  San Bernardino  0.064%  0.0525893% City  Chino Hills  San Bernardino  0.001%  0.0006388% City  Colton  San Bernardino  0.031%  0.0253443% City  Fontana  San Bernardino  0.112%  0.0920543% City  Grand Terrace  San Bernardino  0.006%  0.0051051% City  Hesperia  San Bernardino  0.035%  0.0291522% City  Highland  San Bernardino  0.004%  0.0029061% City  Loma Linda  San Bernardino  0.009%  0.0071188% City  Montclair  San Bernardino  0.039%  0.0322108% City  Ontario  San Bernardino  0.179%  0.1472934% City  Rancho Cucamonga  San Bernardino  0.084%  0.0689431% City  Redlands  San Bernardino  0.057%  0.0469150% City  Rialto  San Bernardino  0.073%  0.0603206% City  San Bernardino  San Bernardino  0.178%  0.1461880% City  Twentynine Palms  San Bernardino  0.002%  0.0012605% City  Upland  San Bernardino  0.052%  0.0424460% City  Victorville  San Bernardino  0.033%  0.0269400% City  Yucaipa  San Bernardino  0.016%  0.0128772% 257 10 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City  Yucca Valley  San Bernardino  0.003%  0.0021228%
County  San Diego County San Diego  5.706%  6.980%  5.9309748% City  Carlsbad  San Diego  0.128%  0.1050485%
City  Chula Vista  San Diego  0.189%  0.231%  0.1961456% City  Coronado  San Diego  0.044%  0.0359095% City  El Cajon  San Diego  0.113%  0.0933582% City  Encinitas  San Diego  0.061%  0.074%  0.0630289% City  Escondido  San Diego  0.145%  0.1192204% City  Imperial Beach  San Diego  0.014%  0.0118283%
City  La Mesa  San Diego  0.055%  0.068%  0.0575593%
City  Lemon Grove  San Diego  0.022%  0.0183911% City  National City  San Diego  0.080%  0.0656808% City  Oceanside  San Diego  0.213%  0.1753428% City  Poway  San Diego  0.062%  0.0511040% City  San Diego  San Diego  1.975%  2.416%  2.0531169% City  San Marcos  San Diego  0.089%  0.0733897% City  Santee  San Diego  0.033%  0.0268401% City  Solana Beach  San Diego  0.017%  0.0138564% City  Vista  San Diego  0.052%  0.0425144% Consolidated  San Francisco San Francisco  3.026%  3.702%  3.1457169% County  San Joaquin County San Joaquin  1.680%  2.055%  1.7460399% City  Lathrop  San Joaquin  0.009%  0.0075394%
City  Lodi  San Joaquin  0.053%  0.0439484%
City  Manteca  San Joaquin  0.054%  0.0443454% City  Ripon  San Joaquin  0.013%  0.0104219% City  Stockton  San Joaquin  0.313%  0.383%  0.3256176% City  Tracy  San Joaquin  0.084%  0.0692047%
County  San Luis Obispo County San Luis Obispo  0.816%  0.999%  0.8484126% City  Arroyo Grande  San Luis Obispo  0.024%  0.0199053% City  Atascadero  San Luis Obispo  0.029%  0.0240680% 258 11 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City  El Paso de Robles (Paso Robles)  San Luis Obispo  0.043%  0.0353456% City  Grover Beach  San Luis Obispo  0.017%  0.0137881% City  Morro Bay  San Luis Obispo  0.020%  0.0160922% City  San Luis Obispo  San Luis Obispo  0.077%  0.0637841% County  San Mateo County San Mateo  1.074%  1.313%  1.1159599% City  Belmont  San Mateo  0.021%  0.0169860% City  Burlingame  San Mateo  0.019%  0.0152537% City  Daly City  San Mateo  0.044%  0.0363880% City  East Palo Alto  San Mateo  0.013%  0.0103982% City  Foster City  San Mateo  0.020%  0.0166101% City  Half Moon Bay  San Mateo  0.004%  0.0031638%
City  Hillsborough  San Mateo  0.013%  0.0110029%
City  Menlo Park  San Mateo  0.015%  0.0126209%
City  Millbrae  San Mateo  0.013%  0.0105836% City  Pacifica  San Mateo  0.016%  0.0130625% City  Redwood City  San Mateo  0.056%  0.0463511% City  San Bruno  San Mateo  0.021%  0.0172161%
City  San Carlos  San Mateo  0.013%  0.0108885%
City  San Mateo  San Mateo  0.052%  0.0425841%
City  South San Francisco  San Mateo  0.043%  0.0353943% County  Santa Barbara County Santa Barbara  1.132%  1.385%  1.1768968% City  Carpinteria  Santa Barbara  0.001%  0.0008938%
City  Goleta  Santa Barbara  0.004%  0.0028969% City  Lompoc  Santa Barbara  0.047%  0.0389379% City  Santa Barbara  Santa Barbara  0.122%  0.1004559% City  Santa Maria  Santa Barbara  0.058%  0.0479179% County  Santa Clara County Santa Clara  2.404%  2.941%  2.4987553% City  Campbell  Santa Clara  0.014%  0.0112566% City  Cupertino  Santa Clara  0.008%  0.0066824% City  Gilroy  Santa Clara  0.025%  0.0202891% 259 12 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City  Los Altos  Santa Clara  0.013%  0.0103338% City  Los Gatos  Santa Clara  0.013%  0.0103220% City  Milpitas  Santa Clara  0.036%  0.0298120% City  Morgan Hill  Santa Clara  0.015%  0.0124619% City  Mountain View  Santa Clara  0.041%  0.0334608% City  Palo Alto  Santa Clara  0.039%  0.0323080% City  San Jose  Santa Clara  0.294%  0.360%  0.3054960% City  Santa Clara  Santa Clara  0.067%  0.0549723%
City  Saratoga  Santa Clara  0.004%  0.0034161% City  Sunnyvale  Santa Clara  0.053%  0.0434069% County  Santa Cruz County Santa Cruz  0.783%  0.957%  0.8135396% City  Capitola  Santa Cruz  0.020%  0.0168191% City  Santa Cruz  Santa Cruz  0.143%  0.1180348% City  Scotts Valley  Santa Cruz  0.015%  0.0126525%
City  Watsonville  Santa Cruz  0.063%  0.0520136%
County  Shasta County Shasta  1.095%  1.339%  1.1380191% City  Anderson  Shasta  0.024%  0.0198896% City  Redding  Shasta  0.284%  0.2334841% City  Shasta Lake  Shasta  0.004%  0.0031993%
County  Siskiyou County Siskiyou  0.228%  0.279%  0.2373393% County  Solano County Solano  0.760%  0.6260795% City  Benicia  Solano  0.031%  0.0253903%
City  Dixon  Solano  0.016%  0.0130849% City  Fairfield  Solano  0.109%  0.0897317% City  Suisun City  Solano  0.021%  0.0176183% City  Vacaville  Solano  0.119%  0.0976497%
City  Vallejo  Solano  0.167%  0.1373644%
County  Sonoma County Sonoma  1.218%  1.490%  1.2661290% City  Healdsburg  Sonoma  0.032%  0.0266929%
City  Petaluma  Sonoma  0.081%  0.0667507%
260 13 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City  Rohnert Park  Sonoma  0.041%  0.0340759%
City  Santa Rosa  Sonoma  0.184%  0.1519070%
City  Sonoma  Sonoma  0.022%  0.0183438%
City  Windsor  Sonoma  0.016%  0.0129298%
County  Stanislaus County Stanislaus  1.722%  1.4182273% City  Ceres  Stanislaus  0.041%  0.0340260%
City  Modesto  Stanislaus  0.217%  0.1788759%
City  Newman  Stanislaus  0.006%  0.0046964%
City  Oakdale  Stanislaus  0.018%  0.0145531%
City  Patterson  Stanislaus  0.015%  0.0126590%
City  Riverbank  Stanislaus  0.010%  0.0085699%
City  Turlock  Stanislaus  0.065%  0.0531966%
County  Sutter County Sutter  0.306%  0.374%  0.3179548% City  Yuba City  Sutter  0.074%  0.0606242%
County  Tehama County Tehama  0.213%  0.261%  0.2216654% City  Red Bluff  Tehama  0.014%  0.0117771%
County  Trinity County Trinity  0.082%  0.101%  0.0855476% County  Tulare County Tulare  0.809%  0.990%  0.8410949% City  Dinuba  Tulare  0.014%  0.0116929%
City  Exeter  Tulare  0.004%  0.0032479%
City  Farmersville  Tulare  0.003%  0.0027879% City  Lindsay  Tulare  0.007%  0.0057111% City  Porterville  Tulare  0.021%  0.0171845% City  Tulare  Tulare  0.037%  0.0302273% City  Visalia  Tulare  0.066%  0.0545872%
County  Tuolumne County Tuolumne  0.486%  0.594%  0.5047621% County  Ventura County Ventura  2.192%  2.681%  2.2781201% City  Camarillo  Ventura  0.002%  0.0012815%
City  Fillmore  Ventura  0.002%  0.0020294% City  Moorpark  Ventura  0.008%  0.0067337% 261 14 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement Percentage Plaintiff Subdivision Percentage Weighted Allcation Percentage City  Oxnard  Ventura  0.156%  0.190%  0.1617338%
City  Port Hueneme  Ventura  0.021%  0.0174145%
City  San Buenaventura (Ventura)  Ventura  0.085%  0.0702181% City  Santa Paula  Ventura  0.014%  0.0119072% City  Simi Valley  Ventura  0.065%  0.0533043% City  Thousand Oaks  Ventura  0.022%  0.0179902% County  Yolo County Yolo  0.357%  0.437%  0.3713319%
City  Davis  Yolo  0.055%  0.0451747% City  West Sacramento  Yolo  0.066%  0.0544321% City  Woodland  Yolo  0.058%  0.0477904% County  Yuba County Yuba  0.214%  0.262%  0.2225679%
City  Marysville  Yuba  0.014%  0.0112079%
262 15 of 15

APPENDIX 2
Cost Reimbursement Procedure

1. Additional defined terms:
a) Costs means the reasonable amounts paid for the attorney and other City Attorney and County Counsel staff time for individuals employed by a Plaintiff Subdivision at the contractual rate, inclusive of benefits and overhead, together with amounts paid for court reporters, experts, copying, electronic research, travel, vendors, and the like, which were not previously reimbursed and which were paid or incurred (i) prior to December 31, 2022 in litigation against any Opioid Defendant and/or (ii) in negotiating and drafting any CA Allocation Agreement(s) concerning a settlement with any Opioid Defendant(s).

Costs does not include attorneys’ fees, costs, or expenses incurred by private contingency fee counsel. No part of the CA Abatement Accounts Fund will be used to reimburse Costs.
b) First Claims Date means October 1, 2023 or when all applications for reimbursement of Costs, in whole or in part, from funds available under Section IX and Exhibit R of the Walgreens Settlement Agreement, Section XIV and Exhibit R of the Teva Settlement Agreement, Section XIII and Exhibit R of the Allergan Settlement Agreement, Section X and Exhibit R of the Distributor Settlement Agreement, Section XI and Exhibit R of the Janssen Settlement Agreement, Section X and Exhibit R of the CVS Settlement Agreement, or Section IX and Exhibit R of the Walmart Settlement Agreement, have been finally determined under the provisions of those agreements, whichever comes first. c) Special Master means a retired judicial officer or former public lawyer, not presently employed or retained by a Plaintiff Subdivision, who will aggregate, review, and determine the reasonable Costs to be awarded to each Plaintiff Subdivision that submits a claim for reimbursement of Costs. The Special Master will be selected by a majority vote of the votes cast by Plaintiff Subdivisions, with each such subdivision having one vote. d) Plaintiff Subdivision Committee means the committee of Plaintiff Subdivisions that will review and approve the invoices submitted by the Special Master reflecting his or her reasonable time and expenses.

2. Cost Reimbursement to Plaintiff Subdivision
a) Purpose. Substantial resources have been expended to hold Opioid Defendants accountable for creating and profiting from the opioid crisis, and this effort has been a significant catalyst in creating National Opioid Settlements with various manufacturers, distributors, and chain pharmacies.
///
1 263

b) Claims Procedure.
i. If a Plaintiff Subdivision is eligible to seek reimbursement of Costs, in whole or in part, from funds available under Section IX and Exhibit R of the Kroger Settlement Agreement, Section IX and Exhibit R of the Walgreens Settlement Agreement, Section XIV and Exhibit R of the Teva Settlement Agreement, Section XIII and Exhibit R of the Allergan Settlement Agreement, Section X and Exhibit R of the CVS Settlement Agreement, Section IX and Exhibit R of the Walmart Settlement Agreement, Section X or Exhibit R of the Distributor Settlement Agreement, or Section XI or Exhibit R of the Janssen Settlement Agreement, it must first make a timely application for reimbursement from such funds. To allow sufficient time for determination of those applications, no claim for Costs to the CA Subdivision Fund under this Agreement may be made before the First Claims Date. ii. A Plaintiff Subdivision that wishes to be reimbursed from the CA Subdivision Fund must submit a claim to the Special Master no later than forty-five (45) days after the First Claims Date. The Special Master will then compile and redistribute the aggregated claim totals for each Plaintiff Subdivision via email to representatives of all the Plaintiff Subdivisions. A claim for attorney and staff time must list, for each attorney or staff member included in the claim, the following information: name, title, total hours claimed, hourly rate (including, if sought, benefits and share of overhead), and narrative summarizing the general nature of the work performed by the attorney or staff member. For reimbursement of “hard” costs, the subdivision may aggregate across a category (e.g., total for travel costs). It is the intention of the Plaintiff Subdivisions that submission of documents related to reimbursement of Costs does not waive any attorney-client privilege or exemptions to the California Public Records Act.
iii. The Special Master may request, at his or her sole option, additional documents or details to assist in the final award of Costs.
iv. The Special Master will review claims for reasonableness and will notify each Plaintiff Subdivision of the final determination of its claim, and will provide a list of all final awards to all Plaintiff Subdivisions by email or, upon request, via First Class U.S. Mail. Any Plaintiff Subdivision may ask the Special Master to reconsider any final award within twenty-one (21) days. The Special Master will make a final determination on any such reconsideration request within thirty (30) days of receipt. v. Any decision of the Special Master is final and binding, and will be considered under the California Arbitration Act, Code of Civil Procedure section 1280 et seq. as a final arbitration award. Nothing in this agreement is intended to expand the scope of judicial review of the final award for errors of fact or law, and the Parties agree that they may only seek to vacate the award if clear and convincing evidence demonstrates one of the factors set forth in Code of Civil Procedure, section 1286.2, subdivision (a). Plaintiff Subdivisions will have fourteen (14) days after all final awards are made, together with any final determination of a request for 2 264

reconsideration, to seek review in the Superior Court of California, pursuant to Code of Civil Procedure, section 1285, where the State has filed its Consent Judgment. vi. The Special Master will prepare a report of Costs that includes his or her fees and expenses at least ninety (90) days before the Payment Date for each Annual Payment. The Special Master’s preparation of a report of Costs does not discharge a Plaintiff Subdivision’s reporting requirement under Section V(B)(2) of the Kroger Settlement Agreement.
vii. A member of the Plaintiff Subdivision Committee, which is a CA Participating Subdivision, will submit to the Settlement Fund Administrator and Kroger a report of the fees and expenses incurred by the Special Master pursuant to Section V(B)(2) of the Kroger Settlement Agreement.
c) Claims Priority and Limitation.
i. The Special Master will submit invoices for compensation of reasonable fees and expenses to the Plaintiff Subdivision Committee no later than ninety (90) days prior to the Payment Date for each Annual Payment. The Plaintiff Subdivision Committee will promptly review and, if reasonable, approve the Special Master’s invoice for compensation. The Plaintiff Subdivision Committee will submit approved invoices to the Settlement Fund Administrator for payment. The Special Master’s approved invoices have priority and will be paid first from the CA Subdivision Fund before any award of Costs, subject to the limitation in Section 2.c.v below. ii. Final Awards of Costs that do not exceed seventy-five thousand dollars ($75,000.00) will be paid next in priority after the Special Master’s approved invoices.
iii. Final Awards of Costs in excess of seventy-five thousand dollars ($75,000.00) will be paid proportionally from the funds remaining in that year’s Annual Payment. iv. Any claim for Costs that is not paid in full will be allocated against the next year’s distribution from the CA Subdivision Fund, until all approved claims for Costs are paid in full.
v. In no event will more than 50% of the total CA Subdivision Fund received in any year be used to pay Costs or the Special Master’s approved invoices. vi. In no event shall more than $28 million of the total CA Subdivision Funds paid pursuant to the Kroger Settlement Agreement, Walgreens Settlement Agreement, Teva Settlement Agreement, Allergan Settlement Agreement, Distributor Settlement Agreement, CVS Settlement Agreement, Janssen Settlement Agreement, and the Walmart Settlement Agreement be used to pay Costs.
3 265
d) Collateral Source Payments and Third-Party Settlement. i. In the event a Plaintiff Subdivision is awarded compensation, in whole or in part, by any source of funds created as a result of litigation against an Opioid Defendant for its reasonable Costs, it will reduce its claim for Costs from the CA Subdivision Fund by that amount. If a Plaintiff Subdivision has already received a final award of Costs from the CA Subdivision Fund, it will repay the fund up to the prior award of Costs via a payment to the Settlement Fund Administrator or notify the Settlement Fund Administrator that its allocation from the next and subsequent Annual Payments should be reduced accordingly. If the Plaintiff Subdivision is repaying any prior award of Costs, that repayment will occur as soon as is feasible after the Plaintiff Subdivision’s receipt of Cost funds from the collateral source, but no more than 90 days after its receipt from the collateral source. The Settlement Fund Administrator will add any repaid Costs to the CA Subdivision Fund. Any Plaintiff Subdivision that has submitted for reimbursement to any national fund and has not received a final determination by the First Claims Date may request that the settlement administrator withhold some or all of its payment from the CA Subdivision Fund in order to avoid repayment.
ii. In the event a Plaintiff Subdivision reaches a monetary settlement or compromise against any Opioid Defendant outside of the National Opioid Settlement, the monetary portion of such settlement, net of fees paid to outside contingency fee counsel and of funds earmarked strictly for abatement, will be credited against its Costs and the subdivision will be ineligible to recover those credited Costs from the CA Subdivision Fund. Plaintiff Subdivisions negotiating monetary settlements or compromises against any Opioid Defendant outside of the National Opioid Settlement will negotiate for funds to repay any Costs it previously received from the CA Subdivision Fund or for Costs it otherwise might be eligible to claim from the CA Subdivision Fund. If such a settlement is paid after all final approved claims for Costs by all Plaintiff Subdivisions are satisfied in full, the settling subdivision will reimburse the CA Subdivision Fund in that amount by making payment to the Settlement Fund Administrator to add to the CA Subdivision Fund in a manner consistent with the repayments described in section 2.d.i above. 4 266

APPENDIX 3

CALIFORNIA-SUBDIVISION BACKSTOP AGREEMENT
On August 6, 2021, Judge Polster of the US District Court for the Northern District of Ohio issued an Order (the Order), docket number 3814, in In Re National Prescription Opiate Litigation, MDL 2804, addressing contingent attorney fee contracts between political subdivisions eligible to participate in the Kroger Settlement and their counsel.

In light of the Order, and at the request of [SUBDIVISION], the [SUBDIVISION], its counsel [COUNSEL], and the California Attorney General, on behalf of the State of California, are entering into this California-Subdivision Backstop Agreement (Backstop Agreement). [SUBDIVISION] and [COUNSEL] intend this Backstop Agreement to constitute a State BackStop Agreement as that term is used in the Order and in Exhibit R (Agreement on Attorneys’ Fees, Costs, and Expenses) of the Kroger Settlement Agreement.

Pursuant to this Backstop Agreement, [SUBDIVISION] may, subject to the limitations of the Kroger Settlement Agreement and CA Kroger Allocation Agreement, as well as any other limitations imposed by law, use funds that it receives from the Kroger Settlement CA Subdivision Fund to pay a contingent fee to [COUNSEL]. Any such payment from [SUBDIVISION] to [COUNSEL], together with any contingency fees that [COUNSEL] may receive from the national Attorney Fee Fund, will not exceed a total contingency fee of [PERCENTAGE NOT TO EXCEED 15%] of the total gross recovery of [SUBDIVISION] from the Kroger Settlement.
[COUNSEL] certify that they first sought fees and costs from the Attorney Fee Fund created under the Kroger Settlement Agreement before seeking or accepting payment under this backstop agreement. [COUNSEL] further certify that they are not seeking and will not accept payment under this backstop agreement of any litigation fees or costs that have been reimbursed through prior settlements or judgments.

The Attorney General is executing this agreement solely because the definition of “State BackStop Agreement” in Exhibit R of the Kroger Settlement Agreement requires such agreements to be between “a Settling State” and private counsel for a participating subdivision. Neither the California Attorney General nor the State of California have any obligations under this Backstop Agreement, and this Backstop Agreement does not require the payment of any state funds to [SUBDIVISION], [COUNSEL], or any other party.
[DATE] [SUBDIVISION SIGNATURE BLOCK]
[DATE] [COUNSEL SIGNATURE BLOCK]
[DATE] [ATTORNEY GENERAL SIGNATURE BLOCK]
1 267
K-1

EXHIBIT K
Subdivision Participation and Release Form
Governmental Entity: State:

Authorized Official:

Address 1:

Address 2:

City, State, Zip:

Phone:

Email:

The governmental entity identified above (“Governmental Entity”), in order to obtain and in consideration for the benefits provided to the Governmental Entity pursuant to the Settlement Agreement dated March 22, 2024 (“Kroger Settlement”), and acting through the undersigned authorized official, hereby elects to participate in the Kroger Settlement, release all Released Claims against all Released Entities, and agrees as follows.

1. The Governmental Entity is aware of and has reviewed the Kroger Settlement, understands that all terms in this Participation and Release Form have the meanings defined therein, and agrees that by executing this Participation and Release Form, the Governmental Entity elects to participate in the Kroger Settlement and become a Participating Subdivision as provided therein.

2. The Governmental Entity shall promptly, and in any event no later than 14 days after the Reference Date and prior to the filing of the Consent Judgment, dismiss with prejudice any Released Claims that it has filed. With respect to any Released Claims pending in In re National Prescription Opiate Litigation, MDL No. 2804, the Governmental Entity authorizes the Plaintiffs’ Executive Committee to execute and file on behalf of the Governmental Entity a Stipulation of Dismissal with Prejudice substantially in the form found at https://nationalopioidsettlement.com/.

3. The Governmental Entity agrees to the terms of the Kroger Settlement pertaining to Participating Subdivisions as defined therein.

4. By agreeing to the terms of the Kroger Settlement and becoming a Releasor, the Governmental Entity is entitled to the benefits provided therein, including, if applicable, monetary payments beginning after the Effective Date.

5. The Governmental Entity agrees to use any monies it receives through the Kroger Settlement solely for the purposes provided therein.

6. The Governmental Entity submits to the jurisdiction of the court in the Governmental Entity’s state where the Consent Judgment is filed for purposes limited to that court’s role as provided in, and for resolving disputes to the extent provided in, the Kroger Settlement.

The Governmental Entity likewise agrees to arbitrate before the National Arbitration Panel 268
K-2
as provided in, and for resolving disputes to the extent otherwise provided in, the Kroger Settlement.

7. The Governmental Entity has the right to enforce the Kroger Settlement as provided therein.

8. The Governmental Entity, as a Participating Subdivision, hereby becomes a Releasor for all purposes in the Kroger Settlement, including without limitation all provisions of Section XI (Release), and along with all departments, agencies, divisions, boards, commissions, districts, instrumentalities of any kind and attorneys, and any person in their official capacity elected or appointed to serve any of the foregoing and any agency, person, or other entity claiming by or through any of the foregoing, and any other entity identified in the definition of Releasor, provides for a release to the fullest extent of its authority. As a Releasor, the Governmental Entity hereby absolutely, unconditionally, and irrevocably covenants not to bring, file, or claim, or to cause, assist or permit to be brought, filed, or claimed, or to otherwise seek to establish liability for any Released Claims against any Released Entity in any forum whatsoever. The releases provided for in the Kroger Settlement are intended by the Parties to be broad and shall be interpreted so as to give the Released Entities the broadest possible bar against any liability relating in any way to Released Claims and extend to the full extent of the power of the Governmental Entity to release claims. The Kroger Settlement shall be a complete bar to any Released Claim.

9. The Governmental Entity hereby takes on all rights and obligations of a Participating Subdivision as set forth in the Kroger Settlement.

10. In connection with the releases provided for in the Kroger Settlement, each Governmental Entity expressly waives, releases, and forever discharges any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States or other jurisdiction, or principle of common law, which is similar, comparable, or equivalent to § 1542 of the California Civil Code, which reads:

General Release; extent. A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release that, if known by him or her would have materially affected his or her settlement with the debtor or released party.

A Releasor may hereafter discover facts other than or different from those which it knows, believes, or assumes to be true with respect to the Released Claims, but each Governmental Entity hereby expressly waives and fully, finally, and forever settles, releases and discharges, upon the Effective Date, any and all Released Claims that may exist as of such date but which Releasors do not know or suspect to exist, whether through ignorance, oversight, error, negligence or through no fault whatsoever, and which, if known, would materially affect the Governmental Entities’ decision to participate in the Kroger Settlement.
269
K-3

11. Nothing herein is intended to modify in any way the terms of the Kroger Settlement, to which Governmental Entity hereby agrees. To the extent this Participation and Release Form is interpreted differently from the Kroger Settlement in any respect, the Kroger Settlement controls.

I have all necessary power and authorization to execute this Participation and Release Form on behalf of the Governmental Entity.

Signature: ______________________________
Name: ______________________________
Title: ______________________________
Date: ______________________________
270
Department: Economic Development
Prepared By: Jennifer Hiramoto
Department: Economic Development
Prepared By: Jennifer Hiramoto
Staff Member Presenting: Jennifer McLain
Hiramoto, Economic Development Director
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 9
SUBJECT: CONSIDER A RESOLUTION APPROVING, PURSUANT TO THE CERTIFIED FINAL

ONTARIO REGIONAL SPORTS COMPLEX ENVIRONMENTAL IMPACT REPORT (SCH NO. 2023110328) AND APPROVED MITIGATION MONITORING AND REPORTING

PROGRAM, A STADIUM VENUE AGREEMENT BETWEEN THE CITY OF ONTARIO

AND RANCHO BASEBALL, LLC AND MAKING CERTAIN CEQA FINDINGS IN

CONNECTION THEREWITH

CITY OF ONTARIO
Agenda Report
August 20, 2024
SECTION:

CONSENT CALENDAR
RECOMMENDATION: That the City Council take the following actions:

A. Consider and Adopt a Resolution Approving pursuant to the Certified Final Ontario Regional Sports Complex Environmental Impact Report (SCH No. 2023110328) and approved Mitigation Monitoring And Reporting Program, A Stadium Venue Agreement between the City And Rancho Baseball, LLC and Making Certain CEQA Findings In Connection Therewith; and B. Authorize the City Manager, or his designee, to execute a Stadium Venue Agreement with Rancho Baseball, LLC on behalf of the City.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Invest in the Growth and Evolution of the City's Economy Focus Resources in Ontario's Commercial and Residential Neighborhoods Encourage, Provide or Support Enhanced Recreational, Educational, Cultural and Healthy City Programs, Policies and Activities
FISCAL IMPACT: This Agreement will generate revenue to the City through a combination of sources, including a license fee, parking revenue, concession sales, and advertising and sponsorship sales. These revenues will emanate from both baseball operations and non-baseball operations.

Per the terms of the Agreement, the base license fee to be paid to the City by Rancho Baseball, LLC ("User") is $400,000 per year in five equal payments between April to August. This amount will increase by $25,000 every five years. City representatives will closely coordinate with the User to leverage each other’s efforts and maximize revenue. Combined with the variety of other revenue 271
sources, staff expects baseball operations to break even or better with additional, non-baseball events and activities allowing the City to generate net revenue.

BACKGROUND & ANALYSIS: The City of Ontario is in the process of developing 200 acres of land generally located between the Cucamonga Creek Channel and Vineyard Avenue, between Riverside Drive and Chino ("Site") as the future Ontario Regional Sportsplex. At build out, it will be one of the largest of its kind in Southern California. While designs are still underway, the Regional Sportsplex is envisioned to contain the following:

Soccer and football fields
Baseball and softball fields
Tennis and pickleball courts
Basketball, volleyball and badminton courts
Competitive and recreational aquatics center
A youth sports training facility
While this project will provide much-desired public athletic amenities, it is also anticipated to be an economic development catalyst. It is estimated that this facility will attract 1.2 million new visitors per year to Ontario and, as such, additional retail and hospitality uses will be required to support this increased number of visitors.

In addition to these public sports amenities and supporting retail facilities, the City is also designing a Minor League Baseball Stadium ("Stadium") with capacity to host 6,500 fans on 10- 12 acres in the northeast portion of the Site.

The proposed anchor user of the Stadium is Rancho Baseball, LLC ("User"), which currently owns and operates a professional baseball club affiliated with Major League Baseball's Los Angeles Dodgers. The User intends to relocate its operations to the City of Ontario and use the Stadium as its home field. A new name for the baseball club- featuring “Ontario"- will be released at a future date. The User would activate the stadium for 80 days a year. In the remaining days, the Stadium will be programmed by the City with such uses as concerts, expositions, graduations, and other sporting events.

In August 2023, the City Council approved a Memorandum of Understanding Regarding Baseball Development and Proposed Lease ("MOU") with Rancho Baseball, LLC, and authorized the City Manager to Negotiate a Lease Agreement with the User. Over the past year, the City and Rancho Baseball have negotiated terms, detailed in the attached Stadium Venue Agreement. A highlight of these terms include:

The City will deliver a 4,000-5,000 seat stadium, plus grass berm seating in the outfield for 500 to 1,500 fans by March 1, 2026.

The annual base license of $400,000 plus increases of $25,000 every five years. Other revenue shares pertaining to merchandise, concessions, stadium signage, advertising, sponsorships and parking revenue are detailed in the Agreement.

City shall design, install and improve the Site with parking. During the baseball season, the City will receive 40 percent of any parking revenues collected by the User. 272
The initial term of the Agreement shall be 20 years, plus options for extensions.

The Project is subject to Prevailing Wage standards.

California Environmental Quality Act (CEQA)
Pursuant to State CEQA Guidelines section 15087(e), the Ontario Regional Sports Complex Draft Environmental Impact Report (“DEIR”) was circulated for at least a 45-day public review and comment period. The City prepared a Final Environmental Impact Report (“FEIR”) in compliance with CEQA (Pub. Resources Code § 21000 et seq.). On July 16, 2024, the City Council conducted a noticed public hearing on the FEIR and Mitigation Monitoring and Reporting Program (“MMRP,”), received testimony from all parties. On July 16, 2024, pursuant to Resolution No . 2024-132, the City Council certified the FEIR, which considered the relocation of the Club to the Stadium, adopted environmental findings, and a Statement of Overriding Considerations, approved the MMRP, and the Project.

Staff has determined that all environmental impacts of the Stadium Venue Agreement have been addressed within the FEIR, and that there is no substantial evidence in the administrative record that the Stadium Venue Agreement may result in any significant environmental impacts beyond those analyzed in the FEIR. Given this, pursuant to State CEQA section 15189 through 15190, staff recommends that the City Council finds that the preparation of a subsequent or supplemental CEQA document is not required for the Stadium Venue Agreement and that, after approving the Agreement, a Notice of Determination be filed pursuant to the FEIR. 273
RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,

CALIFORNIA, APPROVING PURSUANT TO THE CERTIFIED FINAL

ONTARIO REGIONAL SPORTS COMPLEX ENVIRONMENTAL IMPACT
REPORT (SCH NO. 2023110328) AND APPROVED MITIGATION

MONITORING AND REPORTING PROGRAM, A STADIUM VENUE

AGREEMENT BETWEEN THE CITY AND RANCHO BASEBALL, LLC

AND MAKING CERTAIN CEQA FINDINGS IN CONNECTION
THEREWITH.

WHEREAS, the City of Ontario (“City”) is the fee interest owner of certain real property, identified with Assessor’s Parcel Numbers 0218-101-05, 0218-101-06, 0218- 101-07, 0218-102-10 and 0218-102-11, bounded to the north by Riverside Drive, to the south by Chino Avenue, to the west by the unimproved right-of-way for Vineyard Avenue, and to the east by the Cucamonga Creek Flood Control Channel, located in the City of Ontario, County of San Bernardino, California, consisting of approximately 199 gross acres of land, (the “City Property”), upon which the CITY intends to improve the Site with municipal sports complex facilities (“Sports Complex”); and WHEREAS, the City is willing to construct a professional baseball stadium, which includes, among other things, related baseball and ancillary facilities with baseball fields and associated structures on an approximately 16 acre portion of the City Property (“Stadium”); and
WHEREAS, the City desires to enter into a Stadium Venue Agreement with Rancho Baseball, LLC (“Rancho”) whereby Rancho’s Minor League professional baseball team (the “Club”) would relocate to and use the Stadium as its home field for preseason, regular season, postseason home games and other Club events generally during the months of April through September; and
WHEREAS, the City will also have the rights to schedule other events, such as civic, holiday or entertainment events at the Stadium during each year and intends to select a Stadium Manager to operate, maintain and manage the Stadium on behalf of the City; and
WHEREAS, Stadium Venue Agreement is considered a “Project” as defined by the California Environmental Quality Act (“CEQA”); and
WHEREAS, pursuant to State CEQA Guidelines section 15087(e), the Ontario Regional Sports Complex Draft Environmental Impact Report (“DEIR”) was circulated for at least a 45-day public review and comment period; and WHEREAS, the City prepared a Final Environmental Impact Report (“FEIR”) in compliance with CEQA (Pub. Resources Code § 21000 et seq.). For the purposes of this Resolution, the “EIR” shall refer to the DEIR, as revised by the FEIR, together with the other sections of the FEIR; and
274
WHEREAS, on July 16, 2024, the City Council conducted a noticed public hearing on the FEIR and Mitigation Monitoring and Reporting Program (“MMRP,”), received testimony from all parties; and
WHEREAS, on July 16, 2024, pursuant to Resolution No. 2024-132, the City Council certified the FEIR, which considered the relocation of the Club to the Stadium, adopted environmental findings, and a Statement of Overriding Considerations, approved the MMRP, and the Project; and
WHEREAS, pursuant to the foregoing, the City Council has determined that a Notice of Determination for approval of the Stadium Venue Agreement should be filed pursuant to CEQA, the State CEQA Guidelines, and the City's Local CEQA Guidelines.

NOW, THEREFORE, THE CITY COUNCIL FOR THE CITY OF ONTARIO DOES HEREBY RESOLVE AND DECLARE AS FOLLOWS:

Section 1. Recitals. The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference.

Section 2. CEQA. Having considered the certified FEIR and all written and oral evidence presented to the City Council, the Council finds that all environmental impacts of the Stadium Venue Agreement have been addressed within the FEIR, and that there is no substantial evidence in the administrative record that the Stadium Venue Agreement may result in any significant environmental impacts beyond those analyzed in the FEIR. Therefore, pursuant to State CEQA section 15189 through 15190, the City Council finds that the preparation of a subsequent or supplemental CEQA document is not required for the Stadium Venue Agreement.

Section 3. Findings. The City Council finds that the Stadium Venue Agreement for the City Property pursuant to the Agreement will further the goals and purposes of the City, and is in the common interest of the City and its residents.

Section 4. Approval of the Agreement. The City Council hereby approves the Stadium Venue Agreement in substantially the form attached hereto as Exhibit A, subject to any non-substantive revisions which do not increase the City’s liability and are approved by the City Attorney, and authorizes the City Manager to sign and enter into the Agreement and perform the obligations of the City under the Agreement.

Section 5. Notice of Determination. The Executive Director, or designee, is hereby directed to file a Notice of Determination for the Stadium Venue Agreement under CEQA.

Section 6. Severability. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or application, and to this end the provisions of 275
this Resolution are severable. The City declares that the City would have adopted this Resolution irrespective of the invalidity of any particular portion of this Resolution.

Section 7. Effective Date. This Resolution shall become effective immediately upon its adoption.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED this 20th day of August, 2024. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
276

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

CITY OF ONTARIO )
I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that foregoing Resolution No. 2024- was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held August 20, 2024 by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
The foregoing is the original of Resolution No. 2024- duly passed and adopted by the Ontario City Council at their regular meeting held August 20, 2024. _____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
277
46700.12006\42370050.5

STADIUM VENUE AGREEMENT

BY AND BETWEEN

THE CITY OF ONTARIO
AND

RANCHO BASEBALL, LLC
Dated as of _________________
(For Reference Purposes Only)
278
46700.12006\42370050.5

TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS........................................................................................................ 2 ARTICLE 2 LICENSE................................................................................................................. 4 ARTICLE 3 TERM ...................................................................................................................... 5 ARTICLE 4 STADIUM FUNDING, DESIGN AND CONSTRUCTION ............................... 6 ARTICLE 5 USE........................................................................................................................... 8 ARTICLE 6 LICENSE FEE...................................................................................................... 11 ARTICLE 7 OPERATIONS AND MANAGEMENT............................................................. 12 ARTICLE 8 MAINTENANCE, REPAIRS, IMPROVEMENTS AND ALTERATIONS... 14 ARTICLE 9 REVENUE............................................................................................................. 17 ARTICLE 10 STADIUM SIGNAGE, ADVERTISING AND SPONSORSHIPS................. 18 ARTICLE 11 ASSIGNMENT AND SUBLETTING............................................................... 19 ARTICLE 12 OWNERSHIP RIGHTS OF LAND, STADIUM AND FIXTURES .............. 20 ARTICLE 13 TAXES AND ASSESSMENTS.......................................................................... 21 ARTICLE 14 SURRENDER OF PREMISES ......................................................................... 21 ARTICLE 15 INSURANCE AND INDEMNIFICATION...................................................... 22 ARTICLE 16 DAMAGE OR DESTRUCTION....................................................................... 26 ARTICLE 17 CONDEMNATION ............................................................................................ 27 ARTICLE 18 DEFAULTS AND REMEDIES......................................................................... 28 ARTICLE 19 DISPUTE RESOLUTION ................................................................................. 31 ARTICLE 20 REPRESENTATIONS AND WARRANTIES................................................. 31 ARTICLE 21 HAZARDOUS MATERIALS ........................................................................... 33 ARTICLE 22 DELAY, APPROVALS AND CONSENTS...................................................... 33 ARTICLE 23 MISCELLANEOUS PROVISIONS ................................................................. 34

EXHIBITS
EXHIBIT A – SITE MAP
EXHIBIT B – DEPICTION OF STADIUM PLAN
EXHIBIT C – DEPICTION OF PREMISES
EXHIBIT D – CONFIRMATION OF LICENSE DATES
279
46700.12006\42370050.5
1 STADIUM VENUE AGREEMENT

BY AND BETWEEN

THE CITY OF ONTARIO
AND

RANCHO BASEBALL, LLC
This STADIUM VENUE AGREEMENT (“Agreement”) is dated _________________, for reference purposes only, and entered into by and between the CITY OF ONTARIO, a California municipal corporation and general law city (“CITY”) and RANCHO BASEBALL, LLC, a Washington limited liability company (“TEAM”). TEAM and CITY are sometimes collectively referred to herein as the "Parties," and each of TEAM and CITY individually is sometimes referred to as a "Party."

RECITALS
A. The CITY is the owner of that certain real property consisting of approximately 199 gross acres of land, bounded to the north by Riverside Drive, to the south by Chino Avenue, to the west by the unimproved right-of-way for Vineyard Avenue, and to the east by the Cucamonga Creek Flood Control Channel, located in the City of Ontario, County of San Bernardino, California, as depicted in Exhibit A, SITE MAP, attached hereto and by this reference incorporated herein (the “Site”), upon which the CITY intends to improve the Site with municipal sports complex facilities (the “Sports Complex”).

B. The CITY is willing to construct a professional baseball stadium, which includes, among other things, related baseball and ancillary facilities with baseball fields and associated structures as depicted in Exhibit B, DEPICTION OF STADIUM PLAN, attached hereto and by this reference incorporated herein, on a portion of the Site owned by the City of Ontario which shall conform with applicable facility standards put in place by MLB PDL, in effect as of the effective date of this Agreement, to support the TEAM’S operations, subject to the conditions set forth herein in this Agreement. The City agrees to maintain the stadium to the MLB PDL facility standards in effect as of the effective date of this Agreement. In the event the MLB PDL facility standards change after the effective date of this Agreement, the City and TEAM agree to work together in good faith to remain in compliance with those revised PDL Facility Standards.

C. The TEAM desires to relocate TEAM’S operations to the City of Ontario and use the Stadium to be located on the Premises (as defined below) as its home stadium on the terms and conditions set forth herein. The City and the TEAM executed a Memorandum of Understanding (“MOU”) between the CITY and the TEAM on December 27, 2023 that provides, among other things, for 1) the negotiation and execution of a new agreement between the Parties and responsibilities of the Parties for the funding, location, construction and operation of a Minor League Baseball stadium that contains fan and player amenities; and 2) the parties acknowledgement and agreement that this Agreement will not be executed and cannot be considered and approved by the City Council until such time that certain conditions are completed 280
46700.12006\42370050.5
2 and the environmental review and clearance requirements of the California Environmental Quality Act (Public Resources Code Section 21000 et seq., “CEQA”) have been satisfied by the City, including but not limited to, receiving related CEQA approvals pertaining to the development of the Stadium and Sports Complex.

D. The TEAM and the CITY desire to enter into this Stadium Venue Agreement for the license of a portion of the Site which will consist of a baseball stadium for the TEAM’S operation of a PDL Club pursuant to the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the mutual promises, covenants, conditions, contingencies and undertakings as more particularly set forth below, the above recitals are true and correct and incorporated herein, and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the Parties hereto do hereby agree as follows:

VENUE AGREEMENT
ARTICLE 1

DEFINITIONS
Unless the context otherwise requires, the capitalized terms used in this Agreement have the meanings set forth below in this Agreement.

1.1 “Agreement Effective Date” is the date on which the last of CITY and TEAM execute and deliver this Agreement.

1.2 “Baseball Season” is the time in which the Club plays its Home Games generally during the months of April through September, subject to the PDL Rules and Regulations.

1.3 "Club” means the professional baseball club, currently a Single A affiliate of the Los Angeles Dodgers, owned by Rancho Baseball LLC, whose future official team name will be modified to have “Ontario” included.

1.4 “Commissioner” means the Commissioner of Baseball as elected under the Major League Constitution or, in the absence of a Commissioner, any person or body succeeding to the powers and duties of the Commissioner pursuant to the Major League Constitution.

1.5 “Expiration Date” means the last date at 11:59 p.m. of the Term of the Agreement, which is the Initial Term Expiration Date or, if options to extend the Term are exercised, the last date at 11:59 p.m. of any extension periods confirmed by the Parties as described in Section 3.1.4.

1.6 “Home Games” means all baseball games, including preseason, regular season and postseason games, played where the Club is designated as the “home team.”

1.7 “License Commencement Date” is as defined in Section 3.1.1.

1.8 “License Fee Commencement Date” is the same date as the License 281
46700.12006\42370050.5
3 Commencement Date.

1.9 “Major League Baseball” or “MLB” means, depending on the context, any or all of (a) the Office of the Commissioner of Baseball, each other MLB PDL Entity and/or all boards and committees thereof and/or (b) the Major League Clubs acting collectively.

1.10 “Major League Baseball Club” or “Major League Club” means any professional baseball club that is entitled to the benefits, and bound by the terms, of the Major League Constitution.

1.11 “Major League Constitution” means the Major League Constitution adopted by the Major League Clubs as the same may be amended, supplemented or otherwise modified from time to time in the manner provided therein and all replacement or successor agreements that may in the future be entered into by the Major League Clubs.

1.12 “MLB PDL” means, depending on the context, any or all of (i) MLB Professional Development Leagues, LLC, a Delaware limited liability company, and/or (ii) the boards, committees and subcommittees related thereto.

1.13 “MLB PDL Entity” means each of MLB PDL, the Office of the Commissioner of Baseball, MLB Advanced Media, L.P. and/or any of their respective present or future affiliates, assigns or successors.

1.14 “Non-Ontario Professional Baseball Event” is any event scheduled by the CITY, or its Stadium Manager in the event the CITY elects to hire and engage a contractor to serve as the Stadium Manager, as described in Section 7.3.1.

1.15 “Ontario PDL License Agreement” means that certain player development license agreement entered into between TEAM and MLB PDL pursuant to which the Club has been granted the right to participate in the Professional Development League System.

1.16 “Outside License Commencement Date” is March 1, 2026, unless this Agreement is terminated earlier per the terms herein or mutually agreed to amended by the parties and subject to Force Majeure events.

1.17 “PDL Approval” means, any approval, consent or no-objection letter required to be obtained from MLB PDL or any other MLB PDL Entity pursuant to the PDL Rules and Regulations.

1.18 “PDL Club” means a professional baseball club participating in the Professional Development League System pursuant to a player development license agreement between the owner of such club and MLB PDL pursuant to which such owner has been granted the right to participate in the Professional Development League System.

1.19 “PDL Governance Agreement” means that certain Professional Development Leagues Governance Agreement, effective as of February 12, 2021 by and between MLB PDL and each PDL Club, as may be amended, modified, supplemented or restated from time to time. 282
46700.12006\42370050.5
4 1.20 “PDL Governing Documents” means the following documents as in effect from time to time and any amendments, supplements or other modifications thereto and all replacement or successor documents thereto that may in the future be entered into: (i) the Major League Constitution, (ii) the Major League Rules (and all attachments thereto), (iii) the PDL Operating Guidelines, (iv) the PDL Governance Agreement and (v) the PDL License Agreements.

1.21 “PDL License Agreement” means each player development license agreement entered into between a PDL Club and MLB PDL pursuant to which such PDL Club has been granted the right to participate in the Professional Development League System, including, without limitation, the Ontario PDL License Agreement.

1.22 “PDL Rules and Regulations” means (i) the PDL Governing Documents, (ii) any present or future agreements or arrangements entered into by, or on behalf of, MLB PDL or any other MLB PDL Entity or the Major League Clubs acting collectively that are specifically related to or generally applicable to the Professional Development League System or the PDL Clubs, including, without limitation, agreements or arrangements entered into pursuant to the PDL Governing Documents, and (iii) the present and future mandates, rules, regulations, policies, practices, bulletins, by-laws, directives or guidelines issued or adopted by, or on behalf of, the Commissioner, MLB PDL or any other MLB PDL Entity as in effect from time to time that are specifically related to or generally applicable to the Professional Development League System or one or more of the PDL Clubs.

1.23 “Premises” is as defined in Section 2.1 below.

1.24 “Professional Development League System” means a system of professional baseball leagues comprised of professional baseball clubs that compete at different levels and serve to assist with the development of players for Major League Baseball Clubs.

1.25 “Relocation” means that the TEAM shall relocate the Club to the Stadium and shall, subject to the PDL Rules and Regulations, hold its Home Games in such Stadium commencing with the 2026 PDL championship season and continuing for a minimum period of twenty (20) years, with an option to extend such period for two (2) additional periods of five (5) years each option period.

1.26 “Site” shall also include parking facilities, if any, appurtenant structures necessary for operations of the Stadium and the Sports Complex facilities, landscaping and other improvements to the Site.

1.27 “Stadium” means that part of the Premises upon which a state-of-the-art baseball stadium reasonably necessary for the proper playing of professional baseball, which shall include permanent seating for approximately 4,000 to 5,000 fans, plus grass berm seating for between 500 and 1,500 fans, the playing field, home and visiting team locker rooms, umpires’ dressing rooms, ticket sales facilities, press facilities, radio and television broadcast facilities, stadium offices, concession/merchandise stands, reasonable storage and maintenance areas, and other elements required for use and operation of the Stadium and all areas of the Stadium normally made available to spectators.

1.28 “Substantial Completion” of the Stadium is the date when the certificate of 283
46700.12006\42370050.5
5 occupancy has been issued.

ARTICLE 2

LICENSE

2.1 License of the Premises. In consideration of, and subject to, the terms, covenants, conditions and agreements set forth herein the Agreement, CITY hereby licenses to TEAM, and TEAM hereby licenses from CITY, a portion of the Site, consisting of approximately 11.33 acres, and portions of parcels identified with Assessor’s Parcel Numbers 0218-101-05, 0218-101-06, 0218-101-07, 0218-102-10 and 0218-102-11, to be improved with a not to exceed 6,000 seats/capacity Minor League Baseball stadium facility, stadium related and ancillary facilities (which, collectively, shall constitute the "Premises"), as more particularly described in Exhibit C, DEPICTION OF PREMISES, attached hereto and by this reference incorporated herein.

2.2 Delivery of Possession and Acceptance. On the License Commencement Date, the Premises shall be ready for use by the TEAM. CITY will deliver the Premises to TEAM for TEAM its use and occupancy of the Premises and TEAM hereby accepts the Premises in the conditions existing as of the License Commencement Date of the Agreement and TEAM will be deemed to have commenced its use of the Premises as of the License Commencement Date. TEAM hereby accepts this Agreement subject to all Applicable Requirements and to all matters disclosed hereby and by any exhibits attached hereto. TEAM represents and warrants to CITY that TEAM has made such investigation as it deems necessary regarding such Applicable Requirements, matters and exhibits, is satisfied with reference thereto and assumes all responsibility therefor as the same relates to the Premises and/or this Agreement, except as expressly provided otherwise in this Agreement. CITY represents and warrants that as of the License Commencement Date, CITY will deliver the Stadium in compliance with the PDL Rules and Regulations.

2.3 Covenant of Quiet Enjoyment. CITY covenants for the Term that TEAM, upon paying the License Fee and upon keeping, observing and performing the terms, covenants and conditions of the Agreement to be kept, observed and performed by TEAM, shall and may quietly and peaceably occupy, use, and enjoy the Premises for the duration of the Term, without ejection or interference by or from CITY or any other Person (other than Persons claiming by, through or under TEAM), subject to Force Majeure events.

ARTICLE 3
TERM

3.1 License Term.

3.1.1 Initial License Term. The Term of the Agreement shall be for an initial term of twenty (20) years (“Initial Term”), commencing on the License Commencement Date, and ending at 11:59 p.m. on the date which is twenty (20) years later (“Initial Term Expiration Date”), unless this Agreement is sooner terminated or extended as hereinafter provided. When the License Commencement Date has been ascertained, the Parties shall promptly execute a CONFIRMATION OF LICENSE DATES form, substantially in the form attached hereto as Exhibit D and by this reference incorporated herein. The "License Commencement Date" shall mean the date that is the earlier to occur of (i) five (5) days after Substantial Completion, or (ii) the 284
46700.12006\42370050.5
6 date TEAM occupies or uses the Premises with employees for office use or baseball practice or other related uses, including any TEAM Event.

3.1.2 Agreement Prevails. Upon the date the Agreement is fully executed by the Parties, the Agreement shall supersede the MOU and release the Parties from any further obligations under the MOU.

3.1.3 Options to Extend. TEAM shall have two (2) options (each an “Option”, collectively the “Options”) to extend the Term for a period of five (5) years each (An “Extension Term”). The Initial Term and any Extension Terms are herein, collectively, referred to as the “Term”. The Term, as extended by the Options, shall be on all of the same terms and conditions set forth in this Agreement.

3.1.4 Exercise of Options to Extend. TEAM may exercise the first Option by providing written notice to the CITY no later than sixty (60) days before the Initial Term Expiration Date of the Initial Term of TEAM’S intention to extend the Term. If the first Option is timely exercised, the Parties shall promptly execute a Confirmation of License Dates for the first extension period and Expiration Date of the Term. If TEAM had timely exercised the first Option, then TEAM may exercise the second Option by providing written notice to the CITY no later than sixty (60) days before the Expiration Date of the first extended Term of TEAM’S intention to exercise the second option to extend the Term. If the second Option is timely exercised, the Parties shall promptly execute a Confirmation of License Dates for the second extension period and Expiration Date of the Term.

ARTICLE 4

STADIUM FUNDING, DESIGN AND CONSTRUCTION

4.1 Funding for Construction of Stadium. As express consideration for the TEAM relocating the Club to the Stadium and subject to the satisfaction of the conditions precedent set forth herein, CITY agrees to fund and construct the Stadium on the Site, located generally south of East Riverside Drive and between South Vineyard Avenue and South Archibald Avenue in Ontario, California, with an estimated construction cost of approximately $95,000,000.00.

4.2 PDL Rules and Regulations. The Stadium shall be constructed in accordance with the PDL Rules and Regulations.

4.3 Design and Construction of Stadium. Subject to the conditions and required approvals by TEAM and MLB PDL as further described in Sections 4.4, 4.5, and Article 22, the CITY will have the Stadium constructed in accordance with the design, plans and specifications of the Stadium prepared by and for the CITY, that have been deemed to comply with all applicable PDL Rules and Regulations.

4.4 Contingencies. The Parties acknowledge that Relocation to the Stadium is contingent upon receiving PDL Approval, including all design and construction plans for the Stadium. Accordingly, the Parties agree to work in good faith to determine the design and construction of the Stadium to meet all applicable PDL Rules and Regulations, and to ensure the Stadium is aesthetically pleasing, operationally and economically efficient, technologically friendly, and comfortable and fun for fans and baseball personnel. The TEAM and CITY will 285
46700.12006\42370050.5
7 mutually agree on the specialists and consultants (e.g., planning, architectural, engineering, construction and interior design) to be engaged, and the time frames upon which each specialist and consultant must be engaged.

4.5 PDL Approval. The Team shall have obtained all necessary PDL Approvals for this Agreement.

4.6 Stadium Standards. Subject to the conditions precedent set forth herein, the Stadium shall be built to comply with all applicable PDL Rules and Regulations, in addition to the following standards set forth below:
(a) Baseball capacity to not exceed 6,000 fans. This includes permanent seating for approximately 4,000 to 5,000 (including group areas and premium seating) plus grass berm seating for 500 to 1,500 fans; (b) Group entertainment areas;
(c) Premium seating suites;
(d) Premium seating club areas;
(e) Concessions sales, operations and storage facilities as well as concessions equipment;
(f) Merchandise sales, operations and storage facilities; (g) Press box and media production space and equipment; (h) Parking sufficient for the anticipated capacity of the Stadium; (i) Videoboard and other signage facilities;
(j) TEAM offices for a minimum of 32 full-time front-office staff members; (k) Other features as appropriate for a stadium of this type; and (l) Appropriate transportation infrastructure for fans to travel to the Stadium including appropriate roadside identification and directional signs leading up to and into the Stadium.

4.7 TEAM Responsibilities for Furniture, Fixtures and Equipment. The TEAM shall pay for all furniture, fixtures and equipment (“FF&E”) (except for those affixed to the building such as lockers, showers, etc.) in its areas of 365-day access (office, team store and home clubhouse). TEAM shall pay for other furniture, fixtures and equipment in non-365 day access areas if that FF&E is necessary for the TEAM’S Events, not affixed to the building and exclusive for the TEAM’S use.

4.8 CITY Responsibilities for Furniture, Fixtures and Equipment. Equipment that is non-exclusive to the TEAM (such as the rolling batting cage, baseball field screens, field tarp, etc.) will be a CITY expense. All FF&Es for the provision of concessions and catering will be the responsibility of the CITY.

4.9 Parking Facilities. CITY shall design, install and improve the Site with a parking area/facility ("On-Site Parking") sufficient to serve the Stadium which will not be part of the 286
46700.12006\42370050.5
8 Premises. On-Site Parking shall be controlled by CITY, and shall not be used for parking for events not held at the Stadium without CITY’S consent. Some parking for the Stadium may be available off-site, and shall be subject to separate agreements between TEAM and/or CITY with other parties. CITY makes no representation about the availability of other parking rights or the suitability, adequacy, size or capacity of such off-site parking and the sufficiency to serve the Stadium parking needs, nor is CITY obligated under this Agreement or any other agreement to provide sufficient off-site parking for TEAM Events, or for any events held at the Stadium, whether held by CITY or TEAM.

4.10 Completion Date. Subject to the terms in Articles 4 and 22, the Parties agree to work in good faith to ensure the Stadium is designed, constructed and will achieve Substantial Completion and ready for use and occupancy by the TEAM on or before the Outside License Commencement Date of March 1, 2026.

ARTICLE 5
USE

5.1 Events. CITY and TEAM contemplate that events and use of the Premises shall be categorized in three ways: TEAM Events, CITY Events, and Other Events. A "CITY Event" is as defined in Section 5.4. Any event, such as promotional events (subject to the provisions of Article 10 below), clinics and other similarly-constituted events which relate to the Professional Development League System or the TEAM, to be located at the Premises, or any other event which is hosted or otherwise arranged by TEAM or its affiliates, shall be considered a "TEAM Event" (but for the avoidance of doubt, activities related to and occurring on the same day as a Club game shall not be considered a separate and distinct “TEAM Event”). Any other event or use of the Premises, which includes events open to the public, generates attendance and/or parking revenue and incurs expenses, that is not a CITY Event or TEAM Event shall be an "Other Event." With the intent to coordinate dates and to establish a yearly calendar of events (“Stadium Master Calendar”), the Stadium Manager will create and manage a Stadium Master Calendar for each calendar year that will include anticipated or regularly occurring events, subject to the terms and conditions provided herein this Article 5.

5.2 Quarterly Meetings. TEAM and CITY representatives shall meet at least quarterly to set dates and manage the Stadium Master Calendar. For scheduling priority purposes, paid attendance events shall take priority over free attendance events. CITY or its Stadium Manager shall manage all CITY Events. No License Fee shall be paid by CITY, nor credited to TEAM, for CITY Events or Other Events.

5.3 TEAM’S Use of the Premises. TEAM shall use and occupy the Premises only for the purposes specified in this Agreement or any other legal use which is reasonably comparable to such use, and for no other purpose. During the Term of this Agreement, the TEAM shall have access to use the Premises with scheduling priority for all regular season and postseason baseball home game days plus up to twenty (20) non-game day events each year. Except for dates required for Home Games or other TEAM Events previously scheduled or as may be required pursuant to the PDL Rules and Regulations, and subject to the provisions of this Section 5.3 and Section 5.4, CITY or Stadium Manager retains the right to reserve dates to allow for other programming at the Stadium, including dates for concerts, family shows, or other sporting events, during the Term. 287
46700.12006\42370050.5
9 Except as otherwise provided herein, during the presentation of Home Games, TEAM shall have the right to use the Stadium Facilities in a manner consistent with the presentation of minor league baseball games. TEAM shall not unreasonably interfere with the use by others of the areas of the Sports Complex that are not Stadium Facilities. The TEAM shall have 365-day exclusive access to TEAM offices, merchandise, sales facilities and the home and visiting clubhouses. Except as otherwise provided in Article 6 for payment of License Fee by the TEAM, Stadium Manager shall not charge TEAM any License Fee or other Fees in connection with such TEAM Events; provided however, TEAM shall be responsible for paying reasonable incremental out-of-pocket staffing and other direct event-related expenses incurred by Stadium Manager in connection with such TEAM Events and any of TEAM’S costs described in Section 7.2.1 herein. For purposes of clarity, “incremental out-of-pocket staffing and other costs” means those costs beyond what would be incurred during a typical Club game, and prior to incurring the same, the Stadium Manager shall meet and confer with the Team to discuss the proposed magnitude of such incremental out-ofpocket staffing and other costs with respect to the TEAM Event in question.

5.3.1 No Relocation. During the Term, except as provided by PDL Rules and Regulations, or in the event that the Stadium is unusable due to a Force Majeure Event, TEAM agrees to cause the Club to play all pre-season, regular season, and postseason home games for the TEAM at the Premises. TEAM shall not relocate the Club during the Term (“No Relocation Requirement”); provided, however, if the Stadium is not useable due to a Force Majeure Event, the Club may play in an alternate location until the Stadium is restored without such temporarily relocated Club play being a breach of the No Relocation Requirement. If TEAM relocates the TEAM’S Club in breach of the No Relocation Requirement, the License Fee for the remaining, unexpired Term shall be immediately due and payable by TEAM to CITY. Subject to the prior receipt of all necessary PDL Approvals, the official TEAM name will be modified to include the word “Ontario” in its name.

5.3.2 Scheduling of Dates During Regular Baseball Season. TEAM will provide the schedule of Home Games and possible postseason dates for the upcoming MLB PDL championship season no later than December 1 of the prior year. For non-game day events, the TEAM will be granted their desired date upon their written request to the CITY or its Stadium Manager to the extent that date has not been previously scheduled for a CITY Event or Other Event. Within forty-eight (48) hours after TEAM receives its final, complete schedule from the MLB PDL for the ensuing season, TEAM shall submit its final, complete schedule to Stadium Manager for the ensuing season at which point all unscheduled available dates shall be released to Stadium Manager without further notice or action and TEAM will have no priority for use of the Stadium on such dates. In the event that Stadium Manager has the opportunity to schedule a significant event (such as a major concert, family show or sporting event that is not a baseball game) at the Stadium and such opportunity arises prior to December 1 of the prior year and before the TEAM has provided its schedule of Home Games and possible postseason dates for the upcoming Baseball Season, Stadium Manager will submit a request to TEAM to reserve that date and TEAM agrees to consider and work with CITY and Stadium Manager in good faith to accommodate such request and at no cost would be due to the TEAM by the Stadium Manager or the CITY.

5.3.3 Scheduling of Dates During Postseason. For each Baseball Season during the Term, in accordance with Section 5.3.2, TEAM will provide CITY or its Stadium Manager 288
46700.12006\42370050.5
10 with possible postseason dates to be reserved (“Postseason Dates”). Stadium Manager agrees to reserve such Postseason Dates unless and until the Club is eliminated from qualification for the postseason. Within twenty-four (24) hours after TEAM receives notice from MLB PDL of which Postseason Dates will not be used for the Club’s postseason games, TEAM shall notify Stadium Manager of such released dates, which dates shall be released to Stadium Manager without further notice or action and TEAM will have no priority for use of the Stadium on such dates.

5.4 CITY’S Use of the Premises. The CITY or its Stadium Manager shall have the right to schedule events at the Stadium for its own purposes or initiative that are not related to professional baseball (“CITY Events”) or otherwise referred to as Non-Ontario Professional Baseball events, including such regularly occurring events each calendar year (like the State of the City, civic events or certain holiday celebrations). If the CITY Events are to be held during the Baseball Season, PDL Approval is required, and the TEAM agrees to work with the CITY in an effort to obtain PDL Approval for each event. The CITY will ensure that the baseball playing field is restored to compliance prior to any Club games, or other TEAM baseball event that has been scheduled more than thirty (30) days in advance, if an event temporarily alters the condition of the playing field. Subject to Sections 7.3.6 and 9.3.4, CITY will retain concessions rights for all CITY Events or non-Ontario Professional Baseball events, or Other Events.

CITY may reserve and set dates for its events up to one year in advance, so long as such CITY dates do not conflict with the TEAM’S schedule of Home Games or any previously scheduled other TEAM Events, by sending notice to TEAM. Once reserved, TEAM may not set a TEAM Event on such date without CITY’S consent if such TEAM Event would interfere with such CITY Event in the reasonable discretion of CITY.

5.5 Stadium Manager’s Use of the Premises. TEAM acknowledges that Stadium Manager may schedule any CITY Events on behalf of the CITY and may schedule Other Events, such as concerts, family shows, or other sporting events during each calendar year, including during each Baseball Season, subject to (i) the provisions contained in Sections 5.3, 5.3.2, 5.3.3 and 5.4, and (ii) obtaining PDL Approval if such CITY Event or Other Event is otherwise scheduled to occur during the Baseball Season (including the postseason).

5.6 CITY Compliance with Laws. CITY shall comply with all federal, state, county, city or local governmental agency laws, statutes, codes, ordinances, standards, rules, regulations, requirements and orders, including without limitation Environmental Laws (as defined in Article 21 and the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., as amended ("ADA"), covenants and restrictions of record, life and fire safety and similar requirements and requirements of any fire insurance underwriters or rating bureaus, now in effect or which may come into effect at any time during the Term (collectively "Applicable Requirements"), relating in any manner to the Premises or made applicable to the Premises by (i) the Stadium improvements completed by CITY, (ii) any alterations, additions or improvements in the Premises made by CITY, or (iii) the presence of one or more persons with a particular disability within the Premises during any CITY Event. CITY warrants that the Premises, will be in compliance with all applicable laws, including all Title 24 requirements and ADA, as of the License Commencement Date.

5.7 TEAM Compliance with Laws. As of the License Commencement Date, TEAM shall comply with all federal, state, county, city or local governmental agency laws, statutes, codes, 289
46700.12006\42370050.5
11 ordinances, standards, rules, regulations, requirements and orders, including without limitation Environmental Laws (as defined in the ADA and the Applicable Requirements, relating in any manner to the Premises or made applicable to the Premises by (i) TEAM’S occupation or use of the Premises, (ii) any alterations, additions or improvements made to the Stadium or in the Premises made by TEAM, or (iii) the presence of one or more persons with a particular disability within the Premises during any TEAM Event; however, TEAM shall (y) comply with all Applicable Requirements with respect to any alterations, additions or improvements to the Stadium or in the Premises made by TEAM, and (z) not be required to take any action under this Section to the extent related to or arising as a result of the Discretionary Capital Improvements (See Section 8.2 below) but shall promptly notify CITY of the need to do so.

5.8 Inspection by Certified Access Specialist. CITY discloses that the Premises have not undergone inspection by a Certified Access Specialist as referenced in California Civil Code Section 1938 subsection (e) which provides: "A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit any potential lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of a lessee or tenant, if requested by a lessee or tenant.

The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises." Pursuant to the foregoing Section 1938(e), CITY acknowledges and agrees that, if at any time during the Term, TEAM wishes to have the Premises inspected by a CASp: (i) TEAM must notify CITY on or before the date when TEAM executes this Agreement pursuant to the election below; (ii) the inspection will be at CITY’S sole cost and expense; (iii) the inspection must be scheduled through CITY and in coordination with the Stadium’s property manager; (iv) any repairs or modifications necessary to correct any violation of construction-related accessibility standards that is noted in the CASp report shall be CITY’S responsibility; and (v) TEAM must provide a copy of the CASp report to CITY on completion.

ARTICLE 6

LICENSE FEE

6.1 Base License Fee. TEAM shall pay to CITY, as base rent for the Premises, without notice, demand, offset or deduction, except as may be otherwise expressly provided in this Agreement, an annual base license payment of Four Hundred Thousand Dollars and 00/100 ($400,000.00) per year (“Base License Fee”) payable with five (5) equal monthly payments of Eighty Thousand Dollars and 00/100 ($80,000) in advance on or before the first of each of the following months of April through August. In the event that the License Fee Commencement Date shall fall within the months of April through August, TEAM’S obligation to pay the total annual Base License Fee amount for that Term year shall be prorated based upon a fraction, the numerator of which shall be the number of days in the regular season that TEAM is able to occupy the Stadium for TEAM’S intended use, and the denominator of which is the total number of days in the regular season. The annual Base License Fee amount will increase by Twenty Five Thousand Dollars and 00/100 ($25,000) every five (5) years, including during the Options periods. All rent shall be payable in lawful money of the United States to CITY at the address stated herein or to such other 290
46700.12006\42370050.5
12 persons or at such other places as CITY may designate from time-to-time in writing.

6.2 Additional License Fees. All monetary obligations of TEAM under this Agreement that are in addition to the Base License Fee will be deemed as “Additional License Fees”. Base License Fee and Additional License Fees herein are sometimes collectively referred to in this Agreement as “Fees”.

6.3 Late Charges. If any Fees payment is not received by CITY or CITY’S designee within ten (10) days after that Fees is due, TEAM shall pay to CITY a late charge of six percent (6%) of the Fees amount due as liquidated damages, in lieu of actual damages (other than interest under section 6.3 and attorney fees and costs under Section 23.8). The Parties agree that this late charge represents a reasonable estimate of the expenses that CITY will incur because of any late payment of Fees (other than interest and attorney fees and costs). TEAM shall pay the late charge as Additional License Fees with the next installment of Fees. In the event that the late charge assessed is for the August payment of any given License year, the TEAM shall pay the late charge on or before September 1 of that year.

6.4 Interest. If any Fees payment is not received by CITY or CITY’S designee within ten (10) days after that Fees is due, TEAM shall pay to CITY annual interest on the past-due amount, from the date due until paid, at the rate of twelve percent (12%) per year.

6.5 Credit Against Base License Fee. If at any time the CITY, county or state imposes a ticket tax, facility charge, or increases the CITY parking tax that the TEAM is required to pay, those taxes or facility charges will be credited against the Base License Fee.

6.6 License Fee Commencement Date. TEAM’S obligation to pay Fees shall commence upon the License Commencement Date.

ARTICLE 7

OPERATIONS AND MANAGEMENT

7.1 TEAM Business Operations. The CITY will work with the TEAM to provide, at no cost to the TEAM, adequate office space for the business operations of the TEAM from March 2024 until offices at the Stadium are available for use. Upon completion of the Stadium, CITY will provide TEAM with office space solely for TEAM to conduct administrative services with respect to the Club operations. TEAM shall provide all furnishings and equipment for such office space.

7.2 TEAM Obligations.

7.2.1 Personnel. The TEAM shall provide and pay for ushers, ticket takers, and box office personnel consistent with Minor League Baseball industry standards. The TEAM will be responsible for paying all personnel it employs and other expenses related to its games and events.

7.3 CITY Obligations.

7.3.1 Stadium Management Duties. During the Term, CITY shall serve as 291
46700.12006\42370050.5
13 manager of the Premises ("Stadium Manager") and, except as otherwise provided and assigned, shall manage all duties associated with operations and management of the Premises, including but not limited to maintenance and repair, property management, contracting for services, janitorial, employee management/labor relations, general concessions, parking, advertising, signage, accounting, banking, collections, net revenue reporting, master Stadium scheduling, and any other duty necessary to appropriately and professionally manage the Stadium. Stadium Manager shall have the right to book Other Events to maximize revenue and operating efficiency of the Stadium.

Because the Stadium is to be considered a community resource (as well as the TEAM home location), the parties agree to use commercially reasonable efforts to maximize Stadium revenue while providing the community with a reasonably priced venue for sporting events and other public activities such as concerts and civic events. CITY may contract with a third party to serve as the Stadium Manager and, in its sole discretion, shall have the choice of the Stadium Manager and the principal representative of the selected Stadium Manager. CITY intends to engage a qualified venue operator to act as the City’s agent and to serve as the Stadium Manager pursuant to a separate management agreement and assign, in whole or in part, CITY’S rights, duties and obligations of the CITY under this Agreement with respect to the operation, management and maintenance of the Stadium and related facilities.

7.3.2 Operating Expenses. "Operating Expenses" is defined as all of the costs and expenses paid or incurred in connection with the ownership, operation, repair, restoration, maintenance and management of the Premises, as determined by generally accepted accounting principles. Except as otherwise set forth herein, "Operating Expenses" include the following costs by way of illustration, but shall not be limited to: Real Property Taxes (as defined in Section 13.1 below); water and sewer charges; insurance premiums; any deductible portion of an insured loss concerning the Site, the Stadium or Premises or any items or matters described in this Section 7.3.2 (except for earthquake deductibles); utilities; refuse disposal; lighting; fire detection systems including monitoring, maintenance and repair; security; janitorial services; reasonable costs incurred in the management of the Stadium, if any, but not the salaries, benefits or overhead of TEAM; maintenance (but not installation) of air-conditioning and heating; supplies, materials, equipment and tools, including maintenance and repair costs and service contracts; costs of licenses, permits and inspections; ordinary maintenance and repair of the Premises, and other items that are stated elsewhere in this Agreement to be "Operating Expenses." No financing costs, administrative costs, vendor enforcement costs, rent taxes, gross receipt taxes (whether assessed against CITY or assessed against TEAM and collected by CITY, or both) or capital expenditures shall be included in Operating Expenses, even if amortized or depreciated over a period of time.

7.3.3 Utilities. During the Term, the CITY shall be responsible for the payment of utilities that service the Premises. The costs associated for the provision of utilities is considered as part of the Operating Expenses.

7.3.4 Personnel. The CITY shall provide Municipal Services to all Stadium events. Municipal services include police, security personnel, traffic control, fire prevention and protection, emergency medical technicians, street cleaning/trash removal, and other CITY based services (“Municipal Services”). CITY will pay for the Municipal Services at TEAM Events and CITY Events unless any such services are provided by and paid for by a third party. CITY will provide any of the Municipal Services at Other Events and may charge for the provision of such services. The CITY is responsible for paying for all event-related staff for CITY Events. 292
46700.12006\42370050.5
14 7.3.5 Parking Operations. The CITY will operate the parking facilities and shall be responsible for the collection of parking fees (except in some cases the TEAM may sell parking as an “add-on” to a ticket purchase) and traffic direction. The TEAM and CITY will mutually agree upon the parking fee amount for TEAM Events and agree upon the specific lots to be included.

7.3.6 Concessions. The CITY shall have the right to manage the Stadium concessions in accordance with the provisions of this Article 7. “Concessions” shall mean the serving of food, beverage (including beer, wine and spirits), catering and picnic food packages. A “Concessions Director” shall mean the individual responsible for running the operations of the Concessions during the TEAM Events. The CITY will ensure that the concessions operation is managed at the highest levels of quality and customer service consistent with the best of the Professional Development League System. The TEAM will have the right to approve concessions pricing, and menus used during TEAM Events, and have the right to approve the on-site Concessions Director during TEAM Events (such approval not to be unreasonably withheld, conditioned or delayed). The TEAM will have the right to create concessions related promotions and sell group/company picnic packages at TEAM-approved pricing and consistent with the Minor League Baseball industry. The CITY will cooperate on such concessions promotions and packages. The CITY will select a concessionaire to run the stadium concessions for three-year periods throughout the Agreement starting with the first year of the Agreement. The TEAM must approve the selection of the concessionaire before the concessionaire is finalized for each threeyear period (such approval not to be unreasonably withheld, conditioned or delayed).

7.4 Regular Meetings. The Parties and their respective agents and representatives agree to hold regularly scheduled meetings, at least on a quarterly basis, to review the performance of the concessionaire, terms and the status of the operations of the Stadium.

ARTICLE 8

MAINTENANCE, REPAIRS, IMPROVEMENTS AND ALTERATIONS

8.1 CITY Responsibilities. The CITY shall, or cause its Stadium Manager to:

8.1.1 Maintain the Stadium and Premises, including but not limited to, the playing surface, in a neat, sanitary condition and in good state of repair during the Term, so that the Stadium and Premises will be a first class, Professional Development League System facility and ensure the Stadium, playing surface, and affixed facility equipment remains in compliance with the PDL Rules and Regulations; and

8.1.2 Pay for all Operating Expenses, and costs associated with routine maintenance, including janitorial and garbage removal, and repair of the Premises except where such conditions that prompted the need for repairs was caused by the TEAM employees, associates, agents and representatives. The routine maintenance and repair costs shall be considered as part of the Operating Expenses; and

8.1.3 Perform all Capital Repairs or cause the performance of all Capital Repairs necessary to keep and maintain the Premises in a manner reasonably consistent with the industry standard for such facilities and the PDL Rules and Regulations. “Capital Repairs” shall mean 293
46700.12006\42370050.5
15 any and all repairs, replacements and improvements that are necessary or desirable to maintain the Premises to the condition that existed upon the beginning of the Term.

8.2 CITY Discretionary Non-TEAM Related Capital Improvements. CITY shall have the right, in CITY’S sole reasonable discretion and at its sole cost and expense, from time to time to perform and pay for any discretionary capital improvements to the Premises (the "Discretionary Capital Improvements"), so long as such Discretionary Capital Improvements (including the timing and performance of alterations to complete the Discretionary Capital Improvements as well as the Discretionary Capital Improvements themselves, once installed) do not materially impact TEAM’S ability to use the Premises or host TEAM Events, and in such case, may make such Discretionary Capital Improvements so long as CITY obtains TEAM’S prior written approval, not to be unreasonably withheld, conditioned, delayed or denied. In requesting such consent, CITY shall provide detailed plans and specifications of the Discretionary Capital Improvements, including a timeline and a budget.

8.3 Improvements or Alterations by TEAM. TEAM shall have the right to make reasonable alterations, additions, improvements in, on or about the Premises, at TEAM’s sole cost, during the Term up to twenty five thousand dollars ($25,000) per occurence, so long as it does not adversely affect the exterior or interior appearance of the Premises in the reasonable opinion of the CITY or is not a Capital Repair or improvement, with prior consent by the CITY, such consent not to be unreasonably withheld, conditioned or delayed. Except for any work which CITY performs pursuant to this Agreement, as a condition to consenting to such work at the time CITY approves of the same, CITY may require that TEAM remove any or all alterations, additions, improvements installed or made by TEAM at the expiration or sooner termination of the Term, and restore the Premises and the Stadium to their prior condition, at TEAM’S sole cost.

8.3.1 Any alterations, additions, improvements in or about the Premises that TEAM desires to make and which require the consent of CITY shall be presented to CITY in written form, with proposed reasonably detailed plans, and TEAM’S request to either remove or leave installed such work at the expiration or termination of the Term. If CITY gives its consent, the consent shall be deemed conditioned upon TEAM’S obtaining all required permits and approvals from appropriate governmental authorities, furnishing complete copies thereof to CITY prior to the commencement of the work and TEAM’S compliance with all conditions of said permits and approvals and other Applicable Requirements in a prompt and expeditious manner.

Any alterations, additions, improvements shall be performed in a workmanlike manner with good and sufficient materials with all applicable permits and completed in a diligent and timely manner.

TEAM shall not allow or permit any liens to be filed or recorded against the Site or the Premises.

In the event that a lien is filed or recorded against the Site or the Premises, TEAM shall promptly take all actions necessary to have such lien released and removed.

8.3.2 TEAM shall pay, when due, all claims for labor or materials furnished to or for TEAM at or for use in, on or about the Premises, the Stadium and/or the Site, which claims are or may be secured by any mechanic's or materialmen's lien against the Premises, the Stadium and/or the Site, or any interest therein, which were not agreed to be paid for by CITY. TEAM shall give CITY not less than ten (10) days' notice prior to the commencement of any work, and CITY shall have the right to post notices of non-responsibility in or on the Premises as provided by Applicable Requirements
294
46700.12006\42370050.5
16 8.4 TEAM Reimbursement for Repairs. TEAM shall be responsible for reimbursement to CITY for any maintenance and repair costs to the Stadium, the Premises or any of the systems which result solely and directly from TEAM’S use of the Premises that is beyond normal and customary stadium facility use and operations, including but not limited to, for any damages caused to the Stadium and facilities, the Premises or the Sports Complex property by TEAM employees, associates, and representatives.

8.5 Labor Code Requirements.

8.5.1 Prevailing Wages. TEAM is aware of the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. If any work or services being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, TEAM agrees to fully comply with such Prevailing Wage Laws. CITY shall provide TEAM with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement.

TEAM shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the work or services available to interested parties upon request, and shall post copies at the TEAM’S principal place of business and at the Premises. It is the intent of the parties to effectuate the requirements of sections 1771, 1774, 1775, 1776, 1777.5, 1813, and 1815 of the California Labor Code within this Agreement, and TEAM shall therefore comply with such California Labor Code sections to the fullest extent required by law. TEAM shall defend, indemnify and hold the CITY, its officials, officers, employees, agents, and representatives free and harmless from any claim or liability arising out of any failure or alleged failure by TEAM to comply with the Prevailing Wage Laws.

8.5.2 Registration/DIR Compliance. If the work or services are being performed on a public works project of over $25,000 when the project is for construction, alteration, demolition, installation, or repair work, or a public works project of over $15,000 when the project is for maintenance work, in addition to the foregoing, then pursuant to California Labor Code sections 1725.5 and 1771.1, the TEAM and all sublicensees must be registered with the Department of Industrial Relations (“DIR”). TEAM shall maintain registration for the duration of the work or services to be completed and require the same of any sublicensees.

8.5.3 Compliance Monitoring. The work or services may also be subject to compliance monitoring and enforcement by the DIR. It shall be TEAM’S sole responsibility to comply with all applicable registration and labor compliance requirements, including the submission of payroll records directly to the DIR. Any stop orders issued by the DIR against TEAM or any sublicensee that affect the performance of work or services, including any delay, shall be TEAM’S sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered TEAM caused delay and shall not be compensable by the CITY. TEAM shall defend, indemnify and hold the CITY, its officials, officers, employees and agents free and harmless from any claim or liability arising out of stop orders issued by the DIR against TEAM.

8.5.4 Labor Certification. By its signature hereunder, TEAM certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every 295
46700.12006\42370050.5
17 employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services.

ARTICLE 9

REVENUE

9.1 Operating Revenue. Except as otherwise expressly provided in this Agreement, "Operating Revenue" shall include all ticket sales revenue, ticket fees, service fees or charges, handling fees, concession revenue, naming/advertising rights revenue, merchandise revenue, sponsorship revenue, or other revenue derived from attendance or ticket sales, concession, merchandise, sponsorship, naming, advertising, parking, for all operations and/or events held in the Stadium (including all TEAM Events, Other Events and CITY Events). The Parties have agreed to the percentage share each Party would receive from the sources of revenue further described in this Agreement. All Operating Revenue collected by CITY or its Stadium Manager will be distributed to the Parties pursuant to the terms herein, and all Operating Revenue collected by TEAM will be distributed to the Parties pursuant to the terms herein.

9.2 CITY Revenue.

9.2.1 Except as otherwise expressly provided herein, CITY shall be entitled to receive and retain any revenues generated or collected by CITY or from any sources not provided herein.

9.2.2 The CITY will receive 40% of any parking revenues collected by the TEAM.

9.2.3 TEAM shall pay to CITY One Dollar ($1) for every ticket sold over Two Hundred Twenty Five Thousand (225,000) tickets for its baseball events each year. A “sold” ticket is defined as any sold, traded or comped game ticket.

9.3 TEAM Revenue.

9.3.1 The TEAM shall receive all ticket, merchandise, and advertising revenue generated (except as otherwise provided in Articles 9, 10 and 12 herein) during and connected to its games and events. The TEAM will select and manage the ticketing vendor.

9.3.2 The TEAM shall receive 60% of the parking revenue (gross revenue minus the parking tax, which will be retained by the CITY) received from CITY-owned or operated lots within the vicinity of the Stadium on game days starting three (3) hours before game time until the end of the game.

9.3.3 The TEAM shall receive 50% of all gross revenues amount (before sales commissions or other expenses, if any) from in-stadium concessions related sponsorship and pouring/serving rights from the In-Stadium Concessions Related Sponsors referenced in Section

10.3 below to be applied toward mutually agreed upon advertising and hospitality package. 296
46700.12006\42370050.5
18 9.3.4 The CITY shall pay the TEAM on a monthly basis an amount equal to thirty five percent (35%) of the total net concessions and catering revenue during baseball games and TEAM Events, and ten percent (10%) of the total net concession and catering revenue for any CITY Events (CITY-sponsored non-baseball events) taking place during the Baseball Season. Net concessions and catering revenue is defined as total concessions revenue minus applicable state and local sales tax.

ARTICLE 10

STADIUM SIGNAGE, ADVERTISING AND SPONSORSHIPS

10.1 CITY and TEAM Collaboration. The CITY and TEAM shall collaborate on the sale and marketing of CITY-led sponsorships and advertising. A regular meeting of CITY and TEAM representatives shall occur no less than once per quarter to coordinate and leverage the CITY’S and TEAM’S effort.

10.2 CITY Advertising Time. The CITY shall have twenty-five percent (25%) of advertising time on the stadium electric signs (i.e., scoreboard, ribbons) which will run intermittently between the time the gates open until fifteen (15) minutes before the scheduled start of the game.

10.3 In-Stadium Concessions Related Sponsors. Subject to the PDL Rules and Regulations, the CITY, or its assignee, will have the right to sell non-exclusive pouring or serving rights agreements to In-Stadium Concessions Related Sponsors. “In-Stadium Concessions Related Sponsors” is defined as any company whose product will be sold in the Stadium as a part of the food and beverage menu. Examples would be beer, soda or hot dog companies. If an InStadium Concessions Related Sponsor purchases a neighborhood/concourse sponsorship, that will count as one of the CITY’S four (4) neighborhood/concourse sponsorships and be subject to the same stipulations.

10.4 Revenue from Signage. Except for as detailed in Section 10.2 above, the TEAM controls the rights to sell and receive all revenue from all other signage as well as digital and stadium advertising inventory.

10.4.1 Stadium Title Sponsorship. The CITY shall have the right to sell the Stadium title sponsorship, subject to the approval of the TEAM (such approval not to be unreasonably withheld, conditioned or delayed), the applicable PDL Rules and Regulations and the receipt of all necessary PDL Approvals. Any title sponsorship agreement shall be for a term of no less than ten (10) years. The CITY, or its assigned agent, and TEAM will coordinate on these efforts. In exchange for foregoing any revenue directly from the title sponsorship agreement, the CITY will pay the TEAM two hundred thousand dollars ($200,000) per year for the first ten (10) years of this agreement. In subsequent years, this amount paid to the TEAM will increase to two hundred and twenty five thousand dollars ($225,000) per year. If the sponsor wishes to have access to additional TEAM advertising inventory or hospitality items, those items may be purchased from the TEAM at an additional cost to the sponsor. The CITY will facilitate coordination between the TEAM and sponsors related to this additional TEAM inventory.

10.4.2 Neighborhood/Concourse Sponsorships. The CITY shall have the right 297
46700.12006\42370050.5
19 to set up four (4) neighborhood/concourse sponsorships at locations that are mutually agreed upon between the TEAM and CITY. Sponsors shall be non-exclusive, and subject to the approval of the TEAM (such approval not to be unreasonably withheld conditioned or delayed) and the receipt of all necessary PDL Approvals. The TEAM will receive 50% of the gross neighborhood/concourse sponsorship amount (before sales commissions or other expenses, if any) for the TEAM to use the sponsored neighborhood names in its communications and game operations. If the sponsor wishes to have additional TEAM advertising inventory or hospitality items, those items may be purchased from the TEAM at an additional cost to the sponsor. The CITY will facilitate coordination between the TEAM and sponsors related to this additional TEAM inventory.

10.5 Off-Premises Advertising. TEAM and Stadium name shall be featured with permanent signage on the CITY’S existing sport complex digital sign on the 60 freeway. TEAM shall receive reader board inventory to promote its events. The amount of inventory is to be determined by and between the Parties.

ARTICLE 11

ASSIGNMENT AND SUBLETTING

11.1 Assignment by CITY. CITY may assign any or all of its rights, duties and obligations under this Agreement to a third party of its selection in respects to the operations, management and maintenance, repairs, improvements and alternations of the Stadium, provided such assignment resulting in an operating and management agreement with a third party is subject to the terms of this Agreement. CITY agrees to seek input from TEAM in its selection process for a third party to operate and manage the Stadium as the Stadium Manager; however, the final selection of the Stadium Manager is in the CITY’S sole discretion. CITY will provide notice to TEAM when such assignment has been made by CITY. Notwithstanding the foregoing, (i) the selection of an on-site Concessions Director during TEAM Events is subject to the terms in Section

7.3.6; and (ii) no such assignment by CITY shall relieve CITY from its obligations to TEAM under this Agreement.

11.2 CITY’S Consent Required. Subject to the provisions of Section 11.3 (which provisions shall supersede this Section 11.2), TEAM shall not voluntarily or by operation of law assign or otherwise transfer (collectively "assign") or sublet all or any part of TEAM’S interest in this Agreement or in the Premises, or permit the use of the Premises by any party other than TEAM, without CITY’S prior written consent, which will not be unreasonably conditioned, withheld or delayed and the prior receipt of all necessary PDL Approvals. TEAM shall not mortgage or encumber the Site, this Agreement or TEAM’S interest in the Premises, nor ever have any right hereunder to do so. Each request for consent to an assignment or sublicense shall be in writing, accompanied by information relevant to CITY’S determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublicensee, including but not limited to the intended use and any required modification of the Premises. TEAM agrees to provide CITY with such additional or different information and documents as CITY may reasonably request. CITY shall respond to TEAM’S request for consent to an assignment or sublicense within fifteen (15) days after CITY receives all of the information and documents TEAM is required to provide. Any attempted assignment or subletting in violation of this Section

11.2 without CITY’S prior written consent shall be void, and shall constitute a default of this 298
46700.12006\42370050.5
20 Agreement without the need for notice to TEAM under Section 18.1 hereof.

11.3 Assignment to TEAM’S Successor. Subject to the prior receipt of all necessary PDL Approvals, the TEAM may assign their interest in this Agreement to a Successor without the consent of the CITY. For purposes of this Agreement, a “Successor” is an organization or other entity that (i) is affiliated with the TEAM, (ii) will assume the operations of the Ontario PDL License Agreement in the Stadium in connection with the transfer of the Ontario PDL License Agreement, and/or (iii) is a PDL Club. The terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties to the Agreement and their respective successors and assigns. TEAM shall deliver an assignment and assumption agreement entered into between TEAM and Successor which contains terms that the Successor assumes all the obligations, terms and conditions of this Agreement. If TEAM assigns this Agreement to a Successor, upon the assumption by such Successor of all obligations of TEAM under this Agreement, TEAM shall be released from all obligations under this Agreement as of the effective date of such assignment and assumption agreement.

ARTICLE 12

OWNERSHIP RIGHTS OF LAND, STADIUM AND FIXTURES

12.1 Site. The CITY is the sole owner of the Site and retains all rights pertaining to ownership of a fee interest in real property. CITY to consult with TEAM regarding commercial (retail, restaurant, multi-family housing and other development) at or adjacent to the ballpark site, provided, however, CITY shall retain full discretion with respect to any such proposed development.

12.2 Right To Operate Separate Facility(ies). CITY reserves to itself, or to its affiliates, the right to operate the Stadium, or any other new or existing facility(ies), that would accommodate concerts, family shows, sporting events, theater or other community entertainment events. Further, nothing in this Agreement shall prevent CITY from opening or operating entertainment or sports facilities, movie theaters, or other development activities within the City of Ontario. In other words, in no way does this Agreement grant TEAM an exclusive right to entertainment or sports facilities within the City of Ontario.

12.3 Premises. The CITY shall be the sole owner and landlord of the Premises, Stadium, and all improvements made thereon, including but not limited to the FF&Es affixed to the Site by CITY or left on or at the Premises by TEAM after the Expiration Date or earlier termination of the Agreement, Stadium and any building on the Premises.

ARTICLE 13

TAXES AND ASSESSMENTS

13.1 Real Property Taxes/Assessments/Possessory Interest Taxes. The CITY may be responsible for the payment of any ad valorem property taxes or special assessments, if such taxes are assessed against the fee interest in the Site. TEAM hereby recognizes and understands that this Agreement may create a possessory interest subject to property taxation under California Revenue and Tax Code Section 107.6, and that TEAM may be subject to the payment of property taxes levied on such interest. Any such imposition of a possessory interest tax shall be a tax 299
46700.12006\42370050.5
21 liability of TEAM solely, and shall be paid for by TEAM; and any such tax payment shall not reduce any Fees due to CITY. TEAM shall also pay all interest and penalties any government entity assesses for late payment of any possessory interest taxes that this Agreement requires TEAM to pay. TEAM is responsible for the timely payment of any possessory interest taxes that may be assessed against the TEAM’s interest under this Agreement.

13.2 Other Taxes. TEAM shall pay all other required taxes and fees, other than concessions, related to the operation of the TEAM’S games and events at the Stadium.

13.3 Parking Tax. The CITY’S Parking Tax shall be collected and remitted to the CITY, regardless of whether the TEAM (as an add-on to the ticket) or the CITY (at public parking facilities) collect parking fees.

ARTICLE 14

SURRENDER OF PREMISES

14.1 Surrender of Premises. TEAM shall, on or before the Expiration Date, or upon the earlier termination of this Agreement, peaceably and quietly leave, surrender and yield up to CITY in good and operable condition, reasonable wear and tear excepted, (i) the Premises, free of sublicensees and in a clean condition and free of debris, (ii) the FF&E installed, affixed, attached or supplied by CITY pursuant to this Agreement or any FF&E paid for by CITY or paid for out of the any funds on behalf of CITY and all replacements of and substitutions therefor, (iii) all remaining spare parts on hand for the Premises, (iv) all keys for the Premises, and (v) any other items or property which are necessary to operate as a baseball facility which is not specifically and previously owned and brought on the Premises by TEAM excluding such items of property as TEAM is entitled to remove pursuant to Section 4.7. Upon such expiration or termination of this Agreement, and provided that the same are assignable, TEAM shall assign to CITY all of its right, title and interest in and any service contracts, and equipment leases, subject to TEAM’S rights with respect to any claims pending thereunder.

14.2 Removal of Personalty.

14.2.1 TEAM’S Obligations to Remove. All trade fixtures, appliances, furniture, equipment (including exercise and field maintenance equipment), furnishings, and other personal Property purchased by the TEAM that is not part of the Premises (as provided in Section 4.7) shall be removed by TEAM within thirty (30) days after the Expiration Date or earlier termination of this Agreement, provided that TEAM shall promptly repair any damage to the Premises caused by such removal.

14.2.2 CITY’S Right to Remove. Any trade fixtures, furniture, equipment or other personal property of TEAM which remains in the Premises beyond thirty (30) days after the Expiration Date or earlier termination of this Agreement may, at the option of CITY, be deemed to have been abandoned by TEAM and either may be retained by CITY as its property or be disposed of, without accountability, in such a manner as CITY may determine necessary, desirable or appropriate, and TEAM, upon demand, shall pay the cost of such disposal, together with interest thereon at the interest rate provided in Section 6.4 herein from the date such costs were incurred until reimbursed by TEAM, together with reasonable attorney’s fees, charges and costs. 300
46700.12006\42370050.5
22 14.3 Holding Over. In the case of any holding over by TEAM after the Expiration Date or earlier termination of this Agreement without the consent of CITY, TEAM shall pay CITY Fees at one hundred fifty percent (150%) of the Base License Fee amount. Further, in the event TEAM shall hold over beyond any date for surrender of the Premises set forth in CITY’S written demand for possession therefor, TEAM shall reimburse CITY for all actual expenses and losses incurred by CITY by reason of CITY’S inability to deliver use of the Premises to a successor licensee, together with interest on such expenses at the interest rate provided in Section 6.4 herein from the date such expenses are incurred until reimbursed by TEAM, together with CITY’S reasonable attorneys’ fees, charges and costs. The acceptance of Fees under this Section 14.3 by CITY shall not constitute an extension of the term of this Agreement or afford TEAM any right to use of the Premises beyond any date through which such Fees has been paid by TEAM and accepted by CITY. Such Fees shall be due to CITY for the period of such holding over, whether or not CITY is seeking to evict TEAM and, unless CITY otherwise then agrees in writing, such holding over shall be, and shall be deemed construed to be, without the consent of CITY, whether or not CITY accepted any sum due pursuant to this Section 14.3.

14.4 Survival. The provisions contained in this Article 14 shall survive the expiration or earlier termination of this Agreement.

ARTICLE 15

INSURANCE AND INDEMNIFICATION

15.1 Insurance - TEAM. During the Term, and without limiting or diminishing the TEAM’S obligation to indemnify the CITY or hold the CITY harmless as provided elsewhere in this Agreement, TEAM, at its own expense, shall procure and maintain in full force and effect the following policies of insurance during the Term of this Agreement including any Options periods, against claims for injuries to persons or damages to property which may arise from or in connection with the Agreement of the Stadium and the Premises and the activities of the TEAM, the Club, its guests, agents, representatives, employees or subcontractors. In respect to any of the insurance requirements imposed upon the TEAM herein, the CITY herein refers to the City of Ontario, its agencies and departments, directors, officers, City Council, employees, elected or appointed officials, volunteers, agents or representatives.

15.1.1 Commercial General Liability (“CGL”) Insurance. A policy of commercial general liability insurance insuring against all claims, demands, actions or liability for injury to or death of any persons, and for damage to property arising from or related to the use or occupancy of the Premises or the operation of TEAM’S business and the business operated by TEAM [and sublicensees and concessionaires of TEAM] in the Premises. Coverage shall be at least as broad as Insurance Services Form CG 00 01, including coverage for property damage, bodily injury, personal injury, advertising injury, premises/operations, contractual liability (including TEAM’S indemnity under this Agreement), independent contractors, product/completed operations, and, if applicable, liquor liability insurance. The insurance shall be written on an occurrence basis with coverage not less than $2,000,000.00 per occurrence and at least $5,000,000.00 general aggregate limit. These limits may be evidenced by any combination of primary and excess policies. Defense costs shall be paid in addition to the limits. If the use of the Premises includes athletic activities, TEAM shall provide evidence of that the CGL includes coverage for injuries to athletic participants. If the TEAM maintains broader coverage and/or 301
46700.12006\42370050.5
23 higher limits than the minimums shown above, the CITY requires and shall be entitled to the broader coverage and/or higher limits maintained by the TEAM. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the CITY.

The policy shall contain no endorsements or provisions (1) limiting coverage for contractual liability; (2) excluding coverage for claims or suits by one insured against another (cross-liability); (3) products/completed operations liability; or (4) containing any other exclusion(s) contrary to the terms or purposes of this Agreement. No deductible in excess of $10,000.00 will be carried under this coverage without the prior written consent of the CITY.

15.1.2 Property Insurance. TEAM shall obtain and keep in force during the term of this Agreement a policy or policies of insurance for the benefit of the TEAM for its interest in this Agreement covering loss or damage to the TEAM’S personal property, fixtures, equipment, and any other improvements made on the Premises by TEAM for which it is responsible at the full replacement cost thereof, with no coinsurance penalty provision, and providing protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, flood and earthquake, special extended perils ("all risk," as such term is used in the insurance industry). During the period of early access and construction of the Stadium, CITY shall provide, or cause for it to be provided, property insurance covering course of construction insurance for the Stadium until Substantial Completion.

15.1.3 Automobile Liability. Automobile Liability Insurance covering owned, leased, hired and non-owned vehicles used by the TEAM with coverage at least as broad as Insurance Services Office Form CA 00 01 covering "Any Auto" (Symbol 1), or the equivalent, covering bodily injury and third party property damage in an amount not less than $2,000,000 per occurrence combined single limit.

15.1.4 Workers’ Compensation. If TEAM has employees as defined by the State of California, TEAM shall also maintain Worker’s Compensation Insurance as required by the applicable laws and Employer's Liability Insurance in an amount of at least $1,000,000 per person per accident.

15.1.5 Waiver of Subrogation. All required insurance coverages shall allow for a waiver of subrogation in favor of the CITY, its officials, officers, employees, agents, representatives and volunteers or shall specifically allow TEAM or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss.

TEAM hereby waives its own right of recovery against CITY, and shall require similar written express waivers and insurance clauses from each of its sublicensees.

15.1.6 Deductibles and Self-Insured Retentions. Any deductible in excess of $10,000 or self-insured retention must be approved in writing by the CITY and shall protect the CITY, its officials, officers, employees, agents, and volunteers in the same manner and to the same extent as they would have been protected had the policy or policies not contained a deductible in excess of $10,000 or self-insured retention.

15.1.7 Enforcement of License Provisions (non estoppel). TEAM acknowledges and agrees that actual or alleged failure on the part of the CITY to inform TEAM of non-compliance with any requirement imposes no additional obligation on the CITY nor does 302
46700.12006\42370050.5
24 it waive any rights hereunder.

15.1.8 Requirements Not Limiting. Requirement of specific coverage or minimum limits contained in Section 15.1 are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance. If the TEAM maintains broader coverage and/or higher limits than the minimums shown above, the CITY requires and shall be entitled to the broader coverage and/or higher limits maintained by the TEAM. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the CITY. Periodically during the Term, but no more often than annually, the Parties may meet and confer to discuss whether higher policy limits should be implemented with respect to each Party’s respective insurance obligations under this Agreement.

15.1.9 Additional Insurance Provisions. All liability insurance policies shall name the CITY as described in Section 15.1 above and any person, firms or corporations designated by CITY as Additional Insureds with respect to liability arising out of the license granted under this Agreement and in connection with the operations of TEAM. No additional insured shall be liable for any payment for premiums. All Additional Insureds shall be entitled to recovery for any loss occasioned to them, their representatives, agents or employees by reason of negligence of TEAM, its officers, agents or employees. All policies will not be canceled without the TEAM first giving CITY thirty (30) days’ prior written notice. All insurance shall be issued by an insurance company qualified to do business in the State of California and having an overall rating of A-:VIII or better and a financial rating of Class V as rated in the most current available Best’s Key Rating Guide. Certificates of insurance required hereunder shall be delivered to CITY as a condition to TEAM’S entry onto the Premises. All liability insurance policies shall be written as primary policies, not contributing with and not in excess of coverage which CITY may carry under this Agreement.

15.2 Liability Insurance–CITY.

15.2.1 Commercial General Liability (CGL) Insurance. CITY shall obtain and keep in force, or cause its Stadium Manager to procure and maintain, during the Term of this Agreement, a policy of Commercial General Liability insurance insuring CITY and Stadium Manager against all claims, demands, actions or liability for injury to or death of any persons, and for damage to property arising from or related to CITY’S ownership of the Premises, the CITY and Stadium Manager’s use, occupancy or maintenance of the Premises and naming TEAM as an additional insured. Coverage shall be at least as broad as Insurance Services Form CG 00 01 covering CGL on an “occurrence” basis, including coverage for property damage, bodily injury, personal & advertising injury, premises/operations, contractual liability (including CITY’S indemnity under this Agreement), independent contractors, personal injury, product/completed operations, owned and non-owned automobiles, and, if applicable, liquor liability insurance. The insurance shall be written on an occurrence basis with coverage in a minimum amount of $2,000,000.00 per occurrence and at least $5,000,000.00 general aggregate limit. Defense costs shall be paid in addition to the limits. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the CITY. The policy shall contain no endorsements or provisions (1) limiting coverage for contractual liability; (2) excluding coverage for claims or suits by one insured against another (cross-liability); (3) products/completed operations liability; or (4) containing any other exclusion(s) contrary to the 303
46700.12006\42370050.5
25 terms or purposes of this Agreement. No deductible in excess of $10,000.00 will be carried under this coverage without the prior written consent of the TEAM.

15.2.2 Property Insurance. CITY shall obtain and keep in force, or cause its Stadium Manager to obtain and keep in force, a policy or policies of insurance covering loss or damage to the Stadium, with loss payable to CITY and to any lenders having a lien on the Site or any part of it, in the amount of 100% of the replacement value thereof, against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, flood, sprinkler leakage and other perils normally covered in an "all risk" policy, as such term is used in the insurance industry; provided, however, that CITY or Stadium Manager shall have no obligation to insure against earthquakes.

15.2.3 Additional Insurance. In addition, CITY shall obtain and keep in force during the term of this Agreement, a policy of rental value insurance covering the loss of the full rent and other charges payable by all licensees of the Site to CITY for a period of one year, in the name of CITY with loss payable to CITY.

15.3 Indemnification.

15.3.1 Indemnification - TEAM. TEAM shall indemnify, protect, defend and hold harmless CITY, CITY’S agents, its agencies and departments, directors, officers, City Council, employees, elected or appointed officials, volunteers, agents or representatives (each a "CITY’S Party," collectively "CITY Parties"), from and against any and all claims, and/or damages, losses, costs, liens, judgments, penalties, loss of permits, reasonable attorneys' and consultants' fees, expenses and/or liabilities (collectively "Claims") arising out of, involving, or in connection with: (i) TEAM’S use or occupancy of the Premises and the Stadium; (ii) the conduct of TEAM’S business operations at the Premises; (iii) any act, omission, fault or neglect of TEAM, its agents, employees, representatives, contractors, customers, sublicensees, licensees, invitees or other visitors; and (iv) any default or breach by TEAM in the performance in a timely manner of any obligation on TEAM’S part to be performed under this Agreement including, without limitation, TEAM’S violation of or failure to comply with Applicable Requirements; excepting only to the extent such Claims are caused by CITY’S use of the Premises or Stadium, any CITY Event, CITY’S breach of this Agreement, or the negligent or willful acts or omissions of CITY, its agents, employees, representatives, contractors, customers, licensees, invitees or other visitors.

15.3.2 Indemnification - CITY. CITY shall indemnify, protect, defend and hold harmless TEAM, each MLB PDL Entity, and their respective agents, employees, affiliates, and the respective members, managers, officers, directors, owners, partners, trustees, agents and employees of each of these parties (each a "TEAM Party," collectively "TEAM Parties"), from and against any and all Claims arising out of, involving, or in connection with (i) CITY’S use of the Premises and the Stadium; (ii) the conduct of any CITY Event at the Premises; (iii) any act, omission, fault or neglect of CITY, its agents, employees, representatives, contractors, or licensees; and (iv) any default or breach by CITY in the performance in a timely manner of any obligation on CITY’S part to be performed under this Agreement; excepting only to the extent such Claims are caused by TEAM’S use or occupancy of the Premises or the Stadium, any TEAM Event, TEAM’S breach of this Agreement or the negligent or willful acts or omissions of TEAM, its agents, employees, representatives, contractors, customers, sublicensees, licensees, invitees or 304
46700.12006\42370050.5
26 other visitors.

15.3.3 Defense. The foregoing indemnities shall include, but not be limited to, the defense or pursuit of any claim or any action or proceeding involved therein, and whether or not litigated and/or reduced to judgment. In case any action or proceeding is brought against an indemnified party by reason of any of the foregoing matters, the applicable party upon notice from the indemnified party shall defend the same at its expense by counsel reasonably satisfactory to the indemnified party. The indemnified party need not have first paid any such claim in order to be so indemnified. The obligations under Section 15.3 shall survive the expiration or termination of this Agreement.

15.4 Indemnification Obligations Not limiting. The indemnity obligations under Section 15.3 are not intended to, and shall not, (i) restrict or modify any party's insurance and other obligations under this Agreement, or (ii) be restricted, limited or modified by compliance with such insurance and other obligations under this Agreement.

15.5 Exculpation. Except as otherwise expressly provided herein, including the Parties' mutual indemnity obligations in Section 15.4 above, each Party agrees that in no event shall the other Party ever be responsible or liable to such Party on any theory for any injury to such Party's business, loss of profits or rents, loss of income or any other form of consequential damage in any claim arising out of this Agreement. The clauses of this Section 15.5 shall survive the expiration or earlier termination of this Agreement until all claims within the scope of this Section 15.5 are fully, finally and absolutely barred by applicable statutes of limitations. Each party acknowledges that this Section 15.5 was negotiated with the other party, that the consideration for it is fair and adequate, and that such party had a fair opportunity to negotiate, accept, reject, modify or alter it.

ARTICLE 16

DAMAGE OR DESTRUCTION

16.1 Partial Damage or Destruction. In the event that the Stadium or Premises is partially damaged or destroyed by fire or other casualty and can be repaired or restored to sufficient condition in a time period so that it does not render the Stadium facilities unusable or unfit for its intended purpose (i.e. home games can be played in the Stadium with fans in attendance in approximately the same number and degree of comfort as existed prior to the casualty event), the Agreement remains in full force and effect. The CITY shall rebuild or repair the Stadium or Premises damaged or destroyed (except for TEAM fixtures and other TEAM improvements) as soon as reasonably possible, with the right to use any insurance proceeds covering such loss events.

16.2 Total Destruction. In the event that the Stadium is substantially or totally destroyed by fire or other casualty, and after consulting with the TEAM, the CITY may elect whether to rebuild or restore the Stadium or to terminate the Agreement by giving written notice thereof to the TEAM. If the CITY elects to terminate, the Agreement is terminated and shall have no further force and effect except as otherwise provided herein this Agreement. If the CITY elects to repair and restore the Stadium, then the TEAM shall have a period of thirty (30) days after notice of the CITY’S decision (which CITY’S notice shall include reasonable detail regarding the anticipated construction plans, scope of work, contractors and timing for completion), which decision must be delivered to TEAM in writing within thirty (30) days of the casualty event, in 305
46700.12006\42370050.5
27 which TEAM may terminate this Agreement. If the TEAM does not so terminate, the CITY shall proceed to repair and restore the Stadium diligently to its condition existing immediately prior to the casualty or in a condition agreed upon in writing by the Parties.

16.3 Interim Facilities. During any period that the Premises are partially or totally unsuitable for use by the TEAM (as determined by the TEAM in its reasonable discretion), the CITY shall not be liable for interim facilities or replacement facilities, and the TEAM shall, at its option, be relieved of its obligations under this Agreement when the Premises is not usable for the purposes intended by this Agreement for all or any part of the Baseball Season by reason of such damage or destruction. Notwithstanding anything contained herein, in the event that the Premises, or any part thereof, is damaged or destroyed to an extent that the TEAM, in its reasonable discretion, determines that the Premises is unsuitable for use by the TEAM during any regular season game, postseason game, or scheduled non-game day event, then the TEAM shall have the right to conduct all or a portion of the TEAM’S games or non-game day events at any other facility in any other location, whereby the TEAM shall be relieved of its obligations under this Agreement during the time frame the Stadium is unusable and, if possible or desired, continue to utilize such portion of the Premises that remains suitable for use by the TEAM.

ARTICLE 17

CONDEMNATION

17.1 Total Condemnation. In the event all of the Stadium is taken from the CITY pursuant to any right of eminent domain exercised by a governmental agency superior to the CITY or pursuant to any other superior governmental order, then at the election of the TEAM this Agreement may be terminated and payment due from the TEAM hereunder shall cease as of the date title to the Stadium is vested in such governmental entity. For purposes of this Agreement, a “Superior Governmental Agency” means a county of the State of California, the State of California or a federal agency of the United States of America.

17.2 Partial Condemnation. If any portion of the Premises is taken under the power of eminent domain, or sold under the threat of the exercise of said power (all of which are herein called "Condemnation"), this Agreement shall terminate as to the part of the Premises taken as of the date the condemning Superior Governmental Agency who takes title or possession, whichever first occurs of said portion of the Premises. If such portions of the Stadium or the Premises is taken by Condemnation so as to cause the Premises to be noncompliant with PDL Rules and Regulations, TEAM may, at TEAM’S option, to be exercised in writing only within ten (10) days after CITY shall have given TEAM written notice of such taking (or, in the absence of such notice, within 10 days after the condemning authority shall have taken title or possession, whichever first occurs) terminate this Agreement as of the date the condemning Superior Governmental Agency takes such title or possession. If TEAM does not terminate this Agreement in accordance with the foregoing, this Agreement shall remain in full force and effect as to the portion of the Premises remaining, except that the Base License Fee shall be reduced in the proportion that the floor area of the Premises taken bears to the total floor area of the Premises. No reduction of rent shall occur if the condemnation does not include any portion of the Stadium provided that the Premises is otherwise compliant with PDL Rules and Regulations. Any award for the taking of all or any part of the Premises under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of CITY, whether such award shall be made as 306
46700.12006\42370050.5
28 compensation for diminution in value of the interest or for the value of the part taken, or for severance damages; provided, however, that TEAM shall be entitled to any compensation separately awarded to TEAM for loss of or damage to TEAM’S FF&E collateral, other personal property brought on Premises by TEAM, and/or TEAM’S relocation expenses. If this Agreement is not terminated by reason of such Condemnation, CITY shall repair any damage to the Premises caused by such condemnation, except to the extent that TEAM has been reimbursed therefor by the condemning authority.

17.3 Notice of Condemnation. In the event CITY or TEAM shall receive notice of any proposed or pending Condemnation action affecting the Premises, the party receiving such notice shall promptly notify the other Party hereto.

17.4 Survival. The provisions contained in this Article 17 shall survive the expiration or earlier termination of this Agreement, but only insofar as such provisions relate to any Condemnation actions or any Condemnation awards that arose prior to the expiration or earlier termination of this Agreement.

ARTICLE 18

DEFAULTS AND REMEDIES

18.1 Default by TEAM. The occurrence of any one or more of the following events (“Events of Default”) shall constitute a default of this Agreement by TEAM:

18.1.1 The vacating or abandonment of the Premises by TEAM.

18.1.2 The failure by TEAM to make any payment of rent or any other payment required to be made by TEAM hereunder, as and when due, where such failure continues for a period of 10 days after written notice thereof from CITY to TEAM. In the event that CITY serves TEAM with a notice to pay rent or quit pursuant to applicable unlawful detainer statutes, such notice to pay rent or quit shall also constitute the notice required by this Section 18.1.

18.1.3 TEAM, whether by action or inaction, fails to observe or timely perform any of the terms, covenants, conditions or provisions of this Agreement to be observed or performed by TEAM, where such failure continues for a period of 30 days after written notice thereof from CITY to TEAM; provided, however, that if the nature of TEAM’S noncompliance is such that more than 30 days is reasonably required for its cure, then TEAM shall not be deemed to be in default if TEAM commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion. To the extent permitted by law, such 30 day notice shall constitute the sole and exclusive notice required to be given to TEAM under applicable unlawful detainer statutes.

18.1.4 (i) The making by TEAM of any general arrangement or general assignment for the benefit of creditors; (ii) TEAM’S becoming a "debtor" as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a petition filed against TEAM, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially all of TEAM’S assets located at the Premises or of TEAM’S interest in this Agreement, where use is not restored to TEAM within 60 days; or (iv) the attachment, execution or other judicial seizure of substantially all of TEAM’S assets located at the Premises or of TEAM’S interest in this 307
46700.12006\42370050.5
29 Agreement, where such seizure is not discharged within 60 days. In the event that any provision of this Section 13.1(d) is contrary to any Applicable Requirements, such provision shall be of no force or effect, and shall not affect the validity of the remaining provisions hereof.

18.1.5 The Ontario PDL License Agreement is terminated due to TEAM’S failure to comply with PDL Rules and Regulations, or an Event of Default (as defined therein)under the Ontario PDL License Agreement has occurred.

18.1.6 The relocation of the Club by TEAM or a violation of the No Relocation Requirement.

18.2 CITY Remedies. Upon an Event of Default by TEAM under Section 18.1 and after expiration of the applicable cure period and subject to Section 23.17, CITY shall have the right to terminate this Agreement at any time prior to TEAM’S cure of such Event of Default by written notice to TEAM, in which event CITY may also bring an action to recover from TEAM:

18.2.1 The worth at the time of award of any unpaid Fees that had been earned at the time of termination of this Agreement;

18.2.2 Damages in an amount equal to Fees and other sums that would have been owing by TEAM under this Agreement for the balance of the Term plus all of CITY’S relicensing expenses, less the net proceeds, if any, of any relicensing of the Premises by CITY subsequent to the termination;

18.2.3 Any other amount reasonably necessary to compensate CITY for all detriment caused by TEAM’S failure to pay Fees under this Agreement.

18.2.4 Upon an Event of Default under Section 18.1 above, CITY may elect to continue this Agreement in full force and effect for so long as CITY does not terminate TEAM’S right to use the Premises as provided in this Section 18.2, and CITY may enforce all its rights and remedies under this Agreement, including the right to recover Fees as it becomes due under this Agreement. In such event, CITY may exercise all of the rights and remedies of a landlord under California Civil Code Section 1951.4, or any successor statute. Acts of maintenance or preservation or efforts to re-license the Premises or the appointment of a receiver upon initiative of CITY to protect CITY’S interest under this Agreement shall not constitute a termination of TEAM’S right to use the Premise.

18.3 Default by CITY. On and after the date that the TEAM commences use of the Premises, the occurrence of the CITY’S failure to observe or perform any material terms, conditions, or provisions of this Agreement to be observed or performed by CITY under this Agreement within thirty (30) days after receipt of notice of default from TEAM (provided, that if the cure of such CITY Default reasonably requires more than thirty (30) days to complete, then CITY is not in default if CITY promptly commences the cure of such CITY Default and diligently pursues such cure to completion). TEAM’S notice must give in reasonable detail the nature and extent of the failure and identify the Agreement provisions containing CITY’S obligations. If CITY defaults and fails to cure the same within the time provided, TEAM shall have all rights to which TEAM is entitled at law for damages and/or for specific performance as described in Section

18.4. 308
46700.12006\42370050.5
30 18.4 TEAM Remedies. In the event that CITY fails to perform and observe the same, that shall entitle TEAM, at TEAM’S sole option, to terminate the Agreement if after a thirty (30) day written notice to CITY, calling attention to such default, CITY fails to correct the same or commence to correct the same and prosecute such correction to completion, and in such event TEAM shall have the right to exercise any and all legal remedies available to TEAM, including the right to specific performance and injunctive relief. The remedies described in this Section 18.4 do not apply if the event of default by CITY falls under the terms described in Section 18.5.

18.5 CITY Failure to Deliver Stadium. The Parties agree that if CITY fails to deliver the Stadium by the times described herein this Section 18.5, it will be impracticable or extremely difficult to determine the damages suffered by the TEAM. It is therefore agreed that in the event CITY fails to deliver the Stadium as required by the Agreement, (i) by the Outside License Commencement Date, CITY shall pay TEAM liquidated damages in the amount of Twenty Thousand Dollars ($20,000) per day for each day past the License Commencement Date that the Stadium is delayed, up to a maximum of Two and a Half Million Dollars ($2,500,000) for the 2026 season; and (ii) by March 1, 2027, CITY shall pay additional liquidated damages in the sum of $10 million and the TEAM shall have the election to terminate the Agreement (collectively, the “Stadium Liquidated Damages”). Each Party acknowledges the Stadium Liquidated Damages amount is not a penalty and is a reasonable estimation of the actual damages TEAM would suffer upon the CITY’S inability to deliver the Stadium by the Outside License Commencement Date or March 1, 2027, as the case may be, based upon the inherent uncertainty and difficulty in calculating and quantifying damages caused by the CITY’S failure.

18.6 TEAM’S Failure to Occupy and Use the Stadium in Compliance with the Agreement. From and after the License Commencement Date, if TEAM fails to occupy and use the Stadium in compliance with the Agreement, CITY shall have the remedies set forth in the Agreement for non-compliance and as described in Section 18.2 herein.

18.7 Non-Relocation Requirement. Except as set forth in Section 5.3.1, TEAM shall not relocate the Club during the Term. If the TEAM relocates in breach of the Non-Relocation Requirement, the Base Rent for the remaining Term shall be immediately due and payable by TEAM to CITY.

18.8 Survival. The provisions of this Article 18 shall survive the expiration or earlier termination of this Agreement.

ARTICLE 19

DISPUTE RESOLUTION

19.1 Resolution by Mutual Agreement. In the event any dispute, controversy or claim between or among the Parties arises under this Agreement or is connected with or related in any way to this Agreement or any right, duty or obligation arising here from or the relationship of the Parties hereunder (a “Dispute or Controversy”), including, but not limited to, a Dispute or Controversy relating to the effectiveness, validity, interpretation, implementation, termination, cancellation or enforcement of this Agreement, the Parties shall first attempt in good faith to settle and resolve such Dispute or Controversy by mutual agreement in accordance with the terms of this Section 19. In the event a Dispute or Controversy arises, either Party shall have the right to notify the other that it has elected to implement the procedures set forth in this Article 19. Within fifteen 309
46700.12006\42370050.5
31 (15) days after delivery of any such notice by one Party to the other regarding a Dispute or Controversy, the CITY Representative and TEAM Representative shall meet at a mutually agreed time and place to attempt, with diligence and good faith, to resolve and settle such Dispute or Controversy. Should a mutual resolution and settlement not be obtained at the meeting of the CITY Representative and TEAM Representative for such purpose or should no such meeting take place within such fifteen (15) day period, then either Party may by notice to the other Party submit the Dispute or Controversy to confidential non-binding mediation in accordance with the terms of this Article 19 without regard to the justiciable character or executory nature of such Dispute or Controversy.

19.2 Non-Binding Mediation. The Parties agree to cooperate in good faith with respect to their respective rights and obligations under this Agreement and further agree that if they cannot resolve any dispute or claim between themselves, after attempting to resolve a Dispute or Controversy utilizing the procedures in Section 19.1 above and before resorting to judicial remedy, they will in good faith attempt to resolve any such dispute or claim through non-binding mediation.

All expenses of the mediation shall be borne by the parties equally; however, each party shall bear the expense of its own counsel, experts, witnesses, and preparation and presentation of proofs. If either party commences litigation without first attempting to settle the Dispute or Controversy through good faith mediation, such party shall not be entitled to reasonable attorneys’ fees and costs in connection with this Agreement, even where it may be so entitled by law or contract as the prevailing party. In the event that the Parties are still unable to resolve the Dispute or Controversy, then the Parties may pursue all remedies available to the Party at law or in equity (except in the instance where Stadium Liquidated Damages apply as further described in Section

18.5).

ARTICLE 20

REPRESENTATIONS AND WARRANTIES

20.1 Power and Authority. Each individual executing and delivering this Agreement on behalf of a Party hereto hereby represents to the other Party hereto that such individual has all requisite power and authority to execute and deliver the same and to bind such Party hereunder.

20.2 CITY’S Representations. As an inducement to TEAM to enter into this Agreement, CITY hereby represents and warrants to TEAM that CITY is a duly created and in good standing a California municipal corporation and general law city with all the necessary power and authority to carry on its present operations, to enter into this Agreement and to consummate the transactions herein contemplated.

20.3 TEAM’S Representations. As an inducement to CITY to enter into this Agreement, TEAM hereby represents and warrants to CITY, as follows:

20.3.1 TEAM is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Washington, with all necessary corporate power and authority to carry on its present business, to enter into this Agreement and to consummate the transactions herein contemplated.

20.3.2 Neither the execution and delivery of this Agreement by TEAM nor the 310
46700.12006\42370050.5
32 performance by TEAM of its obligations hereunder will (i) violate any statute, regulation, rule, judgment, order, decree, stipulation, injunction, charge, or other restriction of any Governmental Authority, or court to which TEAM is subject or any provision of the charter or bylaws of TEAM, or (ii) result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any contract, lease, sublease, license, sublicense, franchise, permit, indenture, agreement or mortgage for borrowed money, instrument of indebtedness, security interest, or other agreement to which TEAM is a party or by which TEAM or its assets are bound.

20.3.3 All proceedings required to be taken by or on behalf of TEAM to authorize TEAM to execute and deliver this Agreement and to perform the covenants, obligations and agreements of TEAM hereunder have been duly taken. No consent to the execution and delivery of this Agreement by TEAM or the performance by TEAM of its covenants, obligations, and agreements hereunder is required from any partner, board of directors, shareholder, creditor, investor, judicial, legislative or administrative body, Governmental Authority or other Person, other than any such consent which already has been unconditionally given.

20.3.4 This Agreement constitutes the valid and legally binding obligation of TEAM, enforceable in accordance with its terms and conditions, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar law presently or hereafter in effect, affecting the enforcement of creditors’ rights generally and by general principles of equity whether applied in a proceeding at law or in equity.

20.3.5 To the best knowledge of TEAM, there is no action, suit, claim, proceeding or investigation pending or currently threatened against TEAM that questions the validity of this Agreement or the transactions contemplated herein or that could either individually or in the aggregate have a material adverse effect on the assets, conditions, affairs, or prospects of TEAM, financially or otherwise.

ARTICLE 21

HAZARDOUS MATERIALS

21.1 Compliance with Hazardous Materials Laws. The Parties at all times and in all respects shall comply with all federal, state and local laws, ordinances and regulations (“Hazardous Materials Laws”) relating to industrial hygiene, environmental protection or the use, generation, manufacture, storage, disposal or transportation of any hazardous, toxic, contaminated or polluting materials, substances or wastes, including, without limitation, oil or other petroleum products, flammable explosives, asbestos, or any “hazardous substances,” “hazardous wastes,” “hazardous materials” or “toxic substances” regulated under any Hazardous Material Law (collectively, “Hazardous Materials”). TEAM at its own expense shall procure, maintain in effect and comply with all conditions of any and all permits, licenses and other governmental and regulatory approvals required for TEAM’S use of the Premises. In all respects, each Party shall handle, treat, deal with, manage and dispose of any and all Hazardous Materials in total conformity with all applicable Hazardous Materials Laws and prudent industry practices.

Upon expiration or earlier termination of the term of the Agreement, TEAM shall cause all Hazardous Materials that are introduced to the Premises by TEAM to be removed from the Premises and transported for use, storage or disposal in accordance and compliance with all 311
46700.12006\42370050.5
33 applicable Hazardous Materials Laws. If TEAM fails to do so, CITY may remove such Hazardous Materials at TEAM’S expense.

21.2 Adequate Insurance. If at any time it reasonably appears to CITY that TEAM is not maintaining sufficient insurance or other means of financial capacity to enable TEAM to fulfill its obligations to CITY in connection with this Article 21, whether or not then accrued, liquidated, conditional or contingent, TEAM shall procure and thereafter maintain in full force and effect such insurance or other form of financial assurance, with or from companies or persons and in forms reasonably acceptable to CITY, as CITY may from time to time reasonably request.

ARTICLE 22

DELAY, APPROVALS AND CONSENTS

22.1 Delays.

22.1.1 Force Majeure. Any act of the CITY or TEAM required by this Agreement to be done within a specified time shall be subject to Force Majeure Event. If the performance of any act required by this Agreement to be performed by either TEAM or CITY is prevented or delayed by reason of or due to any act of God, fire, flood, hurricane, tornado, earthquake, the elements of nature (including rain), casualties, inability to secure materials, pandemic, state or federal restrictive governmental actions or regulations, shortages of materials or supplies, or any other cause similar to the foregoing, (except financial inability) not the fault of the Party required to perform the act, or beyond the reasonable control of CITY or TEAM which affects the performance of CITY or TEAM under this Agreement, then the time for performance of the act will be extended for a period equivalent to the period of delay and performance of the act during the period of delay will be excused.

22.1.2 TEAM Delays. In the event that TEAM’S actions or inactions cause a delay in the ability for CITY to timely perform its obligations pertaining to the design, construction and delivery of the Stadium to the TEAM, CITY shall not be deemed as in default under the Agreement, then the time for performance of the act and the Outside License Commencement Date will be extended for a period equivalent to the period of delay and performance of the act during the period of delay will be excused.

22.2 Approvals and Consents. In this Agreement whenever the approval or consent of one party is required to an act of the other party, such consent shall not be unreasonably withheld, conditioned or delayed. No consent shall constitute acknowledgement that no default exists under this Agreement, or be deemed a waiver of any default then existing.

ARTICLE 23

MISCELLANEOUS PROVISIONS

23.1 Covenants Running with the Estates in Land. The Parties covenant and agree that all of the conditions, covenants, restrictions, exclusives, agreements, rights, privileges, obligations, duties, specifications, and recitals contained in this Agreement, except as otherwise expressly stated therein, shall be construed as covenants running with title to the Premises and any interests thereunder, respectively, which shall extend to, inure to the benefit of and bind, CITY and TEAM, and their permitted successors and assigns, to the same extent as if such successors 312
46700.12006\42370050.5
34 and assigns were named as original Parties to this Agreement, such that this Agreement shall, at all times after the Agreement Effective Date hereof, bind the owner and holder of any fee or interest in or to the Premises, or any portion thereof, and shall bind predecessors thereof, except as otherwise expressly provided therein.

23.2 Relationship of the Parties. The relationship of TEAM and CITY under this Agreement shall be that of independent parties, each acting in its own best interests, and notwithstanding anything in the Agreement to the contrary, no partnership or joint venture shall be established or intended thereby between TEAM and CITY.

23.3 Notices. Unless otherwise specified by statute, any and all notices which are required under the terms and conditions of this Agreement or which either CITY or TEAM desire to serve upon the other, shall be in writing and shall be deemed served when delivered personally, or when deposited in the United States mail or by private courier service, postage prepaid, return receipt requested, addressed as follows:

LANDLORD:

CITY OF ONTARIO
Attn: Scott Ochoa, CITY Manager
303 E. B Street
Ontario, CA 91764
Email: [email protected]
TENANT:

RANCHO BASEBALL, LLC
Attn: Andrew Billig
8408 Rochester Avenue
Rancho Cucamonga, CA 91730
Email: [email protected]
With a copy to:

Best Best & Krieger LLP
Attn: Ruben Duran
2855 E. Guasti Rd, Suite 400
Ontario, CA 91761
Facsimile: (909) 944-1441
Telephone: (213) 787-2569
Email: [email protected]
With a copy to:

Lukins & Annis, P.S.

Attn: Tyler Black
717 W. Sprague Avenue, Suite 1600
Spokane, WA 99201
Facsimile: (509) 363-2487
Telephone: (509) 363-2367
Email: [email protected]
Any notice so given shall be considered served on the other party (i) on the date of personal delivery, (ii) three (3) days after deposit in the U.S. mail, first class postage prepaid, return receipt requested, and addressed to the party at its applicable address, and (iii) on the date of receipt by the other party in the case of delivery by private courier service. Actual notice shall be deemed adequate notice on the date actual notice occurred regardless of the method of service.

23.4 Non-Merger of Estates. The interests of CITY and TEAM in the Premises shall at all times be separate and apart, and shall in no event be merged, notwithstanding the fact that this Agreement or any interest herein, may be held directly or indirectly by or for the account of the same person who shall own the fee title to the Premises or any portion thereof; and no such merger of estates shall occur by operation of law, or otherwise, unless and until all persons at the 313
46700.12006\42370050.5
35 time having any interest in the Premises, shall join in the execution of a written instrument effecting such merger of estates.

23.5 Survival. Except as may be expressly set forth in this Agreement to the contrary, if CITY or TEAM elects to exercise any right to terminate this Agreement set forth therein, this Agreement shall, on the effective date of such termination, terminate with respect to all future rights and obligations of performance thereunder by the Parties (except for the rights and obligations therein that expressly are to survive such termination thereof). Termination of this Agreement shall not alter the then existing claims, if any, of either Party for breaches of this Agreement occurring prior to such termination and the obligations of the Parties with respect thereto shall survive termination.

23.6 No Waiver. No failure or delay of any Party, in any one or more instances, (a) in exercising any power, right or remedy under this Agreement or (b) in insisting upon strict performance by the other Party of such other Party's covenants, obligations or agreements under this Agreement, shall operate as a waiver, discharge or invalidation, thereof, nor shall any single or partial exercise of any such right, power or remedy or insistence on strict performance, or any abandonment or discontinuance of steps to enforce such a right, power or remedy or to enforce strict performance, preclude any other or future exercise thereof or insistence thereupon or the exercise of any other right, power or remedy. The covenants, obligations, and agreements of a defaulting Party and the rights and remedies of the other Party upon a default shall continue and remain in full force and effect with respect to any subsequent breach, act or omission.

23.7 Severability. If any term or provision of this Agreement, or the application thereof to any Person or circumstances, shall to any extent be invalid or unenforceable in any jurisdiction, as to such jurisdiction, the remainder of this Agreement, or the application of such term or provision to the Persons or circumstances other than those as to which such term or provision is held invalid or unenforceable in such jurisdiction, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by Applicable Laws and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

23.8 Attorneys' Fees. If either party named herein shall bring an action or proceeding to enforce the terms hereof or declare rights hereunder, the prevailing party in any such action or proceeding, on trial or appeal, shall be entitled to its reasonable attorneys' fees and actual costs to be paid by the non-prevailing party.

23.9 No Broker's Fees or Commissions. Each Party hereby represents to the other Party that such Party has not created any liability for any broker's fee, broker's or agent's commission, finder's fee or other fee or commission in connection with this Agreement.

23.10 Governing Law and Choice of Venue. The Parties acknowledge and agree that this Agreement was negotiated, entered into and is to be fully performed in the City of Ontario, California. This Agreement and the actions of the Parties hereunder shall in all respects be governed by, interpreted under, and construed and enforced in accordance with, the laws of the State of California (excluding principles of conflict of laws). The Parties further agree that any judicial action brought by either Party to enforce or interpret this Agreement shall be initiated in a 314
46700.12006\42370050.5
36 state or federal court in the County of San Bernardino.

23.11 Counterparts. This Agreement may be executed by the Parties in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same Agreement. All signatures need not be on the same counterpart.

23.12 Incorporation of Exhibits; Recitals. All Exhibits attached to this Agreement shall be incorporated herein by reference in their entirety and made a part hereof for all purposes. By this reference, the recitals of this Agreement are incorporated into this Agreement as binding agreements of the Parties, the terms and conditions of which are made a part hereof for all purposes.

23.13 Table of Contents; Headings. The table of contents, if any, and headings, if any, of the various articles, sections and other subdivisions of this Agreement shall be for convenience of reference only and shall not modify, define or limit any of the terms or provisions hereof.

23.14 Interpretation; Rules of Construction. Headings at the beginning of each section and sub-section of this Agreement are solely for the convenience of reference of CITY and TEAM and are not a part of this Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. This Agreement shall not be construed as if it had been prepared by one or the other of CITY or TEAM, but rather as if both CITY and TEAM prepared this Agreement. If the date on which CITY or TEAM is required to take any action pursuant to the terms of this Agreement is not a business day of CITY, the action shall be taken on the next succeeding business day of CITY.

23.15 Entire Agreement; Amendment. This Agreement, along with any exhibits and attachments attached hereto and incorporated herein by reference, constitute the entire agreement between CITY and TEAM relative to the Premises, hereby supersede any and all prior oral or written agreements or understandings, and may only be modified by a writing signed by both Parties. This Agreement constitutes the entire agreement between the CITY and the TEAM and may not be amended or modified except (i) by an instrument in writing signed by the parties with the same formality as this Agreement and (ii) upon the prior receipt of all necessary PDL Approvals.

23.16 Non-Discrimination. TEAM will not discriminate against any employee or applicant for employment because of race, color, religion, creed, national origin, ancestry, disability, actual and perceived, medical condition, age, marital status, sex, sexual orientation, Acquired Immune Deficiency Syndrome (AIDS), actual or perceived, or retaliation for having filed a discrimination complaint ("Nondiscrimination Factors"). TEAM will take affirmative steps to ensure that its employees are treated without regard to the Nondiscrimination Factors during employment, including, but not limited to, activities of: upgrading, demotion or transfer; layoff or termination; or rates of pay or other forms of compensation.

23.17 PDL Required Provisions.

23.17.1 This Agreement and any rights granted to CITY or TEAM hereunder shall in all respects be subordinate to the PDL Rules and Regulations, as long as TEAM is party 315
46700.12006\42370050.5
37 to the Ontario PDL License Agreement that is in effect. The issuance, entering into, amendment or implementation of any of the PDL Rules and Regulations shall be at no cost or liability to any MLB PDL Entity or to any individual or entity related thereto. The territory within which CITY is granted rights under this Agreement is limited to, and nothing herein shall be construed as conferring on CITY rights in areas outside of, the PDL Club Marketing Territory (as defined in the Ontario PDL License Agreement). No rights, exclusivities or obligations involving the Internet or any interactive or on-line media (as defined in the applicable PDL Rules and Regulations) are conferred by this Agreement, except as are specifically approved in writing by MLB PDL.

23.17.2 CITY agrees that if the date upon which any termination or suspension of this Agreement falls during the Baseball Season or postseason, the effective date of such termination or suspension shall be the first day of the month following the final home game of such season, and, in no event, shall CITY terminate or suspend TEAM’S rights under this Agreement during any Baseball Season or postseason.

23.17.3 If, at any time prior to the expiration of the Term of this Agreement, this Agreement is terminated by CITY for any reason (and any legal action challenging the right of CITY to terminate this Agreement and seeking specific performance has either been (i) finally adjudicated by a court of competent jurisdiction as evidenced by a final non-appealable order or (ii) settled, withdrawn or otherwise concluded, in either case solely with respect to the request for specific performance) and the Ontario PDL License Agreement has been terminated, CITY agrees to consider entering into an agreement with substantially similar terms to this Agreement with any replacement PDL Club identified by MLB PDL to the extent that such PDL Club is reasonably acceptable to CITY, subject to approval by the City Council for the CITY. To the extent that such agreement is not entered into, CITY agrees to meet promptly with MLB PDL to work together to ascertain whether a replacement PDL Club can be identified, and if such a PDL Club is so identified, CITY shall offer to license the Stadium to such PDL Club. For the avoidance of doubt, this Section 23.17.3 shall survive the termination of this Agreement.

23.17.4 As long as TEAM is party to the Ontario PDL License Agreement that is in effect, MLB PDL is an intended third party beneficiary of the provisions of this Section 23.17 and each other provision in this Agreement that prohibits action without first obtaining PDL Approval and, in addition to its right to waive or enforce the provisions of this Section 23.17, MLB PDL shall be entitled and have the right to waive or enforce such other provisions that prohibit action without first obtaining PDL Approval directly against any party hereto (or their successors and permitted assigns) to the extent that any such other provision is for the explicit benefit of MLB PDL or any other MLB PDL Entity.

23.17.5 Neither MLB PDL nor any other MLB PDL Entity shall have any liability whatsoever to any Person for actions taken pursuant to this Section 23.17 (other than for fraudulent acts or willful misconduct with respect to this Section 23.17 by MLB PDL), and CITY hereby releases MLB PDL and each other MLB PDL Entity from any and all claims arising out of or in connection with any such actions. Nothing contained in this Agreement shall create any duty on behalf of MLB PDL or any other MLB PDL Entity to any other Person. [Signatures continue on following pages]
316
46700.12006\42370050.5
39 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly appointed representatives as of the date last written below.

CITY:

CITY OF ONTARIO, a California municipal
corporation and general law city
APPROVED AS TO FORM:

By:____________________________ By:___________________________ Ruben Duran Scott Ochoa
City Attorney City Manager
Dated: ____________________________
ATTEST:
____________________________
City Clerk
[Signatures continued on next page]
317
46700.12006\42370050.5
40 [Signatures to Venue Agreement continued from previous page] TEAM:

RANCHO BASEBALL, LLC, a Washington limited
liability company
By: _______________________________________
Name:

Its:

Dated: _________________________
318
46700.12006\42370050.5
Exhibit A-1

EXHIBIT A

SITE MAP
319
46700.12006\42370050.5
Exhibit B-1

EXHIBIT B

DEPICTION OF STADIUM PLAN
320
46700.12006\42370050.5
Exhibit C-1

EXHIBIT C

DEPICTION OF PREMISES (STADIUM)
321
46700.12006\42370050.5
Exhibit D-1

EXHIBIT D

CONFIRMATION OF LICENSE DATES
This Confirmation of License Dates is made by and between the CITY OF ONTARIO, a California municipal corporation and general law city, as CITY, and RANCHO BASEBALL, LLC, a Washington limited liability company, as TEAM, agree as follows:

1. CITY and TEAM entered into an Agreement dated ________________ in which CITY licensed to TEAM and TEAM licensed from CITY the Premises described in Article 2 of the Agreement (the “Premises”).

2. Pursuant to Section 3.1 of the Agreement, CITY and TEAM agreed to confirm the following dates in writing:
(a) License Commencement Date: _________________________________ (b) Agreement Effective Date: _______________________________________ (c) Expiration Date of Initial Term: _______________________________ (d) License Fee Commencement Date: __________________________________

3. Pursuant to Section 3.1 of the Agreement, TEAM has timely exercised its [first/second] option to extend the [Initial/First Extended] Term for five (5) years. CITY and TEAM agreed to confirm the following dates in writing:
(a) Commencement Date of First Extended Term: ______________________ (b) Expiration Date of First Extended Term: ___________________________ (c) Commencement Date of Second Extended Term: ____________________ (d) Expiration Date of Second Extended Term: ________________________

4. CITY and TEAM hereby confirm that the Agreement is in full force and effect and:

5. The provisions of this Confirmation of License Dates shall inure to the benefit of, or bind, as the case may require, the Parties and their respective successors, subject to the restrictions on assignment and subleasing contained in the Agreement. (Signature provisions on following page)
322
46700.12006\42370050.5
Exhibit D-2

CONFIRMATION OF LICENSE DATES