AC34 Host and Venue Agreement (cont...)

November 10, 2010

AGREEMENT

1. Selection of Host City. 

1.1. The selection of the host city for AC34 will be made by GGYC, acting in its sole discretion, by December 31, 2010.  Unless written notice confirming that the City has been selected as the host city for the Event is delivered to the City and the SFACOC on or before December 31, 2010, this Agreement shall terminate and no party shall be obliged to perform further hereunder, except that City will indemnify, defend and hold harmless the Authority and the Authority Affiliates from any claims asserted by existing Port tenants against the Authority or the Authority Affiliates for economic loss or damage to the extent such claimed loss or damage arises from the City's entering into this Agreement or its submission of a bid to the Authority to host AC34. The indemnity obligation under this Section 1.1 shall survive the termination of this Agreement.

1.2. If the City is selected as the host city for AC34, the City shall secure all of the rights, services, approvals and legislative or regulatory entitlements or exemptions required to successfully host the Event by or from the United States of America, the State of California, the City and County of San Francisco (where exercising its police powers or regulatory authority, but not as to the City’s proprietary role as a party to this Agreement), and all lawfully constituted agencies, authorities, boards, commissions and other instrumentalities of the foregoing having jurisdiction with respect to the Event (individually, a “Governmental Authority” and collectively, the “Governmental Authorities”).  The Parties acknowledge that, where approvals and legislative or regulatory entitlements or exemptions lie within the exclusive jurisdiction or control of entities, public or private, other than the City, the City will exercise its best efforts to secure the full commitment of such concerned entity(ies) for the Event.  The City shall use best efforts to enter into, as expeditiously as possible, Memoranda of Understanding (“MOU”) with all relevant Governmental Authorities securing, on terms and conditions acceptable to the Authority and the relevant Governmental Authority, all such rights, services, approvals and legislative or regulatory entitlements or exemptions.  These include:

(a) Authorizations from the United States Coast Guard, the Federal Aviation Administration and other relevant Governmental Authorities for periods of exclusive control of the Event Waterspace and the Event Airspace as contemplated by Sections 4.1 and 4.2.

(b) Approvals from the United States Park Service, the GGNRA and other relevant Governmental Authorities for use of the on-shore spectator areas identified in Section 4.3 which are not under the City’s control.

(c) Authorizations from the Federal Communications Commission and other relevant Governmental Authorities for exclusive use of one hundred fifty UHF frequencies by the Authority, the Authority Affiliates, Competitors, Officials and media for radio, voice and telemetry communication, as well as high definition television and internet broadcasting.

(d) All necessary federal legislative or regulatory actions as are necessary to authorize foreign built and/or flagged racing, support and spectator vessels to lawfully undertake race related activities (including the transportation of spectators) for the Event. 

(e) Establishment and implementation of protocols and procedures to allow the temporary importation, without payment of any duties, taxes, fees or bonds, of goods and services related to the Event, including all vessels, equipment, personal effects for use during the Event by the Authority, ACRM, Competitors, the media, and any of their respective employees, contractors and agents, but to be re-exported within twelve months after the Event, save for goods and services consumed or otherwise disposed of, subject to the relevant importer complying with reasonable procedures and inspections.

(f) All necessary federal, state and local legislative or regulatory actions as are necessary for nonresident aliens involved in the Event (whether as employees or contractors of the Authority, the Authority Affiliate, Competitors, Officials or the media) and their dependents to be taxed on terms no less favorable than the income tax regime created for the 32nd America’s Cup in Valencia, Spain, subject to the Authority providing the "general commitments in connection with taxes" referenced in Section 19 of the Valencia Host City Agreement; or, if such tax treatment cannot be achieved, completion of all necessary federal, state and local legislative or regulatory actions as are necessary so that the period of time nonresident aliens involved in the Event and their dependents are present in the United States for AC 34 are excluded for purposes of the Internal Revenue Code “substantial presence” test for taxation of nonresident aliens.

(g) All necessary federal, state and local legislative or regulatory actions as are necessary for full recognition of foreign registration of vessels, and foreign licensing of vessel and vehicle operators, for nonresident aliens involved in the Event and their dependents.

(h) All necessary federal legislative or regulatory actions as are necessary to establish and implement protocols for simplifying the immigration process for nonresident aliens involved in the Event, and their spouses and dependents, to ensure such persons shall be entitled to enter the United States and lawfully remain in the United States, and to obtain necessary permits to work in the United States, until a reasonable time after the conclusion of the Event irrespective of their country of origin.

(i) All necessary federal, state and local legislative or regulatory actions as are necessary for the National Weather Service to provide real time data to Competitors and Officials free of charge, for the installation of land stations within 25 miles of the City, and for the installation of meteorological and oceanographic buoys in and near the Court Area.

1.3 To facilitate the City’s performance under Section 1.2, promptly following its selection as host city, the City shall form a task force (the “Intergovernmental Task Force”), consisting of representatives with decision-making authority from Governmental Authorities with expertise and/or regulatory responsibilities for all matters relevant to the Event and its success, and shall maintain such Intergovernmental Task Force in effect until thirty days after the Match or the earlier termination of this Agreement.  The Authority will, upon request, provide such information as may be reasonably required for the City to secure the rights, services, approvals and legislative or regulatory entitlements or exemptions required under Section 1.2

2. Review Under CEQA and Other Contingencies.

2.1 The parties acknowledge that the City cannot take discretionary actions related to the Event (including entering into the Venue Leases and the DDAs for the Legacy Leases and the Transfer Agreement) until the City has completed its environmental review of the Event as required by CEQA.  For those actions that may be authorized only after environmental review under CEQA, the City, as lead agency under CEQA, shall retain the authority, in the exercise of all such discretion as the City possesses as lead agency under CEQA, to: (i) require modifications to the Event, including agreements pertaining to the Event, as are deemed necessary to mitigate significant environmental impacts if said impacts are identified through the environmental review process; (ii) require other feasible alternatives to avoid such impacts providing the project objectives on balance are met; (iii) balance the benefits against unavoidable significant impacts prior to taking final action if such significant impacts cannot otherwise be avoided; or (iv) determine not to proceed with the Event based upon the information generated by the environmental review process.

(a) If selected as host city, the City as lead agency under CEQA will use its best efforts to complete the environmental review of the Event required under CEQA and, if such environmental review leads to a determination to proceed with the Event, to complete all actions necessary to obtain authorizations for the Event (including for the Infrastructure Work, as defined below) under both CEQA and applicable federal, state and local statutes, codes, ordinances and regulations by no later than twelve months after the Authority has provided the City with sufficient information to prepare the “project” description required for CEQA review.  Prior to their entry into this Agreement, the City identified in writing to the Authority all information not included in the Event Plan attached as Exhibit A to this Agreement (the “Event Plan”), and the Space Plan attached as Exhibit B (the “Space Plan”), the City needs to prepare the project description for the Event; and the Authority’s delivery thereof satisfies the Authority’s duty to provide information under the preceding sentence.

(b) To the maximum extent permitted by law, the City shall be responsible for all costs of environmental review of the Event under CEQA and shall pay (or reimburse the Authority for) all governmental fees and charges payable in connection with the work to be performed (including, for plan checks, permits, variances and inspections associated with such work, regardless of the Governmental Authority imposing such fees or charges) and all fees of consultants retained as part of the CEQA process for the Event.  The scope of environmental review under CEQA will take into consideration the possible need for substitution of Venues if the City is unable to deliver any of the Venues identified in the Space Plan.

(c) In case of a determination under clause (iv) of Section 2.1, this Agreement shall terminate without liability to the City or the Committee, and without need for further action by any party, except that the City shall give written notice confirming such termination to the Authority and the Committee within five days after such determination.

(d) In case of any other determination under Section 2.1 which would require material modification(s) of the Event, or to any agreement(s) of the City and the Authority contemplated by this Agreement which are subject to CEQA, the Authority may elect to terminate this Agreement without liability to the City or the Committee upon written notice to the City and the Committee, to be given within thirty days after the City notifies the Authority of its final, discretionary determination under CEQA.  For this purpose, modification(s) will be “material” where GGYC determines, in its sole but good faith judgment, that such modification(s) is or are likely to impair the organization or staging of AC34, or deprive the Authority of the benefits anticipated under this Agreement. 

2.2 If the City is selected as host city for AC34, this Agreement also is subject to the following contingencies which are to be satisfied prior to execution of the Venue Leases and the DDAs for the Legacy Leases and Transfer Agreement or such earlier date as set forth below:

(a) The Authority may terminate this Agreement if all the MOUs required under Section 1.2 are not provided to the Authority within 90 days, or, with respect to the federal agencies, 180 days, after the later of (i) the City’s receipt of notice that it has been selected as host city for AC34, or (ii) the City’s receipt of data beyond that included in the Event Plan and the Space Plan needed to complete an MOU with each relevant Governmental Authority (however, the City shall be deemed to have all such data except to the extent specified by written notice to the Authority delivered within ten days after receiving notice from a Governmental Authority of the need for such supplemental data from the Authority).

(b) The City or the Authority may terminate this Agreement without liability to the other Parties if they fail to reach agreement on the terms and conditions of the Venue Leases, the DDAs for the Legacy Leases and the Legacy Leases themselves, the People Plan, the Security Plan, the Advertising Plan, the Ambush Marketing Action Plan and the Waste Management Plan by the deadlines identified in this Agreement.

(c) The Authority may terminate this Agreement if the Authority determines that it is not economically feasible to hold the Event in the City within 180 days of the effective date of this Agreement but after the City and the Authority agree upon the Minimum Scope.

(d) The Authority or the Committee may terminate this Agreement if they are unable to agree on the Sponsorship Program by the deadline provided in Section 9.1.

(e) The Authority may terminate this Agreement if the Committee fails to meet any of the milestones for funding by Event Sponsors under the Sponsorship Program agreed to by the Committee and the Authority.

(f) The City may terminate this Agreement if the Authority does not provide satisfactory evidence of its financial ability to perform the Infrastructure Work under Sections 6.2(a) and 6.2(b) by the deadline provided under the applicable Venue Leases.

(g) The Authority may terminate this Agreement if the Authority determines, in the exercise of its good faith discretion, that the City and/or the Committee will be unable to timely and fully perform its or their respective obligations under this Agreement. 

3. Except as otherwise provided in Section 1.1, the Parties shall have no liability for any termination under this Section 2 and each Party will assume the risk of any costs or expenses incurred by them prior to the date of any termination under Section 2.