AC34 Host and Venue Agreement (cont...)

November 10, 2010

10. Other Undertakings.

10.1 By no later than March 31, 2011, the City shall develop in consultation with the Authority and subject to the Authority’s approval, a comprehensive and efficient program (the “Advertising Plan”) to promote the Event (including decoration in the theme of the America’s Cup, flags, America’s Cup logo, billboards and other promotional marketing and merchandise) within San Francisco in the key advertising areas, including the City’s main squares, landmarks and significant public buildings and use its reasonable efforts to gain access to other access points, such as main roads and bridges leading to the Venue, particularly (i) along Highways 101 and 280 between the San Francisco International Airport and San Francisco, (ii) along Highways 580, 880 and 980 between the Oakland International Airport and San Francisco, (iii) on that portion of Highway 80 commonly referred to as the East Shore freeway; (iv) within a five kilometer radius of the America’s Cup Village, and (v) within a two kilometer radius of any on shore spectator area or other venue for live Event activities. The Advertising Plan shall conform in all material respects to requirements imposed by the Brand Manual.

(a) The City shall ensure that Event Sponsors and, when appropriate, other Commercial Affiliates are associated (at no cost to them) with the Advertising Plan in an appropriate manner (in particular by the inclusion of Event Sponsors’ logos and branding) to be determined by the Authority.

(b) The Advertising Plan shall include an Event promotion element, as appropriate and in consultation with and subject to the approval of the Authority, in the City’s generic promotional activities.

(c) The Advertising Plan shall require the Committee to install at the San Francisco International Airport, and will make best efforts to install at the Oakland International Airport, , and staff for a minimum of twelve hours per day during each stage of the Event, a hospitality desk to welcome visitors, Event Competitors, Officials, employees of the Authority, the Authority Affiliates and ACRM.

(d) The City shall carry out the Advertising Plan and use its best efforts to facilitate all advertising and promotion of the Event as well as the organization of any promotional events by the Authority and/or official Event Sponsors and any commercial activities by other Commercial Affiliates, in particular by ensuring that any necessary authorizations and permits are granted easily and speedily.

(e) Subject to existing laws and contractual obligations, the City will maximize publically controlled advertising space in San Francisco and at San Francisco International Airport available to the Authority to promote the Event. The City also will use its reasonable efforts to gain access to other outdoor advertising sites, including in or near Oakland International Airport and San Jose International Airport for use by the Authority to promote the Event.

10.2 The City shall provide free of charge berthage on the City’s waterfront for up to two special purpose America’s Cup ships to transport Competitors’ and Officials’ equipment between Pre-regattas and the Event, and the City will work with the Committee to raise funds to offset all of the stevedoring costs (excluding Authority personnel) associated with the loading and unloading of such ships.

10.3 The City and the Committee will work with the Authority to develop by March 31, 2011, and thereafter implement a mutually agreed upon anti-ambush program (the “Ambush Marketing Action Plan”), to the full extent permitted by law, to protect the Event from ambush marketing, to protect from the sale of counterfeit products and to prevent ambush activities both proximate to the Event and elsewhere in the City and the San Francisco Bay Area.

(a) The City acknowledges the importance of protecting the rights (including the Intellectual Property Rights) owned by the Authority and those which are licensed or otherwise granted to the Event Sponsors and other Commercial Affiliates by the Authority and, to the full extent permitted by law, shall take all appropriate measures to prevent ambush marketing activities and to preserve the rights of Event Sponsors and other Commercial Affiliates to be associated with the 34th America’s Cup

(b) The Ambush Marketing Action Plan shall in particular include: (i) the identification of the existing legal basis to prevent ambush marketing; (ii) if deemed necessary or desirable by the City and the Authority, passing further specific legislation in order to prevent any improper association with the Event; (iii) the prohibition during the Event and for period of one month before and one week thereafter of any unauthorized public display or advertising (other than those expressly authorized by the Authority) around or near Venue (as described in Section 10.1(v)) areas in the City (and for those Venue areas outside the geographical boundaries of the City, the City will endeavor to include in the applicable Governmental Authority MOU similar ambush marketing prohibitions as allowed by the Governmental Authority exercising authority over that Venue area), as well as along main access roads or in key advertising areas; (iv) the prohibition of use of Event Airspace during the Event, and in respect of appropriately large perimeters around the airspace of the Venue to prevent any unauthorized aircraft or any other floating or flying device (in particular hot air/helium/other gas balloons or blimps) from being used to advertise or carry out ambush marketing activities; (v) the prohibition of the use of the Racing Area during the Event for advertising or hospitality uses except as authorized by the Authority; (vi) the prohibition of street vendors (other than the ones expressly authorized by the Authority) near the Venue or along the main access roads and the linking of concessions granted elsewhere in the City to the express condition that no product unduly seeking to capitalize on the Event shall be sold or promoted whatsoever unless authorized by the Authority; (vii) ensuring that effective legal action is taken against the vendors of pirate or counterfeit products; and (viii) generally, the efficient and effective enforcement of any relevant applicable law to prevent ambush marketing activities.

10.4 The City will use all lawful means to restrict noise and debris generating activities on public works and large private construction projects (if any) in areas reasonably proximate to the Event during the America’s Cup World Series Pre-regattas and the Regatta to ensure the environment in and around the Event facilities will reflect well on San Francisco, provided that this obligation shall not extend to activities (if any) associated with the Bay Bridge Replacement or the Doyle Drive Replacement.

10.5 The City shall (a) assure that, for the duration of the Event no major public or private event which could be seen to compete with or have a negative impact on the successful organization, resourcing and staging of AC34, or its public and media exposure, shall take place in the City (it being understood, however, that regular or post-season play by the SF Giants and Fleet Week activities are excluded from this restriction, but such activities shall be coordinated so as not to unreasonably interfere with the Event), and (b) use reasonable efforts to coordinate with other Governmental Authorities regarding other significant events in the Bay Area to minimize negative impact on the Event.

10.6 In consultation with, and subject to the approval of the Authority, the City shall develop by no later than March 31, 2011, and thereafter implement a plan (the “Security Plan”) to address all reasonable safety and security measures (including emergency and rescue services) to protect the Event, Competitors, Officials, Event Sponsors, the media, guests, and spectator vessels, and the public taking into consideration the Authority's wish for an efficient, inviting and open Event. The Security Plan shall include specific measures to ensure a high level of security within and around all elements of the Venue and within and around sensitive locations such as airports, rail, BART, metro and bus stations and shall also include appropriate specific security measures for high profile visitors to the Event. Modifications to the Security Plan shall be subject to prior approval by the Authority, except that the City’s Police command staff and other senior law enforcement officers providing security for the Event may, without the Authority’s approval, make such emergency modifications to the Security Plan as they determine are necessary or appropriate under the circumstances. The Authority shall be responsible for security (other than emergency and rescue services) within areas requiring special authorization, ticketing or other non-public access. Except for areas restricted to authorized persons only (if any), the City shall be responsible for safety and security on and about City streets and sidewalks temporarily closed under the Event Plan and in all City public entry areas, and also shall supply emergency and rescue services throughout the Venue areas in the City

10.7 The City and the Committee will coordinate and facilitate the services for non-US personnel relocating to the San Francisco Bay area with assistance in locating suitable housing and schooling and procuring other government or social services. The City will assist partners of Event related personnel, to the extent legally possible, with applications for work permits, the qualification for which is a matter solely of federal law.

10.8 The Authority, in consultation with the City and the Committee, will develop a volunteer program to recruit persons from the Bay Area sailing community and other civic minded individuals able and willing to provide volunteer assistance in regard to the Event.

10.9 The City and the Committee will coordinate with the City's not for profit convention and visitors bureau and use best efforts to secure sufficient hotel room nights, consistent with the Event Plan, for AC 34 and all America’s Cup World Series pre-regattas, at best discounted room rates in San Francisco hotels. The allocation of hotels or other types of accommodation among Competitors, Event Sponsors and other is subject to the prior written approval of the Authority. To this end, the City shall use its best efforts to provide hotels within San Francisco to sign option agreements at best discounted room rates, which shall cover: (a) 800 rooms in 4 or 5 star hotels during the period from three weeks before until three weeks after any America’s Cup World Series Pre-regattas to be held in the City; (b) 2650 rooms in 4 or 5 star hotels during the period from two days before until two days after any America’s Cup World Series Pre-regattas to be held in the City; (c) 500 rooms in 4 or 5 star hotels during the period from eight weeks before the America’s Cup Challenger Series until three weeks after the last race of the Match; and (d) 5000 rooms in 4 or 5 star hotels during the period from two days before the America’s Cup Challenger Series until two days after the last race of the Match. The option agreements shall be exercised by the Authority no later than three months prior to the commencement of the respective regatta forming part of the Event.

10.10 The City shall in consultation with the Authority prepare a waste management plan for the Venue by no later than March 31, 2011, which shall be consistent with best environmental practices and approved by the Authority and the City’s Department of the Environment (the “Waste Management Plan”). The City shall ensure that the Waste Management Plan is implemented and carried out until six months after the Match. The City shall provide the necessary equipment for carrying out the Waste Management Plan.

11. Benefits to Host City

11.1 It is anticipated that the Event will generate broad media coverage (press, radio, television, new media) and, as a consequence thereof, that the City will benefit from such coverage and in particular television coverage either in the content of the programs, or in the use of the City’s name on screen or in comments or through coverage of the City as part of the Event. The Authority will use its best efforts to optimize the association of the City and/or its name with the Event.

11.2 The Authority has developed and will throughout the Event maintain in operation an official and exclusive internet site for AC34 (www.americascup.com) for the purposes of presenting all the relevant information in connection therewith (the “Official Website”). The Authority shall ensure that the Official Website prominently displays a link to the City’s own internet site, and the City shall ensure that a link to the Official Website is prominently displayed on the City’s own internet site. The City shall be entitled to include on the Official Website a page welcoming Event visitors to San Francisco and a separate page providing up-to-date data on street closures, alterations to public transportation routes or schedules and like information relating to the Event. The City website shall not in any way duplicate the Official Website, which alone shall contain specific and detailed information about the Event such as detailed programs, Competitors information, rankings, live scoring etc.

11.3 The Authority will prepare and publish or procure the preparation and publication of an official program relating to the Event (the “Event Program”). The City shall have the right to include one full color advertising page in the Event Program to promote the City. The Event Program will include a minimum of two pages of content featuring aspects related to the City, and the Bay Area. Such pages will be developed in cooperation with the City.

11.4 The City and the Committee jointly shall have the right to use at cost an exhibition/information stand/display in the America’s Cup Park to promote the City and the Bay Area. The City shall not operate commercial activities in such stand/display. The cost of the stand/display as well as any cost for its maintenance and operation shall be borne by the City or the Committee.

11.5 The City and the Committee jointly shall have the right to receive, at no additional charge (save catering costs), the following single day Event passes giving access to the Foredeck Club (or to other hospitality facilities during Pre-Regatta races in the City) and to spectators’ boats on race days:

Catering costs in connection with the above Event passes are to be borne by the City and/or the Committee. The above Event passes will be made upon request subject to adequate advance notice given to the Authority within the deadlines set by the Authority to this effect and availability for the concerned dates. In the event, the requests for certain dates are in excess of the available capacity, the Authority reserves the right to apportion the available capacity between the various potential users as it will, in its sole reasonable discretion, deem fit.

11.6 Subject to availability and upon reasonable advance request, the following additional Event passes/Event hospitality access can be purchased on preferential terms and conditions, by the City and/or the Committee: (i) single day accesses to the Foredeck Club without boat access; (ii) Hospitality Table within the Foredeck Club without boat access; (iii) right to book the Foredeck Club or part thereof for private functions (outside normal operation days or times). Costs in connection with the above are in any event to be borne by the City and/or the Committee.

11.7 Each of the City and the Committee shall receive one flag which will give access to one spectator boat to be arranged by and at the cost of the City and/or the Committee within the on-water spectator area. Such boat shall not exceed 45 meters in length and may carry on each side up to a maximum total surface of 6 square meters of branding (on each side). Such branding shall be solely branding of the City and the Committee and shall contain no commercial branding whatsoever. The City and the Committee shall only give access to the boat to its representatives or guests, and shall not use such in association with any commercial activities.

11.8 Apart from personnel accredited as part of the City’s operational functions, the City and the Committee each shall be entitled to ten general accreditations providing permanent access on race days to the Foredeck Club for the personal use of representatives of the City, subject to one week’s notice to the Authority. The City may allocate some of these accreditations to the Committee.

11.9 Event passes are for the exclusive use of the City’s representatives and guests and are not for resale. However, the City may allocate any of the Event passes available to the City for use by the Committee.

12. Postponement and Termination.

12.1 The Authority reserves the right to postpone any Pre-regatta(s) and the Regatta (or elements thereof) for a period of up to twelve months from the dates specified in the Event Plan. The Authority shall consult with the City in advance on any planned or anticipated postponements and the Event Plan shall be revised in accordance with Sections 3.3 and 3.4, provided further that the Parties shall mutually agree on the re-scheduling of their obligations as a result of the postponement.

12.2 Without prejudice to any other rights or remedies it may have, the Authority shall be entitled to terminate this Agreement if at any time before or during the Event:

(a) The United States is in a state of war, civil disorder, boycott, embargo decreed by the international community or in a situation officially recognized as one of belligerence (excluding, however, the current US military engagements in Iraq and Afghanistan) which in the Authority’s sole but good faith judgment are reasonably likely to have a material adverse affect on the organization or staging of the Event; or

(b) The City or the Bay Area is affected by fire, flood, earthquake or act of God, strikes, labor disputes or contagious diseases which are reasonably likely to materially, adversely impact upon the organization or staging of any part of the Event; or

(c) The Authority has reasonable grounds to believe that the safety of the Competitors, the Event Personnel or the public may be threatened or at risk; or

(d) The City or the Committee commits a Breach of any of its obligations under this Agreement.

12.3 Without prejudice to any other rights or remedies it may have, the City and the Committee each shall be entitled to terminate this Agreement if:

(a) The Authority shall become insolvent, or shall take the benefit of any present or future insolvency statute, or shall make a general assignment for the benefit of creditors, or file a voluntary petition in bankruptcy, or a petition or answer seeking an arrangement for its reorganization, or the readjustment of its indebtedness under the federal bankruptcy laws, or under any other law or statute of the United States or of any state thereof, or consent to the appointment of a receiver, trustee, or liquidator of any or substantially all of its property; or

(b) A petition under any part of the federal bankruptcy laws, or an action under any present or future insolvency law or statute, shall be filed against Authority and shall not be dismissed within thirty days after the filing thereof; or

(c) The Authority commits a Breach of any of its obligations under this Agreement. 13. Intellectual Property.

13.1 The City and the Committee acknowledge that the and all media rights and other intellectual property rights (the “Intellectual Property Rights”) related to the Event are the exclusive property of the Authority, and in the case of America’s Cup trademarks are the exclusive property of America’s Cup Properties, Inc. (“ACPI”).

13.2 The City and the Committee acknowledge that they shall not obtain any ownership of any media rights and other Intellectual Property Rights and confirm that, if any Intellectual Property Rights are held by the City or the Committee or any other entity under the control of the City or the Committee, the City or the Committee (as applicable) shall assign such rights or procure that they are assigned to the Authority upon the Authority’s request. The provisions of this clause shall not apply to any intellectual property rights belonging to the City or the Committee which are in existence prior to the date of this Agreement, which shall remain vested in the City, the Committee in accordance with the terms of those rights.

13.3 The Authority shall design and develop a logo or logos for the Event (the “Event Logo”). The Authority shall ensure that each Event Logo is registered as a trademark within the City. After February 15, 2011, the Authority shall grant to the City and the Committee the non-exclusive right to use each Event Logo as specified in the Brand Manual in the communication and promotion of the City, the State of California and the United States, provided that such promotion shall be generic and not in any way associated with commercial entities, products, services or any third party’s activities unless otherwise expressly approved in writing by the Authority, in its sole discretion, for each unique use.

14. Insurance.

14.1 Prior to the commencement of the Venue Leases, the Parties shall agree upon insurance coverage that each shall carry, and that other persons including Competitors shall be required to carry, throughout the Event. Insurance coverage shall include such insurance products or an equivalent product or mechanism as are appropriate for a major international sporting event, as agreed by the Parties.

14.2 The Venue Leases shall impose other reasonable and customary insurance requirements on the City and the Authority.

14.3 Each of the City, the Committee and the Authority hereby waives as to the other Parties and releases such other Parties and persons of and from, any and all claims for Losses to the extent covered under any insurance maintained by the party granting such waiver. Each of the City, the Committee and the Authority shall cause its respective insurers to waive rights of subrogation consistent with the foregoing waiver and release.

15. Indemnity.

15.1 The City and the Authority shall agree on their respective indemnity obligations in the Venue Leases. The Venue Leases will allocate liability for risks arising from the Event in an appropriate and commercially reasonable manner, generally assigning the indemnity obligations of each of the Parties for their respective Event related activities.

15.2 Prior to their entry into the Venue Leases, each Party shall defend, indemnify and hold harmless the other Parties (and their respective agents, employees and affiliates) to the extent of Losses attributable to the negligence or intentional acts of the indemnifying Party.

16. Representations and Warranties.

16.1 The City represents and warrants that: (i) it has full capacity and authority to enter into and perform under this Agreement; and (ii) this Agreement is executed by duly authorized representatives of the City.

16.2 The Committee represents and warrants that: (i) it has full capacity and authority to enter into and perform under this Agreement; and (ii) this Agreement is executed by duly authorized representatives of the Committee.

16.3 The Authority represents and warrants that: (i) it has full capacity and authority to enter into and perform under this Agreement on behalf of GGYC as trustee of the America’s Cup pursuant to the Deed of Gift; and (ii) this Agreement is executed by a duly authorized representative of the Authority.

17. Limitations on Liability.

17.1 Except as provided below, nothing in this Agreement shall limit the liability of either Party for: (i) any act or omission for which liability may not be limited by law; or (ii) death or personal injury caused by its negligence or that of its agents, employees or contractors; or (iii) fraud.

17.2 Subject to Section 18.1, no Party to this Agreement shall be liable to any other Party for any indirect or consequential loss or damage, loss of profit, loss of business opportunity or damage to goodwill.

17.3 The Authority and the City acknowledge and agree that the Committee is a newly formed not-for-profit corporation with no assets or staff, no current sources of income or commitments of contributions, and no current fundraising capacity, that the Committee accordingly does not currently have the ability to comply with all of its commitments herein, and that:

(a) The City acknowledges and agrees that it is relying exclusively on the Committee’s agreement to conduct its activities in accordance with the standard of conduct agreed to in this Agreement as the inducement by the Committee for the City to enter into this Agreement.

(b) The Authority acknowledges and agrees that it is relying exclusively on the Committee’s agreement to conduct its activities in accordance with the standard of conduct agreed to in this Agreement as the inducement by the Committee for the Authority to enter into this Agreement; and that, up to completion of environmental review under CEQA, the Authority’s right to terminate the Agreement in Section 2.2(e) is the sole remedy for failure by the Committee to meet its obligations under this Agreement.

(c) The Authority and the City acknowledge and agree that the Bond to be provided by the Committee in accordance with this Agreement constitutes the only asset to secure the performance by the Committee of its obligations under this Agreement, and that the recourse under this Agreement of the Authority against the Committee shall be limited to a claim against the Bond.

(d) The Authority and the City acknowledge and agree that they are not relying in any manner on any current or future commitment, duty, liability or obligation of, or any statements, representation, or actions of, any director, officer, employee, representative, donor, potential donor, volunteer, honorary member or agent of the Committee or any of their respective affiliates (collectively, the “Committee Persons”). The Authority and the City acknowledge and agree that no Committee Person shall be liable to the Authority, the City or any other person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Committee Person in his, her or its capacity as such, and that such Committee Person shall not be personally liable in any manner for (and the Authority and City agree not to sue any Committee Person for) any liabilities or obligations of the Committee, including, without limitation, any liabilities or obligations of the Committee under this Agreement, and the Authority and the City agree to look solely to the Committee pursuant to 17.3(b) with regard to any remedy under this Agreement.

17.4 In order to satisfy the City's Charter as to the City's financial liability under this Agreement, the City's total financial liability in the event of a default under this Agreement will not exceed the Bond amount. Notwithstanding any other provisions of this Agreement, the Authority's and the Committee's sole and exclusive financial remedy against the City for the City's failure to perform any and all of its obligations under this Agreement shall be limited to the amount of the Bond, but such limitation of the City's financial liability shall not apply to any recovery under the City's insurance policies nor prohibit the Authority from exercising its rights of termination.

17.5 The Authority's financial liability in the event of a default under this Agreement. will not exceed $32,000,000. Notwithstanding any other provisions of this Agreement, the City's and the Committee's sole and exclusive financial remedy against the Authority for the Authority's failure to perform any and all of its obligations under this Agreement shall be limited to $32,000,000, but such limitation of the Authority's financial liability shall not apply to any recovery under the Authority's insurance policies nor prohibit the City from exercising its rights of termination.

17.6 Notwithstanding the provisions of Sections 17.4 and 17.5, the foregoing limitations of liability will not apply to the Venue Leases, the DDA's, the Legacy Leases, the Transfer Agreement, or the proceeds of the performance bonds covering Infrastructure Work, once the City or the Authority has commenced the construction of such Infrastructure Work.

17.7 Authority and City agree that the Infrastructure Work shall be included in the applicable Venue Lease, which terms will include all rights and remedies under the law and in equity, including specific perfomance. The Venue Leases will acknowledge that the remedy of specific performance has been bargained for in exchange for the limitations of liability set forth in this Agreement. Revisit spec perf as to City

18. Governing Law, Mediation and Arbitration.

18.1 This Agreement and/or any issue in connection with its validity, execution, performance and interpretation shall be subject to the laws of the State of California.

18.2 The Parties hereby appoint JAMS or such other mediator the Parties mutually agree where the Parties are unable to reach consensus on any of the Plans, agreements or other matters which are to be negotiated and agreed upon by the Parties after the date of this Agreement. Any such mediation shall be non-binding, held in San Francisco, California (or such other place as may be agreed by all parties) and shall be initiated within five business days after a party serves notice on the other parties requesting mediation, which notice shall specify with reasonable particularity both the matter(s) of disagreement between or among the parties and the resolution of such disagreement proposed by the party initiating mediation. If a party fails to participate in any mediation requested by one or more other parties, the party or parties failing to participate in mediation shall not be entitled to recover its or their attorneys’ fees and costs in any arbitration concerning the issues the party seeking mediation asks to address in the mediation or any matters reasonably related thereto.

18.3 Any dispute or difference arising out of or in relation to this Agreement that cannot be amicably settled shall be finally adjudicated by arbitration under the auspices of, and in accordance with the rules of, the ICC International Court of Arbitration (“ICC”) as presently in force or hereafter modified. The place of arbitration shall be mutually agreed by the parties or, failing such agreement, determined by the ICC. The panel shall be composed of three arbitrators selected in accordance with the ICC rules.

18.4 The City irrevocably and unconditionally waives the application of any legal provision under which it may claim immunity from any lawsuit, arbitration or other legal action. Such waiver shall apply not only to the jurisdiction but also to the recognition and enforcement of any judgment, decision or arbitral award or any other possible legal proceedings.

18.5 Immunity (whether claimed by the City or by a party the performance of which the City has agreed to procure) shall in no event constitute a valid defense of the City under this Agreement, whether procedurally or substantively.

18.6 In consideration of the limitations of liability included in Section 17, the City and the Authority agree that specific performance will be an available remedy to enforce the respective obligations assumed by them under this Agreement.