FACILITY LICENSE AGREEMENT
This FACILITY LICENSE AGREEMENT (the “Agreement”) is made this 9th day of May, 2005 between the City of Portland (the “City”), and Champ Car World Series Portland LLC, a Delaware limited liability company (“Champ Car”).
WHEREAS:
A. The City is the owner and operator of an automobile race track in Portland, Oregon, commonly known as the Portland International Raceway (referred to herein as “PIR”);
B. Champ Car is an organizer and promoter of international open-wheel auto races under the brand Champ Car World Series (the “Series”); and
C. The City desires to grant to Champ Car certain rights to use PIR, and Champ Car desires to use PIR, on the terms and conditions set forth herein.
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS & INTERPRETATION
A. “Applicable Taxes” means with respect to any revenues, all applicable taxes, assessments or fees required by law to be collected in connection with such revenues, excluding any income taxes.
B. “Champ Car Standards” means the rules, regulations, standards, guidelines and manuals governing the operation of The Champ Car World Series and its teams, as adopted and amended by Champ Car World Series LLC from time to time.
C. “Initial Term” shall mean from the date first written above and ending on December 31, 2007.
D. “Race Specific Sponsorship” means any sponsorship which is sold by Champ Car, or its designee, specifically for the Races covered herein.
E. In the event of a dispute related to any of the terms or conditions not specifically addressed herein, the parties agree that history and custom between the parties shall form the basis of a resolution.
F. References to “include” and “including” are to be construed without limitation.
G. Unless the context otherwise requires, words importing the singular include the plural and vice versa, words importing the masculine gender include the feminine and neuter and vice-versa.
H. Headings are for convenience only and shall not affect the interpretation of this Agreement.
2. LICENSE
A. The City hereby grants to Champ Car the exclusive license and privilege (the "License") to use PIR and related pit, paddock and parking areas (collectively, PIR and such related areas are referred to as the “PIR Related Areas”) for an annual Series race and other associated, related and ancillary events, including practice, qualifying, support races, and other on-track events (collectively, the “Race”), which shall be held from 8am on Wednesday through noon on Monday during the Rose Festival in the third or fourth week of June, during the Initial Term (the “Licensed Times”). Further, the City acknowledges that certain set-up and tear down activities, including pit row suite construction, will take place outside of the Licensed Times, but will have minimal impact on track usage; the City agrees that such activities may take place during the period beginning on the second Monday prior to the Licensed Times and concluding on the Wednesday following the Licensed Times.
B. In the event the Race cannot be held on the scheduled date due to inclement weather, Champ Car and the City agree that the Race, if so determined by Champ Car, shall be held on the next raceable day or other such time as mutually determined by the City and Champ Car, at no further cost to Champ Car.
C. The City agrees that no other major open wheel racing series shall be permitted to utilize PIR for the period beginning sixty (60) days prior to any Race and ending one hundred (100) days following any Race, without the prior written approval of Champ Car.
3. USE
A. During all Licensed Times, Champ Car shall use the PIR Related Areas in accordance with all applicable laws, ordinances and regulations.
B. The City hereby covenants that it has the contractual authority to enter this Agreement, notwithstanding the objection of any individual or entity, and that all necessary governmental approvals have been obtained.
C. This Agreement is intended and shall be construed as a grant of a license by the City to Champ Car and shall not operate to vest in Champ Car any ownership interest in PIR or the property of the City, whether real or personal, tangible or intangible.
D. Champ Car’s use and possession of the PIR Related Areas shall be subject to the common use and occupancy thereof by employees, agents and contractors of the City for the purpose of enabling the City to perform the City Services.
E. The City agrees to comply with the Champ Car Standards regarding medical and safety in effect as of the date of this Agreement.
F. Champ Car shall be responsible for the cleanup of the PIR Related Areas, as well as any damaged thereto, except for normal wear and tear.
4. CITY SERVICES
A. During the Licensed Times, the City, at its sole cost and expense (except as otherwise expressly provided herein), shall provide the following equipment and services to Champ Car ("City Services"):
The City shall provide the PIR Related Areas in a condition and manner as they are customarily provided to lessees. This shall include, but not be limited to, ensuring that: (i) prior to and during the Licensed Times all permanent facilities are clean and in good repair; (ii) permanent PIR staff are present (iii) garbage dump fees are paid; (iii) ticket selling staff, regular consumables, and track landline communications are provided; and (iv) the existing public address system is in good and working order, pursuant to past practices;
ii) The City shall use its best efforts to make the capital investment necessary to address the three (3) capital needs outlined in Chris Kneifel’s June 5, 2003 letter: paving the gravel pit and reconfiguring turn 2; pit-in (driver’s right) concrete block and fencing; and pit-out (driver’s right) concrete block and fencing, as well as other maintenance reasonably required by Champ Car; and
iii) Operation of all PIR food and beverage concessions;
B. The City shall retain, manage, supervise, and be responsible for, all personnel needed to perform the City Services. Standards of quality and minimum levels of all the City Services, including staffing, shall be subject to Champ Car Standards and any applicable laws or regulations.
5. LICENSE FEE
A. In consideration for the grant of the License to use the PIR Related Areas as provided herein, Champ Car shall pay to the City the amounts set forth below on January 1 of that current year’s Race:
Track Capital Pass
Year Rental Improvements Through Total
2005 $0 $0 $30,000 $30,000
2006 $50,000 $0 $60,000 $110,000
2007 $80,000 $0 $60,000 $140,000
B. In addition, the City shall be entitled to twenty percent (20%) and Champ Car shall be entitled to eighty percent (80%) of the gross revenue received by Champ Car from the sale of Race Specific Sponsorships and hospitality services which are in excess of the yearly Net Revenue Base for such sponsorships and hospitality services shown below:
Year Net Revenue Base
2005 $1,500,000
2006 $1,800,000
2007 $2,000,000
Distributions pursuant to this paragraph 5.B. shall be made within thirty (30) days of the Race in each year of the Agreement.
In the event that net revenues are less than the Net Revenue Base amounts listed above, Champ Car or the City shall have the option to terminate the Agreement without breach or incurring any further liability, so long as notice is given to the other party on or before ninety (90) days following the Race associated with such shortfall.
6. OTHER RIGHTS
A. Champ Car shall have the exclusive right to sell any and all tickets (whether general admission, grandstand, pit, paddock or otherwise), sponsorships, sales and marketing inventory, licensed merchandise and hospitality services for the Race, on such terms as Champ Car shall determine in its sole discretion, and Champ Car shall retain one hundred percent (100%) of the revenues from such sales. Should a conflict arise between a Race sponsor and a sponsor of PIR, the parties shall work in good faith to remedy such conflict. All costs associated with producing, erecting, maintaining and removing signage sold by Champ Car shall be borne by Champ Car, or its designee.
B. The City shall have the exclusive right to sell all food, beverages, candy, and other foodstuffs at the Race and retain one hundred percent (100%) of the revenues therefrom, except as otherwise provided herein and Champ Car, or the Series race teams, shall be granted the right to provide food and beverage at each team’s individual hospitality area (“Food and Beverage Concessions”). The City shall make best efforts to utilize Champ Car sponsors and suppliers for Food and Beverage Concessions.
C. Notwithstanding anything in this Agreement to the contrary, Champ Car shall be entitled to designate the caterer of its choosing for any and all hospitality services at the 2005 Race and there shall be no corkage or license fee for such rights. However, in consideration of these rights Champ Car shall pay the City, $15,000 within thirty (30) days of execution and shall include Portland Parks & Recreation in marketing materials generated for the 2005 Race which are equivalent in retail value to $30,000. The aforementioned $15,000 payment shall be for the exclusive benefit of the North Portland Neighborhood fund for noise mitigation. The parties shall renegotiate the catering rights for the 2006 and 2007 Races within ninety (90) days of the conclusion of the 2005 Race.
D. Notwithstanding anything in this Agreement to the contrary, Champ Car shall be entitled to designate a beer sponsor for the Race and such sponsor shall be entitled to be the featured beer product for the Race. For clarity, such sponsorships shall be deemed to be Race Specific Sponsorships.
E. Champ Car shall have unilateral control over all parking for the event, including operation of the two (2) Broadacre lots, as well as VIP Parking at the Chalet Village and Champions Club. Champ Car shall be entitled to retain one hundred (100%) of the revenue therefrom. Further, Champ Car shall provide the City a mutually agree upon number and location of parking spaces for necessary track workers.
7. MEDIA RIGHTS
A. Champ Car shall have the exclusive right to contract out or to take or cause to be taken by others, make, broadcast, rebroadcast, use, reproduce, transmit, copyright, sell, license, create derivative works of or otherwise dispose of for any purpose whatsoever, television pictures, sound, film and tape, motion pictures, still photographs, depictions, illustrations, graphics, derivative works, electronic images and sound of each Race, by any and all means, uses and media, now known or hereafter developed.
B. Champ Car shall not digitally alter any permanent track signage for its television broadcast of the Race.
C. Nothing in this Agreement shall be deemed to grant the City any rights to use or exploit the intellectual property or other rights of Champ Car, the Series or its race teams.
8. INSURANCE
Champ Car shall, at its sole expense, procure and maintain during the Licensed Times commercial general liability insurance with contractual liability endorsements for the mutual benefit of Champ Car and the City and their respective contractors, successors and assigns, against all claims for personal injury, death or property damage in or about the PIR Related Areas resulting from Champ Car’s use of the PIR Related Areas in the amount of not less than $20 million combined single limit and bodily injury and property damage, including medical, accidental death and dismemberment, and indemnity. All such insurance shall be primary. In addition, Champ Car shall procure and maintain all necessary participant accident insurance.
i) A certificate of insurance evidencing such coverage, and naming the City as an additional insured, shall be furnished to the City prior to each Race. Said policy of insurance and endorsements shall provide that the policy of insurance cannot be canceled without 30 days prior written notification to the City. Said insurance shall not restrict or limit the coverage of the foregoing additional insured.
ii) All such insurance shall be evidenced by valid and enforceable policies issued by A-Best rated insurers approved to do business in the state of Oregon.
9. INDEMNIFICATION
A. Champ Car shall indemnify and hold harmless the City and its officials, agents and employees (collectively, the “City Indemnitees”) from and against any and all damages, claims, losses, demands, costs, expenses (including attorneys’ fees and costs), obligations, liabilities, actions and causes of action which any one or more of them may suffer or incur arising directly or indirectly from (i) any breach of this Agreement by Champ Car, or (ii) Champ Car’s gross negligence or willful misconduct occurring in or about the PIR Related Areas (an "Indemnified City Claim").
B. Champ Car further agrees that in the case of any such Indemnified City Claim against any one or more of the City Indemnitees, Champ Car shall defend the City Indemnitees at Champ Car’s expense by counsel reasonably satisfactory to the City Indemnitees. In the event Champ Car does not provide a defense against any and all such Indemnified City Claims, then Champ Car shall, in addition to the above, pay the City the attorneys’ fees, legal expenses and costs incurred by the City Indemnitees in providing such defense and Champ Car agrees to cooperate with the City in such defense, including, but not limited to, the providing of affidavits and testimony upon request of the City Indemnitees.
C. To the extent permitted by Oregon law, and subject to the limitations of the Oregon Tort Claims Act, ORS 30.260 to 30.300, the City shall indemnify and hold harmless Champ Car and its parent, and their respective members, managers, owners, officers, agents, employees and other affiliates (collectively, the “Champ Car Indemnitees”), from and against any and all damages, claims, losses, demands, costs, expenses (including attorneys’ fees and costs), obligations, liabilities, actions and causes of action which any one or more of them may suffer or incur arising directly or indirectly from (i) any breach of this Agreement by the City, or (ii) the City’s gross negligence or willful misconduct occurring in or about the PIR Related Areas (an "Indemnified Champ Car Claim").
D. The City further agrees that in the case of any such Indemnified Champ Car Claim against any one or more of the Champ Car Indemnitees, the City shall defend the Champ Car Indemnitees at the City’s expense by counsel reasonably satisfactory to the Champ Car Indemnitees. In the event the City does not provide a defense against any and all such Indemnified Champ Car Claims, then the City shall, in addition to the above, pay Champ Car the attorneys’ fees, legal expenses and costs incurred by the Champ Car Indemnitees in providing such defense and the City agrees to cooperate with Champ Car in such defense, including, but not limited to, the providing of affidavits and testimony upon request of the Champ Car Indemnitees.
10. DEFAULT
A. The occurrence of any one or more of the following events shall constitute a default and breach of this Agreement:
If either party fails to make any payment required to be made by it under this Agreement;
If either party fails to promptly and fully perform any other covenant, condition or agreement contained in this Agreement and such failure continues for 24 hours after receipt of written notice thereof; or
iii) If either party makes a general assignment for the benefit of creditors, provides for an adjustment with its creditors, files a voluntary petition for relief under the bankruptcy code, or has an involuntary bankruptcy petition filed against such party that is not dismissed within fourteen (14) calendar days.
B. In the event of a default hereunder, then in addition to any other rights or remedies the non-defaulting party may have under any law, subject to the notice and cure provisions of Section A. above, the non-defaulting party shall have the right to terminate this Agreement upon fourteen (14) calendar days notice to the defaulting party, which notice period is in addition to and cumulative with any notice and cure periods set forth in Section A. above.
C. In addition to and not in limitation of any of Champ Car’s other rights and remedies, if the City, its agents or other parties with whom the City has contracted are not performing any services required to be performed by the City hereunder and the failure to perform such services is materially interfering with the proper presentation of the Races, then without waiving any default by the City, Champ Car may, but shall not be obligated to, take any actions reasonably necessary to restore the performance of such services to a level consistent with the proper presentation of the Races, and the City shall reimburse Champ Car for the reasonable cost of such actions.
11. CANCELLATION
A. "Force Majeure" shall mean any event or circumstances (whether arising from natural causes, human or governmental agency or otherwise) beyond the control of the parties including by way of illustration, but not by way of limitation, strikes, lock-outs or other labor disputes, civil strife, war, flood, fire, or acts of God that prevent either party hereto from performing this Agreement, through no fault of such party. If an event of Force Majeure should occur, then the obligations hereunder will be suspended until the event of Force Majeure abates and a party's non-performance during such period shall not be deemed a breach of this Agreement. In the event a Race is delayed by Force Majeure, the parties shall strive in good faith to reschedule the Race on the next raceable date. However, if the Race is permanently cancelled by Force Majeure and the parties are unable to reschedule such Race on a mutually agreeable date, the parties shall be relieved of their obligations hereunder as to such Race and Champ Car shall be entitled to a refund of all payments made to the City for such Race affected by Force Majeure.
B. In the event that Champ Car cancels a Race for any reason other than Force Majeure, the City shall retain all payments made by Champ Car to that date and Champ Car shall not be entitled to any refund, and thereafter, neither party shall have any further liability to the other with respect to this Agreement.
12. MISCELLANEOUS
A. Audit. The parties agree to keep during the term of this Agreement and for up to three (3) years after expiration or termination of this Agreement, accurate books and records at their principal place of business covering all transactions relating to hospitality services and Race Specific Sponsorships as identified herein. Each party and their authorized representative shall have the right, at the auditing parties expense, upon fifteen (15) days written notice, and during normal business hours, to audit the other party’s books of accounts and records and other documents and material with respect to hospitality services and Race Specific Sponsorships sold which relate to this Agreement. In the event that such review reveals an underpayment, then such underpaying party shall immediately remit payment in the amount of the under payment. If such discrepancies exceeds ten (10%) percent, the underpaying party agrees to pay the other interest calculated at the lower rate of twelve (12%) per annum or the maximum rate permitted by law, calculated from the date such payments were actually due until the date when such payment is made.
B. Waiver. The waiver by either party hereto of any breach of any term, covenant or condition of this Agreement shall not be deemed a waiver of such term, covenant or condition or of any subsequent breach of the same or any other term, covenant or condition.
C. Cumulative Remedies. Reference in this Agreement to any particular remedy shall not preclude either party from any other remedy at law or in equity.
D. Amendment. No alteration, amendment or modification hereof shall be valid, unless contained in a written instrument executed by the parties hereto.
E. Entire Agreement. This Agreement contains the entire agreement between the parties hereto, and there are no promises, agreements, conditions, undertakings or warranties or representations, oral or written, express or implied, between them other than as herein set forth or as specifically referred to herein. This Agreement is intended to be an integration of all prior or contemporaneous promises or agreements, conditions or undertakings between the parties hereto.
F. Notices. All notices, demands, consents, approvals, statements, requests and invoices to be given under this Agreement shall be in writing, and shall be deemed effective (i) upon receipt, if hand delivered; (ii) upon transmittal, if sent by telecopy; (iii) upon the first business day after mailing, if sent by overnight courier service; and (iv) if sent by the United States mail, postage prepaid, certified mail, return receipt requested, upon delivery or the date of refusal. All notices shall be addressed as follows:
For Champ Car: For City:
Champ Car World Series Portland LLC Zari Santner
5350 West Lakeview Parkway South Drive Director of Parks
Indianapolis, Indiana 46268 1120 SW Fifth Ave.
Attention: Richard Eidswick, Manager Room 1302
Facsimile: 317-715-4103 Portland OR 97204
Copy to: Copy to:
Matthew Breeden, Legal Counsel Harry Auerbach
Facsimile: 317-715-4101 Chief Deputy City Attorney
Facsimile: 503-823-3089
Either party may from time to time by written notice given to the other pursuant to the terms of this section, change the address to which notices shall be sent.
G. Governing Law. The validity, interpretation, construction, or enforcement of this Agreement shall be governed and construed by the laws of the State of Oregon, without regard to Oregon's choice of law provisions. Any litigation commenced by a party to this Agreement as the result of any alleged breach of this Agreement shall be commenced in the circuit or superior court for the County of Multnomah, State of Oregon, or in the U.S. District Court for the District of Oregon, and the parties hereby consent to such venue and personal jurisdiction, and hereby waive the right to challenge venue or personal jurisdiction of the above referenced courts over each party. The prevailing party in any form of legal action to enforce or interpret any of the terms or conditions of this Agreement shall be entitled to recover its reasonable attorney fees and any other court or litigation costs associated with such legal action.
H. Successors Bound. The covenants, terms, provisions and conditions of this Agreement shall be binding upon and inure to the benefit of the City and Champ Car and their respective successors and, to the extent permitted herein, assigns.
I. Execution of Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument.
J. Confidentiality. At all times, the terms and conditions of this Agreement are confidential to the City, Champ Car, their parent companies and their respective subsidiaries, and shall not be disclosed to any other entity or individual without the other party's prior written consent or as required by applicable Public Records Laws. However, the parties shall defend to the fullest extent allowable by law any request for documents, or other information, related to this Agreement which is requested pursuant to applicable Public Records Laws. Notwithstanding the foregoing, disclosure may be made if necessary to enforce a party's rights under this Agreement, or if required by a court of competent jurisdiction or by any securities or other law or regulation or by a governmental agency, in which case any and all documents, information, or materials disclosed shall be marked "confidential" and such party shall seek confidential treatment of such information.
K. Assignment. Neither party may assign this Agreement or its rights hereunder. Any such assignment shall be deemed void, if made without the consent of the other party
L. Severability. If any term or provision of this Agreement or the application thereof to any party or circumstance shall, to any extent, be invalid or unenforceable, the remainder of the term or provision of this Agreement or the application of same to parties or circumstances other than those to which it is held invalid or unenforceable shall not be affected thereby and each remaining article, section, subsection, term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
M. Further Assurances. The City and Champ Car shall execute, acknowledge and deliver, without additional consideration, such further assurances, instruments and documents, and shall take such further actions, as the City or Champ Car shall reasonably request of the other in order to fulfill the intent of this Agreement and the transactions contemplated hereby.
N. Relationship. The City is not a partner, joint venturer, principal or agent with Champ Car, and nothing in this Agreement shall be construed so as to create any of those relationships or to impose any liability as such on either of them, or to grant any party the right to bind the other without the other’s prior written consent, except as expressly set forth in this Agreement.
IN WITNESS WHEREOF, the parties have entered into this Agreement by their duly authorized representatives as of the day and year first above written.
CITY OF PORTLAND
By: ______________________________________
Its: ______________________________________
CHAMP CAR WORLD SERIES PORTLAND LLC
By: ______________________________________
Its: ______________________________________
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