Operating Agreement This Agreement

OPERATING AGREEMENT

THIS AGREEMENT made as of this ______day of January, 2015 between the CITY OF AUBURN , Cayuga County, New York (the "City") and AUBURN COMMUNITY NON- PROFIT BASEBALL ASSOCIATION, INC ., a New York State not-for-profit cooperation ("ACB").

WHEREAS the City owns the Auburn Doubledays Baseball Team ("the Doubledays") and Falcon Park Baseball Stadium ("Falcon Park"); and

WHEREAS the City desires to retain ACB as its agent to manage and operate the Doubledays and Falcon Park and to sell merchandise in Falcon Park bearing the Auburn Doubleday's name or trademark; and

WHEREAS the City and ACB acknowledge that Falcon Park is a multi-use facility to be utilized for not only professional baseball, but for other activities appropriate for the structure/facility.

NOW, THEREFORE , in consideration of the terms and conditions herein set forth, the parties agree as follows:

1. Employment of ACB as the City's Agent: The City hereby employs ACB as its agent for the management and operation of Falcon Park and the Doubledays with the exclusive authority, subject to the limitations and conditions herein set forth, to direct, supervise and manage the operation of the Doubledays and Falcon Park, and to sell merchandise bearing the Doubledays' name or trademark (hereinafter, "Doubledays Merchandise"). All trademarks shall be registered in the name of the City and the City shall cooperate with ACB in filing all of the applications and other materials required to obtain trademarks or other intellectual property rights for Doubledays Merchandise to be sold by ACB. The parties acknowledge that the City will become owner of the assets on Attachment A upon the execution of this contract, the City shall allow ACB to use said assets in the presentation of games and events at Falcon Park.

2. Management of the Doubledays: ACB shall have full and exclusive responsibility for all operations of the Doubledays. ACB shall hire the general manager of the Doubledays and all employees, shall attend meetings of the New York-Pennsylvania Professional League, Inc. as the City's representative and, in general, shall do and perform all acts and things incident to the management and control of a baseball team: ACB shall adhere to all terms and conditions of the Player Development Contract with its Major League Baseball affiliates (currently the Washington Nationals) and shall abide by the constitution and by-laws of the New York- Pennsylvania Professional Baseball League, applicable rules and regulations of the National Association of Professional Baseball Leagues, and the Professional Baseball Agreement between the National League and American League of Professional Baseball Clubs and the National Association of Professional Baseball Leagues, as amended from time to time.

3. Management of Falcon Park:

(a) ACB shall have full and exclusive responsibility for the operation of Falcon Park, including but not limited to ticket sales, concessions, sales of Doubledays Merchandise, food service, promotions, and any special events at Falcon Park.

(b) ACB's responsibilities shall include the following:

(1) Custodial maintenance and cleaning of Falcon Park facilities including grounds surrounding the facility, including painting and maintenance of outfield fence signs.

(2) Any and all minor repairs to the playing field and structures at Falcon Park (minor repair being defined as a repair costing $1,000 or less).

(1) Maintenance of the playing field and structures at Falcon Park.

(2) Any and all major repairs to the playing field and structures at Falcon Park (major repairs being defined as repairs costing in excess of $1,000) and also replacement of outfield fence signs as needed.

(3) Refuse removal.

(4) Payment of any and all utilities.

(5) Major equipment purchases.

(d) ACB shall make no permanent physical changes to Falcon Park without the City's prior written approval.

(e) ACB may appoint agents or independent contractors to carry out its responsibilities hereunder.

(f) ACB shall notify the City Manager on or before February 15th of each calendar year of any expenditure known to ACB that may be the City's responsibility pursuant to section 3(c) of this Agreement.

(g) The City retains the right to use Falcon Park for activities deemed acceptable and appropriate by the City Manager, provided that said use will not conflict with activities previously scheduled by ACB.

4. Annual Budget: ACB shall prepare an annual budget estimate of revenues and expenses and, upon approval by ACB's Board of Directors, shall submit this budget to the City Manager on or before September 15th for the following fiscal year. This budget shall include

estimates of revenues and expenses related to (1) operation of Falcon Park (including revenue from sale of advertising); (2) management of the Doubledays; and (3) promotion and sale of Doubledays Merchandise. ACB's Board of Directors and its President shall report to the City Council as requested to review ACB's budget or corporate activities.

5. Budget Review

(i) The Treasurer of ACB shall prepare an annual budget estimate by September 15 th of each year and submit it to the City for review.

(ii) In the event budgeted operating expenses exceed estimated revenues, the City Council shall, in November prior to the budget year in question, review and approve ACB's budget estimate of revenues and expenses submitted to the City Manager, and shall appropriate funds to provide a subsidy equal to the differences between the estimate of revenues and the estimate of expenses. In such case ACB may appear before the City Council or other applicable committee to answer questions regarding the budget and ACB's performance of its duties and responsibilities pursuant to this Agreement.

(iii) ACB shall not incur operating expenses during a calendar year greater than the sum of the revenue estimate contained in its annual budget plus any subsidy appropriated by the City Council under the preceding Section 5.0l(ii) without approval of the City Council. In the event ACB's actual calendar year revenues are greater than actual expenses and startup costs for the following year (which excess is hereinafter referred to as "Surplus Revenues"), ACB shall remit the Surplus Revenues to the City in the following year in accordance with ACB's current budget. Any Surplus Funds not previously remitted to the City shall be paid by ACB to the City within sixty (60) days of the termination of this Agreement.

(iv) In any calendar year in which a subsidy to ACB is required under Section 5.0I(ii) hereof, the City Comptroller shall establish, prior to the commencement of the calendar year in consultation with ACB, a schedule of installment payments by the City to ACB for the next following calendar year. Said amounts shall be based upon projected estimates of ACB's cash needs for the calendar year.

6. Deposit of Revenues and Payment of Expenses: All monies collected by ACB from the operation of the Doubledays and Falcon Park, including revenues from ACB's sales of Doubledays Merchandise, shall be deposited in total not less often than once a week in accounts in the name of ACB. From such account ACB may pay or reimburse itself for obligations and expenditures necessarily and properly incurred for and on account of the City in connection with the management and operation of the Doubledays and Falcon Park. All ACB management employees handling monies collected by ACB shall be covered by fidelity bonds satisfactory to the City Comptroller.

7. Chattel Asset Inventory and Acquisition By The City:

(a) The parties have conducted an inventory of all chattels and items of personalty present at Falcon Park and necessary for the presentation of baseball games and other

events. The City hereby acquires title and ownership to all of the items listed on annexed Attachment A. The consideration for this acquisition and the ownership of these items titled in the name of the City shall be the agreed sum of $93,750. The parties agree that ACB presently owes the City a loan balance principle in the amount of $93,750. The aforesaid $93,750 consideration for the acquisition of said personalty and chattels shall be a credit of $93,750 against the said loan, bringing the present balance owed by ACB to the City the amount of $0.00 dollars, thereby satisfying the debt/loan in full.

(b) The following two groups of chattels are owned by ACB and shall remain owned by ACB.

i) Baseball uniforms (jerseys, pants, hats, belts and socks) for the team players purchased for about $10,000 when new.

ii) All souvenirs and such merchandise purchased for re-sale to the public, purchased by ACB for $9,979.36 new for the 2014 season.

(c) One of the assets acquired by the City hereunder is a certain tractor which was financed by ACB through M&T Bank. There remains indebtedness on the tractor loan of $8,843.88 presently. In consideration of the fact that the tractor is used exclusively to mow the infield, outfield and foul ball areas beyond the first and third bases and field lines, and is not used for any mowing or work anywhere else at Falcon Park or within the City (the rationale for which is that the parties do not wish for weeds, weed seeds or crabgrass trimmings to be co-mingled with the manicured baseball playing field grass at Falcon Park). Therefore, ACB agrees to continue making payments due to M&T Bank on the aforesaid tractor during the life of the loan.

(d) Also annexed hereto is Attachment B prepared by the parties for references sake to assist in the determination of the values of the assets acquired by the City.

8. Accounting: ACB shall maintain full books of account with correct entries of all receipts and expenditures with respect to the operation of Falcon Park and the Doubledays. Such books of account shall at all times be open to inspection by the City or any of its officers or duly authorized agents. ACB shall furnish quarterly to the City Manager a detailed statement of all receipts and disbursements on or before the 30th day following the close of each calendar quarter, for the preceding quarter. ACB shall submit to the City Comptroller by April 1 of each year an annual compilation which shall include cash flow statements and appropriate notes thereto, prepared by a public accounting firm in accordance with generally accepted accounting principles. At the request of the City Manager, ACB shall submit to the City Comptroller by May 1 following the close of ACB's fiscal year or at such times is mutually agreed to, at the City's expense, annual audited financial statements prepared by a firm of certified public accountants in accordance with generally accepted accounting principles.

9. Term: The term of this Agreement shall be for a period of three years, commencing as of January 1, 2014 through December 31, 2016.

10. Termination: This Agreement may be terminated by the City without penalty or cause at any time, upon ninety (90) days' written notice to ACB. In the event of termination, the City shall assume all obligations of ACB relating to the Doubledays and Falcon Park and defend and indemnify ACB and its officers and directors against any and all claims and liabilities relating to such obligations.

11. Insurance: The City shall maintain fire and casualty insurance for Falcon Park. ACB shall maintain liability insurance including liquor liability protecting the City against liability arising out of the operations of Falcon Park's Doubledays or the activities of ACB in such amounts as shall be agreed upon by the parties. The City may elect to cover such liability through insurance' policies covered by the City.

12. Marketing of Doubledays Merchandise: ACB may engage in advertising, promotion and other marketing activities, both within Falcon Park and outside Falcon Park to develop public support for the Doubledays and to promote sales of the Doubledays Merchandise.

13. Non-Assignability: This Agreement is not assignable by ACB.

14. Entire Agreement: This Agreement supersedes all agreements previously made between the parties relating to this subject matter. There are no other understandings or agreements between the City and ACB.

15. Notices: All notices under this Agreement shall be in writing and delivered personally or mailed by certified mail, postage prepaid, addresses to the parties at their last known addresses.

16. Non-Waiver: No delay or failure by either party to exercise any right under this Agreement, and no partial or single exercise of that right, shall constitute a waiver of that or any other right, unless otherwise expressly provided herein.

17. Headings: Headings in the Agreement are for convenience only and shall not be used to interpret or construe its provision.

18. Governing Law: This Agreement shall be construed in accordance with and governed by the laws of the State of New York

19. Counterparts: This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument

20. Binding Effect: The provisions of this Agreement shall be binding upon and insure to the benefit of the City and ACB and their respective legal representatives, successors, and assigns.

21. City Council Approval: This Agreement is effective for three (3) years from January 1, 2014 through December 31, 2016 pursuant to Council Resolution # ____ of 2015

annexed.

IN WITNESS WHEREOF , the parties hereto have duly executed this Agreement as of the day and year first above written.

CITY OF AUBURN

By: ______Michael D. Quill Title: Mayor

AUBURN COMMUNITY NON-PROFIT BASEBALL ASSOCIATION, INC. (ACB)

By: ______Douglas A. Selby Title: President

STATE OF NEW YORK ) COUNTY OF CAYUGA ) ) ss.:

On this _____day of January, 2015, before me, the undersigned, a Notary Public in and for said State, personally appeared Michael D. Quill, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same -in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

Notary Public

STATE OF NEW YORK ) COUNTY OF CAYUGA ) ) ss.:

On this day ____of January, 2015, before me, the undersigned, a Notary Public in and for said Stare, personally appeared Douglas A. Selby, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

Notary Public

ATTACHMENT A

Baseball Operational Items

Coaches office desks, tables, chairs Lockers and shelving units, tables and chairs Training room equipment – work tables, ice tub, coolers Towels Ice machines

Front Office Items

6 computers/laptops TVs 3 Wireless ticket scanners – approximately $3,000 ($1,000 each) 2 Ticket printers – approximately $2,500 ($1,250 each) 2 Safes Desks, tables and chairs Filing cabinets 4 Office phones

Stadium Operational Items

Laundry Equipment - $19,566.32 ($10,409.00 in 2014; $9,157.32 in 2013) Cotton Candy Machine - $837 Tractor (M&T Bank) - $15,748.04 paid to date ($8,843.88 principal remaining) Kitchen Stainless Steel Tables - $3,000 40’x50’ Yellow and Green Tent - $6,000 Picnic Tables - $2,079.00 Sound System - $4,516.72 Water Coolers - $550 20 x 40 Blue and White Tent 2 Bounce Houses Storage Shed Merchandise Store Scoreboard - $47,600 paid in 2006 Advertising signs Table & chairs Garbage cans, tip carts Box seats Radio Broadcast equipment Mascot costume Hoses Power Washer

ATTACHMENT A (Continued)

Concession Stand Items

2 Grills Propane tanks 2 Fryers Convection Oven Walk-in-Cooler Kegerator Warming box 2 Ice machines Shelving Pots, Pans, Utensils, etc. Paper & dry goods inventory – approximately $1,000 Vending trays & rolling ice chests 6 cash registers

ATTACHMENT B

Attachment B is a supplement to Attachment A, itemizing items conveyed and/or now owned by the City of Auburn with the agreed value of some items included.

1. Stadium Operational Chattels

2. Concession Chattels

ATTACHMENT B (Continued)

3. Baseball Operational Chattels

Coaches office desks, tables, chairs Lockers and shelving units, tables and chairs Training room equipment – work tables, ice tub, coolers Towels Ice machines

4. Front Office Chattels