WE BARRETT SPORTS GROUP, LLC April 23, 2015 Lakshmi Kommi Director, Debt Management City of San Diego 202 Street, 7th Floor, San Diego, CA 92101 Dear Ms. Kommi: Barrett Sports Group, LLC (BSG) is pleased to submit this engagement letter to provide consulting services to the City of San Diego (City) and the County of San Diego (County) (collectively, the Governments). It is our understanding that you are interested in retaining an independent/objective consultant with sports industry experience in order to make informed decisions regarding the potential development of a new stadium for the NFL San Diego Chargers (Chargers). It is understood that BSG will make commercially reasonable efforts to provide initial validation/feedback by May 8, 2015 and will provide a presentation style report by mid to late June 2015. We will communicate any significant issues or observations throughout the course of our engagement. analysis may not be used, in whole or in part, in any financing or marketing document associated with the proposed project. The purpose of this engagement letter is to outline a potential scope of services and set forth our contractual obligations to each other to allow the project to move forward in an ef?cient and expeditious manner. SCOPE OF SERVICES Presented below is a summary of the proposed scope of services to be provided by BSG based on our current understanding of the engagement. We would expect to work closely with you to refine our speci?c scope of services (if necessary) to best meet your needs in the most efficient and cost effective manner. Preliminary Due Diligence The goal of this phase is to establish a foundation for the project to move forward in an efficient manner. A. Conduct project kick?off meeting or conference call with the project team members Establish roles and expectations 1. 2. Determine preliminary project schedule Document No. a" Lord ii .1 3. Identify key stakeholders mad 4. Establish communication guidelines 5. Develop/refine scope of services, as appropriate 6. Establish the format and content of deliverable products 1219 Morningside Drive, Suite 101 Manhattan Beach, CA 90266 1 (310) 802-8775 (310) 802-8777 Lakshmi Kommi April 23, 2015 Page 2 B. Collect and review previous relevant work related to marketing, planning, economic, and ?nancial data (if any) C. Conduct interviews with key interested and related parties to obtain background information relevant to conducting analysis interview list adjusted based upon con?dentiality requirements Financial Model Review/Validation BSG will review and comment on the ?nancial analysis prepared by Citi. Speci?cally, BSG will focus on the following revenue streams: Luxury suite revenues Club seat revenues Naming rights revenues Advertising/sponsorship revenues #Wwi?t A. BSG will prepare a data request for the San Diego Chargers and the Governments to better understand historical revenues generated in the categories above (as appropriate). B. Consideration will be given to the following categories (among others) during our review: Market demographics Number of professional and collegiate sports teams Other entertainment alternatives Competitive facilities Tenant/event mix Cost of living Climate Other 9?89)??pr C. BSG will review the performance of other NFL teams/stadiums to assess the reasonableness of the financial model. Summary of Findings The goal of this portion of the engagement is to prepare a presentation style report to communicate ?ndings and conclusions. Speci?cally, BSG will provide feedback and supporting documentation in connection with our review of the relevant documents described above. BUSINESS ARRANGEMENTS We will complete the scope of services above for $50,000, plus reimbursement for all direct expenses incurred including travel and subsistence of our staff, word processing, copies, postage, telephone, publications, subcontractors (if any), econometric models and facsimile transmission. Reimbursable expenses shall not exceed $5,000 without the approval of the Governments. If at any time during our engagement it is determined by you that the engagement should not proceed, we shall halt our Lakshmi Kommi April 23, 2015 Page 3 activities and present a ?nal invoice for our services provided and expenses incurred to date based on our standard hourly rates. For consulting services such as these, our standard hourly rates are as follows: Personnel Rates Principal Daniel S. Barrett $450 Manager Joshua C. Cohen $250 Consultant Brett D. Rasmussen $150 Administrative $50 Additional consulting services not described above (if any) shall be billed at our standard hourly rates, plus reimbursement of expenses. We will invoice each of the City and County separately for one half of any billed amount except that the $10,000 retainer, discussed below, will be paid by the City and the amount of this retainer will be deducted from subsequent City invoices. Our statements will be rendered (progress payments) and payment in full will be due within thirty (30) days a?er receipt of each such statement. Amounts not paid within thirty (30) days accrue an interest charge of one percent per month. Non-Refundable Retainer It is our standard practice to require a non-refundable retainer of $10,000, due upon execution of this engagement letter. We greatly appreciate the opportunity to be of service and assistance to you in this very exciting project. If you have any questions or comments, please contact me at (310) 802-8775. Sincerely, Barrett Sports Group, LLC BY: (Daniel's. (BarrettQ/?p 7 [Wm Daniel S. Barrett TITLE: Principal DATE: April 23, 2015 CONFIRMED AND ACCEPTED: City of San Diego County of San Diego BY: 4-4 J4 TITLE: Lakshmi Kommi April 23, 2015 Page 4 DATE: APPROVED AS TO FORM JAN 1. GOLDSMITH, City Attorney BY: TITLE: DATE: Sig/157 DATE: County Counsel BY: TITLE: DATE: Lakshmi Kommi April 23, 2015 Page 3 activities and present a ?nal invoice for our services provided and expenses incurred to date based on our standard hourly rates. For consulting services such as these, our standard hourly rates are as follows: Personnel Rat-es Principal Daniel S. Barrett $450 Manager Joshua C. Cohen $250 Consultant Brett D. Rasmussen $150 Administrative - $50 Additional consulting services not described above (if any) shall be billed at our standard hourly rates, plus reimbursement of expenses. We will invoice each of the City and County separately for one half of any billed amount except that the $10,000 retainer, discussed below, will be paid by the City and the amount of this retainer will be deducted from subsequent City invoices. Our statements will be rendered (progress payments) and payment in full will be due Within thirty (30) days after receipt of each such statement. Amounts not paid within thirty (3 0) days accrue an interest charge of one percent per month. Non-Refundable Retainer It=is our standard practice to require a non-refundable retainer of $10,000, due upon eXecution of this engagement letter. We greatly appreciate the opportunity to be of service and assistance to you in this very exciting project. If you have any questions or Comments, please contact me at (310) 802-8775. Sincerely, Barrett Sports Group, LLC BY: 43mm. (Barrett Daniel S. Barrett TITLE: Principal DATE: April 23, 2015 CONFIRNIED AND ACCEPTED: C1ty of San Diego . County of San Diego BY: 2 8?44; I - . TITLE: i mlpaylt/ gala/My I 100/1 W?im?aj M?iW?i any - ?own/[7) an??ef Lakshmi Komrni April 23, 2015 Page 4 DATE: APPROVED AS TO FORM JAN 1. GOLDSMITH, City Attorney BY: TITLE: DATE: DATE: County BY: TITLE: 5/1/2015 DATE: ?u Lakshmi Kommi April 23, 2015 Page 5 Terms and Conditions Client: City of San Diego and County of San Diego (the Client) Barrett Sports Group, LLC will perform the services (the Services) set forth in the engagement letter (the Letter) of which these Terms and Conditions are apart, subject to: 1. Information and Data. BSG is entitled to assume, without independent veri?cation, the accuracy of all information and data that the Client provides to BSG. All information and data to be supplied will be complete and accurate to the best of the Client?s knowledge. BSG will use information and data furnished by others if BSG in good faith believes such information and data to be reliable; however, BSG shall not be responsible for, and BSG shall provide no assurance regarding, the accuracy of any such information or data. BSG shall be providing advice and recommendations to the Client; however, all decisions in connection with the implementation of such advice and recommendations shall be the Client?s responsibility. BSG shall have no responsibility for any decisions made by the Client relating to services. BSG shall have no responsibility for any assumptions provided by the Client, which assumptions shall be the Client?s responsibility. The reports may include estimates of annual operating results based upon courses of action that the Client expects to take prior to and during the period under analysis. The Client is responsible for representations about its plans and expectations, and for the disclosure of signi?cant information that might affect the estimated results. 2. Reports. Any reports prepared by BSG are valid only when presented in their entirety and only for the purpose stated therein. It is expressly understood that reports, recommendations, analyses and conclusions, if any, do not, in whole or in part, constitute a fairness or solvency opinion and BSG will not perform any review, audit or other attestation procedures with respect to ?nancial information as de?ned by the American Institute of Certi?ed Public Accountants and will not issue any opinion, report or other form of assurance with respect to any financial information. There will usually be differences between the estimated and actual results because events and circumstances frequently do not occur as expected, and those differences may be material. Should the Client have any reservations with regard to the estimates, we will discuss them with the Client before the report is issued. BSG ?5 reports may not be used, in whole or in part, in. any ?nancing or marketing document associated with the proposed project. 3. Confidentiality. It is understood. and agreed that all work product resulting from services shall remain the exclusive property of BSG. The Client may retain copies of ?nal reports and work product prepared by BSG and provided to Client. BSG will preserve the con?dential nature of information received from the Client in accordance with established policies and practices. The Client agrees not to reference name or any reports, analyses or other documents prepared by BSG, in whole or in part, in any document distributed to third parties without 3 prior written consent, except as required by law. The Client agrees that any reports, analyses or other documents prepared by BSG will be used only in compliance with these Terms and Conditions and applicable laws and regulations. 4. Property. To the extent that BSG utilizes any of its property (including, without limitation, proprietary databases, proprietary information, any hardware or software) in connection with its services, such property shall remain the property of BSG, and the Client shall not acquire any right or interest in such property. BSG shall have ownership (including, without limitation, copyright ownership) and all rights to use and disclose its ideas, concepts, know-how, methods, techniques, processes and skills, and adaptations thereof (including, without limitation, generalized features of the sequence, structure and Lakshmi Kommi April 23, 2015 Page 6 organization of any works of authorship) in conducting its business, and the Client shall not assert or cause to be asserted against BSG or its personnel any prohibition or restraint from so doing. 5. Limitation on Warranties. This is a professional services agreement. BSG represents and warrants that it shall provide the services in good faith to the best of its abilities. BSG disclaims all other representations and warranties, whether express, implied or otherwise, including, without limitation, warranties of merchantability and ?tness for a particular purpose. 6. Indemni?cation. The Client and its af?liates shall indemnify and hold harmless BSG, its members, principals, and employees from and against any and all causes of actions, losses, damages, claims, liabilities, costs, and expenses (including, without limitation, legal fees and expenses) which may be asserted, brought against, paid or incurred by any of them at any time in any way arising out of or relating to services, except to the extent it is ?nally judicially determined that such losses have resulted from the gross negligence or intentional misconduct of BSG. 7. Limitation on Damages. BSG, its members, principals, and employees shall not be liable to the Client for any losses, damages, claims, liabilities, costs, or expenses in any way arising out of or relating to this engagement for an aggregate amount in excess of the fees paid by the Client to BSG for its services. In no event shall BSG, its members, principals, or employees be liable for consequential, special, indirect, incidental, punitive, or exemplary loss, damage, cost, or expense (including, without limitation, lost pro?ts and opportunity costs). The provisions of paragraph 6 and this paragraph 7 shall apply regardless of the form of action, whether in contract, statute, tort (including, Without limitation, negligence), or otherwise, and shall survive the completion or termination of this engagement. 8. Subsequent Work. BSG, by reason of the performance of its services, is not required to furnish additional work or services, or to give testimony, or to be in attendance in court with reference to the assets, properties, or business interests in question. Should BSG agree to furnish additional work or services, or to give testimony, or to be in attendance in court with reference to the assets, properties, or business interests in question Client shall pay BSG based on our applicable hourly rates at the time, plus reimbursable expenses. BSG will have no responsibility to update any report, analysis, or other document relating to its services for any events or circumstances occurring subsequent to the date of such report, analysis, or other document. 9. Cooperation. The Client shall cooperate with BSG in connection with the performance by BSG of its services, including providing BSG with reasonable and timely access to the Client?s information, data, and personnel. 10. Non?Exclusivitv. Nothing in this report, including these Terms and Conditions, shall be construed as precluding or limiting in any way the right of BSG to provide consulting or other services of any kind or nature whatsoever to any person or entity as BSG in its sole discretion deems appropriate. 11. Force Maieure. BSG shall not be liable for any delays or failures to perform its services resulting from circumstances or causes beyond its reasonable control, including, without limitation, fire or other casualty, act of God, strike or labor dispute, war, or other violence, or any law, order, or requirement of any governmental agency or authority. Lakshmi Kommi April 23, 2015 Page 7 12. Independent Contractor. BSG is an independent contractor and compensation is not contingent in any way upon its conclusions or recommendations. BSG reserves the right to use subcontractors, as necessary. 13. Inconsistencies. In the event of any con?ict or inconsistency between the provisions set forth in the Letter and these Terms and Conditions, the provisions of these Terms and Conditions shall govern. 14. Complete Agreement. The Letter, including these Terms and Conditions, constitutes the entire agreement between the Client and BSG with respect to the subject matter thereof and hereof, and supersedes all other oral or written representations, understandings, and agreements between the Client and BSG relating to the subject matter thereof and hereof. The Letter, including these Terms and Conditions, cannot be changed, except by written instrument signed by both the Client and BSG. The Letter, including these Terms and Conditions, shall be binding on the Client and BSG, and the Client?s and permitted successors and assigns; however, neither the Client nor BSG may assign the Letter, including these Terms and Conditions, without the prior written consent of the other, except that the Client and BSG may assign the Letter, including these Terms and Conditions, to any successor to all or substantially all of the business or assets of such party. 15. Governing Law. The Letter, including these Terms and Conditions, shall be governed by and construed under the laws of the State of California.