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Sam Fernandez, Legal Counsel for the Los Angeles Dodgers, stated that the motion <br />was to vote on the MOU "as is". He continued that the legislation that enabled this <br />transaction was not enacted until May of this year which gave the County access to the <br />$7,500,000 to be applied to the transaction. Unfortunately, there is an October 1' deadline <br />for the application for those funds. We have tried to put together a document including the <br />material terms of this transaction and how to proceed toward negotiations on the more <br />detailed agreements. There is no reference in the MOU to the Dodgers remaining in Vero <br />Beach because their current corporate desire and intent is for each of the remaining <br />agreements to come together in order for the transaction to work. Their intent is to turn Vero <br />Beach into a hub for their activities but they cannot commit to it because they are being <br />asked to commit to something which has yet to be developed. He noted that Page 4, Section <br />3(b) of the MOU states: "Dodgers fully responsible" and Page 3, Section 2(c) states "lessee <br />shall assume all obligations". He believed that both of those clearly state the intention of the <br />parties. There are only "x" number of dollars available and, once those are spent, there are <br />no more dollars available. There have been a lot of references to the 20 -year lease with 4 <br />5 -year options for $1 annually and maintenance obligations. The Dodgers must now <br />consider that they must have the same revenues and maintain them over the next 20 and <br />possibly 40 years to come out ahead. With reference to the penalty in the event the Dodgers <br />terminate the agreement, he clarified that when the bonds are issued, the associated costs are <br />paid from the bonds, so that when the bonds are defeased, that will make the County whole. <br />The MOU contemplates a significant counter incentive for the Dodgers because, if they <br />defease the bonds and move on, they would have to purchase the property. If the City <br />Attorney wants to add conditions which would materially affect the MOU, then we would <br />have to go back to more negotiations. The MOU reflects agreements which have taken <br />months to negotiate. The MOU clearly states that any expenditures that exceed the capital <br />reserve fund are obligations of the Dodgers. <br />JULY 249 2000 <br />-14- <br />BK 1 1 4 PG 320 <br />