Loading...
HomeMy WebLinkAbout11779RESOLUTION NO. 11779 A RESOLUTION APPROVING A FACILITY USE/RACETRACK RENTAL AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, ACTING BY AND THROUGH ITS HONOR FARM PROPERTIES ENTERPRISE, AND NEK ADVANCED SECURITIES GROUP, INC. RELATING TO PUEBLO MOTORSPORTS PARK AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that SECTION 1: The Facility Use /Racetrack Rental Agreement dated December 28, 2009, between City of Pueblo acting by and through its Honor Farm Properties Enterprise and NEK Advanced Securities Group, Inc. relating to a recreational motorsports facility on a portion of the Honor Farm Properties, a copy of which is attached hereto and having been approved as to form by the City Attorney, is hereby approved. Section 2: The President of the City Council is hereby authorized and directed to execute said Agreement for and on behalf of the City and the City Clerk is directed to attest same and affix the Seal of the City thereto. INTRODUCED: December 28, 2009 BY: Randy Thurston COUNCILPERSON APPR D' 40, �- PkEglDENTof City Council A77TSTED DY: CITY CLEIRK i Background Paper for Proposed RESOLUTION AGENDA ITEM # Q -1 DATE: December 28, 2009 DEPARTMENT: OFFICE OF THE CITY MANAGER JERRY M. PACHECO, CITY MANAGER JENNY M. EICKELMAN, ASSISTANT CITY MANAGER TITLE A RESOLUTION APPROVING A FACILITY USE/RACETRACK RENTAL AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, ACTING BY AND THROUGH ITS HONOR FARM PROPERTIES ENTERPRISE, AND NEK ADVANCED SECURITIES GROUP, INC. RELATING TO PUEBLO MOTORSPORTS PARK AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAME ISSUE Should the City Council approve a Facility Use/Racetrack Rental Agreement with NEK for the Honor Farm Properties Enterprise dba Pueblo Motorsports Park? Approval of the Resolution BACKGROUND NEK desires to conduct a significant number of motor vehicle training events at Pueblo Motorsports Park during a three -year period commencing January 1, 2010, with the option for a fourth year. City Administration and NEK have negotiated a customer rate for the use of the paved track and off -road dirt areas for this purpose as contained in the Agreement. This Resolution will approve a rental agreement between the City and NEK. FINANCIAL IMPACT Based on a minimum of 30 track rentals per year, NEK has the potential to generate between $96,750 and $123,750 in revenue for the City in track rentals over the three -year period. NEK currently has approximately 40 events scheduled in 2010. The Agreement also establishes a property rental rate for a vehicle storage area within the motorsports facility to be used by NEK, which could generate an additional $36,000 over the three -year period; however, the City may offer credit for certain authorized improvements made to the facility by NEK, thus reducing the amount of property rental revenue received. FACILITY USE/RACETRACK RENTAL AGREEMENT This Agreement (the "Agreement ") is made and entered into this 28th day of December 2009, by and between the City of Pueblo acting by and through its Honor Farm Properties Enterprise ( "City "), and NEK Advanced Securities Group, Inc. ( "NEK," and together with City, each a "Party" and collectively the "Parties "). WHEREAS, City is the manager and operator of the motorsports facility and racetrack known as Pueblo Motorsports Park located at 3733 North Pueblo Boulevard, Pueblo, Colorado, and WHEREAS, NEK desires to conduct motor vehicle training events ( "Events ") on that portion of the Pueblo Motorsports Park shown on the attached map as "NEK Rental Area" and for purposes of this Agreement, such area is referred to as "Park," and WHEREAS, City is willing to permit NEK to conduct Events at the Park. NOW, THEREFORE, in consideration of the mutual promises and agreements of the Parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City does hereby authorize and permit NEK to conduct Events at the Park and NEK accepts the use of the Park for such purpose for a three -year period commencing on January 1, 2010, and ending December 31, 2012, unless extended as provided in Section 33, or earlier terminated as provided in Section 29, subject to the following terms and conditions which City and NEK agree to and accept. 1. RENTAL FEES: A daily Rental Fee for the rental of the Park's paved track and off - road dirt areas as further outlined below shall be paid by NEK: Paved Track $1,250 per day for the first 50 days, and standard customer rate thereafter, during 2010. $1,375 per day for the first 50 days, and standard customer rate thereafter, during 2011. $1,500 per day for the first 50 days, and standard customer rate thereafter, during 2012. Off -road Dirt Areas for OHV Use $950 per day for the first 50 days, and standard customer rate thereafter, during 2010. $1,075 per day for the first 50 days, and standard customer rate thereafter, during 2011. $1,200 per day for the first 50 days, and standard customer rate thereafter, during 2012. (For purposes hereof "day" means 6:00 a.m. to 12:00 a.m. (midnight) and includes time for an Event and Event set -up and tear- down.) The daily rental fees specified above shall be applicable to a combined total of 50 days paved track and off -road dirt areas during each calendar year. Rental fees for days in excess of the combined total of 50 days per calendar year shall be at the standard customer rate. 2. EVENT SCHEDULING: NEK understands and agrees that the primary purpose of the Park is for public motorsports recreational activities and NEK shall have no priority in scheduling Events during the period from April I through October 31 of each calendar year (`Prime Dates "). Notwithstanding the foregoing, special accommodation will be given to NEK for scheduling Events during non -Prime Dates when more than one week's advanced written notice is given to City. City may attempt to reschedule other Renters to accommodate NEK's requests for Prime Dates when at least two weeks' advance written notice is given to City, but only to the extent, as determined by City, that such rescheduling satisfies the primary purpose of the Park, other Renters, and City. City may accommodate NEK's requests to schedule Prime Dates when those dates, as determined by City, are not otherwise reserved and they do not have the potential to be reserved for other Renters. 3. NUMBER OF RENTAL DATES: NEK shall use the Park for a minimum of thirty (30) days in each calendar year. If NEK uses the Park for less than thirty (30) days in any calendar year, NEK shall pay additional rent in an amount equal to the number of days used less than thirty (30) multiplied by the average of the daily rent for the Paved Track and the daily rent for the Off -road Dirt Areas applicable during such calendar year. Additional rent shall be paid in full on or before January 15 of the next calendar year. 4. COMBINED USE: If NEK uses both paved track and off -road dirt areas on the same day, NEK shall pay only the paved track rate for that day. 5. CONDITION OF TRACK: A portion of each Rental Fee includes standard grooming of the track by City, as determined by City, following NEK use and prior to the next scheduled Event. NEK shall clean up any major debris left on the track or off -road dirt areas immediately following each Event held by NEK. NEK is required to provide dust control during use, when necessary, as determined by City. 6. REMITTANCE OF FEES: All Rental Fees are due within 10 days of the conclusion of each Event. After 40 days, a late fee of $50.00 will apply. Interest shall accrue at the rate of 8% per annum on all Rental Fees past due for more than 40 days. 7. RELEASE AND WAIVER OF LIABILITY: Prior to entering the Park on any NEK Event day, all persons MUST sign a Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement (`Release Agreement "). This Release Agreement must be signed in the presence of NEK personnel and is required before entrance into the Park on any Event day. All executed Release Agreements shall be delivered to City prior to the end of each Event. NEK shall bear sole responsibility for full compliance with this Section. Entry into the Park by any person during an Event day prior to the execution of a Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement by such individual shall constitute a material breach of this Agreement by NEK. 2 S. CANCELLATION: NEK may cancel a scheduled Event upon 24 hours prior written notice given to City and each party shall be released from all obligations with respect to the Event. If NEK does not timely cancel an Event, NEK shall pay all rental fees NEK would have paid if the Event had been completed and not cancelled, provided, that if NEK cancels an Event due to the dangerous condition of the paved track or the off -dirt areas for OHV use, NEK shall not be obligated to pay a rental fee for the Event. 9. NON - TRANSFERRABLE: With the sole exception of its subsidiaries and affiliates and for the sole purpose of motor vehicle training, NEK shall not sublease, transfer, or assign to any other party this Agreement without the prior written consent of City. Any attempt to sublease, transfer, or assign this Agreement, or any of NEK's rights hereunder, without the prior written consent of City is void and shall constitute a material breach of this Agreement by NEK. In the event of any assignment, sublease or transfer, whether to a third party or to an NEK subsidiary or affiliate, NEK shall not be released from any responsibility hereunder and shall remain liable and responsible to City for such subleasee, transferee, or assignee and its activities in accordance with the terms and conditions of this Agreement. 10. IMPROVEMENTS: Subject to the prior written approval by the City Manager of the design, plans, specifications and designed area in the Park therefor, NEK may at its sole risk, (1) store and safe -keep up to 70 training vehicles ( "Vehicle Storage Area "), (ii) install a paved skid pad ( "Skid Pad "), (iii) install in an environmentally sound manner up to a 1,000 gallon above- ground fuel storage facility for the purpose of fueling its training vehicles ( "Fuel Storage Facility "), and (iv) exclusively occupy and make improvements, including, but not limited to water line, ADA compliant access ramp, and fencing the entire area, to the existing single -wide mobile classroom for the purpose of holding training sessions ( "Classroom ") (herein collectively the "Improvements "). All costs associated with the development, installation, construction, and maintenance of the Improvements shall be the sole responsibility of NEK. All Improvements shall be constructed, installed, maintained, and operated in compliance with all local, state, and federal laws and regulations. NEK shall maintain the Improvements in good and safe condition, appearance and state of repair, regardless of the cause or need for maintenance and repair. Upon expiration or early termination of this Agreement, NEK shall, at the option of City, by notice given to NEK by City within 24 months after the expiration or termination of this Agreement, remove the Vehicle Storage Area, Skid Pad and/or Fuel Storage Facility from the Park. In the event of such removal, NEK shall restore the designated area as near as practicable to its original condition. With respect to the Fuel Storage Facility, NEK shall remove, clean up, and remediate all contamination caused by or resulting from the release, discharge, or spill of fuel and indemnify, defend, and save harmless City and the Park therefrom. This indemnification provision shall survive the expiration or termination of this Agreement. City shall have no liability or responsibility in any manner for the Improvements or vehicles stored in the Vehicle Storage Area; all such liability and responsibility shall be that of NEK alone. NEK is granted the right to enter the Park at reasonable times on other than NEK Event days for the limited purpose of accessing, maintaining, and using the designated areas and Improvements, provided, such entry, access, and use shall not unreasonably interfere with the use of the Park and its facilities by other persons and entities. Any such entry, access, and use shall be subject to the conditions and provisions of this Agreement. In consideration of the use of the designated areas in the Park, NEK shall pay additional monthly rent to City in the monthly amount of $750.00 during the first 3 year, $1,000.00 during the second year and $1,250.00 during the third year, and $1,500 during the Extended year, payable monthly in advance without notice, on the first day of each month during the effective term of this Agreement, commencing January 1, 2010. In consideration of actual costs incurred by NEK for the installation of the Skid Pad, and upon receipt by City of documented proof that such costs were incurred, City shall apply credit by the same amount to NEK toward monthly rent beginning on the date the Skid Pad is completed. 11. FENCING: On or before April 15, 2010, NEK shall coordinate and install in accordance with design, plan, specification, and location approved in writing by the City Manager, approximately 600 linear feet of chain link fencing around City's maintenance facility area and privacy fencing around the designated Vehicle Storage Area. In consideration of actual costs incurred by NEK for the installation of said fencing, and upon receipt by City of documented proof that such costs were incurred, City shall apply credit by the same amount to NEK toward monthly rent beginning on the date the fencing is completed. 12. PROHIBITED USES: NEK understands and agrees that this Agreement is solely for access to and use of the Park. NEK SHALL NOT photograph, film, or broadcast any Event or any part thereof without a separate written agreement authorizing such activities. In addition, no footage or images obtained from City access granted herein may be reproduced, sold, broadcast, commercially exploited, or distributed without a separate written license agreement authorizing such use. NEK understands and agrees that this Agreement and NEK's use of the Park is subject to the conditions and limitations of the Conservation Easement recorded July 2, 2001 as Reception No. 1390542 in the records of the Pueblo County Clerk and Recorder ( "Easement "). NEK acknowledges receipt of a copy of the Easement. City makes no representation or warranty that NEK's intended use of the Park or the provisions of this Agreement are approved uses or allowed under the Easement. 13. CERTIFICATE OF INSURANCE: Upon execution of this Agreement but in no event less than seven (7) days prior to the first scheduled Event of each year, NEK shall provide City a Certificate of Insurance showing evidence of liability coverage for bodily injury and property damage including contractual coverage with a combined single limit of not less than Five Million Dollars ($5,000,000.00) per occurrence, with a Five Million ($5,000,000.00) annual aggregate, and shall be endorsed to add as additional insureds the City of Pueblo and the City of Pueblo acting by and through its Honor Farm Properties Enterprise and their officers, employees, and agents, (collectively, the "Indemnified Parties "). Such policies shall state that the insurance is primary in coverage to any other insurance which may be available to City. Concurrent with the above mentioned Certificate of Insurance evidencing liability coverage, NEK or the applicable employer shall also provide City a Certificate of Insurance showing evidence of statutory workers' compensation insurance and shall contain an endorsement waiving subrogation against both the City of Pueblo and the City of Pueblo acting by and through its Honor Farm Properties Enterprise. Workers' compensation coverage shall be obtained notwithstanding that NEK may have no employees as defined under said Act or that NEK might otherwise avail itself of an exemption under the Act from any legal requirement to obtain such coverage. Such insurance shall cover all employees of NEK performing work at the Park irrespective of whether such employees may be shareholders, managers, partners, or owners of NEK or exempt employees under the Act. NEK may purchase, for non - statutory employees, a participant accident insurance policy which would include death, disability, dismemberment, and medical benefits. Any independent contractors of NEK shall be covered under NEK's workers' compensation insurance and/or participant accident insurance policy or show evidence that said independent contractor is covered under its own workers' compensation insurance policy. NEK shall have full and sole responsibility for ensuring compliance with this Section, including without limitation indemnification pursuant to Section 14. All insurance policies required hereunder shall provide that such policies not be cancelled or reduced without thirty (30) days' advance written notice to the Indemnified Parties. Failure of NEK to comply with the provisions of this Section shall constitute a material breach of this Agreement by NEK. 14. INDEMNIFICATION: NEK agrees to be responsible for, to hold harmless, indemnify, and defend each of the Indemnified Parties from any and all claims, including reasonable attorney's fees and costs, of liability whether by reason of injury to or death of the person or of damage to the property of another or otherwise arising in connection with any use of the Park by NEK, or any default or breach of any term of this Agreement by NEK, excepting only claims based on the Indemnified Parties' negligence, bad faith, or intentional acts. The Indemnified Parties shall have the right to retain their own counsel, in which case those reasonable attorney and expert fees and costs shall be covered by NEK's indemnification obligation in this Section. This Section shall survive termination or expiration of this Agreement for a period of six (6) years; provided, however, that this Section shall survive termination or expiration of this Agreement for a period of ten (10) years for any claims otherwise covered by this Section that are brought by minors. 15. PROPERTY USE AND DAMAGE: NEK shall maintain a clean and safe activity area throughout each Event and, upon completion of each Event, except for standard grooming of the paved track as provided in Section S, NEK shall repair and restore the Park and all its tracks and facilities to the same condition in which it was received by NEK. NEK shall repair any and all damages to the Park (including without limitation any resources, facilities, premises, or property of City or the Park) caused by or attributable to NEK's activities, and City or its designee shall be the sole judge of the extent of such damage and the adequacy of any repairs or restoration. No physical alteration to the Park (including without limitation installation or modification of new or existing structures, alteration of any trees or other plants, and disturbance of any ground surface or cover) may be made without City's prior written consent. 16. UNSAFE OR UNLAWFUL CONDUCT: Notwithstanding any provision herein to the contrary, City or its designee shall have the sole discretion to terminate any activity permitted hereunder when such action is deemed necessary or appropriate for the safety of lawful users of the Park, for the protection of the Park or resources or equipment of City, or for the prevention of a violation of any local, state, or federal law or regulation or the Easement relating to or arising out of the use of the Park or any activity permitted hereunder. 17. SCHEDULING: Circumstances, including without limitation changes in City's other scheduled motorsports activities or events or resurfacing of or other work on the Park, may necessitate a revision to an existing schedule of Events, which the Parties hereby agree to work together in good faith to address. The Parties acknowledge and agree that any revisions to the schedule of Events by City shall not constitute a breach or default of this Agreement. G 18. NO REPRESENTATION OR WARRANTY OF CONDITION OR FITNESS: PARK IS PROVIDED ON AN "AS IS" "WITH ALL ITS FAULTS" BASIS, AND CITY MAKES NO REPRESENTATION OR WARRANTY AS TO THE CONDITION OR FITNESS OF THE PARK FOR NEK'S EVENTS OR FOR ANY PARTICULAR USE OR PURPOSE. Accordingly, NEK is hereby advised that NEK shall be solely responsible for personally inspecting the Park before execution of this Agreement and commencement of any Event. NEK's commencement of any Event shall constitute an expressed acknowledgement by NEK that the Park is safe and adequate for NEK's permitted use. NEK shall have exclusive control of the Park during its Events and shall be responsible for all equipment, except City's motorized equipment when operated by City employees, and for adequate safeguard for the protection of NEK, its employees, agents, and representatives, and persons engaged in an Event. Notwithstanding any provision in this Agreement to the contrary or which may be construed to the contrary, City assumes no obligation or responsibility to keep or maintain the Park or any track or facility thereon in good and safe condition, appearance or state of repair, regardless of cause of need for maintenance and repair. NEK's sole remedy if the Park, its tracks or facilities are not maintained in good and safe condition, appearance or state of repair is to terminate this Agreement. 19. RELATIONSHIP: Nothing in this Agreement is intended to, or shall be deemed to constitute, a partnership or joint venture between the Parties, or to create any agency or partner relationship between the Parties. Neither Party shall hold itself out as a partner, joint venture, agent, or representative of the other under this Agreement. 20. INTELLECTUAL PROPERTY: NEK shall NOT use any name, trademark, service mark, or logo of City including the name "Pueblo Motorsports Park" for any purpose, without the prior review of all proposed uses by NEK and the expressed prior written consent of City, as the case may be. Notwithstanding the foregoing, NEK may use the official name of the Park in accurate and truthful advertising solely as a means for identifying the location of an Event. 21. JURISDICTION/VENUE: This Agreement and all rights and obligations of the Parties shall be construed and governed in accordance with the laws of the State of Colorado. With respect to any claims or litigation associated in any manner with or arising out of this Agreement, the Parties agree to submit to the exclusive personal jurisdiction of the District Court in and for Pueblo County, Colorado. Exclusive venue for any such litigation shall be Pueblo County, Colorado. In the event of litigation regarding the terms and conditions of this Agreement, the prevailing Party shall be awarded reasonable attorney's fees and costs. 22. TRACK REQUIREMENTS: NEK acknowledges and agrees that all applicable local, state, and federal laws and regulations, and the track requirements set forth herein, including all Exhibits attached hereto and incorporated herein, are binding obligations of NEK and shall govern the permitted uses of the Park by NEK and its agents, employees, representatives, and contractors. 23. MINORS: No individual under the age of 18 years shall be allowed during any Event day in any restricted area of the Park (which shall include the track surface, pit areas, garage areas, run -off areas, trackside communications stations, and any other location as defined in 3 generally accepted policies of liability coverage for motorsports entities), without a (1) Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement, and (2) a Parental Consent to the Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement executed by each minor and the minor's parent or legal guardian. These documents must be signed in the presence of NEK personnel and are required before said minor's entrance into the Park. All executed documents shall be delivered to City prior to the end of each Event. NEK shall bear sole responsibility for full compliance with this Section. Entry by any individual during an Event day prior to the execution of the Agreements listed above in this Section by the proper party shall constitute a material breach of this Agreement by NEK. 24. OTHER ACTIVITIES: Any activities to be conducted in the Park during NEK's use of the Park (including without limitation food service or catering, entertainment, product or merchandise sales, press conferences, or other commercial or professional activities) must be approved in advance in writing by City, and shall be subject to the requirements, conditions, and fees established by City. All individuals engaging in such activities shall be required to execute a Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement in accordance with Sections 7 and 23 above. 25. RIGHT TO REFUSE ACCESS: City may, at City's sole discretion, deny access to, or remove from, the Park any individual(s) who are disruptive, fail to obey any lawful order, or fail to comply with any covenant or provision of this Agreement. 26. ENTIRE AGREEMENT: This Agreement, including all Exhibits attached hereto, contains the entire agreement of the parties relating to the subject matter contained herein. There are no promises, terms, conditions, rights, or obligations other than those contained herein. This Agreement shall supersede all previous communications, representations, or agreement, whether verbal or written, between the parties. 27. COLORADO GOVERNMENTAL IMMUNITY ACT: No term, provision or condition of this Agreement shall be construed or interpreted as a waiver, either express or implied, of any immunities, rights, benefits or protections provided or available to City, its officers and employees under applicable law, including, without limitation, those provided and available to City and its officers and employees under the Colorado Governmental Immunity Act, §24 -10 -101, et seq., C.R. S., as amended or as may hereafter be amended. 28. THIRD PARTIES. Notwithstanding anything in this Agreement to the contrary, NEK agrees that City is not liable or responsible for the acts or omissions of the exclusive vendors, preferred vendors, security personnel or other third parties made available by or through City, at City's sole option, to NEK under this Agreement at NEK's request ( "Third Parties "). NEK agrees that the Third Parties are independent contractors made available by City solely for the benefit of and as an accommodation to NEK and no contractual, tort or other liability results from or arises out of City making or failure to make the Third Parties available to NEK. 29. TERMINATION AND DEFAULT. If either party is in default hereunder, the non - defaulting party may give written notice describing the default to the defaulting party. If the defaulting party does not correct such default within twenty (20) days after receipt of said notice, 7 or if the default cannot be corrected within said 20 -day period and the defaulting party fails to commence action to correct the default within said 20 -day period and thereafter diligently pursues corrective action, the non - defaulting party may upon an additional five (5) days' notice given to the defaulting party terminate this Agreement. Notwithstanding the foregoing, if NEK commits a material breach as defined in Sections 7, 12 and 22, City may terminate this Agreement upon five (5) days' prior written notice to NEK specifying the material breach and the date of termination. Except for accrued rights and liabilities and those covenants which survive termination hereunder, upon such termination each party shall be released from all future duties and obligations hereunder. 30. NOTICE. Any notice required or permitted to be given hereunder shall be in writing and delivered personally or by certified mail, postage prepaid, as follows: (a) If to City, City of Pueblo, 1 City Hall Place, Pueblo, Colorado, 81003, Attention: City Manager, or (b) If to NEK: NEK ASG, 110 S. Sierra Madre, Colorado Springs, Colorado, 80903, Attention: Mark Marchant. 31. STATEMENT OF TRADE NAME. Front Range Motorsports, Inc. ( "Front Range ") on October 29, 2009, filed its statement of trade name in the records of the Colorado Secretary of State to transact business under the trade name "Pueblo Motorsports Park" ( "Statement of Trade Name "). Front Range hereby confirms and ratifies City's use for any and all purposes of the name "Pueblo Motorsports Park." Front Range shall within twenty (20) days after execution of this Agreement by the Parties withdraw its Statement of Trade Name pursuant to Section 7 -71- 106, C.R.S. and assign and transfer to City all its right, title, and interest in and to the name "Pueblo Motorsports Park" and all assets Front Range acquired from Pueblo Motorsports, Inc. This Agreement shall not be deemed to be in effect and shall terminate if Front Range fails to timely comply with the covenants of this Section. 32. MISCELLANEOUS PROVISIONS. 32.1 No assent, express or implied, by City to any breach of default by NEK in the performance of any one or more of the covenants hereof shall be deemed or taken to be a waiver of any succeeding breach of or default in the same or different covenant. 32.2 All financial obligations of City under this Agreement are subject to and conditioned upon funds for such purpose being budgeted, appropriated, and otherwise made available. 32.3 The person executing this Agreement on behalf of NEK warrants and represents that he and NEK have been duly authorized by all appropriate and necessary action to execute this Agreement and this Agreement is a valid and binding obligation of NEK enforceable in accordance with its terms. H 33. OPTION TO EXTEND. If NEK is not in default hereunder, NEK shall have the option to extend this Agreement for an additional period of one (1) year from January 1, 2013, to December 31, 2013, upon the same terms and conditions, except: (a) Rental Fees shall be: Paved Track $1,625.00 per day for the first 50 days, and standard customer rate thereafter, during 2013. Off -Road Dirt Areas for OHV Use $1,325.00 per day for the first 50 days, and standard customer rate thereafter, during 2013. (b) NEK shall have no option to extend this Agreement after December 31, 2013. IN WITNESS WHEREOF, the Parties hereto have executed and delivered this Agreement as of the date first written above. NEK ADVANCED SECURITIES GROUP, CITY OF PUEBLO ACTING BY AND INC. THROUGH ITS HONOR FARM PROPERTIES ENTERPRISE By: �� ems• %r laws Print Name: M ARK G'0A,ea44j By: - Title: 46r/E9A-t A Title: O C v., r Executed this day of a&;< 2009, for the sole purpose of Section 31 of the foregoing Agreement FRONT ANGE MOTORSPORTS, INC. By Print Name: Ageo J 1 mwec. w EXHIBIT I FACILITY RENTAL RULES AND REGULATIONS We want to welcome you to the Honor Farm Properties Enterprise Motorsports Park. The following are general rules and informational items that will aid in making your visit enjoyable and will assist our personnel in better serving your needs. If you have any questions or problems during your visit, please contact our staff for assistance. • All vehicle driver safety equipment which is standard in the industry or required by applicable liability insurance shall be in full and effective use at all times. • Do not drive stakes into the ground or into the asphalt. Underground utilities are everywhere and there will be a charge for utility or asphalt repair. • Please keep the speed of all vehicles to 10 MPH or lower when not on the actual race track surface. • Marked trash barrels are located in the designated area for your convenience. Please assist us in keeping the Park clean by using these barrels. • All parking attendants, if necessary, shall be the sole responsibility of NEK. We hope your visit to the Honor Farm Properties Enterprise Motorsports Park is enjoyable and we wish you the best of luck! 10 EXHIBIT II HONOR FARM PARK & OPEN SPACE NEK LEASE AREA 11 AN AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, AND NEK, INC. FOR THE USE OF CERTAIN FACILITIES AT PUEBLO MOTORSPORTS PARK This Agreement ( "Agreement ") between the City of Pueblo acting by and through its Honor Farm Properties Enterprise ( "City "), and NEK Advanced Securities Group, Inc. ( "NEK ") RECITALS WHEREAS, NEK desires to conduct motor vehicle training events at the Park; and WHEREAS, City is willing to enter into this Agreement to permit NEK to conduct such business at the Park in accordance with and subject to the terms and conditions of this Agreement. WHEREAS, this new Agreement constitutes a minor amendment to the Previous Agreement within the meaning of §1- 5 -2(f) Pueblo Municipal Code, as amended, because it does not significantly increase the City's obligations. Therefore, the City Manager has authority to execute the same. This Agreement is executed as a new Agreement rather than as an amendment to the Previous Agreement simply as a means of creating one unified, clean and comprehensive document that is easier to read and understand than maintaining the Previous Agreement in place and adopting a mynad of minor amendments. NOW, THEREFORE, in consideration of the mutual promises and agreements of the Parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows TERMS AND CONDITIONS 1 DEFINITIONS. For purposes of this Agreement, the following terms shall have the following meanings. Day. means 6.00 a.m. to 12.00 a.m. (midnight) and includes time for an Event and Event set -up and tear -down. Park. means the Pueblo Motorsports Park, located at 3733 North Pueblo Boulevard, Pueblo, Colorado 81008 Previous Agreement: means the Facility Use /Track Rental Agreement the parties previously entered on December 28, 2009 and which was approved in City Council Resolution No 1179 A copy of the Previous Agreement is attached as Exhibit A. 1 i 2. EXHIBITS TO AGREEMENT (a) The following exhibits are attached and incorporated as part of this Agreement: Exhibit A. Previous Agreement Exhibit B Drawing of Rental Areas Exhibit C Facility Rental Rules and Regulations (b) In the event of any conflict between the terms of this Agreement and any Exhibit made a part of this Agreement, the documents shall control and take precedence over one another in the order shown in subsection (a) of this Section, except that Terms and Conditions of this Agreement shall take precedence and control over all Exhibits. 3. PREVIOUS AGREEMENT TERMINATED (a) The Previous Agreement is hereby terminated effective June 27, 2011, and all rights and obligations under the Previous Agreement shall cease effective that date, except as otherwise provided in this Agreement. (b) NEK and City of Pueblo shall continue to fulfill all obligations under the Previous Agreement between the date this Agreement is signed by all parties and June 27, 2011 (c) The Parties waive any requirement in the Previous Agreement requiring notice of termination and any other requirement, procedure, or method for termination of the Previous Agreement. (d) Each Party releases the other from any and all claims arising from the Previous Agreement, except past rent, taxes, and other matters provided in this Agreement. (e) The provisions of the Previous Agreement pertaining to insurance, indemnification, and release of claims and suits are not subject to the foregoing release of claims arising under the Previous Agreement, shall survive termination of the Previous Agreement, and shall continue in effect for a period of three years following the termination of the Previous Agreement, and for such further time as it may take to completely and finally negotiate, settle, or litigate any claim or suit concerning the same. (f) The termination of the Previous Agreement shall not affect this Agreement or any duty, obligation, or claim under this Agreement. 4. TERM. (a) The Term of this Agreement shall be one year (1) year commencing June 27, 2011 and ending June 26, 2012 ( "Term ") unless sooner terminated pursuant to the terms of this Agreement. 2 i ' (b) City shall have the option to extend the term of this Agreement for an additional three (3) incremental terms of one year each by giving NEK written notice of its intention to do so at least thirty (30) days before the expiration of the preceding term. If the City extends this Agreement at the conclusion of the original term of this Agreement ending June 26, 2012, or at the end of the first one year extension thereof, ending June 26, 2013, the onginal fee structure in this Agreement shall remain in place at current rates for each such extended term. If this Agreement is extended for a third one year tem commencing June 27, 2013 all fees in this Agreement must be renegotiated. 5. CERTAIN USES OF CERTAIN AREAS WITHIN PARK GRANTED. (a) Paved Track. NEK may use the Paved Track as shown in Exhibit B, subject to the terms, conditions, limitations, and scheduling in this Agreement, for pursuit, escape, and evasion training, and other automotive events. NEK shall not dnve off of this track on to bordenng areas. NEK shall not use the return road as a braking maneuver area, but may conduct braking maneuvers in the staging lanes near the main tower (b) Off Road Dirt Areas. NEK may use the Off -road Dirt Areas shown in Exhibit B subject to the terms, conditions, limitations, and scheduling in this Agreement. (c) Classrooms. NEK may use the classrooms shown in Exhibit B as "Trailer," subject to the terms, conditions limitations, and scheduling in this Agreement. (d) Storage of Vehicles. NEK may at its sole risk, store up to 70 training vehicles in the Vehicle Storage Area shown on Exhibit B, provided that all vehicles, working or not, are stored within the fenced Vehicle Storage Area shown in Exhibit B NEK shall not store any tires, vehicles or any equipment outside of their designated fenced area. NEK shall provide its own trash dumpster and shall arrange for regular dumping so as the dumpster is not overflowing with trash. NEK shall not store items in their fenced area where they become a fire hazard. The City of Pueblo Fire Department based on fire code, shall determine whether NEK's fenced storage area is a fire hazard. NEK shall move its 5 wheel trailer to an area that is acceptable to the PMP Track Manager (e) Pushing and Ramming Vehicles. NEK may push and ram vehicles in the area designated in Exhibit B, provided that the vehicles pushed or rammed have all four (4) tires in place and are not pushed or rammed on bare rims. (f) Fuel Storage Area. NEK may use the NEK Fuel Storage Area shown in Exhibit B, provided that NEK maintains the same as provided in this Agreement. (g) NEK Access to Rented Areas at Unscheduled Times. NEK may enter the Park at reasonable times on days other than scheduled NEK Event days for the limited purpose of accessing, maintaining, and using the classroom, provided that such entry, access, and use shall not unreasonably interfere with the use of the Park and its facilities by other persons and entities. NEK shall not cross the hot track when a race is in progress. NEK shall not use either the paved track or off -road dirt areas on non - scheduled days. If NEK wishes to access the Park on a non- 3 scheduled day, NEK must communicate with its sub - contractors /instructors to ensure that all NEK staff /subcontractors wishing to be on site contact the Park Manager to schedule an entry time This is extremely crucial on racing days as NEK is never to cross a hot track (racing track in progress) NEK must always coordinate with the Park Manager related to entry whether it is a race day or not, especially if they wish to use the track or off -track areas on an unscheduled day NEK must contact the Park office at least three (3) days prior to being on site on scheduled race days. If NEK's subcontractors do not follow the City's requirement to schedule and make arrangements for entry with the PMP track NEK they may be denied access. If the subcontractors /instructors become belligerent, argumentative and/or threatening to PMP staff, NEK is required to replace these instructors with persons willing to follow procedures and rules. Any entry, access, and use by NEK's subcontractors shall be subject to the conditions and provisions of this Agreement. (h) Other Activities and Uses by Special Approval Only NEK shall not make any other uses or conduct any other activities anywhere in the Park, including but not limited to other race activities, automotive activities, food service or catering, advertising entertainment, product or merchandise sales, press conferences, or other commercial or professional activities whatsoever, unless NEK first obtains in writing permission from the Director specifically authorizing the use or activity and designating the time, place, manner, and fees for such activity or use. 6. MAINTENANCE OF TRACKS, CLASSROOM AND STORAGE AREAS. (a) Maintenance and Use of All Areas. NEK shall use and maintain the areas designated above in a clean, safe, and orderly manner, in compliance with all federal, state, and city laws and regulations and all rules and polices promulgated by the Director or Park Manager, during each Event and at all times that any such areas are being used for storage, classes, or other permitted uses, inspection or entry (b) Restoration to Previous Condition After Each Event. Except for standard grooming which the City shall perform, NEK shall repair and restore the Park and all its tracks and facilities to the same condition in which it was found within a reasonable time after each NEK event not to exceed one (1) day, except for major damage which will be immediately reported to the Park Manager NEK shall clean up all glass and screws after each event to ensure there is no risk of damage to other driver /users. NEK shall repair any and all damages to the Park including without limitation any resources, facilities, premises, or property of City or the Park, caused by or attributable to NEK's activities, and City or its designee shall be the sole judge of the extent of such damage (based on a co- NEK/City inspection conducted prior to each event) and the adequacy of any repairs or restoration. No physical alteration to the Park (including without limitation installation or modification of new or existing structures, alteration of any trees or other plants, and disturbance of any ground surface or cover) may be made without City's prior written consent. (c) Major Debris. NEK shall clean up any major debris including but not limited to metal, tires, glass, nuts and bolts and other matter left on the track or off -road dirt areas caused by NEK immediately following each Event held by NEK. 4 (d) Dust Control. NEK shall provide dust control during use of off -road areas when necessary, to the extent and degree determined by City in its sole and absolute discretion, which shall include the use of City water trucks to spray the tracks at a cost to NEK of $150 per day when using off -road areas. (e) Fluid Spills. NEK shall immediately clean up oil spills or any other fluid spills on Park property, including but not limited to the tracks, pits and staging areas. NEK shall coordinate with on -site City maintenance crew to establish what chemicals or other items are required to clean up oil spills. ( Inspection and Additional Cleaning by City After NEK has completed cleaning the areas it has used after an NEK Event, the City may inspect the same, and if any additional cleaning is necessary, including but not limited to fluid spills, major debris, screws and glass or having to add additional reinforcement dirt to areas that have been run over, NEK shall immediately clean as necessary to avoid the need for additional cleanup by City If NEK fails to make the necessary clean up NEK shall pay the City for such additional clean up at $50 per hour plus supply costs such as reinforcement dirt and track chemicals. 7 RENT AND OTHER CHARGES. NEK shall pay to the City the following rental fees and charges for use of the following portions of the Park or the following activities. (a) Paved Track: $1,375 per day for the first 50 days, and standard customer rate thereafter, during 2011 $1,500 per day for the first 50 days, and standard customer rate thereafter, during 2012. (b) Off - road Dirt Areas for OHV Use: $1,075 per day for the first 50 days, and standard customer rate thereafter, during 2011 $1,200 per day for the first 50 days, and standard customer rate thereafter, during 2012 (c) Combined Usage (Track and OHV Use) $1,375 per day for the first 50 days, and standard customer rate thereafter, during 2011 $1,500 per day for the first 50 days, and standard customer rate thereafter, during 2012 (d) For purposes of this section. "day" means 6 a.m. to 12.00 a.m. (midnight) and includes time for an Event and Event set -up and tear -down. The daily rental fees specified above shall be applicable to a combined total of 50 days paved track and off -road dirt areas during each calendar year Rental fees for days in excess of the combined total of 50 days per calendar year shall be at the standard customer rate NEK agrees to rent the track for a minimum of 40 days per year and shall be charged for any days below the 40 -day threshold, at the rate of $1,225 per days. (e) Classroom and Storage Area. $1,000 per month for rental of either or both the classroom and the Vehicle Storage Area shown in Exhibit B Rental fees for the classroom and Vehicle Storage Area are in addition to all other rental fees in this Agreement. 5 ( Combined Use. Each rent and charge is independent and separate from every other rent and charge NEK shall pay rent for the classroom and storage area whether or not either track is used at the same time. (g) Water Truck. NEK shall pay City $150 per day when using off track/OHV areas at $150 per day City is responsible for providing staff to water track prior to NEK event. (h) Moving Disabled Vehicles from Track to Vehicle Storage Area. City towing of disabled vehicles from any track or other area to the Vehicle Storage at NEK's request: $50 per vehicle. (i) Rent and Charges Due, Late Fees, Interest. All rent and charges are due ten (10) days after the conclusion of each Event. If Rental Fees not paid within 40 days after the Event, NEK shall pay to City a late fee of $50 00 in addition to the Rental Fees. Interest shall accrue at the rate of 8% per annum on all Rental Fees not paid within 40 days. (i) Credit Against NEK Rent. The City hereby grants NEK a credit against rent and all other charges due to the City under this Agreement in the amount of $26,974 50 for fencing that NEK has already constructed at the Park under the Previous Agreement and to which NEK was entitled under the Previous Agreement. In the event that this Agreement is terminated or expires and NEK has not already received full credit for this sum against rent and other charges at the time of such termination or expiration, City shall refund the uncredited balance of this sum to NEK within 45 days of such termination or expiration. 8. UTILITIES. (a) City will pay for all electric and water utilities at all areas rented under this Agreement. (b) City will pay all utilities for the Classroom facility shown on Exhibit A, including electric, water, and propane gas. (c) NEK shall provide for and pay for all trash service at all of the areas it rents under this Agreement 9 EVENT SCHEDULING (a) NEK understands and agrees that the primary purpose of the Park is for public Motorsports recreational activities and NEK shall have no priority in scheduling Events during the period from March 1 through October 31 of each calendar year ( "Prime Dates ") Notwithstanding the foregoing, special accommodation will be given to NEK for scheduling Events during non -prime Dates when more than one week's advanced written notice is given to City (b) City may attempt to reschedule other Renters to accommodate NEK's requests for Prime Dates when at least two weeks' advance written notice is given to City, but only to the 6 extent, as determined by City, that such rescheduling satisfies the primary purpose of the Park, other Renters, and City (c) City may accommodate NEK's requests to schedule Prime Dates when those dates, as determined by City, are not otherwise reserved and they do not have the potential to be reserved for other Renters. (d) Circumstances, including without limitation changes in City's other scheduled Motorsports activities or events or resurfacing of tracks or other work at the Park may necessitate a revision to an existing schedule of Events, which the Parties hereby agree to work together in good faith to address. The Parties acknowledge and agree that any revisions to the schedule of Events by City shall not constitute a breach or default of this Agreement. (e) City shall schedule all NEK requests, NEK must re- schedule any dates that they have not definitely booked if City has another customer requesting the date. (f) NEK may cancel a scheduled Event upon 48 hours prior written notice given to City and each party shall be released from all obligations with respect to the Event. If NEK does not give at least 48 hours prior wntten notice, NEK shall pay all rental fees NEK would have paid if the Event had been completed and not cancelled. If NEK cancels an Event due to dangerous weather conditions that have a negative impact on the paved track or the off -dirt areas NEK shall not be obligated to pay a rental fee for the Event. 10. CONSERVATION EASEMENT, KEYS, REMOVAL OF PROPERTY UPON TERMINATION, PYROTECHNICS, OFF -ROAD DRIVING (a) Conservation Easement. NEK understands and agrees that this Agreement and NEK's use of the Park is subject to the conditions and limitations of the Conservation Easement recorded July 2, 2001 as Reception No 1390542 in the records of the Pueblo County Clerk and Recorder ( "Easement "). NEK acknowledges receipt of a copy of the Easement. City makes no representation or warranty that NEK's intended use of the Park or the provisions of this Agreement are approved uses or allowed under the Easement. (b) Keys. NEK must provide access per city request to the modular classroom trailer it uses to the PMP Track Manager In the event that NEK changes any locks to any buildings, gates, or facilities NEK must immediately provide copies of the keys to the Track Manager (c) Removal Upon Termination. Upon termination of this Agreement, NEK shall remove the vehicles in their fenced Vehicle Storage Area as well as their Fuel Tank Area. In the event of such removal, NEK shall restore the designated area as nearly as practicable to its original condition. With respect to the Fuel Storage Facility, NEK shall remove, clean up, and remediate all contamination caused by or resulting from the release, discharge, or spill of fuel and indemnify, defend, and save harmless City and the Park therefrom. City shall have no liability or responsibility in any manner for the improvements or vehicles stored in the Vehicle Storage Area, all such liability and responsibility shall be that of NEK alone. 7 (d) No Pyrotechnic Devices NEK shall under no circumstance use pyrotechnic devices, explosives, fireworks or incendiary devices of any kind anywhere in the Park without prior written approval from the Fire Department and PMP Track Manager NEK may use shotguns filled with blank cartridges to simulate combat experiences. (e) Off Paved Track Driving. NEK shall not drive vehicles off of the paved track as this causes damage to the edges of the track and forces Park staff to use time and financial resources to back -fill corners. Park will charge NEK for any backfill dirt that may be needed to fix damaged areas due to NEK's driving off of the track. NEK and Park staff will both fill out pre - inspection track reports, to include digital photos to verify prior damage and PMP will fill out a post -use track report to include digital photos to verify post use damage 11 INSURANCE, INDEMNITY, AND RELEASES. (a) Insurance and Proof of Insurance. NEK shall, within ten (10) days after this Agreement is executed by both parties, obtain the following insurance coverages and provide to the City the following Certificates of Insurance showing that NEK has obtained the following insurance coverages. NEK shall maintain all such insurance coverages at all times during the term of this Agreement: (1) Workers' Compensation Insurance complying with statutory requirements in Colorado and in any other state or states where the work is performed. The Workers' Compensation Insurance policy shall contain an endorsement waiving subrogation against the City (2) Commercial General Liability Insurance issued to and covering the liability of NEK, and naming the City of Pueblo and its officers and employees as additional insureds with respect to all work and events performed by NEK and its subcontractors and subcontractors under this Agreement, to be wntten on a Commercial General Liability policy form CG 00 01, with coverage limits of not less than Five Million Dollars ($5,000,000 00) per person and occurrence for personal injury, including but not limited to death and bodily injury, and Five Million Dollars ($5,000,000 00) per occurrence for property damage This CGL policy shall also provide coverage for contractual liability assumed by NEK under the provisions of this Agreement. (3) Comprehensive Automobile Liability Insurance effective during the period of this Agreement, covering the liability of NEK, and naming the City of Pueblo and its officers and employees as additional insureds with limits of liability for injury to one person in any single occurrence of not less than $1,000,000 and for any injury to two or more persons in any single occurrence of not less than $1,000,000 This insurance shall include uninsured/underinsured motorist coverage and shall protect the NEK from any and all claims arising from the use both on and off the Basic Services site of motor vehicles, including any automobiles, trucks, tractors, backhoes and similar equipment whether owned, leased, hired or used by NEK. (b) Notices to City in Policies. Every insurance policy and certificate of insurance specified in subsection (a) of this Section shall contain a provision requiring the that Insuror shall 8 notify the City in writing, in the manner provided in this Agreement, in the event that any such policy or coverage is revoked, terminated, rescinded, or lapses. (c) NEK Releases and Waives Claims. NEK forever releases and waives any and all claims, known and unknown, presently existing or arising in the future, and any suit or action in law or equity against City and its officers, employees, agents and independent contractors ('Released Parties ") in any court or tribunal, based on tort, statute, violation of civil nghts, or any other legal theory, for any physical injury, psychological injury, death, or property damage or loss that NEK may suffer, related to or caused by the Released Parties, or any vehicle, object, thing, or activity in any building or facility owned, leased, operated or controlled by the Released Parties. (d) NEK Covenants Not to Sue. NEK shall not file, pursue or prosecute any suit, action or proceeding, in law or in equity, in any court or tribunal, against the Released Parties, based on tort, statute, violation of civil rights, or any other legal theory, for any physical injury, psychological injury, death, or property damage or loss that NEK may suffer related to or caused by the Released Parties, or any vehicle, object, thing, or activity in any building or facility owned, leased, operated or controlled by the Released Parties (e) NEK Indemnifies. NEK shall indemnify, defend and hold harmless the Released Parties against any liability for any damages, attorneys fees, and restitution that may be imposed by any court or tribunal in any suit, action or proceeding in law or equity filed by any person or entity based on tort, statute, violation of civil rights, or any other legal theory, for any physical injury, psychological injury, death, or property damage or loss that any such third person may suffer, related to or caused by the Released Parties, or any vehicle, object, thing, or activity in any building or facility owned, leased, operated or controlled by the Released Parties. (f) NEK Must Obtain Releases from Third Parties. Prior to entering the Park on any NEK Event day, all NEK employees, agents, participants, and guests MUST sign a Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement ( "Release Agreement ") in the presence of NEK personnel and all executed Release Agreements shall be delivered to City pnor to the end of each Event. NEK shall bear sole responsibility for full compliance with this Section. Entry into the Park by any person dunng an Event day prior to the execution of a Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement by such individual shall constitute a material breach of this Agreement by NEK. 12. IMPROVEMENTS. (a) NEK Fuel Storage Facility NEK shall maintain its above ground fuel storage facility in compliance with city fire ordinances and regulations. (b) Costs of Improvements, Approval Required. All costs associated with the development, installation, construction, and maintenance of any improvements shall be the sole responsibility of NEK. All improvements must be approved in writing by the City prior to making any physical alterations to the modular trailer Any proposed changes must meet all building permit regulations and be constructed, installed, maintained, and operated in compliance 9 with all local, state, and federal laws and regulations. NEK must obtain the prior written approval of the Director for any proposed improvements and certificate from the Pueblo Regional Building Department approving any proposed improvements. NEK shall maintain the improvements in good and safe condition, appearance and state of repair, regardless of the cause or need for maintenance and repair (c) Improvements Become City Property Upon Termination of Agreement. All improvements shall become the property of the City at the option of the City upon termination or expiration of this Agreement, including all fences that NEK has constructed at the Park. 13. INTELLECTUAL PROPERTY This Agreement is solely for access to and use of the Park. NEK shall not photograph, film, or broadcast any Event or any part thereof without first obtaining the prior written consent of the City In addition, no footage or images obtained from City access granted herein may be reproduced, sold, broadcast, commercially exploited, or distributed without a separate written license agreement from the City authorizing such use. Agreement. 14. NO REPRESENTATION OR WARRANTY OF CONDITION OR FITNESS. PARK IS PROVIDED ON AN "AS IS" "WITH ALL ITS FAULTS" BASIS, AND CITY MAKES NO REPRESENTATION OR WARRANTY AS TO THE CONDITION OR FITNESS OF THE PARK FOR NEK'S EVENTS OR FOR ANY PARTICULAR USE OR PURPOSE. Accordingly, NEK is hereby advised that NEK shall be solely responsible for personally inspecting the Park before execution of this Agreement and commencement of any Event. NEK's commencement of any Event shall constitute an expressed acknowledgement by NEK that the Park is safe and adequate for NEK's permitted use. NEK shall have exclusive control of the rented areas of the Park during its Events, subject to the City's right of access, and shall be responsible for all equipment and for adequate safeguard for the protection of NEK, its employees, agents, and representatives, and persons engaged in an Event. Notwithstanding any provision in this Agreement to the contrary or which may be construed to the contrary, City assumes no obligation or responsibility to keep or maintain the Park or any track or facility thereon in good and safe condition, appearance or state of repair, regardless of cause of need for maintenance and repair NEK's sole remedy if the Park, its tracks or facilities are not maintained in good and safe condition, appearance or state of repair is to terminate this Agreement. 15. MINORS. No individual under the age of 18 years shall be allowed during any Event day in any restricted area of the Park (which shall include the track surface, pit areas, garage areas, staging lanes, run -off areas, trackside communications stations, and any other location as defined in generally accepted policies of liability coverage for Motorsports entities), without a (1) Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement, and (2) a Parental Consent to the Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement executed by each minor and the minor's parent or legal guardian. These documents must be signed in the presence of NEK personnel and are required before said minor's entrance into the Park. All executed documents shall be delivered to City prior to the end of each Event. NEK shall bear sole responsibility for full compliance with this Section. Entry by any individual during an Event day prior to the execution of the Agreements listed above in this Section by the proper party shall constitute a material breach of this Agreement by NEK. 10 16. RIGHT TO REFUSE ACCESS. City may, at City's sole discretion, deny access to, or remove from, the Park any individual(s) for any reason whatsoever NEK and its sub - contractors shall comply with all track rules promulgated by the City, including not crossing a hot/live track. If NEK does not make plans to be at the PMP on non - scheduled days, it may be denied access to their rented areas due to safety concerns. NEK and it sub - contractors shall follow the rules of this contract and are not to argue with PMP staff related to access defined under this contract. NEK does have a right to enter its rented modular and fenced area at any time, but they are required to coordinate access with the PMP Track NEK prior to any non - scheduled entry If NEK subcontractors /instructors do not follow PMP rules and become belligerent, threatening or aggressive, NEK shall replace them at PMP's request. 17 THIRD PARTY VENDORS. Notwithstanding anything in this Agreement to the contrary, NEK agrees that City is not liable or responsible for the acts or omissions of Park vendors, or other third parties agreed to and made available by or through City, at City's sole option, to NEK under this Agreement at NEK's request ( "Third Parties ") NEK agrees that the Third Parties are independent contractors made available by City solely for the benefit of and as an accommodation to NEK and no contractual, tort or other liability results from or arises out of City making or failure to make the Third Parties available to NEK. 18. TERMINATION AND DEFAULT (a) Default and Correction. If either party is in default hereunder, the non- defaulting party may give written notice describing the default to the defaulting party If the defaulting party does not correct such default within twenty (20) days after receipt of said notice, or if the default cannot be corrected within said 20 -day period and the defaulting party fails to commence action to correct the default within said 20 -day period and thereafter diligently pursues corrective action, the non - defaulting party may upon an additional five (5) days' notice given to the defaulting party terminate this Agreement. (b) Termination for Material Breach. Notwithstanding the foregoing, if NEK commits a material breach of this contract, City may terminate this Agreement upon thirty (30) days' prior written notice to NEK specifying the matenal breach and the date of termination. Except for accrued rights and liabilities and those covenants which survive termination hereunder, upon such termination each party shall be released from all future duties and obligations hereunder Material breaches shall include (1) Any rent or charge more than 60 days overdue, (2) Any activity that sets any portion of the Park on fire, caused by incendiary or pyrotechnic devices not approved by Fire Dept. and PMP Operations Supervisor (3) Any use of incendiary or explosive devices, and (4) Any other matter declared to be a material breach under any other provision of this Agreement. 11 P (c) Termination Without Cause. Notwithstanding the foregoing, either party may terminate this agreement without cause by providing 60 days written notice to the other party 19 NOTICE. Any notice required or permitted to be given hereunder shall be in wntmg and delivered personally or by certified mail, postage prepaid, as follows (a) If to City, City of Pueblo, 1 City Hall Place, Pueblo, Colorado, 81003, Attention. City Manager, or (b) If to NEK. NEK, 110 South Sierra Madre, Colorado Springs, Colorado, 80903, Attention. Mark Marchant 20. STATE - IMPOSED MANDATES PROHIBITING ILLEGAL ALIENS FROM PERFORMING WORK. (a) At or prior to the time for execution of this Agreement (NEK shall submit to the Purchasing Agent of City its certification that it does not knowingly employ or contract with an illegal alien who will perform work under this Agreement and that the NEK will participate in either the "E- Verify Program" created in Public Law 208, 104 Congress, as amended and expanded in Public Law 156, 108 Congress, as amended, that is administered by the United States Department of Homeland Security or the "Department Program" established pursuant to §8- 17.5- 102(5)(c) C.R.S that is administered by the Colorado Department of Labor and Employment in order to confirm the employment eligibility of all employees who are newly hired for employment to perform work under this Agreement. (b) NEK shall not: (1) Knowingly employ or contract with an illegal alien to perform work under this Agreement; (2) Enter into an Agreement with a subcontractor that fails to certify to NEK that the subcontractor shall not knowingly employ or Agreement with an illegal alien to perform work under this Agreement. (c) The following state - imposed requirements apply to this Agreement. (1) The NEK shall confirm the employment eligibility of all employees who are newly hired for employment to perform work under this Agreement through participation in either the E- Verify Program or Department Program. (2) The NEK is prohibited from using either the E- Verify Program or Department Program procedures to undertake pre - employment screening of job applicants while this Agreement is being performed. 12 (3) If the NEK obtains actual knowledge that a subcontrator performing work under this Agreement knowingly employs or contracts with an illegal alien, the NEK shall. A. Notify the subcontractor and the City's Purchasing Agent within three (3) days that the NEK has actual knowledge that the subcontractor is employing or contracting with an illegal alien, and B Terminate the subcontract with the subcontractor if within three (3) days of receiving the notice required pursuant to subparagraph (c)(III)A. above the subcontractor does not stop employing or contracting with the illegal alien, except that the NEK shall not terminate the Agreement with the subcontractor if, during such three (3) days, the subcontractor provides information to establish that the subcontractor has not knowingly employed or contracted with an illegal alien. (4) The NEK is required to comply with any reasonable request by the Colorado Department of Labor and Employment (hereinafter referred to as "CDLE ") made in the course of an investigation that CDLE is undertaking pursuant to its authority under §8 -17 5- 102(5), C.R.S (d) Violation of this Section by the NEK shall constitute a breach of Agreement and grounds for termination. In the event of such termination, the NEK shall be liable for City's actual and consequential damages. (e) As used in this Section, the term "subcontractor" shall mean any subcontractor of NEK rendering services within the scope of this Agreement. 21 MISCELLANEOUS. (a) Additional Documents. The Parties agree to execute any additional documents or take any additional action that may be necessary to carry out this Agreement. (b) Force majeure. Any delays in or failure of performance by any party of its obligations under this Agreement shall be excused if such delays or failure are a result of acts of God, fires not caused by a breach of this Agreement, floods, storms, lightning strikes, labor strikes, labor disputes, accidents, regulations or orders of civil or military authorities, shortages of labor or materials, or other causes, similar or dissimilar, which are beyond the control of such party (c) Binding Effect. This Agreement shall inure to the benefit of, and be binding upon, the Parties, their respective legal representatives, successors, and assigns, provided, however, that nothing in this paragraph shall be construed to permit the assignment of this Agreement except as otherwise expressly authorized herein. 13 (d) Section Captions. The captions of the paragraphs are set forth only for the convenience and reference of the Parties and are not intended in any way to define, limit or describe the scope or intent of this Agreement. (e) Integrations, Severability, Amendment, and Counterparts. This Agreement represents the entire agreement between the Parties and supersedes all pnor discussions and wntten agreements or understandings. This Agreement may be amended only by an instrument in writing signed by the Parties. If any provision of this Agreement is held invalid or unenforceable, no other provision shall be affected by such holding, and all of the remaining provisions of this Agreement shall continue in full force and effect. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together constitute one and the same agreement. (f) No Third Party Beneficiaries, No Waiver of Immunities. Nothing in this Agreement is intended, nor should it be construed, to create any rights, claims, or benefits or assume any liability for or on behalf of any third party, or to waive any immunities or limitations conferred under federal or state law, including but not limited to the Colorado Governmental Immunity Act, § 24 -10 -101 et seq., C.R.S (g) Waiver of Breach. A waiver by any party to this Agreement of the breach of any term or provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by either party (h) Authority of Signers. Each person signing this Agreement on behalf of a party represents and warrants that he or she has the requisite power and authority to enter into, execute, and deliver this Agreement on behalf of such party and that this Agreement is a valid and legally binding obligation of such party enforceable against it in accordance with its terms. (i) Attorney's Fees and Costs of Collections. In the event that it becomes necessary for the City to bring any action or proceeding to collect unpaid utilities, rent, damages, janrtonal fees, costs, or other sums due under this Agreement, to enforce any provision of this Agreement, to recover damages for NEK's breach of this Agreement, or to seek specific performance of this Agreement, the prevailing party shall be entitled to collect its reasonable attorneys fees, costs of suit, and costs of collection as part of the judgment in such action or proceeding. (j) No Multi - year Fiscal Obligation on City This Agreement is expressly made subject to the limitations of the Colorado Constitution. Nothing herein shall constitute, nor deemed to constitute, the creation of a debt or multi -year fiscal obligation or an obligation of future appropriations by the City Council of Pueblo, contrary to Article X, § 20 Colorado Constitution or any other constitutional, statutory or charter debt limitation. Notwithstanding any other provision of this Agreement, with respect to any financial obligation of the City which may arse under this Agreement in any fiscal year after 2011, in the event the budget or other means of appropriations for any such year fails to provide funds in sufficient amounts to discharge such obligation, such failure shall not constitute a default or breach of this Agreement, including any sub - agreement, attachment, schedule, or exhibit thereto, by the City 14 (k) Certain Provisions Survive Expiration and Termination. The provisions of this Agreement pertaining to insurance, releases, indemnification, payments to the City, and liability shall survive the expiration of the term of this Agreement and termination of this Agreement and continue in effect for a penod of five years following the termination of this Agreement and for such further time as it may take to completely and finally negotiate, settle, or litigate any claim or suit concerning the same (1) Governing Law and Venue. This Agreement shall be governed by the laws of the State of Colorado Venue for any action arising under this Agreement or for the enforcement of this Agreement shall be in a state court with jurisdiction located in Pueblo County, Colorado (m) Assignment. This Agreement shall not be assigned by NEK without the prior wntten consent of the City, which consent may be granted, denied, or conditioned in City's sole and absolute discretion. IN WITNESS WHEREOF, the Parties hereto have executed and delivered on this ?8 'day of Tune_ 2011 NEK ADVANCED SECURITIES GROUP, CITY OF ' ESL* INC By / 1 Print Name N1t4� .V. L. tY1 P tLt4*T P By - 4 01 Jerry Pache r o , ity Manager ATTEST City rk APPROVED AS TO FORM. /71 City Attorney 15 EXHIBIT A (Previous Agreement) FACILITY USE/RACETRACK RENTAL AGREEMENT This Agreement (the "Agreement ") is made and entered into this 28th day of December 2009, by and between the City of Pueblo acting by and through its Honor Farm Properties Enterprise ( "City "), and NEK Advanced Securities Group, Inc. ( "NEK," and together with City, each a "Party" and collectively the "Parties ") WHEREAS, City is the manager and operator of the motorsports facility and racetrack known as Pueblo Motorsports Park located at 3733 North Pueblo Boulevard, Pueblo, Colorado, and WHEREAS, NEK desires to conduct motor vehicle training events ( "Events ") on that portion of the Pueblo Motorsports Park shown on the attached map as "NEK Rental Area" and for purposes of this Agreement, such area is referred to as "Park," and WHEREAS, City is willing to permit NEK to conduct Events at the Park. NOW, THEREFORE, in consideration of the mutual promises and agreements of the Parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City does hereby authorize and permit NEK to conduct Events at the Park and NEK accepts the use of the Park for such purpose for a three -year penod commencing on January 1, 2010, and ending December 31, 2012, unless extended as provided in Section 33, or earlier terminated as provided in Section 29, subject to the following terms and conditions which City and NEK agree to and accept. 1 RENTAL FEES. A daily Rental Fee for the rental of the Park's paved track and off -road dirt areas as further outlined below shall be paid by NEK. Paved Track: $1,250 per day for the first 50 days, and standard customer rate thereafter, during 2010 $1,375 per day for the first 50 days, and standard customer rate thereafter, during 2011 $1,500 per day for the first 50 days, and standard customer rate thereafter, during 2012. Off -road Dirt Areas for OHV Use: $950 per day for the first 50 days, and standard customer rate thereafter, during 2010 $1,075 per day for the first 50 days, and standard customer rate thereafter, during 2011 $1,200 per day for the first 50 days, and standard customer rate thereafter, during 2012. (For purposes hereof "day" means 6.00 a.m. to 12:00 a.m. (midnight) and includes time for an Event and Event set -up and tear - down.) The daily rental fees specified above shall be applicable to a combined total of 50 days paved track and off - road dirt areas during each calendar year Rental fees for days in excess of the combined total of 50 days per calendar year shall be at the standard customer rate. 16 2. EVENT SCHEDULING NEK understands and agrees that the primary purpose of the Park is for public motorsports recreational activities and NEK shall have no priority in scheduling Events during the period from April 1 through October 31 of each calendar year ( "Prime Dates "). Notwithstanding the foregoing, special accommodation will be given to NEK for scheduling Events during non -Prime Dates when more than one week's advanced written notice is given to City City may attempt to reschedule other Renters to accommodate NEK's requests for Prime Dates when at least two weeks' advance written notice is given to City, but only to the extent, as determined by City, that such rescheduling satisfies the primary purpose of the Park, other Renters, and City City may accommodate NEK's requests to schedule Prime Dates when those dates, as determined by City, are not otherwise reserved and they do not have the potential to be reserved for other Renters. 3. NUMBER OF RENTAL DATES. NEK shall use the Park for a minimum of thirty (30) days in each calendar year If NEK uses the Park for less than thirty (30) days in any calendar year, NEK shall pay additional rent in an amount equal to the number of days used less than thirty (30) multiplied by the average of the daily rent for the Paved Track and the daily rent for the Off -road Dirt Areas applicable during such calendar year Additional rent shall be paid in full on or before January 15 of the next calendar year 4. COMBINED USE. If NEK uses both paved track and off -road dirt areas on the same day, NEK shall pay only the paved track rate for that day 5. CONDITION OF TRACK. A portion of each Rental Fee includes standard grooming of the track by City, as determined by City, following NEK use and prior to the next scheduled Event. NEK shall clean up any major debris left on the track or off -road dirt areas immediately following each Event held by NEK. NEK is required to provide dust control during use, when necessary, as determined by City 6. REMITTANCE OF FEES. All Rental Fees are due within 10 days of the conclusion of each Event. After 40 days, a late fee of $50 00 will apply Interest shall accrue at the rate of 8% per annum on all Rental Fees past due for more than 40 days. 7 RELEASE AND WAIVER OF LIABILITY Prior to entering the Park on any NEK Event day, all persons MUST sign a Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement ( "Release Agreement ") This Release Agreement must be signed in the presence of NEK personnel and is required before entrance into the Park on any Event day All executed Release Agreements shall be delivered to City pnor to the end of each Event. NEK shall bear sole responsibility for full compliance with this Section. Entry into the Park by any person dunng an Event day prior to the execution of a Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement by such individual shall constitute a material breach of this Agreement by NEK. 8. CANCELLATION NEK may cancel a scheduled Event upon 24 hours prior written notice given to City and each party shall be released from all obligations with respect to the Event. If NEK does not timely cancel an Event, NEK shall pay all rental fees NEK would have paid if the Event had been completed and not cancelled, provided, that if NEK cancels an Event due to the dangerous condition of the paved track or the off -dirt areas for OHV use, NEK shall not be obligated to pay a rental fee for the Event. 9 NON - TRANSFERABLE With the sole exception of its subsidiaries and affiliates and for the sole purpose of motor vehicle training, NEK shall not sublease, transfer, or assign to any other party this Agreement without the prior written consent of City Any attempt to sublease, transfer, or assign this Agreement, or any of NEK's rights hereunder, without the prior written consent of City is void and shall constitute a material breach of this Agreement by NEK. In the event of any assignment, sublease or transfer, whether to a third party or to an NEK subsidiary or 17 affiliate, NEK shall not be released from any responsibility hereunder and shall remain liable and responsible to City for such subleasee, transferee, or assignee and its activities in accordance with the terms and conditions of this Agreement. 10. IMPROVEMENTS. Subject to the prior written approval by the City Manager of the design, plans, specifications and designed area in the Park therefor, NEK may at its sole risk, (1) store and safe -keep up to 70 training vehicles ( "Vehicle Storage Area "), (ii) install a paved skid pad ( "Skid Pad "), (iii) install in an environmentally sound mariner up to a 1,000 gallon above- ground fuel storage facility for the purpose of fueling its training vehicles ( "Fuel Storage Facility "), and (iv) exclusively occupy and make improvements, including, but not limited to water line, ADA compliant access ramp, and fencing the entire area, to the existing single -wide mobile classroom for the purpose of holding training sessions ( "Classroom ") (herein collectively the "Improvements "). All costs associated with the development, installation, construction, and maintenance of the Improvements shall be the sole responsibility of NEK. All Improvements shall be constructed, installed, maintained, and operated in compliance with all local, state, and federal laws and regulations. NEK shall maintain the Improvements in good and safe condition, appearance and state of repair, regardless of the cause or need for maintenance and repair Upon expiration or early termination of this Agreement, NEK shall, at the option of City, by notice given to NEK by City within 24 months after the expiration or termination of this Agreement, remove the Vehicle Storage Area, Skid Pad and/or Fuel Storage Facility from the Park. In the event of such removal, NEK shall restore the designated area as near as practicable to its original condition. With respect to the Fuel Storage Facility, NEK shall remove, clean up, and remediate all contamination caused by or resulting from the release, discharge, or spill of fuel and indemnify, defend, and save harmless City and the Park therefrom. This indemnification provision shall survive the expiration or termination of this Agreement. City shall have no liability or responsibility in any manner for the Improvements or vehicles stored in the Vehicle Storage Area, all such liability and responsibility shall be that of NEK alone NEK is granted the right to enter the Park at reasonable times on other than NEK Event days for the limited purpose of accessing, maintaining, and using the designated areas and Improvements, provided, such entry, access, and use shall not unreasonably interfere with the use of the Park and its facilities by other persons and entities. Any such entry, access, and use shall be subject to the conditions and provisions of this Agreement. In consideration of the use of the designated areas in the Park, NEK shall pay additional monthly rent to City in the monthly amount of $750 00 during the first year, $1,000 00 during the second year and $1,250 00 during the third year, and $1,500 during the Extended year, payable monthly in advance without notice, on the first day of each month during the effective term of this Agreement, commencing January 1, 2010 In consideration of actual costs incurred by NEK for the installation of the Skid Pad, and upon receipt by City of documented proof that such costs were incurred, City shall apply credit by the same amount to NEK toward monthly rent beginning on the date the Skid Pad is completed. 11 FENCING On or before April 15, 2010, NEK shall coordinate and install in accordance with design, plan, specification, and location approved in writing by the City Manager, approximately 600 linear feet of chain link fencing around City's maintenance facility area and privacy fencing around the designated Vehicle Storage Area. In consideration of actual costs incurred by NEK for the installation of said fencing, and upon receipt by City of documented 18 proof that such costs were incurred, City shall apply credit by the same amount to NEK toward monthly rent beginning on the date the fencing is completed. 12. PROHIBITED USES NEK understands and agrees that this Agreement is solely for access to and use of the Park. NEK SHALL NOT photograph, film, or broadcast any Event or any part thereof without a separate written agreement authorizing such activities. In addition, no footage or images obtained from City access granted herein may be reproduced, sold, broadcast, commercially exploited, or distributed without a separate written license agreement authonzing such use. NEK understands and agrees that this Agreement and NEK's use of the Park is subject to the conditions and limitations of the Conservation Easement recorded July 2, 2001 as Reception No 1390542 in the records of the Pueblo County Clerk and Recorder ( "Easement ") NEK acknowledges receipt of a copy of the Easement. City makes no representation or warranty that NEK's intended use of the Park or the provisions of this Agreement are approved uses or allowed under the Easement. 13. CERTIFICATE OF INSURANCE Upon execution of this Agreement but in no event less than seven (7) days prior to the first scheduled Event of each year, NEK shall provide City a Certificate of Insurance showing evidence of habilrty coverage for bodily injury and property damage including contractual coverage with a combined single limit of not less than Five Million Dollars ($5,000,000 00) per occurrence, with a Five Million ($5,000,000 00) annual aggregate, and shall be endorsed to add as additional insureds the City of Pueblo and the City of Pueblo acting by and through its Honor Farm Properties Enterprise and their officers, employees, and agents, (collectively, the "Indemnified Parties ") Such policies shall state that the insurance is primary in coverage to any other insurance which may be available to City Concurrent with the above mentioned Certificate of Insurance evidencing liability coverage, NEK or the applicable employer shall also provide City a Certificate of Insurance showing evidence of statutory workers' compensation insurance and shall contain an endorsement waiving subrogation against both the City of Pueblo and the City of Pueblo acting by and through its Honor Farm Properties Enterprise Workers' compensation coverage shall be obtained notwithstanding that NEK may have no employees as defined under said Act or that NEK might otherwise avail itself of an exemption under the Act from any legal requirement to obtain such coverage. Such insurance shall cover all employees of NEK performing work at the Park irrespective of whether such employees may be shareholders, managers, partners, or owners of NEK or exempt employees under the Act. NEK may purchase, for non - statutory employees, a participant accident insurance policy which would include death, disability, dismemberment, and medical benefits. Any independent contractors of NEK shall be covered under NEK's workers' compensation insurance and/or participant accident insurance policy or show evidence that said independent contractor is covered under its own workers' compensation insurance policy NEK shall have full and sole responsibility for ensuring compliance with this Section, including without limitation indemnification pursuant to Section 14 All insurance policies required hereunder shall provide that such policies not be cancelled or reduced without thirty (30) days' advance written notice to the Indemnified Parties. Failure of NEK to comply with the provisions of this Section shall constitute a material breach of this Agreement by NEK. 14. INDEMNIFICATION NEK agrees to be responsible for, to hold harmless, indemnify, and defend each of the Indemnified Parties from any and all claims, including reasonable 19 attorney's fees and costs, of liability whether by reason of injury to or death of the person or of damage to the property of another or otherwise arising in connection with any use of the Park by NEK, or any default or breach of any term of this Agreement by NEK, excepting only claims based on the Indemnified Parties' negligence, bad faith, or intentional acts. The Indemnified Parties shall have the right to retain their own counsel, in which case those reasonable attorney and expert fees and costs shall be covered by NEK's indemnification obligation in this Section. This Section shall survive termination or expiration of this Agreement for a penod of six (6) years, provided, however, that this Section shall survive termination or expiration of this Agreement for a period of ten (10) years for any claims otherwise covered by this Section that are brought by minors. 15. PROPERTY USE AND DAMAGE NEK shall maintain a clean and safe activity area throughout each Event and, upon completion of each Event, except for standard grooming of the paved track as provided in Section 5, NEK shall repair and restore the Park and all its tracks and facilities to the same condition in which it was received by NEK. NEK shall repair any and all damages to the Park (including without limitation any resources, facilities, premises, or property of City or the Park) caused by or attributable to NEK's activities, and City or its designee shall be the sole judge of the extent of such damage and the adequacy of any repairs or restoration. No physical alteration to the Park (including without limitation installation or modification of new or existing structures, alteration of any trees or other plants, and disturbance of any ground surface or cover) may be made without City's pnor written consent. 16. UNSAFE OR UNLAWFUL CONDUCT Notwithstanding any provision herein to the contrary, City or its designee shall have the sole discretion to terminate any activity permitted hereunder when such action is deemed necessary or appropriate for the safety of lawful users of the Park, for the protection of the Park or resources or equipment of City, or for the prevention of a violation of any local, state, or federal law or regulation or the Easement relating to or arising out of the use of the Park or any activity permitted hereunder 17 SCHEDULING Circumstances, including without limitation changes in City's other scheduled motorsports activities or events or resurfacing of or other work on the Park, may necessitate a revision to an existing schedule of Events, which the Parties hereby agree to work together in good faith to address. The Parties acknowledge and agree that any revisions to the schedule of Events by City shall not constitute a breach or default of this Agreement. 18. NO REPRESENTATION OR WARRANTY OF CONDITION OR FITNESS PARK IS PROVIDED ON AN "AS IS" "WITH ALL ITS FAULTS" BASIS, AND CITY MAKES NO REPRESENTATION OR WARRANTY AS TO THE CONDITION OR FITNESS OF THE PARK FOR NEK'S EVENTS OR FOR ANY PARTICULAR USE OR PURPOSE. Accordingly, NEK is hereby advised that NEK shall be solely responsible for personally inspecting the Park before execution of this Agreement and commencement of any Event. NEK's commencement of any Event shall constitute an expressed acknowledgement by NEK that the Park is safe and adequate for NEK's permitted use. NEK shall have exclusive control of the Park during its Events and shall be responsible for all equipment, except City's motorized equipment when operated by City employees, and for adequate safeguard for the protection of NEK, its employees, agents, and representatives, and persons engaged in an Event. Notwithstanding any provision in this Agreement to the contrary or which may be construed to 20 the contrary, City assumes no obligation or responsibility to keep or maintain the Park or any track or facility thereon in good and safe condition, appearance or state of repair, regardless of cause of need for maintenance and repair NEK's sole remedy if the Park, its tracks or facilities are not maintained in good and safe condition, appearance or state of repair is to terminate this Agreement. 19 RELATIONSHIP• Nothing in this Agreement is intended to, or shall be deemed to constitute, a partnership or joint venture between the Parties, or to create any agency or partner relationship between the Parties. Neither Party shall hold itself out as a partner, joint venture, agent, or representative of the other under this Agreement. 20. INTELLECTUAL PROPERTY NEK shall NOT use any name, trademark, service mark, or logo of City including the name "Pueblo Motorsports Park" for any purpose, without the prior review of all proposed uses by NEK and the expressed prior written consent of City, as the case may be. Notwithstanding the foregoing, NEK may use the official name of the Park in accurate and truthful advertising solely as a means for identifying the location of an Event. 21 JURISDICTIONIVENUE This Agreement and all nghts and obligations of the Parties shall be construed and governed in accordance with the laws of the State of Colorado With respect to any claims or litigation associated in any manner with or arising out of this Agreement, the Parties agree to submit to the exclusive personal jurisdiction of the District Court in and for Pueblo County, Colorado Exclusive venue for any such litigation shall be Pueblo County, Colorado In the event of litigation regarding the terms and conditions of this Agreement, the prevailing Party shall be awarded reasonable attorney's fees and costs. 22. TRACK REQUIREMENTS NEK acknowledges and agrees that all applicable local, state, and federal laws and regulations, and the track requirements set forth herein, including all Exhibits attached hereto and incorporated herein, are binding obligations of NEK and shall govern the permitted uses of the Park by NEK and its agents, employees, representatives, and contractors. 23. MINORS No individual under the age of 18 years shall be allowed during any Event day in any restricted area of the Park (which shall include the track surface, pit areas, garage areas, run -off areas, trackside communications stations, and any other location as defined in generally accepted policies of liability coverage for motorsports entities), without a (1) Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement, and (2) a Parental Consent to the Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement executed by each minor and the minor's parent or legal guardian. These documents must be signed in the presence of NEK personnel and are required before said minor's entrance into the Park. All executed documents shall be delivered to City prior to the end of each Event. NEK shall bear sole responsibility for full compliance with this Section. Entry by any individual during an Event day prior to the execution of the Agreements listed above in this Section by the proper party shall constitute a material breach of this Agreement by NEK. 24. OTHER ACTIVITIES Any activities to be conducted in the Park during NEK's use of the Park (including without limitation food service or catenng, entertainment, product or 21 merchandise sales, press conferences, or other commercial or professional activities) must be approved in advance in writing by City, and shall be subject to the requirements, conditions, and fees established by City All individuals engaging in such activities shall be required to execute a Release and Waiver of Liability, Assumption of Risk and Indemnity Agreement in accordance with Sections 7 and 23 above 25. RIGHT TO REFUSE ACCESS City may, at City's sole discretion, deny access to, or remove from, the Park any individual(s) who are disruptive, fail to obey any lawful order, or fail to comply with any covenant or provision of this Agreement. 26. ENTIRE AGREEMENT This Agreement, including all Exhibits attached hereto, contains the entire agreement of the parties relating to the subject matter contained herein. There are no promises, terms, conditions, rights, or obligations other than those contained herein. This Agreement shall supersede all previous communications, representations, or agreement, whether verbal or written, between the parties. 27 COLORADO GOVERNMENTAL IMMUNITY ACT No term, provision or condition of this Agreement shall be construed or interpreted as a waiver, either express or implied, of any immunities, rights, benefits or protections provided or available to City, its officers and employees under applicable law, including, without limitation, those provided and available to City and its officers and employees under the Colorado Governmental Immunity Act, §24 -10 -101, et seq., C.R.S., as amended or as may hereafter be amended. 28. THIRD PARTIES. Notwithstanding anything in this Agreement to the contrary, NEK agrees that City is not liable or responsible for the acts or omissions of the exclusive vendors, preferred vendors, security personnel or other third parties made available by or through City, at City's sole option, to NEK under this Agreement at NEK's request ( "Third Parties ") NEK agrees that the Third Parties are independent contractors made available by City solely for the benefit of and as an accommodation to NEK and no contractual, tort or other liability results from or arises out of City making or failure to make the Third Parties available to NEK. 29 TERMINATION AND DEFAULT If either party is in default hereunder, the non- defaulting party may give written notice describing the default to the defaulting party If the defaulting party does not correct such default within twenty (20) days after receipt of said notice, or if the default cannot be corrected within said 20 -day period and the defaulting party fails to commence action to correct the default within said 20 -day penod and thereafter diligently pursues corrective action, the non - defaulting party may upon an additional five (5) days' notice given to the defaulting party terminate this Agreement. Notwithstanding the foregoing, if NEK commits a material breach as defined in Sections 7, 12 and 22, City may terminate this Agreement upon five (5) days' prior written notice to NEK specifying the material breach and the date of termination. Except for accrued rights and liabilities and those covenants which survive termination hereunder, upon such termination each party shall be released from all future duties and obligations hereunder 30. NOTICE. Any notice required or permitted to be given hereunder shall be in writing and delivered personally or by certified mail, postage prepaid, as follows. 22 ii 4 (a) If to City, City of Pueblo, 1 City Hall Place, Pueblo, Colorado, 81003, Attention. City Manager, or (b) If to NEK. NEK ASG, 110 S Sierra Madre, Colorado Springs, Colorado, 80903, Attention. Mark Marchant. 31 STATEMENT OF TRADE NAME Front Range Motorsports, Inc ( "Front Range ") on October 29, 2009, filed its statement of trade name in the records of the Colorado Secretary of State to transact business under the trade name "Pueblo Motorsports Park" ( "Statement of Trade Name ") Front Range hereby confirms and ratifies City's use for any and all purposes of the name "Pueblo Motorsports Park." Front Range shall within twenty (20) days after execution of this Agreement by the Parties withdraw its Statement of Trade Name pursuant to Section 7 -71- 106, C.R.S and assign and transfer to City all its right, title, and interest in and to the name "Pueblo Motorsports Park" and all assets Front Range acquired from Pueblo Motorsports, Inc This Agreement shall not be deemed to be in effect and shall terminate if Front Range fails to timely comply with the covenants of this Section. 32. MISCELLANEOUS PROVISIONS. 32.1 No assent, express or implied, by City to any breach of default by NEK in the performance of any one or more of the covenants hereof shall be deemed or taken to be a waiver of any succeeding breach of or default in the same or different covenant. 32.2 All financial obligations of City under this Agreement are subject to and conditioned upon funds for such purpose being budgeted, appropriated, and otherwise made available. 32.3 The person executing this Agreement on behalf of NEK warrants and represents that he and NEK have been duly authorized by all appropriate and necessary action to execute this Agreement and this Agreement is a valid and binding obligation of NEK enforceable in accordance with its terms. 33. OPTION TO EXTEND If NEK is not in default hereunder, NEK shall have the option to extend this Agreement for an additional period of one (1) year from January 1, 2013, to December 31, 2013, upon the same terms and conditions, except: (a) Rental Fees shall be Paved Track: $1,625 00 per day for the first 50 days, and standard customer rate thereafter, during 2013 Off -Road Dirt Areas for OHV Use 23 o w $1,325 00 per day for the first 50 days, and standard customer rate thereafter, dunng 2013 (b) NEK shall have no option to extend this Agreement after December 31, 2013 IN WITNESS WHEREOF, the Parties hereto have executed and delivered this Agreement as of the date first wntten above. NEK ADVANCED SECURITIES GROUP, CITY OF PUEBLO ACTING BY AND INC THROUGH ITS HONOR FARM PROPERTIES ENTERPRISE By Pnnt Name By Title Title. Executed this day of , 2009, for the sole purpose of Section 31 of the foregoing Agreement. FRONT RANGE MOTORSPORTS, INC By Print Name Title 24 4 FACILITY RENTAL RULES AND REGULATIONS We want to welcome you to the Honor Farm Properties Enterprise Motorsports Park. The following are general rules and informational items that will aid in making your visit enjoyable and will assist our personnel in better serving your needs. If you have any questions or problems during your visit, please contact our staff for assistance. • All vehicle driver safety equipment which is standard in the industry or required by applicable liability insurance shall be in full and effective use at all times. • Do not drive stakes into the ground or into the asphalt. Underground utilities are everywhere and there will be a charge for utility or asphalt repair • Please keep the speed of all vehicles to 10 MPH or lower when not on the actual race track surface. • Marked trash barrels are located in the designated area for your convenience. Please assist us in keeping the Park clean by using these barrels. • All parking attendants, if necessary, shall be the sole responsibility of NEK. We hope your visit to the Honor Farm Properties Enterprise Motorsports Park is enjoyable and we wish you the best of luck! 25 0 EXHIBIT B (PMP Map) . 1 .I , i r . ,, 1 _ .1. 1 1 `1 ■ 1 1 , Q 'Fae \ , R SA 1i F 4 , '16 . . ,-, ,...k \ t ' 1 ,„.„.....aygr\-40//1)4i ..131 ' \*; " 4 \ ( 1.- (.-- cy ' .', \i .............■*". . s 26 EXHIBIT C FACILITY RENTAL RULES AND REGULATIONS We want to welcome you to the Honor Farm Properties Enterprise Motorsports Park. The following are general rules and informational items that will aid in making your visit enjoyable and will assist our personnel in better serving your needs. If you have any questions or problems during your visit, please contact our staff for assistance. • All vehicle driver safety equipment which is standard in the industry or required by applicable liability insurance shall be in full and effective use at all times. • Do not drive stakes into the ground or into the asphalt. Underground utilities are everywhere and there will be a charge for utility or asphalt repair • Please keep the speed of all vehicles to 10 MPH or lower when not on the actual race track surface. • Marked trash barrels are located in the designated area for your convenience. Please assist us in keeping the Park clean by using these barrels. • All parking attendants, if necessary, shall be the sole responsibility of NEK. • Immediately clean any fluid spills • No Alcoholic beverages • No pyrotechnic devices • No animals /pets • If using dirt areas work with PMP Track NEK to coordinate watering of dirt. • Clean up glass and screws after each use of asphalt and track areas. • No driving off track on purpose. • No verbal altercations with PMP staff or volunteers. • No alterations to facilities without written permission from City • No pushing or ramming of vehicles outside of designated area. We hope your visit to the Honor Farm Properties Enterprise Motorsports Park is enjoyable and we wish you the best of luck! 27 e 1 . 4 f __.,„ I g as t-i - f-__' - -im i hrli t , f July 6, 2011 To whom it may concern I, Andrew Woglom, Chief Financial Officer of NEK Advanced Securities Group (NEK), hereby authorize MARK MARCHANT, as Chief Administrative Officer, to act on NEK's behalf in all manners relating to NEK's proposed 2011 contract with Pueblo Motor Sports, including signing of all documents relating to these matters. Any and all acts carried out by Mark Marchant on NEK's behalf shall have the same effect as acts of NEK. This authorization is valid until further written notice from NEK Advanced Securities Group, Inc. Sincerely, ./ Andr, w W' glom, Chie Fin • cial Officer and Treasurer NEK ' d nced Securities Group, Inc. 110 S. Sierra Madre Street Colorado Springs, CO 80903 719 -634 -5523 This correspondence and any attachments or referenced material may contain Confidential and Propriety Information. Such confidential and proprietary information may not be used, reproduced, or disclosed to any other parties for any other purpose without the expressed written permission of NEI( Advanced Securities Group, Inc.