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CITY OF CORONA
VENUE MANAGEMENT AND OPERATING AGREEMENT
(152 E. SIXTH STREET – KNITTING FACTORY ENTERTAINMENT, INC.)
1. PARTIES AND DATE.
THIS VENUE MANAGEMENT AND OPERATING AGREEMENT (“Agreement”) is entered into by and between the CITY OF CORONA, a California municipal corporation (“City”), and Knitting Factory Entertainment, Inc., a Delaware corporation (“Operator”). This Agreement shall become effective as of October 17, 2026 (“Effective Date”). Operator and City are sometimes individually referred to as “Party” and collectively as “Parties” in this Agreement.
2. RECITALS.
A. Venue. City is the owner of that certain commercial real property located at 152 East Sixth Street in the City of Corona, County of Riverside, State of California identified as Assessor Parcel Number 117-191-014 and consisting of approximately 14,576 square feet (“Venue”).
B. Purpose. The purpose of this Agreement is to engage the Operator to provide for the management and operation of the Venue as a first-class music and live entertainment venue consistent with the City’s goals of creating a positive economic impact, stimulating growth for the City’s downtown area, and providing quality family-friendly entertainment opportunity for the community.
3. TERMS.
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below.
1.1 “Acceptable Condition” means a condition no worse than that existing on the Effective Date, reasonable wear and tear excepted, and at least comparable to the standards of maintenance and level of service other live entertainment facilities of similar age, size and amenities.
1.2 “Affiliate” shall mean any person, directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Operator or managers of Docusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF #10328091v11
Operator holding a twenty-five percent (25%) or greater interest in Operator, or any member of the immediate family of a person, directly or indirectly controlling Operator or such a manager of Operator. The term “control,” as used in the immediately-preceding sentence, shall mean with respect to a corporation or limited liability company the right to exercise, directly or indirectly, more than fifty-percent (50%) of the voting rights attributable to the controlled corporation or limited liability company and, with respect to any individual, partnership, trust, other entity or association, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled entity.
1.3 “Applicable Laws” means any and all applicable laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State of California, the County of Riverside, the City or any other political subdivision in which the Venue is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over City, Operator, or the Venue, including all applicable federal, state and local occupation, safety and health laws, rules, regulations and standards, applicable federal and state and labor standards, applicable prevailing wage requirements, the City zoning and building standards, building, plumbing, mechanical and electrical codes, as they apply to the Venue, all other ordinances and requirements of the City and its Municipal Code, and all applicable disabled and handicapped access requirements, including, without limitation, the Americans With Disability Act, 42 U.S.C. §12101, et seq., Government Code §4450, et seq., and the Unruh Civil Rights Act, Civil Code §51, et seq.
1.4 “Capital Expenditures” means expenditures for components, systems, improvements and structures within the Venue that have a useful life of not less than three (3) years or extend the life of the component, system, improvement or structure by not less than three (3) years. Capital Expenditures shall not be Operating Expenses.
1.5 “Claims” means all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, as well as all costs and expenses thereof, (including, but not limited to, fines, penalties, and reasonable attorney fees).
1.6 “Commencement Date” means the date that the Venue is open to the general public.
1.7 “Commencement of Construction” means the initiation of physical demolition or construction for the Venue pursuant to validly issued permits and approved plans, evidenced by the commencement of substantial and continuous work on the Venue site. Commencement of Construction shall require, at a minimum, the commencement of grading, excavation, foundation work, installation of permanent underground utilities, or other comparable physical work that is an integral and substantial part of the Venue. Activities such as surveying, staking, geotechnical or environmental investigations, soil testing, demolition unrelated to construction of the Improvements, preparation of plans, obtaining permits, mobilization, delivery or storage of materials or equipment, or temporary site improvements shall not, by themselves, constitute Commencement of Construction.
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1.8 “Contingency Reserve” means the amount set forth in the Operating Budget and held in the Operating Account to cover unforeseen or unexpected fluctuations in the Operating Expenses.
1.9 “Event” means a show for which tickets are made available for sale to the general public or any other type of programming, rental, promoted event, special event, etc., and which involves a scheduled beginning and ending time, and shall include, without limitation, all live musical events, live entertainment events, movies, public and private rentals, special events and public and private functions.
1.10 “Excess Operating Expenses” means the amount of documented and substantiated Operating Expenses for the Operating Year that exceeds the projected amount of Gross Revenue to be collected by Operator for that Operating Year.
1.11 “Facility Fee” is defined in Section 4.10 of this Agreement.
1.12 “Gross Revenue” means, collectively, on a cash basis, for any period, any and all payments, fees and deposits of every nature received by Operator (including, except as expressly set forth to the contrary in this Agreement, from any revenue streams not presently contemplated by this Agreement) for use of the Venue, including revenues derived from food or beverage sales at the Venue but excluding the Facility Fee.
1.13 “Incentive Management Fee” means a fee payable to Operator annually in arrears in an amount equal to ten percent (10%) of the Gross Revenue that exceeds Six Million Dollars ($6,000,000) annually.
1.14 “Initial Term” is defined in Section 3.1 of this Agreement.
1.15 “Maintenance and Repairs” means those necessary, ordinary, day-to-day maintenance, repairs to the Venue, and restoration and replacement of Venue assets, not otherwise constituting Capital Expenditures, in accordance with usual and customary industry practices consistent with those of other live entertainment facilities of similar age, size and amenities and as set forth in the Operating Budget.
1.16 “Management Fee” means a fee payable to Operator quarterly in arrears in an amount equal to five percent (5%) of the Gross Revenue up to Five Hundred Thousand Dollars ($500,000) per month. Payment to Operator for Gross Revenue in excess of Five Hundred Thousand Dollars ($500,000) per month shall be included in the Incentive Management Fee.
1.17 “Marketing Plan” is defined in Section 4.7 of this Agreement.
1.18 “Net Profit” means the Gross Revenue less all documented Operating Expenses, the Management Fee and the Incentive Management Fee.
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1.19 “Operating Budget” is defined in Section 6.3 of this Agreement.
1.20 “Operating Expenses” means all costs and expenses reasonably and actually incurred in connection with the management, operation, repair, maintenance, improvement and marketing of the Venue, including, but not limited to: (1) actual and direct costs for Venue Staff; (2) Maintenance and Repair; (3) booking and programming services; (4) utility services; (5) pest control; (6) marketing activities and promotional expenses; (7) security services; (8) amounts expressly approved in advance by City, over and above any insurance proceeds received, expended to restore the Venue after a casualty loss or condemnation; (9) taxes, including possessory interest taxes; (10) all charges, assessments, fees and taxes which may now or at any future time be imposed by any governmental body having jurisdiction on the uses and operation of the Venue; and (11) all other customary and reasonable expenses incurred in the operation of a live entertainment venue. Notwithstanding the foregoing, “Operating Expenses” shall specifically exclude: (a) legal fees and other expenses incurred by either Party in connection with the negotiation, documentation, interpretation or enforcement of this Agreement; (b) taxes owed by Operator; (c) Operator overhead or profit; (d) any costs of Operator for services that are not directly provided to the Venue; and (e) Capital Expenditures.
1.21 “Operating Year” means, initially, the period from the Effective Date to June 30, 2027, and thereafter the period from July 1 of each calendar year to June 30 of the following calendar year.
1.22 “Personal Property” means all personal property, technical equipment, furniture, fixtures, displays and similar property used and, following the date of this Agreement, acquired as an Operating Expense or otherwise for use at the Venue.
1.23 “Renewal Term” is defined in Section 3.1 of this Agreement.
1.24 “Start Up Budget” is defined in Section 6.2 of this Agreement.
1.25 “Termination Date” means the actual date that the termination of this Agreement is effective pursuant to Sections 3.2 through 3.5 or the date this Agreement expires or terminates according to its terms.
1.26 “Venue Staff” means employees or temporary workers who provide services directly for or at the Venue and whose duties may include ticketing, ushering guests, setting up and breaking down equipment, maintaining cleanliness, providing customer service, serving food and beverages, and enforcing safety protocols.
ARTICLE II
OPERATOR REPRESENTATIONS AND WARRANTIES
2.1 Experience. Operator represents and warrants that it has the experience, expertise and resources necessary to perform all obligations under this Agreement, and its duties and Docusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF #10328091v11
obligations, expressed and implied, contained herein, and City expressly relies upon Operator's representations regarding its skills and knowledge. Operator further represents and warrants that it has or will retain skilled, experienced and sophisticated employees or contractors in each of the areas of expertise requires to provide all services and perform all obligations under this Agreement in accordance with Applicable Law.
2.2 Authority. Operator has the full power, authority and legal right to enter into this Agreement and to consummate the transactions contemplated hereby and the individuals executing this Agreement on behalf of Operator have the corporate power, right and actual authority to bind Operator to the terms and conditions hereof.
2.3 Conflicts. The execution and delivery of this Agreement, the incurring of the obligations set forth herein and compliance by Operator with the terms of this Agreement and the documents referenced herein (i) do not conflict with the articles of organization or the operating agreement of Operator, (ii) do not, to the knowledge of Operator, violate any Applicable Law, and (iii) do not conflict with and will not result in the material breach of any terms, conditions or provisions of, or constitute a default under, any bond, note, or other evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan, partnership agreement, lease or other agreement or document to which Operator is a party.
2.4 No Litigation. There are no actions, suits or proceedings pending or, to the knowledge of Operator, threatened against or affecting Operator which could have a material adverse effect on the ability of Operator to honor its obligations under this Agreement or that involve the enforceability of this Agreement, at law or in equity.
2.5 No Default. Operator is not in default in violation of, operating under, or subject to, any order, writ, injunction, decree or demand of any court or any governmental authority.
2.6 No Breach. The consummation of the transactions hereby contemplated and the performance of this Agreement will not result in any breach of, or constitute a default under, any mortgage, deed of trust, lease, bank loan or credit agreement, partnership agreement, corporate charter, bylaw, or other agreement or instrument to which Operator is a party or by which it or any of its assets may be bound or affected.
2.7 Not Insolvent. Operator is not insolvent (as such term is defined in the Bankruptcy Code of 1978, 11 U.S.C. Section 101, et seq., as amended) and will not be rendered insolvent by execution of this Agreement or the consummation of the transactions contemplated hereby.
2.8 Misleading Statements. No representation, warranty or statement of Operator in this Agreement, or in any document, report, plan, certificate or schedule furnished or to be furnished to City by Operator (whether before or after the Effective Date) contains or will contain any untrue statement of a material fact or intentionally omits or will intentionally omit to state a material fact necessary to make the statements or facts contained therein not misleading.
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ARTICLE III
TERM AND TERMINATION
3.1 Initial Term; Renewal Term. The term of this Agreement shall commence on the Commencement Date and continue for a period of five (5) years, unless terminated earlier as provided in this Article III (“Initial Term”). Provided Operator is not in default under any terms of this Agreement, Operator is hereby granted one (1) option to renew this Agreement, under the same terms and conditions as set forth in this Agreement or such revised terms mutually agreed upon by the Parties, for the further term of five (5) years (“Renewal Term”) from and after the expiration of the Initial Term. Operator may exercise its option to renew by giving City written notice of its election at least one hundred and eighty (180) calendar days prior to the expiration of the Initial Term. The terms “Initial Term” and “Renewal Term” may sometimes be generally and collectively referred to as “Term” in this Agreement.
3.2 Termination by City for Cause. This Agreement may be terminated by City at any time prior to the expiration of the Term if City reasonably determines that Operator has materially breached this Agreement. In the event City determines that any act or failure to act by Operator constitutes a material breach of this Agreement, City shall give written notice thereof to Operator, which notice shall describe the nature of the breach(es) of this Agreement. Unless Operator cures such breach(es) within thirty (30) calendar days after receiving the written notice from City, or as otherwise mutually agreed upon by the Parties, this Agreement shall be terminated.
3.3 Termination by City for No Cause. City may terminate this Agreement for any reason or for no reason prior to the expiration of the Term by written notice to Operator at least one hundred and eighty (180) calendar days prior to the effective Termination Date.
3.4 Immediate Termination by City. City may terminate this Agreement immediately by giving written notice to Operator of such termination, and specifying the effective Termination Date upon the occurrence of any one of the following events:
3.4.1 Public Safety. The performance of this Agreement by Operator creates, has created or is likely to create, a material risk to public health, safety or general welfare as reasonably determined by the City.
3.4.2 Bankruptcy. Operator or an Affiliate company owned in whole or in part by Operator that provides any services under this Agreement files a petition under any bankruptcy or insolvency statute or similar statute, or enters into a general arrangement with creditors, or if any action is commenced against Operator or an Affiliate that provides any services under this Agreement pursuant to any such statute and such action is not dismissed or discharged within ninety (90) days from the date of its filing.
3.4.3 Damages. All or substantially all of the Venue is destroyed by fire or other casualty, and City notifies Operator that the Venue will not be restored.
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3.4.4 Prior to Construction. Prior to the Commencement of Construction of the Venue, the City, in its sole and absolute discretion, decides not to pursue construction and/or operation of the Venue.
3.5 Termination by Operator. This Agreement may be terminated by Operator at any time prior to the expiration of the Term by written notice to City at least one hundred and eighty (180) calendar days prior to the effective date of termination.
3.6 Effect of Termination. In the event of termination or expiration of this Agreement, the procedures set forth below shall apply.
3.6.1 Payment of Management Fee.
(A) In the event this Agreement is terminated pursuant to Section 3.3 of this Agreement, City shall pay to Operator the Management Fee for each month remaining in the Term after the Termination Date up to a maximum of twelve (12) months. For purposes of this Section 3.6.1 only, the Management Fee shall be calculated based upon the Gross Revenues for the month in which the City provides notice of termination under Section 3.3. (B) In the event this Agreement is terminated pursuant to Sections 3.4 or 3.5, City shall pay to Operator the Management Fee due and payable under the terms of this Agreement, prorated up to the Termination Date. In the event that this Agreement is terminated pursuant to Section 3.4.4, City shall pay Operator all documented and verified costs and expenses incurred on behalf of or for the benefit of the Venue prior to the Termination Date that have not otherwise been paid by the City provided that Operator has notified City in advance of incurring such costs and expenses.
3.6.2 Surrender of Venue; Personal Property. Operator shall surrender and deliver the Venue and all Personal Property to the City in an Acceptable Condition, any alterations, improvements or additions to the Venue approved by the City excepted. City will at all times retain ownership of all Personal Property.
3.6.3 Accounting of Outstanding Matters. Operator and City shall provide an accounting to each other for all matters outstanding with respect to this Agreement. City will reimburse Operator for all accrued and unreimbursed Operating Expenses incurred by Operator prior to the Termination Date that have not otherwise been paid from the Operating Account.
3.6.4 Records. Within sixty (60) days of the Termination Date, Operator shall, at Operator’s expense, also deliver to the City the following with respect to the Venue:
(A) All original records, contracts, subleases, receipts for deposits, unpaid bills, and other papers or documents pertaining to the Venue that are in the Operator’s possession.
(B) All documents and records, including invoices and records of Docusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF #10328091v11
payment, required in order to conduct the audit permitted by Section 7.4 of this Agreement. (C) A final accounting reflecting the balance of expenses, assets and liabilities on the Venue as of the Termination Date.
(D) Operator shall surrender the Operating Account and all other funds held by Operator for the benefit of the City or the Venue to the City or its designee. (E) Operator shall assign, delegate and/or deliver, as appropriate, any contracts entered into by Operator for the Venue to the City or its designee and City or its designee shall assume Operator’s obligations thereunder as of the Termination Date. (F) Operator shall assign to City any warranties then in effect that it may have obtained in connection with Personal Property or any equipment or material used at the Venue and any software program, operating systems, licenses, codes and related programs and services in use at the Venue immediately prior to the Termination Date.
3.6.5 Rights Surviving Termination. The termination of this Agreement shall not affect the rights of either Party with respect to any damages it has suffered as a result of any breach of this Agreement, nor shall it affect the rights or obligations of either Party with respect to liabilities or claims accrued, or arising out of events occurring prior to the Termination Date, all of which shall survive termination of this Agreement.
ARTICLE IV
OPERATOR’S MANAGEMENT RESPONSIBILITIES
4.1 Exclusive License to Operate. Effective on the Effective Date, City grants Operator, and Operator accepts, an exclusive license to manage and operate the Venue and to purchase, create, produce, promote, coordinate and stage all Events to be held at the Venue in accordance with the terms set forth in this Agreement. Operator shall use reasonable efforts to schedule Events at the Venue to maximize the use and profitability of the Venue. Operator shall perform its duties in a manner that maintains the Venue and its facilities, equipment and services on behalf of the City as a live entertainment facility in Acceptable Condition. Operator shall apply prudent and reasonable business practices in the City's best interests in operating, booking and managing the Venue.
4.2 Standard of Care. Operator shall perform all services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Operator represents and maintains that it is skilled in the professional calling necessary to perform under this Agreement. Operator agrees that all employees, contractors, and subconsultants shall have sufficient skill and experience to perform the services assigned to them. Finally, Operator represents that it, its employees, contractors, and subconsultants shall have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform under this Agreement, including a City business license, and that such licenses and approvals shall be Docusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF #10328091v11
maintained throughout the Term of this Agreement. Any employee of Operator, a contractor, or its subconsultants who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely performance under this Agreement, a threat to the safety of persons or property, or any employee who fails or refuses to perform under this Agreement in a manner acceptable to the City, shall be promptly removed by Operator and shall not be re-employed to perform any services under this Agreement.
4.3 Venue Development. Prior to the Commencement Date, Operator shall provide consulting services to the City on the initial design of the Venue and other operational planning matters, including but not limited to, construction coordination, pre-opening preparation, staffing, programming strategy, marketing, systems implementation, and regulatory compliance (“Venue Development Consulting Services”). Within sixty (60) days of Operator’s receipt of the City’s building contractor’s timeline for completion of construction of the Venue, Operator shall provide a comprehensive scope of work for the Venue Development Consulting Services and a schedule for completion of the Venue Development Consulting Services that aligns with the City’s proposed schedule for completion of the Venue (“Scope of Work”), which shall be subject to the City’s approval in its sole and absolute discretion. Upon City approval of the Scope of Work, the Scope of Work shall become a part of this Agreement as though fully set forth herein.
4.3.1 Development Fee. As consideration for the Venue Development Consulting Services, City shall pay to Operator the fixed sum of One Hundred Thousand Dollars ($100,000) (“Development Fee”). A portion of the Development Fee equal to Thirty Thousand Dollars ($30,000) shall be due and payable on the date that Operator commences providing initial design work for the Venue pursuant to the Scope of Work. The remaining portion of the Development Fee equal to Seventy Thousand Dollars ($70,000) shall be due and payable in equal monthly installments in the amount of Ten Thousand Dollars ($10,000) per month based upon Operator’s ongoing efforts to complete the Scope of Work. The Parties acknowledge that Operator’s ability to complete tasks set forth in the Scope of Work may be contingent upon the actions of other City consultants providing services for the design and construction of the Venue.
Operator will not be considered to be in default under this Agreement to the extent that Operator’s failure to complete one or more tasks set forth in the Scope of Work is due to delays caused by such City consultants.
4.4 Venue Name. Operator shall propose the name for the Venue, subject to the review and approval of the City, in its sole and absolute discretion. All intellectual property rights in any Venue name or logos developed by Operator or the City shall be and at all times remain the sole and exclusive property of the City.
4.5 Operator’s Duties. Operator has the exclusive right and responsibility to manage and operate all aspects of the Venue subject to all terms and conditions of this Agreement.
Without limiting the generality of the foregoing, Operator shall do, and shall have the right to do, the following, in each case in accordance with usual and customary industry practices consistent with those of other live entertainment facilities of similar age, size and amenities:
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4.5.1 Event Contracts. Operator shall enter into and administer all agreements that are required in the ordinary course of business of operating the Venue, including, but not limited to services, audio/visual, novelties/merchandise, advertising, equipment, booking, promotion, coordination and staging of all Events to be held at the Venue.
4.5.2 Operating Accounts. Operator shall establish, maintain and administer all funds and accounts as provided in Section 6.5 of this Agreement.
4.5.3 Venue Promotion and Advertising. Operator shall provide and arrange for all promotion and advertising for the Venue in accordance with the Marketing Plan and Section
4.7 of this Agreement.
4.5.4 Venue Calendar. Operator shall establish and coordinate the master booking calendar for all Events at the Venue.
4.5.5 Venue Maintenance. Subject to the term of this Agreement and the approved Operating Budget, Operator shall keep the Venue and the level of service provided in Acceptable Condition, including all Maintenance and Repairs.
4.5.6 Operating Expenses. Operator shall pay when due (on a cash basis) all Operating Expenses as provided in Section 6.7, provided that in the event that cash on hand in the Operating Account is insufficient to pay Operating Expenses, Operator shall request additional funds from City pursuant to Section 6.8.
4.5.7 Food and Beverages. Operator shall provide for, or enter into agreements to provide, and administer all necessary and appropriate food and beverage services at the Venue.
4.5.8 Employees. Operator shall hire and maintain such employees or contract with others for provision of services necessary or desirable for all operations of the Venue including, but not limited to, Maintenance and Repairs, routine cleaning and security services.
Operator and City agree that in no event will the employees and other personnel at the Venue be considered employees of the City of Corona.
4.5.9 Talent Buying. Operator shall provide for, or enter into agreements to provide, talent buying services for exclusive booking and programming of the Venue as provided in Section 4.6.
4.5.10 Marketing. Operator shall manage advertising and marketing operations to promote the maximum possible amount of profitable use of the Venue.
4.5.11 Business-Like Relations. Operator shall maintain business-like relations with all vendors, suppliers and other persons and entities that do business with the Venue.
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4.5.12 Quality Services. Operator shall manage and supervise the effective delivery of quality services to customers, users and licensees of the Venue, including facilitating delivery of all services ancillary to the use of the Venue.
4.5.13 Licenses and Permits. Manager shall, either directly or in conjunction with the City as necessary or appropriate, apply for and use commercially reasonable efforts to obtain and maintain all licenses and permits required from time to time to operate, maintain and conduct the business of the Venue, including, but not limited to, the Liquor License pursuant to Section 4.21 and all other permits required in connection with the use of all equipment and components of the Venue and maintenance of the Venue.
4.5.14 Personal Property. Operator shall preserve and maintain all Personal Property in an Acceptable Condition including all other furniture, fixtures and equipment acquired for use at the Venue from time to time.
4.5.15 Security Services. Operator shall provide, or enter into agreements to provide for, security services for Events at the Venue, consulting with the Corona Police Department in connection with Venue operations, and with respect to staffing for Events and security measures appropriate for different types of Events.
4.5.16 Applicable Laws. Operator shall cause the Venue to be operated in compliance with all Applicable Laws, as may be in effect from time to time.
4.5.17 Liens and Encumbrances. Operator shall keep the Venue free from liens and encumbrances arising out of or in connection with the acts or omissions of Operator, its Affiliates, or any other vendor or service provider for the Venue; or, if any such liens arise, promptly cause the same to be satisfied and discharged on City’s demand, including, if applicable, posting a bond in accordance with Applicable Law guarantying satisfaction of such lien or encumbrance.
4.5.18 Budgets. Operator shall cause the Start Up Budget and the Operating Budget to be prepared and submitted in accordance with Sections 6.2 and 6.3.
4.5.19 Insurance. Operator shall maintain the insurance described in Article X throughout the Term of this Agreement.
4.6 Programming and Booking. Operator shall have the right to contract with a vendor to provide exclusive booking and programming services for the Venue, the cost of which shall be considered an Operating Expense. At least forty-five (45) days prior to the start of each quarter, Operator shall submit to the City for its review a projected schedule of Events at the Venue. Although City shall have the authority to review the schedule, the Operator shall have control over programming and details, such as artist or group approval, performance schedule and length, and other artistic or promotional matters. Notwithstanding the foregoing, the City shall have the right to exclude certain artists, acts or Events from performing or being held at the Venue if significant operational, safety, financial, or reputational issues arise involving the same Docusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF #10328091v11
artist, act or Event.
4.7 Marketing. Operator shall use reasonable efforts, consistent with marketing practices in the industry, to disseminate information and bring the Venue to the attention of a broad base of potential users. Such reasonable efforts may include: (a) advertising in trade publications; (b) including the Venue in event booking websites, which are accessible to and share available dates with national promoters; (c) membership in trade associations; (d) personal contacts by Operator with national promoters, producers, and booking agencies; and (e) involvement in local civic organizations. Operator shall provide to the City, at the same time that Operator delivers the Operating Budget pursuant to Section 6.3 of this Agreement, an annual marketing plan that sets forth a detailed schedule and budget for marketing the Venue (“Marketing Plan”).
4.8 Website. Operator shall create, maintain and upkeep the contents of a website for the Venue. The City shall have the right to reject any inappropriate content on the website following good faith consultation and discussion with Operator.
4.9 Pricing. Operator shall establish the pricing and rate structure for all Events at the Venue. Operator shall, on an annual basis, provide to the City at the same time that Operator delivers the Operating Budget pursuant to Section 6.3 of this Agreement, a current rate schedule of prices or fees for use of the Venue and attendance at Events.
4.10 Facility Fee. At the request of the City, Operator shall impose a facility fee (“Facility Fee”), in an amount determined by the City in its sole and absolute discretion, to be added to the price of tickets for Events at the Venue. Operator shall include the Facility Fee requirement in all agreements for use of the Venue. Operator shall deposit the Facility Fee into the Operating Account and disburse one hundred percent (100%) of the Facility Fee to the City at the same time that the Net Profit is disbursed to the City pursuant to Section 6.7. The Facility Fee shall not be included in Gross Revenue.
4.11 Contracts with Others. In exercising its rights and obligations, pursuant to this Agreement, to enter into contracts and agreements with others for such things as goods, services, and Events, Operator shall follow prudent business practices and generally accepted risk management principles related to contractual risk transfer by using Operator’s commercially reasonable efforts to ensure that such contracts and agreements include requirements for the contractors (including without limitation Event sponsors and talent) to (i) carry proper insurance, (ii) name at least Operator and the City, its directors, officials, officers, employees, volunteers and agents as additional insureds on such insurance, and (iii) indemnify, defend and hold harmless Operator and the City, its directors, officials, officers, employees, volunteers and agents.
4.12 Operator Personnel. Operator shall at all times have in its employ or contract for sufficient qualified, experienced personnel to enable it to properly, adequately, safely and economically manage, operate, maintain, market, and book entertainment at the Venue pursuant to the terms of this Agreement. All persons providing services under this Agreement shall be Docusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF #10328091v11
either employees of Operator or of Operator’s contractors or suppliers, and such persons shall not be, or become, employees of the City by virtue of any provision of this Agreement. All matters pertaining to the selection, training, direction, employment, supervision, compensation, promotion and discharge of such personnel are the sole responsibility of Operator. Operator shall be solely responsible for and shall fully comply with all Applicable Laws and regulations having to do with workers’ compensation, social security, unemployment insurance, hours of labor, wages, working conditions, and other employer-employee related subjects concerning such personnel.
4.13 Utilities and Services. Operator shall contract directly for and pay for all electricity, water, and natural gas, which shall be separately metered to the Venue and shall be included as an Operating Expense. Operator shall contract directly for all telephone and interior janitorial service for the Venue, which shall be included as an Operating Expense.
4.14 Independent Contractor. City retains Operator on an independent contractor basis and not as an employee. Except as provided in Section 4.18, Operator retains the right to perform similar or different services for others during the Term of this Agreement. Any additional personnel performing services under this Agreement on behalf of Operator shall also not be employees of City and shall at all times be under Operator’s exclusive direction and control. Nothing in this Agreement, or in the relationship between City and Operator, shall be deemed to constitute a partnership, joint venture or any other similar relationship and each Party agrees that it will not make any contrary assertion, contention, claim or counterclaim in any action, suit, or other legal proceeding involving City and/or Operator.
4.15 Compliance with Laws. Operator shall manage and operate the Venue and use diligence to comply with all Applicable Laws and shall give all notices required by law.
Operator shall notify City of any alleged violations of Applicable Law affecting any portion of the Venue within two (2) business days of becoming aware of such alleged violations. Operator shall thereafter, with City’s approval, develop and implement an action plan to bring the Venue into compliance with all Applicable Laws. The cost to implement the action plan shall be paid directly by the City, unless and to the extent the alleged violations are covered in the approved Operating Budget or are otherwise caused by the negligence or willful misconduct of Operator.
4.16 Security of Venue. Within thirty (30) days of Operator’s receipt from City of approved floor plan and capacity for the Venue and in consultation with the City, Operator shall develop and implement a security plan to provide at all times adequate security in or about the Venue in order to protect the assets of the City. The cost incurred by Operator for the security services shall be included as an Operating Expense. Operator shall promptly notify City of any incidents or conditions that affect the security of the Venue or otherwise diminish the value of the City’s assets and shall provide recommendations to City on methods to address such incidents or conditions and enhance the level of security for the Venue.
4.17 Taxable Possessory Interests. Operator acknowledges that this Agreement for the Venue may create a taxable possessory interest pursuant to Revenue Taxation Code Section 107, as amended from time to time, subjecting Operator to pay any and all taxes levied on such Docusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF #10328091v11
interest in government owned real property. In such a case, Operator shall be entitled to treat the actual cost of any property taxes (including possessory interest taxes) related to such possessory interests as an Operating Expense.
4.18 Radius Restriction. Operator shall not, during the Term, own, operate, maintain or control competing with the Venue located within a radius of ten (10) miles from the outside boundaries of the Venue.
4.19 Waste, Damage or Destruction of Venue. Operator shall take all reasonable measures to assure that any users, invitees, contractors or licensees of the Venue avoid any form of waste, damage, destruction of the Venue and immediately adjacent City property, or make any temporary or permanent alterations of the facilities without the City's prior written consent. Such measures shall include use of written agreements, provision of insurance, and if necessary, onsite monitoring of performances, conferences, Events, and other uses of the Venue. In the event of any waste, damage or destruction to the Venue, Operator shall give immediate notice to the City of any damage to the facilities within not more than twenty-four (24) hours of such damage occurring. Operator shall not itself commit or allow any waste or damage to the Venue or adjacent City property, or permit or any nuisance. Operator shall keep the Venue clean and clear of refuse and obstructions, and shall assure that either itself or all users, invitees, contractors or licensees dispose of all garbage, trash, and rubbish and return the Venue to the condition prior to use, in a manner satisfactory to the City.
4.20 Alterations. Operator shall not make any alterations, improvements or additions in, on or about any portion of the Venue, without first obtaining City’s prior written consent.
4.21 Liquor License. Prior to the Commencement Date, Operator shall apply for and obtain, or cause to be obtained, all liquor licenses, permits, and approvals required for the sale and service of alcoholic beverages at the Venue from and after the Commencement Date (“Liquor License”). Such application shall be made in accordance with all applicable local, state, and federal laws, rules, and regulations. All costs incurred by Operator in connection with the Liquor License shall be an Operating Expense.
ARTICLE V
OPERATOR COMPENSATION
5.1 Management Fee. Operator shall be entitled to receive the Management Fee as compensation for services performed by Operator pursuant to this Agreement.
5.2 Incentive Management Fee. Operator shall be entitled to receive the Incentive Management Fee to the extent that the Gross Revenue for the Venue exceeds Six Million Dollars ($6,000,000) annually.
5.3 Payment of Management Fee. Except as otherwise provided in this Section, Operator shall be entitled to withdraw the Management Fee from the Operating Account Docusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF #10328091v11
established pursuant to Section 6.5 of this Agreement within thirty (30) days following the end of each quarter.
5.4 Annual Reconciliation. Within ninety (90) days following the end of each Operating Year, the Parties shall conduct an annual reconciliation of the Gross Revenues for the Operating Year, as determined from the final, verified financial statements. If the aggregate Gross Revenue for the Venue during the Operating Year exceeds six million dollars ($6,000,000), Operator shall be entitled to withdraw the Incentive Management Fee from the Operating Account established pursuant to Section 6.5 of this Agreement. Both Parties agree to cooperate in good faith by providing all necessary financial records, statements, and supporting documentation reasonably required to complete the reconciliation process.
ARTICLE VI
BUSINESS PLAN, OPERATING BUDGET, OPERATING ACCOUNT
AND PAYMENT OF EXPENSES
6.1 Business Plan. Within sixty (60) days of the Effective Date and on or before ninety (90) days before the end of each calendar year thereafter, Operator shall prepare and submit to City for City’s review and approval a proposed business plan that describes Operator’s plan for the management, promotion, operation, and booking of the Venue for the forthcoming Operating Year. The business plan shall include a description of the proposed operations and services, the projected Operating Expenses and Gross Revenue, talent booking projections, marketing and promotional strategies, and Operator’s staffing levels for implementation of this Agreement.
6.2 Start Up Budget. Within ninety (90) days of Operator’s receipt of approved floor plan and venue capacity for the Venue, Operator shall prepare and submit to City for City Manager’s review and approval a Start Up Budget that covers the period between the Commencement Date and six (6) months after the Commencement Date (“Start Up Period”) and sets forth on a line item basis (with projected revenue and expenses allocated by month) all projected Operating Expenses, Contingency Reserve, and estimated Gross Revenues during the Start Up Period that are necessary to commence operations at the Venue. Upon approval of the Start Up Budget and the establishment of the Operating Account, the City shall deposit in the Operating Account the projected Operating Expenses set forth in the Start Up Budget to enable Operator to pay the Operating Expenses during the Start Up Period as they become due.
6.3 Operating Budget. At least sixty (60) days before the end of Startup Budget and on or before February 1st of each year full year after the Commencement Date, Operator shall prepare and submit to City for City Manager’s review and approval an annual Operating Budget for the forthcoming Operating Year (“Operating Budget”) setting forth on a line item basis (with projected revenue and expenses allocated by month) all projected Operating Expenses, Contingency Reserve, and Gross Revenue for the Venue for the Operating Year and all remaining unexpended revenue from the prior Operating Budget. Until the Operating Budget has been approved by the City for the upcoming Operating Year, the prior year’s Operating Budget plus five percent (5%) shall remain in effect.
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6.4 Compliance with Operating Budget. Operator shall implement and perform all duties and obligations under this Agreement in accordance with the approved Start Up Budget and the Operating Budget, as applicable; provided that Operator does not guarantee the projected Gross Revenue or projected Operating Expenses will not exceed the amounts as set forth in the Start Up Budget or Operating Budget. Operator shall charge all Operating Expenses to the proper account as specified in the approved Operating Budget, provided that Operator may reallocate savings from one line item to other line items for the benefit of the Venue.
6.5 Operating Account. Operator shall establish one or more separate account(s) held and controlled by Operator for the benefit of and in trust for the City at a reputable bank or financial institution approved by the City whose deposits are insured by an agency of the United States government (“Operating Account”). Funds in the Operating Account shall be held in a trust account separate from all other accounts and funds of Operator. Funds in the Operating Account remain the property of the City subject to disbursement of expenses by Operator as described in this Agreement.
6.6 Accounts Receivable. Operator shall promptly deposit all funds received by Operator in connection with the operation and maintenance of the Venue in the Operating Account.
6.7 Disbursements. Operator shall pay, from the Operating Account, when due all Operating Expenses, and any other expenses for the management, operation, maintenance, and marketing of the Venue set forth in the approved Operating Budget. On a quarterly basis, Operator shall be entitled to disburse and pay to itself from the Operating Account, the Management Fee and the Incentive Management Fee. Within thirty (30) days after the end of each calendar quarter, Operator shall disburse to the City from the Operating Account the Net Profit from the previous quarter, if any.
6.8 Request for Additional Funds. If, during the Operating Year, Operator determines that there are insufficient funds in the Operating Account, excluding the Contingency Reserve, to: (a) pay the Operating Expenses identified in the Operating Budget; or (b) pay for emergency or additional Operating Expenses that could not have been anticipated by Operator at the time the Operating Budget was approved, Operator shall promptly submit a request for additional funding to the City Manager along with documentation satisfactory to the City Manager that justifies the need for such additional funding. Within thirty (30) days of receipt of Operator’s request for additional funding, the City Manager shall review such request and, if warranted, shall either authorize disbursement from the Contingency Reserve or shall, with ten (10) days following authorization, cause additional funds to be deposited in the Operating Account in an amount sufficient to pay the additional Operating Expenses.
6.9 Responsibility for Operating Expenses. Except as provided in Section 8.1, all costs, expenses, liabilities and obligations of the Operator under this Agreement are limited to the amounts available for disbursement from the Operating Account. All Excess Operating Expenses not scheduled in the Operating Budget and Capital Expenditures shall be the sole cost Docusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF #10328091v11
and expense of the City. All disbursements made by Operator from the Operating Account shall be made solely on behalf of City and not by Operator as a principal. Operator shall be under no duty to utilize or apply Operator’s own funds for the payment of any Operating Expenses or Capital Expenditures.
ARTICLE VII
RECORDS AND REPORTS, AND AUDITS
7.1 Accounting Records. Operator shall maintain complete and accurate books and records of the transactions and operations of the Venue, which shall be made available to the City upon request for review and copying.
7.2 Reports. Within thirty (30) days after the end of each calendar quarter, Operator shall provide to City, in a format acceptable to the City, a quarter-to-date and year-to-date report, through the preceding quarter end, of income and expenses, balance sheet, a comparison of income and expenses to the approved Operating Budget (including a statement showing variance from the approved Operating Budget), routine maintenance logs, an accounting of the Incentive Management Fee and Net Profit, if any, disbursed from the Operating Account, and any other statements, reports and information that City reasonably requests from time to time.
7.3 Financial Statements. Within ninety (90) days following the end of each Operating Year, Operator shall provide City with financial statements prepared in accordance with generally accepted accounting principles, consistently applied, in a manner which fairly presents an accurate statement of the financial operations of the Venue, containing balance sheets of Operator as of the end of such Operating Year and statements of cash flow and income for such Operating Year prepared by Operator, all in reasonable detail. As soon as available and in any event within ninety (90) days after the end of each Operating Year, Operator shall provide City an opinion of a nationally known independent certified public accountant selected by Operator and accepted by City as to such financial statements. The cost of such opinion shall be an Operating Expense.
7.4 Audits. City reserves the right to audit and to examine any cost, revenue, payment, charges, claim, other record, or supporting documentation resulting from any items set forth in this Agreement. Any such audit(s) shall be undertaken by City or City’s representative(s) at reasonable times and in conformance with generally accepted auditing standards. City’s rights to audit shall include the right to contact third parties to confirm entries in Operator’s supporting documentation. Operator agrees to fully cooperate with any such audits and shall make office and support facilities available to City representatives as may be reasonably necessary to complete any such audits and inspections. At City’s request, Operator shall make its books and records available to the City or its representatives. Operator shall also provide City or its representative with copies of specifically identified books and records
7.4.1 Audit Period. The City’s audit rights shall extend during the Term of this Agreement and for a period of four (4) years following the Termination Date or until any onDocusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF #10328091v11
going audit is completed, whichever is later. Operator agrees to retain all necessary records and documentation for the entire length of this audit period.
7.4.2 Audit Costs. Operator will be notified in writing of any exception taken as a result of an audit. Should an audit discover either weaknesses in internal control or errors in recordkeeping, Operator shall correct such discrepancies either upon discovery or within a reasonable period of time. Operator shall inform City in writing of the action taken to correct any audit discrepancies. Any adjustments and/or payments which must be made as a result of any such audit or inspection of Operator’s records shall be made within thirty (30) days from presentation of City’s finding to Operator. If an audit inspection or examination in accordance with this Section 7.4 discloses overcharges and/or underpayment (of any nature) by Operator to City in excess of five percent (5%) of the total billings for the period being audited, the actual cost of City’s audit shall be reimbursed to City by Operator.
ARTICLE VIII
CITY AND OPERATOR FINANCIAL OBLIGATIONS
8.1 Operator Financial Obligations. Notwithstanding anything herein to the contrary and except as specifically provided in the approved Operating Budget, the following expenses are the sole responsibility of Operator and shall not be considered an Operating Expense:
8.1.1 Accounting. All costs associated with preparing and maintaining the books, records, and reports required by Article VII of this Agreement.
8.1.2 Operator’s Personnel. Except as otherwise expressly provided in this Agreement, all costs associated with Venue Staff or other employees or personnel of Operator that do not qualify as an Operating Expense.
8.1.3 Breach. All costs incurred by Operator as a result of Operator’s breach of this Agreement and costs attributable to losses arising from the negligence, fraud or willful misconduct on the part of Operator or Operator’s agents or employees.
8.1.4 Insurance. All costs associated with obtaining and maintaining the insurance coverage required by Article XI of this Agreement.
8.1.5 Indemnification. All costs associated with Operator’s indemnification obligations under Section 11.1 of this Agreement.
8.2 City Financial Obligations. Notwithstanding anything herein to the contrary and except as specifically provided in the approved Operating Budget, the following expenses are the sole responsibility of the City and shall not be considered an Operating Expense:
8.2.1 Venue Construction. Construction and development of the Venue, which shall occur prior to the Commencement Date.
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8.2.2 Breach. All costs incurred as a result of City’s breach of this Agreement and costs attributable to losses arising from the negligence, fraud or willful misconduct on the part of City or City’s agents or employees.
8.2.3 Indemnification. All costs associated with City’s indemnification obligations under Article XII of this Agreement.
8.2.4 Capital Expenditures. All Capital Expenditures.
8.2.5 Excess Operating Expenses. All Excess Operating Expenses.
ARTICLE IX
CITY RIGHTS AND OBLIGATIONS
9.1 City Use of Venue. City shall be entitled to use the Venue up to three (3) days per calendar year. City shall not be required to pay any user or rental fee for its use of the Venue, but shall be required, after receipt of a written invoice, to pay Operator for all actual and documented labor costs incurred to facilitate the City’s use of the Venue.
9.2 Inspections. City (and City’s designees) shall be entitled to inspect the Venue at any and all times, and from time to time, without notice. Operator shall fully cooperate with City (and City’s designees) to facilitate such inspection.
9.3 City Property. At all times during the Term of this Agreement, the Venue shall remain the absolute property of the City. No legal title or leasehold interest in the Venue shall be deemed or construed to have been created or vested in Operator by anything contained in this Agreement or otherwise.
9.4 Property Insurance. City shall insure the Venue against casualty losses, either through self-insurance or a purchased insurance policy. Premiums for such insurance, if any, shall be paid by City.
ARTICLE X
INSURANCE
10.1 Time for Compliance. This Agreement shall not commence until Operator has provided evidence satisfactory to the City that it has secured all insurance required under this Article.
10.2 Insurance Requirements. Operator shall, at its expense, procure and maintain for the duration of this Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with performance under this Agreement by the Operator and/or its officers, officials, agents, representatives, volunteers, or employees.
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10.2.1 Minimum Scope and Limits of Coverage. Coverage shall be at least as broad as the latest version of the following:
(A) Commercial General Liability; Liquor Liability. Insurance Services Office Commercial General Liability coverage (occurrence form CG 00 01), including products and completed operations, property damage, bodily injury, and personal and advertising injury, with limits no less than $2,000,000 per occurrence. Such policy shall include liquor liability insurance with limits no less than $5,000,000 per occurrence. If Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit. (B) Automobile Liability. Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto), or if Operator has no owned autos, Code 8 (hired) and 9 (non-owned), with limits no less than $1,000,000 per accident for bodily injury and property damage.
(C) Workers' Compensation and Employer's Liability. Workers' Compensation insurance as required by the California Labor Code and Employer's Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury or disease. (D) Umbrella Policy. Umbrella liability insurance in excess of the coverage set forth in (A) and (B) above, with limits not less than $5,000,000 per occurrence. (E) Broader Coverage. If the Operator maintains higher limits than the minimums shown above, the City requires and shall be entitled to the broader coverage and/or the higher limits maintained by the Operator. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City.
10.2.2 Insurance Endorsements. The insurance policies shall contain the following provisions, or Operator shall provide endorsements on forms supplied or approved by the City to add the following provisions to the insurance policies:
(A) General Liability and Umbrella Policy. The general liability policy and the umbrella policy shall be endorsed to state that: (A) the City, its directors, officials, officers, employees, volunteers and agents shall be covered as additional insurers with respect to the performance under this Agreement by the Operator or its officers, officials, agents, representatives, volunteers or employees, or by those working on Operator’s behalf. General liability coverage can be provided in the form of an endorsement to the Operator’s insurance, at least as broad as ISO Form CG 20 11 12 19 or, if not available, CG 20 43 12 19; and (B) the insurance coverage shall be primary and non-contributory with respect to the City, its officials, officers, employees, volunteers and agents, or if excess, shall stand in an unbroken chain of coverage excess of the Operator's scheduled underlying coverage. Any insurance or selfinsurance maintained by the City, its directors, officials, officers, employees, volunteers and Docusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF #10328091v11
agents shall be excess of the Operator's insurance and shall not be called upon to contribute with it in any way.
(B) Automobile Liability. No endorsement required.
(C) Workers' Compensation and Employers Liability Coverage. The insurer shall agree to waive all rights of subrogation against the City, its directors, officials, officers, employees, volunteers and agents for losses paid under the terms of the insurance policy which arise from work performed by the Operator.
(D) Separation of Insureds; No Special Limitations. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the City, its directors, officials, officers, employees, volunteers and agents.
10.2.3 Other Provisions; Endorsements Preferred. Operator shall endeavor to provide endorsements regarding the following provisions, but nonetheless understands, acknowledges and agrees that the following provisions shall apply and that failure to comply shall be considered to be a breach of this Agreement by Operator:
(A) All Coverages. Each insurance policy required by this Agreement shall be endorsed to state that: (1) coverage shall not be suspended, voided, or canceled except after thirty (30) days prior written notice has been given to the City or ten (10) days if cancellation is due to non-payment of premium; provided, however, if a thirty (30) days’ notice of cancellation endorsement is not available Operator shall notify City of this unavailability in writing and shall forward any notice of cancellation to the City within two (2) business days from date of receipt by Operator; and (2) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the City, its directors, officials, officers, employees, agents, and volunteers. (B) Waiver of Subrogation. Each Party hereby grants to the other a waiver of any right to subrogation which any insurer of said Party may acquire against the other by virtue of the payment of any loss under such insurance. The Parties agree to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the Party has received a waiver of subrogation endorsement from the insurer.
10.2.4 Deductibles and Self-Insurance Retentions. City may require that any deductibles or self-insured retentions must be declared to and approved by the City. Operator shall ensure that, at the option of the City, either: (A) the primary insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its directors, officials, officers, employees, volunteers and agents; or (B) the primary insured shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses.
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10.2.5 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best's rating no less than A:IV, licensed and admitted to do business in California, and satisfactory to the City.
10.2.6 Verification of Coverage. Operator shall furnish City with original certificates of insurance and endorsements affecting coverage required by this Agreement on forms satisfactory to the City. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the City if requested. All certificates and endorsements must be received and approved by the City. The City reserves the right to require complete, certified copies of all required insurance policies, at any time.
10.2.7 Reporting of Claims. Operator shall report to the City, in addition to Operator’s insurer, any and all insurance claims submitted by Operator in connection with this Agreement.
10.2.8 Special Risk or Circumstances. The City reserves the right, in its sole discretion, to modify the requirements of this Article, including limits, based on any of the following: (A) the nature of the risk of the Operator’s responsibilities hereunder; (B) the prior experience of the Operator; (C) the rating or other quality or characteristic of the insurer; (D) any special or unique coverage issues; and (E) any other special or unique circumstances.
ARTICLE XI
GENERAL PROVISIONS
11.1 Indemnification By Operator. To the fullest extent permitted by law and except to the extent caused by the City’s negligence or willful misconduct, Operator shall defend (with counsel acceptable to the City, in the City’s reasonable discretion, and at the Operator’s sole cost and expense), indemnify and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless from any and all Claims, to the extent arising out of, pertaining to, or incident to any alleged willful misconduct or negligent acts, errors or omissions of Operator, its directors, officials, officers, employees, subcontractors, consultants or agents in connection with this Agreement, including without limitation the payment of all settlement amounts, expert witness fees and attorney’s fees and other related costs and expenses. Operator’s obligation to indemnify shall survive expiration or termination of this Agreement, and shall not be restricted to insurance proceeds, if any, received by the City, its directors, officials officers, employees, agents, or volunteers. Operator shall pay or satisfy all reasonable costs, fees or expenses of any kind incident to such defense or incident to enforcing the defense and indemnity obligations set forth herein, including, but not limited to, attorneys' fees, investigators' fees, litigation expenses, expert or other consultant fees, settlement payments, and amounts paid in satisfaction of any judgment, award or decree that may be rendered against an indemnified party. Operator shall specifically and expressly be obligated to reimburse the City for the cost of any settlement paid by the City as part of any Claim.
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11.2 No Consequential or Punitive Damages. In no event shall a party be liable for any consequential or punitive damages.
11.3 Governing Law and Venue. This Agreement shall be governed by the laws of the State of California without regard to conflicts of laws principles. This Agreement shall be deemed to have been made in the County of Riverside, California, regardless of the order of the signatures of the Parties affixed hereto. Any litigation or other legal proceedings that arise under or in connection with this Agreement shall be conducted in a federal or state court located within or for the County of Riverside, California. Operator consents to the personal jurisdiction and venue in federal or state court located within or for the County of Riverside, California and hereby waives any defenses or objections thereto including defenses based on the doctrine of forum non conveniens.
11.4 Waiver. No delay or omission in the exercise of any right or remedy of a nondefaulting Party on any default shall impair such right or remedy or be construed as a waiver.
City's consent or approval of any act by Operator requiring City’s consent or approval shall not be deemed to waive or render unnecessary City's consent to or approval of any subsequent act of Operator. Any waiver by any Party of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Agreement.
11.5 City Manager Authority. The City’s City Manager or his designee, shall have the authority to make approvals, issue interpretations and notices, waive provisions, grant extensions of time, and take similar action on behalf of the City as may be required under this Agreement.
The City Manager reserves the right, in its sole and absolute discretion, to submit any requested modification, interpretation, amendment or waiver to the City Council if the City Manager determines or believes that such action could increase the risk, liability or costs to City.
11.6 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties are cumulative and the exercise by any Party of one or more of such rights or remedies shall not preclude the exercise by that Party, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party.
11.7 Legal Action. In addition to any other rights or remedies, any Party may take legal action, at law or at equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement.
11.8 Attorneys' Fees. If any Party commences an action against the other Party arising out of or in connection with this Agreement, the prevailing Party shall be entitled to recover reasonable attorneys' fees and costs of suit from the losing Party.
11.9 Construction; References; Captions. Since the Parties or their agents have reviewed this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to Docusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF #10328091v11
Operator include all personnel, employees, agents, and subcontractors of Operator, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.
11.10 No Third-Party Beneficiaries. There are no intended third-party beneficiaries of any right or obligation assumed by the Parties.
11.11 Notice. Any notice, demand, request, consent, approval, communication either Party desires or is required to give the other Party or any other person shall be in writing and either served personally, by facsimile transmission, email, or sent by prepaid, first-class mail to the address set forth below. Either Party may change its address by notifying the other Party of the change of address in writing. Notice shall be deemed communicated forty-eight (48) hours from the time of mailing if mailed as provided in this Section. Notices transmitted by facsimile transmission shall be deemed delivered upon telephone confirmation of receipt (confirmation report from fax machine is sufficient). Notices transmitted by electronic mail transmission shall be deemed delivered upon being sent, but only if no message of unavailability or undeliverability is received. If notice is deemed received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. Any notices required to be given by City under this Agreement shall be in lieu of, and not in addition to, the notices required by California’s Unlawful Detainer Statutes (Civil Code of Procedure section 1161 et seq.).
City:
Joel Belding
Economic Development Director
City of Corona
400 S. Vicentia Avenue
Corona, CA 92882
Phone: (951) 736-2297
Email: [email protected]
Operator:
Knitting Factory Entertainment
Morgan Margolis CEO/ Chris
Sherman CFO
11846 Ventura Blvd, Suite 200
Studio City CA 91604
208-343-8883
[email protected] /
[email protected]
11.12 Integrated Agreement. This Agreement contains all of the agreements of the Parties and all previous understanding, negotiations and agreements are integrated into and superseded by this Agreement.
11.13 No Assignment Allowed. Operator shall not sell, assign, sublease, mortgage, pledge, hypothecate or otherwise transfer this Agreement or any right therein, nor make any total or partial sale, assignment, sublease, mortgage, pledge, hypothecation or transfer in any other mode or form of the whole or any part of the Venue. Notwithstanding the foregoing, City acknowledges that Operator may create a single purpose entity to manage and operate the Venue in accordance with this Agreement and City consents to the assignment of this Agreement to Docusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF #10328091v11
such single purpose entity subject to that entity entering into an assignment and assumption agreement that is satisfactory to the City.
11.14 Amendment. This Agreement may be amended at any time by the mutual consent of the Parties by an instrument in writing signed by both Parties.
11.15 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.
11.16 Exhibits. All exhibits attached hereto are hereby incorporated by reference as if fully set out in the body of this Agreement.
11.17 Severability. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement which are hereby declared as severable and shall be interpreted to carry out the intent of the Parties hereunder.
11.18 Authority. The persons executing this Agreement on behalf of the Parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said Parties and that by so executing this Agreement the Parties hereto are formally bound to the provisions of this Agreement.
11.19 Independent Representation by Counsel. The Parties represent and declare that in executing this Agreement they rely solely upon their own judgment, belief and knowledge, and the advice and recommendations of their own independently-selected counsel, concerning the nature, extent and duration of their rights and claims hereunder, and that, except as provided herein, they have not been influenced to any extent whatsoever in executing this Agreement, by any representations, statements or omissions pertaining to any of the matters herein contained by any Party or by any persons representing any Party.
11.20 Binding Effect. This Agreement shall bind and inure to the benefit of the Parties and the City’s heirs, successors and assigns.
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Docusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF #10328091v11
CITY’S SIGNATURE PAGE FOR
CITY OF CORONA
VENUE MANAGEMENT AND OPERATING AGREEMENT
(152 E. SIXTH STREET – KNITTING FACTORY ENTERTAINMENT, INC.)
CITY OF CORONA
By: _________________________
Jacob Ellis
City Manager
ATTEST:
_________________________
Sylvia Edwards
City Clerk
APPROVED AS TO FORM:
By: _________________________
Dean Derleth
City Attorney
Docusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF #10328091v11
OPERATOR’S SIGNATURE PAGE FOR
CITY OF CORONA
VENUE MANAGEMENT AND OPERATING AGREEMENT
(152 E. SIXTH STREET – KNITTING FACTORY ENTERTAINMENT, INC.) KNITTING FACTORY ENTERTAINMENT, INC.
a Delaware corporation
By: _________________________
Signature
Morgan Margolis
Name (Print)
CEO
Title (Print)
By: _________________________
Signature
_________________________
Name (Print)
_________________________
Title (Print)
Docusign Envelope ID: DC9EC711-4396-8779-83CA-B368FC6494DF