STAGE RED VENUE
OPERATING AGREEMENT
BY AND BETWEEN
THE CITY OF FONTANA
AND
ASM GLOBAL, LLC
Dated as of ___________________
Tracking Number: __-__-__-24
TABLE OF CONTENTS
TOC \o "1-1" \h \z \u HYPERLINK \l "_Toc157763421" 1. Term. PAGEREF _Toc157763421 \h 2 HYPERLINK \l "_Toc157763422" 2. Operating and Management of Venue. PAGEREF _Toc157763422 \h 2 HYPERLINK \l "_Toc157763423" 3. Financial Provisions; Fees and Revenue. PAGEREF _Toc157763423 \h 6 HYPERLINK \l "_Toc157763424" 4. Operations, Utilities, Permits and Taxes. PAGEREF _Toc157763424 \h 10 HYPERLINK \l "_Toc157763425" 5. Reporting, Records and Budget. PAGEREF _Toc157763425 \h 11 HYPERLINK \l "_Toc157763426" 6. Maintenance; Repairs and Appearance. PAGEREF _Toc157763426 \h 12 HYPERLINK \l "_Toc157763427" 7. Additions and Alterations. PAGEREF _Toc157763427 \h 13 HYPERLINK \l "_Toc157763428" 8. Assignment. PAGEREF _Toc157763428 \h 14 HYPERLINK \l "_Toc157763429" 9. Advertising. PAGEREF _Toc157763429 \h 14 HYPERLINK \l "_Toc157763430" 10. Default; Termination of Agreement PAGEREF _Toc157763430 \h 14 HYPERLINK \l "_Toc157763443" 11. Indemnification. PAGEREF _Toc157763443 \h 16 HYPERLINK \l "_Toc157763444" 12. Insurance. PAGEREF _Toc157763444 \h 16 HYPERLINK \l "_Toc157763445" 13. Representations and Warranties. PAGEREF _Toc157763445 \h 19 HYPERLINK \l "_Toc157763446" 14. Surrender of Possession.. PAGEREF _Toc157763446 \h 20 HYPERLINK \l "_Toc157763447" 15. Notice. PAGEREF _Toc157763447 \h 20 HYPERLINK \l "_Toc157763448" 16. Force Majeure. PAGEREF _Toc157763448 \h 21 HYPERLINK \l "_Toc157763449" 17. Severability.. PAGEREF _Toc157763449 \h 21 HYPERLINK \l "_Toc157763450" 18. Compliance with Laws. PAGEREF _Toc157763450 \h 21 HYPERLINK \l "_Toc157763451" 19. Discrimination Prohibited. PAGEREF _Toc157763451 \h 21 HYPERLINK \l "_Toc157763452" 20. Litigation.. PAGEREF _Toc157763452 \h 21 HYPERLINK \l "_Toc157763453" 21. Remedies to be Non-Exclusive. PAGEREF _Toc157763453 \h 21 HYPERLINK \l "_Toc157763454" 22. Time is of the Essence. PAGEREF _Toc157763454 \h 21 HYPERLINK \l "_Toc157763455" 23. Integrated Agreement. PAGEREF _Toc157763455 \h 22 HYPERLINK \l "_Toc157763456" 24. Written Waiver. PAGEREF _Toc157763456 \h 22 HYPERLINK \l "_Toc157763457" 25. Successors and Assigns. PAGEREF _Toc157763457 \h 22 HYPERLINK \l "_Toc157763458" 26. Future Acts and Cooperation. PAGEREF _Toc157763458 \h 22 HYPERLINK \l "_Toc157763459" 27. Frustration of Purpose. PAGEREF _Toc157763459 \h 22 HYPERLINK \l "_Toc157763460" 28. Destruction of Property. PAGEREF _Toc157763460 \h 22
LIST OF EXHIBITS
EXHIBIT A Naming Rights Agreement
EXHIBIT B Floor Plan of Venue
EXHIBIT C Depiction of Parking Facilities
EXHIBIT D ASM Proposal
STAGE RED VENUE OPERATING AGREEMENT
(FONTANA, CALIFORNIA)
THIS STAGE RED VENUE OPERATING AGREEMENT (“Agreement”), is entered on this 1st day of March, 2024 (the “Effective Date”) between the City of Fontana, a California municipal corporation (“City”) and ASM Global, LLC, a Delaware limited liability company (“ASM”). City and ASM are sometimes referred to in this Agreement, individually as “Party” and collectively as “Parties.”
RECITALS
WHEREAS, the City is the owner of that certain real property with a multi-use indoor event center, located at 8463 Sierra Avenue, Fontana, CA 92335 and referred to as Stage Red, a Sammy Hagar Venue, Fontana, California, sometimes referred to as “Stage Red” or “Venue,” and WHEREAS, the use of the name of the Venue is via a Grant of License conveyed by Red Head Inc., and is subject to the terms and conditions of that certain Naming Rights Agreement dated September 22, 2022 by and between the City and Red Head Inc., attached hereto as Exhibit “A” and by this reference incorporated herein; and WHEREAS, the City has completed the redesign and will soon complete the renovation of Stage Red; and WHEREAS, upon completion of the renovation project, Stage Red will be the premier intimate location for live entertainment in the region featuring three distinctive experiences for fans and, with a general admission, there will be standing room capacity of approximately on hundred ninety (190), a premium seating area hosting approximately ninety (90), and a VIP seating area limited to forty (40); and WHEREAS, the floor plan of Stage Red is depicted on the attached Exhibit “B” and by this reference incorporated herein; and WHEREAS, in addition to the renovations to the Venue, the City is in the process of constructing a four-level parking structure (“Parking Structure”) adjacent to the Venue to ensure adequate parking as shown in the attached Exhibit “C” and by this reference incorporated herein; and WHEREAS, from the Opening Date of the Venue until such time the Parking Structure is completed, the City intends to make parking available in the adjacent underground parking garage located at 8437 Sierra Ave, Fontana, CA. The Parking Structure and the parking set forth in this paragraph shall be hereinafter referred to collectively as “Parking”; and WHEREAS, City issued a Request for Proposals (RFP DS-24-16-SP) for a qualified organization to operate, manage and maintain Stage Red to which ASM submitted its proposal to operate, manage and maintain Stage Red as further described in the attached Exhibit “D” and by this reference is incorporated herein; and WHEREAS, ASM has extensive experience in venue management and in the production, planning and promotion of live entertainment events; and WHEREAS, the City desires to engage ASM, on the terms and conditions set forth below, to operate, manage and maintain Stage Red in a high quality manner including, but not limited to, deliver live music or comedic performers to the Venue, through direct booking and promotion or by participation with other promoters and talent managers, provide marketing and promotion services, guest services, premium food and beverages, parking and state of the art technology services all to be provided in a safe and secure facility for guests, exhibitors, entertainers and employees.
NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements contained in this Agreement, the Parties agree as follows:
Term.
Initial Term. The term of this Agreement shall commence on March 1, 2024 and shall continue for a term of thirty-six (36) months ending on February 28, 2027 unless terminated as provided herein (“Term”).
Option to Extend. The City may, in its sole discretion, renew the Term of this Agreement, by written agreement, for up to two (2) three-year periods (not to extend beyond March 1, 2033) upon providing written notice to ASM at least ninety (90) days prior to the expiration of the then-current Term. Should the City not provide written notice to ASM at least ninety (90) days prior to the expiration of the then-current Term, this Agreement shall automatically renew and shall continue for the same length of term amount as the prior Term, subject to acceptance by ASM.
Upon termination or expiration of this Agreement, the obligations of the Parties shall cease except for the obligations under Section 12 and such liability or obligations of ASM and/or City that accrued or were to be performed prior to such termination of expiration.
Operating and Management of Venue.
Operating Agreement.
This Agreement is for the operation, management, general maintenance, and supervision of the Venue. ASM shall have exclusive authority over the day-to-day operation of the Venue and all activities therein; provided that ASM shall follow any existing policies and ordinances of the City and subject to restrictions noted in Exhibit A, attached hereto. ASM may not change the name of the Venue or market the Venue under any other name or with any unapproved marketing material which uses the name or official logo of the Venue. Use of the Venue name, Stage RED, a Sammy Hagar Venue, Fontana, California, is under a license, that certain Naming Rights Agreement and ASM shall not violate the terms of said license. The responsibilities and obligations of ASM are to commence upon the Effective Date of this Agreement. ASM shall undertake the obligations described herein (“Pre-Opening Services”) for all activities necessary and to be performed by or before the City’s anticipated opening date of June 1, 2024 (“Opening Date”) to ensure the successful opening of the Venue. A grand opening event featuring Sammy Hagar is tentatively scheduled on Saturday, June 15, 2024 or a date that is subsequently and mutually determined by the Parties.
Provide day to day administrative services pursuant to approved budgets and annual plans, including, but not limited to the acquisition of services and supplies, internal budgeting and accounting, maintenance and property management, personnel functions, record-keeping, collections, and other services.
ASM is an independent contractor, and not an employee of City. No employee or agent of ASM shall be considered an employee of the City. ASM shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of any services under this Agreement and as required by law. ASM shall be responsible for all reports and obligations respecting such personnel, including, but not limited to; social security taxes, income tax withholding, unemployment insurance, and workers' compensation insurance.
No land, property, building, structure, improvement, equipment, space, or fixture is leased to ASM. ASM is not a lessee of the City.
ASM has the right and obligation to operate the Venue in accordance with the terms of this Agreement, including the right to execute contracts, which shall be binding commitments for the Venue. ASM shall procure, prepare, serve, and sell food and beverages at the Venue, market, sell, and distribute tickets for entry to the Venue, issue and execute contracts with performers for the Venue, and take other discretionary actions within the scope and obligations of this Agreement.
License to Use Venue. The City hereby grants to ASM a non-exclusive license to use the Venue in order to conduct the activities reasonably necessary to perform ASM’s obligations hereunder, and that license shall continue in effect throughout the term of this Agreement.
2.1.7 Parking. The City shall include a sufficient number of parking spaces (in the Parking Structure anticipated to be completed in January, 2025) immediately adjacent to and east of the Venue that complies with all ADA, handicap and reserved parking restrictions. For the period of time from the Opening Date until completion of the Parking Structure, the City will make available parking spaces in an underground parking garage located adjacent to the Venue located at 8437 Sierra Ave, Fontana, CA. for scheduled events at the Venue. (collectively both locations are referred to as the “Parking”) In connection with providing the operation and management services for the Venue, ASM shall control the use and operation of the Parking, including without limitation, ASM shall have the right to operate the Parking itself or to subcontract out such operation to a third-party parking operator, and shall include all revenue generated in connection with such parking operation in ASM's calculation of Gross Operating Revenue (as defined below in Section 3.11.1). ASM shall provide parking attendants for the Parking and may provide valet service for any scheduled events at the Venue.
2.1.8 Minimum Utilization Standard. Subject to Force Majeure and City's compliance with its obligations under this Agreement, ASM covenants and agrees to use its good faith effort to utilize the Venue for at least the Minimum Utilization Standard (as defined below) after the initial partial Operating Year (the portion of the first year after the Opening Date), subject to interruption of business actually caused by casualty or condemnation and a reasonable period for periodic remodeling, repairs or maintenance. For purposes of this Agreement, the Minimum Utilization Standard shall mean that ASM agrees to use its best and good faith effort for securing one hundred (100) annual Events (as defined herein) in the initial Term of this Agreement, and provided the Term of this Agreement is extended, one hundred seventy-five (175) annual Events in any subsequent Term of this Agreement. For the purposes of this Agreement, the term “Events” shall include any ticketed or non-ticketed performance or event and any such “Event” shall be counted towards the Minimum Utilization Standard.
2.1.9 City shall maintain responsibility for evaluating ASM’s performance of the obligations described herein, including any licensed service provider. City shall retain the right of approval for any booking of the Venue, which shall be at the City’s reasonable discretion.
Pre-Opening Services. From the Effective Date until the Opening Date, subject to the limitations set forth in this Agreement, ASM shall undertake the following activities ("Pre-Opening Services") in connection with the preparation of Stage Red to conduct business on and after the Opening Date:
2.2.1 Develop and implement, subject to review and approval by City, a pre-opening marketing plan and budget through the first year of operation of the Venue following the Opening Date for purposes of (a) selling all commercial rights with respect to the Venue, including pouring rights and sponsorship, subject to the Naming Rights Agreement, and (b) attracting patrons to the Venue on and after the Opening Date in accordance with the goals of the pre-opening marketing plan and budget; provided that ASM shall use its commercially reasonable efforts to accomplish the sale of commercial rights and the goals of the marketing plan.
2.2.2 Negotiate licenses and bookings for, and promote, post-opening events.
2.2.3 Negotiate agreements with food and beverage vendors, merchandise concessionaires subject to the separate agreement pertaining to the revenue for sale of Merchandise referenced in Section 3.3 of this Agreement, and any other vendors deemed necessary or appropriate by ASM.
2.2.4 Recruit and arrange for the employment of an initial staff for the Venue; train such staff in the operations of the Venue; and develop procedures as necessary to open and operate the Venue in accordance with this Agreement.
2.2.5 Establish and implement all additional policies and procedures necessary to open and operate the Venue in accordance with the terms of this Agreement, including policies regarding general operations, accounting systems and controls, food and beverage.
Operator General Obligations. Upon the Opening Date, in addition to any other obligations set forth in this Agreement, and subject to any exceptions identified in this Agreement, ASM shall be responsible for calendar and event management and the following:
ASM shall coordinate and contract for all live performances, concerts and entertainment activities at the Venue.
ASM shall obtain and maintain in good standing a California Alcoholic Beverage Control License.
ASM shall obtain and maintain in good standing a permit from the San Bernardino Health Department.
When the Venue is open to the public, including private party events, ASM shall ensure the safe operation and use of the Venue in accordance with all rules, regulations, and ordinances of the City.
ASM shall take reasonable measures, including but not limited to, providing appropriate staffing levels, including security personnel, to create and maintain an orderly and safe environment at the Venue.
ASM shall manage all procurement, preparation, service and sale of all food and beverage for the venue and shall recruit, select, hire, employ, and manage all qualified “front of house” staff for the Venue, including but not limited to; servers, bartenders, cooks, dishwashers, security personnel, parking attendants, hosts, and managers or supervisors. ASM shall operate or have a reputable and qualified third person or entity operate food, beverage concessions in connection with operating the Venue. Concession agreements shall include any such contract provisions as may be reasonably required by City.
ASM shall recruit, select, hire, employ and manage all qualified “back of house” personnel including, but not limited to; accounting and finance management, support staff for loading and unloading of entertainment equipment for performers, assistance in acclimating entertainer and entertainer support crew to the venue including technology and facility accommodations, venue management including talent bookings, ticket sales and box office, advertising and marketing, sound engineer, lighting and video technician, general maintenance and cleaning of the venue and general venue operations.
ASM shall establish, for approval by City, operating and procedures plans for Venue, including an emergency response plan.
ASM shall develop, implement, and manage a marketing plan for maximizing of revenue related to sponsorships and corporate brand partnerships.
ASM shall regulate the entry of all persons to the Venue.
As further described in Sections 3.8 and 5, ASM shall generate, deliver and administer event reconciliations and provide quarterly statements to the City detailing revenue from all events/services.
ASM shall operate of the Venue in a manner consistent with industry standards for facilities of the same character.
ASM shall pay, when due, all expenses of ASM related to the operation of the Venue. The term “Operating Expense" means all expenses paid or incurred by Operator in connection with the operation of the Venue. Notwithstanding the foregoing, "Operating Expenses" shall not include (1) property taxes or similar charges levied on the Venue (2) the cost of any capital expenditures (determined in accordance with GAAP) in excess of Five Thousand Dollars ($5,000.00) per item unless Owner and Operator otherwise agree in writing (it being the intent of the parties that individual capital expenditures below that amount be accounted for and treated as an Operating Expense); (3) any reserve for (i) the replacement of Furnishings, Fixtures and Equipment (FF&E) or (ii) any future capital expenditures; (4) principal, interest or any other amounts payable by City in connection with any financing secured by or in connection with the Venue; and (5) all insurance premiums and other charges incurred by City in connection with the insurance required to be maintained by City hereunder.
ASM shall engage in such advertising, solicitation, and promotional activities as ASM deems necessary or appropriate to advertise ASM events at the Venue.
Community Use. ASM shall, upon reasonable notice from City, and subject to availability and after taking into account prior commitments, make Venue available for use by City to conduct public or civic events up to sixteen (16) times each year, not more than eight (8) of which events shall occur in the evening. Such use shall be rent-free; provided that the user of Venue shall be responsible for reimbursing ASM for all costs associated with ASM providing staffing or food and beverage services at the event. Any tickets sold for such community events shall not be subject to ticket surcharges or revenue sharing with ASM. Any public or civic Event set forth above, shall be counted towards the Minimum Utilization Standard set forth in Section 2.1.8 above.
City Event Tickets. City shall be entitled to, free of all charges and fees, ten VIP seating tickets for all events at Venue.
No Partnership or Joint Venture. ASM and the City acknowledge that neither is the other’s agent, partner or fiduciary and that this Agreement was drafted at arm’s length and shall be performed as a matter of arm’s length contract and not as a joint venture, partnership or other arrangement that might give rise to fiduciary or other extra-contractual duties or obligations not stated herein.
Financial Provisions; Fees and Revenue.
Management Fee Schedule. The City shall pay ASM an annual management fee on a monthly basis as follows:
Pre-Opening Date Management Fee. From the Effective Date of this Agreement until the opening of the Venue, the Management Fee shall be $5,000 per month.
Post-Opening Date Management Date Fee. From and after the Opening Date of the Venue, the Management Fee shall be $10,000 per month, for each full month of operation. Should the Opening Date occur on any date other than the 1st of a month, then the Management Fee for that month shall be the Pre-Opening Date Management Fee amount.
3.1.3 Renewal / Contract Extensions. In the event this Agreement is renewed/extended after the Initial Term, as defined in Section 1.1, the Parties shall meet and confer in good faith to consider the amount of the Management Fee(s) for the remaining term of the Agreement, including available extensions. Upon mutual agreement of the Parties, if applicable, the Agreement shall be amended to reflect any changes to the Management Fee.
Food and Beverage Revenue Sharing. ASM shall be entitled to receive an amount equal to seven percent (7%) of the gross revenue of food and beverage sales at Venue.
Merchandise Revenue Sharing. Revenue, Fees, or Commission for the sale of Merchandise, if any, shall be addressed in a separate agreement between the Parties. For purposes of this Agreement, Merchandise shall include without limitation the following: apparel, such as t-shirts, sweatshirts, hats, scarves or other goods featuring the Venue Name.
Parking Revenue Sharing. ASM shall be entitled to receive an amount equal to ten percent (10%) of the gross revenue generated by ASM managed Parking for the Venue, including any revenue associated with valet service provided by or managed by ASM. Parking rates, including the cost of valet service, shall be established by ASM, subject to approval by City, which approval shall not be unreasonably withheld.
Sponsorship Revenue Sharing. ASM shall have the right to develop, negotiate and sell sponsorships at the Venue, subject to limitations described in Exhibit A attached hereto. The sponsorship revenue, if any, shall be shared with City at a rate of twenty five percent (25%) to ASM and seventy-five percent (75%) to City for the term of this Agreement, as extended.
Facility Rental Fees for Private Parties. ASM shall be entitled to receive fifty percent (50%) of revenue received for facility rental of Venue for private events. Facility rental rates shall be established by ASM, subject to approval by City, which approval shall not be unreasonably withheld.
Pricing. ASM shall have the right to set all ticket pricing for all ASM coordinated events and shall not require City approval for said prices, subject to any limitations identified in Section 2.4 above and Exhibit A attached hereto. Subject to the review and approval of City, ASM shall establish prices, fees and other charges applicable to the use and operation of the Venue, including service fees and other charges and costs of goods and services offered in the Venue.
Collections and Payments.
Collection of Revenue. ASM shall be responsible for the collection of all the revenue due from the operation of the Venue.
Payment of Operating Expenses. From the Effective Date, ASM shall be responsible for processing payments of all Operating Expenses on a current basis, regardless of whether sufficient revenues from the operation of the Venue exist to pay such Operating Expenses. In the event there are insufficient revenues from the operation of the Venue in a calendar month of an Operating Year to pay for any Operating Expense(s), ASM shall process the payment of any such Operating Expense(s) when due using funds from the Venue Operations Account (as further described in Section 3.9 below). ASM shall maintain sufficient documentation detailing the amount of the deficiency needed to pay the Operating Expense(s) and accounting of the Operating Expenses.
Payment of Management Fees. Management Fees shall be due and payable on a monthly basis to ASM. The City shall remit payment of the Management Fees to ASM by or on the last day of each month.
Rights Regarding Revenue Due to the Parties. Except as otherwise provided herein this Agreement, the City is entitled to all the revenues received for the operation of the Venue. ASM shall be entitled to keep and retain the revenue sharing percentage amounts from food and beverage sales, parking fees, facility rental fees, and sponsorship revenue (“ASM Revenue Sharing Percentage”) as described in Sections 3.2, 3.4, 3.5 and 3.6. ASM shall remit to the City the Revenue Sharing percentage amounts due the City as described in this Agreement (“City Revenue Sharing Percentage”).
Subject to the audit terms described in Section 5.1 and on the basis of a preliminary determination by ASM of Net Operating Income, not later than forth-five (45) days after the end of each Operating Year, the following shall occur in the order described: (1) If not already retained for and during the Operating Year that just ended, ASM is entitled to pay itself any amounts not yet retained up to the sum total of its ASM Revenue Sharing Percentage for each Operating Year; (2) ASM shall pay to the City the aggregate amount of any Operating Expenses shortfalls or deficiencies that were funded by the City in previous years; and (3) any remaining Net Operating Profit shall be paid eighty percent (80%) to City and twenty percent (20%) to ASM. If the preliminary determination of Net Operating Income on which the above described payments were made differs from the determination of Net Operating Income pursuant to the annual financial report described in Section 5.1.2, City pay to ASM or ASM shall pay to City such portion of the payments received by them so as to reflect the payments each should have received on the basis of the determination of Net Operating Income shown in the annual financial report.
Establishment of Venue Operations Account. An account to be known as the “Venue Operations Account” shall be established by the City with an initial deposit amount of One Hundred Fifty Thousand Dollars ($150,000.00) for use in accordance with the terms of this Agreement, subject to such amount being appropriated by the City. The purpose of the amounts deposited by the City into the Venue Operations Account is to fund Operating Expenses only in the event that the Operating Expenses exceed the revenue collected by ASM in any given Operating Year; otherwise ASM shall use the revenue collected to pay for the Operating Expenses. At the end of each Operating Year (on a prorated basis for any partial Operating Year), City shall deposit funds in an amount sufficient to maintain a balance of One Hundred Fifty Thousand Dollars ($150,000.00) in the Venue Operations Account, subject to the limitations in Section 10.4 of this Agreement. The funds held in the Venue Operations Account shall be made available to fund Operating Expenses of the Venue when there are insufficient Revenues received from the operation of the Venue by ASM.
Establishment of Capital Reserve Account. An account to be known as the “Capital Reserve Account” shall be established by the City with an initial reserve amount of One Hundred Thousand Dollars ($100,000.00) for use in accordance with the terms of this Agreement, subject to such amount being appropriated by the City. At the end of each Operating Year (on a prorated basis for any partial Operating Year), City shall deposit funds in the amount of One Hundred Thousand Dollars ($100,000.00) in the Capital Reserve Account, subject to the limitations in Section 10.4 of this Agreement. The funds held in the Capital Reserve Account shall be made available to fund such capital repairs to the Venue as may be deemed necessary by the City.
Definitions. Set forth below are definitions for Gross Operating Revenue, Operating Expense, Net Operating Profit and Net Operating Loss. Except to the extent contrary to the express terms of such definitions, Gross Operating Revenue, Operating Expense, Net Operating Profit and Net Operating Loss shall be determined in accordance with Generally Accepted Accounting Principles promulgated by the Financial Accounting Standards Board (“GAAP”).
The term "Gross Operating Revenue" means the total revenue earned and received from the operation of the Venue or any portion thereof including, but not limited to revenue received in connection with Venue, sponsorships, sales of general admission tickets and premium seat tickets, facility rental of the Venue, the sale of food and beverages, and parking fees. Notwithstanding the foregoing, the term "Gross Operating Revenues" shall not include (1) where such revenue has been expressly excluded from Gross Operating Revenues; (2) any revenue or commissions associated with naming rights under the Naming Rights Agreement; (3) any amounts paid to or retained by any Licensees or promoters of any Events, regardless of whether any such entities may be affiliated with ASM, or (4) any commissions payable to either party hereto pursuant to Section 3.3 and 3.5 above.
The term "Operating Expenses" means all expenses paid or incurred by ASM on behalf of the City in direct connection with the operation of the Venue.
Notwithstanding the foregoing, "Operating Expenses" shall not include (1) property taxes or similar charges that may be levied on the Venue and/or the Land (except as set forth in paragraph below); (2) the cost of any capital expenditures (determined in accordance with GAAP) in excess of Five Thousand Dollars ($5,000.00) per item unless City and ASM otherwise agree in writing (it being the intent of the parties that individual capital expenditures below that amount be accounted for and treated as an Operating Expense); (3) any reserve for the replacement of FF&E; (4) any reserve for any future capital expenditures; (5) principal, interest or any other amounts payable by City in connection with any financing secured by or in connection with the Venue; and (6) all insurance premiums and other charges incurred by City in connection with the insurance required to be maintained by City hereunder.
The parties do not believe that this Agreement creates a possessory interest on the part of ASM; however, in the event that the applicable taxing authorities determine that ASM's rights hereunder give rise to a taxable possessory interest, such tax shall be treated as an Operating Expense.
The term "Net Operating Profit" means, with respect to the applicable period, the amount by which Gross Operating Revenue exceeds Operating Expenses.
The term "Net Operating Loss" means, with respect to the applicable period, the amount by which Operating Expenses exceed Gross Operating Revenue, and such amount shall be expressed mathematically as a negative number.
Operations, Utilities, Permits and Taxes.
Utilities. ASM shall set up accounts for each of the utilities to operate the Venue and shall be liable for direct payment for all utility charges to the respective billing agency or entity.
Taxes.
The City is solely liable for the direct payment of property taxes and special assessment taxes for the Venue, only in the event that such taxes and special assessments are assessed against the City as a municipal law corporation.
ASM shall be solely responsible for the collection and payment of applicable sales taxes on sales of non-exempt items.
ASM shall be solely responsible for the payment of all employment taxes directly arising out of its operation of the Venue.
Employee Training. ASM shall retain only qualified individuals for the performance of the job for which they were hired. ASM shall provide its employees an orientation regarding operation of the Venue, including a review of all applicable regulations, policies, procedures and safety measures. The City may, in its discretion, provide an orientation on its policies and procedures for ASM’s employees, or may provide to ASM information reasonably sufficient to enable ASM to conduct an orientation on the City’s policies and procedures.
Photography. Venue includes a state-of-the-art video recording system designed to record all live performances at the Venue. Advertising for Venue, including prominent displays on site, shall include legal notice to all entrants that they may appear on recordings and any images from such recordings may be used in connection with marketing the Venue or by the performer for performer’s purposes, which may include sale or other income related distribution of video without additional or specific consent from or compensation due to the individual. With the City’s prior consent, which shall not be unreasonably withheld, ASM shall have the right to grant authorization to persons or corporations associated with ASM to engage in the production of additional still and motion pictures and related activities for, or during, the use of the Venue.
Security Camera Access. ASM shall be provided non-exclusive direct and live streaming access to Venue security cameras to provide ample monitoring of the Venue and surrounding area.
Inventory. ASM shall maintain an inventory of all perishable and non-perishable goods, service ware, alcohol and non-appurtenant fixtures related to ASM services for the Venue and shall be responsible for their safe keeping or replacement if lost, damaged, or stolen. ASM shall ensure appropriate levels of glassware, dinnerware, flatware, food, and beverage are on premise and available for preparation and sale prior to each event at Venue.
Required Permits and Inspection Ratings; Business License. ASM shall at all times maintain the proper City and County Health Department permits and inspection ratings required for its food and beverage sales, including alcoholic beverages sales. ASM shall procure a Business License from the City prior to beginning operations at the Venue and shall maintain a valid license at all times throughout the duration of this Agreement.
Reporting, Records and Budget.
Reporting. ASM shall provide to City the following reports:
5.1.1 Monthly Written Summaries. ASM shall provide City a monthly written summary of the ASM's activities, which shall include monthly financial reports, a calendar of event bookings updated monthly, and such other information as may be reasonably requested by City from time to time ("Monthly Summary"). The Monthly Summary shall be in a form agreed upon by ASM and City and shall be received by City no later than thirty days following the end of each month.
5.1.2 Annual Financial Report: Statistics. Within ninety (90) days after the end of each Operating Year, ASM shall endeavor in good faith to furnish to City: (1) an annual report of income and cash flow from the Venue prepared in accordance with GAAP, and (2) reasonably detailed supporting schedules that provide information on actual results compared to budget projections.
5.1.3 Quarterly Financial Reports; Statistics. Within forty-five (45) days after each calendar quarter ending March 31, June 30th, September 30th and December 31st, (1) income and cash flow reports, and (2) reasonably detailed supporting schedules that provide information on actual results compared to budget projections.
5.1.4 Reports Through End of Term. As promptly as possible after the expiration or termination of this Agreement, ASM shall prepare and deliver to City the annual reports described in Section 5.1.2 if the Term ends at the end of an Operating Year or the reports described in Section 5.1.3 if the Term ends other than at the end of an Operating. Year. In the latter case, such report shall relate to the period from the commencement of the calendar quarter for which no reporting has occurred up to the date of termination.
Records. Upon written request, with no fewer than twenty-eight (28) days’ notice and no more than once per year, unless otherwise required by law or mandate of a state or federal agency, ASM shall make available for inspection or provide copies of its books and records to the City for Venue Operations for and to have an independent certified public accountant acceptable to ASM audit such books, receipts and records. These reporting requirements shall include and be limited to the information called for in Subparagraphs 5.1.1 through 5.1.4., below.
ASM shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. Full, true and accurate records of Gross Operating Revenue, Operating Expenses and Net Operating Income in an Operating Year shall be kept by ASM at either the Venue or ASM’s business office in Southern California. All such records shall be clearly identifiable.
ASM shall keep detailed injury reports, maintenance reports, liability waivers and incident reports, both electronically and in hard copy. ASM shall complete and submit annual reporting and documentation to outside agencies, as required.
ASM shall provide quarterly and annual attendance and sales reports to the City as soon as is practicable after the closing of ASM’s books for such quarter or year.
ASM shall keep all records described in this Section 5 for a period of no less than three (3) years from the date such record(s) was/were created.
5.3 Annual Budget. By April 1st of each calendar year, ASM shall provide City with a copy a copy of ASM’s projection of revenue and estimated budget of expenses relating to the operation of the Venue prepared by ASM. The projected budget shall include a detailed scope of services to be provided by or on behalf of ASM and shall include ASM’s objectives for the Operating Year.
Maintenance; Repairs and Appearance.
Venue Maintenance
ASM shall be responsible for management of all interior janitorial services and minor maintenance of the Venue to keep the Venue in a neat, clean, first-class condition, including removal of debris and garbage from the Venue and loading docks; cleaning of the interior and exterior portions of the Venue, including, but not limited to, all seating areas, stairwells, roofs, storage areas, offices, equipment, windows, window frames and doors of the Venue; making necessary minor repairs to the Venue; and ensuring the exterior of the building and surrounding property are free of clutter, debris, and graffiti. ASM shall not be required to, and shall not, make any repair requiring a "Capital Repair" without the express advance written consent of the City, where a Capital Repair is defined as an item of repair having (1) a one-time cost of $5,000 or more or (2) a life expectancy of five (5) years or more, to keep the Venue in such condition as to comply with all applicable legal requirements. In event that ASM may make a Capital Repair, ASM may seek reimbursement from the City (to be paid from the Capital Reserve Account) by submission of a detailed invoice and sufficient documentation to the City; provided sufficient funds are in the Capital Reserve Account and City has provided its advance written consent to such Capital Repair.
ASM shall conduct daily inspections to ensure adequate upkeep of Venue. ASM shall immediately report any material maintenance or aesthetic issues to the City for further action.
ASM shall immediately notify the City of any need for any Capital Repairs to the Venue. Upon notification from ASM of a required repair, City shall, as soon as is practicable, facilitate required repairs in order to avoid an interruption of programing at Venue. In the absence of a qualified representative of City, ASM may directly facilitate emergency repairs in order to maintain programming.
Venue Appearance.
ASM shall be responsible for maintaining the image and aesthetic of the Venue in accordance with City goals and industry standards and practices.
ASM shall immediately notify the City of any need for any major maintenance required at the Venue, including but not limited to; graffiti abatement, lighting, significant trash and debris.
Quarterly Meetings. ASM’s Venue manager shall meet quarterly, and more frequently, if necessary, with the City’s personnel to review the condition of the Venue.
Additions and Alterations. ASM may not make any improvements, alterations, renovations, additions, modifications or changes to the Venue or any appurtenant features of Venue (collectively, the "Alterations") without first submitting the terms and conditions upon which ASM proposes to make such Alterations and obtaining the prior express written consent of City to such Alterations, which may be withheld in the sole discretion of City and subject to any terms and conditions that the City may impose. Arrangements for payment of any Alterations shall be made by separate agreement of the Parties prior to commencement of any such Alterations. All Alterations shall be and become the property of City and shall not be an Operating Expense. City may make Alterations to the Venue, provided the same do not adversely impact or unreasonably interfere with ASM's operation of the Venue, and are commenced only after providing ASM with prior notice and an opportunity to coordinate the scheduling of such Alterations with the use of the Venue.
7.1 In the event that ASM performs Alterations approved by the City, such Alternations shall conform with any and all applicable legal requirements and pursuant to, if required, a valid permit, issued by the applicable local authority, and in conformance with any reasonable construction rules and regulations City may impose. All work with respect to any Alterations must be done in a good and workmanlike manner and diligently prosecuted to completion to the end that the Venue shall at all times be a complete unit except during the period of work. Upon completion of any material Alterations, a Notice of Completion shall be recorded in the office of the Recorder of the County of San Bernardino and the party performing the Alterations shall deliver to ASM and City a reproducible copy of the "as built" drawings of the Alterations.
7.2 In addition to the insurance requirements of this Agreement, prior to the commencement of Alterations by ASM, ASM shall provide City with evidence that ASM or ASM's contractor carries "Builder's All Risk" insurance in an amount equal to the cost of construction of such Alterations, and such other insurance as City may reasonably require. The cost of such insurance carried by ASM pursuant to this Section 7.2 shall be paid by ASM.
7.3 ASM has no authority or power to cause or permit any lien or encumbrance of any kind whatsoever, whether created by act of ASM, operation of law or otherwise, to attach to or be placed upon the Venue. ASM covenants and agrees not to suffer or permit any lien of mechanics or materialmen or others to be placed against the Venue, or any portion thereof, with respect to work or services claimed to have been performed for or materials claimed to have been furnished to ASM or the Venue, and, in case of any such lien attaching or notice of any lien, ASM covenants and agrees to cause it to be released and removed of record within thirty (30) days.
Assignment. ASM acknowledges that the terms set forth in this Agreement were negotiated by City and ASM in consideration of, and would not have been granted by City, but for the high quality, first class reputation of ASM and the professional judgment, skill and taste of ASM as an operator of live performance events as demonstrated by its operation of other venues prior to the date of this Agreement. This Agreement is in the nature of a personal services contract and not subject to assumption or assignment pursuant to 11 U.S.C. Section 365 (Bankruptcy Code). Except for assignment(s) to wholly owned or controlled affiliates or subsidiaries of ASM (“Affiliates”), ASM shall not assign or delegate or any of its obligations or interest under this Agreement without the City’s prior written consent, in its sole and absolute discretion. In the event of any assignments made in whole or in part to one of ASM’s Affiliates, ASM shall provide notice to City prior to such assignment.
Advertising. ASM may install at the Venue, subject to any applicable sign ordinance and any restrictions included in Exhibit A, signs identifying its business and sponsors. Prior to installation, all outdoor signs, the number, general type, size and locations of signs must be approved in writing by the City, which approval may not be unreasonably withheld. ASM may advertise ASM events at other ASM managed facilities at the Venue subject to mutually agreeable terms and conditions which shall be included within the Venue Operating Plan.
Default; Termination of Agreement.
Default by ASM, Termination by the City.
City’s Right to Terminate Agreement within Thirty (30) Days. The City may terminate this Agreement by giving ASM thirty (30) days written notice after the occurrence of any of the following events:
10.1.1.1 The failure of ASM to materially perform any of its obligations under this Agreement, if ASM fails to cure its default within said thirty (30) day notice period; or if a cure is not reasonably possibly within thirty (30) days and ASM fails to initiate remedial action in a diligent manner and to proceed with the same until said default is cured.
10.1.1.2 The filing of any lien against the Venue because of any act or omission of ASM which is not discharged within thirty (30) days of receipt of actual notice by ASM, unless ASM initiates necessary action to remove such lien within thirty (30) days and diligently proceeds with such action until the lien is removed.
10.1.1.3 The City may terminate this Agreement by giving ASM ninety (90) days written notice from the date of any official act of the City Council of City which fails to allocate sufficient funds to pay ASM’s annual Management Fee.
10.1.2 City’s Right to Terminate Agreement Immediately. The City may terminate this Agreement immediately upon written notice to ASM upon the happening of any of the following events:
10.1.2.1 ASM abandons its operation of the Venue. For purposes of this Agreement, ASM shall be conclusively deemed to have abandoned its operations at any time the ASM fails to offer or provide the services required by this Agreement for a period of ten (10) consecutive days without the written consent of the City, unless such failure is because of circumstances that fall under any of the events defined as Force Majeure.
10.1.2.2 ASM fails to maintain any insurance required by this Agreement. Should ASM fail to maintain adequate insurance; the City shall have the option of securing the required insurance at ASM’s expense in lieu of immediately terminating this Agreement.
10.1.2.3 ASM files in any court, pursuant to any statute either of the United States or of any State, a petition in bankruptcy or insolvency or for reorganization or appointment of a receiver or trustee of all or a part of the property of ASM, or if ASM makes an assignment for the benefit of creditors.
10.1.3 City’s Right to Pro-Rata Refund of Management Fee. If this Agreement is terminated by the City, the City shall have the right to demand and ASM shall be obligated to refund to the City a pro-rata share of the Management Fee, or portion thereof, paid by the City and unearned prior to the date of termination.
10.2 Default by City; Termination by ASM.
10.2.1 ASM’s Right to Terminate. ASM may terminate this Agreement at any time that it is not in default in its obligations by giving the City thirty (30) days written notice after the occurrence of any of the following events:
10.2.1.1 The failure of the City to materially perform any of its obligations under this Agreement, unless the City cures its default within thirty (30) days of ASM’s notice; or, if a cure is not reasonably possible within thirty (30) days and such default has not been caused by the City’s gross negligence or intentional misconduct, the failure of the City to initiate necessary action to cure the default and to diligently proceed with such action until the default is cured.
10.2.1.2 Issuance by a court of competent jurisdiction of an injunction in any way preventing or restraining ASM’s use of any substantial portion of the Venue and the remaining in force of such injunction for a period of thirty (30) consecutive days.
10.2.1.3 The inability of ASM to use any substantial portion of the Venue for a period of thirty (30) consecutive days due to circumstances that fall under any of the events defined as Force Majeure
10.2.1.4 The material breach of any of the City’s representations and warranties set forth in this Agreement.
10.2.2 Right to Pro-Rata Refund of Management Fee. If this Agreement is terminated by ASM, the City shall have the right to demand and ASM shall be obligated to refund to the City a pro-rata share of the Management Fee, or portion thereof, paid by the City and unearned prior to the date of termination. In the event ASM terminates the Agreement for cause, ASM shall keep one month’s proportionate share of the Management Fee as liquidated damages.
10.3 Termination by Mutual Agreement - Both Parties. The Parties may terminate this Agreement for any reason by written agreement.
10.4 Termination Due to Non-appropriations. Notwithstanding any other provision of this Agreement, if this Agreement extends into more than one fiscal year of the City, and if appropriations are insufficient to support this Agreement, or if funds are not appropriated, then the City may terminate this Agreement at the end of the fiscal year or otherwise upon the expiration of existing appropriation authority. Expenditures not appropriated by the City Council in its current fiscal year budget are deemed to be contingent liabilities only and are subject to appropriation in subsequent fiscal year budgets.
Indemnification.
ASM Indemnification Obligation. ASM shall indemnify, defend and hold harmless the City and any of its officials (elected or appointed), officers, employees, agents or representatives (hereafter referred to collectively as the “City” in this Section) from and against all losses, damages or claims of whatever nature, including attorney’s fees and court costs, arising from any act or omission on the part of ASM, its officers, directors, employees, Affiliates, contractors, subcontractors or agents in the use or operation of the Property, or from any failure to fully, faithfully and timely comply with all of ASM’s obligations under this Agreement. This Section applies, without limitation, to claims of personal injury, property damage including without limitation loss of use, or other claims, liability, harm or damages, which may arise out of any use of the Property. This indemnity does not apply to claims arising from the sole gross negligence or willful misconduct of the City. The City shall give ASM prompt notice of any claim made or suit instituted which may subject ASM to liability under this Section 11.1, and ASM shall have the right to compromise and defend the same to the extent of its own interests; provided however that no such compromise in no manner whatsoever limits or changes ASM’s indemnification to City as set forth herein. ASM’s obligations hereunder shall survive any termination of the Agreement or ASM’s activities on the Property.
City Indemnification Obligation. City shall indemnify, defend and hold ASM, and its parents, subsidiaries, members, managers, agents, employees and representatives harmless from and against any and all Claims incurred in connection with or arising from (1) any negligence or willful misconduct of City or its employees, (2) any default by City in the observance or performance of any of the terms, covenants or conditions of this Agreement on City's part to be observed or performed, (3) the presence or release of any Hazardous Materials in, under or around the Property or Venue or (4) any violation of the Americans With Disabilities Act, as relates to accessibility only, or any state or local law of similar import.
The provisions of this Section 11 shall survive the expiration or sooner termination of this Agreement with respect to any claims or liability occurring prior to such expiration or termination until such time the statute of limitations has run for any such claims.
Insurance.
Time for Compliance. ASM shall not commence performance under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this Section 12. As respects to this insurance section, the City herein refers to its directors, officials, officers, employees, agents, representatives and volunteers as Additional Insureds.
Minimum Requirements. ASM shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the ASM, its agents, representatives, employees or subcontractors:
Minimum Scope of Insurance. Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation insurance as required by the State of California and Employer’s Liability Insurance.
Minimum Limits of Insurance. ASM shall maintain limits no less than: (1) General Liability: One Million Dollars ($1,000,000) per occurrence for bodily injury, personal injury and property damage. 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 or the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability: One Million Dollars ($1,000,000) per accident for bodily injury and property damage; and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation limits as required by the Labor Code of the State of California. Employer’s Liability limits of One Million Dollars ($1,000,000) per accident for bodily injury or disease.
Insurance Endorsements. The insurance policies shall contain the following provisions, or ASM shall provide endorsements on forms supplied or approved by the City to add the following provisions to the insurance policies:
General Liability. The general liability policy shall be endorsed to state that: (1) the City, its directors, officials, officers, employees, agents, representatives and volunteers shall be covered as additional insureds with respect to the services or operations performed by or on behalf of the ASM, including materials, parts or equipment furnished in connection with such work; and (2) the insurance coverage shall be primary insurance as respects the City, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the ASM’s scheduled underlying coverage. Any insurance deductibles, self-insurance programs or self-insurance retentions maintained by the City, its directors, officials, officers, employees, agents and volunteers shall not be construed as contributory in any way.
Automobile Liability. The automobile liability policy shall be endorsed to state that: (1) the City, its directors, officials, officers, employees, agents, representatives and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by ASM or for which the ASM is responsible; and (2) the insurance coverage shall be primary insurance as respects the City, its directors, officials, officers, employees, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the ASM’s scheduled underlying coverage. Any insurance deductibles, self-insurance programs or self-insurance retentions maintained by the City, its directors, officials, officers, employees, agents and volunteers shall not be construed as contributory in any way.
Workers’ Compensation and Employers Liability Coverage. The insurer shall agree to waive all rights of subrogation against the City, its directors, officials, officers, employees, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the ASM.
Property Insurance. The City shall acquire and maintain property insurance for fire, extended coverage and vandalism and malicious mischief for the Venue, including furniture, fixtures, improvements and contents in an amount not less than the full replacement value thereof.
All Coverages. Each insurance policy required by this Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the City; and (B) 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.
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, agents, representatives and volunteers.
Deductibles and Self-Insurance Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. ASM shall guarantee that, at the option of the City, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its directors, officials, officers, employees, agents and volunteers; or (2) the ASM shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses.
Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best’s rating no less than A:VIII, licensed to do business in California, and satisfactory to the City.
Verification of Coverage. ASM shall furnish City with original certificates of insurance and endorsements effecting 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 before work commences. The City reserves the right to require complete, certified copies of all required insurance policies, at any time.
12.15 ASM shall pass down the insurance obligations contained herein to all tiers of contractors and subcontractors working under this Agreement.
12.16 The City as owner of the Venue property will maintain its own property and liability insurance; but such insurance shall not be primary or contributory for any claims that may be asserted or based on the use of the Venue or related to the operation and management of the Venue by ASM under this Agreement. City has currently in force and shall maintain in force during the Term of this Agreement a policy or policies of risk of direct physical loss or damage insurance covering damage from fire and other perils (and, at City's sole and absolute discretion, earthquake and flood), for loss or damage to the Venue. Landlord has currently in force and shall maintain in force during the Term a Commercial General Liability policy insuring against liability (including bodily injury or property damage) arising on or about the Venue in commercially reasonable amounts as determined by City in its reasonable discretion.
Representations and Warranties.
City Representations and Warranties. The City hereby warrants and represents that (with the understanding that ASM is relying on said warranties and representations):
The transactions contemplated by this Agreement and the execution and delivery of all documents required herein and their performance hereunder have been duly authorized. The execution and delivery of this Agreement and any other document required herein and the consummation of the transactions contemplated hereby and thereby will not result in any violations of or default under any term or provision of any agreement, instrument, mortgage, loan or similar documents to which the City is a party or by which it is bound.
There is no existing, pending or anticipated condemnation or similar proceeding against or involving the Venue.
The City has not entered into any leases, options, contracts or rights of first refusal, recorded or unrecorded, affecting the Venue which have not been disclosed to ASM.
The individuals executing this Agreement on behalf of the City are authorized and empowered to enter into this Agreement.
The City is not prohibited from consummating the transaction contemplated in this Agreement by any law, regulation, charter, code, ordinance, decree, agreement, instrument, restriction, order or judgment or similar legal or quasi-legal limitation.
ASM representations and warranties.
ASM hereby warrants and represents that the individuals executing this Agreement on behalf of ASM are authorized and empowered to enter into this Agreement.
ASM is skilled and experienced in providing entertainment venue operations and management and has or shall acquire, and shall maintain throughout the Term of this Agreement, all permits, licenses and approvals legally required for the operation of the Venue and the performance of this Agreement.
ASM hereby warrants and represents that all individuals operating or employed at the Venue by or on behalf of ASM shall have all requisite skills and training necessary to safely and satisfactorily perform the services required hereunder. Further, ASM warrants that all such individuals shall have and maintain current all licenses, permits, qualifications and approvals legally required to perform any services under this Agreement.
Surrender of Possession. Upon the expiration or termination of this Agreement, ASM’s right to use the Venue and exercise the privilege and rights herein granted shall cease, and ASM shall surrender the same and leave the Venue in good condition, except for normal wear and tear. Unless otherwise provided herein, all trade fixtures, equipment and other personal property installed or placed by ASM in the Venue shall remain the property of ASM and ASM shall have the right at any time during the term of this Agreement, and for and additional period of twenty (20) days after its expiration, to remove the same from the Venue; provided that ASM is not in default of any of its obligations hereunder and that ASM repairs at its sole cost any damage caused by such removal. Any property not removed by ASM within said twenty (20) day period shall become a part of the Venue and ownership thereto shall automatically vest in the City.
Notice. All notices required or permitted to be given under this Agreement may be personally delivered or mailed by certified mail, return receipt requested, postage prepaid, to the following addresses:
The City: City of Fontana
8353 Sierra Avenue
Fontana, CA 92335
Attn: City Manager
With a Copy to: Best Best & Krieger, LLP
2855 E. Guasti Road
Suite 400
Ontario, CA 91761
Attn: Ruben Duran
ASM: ASM Global, LLC
Attn: Michael K. Krouse
2000 E. Convention Center Way
Ontario, Ca 91764
With a Copy to: Lizarraga Law Firm, APC
Frank J. Lizarraga, Jr.
3401 Centrelake Drive
Suite 600
Ontario, CA 91761
Any notice given by certified mail shall be deemed to be effective upon the date received, which shall be deemed the next business day following the date of mailing. Either party may designate a different address for notice purposes pursuant to this section by informing the other party in writing.
Force Majeure. A Force Majeure Event means if the Venue is damaged or prevented from occupancy or use from any cause whatsoever or if any other casualty or unforeseeable cause beyond the control of the parties, including, without limitation, acts of God, fires, floods, epidemics, pandemics, quarantine restrictions imposed by government officials, terrorist acts, strikes or labor disputes, failure of public utilities, or unusually severe weather, prevents occupancy and use, or either, as granted in this Agreement, then performing party or any other affected party shall be excused from performance and shall not be considered to be in default with respect to any obligation hereunder, if and to the extent that its failure of, or delay in, performance is due to a Force Majeure Event; provided, that performing party uses reasonable commercial efforts to overcome or mitigate the effects of such occurrence. Notwithstanding anything to the contrary contained in this Agreement, a Force Majeure event shall excuse the performance of such party for a period equal to any such prevention, delay or stoppage and, therefore, if this Agreement specifies a time period for performance of an obligation of either party, that time period shall be extended by the period of any delay in such party's performance caused by a Force Majeure.
Severability. Should any provision of this Agreement be declared to be invalid by a court of competent jurisdiction, the remaining terms shall remain effective, provided that elimination of the invalid provision does not materially prejudice any party with regard to its respective rights.
Compliance with Laws. ASM shall at all times comply with all federal, state and local laws, ordinances, rules and regulations which are applicable to its operation of the Venue, including all laws, rules and regulations adopted after the Effective Date of this Agreement.
Discrimination Prohibited. ASM shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, age, disability, political affiliation or national origin. ASM shall at all times operate Venue and related facilities as public facility and shall not, on grounds of race, color, religion, sex age, disability, political affiliation or national origin, deny any services, furnish any benefit which is different from that provided to others, subject any person to segregated or separate treatment in any facility, or in any manner or process related to receipt of any service or benefit, restrict the enjoyment of any privilege enjoyed by others receiving such service or benefit.
Litigation. This Agreement shall be governed by the laws of the State of California. Venue shall be in San Bernardino. In the event of any litigation or other similar proceeding between the City and ASM arising under this Agreement, the successful party shall be entitled to recover its reasonable attorney’s fees, expert witness fees and other costs incurred in connection with such litigation or arbitration.
Remedies to be Non-Exclusive. All remedies provided in this Agreement shall be deemed to be cumulative and additional, not in lieu of or exclusive of each other, or of any other remedy available to the City or ASM at law or in equity, and the exercise of any remedy, or the existence herein of other remedies, shall not prevent the exercise of any other remedy.
Time is of the Essence. Time is of the essence with regard to the performance of all the Parties’ obligation under this Agreement.
Integrated Agreement. This Agreement constitutes the entire agreement between the parties concerning the matters contained herein and supersedes all prior negotiations, understandings and agreements concerning such matters.
Written Waiver. No provision of this Agreement may be waived or modified except by a writing signed by the party against whom such waiver or modification is sought to be enforced. Failure of either Party to insist on any one occasion upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant or condition, nor shall any waiver or relinquishment of any rights or powers hereunder at any one time or more times be deemed a waiver or relinquishment of such other right or power at any other time or times.
Successors and Assigns. The terms of this Agreement shall be binding upon and inure to the benefit of the Parties’ successors and assigns.
Future Acts and Cooperation. The City recognizes and acknowledges that ASM will need the assistance and cooperation of the City in order to properly perform and fulfill ASM’s covenants and obligations under this Agreement. The City agrees it shall designate a specific officer or agent having appropriate experience and authority whose responsibility it is to work with ASM in assuring that ASM obtains the full cooperation and assistance of the City, subject to the terms of this Agreement and all applicable laws.
Frustration of Purpose. At any time during the Agreement term, if the governing body of any political subdivision, having competent jurisdiction of the Venue, should enact any valid zoning ordinance, law or regulation which prohibits the use of the whole or a substantial part of the Venue for the purpose as provided in this Agreement, as reasonably determined by the City, or if a force outside ASM’s control occurs including, but not limited to, declared or undeclared war, sabotage, riot or other acts of civil disobedience, acts or omissions of government, labor disputes, shortages of fuel or other materials, accidents, fires, explosions, floods, earthquakes, or other Acts of God, which substantially prevents ASM’s use of the Venue as provided for in this Agreement, it is agreed that ASM may elect, within one hundred twenty (120) days after the effective date of such ordinance, law, regulation or occurrence of the event outside ASM’s control, to cancel this Agreement and surrender possession of the Venue. Any such cancellation and surrender will act to release and discharge ASM from any further obligation under this Agreement. In addition, it is agreed that during the period of any force outside ASM’s control, the City and ASM shall be excused from performing their respective obligations under this Agreement whether or not ASM exercises its right to terminate as provided herein.
Destruction of Property.
28.1 Total Destruction. If the Venue should be totally destroyed (i.e., damage in excess of partial destruction as defined in this Section by fire or other casualty or occurrence, ASM shall have the option, to be exercised in writing within sixty (60) days of such destruction, to either (1) terminate this Agreement in which event the Parties shall have no further obligations hereunder or (2) elect to repair and restore the Venue and thereafter diligently pursue such restoration to completion. In the event ASM elects option (2), ASM shall have the right to use any and all insurance proceeds arising from such a casualty or occurrence, paid to ASM, to repair and restore the Venue to its preexisting condition.
Partial Destruction. If the Venue should be partially damaged by fire or other casualty occurrence, then ASM shall restore the Venue in a good and workmanlike manner to a condition as good as, or better than, the condition that existed prior to their damage or destruction. To restore the Venue pursuant to this Section, ASM shall be entitled to receive and use any insurance proceeds received by ASM from the aforementioned casualty or occurrence. ASM shall remit to the City any excess proceeds. For purposes of this Agreement, the term “partially damaged” means (1) damage to one third or less of the value of the building and improvements at the Venue or (2) damage to the extent that ASM is unable to make full and productive economic use of the Venue and, in ASM’s reasonable determination, the full and complete restoration of the Venue will take less than one-hundred eighty (180) days.
Application of Insurance Proceeds Upon Termination. If, after the partial or total destruction of the Venue, this Agreement is terminated pursuant to the provisions of this section, then ASM will be entitled to all insurance proceeds made available on account of such destruction in favor of ASM for reimbursement for the value of the improvements or fixtures made or installed at ASM’s cost, or ASM’s personal property held at the Venue. Once ASM has been reimbursed, any additional proceeds shall be paid to the City. [Signatures on Following Page]
SIGNATURE PAGE
TO STAGE RED OPERATING AGREEMENT
CITY OF FONTANA
By:
Matthew Ballantyne
City Manager
ASM GLOBAL, A DELAWARE LIMITED LIABILITY COMPANY
By:
_____________
Approved as to form:
Ruben Duran
City Attorney
IN COMPLIANCE WITH CONTRACT INSURANCE REQUIREMENTS
By: ______________________________
Rakesha Voss
Director of Human Resources
IN COMPLIANCE WITH PURCHASING AND CONTRACT ADMINISTRATION POLICIES/PROCEDURES ___________________________________
Jessica Brown, CFO
EXHIBIT “A”
Naming Rights Agreement
“EXHIBIT B”
Floor Plan of the Venue
EXHIBIT “C”
Depiction of the Parking Facilities
EXHIBIT “D”
ASM Proposal
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16498.10022\41710977.4
16498.10022\41710977.4
16498.10022\41710977.4
16498.10022\41710977.4
16498.10022\41710977.4