Glendale City Council
April 19, 2022

A G E N D A
SPECIAL MEETING: GLENDALE CITY COUNCIL

COUNCIL CHAMBERS
613 E. Broadway, 2nd Floor
Glendale, CA 91206
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APRIL 19, 2022 AT 3:00 PM

ROLL CALL
- 3:00 PM
- Report of the City Clerk of the City Council, re: Posting of Agenda. The Agenda for the Tuesday, April 19, 2022 Special Public Meeting of the City Council was posted on April 12, 2022 on the Bulletin Board Outside City Hall.

A SPECIAL PUBLIC MEETING of the City Council is hereby called to meet at 3:00 PM on Tuesday, April 19, 2022 , in the Council Chamber, 613 E. Broadway, 2nd Floor , Glendale, CA 91206 to consider the following item(s) of business, to wit; 1 TYPED 4/12/2022 9:42:48 PM
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SP CC

1. Community Development, re: Alex Theatre Lease and Management Agreement with SAS Entertainment Partners, Inc.
a. Motion Authorizing the City Manager to Enter into a Management Agreement with SAS Entertainment Partners, Inc.
b. Introduction of 10-Year Lease Ordinance
c. Motion Authorizing City Manager to Amend Existing Public Works Department Contracts for Alex Theatre Maintenance:

1. Golden State Lock & Safe (8001213) increase contract amount by $12,017 for a new not- to-exceed amount of $37,017

2. KONE (C106846A) increase contract amount by $14,380 for a new not-to-exceed amount of $969,583.68

3. Glendale Fire Systems (8001119) increase contract amount by $11,892 for a new not-to- exceed amount of $959,892

4. Global Power Group (8001441) increase contract amount by $10,100 for a new not-to- exceed amount of $561,780

5. Acco Engineered Systems (8001439) increase contract amount by $221,616 for a new not-to-exceed amount of $1,321,160

6. South Coast Industrial Door (8001440) increase contract amount by $5,500 for a new not-to-exceed amount of $753,000

7. Majestic Fire (8001238) increase contract amount by $1,590 for a new not-to-exceed amount of $51,590

8. Allied Reliability (8000247) increase contract amount by $1,900 for a new not-to-exceed amount of $46,900

9. Moe Plumbing (8001570) increase contract amount by $23,500 for a new not-to-exceed amount of $449,155
d. Resolution of Appropriation in the amount of $755,000 e. Motion Authorizing City Manager to Extend Interim Agreement and Right of Entry with SAS Entertainment Partners, Inc. until the effective date of the Lease Ordinance

ADJOURNMENT
2 TYPED 4/12/2022 9:42:48 PM
04 19 22
SP CC
1 CITY OF GLENDALE, CALIFORNIA

REPORT TO THE SPECIAL CITY COUNCIL

AGENDA ITEM
Report: Alex Theatre Lease and Management Agreement with SAS Entertainment Partners, Inc.

1. Motion Authorizing the City Manager to Enter into a Management Agreement with SAS Entertainment Partners, Inc.

2. Introduction of 10-Year Lease Ordinance

3. Motion Authorizing City Manager to Amend Existing Public Works Department Contracts for Alex Theatre Maintenance:
a. Golden State Lock & Safe (8001213) increase contract amount by $12,017 for a new not-to-exceed amount of $37,017
b. KONE (C106846A) increase contract amount by $14,380 for a new not-to- exceed amount of $969,583.68
c. Glendale Fire Systems (8001119) increase contract amount by $11,892 for a new not-to-exceed amount of $959,892
d. Global Power Group (8001441) increase contract amount by $10,100 for a new not-to-exceed amount of $561,780
e. Acco Engineered Systems (8001439) increase contract amount by $221,616 for a new not-to-exceed amount of $1,321,160
f. South Coast Industrial Door (8001440) increase contract amount by $5,500 for a new not-to-exceed amount of $753,000
g. Majestic Fire (8001238) increase contract amount by $1,590 for a new not-to-exceed amount of $51,590
h. Allied Reliability (8000247) increase contract amount by $1,900 for a new not-to-exceed amount of $46,900
i. Moe Plumbing (8001570) increase contract amount by $23,500 for a new not-to-exceed amount of $449,155

4. Resolution of Appropriation in the amount of $755,000

5. Motion Authorizing City Manager to Extend Interim Agreement and Right of Entry with SAS Entertainment Partners, Inc. until the effective date of the Lease Ordinance

COUNCIL ACTION
Item Type: Action Item
Approved for April 19, 2022 calendar
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EXECUTIVE SUMMARY
In 2020, the City Council issued a Request for Proposals to identify an operator for the Alex Theatre that could attain the Council’s three stated goals of financial stability for the Theatre, accessibility to community groups while serving as a cultural hub, and to attract top quality entertainment clients, events, and performances with great frequency which will be an economic catalyst for the downtown. Following a national search, three proposers were presented to the Council and SAS Entertainment was selected for further negotiations. While negotiations were ongoing, a 6-month interim management agreement was initiated, during which time SAS demonstrated their aptitude for success as the operator of the Alex Theatre. With a succinct plan for capital improvements and enhancements to the Theatre, and a Facility Fee fund which would offset the investment by the City, SAS meets the goals set by the Council and their agreement is recommended for approval by the Council.

COUNCIL PRIORITIES
Economic Vibrancy. The Alex Theatre serves as the heart of the Arts & Entertainment district and drives business and patronage to the downtown. A successful venue and operator will make for a more vibrant district.

RECOMMENDATION
Staff recommends approval of all aforementioned motions and introduction of the long- term Lease Ordinance. Each motion is necessary for the successful implementation of the Lease and Management agreement with SAS Entertainment Partners, Inc. In addition, to approve a resolution of appropriation in the amount of $755,000.

BACKGROUND
The Alex Theatre is a historic resource located in downtown Glendale and owned by the City of Glendale. Since 2008, the venue had been managed by Glendale Arts (formerly known as the Alex Regional Board). In anticipation of the expiring management term with Glendale Arts, at the June 30, 2020 public meeting, the City Council directed staff to prepare a Request for Proposals (“RFP”) to seek an operator for the Alex Theatre.

Included within the RFP were the primary goals, listed in order of priority as directed by the City Council, for an organization in place which can:
Establish consistent financial stability and sustainability for Alex Theatre operations, while minimizing the level of the annual management fee provided by the City.
Provide a cultural facility and performing arts venue that is available, accessible, and affordable to use by local community organizations and non‐profits. Attract top quality entertainment clients, events, and performances with great frequency which will be an economic catalyst for the downtown. 4 of 79
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The City Council reviewed the three proposals that were submitted to the City by Glendale Arts, General Admission, and SAS Entertainment and ultimately during the September 28, 2021 public meeting, directed staff to negotiate with a sole proposer, SAS Entertainment.

Staff entered into a 6-month Interim Management Agreement and Right of Entry with SAS Entertainment on October 30, 2021 while the negotiations for a formal long-term agreement were being finalized.

The terms of the proposed Lease and Management agreement with SAS are as follows:
Lease Term: 10-year term with one 10-year option
City Responsibilities: The City will be responsible for the Alex Theatre building including all large capital improvements, and the maintenance of the building structure and systems, including plumbing, HVAC, lighting, etc. As presented during the September 28, 2021 meeting, these costs include:
oCapital Improvements / Capital Outlay $4,500,000
oMajor Improvements $800,000
oUtilities $125,000 (annually)
oPersonal Property replacement $200,000
A 10-year capital outlay / improvements plan with specific timelines, annual costs and projects, and closure periods, totaling $3,175,000 is included as Exhibit 3.

The City’s Public Works Department will maintain the Building Systems. Annual maintenance costs are estimated at $60,000, with one-time immediate repairs / improvements totaling $75,000. Other facility maintenance such as the roof, auditorium ceiling, and the maintenance of the structure itself have cost estimates that remain within the original $4,500,000 in projected improvement costs.
Facility Fee Fund: $2.00 Ticket Fee per ticket for tickets $25 or less face value and a $4.00 per ticket for tickets more than $25.00 per ticket face value. The Management Agreement requires SAS to collect and remit the Ticket Fee to the City on a quarterly basis. This Fee will be utilized for the Capital Improvements / Outlay needed for Theatre management and operation, needed for the City’s Facility System maintenance managed by Public Works, and as-needed for other large maintenance / management / improvement projects which improve the asset.
Operator Responsibilities: Operator is responsible for the daily maintenance and repair of all other items (e.g., general cleaning, trash and debris disposal, and cleaning restrooms and other facilities). The Operator will be responsible for 5 of 79
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coordinating with the City on scheduling capital improvements, including those that are the City’s financial responsibility.
Management Fee: No fee.
Personal Property: All personal property the City purchased for operation of the Theatre will remain the City’s personal property. This ensures continuity of the Theatre in the event of an operator change. The personal property includes sound equipment, lighting systems, etc. which ensures the property can operate as a Theatre.
Theatre Use:
oProgramming: Rental venue that serves as a cultural hub oPublic Use of Theatre: City retains the right to schedule six rent‐free event days and six rent‐free receptions. The City will not pay for the facility, but will incur staffing costs.
Focus: Operator will focus efforts solely on the management, revenue generating capacity, and name recognition of the Alex Theatre. Required Annual/Quarterly Reporting: SAS will be required to provide an annual report demonstrating performance metrics (shows, ticket sales, media coverage, etc.) which report will be presented to the City Council. SAS will also be required to provide the City with quarterly status updates on the amount of Facility Fee Funds collected, and to transfer those funds to the City’s account for the Theatre CIP.

The total City contribution is estimated at $6,750,000 over the 10 years. SAS will be collecting a per-ticket Facility Fee and returning the revenue to the City as an offset to these facility maintenance and improvement costs. The 10 year projected cost to the City, offset by the estimated Facility Fee revenue, is approximately $1,750,000.

SAS will be providing a financial guarantee as part of the management agreement to reach a Facility Fee collection to cover the $3,175,000 in Capital Outlay / Capital Improvement and $1,250,000 in utilities costs, or otherwise will financially reimburse the City for the delta at the end of the first term of their 10-year agreement, contingent on the option for renewal being executed.

ANALYSIS
Based on a history of success, and over the 6-month interim management term, SAS Entertainment has demonstrated their capability of satisfying the three goals set by Council during the RFP process: to provide financial stability, create a cultural facility and 6 of 79
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performing arts venue that is available, accessible, and affordable, and to attract top quality entertainment clients, events, and performances with great frequency which will be an economic catalyst for the downtown. Over the 6-month interim agreement, SAS has already hosted four sold-out shows, three of which were over the course of just one weekend.

SAS has presented a capital outlay plan which will make the Theatre competitive in the entertainment industry in terms of sound production, lighting, overall quality, and atmosphere, and will be initiating a marketing campaign to bring greater name recognition to the Alex Theatre. These ongoing improvements will continue to build on the brand SAS is already known for throughout the entertainment industry, and will drive continued growth and business to the Theatre.

The financial contribution the City will be making to improve its asset is anticipated to be offset by the revenue from ticket sale fees that SAS will be remitting to the City. By fostering an entertainment venue and operator that can serve as a catalyst for the Arts & Entertainment District, the City is making an investment in the vibrancy of the downtown and Glendale as a whole.

Because the Alex Theatre is a City-owned asset, the City’s Public Work’s Department will be taking on the maintenance of the Facility Systems including HVAC, elevators, plumbing etc., and will continue to care for the structural elements of the building to ensure proper care of the historic resource. As such, the following contracts are recommended for amendment to account for the additional facility’s maintenance:
Golden State Lock & Safe for building locks
KONE for elevator service
Glendale Fire Systems for fire & life safety services
Global Power Group for generators
Acco Engineered Systems for HVAC services
South Coast Industrial Door for the gates and doors
Majestic Fire for fire extinguishers
Allied Reliability for thermal imagining
HL Moe Plumbing for domestic hot water and sump pumps
The lease and management agreement is being proposed with a 10-year term, with an option for a 10-year renewal, as a longer agreement period allows the operator to develop long term relationships with shows and promoters, and establish the venue as a location for the high quality entertainment the Council is seeking. This term period also allows for a realistic capital improvement and capital outlay schedule to upgrade the Theatre. Per City Charter, Article VI, Section 15, leases over 5 years require an ordinance introduction and adoption. Staff is recommending the ordinance for the 10-year lease and management agreement be introduced and will return on May 3, 2022 for the adoption.

As such, staff is also recommending an extension of the current Right of Entry and Interim Agreement which is set to expire on April 30, 2022, until the ordinance takes effect. 7 of 79
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While the utilities obligation is outlined for $125,000, $60,000 had already been budgeted as part of the FY 22-23 budget process, so only the balance is being requested.

STAKEHOLDERS/OUTREACH
While specific outreach was not expected as part of the interim or in preparation for a long term management agreement, SAS Entertainment has been meeting monthly with the Theatre’s long term clients and resident companies. They have developed good rapport with these clients to better market and cross promote their shows. SAS Entertainment will continue to conduct outreach and connect with such stakeholders through their long-term lease and management agreement through the marketing and cultural offerings to the community.

FISCAL IMPACT
The City’s obligations set forth in the Theatre Lease and Management Agreements with SAS Entertainment will cost $755,000, which was not included as a part of the FY 2021-22 budget. Any unspent funds will be requested as a carryover to the FY22-23 Fiscal Year. Therefore, staff is requesting for an appropriation of $755,000, from the City’s Measure S fund balance. The appropriation request is outlined below:

Requesting Appropriation
Amount From (Account
String)
To (Account String) Funding Source
$755,000
24274-1010-NON-
0000-P0000
Measure S Fund
Balance
$135,000 43110-1010-CDD-2524- P1280 Measure S Fund
$65,000 46005-1010-CDD-2524- P1280 Measure S Fund
$405,000 51000-1010-CDD-2524-P1280 Measure S Fund
$150,000
51200-4011-CDD-0020-P000
CDD00796AN
Measure S CIP
Fund

ENVIRONMENTAL REVIEW (CEQA/NEPA)
Staff has determined that the actions introducing an ordinance approving a long-term lease with SAS, approving a motion authoring the City Manager to execute the Management Agreement with SAS, approving a motion extending the current interim agreements with SAS, and adopting a resolution of appropriation of funds for the maintenance and capital improvement program for the Alex Theatre are exempt from further environmental review under the California Environmental Quality Act ("CEQA") pursuant to Title 14 of the California Code of Regulations ("CEQA Guidelines") because the actions involve the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of an existing public facility, will not involve an expansion of the facility, 8 of 79
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which activities are exempt pursuant to CEQA Guidelines §15301.

CAMPAIGN DISCLOSURE
The names and business addresses of the members of the board of directors, the chairperson, CEO, COO, CFO, Subcontractors and any person or entity with more than 10% interest in the company proposed for contract in this Agenda Item Report are attached in Exhibit 4, in accordance with the City Campaign Finance Ordinance No. 5744.

ALTERNATIVES

1. Council may approve all motions and resolution of appropriation as presented by staff.

This will ensure the Theatre is professionally managed and sufficiently funded to be competitive in the entertainment industry.

2. Council may reject one or more of the motions or resolution of appropriation presented by staff; this may alter the feasibility of the overall contract and / or the Theatre’s success.

3. Council may consider any other alternative not presented by staff.

ADMINISTRATIVE ACTION
Prepared by:

Bradley Calvert, Assistant Director of Community Development Approved by:

Roubik R. Golanian, P.E., City Manager

EXHIBITS/ATTACHMENTS

1. 10-Year Lease Agreement for the Alex Theatre, 216 N. Brand Blvd.

2. 10-Year Management Agreement

3. 10-Year Capital Improvement / Capital Outlay Plan

4. Campaign Disclosure Form

5. Public Works Contract Amendment Detail

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c:\inetpub\wwwroot\glendale\temp\spcc_04192022_motion_1a.pdf MOTION
Moved by Council Member , seconded by Council Member , that the City Council of the City of Glendale, California, hereby authorizes the City Manager to execute a ten year Management Agreement with SAS Entertainment Partners, Inc., for the management of the Alex Theatre commencing upon the effective date of the ordinance adopting the Alex Theatre Lease with SAS Entertainment, Inc., and continuing until June 30, 2032.

Vote as follows:

Ayes:

Noes:

Absent:

Abstain:
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SPCC_04192022_Ordinance_1b.pdf
1 ORDINANCE NO.

AN ORDINANCE OF THE COUNCIL OF THE CITY OF GLENDALE,

CALIFORNIA AUTHORIZING AND APPROVING A LEASE AGREEMENT
BETWEEN THE CITY AND SAS ENTERTAINMENT PARTNERS, INC., FOR THE LEASE OF THE ALEX THEATRE AT 216 NORTH BRAND BOULEVARD
WHEREAS, the Glendale Redevelopment Agency (“Agency”) acquired the Alex Theatre (“Alex”) and invested over $10 million to transform it into a regional performing arts center and ultimately an anchor for the City’s downtown and its Arts & Entertainment District; and
WHEREAS, after the state-mandates dissolution of the Agency, the City has acquired title to the Alex from the Glendale Successor Agency; and WHEREAS, the success of the Alex Theatre as an iconic historic theatre and first- class entertainment venue, and focal point for the City Arts and Entertainment District is of primary importance to the City; and
WHEREAS, City’s lease of the Alex Theatre to SAS Entertainment Partners, Inc., concurrently with entering into an Alex Theatre management agreement with SAS Entertainment Partners, Inc., will serve valid public purpose of keeping the Alex Theatre an active and vital entertainment venue for the community and the region.

BE IT ORDAINED BY THE COUNCIL OF THE CITY OF GLENDALE, CALIFORNIA:

SECTION 1: The lease of the real property commonly known as the Alex Theatre located at 216 North Brand Boulevard, Glendale, California, as more particularly described in the Lease Agreement attached to City Council staff report, dated April 19, 2022, and by this reference made a part hereof, is hereby approved for a term of ten (10) years with an option to renew for an additional ten years, as set forth in the Lease Agreement.

SECTION 2. The City Manager or his designee is authorized to execute the Lease Agreement in substantially the form as attached to the April 19, 2022 staff report.

SECTION 3. This ordinance shall become effective within thirty days from the date of its adoption.
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SPCC_04192022_Ordinance_1b.pdf
2 Passed and adopted by the Council of the City of Glendale on the day of ____________, 2022.
_______________________________
Mayor
Attest:
__________________________
City Clerk

STATE OF CALIFORNIA )

COUNTY OF LOS ANGELES ) SS

CITY OF GLENDALE )
I, ARAM ADJEMIAN, City Clerk of the City of Glendale, certify that the foregoing Ordinance No. ______________ was adopted by a majority vote of the Council of the City of Glendale, California, at a regular meeting held on the day of , 2022, and that same was adopted by the following vote:

Ayes:

Noes:

Absent:

Abstain:
____________________________
City Clerk
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c:\inetpub\wwwroot\glendale\temp\spcc_04192022_motion_1c.pdf

M O T I O N
Moved by Council Member ______________, seconded by Council Member ________________, that the City Council hereby authorizes the City Manager to execute amendments to the following existing Public Works Department Contracts for Alex Theatre Maintenance:
a. Golden State Lock & Safe (8001213) increase contract amount by $12,017 for a new not-to-exceed amount of $37,017;
b. KONE (C106846A) increase contract amount by $14,380 for a new not-to- exceed amount of $969,583.68;
c. Glendale Fire Systems (8001119) increase contract amount by $11,892 for a new not-to-exceed amount of $959,892;
d. Global Power Group (8001441) increase contract amount by $10,100 for a new not-to-exceed amount of $561,780;
e. Acco Engineered Systems (8001439) increase contract amount by $221,616 for a new not-to-exceed amount of $1,321,160;
f. South Coast Industrial Door (8001440) increase contract amount by $5,500 for a new not-to-exceed amount of $753,000;
g. Majestic Fire (8001238) increase contract amount by $1,590 for a new not-to- exceed amount of $51,590;
h. Allied Reliability (8000247) increase contract amount by $1,900 for a new not- to-exceed amount of $46,900; and
i. Moe Plumbing (8001570) increase contract amount by $23,500 for a new not- to-exceed amount of $449,155.

Vote as follows:

Ayes:

Noes:

Absent:

Abstain:
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RESOLUTION NO. ___________

RESOLUTION OF THE COUNCIL OF THE CITY OF GLENDALE

MAKING AN APPROPRIATION
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF GLENDALE:

SECTION 1: That the sum of $755,000, is hereby appropriated and/or transferred from the following accounts to the following accounts:

ACCOUNTS DESCRIPTION FROM TO
24274-1010-NON-0000-
43110-1010-CDD-2524-P1280-
T0000-F0000-0000-0000-
46005-1010-CDD-2524-P1280-
T0000-F0000-0000-0000-
51000-1010-CDD-2524-P1280-
T0000-F0000-0000-0000-
51200-4011-CDD-0020-P0000-
T0000-F0000-0000-0000-
CDD00796AN
Measure S Fund Balance, General Fund
Contractual Services, General Fund,
Community Development, Measure S CDD,
Alex Theatre
Utilities, General Fund,
Community Development, Measure S CDD,
Alex Theatre
Capital Outlay, General Fund,
Community Development, Measure S CDD,
Alex Theatre
Other Improvements, Measure S CIP,
Community Development, Projects,
Alex Theatre Spire

$755,000

$135,000
$ 65,000

$405,000

$150,000

To appropriate funding for the Alex Theatre on-going maintenance and one-time capital expenditures.

SECTION 2: The Director of Finance is authorized to make such other revisions, individual appropriation line-items, changes in summaries, fund totals, grand totals, and other portions of the budget document as necessary to reflect and implement the changes specified in this resolution.

SECTION 3: The City Clerk shall certify to the adoption of this Resolution.

Adopted this________day of _______________, 2022.
_______________________________
Mayor
ATTEST:
04/12/2022
___________________________________
City Clerk 755,000

STATE OF CALIFORNIA )
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COUNTY OF LOS ANGELES ) SS

CITY OF GLENDALE )
I, Aram Adjemian, City Clerk of the City of Glendale, do hereby certify that the foregoing Resolution No._________was adopted by the Council of the City of Glendale, California, at a regular meeting held on the__________ day of _______________, 2022, and that the same was adopted by the following vote:

Ayes:

Noes:

Absent:

Abstain:
________________________________
City Clerk
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c:\inetpub\wwwroot\glendale\temp\spcc_04192022_motion_1e.pdf MOTION
Moved by Council Member , seconded by Council Member , that the City Council of the City of Glendale, California, hereby authorizes the City Manager to execute an extension of the City’s Interim Management Agreement and of the City’s Right of Entry Agreement with SAS Entertainment Partners, Inc., for the occupancy, operation and management of the Alex Theatre until the effective date of the Ordinance Leasing the Alex Theatre to SAS Entertainment Partners, Inc.

Vote as follows:

Ayes:

Noes:

Absent:

Abstain:
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1 LEASE BY AND BETWEEN
CITY OF GLENDALE "LANDLORD"
AND
SAS ENTERTAINMENT PARTNERS, INC., "TENANT"
This Lease ("Lease") is made and entered into as of this ________ day of __________, 2022 by and between the City of Glendale, a municipal corporation ("City"), as landlord ("Landlord"), and SAS Entertainment Partners, Inc., a Delaware Corporation, as tenant (“SAS” or “Tenant”).

RECITALS
A.Landlord is the owner of that certain improved real property (the "Property") located in the City of Glendale, state of California, and more particularly described in Exhibit "A" attached hereto, commonly known as the Alex Theatre ("Theatre").

B.The City of Glendale as "City" and Tenant as "Manager" have concurrently with this Lease entered into that certain Management Agreement for the management and operation of the Alex Theatre dated ___________ 2022.

C. The Theatre improvements on the Property are designated as an historical landmark and the Theatre was rehabilitated in accordance with the plans, drawings and specifications approved by Landlord and in a manner consistent with its original 1925 design for use as a cultural and performing arts center.

D. The Theatre consists of all buildings, structures and other improvements, including the building fixtures thereon, now located on the Property or hereafter constructed on the Property, all landscaping, fencing, walls, paving, curbing, sidewalks and gutters, drainage facilities, lighting and parking areas, roadways and similar site improvements now located or hereafter placed upon the Property.

E. The operation of the Theatre via a Theatre management agreement and use of the Property for the benefit of the general public through this Lease is of paramount importance to Landlord.

NOW, THEREFORE, in consideration of the terms, covenants and conditions contained herein, Landlord and Tenant hereby agree as follows:

ARTICLE 1

SUBJECT OF LEASE

1.1 Purpose of the Lease.

The purpose of this Lease is to allow SAS to occupy the Property for purposes of operating the Theatre as a cultural and performing arts center. The operation of the Theatre by Tenant and the fulfillment generally of this Lease are in the vital residents and best interest of the City and the health, safety, morals, and welfare of its citizens.

1.2 The Property.
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2 Except as expressly provided to the contrary in this Lease, reference to the Property is to the described land described in Exhibit "A", together with any improvements now or hereafter located on the land, including without limitation the Theatre, the equipment and all other personal property located in or about the Theatre or used in connection with the operation of the Theatre.

1.3 Parties to the Lease.

1.3.1 Landlord.

The principal office of Landlord is the City of Glendale, 633 East Broadway, Room 201, Glendale, California 91206-4387. Landlord is the City or any successor or successors to its obligations as Landlord hereunder, whether such succession is by way of merger, consolidation or acquisition of all or substantially all of the assets of Landlord, or by assignment of this Lease or Landlord's Interest or any part thereof, or by acquisition of the Property or otherwise. "Landlord's Interest" means its fee interest in the Property, its interest in the Theatre, and its interest in this Lease, or any part thereof.

1.3.2 Tenant.

Tenant is a Delaware corporation. The principal office of Tenant for purposes of this Lease is 846 S. Broadway, #705, Los angeles, CA 90014. City has retained Tenant pursuant to a Management Agreement executed concurrently herewith for the purposes of preserving and operating the Alex Theatre as a performing arts and entertainment center.

Wherever the term "Tenant" is used herein, such term shall also include any permitted nominee or assignee as herein provided.

ARTICLE 2

LEASE OF PROPERTY

2.1 Lease of Property.

Landlord hereby leases the Property to Tenant, and Tenant hereby leases the Property from Landlord for the Term and upon the provisions, covenants and conditions set forth herein.

2.2 Condition of Title.

The Property is leased subject to the title exceptions and other matters affecting title which do not inhibit, prevent or impair the operation, maintenance or use of the Theatre, insofar as the same are now in force and affect the Property or the Theatre or any part thereof.

ARTICLE 3

POSSESSION OF PROPERTY

3.1 Acceptance of Property.

Except as may be otherwise herein provided, Tenant, by entering into and occupying the Property shall be deemed to have accepted the Property and to have acknowledged that the same is then in the condition called for by this Lease, is in good order, condition and repair, and is fit for use as a cultural and performing arts center. 18 of 79
3 Tenant has had an opportunity to perform such Property inspections as Tenant deems advisable, and accepts the Property, including all improvements thereon, “as is." Notwithstanding the foregoing, City has a list of capital improvements scheduled for installation at the Theatre over the next ten (10) years (the "City’s Theatre CIP" or “Theatre CIP”). The City CIP is attached hereto as Exhibit "B" and incorporated herein by this reference. The City reserves the right to modify the Theatre CIP based on Theatre Contingencies as defined in Section 4.1(s) of the Management Agreement.

3.2 Quiet Enjoyment.

Tenant, upon performing and complying with all covenants, agreements, terms and conditions of this Lease to be performed or complied with by it, shall lawfully and quietly hold, occupy and enjoy the Property during the Term of this Lease without hindrance or molestation by Landlord, or any person or persons claiming through Landlord.

3.3 Ownership of Improvements and Equipment; Distribution Upon Termination.

Within sixty (60) days of the Commencement Date, Landlord and Tenant shall together inventory all personal property, fixtures and equipment (the "PPF&E") located on the Property, including without limitation, any and all furniture, fixtures, machinery, rigging, lighting, staging, trade fixtures, equipment and other personal property as may be necessary or convenient to the operation or maintenance of the Theatre (the "Property Inventory"). Ownership of any personal property in the Property Inventory that was purchased by Tenant with Tenant funds and identified as Tenant personal property in the Property Inventory shall be vested in and belong to Tenant unless Tenant expressly transferred its personal property to Landlord. All other PPF&E existing prior to the Term of this Lease, including all personal property City purchased from Glendale Arts following the termination of City’s Management Agreement with Glendale Arts, shall be vested in and belong to Landlord.

Tenant and Landlord shall review and approve the Property Inventory within sixty (60) days after its completion (the "Property Inventory Review Period"). Any disputes over ownership of PPF&E shall be expeditiously resolved within the Property Inventory Review Period. If the parties are unable to resolve a PPF&E dispute within the Property Inventory Review Period, the Parties agree to abide by the decision of a mutually acceptable neutral third-party mediator. Any cost for mediation to resolve a PPF&E dispute shall be equally shared by the parties. Provided however, if any Property Inventory required hereunder discloses any material misrepresentation by Tenant, its staff or agents, in its reports, requests or negotiations with Landlord, then Landlord may terminate this Lease in accordance with Article 21 (Defaults, Remedies and Termination) below. Tenant shall annually provide Landlord with an updated Property Inventory following completion of the first Property Inventory.

During the Term of this Lease title to any FF&E, or to any improvements constructed, or placed on the Property (the "Improvements"), is and shall be vested in Landlord. For purposes of this Lease, a "fixture" is an improvement or personal property attached to the land so as to become part of the real estate and is not moveable. For purposes of this Lease the Parties agree that Tenant's PPF&E shall not include, any of the items the City purchased from Glendale Arts (as reflected on the list of items attached hereto and incorporated herein as Exhibit “C”), and shall not include the stage floor, 19 of 79
4 carpet, paint, permanent theatre seating, curtins, light fixtures or permanent lighting, stage rigging, lift lines and head blocks, and physical improvements to the building including to the marquee, spire, and boiler. Tenant shall not demolish the Improvements or remove any portion thereof from the Property except as permitted herein.

Upon the termination of this Lease, any jointly owned PPF&E, if any, shall be distributed based upon the depreciated value of such PPF&E. Except as expressly set forth in preceding paragraph, Tenant shall have the right to acquire any jointly owned PPF&E upon payment to Landlord of 50% of the remaining book value of any such PPF&E. Upon such payment Landlord shall quitclaim all right title and interest to said PPF&E to Tenant.

Landlord shall have the right to acquire any jointly owned PPF&E upon payment to Tenant of 50% of the remaining book value of any such PPF&E. Upon such payment Tenant shall quitclaim all right title and interest to said PPF&E to Landlord. Landlord and Tenant can agree, but are not obligated to agree, to sell any of their respective PPF&E to each other.

Any PPF&E remaining after such distribution shall be donated to a Section 501 (c)(3) charitable organization dedicated to the purpose of operating the Theatre, or to the Landlord for an educational or charitable purpose.

3.4 Surrender of Property.

3.4.1 On expiration or termination of the Term of this Lease, Tenant shall peaceably and quietly leave and surrender the Property, the improvements thereon, merchandise, and equipment that is not Tenant PPF&E, to Landlord, and leave the Property broom clean and in good order, condition and repair, reasonable wear and tear and obsolescence excepted. Tenant shall also leave in place and in good order, condition and repair, all PPF&E not owned by Tenant, as well as any contracts, agreements, books and records, and any other writing related to the operation and or maintenance of the Theatre building. For avoidance of doubt, such contracts, books and records do not include those pertaining to Tenant’s business operations. Tenant shall not remove any PPF&E that it does not own under the provisions of this Lease. Landlord shall have the right to have the Property and the Improvements inspected to determine whether the Property, Improvements, and PPF&E have been properly maintained, repaired and restored in accordance with the terms of this Lease.

3.42 Contemporaneous with the expiration or termination of the Term of this Lease, Tenant shall immediately deliver to Landlord the following:
(a)Such documents, instruments and conveyances as Landlord may request to enable Landlord's ownership of the Property to be reflected in the title records, including, without limitation, a quitclaim deed in recordable form for the Property.
(b)If requested by Landlord, title, insurance, surety bond, or other security reasonably acceptable to Landlord insuring Landlord against all claims and liens against the Property other than those incurred by Landlord or accepted by Landlord in writing.
(c)All plans, surveys, permits and other documents relating to the Property as may be in the possession of Tenant at the time.
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5 3.4.3 All documents and instruments required to be delivered by Tenant to Landlord pursuant to items (3.4.2) (a) through (c) of this Section shall be in form satisfactory to Landlord.

3.5 Abandonment.

Tenant shall not abandon or vacate the Property at any time during the Term hereof.

If Tenant shall abandon, vacate or otherwise surrender the Property, or be dispossessed thereof by process of law or otherwise, the same shall constitute a default under this Lease on the part of Tenant and, in addition to any other remedy available on the part of Tenant, any of Tenant's property left in, upon or about the Property shall, at Landlord's option, be deemed to be abandoned and shall become the property of Landlord.

ARTICLE 4
TERM

4.1Duration and Commencement.

The initial term ("Initial Term") of this Lease shall commence on the date the Lease is executed by all Parties (the "Commencement Date") and shall continue thereafter on annualized term from July 1st through June 30th of each year for ten (10) consecutive years. This Lease shall expire on June 30, 2032, or until terminated in accordance with Article 21 below. For the purposes of this Lease, "Lease Year" means the period commencing on the Commencement Date and ending on June 30th, and thereafter, means a period of twelve (12) consecutive calendar months commencing with July 1st following the Commencement Date, except that the last Lease Year means the period commencing on the July 1st within twelve (12) calendar months prior to the date on which this Lease terminates or expires and ending on the date of such termination or expiration, which for purposes of this Lease is June 30, 2032.

4.2Tenant's Option to Renew.

Tenant has the right and option, granted hereby by Landlord, to extend the Term of this Lease subject to all the provisions herein contained for up to one (1) additional ten (10) year option period ("Renewal Term”) following the expiration of the Initial Term in section

4.1 above, provided Tenant delivers written notice to Landlord of Tenant's interest in exercising such Renewal Term option at least twelve (12) months prior to the expiration of the Initial Term, or of any Renewal Term as the case may be ("Notice of Intent to Renew").

Renewal of the Lease or Renewal Term is expressly contingent upon the Landlord as "Owner" and Tenant as "Manager" concurrently agreeing to the terms of renewal of the Management Agreement to manage and operate the Theatre.

ARTICLE 5
RENT

5.1 Consideration for Lease.

As consideration for this Lease, Tenant agrees to:
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6 5.1.1 Operate and maintain the Theatre and Property as cultural and performing arts center, together with such related uses as may be necessary or convenient to, or compatible with the operation of the Theatre, and to:

5.1.2 Irrevocably dedicate its possessory interest created by this Lease to such use.

5.1.3 Not alter said dedication in any way except as may be required to conform to applicable legal requirements.

5.1.4 Upon liquidation or dissolution of Tenant, and after paying for all debts, obligations and liabilities of Tenant, if any, distribute any remaining Tenant assets pursuant to Section 3.4 herein above.

5.1.5 Comply with its obligations and duties under this Lease.

ARTICLE 6

FACILITY FEE TICKET FUNDS
Pursuant to Section 4.1(r) of the Management Agreement, Tenant is required to maintain and make regular deposits into a Facility Ticket Fee Account for purposes of collecting Facility Ticket Fees which the City will use to fund the City Theatre CIP. Said deposits shall be transferred to the City on a quarterly basis, commencing no later than the end of fiscal year third quarter on September 30, 2022 and continuing quarterly thereafter.

ARTICLE 7

MANAGEMENT AGREEMENT AND RECORDS

7.1 Records and Audit.

Tenant shall use generally accepted accounting principles and shall prepared and maintain all records as may be required by Landlord pertaining to the Facility Ticket Fee Account, and for Theatre building maintenance and operation. Tenant shall provide to Landlord with quarterly and annual reports as required by Section 4.1(q) the of the Management Agreement.

7.2 Audit.

Tenant shall submit all required records, together with evidence of compliance with the terms of this Agreement to City, as City may request, in order for City to complete a full scope audit. All records for a City requested audit shall be made available no later than thirty (30) days after a written request by City to conduct such audit. Tenant shall, however, be responsible for and shall pay for any audit, accounting or legal costs incurred by either party due to additional investigation warranted because of fraud, theft or gross negligence on the part of the Tenant. Tenant shall also maintain and keep updated the annual inventory of Personal Property and maintain schedules of any Tenant purchased fixed assets and any Tenant funded and completed capital improvements to the Theatre.

ARTICLE 8

USE OF PROPERTY
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7 8.1 Permitted Use.

During the Initial Term and any Renewal Term, the Theatre shall be used solely for the operation of a first class cultural and performing arts center, which may also support Theatre use by non-profit, for profit and governmental organizations. The Theatre shall be open to the general public and its operation may include community activities, conferences, tours of the Theatre by the public, and in portions of the Theatre, incidental operations such as beverage sales, catering, gift and book shop, concession stands, and retail sales (herein the "Permitted Uses"). Tenant shall make no material change in the use of the Theatre required hereunder without the consent of Landlord, which consent Landlord reserves the right to withhold in its absolute discretion. Tenant shall not use or suffer to be used the Property or any portion thereof for any other purpose or purposes whatsoever without obtaining Landlord's prior written consent.

8.1.1 Rules and Regulations.

From time to time Tenant, with the approval of Landlord, shall establish such reasonable rules and regulations to govern the use and operation of the Theatre as Tenant shall deem necessary or desirable in order to assure the level, quality and character of the Theatre operation required by this Lease. Tenant shall provide Landlord with a copy of such rules and regulations. Tenant shall use all reasonable efforts to enforce such rules and regulations.

8.1.2 Events.

All Theatre users shall comply with all applicable laws; events shall not be incompatible with or unusually disruptive of operation of the Theatre, and shall not otherwise violate the use restrictions set forth in this Lease. Tenant shall provide Landlord with evidence of adequate insurance or other security for claims, or losses arising out of any proposed use as required by this Lease and the Management Agreement.

8.2 Public Parking.

To the extent Landlord owns or controls public parking facilities that, subject to other demands upon and priorities of Landlord, could be used to provide parking for Theatre, Landlord agrees, upon request by Tenant, to exert its best efforts to make such facilities available to accommodate parking for such patrons at times, and upon terms and conditions, that may be mutually agreeable to Landlord and Tenant.

8.3 No Change of Use.

Tenant shall not change the use of the Property or the Theatre without the prior written consent of Landlord, which consent may be withheld at Landlord's sole discretion.

8.4 Compliance with Laws.

Tenant will not occupy or use the Property or Theatre, or permit the Property or Theatre to be used or occupied, nor do or permit anything to be done in or on the Property or Theatre, in whole or in part, for other than legal purposes, or for a purpose or in a manner liable to create a public or private nuisance or to cause structural injury to the Theatre or any part thereof, or which may make it impossible to obtain fire or other 23 of 79
8 insurance thereon required to be furnished by Tenant hereunder, or in violation of any certificate of occupancy or evidence of compliance issued by any governmental agency covering or affecting the use of the Property or Theatre.

ARTICLE 9

REPAIRS AND MAINTENANCE

9.1 Tenant’s Maintenance Obligation. Except as expressly set forth herein, and subject to the provisions of Article 17 (Damage by Fire or Casualty) and Article 18 (Eminent Domain), Tenant shall, at Tenant's expense, the limitations to which are specified in Section 9.1.2 below, and in accordance with Article 11 (Alterations), regularly inspect the Theatre and perform routine maintenance and repair to maintain the Theatre in good order and condition (reasonable wear and tear excepted) in compliance with all Legal Requirements as defined in Article 9, herein. Routine maintenance includes those activities that keep the facilities safe, clean and sanitary. Tenant shall be responsible for the routine maintenance of:

9.1.1 The non-structural portions of the Property (including all improvements, alterations, fixtures, furnishings and equipment) including, without limitation, the cleaning and maintenance of the (i) exterior surfaces of the Theatre; (ii) all interior items including but not limited to interior walls, interior surfaces of exterior walls, ceilings, floors, windows, doors, plate glass, and skylights; (iii) sweeping, washing, vacuuming floors and carpeting, washing windows, cleaning and stocking restrooms, keeping walks, fire escapes, exit corridors and egress corridors free of obstructions, dirt, debris and standing water, and disposing of trash and refuse and the like. Provided, however, the cleaning and maintenance of interior and exterior Theatre walls shall exclude painting or other protective treatment. Tenant agrees to immediately notify the City of the existence of any interior or exterior damage, including graffiti.

9.1.2 Tenant shall conduct routine inspection of the Theatre and shall notify Landlord in writing of any repair or maintenance issues which require more than routine maintenance to complete.

9.2 Landlord's Repair and Maintenance Obligation. Landlord shall be responsible, at Landlord’s sole expense, for the repair, replacement, renewal and maintenance of all portions of the Theatre building systems and equipment (including but not limited to utility installations, plumbing, HVAC, electrical, security systems including doors, gates and door locks, elevator, lighting facilities (except bulb replacements), boilers, pressure vessels including fire/life-safety systems, power generators) that serve any portion of the building (the "Facility Systems"). Subject to Sections 11 (Alterations) and 18 (Eminent Domain), Landlord shall keep in good order, condition and repair the foundations, structural condition of exterior walls, structural condition of interior bearing walls, exterior roof, fire sprinkler system, fire alarm and/or smoke detection systems, and fire hydrants. Landlord shall also be responsible for the City’s Theatre CIP defined in Section 1.3 of the Management Agreement.

9.3 Landlord may, but need not, undertake Tenant’s routine cleaning and maintenance obligations, subject to the provisions of the Public Contracts Code, where:

9.3.1 Tenant fails to perform its required routine cleaning and maintenance within thirty (30) days after written notice by Landlord to Tenant of the need for such cleaning and maintenance; or
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9 9.3.2 Tenant fails to commence its required routine cleaning and maintenance obligation for which the reasonable completion period exceeds thirty (30) days, and to diligently prosecute this obligation to completion.

9.4 Within thirty (30) days after a written demand from Landlord, Tenant shall pay Landlord's reasonable, actual, out of pocket costs incurred in connection with the required routine cleaning and maintenance plus prevailing interest rates, from the date City incurred these costs until the date of Tenant's repayment. Despite any other provision of this Section 9.4, in the event of an emergency, Landlord shall have the right, but not the obligation, to perform any Tenant cleaning and maintenance obligation that Tenant fails to perform promptly. Landlord may seek reimbursement from Tenant for the reasonable cost of performing emergency repairs to Property which are a Tenant repair and maintenance obligation as specified herein. Tenant may seek reimbursement from Landlord for the reasonable cost of performing emergency repairs to Property which are a Landlord repair and maintenance obligation as specified in Section 9.2 herein above. Within thirty (30) days after written demand, Tenant shall pay Landlord's reasonable costs incurred in connection with the repair and maintenance obligation.

ARTICLE 10

LEGAL REQUIREMENTS, INSURANCE REQUIREMENTS, INSTRUMENTS

10.1 Subject to Article 22 (Permitted Contests), Tenant, at no cost or expense to Landlord, will promptly (a) comply with all Legal Requirements and Insurance Requirements, whether or not compliance therewith shall require structural changes in the Theatre or any part thereof; (b) procure, maintain and comply with all permits, licenses and other authorizations required for any use of the Property or Theatre, or any part thereof, and for the proper erection, installation, operation and maintenance of the Theatre, or any part thereof; and (c) comply with any instruments of record presently in force or subsequently executed by Landlord or Tenant affecting the Property or the Theatre, or any part thereof.
"Insurance Requirements" means all terms of any insurance policy covering or applicable to the Property or Theatre, or any part thereof, all requirements imposed by the issuer of any such policy, and all orders, rules, regulations and other requirements of the National Board of Fire Underwriters (or any other body exercising similar functions) applicable to or affecting the Property or Theatre, or any part thereof or any use or condition of the Property or Theatre, or any part thereof. "Legal Requirements" means all laws, statutes, codes, acts, ordinances, orders, judgments, decrees, injunctions, rules, regulations, permits, licenses, authorizations, directions and requirements of and agreements with all governments, departments, commissions, boards, courts, authorities, agents, officials and officers, foreseen or unforeseen, ordinary or extraordinary, which now or at any time hereafter may be applicable to the Property or Theatre, or any part thereof, or to any of the adjoining sidewalks, streets or ways, or to any use or condition of the Property or Theatre, or any part thereof.
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10 ARTICLE 11

ALTERATIONS

11.1 Written Consent Required for Any Tenant Alternations.

Tenant shall preserve and maintain the Theatre in accordance with the plans, specifications and drawings approved by the Landlord to be consistent with the Theatre's 1925 design. Except as otherwise herein provided in this Article 11 (Alterations), Tenant shall not make or suffer to be made any structural or nonstructural changes, alterations or additions to the Property ("Alterations"), the Theatre or any part thereof without the prior written consent of Landlord obtained as to detailed plans and specifications of the proposed Alterations. Any Alterations must conform to the Secretary of Interior’s Standards as required to preserve the Theatre's designation as a historic resource, and the plans, specifications and drawings approved by the Landlord must also be consistent with the Theatre's 1925 design. Any Tenant proposed Alterations in or on the Property and the Theatre shall be at no cost or expense to Landlord (unless Landlord shall agree otherwise in a written contract approved by Landlord) and shall become at once a part of the Theatre.

Landlord shall not unreasonably withhold or delay its consent to proposed Alterations. The Alterations for which Landlord may reasonably withhold consent include those that would or could:
(a)Affect the structure of the Building or any portion of the Building other than the interior of the Property;
(b)Affect the Building Systems;
(c)Result in Landlord being required under Legal Requirements to perform any work that Landlord could otherwise avoid or defer (“Additional Required Work”), unless Tenant agrees in writing to pay for the entire cost of the design and construction of the Additional Required Work;
(d)Result in a material increase in the premiums for hazard or liability insurance carried by Landlord, unless Tenant agrees to pay the amount of the increase in premiums.

11.2 Notice of Non-responsibility.

If Tenant makes any Alterations as provided in this Article, the Alterations shall not be commenced until fifteen (15) days after Landlord has received notice from Tenant stating the date work is to commence so that Landlord can post and record an appropriate notice of non-responsibility. Any alterations shall be made by a licensed contractor approved by Landlord.

11.3 Compliance of Alterations with Legal and Insurance Requirements.

Tenant shall cause all Alterations to comply with the following:
(a)Applicable Legal Requirements; and
(b)Applicable requirements of a fire-rating bureau.
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11 Tenant shall also comply with those requirements in the course of constructing the Alterations. Before beginning construction of any Alteration, Tenant shall obtain a valid building permit and any other permits that may be required by any government entity having jurisdiction over the Property. Tenant shall provide copies of those permits to Landlord before the work begins.

Tenant shall, at Tenant's sole expense, perform any Additional Required Work in the Property, which shall be subject to the same requirements as any Alteration. If any Additional Required Work must be performed outside the Property, Landlord may elect to perform that work at Tenant's expense.

11.4 Construction Insurance.

Before construction begins, Tenant shall deliver to Landlord reasonable evidence that damage to, or destruction of, the Alterations during construction will be covered either by the policies that Tenant is required to carry under Article 16, or by a policy of builder's all-risk insurance if such policy is required by Landlord in an amount approved by Landlord.

If Landlord requires Tenant to provide builder's all-risk insurance for the proposed Alterations, Tenant shall provide a copy of the policy, any endorsements, and an original certificate of insurance that complies with subsection 16.4.

Tenant shall cause each contractor and subcontractor to maintain all workers' compensation insurance required by law and liability insurance (including property damage) in amounts reasonably required by Landlord. Tenant shall provide evidence of that insurance to Landlord before construction begins.

ARTICLE 12

PAYMENT OF UTILITY SERVICES TAXES, CHARGES AND FEES

12.1 Public and Private Utility Services.

City will pay or cause to be paid all charges for all public or private utility services and all sprinkler systems and interior protective services at any time rendered to or in connection with the Property, or the Theatre, or any part thereof (“Public and Private Utility Charges”). City will comply with all contracts relating to such services, and will do all other things required for the maintenance and continuance of all such utility services which are within its control, so long as such charges do not exceed $125,000.00 per year commencing on July 1 through June 30th of each year. All Public and Private Utility Charges that exceed $125,000 per year shall be the sole responsibility of the Tenant, and Tenant shall promptly reimburse Landlord fo any Public and Private Utility Charges in excess of $125,000 per year in response to Landlord’s presentation of a written request for reimbursement thereof. Under no circumstances will Landlord (in its capacity as Landlord and not in its possible capacity as a supplier of a utility) be held liable for any failure or defect in the supply of any utility.

12.2 Electronic Security.

If Tenant provides electronic security for the Theatre, under no circumstances will Landlord be held liable for any failure or defect of the security systems. 27 of 79
12 12.3 Taxes, Assessments and Charges.

With the exception of Public and Private Utility Charges specified in Section 12.1 herein above, Tenant covenants and agrees to pay, or to cause to be paid, on or before the last-day upon which payment may be made without the assessment of any fine, penalty, interest, late charge or the like, all taxes, assessments, and other governmental charges, operational, maintenance, repair and occupancy charges, excises, levies, license and permit fees, and all other impositions and charges of whatsoever kind or character, extraordinary as well as ordinary, unforeseen as well as foreseen, and each and every installment thereof, which shall or may during the Term be imposed or levied upon or assessed against or arising out of use of the Property, or the operation, alteration, maintenance, repair, use, occupancy or possession of the Property or any portion thereof, whether deemed under the Laws to be payable by Landlord or Tenant and regardless of which party is considered the owner of the Property under the Laws for purposes of ad valorem taxes. The foregoing may be referred to in this Lease as "Imposition" or "Impositions", as the context requires.

12.4 Property Taxes Not Valid.

Nothing in this Lease, including an obligation to pay any taxes, is meant to indicate that the parties believe that any tax is applicable to Tenant or legally imposed upon Tenant.

Nothing contained herein is to be construed to mean that Tenant is obligated to pay any tax or other imposition to which it is entitled to be exempt under applicable law. On the contrary, the effect of the provision of this Article regarding the payment of taxes is to oblige the Tenant to pay said taxes only if they are applicable and legally imposed.

12.5 Notice of Possessory Interest.

With respect to the payment of Taxes and Assessments on Value of Entire Property in accordance with California Revenue and Taxation Code §107.6(a) and California Health and Safety Code §33673, Landlord states that by entering into this Lease, a possessory interest subject to property taxes may be created, and if so, that Tenant shall pay taxes upon the assessed value of the entire property and not merely the assessed value of its leasehold interest. Tenant or other party in whom the possessory interest is vested may be subject to the payment of property taxes levied on such interest. As stated in the paragraph immediately above, nothing contained in this paragraph is intended to cause Tenant to pay any tax for which it is otherwise exempt.

ARTICLE 13
LIENS

13.1 Indemnification.

Tenant shall at all times indemnify, save and hold Landlord and the Property and the Theatre free, clear and harmless from and against any and all liability, loss, damages, costs, actions, claims, liens, demands, charges, expenses (including reasonable attorneys’ fees), encumbrances or litigation arising directly or indirectly out of any use, occupancy or activity of Tenant, or out of any work performed, material furnished, or obligations incurred or undertaken by Tenant, in, upon, about or otherwise in connection with the Property and the Theatre and shall, except as hereinafter permitted in this Article 13, pay or cause to be paid for all work performed and material furnished to the Property 28 of 79
13 and the Theatre which will or may result in a lien on the Property or the Theatre on the Landlord’s Interest therein, and will keep the Property and Theatre free and clear of all mechanic's liens and materialmen's liens (including the posting of an appropriate bond which shall release the lien). Nothing contained herein shall prohibit Tenant from incurring any obligation which has been included in a budget approved by Landlord or which is otherwise approved in writing by Landlord (provided, in no event shall any approval of Landlord cause such obligation to be an obligation of Landlord).

13.2 Satisfaction of Liens.

Immediately upon entry of final judgment in any action in which Tenant contests any claim of lien, and if such final judgment shall establish the validity of the lien, or any part thereof, and within fifteen (15) days after notice of the filing of any lien for record which Tenant does not contest (or does contest, but for which Tenant has not posted an appropriate bond causing the release of the lien). Tenant shall fully pay and discharge such judgment or lien, as the case may be, and Tenant shall reimburse Landlord upon demand for any and all loss, damage and expense, including reasonable attorneys' fees, which Landlord may suffer or be put to by reason thereof. Nothing contained herein shall prevent Landlord, at the cost and for the account of Tenant, from satisfying any such judgment or lien, as the case may be, in the event Tenant fails or refuses to satisfy the same as herein provided.

13.3 Notice to Landlord.

Should any claim or lien be filed against the Property or the Theatre, or any action or proceeding be instituted affecting the title to the Property or the Theatre, Tenant shall give Landlord written notice thereof as soon as Tenant obtains knowledge thereof.

13.4 Notice of Non-Responsibility.

Landlord shall have the right to post and maintain on the Property any notices of non- responsibility provided for under applicable law.

ARTICLE 14
SIGNS

14.1 Except as specified in Section 14.2 herein below, Tenant shall not place or suffer to be placed on the Property or upon the roof or any exterior door or wall or on the exterior or interior of any window of the Theatre, of any sign, awning, canopy, marquee, advertising matter, decoration, lettering or other thing of any kind without first obtaining the written consent of the Landlord.

14.2 Except as otherwise herein provided, Tenant shall have the right, at its sole cost and expense, to erect and maintain within the interior and exterior of the Theatre all signs and advertising matter customary or appropriate in the management of a cultural arts and performance center including in existing poster cases and on the Theatre marquee.

Provided, however, that Tenant shall upon demand of the Landlord immediately remove any sign, advertisement, decoration, lettering or notice which Tenant has placed in, upon or about the Property and the Theatre which Landlord reasonably deems not in keeping with or which may physically damage the historical status of the Theatre. If Tenant fails or refuses to do so Landlord may enter upon the Property and remove the same at Tenant's 29 of 79
14 cost and expense. In this connection, Tenant acknowledges that the Property and the Theatre are to be operated for the benefit of the general public, and agrees that control of all signs by Landlord is essential to the maintenance of aesthetic values in or pertaining to the historic nature of the Theatre.

ARTICLE 15

INDEMNIFICATION

15.1 Indemnity.

Except for claims based on alleged violations of the Americans with Disability Act, Tenant shall save, defend, indemnify and hold harmless Landlord, and Landlord's representatives, employees, agents, contractors, attorneys and predecessors, (hereinafter individually and collectively referred to as the "Indemnified Parties"), jointly and severally, from and against any and all suits, actions, legal or administrative proceedings, claims, demands, liabilities, obligations, liens, encumbrances, costs (including reasonable attorneys' fees and costs), expenses, penalties, actual damages, punitive damages and losses, whether direct, contingent or consequential, whether arising under any provision of federal, state or local law or common law, or otherwise, including, without limitation, indemnity claims (the "Indemnity Claims") for injury or death of any person including any Indemnified Parties, or for physical damage to property of any kind wherever located and by whomever owned including any property belonging to any Indemnified Parties, or for any harm or damage to the environment or the Property or Theatre, based on, arising out of, related to, or in any way connected directly or indirectly with: (i) the use, maintenance, ownership and operation of the Property or Theatre; (ii) this Lease; (iii) the presence, use, release, generation, storage or disposal of Hazardous Materials (as defined below) in or on the Property or Theatre; (iv) compliance with any federal, state or local environmental law, ordinance, rule or regulation, and as now or at any time hereafter in effect; (v) any accident or injury to or death of persons or loss of or damage to property occurring on or about the Property or Theatre, or any part thereof or the adjoining sidewalks, curbs, vaults and vault space, if any, streets or ways; (vi) the removal, clean-up, encapsulation, detoxification or any other action taken by Tenant or any other party, directly or indirectly arising out of the presence of Hazardous Materials in, on or around the Property or Theatre, whether such action is undertaken voluntarily or pursuant to any order, demand, request, or other mandate of any third party (including, without limitation, any governmental body or authority, Tenant's lessees, Tenant's lender, subsequent buyers or lessees, and any other successors or assigns) and whether such action is undertaken to comply with the law or as preventative action to avoid a violation or possible violation of the law; and (vii) each of the representations and warranties made by Tenant herein. Tenant agrees to assume the immediate defense of the Indemnified Parties by hiring and paying for legal counsel acceptable to Landlord. Tenant's obligations under this paragraph shall apply, except for the gross negligence and willful misconduct of Indemnified Parties. Provided, however, the indemnity requirement does apply with respect to sole, active and/or passive negligence of the Landlord, non-willful misconduct of the Indemnified Parties, and regardless of the degree of Indemnified Parties' or Tenant's fault in causing the harm that result in the claim, demand, proceeding or lawsuit.

15.2 Hazardous Materials Liability.
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15 Without limiting the indemnity provided for herein, Tenant hereby acknowledges that the indemnifications contained in this Lease are intended to operate as indemnifications for the presence, use, storage, disposal, treatment or transportation on, to, or from the Property of Hazardous Materials.

15.3 Expense of Proceedings.

The defense of any suit, action, legal or administrative proceeding that may be threatened, brought or instituted against any of the Indemnified Parties on account of any matter which is the subject of the indemnity provided for in this Lease shall be conducted at Tenant's sole expense. Landlord shall have the right to approve legal counsel, if any, necessary to defend any suit, action legal or administrative proceeding brought or instituted against any of the Indemnified parties, which approval shall not be unreasonably delayed or withheld.

15.4 Definition of Hazardous Materials.

As used herein, the term "Hazardous Materials" means any toxic substance, material, or waste which is now regulated by any local governmental authority, the State of California, or the United States Government under any Environmental Law including, but not limited to, any material or substance which is (i) defined as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Sections 25115, 25117, or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (i) defined as "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material," "hazardous substance," or hazardous waste" under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (v) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) a petroleum or refined petroleum product, including without limitation petroleum-based paints and solvents, (vi) asbestos, (vii) polychlorinated biphenyls, (viii) methyl tertiary butyl ether (MTBE); (ix) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 1 1 of Title 22 of the California Administrative Code, Division 4, Chapter 20} (x) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act (33 U.S.C. S 1317), (xi) defined as a "hazardous waste" pursuant to section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., (xii) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq., (xiii) any flammable or explosive materials, (xiv) a radioactive material, or (x) lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs and similar compounds and including any different products and materials which have been found to have adverse effects on the environment or the health and safety of persons.

ARTICLE 16

PUBLIC LIABILITY AND INSURANCE

16.1 Landlord Not Liable.
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16 Tenant covenants with the Landlord that Landlord shall not be liable for injury to Tenant's business or any loss of income therefrom or, except from Landlord's or City's intentional acts (other than acts of Landlord's Board or City's Council), for any damage or liability of any kind or for any injury to or death of persons or damage to property of Tenant, or to Tenant's agents, employees, servants, contractors, subtenants, licensees, concessionaires, customers or business invitees or any other person in or about the Property or the Theatre during the Term of this Lease, from any cause whatsoever by reason of the use, occupancy and enjoyment of the Property and the Theatre by the Tenant, its agents, employees, servants, contractors, subtenants, licensees, concessionaires, customers or business invitees, or any person thereon or holding under the Tenant.

16.2 Insurance to be Maintained.

From the Commencement Date and for the Term of this Lease and any extensions thereof, Tenant shall obtain and maintain at Tenant's sole cost and expense, the following insurance in the amounts specified and in the forms provided below:

16.2.1. Commercial General Liability in an amount not less than two million dollars ($2,000,000) combined single limit for each occurrence or three million dollars ($3,000,000) General Aggregate for bodily injury, personal injury and property damage including contractual liability. Landlord and its officers, agents, and employees shall be covered as additional insured's with respect to liability arising out of activities by or on behalf of Tenant or in connection with the use or occupancy of the Property and or of the Theatre. Coverage shall be in a form acceptable to the Landlord's Risk Manager and shall be primary and noncontributing with any insurance or self-insurance maintained by Landlord.

16.2.2. Workers’ compensation as required by the Labor Code of the state of California and Employers' Liability insurance in an amount not less than one million dollars ($1,000,000).

16.2.3. "All Risk" Property insurance including, if such coverage may be obtained at commercially reasonable rates, the perils of earthquake and flood, covering the full replacement cost of Tenant's improvements and fixtures constructed or installed on or about the Property. Prior to the end of October 2015, or as soon thereafter as practical, Tenant and Landlord shall conduct a joint inventory of all improvements and fixtures in order to get quotes for All-Risk Insurance coverage (the "Inventory"). Tenant and Landlord agree to annually update the Inventory. Landlord shall be added as insured under the standard loss payable endorsement. Tenant hereby agrees to waive all rights of subrogation against Landlord for any damage to said improvements or fixtures covered by collectable commercial insurance. Tenants obligations to provide insurance under this paragraph shall apply to all improvements and fixtures, notwithstanding that some or all of such improvements or fixtures may have been installed by Tenant or any other party before or at any time after delivery of the Property to Tenant.

16.2.4. "Dram Shop" coverage in amounts appropriate for the operation of the Theatre, as determined by City's Risk Manager, to the extent same is not already covered in the CGL policy.
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17 16.2.5. "Director's and Officer's Liability" coverage, if available at commercially reasonable rates.

16.3 Other Insurance.

Such other insurance and in such amounts as may from time to time be reasonably required by Landlord against the same or other insurable hazards which at the time are commonly insured against in the case of Property similarly situated, due regard being given to the height and type of buildings thereon and their construction, use and occupancy.

16.4 Acceptable Terms of Coverage.

Acceptable insurance coverage shall be placed with carriers admitted to write insurance in California, or carriers with a rating of or equivalent to A:VIII by A. M. Best & Company. Any deviation from this rule shall require specific approval in writing from the Landlord's Risk Manager. Any deductibles or self-insured retentions must be declared to and approved by Landlord. At the option of Landlord, Tenant may be required to reduce or eliminate such deductibles or self-insured retentions or to procure a bond guaranteeing payment of losses and related investigations, claim administration and defense costs.

Coverage under each policy shall not be suspended, avoided or canceled by either party except after 30 days’ prior written notice to Landlord. Tenant shall furnish Landlord with certificates of insurance and with original endorsements effecting coverage as required under this section. The certificates and endorsements for each insurance policy shall be signed by a person authorized by the insurer to bind coverage on its behalf. Landlord reserve the right to require complete certified copies of all insurance policies at any time. If required by Landlord, Tenant shall, from time to time, increase the limits of its general liability insurance to reasonable amounts customary for owners of improvements similar to those on the Property. Notwithstanding anything to the contrary set forth in this Section, Tenant's obligations to carry the insurance provided for herein may be brought within the coverage of a so-called blanket policy or policies of insurance carried and maintained by Tenant; provided, however, (i) that Landlord, and other parties in interest to it shall be named as additional insured as their interests may appear and (ii) that the coverage afforded Landlord will not be reduced or diminished by reason of the use of such blanket policy of insurance, and (iii) that the requirements set forth herein are otherwise satisfied.

16.5 Waiver of Subrogation.

Each policy of insurance procured pursuant to Article 16 shall contain, if obtainable, either (i) a waiver by the insurer of the right of subrogation against either party hereto for negligence of such party or (ii) a statement that the insurance shall not be invalidated should any insured waive in writing prior to a loss any or all right of recovery against any party for loss accruing to the property described in the insurance policy. Each of the parties hereto waives any and all rights of recovering against the other, or against the officers, employees, agents and representatives of such other party, for loss or damage to such waiving party or its property or the property of others under its control, arising from any cause insured against under the form of insurance policies required to be carried pursuant to Article 16 of this Lease or under any other policy of insurance carried by such waiving party.

ARTICLE 17
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18 DAMAGE BY FIRE OR CASUALTY

17.1 Tenant to Give Notice.

In case of any material damage to or destruction of the Property or of the Theatre or any part thereof, Tenant will promptly give written notice thereof to Landlord generally describing the nature and extent of such damage or destruction.

17.2. Restoration.

17.2.1. In case of any material damage to or destruction of the Theatre or any part thereof on the Property, and if the insurance proceeds to Landlord pursuant to Article 16 (Public Liability and Insurance) on account of such damage or destruction are sufficient for the purpose, Landlord shall as promptly as practicable commence and complete (subject to an event of force majeure) the restoration, replacement or rebuilding of the Theatre with such alterations and additions as may be made so as to preserve the Theatre’s historic status and make the Theatre at least equal in value to the building existing immediately prior to such occurrence and as nearly similar to it in character and appearance as shall be practicable and reasonable (such restoration, replacement and rebuilding, together with any temporary repairs and property protection pending completion of the work, being herein called "Restoration"). All plans for any such Restoration, replacement or rebuilding shall be subject to the written approval of the Landlord. In the event that such restoration is undertaken pursuant to this subsection 17.2.1, Tenant shall pay to Landlord, any out of the proceeds it receives pursuant to Section 17.3.2, or as is otherwise available to Tenant for such purpose, such monies as may be required to accomplish said Restoration, but in no event will Tenant be required to pay any amount in excess of that amount received pursuant to section 17.3.2. Excess funds, if any, shall be the property of Tenant.

17.2.2 In case of any material damage to or destruction of the Theatre or any part thereof during the last five (5) years of this Lease that renders the Theatre unusable, Landlord, at its sole discretion, may terminate the Lease. Upon receipt of written notice of termination pursuant to this subsection, Tenant shall secure the building and Property.

17.2.3. If the insurance proceeds are not sufficient to complete the Restoration or if there are no insurance proceeds, Tenant shall at the election of Landlord, do one or more of the following: (i) as promptly as possible secure the property and cause the Property to be returned to Landlord in a safe condition; (i) take such actions and deliver to Landlord any or all of the items in Subsection 21.5 below. This Lease shall terminate upon such securing by Tenant, unless Tenant requests in writing that Tenant be permitted to restore the Property as provided in Section 17.2 at its own expense and satisfies Landlord that it is capable of doing so, and if so satisfied Landlord may consent to Tenant's request and will pay Tenant all insurance proceeds received pursuant to Section 17.3, less expenses. Upon such agreement being made, this Lease shall remain in full force and effect.

17.3. Application of Insurance Proceeds.

Insurance proceeds required to be carried under Article 16 (Public Liability and Insurance), whether received by Landlord or Tenant, which are received on account of any damage to or destruction of the Property or the Theatre thereon (less the costs, fees and 34 of 79
19 expenses incurred in the collection thereof, including without limitation attorney's fees and expenses) if Tenant shall have been authorized to proceed with the Restoration as provided in section 17.2 above, shall be applied as follows:

17.3.1. Tenant shall furnish to Landlord evidence satisfactory to Landlord of the total cost of Restoration pursuant to Section 17.2. Tenant shall then furnish to Landlord satisfactory evidence that it has available the total amount of money which, when added to the insurance proceeds received, shall be sufficient to pay the cost of such Restoration.

17.3.2. After the conditions of subsection 17.3.1 have been complied with, net insurance proceeds received on account of any damage to or destruction of the Property or the Theatre, or any part thereof shall, unless Tenant is in Default hereunder, be paid to Tenant or as Tenant may direct, from time to time as Restoration progresses, to pay (or reimburse Tenant for) the cost of Restoration. Such payment shall be made only upon written request of Tenant accompanied by a certificate of an independent architect satisfactory to Landlord to the effect that the amount requested has been paid or is then due and payable and is properly a part of such cost and upon evidence satisfactory to Landlord that there are no mechanic's or similar liens for labor or material supplied in connection with such Restoration to date or that such have been adequately provided for to the Landlord's satisfaction and that the balance of said proceeds after making the payment requested will be sufficient to pay the balance of the cost of Restoration. Upon receipt by Landlord of evidence satisfactory to it that Restoration has been completed and the cost thereof paid in full, and that there are no mechanic's or similar liens for labor or materials supplied in connection therewith, and if Tenant is authorized to and will continue to occupy the Theatre and fulfill its obligations hereunder, the balance, if any, of such proceeds shall first be paid to Landlord to the extent of its actual expenses incurred in connection with the restoration, then to Tenant to the extent reasonably necessary (as determined by Landlord) for Tenant's working capital, and then to Landlord.

17.3.3. Any insurance proceeds held by the recipient not required to be paid to Tenant pursuant to this Article 17 (Damage by Fire or Casualty) shall be paid to and retained by Landlord.

ARTICLE 18

EMINENT DOMAIN

18.1. Tenant to Give Notice.

For the purposes of this Article, "Taking" means a taking or damaging, including severance damage, by eminent domain or by inverse condemnation or for any public or quasi-public use under any statute. The taking may occur as a result of a transfer pursuant to the recording of a final order in condemnation, a voluntary transfer or conveyance to the taking authority under threat of condemnation, or a transfer while condemnation proceedings are pending. In case of taking of all or any part of, or interest in the Property and/or the Theatre, or the commencement of any proceedings or negotiations which might result in such taking, Tenant shall promptly give written notice thereof to Landlord generally describing the nature and extent of such taking or the nature of such proceedings or negotiations and the nature and extent of the taking which might result therefrom, as the case may be. Only Landlord may file and prosecute a claim for an award.

18.2. Total Taking.
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20 In case of a taking of the fee of, or the possessory interest in, the entire Property and the Theatre, this Lease shall terminate as of the date title vests in the condemning authority or the date the condemning authority is entitled to possession, whichever first occurs (the "Date of Taking"). In case of a taking of such perpetual easement on or such possessory interest in, or such fee interest that the Property and any Theatre thereon remaining after such Taking (even if Restoration were made) are unsuitable for the uses described in Article 8 hereof, Landlord, at its sole discretion, may terminate this Lease. Any taking of the Property and/or the Theatre of the character referred to in this Article 18 which results in the termination of this Lease is referred to herein as a "Total Taking."

18.3. Partial Taking.

In case of a taking of the Property other than a Total Taking (a "Partial Taking");

18.3.1 This Lease shall remain in full force and effect as to the portion of the Property remaining immediately after such Partial Taking, with a corresponding pro rata reduction of any consideration or sum payable hereunder; and

18.3.2 Tenant, if the awards or payments, if any, on account of such Partial Taking are sufficient for the purpose, at its expense, but first subject to Article

18.4.1, shall promptly commence and complete, subject to an event of force majeure) Restoration of the Property and/or the Theatre thereon as nearly as possible to its value, condition and character immediately prior to such Partial Taking, with such alterations and additions as may be made at Landlord's election; provided, however, that in case of a Partial Taking for temporary use Tenant shall not be required to effect Restoration until such Taking is terminated; or

18.3.3 if the proceeds referred to in subparagraph 18.3.2 are not sufficient for said purpose, Tenant at Tenant's election, may make such restoration as Landlord may direct and for which the proceeds are sufficient. Landlord shall be under no obligation to contribute to the restoration.

18.4 Application of Awards and Other Payments.

Awards and other payments on account of a taking, less costs, fees and expenses incurred in the collection thereof ("Net Awards and Payments") shall be applied as follows:

18.4.1 In case of a taking other than a Total Taking or a Taking for temporary use, Tenant shall furnish to Landlord evidence satisfactory to Landlord of the total cost of the Restoration required by Section 18.3. Net Awards and Payments received on account of such a Taking shall be held and applied to pay the cost of Restoration of the Property, such application to be made substantially as provided in section 17.2. The balance, if any, shall be paid to the Landlord.

18.4.2 Net Awards and Payments received on account of a taking of the possessory interest created by this Lease shall be paid to Landlord. Tenant shall pay to Landlord any amounts it receives from the condemnor.

18.4.3 Net Awards and Payments received on account of a Total Taking shall be paid to Landlord.
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21 ARTICLE 19

MORTGAGES, SALE, ASSIGNMENT AND SUBLETTING

19.1 Tenant.

Tenant may not transfer, sell, assign or sublet, without Landlord's prior written consent (which consent may be withheld in Landlord's sole discretion) all or any portion of Tenant's Leasehold Interest, the PPF&E that is not owned by Tenant, the Property or the Theatre; provided, however, that Tenant may grant such licenses and concessions as are reasonable, appropriate and customary to promote a Permitted Use. "Tenant's Leasehold Interest" means Tenant's interest in this Lease, the Property, and in the Theatre. Tenant shall have no right to encumber Tenant's Leasehold Interest, the Property or the Theatre without Landlord's prior written consent, which consent may be withheld in Landlord's sole discretion. "Encumber" means the entering into of any mortgage, deed of trust, lien or other charge or encumbrance of any nature (including without limitation, the lien or retained security title of a conditional vendor) created, assumed, incurred or suffered by the party seeking to encumber.

19.2 Landlord.

Landlord shall have the unconditional right to freely transfer, sell, encumber or assign Landlord's Interest, or any part thereof. In the event of any sale or transfer of Landlord's Interest, Landlord shall be and hereby is entirely freed and relieved of all covenants and obligations hereunder thereafter accruing, and it shall be deemed and construed, without further agreement, that the purchaser or transferee has assumed and agreed to carry out any and all covenants and obligations of its predecessor in title hereunder before and while such purchaser or transferee remains the owner of the Landlord's Interest, but until notice shall have been given to Tenant of any such sale or transfer, Tenant shall have the right to assume and rely upon the fact that there has been no change of ownership of the Property.

ARTICLE 20

PERFORMANCE OF COVENANTS

20.1 Right of Performance.

If Tenant shall at any time fail to pay any Imposition or other charge in accordance with Article 12 hereof, within the time period therein permitted or shall fail to pay for or maintain any of the insurance policies provided for in Article 16 hereof, within the time therein permitted, or to make any other payment or perform any other act on its part to be made or performed hereunder, within the time permitted by this Lease, then Landlord, after 30 days’ written notice to Tenant (or, in case of an emergency, on such notice, or without notice, as may be reasonable under the circumstances) and without waiving or releasing Tenant from any obligation of Tenant hereunder, may (but shall not be required to):

20.1.1. Pay such Imposition or other charge payable by Tenant pursuant to the provisions of Article 12 hereof, or

20.12. Pay for and maintain such insurance policies provided for in Article 16 hereof, or
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22 20.1.3. Make such other payment or perform such other act on Tenants part to be made or performed as in this Lease provided

20.2 Reimbursement and Damages.

All sums so paid by Landlord and all costs and expenses incurred by Landlord in connection with the performance of any such act, together with interest thereon at the maximum rate permitted by law from the respective dates of Landlord's making of each such payment or incurring of each such cost or expense, shall constitute an obligation payable by Tenant under this Lease and shall be paid by Tenant to Landlord on demand.

Landlord shall not be limited in the proof of any damages which Landlord may claim against Tenant arising out of or by reason of Tenant's failure to provide and keep in force insurance as aforesaid, to the amount of the insurance premium or premiums not paid or incurred by Tenant and which would have been payable upon such insurance, but Landlord shall also be entitled to recover as damages for such breach, the uninsured amount of any loss (to the extent of any deficiency in the insurance required by the provisions of this Lease), damages, costs and expenses of suit, including attorneys' fees, suffered or incurred by reason of damage to, or destruction of, the Theatre, occurring during any period in which Tenant shall have failed or neglected to provide insurance as aforesaid.

ARTICLE 21

DEFAULTS REMEDIES AND TERMINATION

21.1 Legal Actions.

21.1.1. Institution of Legal Actions.

In addition to any other rights or remedies, either party may institute legal action to cure, correct, or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Lease. Such legal actions must be instituted in the County of Los Angeles, State of California, or in the Federal District Court in the Central District of California.

21.1.2. Applicable Law.

The laws of the State of California shall govern the interpretation and enforcement of this Lease.

21.1.3. Acceptance of Service of Process.

In the event that any legal action is commenced by Tenant against Landlord, service of process on Landlord shall be made by personal service upon the Executive Director, Chairperson or other chief executive or presiding officer of Landlord, or in such other manner as may be provided by law. In the event that any legal action is commenced by Landlord against Tenant, service of process on Tenant shall be made by personal service upon a partner or officer of Tenant and shall be valid whether made within or without the State of California, or in such manner as may be provided by law.

21.2. Rights and Remedies are Cumulative.
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23 Except with respect to rights and remedies expressly declared to be exclusive in this Lease, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party.

21.3. Occurrence of Default and Effect Thereof

21.3.1. If Tenant shall operate in any Lease Year for which an Annual Budget has not been approved in accordance with Section 4.1 (aa) of the Management Agreement, or fail to submit its Annual Financial statement in accordance with Section

4.1 (q) of the Management Agreement; or

21.3.2. If Tenant shall cease to operate or shall file for bankruptcy, or otherwise indicate its intention to cease operating as a nonprofit cultural corporation in conformance with its By-Laws as they existed at the time of the execution of this Lease or as amended with the prior written approval of Landlord; or

21.3.3. If Tenant shall abandon this Lease, fail to perform or comply with any term hereof or with the terms of the Management Agreement, and if any such failure shall continue for more than sixty (60) days after notice thereof from Landlord, and Tenant shall not, subject to an event of force majeure, within such period commence with due diligence and dispatch the curing of such default, or having so commenced, shall thereafter fail or neglect, for reasons other than an event of force majeure, to prosecute or complete with diligence and dispatch the curing of such default; or

21.3.4. If Tenant shall otherwise be in material breach of this Lease; then, an Occurrence of Default shall be deemed to have occurred, and on any such occurrence Landlord, at any time thereafter may give a written termination notice to Tenant, and on the date specified in such notice this Lease shall terminate and the Lease Term shall expire and terminate and all rights of Tenant under this Lease shall cease.

21.4 Current Remedies
If there exists an Occurrence of Default, then, in addition to all other rights or remedies:

21.4.1. Landlord shall have the immediate right to reenter the Property and/or the Theatre, take possession of the Theatre, any and all of its PPF&E, books and records, contracts and any other personality, and terminate Tenant's right to possession of the Property and/or the Theatre, and may, but shall have no obligation to, remove all persons and property therefrom. Such property may be removed and stored in a warehouse or elsewhere at the expense and risk of and for the account of Tenant. Should Landlord elect to reenter as herein provided, or should Landlord terminate Tenant's right to possession pursuant to legal proceedings or to any notice provided for by law, this Lease shall terminate.

21.4.2. Landlord may, at its option, enforce all of its rights and remedies under this Lease, including the right to recover the consideration and all other sums payable hereunder as the same become due hereunder. Additionally, Landlord shall be entitled to recover from Tenant all costs of maintenance and preservation of the Property 39 of 79
24 and/or the Theatre, and all costs, including attorneys' and receiver's fees, incurred in connection with the appointment of and performance by a receiver to protect the Property and Landlord's interest under this Lease.

21.5 Final Remedies and Other Termination.

This Lease shall terminate in the event of termination of the Management Agreement with Tenant, as Manager, executed concurrently herewith. On the happening of any Occurrence of Default, and upon notice of termination as provided in section 21.1, this Lease shall terminate. Without an Occurrence of Default, Landlord may terminate this Lease by giving Tenant written notice of termination; this Lease shall terminate twelve (12) months after Tenant's receipt of such termination notice. Upon either such termination of this Lease, and in addition to all other rights or remedies it may have, Landlord may recover from Tenant all or any of the following:

21.5.1. The worth at the time of award of all sums payable hereunder which are due, owing and unpaid by Tenant to Landlord at the time of termination;

21.5.2. The Manager's Facility Ticket Fee Account;

21.5.3. Insurance contracts and insurance, proceeds and all claims thereto that are connected with the Property;

21.5.4. Possession of the Theatre, and subject to the provisions of Section

3.3 herein, any and all Improvements, PPF&E, including but not limited to books and records, contracts and any other personality in any way connected to the operation, maintenance or use of the Theatre; and

21.5.5. Possession of the Property, and if requested by Landlord, a quitclaim deed from Tenant to Landlord describing the Property. Without an Occurrence of Default, Tenant may terminate this Lease, effective ninety (90) days after Landlord's receipt of written notice of termination, if the cost of repairing or replacing any of the structural, roof, main electrical, plumbing, building service or fire/life safety components of the Theatre would make continued operation of the Theatre economically infeasible.

ARTICLE 22

PERMITTED CONTESTS
Tenant, at no cost or expense to Landlord, may contest (after prior written notice to Landlord), by appropriate legal proceedings conducted with due diligence, the amount or validity or application, in whole or in part, of any Imposition or lien or any Legal Requirement or Insurance Requirement, provided that: (a) in the case of liens of mechanics, materialmen, suppliers or vendors, or Imposition or lien therefor, such proceedings shall suspend the collection thereof from Landlord, and shall suspend a foreclosure against the Property and/or the Theatre, any interest therein; (b) neither the Property or the Theatre, nor any part thereof or interest therein, would be in any danger of being sold, forfeited or lost by reason of such proceedings; (c) in the case of a Legal Requirement, Landlord would not be in any danger of any criminal liability or, unless Tenant shall have furnished a bond or other security therefor satisfactory to Landlord, any additional civil liability for failure to comply therewith and the Property and Theatre would 40 of 79
25 not be subject to the imposition of any lien as a result of such failure; and (d) Tenant shall have furnished to Landlord, if requested, a bond, or other security, satisfactory to Landlord.

If Tenant shall fail to contest any such matters, or to give Landlord security as hereinabove provided, Landlord may, but shall not be obligated to, contest the matter or settle or compromise the same without inquiring into the validity or the reasonableness thereof.

Landlord, at the sole cost and expense of Tenant, will cooperate with Tenant and execute any documents or pleadings legally required for any such contest.

ARTICLE 23

ENTRY BY LANDLORD
Landlord and its respective authorized representatives shall have the right to enter the Property at all reasonable times for the purpose of inspecting the same and to post any notices and to take all such action thereon as may be necessary or appropriate for any such purpose provided for under this Lease (but nothing contained in this Lease shall create or imply any duty on the part of Landlord to make any such inspection or to do any such work). No such entry shall constitute an eviction of Tenant.

ARTICLE 24

FORCE MAEJURE
Any prevention, delay, nonperformance or stoppage due to any of the following causes shall be excused: any regulation, order, act, restriction or requirement or limitation imposed by any federal, state, municipal or foreign government or any department or agency thereof, or civil or military authority; acts of God; acts or omissions of Landlord or its agents or employees; fire, explosion or floods; strikes, walkouts or inability to obtain materials; war, riots, sabotage or civil insurrection; or any other causes beyond the reasonable control of Tenant.

ARTICLE 25

MISCELLANEOUS

25.1 Notices.

All notices hereunder must be in writing and} unless otherwise provided herein, shall be deemed validly given on the date either personally delivered to the address indicated below; or on the third (3rd) business day following deposit, postage prepaid, using certified mail, return receipt requested, in any U.S. Postal mailbox or at any U.S. Post Office.

Should Landlord or Tenant have a change of address, the other party shall immediately be notified in writing of such change, provided, however, that each address for notice must include a street address and not merely a post office box. All notices, demands or requests from Tenant to Landlord shall be given to Landlord addressed as follows:

Landlord:

City of Glendale
633 East Broadway, Room 201
Glendale, California 91206-4387
Attn: Economic Development Director
with a copy to:
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26 City Attorney's Office
City of Glendale City Hall
Glendale, California 91206
Attn: Gillian van Muyden, Chief Assistant City Attorney or at such other addresses as Landlord shall have furnished to Tenant; and (b) if to Tenant;
Tenant:

SAS Entertainment Partners, Inc.
846 S. Broadway, #705
Los Angeles, CA 90014
Attn: Mike Klousia or Miles Williams
[email protected] or [email protected]
or at such other addresses as Tenant shall have furnished Landlord in writing.

25.2 No Claims Against Landlord.

Nothing contained in this Lease shall constitute any consent or request by Landlord, express or implied, for the performance of any labor or services or the furnishing of any materials or other property in respect of the Property or any part thereof, nor as giving Tenant any right, power or authority to contract for or permit the performance of any labor or services or the furnishing of any materials or other property in such fashion as would permit the making of any claim against Landlord or its interest in the Property in respect thereof.

25.3 Integration.

This Lease, and the exhibits attached hereto, together are the entire agreement between and final expression of the parties, and there are no agreements or representations between the parties except as expressed herein or therein. All prior negotiations and agreements between Landlord and Tenant with respect to the subject matter hereof are superseded by this Lease. Except as otherwise provided herein, no subsequent change or addition to this Lease shall be binding unless in writing and signed by the parties hereto.

25.4 No Waiver by Landlord.

To the extent permitted by applicable law, no failure by Landlord to insist upon the strict performance of any term hereof or to exercise any right, power or remedy consequent upon a default under this Lease, and no acceptance of rent during the continuance of any such default, shall constitute a waiver of any such default or of any such term. No waiver of any default shall affect or alter this Lease, which shall continue in full force and effect, or the rights of Landlord with respect to any other then existing or subsequent default.

25.5 Amendment.

This Lease can be modified, supplemented, amended or rescinded only by a writing expressly referring to this Lease and signed by Landlord and Tenant. 42 of 79
27 25.6 Severability: Consent.

If any term of this Lease or any application thereof shall be invalid or unenforceable, the remainder of this Lease and any other application of such term shall not be affected thereby. Unless otherwise expressly provided herein, any approval or consent of Landlord required hereunder shall not be unreasonably withheld or delayed. This Lease shall be binding upon and inure to the benefit of and be enforceable by the respective successors of the parties hereto. The headings in and the table of contents of this Lease are for purposes of reference only and shall not limit or define the meaning hereof. This Lease may be executed in any number of counterparts, each of which shall be an original, but all of which shall together constitute one and the same instrument.

25.7 Holding Over.

In the event Tenant shall holdover or remain in possession of the Property or the Theatre with the consent of Landlord after the expiration of the Term of this Lease, such holding over or continued possession shall create a tenancy for month to month only, upon the same terms and conditions as are herein set forth so far as the same are applicable, except that Tenant shall pay to Landlord fair market rent for the Property.

25.8 No Partnership.

Anything contained herein to the contrary notwithstanding, Landlord does not in any way or for any purpose become a partner of Tenant in the conduct of its business, or otherwise, or a joint venturer or member of a joint enterprise with Tenant hereunder.

25.9 Warranty Against Payment of Consideration.

Tenant warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Lease.

25.10 Non-liability of Landlord Officials and Employees.

No member, official or employee of Landlord shall be personally liable to Tenant, or
any successor in interest, in the event of any default or breach by Landlord or for any amount which may become due to Tenant or its successor or on any obligations under the terms of this Lease.

25.11 Remedies Cumulative.

The various rights, options, elections and remedies of Landlord and Tenant, respectively, contained in this Lease shall be cumulative and no one of them shall be construed as exclusive of any other, or of any right, priority or remedy allowed or provided for by law and not expressly waived in this Lease.

25.12 Time of the Essence.

Time is of the essence of this Lease and all of the terms, provisions, covenants and conditions hereof.

25.13 Pronouns.
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28 Masculine or feminine pronouns shall be substituted for the neuter form and vice versa, and the plural shall be substituted for the singular form and vice versa, in any place or places herein in which the context requires such substitution or substitutions.

25.14 Interpretation.

25.14.1 Law.

The laws of the state of California shall govern the validity, construction and effect of this Lease.

25.14.2. Covenants.

Whenever in this Lease any words of obligation or duty are used in connection with either party, such words shall have the same force and effect as though framed in the form of express covenants on the part of the party obligated.

25.14.3. Joint and Several Liability.

In the event either party hereto now or hereafter shall consist of more than one person, firm or corporation, then and in such event all such persons, firms or corporations shall be jointly and severally liable as parties hereunder.

25.15. Attorneys’ Fees.

In the event of a dispute between the parties arising out of or in connection with this Lease, whether or not such dispute results in litigation, the prevailing party (whether resulting from settlement before or after litigation is commenced) shall be entitled to have and recover from the losing party reasonable attorneys' fees and costs of suit incurred by the prevailing party.

25.16. No Memorandum of Lease.

Tenant shall not record this Lease or a memorandum of this Lease without the prior written consent of Landlord.

25.17. Attachments.

All attachments referred to in this Lease are attached to and incorporated herein by reference.

IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be signed on their behalf by their respective signatories thereunto duly authorized as of the date first above written.
[SIGNATURES APPEAR ON NEXT PAGE]
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EXHIBIT A
Legal Description of the Site
Lots 7, 8, 9, and 17 in Block 5 of the Glendale Boulevard Tract, in the City of Glendale, County of Los Angeles, State of California, as per map recorded in Book 5 Page 167 of Maps, in the Office of the County Recorder of said County. 45 of 79

EXHIBIT B

CITY THEATRE CAPITAL IMPROVEMENT PROGRAM AND SCHEDULE
The projects outlined below address long-standing maintenance concerns as well as the needed modernization of the Alex Theatre's operating systems. Items addressed include nearly all areas of the facility and are designed to create a top class venue experience for both the artists and the audience.

Fiscal Year Description Cost Total Estimated longevity / Notes 2022-23 No closure needed $555,000
Digital Video Projection System $125,000 10-15 yrs Replacement for GA property Grand Piano $45,000 50+ yrs Replacement for GA property Spire refurbishment - LED Conversion $150,000 15-20 yrs Several lighting sections are not functioning Acoustic Panels $45,000 20-25 yrs replacement for acoustic curtains that were out of code and aging
General Beautification and modernization $100,000 20-25 yrs Entrance decor, forecourt greenery / lighting, lobby decor, stage draperies, proscenium
curtains, patron furniture, artist entrance,
lobby gallery, etc.

House Audio components $30,000 15-20 yrs Main cable snake and splitter, near field speakers
Stage Scenery $60,000 15-20 yrs Stage set matched to interior architecture for concerts, like an orchestra shell for popular
music
2023-24 Estimated closure of 3-4 months $555,000
Flooring in audience areas
Seat cushions and fabric replacement
$200,000
$200,000
15-20 yrs
20-25 yrs
Carpet worn and out of date, concrete floors
in auditorium flaking and aging - safety
lighting replaced
Current seat covers are worn and cushions
are breaking down
Video cameras / streaming hardware $80,000 10-15 yrs Hardware needed to complete live streaming upgrade
Exterior Painting $75,000 10 yrs Last painted 2014
Closure planned for July-October 2023 $800,000
DRESSING ROOMS / CONCESSIONS $300,000 20-25 yrs Worn, aging, and un-befitting a top class venue
UPPER BALCONY REHAB / REBUILD $500,000 Perm Safety and code concerns per consultant 2024-25 No closure needed $500,000
Lighting system - component replacement $250,000 15-20 yrs System modernization needed LED Video wall $100,000 10-15 yrs Modern video system for on-stage usage Stage Audio Improvements $150,000 15-20 yrs Microphones, cables and stands, stage monitors
2025-26 Estimated closure of 1 month for projects $185,000 Stage communication replacement $75,000 15-20 yrs Stage communication system Clear Com Stage floor replacement $60,000 25-30 yrs New flooring needed every 25 yrs or so Soft Goods $50,000 15-20 yrs black stage masking curtains 2026-27 No closure needed $180,000
Stage rigging refurbishment $30,000 15-20 yrs replace hand lines and worn blocks Stage Dimmers $150,000 20-25 yrs last replaced 1992
2027-28 No closure needed $400,000
Sound system replacement $400,000 15-20 yrs Modernization needed 2028-2031
No projects needed
Sub-total - new projects / improvements proposed $2,375,000 Total including previously identified projects $3,175,000 46 of 79

EXHIBIT C

LIST OF PERSONAL PROPERTY
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1 MANAGEMENT AGREEMENT FOR THE
ALEX THEATRE 2022-2032
THIS MANAGEMENT AGREEMENT FOR THE ALEX THEATRE 2022-2032 (the “Agreement”) is made and entered into as of this ______day of ___________, 2022, (“Effective Date”) by and between the City of Glendale, a municipal corporation ("City"), SAS Entertainment Partners, Inc., a Delaware Corporation, as manager (“SAS” or “Manager”), for SAS’s management and operation of an historic theatre located on certain City-owned real property located at 216 N. Brand Boulevard, in the City of Glendale, County of Los Angeles, State of California, as more specifically described on Exhibit “A” attached hereto and incorporated herein by this reference (commonly known as the "Alex Theatre" and referred to herein as the “Theatre” or “Property”). The City and SAS may be referred to individually as “Party” and collectively as “Parties”.

RECITALS:

WHEREAS, on October 29, 2021, the City and SAS entered into a six (6) month right of entry permit (the “Permit”) for the interim management of the Theatre in order to ensure continued Theatre operations while the Parties negotiated a formal management agreement; and
WHEREAS, the Parties have completed negotiations of the terms and conditions of this ten (10) year Agreement for management of the Theatre which are set forth herein.

WITNESSETH:

NOW, THEREFORE, in consideration of the mutual covenants and other consideration herein contained, the Parties hereto agree as follows:

ARTICLE I

DEFINITIONS
Capitalized terms within this Agreement shall have the meanings set forth below, or if not defined in this Article I, shall have the meaning ascribed thereto when such terms are first used herein. Unless otherwise provided herein all terms refer to the operations and management of the Alex Theatre or “Theatre”.

1.1 "Advance Payment" shall mean the payment collected pursuant to Section 4.1 (f) hereof.

1.2 "Annual Report" shall mean the Manager's annual report on the performance and operation of the Theatre as specified in Section.
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2 1.3 "Capital Expenditures" shall mean any purchase of any tangible article necessary to operate the Theatre, costing over $10,000.00 and expected to last for a period of years.

All of the Capital Expenditures shall be contracted for and paid pursuant to Sections 4.1 (b) and 4.2 (e) as set forth in the City’s 10-Year Capital Improvement Program for the Theatre (the “City Theatre CIP”) attached hereto as Exhibit “B”.

1.4“City Staff Liaison” shall mean the main City contact that SAS shall work with to schedule maintenance, capital improvements, and review quarterly and annual reports.

1.5 "Employee" shall mean and include physical plant supervisors, accounting personnel, box office staff, maintenance personnel, concession workers, ushers, technicians and all other personnel of the Manager who are required to operate the Theatre.

1.6 "Employee Costs" shall mean salaries, wages, fees, health insurance, accrued vacation compensation, workers' compensation insurance, employment taxes including federal and state withholding, social security, and unemployment compensation taxes.

1.7 "Event" or “Activity” shall mean a program or performance or rehearsal of whatever nature, including filming, videotaping, recording, receptions, and meetings, whether produced, sponsored or offered by a profit, non-profit, or governmental entity at the Theatre.

1.8 “Lease” shall mean the Lease by and between the City, as Landlord, and SAS, as Tenant, executed concurrently with this Management Agreement for use of the Theatre.

An executed copy of Lease, which is on file in the offices of the City, is attached hereto as Exhibit “C”. All initially capitalized terms defined in this Agreement and used in the Lease which are not specifically defined in the Lease shall have the meanings given in the Management Agreement.

1.9 "Maintenance" shall have the meaning set forth in Article 9 of the Lease.

1.10“Facility Systems” shall have the meaning set forth in Article 9 of the Lease.

1.11 "Management Agreement" shall mean this agreement between the City and Manager and any amendments thereto.

1.12“Manager” shall mean SAS Entertainment Partners, Inc.

1.13“Operating Expenses” shall mean all expenses, other than Capital Expenditures, necessary to operate and manage the Theatre.

1.14“Repairs" shall mean the cost of fixing or replacing broken fixtures and equipment, such as but not limited to, theatre seats, windows, doors, fire escape components, air conditioning elements, heating elements, plumbing fixtures, existing safety equipment such as fire extinguishers and other fixtures and equipment or parts thereof which are 50 of 79
3 vital to the operation of a public theatre. Repairs will be treated in accordance with Section 4.1 (b), Section 4.2 (d) and as specifically set forth in the Lease.

1.15“Routine Maintenance” shall have the meaning set forth in Article 9 of the Lease.

ARTICLE II

ENGAGEMENT OF MANAGER

2.1Engagement. City hereby engages the Manager as the exclusive manager of the Theatre and the Manager does hereby agree to perform all of the terms and conditions contained in this Agreement.

2.2Independent Contractor. The Manager shall be an independent contractor and shall determine all the conditions and terms of its work except as otherwise provided in this Agreement.

ARTICLE III
TERM

3.1Term and Termination.The term of this Agreement ("Term") shall commence on ____________, 2022, and continue through and include _____________, 2032, for one ten (10) year term as described herein below, and subject to earlier termination in accordance with Article III and Article VIII hereof.

Either Party may, without cause or penalty, terminate this Agreement during the Term providing the other Party with at least eighteen (18) months’ notice in writing of such desire to terminate the Agreement. However, in the event of termination of Lease, this Agreement shall also terminate.

3.2Renewal Term. Following the Initial Term, and subject to the True-Up Payment for City Contribution deficit as set forth in Section 4.1(s) herein below, this Agreement shall be renewable for one (1) additional ten (10) year term ("Renewal Term"). The terms of the Renewal Term shall be negotiated prior to the time of renewal. Manager shall provide City with written notice of Manager’s intent to renew at least twelve (12) months prior to the end of the Initial Term (“Notice of Intent to Renew”). The Tenant’s request for a Renewal Term shall be subject to the City’s approval, as Landlord, of a renewal of the Lease Agreement with Manager as Tenant, which Lease between the Parties is attached hereto as Exhibit “C” and incorporated herein by this reference.

ARTICLE IV

DUTIES AND POWERS OF MANAGER

4.1 Duties. The Manager shall exercise all of the following powers and duties:
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4 (a) Employees. The Manager shall hire and supervise Employees who are required to operate the Theatre on a regular Event basis. These Employees shall not be deemed employees of the City, and the Manager shall be responsible for and shall make timely payment of all Employee Costs. The Manager shall provide City with evidence that proper workers' compensation insurance is maintained throughout the term hereof. (b) Routine Maintenance and Repairs.
(1) Routine Maintenance and Repair. The Manager shall provide routine maintain and repair the Theatre Property in conformance with the standards of maintenance and repair set forth in Article 9 of the Lease (herein referred to as the “Routine Maintenance and Repair”).
(2) Payment. All expenses relating to Routine Maintenance and Repair as set forth in this Section 4.1(b) together with all Employee Costs set forth in 4.1(a), shall be Operating Expenses payable by Manager.
(c) Theatre Use. The Manager shall use its best efforts to schedule Events and to maximize the use of the Theatre in a manner that supports use of the Theatre for a wide variety of appropriate uses that may include, but are not limited to, non-profits, local companies and arts programs. Manager’s agreement(s) with third-parties to use the Theatre are referred to herein as “Use Agreements.”
(d) Licensing Beyond Term. City and Manager acknowledge that the booking of events into the Theatre requires a long lead time and that these events often contracted up to twelve (12) months prior to the dates of performance. The attraction and servicing of these events requires a substantial effort on the part of the Manager. Manager and City agree that Manager's efforts to book events beyond the end of the Initial Term or any Renewal Term is in the best interest of the City, and that Manager should be compensated for these efforts. In consideration of this acknowledgement, Manager shall use its best efforts to obtain fully executed Use Agreements to use the Theatre on dates which fall beyond the date on which this Agreement terminates. City agrees to compensate Manager for post-term bookings for Events that take place after this Agreement Terminates at a rate of 10% of the rental rate for post-term Events (the "Post-Term Fee").

Upon notification of non-renewal of this Agreement by either party, Manager will refer all post-term booking inquiries to the new management entity, if any, or to a representative designated by the City. Any bookings made by the Manager prior to the time of notification of non-renewal, are eligible for a Post-Term Fee provided: (1) Manager provides City with a signed Use Agreement to use the Theatre during the one-year period following the notice of non-renewal; (2) Manager provides City with the immediately aforementioned signed User Agreement before the Agreement termination date; and (3) Manager has notified City in writing of such booking by no later than the date thirty (30) days after the notification of non-renewal.
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5 At the end of Manager's term, Manager shall submit to City, for payment of Post-Term Fees, copies of signed Use Agreements consistent with the provisions of Section 4.1 (c).

The Post-Term Fee will be paid to the Manager by the twenty-fifth (25th) day of the month following the month in which the Event was scheduled and occurs, during the one-year period following the City's delivery of the notice of non-renewal of this Agreement. City may apply any Post-Term Fees against any loss or damage resulting from any default by Manager hereunder.
(e) Licensing Agreements. Manager shall enter into a written Use Agreements with each party wanting to use the Theatre. The Manager shall employ and pay for legal services as needed to draft and review Use Agreements or contracts pertaining to Theatre use. The Manager shall make available to City at City's request evidence of insurance required under each Use Agreement.
(f) Marketing. The Manager shall use its best efforts, consistent with marketing practices in the industry, to disseminate information and bring the Theatre to the attention of a broad base of potential users including profit and non-profit groups. The marketing best efforts may include: (a) advertising in trade publications; (b) including the Theatre in event booking websites, which are accessible to and share available dates with national promoters; (c) branding the venue in print, digital and other media (d) personal contacts by Manager with national promoters, producers, and booking agencies; and (e) involvement in local civic organizations.
(g) Concessions. During all Events, the Manager shall maintain and operate food and beverage concessions and may maintain and operate merchandise concessions on the premises of the Theatre either through contracting for such concessionaires or directly providing these concessions. If Manager is providing alcoholic beverages through its own concession, Manager shall be responsible for obtaining a liquor license for the sale of alcoholic beverages at the Theatre and obtaining all required City permits therefore (“Liquor License”). Manager shall ensure any concessionaire hired by Manager to provide alcoholic beverage service at the Theatre, has obtained a Liquor License, and shall comply with any other required licensing and governmental requirements. (h) Supervision. The Manager shall supervise, either directly or by delegating such obligation to a responsible, adult Employee of Manager, every performance that is held at the Theatre.
(i) Crime Insurance. The Manager shall purchase from a company acceptable to the City, at Manager's expense, a crime insurance policy in an amount satisfactory to the City’s Risk Manager, which amount shall not be less than $500,000 and shall have a deductible not to exceed $10,000. The policy shall indemnify the City against any fraud or dishonest acts of the Manager, its agents or its employees, individually or in collusion with others. Manager shall maintain such insurance coverage until City consents to its removal following a final audit of Manager's records at the end of the contract term. 53 of 79
6 (j) Meet and Confer. The Manager shall meet and confer with City about all matters affecting the viability of the Theatre. These meetings shall be held quarterly, and on an as needed basis.
(k) Non-Discrimination in Employment. Manager certifies and agrees not to discriminate against any employee or person who is subject to this Agreement because of race, color, religion, religious belief, national origin, ancestry, citizenship, age, sex, sexual orientation, marital status, pregnancy, parenthood, medical condition, or physical or mental disability. Evidence of discrimination shall be sufficient cause for termination of this Agreement.
(l) Insurance. When Manager signs and delivers this Agreement to City, and during this Agreement’s Term, Manager shall furnish City with insurance forms that fully meet the requirements of— and contain provisions entirely consistent with— all of the “Insurance Requirements,” which are attached as “Exhibit D” to this Agreement and are incorporated into it by this reference. This Agreement’s insurance provisions are separate and independent from the indemnification and defense provisions in this Agreement; and do not limit, in any way, the applicability, scope, or obligations of the indemnification and defense provisions in this Agreement. (m) Laws. The Manager shall comply with all laws, statutes, ordinances and rules of all applicable governmental authorities unless the City is contesting or has affirmed its intention to contest any such law, statute, ordinance, rule, regulation, order, or requirements pursuant thereto.
(n) Taxes and Fees. The Manager shall pay or cause to be paid all sales tax and other taxes and fees attributable to operation of the Theatre. (o) Fire Safety Procedures. The Manager shall maintain written plans, acceptable to City, for the emergency evacuation of the Theatre. The Manager shall instruct all current staff members and thereafter all newly hired staff members each calendar quarter; provided, however, that such fire drills also ensure that at least one employee trained and qualified to monitor safety procedures and to report the status of such procedures to City on a biannual basis, and at such other times as City may reasonably request. (p) Manager's Other Activities; Management Entity. Manager may engage in the operation of theatres and venues other than the Theatre. However, pursuant to the terms and conditions of the Manager’s employment contract with SAS, SAS shall during the term thereof remain the person principally responsible for managing the Theatre, shall remain an officer of Manager, and shall devote such time to Manager's obligations hereunder as shall be necessary to operate the Theatre in a first class manner. (q) Annual and Quarterly Reports. The Manager shall submit an Annual Report to the City each year on or before June 1 st during the term hereof. The Annual Report shall generally cover the Theatre operations for the period July 1 st through June 30 th of the preceding year and shall include a summary of proposed shows and activities for the coming year. The Annual Report shall provide the Theatre’s performance metrics in the 54 of 79
7 form of number and type of shows presented, total tickets sold, highlights of any media coverage, and Manager’s promotional efforts. Quarterly reports shall be provided to the City staff liaison and shall provide the total ticket sales, amount of Facility Ticket Fee collected, summarize the success of and types of shows and events at the Theatre, and shall describe any new maintenance concerns (including status of fixtures and equipment required for Theatre operations), provide updates on ongoing maintenance and Theatre improvement activities.
(r) Facility Ticket Fee. Manager shall impose a Facility Ticket Fee (the "Ticket Fee") to be added to the price of tickets for Events at the Theatre during the Initial Term and any Renewal Term. Manager shall transfer the Ticket Fee to the City on a quarterly basis in conjunction with Manager’s Quarterly Report. City shall use the Ticket Fee for underwriting the City’s obligation to undertake the City’s Theatre CIP, (attached as Exhibit “B”), annual utility costs, purchase of personal property equipment for Theatre operation, and for the maintenance of Building Systems and building structure incurred during the Initial Term (the “City’s Contribution”). Manager shall include the Ticket Fee requirement in all Use Agreements and ticket sale agreements. Manager shall collect a minimum $2.00 Ticket Fee per ticket for tickets $25 or less face value and a $4.00 per ticket for tickets more than $25.00 per ticket face value. Manager may increase the Ticket Fee from time to time after prior consultation with City and upon ninety days’ (90) prior written notice of such increase. Ticket Fee shall be remitted to the City on a quarterly basis concurrently with Manager’s Quarterly Report.
(s) Manager’s True Up Payment for City Contribution. Prior to the commencement of any Renewal Term, Manager shall pay City the difference between the total Facility Ticket Fee previously remitted by Manager to City pursuant to this Agreement, and the City’s Contribution (the “True Up Payment”). As of the Effective Date of this Agreement, the City’s Contribution is projected to be $6,500,000 over the Initial Term. The Parties agree that the $6,500,000 is a good faith estimated projection of City Contribution over the Initial Term that was based on investigation, discussion and negotiations of the Parties. The Parties acknowledge and agree that the City’s Contribution may increase or decrease depending on, among other things, but not limited to, the cost and availability of materials and labor, the existence of later-discovered Theatre building or operational conditions that require additional capital outlay to ensure the safety and functionality of Theatre for its intended use, as well as changes in the equipment and technology necessary to operate the Theatre as a first-class entertainment venue (the “Theatre Contingencies”).

The aforementioned list of Theatre Contingencies is not exhaustive and is not meant to limit the scope of such Theatre Contingencies. To this end, the Parties agree that City may modify the City Contribution from time to time, in order to address the Theatre Contingencies. Following Manager’s Notice of Intent to Renew required in Section 3.2 herein above, but by no later than six (6) months before the end of the Initial Term, the Parties shall meet and confer in good faith to determine the total amount of Manager’s True Up Payment, if any is required. Manager’s True Up Payment shall be completed prior to the commencement of any Renewal Term.
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8 (t) Ownership of Improvements and Equipment. The City is the owner of all Theatre improvements, furniture fixtures and equipment, and personal property purchased by the City as reflected in the inventory of personal property required by the Lease.

4.2 Powers. The Manager shall have the following authority and powers under this Agreement:

(a) Use of Theatre Generally. Manager acknowledges that the Theatre is intended to be operated as a first class entertainment venue and that Events that are generally viewed as obscene or offensive are not appropriate. In the event the Manager desires to present an Event that contains any material that could be regarded as obscene, generally offensive or contrary to the image of the Theatre as first class public entertainment facility, Manager shall first discuss the proposed Event with City, and the presentation thereof shall be subject to City's determinations to the appropriateness of the Event and in conformance with the Rules and Regulations attached to the Lease. (b) City Use of Theatre. City shall have the right to use the Theatre rent free for twelve public event days (“Public Events”); provided however, City shall provide Manager with at least thirty days’ notice of such Public Events, and City acknowledges that booking of Public Events shall be subject to Manager’s previously booked Events. In addition, City agrees to reimburse Manager for any labor, box office services and equipment rental necessary for Public Events at published rates.
(c) Hiring. To carry out performance of its duties under Section 4.1 (b) hereof, including its duty to make emergency repairs, as applicable, the Manager shall be authorized to contract for, discharge and supervise any and all labor and services performed by laborers, subcontractors, independent contractors, agents or any other person, firm, or legal entity performing a service for consideration for the benefit of the Theatre. Manager shall enter into a written contract with each party or entity so providing labor or services ("Vendor"). Any costs for services or labor that may be incurred for the Theatre shall comply with the City’s procurement policies and procedures and are subject to the California Public Contracts Code including Prevailing Wage laws. Specifically, Manager may not incur a cost for any single service or labor in excess of $1,000.00 without having first obtained three written bids, unless the labor falls into an express exception to the public bidding requirement. Manager must endeavor to inform City prior to making any emergency repairs in excess of $1,000.00. Manager shall make a reasonable effort to obtain the best price possible in selecting said Parties to perform necessary services, including emergency repairs. In no event shall any Vendor be deemed an employee of City.
(d) Purchases. To carry out performance of its duties under Section 4.1(b) hereof, including its duty to make emergency repairs as applicable, the Manager shall be authorized to contract for the purchase of goods, materials, fixtures, tools, supplies, equipment, implements, appliances and other products (collectively, "Goods") needed for the Routine Maintenance and Repair of the Theatre. In addition, because the Theatre is a publicly owned facility, Manager may incur costs for Routine Repair or Maintenance 56 of 79
9 only in accordance with City's procurement policies and procedures, and the Public Contracts Code. Specifically, Manager may not incur a cost for Routine Repair or Maintenance in excess of $1,000.00, without having first obtained three competitive bids.

It is the intent of the Parties hereto that the Manager shall make a reasonable effort to obtain the best price possible in purchasing Goods.
(e) Box Offices. Manager may operate a full-service box office on the premises of the Theatre for the sale of tickets to Events at the Theatre. Manager shall have sole and exclusive control and supervision of the box office(s) and its personnel. All receipts from the sale of tickets purchased at the Theatre’s box office(s), shall be under the control, disposition and supervision of Manager, and City shall incur no liability for the same. (f) Naming Rights. Manager shall not pursue Theatre naming rights relationships without the City’s express written authorization.

ARTICLE V

MANAGEMENT COMPENSATION

5.1 Management Fee. There is no management fee payable to SAS for the management and operation of the Theatre pursuant to this Agreement.

ARTICLE VI

POWERS AND DUTIES OF CITY

6.1 Capital Replacement and Improvements. Except as otherwise provided herein, it will be the City’s responsibility to procure and pay for any Capital Expenditures (as defined in Section 1.3) and as set forth in the Lease, and for the City’s Theatre CIP attached hereto as “Exhibit B”. Before undertaking any Capital Expenditures including the City’s Theatre CIP, which are not of any emergency nature, the City and Manager shall meet and confer to discuss and agree upon the timing, scope and schedule of any capital replacement or improvement projects the City chooses to undertake.

6.2 Facility Systems. Except as otherwise provided herein, it will be the City’s responsibility to maintain, repair and pay for any Facility Systems as defined in Section

9.2 of the Lease. Before undertaking any Facility Systems upgrades, maintenance, or other expense which is not of any emergency nature, the City and Manager shall meet and confer to discuss and agree upon the timing, scope and schedule of Facility System projects the City undertakes.

ARTICLE VII

DEFAULT AND TERMINATION

7.1 Default of Manager. If any of the Theatre is deserted, vacated or abandoned due to the fault of the Manager; or if the Manager sells, assigns, or pledges this Agreement; or if the Manager defaults in the performance of any of the covenants and agreements to be performed by the Manager pursuant to this Agreement including, without limitation, 57 of 79
10 Manager's obligation to operate and manage the Theatre in a professional manner in compliance with this Agreement, timely manner and to perform its duties hereunder; or if the Manager fails to procure the bonds, insurance, pay taxes and fees referenced in Section 4.1; or if the Manager misappropriates City's personal or real property or engages in any other illegal act; or if Manager fails to comply with any of the statutes, ordinances, rules, orders, regulations or requirements of the federal, state or city governments; or if the Manager files a petition in bankruptcy, or makes an assignment for the benefit of creditors or takes advantage of any insolvency act; then the City shall provide written notice of such default to Manager. If such default is not cured within thirty (30) days (or, if the default is not susceptible to cure within said thirty-day period, or if the Manager does not commence to cure the default during the thirty-day period and complete said cure within a reasonable time) after said notice is mailed or delivered to Manager, the City may terminate this Agreement and the Manager shall compensate City for any losses or damages incurred as a result of a Manager Default.

7.2 Default of City. If a default by the City in the performance of any of the covenants and agreements to be performed by the City pursuant to this Agreement causes the cancellation of an Event or Events, the City shall compensate the Manager for the loss of based on proof of incurred expenses suffered by reason of such default. Upon the occurrence of any other default by the City in the performance of any of the covenants and agreements to be performed by the City pursuant to this Agreement, Manager shall provide written notice of such default to City. If such default is not cured within thirty (30) days (or if the default is not susceptible to cure within said thirty-day period, the City does not commence to cure the default within the thirty-day period) after said notice is mailed or delivered to City, the Manager may terminate this Agreement.

7.3 Damage or Destruction. In the event of the damage or destruction of the Theatre to an extent which interferes with the regular and customary operation of the Theatre, either City or Manager may terminate this Agreement unless Manager, as Tenant, shall as promptly as practicable (subject to an event of force majeure) diligently undertake to repair, restore, rebuild or replace such damage or destruction subject to Article 17 of the Lease pertaining to damage by fire or casualty.

7.4 Vacation of Premises. Upon expiration or earlier termination of this Agreement or the Lease, the Manager shall immediately: (a) vacate the Theatre, including offices and box offices, and shall not damage any part of the Theatre during such vacation; (b) shall make arrangements for the delivery, transfer or (or disposition) to City all of City’s personal property, as well as records, accounts, contracts and other information held or obtainable by Manager in connection with the Ticket Fee; and (c) cooperate with City and any successor manager in accomplishing a transition of management that minimizes to the extent possible any disruption in the operation of the Theatre.

ARTICLE VIII

MISCELLANEOUS PROVISIONS
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11 8.1 Assignment. City may assign its interest in this Agreement to a governmental, non-profit, or for profit entity (the "City Assignee"), in its sole discretion. Manager shall not assign any right or interest in this Agreement, and shall not delegate any duty owned, without City’s prior written consent. Any attempted assignment or delegation shall be void and totally ineffective for all persons, and shall constitute a material breach upon which City may immediately terminate or suspend this Agreement. Notwithstanding the foregoing, Manager, with written consent of the City, may assign all or a portion of its interest in this Agreement to another Management entity (the "Manager Assignee"), but only if:
(a) The assignment is to a Manager Assignee which has the capability to carry on the operation of the Theatre in substantially the same manner as Manager; (b) The Manager Assignee agrees to assume all the rights and obligations assigned, and to keep and perform all the provisions and obligations of this Agreement; (c) Manager agrees to guarantee the performance of its obligations under this Agreement not assumed by the Manager Assignee, and to reaffirm this guarantee simultaneously with the assignment;
(d) Manager has the written consent of City, such consent to be granted by City in its sole discretion; and
(e) Manager's Executive Director remains a part of the Manager Assignee during the Initial Term and Renewal Term of the Management Agreement.

Subject to the foregoing, this Agreement shall inure to the benefit of, and be binding upon, the Parties hereto and their respective permitted successors and assigns.

8.2 Notices. All notices hereunder must be in writing and, unless otherwise provided herein, shall be deemed validly given on the date either personally delivered to the address indicated below; or on the third (3rd) business day following deposit, postage prepaid, using certified mail, return receipt requested, in any U.S. Postal mailbox or at any U.S. Post Office; or when sent via email received receipt confirmed, or via facsimile to a party at the facsimile number set forth below or to such other or further facsimile number provided in a notice sent under the terms of this paragraph, on the date of transmission of that facsimile. Should City or Manager have a change of address, the other party shall immediately be notified in writing of such change, provided, however, that each address for notice must include a street address and not merely a post office box. All notices, demands or requests from Manager to City shall be given to City addressed as follows:

CITY: Community Development Department
Economic Development Administration Division
633 E. Broadway, Suite 103
Glendale, CA 91206
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12 Telephone: (818) 937-8277
Facsimile: (818) 409-7239
Attn: Tamar Sadd, Principal Administrative Officer
[email protected]
With Copy to:

Glendale City Attorney’s Office
613 E. Broadway, Suite 220
Glendale, CA 91206
Attn: Gillian van Muyden, Chief Assistant City Attorney [email protected]
MANAGER: SAS Entertainment Partners Inc.

P.O. Box 845
La Mirada, CA 90637
Phone: 213-842-8535
Attn: Michael Klousia, CEO
[email protected]
SAS Entertainment Partners, Inc.
846 S Broadway #705
Los Angeles, CA 90014
Telephone: (213) 400-1901
Attention: Miles Williams, Founder
[email protected]
With Copy to:

Blaine Greenberg, Esq.
3400 Red Rose Dr.

Encino, CA 91436
Telephone: (818) 986-8433
[email protected]

8.3 Successors and Assigns. The terms and provisions of this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns.

8.4 Attorney’s Fees. If any action at law or in equity is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees in addition to any other relief to which he, she or it may be entitled.

8.5 Rights Cumulative. The rights and remedies hereby created are cumulative, and the use of one remedy shall not be taken to exclude or waive the right to use of another.

8.6 Severability. In the event that any provision of this Agreement shall be held invalid or unenforceable, no other provisions of this Agreement shall be affected by such holding, 60 of 79
13 and all of the remaining provisions of this Agreement shall continue in full force and effect pursuant to the terms hereof.

8.7 Governing Law. This Agreement shall be governed by and construed under the laws of the State of California.

8.8 Entire Agreement. This Agreement is the entire agreement of the Parties and replaces and supersedes any prior agreements or understandings between the Parties.

8.9 No Additional Rights. By entering into this Agreement the Manager shall obtain no additional rights or privileges in the future regarding the operation or use of the Theatre and the City shall not be deemed to have waived or abrogated any power or discretion it has regarding the operation or ownership of the Theatre upon the expiration or termination of this Agreement.

8.10 Force Majeure. Neither party shall be considered in default in the performance of its obligations hereunder or any of them, if such obligations were prevented or delayed by any cause, existing or future beyond the reasonable control of such party which include but are not limited to acts of God, labor disputes or civil unrest. Any delays beyond the control of either party shall automatically extend the time schedule as set forth in this Agreement by the period of any such delay.

8.11 Indemnification. Throughout the term of this Agreement, except for claims based on alleged violations of the Americans with Disability Act and except for the gross negligence or willful misconduct of the City, as and from the date hereof, Manager agrees to defend, indemnify and hold harmless to the maximum extent permitted by law, the City of Glendale, their officers agents and employees (“Indemnitees”), from and against any and all liabilities, suits, proceedings, judgments, claims, charges, damages, liens, causes of action, losses or injuries (whether in contract or in tort, including personal injury, accidental death or property damage, and regardless of whether the allegations are false, fraudulent or groundless), costs and expenses (including attorney’s fees, litigation, arbitration, mediation, appeal expenses) which in whole or in part arise out of or are connected with acts or omissions of, performance of, or breach of this Agreement by Manager or Manager's independent contractors, agents, employees or delegates. In the event of any such claim, demand, proceeding or lawsuit against City, Manager agrees to assume the immediate defense of Indemnitees by hiring and paying for legal counsel acceptable to City. Except as provided herein above in this Section 8.11, Manager’s obligations under this paragraph shall apply, regardless of any sole, active and/or passive negligence of City, and regardless of the degree of Manager’s or Indemnitee’s fault in causing the harm that results in the claim, demand, proceeding or lawsuit.

8.12 Intentionally deleted.

8.13 Conflicts between Management Agreement and Lease. The Parties intend and expect that the provisions of this Agreement and the Lease do not conflict and that this Agreement and the Lease shall be construed harmoniously so as to give effect to all of the terms, covenants and conditions of both documents. In the event of any conflict 61 of 79
14 between the provisions of this Agreement and the provisions of the Lease, the provisions of the Lease shall control to the extent of such conflict.

8.14 Exhibits. All exhibits attached shall conform to any requirements of this Agreement.

8.15 Public Records Act.
(a) Manager acknowledges that this Agreement is a public record. This Agreement, its Exhibits, and all documents produced under this Agreement are subject to the California Public Records Act (Government Code Sections 6250 et seq.), including its exemptions. Manager acknowledges that City has no obligation to notify Manager when a request for records is received.
(b) Manager shall identify in advance all records, or portions of them, that MANAGER believes are exempt from production under the Public Records Act. (c) If Manager claims a privilege against public disclosure or otherwise objects to the records’ disclosure, then:
(1) Manager may, when notified by City of the request, seek protection from disclosure by timely applying for relief in a court of competent jurisdiction; or (2) City may either decline to produce the requested information, or redact portions of the documents and produce the redacted records. (d) If Manager fails to identify one or more protectable documents, in City’s sole discretion, and without its being in breach of this Agreement or its incurring liability to Manager, City may produce the records— in whole, in part, or redacted— or may decline to produce them.
(e) Manager shall indemnify, defend (including Manager’s providing and paying for legal counsel for City), and hold harmless City, its officers, agents, employees, and representatives from and against all liability, claims, suits, demands, damages, fines, penalties, costs, or expenses arising out of or alleging City’s refusal to publicly disclose one or more records that Manager identifies as protectable, or asserts is protectable.

8.16 Conflict of Interest
Manager represents and certifies that:
(1) Manager’s personnel are not currently officers, agents, employees, representatives, or elected officials of City;
(2) Manager will not employ or hire a City officer, agent, employee, representative, or elected official during this Agreement’s Term;
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15 (3) City’s officers, agents, employees, representatives, and elected officials do not, and will not, have any direct or indirect financial interest in this Agreement; and (4) During this Agreement’s Term, Manager will inform City about any possible conflict of interest that may arise as a result of any change in circumstances.

8.17 Campaign Contributions.
(a) Manager and its Subconsultants shall fully comply with Glendale Municipal Code Section 1.10.060, which places limitations on Manager’s and its Subconsultants’ ability to make campaign contributions to certain elected City officials or candidates for elected City office. Specifically, Section 1.10.060 prohibits:
(1) A Manager (including a subconsultant)― who has a contract with the City of Glendale, Glendale Successor Agency, or the Housing Authority of the City of Glendale and that contract is subject to approval by the City Council, Successor Agency, or Housing Authority― from making a contribution to a Board Member, City Council member, City Clerk, or City Treasurer, when the contract has a total anticipated or actual value of $50,000 or more, or a combination or series of contracts having a value of $50,000 or more; and
(2) A Board Member, City Council member, Successor Agency member, or Housing Authority member from voting on a contract in which a Manager (or a subconsultant) has provided a campaign contribution.
(b) Manager acknowledges that even if the Management Fee in Section 5.2 of this Agreement is less than $50,000, Manager still may be subject to the campaign contribution limitations in Municipal Code Section 1.10.060, when:
(1) Manager and City amend the Scope of Services in this Agreement which increases the Maximum Cost to equal or exceed $50,000; or (2) City, Glendale Successor Agency, or the Housing Authority awards Manager another contract which has a total anticipated or actual value of $50,000 or more, or awards Manager a combination or series of contracts which have a value of $50,000 or more.
(c) Manager represents and certifies that:
(1) Manager has read and fully understands the provisions of Municipal Code Section 1.10.060;
(2) Manager will not: (a) make a prohibited campaign contribution to an individual holding City elective office; or (b) otherwise violate Municipal Code 63 of 79
16 Section 1.10.060; and (3) Manager shall timely complete, return, and update one or more disclosure or reporting forms that City provides.

8.18 The following Exhibit “A” through Exhibit “D” should be considered a list of Exhibits, in their entirety:

Exhibit A – Legal Description
Exhibit B - City 10-Year Capital Improvement Project Schedule Exhibit C - Lease Agreement
Exhibit D - Insurance Requirements
Any change to the Exhibits shall be subject to the review and approval of the City Manager, or his or her designee.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement the day and year first above written.
[SIGNATURES FOLLOW ON NEXT PAGE]
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17 MANAGER: SAS Entertainment Partners, Inc.

By: _________________________________
Michael Klousia, CEO
APPROVED AS TO FORM:

By: _________________________________
CITY:

By: _________________________________
Roubik Golanian, City Manager
APPROVED AS TO FORM:

MICHAEL J. GARCIA, CITY ATTORNEY
By: _________________________________
Gillian van Muyden,
Chief Assistant City Attorney
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EXHIBIT “A”

LEGAL DESCRIPTION OF PROPERTY
Lots 7, 8, 9, and 17 in Block 5 of the Glendale Boulevard Tract, in the City of Glendale, County of Los Angeles, State of California, as per map recorded in Book 5 Page 167 of Maps, in the Office of the County Recorder of said County. 66 of 79
EXHIBIT “B”
10 YEAR - CITY THEATRE CAPITAL IMPROVEMENT PROJECT SCHEDULE The projects outlined below address long-standing maintenance concerns as well as the needed modernization of the Alex Theatre's operating systems. Items addressed include nearly all areas of the facility and are designed to create a top class venue experience for both the artists and the audience.

Fiscal Year Description Cost Total Estimated longevity / Notes 2022-23 No closure needed $555,000
Digital Video Projection System $125,000 10-15 yrs Replacement for GA property Grand Piano $45,000 50+ yrs Replacement for GA property Spire refurbishment - LED Conversion $150,000 15-20 yrs Several lighting sections are not functioning Acoustic Panels $45,000 20-25 yrs replacement for acoustic curtains that were out of code and aging
General Beautification and modernization $100,000 20-25 yrs Entrance decor, forecourt greenery / lighting, lobby decor, stage draperies, proscenium
curtains, patron furniture, artist entrance,
lobby gallery, etc.

House Audio components $30,000 15-20 yrs Main cable snake and splitter, near field speakers
Stage Scenery $60,000 15-20 yrs Stage set matched to interior architecture for concerts, like an orchestra shell for popular
music
2023-24 Estimated closure of 3-4 months $555,000
Flooring in audience areas
Seat cushions and fabric replacement
$200,000
$200,000
15-20 yrs
20-25 yrs
Carpet worn and out of date, concrete floors
in auditorium flaking and aging - safety
lighting replaced
Current seat covers are worn and cushions
are breaking down
Video cameras / streaming hardware $80,000 10-15 yrs Hardware needed to complete live streaming upgrade
Exterior Painting $75,000 10 yrs Last painted 2014
Closure planned for July-October 2023 $800,000
DRESSING ROOMS / CONCESSIONS $300,000 20-25 yrs Worn, aging, and un-befitting a top class venue
UPPER BALCONY REHAB / REBUILD $500,000 Perm Safety and code concerns per consultant 2024-25 No closure needed $500,000
Lighting system - component replacement $250,000 15-20 yrs System modernization needed LED Video wall $100,000 10-15 yrs Modern video system for on-stage usage Stage Audio Improvements $150,000 15-20 yrs Microphones, cables and stands, stage monitors
2025-26 Estimated closure of 1 month for projects $185,000 Stage communication replacement $75,000 15-20 yrs Stage communication system Clear Com Stage floor replacement $60,000 25-30 yrs New flooring needed every 25 yrs or so Soft Goods $50,000 15-20 yrs black stage masking curtains 2026-27 No closure needed $180,000
Stage rigging refurbishment $30,000 15-20 yrs replace hand lines and worn blocks Stage Dimmers $150,000 20-25 yrs last replaced 1992
2027-28 No closure needed $400,000
Sound system replacement $400,000 15-20 yrs Modernization needed 2028-2031
No projects needed
Sub-total - new projects / improvements proposed $2,375,000 Total including previously identified projects $3,175,000 67 of 79
EXHIBIT “C”

LEASE AGREEMENT
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EXHIBIT “D”

INSURANCE REQUIREMENTS
“WORKERS’ COMPENSATION” INSURANCE

1.1At its own expense, Manager shall obtain, pay for, and maintain— and shall require each of its Subconsultants to obtain and maintain— for the duration of this Agreement:
(A) Complete Workers’ Compensation insurance, meeting or exceeding the coverages and amounts that California law requires; and
(B) Employer’s Liability insurance in an amount not less than:
(1) ONE MILLION DOLLARS ($1,000,000) per accident for bodily injury or disease; (2) ONE MILLION DOLLARS ($1,000,000) per employee for bodily injury or disease; and (3) ONE MILLION DOLLARS ($1,000,000) policy limit.

1.2MANAGER shall provide CITY with a “certificate of insurance” and a subrogation endorsement, “Waiver of Our Right to Recover From Others”— on forms satisfactory to the City Attorney or City’s Risk Manager, and signed by the insurance carrier or its authorized representative— which fully meet the requirements of, and contain provisions entirely consistent with, this Agreement’s workers’ compensation insurance requirements.

1.3CITY shall not be liable to MANAGER’s personnel, or anyone MANAGER directly or indirectly employs or uses, for a claim at law or in equity arising out of MANAGER’s failure to comply with this Agreement’s workers’ compensation insurance requirements. “COMMERCIAL GENERAL LIABILITY” OR “BUSINESSOWNERS LIABILITY” INSURANCE

1.1At its own expense, MANAGER shall obtain, pay for, and maintain— and shall require each of its Subconsultants to obtain and maintain— a “Commercial General Liability” or a “Businessowners Liability” insurance policy on an occurrence basis to fully protect MANAGER and CITY from claims and suits for bodily injury, personal and advertising injury, property damage, and medical payments. The policy must add the City of Glendale and its officers, agents, employees, and representatives (collectively, “CITY AND ITS REPRESENTATIVES”) as additional insureds.

1.2Coverage afforded to CITY, CITY AND THEIR REPRESENTATIVES must be at least as broad as that afforded to MANAGER. If MANAGER has higher limits than the limits specified in these insurance requirements, or has additional broader coverage, or has both, the insurer shall make available the higher limits and broader coverage to CITY, CITY AND THEIR REPRESENTATIVES. The insurance must be written for the limits of liability specified below:
(A) TWO MILLION DOLLARS ($2,000,000) per occurrence, or the full per occurrence limits of the policy― whichever limit is greater― for bodily injury (including accidental death) to any one person;
(B) TWO MILLION DOLLARS ($2,000,000) per occurrence, or the full per occurrence limits of the policy ― whichever limit is greater ― for personal and advertising injury to any one person;
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(C) TWO MILLION DOLLARS ($2,000,000) per occurrence, or the full per occurrence limits of the policy ― whichever limit is greater ― for property damage; and
(D) THREE MILLION DOLLARS ($3,000,000) general aggregate limit, or the full aggregate limits of the policy― whichever limit is greater.

1.3The liability insurance must include all major divisions of coverage and must cover:
(A) Premises Operations (including Explosion, Collapse, and Underground [“X, C, U”] coverages as applicable);
(B) Independent Contractors’ Protective Liability;
(C) Products and Completed Operations (maintain same limits as above until five (5) years after: recordation of the Notice of Completion or final close- out of the Agreement);
(D) Personal and Advertising Injury (with Employer’s Liability Exclusion deleted);
(E) Contractual Liability; and
(F) Broad Form Property Damage.

1.4MANAGER shall provide City with a “certificate of insurance,” an “additional insured endorsement,” and a subrogation endorsement, “Waiver of Transfer to Rights of Recovery Against Others”— on forms satisfactory to the City Attorney or City’s Risk Manager, and signed by the insurance carrier or its authorized representative— which fully meet the requirements of, and contain provisions entirely consistent with, all of the Insurance Requirements.

1.5The “certificate of insurance” and an “additional insured endorsement” must state:
“The City of Glendale, and its officers, agents, employees, and representatives are included as additional insureds under the policy(s). This insurance is primary to all other insurance of the City. The City’s insurance, or self-insurance, or both, will apply in excess of— and will not contribute with— this insurance. This insurance applies separately to each insured or additional insured who is seeking coverage, or against whom a claim is made or a suit is brought. The issuing company shall mail thirty (30) days advance notice to the City for any policy cancellation, termination, non-renewal, or reduction in coverage.” “BUSINESS AUTOMOBILE” LIABILITY INSURANCE

1.1At its own expense, MANAGER shall obtain, pay for, and maintain— and shall require each of its Subconsultant to obtain and maintain— a “Business Automobile” insurance policy on an occurrence basis to fully protect MANAGER and CITY from claims and suits for bodily injury, property damage, and medical payments. The policy must add the City of Glendale, its officers, agents, employees, and representatives as additional insureds.

1.2The insurance must not be written for less than the limits of liability specified below or required by law, whichever coverage amount is greater:
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(A) ONE MILLION DOLLARS ($1,000,000) per occurrence for bodily injury (including accidental death) to any one person; and

(B) ONE MILLION DOLLARS ($1,000,000) per occurrence for property damage; or

(C) TWO MILLION DOLLARS ($2,000,000) combined single limit (“CSL”).

1.3The liability insurance must include all major divisions of coverage and must cover all vehicles, whether rented, leased, hired, scheduled, owned or non-owned.

1.4MANAGER shall provide CITY with a “certificate of insurance” and an “additional insured endorsement”— on forms satisfactory to the City Attorney or City’s Risk Manager, and signed by the insurance carrier or its authorized representative— which fully meet the requirements of, and contain provisions entirely consistent with, all of the Insurance Requirements.

1.5The “certificate of insurance” and an “additional insured endorsement” must state:
“The City of Glendale, and their officers, agents, employees, and representatives are included as additional insureds under the policy(s). This insurance is primary to all other insurance of the City. The City’s insurance, or self-insurance, or both, will apply in excess of— and will not contribute with— this insurance. This insurance applies separately to each insured or additional insured who is seeking coverage, or against whom a claim is made or a suit is brought. The issuing company shall mail thirty (30) days advance notice to the City for any policy cancellation, termination, non-renewal, or reduction in coverage.”

GENERAL REQUIREMENTS

1.1At all times, the insurance company issuing the policy must meet all three of these requirements:
(A) It must be “admitted” insurer by the State of California Department of Insurance or must be listed on the California Department of Insurance’s “List of Approved Surplus Line Insurers” (“LASLI”);
(B) It must be domiciled within, and organized under the laws of, a State of the United States; and
(C) It must carry a minimum A.M. Best Company Financial Strength Rating of “A:VII,” or better.

1.2If the Agreement requires any of the foregoing insurance coverages to remain in force after the Final Payment, and if they are reasonably available, MANAGER shall submit to City— with the final Application for Payment— all certificates and additional insured endorsements evidencing the coverages’ continuation.

1.3A deductible or self-insured retention is subject to City’s review and approval, in its sole discretion. The insurance company or its authorized representative must state either on the insurance certificate or in a separate correspondence:
(A) The amount of the deductible, or self-insured retention, or both; 71 of 79
(B) Whether a limit of insurance has been lowered by any pending or paid claim; and
(C) The current limit amount, as lowered by the pending or paid claim.

1.4Despite any conflicting or contrary provision in MANAGER’s insurance policy:
(A) If MANAGER’s insurance company adds City, and its officers, agents, employees, and representatives (collectively, “its representatives”) as additional insureds, then for all acts, errors, or omissions of City, or their representatives, or both, that insurer shall:
(1) Pay those sums that City, or its representatives, or both, become legally obligated to pay as damages; and
(2) Defend— and pay the costs of defending—City, or its representatives, or both;
(B) MANAGER’s insurance is primary;
(C) Other insurance (whether primary, excess, contingent or self-insurance, or any other basis) available to City, or its representatives, or both, is excess over MANAGER’s insurance;
(D) City’s insurance, or self-insurance, or both, will not contribute with MANAGER’s insurance policy;
(E) MANAGER and MANAGER’s insurance company waive— and shall not exercise— any right of recovery or subrogation that MANAGER or the insurer may have against City, or its representatives, or both; (F) MANAGER’s insurance policy applies separately to each insured or additional insured who is seeking coverage, or against whom a claim is made or suit is brought, except that the naming of multiple insureds will not increase an insurance company’s limits of liability;
(G) MANAGER’s insurance policy applies to a claim or suit brought by an additional insured against a Named Insured or other insured, arising out of bodily injury, personal injury, advertising injury, or property damage; and (H) City is not liable for a premium payment or another expense under MANAGER’s policy.

1.5At any time during the duration of this Agreement, City may do any one or more of the following:
(A) Review this Agreement’s insurance coverage requirements; or (B) Require that MANAGER:
(1) Obtain, pay for, and maintain more or less insurance depending on CITY’s assessment of any one or more of the following factors:
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(a) City’s risk of liability or exposure arising out of, or in any way connected with, the services of MANAGER under this
Agreement;
(b) The nature or number of accidents, claims, or lawsuits arising out of, or in any way connected with, the services of MANAGER under this Agreement; or
(c) The availability, or affordability, or both, of increased liability insurance coverage;
(2) Reduce or eliminate a deductible or self-insured retention as it applies to City; or
(3) Obtain, pay for, and maintain a bond (as a replacement for an insurance coverage) from a California corporate surety, guaranteeing payment to City for liability, or costs, or both, that City incurs during City’s investigation, administration, or defense of a claim or a suit arising out of this Agreement.

1.6MANAGER shall maintain the insurance policy without interruption, from the Project’s commencement date to the Final Payment date, or until a date that City specifies for any coverage that MANAGER must maintain after the Final Payment.

1.7MANAGER’s insurance company or self-insurance administrator shall mail City written notice at least thirty (30) days in advance of the policy’s or the self-insurance program’s cancellation, termination, non-renewal, or reduction in coverage.

1.8MANAGER shall not allow any insurance to expire, cancel, terminate, lapse, or non-renew.

Twenty-one (21) days before its insurance policy’s expiration, cancellation, termination, or non- renewal, MANAGER shall deliver to CITY and CITY evidence of the required coverage as proof that MANAGER’s insurance policy has been renewed or replaced with another insurance policy which, during the duration of this Agreement, meets all of this Agreement’s insurance requirements.

1.9At any time, upon City’s request, MANAGER shall furnish satisfactory proof of each type of insurance coverage required— including a certified copy of the insurance policy or policies; certificates, endorsements, renewals, or replacements; and documents comprising MANAGER’s self-insurance program— all in a form and content acceptable to the City Attorney or City’s Risk Manager.

1.10If MANAGER hires, employs, or uses a Subconsultant to perform work, services, operations, or activities MANAGERS’s behalf, MANAGER shall ensure that the Subconsultant:
(A) Meets, and fully complies with, all insurance requirements of this Agreement; (B) Delivers to City— for their review, or approval, or both— all insurance policies, certificates, and endorsements that this Agreement requires; and (C) Furnishes City, at any time upon its request, with a complete copy of the Subconsultant’s insurance policy or policies for City’s review, or approval, or both.

1.11MANAGER’s failure to comply with an insurance provision in this Agreement constitutes a breach upon which City may immediately terminate or suspend MANAGER’s performance of 73 of 79
this Agreement, or invoke another remedy that this Agreement or the law allows. At its discretion, City may obtain or renew the insurance, and City may pay all or part of the premiums. Upon demand, MANAGER shall repay City for all sums or monies that City paid to obtain, renew, or reinstate the insurance, or City may offset the cost of the premium against any sums or monies that City may owe MANAGER.

MANAGER’S SUBMITTAL OF CERTIFICATES AND ENDORSEMENTS

1.1MANAGER shall have its insurance carrier(s) or self-insurance administrator(s) complete and execute the following insurance documents, unless an exception below applies. When MANAGER signs and delivers the Agreement to City, MANAGER also shall deliver:
(A) A “certificate of insurance” for each required liability insurance coverage; (B) City’s “General Liability/Automobile Liability Special Endorsement” form (L-15), unless this Agreement does not require MANAGER to obtain and maintain Commercial General Liability coverage, Businessowners Liability coverage, or Automobile Liability coverage;
(C) A subrogation endorsement, “Waiver of Transfer to Rights of Recovery Against Others,” for Commercial General Liability coverage or Businessowners Liability coverage;
(D) A “certificate of insurance” for Workers’ Compensation insurance; or if MANAGER is self-insured for workers’ compensation, a copy of the “Certificate of Consent to Self-insure” from the State of California; or if MANAGER is lawfully exempt from workers’ compensation laws, an “Affirmation of Exemption from Labor Code §3700” form;
(E) A subrogation endorsement, “Waiver of Our Right to Recover From Others,” for Workers’ Compensation coverage; and
(F) A complete copy of MANAGER’s Professional Liability insurance policy, including all forms and endorsements attached to it.

1.2City will neither sign this Agreement nor issue a “Notice to Proceed” until the City Attorney or City’s Risk Manager has reviewed and approved the insurance documents. City's decision as to the acceptability of all insurance documents is final. Unless MANAGER obtains City’s written approval, City will not permit or allow a substitution of an insurance policy, or a change in a certificate’s or an endorsement’s form and content, or both.

INSURANCE OBLIGATION IS SEPARATE FROM INDEMNITY OBLIGATION

2.1This Agreement’s insurance provisions:
(A) Are separate and independent from the indemnification and defense provisions in Article 12 of the Agreement; and
(B) Do not limit, in any way, the applicability, scope, or obligations of the indemnification and defense provisions in Article 12 of the Agreement. 74 of 79
The projects outlined below address long-standing maintenance concerns as well as the needed modernization of the Alex Theatre's operating systems. Items addressed include nearly all areas of the facility and are designed to create a top class venue experience for both the artists and the audience.

Fiscal Year Description Cost Total Estimated longevity / Notes 2022-23No closure needed $555,000
Digital Video Projection System$125,000 10-15 yrsReplacement for GA property Grand Piano $45,000 50+ yrsReplacement for GA property
Spire refurbishment - LED Conversion$150,000 15-20 yrsSeveral lighting sections are not functioning Acoustic Panels $45,000 20-25 yrsreplacemenmt for acoustic curtains that were out of code and aging General Beautification and modernization$100,000 20-25 yrsEntrance decor, forecourt greenery / lighting, lobby decor, stage draperies, proscenium curtains, patron furniture, artist entrance, lobby gallery, etc.

House Audio components $30,000 15-20 yrsMain cable snake and splitter, near field speakers Stage Scenery $60,000 15-20 yrsStage set matched to interior architecture for concerts, like an orcherstra shell for popular music 2023-24Estimated closure of 3-4 months $555,000
Flooring in audience areas $200,000 15-20 yrsCarpet worn and out of date, concrete floors in auditorium flaking and aging - safety lighting replaced Seat cushions and fabric replacement$200,000 20-25 yrsCurrent seat covers are worn and cushions are breaking down Video cameras / streaming hardware $80,000 10-15 yrsHardware needed to complete live streaming upgrade Exterior Painting $75,000 10 yrs Last painted 2014
Closure planned for July-October 2023$800,000
DRESSING ROOMS / CONCESSIONS$300,000 20-25 yrsWorn, aging, and un-befitting a top class venue UPPER BALCONY REHAB / REBUILD$500,000 Perm Safety and code concerns per consultant 2024-25No closure needed $500,000
Lighting system - component replacement$250,000 15-20 yrsSystem modernization needed LED Video wall $100,000 10-15 yrsModern video system for on-stage usage Stage Audio Improvements $150,000 15-20 yrsMicrophones, cables and stands, stage monitors 2025-26Estimated closure of 1 month for projects$185,000 Stage communication replacement$75,000 15-20 yrsStage communication system Clear Com Stage floor replacement $60,000 25-30 yrsNew flooring needed every 25 yrs or so Soft Goods $50,000 15-20 yrsblack stage masking curtains 2026-27No closure needed $180,000
Stage rigging refurbishment $30,000 15-20 yrsreplace hand lines and worn blocks Stage Dimmers $150,000 20-25 yrslast replaced 1992
2027-28No closure needed $400,000
Sound system replacement $400,000 15-20 yrsModernization needed 2028-2031
No projects needed
Sub-total - new projects / improvements proposed $2,375,000 Total including previously identified projects$3,175,000 75 of 79
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ALEX THEATRE SERVICES
Council Request 2022
Services Vendor
Contract
No. Expiration Years Left
Annual
PM Cost
Needed for
PM
Needed for
Repairs &
Contngcy
As-Needed
Committed
Needed
Repairs
As-Needed
On-Going
Total
PM + R&C
Building Locks Golden State Lock & Safe 8001213 6/30/22 1 $1,000.00 $1,000.00 $11,016.45 $10,516.45 $500.00 $12,016.45 Elevators KONE C106846A 8/31/23 1.5 $7,920.00 $11,880.00 $2,500.00 $2,500.00 $14,380.00 Fire Life Safety Glendale Fire Systems 8001119 12/31/25 4 $2,565.00 $10,260.00 $1,631.25 $631.25 $1,000.00 $11,891.25 Generators Global Power Group 8001441 10/31/26 5 $1,600.00 $8,000.00 $2,100.00 $1,600.00 $500.00 $10,100.00 HVAC - (PM amount) Acco Engineered Systems 8001439 10/31/26 5 $30,000.00 $150,000.00 $71,615.97 $16,615.97 $50,000.00 $5,000.00 $221,615.97 Industrial Gates & Doors (PM) South Coast Industrial Door 8001440 10/31/26 5 $700.00 $3,500.00 $2,000.00 $2,000.00 $5,500.00 Fire Extinguishers Majestic Fire 8001238 6/30/22 1 $1,290.00 $1,290.00 $300.00 $300.00 $1,590.00 Thermal Imaging Allied Reliability 8000247 6/30/22 1 $1,300.00 $1,300.00 $600.00 $600.00 $1,900.00 Domestic Hot Water Moe Plumbing 8001570 2/22/25 3 $3,500.00 $10,500.00 $500.00 $500.00 $11,000.00 Sump Pumps Moe Plumbing 8001570 2/22/25 3 $4,000.00 $12,000.00 $500.00 $500.00 $12,500.00 $53,875.00 $209,730.00 $92,763.67 $29,363.67 $50,000.00 $13,400.00 $302,493.67 79 of 79