Amphiteater Concession Lease

STATE SEAL]


COUNTY OF SAN BERNARDINO
REGIONAL PARKS DEPARTMENT


AND


AMPHITHEATER ENTERTAINMENT CORPORATION


LEASE FOR


THE GLEN HELEN BL0CKBUSTER AMPHITHEATER


OCTOBER 19, 1992


SAN BERNARDINO COUNTY BOARD OF SUPERVISORS


Marsha Turoci, First District Barbara Cram Riordan, Third District Jon D. Mikels, Second District Larry Walker, Chairman, Fourth District

Robert L. Hammock, Fifth District


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TABLE OF CONTENTS


RECITALS .................................................................... 1


1. AREA TO BE LEASED ..................................................... 1
1.1 Premises .......................................................... 1
1.2 Use of Park Outside of Premises ................................... 2


2. TERM ................................................................... 2
2.1 Initial Term ...................................................... 2
2.2 Extended Term ..................................................... 3


3. CONCESSION RIGHTS GRANTED ............................................. 5
3.1 OPERATOR's Use of Premises ........................................ 5
3.2 Programming ....................................................... 5
3.3 Notice to County .................................................. 6
3.4 Limitation on Hours of Operation .................................. 7
3.5 County Use of Premises ............................................ 8
3.6 Non-Discrimination ................................................ 9
3.7 Non-Disturbance; Quiet Enjoyment .................................. 10
3.8 Liquor License .................................................... 10
3.9 Limitations on Use of Premises .................................... 10
3.10 OPERATOR's Fiscal Obligations ..................................... 10
3.11 Security for Fiscal Obligations of OPERATOR ....................... 11
3.12 Credit and/or Reimbursement for Costs ............................. 12


4. RENTAL ................................................................. 12
4.1 Fixed Minimum Rent ................................................ 12
4.2 Percentage of Net Ticket Sales Rent ............................... 13
4.3 Park Amphitheater Fee ............................................. 14
4.4 Percentage of Excess Total Other Revenue .......................... 15
4.5 Late Payment Charges .............................................. 15
4.6 COUNTY Tickets .................................................... 16
4.7 Utilities ......................................................... 16
4.8 Termination by OPERATOR ........................................... 17
4.9 Security Deposit .................................................. 18


5. CONSTRUCTION OF PROJECT, IMPROVEMENTS AND ALTERATIONS .................. 19
5.1 Construction of Project ........................................... 19
5.2 Improvements and Alterations ...................................... 19
5.3 Improvement Fund .................................................. 22


6. MANAGEMENT REQUIREMENTS ................................................ 22
6.1 General Requirements .............................................. 22
6.2 OPERATOR Employees ................................................ 23
6.3 Merchandise ....................................................... 23
6.4 Subconcession Agreements .......................................... 24
6.5 Continued Occupancy ............................................... 24


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6.6 Security, Traffic Management, Waste, and
Miscellaneous Plans ............................................... 24
6.7 Disorderly Persons ................................................ 25
6.8 Affirmative Action ................................................ 26
6.9 Environmental Requirements ........................................ 26
6.10 Security .......................................................... 26
6.11 Emergency Aid ..................................................... 27
6.12 Damage Provisions ................................................. 27


7. RECORDS AND ACCOUNTS
7.1 Records and Accounts .............................................. 27
7.2 Reports ........................................................... 27
7.3 Audit ............................................................. 28
7.4 Compliance Covenant ............................................... 28
7.5 Release of Information ............................................ 28


8. TAXES, ASSESSMENTS AND OTHER CHARGES ................................... 29
8.1 Payment of Impositions ............................................ 29
8.2 Payment of Impositions in Installments ............................ 30
8.3 Tax Receipts ...................................................... 30
8.4 Limits of Tax Liability ........................................... 30
8.5 Permitted Contests ................................................ 31
8.6 Liens; COUNTY Right to Cure ....................................... 31
9. REPAIRS AND MAINTENANCE ................................................ 32
9.1 Premises Repair and Maintenance ................................... 32
9.2 Return of Premises ................................................ 33


10. INSPECTION/EVALUATION .................................................. 34
10.1 Inspection ........................................................ 34


11. CLEANING PREMISES ...................................................... 34
11.1 OPERATOR's Responsibilities ....................................... 34
11.2 COUNTY's Responsibilities ......................................... 34


12. INDEMNITY AND INSURANCE ................................................ 34
12.1 Liability ........................................................ 34
12.2 Hold Harmless Agreement .......................................... 34
12.3 Liability Insurance .............................................. 35
12.4 Workers' Compensation ............................................ 35
12.5 Evidence of Coverage ............................................. 35
12.6 Premium Payments ................................................. 35
12.7 Additional Named Insured ......................................... 36
12.6 Cancellations of Insurance ....................................... 36
12.9 General Insurance Provisions ..................................... 36
12.10 Disposition of Insurance Proceeds Resulting from
Loss or Damage to Improvement .................................... 37


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13. EMINENT DOMAIN ......................................................... 37
13.1 Takings .......................................................... 37
13.2 Total Taking ..................................................... 38
13.3 Partial Taking ................................................... 38


14. ASSIGNMENT AND SUBLETTING .............................................. 40
14.1 Assignment & Subletting .......................................... 40
14.2 Assignment of Rents .............................................. 40
14.3 Payments to COUNTY ............................................... 40
14.4 Requesting Consent ............................................... 41
14.5 No Assignment by Operation of Law ................................ 41


15. INCORPORATION OF PRIOR AGREEMENT ....................................... 42
15.1 Entire Agreement ................................................. 42


16. AMENDMENTS ............................................................. 42
16.1 Amendments ....................................................... 42


17. VIOLATION OF AGREEMENT ................................................. 42
17.1 Default and Right to Terminate ................................... 42
17.2 Termination for Criminal Conviction .............................. 44
17.3 Liability for Breach ............................................. 44
17.4 Entry for Mitigation ............................................. 44
17.5 COUNTY Defaults .................................................. 44


18. CONDITIONS AND SURRENDER OF PROPERTY AND TERMINATION
AGREEMENT .............................................................. 44
18.1 County Property .................................................. 44
18.2 Operator Property ................................................ 45


19. NOTICES ................................................................ 45
19.1 Notices .......................................................... 45


20. EASEMENTS, TRUSTS AND WARRANTIES ....................................... 46
20.1 Existing Encumbrances ............................................ 46


21. MISCELLANEOUS .......................................................... 46
21.1 Use of Name ...................................................... 46
21.2 Signs ............................................................ 47
21.3 No Partnership ................................................... 47
21.4 Binding Effect ................................................... 47
21.5 Captions ......................................................... 47
21.6 No Waiver ........................................................ 47
21.7 Regulations and Permits .......................................... 48
21.8 Common Areas ..................................................... 48
21.9 Parking .......................................................... 48
21.10 Renaissance Pleasure Faire ....................................... 49
21.11 Lakeside Area .................................................... 50
21.12 Health Certificate ............................................... 51


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21.13 Designee ......................................................... 51
21.14 Time of Essence .................................................. 51
21.15 Provisions are Covenants and Conditions .......................... 51
21.16 Exhibits ......................................................... 52
21.17 Consent .......................................................... 52
21.18 Lease Interpretation ............................................. 52
21.19 Jury Trial Waiver ................................................ 52
21.20 Attorneys' Fees .................................................. 52
21.21 Arbitration ...................................................... 53
21.22 Law .............................................................. 53
21.23 Severance ........................................................ 53
21.24 Survival ......................................................... 54


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SAN BERNARDINO COUNTY
REGIONAL PARKS DEPARTMENT
GLEN HELEN REGIONAL PARK AMPHITHEATER
CONCESSION LEASE


THIS CONCESSION LEASE ("Lease") is made and entered into by and between the COUNTY OF SAN BERNARDINO, a political subdivision of the State of California, hereinafter referred to as the "COUNTY," and AMPHITHEATER ENTERTAINMENT CORPORATION, a Florida corporation, hereinafter referred to as "OPERATOR," (hereinafter collectively referred to as the "Parties", or singularly as a "Party").


RECITALS


A. Whereas, the COUNTY has previously determined that the presence of a permanent major amphitheater in the County will substantially enhance the recreational, entertainment, artistic and cultural quality of life in the County; and


B. Whereas, the COUNTY, through its Regional Parks Department (the "Department"), issued a Request for Proposals (the "RFP") in October, 1990 for the construction and operation of such an amphitheater at Glen Helen Regional Park (the "Park"), a facility owned by the COUNTY and operated by the Department; and


C. Whereas, on April 13, 1992, the Board of Supervisors of the COUNTY, at a meeting regularly called and held, unanimously selected the OPERATOR as the sole successful respondent to such request for proposals; and


D. Whereas, the COUNTY and OPERATOR now desire to enter into this Lease to provide the terms and conditions upon which an amphitheater will be constructed and operated at the Park, and to otherwise provide the terms to govern the relationship of the Parties with respect to the design, construction and operation of such amphitheater and related facilities.


NOW, THEREFORE, in consideration of the above Recitals, and of the mutual covenants, conditions, and undertakings set forth herein, the Parties hereto agree as follows:


1.
AREA TO BE LEASED


1.1 Premises. COUNTY hereby lets to OPERATOR and OPERATOR hereby leases from COUNTY the real property, hereinafter referred to as the "Premises", described on Exhibit "A", Legal Description and Layout Plan of Premises, on the terms and conditions and for the uses hereinafter specified including, without limitation, the exercise by OPERATOR of


the concession rights granted in Article 3, CONCESSION RIGHTS GRANTED. The Premises leased hereunder are located in the Park. OPERATOR shall, except as expressly set forth to the contrary herein, have full and exclusive year round use of the Premises and all improvements thereon. Further, in conjunction with all events presented at the amphitheater, OPERATOR is granted a license (the "License") to use the parking areas (the "Parking Areas") described on Exhibit "B", Areas Under License, pursuant to Section 21.9, Parking, and to use the lakeside area (the "Lakeside Area") also described on Exhibit "B", Areas Under License, pursuant to Section 21.11, Lakeside Area (jointly referred to as the "License Areas"). COUNTY and OPERATOR specifically acknowledge and agree that OPERATOR's exclusive right to use of the Premises pursuant hereto shall include the amphitheater as it is expanded and as completed as required by Section 5.1, Construction of Project.


1.2 Use of Park Outside of Premises.


(a) OPERATOR may request in writing, to the Director of Regional Parks or his/her designee (the "Director"), the use of any area of the Park not included in the Premises or License Areas. The Director will consider issuing an interim use permit to the OPERATOR when the area requested is not already leased to or reserved for use by other individuals or groups, and if the Department does not have it reserved for its own programmed event, and the proposed event is not in conflict with similar events in the Park. The written request should include the proposed area to be used, the proposed programmed use, the proposed number of Park users, the proposed entrance and control of the area, any fees to be charged, and any proposed mitigation for damage to the Park that may occur as a result of the use. The fees charged by Department for the use of the request area will be negotiated in good faith, and if an agreement cannot be reached, shall be subject to arbitration under Article 21.21, Arbitration. The Director will respond to the use request within five (5) days.


(b) Any person attending an OPERATOR event may use areas of the Park outside of the Premises and License Areas upon payment of the appropriate fees as set forth in the COUNTY Schedule of Fees, San Bernardino County Code, Section 16.0223, Regional Parks.


2.
TERM


2.1. Initial Term.


(a) The term of this Lease shall be for a period of twenty-five (25) years (the "Initial Term") commencing on the first date that both of the following events have occurred: (i) a certificate of occupancy for the Premises has been issued and (ii) all of the improvements required in Phase I of the construction has been completed or OPERATOR has its first scheduled paid event on the Premises, whichever comes first.


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(1) Notwithstanding the above, if the OPERATOR is the proximate cause of any delays in construction which prevent the Initial Term from commencing under Subsection 2.1(a), above, by July 1, 1993, then the Initial Term of this Lease shall commence on July 1, 1993.


(2) Notwithstanding the above, if there are delays in construction (which are not the proximate cause of the OPERATOR) which prevent the Initial Term from commencing under Subsection 2.1(a), above, on or before August 31, 1993, then (except as provided below) the Initial Term of this Lease and the rental provisions of Article 4, RENTAL, shall not commence until April 1, 1994 but the OPERATOR shall have access to the Premises once a certificate of occupancy for the Premises has been issued and all other provisions of this Lease shall be operative during such occupancy. Provided, however, if the requirements of Subsection 2.1(a) are met between August 31, 1993 and April 1, 1994 and the OPERATOR has its first scheduled paid event on the Premises, then the Initial Term of this Lease and the rental provisions of Article 4, RENTAL, shall commence on the date the OPERATOR has its first scheduled paid event on the Premises and the Initial Term shall be extended by the number of days from commencement of the Initial Term to April 1, 1994.


2.2 Extended Term. The COUNTY agrees to enter into good faith negotiations with OPERATOR for two-five (5) year extensions (the "Extended Term(s)") of the Initial Term of this Lease, if OPERATOR gives written notice of its request to negotiate the first of such extensions (the "Extension Notice") to COUNTY at least nine (9) months but not more than one (1) year before the expiration of the Initial Term. The OPERATOR shall have the right to extend the Lease for the second five (5) year Extended Term only in the event that the OPERATOR has extended the term of the Lease for the first Extended Term and only if OPERATOR gives written notice of its request to negotiate the second of such extensions (also called the "Extension Notice") to COUNTY at least nine (9) months but not more than one (1) year before the expiration of the first Extended Term. Provided that, if OPERATOR is in Material Default, beyond all applicable notice and cure periods, as defined in Article 17, VIOLATION OF AGREEMENT, on the date of giving either Extension Notice, the Extension Notice shall be totally ineffective, or if OPERATOR is in Material Default, beyond all applicable notice and cure periods, on the date either Extended Term is to commence, the Extended Term shall not commence and this Lease shall expire at the end of the then existing term. The terms and conditions for each Extended Term shall be substantially the same as contained herein, except that the Fixed Minimum Rent as defined in Article 4, RENTAL, for each of the years of any Extended Term(s) shall not be less than the amounts set forth in Section 4.1, Fixed Minimum Rent. Furthermore, in the event that there is a material change in the make up of the Total Gross Revenue such that the Net Ticket Sales is increased or reduced substantially in relation to the Total Gross Revenue of the Premises, the percentage used to calculate Percentage of Net Ticket Sales Rent shall be increased or reduced to a percent which would give substantially the same revenue to the COUNTY that the COUNTY would have received if the make up of the Total Gross Revenue had not


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changed substantially. For the purposes of negotiating the Percentage of Net Ticket Sales Rent only, the Parties agree that during the Initial Term of the Lease, the Net Ticket Sales averaged seventy-five percent (75%) or the Total Gross Revenue. Therefore, if at the time of the first or second Extended Term negotiations, the Net Ticket Sales is estimated to be less than seventy percent (70%) or more than eighty percent (80%) of the Total Gross Revenue, then the Parties shall negotiate a Percentage of Net Ticket Sales Rent at a percent of the Net Ticket Sales expected during the Extended Term which would provide the COUNTY substantially the same revenue as the COUNTY would have received had Net Ticket Sales remained at 75% of Total Gross Revenue during the Extended Term. The term "Total Gross Revenue", as used in this Lease, is defined as Net Ticket Sales and all other money, cash, receipts, assets, property or other things of value, including but not limited to gross charges, sales, rentals, wholesale and consignment fees and commissions made, or earned, and all gross sums received by OPERATOR from its own operations and/or from its concessions, subtenants, subconcessions, assignees, or successors in interest, when collected or accrued, from any business, use or occupation, or any combination thereof, originating, transacted or performed, in whole or in part, on the Premises including, but not limited to, rental, the rendition or supplying of services, and the sale of goods, wares or merchandise, coin machines or devices of any nature. All gross sums received by a concession, subtenant or subconcession shall be considered to be considered part of the OPERATOR's Total Gross Revenue unless the OPERATOR establishes that the concession, subtenant or subconcession is not a related organization of the OPERATOR or anyone substantially controlling the OPERATOR.


(a) There shall be no deduction from Total Gross Revenue of any overhead or expense of operation, such as, but without limitation to, salaries, wages, cost of goods, advertising, interest, debt amortization, discount, collection, credit card and bad debt charges, insurance and taxes, except as specifically provided for herein.


(b) Total Gross Revenue shall include the amount of any manufacturer's or importer's excise tax included in the prices of any property or material sold, even though the manufacturer or importer is also the retailer thereof; and it is immaterial whether the amount of such excise tax is stated as a separate charge.


(c) Total Gross Revenue shall not include Federal, State, Municipal or other taxes collected from the consumer (regardless of whether the amount thereof is stated to the consumer as a separate charge) and paid periodically by OPERATOR, its concessions, subtenants, subconcessions, assignees or successors in interest to a governmental agency, accompanied by a tax return or statement; but the amount of such taxes shall be shown on the books and records elsewhere herein required to be maintained.


(d) Total Gross Revenue shall not include the Park Amphitheater Fee and/or the Business License Tax, if any, as they are defined in Section 4.3, Park Amphitheater Fee; but the amount of such Park Amphitheater Fee and/or Business License Tax shall be shown on the


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books and records elsewhere herein required to be maintained. In the event the Parties reach an agreement on the terms and conditions for an Extended Term prior to the expiration of the Initial Term/first Extended Term, the COUNTY shall forthwith prepare an amendment to this Lease setting forth the agreed upon terms and conditions for the Extended Term and submit same for approval and execution by OPERATOR and the COUNTY. In the event the Parties are not able to reach an agreement on the terms and conditions for an Extended Term prior to the expiration of the Initial Term/first Extended Term, this Lease shall terminate at the end of the Initial Term/first Extended Term.


3.
CONCESSION RIGHTS GRANTED


3.1 OPERATOR's Use of Premises. Except as specifically provided hereinafter to the contrary, OPERATOR shall have the exclusive right and obligation to use the Premises for recreational, entertainment, artistic and cultural activities, and the reasonably necessary office and storage purposes connected therewith. OPERATOR shall not use the Premises for any other purpose without the prior consent of the COUNTY.


3.2 Programming. All attractions being offered by OPERATOR at the Amphitheater shall be subject to the following guidelines with respect to performances:


(a) All programs shall be similar to the same types of programs then being or having been offered at any of the following facilities ("Other Venues") in Southern California:


1. Music Center, Los Angeles;
2. Shubert Theater, Los Angeles;
3. Universal Amphitheater, Los Angeles;
4. Greek Theater, Los Angeles;
5. Hollywood Bowl, Los Angeles;
6. Pacific Amphitheater, Orange County;
7. Irvine Meadows Amphitheater, Orange County;
8. The Forum, Los Angeles;
9. The L.A. Coliseum, Los Angeles;
10. Dodger Stadium, Los Angeles; and,
11. Anaheim Stadium, Orange County.


(b) All admission ticket prices (not including fees and Impositions, as defined in Section 8.2, Payment of Impositions) (the "Ticket Price") shall be comparable to similar events at the Other Venues.


(c) All food and other items or services with prices for


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sale or rent shall be of comparable quality and price for such items at the Other Venues.


(d) OPERATOR shall use its best efforts to present Cultural Events at least twice yearly. Cultural Events are defined as:


1. Opera or operetta;
2. Dance;
3. Symphonic and classical musical presentations;
4. Musical productions;
5. Stage play;
6. Cultural exchange presentations;
7. Festivals; and
8. Holiday and musical celebrations; and
9. Educational programs.


(e) It is the intent and policy of the Parties that cultural events may include some performances of widely accepted national or international reputation in addition to local symphonies, opera, and broadway-type performances.


(f) OPERATOR shall attempt to broaden the base of support for the amphitheater to include all segments of the community, through sponsoring a season ticket subscription drive. Also, out-reach programs, group sales, theater parties, chartered busses to the amphitheater and non-political fund-raising benefits shall be encouraged.


(g) Any exception to the above programming and pricing guidelines must have the prior approval of the COUNTY.


3.3 Notice to County.


(a) Not later than thirty (30) calendar days before OPERATOR's first scheduled event, and twice annually thereafter not ...