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HomeMy WebLinkAbout2026-09-22 - AGENDA REPORTS - THE CUBE OPERATING AGMTAgenda Item: 10 CITY OF SANTA CLARITA W AGENDA REPORT CONSENT CALENDAR CITY MANAGER APPROVAL: DATE: September 22, 2026 SUBJECT: OPERATING AGREEMENT FOR THE CUBE ICE AND ENTERTAINMENT CENTER DEPARTMENT: Recreation and Community Services PRESENTER: Kyle Lopez RECOMMENDED ACTION City Council: 1. Authorize the City Manager to execute the Amended and Restated Agreement with JV Ice at the Cube, LLC (JVI) for the operation and management of The Cube Ice and Entertainment Center, in a form approved by the City Attorney and substantially similar to the attached draft agreement, for a five-year term for a management fee not to exceed $1,207,337 and a potential incentive fee (if earned) based upon the formula set forth in the Agreement. 2. Authorize the City Manager to execute any amendment to the Agreement, in a form approved by the City Attorney, during the five-year term, including without limitation modifying the award over the course of the contract term based on revenue actuals. 3. Increase recreational facility revenue accounts by $102,370 for FY26-27, $132,090 for FY27-28, $136,020 for FY28-29, $140,100 for FY29-30 and $144,310 for FY30-31, and appropriate across recreational facility expenditure accounts per the attached Attachment A $197,684 for FY26-27, $67,519 for FY27-28, $69,293 for FY28-29, $71,090 for FY29-30 and $72,978 for FY30-31. 4. Authorize the City Manager or designee to execute up to two additional five-year renewal options, contingent upon the appropriation of funds by the City Council in the annual budget for such fiscal year. BACKGROUND On February 23, 2021, the City Council awarded a five-year agreement, with up to two optional five-year renewals, for the operation of the City of Santa Clarita (City) The Cube -Ice and Page 1 Packet Pg. 46 Entertainment Center (The Cube), with American Sports Entertainment Company and the Los Angeles Kings (ASEC/Kings). Pursuant to the agreement, operations are performed by JV Ice at the Cube, LLC (JVI), a California limited liability company established by ASEC/Kings and identified in the agreement as the Manager. Since opening in April, 2021, The Cube has served more than 2 million patrons and has established itself as a regional destination for recreational ice sports, tournaments, camps, public skating, and community programming. ASEC/Kings was selected as the preferred operator through a Request for Proposals process conducted in September 2020. The original agreement was negotiated and implemented during a period of unprecedented operational uncertainty associated with the COVID-19 pandemic and included financial, operational, and service assumptions based on conditions known at that time. Over the course of the initial agreement term, The Cube exceeded original operational and programming expectations. Based on operational experience gained during the first five years of service, City staff and JVI negotiated an Amended and Restated Agreement (agreement) to clarify operational roles and responsibilities, refine management and revenue -sharing provisions, and align budget assumptions with current facility performance and long-term operational objectives. A draft of the agreement is attached. Roles and Responsibilities: The agreement more clearly defines maintenance obligations, establishes responsibilities for repairs and replacement of facility assets, and refines oversight, reporting, and financial transparency requirements. In addition, the agreement clarifies contracting and procurement responsibilities to ensure consistency with the City's purchasing policies and procedures. Management Fee: The agreement updates the base management fee and incentive management fee structures. The annual base management fee will increase to $232,000 in Fiscal Year 2026-27 and will increase by 2 percent annually thereafter. Costs associated with the management fee include general and administrative expenses, overhead, and travel and training. The annual incentive management fee is revised so that JVI will be eligible to receive an annual incentive payment of $150,000 once gross revenue reaches the applicable annual gross revenue threshold, initially set at $4,300,000 for Fiscal Year 2026-27 and increasing by 2 percent annually. JVI will also receive 10 percent of gross revenue generated above the applicable annual threshold. Because the amount of the annual incentive management fee is dependent on actual annual gross revenue, the City Manager or designee will be authorized to modify the contract award during the contract term to accommodate any increase in incentive compensation resulting from revenues exceeding the applicable threshold. Budget Adjustments: The first five years of this contract saw both expenditures and revenues exceeding initial Page 2 Packet Pg. 47 estimates related to facility performance and use. The adjusted Fiscal Year 2026-27 operating budget reflects lessons learned during the first five years of operations at The Cube. Budget adjustments include increased expenditures for repairs and maintenance, service contracts impacted by prevailing wage requirements, insurance premiums, and banking and credit card processing fees associated with higher transaction volumes. The five-year forecasted revenue and expenditure plan is attached. ALTERNATIVE ACTION Other action as determined by the City Council. FISCAL IMPACT Upon approval of the recommended actions, and as outlined in Attachment A, budget for the Recreational Facility Expenditure Accounts will increase by $478,564 for all five years and Recreational Facility Revenue Accounts will increase by $654,890 for all five years. ATTACHMENTS Attachment A- Five Year Forecasted Revenue and Expenditure Plan Draft Cube Agreement Page 3 Packet Pg. 48 ATTACHMENT A The Cube Ice & Entertainment Center Five Year Foreasted Revenue and Expenditure Plan Fund: 120 FY 2026-27 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2020-31 Account Adopted Adjustment Adjusted Adjustment Adjustment Adjustment Adjustment Budget Budget Projection Projection Projection Projection Contract Operator Revenues First Floor Rental Income 431112 $ 51,300 $ 1,540 $ 52,840 $ 1,590 $ 54,430 $ 1,630 $ 56,060 $ 1,680 $ 57,740 $ 1,730 $ 59,470 On -Ice Revenue 456701 $ 4,089,530 $ 75,970 $ 4,165,500 $ 124,970 $ 4,290,470 $ 128,700 $ 4,419,170 $ 132,570 $ 4,551,740 $ 136,550 $ 4,688,290 Food Concession 456702 $ 54,170 $ 5,030 $ 59,200 $ 1,780 $ 60,980 $ 1,830 $ 62,810 $ 1,880 $ 64,690 $ 1,940 $ 66,630 MiscRevenue 456705 $ 20,000 $ (6,810) $ 13,190 $ 400 $ 13,590 $ 410 $ 14,000 $ 420 $ 14,420 $ 430 $ 14,850 Filming 456706 $ 50,000 $ 1,940 $ 51,940 $ 1,560 $ 53,500 $ 1,610 $ 55,110 $ 1,650 $ 56,760 $ 1,700 $ 58,460 Parties & Room Rentals 462101 $ 35,000 $ 24,700 $ 59,700 $ 1,790 $ 61,490 $ 1,840 $ 63,330 $ 1,900 $ 65,230 $ 1,960 $ 67,190 Revenue Subtotal Contract Operator Expenditures Management Fee 1205120-516138 $ 4,300,000 $ 100,500 $ 102,370 $ 131,500 $ 4,402,370 $ 232,000 $ 132,090 $ 4,640 $ 4,534,460 $ 236,640 $ 136,020 $ 4,733 $ 4,670,480 $ 241,373 $ 140,100 $ 4,827 $ 4,810,580 $ 246,200 $ 144,310 $ 4,924 $ 4,954,890 $ 251,124 Ice Rink Operations 1205120-516139 $ 2,305,283 $ 25,947 $ 2,331,230 $ 58,270 $ 2,389,500 $ 59,730 $ 2,449,230 $ 61,200 $ 2,510,430 $ 62,750 $ 2,573,180 Revenue Share 1205120-516140 $ 120,000 $ 40,237 $ 160,237 $ 4,609 $ 164,846 $ 4,830 $ 169,676 $ 5,063 $ 174,739 $ 5,304 $ 180,043 Expenditure Subtotal SURPLUS/(DEFICIT) - Contract Citv Operating Expenditures Business Sponsorship 1203506-516124 $ 2,525,783 $ 1,774,217 $ 22,500 $ 197,684 $ (95,314) $ $ 2,723,467 $ 1,678,903 $ 22,500 $ 67,519 $ 64,571 $ - $ 2,790,986 $ 1,743,474 $ 22,500 $ 69,293 $ 66,727 $ - $ 2,860,279 $ 1,810,201 $ 22,500 $ 71,090 $ 69,010 $ - $ 2,931,369 $ 1,879,211 $ 22,500 $ 72,978 $ 71,332 $ - $ 3,004,347 $ 1,950,543 $ 22,500 Maintenance Supplies 1205120-511105 $ 10,400 $ $ 10,400 $ $ 10,400 $ $ 10,400 $ $ 10,400 $ $ 10,400 Electric Utility 1205120-513101 $ 513,500 $ $ 513,500 $ $ 513,500 $ $ 513,500 $ $ 513,500 $ $ 513,500 Gas Utility 1205120-513102 $ 62,000 $ $ 62,000 $ $ 62,000 $ $ 62,000 $ $ 62,000 $ $ 62,000 Tele hone Utility 1205120-513103 $ 8,200 $ $ 8,200 $ $ 8,200 $ $ 8,200 $ $ 8,200 $ $ 8,200 Water Utility 1205120-513106 $ 12,000 $ $ 12,000 $ $ 12,000 $ $ 12,000 $ $ 12,000 $ $ 12,000 Contractual Services 1205120-516101 $ 174,921 $ $ 174,921 $ $ 174,921 $ $ 174,921 $ $ 174,921 $ $ 174,921 Janitorial 1205120-516143 $ 142,516 $ $ 142,516 $ $ 142,516 $ $ 142,516 $ $ 142,516 $ $ 142,516 Reimbursement to GF 1205120-720001 $ 115,220 $ $ 115,220 $ $ 115,220 $ $ 115,220 $ $ 115,220 $ $ 115,220 Total City Operating Expense SURPLUS/(DEFICIT) Citv Revenues Sponsorship Revenue 456611 $ 1,061,257 $ 712,960 $ 130,000 $ $ (95,314) $ $ 1,061,257 $ 617,646 $ 130,000 $ - $ 64,571 $ - $ 1,061,257 $ 682,217 $ 130,000 $ - $ 66,727 $ - $ 1,061,257 $ 748,944 $ 130,000 $ - $ 69,010 $ - $ 1,061,257 $ 817,954 $ 130,000 $ - $ 71,332 $ - $ 1,061,257 $ 889,286 $ 130,000 Rental Income - Misc 431107 $ 79,593 $ $ 79,593 $ $ 79,593 $ $ 79,593 $ $ 79,593 $ $ 79,593 City Revenue OVERALL SURPLUS (DEFICIT) Summary of Budget Adjustments Total Revised Revenues Total Revised Expenditures $ 209,593 $ 922,553 $ 4,509,593 $ 3,587,040 $ $ (95,314) $ 102,370 $ 197,684 $ 209,593 $ 827,239 $ 4,611,963 $ 3,784,724 $ $ 64,571 $ 132,090 $ 67,519 $ 209,593 $ 891,810 $ 4,744,053 $ 3,852,243 $ $ 66,727 $ 136,020 $ 69,293 $ 209,593 $ 958,537 $ 4,880,073 $ 3,921,536 $ $ 69,010 $ 140,100 $ 71,090 $ 209,593 $ 1,027,547 $ 5,020,173 $ 3,992,626 $ $ 71,332 $ 144,310 $ 72,978 $ 209,593 $ 1,098,879 $ 5,164,483 $ 4,065,604 10.a PacketPg. 49 10.b DRAFT AMENDED AND RESTATED MANAGEMENT AGREEMENT BETWEEN JV ICE AT THE CUBE, LLC AND CITY OF SANTA CLARITA THIS AMENDED AND RESTATED AGREEMENT ("Agreement") is made and entered into this day of , 2026, by and between the CITY OF SANTA CLARITA, a municipal corporation and general law city existing under the laws of California ("CITY"), and JV Ice at the Cube, LLC, a California limited liability company ("JVI"). The Parties agree as follows: RECITALS. The Parties enter into this Agreement with the following understandings: Section 1.01 On March 24, 2021, the Parties entered into an agreement, as amended by Amendment No. 1, Amendment No. 2, and Amendment No. 3 (collectively, the "Original Agreement") under which JVI operates and manages CITY's facilities located at 27745 Smyth Drive, Santa Clarita, CA 91355 known as "The Cube: Ice and Entertainment Center" (the "Cube"). Section 1.02 The Original Agreement expires September 30, 2026. To ensure that JVI's management of the Cube continues uninterrupted, the Parties negotiated this Agreement to redefine JVI's roles in managing the Cube and ensure that the public interest is met by utilizing a private company to operate a public facility. Section 1.03 This Agreement reflects the Parties' intent to clarify their relationship, ensure uninterrupted management of the Cube, and continue outstanding service for the community. Section 1.04 In entering into this Agreement, the Parties acknowledge and agree that because various improvements to the Cube were funded in part by tax-exempt bonds, CITY must comply with IRS regulations regarding the use of the Cube and that specifically for the Cube, because improvements were funded by both taxable and tax-exempt bonds, "private business use" (as defined in Internal Revenue Code section 141) of the Cube is limited to the proportion of bonds made up of taxable bonds, which was previously determined to be approximately 25%. ARTICLE 2 MANAGEMENT This Agreement constitutes a management agreement whereby CITY retains JVI to operate and manage the Cube. The scope of JVI's management responsibilities includes operation of the recreational, food, and beverage facilities located at the Cube. By entering into this Agreement, JVI's representatives may access the Cube for the limited purpose of performing this Agreement. CITY retains complete control and occupancy of the Cube in accordance with applicable law including, without limitation, Government Packet Pg. 50 10.b Code section 37359. ARTICLE 3 PAYMENTS AND ACCOUNTING RECORDS Section 3.01 Management Fees. (a) CITY will pay JVI a Management Fee as follows: Annual Base Management Fee (payable monthly): Year 1 (FY 2026/27) = $232,000 Year 2 (FY 2027/28) = $236,640 Year 3 (FY 2028/29) = $241,373 Year 4 (FY 2029/30) = $246,200 Year 5 (FY 2030/31) = $251,124 Each FY is July 1 through June 30. Optional years: the Base Management Fee will increase 2% annually. (b) In addition, CITY will pay JVI an Annual Incentive Management Fee. Subject to the requirements of this Section, the Annual Incentive Management Fee (i) will include a $150,000 payment upon Gross Revenue reaching $4,300,000 plus (ii) 10% of Gross Revenue generated by JVI that exceeds $4,300,000 annually. Beginning in Year 2 (FY 2027/28), and for each fiscal year thereafter during the Term (including any option years), the $4,300,000 Gross Revenue target increases by 2% over the target for the immediately preceding fiscal year, so that a new target Gross Revenue applies each year. The escalated target applies both to the $150,000 payment under clause (i) and to the 10% calculation under clause (ii). Except as otherwise provided in this Agreement, if the Cube closes, or its operations are materially impaired, for any period for reasons outside JVPs reasonable control, the Parties must equitably adjust the Operations Costs, the resulting threshold, and the $4,300,000 Gross Revenue target so that JVI is not penalized for the closure or impairment. Gross Revenue is defined as all gross sales generated by JVI at the Cube to the extent managed and operated by JVI, as detailed in Exhibit A, less any applicable sales tax. For illustrative purposes only, the methodology for calculating the Annual Incentive Management Fee is generally reflected in the five-year Forecasted Revenue and Expenditure Plan attached as Exhibit A (described in Section 3.02). Gross Revenue does not include revenue generated by City's exclusive use of the Cube, which may include sale of City merchandise, sponsorship, tourism events or miscellaneous rental income. (c) JVI must deliver to CITY its detailed accounting of the Cube's revenue and the calculation of the Annual Incentive Management Fee by the 151h 2 Packet Pg. 51 10.b of each July. CITY will verify the calculation, and, if the fee is earned, CITY will pay the Annual Incentive Management Fee to JVI by the 151h of each August. The Annual Incentive Management Fee is payable only to the extent of, and up to, the resulting net operating surplus. A written memo signed by the City Manager, or designee (who has signature authority on file with the City's Finance Division), will be provided by CITY to JVI authorizing the timely payment as set forth herein. Section 3.02 Operations Costs. (a) JVI must prepare and submit to CITY for approval a proposed five-year revenue and expenditure plan for the management and operation of the Cube. Year 1 of the revenue and expenditure plan is the proposed Fiscal Year 26/27 Budget until approved by City Council. Years 2-5 of the revenue and expenditure plan are forecasted budgets that will be evaluated and adjusted annually as needed for the upcoming fiscal year. All forecasted budgets are subject to review and approval by the CITY annually, and appropriations are contingent upon approval by the City Council. The Parties intend that any revisions to the forecasted revenue and expenditure plans must be transmitted by JVI to CITY by December 31 of each year during the Term, which must be consistent in form with the forecasted revenue and expenditure plan in Exhibit A. Once adopted by City Council, the forecasted revenue and expenditure plan becomes the Approved Annual Operating Budget for the coming fiscal year. (b) JVI may submit revised budgets to CITY for its review and approval, per CITY's provided deadlines. JVI must use diligence and commercially reasonable efforts to prevent the actual costs of maintaining and operating the Cube from exceeding the Approved Annual Operating Budget for such fiscal year. At CITY's direction, JVI must make changes to previously approved forecasted revenue and expenditure plans to the extent feasible. Any requested budget changes will not take effect unless a written approval signed by the City Manager, or designee, is provided by CITY. If a new Annual Operating Budget is not approved before commencement of the applicable fiscal year, the most recently approved Annual Operating Budget remains in effect on an interim basis until a new Annual Operating Budget is approved. During such interim period, JVI is authorized to continue operating the Cube and incur expenditures in accordance with the prior approved Annual Operating Budget. (c) JVI will pay monthly Operations Costs, as established in the Approved Annual Operating Budget, from the Disbursement Account. In accordance with the approved Annual Operating Budget, such costs are strictly limited to the following: Payroll (including taxes, fees, and benefits) and any other labor Packet Pg. 52 10.b related costs and expenses, including without limitation full or part-time on -site personnel of JVI; ii Insurance — worker's compensation, property, employers' liability, commercial general liability, excess liability, and all other insurance JVI must carry under the Insurance Article of this Agreement, including any related deductibles or retentions; iii Supplies, uniforms, equipment, materials used in the Cube; iv Except as otherwise provided, administration of maintenance and service contracts for the Cube; v Sales tax for purchase of personal property; vi Internet service and landline telecommunications; and vii Licenses and permits. viii Such additional amounts as permitted herein. Operations Costs do not include payment for alleged property damage or personal injury; JVI's training of its employees; JVI's travel expenses; JVI's human resource expenses (General & Administrative); JVI's entertainment expenses including, without limitation, meals and activities; or any other expenses not specifically identified as an Operations Cost. (d) Within 15 days of the end of each month, JVI must provide to CITY a reconciliation of all Cube expenses for the prior month, along with corresponding income and cash flow statements. (e) Should the Cube's reasonable or necessary expenses exceed the Approved Annual Operating Budget, JVI must promptly (and not less than 15 days after identifying the potential exceedance) seek CITY's approval of such additional expenses. Once such additional reasonable or necessary expenses are approved, JVI must be reimbursed for any such reasonable or necessary expenses incurred, even if not in the Approved Annual Operating Budget. Should JVI fail to obtain CITY's approval within 15 days, JVI shall not be required to incur such expense. (f) JVI must pay from the Disbursement Account, in a commercially reasonable manner, all operating expenses of the Cube per the Approved Annual Operating Budget and in accordance with CITY's purchasing policy, as detailed in Exhibit B. M Packet Pg. 53 10.b (g) JVI will maintain a bank account opened by JVI for the sole purpose of collecting funds generated at the Cube and paying the Cube related costs and expenses ("Disbursement Account"). All funds received by JVI derived from the operation of the Cube must be immediately deposited into the Disbursement Account. No other funds of JVI may be deposited or commingled with funds in the Disbursement Account. (h) JVI must pay Cube -related costs and expenses from the Disbursement Account. Only those personnel specifically identified by JVI to CITY have the authority to write checks from the Disbursement Account. The following costs must be paid directly from the Disbursement Account: All costs necessary for the management, operation, and maintenance of the Cube, so long as such costs are provided for in the Approved Annual Operating Budget or are specifically authorized in writing by CITY; or otherwise permitted herein ii Any and all costs necessary to handle emergencies, (defined in Section 6.15) (i) Within 15 days after the end of each month, JVI will provide CITY with a monthly reconciliation of the Disbursement Account including a copy of the monthly bank statements, together with expense reports and corresponding income and cash flow statements. (j) JVI will transfer to CITY funds from the Disbursement Account in excess of actual expenditures, pursuant to CITY's ACH instructions; provided, however, notwithstanding anything contained in this Agreement to the contrary, the CITY shall at all times be required to ensure there are enough funds in the Disbursement Account to cover Operations Costs. (k) Contingency Reserve. The Parties acknowledge that the $60,000 startup advance provided under the Original Agreement was intended solely to fund initial startup costs and has not been drawn upon since the first year of operations. CITY is not obligated to maintain, and this Agreement does not create, any contingency or reserve fund. Whether to establish, maintain, or permit the use of any contingency amount is at the CITY's sole and complete discretion. If the Parties elect to retain a contingency amount, JVI may access and use it only with the CITY's prior written approval, and only to fund extraordinary, unbudgeted expenses arising from a closure or material impairment of operations beyond JVI's reasonable control. (1) Notwithstanding anything contained in this Agreement to the contrary, in no event shall JVI be required to expend any of its own funds related to the operation of the Cube that are not paid out of the Disbursement 5 Packet Pg. 54 10.b Account or reimbursed to JVI by the City (except for JVI's training of its employees; JVI's travel expenses; JVI's human resource expenses (General & Administrative); JVI's entertainment expenses including, without limitation, meals and activities). Section 3.03 STATEMENTS BOOKS AND RECORDS. (a) JVI must keep full and accurate records, books, and data with respect to all business conducted pursuant to this Agreement which must show all the Gross Revenue and detailed expenditures. Detailed back up documentation must be retained for all revenues and expenditures (i.e. point of sale records, invoices, credit card receipts, etc.). CITY, or designee, may at all reasonable times and at CITY's expense, inspect such books and records, including any California sales tax return records. JVI must retain all such records and instruments and will make them available to CITY at CITY's request. Time required of JVI staff to provide requested documentation will not be reimbursed by the CITY. Documentation requested is required to be provided to the CITY or designee, within a reasonable, timely timeframe. (b) All financial statements and reports must be prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), as issued by the Financial Accounting Standards Board (FASB). JVI must classify and disclose assets, liabilities, and equity according to FASB requirements, including restrictions on net assets resulting from contractual obligations, loan covenants, or board designations. JVI must disclose, in footnotes to the financial statements, the nature and amount of any restricted cash, contract assets, contract liabilities, or other constraints on the use of equity or net assets, in compliance with FASB Accounting Standards Codification (ASC) and relevant guidance, including ASC 606 as applicable. (c) JVI must provide CITY with profit/loss statements monthly, with a final profit/loss statement for the fiscal year on a form reasonably acceptable to CITY. Section 3.04 Reports and Reconciliation of Cube Accounts. (a) Monthly Reports. Each month JVI will provide CITY with the following detailed reports by the 151h of the following month: Income Statements — monthly income statements including a comparison of the current month and year-to-date actual financial performance versus the Approved Annual Operating Budget. Appropriate descriptions of any significant monthly or year-to-date variances of revenue, expenses, net income, and/or EBITDA. 0 Packet Pg. 55 10.b ii Cube Expenses — report of all expenses paid by JVI the previous month; a comparison of the current month and year -to- date account of actual expenses versus the Approved Annual Operating Budget; iii Cube Revenue — report of all revenue collected each month. iv Itemized Receipts and Invoices of all purchases, including credit card statements. v The following specific monthly financial reports will be provided: vi General Ledger Detail (Balance Sheet & Income Statement accounts) vii Trial Balance viii Income statement, with budget information ix Balance Sheet x Cash Flow Statement xi Deferred Income Statement xii Bank reconciliation report xiii Bank statement xiv Merchant company statements xv Point of Sale report xvi Copy of EFT deposit to City of Santa Clarita xvii Cube Excel Forecast (Actuals to Date and Approved Budget) (b) Additional Reports - a written report describing any material changes in the Cube which occurred during the month or are anticipated to occur; any security incidents or changes to security protocol; event recap and evaluation with suggested changes to protocols; and any other financial or operating information which may be requested from time to time by the CITY relating to the services herein. (c) Quarterly Safety Report. JVI must provide CITY with a quarterly safety 7 Packet Pg. 56 10.b report. Safety meetings and Cube safety drills must be conducted and documented within the quarterly report. (d) Periodic Reports. JVI must furnish CITY reports regarding on -site physical inspections and operating reviews; and a current inventory of all personal property and equipment in connection with the Cube, which must be submitted to CITY no later than 30 days after the end of each fiscal year. (e) Contracts and Other Agreements. JVI must maintain at the Cube one copy of all contracts, warranties, equipment leases, maintenance agreements, and all other agreements relating to the Cube. (f) Final Accounting. JVI must deliver to CITY a final accounting for the Cube within 60 days of termination of this Agreement. Section 3.05 AUDIT. (a) CITY may, at its own expense, audit JVI's books and records of receipts at any time, for the purpose of verifying JVI's obligations under this Agreement. JVI must promptly correct any deficiencies or errors disclosed by CITY's audits and promptly inform CITY of all corrective actions taken. (b) CITY may also obtain, upon reasonable request and at CITY's expense, information from JVI's books and records to include Gross Revenue and expenditures. (c) JVI must adhere to the City financial retention schedule as follows: Audit year plus six (6) years of detailed financial reports outlined in Section 3.04 (a) plus journal entries and detailed back up documentation. Section 3.06 POSSESSORY INTEREST TAXES. JVI is hereby informed by CITY that although this Agreement is intended solely to be a contract for the operation and management of the Cube and not, e.g., a lease, nonetheless, pursuant to Revenue and Taxation Code § 107.6, the California Franchise Tax Board (the "FTB") could determine that JVI's interest in the Cube pursuant to this Agreement may be subject to property taxation and that JVI may be subject to the payment of property taxes levied on whatever the FTB defines as its interest. JVI may not deduct such amount from payments to CITY. Should, however, the FTB assess a tax, then CITY, after exhausting any applicable appeal of that decision, shall reimburse JVI for tax payments, if any, plus any interest and penalties, or allow JVI to disburse such funds to JVI from the Disbursement Account, which such obligation shall survive termination of this Agreement. ARTICLE 4 TERM Packet Pg. 57 10.b Section 4.01 INITIAL TERM. The initial term of this Agreement will begin July 1, 2026, or as soon thereafter as is practical, and, unless terminated, end June 30, 2031. Section 4.02 OPTION. Subject to the termination requirements, this Agreement may be extended two times for five additional years each, for a total (initial term plus options) of fifteen years at CITY's sole discretion. To exercise an option, CITY must provide JVI with written notice of its election to extend at least one hundred eighty (180) days prior to the expiration of the then -current term. CITY's City Manager may exercise such options on CITY's behalf. Time is of the essence with respect to CITY's exercise of each option. If CITY fails to timely deliver written notice of exercise within the period specified above, the applicable option shall automatically expire and be of no further force or effect, and JVI shall have no obligation to extend the Term. Any exercise of an option shall be conditioned upon CITY not being in default of any monetary obligation under this Agreement on the date of exercise. Section 4.03 START DATE. The "Start Date" is the day on which this Agreement becomes effective. The Start Date is the date from which the Initial Term of this Agreement is measured. ARTICLE 5 PERSONNEL Section 5.01 Stability of Management Team. CITY and JVI recognize the benefits inherent in promoting stability in the management team engaged in the operation of the Cube. Section 5.02 JVI must cause to be employed at least the following key personnel for the Cube ("Key Personnel") as specified in the Approved Annual Operating Budget: (i) Cube Manager, (ii) Operations Manager, (iii) Skating Director, (iv) Director of Guest Services, and any other positions mutually agreed upon by the Parties. Section 5.03 CITY may approve all of JVI's Key Personnel with supervisory or oversight responsibilities over day-to-day management of the Cube and may have any of them reassigned from the Cube and replaced, provided the CITY has and articulates a lawful and reasonable basis for such request. JVI is solely responsible for determining and implementing any resulting employment action, including reassignment, discipline, termination, or replacement, and is solely responsible for all costs and expenses incurred by JVI, directly or indirectly, in connection with any such action, regardless of whether such amounts are budgeted. Section 5.04 JVI must conduct security, background checks, including searches of 0 Packet Pg. 58 10.b the national and California sex offender registries, and drug screening, as required and to the extent permitted by California law, on all potential employees and may not hire any applicants who, in JVI's reasonable judgment, pose a risk to safety of the Cube or any customers, guests or employees thereof. Section 5.05 The Parties agree to keep any information regarding employees confidential in accordance with this Agreement and all applicable employment and privacy laws. Section 5.06 JVI EMPLOYEES. (a) JVI must employ such persons, in such positions, as may be reasonably necessary for the performance of its obligations under this Agreement to the extent contemplated by the Approved Annual Operating Budget. (b) All JVI employees must be identified as the Cube employees by means of a uniform mutually acceptable to the Parties or by some other, similar, means. (c) Pursuant to Penal Code § 11105.3, JVI employees who work with or have contact with minors (under the age of 18) will be required to be fingerprinted per California law as a condition of employment or as a condition of continued employment. Accordingly, all such employees will be required to submit to a fingerprinting via LiveScan, as required by California law, (or other mutually agreed upon service) on an annual basis per the Approved Annual Operating Budget. CITY may require non - employees (e.g., vendors and volunteers), who work with or have contact with minors to be fingerprinted at their own expense. ARTICLE 6 USE OF PROPERTY AND JVI' S OBLIGATIONS In consideration of the Management and Incentive Fees, JVI is obligated to implement the following in performance of this Agreement: Section 6.01 JVI must operate the Cube; rental facilities; automobile parking facility for patrons of the Cube and restaurants; and furnish skating lessons. CITY's written approval is necessary for any additional use of the Cube. JVI agrees to comply with all federal, state, and local laws and/or regulations applicable to the use and operation of the Cube. Section 6.02 JVI must maintain, use, and operate the Cube in a professional manner. Section 6.03 JVI covenants to diligently perform all of its obligations under this Agreement, and to use the Cube to operate, manage and maintain the service 10 Packet Pg. 59 10.b operations for the public described below in this Article upon the terms and conditions of this Agreement and for no other purposes. The Cube must be managed by JVI solely for the purpose of a first-class ice arena for local residents and visitors including, without limitation, hockey leagues, skating and other sports programs, and for no other purpose unless otherwise provided herein, without the prior signed, written consent of CITY. Said services must be conducted and offered on substantially the same basis as like services are conducted and offered by other high quality ice rink arenas open to the general public. JVI may sell food or beverages to the public or patrons in the Cube only with CITY's prior written consent and with prices approved by CITY. Uses include the following: (a) Provide a full -service ice arena facility for the public including, without limitation, ice rental, ice hockey, ice skating and other activities that may be held at an ice arena. (b) Provide a facility for meetings, conferences, exhibitions, banquets, fund raising events, and other uses associated with public assembly. (c) Use by corporations, organizations, individuals or others that may use the Cube for its intended purposes, consistent with policies proposed by JVI and approved by CITY. (d) Offer and post hours of operation consistent with a public ice arena. (e) The sale of tickets, beverages, food, confections, clothing, novelties and publications relating to the ice arena, provided the Gross Revenue from such sales are allocated between the CITY and JVI as set forth in this Agreement. (f) JVI may operate, or contract for operation, a food concession area in the cafe area of the Cube that may sell alcoholic beverages with a liquor license in compliance with all applicable local health regulations and State of California Alcoholic Beverage Control ("ABC") Board requirements including, without limitation, licensing, bonding and insurance requirements. CITY may obtain a license (Type 47) from the State of California Alcoholic Beverage Control Board if feasible and pay all costs or fees required by the ABC. This provision in no way obligates City to procure such ABC license. (g) Except as provided for an alcohol license, JVI or the applicable third -party vendor is responsible for obtaining all appropriate licenses, permits and permissions before the commencement of food and/or beverage sales. Alcohol may be served within the cafe area after obtaining all appropriate permits, licenses and insurance coverages. 11 Packet Pg. 60 10.b (h) With the City's review and approval of the menu, JVI or its third -party vendor must ensure that all merchandise and supplies needed for the food and beverage menu are available and adequately stocked at all times, and must account for all related revenues and expenses. JVI or its third -party vendor must maintain an accurate perpetual inventory of all food and beverage items, verify inventory levels regularly, and report those levels to the City. (i) Rental Vendors: JVI is responsible for operating or causing a vendor to operate rentals including, without limitation, skates and related equipment. (j) Customer Survey. JVI must create and implement a semi-annual schedule of customer surveys for individual programs and overall facility service and cleanliness, to send out to customers, subject to CITY review and approval. Results of the semi-annual surveys must be provided to CITY not later than 30 days after the survey closes. If the results of a semi- annual customer survey do not meet CITY's reasonable satisfaction, CITY may, within 30 days of receiving such results, schedule a meeting with JVI to collaboratively review the survey results, discuss potential causes for the unsatisfactory performance, and explore strategies for improvements that are within JVI's reasonable control. Following this meeting, JVI will have 30 days to provide CITY with a detailed, written action plan specifically outlining proposed remedial actions that are within JVI's reasonable control. Once the action plan is approved by CITY, JVI will have one (1) fiscal quarter, the "Implementation Period," to implement the approved plan. Following the Implementation Period, JVI will have an additional one (1) fiscal quarter, the "Performance Evaluation Period," to show the effectiveness of the implemented action plan. — in conjunction with CITY oversight. (k) Provide a presence by a JVI representative on the site to operate the Cube and ensure a JVI designee is available to respond to emergencies, either on site or remotely, on a 24 hour per day, 365 days per year basis. (1) Upon request, JVI must provide consultation services to CITY regarding potential capital improvements to the Cube. This consultation includes, without limitation, providing advice on planning, design, budgeting, and the operational impact of improvements. JVI will work closely with CITY to ensure that any capital improvements align with the operational needs and sustainability of the Cube. (m) Assist CITY in improving the Cube to ensure accessibility, general safety in accordance with Cal/OSHA standards, and overall appearance. (n) Assume all maintenance, upkeep and operational obligation for the Cube per the Approved Annual Operating Budget, as further described in 12 Packet Pg. 61 10.b Article 3. (o) Maintenance. Other than repairs and replacements expressly required to be made by CITY, JVI is responsible for always maintaining the Cube in good condition and repair per the Approved Operating Budget. JVI must conduct routine preventative maintenance on equipment it is responsible for in accordance with manufacturer's maintenance requirements per the Approved Annual Operating Budget. CITY must conduct routine preventative maintenance on equipment it is responsible for in accordance with manufacturer's maintenance requirements. Attached Exhibit C, which is incorporated by reference, is the Maintenance Responsibilities outlining CITY and JVI responsibilities which must be performed pursuant to this Agreement. JVI must keep records of all maintenance and repair activities via the CITY computer maintenance management system. CITY will execute and maintain maintenance contracts exceeding $50,000 annually. A one-time operating budget transfer will be moved to CITY for the services for maintenance contracts that require CITY administrative oversight due to purchasing policy, as referenced in Exhibit B. JVI is responsible for serving as the onsite contact for these contracts, but will communicate with CITY designee regarding service calls. Notwithstanding anything contained in Exhibit C to the contrary, JVI's responsibility for maintenance, repair or replacement of any item identified in Exhibit C shall not include any Capital Improvement Project or any major replacement or upgrade for which CITY is responsible under Section 10.01(g). All obligations of JVI under Exhibit C are subject to the Approved Annual Operating Budget, and JVI shall have no obligation to expend its own funds to perform any maintenance, repair or replacement required by Exhibit C. (p) JVI must keep the interior and exterior of the Cube free of graffiti. (q) JVI is responsible for administering and overseeing janitorial services in the entirety of the area it manages, subject to Exhibit C and the Approved Annual Operating Budget. CITY shall remain responsible for contracting and payment obligations assigned to CITY under Exhibit C. (r) JVI agrees to conduct quarterly walk-throughs of the Cube with CITY representatives. These walk-throughs will be scheduled on mutually agreed -upon dates each quarter to assess the condition of the Cube, identify necessary maintenance, and evaluate potential capital improvements. JVI may recommend that CITY purchase major items of new or replacement equipment when JVI deems such purchase to be necessary or desirable. If acceptable to CITY, it will contract to purchase and install such items itself. (s) JVI must comply with applicable law in the provision of its services 13 Packet Pg. 62 10.b herein. (t) Security. JVI must establish and maintain reasonable procedures for the security of the premises including any merchandise, equipment and materials stored at the Cube. JVI is responsible for maintaining a security plan at the Cube, subject to CITY's approval and inclusion in the Approved Annual Operating Budget. (u) JVI, or any person, firm or corporation which controls or is controlled by JVI, may not without the prior written approval of City, during the Term, own operate or become financially interested in any Ice Arena Management business similar to the one to be operated by JVI within 50 miles of the Cube in any direction, excluding, however, any business being conducted as of the date of this Agreement. JVI's Toyota Sports Performance Center in El Segundo, LA Kings Ice at Pickwick Gardens in Burbank, and JVI's planned ice facility in Reseda are specifically excluded from this covenant. CITY's approval must not be unreasonably withheld. Without limiting CITY's remedies, if JVI violates this covenant, CITY may, at its option and for so long as JVI is operating such other business, include the Gross Revenue of such other business in the Gross Revenue made from the Cube for the purpose of computing the Annual Incentive Management Fee due hereunder. (v) Fire Protection. In collaboration with the CITY, the Parties will take all necessary precautions in accordance with the Approved Operating Budget to prevent fire in or about the Cube, and JVI must carefully observe all rules of CITY relative to fire prevention. JVI must maintain such onsite water storage for fire prevention as may be specified or required by CITY or any other agency having jurisdiction to regulate fire prevention measures at the Cube in accordance with the Approved Operating Budget. (w) Energy Management; Utility Efficiencies. In collaboration with the CITY, JVI must prepare an energy management program, provide proper energy management, and utilize utility conservation techniques. The parties will cooperate to identify and implement measures to reduce utility consumption at the Cube, including electricity, gas, water, sewer, and telecommunications. As JVI becomes aware of feasible measures, JVI will give CITY recommendations for reducing that consumption or its cost. JVI's obligation under this paragraph is limited to cooperating with CITY and providing recommendations; JVI is not responsible for achieving any particular reduction in utility consumption or cost, and JVI does not control the Cube's utility systems. (x) Compliance with City's Obligations. JVI must operate the Cube in compliance with all terms and conditions of any ground lease, space lease, mortgage, deed of trust, or other security instrument affecting the Cube, if 14 Packet Pg. 63 10.b any, of which JVI has knowledge. JVI may not make any payments on account of any ground lease, space lease, mortgage, deed of trust, or other security instrument affecting the Cube, unless specifically instructed to do so by CITY. (y) From and after the Start Date, JVI must maintain or cause to be maintained the Cube and common areas thereof, external and internal, in good and clean condition and repair comparable to the industry standard found at other ice skating and sports facilities in southern California in accordance with the Approved Operating Budget. This includes, without limitation, the following: All duties normally required to operate a skating facility; ii Monitoring all activities in the Cube, to ensure compliance with rules and regulations proposed by JVI and approved by CITY; iii Scheduling and reserving private lessons and club practices. JVI must promote interest in the sport of skating and, in such pursuit, plan, schedule, and oversee the conduct of tournaments, including those for which reservations were received before the Start Date; iv Employ qualified assistants, including player assistants, to meet the public's needs under this Agreement and to serve CITY, the general public, and skating public in an efficient and courteous manner at all times; v Be responsible for collecting all fees and providing personnel for the collection of fees, per the Approved Annual Operating Budget. JVI may, and is expected to, recommend fee amounts to CITY. CITY may, in its sole discretion, approve or disapprove of such recommendations. Under no circumstances will a fee increase occur before CITY has approved. vi Review costs with CITY on a monthly basis; vii Cooperate with CITY's Recreational Programs and agree that such programs may have fees waived or discounted; viii Conduct weekly onsite meetings at the Cube between CITY's designee and the Cube's General Manager; ix Permit CITY to freely distribute promotional or informational literature to patrons at the Cube; x Issue and honor reservation and/or discount cards to customers; 15 Packet Pg. 64 10.b xi Recommend to CITY the design and placement of advertising and signage on the Cube and, if approved by CITY at CITY's sole discretion, implement such recommendations; xii Provide such security, including alarm systems, as JVI deems necessary or appropriate for the protection of the Cube, per the approved operating budget JVI. must consult with CITY regarding any additional security that may be deemed necessary or appropriate; and xiii Obtain any necessary license or permit for operating the Cube, per the Approved Annual Operating Budget. xiv First floor rental space: JVI is responsible for negotiating with vendors to operate rental spaces within the Cube utilizing a form approved by the City Manager, or designee and subject to JVI's approval. (z) Hockey Leagues; Skating and Other Sports Programs. JVI must provide all staffing, supplies, furniture, fixtures, equipment, inventory for sale, amenities, routine maintenance, repairs, and services and other items as may be required to support the operation and management of a quality municipal ice facility, per the Approved Annual Operating Budget. JVI will provide programming opportunities for participants of all ages and abilities, including but not limited to: Leagues (youth and adult) for in-house ice programs; ii Learn -to -Skate and Learn -to -Play programs; iii Public skating sessions; birthday parties; iv Summer, holiday, and track -out camps; v Hockey and figure skating clinics; vi Contract ice rentals; and vii Other sports programming to maximize Cube revenue use. (aa) Program Offerings. JVI must work with CITY to enhance recreational program offerings at the Cube. CITY may always program areas within the Cube. (bb) In addition to the above, JVI will be responsible for providing all services 16 Packet Pg. 65 10.b at the Cube including, at a minimum, the following services and activities: Manage equipment rentals. ii Supervise and control the reservation process, e.g., ice times and tournaments, and permit uses with third parties accordingly. iii Collect and deposit all daily revenues including, without limitation, monies from ice rental fees, merchandise sales, equipment rentals, lessons, tournaments, and gift certificate sales. iv Schedule and facilitate tournaments, clinics and promotions that meet CITY's image and priorities. v Accommodate CITY's use of the Cube for non-traditional events including, without limitation, permitted film activity, expositions, conferences and meetings. vi Provide diverse ice sports programming as well as other recreational type activities. vii Attend meetings, as requested, with CITY to provide updates on the Cube -related matters. viii Work cooperatively and collaboratively with CITY to provide a positive experience for all users. ix Clean and maintain the Cube in a manner such that it is attractive to guests and the public in accordance with the Approved Operating Budget. Section 6.04 Grievance Complaint Procedure (a) JVI agrees to install, maintain and operate the following suggestions - complaint procedure for the Cube. JVI must post and keep posted on the bulletin board the following notice: "Any person desiring to present any suggestion or complaint concerning the operation or condition of the Cube must present same verbally to the Cube General Manager. If satisfaction is not obtained, the suggestion or complaint must be followed up in writing to the Cube General Manager, with a copy to be mailed to the City Manager or his designee, City of Santa Clarita, 23920 Valencia Boulevard, Suite 300, Santa Clarita, CA 91355." 17 Packet Pg. 66 10.b (b) Subject to the provisions of the JVI Agreement, both CITY and JVI must in good faith endeavor to respond positively and favorably to such suggestions and complaints. Section 6.05 Operating Documents. The operating documents, the purchasing policy, and the training materials for the Cube are incorporated into this Agreement as identified Exhibits. CITY will provide these materials to JVI. Each is attached and referenced as a specific Exhibit, and no such Exhibit modifies the terms of this Agreement. These materials detail the expectations described in this Agreement, and may relate to such items as purchasing policy, financial documents, preventative maintenance schedule, contract templates, and policy and procedure thresholds. Section 6.06 Marketing Plans. JVI must prepare, implement, and administer marketing plans for the Cube. JVI will incorporate the Cube in JVI's other marketing programs in southern California. JVI will use its commercially reasonable efforts consistent with the Approved Annual Operating Budget, to reasonably market, advertise, and promote the Cube. Section 6.07 Technology. JVI must administer and provide technical support for all aspects of technology within the Cube, including hardware, and software, such as the point of sale ("POS") system for the Cube, which must track all of the revenue generated at the Cube by day, time, and program category. JVI must cooperate with CITY on the licensing of POS / website / scheduling and other specialty software and hardware specific to the Cube. JVI must maintain interoperability with its own accounting systems. Section 6.08 Equipment/Systems Failure. JVI is responsible for ensuring all technology systems are properly maintained, updated, and repaired in a timely manner, with minimal downtime to patrons. Where applicable, JVI may seek assistance from CITY for systems of joint use. Section 6.09 Software/Licensing. JVI is responsible for proper licensing and funding of all necessary software, inclusive of operating systems, office productivity, anti -virus, website hosting, and other specialty software for use by its staff for management of the Cube, per the Approved Annual Operating Budget. Section 6.10 Day -to -Day Support. JVI is responsible for supporting the Cube's technology systems, inclusive of software, hardware, as well as customer service to patrons per the Approved Annual Operating Budget. Where practicable, JVI may seek assistance from CITY for systems of joint use. Additionally, JVI is responsible to safeguard its technology from cybersecurity attacks and must maintain appropriate solutions to mitigate and respond to such attacks. Section 6.11 Cybersecurity. If JVI's systems are breached or a cybersecurity threat takes place, JVI must report it to CITY promptly and not later than 24 hours. IN Packet Pg. 67 10.b Section 6.12 Cooperation with Lender. If at any time during the Term, CITY enters into a financing agreement for the Cube pursuant to which CITY grants one or more lenders a lien on the Cube or a security interest in some or all of the income generated by the Cube, JVI must cooperate in all respects as reasonably necessary to consummate such financing and comply with the terms and conditions thereof. Without limiting the generality of the foregoing, JVI must, if requested by CITY, (a) execute and deliver such documentation (e.g., estoppel certificate and/or lender consent and recognition agreement) as may be reasonably requested by the lender(s); (b) create and maintain such lockbox and/or disbursement accounts as may be required pursuant to the financing agreement; and (c) deposit funds into and disburse funds from such accounts in accordance with the requirements of the financing agreements. Section 6.13 General. JVI must provide such direction, supervision, professional management, and in-house consulting staff services as may be necessary or desirable to operate the Cube in a manner at least equal to that which is usual and customary in the operation of other properties of substantially comparable location, class, size, and standing, and JVI must provide such services for the Cube as are consistent with the Cube's size and facilities. Subject to the limitations set forth in this Agreement, JVI must have control and discretion in the management and operation of the Cube and the provision of the services described in this Agreement. Section 6.14 JVI cannot convey any information from the customer database created from operating the Cube to any person or entity without CITY's prior consent, except as necessary to perform the services herein. Section 6.15 Notwithstanding anything to the contrary in this Agreement, in the event of an emergency in which there is an immediate danger to persons or property or which action is required to avoid suspension of services, JVI must take such action as is reasonable and prudent under the circumstances. JVI must inform CITY promptly, but not more than 24 hours after such emergency is determined. All such emergency expenses must either be incurred directly on CITY's behalf or incurred by JVI and promptly paid by CITY to JVI (or disbursed to JVI from the Disbursement Account). Nothing in this Agreement grants JVI authority to settle potential claims arising from such incidents. Section 6.16 Settlement of Claims. JVI may not settle, compromise, or consent to entry of judgment on any claim, action, suit, or other legal proceeding relating to the Cube if the settlement, compromise, or judgment is to be paid, in whole or in part, from City funds in the Disbursement Account, unless CITY first consents in writing. CITY must not unreasonably withhold, condition, or delay that consent. (a) If CITY withholds, conditions, or delays consent to a proposed settlement, JVI is not in breach of this Agreement and has no liability for any 19 Packet Pg. 68 10.b increased judgment, award, settlement amount, attorneys' fees, or other costs resulting from the failure to settle; those amounts remain CITY's responsibility to the same extent as the proposed settlement. This Section does not limit JVI's right to settle any claim paid solely from JVI's own funds or an insurer's funds, and it does not affect any insurer's rights under the policies required by the Insurance Article of this Agreement. (b) JVI must present any claim for damage or injury relating to the Cube to CITY through the ordinary claims process under California law before any payment is made. CITY will determine whether to settle or reject the claim. JVI may not spend any City funds to settle or pay a claim without CITY's approval, and JVI is not responsible for a claim CITY rejects unless as otherwise provided for in this Agreement. Section 6.17 JVI must, on CITY's behalf, supervise and purchase or arrange for the purchase of all reasonable inventories, provisions, supplies, and operating equipment which are provided for in the Approved Annual Operating Budget or otherwise approved by CITY. To the extent available, JVI must obtain for CITY all volume purchasing benefits and discounts that are available to JVI. Section 6.18 Event Reservation. With CITY's prior consent, which consent must not be unreasonably withheld, JVI may allow corporations, organizations, individuals or others reserve the Cube, or any part of it, for special events. Such events must utilize the Cube for its intended purposes, consistent with policies approved by CITY. The Gross Revenue from such reservations must be allocated between CITY and JVI as set forth in this Agreement. Any reservation agreement for the use of the Cube is subject to the terms of this Agreement. ARTICLE 7 PROHIBITED USES. Section 7.01 Campaigning. The Cube must not be used by JVI for the purpose of working or campaigning for the nomination or election to any public office, whether partisan or nonpartisan. However, JVI is not precluded from renting all or a portion of the Cube to persons or entities that engage in such political activities, on such terms as otherwise available for commercial use. Section 7.02 Safety; Environmental Matters. To ensure the safety of the public, these safety precautions will be always followed: Smoking is strictly prohibited on the Cube and the surrounding area. Section 7.03 Neither Party may knowingly use or allow the Cube to be used for any unlawful purpose, nor knowingly cause, maintain, or permit any nuisance or waste in, on, or about the Cube. ARTICLE 8 CITY' S PROPERTY RIGHTS 20 Packet Pg. 69 10.b Section 8.01 CITY's Exclusive Right to Use the Cube. JVI understands that this Agreement grants it access to the Cube only; it is not a lease and JVI does not have a right to occupancy or quiet enjoyment. JVI is CITY's operator and manager for the Cube. Consequently, CITY may use all or part of the Cube for its own purposes upon reasonable notification to JVI, subject to any third -party contractual commitments. To calculate the Annual Incentive Management Fee, Gross Revenue includes any Gross Revenue that JVI would reasonably have generated but for closures or restrictions that CITY imposes. JVI must determine the amount of this deemed Gross Revenue in good faith, using the average Gross Revenue generated from comparable dates, times, and facilities during the preceding 12 months. This calculation is based on JVI's past performance at the Cube consistent with the approach used during the prior five-year term. No other category of lost revenue is included. Section 8.02 Name of Cube. JVI agrees that the name of the Cube is and must be referred to as "The Cube: Ice and Entertainment Center." Section 8.03 Sponsorships. CITY retains all rights to assets for sponsorship and advertising opportunities. JVI may propose sponsorship and advertising offers; however, no commitments may be made without CITY's prior written consent. If a sponsorship proposal is approved by CITY, all sponsorship revenues shall be received by CITY. JVI acknowledges that, for approved sponsorships, JVI and its contractors may be required to coordinate with CITY to ensure sponsor agreements are properly implemented and fulfilled. Such coordination may include, but is not limited to, interior and exterior signage, in -ice logos, banners, dasher boards, skate passes, and other approved sponsorship integration elements, as applicable. ARTICLE 9 STANDARDS OF SERVICE Section 9.01 HOURS OF OPERATION. (a) The Cube must be open for business at minimum from 7:00am to 9:00pm, excluding certain holidays, unless closed due to inclement weather, safety, and/or emergency. (b) JVI is allowed to change the hours of operation for all the Cube facilities subject to CITY's approval. ARTICLE 10 CITY' S OBLIGATIONS Section 10.01 CITY' S REPRESENTATIONS. CITY represents that (a) The present use and operation of the Cube is authorized by, and complies with, all applicable federal, state, and local laws; 21 Packet Pg. 70 10.b (b) No current or past legal or administrative action affects the use of the Cube for its intended purposes; (c) To the best of CITY's knowledge, the Cube does not have any physical defects that would affect using the Cube for its intended purposes; (d) Parking Lot (solar) / Landscaping: CITY will maintain parking lot and outside landscaping. (e) Waste Hauling: CITY will maintain responsibility for waste hauling. (f) Utilities: CITY will administer and pay for utilities — including electric, gas, water and sewer. (g) CITY is solely responsible for Capital Improvement Projects. For purposes of this Agreement, "Capital Improvement Projects" mean major, non -routine projects involving the construction, reconstruction, replacement, renovation, alteration, or improvement of the Cube or its major building systems that materially extend the useful life, capacity, structural integrity, or value of the facility. Such projects include, without limitation, major replacements or upgrades to roofing, structural components, refrigeration systems, HVAC systems, dasher boards, flooring, plumbing, electrical infrastructure, or other major building systems. Capital Improvement Projects also include full -building or large- scale repainting projects and similar facility -wide improvements. Capital Improvement Projects do not include routine maintenance, minor repairs, operational upkeep, preventative maintenance, or cosmetic touch- up work performed in the ordinary course of operations, including minor or localized painting and patching. Section 10.02 ACTIVITIES BEFORE START DATE. From and after the date of this Agreement through the Start Date, CITY will do the following: (a) Assist JVI in obtaining any approvals, licenses or permits that are necessary or appropriate to operate the Cube in the manner provided herein. (b) Deliver to JVI a list of personal property belonging to CITY located at the Cube which will be attached as Exhibit D and incorporated herein. Section 10.03 ACTIVITIES FROM AND AFTER START DATE. From and after the Start Date and throughout the term of this Agreement, CITY will perform the following: 22 Packet Pg. 71 10.b (a) Promote the Cube in cooperation with JVI; provided, however, that CITY is not obligated to incur any financial obligations concerning such promotion without CITY's prior written consent. (b) Continue to assist and cooperate with JVI in maintaining any approvals, licenses, or permits necessary or appropriate to operate the Cube. (c) Hardware/Systems. CITY must procure standard items and provide training/access for JVI to manage including PCs, digital signage, and other administrative needs. ARTICLE 11 CITY CONTACT/INSPECTION OF PREMISES Section 11.01 CITY CONTACT. CITY's Recreation and Community Services Director or designee ("Director") will be CITY's the Cube coordinator. ARTICLE 12 ASSIGNMENT, TRANSFER AND SUBLETTING Section 12.01 The Parties understand that JVI's professionalism and reputation in the industry is a primary inducement to CITY for entering into this Agreement. For this reason, JVI cannot assign any portion of or interest in this Agreement without CITY's prior written consent. CITY will not unreasonably withhold or delay its consent, and will cooperate with JVI in signing any documents reasonably necessary to accommodate an assignment, if JVI assigns this Agreement to (a) Its affiliate; or (b) An entity in which JVI owns a controlling interest. ARTICLE 13INDEMNIFICATION Section 13.01 INDEMNITY. (a) JVI's Status. JVI is not an agent, partner, or employee of CITY and any provision in this Agreement that may appear to give CITY the right to direct JVI as to the details of doing work or to exercise a measure of control over the work means that JVI must follow the direction of CITY as to end results of the work only. CITY is not responsible for the wages or salaries of any employee or representative of JVI, nor for any debts, liabilities or other obligations of JVI, except as otherwise set forth herein. JVI and its employees are not entitled to participate in any pension plan, insurance, bonus or similar benefits CITY provides for its employees. (b) Indemnification. To the fullest extent permitted by law, JVI must defend (with legal counsel reasonably acceptable to CITY and CITY's consent 23 Packet Pg. 72 10.b cannot be unreasonably withheld), indemnify and hold harmless CITY and its elected and appointed officials, officers, agents, representatives and employees (collectively "Indemnitees") from and against any and all claims, loss, cost, damage, injury (including, without limitation, economic harm, injury to or death of an employee of JVI or its sub -consultants), expense and liability of every kind, nature and description to the extent that they arise from or relate to (including, without limitation, incidental and consequential damages, court costs, attorneys' fees, litigation expenses and fees of experts or expert witnesses incurred in connection therewith and costs of investigation) that arise from or relate to, directly or indirectly, in whole or in part, from: (1) JVI's performance of Services under this Agreement, or any part thereof, (2) any negligent act or omission of JVI, any sub -consultant, anyone directly or indirectly employed by them, or anyone that they control; (3) any actual or alleged infringement of the patent rights, copyright, trade secret, trade name, trademark, service mark or any other intellectual or proprietary right of any person or persons in consequence directly resulting from materials supplied by JVI in the performance of this Agreement; or (4) any breach of this Agreement by JVI (collectively "Liabilities"). These obligations do not apply to the extent the Liabilities are caused by the negligence or willful misconduct of any Indemnitee. (c) Indemnification by CITY. To the fullest extent permitted by law, CITY must defend (with legal counsel reasonably acceptable to JVI and JVI's consent not unreasonably withheld), indemnify, and hold harmless JVI and its affiliated entities and each of their members, managers, officers, agents, representatives, and employees (collectively "JVI Indemnitees") from and against any and all claims, loss, cost, damage, injury, expense, and liability of every kind, nature, and description (including, without limitation, court costs, attorneys' fees, and litigation expenses) to the extent that they arise from or relate to, directly or indirectly, in whole or in part, from: (1) the negligence or willful misconduct of CITY or any sub- contractor, anyone directly or indirectly employed by them, or anyone that they control; (2) structural defects, latent defects, ADA compliance of the building, building systems, and Capital Improvement Projects for which CITY is responsible under or takes responsibility for under this Agreement; or (3) any breach of this Agreement by CITY. These obligations do not apply to the extent the Liabilities are caused by the negligence or willful misconduct of any JVI Indemnitee. (d) The foregoing indemnification provisions will not reduce or affect other rights or obligations which would otherwise exist in favor of a party and other indemnitees. In every sub -consulting agreement relating to the Cube, and in every agreement with a person reserving the Cube for a special event, the contracting Party must require the sub -consultant or user to indemnify, and to carry insurance in favor of, both CITY and JVI (and 24 Packet Pg. 73 10.b their respective indemnitees) equally. (e) Insurance. The requirements as to the types and limits of insurance coverage to be maintained by JVI as required by this Agreement, and any approval of said insurance by CITY, are not intended to and will not in any manner limit or qualify the liabilities and obligations otherwise assumed by JVI pursuant to this Agreement, including, without limitation, to the provisions concerning indemnification. (f) CITY and JVI must each give prompt notice to the other of the commencement of any action, suit, or other legal proceeding against CITY or JVI with respect to the operations of the Cube or otherwise affecting the Cube. The parties must fully cooperate in connection with the prosecution of defense of all legal proceedings affecting the Cube. (g) Survivability. It is expressly understood and agreed that the foregoing provisions will survive termination of this Agreement. ARTICLE 14INSURANCE. Section 14.01 Insurance (JVI). JVI must procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with JVI's occupancy, use, development, maintenance, restoration or improvement under the contract and the results of that work by any of JVI's contractors, or contractor's agents, representatives, employees, or subcontractors. Maintenance of specified insurance coverage is a material element of this contract and JVI's failure to maintain or renew coverage or to provide evidence of renewal during the term of this contract constitutes a material breach of this Agreement. Section 14.02 Commercial General Liability ("CGL"): Insurance written on an ISO Occurrence form CG 00 0107 98 or an equivalent form providing coverage at least as broad which must cover liability arising from any and all personal injury or property damage in the amount of $5 million per occurrence and subject to an annual aggregate of $10 million. There must be no endorsement or modification of the CGL limiting the scope of coverage for either insured vs. insured claims or contractual liability. All defense costs must be outside the limits of the policy. Section 14.03 Employment Practices (EPLI): employment liability insurance reasonably consistent with the size and scope of the Cube's operations. Section 14.04 Causes of Loss - Special Form Property Insurance: JVI must obtain and maintain, at its sole cost, Causes of Loss - Special Form Property Insurance on all JVI's insurable property, related to the allowed uses of the property under this contract or the premises in an amount to cover the replacement cost. 25 Packet Pg. 74 10.b Section 14.05 Sexual Abuse & Molestation: JVI must obtain and maintain a policy covering Sexual Abuse and Molestation with a limit no less than $1,000,000 per occurrence or claim. Section 14.06 NOT APPLICABLE. Section 14.07 Liquor Liability: If JVI serves liquor, JVI must provide evidence that its General Liability Policy includes coverage for host liquor liability. Section 14.08 Insurance (third party agreements). JVI must place in its sub - consulting agreements and cause its sub -operators to agree to indemnities and insurance obligations in favor of CITY and other Indemnitees in the exact form and substance of those contained in this Agreement, unless otherwise approved by the City Manager, or designee. To the extent permitted by law and subject to CITY's contracting requirements and approval processes, CITY shall require its contractors, consultants, and service providers performing work at the Cube to provide commercially reasonable indemnity and insurance protections in favor of JVI and its officers, directors, employees, agents, and affiliates for claims arising out of such contractor's or consultant's operations, acts, or omissions. Section 14.09 Additional Insured; Co -Party Status. In CITY's contracts relating to the Cube, JVI will be named as an additional insured and identified at the same level as CITY, including as a named defendant, to the extent of the operations JVI performs under this Agreement. The parties will conform the relevant insurance and contract language to give effect to this provision. Section 14.10 Waiver of Consequential Damages. CITY is not liable to JVI nor is JVI liable to CITY for any consequential damages incurred by either party due to the fault of the other, regardless of: the nature of this fault; or whether it was committed by CITY or JVI, their employees, agents, or subcontractors; or whether such liability arises in breach of contract or warranty, tort (including negligence), statute, or any other cause of action. Consequential damages include, without limitation, loss of use and loss of profit. Section 14.11 CGL. Commercial general liability insurance will meet or exceed the requirements of the most current ISO-CGL Form. The amount of insurance set forth above will be a combined single limit per occurrence for bodily injury, personal injury, and property damage for the policy coverage. Liability policies will be endorsed to name CITY, its officials, and employees as "additional insureds" under said insurance coverage and to state that such insurance will be deemed "primary" such that any other insurance that may be carried by CITY will be excess thereto. Such insurance will be on an "occurrence," not a "claims made," basis and will not be cancelable or subject to reduction except upon 30 days prior written notice to CITY. Section 14.12 Auto. Automobile coverage will be written on ISO Business Auto 26 Packet Pg. 75 10.b Coverage Form CA 00 01 06 92 (Any Auto). Section 14.13 Certificates. JVI will furnish to CITY duly authenticated Certificates of Insurance evidencing maintenance of the insurance required under this Agreement and such other evidence of insurance or copies of policies as may be reasonably required by CITY from time to time. Insurance must be placed with insurers with a current A.M. Best Company Rating equivalent to at least a Rating of "A: VII." Section 14.14 Replacement Coverage. Should JVI, for any reason, fail to obtain and maintain the insurance required by this Agreement, CITY may obtain such coverage at JVI's expense and charge the cost of such insurance to JVI under this Agreement. Section 14.15 General Property Insurance. Other than as expressly set forth in this Section 14, the CITY will insure the Cube to the extent it deems necessary, as the CITY has borne, and will continue to bear, the overall risk of loss with respect to damage or destruction of the Cube. See Article 16 below for more specificity regarding damage or destruction of the Cube. ARTICLE 15 RELATIONSHIP OF PARTIES. Section 15.01 No Partnership Formed. CITY is not, and will not in any way or for any purpose become, an agent, partner or joint venturer of JVI in its business or otherwise. Section 15.02 Conflict of Interest. JVI warrants and covenants that no official or employee of CITY nor any business entity in which an official or employee of CITY is interested; (1) has been employed or retained to solicit or aid in the procuring of this contract; (2) will be employed in the performance of this contract. In the event CITY determines that the employment of any such official, employee or business entity is not compatible with such official's or employee's duties as an official or employee of CITY, JVI, upon request of CITY, must terminate such employment immediately. Nothing in this section prohibits CITY and JVI from cross -marketing or jointly marketing programs, classes and other events with CITY departments. ARTICLE 16 DAMAGE OR DESTRUCTION OR TAKING OF PROPERTY Section 16.01 In the event all or part of the Cube is damaged or destroyed by any act or omission beyond the control of either JVI or CITY, such that the operation of the Cube is adversely impaired, any payments under this Agreement may be adjusted during the period reasonably necessary to repair or rebuild the affected part of the Cube. 27 Packet Pg. 76 10.b Section 16.02 If all or part of the Cube is acquired by eminent domain or purchase in lieu thereof, JVI acknowledges that it has no claim to any compensation, including goodwill, awarded for the taking of the Cube or any portions thereof. Notwithstanding the foregoing, Payments due to CITY from JVI will be adjusted to take into account the effect a condemnation has on JVI's use and enjoyment of the remainder of the Cube. In the event the Cube is rendered unfit for its intended purpose as a result of a condemnation, this Agreement will terminate on the date the condemning agency takes possession of the Cube. Section 16.03 JVI acknowledges that CITY is a public entity and that the Cube was previously acquired by CITY for a public purpose. JVI further acknowledges that any rights acquired under this Agreement arose after the date of acquisition of the Cube and that said rights are subject to termination should CITY need the Cube. JVI acknowledges that at the time of said termination of this Agreement by CITY, it will not be a "displaced person" entitled to any of the relocation assistance or benefits offered to displaced persons under State or Federal Law. ARTICLE 17 HAZARDOUS SUBSTANCE Section 17.01 Hazardous Materials. Hazardous Material means any substance, chemical, or waste identified as hazardous, toxic, or dangerous under any applicable federal, state, or local law or regulation, including petroleum and asbestos. To CITY's knowledge, neither CITY nor any third party has used, generated, stored, or disposed of any Hazardous Material on, under, or within the Cube in violation of any law or regulation. JVI must not use, generate, store, or dispose of any Hazardous Material on, under, or within the Cube in violation of any law or regulation. Each Party must defend and indemnify the other, to the extent stated in this Agreement, against all losses, liabilities, claims, and costs arising from that Party's breach of this Section; provided that JVI is not responsible for, and CITY retains responsibility for, any Hazardous Material present at the Cube before the Start Date or brought onto, released at, or generated at the Cube by CITY or by third parties not under JVI's control. ARTICLE 18 RETENTION SCHEDULE; CONFIDENTIAL INFORMATION. Section 18.01 JVI understands and agrees that CITY is a public entity subject to various federal and state transparency laws including, without limitation, the California Public Records Act and court orders (collectively, the "CPRA"). JVI is required by the CPRA and this Agreement to preserve all "writings" related to this Agreement including, without limitation, electronic communications. Writings include electronic mail, voicemail, texts, video, and social media posts. All such writings must be retained in accordance with CITY's retention schedule which requires a minimum retention of two years. Section 18.02 CITY, acting through the City Attorney, is responsible for determining Packet Pg. 77 10.b and advising JVI in writing what records are required to be preserved, collected, or produced under the CPRA, and JVI may reasonably rely on that determination. JVI's obligations under this Article are limited to records in JVI's possession, custody, or control that the City Attorney identifies. Notwithstanding Section 3.03(a) or any other provision of this Agreement to the contrary, CITY must reimburse JVI for all reasonable costs and expenses incurred in reviewing, or producing such records, including staff time, third -party vendor and technology costs, and reasonable attorneys' fees, whether or not such amounts are included in the Approved Annual Operating Budget. Section 18.03 JVI may assert that certain writings constitute "Confidential Information." Such writings mean any financial, tenanting, physical improvement, or retail strategy information relating to the Cube provided by JVI to CITY on or after the Effective Date (whether in written, graphic, electronic or any other form) that is clearly marked as "CONFIDENTIAL/ PROPRIETARY INFORMATION." Section 18.04 The Parties must use good faith efforts to prevent disclosure of the Confidential Information to any third party or parties. Notwithstanding the preceding sentence, a Party may disclose Confidential Information to its officials, employees, agents, attorneys and advisors, but only to the extent necessary to carry out the purpose for which the Confidential Information was disclosed. Section 18.05 In the event the City Attorney determines that the release of Confidential Information may be required by the CPRA or order of a court of competent jurisdiction, CITY agrees to notify JVI of CITY's intention to release the Confidential Information. JVI has five business days after receiving CITY's notice to intervene in the potential release of Confidential Information. Upon such notification, CITY will refrain from releasing information until such time as either JVI confirms in writing that it may be released or obtains a protective order from a court of competent jurisdiction preventing its release. In either instance, JVI remains obligated to defend (with counsel acceptable to CITY), indemnify, and hold CITY harmless from any claims, liabilities and damages (including attorney fees and cost awards) arising out of non -disclosure solely to the extent JVI has such information under its control and refuses to provide it. Notwithstanding the foregoing, JVI shall have no liability or obligation to defend, indemnify, or hold CITY harmless with respect to the preservation, withholding, disclosure, or non- disclosure of any record to the extent JVI acted in reasonable reliance upon the written determination, instruction, or direction of the City Attorney. Section 18.06 To the greatest extent permitted by California law, each Party (the "Indemnifying Party") must indemnify, hold harmless, and defend (with counsel reasonably acceptable to the other Party) the other Party and its officers, directors, officials, employees, agents, affiliates, commissions, boards, members, managers and volunteers, as applicable, from and against any and all claims, demands, causes of action, damages, costs, liabilities, judgments, penalties, fines, losses or 29 Packet Pg. 78 10.b expenses (including awards of attorneys' fees and/or litigation costs) to the extent arising from the Indemnifying Party's failure or refusal to preserve, provide, produce, or protect information in such Party's possession, custody, or control as required under this Article. Notwithstanding the foregoing, JVI shall have no liability or obligation under this Section to the extent JVI acted in reasonable reliance upon the written determination, instruction, or direction of the City Attorney. ARTICLE 19 DEFAULT Section 19.01 The occurrence of any one or more of the following events constitutes a material default ("Default") of this Agreement by JVI. (a) The abandonment, vacation, or discontinuance of operations on the Cube for more than one day unless discontinuance of operations has been previously approved by the CITY in writing. (b) The failure of JVI to make any payment required to be made by JVI hereunder, after 10 days' written notice from CITY of non- payment. (c) The interest of JVI in the Agreement is assigned, transferred, passes to or devolves upon, by operation of law or otherwise, to any other person, firm, or corporation without CITY's prior written consent. (d) The failure to maintain the Cube and the improvements constructed thereon in a state of repair required by this Agreement, and in a clean, sanitary, safe condition, subject to the Approved Annual Operating Budget providing sufficient funds to do so, where such failure continues for more than 15 days after written notice from CITY for correction thereof. (e) Deterioration of service for any period which materially and adversely affects the operation or service required to be performed by JVI under the Agreement which is not corrected within 30 days after written notice from CITY for correction thereof, and the failure to maintain service standards thereafter. (f) The failure of JVI to comply with applicable law, where such failure continues for more than 15 days after written notice from CITY for correction thereof. (g) The filing of a voluntary petition in bankruptcy by JVI, the adjudication of JVI as bankrupt, the appointment of any receiver of JVI's assets, the making of a general assignment for the benefit of creditors, and/or a petition or answer seeking a reorganization of JVI under the federal bankruptcy laws or any other federal or state laws. 30 Packet Pg. 79 10.b (h) JVI's misrepresentation or inaccuracy of facts in its required forms, documents, and submittals required as part of this Agreement or in the submittals in the solicitation and selection of a JVI to perform the services under this Agreement. (i) The filing of any lien or stop notice on account of JVI where such lien/notice is not removed or enjoined and/or a bond for satisfaction of such lien is not posted within ten (10) days. (j) The failure of JVI to operate in the manner required by this Agreement, or JVI's breach of or default under any provision of this Agreement not otherwise specified above in this Section, where such failure or default continues for more than 30 days after written notice from the CITY to correct the condition specified unless such failure by JVI is causing immediate harm to CITY in which event CITY is not required to provide notice and opportunity to cure, but may immediately terminate. ARTICLE 20 REMEDIES. Section 20.01 In the event of a Default by JVI, CITY may: (a) Terminate this Agreement in which case JVI must immediately surrender possession of the Cube and all CITY -owned personal property to CITY. Section 20.02 Remedies Cumulative. It is understood that the remedies herein provided for a Party in case of a violation of the terms of this Agreement by the other Party are cumulative and not exclusive, and are in addition to the remedies provided by law or at equity, and any of which remedies a Party must have the right to use at its option. ARTICLE 21 TERMINATION Section 21.01 Termination by either Party. Either party may terminate this Agreement for any reason, i.e., with or without cause, upon delivering ninety (90) days prior written notice to the other party. Upon such termination, all amounts set forth herein shall be prorated to the effective date of termination. Section 21.02 The following constitute grounds for termination by CITY for cause, in which case JVI may only receive reimbursement for expenses incurred under this Agreement through the effective date of termination: (a) If JVI fails to observe or perform any of its obligations under this Agreement, and such failure continues for 30 days after written notice thereof has been given by CITY to JVI or occurs repeatedly; 31 Packet Pg. 80 10.b (b) If JVI suspends or discontinues business; (c) If a court enters a decree or order for relief in respect of JVI in an involuntary case under federal bankruptcy laws or any other applicable federal or state bankruptcy, insolvency, or other similar law, or appoints a receiver, liquidator, assignee, custodian, trustee, or similar official of JVI, and such decree or order continues unstayed and in effect for a period of 60 consecutive days; and (d) If JVI commences a voluntary case or action under the federal bankruptcy laws or any other applicable federal or state bankruptcy, insolvency, or other similar law, or consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, or similar official of JVI or fails generally to pay its debts as such debts become due, or takes any action in the furtherance of any of the foregoing. Section 21.03 Orderly Transition. In the event of any termination of this Agreement, (i) JVI must (a) immediately deliver to CITY all files and documents in JVI's possession or control, including those being held according to retention schedule, relating to the Cube, and (b) cooperate with CITY to effect an orderly transition of the management and operation of the Cube and (ii) CITY must promptly pay JVI amounts owed to JVI under this Agreement. The obligations set forth in this Section survive the termination of this Agreement. Section 21.04 Rights Which Survive Termination or Expiration. The termination of this Agreement does not terminate or prejudice (a) any right arising out of or accruing in connection with the terms of this Agreement attributable to events and circumstances occurring before termination; or (b) any rights or obligations specified in this Agreement to survive termination. ARTICLE 22 MISCELLANEOUS. Section 22.01 Notices. Any notices relating to this Agreement must be in writing and either sent by registered or certified mail postage pre -paid, or delivered by hand or overnight courier as set forth below or to other such addresses as the respective Parties hereto may designate in writing. Notice may also be given by email, provided an acknowledgment receipt is given. Notices must be effective on the date of receipt. Notices must be sent to the following: OWNER: City Manager City of Santa Clarita 23920 Valencia Blvd., Suite 300 Santa Clarita, CA 91355 32 Packet Pg. 81 10.b (661) 255-4901 JVI: Mr. Brad Berman American Sports Entertainment Company, LLC 1820 East Ray Rd. Chandler, AZ 85225 Tel: (480) 264-5123 With a copy to: Mr. Gary Worobow, Esq. gary.worobow@asecllc.com Tel: (212) 644 9691 Section 22.02 Waiver of Contract Terms. No waiver by either Party at any time of any of the terms, conditions, or covenants of this Agreement must be deemed as a waiver at any time thereafter of the same or of any other terms, conditions, or covenants herein contained, nor of the strict and prompt performance thereof. No delay, failure or omission of CITY to re-enter the Cube or to exercise any right, power, privilege, or accrued to CITY in the event of a Default by JVI is construed as a waiver of such default or a relinquishment of any right or acquiescence therein. No notice to JVI is required to restore or revive time as of the essence after the waiver by the CITY of any default. No option, right, power, remedy, or privilege of CITY must be construed as being exhausted by the exercise thereof in one or more instances. The rights, powers, options, and remedies given to the CITY by this Agreement must be deemed cumulative. Section 22.03 Non -Discrimination. JVI and JVI's employees must not discriminate because of sex, sexual orientation, race, religion, age, color, disability, or national origin, against any person by refusing to furnish such person any accommodation, facility, service or privilege offered to or enjoyed by the general public. Nor must the JVI or JVI's employees publicize the accommodations, facilities, services or privileges in any manner that would directly or inferentially reflect upon or question the acceptability of the patronage of any person because of sex, sexual orientation, race, religion, age, color, disability, or national origin. In the performance of this Agreement, JVI will not discriminate against any applicant because of sex, sexual orientation, race, religion, age, color, disability, or national origin. Section 22.04 Entire Agreement. This Agreement is intended by the Parties as the complete and final expression of their agreement with respect to the subject matter hereof and may not be contradicted by evidence of any prior or contemporaneous agreement. This Agreement specifically supersedes any prior written or oral agreements between the Parties with respect to the subject matter hereof. 33 Packet Pg. 82 10.b Section 22.05 Authority of Parties/Signatories. Each person signing this Agreement represents and warrants that he or she is duly authorized and has legal capacity to execute and deliver this Agreement. Each Parry represents and warrants to the other that the execution and delivery of the Agreement and the performance of such Party's obligations hereunder have been duly authorized and that the Agreement is a valid and legal agreement binding on such Party and enforceable in accordance with its terms. Section 22.06 Force Majeure. Neither Parry is liable for, and the time for performance of any obligation (other than the payment of money then due) will be extended by, any delay or failure in performance caused by events beyond that Party's reasonable control including, without limitation, acts of nature, epidemic or pandemic, public health orders, war, terrorism, civil unrest, labor disputes, utility or telecommunications failures ("Force Majeure"). The affected Party will give the other Party prompt written notice of the Force Maj eure event and will use commercially reasonable efforts to resume performance as soon as practicable. Section 22.07 Safe Harbor. It is the intention of the Parties that this Agreement satisfy the safe harbor conditions under Revenue Procedure 2017-13, 2017-6 I.R.B. 787, such that the management of the Cube by the JVI does not result in private business use of the portion of the Cube financed with the proceeds of tax- exempt bonds. If it is determined that this Agreement does not satisfy the conditions for the safe harbor treatment under Revenue Procedure 2017-13, the Parties must re -negotiate the Agreement, or applicable portions thereof, in good faith to meet the conditions required for such safe harbor treatment. JVI agrees not to claim any depreciation or amortization deduction, investment tax credit, or deduction for any payment as rent with respect to the Cube relating to the portion of the Cube financed with the proceeds of tax-exempt bonds. Section 22.08 Severability. If any portion of this Agreement is declared by a court of competent jurisdiction to be invalid or unenforceable, then such portion will be deemed modified to the extent necessary in the opinion of the court to render such portion enforceable and, as so modified, such portion and the balance of this Agreement will continue in full force and effect. Section 22.09 Governing Law. This Agreement was drafted in and will be construed in accordance with the laws of the State of California and exclusive venue for any action involving this Agreement is Los Angeles County. Section 22.10 Headings. The headings contained herein are for convenience in reference and are not intended to define or limit the scope of any provisions of this Agreement. Section 22.11 Time Is of Essence. Time is of the essence in the performance of all obligations pursuant to this Agreement. 34 Packet Pg. 83 10.b Section 22.12 Rules Of Construction. This Agreement has not been drafted or prepared by either parry hereto, the same being a fully negotiated Agreement. Thus, the Parties expressly agree that any rule of construction regarding interpretation in favor of one or the other party by reason of the parry drafting the Agreement does not apply. Section 22.13 Exhibits. The Exhibits which are referred to herein and attached hereto (currently or within 30 days) will become a part of this Agreement as if set forth herein verbatim. Section 22.14 Acceptance Of Facsimile Signatures/Counterparts. (a) The Parties agree that this Agreement, agreements ancillary to this Agreement, and related documents to be entered into in connection with this Agreement will be considered signed when the signature of a party is delivered by facsimile transmission. Such facsimile signature will be treated in all respects as having the same effect as an original signature. (b) This Agreement may be executed in any number of counterparts, each of which is an original, but all of which together constitutes one instrument executed on the same date. IN WITNESS WHEREOF the Parties hereto have executed this contract the day and year first hereinabove written. CITY OF SANTA CLARITA, a municipal corporation. KENNETH W. STRIPLIN City Manager ATTEST: City Clerk APPROVED AS TO FORM: JOSEPH M. MONTES, CITY ATTORNEY IIn 35 Packet Pg. 84 10.b JV Ice at the Cube, LLC, a California limited liability company By: American Sports Entertainment Company, LLC, an Arizona limited liability company, Managing Member IIn Brad Berman, President ATTACHMENTS 36 Packet Pg. 85