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HomeMy WebLinkAboutExhibitMANAGEMENT AGREEMENT BETWEEN THE CITY OF MIAMIiFLORIDA, THE BAYFRONT PARK MANAGEMENT TRUST AND LIVE NATION WORLDWIDE, INC. FOR THE BAYFRONT PARK AMPHITHEATER TERM SHEET DOCUMENT: Management Agreement PARTIES: City of Miami, Bayfront Park Management Trust ("Trust") and Live Nation Worldwide, Inc. ("Live Nation") PURPOSE: To codify the parties' desire to engage Live Nation to provide management services for the Bayfront Park Amphitheater on the terms and conditions set forth in the agreement. REVENUE: The following amounts shall be deemed Required Trust Distributions: SCOPE: (i) for the period commencing November 1, 2008 and continuing through December 31, 2008, the sum of $30,000.00; (ii) for the Live Nation Fiscal Year commencing with January 1, 2009 and continuing through December 31, 2009, the sum of $625,000; (iii) for the Live Nation Fiscal Year commencing January 1, 2010 and each Live Nation Fiscal Year thereafter for the remainder of the Term, the Required Trust Distribution shall be an amount equal to a three percent (3%) increase over the preceding Live Nation Fiscal Year's Required Trust Distribution. Live Nation shall. pay all applicable Ticket Surcharges as stated in section 53-2 of the City Code and Ordinance 10509, as amended and as the same may be amended from time to time. In retum for placement of any title sponsorship's signage on the Bayfront Park Marquee, Live Nation shall pay ten percent (10%) of revenues from any such sponsorship agreement. Neither the City, nor the Trust, shall have the obligation to provide funds for the payment of the Facility's Operating Expenses. Engage Live Nation to operate, manage, maintain, secure, promote and market amphitheater. In doing so, Live Nation shall perform and furnish management services, personnel, and systems and materials necessary. Trust Use/Ticket Programs: FINAL REVISED LN Term Sheet (2) 1 • Trust shall be entitled on ten (10) occasions in each full Fiscal Year (and proportionately for any partial Fiscal Year) during the Term and any Renewal Term to make use of the Facility for hosting an Event, subject to the provisions of this agreement. Two (2) of the Trust Use Events shall be annually reoccurring on July 4, for the Trust's July 4 celebration and on December 31, for the Trust's New Year's Eve celebration; for which admission is free and a concert may be held. Additionally a concert may be held which is promoted by Live Nation on behalf of the City of Trust on terms to mutually agreed upon by the parties. The remaining eight dates (8) preclude a concert, except where amateur talent performs. Trust shall maintain complete control of any VIP areas for the Events, which may include food and beverage. • Trust shall not owe a fee, rent or other payment strictly for the right to make such Trust Use, nonetheless. • Trust shall promptly (within ten (10) business days after receipt of written invoice therefore), reimburse Live Nation for all actual expenses and costs including, without limitation, Live Nation's standard charges for janitorial, clean up, crowd and traffic control, set-up and tear -down costs and fees and charges (including for materials, labor and other services) directly necessitated by the occurrence of Trust Use. Live Nation shall provide Trust with a standard charge schedule each Fiscal Year, and shall provide any updates thereto within ten (10) calendar days of the change going into effect. • Live Nation shall retain exclusive rights to the operation of all concessions and other operations at the Facility during Trust Use, including, without limitation, food and beverage concessions and sales, including alcoholic beverages (but Executive Director shall have the right to prohibit the sale of alcoholic beverages for any Trust Use); and all proceeds of such sales and concession operations shall be Operating Revenues. • Trust shall be entitled to ten (10) complimentary tickets to all third party rental events and thirty (30) complimentary tickets to all other Events for which the Artist allows complimentary tickets to be distributed. • Live Nation will request that every Artist autograph two (2) pieces of memorabilia for the ultimate use in an auction to benefit Bayfront Park. The auction shall take place during a Live Nation Event, as long as the Artist allows it. The Trust shall receive the net proceeds of the auction for use in Bayfront Park programs or Improvements. FINAL REVISED LN Term Sheet (2) 2 Rights of Entry: The Trust shall have the right to enter the Facility to inspect it and to observe Live Nation's performance of its obligations. Signage: Term: • Live Nation retains the right to name the Facility, subject to Trust approval, and all revenue derived therefrom. The name shall include "Amphitheater at Bayfront Park. • Live Nation shall pay the Trust ten percent (10%) of revenues from any such sponsorship agreement for the permission to place the sponsor's logo on the Marquee Sign. • The initial term of this management agreement is ten (10) years. • Live Nation may renew the management agreement for two (2) additional five (5) year terms if it provides proper notice, it is not in default of the management agreement, and the Trust consents. Termination by the City/Trust: • Live Nation shall be required to pay any ad valorem taxes that a governmental body imposes upon the Facility up to the amount of the Required Trust Distribution. If a governmental body imposes any such ad valorem taxes upon the Facility or any sales, income, excise or other tax upon the Required Trust Distribution, the City/Trust have the right to terminate the management agreement. If the City/Trust wish to terminate the management agreement, rather than incur the expense of any such tax in excess of the Required Trust Distribution, or any sales, income, excise or other tax upon the Required Trust Distribution the City/Trust shall pay Live Nation a Termination Payment. The Termination Payment is determined by amortizing Live Nation's total costs (but not exceeding $2,000,000) on a straight line basis (w/o interest) over the period from the date when the costs were incurred over the then -remaining Term of this Agreement. Live Nation shall also be entitled to receive the remainder of the prepaid Required Trust Distribution. • The City/Trust have the right to terminate the management agreement at will. If the City/Trust wish to terminate the management agreement at any time for any reason, the City/Trust shall give Live Nation ninety (90) days written notice. The termination shall be effective after ninety (90) days unless Live Nation has a prior scheduled Event. In that case, the termination FINAL REVISED LN Term Sheet (2) 3 will take place after the prior scheduled Event takes place. The City/Trust shall pay Live Nation the following sums upon a termination at will: (A) if the termination is effective during the period from the Effective Date through January 1, 2012, the sum of $5,000,000, (B) if the termination is effective during the period from January 2, 2012 through January 1, 2014, the sum of $4,000,000, (C) if the termination is effective during the period from January 2, 2014 through January 1, 2016, the sum of $3,000,000, (D) if the termination is effective during the period from January 2, 2016 through December 31, 2028, the sum of $2,000,000; the foregoing sums shall not be prorated and are to be lump sums regardless of when the payment obligation would occur during the applicable period. Live Nation shall also be entitled to receive the remainder of the prepaid Required Trust Distribution. • In an Event of Default by Live Nation, the City/Trust shall have the right to terminate the management agreement by written notice to Live Nation. Live Nation shall not be entitled to a refund of any prepaid Required Trust Distribution if a termination occurs for this reason. • The City/Trust shall have the right to terminate the management agreement thirty (30) days after the occurrence of a Net Worth Deficiency. A Net Worth Deficiency occurs when Live Nation fails to maintain a Tangible Net Worth of not less than five million dollars ($5,000,000). Live Nation shall not be entitled to a refund of any prepaid Required Trust Distribution if a termination occurs for this reason. Termination by Live Nation: • Live Nation shall have the right to terminate the management agreement if it has not received all Upgrade Consents (including building permits and licenses to vend food and beverages) by January 31, 2009. However, if by January 31, 2009, Live Nation has not received all Upgrade Consents, the Trust shall have the right to attempt that all Upgrade Consents be issued within thirty (30) days. • In the event that the Trust fails to accept a Transferee, Live Nation shall have the right to terminate the management agreement. If Live Nation so terminates, it shall remain the operator and manager of the Facility for six (6) months thereafter. Live Nation shall not be entitled to a refund of any prepaid Required Trust Distribution if it terminates for this reason. FINAL REVISED LN Term Sheet (2) 4 City/Trust's default: Live Nation default: • In an Event of Default by the City/Trust, Live Nation shall have the right to terminate the management agreement by written notice to the City/Trust. • The failure by City andlor Trust to make any payment required to be made by City and/or Trust as and when due, which continues for more than ten (10) business days after written notice of default from Live Nation. • The failure or inability by City and/or Trust to observe or perform any of the covenants or provisions of this Agreement to be observed or performed by City andlor Trust, other than as specified in subparagraph 12.3(a) above, which continues for more than thirty (30) days after written notice from Live Nation; provided, however, if the nature of the failure is such that more than such period is reasonably required for its cure, then City and/or Trust shall not be deemed to have committed an Event of Default if City and/or Trust commences the cure within such period and thereafter diligently pursues the cure to completion and actually completes the cure within an additional sixty (60) days. • The failure by Live Nation to make any payment required to be made by Live Nation as and when due, which continues for more than ten (10) business days after written notice from Trust (including without limitation any Required Trust Distributions and Ticket Surcharge. • The failure or inability by Live Nation to observe or perform any of the covenants or provisions of this Agreement to be observed or performed by Live Nation, other than as specified in subparagraph 12.1(a), above, which continues for more than thirty (30) days after written notice from Executive Director; provided, however, if the nature of the failure is such that more than such period is reasonably required for its cure, then Live Nation shall not be deemed to have committed an Event of Default if Live Nation commences the cure within such period and thereafter diligently pursues the cure to completion and actually completes the cure within an additional sixty (60) day period. • Except as permitted pursuant to Section 10.1 of this Agreement, the assignment, encumbrance, pledge, or transfer of this Agreement, whether voluntarily or by operation of law, or any subcontract of Live Nation's duties hereunder, which continues for FINAL REVISED IN Term Sheet (2) 5 more than fifteen (15) business days after written notice thereof from Executive Director. • Live Nation's failure to provide and maintain the letter of credit required by Section 14.2 hereof during any period in which Live Nation has not satisfied the Net Worth Requirement set forth in Section 14.1 if such failure continues for more than thirty (30) days after written request from Executive Director that the letter of credit be provided. • (i) The making by Live Nation of any general assignment for the benefit of creditors; (ii) the filing by or against Live Nation of a petition to have Live Nation adjudged a Chapter 7 debtor under the Bankruptcy Code or to have debts discharged or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Live Nation, the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Live Nation's assets located at the Facility or of Live Nation's interest in this Agreement, if possession is not restored to Live Nation within sixty (60) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Live Nation's assets located at the Facility or of Live Nation's interest in this Agreement, where the seizure is not discharged within sixty (60) days. Ownership upon termination: Ownership of the Facility shall remain with the City. Indemnification: Live Nation shall indemnify the City/Trust. Insurance: Live Nation shall maintain insurance coverage in the amounts deemed appropriate by the City's Risk Management Department. Transfer/Assignments: • Live Nation shall have the right to assign or transfer this Agreement without the necessity of City's and/or Trust's consent to an Affiliate that has Tangible Net Worth of not less than Five Million Dollars ($5,000,000), provided that Live Nation and Affiliate execute and deliver to City and Trust an agreement pursuant to which the Affiliate assumes all obligations under this Agreement arising subsequent to the assignment or transfer and Live Nation acknowledges that it remains jointly and severally liable for all such obligations. • Live Nation shall have the right to assign or transfer this Agreement to any of the following (each a "Transferee"): a FINAL REVISED LN Term Sheet (2) 6 successor entity arising from the purchase of, or merger or consolidation with Live Nation; or an entity that purchases substantially all of the assets of Live Nation provided in either case all of the following conditions are met: The Transferee has a Tangible Net Worth in excess of $5,000,000; simultaneous with the transfer, the Transferee is acquiring not less than five (5) other live entertainment venues owned or operated by Live Nation or its Affiliates; The Transferee has not less than five (5) years' experience in operating similar live entertainment venues internationally, nationally or regionally (meaning operating not less than five (5) live entertainment venues in multiple states or countries during such five (5) year period); Live Nation and the Transferee shall execute an instrument pursuant to which the Transferee assumes all obligations thereafter arising and Live Nation acknowledges its joint and several liability for all such obligations; In Executive Director's reasonable determination, the Transferee has a good reputation for operating venues similar to the Facility and is an appropriate manager and operator for the Facility. FINAL REVISED LN Term Sheet (2) 7