Res 090-2016 9/6/2016Resolution No. __90-2016 _
Resolution authorizing the City Manager to execute a professional
services contract with Global Spectrum, L.P. dba Spectra Venue
Management for management of the Multi-Purpose Events Center
and Memorial Auditorium Facilities for a period of five years
WHEREAS the City operates four public assembly facilities including the Kay
Yeager Coliseum, Ray Clymer Exhibit Hall, J.S. Bridwell Agricultural Arena, and
Memorial Auditorium; and
WHEREAS the City Council desires to contract with a nationally recognized
management firm for the day-to-day oversight, management and administration of the
facilities; and
WHEREAS the City requested proposals from management firms qualified in
management of public event venues; and
WHEREAS the proposal submitted by Spectra Venue Management was
determined to be the most responsible proposal and in the best interest of the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WICHITA FALLS, TEXAS, THAT:
The City Manager is hereby authorized to execute a professional services
contract with Global Spectrum, L.P. dba Spectra Venue Management for management
of the Multi-Purpose Events Center and Memorial Auditorium for a period of five years
in a form approved by the City Attorney.
PASSED AND APPROVED this the 6th day of September, 2016.
______________________________
M A Y O R
ATTEST:
_______________________________
City Clerk
MANAGEMENT AGREEMENT
between
CITY OF WICHITA FALLS, TEXAS
and
GLOBAL SPECTRUM, L.P.
d/b/a SPECTRA VENUE MANAGEMENT
Dated: October 1, 2016
COM 422871_1
TABLE OF CONTENTS
Page
RECITALS................................................................................................................................ 1
ARTICLE1— DEFINITIONS................................................................................................. 1
Section1.1 Definitions................................................................................................................ 1
ARTICLE 2 — SCOPE OF SERVICES................................................................
Section2.1 Engagement..........................................................................................
Section 2.2 Limitations on Manager's Duties..........................................................
ARTICLE 3 — COMPENSATION ...................................
Section 3.1 Fixed Management Fee ....................................
Section 3.2 Incentive Fee ....................................................
Section 3.3 Commercial Rights Fee ....................................
Section 3.4 Transition Costs ...............................................
Section 3.5 Late Payments ..................................................
6
6
6
6
6
............................................ 7
............................................ 8
............................................ 8
............................................ 8
ARTICLE 4 — TERM; TERMINATION................................................................................ 9
Section4.1 Term......................................................................................................................... 9
Section4.2 Termination.............................................................................................................. 9
Section 4.3 Effect of Termination............................................................................................... 9
ARTICLE 5 — OWNERSHIP; USE OF THE FACILITY.....................................................10
Section 5.1 Ownership of Facility, Data, Equipment and Materials...........................................10
Section 5.2 Right of Use by Manager.........................................................................................11
Section 5.3 Observance of Agreements......................................................................................11
Section5.4 Use by the Ci tv.........................................................................................................11
ARTICLE 6 — PERSONNEL....................................................................................................11
Section6.1 General lv..................................................................................................................11
Section 6.2 Transitioning Employees.........................................................................................12
Section 6.3 General Manager......................................................................................................12
Section 6.4 Non-Solicitation/Non-Hiring...................................................................................12
ARTICLE 7 — OPERATING BUDGET..................................................................................13
Section 7.1 Establishment of Operating Budg_et.........................................................................13
Section 7.2 Approval of Operating Budget.................................................................................13
Section 7.3 Adherence to Operating Budget...............................................................................13
ARTICLE 8 — PROCEDURE FOR HANDLING INCOME.................................................13
i
COM 422871_1
Section 8.1 Event Account .....................................
Section 8.2 Alcohol Account .................................
Section 8.3 Facility Operating Account .................
ARTICLE 9 — FUNDING .........................................
Section 9.1 Source of Funding ...................................
Section 9.2 Advancement of Funds ...........................
..14
..14
..14
...............................................................14
...............................................................15
...............................................................15
ARTICLE 10 — FISCAL RESPONSIBILITY; REPORTING..............................................15
Section10.1 Records..................................................................................................................15
Section 10.2 Monthly Financial Reports.....................................................................................15
Section10.3 Audit......................................................................................................................15
Section 10.4 Quarterly Report to Council...................................................................................15
ARTICLE 11— CAPITAL IMPROVEMENTS......................................................................15
Section 11.1 Schedule of Capital Expenditures..........................................................................16
Section 11.2 Responsibility for Capital Expenditures................................................................16
Section 11.3 Manager's Contribution.........................................................................................16
ARTICLE 12 — FOOD AND BEVERAGE SERVICE
Section 12.1 Generally.....................................................
Section 12.2
Concession Areas ..............................................
Section 12.3
Food and Beverage Duties ................................
Section 12.4
Alcohol Licenses and Permits ...........................
Section 12.5
Food and Beverage Revenue and Expenses......
Section 12.6
Existing Catering Contracts ..............................
Section 12.7
Outside Caterers ................................................
.....................................................16
.....................................................16
.....................................................16
.....................................................17
.....................................................17
.....................................................17
.....................................................18
.....................................................18
ARTICLE 13 — FACILITY CONTRACTS; TRANSACTIONS WITH AFFILIATES .....19
Section 13.1 Existing Contracts..................................................................................................19
Section 13.2 Execution of Contracts...........................................................................................19
Section 13.3 Transactions with Affiliates...................................................................................19
ARTICLE 14 — AGREEMENT MONITORING AND GENERAL MANAGER ...............19
Section 14.1 Contract Administrator..........................................................................................19
ARTICLE 15 — INDEMNIFICATION....................................................................................19
Section 15.1
Indemnification by Manager..................................................................................19
Section 15.2
Indemnification by the City....................................................................................20
Section 15.3
Conditions to Indemnification...............................................................................20
Section15.4
Survival..................................................................................................................20
Section 15.5
Legal Costs.............................................................................................................20
COM 422871 I ii
ARTICLE16 — INSURANCE...................................................................................................21
Section 16.1 Types and Amount of Coverage............................................................................21
Section 16.2 Rating; Additional Insureds...................................................................................21
ARTICLE 17 — REPRESENTATIONS, WARRANTIES AND COVENANTS..................21
Section 17.1 Manager Representations and Warranties...............................................21
Section 17.2 City Representations, Warranties and Covenants..................................................22
ARTICLE 18 — MISCELLANEOUS.......................................................................................22
Section18.1 PCI Compliance.....................................................................................................22
Section 18.2 No Discrimination..................................................................................................22
Section 18.3 Use of Facility Names and Logos..........................................................................23
Section 18.4 Facility Advertisements.........................................................................................23
Section18.5 Force Majeure........................................................................................................23
Section 18.6 Assignment; Binding on Successors and Assigns; Delegation
of Alcohol Duties 23
Section18.7 Notices...................................................................................................................24
Section18.8 Severability ............................................................................................................25
Section 18.9 Entire Agreement...................................................................................................25
Section 18.10 Governing Law....................................................................................................25
Section18.11 Amendments........................................................................................................25
Section 18.12 Waiver; Remedies................................................................................................25
Section 18.13 Relationship of Parties.........................................................................................25
Section 18.14 No Third Party Beneficiaries...............................................................................25
Section18.15 Attorneys Fees......................................................................................................26
Section 18.16 Limitation on Damages........................................................................................26
Section 18.17 Counterparts; Facsimile and Electronic Signatures.............................................26
Section18.18..............................................................................................................................26
SCHEDULE 1 — MAP DEFINING OUTDOOR ARAS UNDER MANAGER'S
MANAGEMENT.......................................................................................................................27
EXHIBIT A — MANAGER DUTIES........................................................................................28
EXHIBIT B — EXISTING CONTRACTS...............................................................................31
EXHIBIT C — OPERATING BUDGET (1sT OPERATING YEAR)....................................32
EXHIBITD — INSURANCE.....................................................................................................33
EXHIBIT E — COMMERCIAL RIGHTS — EXISTING SPONSORS/REVENUE.............35
EXHIBIT F — TRANSITION BUDGET..................................................................................36
COM 422871 1 iii
COM 4228711 iv
MANAGEMENT AGREEMENT
This Management Agreement is made as of October 1, 2016 ("Effective Date"), by and
between the City of Wichita Falls, Texas, a ("City"), and Global
Spectrum, LP, a Delaware limited partnership d/b/a Spectra Venue Management ("Manager").
RECITALS
WHEREAS, City owns the Multi -Purpose Events Center located in Wichita Falls, consisting
of Kay Yeager Coliseum, Ray Clymer Exhibit Hall, J.S. Bridwell Agricultural Center, Memorial
Auditorium and Festival Park (collectively, the "Facility"); and
WHEREAS, the City desires to engage Manager to manage and operate the Facility on behalf
and for the benefit of the City, and Manager desires to accept such engagement, pursuant to the terms
and conditions contained herein; and
NOW THEREFORE, for and in consideration of the foregoing, the mutual covenants and
promises hereinafter set forth and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1. Definitions. For purposes of this Agreement, the following terms have the
meanings referred to in this Section:
Affiliate: A person or company that directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with, a specified person or
company.
Agreement: The "Agreement' shall mean this Management Agreement, together with all
schedules and exhibits attached hereto (each of which are incorporated herein as an integral part of
this Agreement).
Alcohol Account: shall have the meaning given to such term in Section 8.2 of this
Agreement.
Capital Expenditures: All expenditures for building additions, alterations, repairs or
improvements and for purchases of additional or replacement furniture, machinery, or equipment,
where the cost of such expenditure is greater than $5,000 per item or across similar items and the
depreciable life of the applicable item is, according to generally accepted accounting principles, is in
excess of five (5) years.
COM 422871_1
City: The term "City" shall have the meaning ascribed to such term in the Recitals to this
Agreement.
Commercial Rights: Naming rights, pouring rights, advertising, sponsorships, the branding
of food and beverage products for resale, premium seating (including suites, club seats and party
suites) and memorial gifts at or with respect to the Facility and owned or controlled by the City.
CPI: The "Consumer Price Index" for the Dallas/Ft. Worth area, as published by the United
States Department of Labor, Bureau of Labor Statistics or such other successor or similar index.
Effective Date: "Effective Date" shall have the meaning ascribed to such term in the opening
paragraph of this Agreement.
Emergency Repair: The repair of a condition which, if not performed immediately, creates
an imminent danger to persons or property and/or an unsafe condition at the Facility threatening
persons or property.
Event Account: A separate interest-bearing account in the name of the City and under the
City's Federal ID number in a local qualified public depository, to be designated by the City, where
advance ticket sale revenue is deposited by Manager.
Event of Force Majeure: An act of God, fire, earthquake, hurricane, flood, riot, civil
commotion, terrorist act, terrorist threat, storm, washout, wind, lightning, landslide, explosion,
epidemic, inability to obtain materials or supplies, accident to machinery or equipment, any law,
ordinance, rule, regulation, or order of any public or military authority stemming from the existence
of economic or energy controls, hostilities or war, a labor dispute which results in a strike or work
stoppage affecting the Facility or services described in this Agreement, or any other cause or
occurrence outside the reasonable control of the party claiming an inability to perform and which by
the exercise of due diligence could not be reasonably prevented or overcome.
Existing Contracts: Service Contracts, Revenue Generating Contracts, and other agreements
relating to the day-to-day operation of the Facility existing as of the Effective Date, as set forth on
Exhibit B attached hereto.
Facility: The "Facility" shall have the meaning ascribed to such term in the Recitals to this
Agreement, and shall be deemed to include the entire arena complex, including but not limited to the
arena, suites, locker rooms, meeting rooms, box office, common areas, lobby areas, executive and
other offices, storage and utility facilities, as well as the entrances, ground, sidewalks and parking
areas immediately surrounding the Facility and adjacent thereto, as identified on Schedule 1 hereto.
Facility includes Memorial Auditorium only as to the performance hall and the box office and
concessions area and does not include any other area of the building, including City offices and
business areas.
FF&E: Furniture, fixtures and equipment to be procured for use at the Facility.
COM 422871_1
Fixed Management Fee: The fixed monthly fee the City shall pay to Manager under this
Agreement, as more fully described in Section 3.1 of this Agreement.
General Manager: The employee of Manager acting as the full-time on-site general manager
of the Facility.
Incentive Fee: The contingent fee the City shall pay to Manager under this Agreement, if
earned, as more fully described in Section 3.2 below.
Initial Term: shall have the meaning given to such term in Section 4.1 herein.
Laws: federal, state, local and municipal laws, statutes, rules, regulations and ordinances.
Liquor Subsidiary: The wholly owned subsidiary of Manager currently known as Global
Spectrum of Texas, LCC (or any substitute entity), which is a limited liability company organized in
the State of Texas in order to comply with Texas liquor laws. The Liquor Subsidiary is the entity
that is anticipated to hold the liquor permits covering sale of alcoholic beverages at the Facilities.
Management -Level Employees: The General Manager, Assistant General Manager,
Business Manager (or employees with different titles performing similar functions), and any
department head employed by Manager to perform services at the Facility (including, if applicable,
employees performing the function of the Director of Operations, Director of Sales and Marketing,
Director of Security, Finance Director and Event Manager).
Manager: The term "Manager" shall have the meaning ascribed to such term in the Recitals
to this Agreement.
Marketing Plan: A plan for the advertising and promotion of the Facility and Facility events,
which may contain but not be limited to the following elements: (i) market research, (ii) market
position, (iii) marketing objectives, (iv) marketing strategies, (v) booking priorities, (vi) targeted
events - local, regional, national and international, (vii) targeted meetings, conventions and trade
shows, (viii) industry advertising campaign, (ix) internal and external support staff, (x) advertising
opportunities at the local, regional and national level, (xi) attendance at various trade shows,
conventions and seminars, (xii) incentive formulas for multiple event presenters, (xiii) suite and club
seat sales, (xiv) merchandising and retail, (xv) food and beverage, (xvi) a plan for the sale of
commercial rights, including without limitation naming rights, pouring rights, advertising signage,
sponsorships (including event sponsorships), branding of food and beverage products for resale,
premium seating (including but not limited to suites and club seats), and memorial gifts, (xvii) a plan
regarding national, regional and local public relations and media relations, (xviii) development of an
in-house advertising agency, and (xix) policies regarding the use of trade/barter.
COM 422871_1
Operating Account: A separate interest-bearing account in the name of the City and under
the City's Federal ID number in a local qualified public depository, to be designated by the City,
where Revenue is deposited and from which Operating Expenses are paid.
Operating Budget: A line item budget for the Facility that includes a projection of Revenues
and Operating Expenses, presented on a monthly and annual basis.
Operating Expenses: All expenses incurred by Manager in connection with its operation,
promotion, maintenance and management of the Facility, including but not limited to the following:
(i) employee payroll, benefits, relocation costs, severance costs, bonus and related costs, (ii) cost of
operating supplies, including general office supplies, (iii) advertising, marketing, group sales, and
public relations costs, (iv) cleaning expenses, (v) data processing costs, (vi) dues, subscriptions and
membership costs, (vii) the Fixed Management Fee, (viii) printing and stationary costs, (ix) postage
and freight costs, (x) equipment rental costs, (xi) minor repairs, maintenance, and equipment
servicing, not including expenses relating to performing capital improvements or repairs, (xii)
security expenses, (xiii) telephone and communication charges, (xiv) travel and business expenses of
Manager employees, (xv) cost of employee uniforms and identification, (xvi) exterminator, snow and
trash removal costs, if applicable (xvii) computer, software, hardware and training costs, (xviii)
parking expenses, (xix) utility expenses, (xx) office expenses, (xxi) ) audit and accounting fees,
(xxii) legal fees, (xxiii) all bond and insurance costs, including but not limited to personal property,
liability, and worker's compensation insurance, (xxiv) commissions and all other fees payable to
third parties (e.g. commissions relating to food, beverage and merchandise concessions services and
commercial rights sales), (xxv) cost of complying with any Laws, (xxvi) costs incurred by Manager
to settle or defend any claims asserted against Manager arising out of its operations at the Facility on
behalf of City; (xxvii) amount of any deductible or self-insured retention under insurance policies;
(xxviii) costs incurred under Service Contracts and other agreements relating to Facility operations,
and (xxviii) Taxes.
The term "Operating Expenses" does not include debt service on the Facility, Capital
Expenditures, Transition Costs, property taxes, insurance on the Facility of contents within the
Facility owned by City, or the Incentive Fee, all of which costs shall be borne by City.
Operating Year: Each twelve (12) month period during the Term, commencing on October
1 and ending on September 30.
Operations Manual: Document to be developed by Manager which shall contains terms
regarding the management and operation ofthe Facility, including detailed policies and procedures to
be implemented in operating the Facility, as agreed upon by both the City and the Manager.
Revenue: All revenues generated by Manager's operation of the Facility, including but not
limited to event ticket proceeds income, rental and license fee income, merchandise income, gross
food and beverage income, gross income from the sale of Commercial Rights, gross service income,
COM 4228711 4
equipment rental fees, box office income, and miscellaneous operating income, but shall not include
event ticket proceeds held by Manager in trust for a third party and paid to such third party.
Revenue Benchmark: for the first Operating Year, the Revenue Benchmark shall be the
average annual amount of Revenue (but not including revenue from the sale of Commercial Rights)
for the three (3) years ending September 30, 2014, 2015 and 2016. The parties shall confirm such
benchmark in writing upon completion of the audit for the year ending September 30, 2016.
For the second (2"d) and third (3`d) Operating Years, the Revenue Benchmark shall be
increased over the Revenue Benchmark from the previous Operating Year in accordance with the
percentage increase in the CPI over the previous twelve (12) month period Year (i. e., the difference,
expressed as a percentage, between the value of the CPI published most recently prior to the
commencement of the preceding Operating Year and the value of the CPI published most recently
prior to the commencement of the Operating Year for which the CPI adjustment will apply.)
For the fourth (0) Operating Year, the Revenue Benchmark shall be reset to be the annual
average amount of Revenue (but not including revenue from the sale of Commercial Rights) from
the first (15) three (3) Operating Years under this Agreement, provided that in no event shall the
Revenue Benchmark in such fourth (0) Operating Year be less than the Revenue Benchmark from
the first (I") Operating Year hereunder, as calculated under the first paragraph of this "Revenue
Benchmark" definition above.
For the fifth (5d`) Operating Year and each subsequent Operating Year, the Revenue
Benchmark shall be increased over the Revenue Benchmark from the previous Operating Year in
accordance with the percentage increase in the CPI over the previous twelve (12) month period Year
(i. e., the difference, expressed as a percentage, between the value of the CPI published most recently
prior to the commencement of the preceding Operating Year and the value of the CPI published most
recently prior to the commencement of the Operating Year for which the CPI adjustment will apply.)
Calculations to determine the Revenue Benchmark for each year shall exclude all revenue
generated from the sale of Commercial Rights.
Revenue Generating Contracts: Vendor, concessions and merchandising agreements,
user/rental agreements, booking commitments, licenses, and all other contracts or agreements
generating revenue for the Facility and entered into in the ordinary course of operating the Facility.
Service Contracts: Agreements for services to be provided in connection with the operation
of the Facility, including without limitation agreements for ticketing, web development and
maintenance, computer support services, FF&E purchasing services, engineering services, electricity,
steam, gas, fuel, general maintenance, HVAC maintenance, telephone, staffing personnel including
guards, ushers and ticket -takers, extermination, elevators, stage equipment, fire control panel and
other safety equipment, snow removal and other services which are deemed by Manager to be either
necessary or useful in operating the Facility.
COM 422871_1
Taxes: Any and all governmental assessments, franchise fees, excises, license and permit
fees, levies, charges and taxes, of every kind and nature whatsoever, which at any time during the
Term may be assessed, levied, or imposed on, or become due and payable out of or in respect of, (i)
activities conducted on behalf of the City at the Facility, including without limitation the sale of
concessions, the sale of tickets, and the performance of events (such as any applicable sales and/or
admissions taxes, use taxes, excise taxes, occupancy taxes, employment taxes, and withholding
taxes), or (ii) any payments received from any holders of a leasehold interest or license in or to the
Facility, from any guests, or from any others using or occupying all or any part of the Facility.
Term: The term "Term" shall have the meaning ascribed to such term in Section 4.1 of this
Agreement.
"Transition Budget" shall mean the budget reflecting anticipated Transition Costs attached
hereto as Exhibit F.
"Transition Costs" shall mean the out-of-pocket costs incurred, or to be incurred, by
Manager in connection with its activities related to the transition of management of the Facility to
Manager, as set forth in the Transition Budget. The Transition Budget of $61,450 is a cap subject to
documented evidence of authorized actual costs.
ARTICLE 2
SCOPE OF SERVICES
Section 2.1 Engagement.
(a) City hereby engages Manager during the Term to act as the sole and exclusive
manager and operator of the Facility, subject to and as more fully described in this Agreement, and,
in connection therewith, to perform the services described in Exhibit A attached hereto.
(b) Manager hereby accepts such engagement, and shall perform the services
described herein, subject to the limitations expressly set forth in this Agreement and in the
Operations Manual.
Section 2.2 Limitations on Manager's Duties. Manager's obligations under this
Agreement are contingent upon and subject to the City making available, in a timely fashion, the
funds budgeted for and/or reasonably required by Manager to carry out such obligations during the
Term. Manager shall not be considered to be in breach or default of this Agreement, and shall have
no liability to the City or any other party, in the event Manager does not perform any of its
obligations hereunder due to failure by the City to timely provide such funds.
COM 422871_1
ARTICLE 3
COMPENSATION
Section 3.1 Fixed Management Fee. In consideration of Manager's performance of its
services hereunder, City shall pay Manager a Fixed Management Fee. Beginning on the Effective
Date and continuing through the first (I") Operating Year, the Fixed Management Fee shall be Ten
Thousand One Hundred Sixty -Seven ($10,167) per month. Beginning in the second (2nd) Operating
Year, the Fixed Management Fee shall be increased over the Fixed Management Fee from the
previous Operating Year in accordance with the percentage increase in the CPI over the previous
twelve (12) month period Year (i.e., the difference, expressed as a percentage, between the value of
the CPI published most recently prior to the commencement of the preceding Operating Year and the
value of the CPI published most recently prior to the commencement of the Operating Year for
which the CPI adjustment will apply). The Fixed Management Fee shall be payable to Manager in
advance, beginning on the Effective Date, and payable on the first (1") day of each month thereafter
(prorated as necessary for any partial months). Manager shall be entitled to pay itself such amount
first from the Alcohol Account and, if such amounts in the Alcohol Account are not sufficient to pay
the entire Fixed Management Fee, then next from the Operating Account.
Section 3.2 Incentive Fee. In addition to the Fixed Management Fee, Manager
shall be entitled to receive an Incentive Fee each full or partial Operating Year of the Term. The
Incentive Fee shall be comprised of two (2) components, a quantitative component ("Quantitative
Component") and a qualitative component ("Qualitative Component"), as follows:
(a) The Quantitative Component shall be equal to twenty percent (20%) of
the amount (if any) by which Revenue (excluding revenue generated from the sale of Commercial
Rights) in any Operating Year exceeds the Revenue Benchmark, provided that in order to be eligible
for the Quantitative Component in any Operating Year, Manager must meet or exceed the approved
Operating Budget for such year, unless failure to meet or achieve the Operating Budget is due to a
reason or reasons outside Manager's reasonable control. The Revenue Benchmark shall be pro -rated
for any Operating Years of less than 12 months, based on the actual number of days elapsed in such
Operating Years prior to termination out of a total of 365. The Operating Budget includes the
Manager's Fixed Management Fee.
(b) The Qualitative Component shall equal up to Thirty Thousand Dollars
($30,000) per Operating Year ("Qualitative Incentive Potential"), and shall be based on City's
reasonable and good faith evaluation of Manager's performance during each Operating Year in the
five following qualitative categories:
a. Results of customer service surveys ("Customer Satisfaction")
b. Facility repairs and maintenance ("Maintenance/Upkeep")
C. Financial Reporting and Results ("Financial Performance")
COM 4228711 7
d. Community Involvement ("Community")
e. Innovative Marketing Efforts ("Marketing")
f. Quality of Food and Beverage ("Food Quality")
City shall determine a performance rating for each category, as rated on a scale of 1 to 5 with 5 being
the highest (for a total possible score of 30). Once the total score is determined, it shall be divided
by 30 to determine the percentage of the Qualitative Incentive Potential Manager shall earn.
By way of example, assume that Manager scored 5 points on Customer Satisfaction, 5 points on
Maintenance/Upkeep, 4 points on Financial Performance, 4 points on Community, 4 points on
Marketing, and 5 points of Food Quality. The total points would be 27, which, when divided by 30
equals 90%. The Qualitative Component for that Operating Year would be 90% x $30,000 =
$27,000.
The Incentive Fee (both Quantitative Fee and Qualitative Fee), to the extent earned,
shall be paid to Manager no later than ninety (90) days following the end of each Operating Year.
Section 3.3 Commercial Riehts Fee. In consideration for Manager's marketing of
the Commercial Rights as described on Exhibit A, Manager shall receive twelve and a half percent
(12.5%) of all gross Revenue (including cash and budget -relieving trade, with such trade valued at its
retail price in an arms -length transaction) from the sale of Commercial Rights (the "Commercial
Rights Fee"), provided that Manager shall not be entitled to any Commercial Rights Fee on the
revenue previously secured by City, as detailed on Exhibit E hereto, from the sponsors listed on
Exhibit E (but Manager shall be entitled to the Commercial Rights Fee on any incremental revenue it
secures from such sponsors above the revenue levels set out on such Exhibit). The Commercial
Rights Fee shall be paid to Manager for all years of each naming, sponsorship, advertising and
premium seating agreement secured by Manager, notwithstanding that the term of this Agreement
may expire or terminate earlier. The portion of the Commercial Rights Fee due to Manager after the
end of the Term is referred to herein as the "Trailing Commissions". The Commercial Rights Fee
shall be paid to Manager on a quarterly basis, on or about the last day of March, June, September and
December each year, and Manager shall be entitled to pay itself such amount from the Operating
Account upon providing documentation of such fee to City. The parties shall also hold a settlement
at the expiration or termination of this Agreement, at which time City shall pay to Manager all
Trailing Commissions. City acknowledges that Manager may employ one (1) sales representative at
the Facility to sell Commercial Rights, the cost of which shall be an Operating Expense. The terms
in this Section 3.3 shall survive termination or expiration of this Agreement.
Section 3.4 Transition Costs. Promptly following the Effective Date (or prior to
the Effective Date, as applicable), Manager shall do all things reasonably necessary to transition from
the current management of the Facility to the commencement of its management services hereunder.
Manager shall initially pay for the Transition Costs in accordance with the Transition Budget, but
such costs shall be deducted from the amount Manager would otherwise contribute to the City under
COM 4228711 8
Section 11.3 below, and shall be amortized along with Manager's Contribution, as more fully
described in Section 11.3 below.
Section 3.5 Late Payments. Manager shall have the right to assess interest on any
payments of the fees described in this Section that are not made when due. Such interest shall accrue
at the rate of nine percent (9%) per annum.
ARTICLE 4
TERM; TERMINATION
Section 4.1 Term. The initial term of this Agreement (the "Initial Term") shall
begin on the Effective Date, and, unless sooner terminated pursuant to the provisions of Section 4.2
below, shall expire on the fifth (5`") anniversary of the Effective Date. City may extend the Initial
Tenn for an additional five (5) year period, to expire on the tenth (10`h) anniversary of the Effective
Date, by providing written notice of such extension to Manager no later than ninety (90) days before
the end of the Initial Tenn. The Initial Tenn plus any such extension is referred to herein as the
"Term".
Section 4.2 Termination. This Agreement may be terminated:
(a) subject to Section 4.3(a) below, by City upon ninety (90) days' written notice to
Manager in the event of a permanent closure of the Facility, the fact of which is certified by the City
in writing to Manager;
(b) by either parry upon thirty (30) days written notice, if the other party fails to
perform or comply with any of the material terms, covenants, agreements or conditions hereof, and
such failure is not cured during such thirty (30) day notification period, provided, however, if such
failure cannot reasonably be cured within such thirty (30) day period, then a longer period of time
shall be afforded to cure such breach, up to a total of ninety (90) days, provided that the party in
default is diligently seeking a cure and the non -defaulting party is not irreparably harmed by the
extension of the cure period; or
(c) by either party immediately by written notice upon the other party being judged
bankrupt or insolvent, or if any receiver or trustee of all or any part of the business property of the
other party shall be appointed and shall not be discharged within one hundred twenty (120) days after
appointment, or if either party shall make an assignment of its property for the benefit of creditors or
shall file a voluntary petition in bankruptcy or insolvency, or shall apply for bankruptcy under the
bankruptcy or insolvency Laws now in force or hereinafter enacted, Federal, State or otherwise, or if
such petition shall be filed against either party and shall not be dismissed within one hundred twenty
(120) days after such filing.
Section 4.3 Effect of Termination
COM 422871_1
(a) In the event this Agreement is terminated by the City pursuant to
Section 4.2(a), the City shall reimburse Manager for any actual ordinary and necessary expenses
incurred by Manager in withdrawing from the provision of services hereunder following such
termination. Such ordinary and necessary expenses shall include actual documented costs associated
with (i) severance pay, not to exceed three (3) months, for each of Manager's Management -Level
Employees, (ii) reasonable household relocation expenses for Manager's Management -Level
Employees, to the extent any of such individuals had previously relocated to the Facility (or its
surrounding areas) in connection with this Agreement and (iii) other reasonable costs actually
incurred by Manager in withdrawing from the provision of services hereunder, such as those incurred
in connection with the termination and/or assignment of Service Contracts, Revenue Generating
Contracts, or other contracts or leases entered into by Manager pursuant to this Agreement. The
City's payment of such expenses will occur only after Manager has provided reasonable evidence of
the incurrence of such expenses. Except for the reimbursement of the above stated expenses,
Manager shall have no other right or remedy, at law or in equity, against the City for a termination
pursuant to Section 4.2(a), except that, in the event the Facility re -opens at any time during the Term,
this Agreement shall, at the option of Manager, once again become effective and Manager shall
manage and operate the Facility under the terms hereof, except that the Term shall be extended for a
period of time in which the Facility was closed.
(b) Upon termination or expiration of this Agreement for any reason, (i) Manager
shall promptly discontinue the performance of all services hereunder, (ii) City shall promptly pay
Manager all fees due Manager up to the date of termination or expiration (subject to proration if the
Term ends other than at the end ofthe Operating Year), (iii) City shall pay to Manager all Operating
Expenses incurred by Manager through the end of the Term that are due to be paid to Manager
hereunder and have not previously been paid, including costs of accrued but unused vacation time for
the calendar year in which this Agreement expires or terminates, (iv) Manager shall make available
to the City all data, electronic files, documents, procedures, reports, estimates, summaries, and other
such information and materials with respect to the Facility as may have been accumulated by
Manager in performing its obligations hereunder, whether completed or in process, and (v) without
any further action on part of Manager or City, the City shall, or shall cause the successor Facility
manager to, assume all obligations arising after the date of such termination or expiration, under any
Service Contracts, Revenue Generating Contracts, booking commitments and any other Facility
agreements entered into by Manager in furtherance of its duties hereunder. Any obligations of the
parties that are specifically intended to survive expiration or termination of this Agreement shall
survive expiration or termination hereof.
ARTICLE 5
OWNERSHIP; USE OF THE FACILITY
Section 5.1 Ownership of Facility, Data, Equipment and Materials. The City will
at all times retain ownership of the Facility, including but not limited to real estate, technical
COM 4228711 10
equipment, furniture, displays, fixtures and similar property, including improvements made during
the Term, at the Facility. Any data, equipment or materials furnished by the City to Manager or
acquired by Manager as an Operating Expense shall remain the property of the City, and shall be
returned to the City when no longer needed by Manager to perform under this Agreement.
Notwithstanding the above, City shall not have the right to use any third party software licensed by
Manager for general use by Manager at the Facility and other facilities managed by Manager, the
licensing fee for which is proportionately allocated and charged to the Facility as an Operating
Expense; such software may be retained by Manager upon expiration or termination hereof.
Furthermore, the City recognizes that the Operations Manual to be developed and used by Manager
hereunder is proprietary to Manager, and shall belong to Manager at the end of the Term; City shall
not use or maintain copies thereof upon the end of the Term.
Section 5.2 Right of Use by Manager. The City hereby gives Manager the right and
license to use the Facility, and Manager accepts such right of use, for the purpose of performing the
services herein specified, including the operation and maintenance of all physical and mechanical
facilities necessary for, and related to, the operation, maintenance and management of the Facility.
The City shall provide Manager with a sufficient amount of suitable office space in the Facility and
with such office equipment as is reasonably necessary to enable Manager to perform its obligations
under this Agreement. In addition, the City shall make available to Manager, at no cost, parking in
proximity to the Facility for all of Manager's full-time employees and for the Facility's event staff.
Section 5.3 Observance of Agreements. The City agrees to pay, keep, observe and
perform all payments, terms, covenants, conditions and obligations under any leases, bonds,
debentures, loans and other financing and security agreements to which the City is bound in
connection with its ownership of the Facility.
Section 5.4 Use by the City. Subject to availability, the City shall have the right to use the
Facility or any part thereof rent -fee for meetings, seminars, training classes or other non-commercial
uses, provided that the City shall promptly reimburse Manager, for deposit into the Operating
Account, for any out-of-pocket expenses incurred by Manager (such as the cost of ushers, ticket -
takers, set-up and take-down personnel, security expenses and other expenses) in connection with
such use. Such non-commercial use of the Facility by the City shall (i) not compete with or conflict
with the dates previously booked by Manager for paying events, (ii) not consist of normally touring
attractions (such as concerts and family shows), and (iii) be booked in advance upon reasonable
notice to Manager pursuant to the Facilities' approved booking policies. Upon request of the City,
Manager shall provide to the City a list of available dates for City use of the Facility. To the extent
that Manager has an opportunity to book a revenue-producing event on a date which is otherwise
reserved for use by the City, Manager may propose alternative dates for the City's event, and the City
shall use best efforts to reschedule its event to allow Manager to book the revenue-producing event.
For purposes of calculating Manager's Incentive Fee, Manager shall receive a "paper" credit for an
amount equal to the difference between the published Facility rate and the rate (if any) charged to the
City for such use of the Facility.
COM 422871 1 11
ARTICLE 6
PERSONNEL
Section 6.1 Generally. All Facility staff and other personnel shall be engaged or hired by
Manager, and shall be employees, agents or independent contractors of Manager (or an Affiliate
thereof), and not of the City. Manager shall select, in its sole discretion but subject to City's right to
approve the Operating Budget, the number, function, qualifications, and compensation, including
salary and benefits, of its employees and shall control the terms and conditions of employment
(including without limitation termination thereof) relating to such employees. Manager agrees to use
reasonable and prudent judgment in the selection and supervision of such personnel. The City
specifically agrees that Manager shall be entitled to pay its employees, as an Operating Expense,
bonuses and benefits in accordance with Manager's then current employee manual, which may be
modified by Manager from time to time in its sole discretion. A copy of Manager's current
employee manual shall be provided to the City upon request. City shall pay all accrued but unused
vacation time to its employees whose employment with City is terminating and whose employment
with Manager is commencing.
Section 6.2 Transitioning Employees. With respect to any individuals who are employed by
City on or immediately prior to the Effective Date and who transition to become employees of
Manager hereunder ("Transitioning Employees"): (a) the City will pay all accrued but unused
vacation time to such employees upon termination of their employment with City, and (b) Manager
agrees to credit their years of services with City when determining how much vacation time they are
entitled to under Manager's policies once employed by Manager. Upon employment by Manager
such employees shall be under Manager's benefit plans (subject to any wait periods required under
Manager's plans) and Manager shall have no obligation or liability, and the Transitioning Employees
shall have no right or claim against Manager for any benefits, under City's benefit plans.
Section 6.3 General Manager. Personnel engaged by Manager will include an individual
with managerial experience in similar facilities to serve as a full-time on-site General Manager of the
Facility. Hiring of the General Manager by Manager shall require the prior approval of the City,
which approval shall not be unreasonably withheld or delayed; provided, however, in the event of a
vacancy in the General Manager position, Manager may, upon notice to the City, temporarily fill
such position with an interim General Manager for up to ninety (90) days without the necessity of
obtaining the City's approval. The General Manager will have general supervisory responsibility for
Manager and will be responsible for day-to-day operations of the Facility, supervision of employees,
and management and coordination of all activities associated with events taking place at the Facility.
Section 6.4 Non -Solicitation. During the Term and for a period of one (1) year after the
end of the Term, neither City nor any of its Affiliates shall solicit for employment any of Manager's
Management -Level Employees. The City acknowledges that Manager will spend a considerable
amount of time identifying, hiring and training individuals to work in such positions, and that
COM 422871 1 12
Manager will suffer substantial damages, the exact amount of which would be difficult to quantify, if
the City were to breach the terms of this Section by soliciting for employment any of such
individuals. Accordingly, in the event of a breach or anticipated breach of this Section by the City,
Manager shall be entitled (in addition to any other rights and remedies which Manager may have at
law or in equity, including money damages) to equitable relief, including an injunction to enjoin and
restrain the City from continuing such breach, without the necessity of posting a bond. This section
does not apply to City if the position it is seeking to fill is not directly related to Facility duties and
the applicable employee the City is soliciting is not the General Manager or the Director of
Marketing for the Facility.
ARTICLE 7
OPERATING BUDGET
Section 7.1 Establishment of Operating Budget. Attached hereto as Exhibit C is the
Operating Budget for the first (15) Operating Year, which Operating Budget is hereby approved by
both Manager and City. Manager agrees that at least 90 days prior to the commencement of each
subsequent Operating Year in respect of such year, it will prepare and submit to the City its proposed
Operating Budget for such year. Each annual Operating Budget shall include Manager's good faith
projection of Revenues and Operating Expenses, presented on a monthly and annual basis, for the
upcoming Operating Year. The City agrees to provide Manager with all information in its
possession necessary to enable Manager to prepare each Operating Budget,
Section 7.2 Approval of Operating Budget. Each annual Operating Budget shall be
subject to the review and approval of the City, which approval shall not be unreasonably withheld or
delayed. In order for the City to fully evaluate and analyze such budgets or any other request by
Manager relating to income and expenses, Manager agrees to provide to the City such reasonable
financial information relating to the Facility as may be requested by the City from time to time. If
extraordinary events occur during any Operating Year that could not reasonably be contemplated at
the time the corresponding Operating Budget was prepared, Manager may submit an amendment to
such budget for review and approval by the City (which approval shall not be unreasonably withheld
or delayed). If the City fails to approve any annual Operating Budget (or any proposed amendment
thereto), the City shall promptly provide Manager the specific reasons therefor and its suggested
modifications to Manager's proposed Operating Budget or amendment in order to make it
acceptable. The parties shall then engage in good faith discussions and use reasonable commercial
efforts to attempt to resolve the matter to the mutual satisfaction of the parties, including, if
applicable, negotiation of a mutually acceptable modification to the economic terms of this
Agreement to enable the Manager to achieve the compensation contemplated by its proposed
Operating Budget.
Section 7.3 Adherence to Operating Budget. Manager shall use all reasonable efforts to
manage and operate the Facility in accordance with the Operating Budget. However, City
acknowledges that notwithstanding the Manager's experience and expertise in relation to the
COM 422871 1 13
operation of facilities similar to the Facility, the projections contained in each Operating Budget
are subject to and may be affected by changes in financial, economic and other conditions and
circumstances beyond the Manager's control, and that Manager shall have no liability if the
numbers within the Operating Budget are not achieved. Manager agrees to notify the City within 30
days of any significant change or variance in the bottom line number in the Operating Budget, and
any material increase in total Facility expenses from that provided for in the Operating Budget. In
either such case and if requested by City, Manager agrees to work with City to develop and
implement a plan (or changes to the then current plan) to limit Operating Expense to be incurred in
the remaining months of such Operating Year with the goal of achieving the Operating Budget.
ARTICLE 8
PROCEDURE FOR HANDLING INCOME
Section 8.1 Event Account. Manager shall deposit as soon as practicable following
receipt, in the Event Account, all revenue received from ticket sales and similar event -related
revenues (not including revenue from the sale of alcohol) which Manager receives in contemplation
of, or arising from, an event, pending completion of the event. Such monies will be held in escrow
for the protection of ticket purchasers, the City and Manager, to provide a source of funds as required
for payments to performers and for payments of direct incidental expenses in connection with the
presentation of events that must be paid prior to or contemporaneously with such events. Promptly
following completion of such events, Manager shall transfer all funds remaining in the Event
Account, including any interest accrued thereon, into the Operating Account. Bank service charges,
if any, on such account(s) shall be deducted from interest earned.
Section 8.2 Alcohol Account. Manager shall deposit as soon as practicable following
receipt, in a separate bank account ("Alcohol Account"), all revenue received by Manager or the
Liquor Subsidiary from the sale of alcoholic beverages at the Facility. Such revenue may be used by
Manager and the Liquor Subsidiary to pay applicable taxes on the sale of alcohol, as well as expenses
associated with obtaining the alcohol product to be sold at the Facility. Revenue remaining in such
account after withdrawals for such purposes shall be transferred to the Operating Account on a
monthly basis. The Alcohol Account shall be established under the name and federal identification
number of the Liquor Subsidiary.
Section 8.3 Operating Account. Except as provided in Section 8. 1, all Revenue derived
from operation of the Facility shall be deposited by Manager into the Operating Account as soon as
practicable upon receipt (but not less often than once each business day). The specific procedures
(and authorized individuals) for making deposits to and withdrawals from such account shall be set
forth in the Operations Manual, but the parties specifically agree that Manager shall have authority to
sign checks and make withdrawals from such account, subject to the limitations of this Agreement,
without needing to obtain the co -signature of a City employee or representative.
ARTICLE 9
COM 4228711 14
FUNDING
Section 9.1 Source of Funding. Manager shall pay all items of expense for the operation,
maintenance, supervision and management of the Facility from the funds in the Operating Account,
which Manager may access periodically for this purpose. The Operating Account shall be funded
with amounts generated by operation of the Facility (as described in Article 8 above), or otherwise
made available by the City. To ensure sufficient funds are available in the Operating Account, City
will deposit in the Operating Account, on or before the Effective Date, the budgeted or otherwise
approved expenses for the month beginning on the Effective Date. The City shall thereafter, on or
before the 151 day of each succeeding month following the Effective Date, deposit (or allow to
remain) in the Operating Account the budgeted or otherwise approved expenses for each such month.
Manager shall have no liability to the City or any third party in the event Manager is unable to
perform its obligations hereunder, or under any third party contract entered into pursuant to the terms
hereof, due to the fact that sufficient funds are not made available to Manager to pay such expenses
in a timely manner.
Section 9.2 Advancement of Funds. Under no circumstances shall Manager be required to
pay for or advance any of its own funds to pay for any Operating Expenses. In the event that,
notwithstanding the foregoing, Manager agrees to advance its own funds to pay Operating Expenses,
City shall promptly reimburse Manager for the full amount of such advanced funds, plus interest at a
rate to be mutually agreed.
ARTICLE 10
FISCAL RESPONSIBILITY; REPORTING
Section 10.1 Records. Manager agrees to keep and maintain, at its office in the Facility,
separate and independent records, in accordance with generally accepted accounting principles,
devoted exclusively to its operations in connection with its management of the Facility. Such
records (including books, ledgers, journals, and accounts) shall contain all entries reflecting the
business operations of Manager under this Agreement. The City or its authorized agent shall have
the right to audit and inspect such records from time to time during the Term, upon reasonable notice
to Manager and during Manager's ordinary business hours.
Section 10.2 Monthly Financial Reports. Manager agrees to provide to the City, within
thirty (30) days after the end of each month during the Term, financial reports for the Facility
including a balance sheet, aging report on accounts receivable, and statement of revenues and
expenditures (budget to actual) for such month and year to date in accordance with generally
accepted accounting principles. In addition, Manager agrees to provide to the City a summary of
bookings for each such month, and separate cash receipts and disbursements reports for each event
held at the Facility during such month. Additionally, Manager shall submit to the City, or shall cause
the applicable public depository utilized by Manager to submit to the City, on a monthly basis,
copies of all bank statements concerning the Event Account, Alcohol Account and the Operating
Account.
COM 4228711 15
Section 10.3 Audit. Manager agrees to provide to the City, within ninety (90) days
following the end of each Operating Year, a certified audit report on the accounts and records as kept
by Manager for the Facility. Costs associated with obtaining such certified audit report shall be an
Operating Expense of the Facility. Such audit shall be performed by an external auditor approved by
the City, and shall be conducted in accordance with generally accepted auditing standards.
Section 10.4 Quarterly Report to Council. Manager agrees to provide to the City Council
in person (through its General Manager or his/her designee) quarterly activity and performance
reports.
ARTICLE 11
CAPITAL IMPROVEMENTS; MANAGER'S CONTRIBUTION
Section 11.1 Schedule of Capital Expenditures. Manager shall annually, at the time of
submission of the annual Operating Budget to the City, provide to the City a schedule of proposed
capital improvements to be made at the Facility, for the purpose of allowing the City to consider such
projects and to prepare and update a long-range Capital Expenditure budget.
Section 11.2 Responsibility for Capital Expenditures. The City shall be solely responsible
for all Capital Expenditures at the Facility; provided, however, the City shall be under no obligation
to make any Capital Expenditures proposed by Manager, and provided further that Manager shall
have no liability for any claims, costs or damages arising out of a failure by the City to make any
Capital Expenditures. Notwithstanding the foregoing, Manager shall have the right (but not the
obligation), upon notice to the City, to make Capital Expenditures at the Facility for Emergency
Repairs. In such event, the City shall promptly reimburse Manager for the cost of such Capital
Expenditure.
Section 11.3 Manager's Contribution. Within ninety (90) days of the Effective Date,
Manager shall pay to the Citythe aggregate sum of Three Hundred Thousand and No/100 Dollars
($300,000.00), less the amount paid by Manager toward Transition Costs as described in Section 3.4
above ("Manager's Contribution"). The City shall use Manager's Contribution for the following
purpose: to establish a Promotional Account to attract events; Concessions Modifications, and other
mutually agreed upon projects. The amount to be devoted to each such use shall be mutually agreed.
The entire sum of Three Hundred Thousand and No/100 Dollars ($300,000) (as opposed to the lesser
amount of Manager's Contribution) shall be amortized on a straight line, monthly, non-cash basis
over a five (5) year period commencing on the Effective Date. In the event of expiration or
termination of this Agreement for any reason whatsoever (including without limitation if due to a
breach or default by Manager) prior to full amortization of Manager's $300,000.00 contribution, the
City shall pay to Manager, unconditionally and without set-off, the unamortized portion of such
initial $300,000.00 contribution existing as of the date of such expiration or termination. The
payment of any such amount shall be made to Manager no later than sixty (60) days after the
effective date of expiration or termination of this Agreement.
COM 4228711 16
ARTICLE 12
FOOD AND BEVERAGE SERVICE
Section 12.1 Generally. Manager shall have the sole and exclusive right to manage and
perform, and Manager hereby agrees to manage and perform, all food and beverage concession and
catering service at the Facility ("Food and Beverage Service"). Manager may engage sub-
contractors to sell food and beverages at the Facility when approved in writing by the City.
Section 12.2 Concession Areas. Manager shall have the exclusive right to use (or permit a
third party to use, as applicable) the concession stands, novelty stands, customer serving locations,
food preparation areas, vendor commissaries, kitchen and warehouse facilities, and other food
service related areas of the Facility, together with the improvements, equipment and personal
property upon or within such areas, for the purpose of providing the Food and Beverage Service (and
providing other duties required of Manager hereunder). The City shall provide all smallwares and
equipment reasonably required by Manager to perform the Food and Beverage Service.
Section 12.3 Food and Beverage Duties. In connection with its management and provision
of the Food and Beverage Service, Manager shall:
(a) Develop and implement all necessary policies and procedures for the food and
beverage operations;
(b) Engage and oversee employees necessary to perform the Food and Beverage
Services;
(c) Manage the Food and Beverage Service in compliance with and subject to all
federal, state and local laws, ordinances and regulations (including, without limitation, health and
sanitation codes and regulations with respect to the sanitation and purity of the food and beverage
products for sale);
(d) Arrange for all minor repairs and routine maintenance to the equipment used
in the operation of the Food and Beverage Service;
(e) Keep the food and beverage facilities and equipment neat, clean and in a
sanitary condition;
(f) Undertake appropriate advertising, marketing and promotion of the food and
beverage offerings at the Facility;
(g) Develop menus, portions, brands, prices, themes and marketing
approaches. Manager (or the third party concessionaire, as applicable) shall be entitled to set the
COM 4228711 17
prices for such items for sale, but Manager agrees to confer with the City Contract Administrator
and take the City's views into account prior to setting (or changing) such prices; and
(h) Order, stock, prepare, pay for (as an Operating Expense) and sell appropriate
foods and beverages.
Section 12.4 Alcohol Licenses and Permits. Manager agrees to obtain all appropriate
alcohol licenses and permits, subject to applicable law. The City shall provide reasonable assistance
to Manager in such regard. At the end of the Term, Manager shall without charge to City relinquish
its rights in, or terminate (as applicable), the alcohol licenses and permits for the Facility.
Section 12.5 Food and Beverage Revenue and Expenses. All revenue to the Facility from
operation of the Food and Beverage Service shall be deemed to be Revenue, and shall be deposited
by Manager into the Operating Account. All expenses incurred in connection with the provision of
the Food and Beverage Service shall be Operating Expenses, payable by Manager with funds from
the Operating Account. However, shortages shall not be shown as operating expenses.
Section 12.6 Existing Catering Contracts. Manager agrees to honor all existing outside
catering contracts currently in place until said contracts expire December 31, 2016.
Section 12.7 Outside Caterers. Manager will allow at Facilities, with City approval, at up
to eight (8) chanty events per Operating Year (with any additional events requiring the approval of
both Manager and the City), outside caterers that meet all of the following conditions:
a) Caterer is a non-profit 501(c)(3) or 501(c)(4) entity;
b) Caterer does not charge for food or labor to prepare food;
C) Caterer does not make any profit;
d) The caterer, at its own cost shall maintain Public Liability and Contractual Liability
Insurance covering the indemnity herein, Property Damage Insurance and Products
Liability Insurance with limits not less than $500,000.00 for personal injury or death,
and $1,000,000.00 for damage to property to cover its operation hereunder. The
policy or policies must contain a provision that it shall not be canceled, modified,
expired or otherwise terminated until after at least (30) days written notice to that
effect is given to the Center. The Caterer agrees to furnish to the Manager
certificates evidencing such insurance coverage and/or certificates of self-insurance
within five (5) days of execution of the contract. Furthermore, Caterer shall maintain
Automobile Comprehensive Liability Insurance covering owned, non -owned, hired
vehicles in the previously stated liability amounts. In the event that Caterer is self-
insured for any of the required insurance provisions, appropriate documentation of
self insurance shall be provided to Manager. All insurance policies shall be in form
and content satisfactory to the Manager and copies of all policies shall be submitted
to the Manager for review within five (5) days of execution of the contract. All
policies of insurance required herein, shall name the Center, Manager, the City of
COM 422871 1 18
Wichita Falls as additional named insured.
0) The Caterer and all employees actively involved in preparing and serving food for
events shall have a current health card.
f) The Caterer agrees to furnish to the Manager a current copy of their catering license
issued by the Health Department.
g) The Caterer must operate out of an inspected, approved, and licensed food service
establishment in which food is prepared and intended for individual portion service
and must include the location where individual portions are provided. This includes
any such place, regardless whether consumption is on or off the premises, and
regardless of whether there is a charge for the food. This does not include private
homes.
h) A caterer shall not sublease or assign the permit or any other portion thereof without
written permission of the Manager. Any purported sublease or assignment made
without such written permission shall be invalid.
ARTICLE 13
FACILITY CONTRACTS; TRANSACTIONS WITH AFFILIATES
Section 13.1 Existing Contracts. The City shall provide to Manager, on or before the
Effective Date, copies of all Existing Contracts. Manager shall administer and assure compliance
with such Existing Contracts.
Section 13.2 Execution of Contracts. Manager shall have the right to enter into Service
Contracts, Revenue Generating Contracts and other contracts related to the operation of the Facility,
as agent on behalf of the City. Any such material agreements shall contain standard indemnification
and insurance obligations on the part of each vendor, licensee or service provider, as is customary for
the type of services or obligations being provided or performed by such parties. Manager shall
obtain the prior approval of the City (which approval shall not be unreasonably withheld or delayed)
before entering into any such contract with a term that expires after the Term of this Agreement,
unless such contract, by its express terms, can be terminated by Manager or City following expiration
of the Term without any penalty.
Section 13.3 Transactions with Affiliates. In connection with its obligations hereunder
relating to the purchase or procurement of services for the Facility (including without limitation
food and beverage services, ticketing services, Commercial Rights sales, web design services and
graphic design services), Manager may purchase or procure such services, or otherwise transact
business with, an Affiliate of Manager, provided that the prices charged and services rendered by
such Affiliate are competitive with those obtainable from any unrelated parties rendering comparable
services. Manager shall provide reasonable evidence establishing the competitive nature of such
prices and services, including, if appropriate, competitive bids from other persons seeking to render
such services at the Facility.
COM 422871 1 19
ARTICLE 14
AGREEMENT MONITORING AND GENERAL MANAGER
Section 14.1 Contract Administrator. Each party shall appoint a contract administrator who
shall monitor such party's compliance with the terms of this Agreement. Manager's contract
administrator shall be its General Manager at the Facility, unless Manager notifies City of a
substitute contract administrator in writing. City shall notify Manager of the name of its contract
administrator within thirty (30) days of execution hereof. Any and all references in this Agreement
requiring Manager or City participation or approval shall mean the participation or approval of such
party's contract administrator.
ARTICLE 15
INDEMNIFICATION
Section 15.1 Indemnification by Manager. Manager agrees to defend, indemnify and hold
harmless the City and its officials, directors, officers, employees, agents, successors and assigns
against any claims, causes of action, costs, expenses (including reasonable attorneys' fees) liabilities,
or damages (collectively, "Losses") suffered by such parties, arising out of or in connection with any
(a) negligent act or omission, on the part of Manager or any of its employees or agents in the
performance of its obligations under this Agreement, or (b) breach by Manager of any of its
representations, covenants or agreements made herein.
Section 15.2 Indemnification by City. City represents that the Texas Constitution, as
interpreted by the Texas Attorney General, prohibits City from indemnifying Manager.
Notwithstanding the foregoing, City recognizes that it shall be solely responsible for any damages,
liabilities, costs and claims resulting from the City's breach of this Agreement or the negligence or
willful misconduct of the City or its employees or agents.
Section 15.3 Conditions to Indemnification. With respect to each separate matter brought
by any third party against which a party hereto ("Indemnitee") is indemnified by the other party
("Indemnitor") under this Article 15, the Indemnitor shall be responsible, at its sole cost and expense,
for controlling, litigating, defending and/or otherwise attempting to resolve, through counsel of its
choice, any proceeding, claim, or cause of action underlying such matter, except that (a) the
Indemnitee may, at its option, participate in such defense or resolution at its expense and through
counsel of its choice; (b) the Indemnitee may, at its option, assume control of such defense or
resolution if the Indemnitor does not promptly and diligently pursue such defense or resolution,
provided that the Indemnitor shall continue to be obligated to indemnify the Indemnitee hereunder in
connection therewith; and (c) neither Indemnitor nor Indemnitee shall agree to any settlement
without the other's prior written consent (which shall not be unreasonably withheld or delayed). In
any event, Indemnitor and Indemnitee shall in good faith cooperate with each other and their
respective counsel with respect to all such actions or proceedings, at the Indemnitor's expense. With
COM 422871 1 20
respect to each and every matter with respect to which any indemnification may be sought hereunder,
upon receiving notice pertaining to such matter, Indemnitee shall promptly (and in no event more
than twenty (20) days after any third parry litigation is commenced asserting such claim) give
reasonably detailed written notice to the Indemnitor of the nature of such matter and the amount
demanded or claimed in connection therewith.
Section 15.4 Survival. The obligations of the parties contained in this Article 15 shall
survive the termination or expiration of this Agreement.
Section 15.5 Legal Costs. Notwithstanding the other provisions of this Agreement, if legal
costs are being incurred by the Manager or the City for a third parry claim in respect of which the
City is claiming indemnity from the Manager, such legal costs will be considered an Operating
Expense unless and until liability of the Manager pursuant to this Agreement is conclusively
established by a court of competent jurisdiction with respect to the underlying claim on which the
Manager's obligation to indemnify is based. In the event that the liability of the Manager is so
conclusively determined, then such legal costs shall be considered as costs of the Manager (and not
Operating Expenses) and covered by the indemnity given by the Manager to the City hereunder and
the parties shall adjust between them in respect of such legal costs.
ARTICLE 16
INSURANCE
Section 16.1 Types and Amount of Coverage. Manager agrees to obtain insurance coverage
in the manner and amounts as set forth in Exhibit D, attached hereto, and shall provide to the City
promptly following the Effective Date a certificate of certificates of insurance evidencing such
coverage. Manager shall maintain such referenced insurance coverage at all times during the Term,
and will not make any material modification or change from these specifications without the prior
approval of the City. Each insurance policy shall include a requirement that the insurer provide
Manager and the City at least thirty (3 0) days written notice of cancellation or material change in the
terms and provisions of the applicable policy. The cost of all such insurance shall be an Operating
Expense.
Section 16.2 Rating; Additional Insureds. All insurance policies shall be issued by
insurance companies rated no less than A VIII in the most recent "Bests" insurance guide, and
licensed in the State of Texas or as otherwise agreed by the parties. All such policies shall be in such
form and contain such provisions as are generally considered standard for the type of insurance
involved. The commercial general liability policy, automobile liability insurance policy and
umbrella or excess liability policy to be obtained by Manager hereunder shall name City as an
additional insured. The workers compensation policy to be obtained by Manager hereunder shall
contain a waiver of all rights of subrogation against the City. Manager shall require that all third -
party users of the Facility, including without limitation third -party licensees, ushers, security
COM 422871 1 21
personnel and concessionaires, provide certificates of insurance evidencing insurance appropriate for
the types of activities in which such user is engaged. If Manager subcontracts any of its obligations
under this Agreement, Manager shall require each such subcontractor to secure insurance that will
protect against applicable hazards or risks of loss as and in the minimum amounts designated herein,
and name Manager and the City as additional insureds.
ARTICLE 17
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 17.1 Manager Representations and Warranties. Manager hereby represents,
warrants and covenants to City as follows:
(a) that it has the full legal right, power and authority to enter into this Agreement
and to grant the rights and perform the obligations of Manager herein, and that no third party consent
or approval is required to grant such rights or perform such obligations hereunder; and
(b) that this Agreement has been duly executed and delivered by Manager and
constitutes a valid and binding obligation of Manager, enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar
Laws affecting creditors' rights generally or by general equitable principles.
(c) that Manager will comply with all Laws applicable to its management of the
Facility, provided that Manager shall not be required to undertake any compliance activity, nor shall
Manager have any liability under this Agreement therefor, if such activity requires any Capital
Expenditure.
Section 17.2 City Representations, Warranties and Covenants. City represents, warrants
and covenants to Manager as follows:
(a) that it has the full legal right, power and authority to enter into this Agreement
and to grant the rights and perform the obligations of City herein, and that no other third party
consent or approval is required to grant such rights or perform such obligations hereunder.
(b) that this Agreement has been duly executed and delivered by City and
constitutes a valid and binding obligation of City, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally or by general equitable principles.
(c) that the Facility is, as of the Effective Date, in compliance in all respects with
all applicable Laws relating to the construction, use and operation of the Facility (including, without
limitation, Title III of the American with Disabilities Act), and that there exist no structural defects
or unsound operating conditions at the Facility.
COM 422871 1 22
ARTICLE 18
MISCELLANEOUS
Section 18.1 PCI Compliance. Manager agrees to comply with all current Payment Card
Industry Data Security Standards ("PCI Standards") and guidelines that may be published from time
to time by Visa, MasterCard or other associations as they relate to the physical storage of credit card
data. For PCI Standards compliance purposes, City will provide on a segmented network, an
appropriate number of wired data connections to the Internet for point of sale devices to be used by
Manager and any contractors at the Facility. City shall be responsible for the security of its network,
including, without limitation, applicable PCI -DSS compliance, and for procuring and installing point
of sale (POS) payment systems that are compliant with the latest PCI -DSS requirements. If at any
time either party determines that card account number or other information has been compromised,
such party will notify the other immediately and assist in providing notification to the proper parties
as deemed necessary.
Section 18.2 No Discrimination. Manager agrees that it will not discriminate against any
employee or applicant for employment for work under this Agreement because of race, religion,
color, sex, disability, national origin, ancestry, physical handicap, or age, and will take affirmative
steps to ensure that applicants are employed, and employees are treated during employment, without
regard to race, religion, color, sex, disability, national origin, ancestry, physical handicap, or age.
Section 18.3 Use of Facility Names and Logos. Manager shall have the right to use
throughout the Term (and permit others to use in furtherance of Manager's obligations hereunder),
for no charge, the name and all logos of the Facility, on Manager's stationary, in its advertising of the
Facility, and whenever conducting business of the Facility; provided, that Manager shall take all
prudent and appropriate measures to protect the intellectual property rights of the City relating to
such logos. All intellectual property rights in any Facility logos developed by the Manager or the
City shall be and at all times remain the sole and exclusive property of the City. Manager agrees to
execute any documentation requested by the City from time to time to establish, protect or convey
any such intellectual property rights.
Section 18.4 Facility Advertisements. The City agrees that in all advertisements placed by
the City for the Facility or events at the Facility, whether such advertisements are in print, on radio,
television, the internet or otherwise, it shall include a designation that the Facility is a "Managed by
Spectra".
Section 18.5 Force Maieure; Casualty Loss.
(a) Neither party shall be liable or responsible to the other party for any delay,
loss, damage, failure or inability to perform under this Agreement due to an Event of Force Majeure,
provided that the party claiming failure or inability to perform provides written notice to the other
party within thirty (3 0) days of the date on which such party gains actual knowledge of such Event of
COM 422871 1 23
Force Majeure. Notwithstanding the foregoing, in no event shall a party's failure to make payments
due hereunder be excusable due to an Event of Force Majeure.
(b) In the event of damage or destruction to a material portion of the Facility by
reason of fire, storm or other casualty loss that renders the Facility (or a material portion thereof)
uninhabitable, the City shall use reasonable efforts to remedy such situation. If notwithstanding such
efforts, such damage or destruction is expected to render the Facility (or a material portion thereof)
uninhabitable for a period estimated by an architect selected by the City at Manager's request, of at
least one hundred eighty (180) days from the date of such fire, storm or other casualty loss, this
Agreement shall remain in effect with respect to the unaffected portion of the Facility and the parties
shall in good faith negotiate changes to this Agreement in light of the changed circumstances. If all
or substantially all of the structures that make up the Facility are rendered uninhabitable for a period
of at least 180 days, then either party may terminate this Agreement upon written notice to the other,
provided that (i) the City shall pay to Manager its costs of withdrawing from services hereunder, as
described in Section 4.3(a) above, and (ii) in the event the Facility once again becomes habitable at
any time during the Term, this Agreement shall, at the option of Manager, once again become
effective and Manager shall manage and operate the Facility under the terms hereof, except that the
Term shall be extended for a period of time in which the Facility was closed.
Section 18.6 Assignment; Binding on Successors and Assigns; Delegation of Alcohol
Duties.
(a) Neither party may assign this Agreement without the prior written consent of the
other, which consent shall not be unreasonably withheld or delayed, except that either party may,
without the prior written consent of the other party but upon at least 30 days' written notice to the
other party, assign this Agreement in connection with a sale, merger or other business combination
involving all or substantially all of its assets or equity interests, and Manager may further assign this
Agreement to an Affiliate where such assignment is intended to accomplish an internal corporate
purpose of Manager as opposed to materially and substantially altering the method of delivery of
services to City. Any purported assignment in contravention of this Section shall be void. This
Agreement is binding on successors and permitted assigns of the parties.
(b) The parties acknowledge that, for purposes of complying with applicable liquor law,
Manager may delegate its obligations hereunder relating to the sale of alcohol at the Facility to the
Liquor Subsidiary. Without limiting the foregoing, the parties acknowledge and agree that the
Liquor Subsidiary shall be authorized to perform the sale of alcohol at the Facility on behalf of
Manager, collect all revenue from the sale of alcohol, handle such revenues as described in Section
8.2, and pay the related costs and taxes associated with alcohol sales as an Operating Expense of the
Facility.
Section 18.7 Notices. All notices required or permitted to be given pursuant to this
Agreement shall be in writing and delivered personally or sent by registered or certified mail, return
receipt requested, or by generally recognized, prepaid, overnight air courier services, to the address
COM 422871 1 24
and individual set forth below. All such notices to either party shall be deemed to have been
provided when delivered, if delivered personally, three (3) days after mailed, if sent by registered or
certified mail, or the next business day, if sent by generally recognized, prepaid, overnight air courier
services.
If to the City:
City of Wichita Fails
Darron Leiker
City Manager
P. O. Box 1431
Wichita Falls, Texas 76307
With a copy to:
Jim Dockery
Deputy City Manager
P. O. Box 1431
Wichita Falls, Texas 76307
If to Manager:
Spectra Venue Management
3601 S. Broad Street
Philadelphia, PA 19148
Attn: Chief Operating Officer
With a copy to:
Comcast Spectacor, L.P.
3601 South Broad Street
Philadelphia, Pennsylvania 19148-5290
Attn: General Counsel
The designation of the individuals to be so notified and the addresses of such parties set forth above
may be changed from time to time by written notice to the other party in the manner set forth above.
Section 18.8 Severability. If a court of competent jurisdiction determines that any term of
this Agreement is invalid or unenforceable to any extent under applicable law, the remainder of this
Agreement (and the application of this Agreement to other circumstances) shall not be affected
thereby, and each remaining term shall be valid and enforceable to the fullest extent permitted by
law.
Section 18.9 Entire Agreement. This Agreement (including the exhibits attached hereto)
contains the entire agreement between the parties with respect to the subject matter hereof, and
supersedes and replaces all prior negotiations, correspondence, conversations, agreements, and
understandings concerning the subject matter hereof. Accordingly, the parties agree that no
deviation from the terms hereof shall be predicated upon any prior representations, agreements or
understandings, whether oral or written.
Section 18.10 Governing Law. The Agreement is entered into under and pursuant to, and is
to be construed and enforceable in accordance with, the laws of the State of Texas, without regard to
its conflict of laws principles.
Section 18.11 Amendments. Neither this Agreement nor any of its terms may be changed or
modified, waived, or terminated (unless as otherwise provided hereunder) except by an instrument in
COM 422871 1 25
writing signed by an authorized representative of the party against whom the enforcement of the
change, waiver, or termination is sought.
Section 18.12 Waiver; Remedies. No failure or delay by a party hereto to insist on the strict
performance of any term of this Agreement, or to exercise any right or remedy consequent to a
breach thereof, shall constitute a waiver of any breach or any subsequent breach of such term. No
waiver of any breach hereunder shall affect or alter the remaining terms of this Agreement, but each
and every term of this Agreement shall continue in full force and effect with respect to any other then
existing or subsequent breach thereof. The remedies provided in this Agreement are cumulative and
not exclusive of the remedies provided by law or in equity.
Section 18.13 Relationship of Parties. Manager and City acknowledge and agree that they
are not joint venturers, partners, or joint owners with respect to the Facility, and nothing contained in
this Agreement shall be construed as creating a partnership, joint venture or similar relationship
between City and Manager. In operating the Facility, entering into contracts, accepting reservations
for use of the Facility, and conducting financial transactions for the Facility, Manager acts on behalf
of and as agent for City (but subject to the limitations on Manager's authority as set out in this
Agreement), with the fiduciary duties required by law of a party acting in such capacity.
Section 18.14 No Third Party Beneficiaries. Other than the indemnitees listed in Sections
15.1 and 15.2 hereof (who are third party beneficiaries solely with respect to the indemnification
provisions in such sections), there are no intended third party beneficiaries under this Agreement,
and no third party shall have any rights or make any claims hereunder, it being intended that solely
the parties hereto (and the aforementioned indemnitees with respect to the indemnification
provisions hereofl shall have rights and may make claims hereunder.
Section 18.15 Attorneys Fees. If any suit or action is instituted by either party hereunder,
including all appeals, the prevailing parry in such suit or action shall be entitled to recover reasonable
attorney fees and expenses fiom the non -prevailing party, in addition to any other amounts to which
it may be entitled.
Section 18.16 Limitation on Damages. In no event shall either party be liable or responsible
for any consequential, exemplary, indirect, incidental, punitive, or special damages (including,
without limitation, lost profits) whether based upon breach of contract or warranty, negligence, strict
tort liability or otherwise, and each party's liability for damages or losses hereunder shall be strictly
limited to direct damages that are actually incurred by the other party, provided that the foregoing
shall not limit or restrict any claim by Manager for the management fees described herein upon a
breach or default of this Agreement by City. All parties agree that damages in this contract are
limited only to those authorized under TEXAS LOCAL GOVERNMENT CODE section 271.153.
Section 18.17 Counterparts; Facsimile and Electronic Sigriatures. This Agreement may be
executed in counterparts, each of which shall constitute an original, and all of which together shall
constitute one and the same document. This Agreement may be executed by the parties and
COM 422871 1 26
transmitted by facsimile or electronic transmission, and if so executed and transmitted, shall be
effective as if the parties had delivered an executed original of this Agreement.
Section 18.18 All parties agree that this contract is one wherein the City is solely performing
a governmental function. All parties expressly agree that the City is not engaging in any proprietary
function.
IN WITNESS WHEREOF, each party hereto has caused this Management Agreement
to be executed on behalf of such parry by an authorized representative as of the date fust set forth
above.
CITY OF WICHITA FALLS, TEXAS
By:
Name: iAanon Leiker
Its: City Manager
COM 422871 1 27
GLOBAL SPECTRUM, L.P.,
d/b/a Spectra Venue Management
By: Global Spectrum, Inc., its general
By: , , ,,
Name: Ph ip leinberg
Its: Pi ident l Secretary
SCHEDULEI
MAP DEFINING OUTDOOR AREAS UNDER MANAGER'S MANAGEMENT
COM 4228711 28
'Y OHtHMNffH,
OH+IIUMHH
OHtHfHffHHHfC
O+HHHHHHHHO
iLh.edw(i- I
�ThMp
J,S BRI➢YE! L
V
/+G aMTER 7n5
Ou
Exwort n.0
G �// ccuscux
EXHIBIT A
MANAGER DUTIES
Manager's obligations under the Agreement shall consist of the following obligations, all of
which are subject to the terms hereof and the controls and restrictions in the Operations Manual:
(a) Manage all aspects of the Facility in accordance with the Operations Manual and the
terms of this Agreement, including but not limited to managing purchasing, payroll, fire prevention,
security, crowd control, routine repairs, preventative maintenance, janitorial services, promotions,
advertising, energy conservation, security, box office, admission procedures, parking (if applicable),
and general user services. Notwithstanding the foregoing, Manager is not responsible for any
landscaping/mowing of outdoor areas.
(b) Establish and adjust prices, rates and rate schedules for user, license, concessions,
occupancy, and advertising agreements, and booking commitments. Manager may deviate from the
established rate schedule when entering into any such agreements if determined by Manager, using
its reasonable business judgment, to be necessary or appropriate with respect to the specific situation.
(c) Procure, negotiate, execute, administer and assure compliance with Service Contracts,
Revenue Generating Contracts, and other contracts related to the operation of the Facility.
(d) Require that all material vendors and licensees of the Facility execute vendor/license
agreements containing standard indemnification and insurance obligations on the part of each such
vendor/licensee.
(e) Provide standard form advertising and sponsorship contracts and user/rental
agreements for use at or with respect to the Facility. Manager shall submit such form agreements to
the City for review and comment, and the parties shall work together to finalize such forms. Once
finalized, Manager shall use such forms in furtherance of its duties hereunder, and shall not
materially deviate from the terms contained in such forms without obtaining the prior approval of the
City (which shall not be unreasonably withheld). Manager's sole responsibility with regard to
providing legal advice or assistance hereunder shall be to provide such standard form contracts.
(f) Operate and maintain the Facility, including the equipment utilized in connection with
its operation and any improvements made during the term of this Agreement, in the condition
received, normal wear and tear excepted.
(g) Arrange for and otherwise book events at the Facility in accordance with a booking
schedule to be developed by Manager.
(h) Hire or otherwise engage, pay, supervise, and direct all personnel Manager deems
necessary for the operation of the Facility in accordance with Article 6 of the Agreement, and
COM 422871 1 29
conduct staff planning, retention and training programs as determined to be necessary by Manager in
its sole discretion.
(i) Maintain detailed, accurate and complete financial and other records of all its
activities under this Agreement in accordance with generally accepted accounting principles, which
records shall be made available to the City upon request, in accordance with Section 10.1 of the
Agreement.
0) Submit to the City in a timely manner financial and other reports detailing Manager's
activities in connection with the Facility, as set forth in Section 10.2 of the Agreement.
(k) Prepare a proposed annual Operating Budget and submit such proposed budget to the
City, both in accordance with Article 7 of the Agreement.
(1) Pay all Operating Expenses and other expenses incurred in connection with the
operation, maintenance, supervision and management of the Facility from the Operating Account or
with funds otherwise made available by the City.
(m) Secure, or assist the City (or any other third party, as applicable) to secure, all licenses
and permits necessary for the operation and use of the Facility for the specific events to be held
therein, and for the general occupancy of the Facility, including without limitation all necessary food
and liquor licenses, and renewals thereof. The City shall cooperate in this process to the extent
reasonably required. All costs associated with this process shall be Operating Expenses.
(n) Collect, deposit and hold in escrow in the Event Account any ticket sale revenues
which it receives in the contemplation of or arising from an event pending the completion of the
event, as more fully described in Section 8.1 of the Agreement.
(o) Collect and deposit in the Alcohol Account any revenue from the sale of alcohol at
the Facility, as more fully described in Section 8.2.
(p) Collect in a timely manner and deposit in the Operating Account all Revenue, as more
fully described in Section 8.2 of the Agreement.
(q) Subject to the City making available sufficient funds in a timely manner, pay all
Taxes.
(r) Plan, prepare, implement, coordinate and supervise all public relations and other
promotional programs for the Facility.
(s) Prepare, maintain and implement on a regular basis, subject to the City's approval, a
Marketing Plan for the Facility.
COM 422871 1 30
(t) Market and sell Commercial Rights at or in connection with the Facility.
(u) On an annual basis, cause a written inventory to be taken of all furniture, fixtures,
office equipment, supplies, tools and vehicles at the Facility, and deliver a written report of the
foregoing to City. Manager shall document all major damage to, or loss in, such inventory during the
Term as soon as such damage or loss is discovered by Manager, and Manager shall promptly notify
City of any such damage or loss.
(v) Purchase, on behalf of the City and with City funds, and maintain during the Term, all
materials, tools, machinery, equipment and supplies necessary for the operation of the Facility.
(w) As agent for the City, manage risk management and Facility insurance needs, as more
fully described in Article 15 of the Agreement.
(x) Make and be responsible for all routine and minor repairs, maintenance, preventative
maintenance, and equipment servicing. Manager shall be responsible for ensuring that all repairs,
replacements, and maintenance shall be of a quality and class at least equal to that of the item being
repaired, replaced or maintained. Any replacement of an item in inventory, or any new item added to
the inventory, which is paid for by the City, shall be deemed the property of the City.
(y) Cause such other acts and things to be done with respect to the Facility, as determined
by Manager in its reasonable discretion to be necessary for the management and operation of the
Facility following the Effective Date.
COM 422871 1 31
EXHIBIT B
EXISTING CONTRACTS
See contents of zip file provided by Lindsay Greer to Brian Hoffman on September 22,
2016
COM 429532 I 32
EXHIBIT C
OPERATING BUDGET (1ST OPERATING YEAR)
COM 4228711 33
0 SPECTRA
.�T .o Tr. o2
SPECTRA VENUE MANAGEMENT
WICHITA FALLS MULTI-PURPOSE EVENTS CENTER AND MEMORIAL AUDITORIUM
FIRST YEAR OPERATING BUDGET
Year 1
Net Rental Income $577,437
Ancillary Income
Food & Beverage
$561,130
Novelty
$23,738
Booth Cleaning
$16,797
IT/Telecom
$17,095
Audio Visual
$20,580
Equipment Rental
$17,010
Total Ancillary
$656,349
Other Event Related Income
($897,695)
Ticket Incentives/Box Office
$152,927
Facility Fees
$197,424
Total Other Event Related
$350,351
Total Event Income
$1,584,138
Other Operating Income
Advertising/Sponsorship
$250,000
Naming Rights
$0
Suite Revenues
$89,000
Trolley Rental Income
$25,000
Stall Rental
$10,000
RV Rental
$45,000
Public/Open Skating
$25,000
Office Rental
$32,520
Outside Catering Commissions
$40,000
Other Miscellaneous (vending, interest, etc.)
$10,000
Total Other Operating Income
526,520
Total Adjusted Gross Income
$2,110,658
Indirect Operating Expenses
Personnel Expenses
$1,324,120
General & Administrative
757,619
Operations/Maintenance
114,955
Utilities
650,407
Insurance
39,252
Total Indirect Expenses
$2,886,353
Spectra Base Management Fee
$122,000
Net Operating Income/(Loss)
($897,695)
(excluding incentive fees, debt service, depreciation, property taxes & property insurance)
EXHIBIT D
INSURANCE
At all times during this Agreement, Manager shall maintain the following insurance coverage:
(a) commercial general liability insurance, including products and completed operations,
bodily injury and property damage liability, liquor liability, contractual liability, independent
contractors' liability and personal and advertising injury liability against claims occurring on, in, or
about the Facility, or otherwise arising under this Agreement;
(b) umbrella or excess liability insurance;
(c) commercial automobile liability insurance, including coverage for the operation of
owned, leased, hired and non -owned vehicles;
(d) workers compensation and employer's liability insurance as shall be required by and
be in conformance with the laws of the State of Texas;
(e) professional liability insurance and self-insured employment practices liability
coverage;
(f) employment practices liability insurance;
(g) pollution liability; and
(h) crime coverage.
Such liability insurance shall be maintained in the following minimum amounts throughout the
Term:
Commercial General Liabilitv
$1,000,000 per occurrence
$1,000,000 personal and advertising injury
$1,000,000 products -completed operations aggregate
Umbrella or Excess Liability
$5,000,000 per occurrence and aggregate
Automobile Liability
$1,000,000 per accident (PI and PD combined single limit)
$1,000,000 uninsured/underinsured motorist
COM 422871 1 34
Workers Compensation
Workers Compensation: Statutory
Employer's Liability: $100,000 each accident -bodily injury by accident
$500,000 policy limit -bodily injury by disease
$100,000 each employee -bodily injury by disease
Professional Liability/Errors & Omissions (Claims Made basis)
$1,000,000 each occurrence/aggregate
Employment Practices Liability Insurance (Claims Made basis)
$1,000,000
Pollution Liability (Claims Made basis
$1,000,000
Crime Insurance
Coverage on all on-site Manager employees. Limit: $500,000.00
Each insurance policy to be furnished by Manager shall include the following conditions by
endorsement to the policy:
1) Each policy shall name the City as an additional insured as to all applicable coverage;
2) Each policy shall require that 30 days prior to cancellation, nonrenewal or any material
change in coverage, a notice thereof shall be given to City by certified mail.
COM 422871 1 35
EXHIBIT E
COMMERCIAL RIGHTS — EXISTING SPONSORS/REVENUE
Sponsors
Alsco - $1,500/yr
Wells Fargo - $2,500/yr
Premium Seating/Suites:
Suite 1 - Falls Distributing - $15,000/yr
Suite 3 - URHCS - $17,500/yr
Suite 4 - Yeagers - $15,000/yr
Suite 5 - Williams - $4,375/yr
Suite 6 -Nighthawks - $10,000/yr
Suite 10 - Wildcats - $11,250/yr
COM 422871 1 36
EXHIBIT F
TRANSITION BUDGET
COM 4228711 37
SPECTRA
BY COMCAST SPECTACOR
Spectra
Wichita Falls Multi -Purpose Events Center
Management Transition Expenses
As of August 17, 2016
General Manager 20,000
Other Director Level Positions (2 x $5,000) 10,000
Travel
GM/Director Candidates Interview Trips 3
Cost Per Trip (2 days/1 night) $1,050
Recruitment Cost
Cost per Background Check
Number of Checks
Recuitment Ad Placements
Total Personnel Expenses
Air
Airfare $300
Transportation ($75 per day) $225
Hotel ($150 per night) $300
Expenses ($75 per day) 225
$1,050
Estimated #of Trios
if
Air
Regional VP/Operations
2
$2,100
Box Office
2
$2,100
Finance/Accounting
3
$3,150
Human Resources
3
$3,150
Event Services
2
$2,100
Food & Beverage
2
$2,100
Sales & Marketing
2
$2,100
Total Trips
16
$16,800
Total Travel Expenses
TOTAL TRANSITION EXPENSES............
............. 30,000
............. $3,150
.............. $11,500
$50
200
$1,500
$44,650
$16,800
..................$61,450