HomeMy WebLinkAboutGlobal Spectrum, LP d/b/a/ Spectra Venue Management - Management Agreement - 1/13/2020MANAGEMENT AGREEMENT
between
CITY OF WATERLOO
and
GLOBAL SPECTRUM, L.P.
d/b/a SPECTRA VENUE MANAGEMENT
Effective Date: January 15, 2020
MANAGEMENT AGREEMENT
This Management Agreement is entered into on January i , 2020 and made effective as
of January 15, 2020 ("Effective Date"), by and between the City of Waterloo, Iowa ("City"), and
Global Spectrum, LP, a Delaware limited partnership, d/b/a Spectra Venue Management
("Manager").
RECITALS
WHEREAS, City owns a convention center comprised of approximately 40,000 square feet
of space, including exhibition space and meeting rooms, located in Waterloo, Iowa and currently
known as the 5 Sullivan Brothers Convention Center (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: 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).
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 and the depreciable life of the applicable
item is, according to generally accepted accounting principles, in excess of one (1) year.
Commercial Rights: Naming rights, pouring rights, advertising, sponsorships, the branding
of food and beverage products for resale, and, if applicable, any premium seating (including clubs,
suites and party suites) at or with respect to the Facility and owned or controlled by the City.
Contribution: shall have the meaning set forth in Section 11.3.
CPI: The "Consumer Price Index" for all urban consumers, Midwest region, all items, not
seasonally adjusted, 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 convention center complex, including but not
limited to the (a) meeting rooms, banquet rooms, exhibition space, event floor, box office, common
areas, lobby areas, executive and other offices, storage and utility facilities, and (b) the entrances,
grounds, sidewalks and parking areas immediately surrounding the Facility and adjacent thereto, as
identified on Schedule 1 hereto.
FF&E: Furniture, fixtures and equipment to be procured for use at the Facility.
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.
Food and Beverage Services: shall have the meaning given to such term in Section 12.1.
General Manager: The employee of Manager acting as the full-time on -site general
manager of the Facility.
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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 ascribed to such term in Section 4.1 of this Agreement.
Laws: Federal, state, local and municipal laws, statutes, rules, regulations and ordinances.
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).
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)
merchandising and retail, (xiv) food and beverage, (xv) 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, and memorial
gifts, (xvi) a plan regarding national, regional and local public relations and media relations, (xvii)
development of an in-house advertising agency, and (xviii) policies regarding the use of trade/barter.
Net Operating Income/Loss: shall mean the amount by which Revenue exceeds Operating
Expenses, resulting in Net Operating Income, or by which Operating Expenses exceed Revenue,
resulting in Net Operating Loss, for the period in question.
Net Operating Income/Loss Benchmark: Except as otherwise provided in this paragraph,
the benchmark shall mean a loss of Two Hundred Thousand Dollars ($200,000) for the Operating
Year ending June 30, 2021. The parties will review the financial results of operations for the period
ended March 31, 2020, and by May 15, 2020 will agree on any adjustments to said benchmark for
the Operating Year ending June 30, 2021. There shall be no benchmark for the short Operating Year
ending June 30, 2020. No later than August 15 of each year of the Term starting August 15, 2021,
the parties will confer in good faith to balance the respective interests of the parties in this
Agreement by adjusting the Net Operating Income/Loss Benchmark to account for revenue and
expense performance and other relevant factors occurring in the Operating Year just ended. The
parties will express their mutually agreeable adjustment of the Net Operating Income/Loss
Benchmark (if any) in writing.
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.
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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 entertainment
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, (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) costs incurred under Service Contracts and other agreements
relating to Facility operations, (xxviii) amount of any deductible or self -insured retention under
insurance policies; (xxix) costs related to the provision of Food and Beverage Services, and (xxx)
Taxes.
The term "Operating Expenses" does not include debt service on the Facility, Capital
Expenditures, Transition Costs, property taxes, insurance on the Facility or the City's property or
contents within the Facility, 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 July 1
and ending on June 30 of the following year, except that the first Operating Year shall be a stub
period from the Effective Date until and including June 30, 2020.
Operations Manual: Document to be developed by Manager which shall contains terms
regarding the management and operation of the 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 any sale of Commercial Rights, gross service income,
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 and shall
not include contributions or grants to the City or Manager relating in any way to Facility operation
or improvements and that are sourced from the Black Hawk County Gaming Commission or any
charitable foundation having its principal office in Black Hawk County, Iowa.
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Revenue Benchmark: Except as otherwise provided in this paragraph, Revenue Benchmark
shall initially mean One Million Five Hundred Thousand Dollars ($1,500,000). The parties will
review the financial results of operations for the period ended March 31, 2020, and by May 15, 2020
will agree on any adjustments to said benchmark for the Operating Year ending June 30, 2021.
There shall be no benchmark for the short Operating Year ending June 30, 2020. No later than
August 15 of each year of the Term, the parties will confer in good faith to balance the respective
interests of the parties in this Agreement by adjusting the Revenue Benchmark to account for
revenue performance and other relevant factors occurring in the Operating Year just ended. The
parties will express their mutually agreeable adjustment of the Revenue Benchmark (if any) in
writing.
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.
Review Board: shall mean the performance review board provided for in Section 3.2(a).
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.
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: 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 E.
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.
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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.
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 end of the first (I st) Operating Year, the Fixed Management Fee
shall be Ten Thousand Dollars ($10,000) per month. Beginning in the second (2nd) Operating Year,
and continuing for each subsequent 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 (1st) day of each month thereafter (prorated as necessary for any partial
months). Manager shall be entitled to pay itself such amount 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, except that no
Quantitative Incentive Fee shall be payable in respect of the partial Operating Year ending June 30,
2020. The Incentive Fee shall be comprised of both a qualitative based fee ("Qualitative Fee") and a
quantitative based fee ("Quantitative Fee"), as follows:
(a) Qualitative Fee. Manager shall be eligible to earn a Qualitative Fee of up to twenty-five
thousand dollars ($25,000) in each Operating Year, including the partial Operating Year
ending June 30, 2020 (pro -rated for any Operating Years of less than a full 12 months
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based on the actual number of days elapsed in such Operating Year out of 365). The
Qualitative Fee shall be determined by the City, in its reasonable and good faith
discretion, based significantly but not exclusively on evaluation by the Review Board of
Manager's performance each Operating Year in each of the following five (5)
performance areas (with each area worth up to $5,000.00):
Results of Customer Service Surveys
Stakeholder/Tenant Relationships
Innovative Sales and Marketing
Repairs and Maintenance
Community Involvement
The Review Board shall be developed and facilitated by the City, and shall consist of at
least seven members, including two City staff members appointed by the mayor, the
Executive Director or other designee of the Waterloo Convention & Visitors Bureau, the
Executive Director or other designee of Main Street Waterloo, one representative of
Waterloo Development Corporation, one Manager representative, and one representative
from a company in the community that is designated by the mayor because of its high
utilization of the Facility. Each organization that contributes a Review Board member
may replace its appointed member at any time in its discretion. The Review Board will
meet at least semi-annually to evaluate the use, operation and condition of the Facility
and to assess the extent to which the Facility has been utilized to positively impact the
local economy, to enhance the business climate of Waterloo, and to enhance the quality
of life for Waterloo residents and area visitors by providing a high -quality venue and
user experience for meetings, conventions, banquets, and other community gatherings
and events. Evaluation criteria shall include user attendance and the service satisfaction
metrics described in Exhibit F attached hereto. At least annually, the Review Board will
rate the evaluation criteria as set forth in Exhibit F.
(b) Ouantitative Fee. Except in respect of the partial Operating Year ending June 30, 2020,
Manager shall be entitled to receive a Quantitative Fee comprised of two parts: (i) five
percent (5%) of the amount by which the Revenue in each Operating Year exceeds the
Revenue Benchmark, and (ii) fifteen percent (15%) of the amount by which the actual
Net Operating Income/Loss in each Operating Year exceeds the Net Operating
Income/Loss Benchmark. For any Operating Years of less than a full 12-months, the
Revenue Benchmark and Net Operating Income/Loss Benchmark shall be prorated based
on the actual number of days elapsed in such Operating Year out of 365. There shall be
no cap or maximum limit on the amount of the Quantitative Fee.
The Incentive Fee earned by Manager (both the Qualitative Fee and Quantitative Fee) shall be paid
to Manager no later than ninety (90) days following the end of each Operating Year.
Section 3.3 Commercial Rights Fee. In addition to the other fees due Manager hereunder,
the City shall pay Manager twenty percent (20%) of the Revenue from the sale of all new or renewed
contracts for Commercial Rights ("Commercial Rights Fee"). For purposes of this paragraph,
Revenue shall include trade/barter, with such trade/barter valued at its retail price in an arms -length
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transaction. The Commercial Rights Fee shall be paid for the full duration of all new or renewed
contracts for Commercial Rights, but for any renewals, the Commercial Rights Fee shall only be
paid if (a) such renewal took effect during the Term or within three (3) months after the end of the
Term, or (b) if such renewal can be unilaterally exercised by the City without the approval of the
sponsor. Payments due under this paragraph shall be made to Manager on an annual basis, within
sixty (60) days of the end of each Operating Year, with respect to Revenue received in that year from
the applicable Commercial Rights contracts. The provisions of this paragraph shall survive
expiration or termination of this Agreement, and such settlements shall continue on an annual basis
following the end of the term with respect to Revenue from Commercial Rights received in such
years until such time as all Commercial Rights Fees due Manager under this paragraph are fully
paid. No Commercial Rights Fees shall be paid on any existing contract for Commercial Rights (but
the Commercial Rights Fee shall be paid on any renewals of such contracts).
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.
The City shall reimburse Manager for the Transition Costs, in accordance with the Transition
Budget. Manager shall invoice the City for such costs, and the City shall pay such costs within thirty
(30) days of its receipt of each such invoice. Each invoice to be provided by Manager shall be
accompanied by reasonable back-up documentation evidencing the incurrence of the Transition
Costs.
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 within thirty (30) days of the due
date. Such interest shall accrue at the rate of four percent (4%) 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 June 30, 2025. The City may extend this Agreement following the Initial Term for
an additional five (5) year period, to end on June 30, 2030, by providing written notice of such
extension to Manager no later than March 31, 2025. The Initial Term plus any such extension period
is referred to herein as the "Term".
Section 4.2 Termination. This Agreement may be terminated:
(a) 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, or
(b) by City upon ninety (90) days' advance written notice to Manager if Manager fails to
achieve the budgeted Net Operating Income/Loss by more than fifteen percent (15%) of the
budgeted Net Operating Income/Loss in each of two (2) consecutive Operating Years not
commencing before July 1, 2021, provided that Manager shall not be responsible for losses arising
from or in connection with an Event of Force Majeure, or
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(c) by either party 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
(d) 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. Each of the reasons for termination described in this paragraph may be
referred to as an "Insolvency."
Section 4.3 Effect of Termination
(a) In the event this Agreement is terminated early (i.e., prior to the end of the
Initial Term or, if renewed, prior to the end of the renewal Term) for any reason other than a breach
or default by Manager or the Manager's Insolvency, 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, but only with respect to reimbursement claims delivered to
the City within six (6) months after the effective date of termination. Such ordinary and necessary
expenses shall include costs associated with (i) severance pay, not to exceed three (3) months, for
each of Manager's Management -Level Employees who are discharged by Manager within two (2)
months after termination of this Agreement, (ii) reasonable household relocation expenses for
Manager's Management -Level Employees who are not discharged by Manager and are relocated to
another Manager -managed facility, 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.
(b) Without limiting the terms of Section 4.3(a), upon termination or expiration of
this Agreement for any reason, (i) Manager shall promptly discontinue the performance of all
services hereunder, (ii) the City shall promptly pay Manager all fees due Manager up to the date of
termination or expiration (subject to pro -ration if the Term ends other than at the end of the
Operating Year), (iii) City shall pay to Manager all Operating Expenses incurred by Manager
through the end of the Term that have not previously been paid, including costs of accrued but
unused vacation time and other end of employment payments due to Manager's employees whose
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employment is being terminated Manager; (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 ofthe Facility, including but not limited to real estate, technical 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 ofthe 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's Management -Level
Employees, at no cost, up to six (6) parking spaces in the lower level of the Facility and shall
provide parking spaces in the lots under the Highway 218 overpass at a discounted rate (to be paid as
an Operating Expense) for the rest of Manager's staff. Manager shall direct its employees and event
staff to not use on -street parking spaces.
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.
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Section 5.4 Rights Reserved to the City: Tax Position: RiskofLoss. Without limiting any
other rights of the City as described herein, the parties agree that the City shall have the right to
approve (a) the annual Operating Budget, (b) major Capital Expenditures, (c) any significant
disposition of Facility assets, and (d) the general rates charged at the Facility for users of the
Facility. Manager agrees that it is not entitled to, and will not take, any tax position that is
inconsistent with Manager being a service provider to the City for the Facility. City shall bear the
risk of loss upon damage or destruction to the Facility. Manager shall have no liability for any
operating losses.
Section 5.5 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 or guards,
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, provided that any such uses by the City
numbering more than two (2) in any Operating Year shall be subject to advance written approval by
the City's Chief Financial Officer .
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. Each year,
Manager shall solicit the City's input regarding performance evaluations of Manager's Management -
Level Employees. The City specifically agrees that Manager shall be entitled to pay its employees,
as an Operating Expense under an approved Operating Budget, reasonable 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.
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Section 6.2 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 ofthe
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 ofthe Facility, supervision of employees,
and management and coordination of all activities associated with events taking place at the Facility.
Section 6.3 Non-Solicitation/Non-Hiring. During the Term, neither City nor any of its
Affiliates shall solicit for employment, or hire, any of Manager's Management -Level Employees.
Said restriction shall also apply for a period of one (1) year after the end of the Term unless this
Agreement is terminated early by City under Section 4.2(c) due to an uncured breach or default by
Manager or under Section 4.2(d) due to Manager's Insolvency. The City acknowledges that
Manager will spend a considerable amount of time identifying, hiring and training individuals to
work in such positions, and that 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 hiring, or
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.
ARTICLE 7
OPERATING BUDGET
Section 7.1 Establishment of Operating Budget. Attached hereto as Exhibit C is the
Operating Budget for the first (1st) partial Operating Year ending June 30, 2020, which Operating
Budget is hereby approved by both Manager and City. By January 15, 2020, Manager will prepare
and submit to the City a proposed Operating Budget for the Operating Year commencing July 1,
2020 and ending June 30, 2021, provided that the Operating Budget for said year may be adjusted as
agreed by the parties following review of the financial results of operations for the period ending
March 31, 2020. Any such adjustment shall be completed by May 15, 2020. For all Operating
Years thereafter, Manager agrees that it will prepare and submit to the City its proposed Operating
Budget by September 1 for the Operating Year that begins the following July 1. 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
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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
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 Net Operating Income/Loss in the Operating
Budget, and any material increase in total Indirect Expenses or Event Expenses from that provided
for in the Operating Budget. Indirect Expenses and Event Expenses are expense categories labeled
as such in the Operating Budget. In any Operating Year, individual budget line items can be
amended to be increased or decreased as long as either the total Indirect Expenses or Event Expenses
in the Operating Budget for that year do not exceed the initially approved Operating Budget for that
year. For purposes of this Section, a "significant" or "material" increase in Indirect Expenses or
Event Expenses shall mean the following:
(a) Indirect Expenses. The lesser of (i) 5% of the original budgeted amount for Indirect
Expenses, or (ii) $25,000.
(b) Event Expenses. The lesser of (i) 10% of the original budgeted amount for Event
Expenses, or (ii) $75,000.
Revenue amendments for revenue received in a given Operating Year in excess of the initially
approved Operating Budget for that year should also be provided to the City, delivery of which may
coincide with notification of significant or material changes in expenses as described above. In any
event, amendments to revenue and expenses must be delivered to the City by May 1 for the
Operating Year then in effect (e.g., by May 1, 2020 for the year ending June 30, 2020).
ARTICLE 8
PROCEDURE FOR HANDLING INCOME
Section 8.1 Event Account. To the extent the Facility hosts a ticketed event and collects
advance ticket sale revenue and/or admissions tax, Manager shall deposit as soon as practicable
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following receipt, in the Event Account all revenue received from ticket sales and similar event -
related revenues which Manager receives in contemplation of, or arising from, an event, pending
completion ofthe 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 from such event, including
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 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
FUNDING
Section 9.1 Source of Funding. Manager shall pay all items of expense for the operation,
maintenance, supervision and management ofthe 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 make a long-term advance, on or before the Effective Date, of $250,000. After each month
during the Term, Manager shall provide to City a statement of revenues and expenditures prepared
on a cash basis, and within thirty (30) days of receiving such report City shall deposit to the
Operating Account an amount sufficient to reimburse the expenditures reported for 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. Upon termination of this Agreement, the balance of funds in the Operating
Account shall be paid over to the City.
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.
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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, provided however the first financial statement Manager shall provide
shall be within thirty (30) days following the second (2nd) month of the Term, and shall cover the
first two (2) months of the Term. In addition, starting with the second (2nd) month of the Term,
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 and the Operating Account.
Section 10.3 Audit. The City may choose to include an audit of Manager's accounts and
records for the Facility in the City's annual audit of its own accounts and records. If an audit is not
handled in this fashion, Manager agrees to provide to the City, within one hundred twenty (120) 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.
ARTICLE 11
CAPITAL IMPROVEMENTS
Section 11.1 Schedule of Capital Expenditures. Manager shall annually, at the time of
submission of the annual Operating Budget to the City, or at such other time as requested by 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
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obligation), upon notice to the City, to make Capital Expenditures at the Facility for Emergency
Repairs, subject to the procedures of Section 13.3. In such event, the City shall promptly reimburse
Manager for the cost of such Capital Expenditure.
Section 11.3 Manager's Contribution. Manager shall contribute Three Hundred Fifty
Thousand Dollars ($350,000) (the "Contribution") to the City, to be used by the City towards
payment of Transition Expenses, improvements or equipment at the Facility designed to increase
Revenue, or other uses at the Facility. All equipment and improvements purchased with the
Contribution shall be owned by the City upon installation thereof. The Contribution shall be
amortized on a straight line basis over a ten (10) year period (at the rate of 1/120 per month),
commencing on the Effective Date. Upon the expiration or termination (for any reason whatsoever,
including without limitation if due to a breach or default by Manager or the Manager's Insolvency,
or the City's election not to renew this Agreement following the Initial Term) of this Agreement, the
City shall, within fifteen (15) days of the expiration or termination date, pay to Manager the
unamortized amount of the Contribution, subject, however, if termination was due to an uncured
breach or default by Manager, to a right of offset or repayment to the City for the full amount of any
damages or losses actually and reasonably incurred by the City arising from or directly relating to
such breach or default, as reasonably documented by the City.
ARTICLE 12
FOOD AND BEVERAGE SERVICES
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 and Catering 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, at no cost to
Manager, 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;
Services;
(b) Engage and oversee employees necessary to perform the Food and Beverage
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(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 shall be entitled to set the 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 apply for 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.
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 Shared Services. Notwithstanding anything in this Agreement to the
contrary, City staff will be responsible for routine maintenance, repair, and replacement, of major
operating systems including heating and cooling, plumbing, electrical systems, elevators and
escalators, doors and associated hardware, partitions, and permanently installed sound and audio
systems. City staff will be responsible for setting up any electrical power services that require
hardwiring or electricity in a timely manner during normal City business hours of 8 a.m. to 5 p.m.,
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Monday through Friday (except for recognized holidays), and in coordination with all event
requirements. Manager may choose to utilize City staff or an outside vendor for after-hours
connections or if City staff is not capable of meeting event -required timing. The City will invoice
Manager for City's reasonable cost for employee time and materials, provided that the aggregate
costs invoiced in any Operating Year do not exceed the amount in that Operating Year's approved
budget for such maintenance, repairs and replacements. Except as provided in this Section, Manager
will be responsible for routine maintenance, repair and cleaning as described in Exhibit A. Outside
of the City's normal business hours, Manager shall notify the City's on -call maintenance staff at
319-230-8317 if issues arise with any such systems. As soon as reasonably possible after
notification, the City Facility Administrator shall notify Manager if City staff will accept or decline
the work assignment. If the City accepts the work assignment, it shall perform the work as promptly
as possible. If the City declines the work assignment, then Manager may use an outside contractor
for those services, the costs of which shall be an Operating Expense. If City staff fails to promptly
and efficiently provide the above services, Manager shall have the right to consider internal staff or
outside vendors.
Section 13.3 Emergency Repairs. Emergency Repairs with an estimated cost in excess of
$25,000 require notification to the City Facilities Administrator. Bids must be obtained following a
finding by the City that an emergency exists and the necessity of emergency repairs is certified by a
licensed professional engineer or architect.
Section 13.4 Execution of Contracts. Subject to Section 13.2, Manager shall have the right
to enter into Service Contracts, Revenue Generating Contracts and other contracts related to the
operation of the Facility, for the benefit of the City and without Manager being personally liable on
such contracts. 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 13.5 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, at the request of the City, 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.
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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 and caused by any (a) negligent act or
omission, or intentional misconduct, or failure to comply with Laws, 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 the City. City agrees to defend, indemnify and hold
harmless Manager, its parent, subsidiary and affiliate companies, and each of their respective
directors, officers, employees, agents, successors and assigns, against any Losses suffered by such
parties, arising out of or in connection with (a) any negligent act or omission, or intentional
misconduct, or failure to comply with Laws, on the part of City or any of its employees or agents in
the performance of its obligations under this Agreement, (b) a breach by City of any of its
representations, covenants or agreements made herein, including without limitation City's obligation
to pay any budgeted or otherwise approved expenses in a timely manner, (c) failure by City to pay
any amounts due by City or to otherwise perform any obligations of City under any third party
contracts, licenses or agreements entered into by Manager in furtherance of its duties hereunder as
authorized hereby; (d) any environmental condition at the Facility or on or under the premises on
which the Facility is located not caused by Manager, its employees or agents, (e) any structural
defect with respect to the Facility, (f) the fact that any time prior to, as of, or after the date hereof the
Facility is not or has not been in compliance with all Laws, including, but not limited to, the
Americans With Disabilities Act as it now exists and as it may be amended in the future by statute or
judicial interpretation, (g) any act or omission carried out by Manager in a reasonable manner at or
pursuant to the direction or instruction of City, its agents or employees, (h) any claims relating to the
Facility or its operations accruing or caused by occurrences prior to the Effective Date or following
termination or expiration of this Agreement, and (i) any withdrawal liability for a share of unfunded
vested benefits under multiemployer plans (as that term is defined in 4001(a)(3) of the Employee
Retirement Income Security Act of 1974, as amended).
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
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("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
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 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 party 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, or as otherwise agreed by the parties in connection with
the settlement of any claim. 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 or 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 (30) days written notice of cancellation or material change in the
terms and provisions of the applicable policy. The City must be named as an additional insured on
all liability policies. Coverage shall be written on a primary and non-contributory basis and shall
include a waiver of subrogation in favor of the City. The cost of all such insurance shall be an
Operating Expense.
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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 Iowa 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
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 or funding of an Operating Expense that is not funded by City.
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.
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(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.
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, sexual orientation, 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, sexual orientation, 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 "Managed by
Spectra".
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Section 18.5 Force Majeure; 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 (30) days of the date on which such party gains actual knowledge of such Event
of 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)
untenantable, 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)
untenantable 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, 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, provided that the parties shall negotiate an appropriate adjustment in Manager's
compensation to account for the reduction in Manager's duties during such period, and (ii) in the
event the Facility once again becomes tenantable 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. Except as set forth in this
Section, neither party may assign this Agreement without the prior written consent of the other,
which consent shall not be unreasonably withheld or delayed. Manager may assign this Agreement
in connection with a sale, merger or other business combination involving all or substantially all of
its assets or equity interests, provided that the City shall have the right to reasonably evaluate the
experience, qualifications and financial standing of the proposed assignee and to make reasonable
objection thereto. The City shall notify Manager in writing of any objections to the proposed
assignment (with reasonable specificity as to the nature of, and reason for, the objections) within
twenty (20) days after Manager has notified the City in writing of a proposed assignment. The
City's consent to assignment shall be presumed unless it has timely notified Manager of its
objection(s) as provided herein. If the City objects, Manager may proceed with the assignment only
if Manager agrees in writing to remain liable under this Agreement to the City for the performance
of the duties of Manager hereunder, notwithstanding the assignment. Manager may, without the
prior written consent of the City, 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.
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
23
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 Waterloo
715 Mulberry Street
Waterloo, IA 50703
Attn: Mayor
With copies to:
City of Waterloo
715 Mulberry Street
Waterloo, IA 50703
Attn: City Attorney
Attn: Chief Financial Officer
If to Manager:
Spectra Venue Management
150 Rouse Blvd.
Philadelphia, PA 19112
Attn: Chief Operating Officer
With a copy to:
Spectra Venue Management
150 Rouse Blvd.
Philadelphia, Pennsylvania 19112
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 18.9 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 Iowa, without regard to
its conflict of laws principles.
Section 18.10 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
writing signed by an authorized representative of the party against whom the enforcement of the
change, waiver, or termination is sought.
24
Section 18.11 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 18.12 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 the 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 18.13 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 hereof) shall have rights and may make claims hereunder.
Section 18.14 Attorneys Fees. If any suit or action is instituted by either party hereunder,
including all appeals, the prevailing party in such suit or action shall be entitled to recover
reasonable attorney fees and expenses from the non -prevailing party, in addition to any other
amounts to which it may be entitled.
Section 18.15 Limitation on Damages. In no event shall either party be liable or responsible
for any consequential, 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.
Section 18.16 Counterparts: Facsimile and Electronic Signatures. 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
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.
IN WITNESS WHEREOF, each party hereto has caused this Management Agreement
to be executed on behalf of such party by an authorized representative as of the date first set forth
above.
25
CITY OF WATERLOO
GLOBAL SPECTRUM, L.P.
d/b/a Spectra Venue Management
By: Global Spectrum, LLC, its general
partner
By: L azcs�- By:
Name: Name:
Its: Its:
26
SCHEDULE 1
MAP DEFINING OUTDOOR AREAS UNDER MANAGER'S MANAGEMENT
See attached, consisting of the entire block bounded by Commercial Street, W. 4th Street,
Jefferson Street, and Park Avenue.
27
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 Food and Beverage Service,
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. In addition to standards set
forth in the Operating Manual or as otherwise set forth in the Agreement, standards of Facility care
shall include the following minimum standards (the specifics of which shall be mutually agreed by
the parties):
(1) Replace light bulbs in lighting fixtures as necessary, keep faucets closed so as
to prevent waste of water and flooding of premises, and control thermostats with an aim to
prevent freezing of pipes.
(2) Clean all interior and exterior window surfaces as needed, but no less than
quarterly, and clean all floors and floor coverings on a regular basis, keeping same in a first-
rate condition of cleanliness.
(3) Clean and maintain kitchen hoods and grease interceptor/grease traps.
(4) Litter control in and around the premises, including adjacent streets and
sidewalks. Litter shall be picked up no Less than weekly, but shall be done as often as
required to maintain the premises and surrounding areas in clean and attractive condition.
(5) Remove snow from sidewalks and plaza area that is not removed by City
staff. City staff will remove snow from all areas at street sidewalk level and driveway to
the loading dock, and Manager will be responsible for steps and areas above. Apply ice
control treatments as reasonably necessary or advisable to mitigate hazards.
(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
28
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) Subject to Section 13.2, 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
conduct staffplanning, 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.
(j) 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 in a timely manner and deposit in the Operating Account all Revenue, as
more fully described in Section 8.2 of the Agreement.
29
(p) Subject to the City making available sufficient funds in a timely manner, pay all
Taxes.
(q) Plan, prepare, implement, coordinate and supervise all public relations and other
promotional programs for the Facility.
(r) Prepare, maintain and implement on a regular basis, subject to the City's approval, a
Marketing Plan for the Facility.
(s) Market and sell Commercial Rights at or in connection with the Facility.
(t) 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.
(u) 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.
(v) As agent for the City, manage risk management and Facility insurance needs, as more
fully described in Article 16 of the Agreement.
(w) Make and be responsible for all routine and minor repairs, maintenance, preventative
maintenance, and equipment servicing, subject to the terms of Section 13.2. 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.
(x) 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.
30
EXHIBIT B
EXISTING CONTRACTS
1. Hawkeye Alarm
2. Pro -Shield (fire extinguishers)
3. Schumacher Elevator
4. Black Hawk Sprinkler
5. Black Hawk Waste Disposal
31
See attached.
EXHIBIT C
OPERATING BUDGET (1ST PARTIAL OPERATING YEAR)
32
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EXHIBIT D
INSURANCE
At all times during this Agreement, Manager shall maintain the following insurance coverage, in
conformance with and subject to the terms of the Agreement:
(a) commercial general liability insurance, including products and completed operations,
bodily injury and property damage 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 Iowa;
(e) professional liability insurance and self -insured employment practices liability
coverage;
(f)
(g)
(h)
employment practices liability insurance;
pollution liability; and
crime coverage.
Such liability insurance shall be maintained in the following minimum amounts throughout the
Term:
Commercial General Liability
$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
33
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 basisl
$1,000,000
Crime Insurance
Coverage on all on -site Manager employees. Limit: $500,000.00
34
See attached.
EXHIBIT E
TRANSITION COSTS
35
SPECTRA
Spectra
5 Sullivan Brothers Convention Center
Estimated Management Transition Expenses
Relocation
Travel
Employee Recruitment Cost
Personnel Related Expenses
General Manager
$20,000
Director/Manager Interview Trips
Cost Per Trip (2 days/1 night)
2
$1,000
Cost per Background Check
Number of Checks
Recuitment Expenses
Total Personnel Related Expenses
$50
30
$1, 500
20,000
$2,000
$3,000
$25,000
Corporate/Regional Travel Expenses
Corporate Travel Expenses per Trip (based upon 2 nights/3 days):
Airfare
Transportation ($50 per day)
Hotel ($150 per night)
Expenses ($75 per day)
Total Estimated Cost per Trip
$600
$150
$300
$225
$1,275
Estimated # of Trips #
Regional VP/Operations 4 $5,100
Field Operations 2 $2,550
Facility Accounting 2 $2,550
Human Resources 4 $5,100
Food & Beverage 3 $3,825
Sales & Marketing 3 $3,825
Total Corporate Trips 18 $22,950
Total Travel Expenses
Miscellaneous Start Up Expense
Office Supplies, Etc. $500
Total Miscellaneous Cost $500
TOTAL TRANSITION EXPENSES
$22,950
$48,450I
EXHIBIT F
PERFORMANCE EVALUATION CRITERIA
The annual performance review will be conducted by assessing Manager's performance each
Operating Year against goals mutually established by the Performance Review Board and
Manager with respect to the qualitative categories recited in Section 3.2(a) of the Agreement.
The purpose of such review is, among other things, to set expectations, to provide a forum for
planning and dialogue relevant to optimizing consistent utilization of the Facility, and to provide
meaningful tools to aid the City in determining Manager's Qualitative Fee for a given Operating
Year. This review and its results shall not be used as a basis for establishing a default or breach
by Manager under this Agreement. Specific evaluation criteria for each category will include,
but not be limited to, the factors described below.
(1) "Results of Customer Service Surveys" will evaluate the level of satisfaction set
annually by the Performance Review Board, rating Manager's performance in meeting the
overall goals of the Board. The Board will consider the following sub -categories, giving
consideration to the criteria set forth for each sub -category and other relevant and related
considerations by using customer satisfaction surveys that encompass the concepts outlined
below. Manager shall develop a survey document and cover letter. Manager and the
Performance Review Board can jointly approve periodic changes to the survey document and
cover letter. Manager will provide to the Waterloo Convention & Visitors Bureau contact
information (contact person, mailing address, email address, and phone number) with respect
to each event at the Facility, and the Convention & Visitors Bureau will solicit and collect
survey responses and provide results to the Board. Survey responses will be requested from
event planners for each event. City will require the Convention & Visitors Bureau to
promptly forward a copy of all survey responses to Manager so as to allow Manager to
respond to any issues that require attention and/or to recognize Manager's staff for their
outstanding efforts.
Cleanliness — Are the building and grounds consistently in a high state of cleanliness?
Is cleaning done beyond a surface level? Manager shall have a manual that outlines
cleaning procedures, schedules and standards applicable to the facility. Manager will
provide committee with a copy of the manual as well as documentation of cleaning.
Event Execution — Do set-up and tear -down happen in a timely fashion? Is the audio-
visual equipment prepared appropriately for the event? Are the details and
expectations that are set out in the banquet event order matched? The Board may
review all customer surveys that Manager receives.
Customer Service — Have Manager and staff performed all duties in a professional
productive manner with the aim of ensuring a successful event and experience for the
client, ensured that client needs are met and operational policies and procedures
followed, and been responsive to requests by customers and prospective customers to
view the facility and to address inquiries satisfactorily and in a timely manner?
36
Food and beverage service — Is food served at the appropriate temperature? Are
guests being served the correct food? Does the quantity of food match what was
ordered by the customer? Are food and beverage served in a timely fashion? Does
the setup of food service adequately provide guests an opportunity to serve
themselves (banquet setup)? Are there enough beverages available to guests? Are
dirty plates, glasses, silverware cleared at the appropriate time?
(2) "Stakeholder/Tenant Relationships" — Does Manager maintain regular
communications and meetings with groups that make regular use of the Facility or that hold
large-scale events at the Facility? Is Manager responsive to inquiries and suggestions from
organizations promoting Facility usage to third -party users, such as the Convention and
Visitors Bureau, and work cooperatively with such organization and local hotels to
coordinate promotional efforts and maintain an up-to-date event calendar? How well does
Manager coordinate Facility utilization with other community events? Has Manager made
regular reports (monthly, unless otherwise noted) to the Board with attendance figures,
property and equipment maintenance, facility cleaning and post -event customer surveys?
(3) "Innovative Sales and Marketing" — Does Manager demonstrate resourcefulness in its
sales and marketing methods, devise creative approaches to generating single -use events and
repeat business for the Facility, and/or make use of industry channels to stimulate Facility
utilization?
(4) "Repairs and Maintenance" — Are all facility features, systems and mechanicals to the
extent serviced by Manager in good working order, set to function within desired parameters
and, if appropriate, of a presentable appearance?
(5) "Community Involvement" — Is Manager, through its Management -Level Employees
and/or other appropriate personnel, actively and regularly involved in the activities and
organizations that promote the betterment and welfare of the City of Waterloo, its citizens
and neighboring communities?
An evaluation score will be determined for category, using the following scale:
0 — Fails to meet expectations
1 — Sometimes meets expectations
2 — Consistently meets expectations
3 — Meets and sometimes exceeds expectations
4 — Consistently exceeds expectations
Each sub -category under "Results of Customer Service Surveys" will be separately scored, and
then the scores will be totaled, averaged and rounded to the nearest tenth of a point to determine
a score for the category as a whole.
If aggregate scores for any category fall below two (2) for more than one consecutive year
Manager will be required to provide plans for specific corrective measures. The scoring system
and expectations for scores will be reviewed annually by the Performance Review Board and
37
modified as deemed appropriate by a majority of all members of the Board in consultation with
Manager.
38