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AG 24-039 - GLOBAL SPECTRUMRETURN TO: AUTUMN GRESSETT EXT: 6914 CITY OF FEDERAL WAY LAW DEPARTMENT ROUTING FORM 1. ORIGINATING DEPT./DIV: PARKS 2. ORIGINATING STAFF PERSON: AUTUMN GRESSETT EXT: 6914 3. DATE REQ. BY:10/23/2023 4. TYPE OF DOCUMENT (CHECK ONE): ❑ CONTRACTOR SELECTION DOCUMENT (E.G., RFB, RFP, RFQ) ❑ PUBLIC WORKS CONTRACT ❑ SMALL OR LIMITED PUBLIC WORKS CONTRACT ❑ PROFESSIONAL SERVICE AGREEMENT ❑ MAINTENANCE AGREEMENT ❑ GOODS AND SERVICE AGREEMENT ❑ HUMAN SERVICES / CDBG ❑ REAL ESTATE DOCUMENT ❑ SECURITY DOCUMENT (E,G. BOND RELATED DOCUMENTS) ❑ ORDINANCE ❑ RESOLUTION ❑ CONTRACT AMENDMENT (AG#): ❑ INTERLOCAL 0 OTHER MANAGEMENT AGREEMENT 5. PROJECT NAME: PAEC VENUE MANAGEMENT 6. NAME OF CONTRACTOR: GLOBAL SPECTRUM L.P. ADDRESS: 3601 S BROAD ST, PHILADELPHIA, PA 19146 TELEPHONE 253-740-9127 E-MAIL: BRIAN.HOFFMAN@OAKVIEWGROUP.COM FAX: SIGNATURENAME: BRIAN ROTHENBERG TITLE 7. EXHIBITS AND ATTACHMENTS: A SCOPE, WORK OR SERVICES R COMPENSATION ❑ INSURANCE REQUIREMENTS/CERTIFICATE ❑ ALL OTHER REFERENCED EXHIBITS ❑ PROOF OF AUTHORITY TO SIGN ❑ REQUIRED LICENSES ❑ PRIOR CONTRACT/AMENDMENTS 8. TERM: COMMENCEMENT DATE: upon signature COMPLETION DATE: DECEMBER 31, 2033 9. TOTAL COMPENSATION $ 75,000 annually (INCLUDE EXPENSES AND SALES TAX, IF ANY) (IF CALCULATED ON HOURLY LABOR CHARGE - ATTACH SCHEDULES OF EMPLOYEES TITLES AND HOLIDAY RATES) REIMBURSABLE EXPENSE: ❑ YES @ NO IF YES, MAXIMUM DOLLAR AMOUNT: $ IS SALES TAX OWED ®YES DNO IF YES, $ PAID BY: ❑ CONTRACTOR ❑ CITY RETAINAGE: RETAINAGE AMOUNT: ❑ RETAINAGE AGREEMENT (SEE CONTRACT) OR ❑ RETAINAGE BOND PROVIDED ® PURCHASING: PLEASE CHARGE TO:� 10. DOCUMENT/CONTRACT REVIEW INITIAL / DATE REVIEWED INITIAL / DATE APPROVED ® PROJECT MANAGER ag8/29 revised-ag10/18 ❑ DIRECTOR ❑ RISK MANAGEMENT (IF APPLICABLE) A LA`111 JE 9/27/23, JE 10/19/23 11. COUNCIL APPROVAL (IF APPLICABLE) COMMITTEE APPROVAL DATE: COUNCIL APPROVAL DATE: 12. CONTRACT SIGNATURE ROUTING p © SENT TO VENDOR/CONTRACTOR DATE SENT: 12/1/2023 DATE REC'D:LI 0 ATTACH: SIGNATURE AUTHORITY, INSURANCE CERTIFICATE, LICENSES, EXHIBITS ❑ CREATE ELECTRONIC REMINDER/NOTIFICATION FOR 1 MONTH PRIOR TO EXPIRATION DATE (Include dept. support staff if necessary and feel free to set notification more than a month in advance if council approval is needed.) INITIAL/ DATE SIGNED EPARTMENTTORY (MAYOR OR DIRECTOR) LERK V NED AG# AG# COMMENTS: Some minor changes included - JE 10/19/23 CITY OF CITY HALL Federal Wa Feder 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityoffederalway com MANAGEMENT AGREEMENT FOR PERFORMING ARTS AND EVENTS CENTER (PAEC) This Management Agreement is entered into and made effective as of January 1, 2024 ("Effective Date"), by and between the City of Federal Way, Washington, a Washington State municipal corporation ("City"), and Global Spectrum, LP, a Delaware limited partnership ("Manager"). City and Manager are collectively referred to herein as "Parties." RECITALS WHEREAS, City owns the Performing Arts and Events Center of Federal Way ("PAEC"), a 716-seat performing arts center, approximately 8,400 square feet event space, kitchen, and associated office space (the "Facility"), located in Federal Way, Washington; and WHEREAS, the City has the right and authority to engage Manager to manage and operate 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. 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: 1. DEFINITIONS Section 1.1. Definitions. For purposes ofthis 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. 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 five (5) years. Commercial Rights: Naming rights, pouring rights, advertising, sponsorships, the branding of food and beverage products for resale, premium seating (including suites, club seats and party suites), and memorial gifts at or with respect to the Facility. Contribution: shall have the meaning given to such term in Section 11.3 herein. CPI: The "Consumer Price Index" for the local Federal Way, Washington area, as published by the United MANAGEMENT SERVICES AGREEMENT - 1 - 4/2023 CITY OF Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253)835-7000 www cilyoffederalway com States Department of Labor, Bureau of Labor Statistics or such other successor or similar index. Effective Date: shall have the meaning given 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 one or both of the Facility threatening persons or property. Event Account: A separate interest -bearing account in the name of the Manager and under the Manager's Federal ID number in a local qualified public depository, 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. Facility: shall have the meaning given to such term in the Recitals to this Agreement, and shall be deemed to include the entire PAEC (theater and event spaces), including but not limited to, as applicable, the seating areas, dressing rooms, meeting rooms, box office, common areas, kitchen areas, lobby areas, executive and other offices, storage and utility facilities, the entrances, ground, sidewalks and parking areas immediately surrounding the Facility, and outdoor areas, all as specifically 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. General Manager: The employee of Manager acting as the full-time on -site general manager ofthe Facility. Incentive Fee: The contingent fee the City shall pay to Manager under this Agreement, if earned, as more fully described in Section 3.2 below. Initial Term: "Term shall have the meaning given 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, and Food and Beverage 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 MANAGEMENT SERVICES AGREEMENT - 2 - 4/2023 CITY OF ,4! ,�S� Federal Inlay CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityoffederalway com contain but not be limited to the following elements, as applicable: (i) market research, (ii) market position, (iii) marketing objectives, (iv) marketing strategies, (v) booking priorities, (vi) targeted events - local, regional, national and international, (vii) targeted meetings, conventions and trade shows, (viii) industry advertising campaign, (ix) internal and external support staff, (x) advertising opportunities at the local, regional and national level, (xi) attendance at various trade shows, conventions and seminars, (xii) incentive formulas for multiple event presenters, (xiii) suite and club seat sales, (xiv) merchandising and retail, (xv) food and beverage, (xvi) a plan for the sale of commercial rights, including without limitation naming rights, pouring rights, advertising signage, sponsorships (including event sponsorships), branding of food and beverage products for resale, premium seating (including but not limited to suites and club seats), and memorial gifts, (xvii) a plan regarding national, regional and local public relations and media relations, (xviii) development of an in-house advertising agency, and (xix) policies regarding the use of trade/barter. Net Operating Income/Loss: shall mean the amount by which Revenue at the Facility exceeds Operating Expenses at the Facility, resulting in Net Operating Income, or by which Operating Expenses at the Facility exceeds Revenue at the Facility, resulting in Net Operating Loss, for the period in question. Net Operating Income/Loss Benchmark: shall be mutually agreed on annually, prior to December 1, and confirmed in writing. If for any reason the Parties are unable to mutually agree on such figure prior to such date, the Parties shall submit such determination to a mutually agreed upon third -party arbitrator who shall be an independent industry expert, without any conflicts of interest. City and Manager shall each submit to such third party their proposed figure for the Net Operating Income/Loss Benchmark, and such third Parties' determination shall be final and binding on the City and Manager, provided that such determination shall be made consistent with the terms of this Agreement, and shall not be outside of the range of the figures submitted by the City and Manager. The cost of such third -party arbitrator shall be shared equally between the Parties. Operating Account: A separate interest -bearing account in the name of the Manager and under the Manager's Federal ID number in a local qualified public depository, where Revenue is deposited and from which Operating Expenses are paid. Operating Budget: A line item budget for the Facility that includes a projection of Revenues and Operating Expenses, presented on a monthly and annual basis. Operating Expenses: All expenses incurred by Manager in connection with its operation, promotion, maintenance and management of the Facility, including but not limited to the following: (i) employee payroll, benefits, relocation costs, severance costs, bonus and related costs, (ii) cost of operating supplies, including general office supplies, (iii) advertising, marketing, group sales, and public relations costs, (iv) cleaning and landscaping 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) amount of any deductible or self -insured retention under insurance policies; MANAGEMENT SERVICES AGREEMENT - 3 - 4/2023 CITY OF CITY HALL �e �� � 8th Avenue South Federad le l Way, WA 98003-6325 (253) 835-7000 www cityoffederalway.com (xxviii) costs incurred under Service Contracts and other agreements relating to Facility' operations, (xxix) all costs relating to provision of the Food and Beverage Services, including labor, cost of goods, and cost ofpennits/licenses; and (xxx) Taxes. The term "Operating Expenses" does not, include debt service on the Facility, Capital Expenditures, property taxes, insurance on the Facility of contents within the Facility owned by City, or the Incentive Fee, all of which costs shall be borne by the City. Operating Year: Each twelve (12) month period during the Term, commencing on January 1 and ending on the following December 31. Operations Manual: Document to be developed by Manager that shall contain 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 ofthe 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. Revenue Generating Contracts: Vendor, concessions and merchandising agreements, user/rental agreements, booking commitments, licenses, and all other contracts or agreements generating revenue for the Facility and entered into in the ordinary course of operating the Facility. Service Contracts: Agreements for services to be provided in connection with the operation of the Facility, including without limitation agreements for ticketing, web development and maintenance, computer support services, FF&E purchasing services, engineering services, electricity, steam, gas, fuel, general maintenance, HVAC maintenance, telephone, staffing personnel including guards, ushers and ticket -takers, extermination, elevators, stage equipment, fire control panel and other safety equipment, snow removal, and other services that 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. 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 MANAGEMENT SERVICES AGREEMENT - 4 - 4/2023 CITY OF CITY HALL - Fe d e ra l Vila Feder 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cftyotiederalway com operator of the Facility, subject to and as more fully described in this Agreement. (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. Section 2.3 Standard of Care. Subject to the limitations of the Operating Budget, Manager shall exercise reasonable commercial, good faith efforts in managing and operating the Facility so as to minimize Operating Expenses and maximize Operating Revenues, provided that Manager shall be permitted to book events at no or reduced rental fees as required and approved by the City pursuant to the terms of Section 5.4. Section 2.4 Duty. Manager shall owe to the City a duty to perform its obligations under this Agreement and pursuant to the terms in Exhibit A and to conduct the management and operation of the Facility at all times with integrity and good faith and in a manner that is in the best interests of the Facility and the City and consistent with the terms of this Agreement. Manager shall not engage in any act that not within the scope of its authority under this Agreement, that is not in good faith or from which the Manager derives an improper personal benefit. 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 December 31, 2028, the Fixed Management Fee shall be Six Thousand Two Hundred Fifty Dollars ($6,250.00) per month. The Fixed Management Fee shall be payable to Manager in advance, beginning on the Effective Date, and payable on the first (1 st) 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. The Incentive Fee shall be comprised of a qualitative component as described in subpart (a) below ("Qualitative Component") and a quantitative component as described in subpart (b) below ("Quantitative Component"). (a) Qualitative Component. Manager shall be eligible to earn up to ten thousand dollars ($10,000) in each Operating Year (pro -rated for any Operating Years of less than a full 12 months based on the actual number of days elapsed in such Operating Year out of 365). The Qualitative Component shall be determined by the City, in its reasonable and good faith discretion based on its evaluation of Manager's performance each Operating Year in each of the following five (5) performance areas: Revenue Generation Metric. Each eligible to earn up to $500, with a maximum benefit of $2,000 1. Increase F&B Rev YOY by 2.5% 2. Increase Theater Rental Rev YOY by 2.5% 3. Increase Event Space Rental Rev YOY by 2.5% MANAGEMENT SERVICES AGREEMENT - 5 - 4/2023 CITY OF CITY HALL Apo*Fe d e ra Y Y �y Feder 8th Avenue South Federal Way, WA 98003-6325 (253)835-7000 wvw a yoffederalway com 4. Increase Ticket Rev YOY by 2.5% ii. Attendance Metric. Eligible to earn $2,000 1: Increase Venue Attendance by 5% 2024 and 2.5% every year after iii. Usage Days Metric. Eligible to earn $2,000 1. Increase Venue Usage Days by 2.5% every year (includes all contractual usage days including rehearsals, setup and event day) iv. Host Free Community Events (paid for by local sponsorships acquired by Manager). Each event is worth $400, with a maximum benefit of $2,000 1. 5 annually in 2024, 2025 and 2026 (minimum 1 per quarter) 2. Increase by 1 each year starting in 2027 v. Types of Events Metric. Each eligible to earn $500, with a maximum benefit of $2,000 1. Weddings — minimum 4 annually 2. Banquets/meetings/conferences —minimum 50 annually 3. Non-profit —minimum 10 annually 4. Arts4youth — minimum 6 annually (b) Quantitative Component. Manager shall be paid twenty percent (20%) 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 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 earnable by Manager. The mutually agreed upon Benchmark shall be determined during each Biennium budget. The Incentive Fee earned by Manager shall be paid to Manager no later than one -hundred eighty (180) 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 fifteen percent (15%) of the Revenue from Commercial Rights ("Commercial Rights Fee"), as set forth below. For the sake of clarity, the Parties acknowledge that the Commercial Rights Fee shall be paid on all gross revenue from the sale of advertising signage, sponsorships, naming/title rights, sub-naming/title rights, pouring rights, branding rights, and other Commercial Rights at the Facility. For purposes of this paragraph, Revenue shall include trade/barter, with such trade/barter valued at its retail price in an arms -length transaction. The Commercial Rights Fee shall be paid for the full duration of all contracts for such Commercial Rights, including any period that extends after the end of this Agreement. Notwithstanding the foregoing, the Commercial Rights Fee shall not be paid on Revenue from Commercial Rights secured prior to the Effective Date. 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 ofthis 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 Commissions due Manager under this paragraph are fully paid. Manager shall engage one (1) person to serve as an on -site sales person, the costs of whom shall be considered an Operating Expense of the Facility. Section 3.4 Naming Rights. In addition to the other fees due Manager hereunder, the City shall pay Manager twenty percent (20%) of the Revenue from Naming Rights ("Naming Rights Fee"), as set forth below. For the sake of clarity, the Parties acknowledge that the Naming Rights Fee shall be paid on all gross revenue from the sale of naming/title rights and sub-naming/title rights at the Facility. For purposes of this paragraph, Revenue shall not include trade/barter, with such trade/barter valued at its retail price in an arms -length transaction. The Naming Rights Fee shall be paid for the full duration of all contracts for such Naming Rights, including any period that MANAGEMENT SERVICES AGREEMENT - 6 - 4/2023 CITY OF Federal Inlay CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www c 4loffederalway com extends after the end of this Agreement. Notwithstanding the foregoing, the Naming Rights Fee shall not be paid on Revenue from Naming Rights secured prior to the Effective Date and/or solely secured by the City. Payments due under this paragraph shall be made to Manager on an annual basis, within one -hundred eighty (180) days of the end of each Operating Year, with respect to Revenue received in that year from the applicable Naming 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 Naming Rights received in such years until such time as all Naming Rights Commissions due Manager under this paragraph are fully paid. Section 3.5 Late Payments. Manager shall have the right to assess interest on any payments of the fees described in this Section that are not made when due. Such interest shall accrue at the rate of twelve percent (12%) per annum. 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 December 31, 2028. Following the Initial Term, the City may extend the Agreement for an additional five (5) years, to end on December 1, 2033, by providing written notice of such extension to Manager no later than August 31, 2028. The Initial Term plus any such Renewal Term is referred to as the "Term" hereunder. Section 4.2 Termination. This Agreement may be terminated: (a) 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 (b) by either party immediately by written notice upon the other party being judged bankrupt or insolvent, or if any receiver or trustee of all or any part of the business property of the other party shall be appointed and shall not be discharged within one hundred twenty (120) days after appointment, or if either party shall make an assignment of its property for the benefit of creditors or shall file a voluntary petition in bankruptcy or insolvency, or shall apply for bankruptcy under the bankruptcy or insolvency Laws now in force or hereinafter enacted, Federal, State or otherwise, or if such petition shall be filed against either party and shall not be dismissed within one hundred twenty (120) days after such filing. Section 4.3 Effect of Expiration or Termination (a) Upon expiration or termination ofthis Agreement, the City shall reimburse Manager for any actual ordinary and necessary expenses incurred by Manager in withdrawing from the provision of services hereunder following such termination. Such ordinary and necessary expenses shall include costs associated with (i) severance pay, not to exceed three (3) months, for each of Manager's Management -Level Employees who are not retained by Manager following termination of this Agreement; (ii) reasonable household relocation expenses for Management -Level Employees at the Facility who are retained by Manager following termination to work at another Manager -managed Facility, but only to the extent any of such individuals had previously relocated to the Facility (or MANAGEMENT SERVICES AGREEMENT - 7 - 4/2023 4qCITY OF CITY HALL 33325 Avenue South Federall Way, WA 98003-6325 Fed a ra l Way (253)835-7000 www cilyoffederalway com 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) Upon expiration or termination or this Agreement, the following shall also apply: (i) Manager shall promptly discontinue the performance of all services hereunder; (ii) City shall promptly pay Manager all fees due Manager up to the date of termination or expiration (subject to proration if the Term ends other than at the end of the Operating Year); (iii) the 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 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 (iv) 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. 5. OWNERSHIP; USE OF THE FACILITY Section 5.1 Ownership of Facility. Data. Equipment and Materials. The City will at all times retain ownership of the Facility, including but not limited to real estate, technical equipment, furniture, displays, fixtures, and similar property, including improvements made during the Term. Any data, equipment or materials furnished by the City to Manager or acquired by Manager as an Operating Expense shall remain the property of the City, and shall be returned to the City when no longer needed by Manager to perform under this Agreement. Notwithstanding the above, City shall not have the right to use any third -party software licensed by Manager for general use by Manager at the Facility and other facilities managed by Manager, the licensing fee for which is proportionately allocated and charged to the Facility as an Operating Expense; such software may be retained by Manager upon expiration or termination hereof. Furthermore, the City recognizes that the Operations Manual to be developed and used by Manager hereunder is proprietary to Manager, and shall belong to Manager at the end of the Term; City shall not use or maintain copies thereof upon the end of the Term except as may be required by the Washington State Public Records Act per Section 18.17 below.. 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 Facility necessary for, and related to, the operation, maintenance and management ofthe Facility. The City shall provide Manager with a sufficient amount of suitable office space in the Facility and with such office equipment as is reasonably necessary to enable Manager to perform its obligations under this Agreement. In addition, the City shall make available to Manager, at no cost, parking spaces adjacent to the Facility for all of Manager's full-time employees and for the Facility's event staff. The City will retain the use of one (1) office with a door in the Facility for use by City staff. Section 5.3 Observance of Agreements. The City agrees to pay, keep, observe and perform all payments, terms, covenants, conditions and obligations under any leases, bonds, debentures, loans and other financing and MANAGEMENT SERVICES AGREEMENT - 8 - 4/2023 CITY of CITY HALL 4'!Fe d e ra I Y Y a Feder 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityoffederalway com security agreements to which the City is bound in connection with its ownership of the Facility. Section 5.4 . Use by the City_. Subject to availability, the City shall have the right to use the Facility or any part thereof without paying rent for meetings, seminars, training classes or other non-commercial uses, provided that the City shall promptly reimburse Manager, for deposit into the Operating Account, for any out-of-pocket expenses incurred by Manager (such as the cost of ushers, ticket -takers, set-up and take -down personnel, security expenses, and other expenses) in connection with such use. Such non-commercial use of the Facility by the City shall: (i) not compete with or conflict with the dates previously booked by Manager for paying events, (ii) not consist of normally touring attractions (such as concerts and family shows), and (iii) be booked in advance upon reasonable notice to Manager pursuant to the Facility' 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 that 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, provided, that the City shall not be obligated to reschedule its 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, when such City use precludes rental of the facility to an available paying customer. Section 5.5 Right of Ingress and Egress, Manager acknowledges that the City shall have the right to enter the Facility and to grant to others the right of ingress and egress to and from the Facility for the purpose of inspection thereof, the conduct of capital improvements, or other purposes. The City agrees to use reasonable commercial efforts to coordinate such entry with the Manager to minimize interference with scheduled activities at the Facility. 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. Subject to the remainder of this paragraph, Manager shall select, in its sole discretion but subject to City's right to approve the Operating Budget, the number, function, qualifications, and compensation, including salary and benefits, of its employees and shall control the terms and conditions of employment (including without limitation termination thereof) relating to such employees. Manager agrees to use reasonable and prudent judgment in the selection and supervision of such personnel. The City specifically agrees that Manager shall be entitled to pay its employees, as an Operating Expense, bonuses and benefits in accordance with Manager's then current employee manual, which may be modified by Manager from time to time in its sole discretion. A copy of Manager's current employee manual shall be provided to the City upon request. City shall pay all accrued but unused vacation time to its employees whose employment with City is terminating and whose employment with Manager is commencing. Section 6.2 General Manager. Personnel engaged by Manager will include an individual with experience managing facilities similar to the Facility to serve as a full-time on -site General Manager of the Facility. Hiring of the General Manager by Manager shall require the prior approval of the City, which approval shall not be unreasonably withheld or delayed; provided, however, in the event of a vacancy in the General Manager position, Manager may, upon notice to the City, temporarily fill such position with an interim General Manager for up to ninety (90) days without the necessity of obtaining the City's approval. The General Manager will have general supervisory responsibility for Manager and will be responsible for day-to-day operations ofthe Facility, supervision of employees, and management and coordination of all activities associated with events taking place at the Facility. MANAGEMENT SERVICES AGREEMENT - 9 - 4/2023 4% CITY OF Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 wvw cityoffederalway com Section 6.3 On -Site Sales Person. Manager shall engage one (1) person to serve as an on -site sales person for commercial and naming rights, the costs of whom shall be considered an Operating Expense of the Facility. Section 6.4 Non-Solicitation/Non-Hiring. During the Term and for a period of one (1) year after the end of the Term, neither City nor any of its Affiliates shall solicit for employment, or hire, any of Manager's Management -Level Employees unless Management agrees to such solicitation or employment in writing. 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. 7. OPERATING BUDGET Section 7.1 012erating Budget. Manager agrees that at least 180 days prior to the commencement of each subsequent Operating Year in respect of such year, it will prepare and submit to the City a proposed Operating Budget for the for such year for the City's review and approval as provided in Section 7.2. Each such 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. Manager agrees to cooperate with the City and make presentations to the City council as part of the City's own internal budgeting process. Section 7.2 Approval of Operating Budget. Each of the annual Operating Budgets shall be subject to the review and approval of the City, which approval may be withheld or granted in its sole discretion. In order for the City to fully evaluate and analyze such budgets or any other request by Manager relating to income and expenses, Manager agrees to provide to the City such reasonable financial information relating to the Facility as may be requested by the City from time to time. If extraordinary events occur during any Operating Year that could not reasonably be contemplated at the time the corresponding Operating Budget was prepared, Manager may submit an amendment to such budget for review and approval by the City, which approval may be withheld or granted in its sole discretion. 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 its 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 bottom line number in the Operating Budget, and any material increase in total Facility expenses from that provided for in the Operating Budget. In either such case Manager MANAGEMENT SERVICES AGREEMENT - 10 - 4/2023 CITY OF CITY HALL Fed a raN Wa 8th Avenue South � Federal Way, WA 98003-6325 (253)835-7000 www cityotfederalway com agrees to work with City to develop and implement a plan (or changes to the then current plan) to limit Operating Expenses to be incurred in the remaining months of such Operating Year with the goal of achieving the Operating Budget. 8. PROCEDURE FOR HANDLING INCOME Section 8.1 Event Account. Manager shall deposit as soon as practicable following receipt, in the Event Account for the Facility, all revenue received from ticket sales and similar event -related revenues that Manager receives in contemplation of, or arising from, an event at the Facility, pending completion ofthe event. Such monies will be held in trust for the protection of ticket purchasers, City, and Manager, and to provide a source of funds as required for payments to performers and for payments of direct incidental expenses in connection with the presentation of events that must be paid prior to or contemporaneously with such events. Promptly following completion of such events, Manager shall transfer all funds remaining in the Event Account, including any interest accrued thereon, into the Operating Account for the Facility. Section 8.2 OperatingAccount. 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. 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 accounts, subject to the limitations of this Agreement. 9. FUNDING Section 9.1 Source of Funding. Manager shall pay all items of expense for the operation, maintenance, supervision and management of the Facility from the funds in the Operating Accounts for the Facility. The Operating Accounts 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 Accounts, City will deposit in the Operating Accounts, on or before the Effective Date, the budgeted or otherwise approved expenses for the Facility for the three (3) month period beginning on the Effective Date. The City shall thereafter, on or before the I" day of each succeeding month following the Effective Date, deposit (or allow to remain) in the Operating Accounts the budgeted or otherwise approved expenses for each such month, retaining at all times in the accounts funding for the upcoming 3-month period. 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. If the City appropriates funds at (or reduces appropriated funds to) a level that, in the Manager's good faith reasonable judgment, renders the management of the Facility as contemplated in the Agreement not feasible, Manager and the City shall meet as necessary to formulate a plan to continue management of the Facility at a reduced level of services consistent with anticipated Operating Revenues and available funding. 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 12% per annum. 10. FISCAL RESPONSIBILITY; REPORTING Section 10.1 Records. Manager agrees to keep and maintain, at its office in the Facility, separate and MANAGEMENT SERVICES AGREEMENT - 11 - 4/2023 CITY OF CITY HALL �� Feder Federal ra [Way 8th Avenue South Federal Way, WA 98003-6325 (253)835-7000 www cityotiederalway com independent records, in accordance with generally accepted accounting principles, devoted exclusively to its operations in connection with its management ofthe Facility. Such records (including books, ledgers, journals, and accounts) shall contain all entries reflecting the business operations of Manager under this Agreement. The City or its authorized agent shall have the right to audit and inspect such records from time to time during the Term, upon reasonable notice to Manager and during Manager's ordinary business hours. Section 10.2 Monthly Financial Reports. Manager agrees to provide to the City, within thirty (30) days after the end of each month during the Term, financial reports for the Facility including a balance sheet, aging report on accounts receivable, and statement of revenues and expenditures (budget to actual) for such month and year to date in accordance with generally accepted accounting principles. In addition, Manager agrees to provide to the City a summary of bookings for each such month, and separate cash receipts and disbursements reports for each event held at the Facility during such month. Additionally, Manager shall submit to the City, or shall cause the applicable public depository utilized by Manager to submit to the City, on a monthly basis, copies of all bank statements concerning the Event Account and the Operating Account. Section 10.3 Annual Plan. Simultaneously with the submission of each annual Operating Budget referenced in Section 7 of this Agreement, Manger shall also submit an annual plan (the "Annual Plan") for the City's review and approval. The Annual Plan will include information regarding Manger's anticipated operations for the coming Operating Year, including planned operating maintenance activities (including a preventive maintenance schedule), expense control initiatives, requested capital improvements and capital equipment purchases, anticipated events at the Facility, anticipated advertising and promotional activities, and planned equipment and furnishings purchases. The Annual Plan shall be subject to review, revision and approval by the City. Section 10.4 Audit. 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 and those procedures required by applicable state law. Manager agrees that it will cooperate fully with the Auditor's Office ofthe State of Washington and provide it and its agents with all information that it may request in connect with a state audit of the Facility. Costs associated with a state audit shall be an Operating Expense of the Facility. Section 10.5 Federal Pro ram Reporting. Facility construction costs were partially funded by the federal Section 108 program as well as the New Market Tax Credit program, both of which require recording and reporting of performance metrics on established subjects. Manager agrees to record those metrics required by the City to facilitate the City's obligation to report to the federal government. 11. CAPITAL IMPROVEMENTS; MANAGER CONTRIBUTION Section 11.1 Schedule of Capital_ Expenditures. Manager shall annually, at the time of submission of the annual Operating Budget to the City, provide to the City a schedule of proposed capital improvements to be made at the Facility, for the purpose of allowing the City to consider such projects and to prepare and update its 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 MANAGEMENT SERVICES AGREEMENT - 12 - 4/2023 CITY OF CITY HALL A`, Federal Way Feder 8th Avenue South Ma Federal Way, WA 98003-6325 (253) 835-7000 www apyoffederalway com or damages arising out of a failure by the City to make any Capital Expenditures. Notwithstanding the foregoing, Manager shall have the right (but not the obligation), upon notice to the City, to make Capital Expenditures at the Facility for Emergency Repairs. In such event, the City shall promptly reimburse Manager for the cost of such Capital Expenditure. Section 11.3 Manager Contribution. Manager hereby agrees to make a contribution of Two Hundred Thousand Dollars ($200,000) to the City (the "Contribution"). The Contribution shall be paid to the City no later than February 1, 2024, and may be used for any purpose in the City's discretion, but the City agrees to give due consideration to using such funds to develop an event fund to attract events to the Facility. The Contribution shall be amortized on a straight-line basis over a one hundred twenty (120) month period (at the rate of 1/120 per month), beginning on the Effective Date and ending on December 31, 2033. Upon the expiration or termination (for any reason whatsoever, including without limitation if due to a breach, default or bankruptcy event by or affecting Manager, or if the City elects not to renew this Agreement beyond the Initial Term) of this Agreement, the City shall immediately pay to Manager the unamortized amount of the Contribution, without deduction or setoff of any kind. 12. FOOD AND BEVERAGE SERVICE Section 12.1 Generally. Manager shall have the sole and exclusive right to manage and perform, and Manager hereby agrees to manage and perform all food and beverage concession and catering service at the Facility ("Food and Beverage Service"). Manager may engage sub -contractors to sell food and beverages at the Facility. 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, banquet facility, catering facility, exhibition space, food preparation areas, vendor commissaries, kitchen and storage 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). Manager shall acquire all smallwares and equipment reasonably required by Manager to perform the Food and Beverage Service and such costs shall be an Operating Expense or Capital Expenditure, as applicable, of the Facility. Section 12.3 Food and Beverage Duties. In connection with its management and provision ofthe Food and Beverage Service, Manager shall: (a) Develop and implement all necessary policies and procedures for food and beverage operations; (b) 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); (c) Engage and oversee employees necessary to perform the Food and Beverage Services; (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 Facility and equipment in a neat, clean, and sanitary condition; (f) Undertake appropriate advertising, marketing, and promotion of the food and beverage offerings at the Facility; MANAGEMENT SERVICES AGREEMENT - 13 - 4/2023 CITY OF � Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityoffederalway. com (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's 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 from operation of the Food and Beverage Service shall be deemed 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. 13. FACILITY CONTRACTS; TRANSACTIONS WITH AFFILIATES Section 13.1 Execution of Contracts. Excluding any contract for a "public work" as defined in Chapter 39.04 RCW, Manager shall have the right to enter into Service Contracts, Revenue Generating Contracts, and other contracts related to the operation of the Facility, as agent on behalf of the City. Any such material agreements shall contain standard indemnification and insurance obligations on the part of each vendor, licensee, or service provider, as is customary for the type of services or obligations being provided or performed by such parties and consistent with other provisions in this Agreement relating to indemnification and insurance requirements for vendors, licensees, or service providers. 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 13.2 Transactions with Affiliates. In connection with its obligations hereunder relating to the purchase or procurement of services for the Facility, 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. 14. AGREEMENT MONITORING AND GENERAL MANAGER Section 14.1 Contract Adm inistrator. 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. Either party may change its contract administrator by providing written notice of such change to the other party. Any matters in this Agreement requiring Manager's participation or approval shall mean the participation or approval of the Manger's MANAGEMENT SERVICES AGREEMENT - 14 - 4/2023 CITY OF CITY HALL Federal 'Wa Feder 8th Avenue South �S Y Federal Way, WA 98003-6325 (253)835-7000 www o1yoffederalway com contract administrator, who to the extent such contract administrator has authority delegated from Manager, shall have the authority to act for and bind Manager with respect to any such matter. The City acknowledges that Manager's contract administrator does not have the authority to amend or modify this Agreement in any manner. Any matters in this Agreement requiring the City's participation or approval shall be directed to the City's contract administrator. The City's contract administrator may, to the extent such contract administrator has authority delegated from the City, act for and bind the City. When the City's contract administrator must present an issue to the City mayor or City council in order to authorize a request or bind the City, the City contract administrator will notify Manager promptly. 15. INDEMNIFICATION Section 15.1 Indemnification by Manage. 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, 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 (excluding Manager and its employees) 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 the Facility, (f) the fact that any time prior to, as of, or after the effective date of this agreement 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 at or pursuant to the written direction or instruction of City, its agents or employees, (h) any claims relating to the Facility or their 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 ("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 MANAGEMENT SERVICES AGREEMENT - 15 - 4/2023 CITY OF CITY HALL Fe d e ra I Way Feder 8th Avenue South �� � Federal Way, WA 98003-6325 (253)835-7000 www cityoffederalway com 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 established by a court of competent jurisdiction with respect to the underlying claim on which the Manager's obligation to indemnify is based. In the event that the liability of the Manager is so determined, then such legal costs shall be considered as costs of the Manager (and not Operating Expenses) in proportion to the comparative degree established by the court 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. 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 C, attached hereto, and shall provide to the City promptly following the Effective Date a certificate of certificates of insurance evidencing such coverage. Manager shall maintain such referenced insurance coverage at all times during the Term, and will not make any material modification or change from these specifications without the prior approval of the City. Each insurance policy shall include a requirement that the insurer provide Manager and the City at least thirty (30) days written notice of cancellation or material change in the terms and provisions of the applicable policy. The cost of all such insurance shall be an Operating Expense. Section 16.2 Rating: Additional Insureds. All insurance policies shall be issued by insurance companies rated no less than A VIII in the most recent "Bests" insurance guide, and licensed in the State of Washington 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. Section 16.3 Crime Insurance. Those employees of Manager who have access to or are responsible for the funds generated under this Agreement shall be covered by a crime insurance policy to be obtained by Manager consistent with the requirements of Exhibit C hereto. 17. REPRESENTATIONS, WARRANTIES AND COVENANTS MANAGEMENT SERVICES AGREEMENT - 16 - 4/2023 CITY OF CITY HALL �8th Avenue South � Federal WayFederal Way, WA 98003-6325 (253) 835-7000 www cityoffederalway com Section 17.1 Manager Representations and Warranties. Manager hereby represents, warrants and covenants to City as follows: (a) that it has the full legal right, power, and authority to enter into this Agreement and to grant the rights and perform the obligations of Manager herein, and that no third -party consent or approval is required to grant such rights or perform such obligations hereunder; and (b) that this Agreement has been duly executed and delivered by Manager and constitutes a valid and binding obligation of Manager, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, or similar Laws affecting creditors' rights generally or by general equitable principles. (c) that Manager will comply with all Laws applicable to its management of the Facility, provided that Manager shall not be required to undertake any compliance activity, nor shall Manager have any liability under this Agreement therefor, if such activity requires any Capital Expenditure. Section 17.2 City Representations, Warranties and Covenants. City represents, warrants and covenants to Manager as follows: (a) that it has the full legal right, power and authority to enter into this Agreement and to grant the rights and perform the obligations of City herein, and that no other third -party consent or approval is required to grant such rights or perform such obligations hereunder. (b) that this Agreement has been duly executed and delivered by City and constitutes a valid and binding obligation of City, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally or by general equitable principles. (c) that the Facility is, as of the Effective Date, in compliance in all respects with all applicable Laws relating to the construction, use and operation of the Facility (including, without limitation, Title III of the American with Disabilities Act), and that the City has no knowledge of any existing structural defects or unsound operating conditions at the Facility. 18. MISCELLANEOUS Section 18.1 PCI Compliance. Manager agrees to comply with all current Payment Card Industry Data Security Standards ("PCI Standards") and guidelines that may be published from time to time by Visa, MasterCard or other associations as they relate to the physical storage of credit card data. For PCI Standards compliance purposes, City will provide on a segmented network, an appropriate number of wired data connections to the Internet for point of sale devices to be used by Manager and any contractors at the Facility. City shall be responsible for the security of its network, including, without limitation, applicable PCI-DSS compliance, and for procuring and installing point of sale ("POS") payment systems that are compliant with the latest PCI-DSS requirements. If at any time either party determines that card account number or other information has been compromised, such party will notify the other immediately and assist in providing notification to the proper parties as deemed necessary. Section 18.2 No Discrimination. Manager agrees that it will not discriminate against any employee or applicant for employment for work under this Agreement because of race, religion, color, sex, disability, national MANAGEMENT SERVICES AGREEMENT - 17 - 4/2023 C[rr of CITY HALL 33325 ., Federal Way8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityotfederalway com origin, ancestry, physical handicap, age, sexual orientation, gender identity, or veteran or military status and will take affirmative steps to ensure that applicants are employed, and employees are treated during employment, without regard to race, religion, color, sex, disability, national origin, ancestry, physical handicap, age, sexual orientation, gender identity, or veteran or military status. 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 OVG360. The specific logos and branding details to be include in any designations shall be set forth in the Operations Manual. Section 18.5 Force Majeure; Casually 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 parry's failure to make payments due hereunder be excusable due to an Event of Force Majeure. (b) In the event of damage or destruction to a material portion of the Facility by reason of fire, storm, or other casualty loss that renders the Facility (or a material portion thereof) uninhabitable, the City shall use reasonable efforts to remedy such situation. If notwithstanding such efforts, such damage or destruction is expected to render the Facility (or a material portion thereof) 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 at the Facility hereunder, as described in Section 4.3(a) above, and (ii) the Parties shall negotiate appropriate adjustments to the compensation terms herein to account for the reduction in duties of Manager hereunder (and any such changes shall be mutually agreed). Section 18.6 Assi nenent: Binding on Successors and Assigps. Neither party may assign this Agreement without the prior written consent of the other, which consent shall not be unreasonably withheld or delayed, except that either party may, without the prior written consent of the other party but upon at least 30 days' written notice to the other party, assign this Agreement in connection with a sale, merger, or other business combination involving all or substantially all of its assets or equity interests, and Manager may further assign this Agreement to an Affiliate where such assignment is intended to accomplish an internal corporate purpose of Manager as opposed to materially and substantially altering the method of delivery of services to City. Any purported assignment in contravention of this Section shall be void. This Agreement is binding on successors and permitted assigns of the Parties. Section 18.7 Notices. All notices required or permitted to be given pursuant to this Agreement shall be in MANAGEMENT SERVICES AGREEMENT - 18 - 4/2023 CITY OF CITY HALL '' Feder F� d e ra 11lllay 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityoffederalway com 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 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 Federal Way 33325 8 h Avenue South Federal Way, WA 98003 Attn: Parks Department With a copy to: City of Federal Way 33325 8th Avenue South Federal Way, WA 98003 Attn: City Attorney's Office If to Manager: Global Spectrum L.P. 150 Rouse Blvd Philadelphia, PA 19112 Attn: Chief Operating Officer With a copy to: Global Spectrum L.P. 150 Rouse Blvd Philadelphia, PA 19112 Attn: General Counsel The designation of the individuals and/or entities to be so notified and the addresses of such Parties set forth above may be changed from time to time by written notice to the other party in the manner set forth above. Section 18.8 Severability. If a court of competent jurisdiction determines that any term of this Agreement is invalid or unenforceable to any extent under applicable law, the remainder of this Agreement (and the application of this Agreement to other circumstances) shall not be affected thereby, and each remaining term shall be valid and enforceable to the fullest extent permitted by law. Section 18.9 Entire Agreement. This Agreement (including the exhibits attached hereto) contains the entire agreement between the Parties with respect to the subject matter hereof, and supersedes and replaces all prior negotiations, correspondence, conversations, agreements, and understandings concerning the subject matter hereof. Accordingly, the Parties agree that no deviation from the terms hereof shall be predicated upon any prior representations, agreements or understandings, whether oral or written. Section 18.10 Governing Law. The Agreement is entered into under and pursuant to, and is to be construed and enforceable in accordance with, the laws of the State of Washington without regard to its conflict of laws principles. Section 18.11 Amendments. Neither this Agreement nor any of its terms maybe changed or modified except by an instrument in writing signed by an authorized representative of both of the Parties to this Agreement. Section 18.12 Waiver; Remedies. No failure or delay by a party hereto to insist on the strict performance of any tern 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. MANAGEMENT SERVICES AGREEMENT - 19 - 4/2023 CFederal Vila CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityoffederalway com Section 18.13 Relationship of Parties. Manager and City acknowledge and agree that they are not joint venturers, partners, or joint owners with respect to the Facility, and nothing contained in this Agreement shall be construed as creating a partnership, joint venture or similar relationship between City and Manager. In operating the Facility, entering into contracts, accepting reservations for use of the Facility, and conducting financial transactions for the Facility, Manager acts on behalf of and as agent for City (but subject to the limitations on Manager's authority as set out in this Agreement), with the fiduciary duties required by law of a party acting in such capacity. Section 18.14 No Third -Party Beneficiaries. Other than the indemnitees listed in Sections 15.1 and 15.2 hereof (who are third party beneficiaries solely with respect to the indemnification provisions in such sections), there are no intended third party beneficiaries under this Agreement, and no third party shall have any rights or make any claims hereunder, it being intended that solely the Parties hereto (and the aforementioned indemnitees with respect to the indemnification provisions hereof) shall have rights and may make claims hereunder. 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 parry'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. Section 18.17 Public Records Act. To the extent the Washington Public Records Act (Chapter 42.56 RCW) or equivalent or successor statute is applicable to the City, Manager shall cooperate, coordinate with, and assist the City in the disclosure, or non -disclosure in the event of an exemption to such disclosure, of any information requested under the Public Records Act, as determined by the City, in its sole discretion. Section 18.18 Gratuities and Kickbacks. It shall be a breach of the Manager's obligations hereunder to offer, give, or agree to give any person, entity or any employee of the City (or former employee of the City) a gratuity, success fee, commission, anything else of value, or an offer of employment in connection with any decision, approval, disapproval, recommendation, preparation of any part of any purchase request, influence in the consent of any specification or procurement standard, rendering of advice, investigation, auditing, or in any other advisory capacity, in any proceeding or application, request for ruling, determination, claim or controversy or other particular matter, pertaining to or solicitation of, any contract or proposal therefor by the manager from the City. [Signature pages to follow] MANAGEMENT SERVICES AGREEMENT - 20 - 4/2023 CITY OF ,.� Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityoffederalway com 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. CITY OF FEDERAL WAY: — (:2;4w/ ]itn ]],`Mayor DATE: O 0 ATTEST: �f �-- C&&� - hartie Courtney, CM 10 ity Cleric APPROVED AS TO FORM: J. Call, City Att ey MANAGEMENT SERVICES AGREEMENT - 21- 4/2023 CITY OF ,��.. Federal Way GLOBAL SPECTRU By; Priltt ne: t`� iv Tit DATE - STATE OF ?,*A41 9 4 } ss. COUNTY OF /h' /a /� CITY HALL 33325 8th Avenue South Federal Way. WA 98003-6325 (253) 835-7000 www olyoffederalway can On this ay personally appeared before me A^.�i me known to be the E'Vf 6 •je - of Global Spectmm. L.P. that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said limited partnership, for the uses and purposes therein mentioned, and on oath stated that he or she was authorized to execute said instrument. GIVEN under my hand and official seal this day of ✓"�20-2.Y Notary's signature Notary's printed name _ / w rle i c A ct TG t7� Notary Public in and for the State of AWN rY�/'�fG«I Commonwealth of Pennsylvania • Notary Seal My commission expires d d y PATRICIA BUTLER - Notary Public Philadelphia County My Commission Expires Jul 10, 2024 Commission Number 1373124 MANAGEMENT SERVICES AGREEMENT - 22 - 4/2023 CITY OF Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityotfederalway. com SCHEDULEI MAP DEFINING OUTDOOR AREAS UNDER MANAGER'S MANAGEMENT MANAGEMENT SERVICES AGREEMENT - 23 - 4/2023 CITY OF CITY HALL Federal ■ w ■a Feder 8th Avenue South ��Yl Federal Way, WA 98003-6325 �i (253) 835-7000 www cityotfederalway. com 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, Manager's 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. (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 the Manager, using reasonable business judgment, determines it 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, in compliance with current City insurance requirements, on the part of each such vendor/licensee. Parties (e) Provide standard form advertising and sponsorship contracts and user/rental agreements for use at or with respect to the Facility. The Manager shall submit such form agreements to the City for review and comment, and the Parties shall work together to finalize'such forms. Once finalized, the 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. The Manager's sole responsibility with regard to providing legal advice or assistance hereunder shall be to provide such standard form contracts. (f) Operate and maintain the Facility, including the equipment utilized in connection with its operation and any improvements made during the term of this Agreement, in the condition received, normal wear and tear excepted. Arrange for and otherwise book events at the Facility in accordance with booking schedules to be developed by Manager. (g) Arrange for and otherwise book events at the Facility in accordance with booking schedules 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 and conduct staff planning, retention, and training MANAGEMENT SERVICES AGREEMENT - 24 - 4/2023 CITY OF CITY HALL Fe d a ra Way8th Avenue South Feder Federal Way, WA 98003-6325 (253)835-7000 www cityoffederalway com 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. 0) Submit financial and other reports detailing Manager's activities in connection with the Facility to the City in a timely manner on a regular schedule as mutually agreed to by the Parties. (k) Prepare proposed annual Operating Budgets and submit such proposed budget to the City for approval in accordance with Section 7.1. (1) Pay all Operating Expenses and other expenses incurred in connection with the operation, maintenance, supervision, and management of the Facility from the applicable Operating Account or with funds otherwise made available by the City. (m)Apply for (or direct any other third party, as applicable, to apply for) and obtain 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 classified as Operating Expenses. (n) Collect, deposit and hold in escrow in the Event Accounts 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 Accounts all Revenue, as more fully described in Section 8.2 of the Agreement. (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 a Marketing Plan for the Facility subject to the City's approval, which shall be updated on a regular basis. (s) Market and sell Commercial Rights at or in connection with the Facility. Manager intends to employ one (1) individual at the Facility to be responsible for marketing and selling Commercial Rights. The cost of such individual (salary, commission, and benefits) shall be an Operating Expense. MANAGEMENT SERVICES AGREEMENT - 25 - 4/2023 CITY OF At Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835-7000 www cityoffederalway com (t) On an annual basis, take a written inventory 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. (w) Make and be responsible for all routine and minor repairs, maintenance, preventative maintenance, and equipment servicing. Manager shall be responsible for ensuring that all repairs, replacements, and maintenance shall be of a quality and class at least equal to that of the item being repaired, replaced or maintained. Any replacement of an item in inventory, or any new item added to the inventory, which is paid for by the City, shall be deemed the property of the City. (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. MANAGEMENT SERVICES AGREEMENT - 26 - 4/2023 CITY OF �Federal Way EXHIBIT B OPERATING BUDGET This Exhibit shall be updated annually with the approved Operating Budget. CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253)835-7000 www cityoffederafway com MANAGEMENT SERVICES AGREEMENT - 27 - 4/2023 Federal Way PAEC FISCAL YEAR 2024 Budget Fiscal Year Budget Number of Events 135 Attendance - Paid 30,898 Average Ticket Price 42.81 General Attendance 37,178 Gross Ticket Revenue 1,322,781 Less: Tax @ 5 (70,406) Net Ticket Revenue 1,252,375 Net Event income Direct Event Income 86,322 Suite Revenue - Reservation Fees - Ticket System Fees 10,336 Facility Fees 109,867 Rebates 72,563 Direct Event Income 279,087 Net Ancillary Income Concession Income 88,478 Catering Income 61,653 Novelty Income - Parking Income - Total Ancillary Income 160,131 Event Operating Income 429,218 Other Income Advertising 53,900 0 Misc Income 1.200 Total Other Income 66,100 Indirect Expenses Executive 240,929 Marketing 168,889 Finance 171,004 Event Services 160,920 Operations 274,757 Group Sales 146,634 Food & Beverage 221,716 Box Office 144,925 Overhead 216,610 Total Indirect Expenses 1,746,384 Net Operating Income (1,262,066) Revenue Generated per City Estimates 1,807,099 CITY OF CITY HALL �A Federal Way Feder 8th Avenue South Federal Way, WA 98003-6325 (253)835-7000 www cityoffederalway com EXHIBIT C INSURANCE At all times during this Agreement, Manager shall maintain insurance coverage at commercially reasonable levels and in compliance with state law where applicable. Minimum insurance coverage shall be as follows: (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 Washington; (e) professional liability insurance and self -insured employment practices -liability coverage; (f) employment practices liability insurance; (g) pollution liability; and (h) crime coverage. Such liability insurance shall be maintained in the following minimum amounts throughout the Term: Commercial General Liabili $1,000,000 per occurrence $1,000,000 personal and advertising injury $1,000,000 products -completed operations aggregate Umbrella or Excess Liabilitv $6,000,000 per occurrence and aggregate Automobile Liabili $2,000,000 per accident (PI and PD combined single limit) MANAGEMENT SERVICES AGREEMENT - 28 - 4/2023 CITY of CITY HALL Fe d e ra I Wa 8th Avenue South �. � Feder Federal Way, WA 98003-6325 (253) $35-7000 www. c "ffederaM ay com $2,000,000 uninsured/underinsured motorist 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 Liabili /Errors & Omissions Claims Made basis $1,000,000 each occurrence/aggregate EmplgMent Practices Liability Insurance (Claims Made basis3 $1,000,000 Pollution Liability (Claims Made basis) $1,000,000 Crime Insurance Coverage on all on -site Manager employees. Limit: $500,000.00 MANAGEMENT SERVICES AGREEMENT - 29 - 4/2023 ACaRP� DATE (MM/DDNYYY) �� CERTIFICATE OF LIABILITY INSURANCE 3/30/2024 1 2/21/2024 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER Lockton Companies 8110 E Union Avenue Suite 100 Denver CO 80237 CONTACT NAME; PHONE i FAX He •. EMAIL ADDRESS: (303) 414-6000 INSURERS AFFORDING COVERAGE NAIC # INSURER A: Pennsylvania Manufacturers' Assoc Ins Co 12262 INSURED Oak View Group, LLC - Venue Management 1538384 INSURER B : Travelers Property Casualty Company of America 25674 INSURER C:HDI Global Special1y SE 40041 Global Spectrum, LP INSURER D : Lloyd's of London 5050 S Syracuse St., Ste 800 Denver CO 80237 INSURER E INSURER F : COVERAGES CERTIFICATE NUMBER: 20310803 REVISION NUMBER: XXXXXXX THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSIR LTR TYPE OF INSURANCE ADDL SUER N POLICY NUMBER 302301-10-69-23-6 MMIDDIYYYV POLICY EFF 3/30/2023 POLICY Y EXP 3/30/2024 LIMITS EACH OCCURRENCE $ 1,000,000 A X COMMERCIAL GENERAL LIABILITY CLAIMS -MADE FRI OCCUR Liquor Liab. Y N PREMISES jEgi $ 1,000,000 X MED EXP (Any oneperson) $ Excluded $1 M/$2M PERSONAL & ADV INJURY $ 1,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: X POLICY AJEcrRO- LOC OTHER: GENERAL AGGREGATE $ 2,000,000 PRODUCTS - COMP/OP AGG $ 2,000,000 $ B AUTOMOBILE X LIABILITY ANY AUTO OWNED AUTOS ONLY AUTOSULED HIRED X NON -OWNED AUTOS ONLY AUTOS ONLY Y N TJ-CAP-4R629726-TIL-23 3/30/2023 3/30/2024 j�IVIIINEOO SINGLE LIMIT $ 1.000.000 BODILY INJURY (Per person) $ XXXXXXX BODILY INJURY (Per accident) $ XXXXXXX X PROPERTY DAMAGE LOP $XXXXXXX $ XXXXXXX C UMBRELLA LIAB EXCESS LIAB X OCCUR CLAIMS -MADE Y N HDEX003700325 3/30/2023 3/30/2024 EACH OCCURRENCE $ 5,000,000 X AGGREGATE $ 5,000,000 DED RETENTION $ $ X WORKERS COMPENSATION AND EMPLOYERS' LIABILITY Y /N ANY PROPRIETOR/PARTNERIEXECUTIVE ❑N OFFICERIMEMBER EXCLUDED? (Mandatory In NH) If yes, describe under DESCRIPTJON OF OPERATIONS below / A NOT APPLICABLE PTA U 011-1 E.L. EACH ACCIDENT $ XXXXXXX E.L. DISEASE - EA EMPLOYE $ X)LYY,= E.L. DISEASE - POLICY LIMIT $ XXXXXXX D Liability Terrorism N N CMTRB2300099 7/1/2023 7/l/2024 Aggregate: $15,000,000 Each Claim: $15,000,000 DESCRIPTION OF OPERATIONS I LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) Certificate Holder is included as Additional Insured as respects General, Auto, and Excess Liability if required by written contract. UhK I IFIUA I t MULUtK t:ANL;t_LLA I tVr4 gee ttriacrimem: 20310803 City of Federal Way City Hall 33325 8th Avenue South Federal Way, WA 98003-6325 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE Y �f ©1 TION_ All rights reserved. ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD Attachment Code: D633890 Certificate ID: 20310803 Policy Period Policy Number Carrier Limits 3/30/2023 — 3/30/2024 RMHX004900100 HDI Global Specialty SE $5M xs $5M 3/30/2023 — 3/30/2024 BESGLHTPA011301-170092-01 Allianz Global Corporate & Specialty SE $10M xs $10M 3/30/2023 — 3/30/2024 CSX-8000002-0 Texas Insurance Company $5M xs $20M 3/30/2023 — 3/30/2024 21CABHX0005 HDI Global Specialty SE $10MM xs $25MM 3/30/2023—3/30/2024 S18EX02332-231 Fair American Select Insurance Company $15M xs $35M Washington State Department of Revenue < Business Lookup License Information: Entity name: GLOBAL SPECTRUM, L.P. Business GLOBAL SPECTRUM LP name: Entity type: Limited Partnership UBI #: 602-675-177 Business ID: 001 Location ID: 0001 Location: Active Location address: 2000 HEWITT AVE STE 200 EVERETT WA 98201-3600 Mailing address: 3601 S BROAD ST PHILADELPHIA PA 19148-5250 Excise tax and reseller permit status: Click here Secretary of State status: Click here D-1 New search Back to results Governing People May include governing people not registered with Secretary of State Governing people Title GLOBAL SPECTRUM, LLC Governing people Title SPECTRA US, LLC Registered Trade Names Registered trade names Status First issued FEDERAL WAY Active Jul-19-2018 PERFORMING ARTS & EVENTS CENTER View Additional Locations The Business Lookup information is updated nightly. Search date and time: 8/30/2023 1:31:43 PM Contact us How are we doing? Take our survey! Don't see what you expected? Check if your browser is supported BUSINESS INFORMATION Business Name: GLOBAL SPECTRUM, L.P. UBI Number: 602 675 177 Business Type: FOREIGN LIMITED PARTNERSHIP Business Status: ACTIVE Principal Office Street Address: 150 ROUSE BLVD, 4TH FL, PHILA, PA, 19112-1901, UNITED STATES Principal Office Mailing Address: 150 ROUSE BLVD, 4TH FL, PHILA, PA, 19112-1901, UNITED STATES Expiration Date: 12/31/2024 Jurisdiction: UNITED STATES, DELAWARE Formation/ Registration Date: 12/07/2006 Period of Duration: PERPETUAL Inactive Date: Nature of Business: ADMINISTRATION & BUSINESS SUPPORT SERVICES, VENUE MANAGEMENT REGISTERED AGENT INFORMATION Registered Agent Name: C T CORPORATION SYSTEM Street Address: 711 CAPITOL WAY S STE 204, OLYMPIA, WA, 98501-1267, UNITED STATES Mailing Address: 711 CAPITOL WAY S STE 204, OLYMPIA, WA, 98501-1267, UNITED STATES GOVERNORS Title Governors Type GOVERNOR ENTITY GOVERNOR ENTITY Entity Name SPECTRA US, LLC GLOBAL SPECTRUM, LLC First Name Last Name BRIAN ROTHENBERG :Q .ej H_ U_:_ ' j