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HomeMy WebLinkAbout03079 - LMI SMG LEISURE MANAGEMENT CONVENTION CENTER .'F:d�, E;r3i3; Ci mr".1,P.U.4s. 'MG tk7hk '�`j';iFL3;5. ,'htiArhPs>�r:rt'.: 46 '. Getr Letters �Y�Ff6YrOn9 FYepm'#s lr3altri�rran� HetEr i;HriPf[a�FaYFr ,[[�«w[[q..ttn•n.•�:.•:y:� ;' , �u, .... v iv v v i.n. ..... .: ..v i..<:i[ ; ;' .ui�:$ ;K f ;" ; a f• .� 3,.... ^r .0 a[�ftt[���i#�Etl r I trFNr..Ike Y "Apia l[rnti't„, i 171 P M, �§SYrrF£'��tk`YtA' Q'.:,%i?J Iz�J04 „�ItS:,£U.Witm: r t ' cSImJyfi'tUF'NztYtff:; CILFss ` `.Fwr`tsli-.Pd>���Ffi ... i�r N 3 �rH7,�alirtaYr Ad { f Cam. &t1 'zi tr ptt; ( f 1...... 1�IGf+' Eru.nF Ertlata t Fv3t ink lnsia(wco swu's.i ns�Errti3r.Yrf rctiue " ., s liarr3 'iude €�fa�'' '.C!vt �a4µ" :�P3r3 f�Yail 911_ U.33tt ,tu3'naft�.e Y U :£r 1 . ; vi 3vsrri t arrd 3 f uratF h Adtf lbw> ontr IYoWe Con tf act close x Rack Insurance :cantelumrr Adds Pf" �L ; 5tea'E e ', �. ;[."j i.. Irl'ty: f�lEt.;'c>:inftCitdls�k` M,:ICRTRAK"SCbNTIYAC.,. „ 'p�'ftl ''C.`sCfs•r.Y3irffv!'''li' �4.' 4wo ei �/r• SMG LMI Convention Center Management AGREEMENT #3079 Amend 4 M07383 10-1-03 FOURTH AMENDMENT TO MANAGEMENT AGREEMENT This Fourth Amendment to Management Agreement ("Fourth Amendment") is made effective as of iiYbCf 1, 2003, by and between SMG, a Pennsylvania general partnership, ("Manager") and the City of Palm Springs, a California municipal corporation ("City"). RECITALS: 1. On or about April 1, 1992, Manager's predecessor in interest, Leisure Management International, and the City entered into a management agreement for the Pahn Springs Convention Center ("Management Agreement"). 2. On or about August 1, 1994, the parties entered into the "First Amendment to the Management Agreement" ("First Amendment"), whereby the parties agreed to extend the initial term of the Management Agreement to July 31, 1999. 3. On or about April 15, 1998, the parties entered into the "Second Amendment to Management Agreement" ("Second Amendment"), whereby the parties agreed to an amendment extending the term of the agreement beyond that set out in the First Amendment and through to June 30, 2003, and amended and further defined the duties of the parties in the management, operation, promotion, and marketing of the "Facility." 4. On or about June 18, 2003 (City Council approval), the parties entered into that certain Third Amendment to Management Agreement ("Third Amendment"), whereby the parties extended the agreement to September 30, 2003 to allow the parties to negotiate a new and restated agreement which shall supercede the Management Agreement. 5. The parties are currently negotiating the new agreement in good faith. Due to the complexity of the issues involved, the parties will nevertheless need to extend the existing agreement for a period of sixty (60) days as the parties anticipate that a new and restated agreement will not be prepared and ready for action until the end of November. 6. Accordingly, until the new and restated agreement is in place, the parties desire to amend the Management Agreement to extend the term for a period of sixty (60) days. NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows: FrM(;' 4.kL 810 4100,K)r,l AGREEOI R?'i' Doc 9720702v2 1. Term. The term of the Management Agreement is extended for sixty (60) days to November 30, 2003 or until it has been superceded by the amended and restated agreement. 2. Full Force and Effect. Except as set forth herein, every provision of the Management Agreement and all amendments thereto, shall remain unrnodified and in full force and effect for the direction of the term as revised herein. IN WITNESS WHEREOF, the parties have executed and entered into this Fourth Amendment as of the date first written above. CITY OF PALM SPRINGS, a municipal corporation By: City Manager > 7 ATTEST: SMG, a Pennsylvania general partnership By: .l . City Clerk Ill iN�O�5 Name S Title APPROVED AS TO FORM: City Attu [END OF SIGNATURES] Agreement over/atrder $25,000 Reviewed and approved by Procurement & Contracting ✓�� =-� y — Initials V 21 © J Date `3 P.O. Number Doc.#720702vs SMG LMI Convention Center Management AGREEMENT #3079 Amend 3 MO7330, 6-18-03 THIRD AMENDMENT TO MANAGEMENT AGREEMENT- - -- - This Third Amendment to Management Agreement ("Third Amendment") is made effective as of le , 2003, by and between LMI/HHI, Ltd., a Texas Limited Partnershipf("Manager") and the City of Palm Springs, a California municipal corporation ("City"). RECITALS: 1. On or about April 1, 1992, Manager's predecessor in interest and the City entered into that certain Management Agreement for the Palm Springs Convention Center, Palm Springs, California, between the City of Palm Springs and Leisure Management International ("Management Agreement"). 2. On or about August 1, 1994, the parties entered into that certain First Amendment to Management Agreement ("First Amendment"), whereby the parties agreed to extend the initial term of the Management Agreement to July 31, 1999, as set forth in the First Amendment. 3. On or about April 15, 1998, the parties entered into that certain Second Amendment to Management Agreement ("Second Amendment"), whereby the parties agreed to an amendment extending the term of the agreement beyond that set out in the First Amendment, and amended and further defined the duties of the parties in the management, operation, promotion, and marketing of the "Facility." 4. The parties have been negotiating over the last several months to supercede the Management Agreement with a new and restated agreement. The parties have developed a "Tentative Agreement," which is attached hereto as Exhibit "A" and incorporated herein by this reference, extending the existing agreement for a period of ninety (90) days. The parties anticipate that a new and restated agreement will not be prepared and ready for action until September, following the Council summer recess. 5. Until the new and restated agreement is in place, the parties desire to amend the Management Agreement to extend it for a period of ninety (90) days to allow time to amend and further define the duties of the parties in the management, operation, promotion and marketing of the Facility in accordance with the provisions of the Tentative Agreement, from July 1, 2003 until the new and restated agreement is in place. 6. Concurrently with the execution of a new and restated Management Agreement, the parties plan to execute an .Agreement for Tourism Services ("Tourism Agreement"), wherein Manager shall provide City with services to privatize, manage, and operate the Tourism Department of the City. NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows: i 1. Term. The Term of the Management Agreement is extended for ninety (90) days or it has been superceded by the amended and restated agreement, provided that from July 1, 2003, all operations shall be subject to the Tentative Agreement as stated below. 2. Tentative Agreement. While this Tentative Agreement is in effect, and after July 1, 2003, all Manager's operations, fees and contributions shall be governed by the Tentative Agreement. In the event of inconsistency between the Management Agreement and the Tentative Agreement, the provisions of the Tentative Agreement shall govern. To the extent the Tentative Agreement is a summary and lacks details, it shall be interpreted consistent with the goals and objectives of the parties and to carry out their understanding. 3. Full Force and Effect. Except as set forth herein, the Management Agreement shall remain unmodified and in full force and effect for a period of ninety (90) days, until superceded by the new and restated agreement. IN WITNESS WHEREOF, the parties have executed and entered into this Third Amendment as of the date first written above. CITY OF PALM SPRINGS, a municipal Corporation By: �� City Manager ATTEST: LMI/HHI, Ltd., a Texas Limited Partnership By: SMG/LMI, LLC, its General Partner By: t�•W City Jerk if IV p3 Name t� ��esr(•e� Title p,vasrl�ev� APPROVED AS TO FORM: �f / -/ f, -( . City'Att rney (END OF SIGNATURES) 2 TENTATIVE AGREEMENT BETWEEN CITY AND SMG FOR THE MANAGEMENT OF THE PALM SPRINGS CONVENTION CENTER June 16, 2003 Fee Schedules Base Fee *Incentive Fee Year $2251000 $175,000 Year $225,000 $175,000 Year $185,000 $185,000 Year 4 $188,700 (Including 2010 CPI $188,700 Adjustment Year 5 $192,474 (Including 2% CPI $192,474 Adjustment *Incentive Fee Calculation Potential incentive compensation would be broken down into the following categories: 60% Room Night Sales Must achieve room night goal to c 30% Financial Performance qualify for financial performance incentive. 10% Customer Satisfaction Customer Satisfaction goal to be measured independently based on mutually acceptable evaluation criteria as described below. Room Night Goal (60%) Fiscal Year Room Nights 03-04 60,000 Room Nights (Construction beginning 12/03 in FY 2003-04) 04-05 80,000 Room Nights (Construction scheduled until 3/1/05) 05-06 100,000 Room Nights 06-07 105,000 Room Nights 07-08 110,000 Room Nights Note: Room night achievement will be calculated based on pick-up reports received from participating hotels plus a minimum of 10% in recognition that many attendees cannot be tracked as they will stay outside of the room block. EXHIBIT "A" s Financial Performance (30%) r Fiscal Year COST GOAL* 03-04 $1,600,000 04-05 $1,500,000 05-06 $1,200,000 06-07 $1,100,000 07-08 $1,000,000 *Cost Goal includes the base management fee. This portion of the incentive fee is the lesser of 30% of the base management fee or the actual difference between the net cost goal and the actual performance. Customer Satisfaction (10%) In order to ensure that the Contractor maintains the highest level of customer satisfaction, surveys of Convention Center clients and users will be conducted on a routine basis. The survey results will be used to determine whether the Contractor receives the 10% incentive provided under this contract, as well as to continually monitor the quality of service and ensure that the needs of our customers are being met. The Customer Satisfaction Survey shall consist of two components: 1. Conduct an annual survey of all key stakeholders (i.e., group meeting hotels, Hotels of Palm Springs, Palm Springs Desert Resorts Convention and Visitors Authority). 2. Conduct at least two (2) surveys per year consisting of at least 50% of all meeting planners that have contracted with the Convention Center over the prior twelve (12) month period. The purpose of this survey is to gage customer satisfaction with regards to the Convention Center's performance in assisting these groups in soliciting, planning and servicing their conventions. SMG agrees to cooperate and assist City in the design of evaluation criteria for measuring customer satisfaction. At a minimum, SMG agrees that it will "meet" or "exceed" the evaluation criteria requirements developed by the parties in order to qualify for the 10% inventive provided herein. Furthermore, SMG agrees to allocate any incentive amount that is paid by City for achieving this goal directly to the Convention Center to be used as a financial reward to employees of the Convention Center. The parties agree to mutually develop a performance based incentive plan for employees of the Convention Center. Contribution The City proposes that at the time of contract signing SMG will make a $400,000 contribution to City to be used for marketing of the Convention Center expansion, The amortization period for this contribution should not exceed ten (10) years. z Food and Beverage Contract The City proposes to enter into a separate contract with Savoury's for food and beverage services at the Convention Center. SMG agrees to manage and direct Savoury's operations as part of this management agreement. Agreed to and attested to as the full and complete understanding of the parties specified by the signature of the following representatives for the City and SMG. fl.W� City of Palm Springs SMG Date: Date: 3 LMI/HHI,Ltd. Consent to Assign (SMG/LMI) Conv. Ctr. Mgt. Agr. AGREEENT IN L M ' M06595, 4-5 003079 Leisure Management International -? March 16, 2000 Mr. Dallas Flicek, City Manager and Authorized Representative City of Palm Springs P.O. Box 2743 Palm Springs, California 92263 Re: Agreement for Tourism Services., dated April 15, 1998 (the "Agreement"), by and between the City of Palm Springs, a municipal corporation(the "City") and LMI/HM, Ltd., a Texas limited partnership d/b/a Leisure Management International ("LMI") Gentlemen: As I shared with you during our telephone conversation this morning, LMI and SMG have "merged" their companies. As you may know, SMG has nationally recognized expertise in the management and operation of public multi- purpose sports, entertainment, and public assembly facilities. As part of the transaction with SMG,the ownership interests in LMI have been transferred to SMG (which is a Pennsylvania general partnership)and to an affiliate of SMG. The"combined" LMI and SMG will manage and operate a substantially larger portfolio of public assembly/leisure facilities than that managed by LMI prior to the transaction. Like LMI, SMG has extensive experience in the management and operation of facilities and programs similar to yours and can offer a comparable level of quality of services that LMI has provided to you over the years. Importantly, the financial net worth of LMI will remain strong and will ultimately have greater resources as a result of the transaction. As you may know, Section 6.3 of our Agreement, states that transfers to any person of more than twenty-five percent (25%) of the ownership and/or control of LMI may not be accomplished without the prior written approval of the City. In that the transaction referenced above entails the transfer of greater than that amount, the transaction with SMG appears to require the consent of the City pursuant to the Agreement. As such, LMI hereby requests that the City consent to the above-discussed transaction, that it waive any Event of Default resulting therefrom (including, without limitation, any Event of Default pursuant to Section 6.1 of the Agreement.) and any termination rights that it may have as a result Eleven Greenway Plaza,Suite 3000 Houston, TX77046-1105, USA Ph 713-623 4583 1003 Fax 713 622.4134 www leuuremanagrment.ram thereof or any other termination of the .Agreement as a result thereof. It has of course been our understanding (as particularly set forth in Section 6.3 of the Agreement) that the experience, knowledge, capability, and reputation of LMI and its business principals and employees have been a substantial inducement for the City to enter into the Agreement. Importantly, LMI will remain the Manager under the Agreement and will not be relieved from any obligations as a result of the transaction with SMG. We are enclosing background material and financial statements of SMG to facilitate your review in this regard. In light of the foregoing discussion and enclosed information, we hereby request that you please countersign below where indicated on behalf of the City to evidence the City's consent to the transactions described in this letter. If you need additional information or have any questions, please feel free to contact us. Thank you for your attention to this matter. Very truly yours, LMIIHHI, LTD., a T as limited partnership By: David Bobo, Vice-President The City hereby executes below, in accordance with Section 6.3 of the Agreement, to evidence its acceptance and approval of the transactions set forth above in this letter. ATTEST: CITY OFPALMSPRINGS, amunicipal corporation City Cierk City Manager APPROVED BY THE CITY COUNCIL /DAY BY*. NO. -S- rru� LMI/HHI , Ltd. • 2nd Amend Extend Term 6-30-2003 AGREEMENT #3079 Motion, 4-15-98 SECOND AMENDME TO MANA rFMFNr AGItrrrvu��Z This Second Amendment to Management Agreement ("Second Amendment") is made effective as of April /, 1998, by and between LMI/HHI, LTD. , Texas limited partnership, dba Leisure Management International (^Manager") and the City of Palm Springs, a California municipal corporation (Itcity") . R E C I T A L 5• 1. On or about April 1, 1992 , Manager's predecessor in interest and the City entered into that certain Management Agreement for the. Palm Springs Convention Center, Palm Springs, California, between the City of Palm Springs and Leisure Management International ("Management Agreement") 2 . On or about August 1, 1994, the parties entered into that certain First Amendment . to Management Agreement ("First Amendment") , whereby the parties agreed to extend the initial term Of the Management Agreement to July 31, 1999, as set forth in the First Amendment. 3 . The parties desire to amend the Management Agreement to further extend its term, beyond that set out in the First Amendment, amend and further define the duties of the parties in the management, operation, promotion and marketing of the "Faci.lity4l (as that term is defined in the Management Agreement) . 4 . Concurrently herewith, the parties are executing an Agreement for Tourism Services ( "Tourism Agreement") , wherein Manager shall provide city with services to privatize, manage, and operate the Tourism Department of the city. 5. Any capitalized terms contained herein which are not defined shall have the meanings ascribed to them in the original Agreement. NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Modification of Section 1. 1 . The definition of "Term" contained in section 7 . 1 of the Management Agreement, as amended by the First Amendment, is amended to read as follows: "Term" shall have the meaning set forth at Section 2 . 3 herein, as amended by the Second Amendment. 2 . Modification of Section 2 . 3 . Section 2 .3 of the Management Agreement, as amended by the First Amendment, is amended to read as follows: 617107dpRn.01 m/9151R70.1 A1701199 2 . 3 Term. The Term of this Agreement shall commence July 1, 1998, and shall terminate June 30, 2003 . Notwithstanding the foregoing, City shall have the right to cancel this Agreement without penalty at the end of the third year of the Term of- this Agreement or at any time thereafter upon thirty (30) days prior written notice to Manager. 3 . Modification of Section 7_1. Section 7. 1 of the Management Agreement is amended to read as follows: 7 . 1 Base Compensation. For services to be performed by Manager during the Term, City shall pay to Manager the sum of three hundred fifty thousand dollars ($350, 000) per annum, payable at the rate of one twelfth (1/12) of the per annum compensation,-per month within thirty (30) days of the monthly billing received from Manager within the Term. To account for annual increases in the Consumer Price Index, the fee payable under this Section 7 . 1 to Manager during the Term shall he increased annually at the close of the first full Fiscal Year and every Fiscal Year 'thereafter by the lesser of: Subsections (a) and (b) under Section 7 . 1 shall remain as written on the Management Agreement, without any modification thereto. 4_ Modification of section_.7 . 2 . Section 7 . 2 (a) of the Management Agreement is amended to read as follows : (a) Reductions in Assumed Operating Deficit. To the extent that the Assumed Operating Deficit is greater than the Operating Loss for any given full fiscal year during the Term of this Agreement, city shall pay and the Manager shall be entitled to receive an amount equal to a percentage of such difference (if any) pursuant to the following schedule, which amount shall, in no event,, exceed twenty percent (20%) of the Base Compensation payable to Manager pursuant to Section 7 . 1• All other paragraphs, schedules and subsections under Section 7 . 2 shall remain as written on the Management Agreement, without any modification thereto. 5. Modification of Section 11=1. Section 11. 1 shall be amended and supplemented by the following subsection (i) , which shall be inserted prior to the existing subsections (i) and (ii) , which subsections shall be renumbered (ii) and (iii) : (i) Any failure or delay by Manager in performing its duties under the Tourism Agreement which failure or delay constitutes a default, as that term is defined in the Tourism Agreement at Section 9 .2 therein, which is not cured by Manager within the time specified at Section 9 . 3 in the Tourism Agreement, shall constitute a default under this Agreement; under no circumstances, however, shall Manager's failure or refusal to renew or extend the Tourism Agreement, hY/l(1W N4-11(111315400.1 .(D/21198 '•-.2- or Manager's termination of the Tourism Agreement, pursuant to the terms therein, effect a default of this Agreement; 6. Modification of Schedule C. Schedule C, incorporated into the Management Agreement under the definition of "Assumed Operating Deficit" under Section 1. 1, shall be amended and replaced by Schedule C attached hereto and incorporated herein as Attachment 1. 7. Full Force and Effect. Except as set forth herein, the Management Agreement shall remain unmodified and in full force and effect. IN WITNESS WHEREOF, the parties have executed and entered into this second Amendment as of the date first written above. CITY O Z'ALM SPRINGS, a muni i al corporatic . By, City Man 'ger ATTEST: City!Clerk APPROVED A/Sf�TO� FORM: City Att t T,,�n�-�yl' "MANAGER" LMI/HHI, LTD. , Texas limited partnership, dba Leisure Management Into ational By: t Name: Title: Address: [END OF SIGNATURES] �mm�3crau�tnrrm�sarnu.i n(r�nvyK -3- i' ATTACHMENT 1 TO SECOND AMENDMENT CITY OF PALM SPRINGS AND LMI/HEI, LTD. , dba Leisure Management International, SCREDULE C TO MANAGEMENT AGRE 4EXT Sr DOLE C ASSUMED OPERATING DEFICITS Fiscal Year Ending Assumed Ooerati22g Defi June 30, 1999 ($2, 000, 000) June 30, 2000 ($1, 800, 000) June 30 , 2001 ($1, 600, 000) June 30, 2002 ($1, 400, 000) June 30, 2003 ($1, 200, 000) sz�roiaoxaoto7msaa�ai earrzsi9a -4- P.S. Leisure Management Inc 1st Amend to Mgt Agr Term 8-1-94 to 7-31-99 AGREEMENT #3079 M05445, 10-5-94 FIRST AMENDMENT TO MANAGEMENT AGREhivrn,iq r - - This First Amendment to Management Agreement (the "Amendment"), is made effective as of August 1, 1994, by and between Palm Springs Leisure Management, Inc., a California corporation (the "Manager"), and the City of Palm Springs, a municipal corporation of the State of California(the "City"). RECITALS A. On or about April 1, 1992, Manager's predecessor in interest and the City entered into the that certain Management Agreement for the Palm Springs Convention Center, Palm Springs, California, between the City of Palm Springs and Leisure Management International (the "Management Agreement"). B. City is desirous of retaining and engaging Manager to manage, operate, promote, and market the "Facility" (as such term is defined in the Management Agreement) beyond the initial term of the Management Agreement as set forth in Section 2.3 of the Management Agreement and Manager is desirous of accepting such engagement. NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. Modification of Section 1.1. The definition of"Base Room Night Amount" contained in Section 1.1 of the Management Agreement is amended to read as follows: "'Base Room Night Amount' shall mean the number of Room Nights set forth under the column headed Base Room Night Amount in Exhibit E attached hereto, as from time to time amended. The definition of "Term" contained in Section 1.1 of the Management Agreement is amended to read as follows: "'Term""shall mean that period commencing as of the August 1, 1994 and ending as of July 31, 1999." 2. Modification of Section 2.3. Section 2.3 of the Management Agreement is amended to read as follows: "The Term of this agreement shall commence August 1, 1994 and shall terminate July 31, 1999. Notwithstanding the foregoing, City shall have the right to cancel this Agreement without penalty at the end of the second year of the Term of this Agreement or at any time thereafter upon thirty (30) days prior written notice to Manager. 0 • 3. Modification of Section 4.5 (aj. The following sentence shall be added to the end of Section 4.5 (a) of the Management Agreement: "Notwithstanding the foregoing, Capital Improvements may be performed by Manager utilizing monies from the Operating Fund (as defined in Section 5.1) upon the written agreement between City and Manager." 4. Modification of Schedule C. Schedule C to the Management Agreement shall be amended as set forth on a new Exhibit C attached hereto, as amended from time to time. 5. No Other Modification. Except as otherwise expressly amended herein, all of the provisions, terms, and conditions of the Management Agreement shall remain in full force and effect and are hereby ratified and affirmed. 6. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first set forth above. CITY: CITY OF PALM SPRINGS By: _(r—Rob Parkins City Manager APPROVED AS TO FORM: CITY OF PALM SPRINGS APNZOLVED ty>1''THE CITY COI7nlelL David J. Aleshire, Esq. SY�R%'• NCO. 7 q��� lc �yfll City Attorney MANAGER ATTEST: PALM SPRINGS LEISURE _J MANAGEMENT IN/C. l� By: CY City Clerk of the David L. Bobo City of Palm Springs Vice-President CITY OF PALM SPRINGS AND LEISURE MANAGEMENT INTERNATIONAL SCHEDULE C TO MANAGEMENT AGREEMENT SCHEDULE C ASSUMED OPERATING DEFICITS Fiscal Assumed Year Operating Ending Deficit June 30, 1995 ($2,150,000) June 30, 1996 ($2,300,000) June 30, 1997 ($2,400,000) June 30, 1998 ($2,400,000) June 30, 1999 ($2,400,000) Amended 9/28/94 CITY OF PALM SPRINGS AND LEISURE MANAGEMENT INTERNATIONAL EXHIBIT E TO MANAGEMENT AGREEMENT EXHIBIT E BASE ROOM NIGHT AMOUNT Fiscal Base Year Room Night Ending Amount June 30, 1995 65, 000 June 30, 1996 85, 000 June 30, 1997 85, 000 June 30, 1998 85,000 June 30, 1999 85, 000 Leisure Management Int' 1 . Conv. Ctr. Mgt. Agr. AGREEMENT #3079 M04957, 3-4-92 MANAGEMENT AGREEMENT FOR THE PALM SPRINGS CONVENTION CENTER PALM .SPRINGS, CALIFORNIA BETWEEN THE CITY OF PALM SPRINGS AND LEISURE MANAGEMENT INTERNATIONAL TABLE OF CONTENTS Pave RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE 1 DEFINITIONS 1 1. 1 Definitions . . . . . . . . . . . . . . . . . . . 1 ARTICLE 2 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . 6 2 . 1 Grant of Authority . . . . . . . . . . . . . . 6 2 . 2 Nature of Relationship . . . . . . . . . . . . . 6 2 . 3 Term . . . . . . . . . 6 2 . 4 Special obligations of City Regarding Manager' s Employees . . . . . . . . . . . . . . 6 2 . 5 City' s Authorized Representative; Approval . . . 6 2 . 6 General Manager Approval . . . . . . . . . . . . 7 2 . 7 Pre-Existing Agreements . . . . . . . . . . . 7 2 . 8 Representations and Warranties . . . . . . . . . 7 2 . 9 Cooperation in Promotion . . . . . . . . . . . . 8 2 . 10 Use by City . . . . . . . . . . . . . . . . . . . 8 ARTICLE 3 RESPONSIBILITIES OF MANAGER . . . . . . . . . . . . . . . . . 8 3 . 1 Responsibilities of Manager . . . . . . . . . . . 8 3 . 2 Duty and Liability . . . . . . . . . . . . . . 10 3 . 3 Performance Standards . . . . . . . . . . . . . 10 3 . 4 Employee Transition Plan . . . . . . . . . . . 11 ARTICLE 4 RECORDS, ACCOUNTS AND REPORTS . . . . . . . . . . . . . . . 12 4 . 1 Books . . . . . . . . . . . . . . . . . . . 12 4 .2 Access to Information . . . . . . . . . . . . . 12 4 . 3 Annual Audit . . . . . . . . . . . . . . . . . 12 4 . 4 Monthly Reports . . . . . . . . . . . . . . . . 13 4 . 5 Capital Improvements Budget; Emergency Expenditures . . . . . . . . . . . . . . . . 13 4 . 6 Annual Operating Budget . . . . . . . . . . . . 13 4 . 7 Budget Approval . . . . . . . . . . . . . . . . 14 4 . 8 Expenditures in Excess of Budget . . . . . . . 14 ARTICLE 5 FUNDS AND ACCOUNTS . . . . . . . . . . . . . . . . . . . . 14 5. 1 Operating Fund . . . . . . . . . . . . . . . . 14 5. 2 Working Capital Fund . . . . . . . . . . . . . 14 (i) Working Capital Fund . . . . . . . 15 (ii) Application to Unfunded operating Loss . 15 5 . 3 Security for and Investment of Funds . . . . . 15 5. 4 No Obligation of Manager to Advance Funds . . . 15 ARTICLE 6 POWERS AND FUNCTIONS . . . . . . . . . . . . . . . . . . 16 6. 1 Authority of Manager . . . . . . . . . . . . . 16 6. 2 Employees . . . . . . . . . . . . . . . . . . . 16 6 . 3 Contracting For Facility Use and Purchase of Supplies and Services . . . . . . . . . . . . . 16 ARTICLE 7 COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . 16 7 . 1 Base Compensation . . . . . . . . . . . . 16 7 . 2 Performance Compensation . . . . . . . . . . . 17 ARTICLE 8 INSURANCE . . . . . . . . . . . . . . . . . . 18 8 . 1 Insurance to be Maintained by City . . . . . . 18 8 . 2 Insurance to be Maintained by Manager . . . . . 19 (a) Workers ' Compensation . . . . . . . . 19 (b) Business Automobile Policy . . . . . . . 19 (c) Crime and Fidelity Coverage. . . . . . . 19 (d) Other Insurance . . . . . . . . . . . . 19 8 . 3 Insurance Policies . . . . . . . . . . . . . . 19 ARTICLE 9 EQUAL EMPLOYMENT OPPORTUNITY . . . . . . . . . . . . . . 20 9 . 1 Discrimination Prohibited . . . . . . . . . . . 20 9 . 2 Affirmative Action . . . . . . . . . . . . . . 20 ARTICLE 10 TERMINATION . . . . . 20 10. 1 Surrender of Facility . . . . . . . . . . . . . 20 10. 2 Continuation of Performance . . . . . . . . . . 20 10. 3 Surrender of Improvements . . . . . . . . . . . 20 10.4 Performance Failure . . . . . . . . . . . . . . 21 10. 5 Damage or Destruction. . . . . . . . . . . . . 21 10. 6 Termination by City . . . . . . . . . . . . . . 21 ARTICLE 11 DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . 21 11. 1 Events of Default . . . . . . . . . . . . . . . 21 11. 2 Default Notices . . . . . . . . . . . . . 22 11. 3 Rights of Non-Defaulting Party . . . . . . . . 22 ARTICLE 12 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 22 12 . 1 Notices . . . . . . . . . . . . . . . . . . . 22 12 .2 Amendments . . . . . . . . . . . . . . . . . . 23 12 . 3 Title and Captions . . . . . . . . . . . . . . 23 12 . 4 Pronouns and Plurals . . . . . . . . . . . . . 23 12 . 5 Severability . . . . . . . . . . . . . . . . . 23 12 . 6 Successors . . . . . . . . . . . . . . . . . . 24 12 . 7 Assignment . . . . . . . . . . . . . . . . . . 24 12 . 8 Reasonableness . . . . . . . . . . . . . . . . 25 12 .9 Entire Agreement . . . . . . . . . . . . . . . 25 12 . 10 Counterparts . . . . . . . . . . . . . . . . . 25 12 . 11 Applicable Law . . . . . . . . . . 25 12 . 12 No Representations as to Profitability . . . . 25 12 . 13 Limitation of Liability . . . . . . . . . . . . 26 12 . 14 Indemnification by Manager . . . . . . . . . . 26 12 . 15 Indemnification by City . . . . . . . . . . . . 26 MANAGEMENT AGREEMENT THIS MANAGEMENT AGREEMENT is made effective as of the 1st day of April, 1992 (the "Effective Date") , by and between LEISURE MANAGEMENT INTERNATIONAL, a, Texas Joint Venture (the "Manager") and THE CITY OF PALM SPRINGS, a municipal corporation of the State of California (the "City") . RECITALS The parties enter into this Agreement with reference to the following facts and objectives: 1. City desires that the Facility (as hereinafter defined) be managed, operated, marketed and promoted in a professional manner with the objectives of providing a venue for international, national and regional conventions, meetings, exhibitions and other comparable purposes such as cultural, educational, entertainment, professional, social, corporate and other activities to maximize the utilization of the Facility and to stimulate the economy of the City; and 2 . City has determined that it is in its best interests to delegate the responsibility for the management and operation of the Facility to a private management company with experience and expertise in the management, operation and marketing of facilities such as the Facility; and, 3 . Manager is an organization whose principals have substantial experience and expertise in the management, operation and marketing of facilities such as the Facility; and 4 . City is desirous of retaining and engaging Manager to manage, operate, promote and market the Facility to assist in meeting the objectives as above-stated and Manager is desirous of accepting said engagement, all on the terms and conditions herein contained. NOW, THEREFORE, in consideration of the mutual covenants, conditions and promises herein contained, the receipt and sufficiency of which is expressly acknowledged and confessed, the parties hereby agree as follows: ARTICLE 1 DEFINITIONS 1.1 Definitions. In addition to other terms which are defined elsewhere in this Agreement, the following terms, for purposes of this Agreement, shall have the meanings set forth in this Section: "Actual Room Nights Blocked" shall mean that amount of room nights blocked by meeting planners when booking the City, plus those room nights blocked as a result of a lead supplied by Manager to a third party according to the booking report published by Manager. "Adjusted Operating Loss" shall be the Operating Loss for a given fiscal year reduced by the actual Operating Expenses incurred for (i) utilities, (ii) insurance, and (iii) other expenses which are beyond the reasonable control of Manager. "Affiliate" of a specified person means a person that directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the specified person. For purposes of this definition "control" shall mean the ownership, either directly or indirectly, of equity securities or other ownership interests which represent more than 50% voting power in the controlled entity. "Agreement" shall mean this Management Agreement. "Assumed Operating Deficit" shall mean the amount of projected Operating Loss set forth under the column headed "Assumed Operating Deficit" in Exhibit C, as from time to time amended. "Authorized Representative" shall mean any officer, agent, employee of or independent contractor retained or employed by either party, acting within the scope of authority given such person by such party. "Base Room Night Amount" shall be 65, 000 Room Nights. "Budget" shall mean any budget prepared by Manager pursuant to Article 4 hereof. "Capital Expenditures" shall mean all expenditures for building additions, alterations or improvements, and for purchases of additional or replacement furniture, machinery or equipment, the depreciable life of which, according to accepted accounting principles, is in excess of one (1) year and expenditures for repairs (normal wear and tear excepted) or replacements which extend the useful life of the assets being repaired or replaced for a period in excess of one (1) year. "Capital Improvements" shall mean all improvements paid for by Capital Expenditures. "Capital Improvements Budget" shall mean the budget submitted by Manager to City pursuant to Section 4 . 5 "City" shall mean The City of Palm Springs. MEE22254/3/4/92 -2- "City Savings" shall be the amount by which the Assumed Operating Deficit exceeds the Operating Loss. "Cumulative Incremental TOT" shall mean that amount equal to the aggregate of all prior years Incremental TOT. "Cumulative City Savings" shall be the amount equal to the aggregate of all prior years City Savings. "Depository" shall mean the place in which Manager shall maintain its bank accounts for the funds required to be maintained under this Agreement. "Emergency Expenditure" shall mean any Capital Expenditure, which is not included in the then applicable Capital Improvements Budget, necessary to correct any condition that jeopardizes the structural soundness of the Facility or the public safety. "Event of Default" shall have the meaning provided in Section 11. 1. "Facility" shall mean any and all portions or parts of the Palm Springs Convention Center, all furniture, fixtures and equipment, all appurtenances and all parking ancillary to and in connection therewith as described in Exhibit "A" attached hereto and incorporated herein by this reference. "Fiscal Year" shall mean the year beginning July 1 and ending June 30. "General Manager" shall be the chief operating officer of Manager at the Facility. "Incremental TOT" shall mean an amount calculated annually in arrears equal to the product of (i) the number of Actual Room Nights Blocked in excess of 60, 000; (ii) average daily room rate of $100. 00; and (iii) the City' s transient occupancy tax percentage. "Legal Requirement" shall mean the laws, rules and regulations (including statutory and judicial interpretations) of the United States of America, the State of California and all other governmental bodies having jurisdiction over the Facility. "Management Fees" shall mean those fees payable by City to Manager under Article 7 . "Manager" shall mean Leisure Management International and its permitted successors and assigns. "Minimum Room Might Amount" shall be 60, 000 room nights in the City according to the booking report published by Manager. MEE22254/3/4/92 -3- "Net Operating Income" shall mean the positive difference between Operating Revenues and Operating Expenses. "Operating Expenses" shall mean and include all expenditures or obligations of whatever kind or nature incurred (directly or indirectly) or accrued by Manager in any specified period during the Term of this Agreement, within (or reasonably believed by Manager to be within) the scope of Manager's authority or responsibility under this Agreement, including but not limited to, all payments made or liabilities incurred to obtain Operating Revenues; salaries, wages,, applicable taxes, benefits costs and expenses of personnel working at the Facility or otherwise related to the Facility; contract labor; maintenance and repairs (whether ordinary or extraordinary, and whether foreseen or unforeseen) ; utilities; telephone; te>_lescreen and/or marquee operations; telecommunications and broadcast facilities; dues, memberships and subscriptions; security; audit and accounting fees; legal fees; other professional fees; fees payable to concessionaires or other subcontractors; refuse .removal; cleaning; sales and other applicable taxes; building supplies; ticket commissions; premiums for insurance; data processing; advertising; marketing and market research; pest control; office supplies; employment fees; freight and delivery; lease of equipment; Master Card, VISA and other credit card fees and charges and telecheck fees and expenses; travel (economy class) , lodging and related out-of-pocket expenses of officers, directors and corporate personnel of Manager properly allocable to the performance of Manager' s obligations under this Agreement not to exceed $25, 000 each Fiscal Year without City Manager's prior written consent; travel (economy class) , lodging and related out-of-pocket expenses of employees of the Facility conducting business on behalf of the Facility; Management Fees; ticket/box office expenses; charges for fidelity bonds; expenses incurred in complying with all Legal Requirements; and all other costs and expenses incurred in accordance with the terms of this Agreement by or for the account of City reasonably related to Manager' s performance of this Agreement, including, without limitation, all damages, .Losses or expenses suffered or paid by Manager or its agents or employees as the result of any and all claims, demands, suits, causes of action, proceedings, judgments and liabilities, including court costs and attorneys ' fees, incurred or sustained by or against Manager; but excluding (a) any portion of any Capital Expenditures expended, (b) any portion of any loss or damage suffered by Manager or its agents or employees as a result of (1) any act or omission of Manager made in bad faith or involving negligence or intentional misconduct; (2) any transaction from which Manager derives an improper personal benefit; or, (3) any willful Event of Default on the part of Manager and/or (c) non-cash expenses such as depreciation. Operating Expenses shall not include and Manager shall not be responsible for the payment of any ground lease payments or any debt service relating to the construction, expansion or development of any portion of the Facility. MEE22254/3/4/92 -4- "Operating Fund" shall mean a fund maintained by Manager under Section 5. 1. "Operating Loss" shall mean the amount by which Operating Expenses for any specified period exceed the Operating Revenues for such period. "Operating Revenues" shall mean all cash received or collected by Manager: (a) for the rental of, use of or admission to the Facility; (b) for the right to sell, or in respect of the sale of, any product (including, without limitation, food, beverages, novelties and merchandise) or advertisement in the Facility; (c) from interest on or proceeds of investment of any accounts required to be maintained by the Manager under Article 5; (d) for rental of Facility equipment; and (e) as fees for all user services rendered at the Facility, including but not limited to decorating, utilities, cleaning and parking; but excluding, in all events, sums received or collected by Manager for and on behalf of a user of the Facility or other third party and any sums received as disbursements from the Working Capital Fund. "Performance Standards" shall mean those standards of performance, set out with particularity at Section 3 . 3 , to which Manager will be subject in performing its obligations under this Agreement. "Pre-Existing Agreements" shall mean all contracts, licenses, agreements, options, leases or commitments, existing as of the date of this Agreement as set forth on Exhibit B, that grant any person or entity (other than Manager or its Affiliates) any right (i) to license, use, occupy or rent all or any portion of the Facility, or (ii) to provide services to all or any portion of the Facility, or (iii) to provide goods or services to be used in the management, operation, use, possession, occupation, promotion or marketing of all or any portion of the Facility. "Term" shall mean that period commencing as of the Effective Date of this Agreement and ending as of March 30, 1997 . "Transition Period" shall mean the period commencing upon the Effective Date of this Agreement and ending no later than September 30, 1992 . MEE22254/3/4/92 -5- "Working Capital Fund" shall mean the fund required to be established pursuant to Section 5. 2 . ARTICLE 2 INTRODUCTION 2 . 1 Grant of Authority. City hereby grants to Manager, and Manager hereby accepts, the exclusive right and obligation in its own name to manage, operate, use, possess, occupy, promote, and market the Facility on behalf of City and, in connection therewith, to perform and furnish, or cause to be performed and furnished, all management, operation, promotion, marketing and administration of the Facility in accordance with all Legal Requirements, all on the terms and subject to the limitations of this Agreement. 2 .2 Nature of Relationship. The parties agree that the only relationship created by this Agreement is and shall be that between City as owner of the Facility, and Manager, as an independent contractor, providing management, marketing, promotional and operating services, and not as agent, employee, joint venturer, partner or lessee of City. 2 . 3 Term. The Term of this Agreement shall begin on the Effective Date and shall expire at the close of business on March 30, 1997. Notwithstanding the foregoing, City shall have the right to cancel this Agreement without penalty at the end of the third year of the Term of this Agreement or at any time thereafter upon thirty (30) days prior written notice to Manager. 2 . 4 Special Obligations of City Regarding Manager' s Employees. (a) City hereby agrees that, for a period of twenty- four (24) months following termination of this Agreement for any reason, City will not employ or hire, or attempt to employ or hire the General Manager, the Director of Operations, the Director of Sales and Marketing or the Director of Finance and Administration for the Facility, without first obtaining the prior written consent of Manager. 2 .5 City' s Authorized Representative; Approval. (a) City hereby designates City Manager to be its Authorized Representative who shall act as a liaison and contact person between City and Manager in all matters concerning this Agreement. City shall have the right, from time to time, to change the person who is its Authorized Representative by giving Manager written notice thereof. (b) Except for Budget approvals, if Manager desires to do any act hereunder which requires City's prior consent thereto or prior approval thereof, Manager shall submit to the City' s MEE22254/3/4/92 -6- 9 0 Authorized Representative a written summary of the proposed act and a request for City' s consent thereto or approval thereof. City shall respond to such request within thirty (30) days. 2 .6 General Manager Approval. Manager shall select the General Manager who will be placed on site at the Facility and shall notify City' s Authorized Representative of its selection. Within ten (10) days of receipt of Manager's notice, City ' s Authorized Representative shall notify Manager of its approval or disapproval of Manager' s choice. 2 . 7 Pre-Existing Agreements. (a) City represents and warrants to Manager that: (1) To the reasonable knowledge of City, Exhibit B hereto contains a complete list of all Pre-Existing Agreements; (2) City has provided or caused to be provided Manager with complete and correct copies of such Pre- Existing Agreements listed in Exhibit B; (3) To the reasonable knowledge of City and except as listed in Exhibit B hereto, each of the Pre-Existing Agreements is in full force and effect and constitutes the legal and binding obligation of the parties thereto; (4) To the reasonable knowledge of City and except as listed in Exhibit B, no event of default has occurred under any material term, covenant or condition of any Pre-Existing Agreement; and (5) To the reasonable knowledge of City and except as listed in Exhibit B, there is no pending or threatened litigation, decree, judgment, order, arbitration proceeding or other proceeding before any governmental authority relating to or arising out of any such Pre-Existing Agreement. (b) Manager agrees to use reasonable efforts to assist City in completing Exhibit B, obtaining copies and determining the status of the Pre-Existing Agreements. Manager shall undertake from City the supervision of all subcontractors, concessionaires and all other contracting parties to the Pre- Existing Agreements and assume responsibility for any and all negotiations, renewals, extensions and the enforcement of, such Pre-Existing Agreements. 2 .8 Representations and Warranties. Each party represents and warrants to the other that (i) it has the full power and right to enter into and fully perform this Agreement, (ii) except for that certain contract for audio- MEE22254/3/4/92 -7- visual services referred to in Schedule B, Item 2 , which requires contractor ' s consent to assignment, it is under no contractual or other legal obligation, and there exists no lien or claim, which will in any way interfere with its full, prompt and complete performance hereunder, and (iii) the individual executing this Agreement on its behalf has the authority to do so. 2 .9 Cooperation in Promotion. (a) City acknowledges that in order to successfully manage and market the Facility, it is necessary to have a stable relationship with Manager for continuity, stability, and good client relations. City agrees to use its reasonable best efforts to cooperate and coordinate with Manager to promote, market and maintain the Facility as a first-class facility comparable to other facilities providing similar services throughout the United States. (b) City or its designee will continue to provide existing services in connection with the use of the Facility including, but not limited to, marketing the Facility, locating housing and arranging transportation and other convention-related services for individuals and convention delegates attending events at the Facility and other related services which directly affect the operation and success of the Facility. 2 .10 Use by City. Manager agrees to provide the Facility to City rent-free for City' s use for official business purposes. All days requested by City shall be subject to availability due to prior event scheduling. All event-related expenses including, but not limited to, event attendants, ushers, ticket-takers, security, utilities and other expenses incurred in connection with the use of the Facility by City shall be reimbursed to Manager by City. ARTICLE 3 RESPONSIBILITIES OF MANAGER 3 . 1 Responsibilities of Manager. From the Effective Date of this Agreement through the end of the Term or such other termination date made pursuant to the terms of this Agreement, Manager shall, consistent with this Agreement and subject to the then applicable Budget: (a) Manage, operate and maintain the Facility and contract for its use in a manner that is consistent with other comparable facilities providing similar services throughout the United States; (b) Negotiate, execute and perform contracts, use agreements, licenses and other agreements (1) with persons who desire to schedule events, performances, telecasts, broadcasts or other transmissions in, from or to the Facility or who desire otherwise to use the Facility or any part thereof; or (2) that MEE22254/3/4/92 -8- otherwise pertain to the use, operation, marketing, promotion and occupancy of the Facility or any part thereof; (c) Coordinate all advertising, licensing, promotional activities, marketing, and public relations for the Facility; (d) Formulate a marketing plan for the Facility; and provide an executive summary of such plan to the City' s Authorized Representative; (e) Subject to Pre-Existing Agreements, negotiate, execute and perform contracts, use agreements, licenses and other agreements (1) for all sponsorships, including, but not limited to, the use of advertising space in or about the Facility and all advertising rights of whatever kind or nature related to the Facility, and (2) for the sale, promotion, marketing and use of all names, trademarks, tradenames, logos and similar intangible property relating to the Facility; (f) Subject to Pre-Existing Agreements, operate, procure or cause to be operated (1) concessions within the Facility, for the sale of food, beverages, souvenirs, novelties and programs, and (2) clubs and restaurants within the Facility. Manager shall cooperate with City and keep City informed of Manager' s selection process; in the selection of concessionaire(s) . Manager shall submit its, choice of caterer (but not other concessionaires) to City' s Authorized Representative who shall within thirty (30) days of receipt of Manager's notice of its selection notify Manager of its approval or disapproval of Manager's choice; (g) Establish and maintain consistent procedures for cost estimating and reporting, maintenance and payment of invoices, including preparation of Budgets and reports as contemplated by Article 4 ; (h) Plan, coordinate and administer operation of the Facility; (i) Retain legal counsel in connection with Manager's duties herein; (j) Monitor actual and projected Operating Expenses; (k) Make prompt payment of all operating Expenses from funds made available for that purpose pursuant to Article 5; provided, however, that nothing herein shall prohibit Manager from reasonably contesting the validity of any claim made against Manager; MEE22254/3/4/92 -9- 0 (1) Furnish all services, personnel, materials, tools, machinery, equipment: and other items necessary to accomplish the foregoing requirements of this Section 3 . 1; and (m) Devise and implement procedures reasonably designed to keep the Facility in good order and condition, subject to ordinary wear and tear, and maintain the Facility in such order and condition, subject to the responsibilities of City as set forth in Section 4 . 5. 3.2 Duty and Liability. Manager shall owe to City a duty to perform its obligations under this Agreement and to conduct the management and operation of the Facility at all times consistent with the Performance Standards set out in Section 3 . 3 below. Manager shall not be liable, responsible or accountable in damages or otherwise to City or to any other person for any act or omission that is within, or that the Manager reasonably believes to be within, the scope of its authority under this Agreement; provided, however, that Manager shall be liable for that portion of any loss sustained by City or any other person which is caused by: (a) Acts or omissions of the Manager in bad faith or proximately resulting from Manager's negligence or intentional misconduct, or (b) Any transaction from which Manager derives an improper personal benefit; or (c) Any willful Event of Default (as defined in Section 11. 1 below) on the part of Manager. In the event that City sustains a loss by reason of any of the foregoing which is the type of loss covered by City's insurance policy (whether property insurance, liability insurance or other) and such loss is caused in whole or in part by Manager or any party, person, firm or other entity acting by, through or under Manager, then City shall have no right of recovery against Manager or such party, person, firm or other entity. 3.3 Performance Standards. Manager agrees to: (a) Manage and operate the Facility so as to minimize Operating Expenses and maximize Operating Revenues; provided, however, that Manager, in establishing and implementing its booking policies, may schedule not only those events that generate substantial direct revenue to the Facility, but also those events that produce less direct revenue but, in the Manager's good faith judgment, generate either a significant economic, cultural or other benefit to City or otherwise serve the public interest; (b) Not permit the use of the Facility without reasonable charge for such use, absent City' s prior written consent; MEE22254/3/4/92 -10- (c) Maintain the Facility in good condition, reasonable wear and teal- excepted, and continue maintenance procedures which will keep the Facility in good condition and working order, reasonable wear and tear excepted. Without limiting the foregoing, the parties acknowledge that the overall appearance and maintenance of the Facility are important to client relations, promotions and marketing of the Facility. Consistent therewith, Manager shall perform general routine maintenance of the entire Facility consistent with a first-class facility comparable to other facilities providing similar services throughout the United States, and, in particular, Manager shall provide specialized maintenance for the air conditioning chiller units in accordance with the recommendations and/or schedules of the manufacturer, using competent, properly trained personnel; (d) Require that all events, performances and other uses of the Facility shall be in keeping with the purposes described in the Recitals of this Agreement for which the Facility is to be used; (e) Require that all persons using the Facility or attending events therein comply with all Legal Requirements of all governmental authorities having jurisdiction over the Facility. (f) Perform its obligations under this Agreement and conduct the management and operation of the Facility at all times in conformity with the standard to which a good operator would operate given the monetary limits set forth in the approved Budgets then in effect; (g) Perform its obligations under this Agreement in accordance with the Legal Requirements of all governmental authorities having jurisdiction over such obligations, or any part thereof; provided, however, that if any Legal Requirement enacted after the execution hereof necessitates any structural change to the Facility, City shall be responsible, at its sole cost and expense, for complying with such Legal Requirement; and (h) Promptly and fully discharge and pay all of its obligations under this Agreement at or prior to the times specified for performance or payment; provided, however, that nothing herein shall prohibit Manager from reasonably contesting the validity of any claim against Manager (any such claim due and owing to be promptly paid by Manager upon the conclusion of such dispute by final non-appealable judgment or otherwise) . 3.4 Employee Transition Plan. (a) Manager agrees to assume employment of Facility employees no later than September 30, 1992 . During the Transition Period, Manager and its transition team shall implement a MEE22254/3/4/92 -11- transition plan to assist in the conversion of City's employees to Manager' s employees. (b) During the Transition Period: (1) City employees shall be supervised by Manager but shall retain their status and benefits as City employees and Manager shall comply with all City personnel policies and procedures; (2) City and Manager shall cooperate and use their best efforts to ensure that accrued benefits for existing employees for prior years of service are preserved to the maximum extent possible; and (3) Any additional employees hired during the Transition Period by Manager, or any vacant City positions filled during this time, shall become employees of Manager and shall be an Operating Expense. (c) At the end of the Transition Period, Manager shall: (1) make final personnel appointments consistent with the objectives of Manager's Performance Standards and the management plan for the Facility; (2) provide re-training and continuing education to employees who may require assistance in the event the responsibilities and functions of their current position are changed or expanded; and (3) provide the retained employees with a benefit package including medical and dental insurance benefits similar to those benefits provided to other employees of Manager. ARTICLE 4 RECORDS, ACCOUNTS AND REPORTS 4. 1 Books. Manager shall maintain in accordance with generally accepted accounting principles (GAAP) , adequate books of account with respect to its management and operation of the Facility and shall maintain such books on the premises of the Facility. 4.2 Access to Information. City shall have the right to obtain from Manager such information, and to inspect such books and records concerning the management and operation of the Facility during normal business hours. 4.3 Annual Audit. As soon as practicable at the close of each Fiscal Year but no later than 90 days after the close of each Fiscal Year, Manager shall furnish to City a balance sheet, a MEE22254/3/4/92 -12- • b statement of profit or loss: and a statement of cash flow, prepared in accordance with GAAP and accompanied by an independent auditor' s report containing an opinion of the independent certified public accountant preparing the report, which shall be a reputable firm selected by Manager. Manager shall inform City of its selection of the independent certified public accountant promptly after its selection. If City notifies Manager that it objects to Manager ' s selection, Manager shall select a different independent certified public accountant. 4. 4 Monthly Reports. Within twenty (20) days after the end of each month, Manager shall furnish to City a report in the general form as attached hereto as Exhibit D. 4. 5 Capital Improvements Budget; Emergency Expenditures. (a) During the Term and no later than six (6) months before the beginning of each Fiscal Year (the first of which is to commence July 1, 1993) , Manager shall submit to City, for its approval, a budget for projected Capital Expenditures for such Fiscal Year. This budget shall be subject to the procedures customarily employed in connection with the development, approval and implementation of capital budgets for City. City acknowledges and agrees that Manager shall have no obligation hereunder to make any Capital Expenditures and, therefore, City shall be responsible for and shall repair, provide and maintain, at its own expense, from funds set aside for the Capital Improvements Budget, all Capital Improvements as set forth in this Article 4, including, without limitation, the exterior and structural portions of the Facility, together with all mechanical, HVAC and electrical systems contained therein. (b) In addition, if Manager at any time becomes aware of any condition that jeopardizes the structural soundness or operational capability of the Facility, the public safety, or the ability of Manager to perform its obligations under this Agreement, Manager shall have its opinion verified by such engineer as City may from time to time designate, shall so advise City, and, to the extent allowable by law, City shall make available the funds necessary for the Emergency Expenditures to correct such condition, within such time as is reasonable under the circumstances or shall indemnify, defend and hold Manager harmless for any loss sustained by Manager as a result of City' s failure to approve or fund an Emergency Expenditure. 4. 6 Annual Operating Budget. Not later than ninety (90) days before the beginning of each Fiscal Year (the first of which is to commence July 1, 1993) , Manager shall submit to City, for its approval, an annual operating budget for the Fiscal Year ("Annual Operating Budget") , listing all projected Operating Revenues and Operating Expenses by category. Manager shall have the discretionary authority to modify individual line items of the Annual Operating Budget without the consent of City provided that MEE22254/3/4/92 -13- Manager shall give the City's Authorized Representative three (3) days prior written notice of such modifications. Such modifications shall not in the aggregate result in an increase in the total approved Annual operating Budget. 4.7 Budget Approval. (a) City shall promptly review all proposed Budgets, and promptly communicate to Manager any comments or suggested revisions thereto to the extent necessary or needed to conform such Budget to the policy guidelines of the City. City shall, in any event, complete its review of any such Budget, and deliver its comments no later than the first day of each Fiscal Year, or failing to act by such time, City shall continue to fund this Agreement at the prior Fiscal Year' s Budget level by a continuing resolution. (b) Within twenty (20) days of City's approval of any and all Budgets, City shall cause its treasurers to issue a statement to Manager indicating that the funds required by such approved Budget are or will be timely available, and have been or will be timely set aside, for such Budget. 4.8 Expenditures in Excess of Budget. Manager shall not, without written authorization by City, knowingly incur in any Fiscal Year obligations for Operating Expenses in excess of total Operating Expenses contemplated by the then applicable Annual Operating Budget approved by City. ARTICLE 5 FUNDS AND ACCOUNTS 5. 1 Operating Fund. Manager shall collect all Operating Revenues and deposit therm in an Operating Fund in an account maintained by Manager in its name in the Depository. Manager shall have complete control and authority as to the Operating Fund, subject only to the provisions of this Article 5. Monies in the Operating Fund and any interest thereon shall be applied first to the payment of Management Fees accrued through the end of the prior month and thereafter to any other Operating Expenses then accrued. The balance shall be retained in the Operating Fund as reserve for payment of future Operating Expenses. If, at the end of any Fiscal Year, there shall be a balance in the Operating Fund in an amount in excess of the anticipated working capital and Operating Expenses for the first month of the ensuing year, Manager shall disburse such excess to City on or before the fifteenth (15th) day of such month. 5.2 Working Capital Fund. In order to provide the working capital necessary for Manager to perform its obligations hereunder with respect to Operating Expenses not funded by the Operating Fund during the Term, City shall advance to Manager for deposit in an MEE22254/3/4/92 -14- interest-bearing account in the Depository to be held and administered by Manager in Manager' s name ("Working Capital Fund") , a minimum amount equal to the aggregate of the projected Operating Losses (which shall be deemed to be an amount equal to budgeted operating Expenses for three (3) months of the Annual Operating Budget) , as applicable, then in effect, as provided below: (i) Working Capital Fund: By no later than each of the Effective Date hereof and the first day of each Fiscal Year during the Term, City shall advance to Manager such amount as is necessary to replenish the Working Capital Fund to a minimum amount equal to the aggregate of projected Operating Losses as set out in the initial three (3) months of the approved Annual Operating Budget then in effect. (ii) Application to Unfunded Operating Loss: If after the first day of any month during the Term, the amount of monies on deposit in the Operating Fund, which are available for such purpose, shall be insufficient for the payment of Operating Expenses then due or budgeted to become due during such month, Manager shall advance the amount of such insufficiency from the Working Capital Fund to the Operating Fund. City shall promptly, but in no event later than the thirtieth (30th) day after such advance, restore to Manager the amount of such advance for deposit in the Working Capital Fund. 5.3 Security for and Investment of Funds. All funds and accounts required to be maintained by Manager under this Article 5 shall be maintained in the Depository, which shall be a bank or branch located in City. Manager shall require of the Depository that all funds held in any account maintained under this Article 5 be secured to such an extent and in such a manner as is required by applicable law in connection with the deposit of funds of City. Money on deposit in the Operating Fund and Working Capital Fund shall be retained on deposit in fully secured interest-bearing demand deposit accounts or may be invested, to the extent and only if permitted by applicable laws, in the following obligations or securities, maturing at such time or times so as to enable disbursements to be made for the payment of Operating Expenses: (i) Bonds or other obligations of, or unconditionally guaranteed by, the United States of America or any agency or instrumentality thereof or by the State of California; or (ii) Other obligations and securities that are lawful investments for funds of City. 5.4 No Obligation of Manager to Advance Funds. Notwithstanding any provision of this Agreement to the contrary, Manager shall not be obligated to make any advance to or for the account of City or to pay any sums incurred for the performance of City, nor shall Manager be obligated to incur any liability or obligation for the account of City, nor shall Manager be MEE22254/3/4/92 -15- 0 0 responsible for the failure of its performance of its obligations hereunder as a result of Ci.ty' s failure to provide sufficient funds as herein set forth. Further, notwithstanding any other provision of this Agreement, Manager shall be obligated to perform its duties, responsibilities and obligation hereunder only to the extent that funds are made available to Manager for such purpose. ARTICLE 6 POWERS AND FUNCTIONS 6. 1 Authority of Manager. Except as otherwise specifically provided in this Agreement, Manager shall have the exclusive right and authority to exercise, or delegate the exercise of, all rights, powers and duties conferred or imposed on Manager in this Agreement. The powers of Manager with respect to the Facility shall be complete, subject only to the limitations expressly set forth in this Agreement. 6.2 Employees. Subject to City' s obligation pursuant to Sections 2 .4 and 3 . 4 and to the then current approved Annual operating Budget, employees hired by Manager shall be employees of Manager and not of City. Manager shall have complete and absolute discretion and authority with respect to the number, functions, qualifications, compensation and other terms and conditions relating to its employees, subject only to the provisions of Article 9 of this Agreement. 6.3 Contracting For Facility Use and Purchase of Supplies and Services. Manager shall have full authority and discretion as to contracting for the use of the Facility and the purchase of all equipment, materials, supplies and inventories reasonably required by Manager hereunder. Manager, however, shall make all such purchases at the best available price known to Manager, considering the quantities required, the time available for the delivery and the sources of supply. City shall amend its purchasing ordinance such that Manager shall not be subject to any public bid or other law regulating the purchase of goods or services by municipal or other governmental authorities. ARTICLE 7 COMPENSATION 7. 1 Base Compensation. For services to be performed by Manager during the Term, the City shall pay to Manager $16, 666 . 66 on or before the first business day of each month throughout the Term. In order to account for annual increases in the Consumer Price Index, the fee payable under this Section 7 . 1 to Manager during the Term shall be increased annually at the close of the first full Fiscal Year and every Fiscal Year thereafter by the lesser of: MEE22254/3/4/92 -16- 0 0 (a) four percent (4%) of the then current fee; or (b) the increase in the Consumer Price Index determined as follows: The base for computing the adjustment is the Consumer Price Index for all Urban Consumers (base year 1967 = 100) for the United States, published by the United States Department of Labor, Bureau of Labor Statistics ("Index") , which is in effect on the Effective Date ("Beginning Index") . The Index published most immediately preceding the Adjustment Date in question ("Interim Index") is to be used in determining the amount of the adjustment. If the Interim Index has increased over the Beginning Index, the fee for the following Fiscal Year (until the next adjustment) shall be set by multiplying the then current base fee by a fraction, the numerator of which is the Interim Index and the denominator of which is the Beginning Index. In no case shall the fee be less than the fee in effect immediately prior to the Adjustment Date then occurring. If the Index is changed, so that the base year differs from that in effect as provided above, the Index shall be converted in, accordance with the conversion factor published by the United States Department of Labor, Bureau of Labor Statistics. If the Index is discontinued or revised during the Term, such other government index or computation with which it is replaced shall be used in order to obtain substantially the same result as would be obtained if the Index had not been discontinued or revised. Upon adjustment of the fee as provided in Section 7 . 1, the parties shall immediately execute an amendment to this Agreement stating the new fee. 7 .2 Performance Compensation. In addition to the base compensation payable to Manager under Section 7 . 1, City shall pay to the Manager annually in arrears on before the thirtieth (30th) day following the date on which Manager has given the City the annual audit report for the subject year as contemplated by Section MEE22254/3/4/92 -17- 46 6 4 . 3 , additional sums resulting from Reductions in Assumed Operating Deficit and Increases in Hotel Occupancy as set forth in Subparagraphs (a) and (b) below. (a) Reductions in Assumed Operating Deficit. To the extent that the Assumed Operating Deficit is greater than the Operating Loss for any given full fiscal year during the Term of this Agreement, City shall pay and the Manager shall be entitled to receive an amount equal to a percentage of such difference (if any) pursuant to the following schedule: Difference City Percentage LMI Percentage First $100, 000 60% 40% From $100, 001 - $250, 000 55% 45% Over $250, 000 50% 50% (b) Increase in Hotel Occupancy. In addition to the sums payable (if any) pursuant to Subparagraph (a) above, City shall pay, and the Manager shall be entitled to receive, incentive compensation based upon the Actual Room Nights Blocked in comparison to the Base Room Night Amount as follows: -First 15, 000 Room Nights Blocked in Excess of Base Room Night Amount $4 . 00 Per Room Night -Next 20, 000 Room Nights Blocked $6. 00 Per Room Night -Additional Room Nights Blocked $8 . 00 Per Room Night Notwithstanding the foregoing, the total incentive compensation payable to Manager pursuant to this Section 7 . 2 , shall not exceed an amount equal to the base compensation payable to the Manager pursuant to Section 7 . 1, and shall not be payable to the extent that such payment would cause a Cost Savings Failure pursuant to Section 10.4 (a) . ARTICLE 8 INSURANCE 8.1 Insurance to be Maintained by City. City shall at all times maintain in effect the following policies of insurance: (a) Proper Insurance. An "All Risk of Physical Loss" form of policy (with Replacement Costs Endorsement) , insuring all movable and immovable property constituting the Facility excluding the foundation (including the expense of the removal of debris of such property as a result of damage by an insured peril) , subject to the terms and conditions of the insuring agreements, including coverage for loss or damage by earthquake and flood. Such insurance shall name Manager as an additional named insured. Coverage shall be on a broad "All Risk of Physical Loss" form. The MEE22254/3/4/92 -18- 0 p Facility and its contents shall be insured to full replacement value. (b) Comprehensive General Liability. Public liability and property damage insurance with a combined single limit of at least $10, 000, 000 dollars insuring against all liability of the City and its Authorized Representatives arising out of, and in connection with, the use or occupancy of the Facility. Such insurance shall name Manager as an additional named insured. 8.2 Insurance to be Maintained by Manager. Manager shall at all times maintain in effect the following policies of insurance: (a) Workers ' Compensation. Such workers ' compensation insurance coverage as may be required by law, including employer ' s liability coverage of at least $3, 000, 000 per person per occurrence. (b) Business Automobile Policy. At least $1, 000, 000 of coverage, including bodily injury and property damage, arising out of the operations, maintenance or use of automobiles or other vehicles. Such insurance shall name City as an additional named insured. (c) Crime and Fidelity Coverage. At least $100, 000 per occurrence of coverage for (i) employee dishonesty; (ii) forgery or alteration; (iii) theft, disappearance and destruction inside and outside the Facility; and (iv) robbery and safe burglary inside and outside the Facility. Such insurance shall name City as additional named insured. (d) other Insurance. Such other coverages as Manager, in its discretion, may deem prudent or necessary. Such insurance shall name City as an additional named insured. 8.3 Insurance Policies. The insuring party as specified in this Article 8 shall deliver to the other party copies of policies of such insurance or certificates evidencing the existence and amounts of such insurance as required to be maintained hereunder. No such policy shall be cancelable or subject to reduction of coverage or other modification except after thirty (30) days prior written notice to both parties. The parties specifically acknowledge that obtaining such insurance policies will not limit their liability hereunder for amounts in excess of such policies or diminish their respective , duties to indemnify each other as specifically set forth in this Agreement. MEE22254/3/4/92 -19- 0 ARTICLE 9 EQUAL EMPLOYMENT OPPORTUNITY 9. 1 Discrimination Prohibited. Manager shall not discriminate against any employee or applicant for employment because of age, race, creed, sex, color or national origin or any other basis prohibited by Legal Requirements, and Manager shall take affirmative action to ensure that any employee or applicant for employment is afforded equal employment opportunities without discrimination because of age, race, creed, sex, color or national origin. Such action shall be taken with reference, but not be limited to, recruitment, employment, job assignment, promotion, upgrading, demotion, transfer, layoff or termination, rates of pay or other forms of compensation in selection for training or retraining, including apprenticeship and on the job training. 9.2 Affirmative Action. Manager shall comply with applicable affirmative action policies of City and shall participate in City' s affirmative action programs. ARTICLE 10 TERMINATION 10. 1 Surrender of Facility. Upon expiration or termination of this Agreement, Manager shall promptly surrender the Facility to City, leaving all equipment, supplies, books and records, manuals and inventories that are the property of City or that have been purchased with Operating Revenues or from funds made available by City. All funds and accounts maintained by Manager in the Depository required to be maintained under this Agreement shall be transferred to City within five (5) business days of the expiration or termination of this Agreement. 10.2 Continuation of Performance. In the event of termination of this Agreement, Manager, at City's option, shall continue to perform under the provisions of this Agreement (at the then current level of compensation) for a period of up to six (6) months to enable City to make arrangements for a successor as operator of the Facility; provided, however, that Manager shall not be required to perform for a period of time to its detriment or for a period during which Manager's actual Operating Expenses exceed actual Operating Revenues, unless such deficit is promptly and timely funded and paid by City. 10.3 Surrender of Improvements. Upon the expiration or termination of this Agreement, all improvements made to or upon the Facility by Manager and all equipment, materials, supplies and inventories purchased by Manager with operating Revenues or with funds made available by City shall be promptly surrendered to City and title thereto shall vest in City, to the extent not earlier MEE22254/3/4/92 -20- 0 0 vested in City, without any further compensation therefor from City. 10.4 Performance Failure. At the conclusion of any Fiscal Year subsequent to the second full Fiscal Year of this Agreement, City may upon thirty (30) days' written notice, terminate this Agreement for either a Cost Savings Failure, or Minimum Room Night Failure as defined in Subparagraphs (a) and (b) below: (a) Cost Savings Failure. A Cost Savings Failure shall occur if: (i) The Adjusted Operating Loss in any given fiscal year is greater than the Assumed operating Deficit for that fiscal year; and (ii) The amount of the Adjusted Operating Loss in excess of the Assumed Operating Deficit is greater than the sum of (a) the Cumulative City Savings, plus (b) the Cumulative Incremental TOT. (b) Minimum Room Night Failure. A Minimum Room Night Failure shall occur if for any consecutive two-year period during the term of this Agreement: the Actual Room Nights Blocked is less than two times (2x) the Minimum Room Night Amount. 10.5 Damage or Destruction. Either party may terminate this Agreement in the event that the entire Facility is destroyed or a significant portion thereof is damaged from any cause, whether or not covered by insurance. 10. 6 Termination by City. In the event of termination by City in accordance with this Agreement, City shall pay Manager all fees earned to the date of City's termination. ARTICLE 11 DEFAULT 11.1 Events of Default. Each of the following shall constitute an "Event of Default" under this Agreement: (i) Failure to pay under Section 7 when due any amount required to be paid under this Agreement, if the failure continues for five (5) days after notice has been given to the defaulting party; or, (ii) Failure to perform any other material obligation under this Agreement (including, without limitation, Manager' s failure to meet the responsibilities of Manager set out in Section 3 . 1 and the Performance Standards set out in Section 3 . 5) , if the failure to perform is not cured within thirty (30) days after MEE22254/3/4/92 -2 1- 0 0 notice has been given to the defaulting party, except that if the default cannot reasonably be cured within thirty (30) days, an Event of Default shall not be deemed to have occurred if the defaulting party begins to cure the default within the thirty (30) day period and diligently and in good faith continues to pursue the cure of the default. 11.2 Default Notices. The non-defaulting party shall promptly notify the defaulting party of any acts or omissions believed by the non-defaulting party to be an Event of Default under this Agreement. In order to be effective for purposes of Section 11. 1, a notice of a default must be timely given, must state that it is a notice of default and must specify in detail the acts or omissions alleged to constitute a default of this Agreement. 11.3 Rights of Non-•Defaulting Partv. If an Event of Default occurs and is not waived in writing by the non-defaulting party, then the non-defaulting party shall have the following remedies which are not exclusive but cumulative in addition to any other remedies now or later allowed by law: (i) The right to reasonably cure, at the defaulting party's cost and expense, any default; (ii) The right to sue to collect any sums not paid when due; (iii) The right to terminate this Agreement; and (iv) The right to seek specific performance of the defaulted obligation. ARTICLE 12 MISCELLANEOUS 12 . 1 Notices. Unless expressly otherwise provided elsewhere in this Agreement, any election, notice or other communication required or permitted to be given under this Agreement shall be in writing and deemed to have been duly given if and when delivered personally (with receipt acknowledged) or the fourth (4th) day after mailing (by certified mail return receipt requested) with proper postage prepaid, by facsimile transmission with evidence confirming transmission, or when delivered by a national commercial courier service (such as ]Federal Express) for expedited delivery, to be confirmed in writing by such courier. To City: City Manager City of Palm Springs 3200 East Tahquitz Canyon Way Palm Springs, California 92262 FAX: (619) 323-7701 MEE22254/3/4/92 -2 2- With a copy to: David J. Aleshire, Esq. Rutan & Tucker Central Bank Tower, Suite 1400 611 Anton Boulevard P.O. Box 1950 Costa Mesa, California 92628 FAX: (714) 546-9035 To Manager: Palm Springs Leisure Management, Inc. ATTN: General Manager Palm Springs Convention Center 277 North Avenida Caballeros Palm Springs, California 92262 FAX: (619) 322-6921 and John A. Blaisdell Executive Vice President Leisure Management International Eleven Greenway Plaza, Suite 3106 Houston, Texas 77046 FAX: (713) 622-4134 With a copy to: Marc E. Empey, Esq. Best, Best & Krieger 600 E. Tahquitz Canyon Way Palm Springs, California 92262 FAX: (619) 325-0365 12 .2 Amendments. This Agreement may be amended only by the written consent of the parties. 12 .3 Title and Captions. All articles or section titles or captions in this Agreement are for convenience of reference only. They should not be deemed to be part of this Agreement or to in any way define, limit, extend, or describe the scope or intent of any provisions of this Agreement. Except as specifically otherwise provided, reference to "Articles, " "Sections, " "Exhibits, " and "Schedules" are to Articles and Sections of, and Exhibits and Schedules to this Agreement. 12.4 Pronouns and Plurals. Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa. 12.5 Severability. Each provision of this Agreement shall be considered to be separable and, if, for any reason, any such provision or any part thereof, is determined to be invalid and MEE22254/3/4/92 -2 3- i 0 contrary to any existing or future applicable law, such invalidity shall not impair the operation of or affect those portions of this Agreement that are valid, but this Agreement shall be construed and enforced in all respects as if the invalid or unenforceable provision or part thereof had been omitted. 12. 6 Successors. This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, successors, and permitted assigns but this provision shall not be deemed to permit any assignment by a party of any of its rights or obligations under this Agreement except as expressly provided herein. 12 .7 Assignment. Neither Manager nor City shall voluntarily assign or encumber its interest in this Agreement, without first obtaining the other party' s consent. Any assignment or encumbrance without the other party' s consent shall be voidable and, at the other party's election within thirty (30) days of actual knowledge of an assignment or encumbrance, shall constitute a default which shall be an Event of Default unless the assignment or encumbrance is rescinded within thirty (30) days after the other party has given the assigning party notice of its election to treat the assignment or encumbrance! as an Event of Default; provided, however, that no such consent is or shall be required in the case of an Approved Assignment, as hereinafter defined. Manager agrees that at all times during the Term of this Agreement, an Affiliate, or any person or entity that purchases all or substantially all of the assets of Manager or an Affiliate, shall possess the power to direct or cause the direction of the management and policies of the Manager. (a) For purposes hereof, an "Approved Assignment" shall mean: (i) a party's pledge, mortgage, or other assignment of the revenues or fees which it is entitled to be paid under this Agreement (but not including the assignment of any other rights under this Agreement) in connection with any credit facilities that may be obtained by either party or any of their Affiliates, it being the express intent hereunder that Manager shall have the right to pledge only its Management Fees and no other fees or revenues hereunder; (ii) the assignment of this Agreement by the Manager to any Affiliate; (iii) the acquisition by a person or an entity of any equity or other beneficial interest in, or all or substantially all of the assets of, the Manager or any Affiliate. MEE22254/3/4/92 -2 4- 0 41 (b) The provisions of this Section shall not prohibit or restrict the Manager' s entering into :subleases, contracts, concessions or licensers for the operation of any portion of the Facility, subject to the terms of this Agreement; provided, however, that any such agreements shall be assignable to the City upon termination of this Agreement and for any such agreements which have a non-cancelable term beyond one (1) year from the date of the termination of this Agreement, the City shall have an option, to be exercised within sixty (60) days of the termination of this Agreement, to cancel any such agreement upon at least six (6) months prior notice unless: (a) the agreement received the prior approval of the City pursuant to this Agreement or otherwise; or (b) the City has a non-disturbance and attornment arrangement (or the like) with respect to such agreement. 12 .8 Reasonableness. Whenever by the terms of this Agreement, a party has the right or power to grant or withhold its consent or approval, such party agrees not to withhold or delay such consent or approval unreasonably. 12.9 Entire Agreement. This Agreement, including the attached exhibits, contains the entire agreement of the parties and supersedes all prior and contemporaneous agreements and understandings, oral or otherwise, among the parties with respect to the matters contained in this Agreement and may not be modified or amended except as set forth in this Agreement. 12. 10 Counterparts. This Agreement may be executed in one or more counterparts and each of such counterparts, for all purposes, shall be deemed to be an original, but all of such counterparts together shall constitute but one and the same instrument, binding upon the parties, notwithstanding that all of the parties may not have executed the same counterpart. 12. 11 Applicable Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California and the applicable venue shall be Riverside County. 12 . 12 No Representations as to Profitability. In performing its obligations hereunder, nothing herein contained is intended to impose upon Manager any obligation to achieve, for the benefit of City any Net operating Income. Manager has made no MEE22254/3/4/92 -2 5- • 0 representations, warranties or promises that Manager (on behalf of City) will be able to achieve or obtain any Net Operating Income from the Facility and City acknowledges that no such representations, warranties or promises have been made by Manager. In connection with the foregoing, neither Manager nor any Manager Affiliate and none of their officers, joint venturers, employees or agents shall be liable or bound in any manner by any verbal or written statements, representations, or information pertaining to: (i) the profitability of operations of the Facility and (ii) any benefits which may or may not accrue to City resulting from such operations. In no event shall Manager or any Manager Affiliate have any obligation to reimburse City any part of any net loss resulting from the ownership, operation or management of the Facility. 12. 13 Limitation of Liability. City agrees that no partner, co-venturer, employer, agent, director, officer, shareholder or employee of Manager shall be personally liable to City or anyone claiming by, through or under City, by reason of any default by Manager under this Agreement or for any amount that may become due to City by Manager under the terms of this Agreement or otherwise. Manager agrees that no officers, agents, or employees of City shall be personally liable to Manager or anyone claiming by, through, or under Manager by reason of any default by City under this Agreement, or for any amount that may become due to Manager by City under the terms of this Agreement or otherwise. 12 . 14 Indemnification by Manager. Manager hereby indemnifies and agrees to hold City and its officers, agents and employees, individually and collectively, harmless from and against any and all actions, claims, damages or costs (including, without limitation, attorneys' fees and expenses and litigation expenses) they may suffer, sustain or incur in connection with, arising out of, or in any way related to, Manager's breach under this Agreement. 12. 15 Indemnification by City. City hereby indemnifies and agrees to hold Manager and its directors, officers and shareholders, agents and employees, individually and collectively, harmless from and against any and all actions, claims, damages or costs (including, without limitation, attorneys ' fees and expenses and litigation expenses) they may suffer, sustain or incur in connection with, arising out of, or in any way related to, City' s breach under this Agreement. 12 .16 Force Majeure. Neither party shall be liable or responsible to the other party for any delay, damage, loss, failure, or inability to perform caused by "Force Majeure" if notice is provided to the other party within ten (10) days of the actual knowledge of the event of "Force Majeure" that such party is unable to perform. The term "Force Majeure" as used in this Agreement shall include the following: an act of God, strike, act MEE22254/3/4/92 -2 6- of the public enemy, war, mines or other items of ordinance, blockage, public rioting, lightning, fire, storm, flood, explosions, inability to obtain materials, supplies, labor permits, servitudes, rights of way, acts or restraints of any governmental authority, epidemics, landslides, lightning storms, earthquakes, floods, storms, washouts, arrests, restraints of rulers and peoples, civil disturbances, explosions, breakage or accident to machinery or lines of equipment, temporary failure of equipment, freezing of equipment and any other cause whether of the kinds specifically enumerated above or otherwise which is not reasonably within the control of the parties hereto and which by the exercise of due diligence could not be reasonably prevented or overcome. IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first set forth above. CITY: CITY PALM SPRIN By: Rob ar ins Ci Manager APPROVED AS TO FORM: CITY OF PALM SPRINGS David J,.l Tleshire, sq. City Attotney MANAGER: ATTEST• LEISURE MANAGEMENT INTERNATIONAL "Cityf'Clerk of the-- City of Palm Springs By: John A. Blaisdell Authorized Representative R Ft So? MEE22254/3/4/92 -2 7- CITY OF PALM SPRINGS AND LMI SCHEDULE A TO MANAGEMENT AGREEMENT SCHEDULE A DESCRIPTION OF FACILITY The land referred to in this report is situated in the County of Riverside, State of California, and is described as follows: Lot 2 and Lettered Lot A of Tract No. 20485, in the City of Palm Springs, County of Riverside, State of California, as per map recorded in Book 147, Pages 55 and 56 of Maps, and by Amended Map recorded in Book 200, Pages 47 and 48 of Maps, in the Office of the County Recorder of said County. Lot number 105 , Section 14, Township 4 South, Range 4 East , San Bernardino Meridian, Riverside County, California. 140TE : City of Palm Springs owns adjoining lot numbers 103 and 106 . ATTACHMENT I TO SCHEDLO A y h aw[er E or l sn(E*. IN THE CITY OF PALM SPRINGS, STATE OF CALIFORNIA TRACT NO. 20485 ROCKS 107 IviLl 11O.AND DLOC,Ia IIt THRU II..AS SHOWN OM THE OFFICIAL FIAT CO TH[ SURVET al FILE tN THE BUREAU OF LAND si ." NE1R•LINO A IgRTKN OF TIA EVE OF rHE W tN OF THE mw W OF SEC.14.TES,R EE.S 10 4k(L J 1 IR/rCl•N ILIA. 1fOw COW OWINY M/'OOCtI A•l MrA(T7r FMIN[[R{ Q DARw OF DEARINOS- LEGEND Tls •WIN 4AL r rs A•w r xl1AI.... • AAHGA I((,IorArin• ••I.w .( A•tT• TA(-MD.(F\N,AArFR A xAA.F•W 109' ' i• Is .•Hal(( w •eA Iql T• .[ SIT Iwlr ADS 1(ACi .0 i0E(•(Mr N4( r TA( Rrtcl.a H4, t.Nl• AC.D. DNT( ILCOAtAl\I,Cl.I•/ laxTT. ' idn/[F IT FALL AW ,MC-IASURKVCF7WLINO, ' -IFL(![;'1 IwrO•YATg11 CI(T . W I Lti IHf FIFIQ OBI FCIXY TIC;LT ll•':i 1Ny WA.C[DO`IFFAk a&W wc9.111( J 1•• ADO ROAD ICAIl A10• _��JJ S iit • wlr•tLn•r tir• - N V•/1 WIT/Irr lS r 0[TArAYnf•NYA T(ArElV(•-w'r VA/n'•l/,Ae0r/.//u4(w!I•m+na•rr.ir wm.or•V+ ' L;;�•A IL—• / •�' r C<WOJ< F oNt r AItr(Y(erlYE'•wfr!)[-((An r/ w • r •".All AIr n•w tollILO 2 t LA A M�rnr VT rrAW,er,I I n.rAeQN�.rl•aIw t.rA y • 2 +a i^�e C; x 1 V i•YI i 3 O = i Q9 O[T.1\... . { �__._. -1--�1=----1 Ill . • _ . 1 •! T_ANDIREAS _ 1 �� •ll-_ :vAGF'[D/ w rta0'e-r arY _ IA - S'•.❖ � � : ro ry ta/nCW s .0 aIV RaY//M1Rl 11! LOT ( -� I V.(ti]F asL,LA/9 r{ .+..f.fA1P KML•S � � I= .'(r O�lfrO R!f/•TT/ .�.,o•�,...IAn . • I rLor I i ^•YW .N O ••� L'VDVE CST\ c T ��1 •.y lP•1•Y G .,'aTC.• IoaF ]I S•' /JT J. 1 A�It.M1/!� ^•�• !•IlV�Rr1 I I t I 'Z Y•M w- SS•a Oh r.'(iww .14IH U N xva ai •a oo' +e T• as ••• �I LOT�i CL,G MIKAIU/'''r111 i r,•SartK/fx HOP rcri0 r�M =/Y/Wwr 1. ayr• I I j wwA/r+ I I or+.I/ry - ar/n//!W 5q•d b�Tb��S�TLT5 01 �JJNO nh4C1 S9hJI�JdS W"1Hd WC?Jd Wd57-:20 FGGT-LZ-F_O ATTACY N� T 2 TO SCHEDULE A VICINITY MAP ALEJO ROAD O (I z z Cr Z 2 J J U U ¢ m AMADO ROAD U PROJECT LOCATION a ANDREAS ROAD p a z w CONVENTION TAHOUITZ CANYON WAY ¢ CENTER I 1 w O cr w J J m PROJECT SITE PROPOSED VI PARKING ¢I 0 �Z�u,1I CONVENTION QI CENTER CITY OF PALM SPRINGS CASE NO. 5.0595-CUP DESCRIPTION CUP for construction of APPLICANT City of Palm Springs parking lot for the PS Convention Center, NW corner Amado/Caballeros , IL, Sec. 14. CITY OF PALM SPRINGS AND LMI SCHEDULE B TO MANAGEMENT AGREEMENT SCHEDULE B PRE-EXISTING AGREEMENTS 1. Catering Services Agreement by and between the City of Palm Springs and Park Avenue Gourmet Catering dated as of November 10, 1987, expiring October 9, 1992, as amended by Amendment #1 dated as of December 7, 1988, assigned by virtue of an Assignment of Contract dated June 6, 1990 from Park Avenue to N.W. Expo Catering Service of America, further amended by Amendment #2 dated as of October 4, 1990 and Amendment #3 dated December 19, 1990. 2. Audio Visual Agreement by and between the City of Palm Springs and Audio Visual West, Inc. of Palm Springs dated August 15, 1987, expiring August 14, 1992, assigned by virtue of an assignment of contract dated September 24, 1990, to Swank Audio Visual, Inc., as amended by Amendment #1 dated October 10, 1990. 3. Agreement to provide Security Services by and between the City of Palm Springs and O'Linn Executive Security Services, Inc. dated as of March 16, 1989 for two years plus renewals, as amended by Amendment #1 dated as of March 17, 1991. 4. Parking Services Agreement by and between the City of Palm Springs and Resort Parking Services dated November 1, 1988 for a one year period with renewals expiring December 29, 1992. CITY OF PALM SPRINGS AND LEISURE MANAGEMENT INTERNATIONAL SCHEDULE C TO MANAGEMENT AGREEMENT SCHEDULE C ASSUMED OPERATING DEFICITS Fiscal Assumed Year Operating Ending Deficit June 30, 1993 ($1, 950, 000) June 30, 1994 ($2 , 050, 000) June 30, 1995 ($2 , 150, 000) June 30, 1996 ($2 , 300, 000) June 30, 1997 ($2 , 400, 000) MEE22481 [S!A�MP�LE��FORM & FORMAT I SCHEDULE D PAGE 1 OF 3 PAW SPRINGS CONVENTION CENTER Statement of Actual Compared to Budget for the period ending December 31,199Y • Current Nash Year b Dais Actual Budget 19M Actual Budget 1991( 199Y 19W Varisrrce Actual t9W low Mariana Actual OneralM9 Re�: Facility Rw1LLls(Schedule 1) 116.373 56,314 60,050 110,554 641,977 875,765 (33.788) 501,158 Concseskm Commissluna 75,967 73,045 2,M 72.169 832.716 876,543 (43,827) 753,827 Reimbursed Stalling(Neq 20,310 19,536 782 19,302 222.711 234,433 (11.722) 201.612 Box OMm Fsse(Neq 11,752 11.300 462 11,164 128,820 135,600 (6,780) 116,616 Contract Services 39,963 30.167 1,796 37,965 435,100 458,000 (22,900) 393,850 Paridng 20.116 19,343 773 19.110 220,505 232,111 (11,606) 199,615 Ballroom Rental 4,738 4.556 183 4,501 51,933 54,665 (2,733) 47,013 Advertising 21.667 20.833 834 20,584 237.500 250,000 (12,500) 215.000 Equipment Rental 6,673 6.417 256 6,339 73,150 77.000 (3,850) 66.220 Other 33,727 3583 144 3 541 40_,850 43y0 2150 36y0 Total Revenues 32y294 253_`93 68_,201 3�5P29 2,885,202 3,037,118 151856 2,611,921 O9eraWrO E)Verws: Compensation 6 Benefits 125,625 139,583 (13,966) 124.369 1,624,750 1,675.000 (50,250) 1.591,250 utllydee 58.950 90.500 (31.550) 58,361 1,053,420 1,0116,000 (32,580) 1,031,700 Rapalra and Maintenance 24.300 27,000 (2,700) 24,057 314,280 324,000 (9,720) 307,800 Operations 11.700 13.000 (1,300) 11,503 151,320 156,000 (4,680) 148.200 Advertising 3 Promotlon 16.875 27.083 (10,208) 16,706 315,250 325,000 (9,750) 305,750 Travel i Entertainment 5,625 6.250 (625) 5,669 72,750 75,000 (2,250) 71.250 Contract Service 33,750 37.500 (3,750) 33,413 436,500 450,000 (13,500) 427,500 Proteaelalal Services 11,250 12,500 (1,250) 11.138 145,500 150.000 (4,500) 142,500 Management Fee 9,375 10,417 (1,042) 9,281 121,250 125,000 (3,750) 110,750 Telephone 3,750 4,167 (417) 3.713 48,500 50,000 (1,500) 47,500 MtacWYrwous 1575 2583 208 16�58 24y0 25y0 (750) 23750 Total Expenses 303y75 370,063 67008 300.044 4.307.770 4,441,000 (133,230 1 4,218,950 No Open6rg Income(Loaf) 18�19 116990 135._209 55.185 (1,422,5081 (1.403.B821 18626 11,607,029 SAMPLE FORM & FORMAT SUBMITTED QUARTERLY SCHEDULE D PAGE 2 OF 3 PALM SPRINGS CONVENTION CENTER Statement of Revenues and Expenses for the quarter ending December 31, 199Y and 199X Operatina Revenues: 199Y 199X Facility Rentals(Schedule 1) $675,765 540.612 Concession Commissions 876,543 701,234 Reimbursed Staffing (Net) 234,433 187,546 Box Office Fees(Net) 135,600 108,480 Contract Services 458,000 366,400 Perking 232,111 185,689 Ballroom Rental 54,666 43,733 Advertising 250,000 200,000 Equipment Rental 77,000 61,600 Other 43y00 34,400 3.037118 2,429,694 Total Revenues Operatina Expenses: Compensation&Benefits 1,675,000 1,507,500 Utilities 1,086,000 977,400 Repairs and Maintenance 324,000 452,000 Operations 156,000 140,400 Advertising&Promotion 325,000 292,500 Travel&Entertainment 75,000 67,500 Contract Services 450,000 405,000 Professional Services 150,C00 135,000 Management Fee 125,000 112,500 Telephone 50,000 45,000 Miscellaneous 25 000000 22,500 Total Expenses 4,441,000 4,157300 Net Operating Income (Loss) 1 403 88 (I 727,6061 See accompanying notes. SAMPLE FORM & FORMA;r SUBMITTED QUARTERLY A ANNUALLY SCHEDULE D PAGE 3 OF 3 PAL61 SPRINGS CONVENTION CENTER Balance Sheet as of ASSETS: 199y 199X Current Assets: Cash 54,678 50,851 Short Term Investments 225467 209684 Accounts Receivable (Ne1) 34,567 32,147 Prepaid Expenses 67,890 63,138 Accrued Interest 2,345 2.181 Deferred Costs 12,345 11,481 Total Current Assets 397292 369, Property 3 Equipment: Property 3 Equipment 125,000 116,250 (—)Accumulated Depreciation (32,000 0.7601 Net Property i4 Equipment 93,000 86, TOTAL ASSETS �90,292 5455.972 LIABILITIES AND EQUITY Current Liabilities: Accounts Payable and Accrued Expenses 123,456 114,814 Advance Ticket Sales 234,567 218,147 Sales Tax Payable 2,343 2,179 Deposits 2_�_4-A`-A` 21`74 Total Current Uabilities 383_`22 356,954 Other Liabilities: Deferred Revenues 47,336 44,022 Due to City 2,345 2,181 Total Other Liabilities 49,581 46.203 TOTAL LIABILITIES 433,503 403,158 EQUITY Retained Earnings 56,789 5_2,814 TOTAL LIABILITIES AND EQUITY 90.9 97 10"18,193 14:4 2 V713 688 7967 BCH & ASSOCIATES z 003 ............. -4,f,MUD OA= fummmy) A001tt Do W" Am s Pa ........... vu, �=-d ft, �fl q: x 1, ........ �! x�sk-,k u� r 5", , .1 _,�, .. ...10 1993 THIS CERTIFIrATI! 15 ISSU90 AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIncATE HOLDER. THIS cER-nFicAT;; Brady, Chapmano Holland DOES NOT AMEND, EXTEND OR ALTER THE covERAor AFFORDED BY THE P.O. BOX 922019 POLICIES BELOW. ................................................11.1.......... ............... ...... .........I................1.1-............ Houston, TX 77292-2019 COMPANIES AFFORDING COVERAGE (713) 608-1500 .......................... I..........I--,.......I.......... ..............-.-,..........I...................................................... C""PA"' A AMERICAN CASUALTY COMPANY LEnu ...................:.....................................I ............. ..................................... ....... . .................................. ................................. c'-"w"N' 8 CONTINENTAL CASUALTY COMPANY ..............................I....".................. ............ .................................................................. PALM SPRINGS LEISURE CO ANY � C MANAGEMENT, INC. ' ......................... .................................... ...I..............................11-........................ 277 NORTH AVENIDA CABALLEROS COMPANY D PALMSPRINGS, CA 92262 ..... ....... .......11....................1-1............ ............. ..................... LcgmAw E 11.�U,1.11�1'�.`M�--�11— NNENI-011,Pmohl �,7757 777-7 E7-,—, 5A z 77FTLT-355v.5 E THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOT4ITHSTANDIN5 ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH 13418 CERTIFICATE MAY BE ISSUCD OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS S1JWEOt TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE SEEN REDUCED BY PAID CAMS. .............................1-1-1-......................... ......................11.....................I.................,.,,,...................... V........... .............-........................................................ LTA I TfIT Or INSURANCI POLICY mumam POLICY E"v=m ipomy Ex�npN Lu" DATE (MMMONY) DATE(kWMDN�) .............. ................ ............. ...... ..................1.................. ......... ............... ...................-...........................................-....... C24ERAL An[ GAT!! ................ ............ i COMMERCIAL OENOUL LMfL(TY PROCUCTS.COMA/0'A*C. eE ........... ............... ............ .................. CLAIMS MADE OCCUR. PEMOML&ADV.NXRY .......... ............................... OWNER'S d CONTRACTOWS PROT. EACH Occuhl"CE FIRE . ............ ...par-) ... KO,tOa 59(Any w pa—)'$............ ........... ............... ................. ....... ....................... .................................................................................------- COM21NO fteiLE ANY AUTO ... BUA B 1244iS= LIMIT 4 1, 000,000 ...................................I............ i ALL OWN90 AVrOS :04/01/93 0 4 0 3. 9 4 B­0­0 A'Y SCHEDULED ALITOG '........... cpar pme.) 7 ............. .......................... X HIRED ALrFOS SODLY XJU4w NO"WNED Amos ............... ............................. 0AMOE LIASL� t PROPSM DAMAAE .............. ........ ................ ................ ................................ .................... ......... :s ................ ..... UMSFgj-A Fr.PM A6aFEMTE OTtGR THAN UNIBRO.LA FORM ....... ............. ...... ........ ............... ................ .......... WOAKF.R09 CDmM$AM0N 3 WC W 12n10114 B:: AND :0 6/0 3/9 3 0 6 0 3 9 t ...2,000.1.90O ................ ........ 01$� EkCH 2 ................................. ............... . ................... .............. ............. ........... .......... .............. ....... . .......... ...... . ....... ................. ...... DIMICRIPMON Or OPMATIONVLOCAMN&VEHICUMMMIa MCI THE CITY OF PALM SPRINGS 19 ADDED AS AN ADDITIONAL INSURED ON THE ABOVE REFERENCED POLICIES. 7 75c 77 -,ai-,,5i77, 3 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED ED BEFORE THII EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO g; MAIL_.LO-DAYS vvHITT`EN N0110E TO THE CERTIFICATE HOLDER NAMED TO THE CITY OF PALM SPRINGS �;l LEFT, OUT FAILURE 10 MAIL SUCH NOTICE SHALL IMPOSE NO 05WGATION OR CITY CLERK LIABIIJTY OF ANY KNO UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. 3200 TAHQUITZ CANYON WAY M=M Fi9psATrcE PALM SPRINGS CA 92262 L 4 R 1U%181,93 1-1: 43 1$719 6dk967 BCB fi ASSOCIATES f�001 r >, T ,(•: 4. kG F T. jyy`eyx�)^ �iA(}']f� n x r f6fiilE DATE (MA40DNA f C al Y�'(wx FIN '14� µYSIg f ksrtx FNt' R��Rr k '�a:Yii'N, b '/ �ax,�v S'v. xHM"'9M .,, nx.bY''�;;I•f1`n Ox xni3,Y YHRIb• ,n..r'�RnJR�.S.]9J,n.S...faxwi3l<, xn.x4 an3�aSRb. IVn F� Y�rtj k (xlx rnS ij 'a[..- L.}'i S 10/�q 1993 PRODUCER .wx,.a>va xnU.Sab.x.x.x s,H:a Ss�•Y..x r'nhv..,r.x...arb..��! ..... ... ........ . k THIS CERTIFICATE IS ISSUED AS A PATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE trady, Chapman, SO118nd : DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE P.O. Box 922019 POLICIES BELOW. . ................................................ ..................................................................................,......................... Houston, TIC 7 72 92-2 019 COMPANIES AFFORDING COVERAGE (713) 688-1500 .................I..........I...... ..... .................................................................................................... 1 � A CONTINENTAL CASUALTY COMPANY ....................................... ...................,,,.......................................,,.,...................... ........ .......,�................... ............. .... ............. ................... COMRANY B INSURED LETIFA ........................................ ................. .............,.................I.."...................o..................I........... LEISURE MANAGEMENT INT'L AND � C PALM SPRINGS LEISURE MGMT, INC .............................. . 11 GREENWAY PLAZA, SUITE 3106 COMPANY D HOUSTON, TX 77046 �.............. ........................................................................................................•........... CCMPAWY E X �y ;y^xx��•.. (� LETTER GDVERAYF� :vrtTl�MY� a % ' fl I,SY � /' ✓.k ka' N J! flk ak f `q i x Yob Y'TSI% %l15 y w5 xd'% �5 R}' �N 5 i f a.•!Rfla '.I.%xn Aft' a.ni�nxxrl MAk r PJ.�x.< MM,'b�8;n.:."C x2x xM'Mf^Yk SN(, nr.fx>YY%3 Y.a..R.x1,y.xb 1. 3 I.L:'xoilnn'Ra.k�kfbV✓�y yx.,Ynrtr�bk},MR!5,.,,:,N Na%x'RxR I�RN vrfvxN4I Yx THIS 13 TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMONT, 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 OESCRIMD HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES", LIMITS SHOWN MAY HAVE SEEN REDUCED BY PAID CLAIMS. ...........•............................................... ....................�„ �.,,� ......._....... ., .................... ..................................................................L.......................... ...... LTOR. TYPE OF IN POLICY NUYRM ' OLICYfM ?�TE IMMDATE LwRS ...........m .................... :�........ ....., .............:.......,...,............ .......i................................................... .. ....�i .....................___. GENERAL UARILRY .•....••.••••... i GENERAL AGGREGATE ?S •........................ .......... ................... i 00wa AL GENERAL LIAMRY PRODUCTSCOMPAJP AGG. 'i .. .................. CWMS MADE OCCUR, I i PERSONAL.6 ACV.1"" :A O'ARIEF3 A COWIRACTORS PROT. EACH OMRRENCE i i... : .......... .................. �........,.. .......; ........................... I FIRE DAMAGE Carry ... ._...... . ..... MED.COV"-8(Any&A W mm):a AUTGNmRM1E WRA1ry BI COM& ....;.i. COMBINED SINGLE ANY AUTO "LIMIT ii......._.............. ......................d ............................... ...:ALL OWNED Amos .900a-Y WJL'<Tf ! i SCHEDULED AMOS (Par Amen) 'A ''.... .: ........................................... ................................ NIPFID ALL :BODILY INAIRY iA .`NON•OWNED AUTC8 (Per AeeWnp........................... ................................ ......!GAPAGE LV•DILM f i :PRCPESiLY DAMAGE Y ....F.J..fC..E.s4:.4�.�.L.I.A.�R.�l...R...Y.............. ......._.........L�..,.„......................... ..................... ...................... ........ ...... .......j..........L........._...........,{.............. 2I EACH CtF5NCS 01 Aj X`UMeREL_A FORM ' CUP U124424S98 ,02/01/93 02/ Oi/94 AGGREBAr is 2,,000{ GOO OTHER THAN L•MDFEILA FORM �, T'i2..:...,.: WORKERS COIddSAT1ON ..:.'.,..i",.,.•....•..;....••. .EACH ..........,,��....................... ...... :::.�:..........,.::.::. AND [ :EACH ACCiaeNT................. :S CLRE4aE-POLICY LIMIT .. CLIPLOYER9'WlRTI .....ISEA,.�..............EM LOPE...,....i....... ------------- DISEASE.EACH EMP...... 7 ... OTHER I ...................... ...... .....,.............................. ...... .., ...........!................................ ..., ..............,.,,,................. .................. DESDRIPTION OF DPERILT10HSl[DCATIONSNF]IICLEySRCCLLL REBD ADDITIONAL INSURED — SOLLOWING FORM WITH WORKERS' COMPENSATION and EMPLOYERS LIABILITY FOR THE CITY OF PALM SPRINGS E}1 FISiA7 F:{ISL➢ER �','': ! a! e, , q I•)�q.Nt,',Fi1A E.fCTI N ::?. ...1:.9<n�nxie?EI.4 'I ....,...�i ...a...., ..r r'k aYkYearu'f..', SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE wV EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO x MAIL 10 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE CITY OF PALM SPRINGS a LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR CITY CLERIC * LIABILITY OF ANY KINO UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. 3200 TAHQUITZ CANYON WAY <g:AUTHOR=REIR TArIVE PALM SPRINGS CA 92262 .:. :.P? w,`Ild. rt „ „ ;n," `' . '�`: x s s „'::r" :.�?a0oRI3 iATIGt�i§3ff,f L ,.3,'.n.Y x w 10/09/02 CERTIFICATE OF INSURANCE CERTIFICATEHOLDER City of Palm Springs PRODUCERS INSURED Z SMG, LMI/HHI, Ltd ,/ 61� American Specialty Insurance Services, Inc. 701 Market Street, 4`'Floor 142 North Main Street Philadelphia, PA 19106 J Roanoke, IN 46783 COMPANIES AFFORDING COVERAGE This Certificate is issued as a matter of information only COMPANY A United States Fidelity and Guaranty Company and confers no riqhts upon the certificateholder. This certificate does not amend, extend, or alter the coverage COMPANY B afforded by the policy below. COVERAGES- 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 CONTRACTOR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAYBE 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. CO TYPE OF INSURANCE POLICY POLICY POLICY LTR NUMBER EFF. DATE EXP. DATE LIMITS A Commercial General D064LOO414 10/01/02 10/01/03 General Aggregate(per location) $3,000,000 Liability 12:01 A.M. 12:01 A.M. Products and Completed Operations Aggregate $1,000,000 (per location Personal and Advertising Injury $1,000,000 Each Occurrence $1,000,000 Damage to Premises Rented to You (Any One $50,000 Premises Employee Benefits Occurrence/Aggregate Limit $1,000,000 1 000 deductible Ambulance Drivers and EMT Malpractice Included Liquor Liability Occurrence/Aggregate-Excess $1.000,000 Leased Facility Property Damage $2,000,000 Medical Expense(Any One Person) Excluded A Excess Liability D064YO0208 10/01/02 10/01/03 Each Incident Limit $3,000,000 12:01 A.M. 12:01 A.M. Product-Completed Operations aggregate limit $3,000,000 General Aggregate $3,000,000 A Automobile Liability D064AO0226 10/01/02 10/01/03 Combined Single Limit $1,000,000 12:01 A.M. 12:01 A.M. Physical Damage Deductibles Comprehensive-$500 Collision-$500 Non Owned Hired Auto $1,000,000 Hired Auto Physical Damage Deductibles Comprehensive-$500 Collision -$500 ADDITIONAL INFORMATION/RESTRICTIONS/SPECIAL ITEMS The Certifiacateholder is only an Additional Insured with respect to liability caused by the negligent acts or omissions of the Named Insured. Location: Palm Springs Tourism Services, 777 North Palm Canyon Drive, Suite 114, Palm Springs, CA 92262 CANCELLATION— SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS' WRITTEN NOTICE TO THE CERTIFICATEHOLDER, BUT FAILURE TO MAILS: NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS}OR REPRESENTATIVES. David A. Harris Authorized Representative 10/08/02 CERTIFICATE OF INSURANCE CEtTIFICATEHOLDER Palm Springs Convention Center 277 North Avenida Caballeros Palm Springs, CA 92262 PRODUCERS INSURED SMG, LMI/HHI Ltd. American Specialty Insurance Services, Inc. 701 Market Street, 4"Floor 142 North Main Street Philadelphia, PA 19106 Roanoke, IN 46783 COMPANIES AFFORDING COVERAGE This Certificate is issued as a matter of information only COMPANY A United States Fidelity and Guaranty Company and confers no rights upon the certificateholder. This certificate does not amend, extend, or alter the coverage COMPANY B afforded by the nolicy below. COVERAGES- 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 MAYBE 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. CO TYPE OF INSURANCE POLICY POLICY POLICY LTR NUMBER EFF. DATE EXP. DATE LIMITS A Automobile Liability D064AO0226 10/01/02 10/01/03 Combined Single Limit $1,000,000 12:01 A.M. 12:01 A.M. Physical Damage Deductibles Comprehensive-$500 Collision-$500 Non Owned Hired Auto $1,000,000 Hired Auto Physical Damage Deductibles Comprehensive-$500 Collision -$500 ADDITIONAL INFORMATION/RESTRICTIONS/SPECIAL ITEMS Evidence of coverage as respects 1991 GMC Sonoma, VIN#1 GTCS14ZXM8543787. Location: Palm Springs Convention Center, 277 N. Avenida Caballeros Palm Springs, CA 92262 CANCELLATION- SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS' WRITTEN NOTICE TO THE CERTIFICATEHOLDER, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO.OBUGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. David A. Harris Authorized Representative 10/09/02 CERTIFICATE OF INSURANCE CERTwICATEHOLDER Palm Springs Tourism 777 N. Palm Canyon Drive#201 Palm Springs, CA 92262 PRODUCERS INSURED SMG, I Ltd. American Specialty Insurance Services, Inc. 701 Marketarket Street, 4'" Floor 142 North Main Street Philadelphia, PA 19106 2, Roanoke, IN 46783 a COMPANII A�FOFDING COVERAGE This Certificate is issued as a matter of information only COMPANY A United States Fidelity and Guaranty Company and confers no rights upon the certificateholder. This certificate does not amend, extend, or alter the coverage COMPANY B afforded by the poIIcV below. COVERAGES- 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 CONTRACTOR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAYBE 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. CO TYPE OF INSURANCE POLICY POLICY POLICY LTR NUMBER EFF. DATE EXP.DATE LIMITS A Excess Liability D064YO0208 10/01/02 10/01/03 Each Incident Limit $3,000,000 12:01 A.M. 12:01 A M Product-Completed Operations aggregate limit $3,000,000 General Aggregate $3,000,000 ADDITIONAL INFORMATION/RESTRICTIONS/SPECIAL ITEMS Coverage is excess of Employers Liability issued by Zurich-American Insurance Company. Location: Palm Springs Tourism Service, 777 North Palm Canyon Drive, Suite 114, Palm Springs, CA 92262 CANCELLATION- SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS' WRITTEN NOTICE TO THE CFRTIFICATEHOLDER, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. David A. Harris Authorized Representative