PROPOSED ADDENDUM NUMBER SIX TO THE AGREEMENT FOR PROFESSIONAL MANAGEMENT SERVICES AND LICENSE FOR USAGE OF THE EVANSVILLE ARENA

ADDENDUM NUMBER SIX TO THE AGREEMENT FOR PROFESSIONAL MANAGEMENT SERVICES AND LICENSE FOR USAGE OF THE EVANSVILLE ARENA

This ADDENDUM NUMBER SIX (“Addendum Number Six”) to the AGREEMENT FOR PROFESSIONAL MANAGEMENT SERVICES AND LICENSE FOR USAGE OF THE EVANSVILLE ARENA, dated as of the ___ day of March, 2016, to be effective as of January 1, 2016, is entered into by and between THE CITY OF EVANSVILLE, through its Evansville Redevelopment Commission (“ERC”, “CITY” or “Owner” as the case may be), an Indiana municipal corporation, and VENUWORKS OF EVANSVILLE, LLC, an Iowa limited liability company with offices at 4611 Mortensen Road, Suite 111, Ames IA 50014 (“VENUWORKS” or “Manager”).

WITNESSE:  WHEREAS, The City and VenuWorks entered into that certain Agreement for Professional Management Services, and License for Usage of the Evansville Arena, dated August 12, 2011 (the “Original Agreement”); and ,

WHEREAS, the Original Agreement was modified by numerous addenda, which includes an Addendum, dated September 1, 2011; Addendum Number Two and Addendum Number Three, both of which were dated October 2, 2012; Addendum Number Four, dated December 18, 2012; and Addendum Number Five, dated August 5, 2014, (the Original Agreement, as modified by the foregoing addenda, the “Agreement”); and

WHEREAS, the Agreement provides that VenuWorks is to provide management services through December 31, 2016, and the parties desire to extend the term of the Agreement for an additional five (5) years subject to the terms and conditions herein; and

WHEREAS, VenuWorks has entered into a partnership with Evansville Professional Hockey, LLC to secure a franchise in the Southern Professional Hockey League (the “SPHL Franchise”) and the parties desire to clarify certain rights and obligations with respect thereto.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements herein contained and contained in the Agreement, the parties hereby agree as follows:

1. Defined Terms. All terms not defined herein shall have the meaning ascribed to them in the Agreement.

2. Renewal Term. Pursuant to Section 3.2 of the Agreement, the parties hereby mutually agree to extend the term of the Agreement for an additional five (5) year period, which additional five (5) year period shall commence January 1, 2017 and run through and include December 31, 2021 (the “Renewal Term”).

3. Amendments. The Agreement is hereby amended as follows:

1. Section 4.1(d) of the Agreement entitled “Expense Containment Incentive Fee” shall hereby be deleted in its entirety.
2. Section 4.1(e)(iii) of the Agreement shall hereby be deleted in its entirety.
3. Section 4.1(f) of the Agreement entitled “Total Variable Fees Capped” shall hereby be amended to read in its entirety as follows:“Total annual Variable Fees paid to VenuWorks for fiscal year 2012 shall not exceed Three Hundred Ninety Thousand Dollars ($390,000.00) (the “Variable Fee Cap”). In years subsequent to 2012, the Variable Fee Cap shall be increased by three percent (3%) per year. Upon the commencement of the Renewal Term, the Variable Fee Cap shall reset to Three Hundred Ninety Thousand Dollars ($390,000.00), and in each year subsequent to fiscal year 2017, the Variable Fee Cap shall increase three percent (3%).”
4. Section 4.1(g) of the Agreement entitled “Sustained Effort Incentive Fee” shall hereby be deleted in its entirety.
5. Section 4.6 of the Agreement entitled “Fees with Respect to the Victory Theatre” is hereby amended to read in its entirety as follows:“The City shall pay VenuWorks Three Thousand Dollars ($3,000.00) per month as compensation to VenuWorks for providing management services for the Victory Theatre.”

4. Disbursement and Use of Sustained Effort Incentive Fee. The parties acknowledge and agree that through the fiscal year ending December 31, 2015 the total amount earned and placed into the Sustained Effort Incentive Fee Account (as defined in the Agreement) equals Two Hundred Thousand Dollars ($200,000.00) and that Seventy Five Thousand Dollars ($75,000.00) of such amount was deemed due and payable to VenuWorks pursuant to the terms of the Agreement. Upon the execution of this Addendum Number Six all amounts held in the Sustained Effort Incentive Fee Account shall be disbursed to VenuWorks to partially offset the cost of the onetime affiliation fee for the SPHL Franchise incurred by VenuWorks in the amount of Two Hundred Twenty Five Thousand Dollars ($225,000.00) (the “SPHL Affiliation Fee”). Upon disbursement of such funds, the Sustained Effort Incentive Fee Account shall be terminated and neither party shall have any further claims with respect to the Sustained Effort Incentive Fee Account and related funds.

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5. Facility Equipment and Enhancements. To the extent that the annual Variable Fee calculated without regard to the Variable Fee Cap exceeds Three Hundred Ninety Thousand Dollars ($390,000.00), the amount over Three Hundred Ninety Thousand Dollars ($390,000.00), but not more than Twenty Five Thousand Dollars ($25,000.00), shall be retained by VenuWorks and held in an account for expenditures on equipment or other enhancements to or for the benefit of the Facility (the “Facility Enhancements Account”). Funds from the Facility Enhancements Account shall be spent at VenuWork’s reasonable discretion, and VenuWorks shall provide an annual accounting to the ERC of amounts accumulated in the Facility Enhancements Account and how such amounts have been spent, if at all, during the prior fiscal year.

6. Operation of SPHL Franchise. In the event that VenuWorks assumes operation of the SPHL Franchise pursuant to the terms of its Operating Lease by and between VenuWorks and Evansville Professional Hockey, LLC (the “Hockey Operating Lease”), VenuWorks shall be entitled to utilize Facility staff and resources reasonably necessary in connection with its operation of the SPHL Franchise. During any such periods in which VenuWorks operates the SPHL Franchise all operating expenses of the SPHL Franchise shall be deemed an expense of the Facility and all operating revenues of the SPHL Franchise shall be deemed a revenue of the Facility.

7. Assignment of SPHL Franchise and All Related Intellectual Property. In the event that VenuWorks assumes the operation and legal control of the SPHL Franchise pursuant to the Hockey Operating Lease at the direction of the City and upon reimbursement to VenuWorks of the SPHL Affiliation Fee, VenuWorks shall assign and transfer its interest in the SPHL Franchise, including all SPHL Franchise rights and related intellectual property, to an operator approved by the SPHL.

8. Victory Theatre Fee Cap – 2015. For purposes of clarification, the parties agree that VenuWorks’ total fee in connection with the management of the Victory Theatre for fiscal year 2015 was capped at $50,000.00.

9. Termination of Agreement with Respect to Victory Theatre. Irrespective of anything contained in the Agreement to the contrary, the City may, upon not less than sixty (60) days prior written notice to VenuWorks, terminate the Agreement solely with respect to VenuWork’s management of the Victory Theatre. Upon the effective date of such termination, the Facility, as defined in the Agreement, shall no longer include the Victory Theatre and VenuWorks shall no longer be paid the fees contemplated by Section 4.6 of the Agreement.

10. Conflict. In the event of a conflict between the terms of the Agreement and this Addendum Number Six, the terms and provisions of this Addendum Number Six shall control.

11. Counterparts. This Addendum Number Six may be executed in counterparts, each of which shall be deemed an original, and all of which, when taken together, shall be deemed to constitute one and the same Addendum Number Six.

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IN WITNESS WHEREOF, this Addendum to the Agreement has been duly executed by the parties hereto as of the day and year first above written.

THE CITY OF EVANSVILLE, THROUGH ITS REDEVELOPMENT COMMISSION

By: _________________________________ Randy Alsman, President

H:\Evansville, City of\DMD – VenuWorks\Addendum No 6 Venuworks and ERC.docx

VENUWORKS OF EVANSVILLE, LLC

By: _______________________________ Printed Name: ______________________ Title: ______________________________