HomeMy WebLinkAboutHULL MCKNIGHT GEORGIA CYBER INNOVATION AND TRAINING CENTER PARKING DECK OPERATING AGREEMENT •
HULL MCKNIGHT
GEORGIA CYBER INNOVATION AND TRAINING CENTER
PARKING DECK OPERATING AGREEMENT
THIS HULL MCKNIGHT GEORGIA CYBER INNOVATION AND
TRAINING CENTER PARKING DECK OPERATING AGREEMENT ("Agreement")
is made effective the 3oay of ( 64,-t! , 2018, by and between Augusta, Georiga, a
political subdivision of the State of Georgia ("Augusta") and the Board of Regents of the
University System of Georgia on behalf of Augusta University("Manager").
RECITALS
A. Augusta is a political subdivision of the State of Georgia.
B. Manager is an agency of State of Georgia.
C. Augusta intends to construct and own the Hull McKnight Georgia Cyber
Innovation and Training Center Parking Deck (the "Parking Deck") pursuant to the
Parking Deck Agreement effective July 20, 2017 between the URA and the Georgia
Technology Authority ("GTA") and assigned to Augusta pursuant to that certain
Assignment and Assumption agreement dated July 20, 2017.
D. Augusta has determined that the significant public benefits will inure to
the citizens of Augusta when the Parking Deck is continuously operated at a high
standard of quality, and is consistent with and in furtherance of the Urban Redevelopment
Plan adopted by the Augusta Commission on June 20, 2017 (the "Plan"); and
E. Augusta has further determined that the Parking Deck, in furtherance of
the Plan, should be made available to persons, groups, and entities working and visiting
within the Urban Redevelopment Area and its surrounding areas, and that in order to
achieve its objectives the most cost efficient and cost effective method to achieve this
goal is to contract with an entity that has expertise in operating parking facilities; and
F. Manager, has significant experience in operating, managing and
maintaining parking facilities at its campuses located in Augusta, Georgia; and
G. Augusta desires to have Manager manage and operate the Parking Deck,
and Manager desires to manage and operate the Parking Deck or the account of Augusta
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. In addition to the terms defined elsewhere in this
Agreement, the following terms shall have the meanings assigned to them herein, unless
the context otherwise indicates:
"Annual Plan" shall have the meaning set forth in Section 7.1.
"Approving Tax Opinion" shall mean the opinion of tax counsel experienced in
federal income tax matters related to state and local bonds, within the meaning of Section
103 of the Internal Revenue Code of 1986, as amended (the "Code"), and qualified
bonds, within the meaning of Section 141 of the Code, to the effect that a proposed action
or amendment will not, without more, impair any exclusion of the interest on any
outstanding issues of obligations that were issued to finance the Parking Deck, or result
in the disallowance of any credit against federal income tax or payable to the issuer of
such obligations by the U.S. Treasury Department.
"Augusta" shall mean Augusta, Georgia, a political subdivision of the State of
Georgia.
"Bond Indebtedness" shall mean the Urban Redevelopment Agency of Augusta
Revenue Bonds (Parking Garage Project), Series 2017 and Series 2018 issued by the
URA in the aggregate principal amount not to exceed $16,500,000 to finance the
construction of the Parking Deck.
"Capital Expenses" shall mean all expenditures for Capital Improvements.
Manager shall not "mark-up" or otherwise add any profit or administrative charge to any
Capital Expense.
"Capital Improvements" shall mean one or more items or project(s) - i) the cost
of each of which totals $5,000.00 or more, ii) that becomes part of the Parking Deck, and
iii) the cost of which is required or allowed to be capitalized under the accounting
guidelines of Augusta, Georgia and GAAP. Examples of Capital Improvements include
but are not limited to, traffic/parking/access control equipment, furniture, fixtures, and
roofing, including the cost of replacement,but not repair,thereof.
"Effective Date" shall mean the date on which construction of the Parking Deck
has been completed, a certificate of occupancy for the Parking Deck has been issued, and
the Parking Deck has been fully furnished and delivered to Manager for operation.
"Financial Statement" shall have the meaning set forth in Section 7.7.
"Fiscal Year" shall mean the twelve (12) month period ending December 31 of
each year during the Operating Term of this Agreement. The first Fiscal Year shall be
the period commencing on the Effective Date and ending on December 31 of the same
year. A partial Fiscal Year after the end of the last full Fiscal Year and ending with the
expiration or earlier termination of the Operating Term shall constitute a Fiscal Year.
"GAAP" shall mean Generally Accepted Accounting Principles. The accrual
method of accounting will be used for the preparation of financial statements."GTA"
shall meant the Georgia Technology Authority.
"Lease Agreement" shall mean the Lease entered into by and between GTA and
the URA dated July 20, 2017.
"Management Fee" shall have the meaning set forth in Section 3.1.
"Manager's Other Activities" shall mean the operation, management and
maintenance of Augusta University's campuses and facilities, including but not limited to
Augusta University's parking facilities.
"Net Operating Revenues" shall mean for any period the excess, if any, of
Operating Revenues over Operating Expenses, as determined using GAAP.
"Operating Account" shall have the meaning set forth in Section 6.1.
"Operating Expenses" shall mean all expenses required to be incurred in order to
operate and manage the Parking Deck to the extent the same are authorized under the
applicable Annual Plan, including, but not limited to the following: (a) Salary Costs of
Parking Deck Employees and Shared Employees; (b) operating supplies; (c) equipment
rental costs; (d) insurance costs related to Parking Deck operations, including insurance
premiums paid by Manager on behalf of the Augusta, if any (but not performance or
fidelity bonds); (e) security costs which are not the obligation of GTA; ; (f) cost of
reimbursable event expenses; (g) the cost of obtaining an audited financial statement of
Manager; (h) software/licensing fees for parking access systems; and (i) any other
expenses incurred in the operation of the Parking Deck that would be considered
operating expenses, but not maintenance expenses under GAAP or the Parking Deck
Agreement. Operating Expenses shall not include debt service on any borrowing to
finance the acquisition, construction, installation, and equipping of the Parking Deck.
"Operating Revenues" shall mean the gross revenues generated from the
operation of the Parking Deck including, but not limited to, the following: (a) sums
collected by the Manager from the rental of space for the parking and storage of motor
vehicles whether on an hourly, daily, weekly, or monthly basis, less all refunds, credit
card fee discounts, and other discounts as authorized by Augusta (sales tax, use tax,
excise tax, occupancy tax, gross receipts tax, or other taxes assessed upon or attributable
to said receipts shall be held by the Manager and paid directly to the taxing entity
involved); (b) on-site advertising revenues; (c)interest income, if any, from the Operating
Account; (d) reimbursable event expenses; (e) all other Parking Deck miscellaneous
revenue; (f) any and all revenues generated by or associated with Parking Deck marquee
advertising; and (g)revenue derived from naming rights.
"Operating Term" shall have the meaning set forth in Section 2.4.
"Parking Deck Agreement" shall mean the agreement titled as such effective
July 20, 2017 between the URA and GTA as amended bythat certain Amendment
Parking Deck Agreement dated July 12, 2018.
"Parking Deck Employees" shall have the meaning set forth in Section 5.3(a)
but shall not include any officer or employee of the University System of Georgia that
has supervisory duties of other employees or who is responsible in whole or in part for
the management and/or operation of other facilities of Manager.
"Salary Costs" shall mean the gross amount payable by an employer to secure
the services of an employee including, without limitation, employees' accrued and vested
wages, salaries, employee medical/disability/life insurance and other health benefits
incurred by Manager, vacation pay and sick leave, severance costs, 403(b)/457(b) and
other state retirement programs including Techers' Retirement System/Optional
Retirement Plan, profit sharing, pension or similar retirement benefits or other accrued
and vested fringe benefits, business travel expenses, and other compensation of whatever
nature, including any applicable federal, state and local taxes. For the avoidance of
doubt, Salary Costs may also include bonuses for employees or commissions for sales
staff and specifically excludes any indirect cost allocation for any Shared Employees.
"Shared Employees" shall have the meaning ascribed thereto by Section 5.3(f)
and may include officers,managers or members of Manager.
"Standard" shall mean the minimum standard of operation, maintenance and
repair of parking facilities operated or owned by Augusta University and the Reynolds
Street Parking Deck located in Augusta, Georgia.
"URA" shall mean the Urban Redevelopment Agency of Augusta.
ARTICLE II
APPOINTMENT OF MANAGER AND OPERATING TERM
2.1 Appointment of Manager; Powers and Duties Generally. Subject to
Manager's covenants set forth in § 5.1, Augusta hereby appoints, authorizes, and engages
Manager, and Manager hereby accepts appointment on the terms and conditions
hereinafter provided as agent to: (a) manage, operate, control, license, and rent the
Parking Deck on Augusta's behalf during the Operating Term; (b) collect all fees, pay all
Operating Expenses, and pay or cause to be paid all Capital Expenses with respect to the
Parking Deck in accordance with the Annual Plan; (c) render Financial Statements to
Augusta as set forth in this Agreement; (d) execute, renew and cancel rental and license
agreements for the Parking Deck or any part thereof at rates and on such terms as may be
approved by Augusta in accordance with the Annual Plan; (e) oversee the maintenance
obligations provided for in the Parking Deck Agreement and report to Augusta, or its
designee, deficiencies in the maintenance of the Parking Deck; and (f) sue and recover
for rent and for loss of or damage to any part of the Parking Deck and, when expedient,
compromise, settle and release any such legal proceedings or lawsuits; provided,
however, that Manager shall not settle any lawsuit or other claim relating to the Parking
Deck without the prior consent of Augusta. Concerning the Parking Deck, Manager shall
have the exclusive right to enter into any lease, license or other agreement granting any
party the right to use any portion of the Parking Deck except as provided in the Annual
Plan. Parking Deck operations shall be under the exclusive supervision and control of
Manager subject to the terms of this Agreement. Manager shall have discretion and
control, free from interference, interruption or disturbance, in all matters relating to
management and operation of the Parking Deck, including, without limitation, charges
for license and rental, other Parking Deck services, employment policies, granting of
concessions or renting of space within the Parking Deck, receipt, holding and
disbursement of funds, maintenance of accounts, procurement of supplies and services,
promotion and publicity and, in general, all activities necessary for operation of the
Parking Deck. All the provisions in this paragraph are subject to Univeristy System of
Georgia policies, to which Manager must abide.
2.2 Restriction on Parking Deck Licenses and Rentals. Except as
otherwise additionally limited hereby, Manager shall have the discretion to prescribe the
terms of the rental or licensing of space at the Parking Deck based on generally
applicable and uniformly applied rates or that are negotiated with the user in arms-length
bargaining, in either case, that is consistent with the Parking Deck Agreement and the
applicable Annual Plan. Notwithstanding the foregoing, Manager shall not be prohibited
by this Section 2.2 from entering into a lease or licensing of space at the Parking Deck if
Manager and Augusta have received an Approving Tax Opinion.
2.3 Relationship of Parties. Neither this Agreement nor any agreements,
instruments, documents or transactions contemplated hereby shall in any respect be
interpreted, deemed or construed as making Manager a partner or joint venturer with
Augusta or as creating any similar relationship or entity, and Augusta and Manager agree
that they will not make any contrary assertion, contention, claim or counterclaim in any
action, suit or other legal proceeding.
2.4 Operating Term. The Operating Term of this Agreement shall
commence on the Effective Date hereof and continue until the earlier to occur of: (I)
twenty-four (24) months after the satisfaction by the City of its obligations under that
certain Agreement of Sale with respect to the Bond Indebtedness, or(II) GTA's payment
to URA of an amount equal to the following (a) the amount required to call the Bond
Indebtedness for redemption or otherwise pay the then outstanding Bond Indebtedness
pursuant to the Bond Resolution adopted by the URA on June 21, 2017, as supplemented
to include additional bonds (the "Bond Resolution") at the time of such payoff (which
will equal the sum of the principal of, premium, if any, and accrued interest on the then
outstanding Bond Indebtedness, together with all fees, charges and expenses due and
payable under the Bond Resolution, necessary to call or otherwise pay or defease the
outstanding Bond Indebtedness in full), plus (b) the present value (calculated using an
interest rate equal to the effective total interest cost of the Bond Indebtedness) of five
times the average revenue which was received by URA during the last two years of
URA's operation of the Parking Deck, or (III) upon the termination of the Lease
Agreement; or (IV) upon either party given the other one hundred twenty (120) days
advance written of its intent to terminate the Agreement. Upon the expiration of the
Term,this Agreement shall immediately terminate and be of no further force and effect.
ARTICLE III
COMPENSATION OF MANAGER
3.1 Parking Deck Management Fee. Commencing on the Effective Date,
Augusta shall, pay to Manager a Management Fee in the amount of$26,000.00 per year,
payable in equal monthly installments, adjusted upward annually, but not downward, by
the percentage increase in the Consumer Price Index for all urban consumers (CPI-U)
(All Items 1982-84=100) for the preceding calendar year for performing its services
under this Agreement in managing the Parking Deck.
3.2 Payment of Fee. The Management Fees shall be due and payable no later
than the fifteenth (15t) day after the end of the month for which the Management Fee is
owed. .
3.3 Survival. The provisions of this Article shall survive termination of this
Agreement.
ARTICLE IV
TERMINATION
4.1 Termination. Should either party materially fail to comply with any of
the terms of this Agreement, the non-defaulting party may cancel this Agreement upon
ninety (90) days' written notice to the other party of the alleged breach and failure by
such other party to cure such breach within such ninety (90) day period; provided,
however, that in the event the default is not curable within such ninety (90) day period,
but the defaulting party has commenced within the ninety (90) day period efforts to cure
the default, the time to cure the default shall be extended for a reasonable period of time
in order to allow such cure. In the event the party alleged to be in material default of this
Agreement disputes the existence of such material default, this Agreement shall continue
in full force until a court of competent jurisdiction finds such party to be in material
default, after written notice and expiration of the applicable cure period, and all time
periods for appeal of such finding have expired.
4.2 Rights and Obligations Following Termination. In addition to the
rights and remedies otherwise available to the parties at law or in equity, the following
provisions will apply following termination pursuant to this Article or the expiration of
the Operating Term.
(a) Manager shall quit, vacate, surrender, and deliver to Augusta
peacefully and promptly the Parking Deck, together with all books, records, accounts,
contracts, keys, all cash in the Operating Account, less any fees due Manager, and all
other pertinent and necessary documents and records pertaining to the Parking Deck and
the operation thereof. After termination of this Agreement, Augusta shall, without right
of offset against Manager, timely pay all unpaid Operating Expenses incurred by
Manager prior to the date of such termination, including without limitation, Salary Costs;
(b) Manager shall do all acts and execute and deliver all documents
reasonably requested by Augusta and otherwise reasonably cooperate with Augusta and
any successor manager to insure or facilitate orderly continuation of the business of the
Parking Deck. Manager shall take such actions at Augusta's cost, in which case the costs
of such action shall be an Operating Expense;
(c) The rights and liabilities of the parties having accrued prior to
termination shall continue; and
(d) All provisions hereof identified herein as surviving termination of
this Agreement shall survive.
ARTICLE V
SERVICES OF MANAGER
5.1 Manager's General Covenants.
(a) Manager shall use commercially reasonable efforts to manage and
operate the Parking Deck in accordance with the Standard.
(b) Manager covenants to use its best efforts to cause the Parking
Deck to be operated to fulfill Augusta's objectives. Without limiting the generality of the
foregoing, Manager shall never reduce or discount fees or charges for the license or rental
of the Parking Deck or for goods or services provided at the Parking Deck, which
comprise part of Operating Revenues, from the fees or charges authorized to be charged
in such circumstances pursuant to the applicable Annual Plan, without the advance
written consent of Augusta.
(c) Manager shall maintain a separate set of books and records and
prepare financial statements reflecting its activities hereunder that are sufficient to enable
an auditor to audit the same on the same basis as if such activities were conducted by a
separate accounting unit or single purpose entity.
5.2 Policies and Practices. Manager shall adopt and implement
administrative, accounting, budgeting, marketing, personnel, and operational policies and
practices consistent with industry standards for parking facilities of similar size and
quality.
5.3 Personnel.
(a) Employment. Subject to the terms of this Agreement, Manager
shall select, employ, promote, terminate where appropriate, supervise, direct, train, and
assign the duties of all personnel which Manager reasonably determines to be necessary
or appropriate for the operation of the Parking Deck (collectively, the "Parking Deck
Employees"). All Parking Deck Employees shall be employed by Manager. Augusta
may at any time consult or communicate with Manager regarding any of the Parking
Deck Employees, but Augusta shall not give orders to or otherwise interfere in the day-
to-day activities of Parking Deck Employees including for this purpose Shared
Employees.
(b) Selection. Manager agrees to use reasonable and prudent judgment
in the training and supervision of Parking Deck employees to ensure that they are
courteous and efficient, and do not use improper language or act in a loud or boisterous
manner while performing duties at the Parking Deck. Manager agrees that it will not
discriminate against any Parking Deck Employee or applicant for employment for work
under this Agreement because of race, religion, color, sex, sexual orientation, disability,
national origin, ancestry, physical handicap, or age.
(c) Appearance and Training. Manager shall ensure that non-
management Parking Deck Employees performing the duties at the Parking Deck shall be
neatly attired in clean, commercially attractive uniforms. Manager shall train all such
employees that they are aware of the high standards for cleanliness, courtesy and service
required.
(d) Compensation. Manager shall set the salaries and fringe benefits
of all Parking Deck Employees consistent with industry standards and the Annual Plan.
Cost-of-living increases shall not exceed those given by Augustato its employees. Unless
otherwise provided in the Annual Plan, no bonuses or merit raises shall be given without
the approval of Augusta.
(e) Salary Costs for Full Time Parking Deck Employees. Although all
Parking Deck Employees shall be employed by Manager, Augusta shall be responsible
for all Salary Costs of Parking Deck Employees.
(f) Salary Costs of Shared Employees. In order to provide the most
cost-effective services, the parties specifically contemplate that Manager may provide
certain of the services under this Agreement through employees and agents of Manager
that are utilized in Manager's Other Activities ("Shared Employees"). Manager shall set
forth in the Annual Plan the title, function and salary of each Shared Employee for
approval by Augusta. To the extent Manager (a) incurs Salary Costs of its Shared
Employees that are allocable to operation of the Parking Deck and (b) Manager shall not
"mark-up" or otherwise add any profit or administrative charge to such Salary Costs,
then, such Salary Costs shall be deemed to be Operating Expenses and shall be remitted
to Manager from the Operating Account the same as any other Operating Expense.
Salary Costs of a Shared Employee shall be deemed to have been fairly allocable to
Parking Deck operations if the proportion of the Shared Employee's aggregate Salary
Costs for the period in question so allocated is the same the proportion of the amount of
time the Shared Employee exclusively devoted to operation of the Parking Deck in
relation to the total amount of time worked for the period in question.
(g) Recordkeeping. The books and records required to be maintained
by Manager pursuant to Section 7.6 hereof shall be sufficient to establish the amount of
time that any Parking Deck Employee spends providing services to Manager's Other
Activities, and the amount of time any Shared Employee expends providing services for
the Parking Deck, in each case as a percentage of their periodic work schedules.
5.4 Maintenance.
(a) Parking Deck. Manager shall (i) confirm that the Parking Deck and the
related furniture, fixtures and equipment is maintained in good condition and repair as
required under the Parking Deck Agreement and advise Augusta of any deficiencies.
Subject to the limitation of § 5.4(b), if applicable, Manager may obtain from Augusta
funds to pay for Capital Expenses. Manager shall obtain Augusta's approval prior to
making any non-emergency expenditure of more than $10,000.00 on a single
maintenance item or category of Capital Expenses not otherwise authorized by the
Annual Plan.
Marketing. Marketing of the Parking Deck shall be the obligation of the
Manager, subject to the terms of the Annual Plan.
5.5 Legal Services. Manager is authorized to engage such legal counsel as
Manager deems reasonably necessary for the ordinary operational legal matters for the
Parking Deck, the reasonable costs and expenses of which shall be an Operating Expense;
subject to the standard relationship bwtween Manager and the Gerogia Attorney
General's Office. With the advice and consent of Augusta, Manager shall institute any
necessary or desirable legal actions or proceedings to collect charges or other income of
the Parking Deck or to enforce the right to cancel or terminate or sue for damages under
any agreement relating to the operation of the Parking Deck.
5.6 Compliance with Government Rules and Regulations. Manager shall
operate the Parking Deck in compliance with all applicable federal, state and local laws
and insure that no activity or condition occurs on or about the Parking Deck in violation
of any laws; provided, however, that Manager shall have no liability nor be subject to any
allegation of default with respect to non-compliance by the Parking Deck with any
applicable federal, state and local laws regarding the condition or use of the Parking Deck
and the surrounding property, including without limitation, the Americans with
Disabilities Act, zoning regulations and hazardous waste laws.
5.7 Limitation Upon Obligations. In the event that the performance of any
of Manager's duties requiring expenditure of Augusta's funds shall be impeded by reason
of unavailability of such funds, then, Manager's performance of such obligations shall be
excused to the extent so impeded and until such funds become available. Manager shall
be under no obligation to provide such funds from any source other than amounts then
held in the Operating Account. Manager's obligations also shall be excused to the extent
performance would be contrary to express written instructions of Augusta. Augusta shall
indemnify, defend, and hold Manager harmless from and against any and all liabilities,
claims, suits, fines, penalties, damages, judgments, fees, costs and expenses (including,
but not limited to attorneys' fees and disbursements) related to the performance of any of
Manager's duties requiring expenditure of Augusta's funds, if and when such funds are
not available to Manager.
5.8 Contracts. (a) In General. Manager is hereby authorized, without
Augusta's prior approval, to enter into contracts, in its own name or as Augusta's agent,
with vendors or service providers of its choice, provided, in addition, that the contract in
question: (i) does not have a term exceeding the lesser of one year and the then remaining
Operating Term, (ii) the aggregate annual Operating Expense attributable to the contract
does not exceed $5,000, (iii) does not authorize the vendor or service provider to use any
portion of the Parking Deck unless the compensation therefor is not based on the net
profits arising from such service or activity, and (iv) is not inconsistent with the
applicable Annual Plan. Manager shall promptly notify Augusta of the execution of such
contracts.
(b) Special Indemnity. In the event Manager, in its own name or as
agent of Augusta, enters into a contract for or related to the Parking Deck, Augusta shall,
to the extent permitted by law, indemnify, defend, and hold Manager harmless from and
against any and all liabilities, claims, suits, fines, penalties, damages, judgments, fees,
costs and expenses (including, but not limited to attorneys' fees and disbursements)
related to the payment of, or obligations related to such contract. This right of
indemnification shall survive termination of this Agreement.
5.9 Costs of Compliance. Unless otherwise set forth in this Agreement to the
contrary, any costs related to duties imposed on Manager shall, except to the extent
incurred as a result of Manager's gross negligence, willful misconduct or breach of this
Agreement, be at Augusta's cost, in which case the costs of such action shall be an
Operating Expense and may be paid from the Operating Account.
ARTICLE VI
ACCOUNTS, PAYMENTS AND DISTRIBUTIONS
6.1 Accounts. Augusta shall establish and maintain an account for the benefit
of Augusta, which will serve as an operating account for the Parking Deck (the
"Operating Account"). Such account shall be a separate account established for the
benefit of Augusta and no funds of Manager shall be comingled with the funds of
Augusta.
6.2 Operating Account; Payment to Augusta. Manager shall deposit or
transfer all Operating Revenues into the Operating Account. All Operating Revenues,
whether or not deposited into such account, shall be solely the property of Augusta. All
Operating Expenses shall be borne exclusively by Augusta. Manager shall have authority
to pay Operating Expenses, and shall invoice Augusta for reimbursment on a monthly
basis of said Operating Expenses along with the Management Fee. If at any time the
Operating Account contains less than the reasonably anticipated Operating Expenses for
a period of time not longer than the ensuing 90 days, Manager shall so advise Augusta in
writing, accompanied by an (pro-forma) operating budget, that was submitted as part of
the Annual Plan or, if the Annual Plan has not yet been adopted, in Manager's proposed
budget for the Annual Plan, and Augusta shall cause such amount to be deposited into the
Operating Account within ten (10) business days of receipt of such notice. The intent of
this section is that the Operating Account shall, at all times, contain a permitted reserve
sufficient to cover Operating Expenses for the next 90 days, without regard to the future
receipt of any Operating Revenues. In the event of a deficiency in the Operating
Account, Manager may, but shall not be required to, in its sole discretion, advance funds
to meet Operating Expenses and such advances shall become immediately due from
Augusta.
Manager may,but shall not be required to, in its sole discretion, advance funds for
pre-opening expenses approved by Augusta. Such advances shall be reimbursed to
Manager from the first receipts from the operation of the Parking Deck.
6.3 Capital Improvements. Augusta agrees to provide all necessary funding
for Capital Expenses that are reasonably necessary for capital repairs to the Parking Deck
to the Standard in accordance with the Annual Plan.
6.4 Indemnity. Debts, obligations, and other liabilities incurred by Manager
that are part of the Annual Plan or are otherwise authorized hereunder and are incurred in
the performance of its duties under this Agreement shall be deemed to be incurred on
behalf of Augusta. To the extent permitted by law, Augusta shall indemnify, defend, and
hold Manager harmless from and against any and all liabilities, claims, suits, fines,
penalties, damages, judgments, fees, costs and expenses (including, but not limited to
attorneys' fees and disbursements) related to the payment of, or obligations related to, the
Management Fee, other Operating Expenses, and Capital Expenses. Expenses arising
from the fraud or gross negligence of Manager's senior management personnel in the
management, operation, or maintenance of the Parking Deck shall not be authorized
expenditures and shall not be subject to indemnification from the Augusta.
6.5 Tax Authority Audits. If, during the Operating Term or thereafter, any
applicable taxing authority assesses additional taxes of any kind with respect to the
Parking Deck, such additional taxes or assessments, together with any interest, penalties,
fees, or other amounts assessed related thereto, shall be Operating Expenses, together
with all costs, accounting fees, and legal fees incurred by Manager on behalf of the
Parking Deck in reviewing and, if necessary, challenging or negotiating such
determinations. Manager shall be authorized to pay from the Operating Account all such
costs, fees, and tax amounts determined to be due but shall otherwise have no liability
therefor. This provision shall survive any termination of this Agreement.
ARTICLE VII
BUDGETS AND ACCOUNTING
7.1 Annual Plan. Manager shall submit to Augusta, for Augusta's approval
as a part of Augusta's budget process, not later than ninety (90) days subsequent to the
Effective Date, and at least one hundred and twenty (120) days prior to the beginning of
each Fiscal Year thereafter, an annual plan for the Parking Deck (the "Annual Plan"),
which shall include for the ensuing Fiscal Year, the following proposed budgets and
programs setting forth:
(a) Manager's best estimate of Operating Revenues and Operating
Expenses;
(b) Manager's best estimate of Capital Expenses for Parking Deck;
(c) a proposed schedule of rental rates for the use of the Parking Deck
(including hourly, daily and monthly fee rates), and objective criteria for deviating from
such rates and fees;
(d) marketing expenses; and
(e) a summary of the prior year's operations and such other
information Manager deems beneficial to Augusta.
Following adoption of the Annual Plan, Manager covenants not to make the
Parking Deck available for rates and fees that differ from the approved schedule of rates
and fees without prior consent of Augusta. The Annual Plan attached to this Agreement
covers Fiscal Year 2019. Operating Expenses set forth in said Annual Plan shall
constitute the approved Operating Expenses, on a pro-rata basis, for the period from the
date of this Agreement through December 31, 2018. The parties acknowledge that the
first Annual Plan is based on estimates made without the benefit of operating experience.
Manager may submit a revised first Annual Plan if operating experience from the
opening of the Parking Deck through December 31, 2018, indicates that the first Annual
Plan does not accurately reflect anticipated revenues and expenses.
7.2 Information Sharing. [intentionally deleted].
7.3 Approval of Annual Plan. Augusta shall notify Manager within thirty
(30) days of its receipt of the proposed Annual Plan if Augusta has any objections to the
Annual Plan. Otherwise, the Annual Plan shall be deemed approved. If the Annual Plan
is disapproved by Augusta, Manager and Augusta shall enter into discussions in an
attempt to determine mutually satisfactory budgets and programs. Until the Annual Plan
is approved or deemed approved by Augusta, the parties agree that Manager shall operate
the Parking Deck in accordance with the last previously approved or deemed approved
Annual Plan. Manager shall operate the Parking Deck in substantial accordance with the
Annual Plan; provided, however, Augusta acknowledges and agrees with Manager that
during the first three Fiscal Years of the Operating Term, when Net Operating Revenues
will be especially difficult to predict, the Annual Plan will be only a planning tool.
Furthermore, expenses related to the Parking Deck vary in proportion to business volume,
making budgeting imprecise and unpredictable. During the initial two Fiscal Years,
Augusta authorizes Manager to deviate from the Operating Expenses or Capital Expenses
as set forth in the Annual Plan, following notice to Augusta and without any prior
approval of Augusta if, in the reasonable judgment of Manager, such deviation is
necessary to achieve Augusta's objectives to operate Parking Deck in accordance with
the Standard,but only if such change does not result in the expenditure of funds in excess
of the lesser of: fifteen percent (15%) of the budgeted amount of Operating Expenses or
Capital Expenses, as the case may be in the Annual Plan .
7.4 Amendments of Annual Plan. Manager may notify Augusta of a
proposed change to the Annual Plan. Augusta shall notify Manager within thirty (30)
days of its receipt of the requested modification of any objections to the modified Annual
Plan. Otherwise, the modified Annual Plan shall be deemed approved. Augusta agrees
to consider, in its reasonable judgment, modification of the Annual Plan to enable the
Parking Deck to be operated in accordance with the Standard.
7.5 Obligation to Provide Funding to Operate the Parking Deck to the
Standard. Notwithstanding anything in this Agreement to the contrary, Augusta agrees
to provide funding to Manager, whether through approval and funding of the Annual Plan
or through approval and funding of amendments to the Annual Plan, in an amount
sufficient to operate the Parking Deck. In the event Augusta fails to provide funding as
required in this Section, Manager's sole remedy shall be to terminate this Agreement
whereupon Manager shall have the rights and obligations set forth in Section 4.2 of this
Agreement. After such termination, neither Manager nor Augusta shall have any further
obligations to the others under this Agreement.
7.6 Books and Records. Manager shall establish and maintain for the benefit
of Augusta complete, current, and accurate records and books of account reflecting all
transactions of the Parking Deck and of Manager with respect to the Parking Deck that
are separate from Manager's Other Activities. Manager shall make such books and
records available during normal business hours and at all other reasonable hours at the
Parking Deck for inspection, copying, and audit upon reasonable notice by Augusta and
its agents.
7.7 Financial Statements.
(a) Annual Statements. Manager shall prepare and deliver to Augusta
(with a copy delivered to the Augusta Finance Department) by the 90th day after the end
of each Fiscal Year the following financial statements and reports (the "Financial
Statements") using GAAP, which are in reasonable detail covering Parking Deck
operations for such previous Fiscal Year: (i) balance sheet as of the last day of such
Fiscal Year, which shall reflect the balances of the Operating Account as of the last day
of such Fiscal Year, (ii) cash flow statement, and (iii) profit and loss statement. The
profit and loss statement will include a comparison of the budgeted and actual revenues
and expenses as well as a comparison to the prior Fiscal Year.
(b) Quarterly Statements. On or before 30 days after the end of each
calendar quarter, Manager shall prepare and deliver to Augusta a statement showing
Operating Revenue and Operating Expenses for the previous calendar quarter and
Statement of Capital Expenditures.
7.8 Annual Audit. On or prior to 120 days after the end of each Fiscal Year,
Manager shall provide, at Augusta's cost and expense, a financial audit with respect to
Parking Deck operations to be made by an independent certified accounting firm selected
by Manager and designated in the Annual Plan.
7.9 Survival Following End of Term. Manager's obligations under this
Article shall continue as to all Fiscal Years occurring within the Operating Term
notwithstanding that such performance may be due following the end of such term.
ARTICLE VIII
ASSIGNMENT
8.1 Assignment by Manager. Manager shall have the right, without the prior
written consent of Augusta (but only upon not less than five (5) business days' prior
notice to Augusta), to assign this Agreement or any duties arising hereunder to any entity
controlled by, or under common control with, Manager, provided that (i) such case such
transferee shall have, in the reasonable judgment of Augusta, expertise, personnel and
other resources sufficient to discharge its duties hereunder no less favorably than
Manager has performed the same, (ii) the assignee or transferee agrees directly with
Augusta to be bound by all of Manager's obligations under this Agreement, and (iii)
Augusta shall have received an Approving Tax Opinion.
8.2 Assignment by Augusta. Augusta's obligations under this Agreement
may be transferred contemporaneously with the transfer of the ownership of the Parking
Deck.
ARTICLE IX
INSURANCE
Augusta shall either self-insure or self-fund or provide insurance equal or greater
the following insurance requirements
9.1 General Liability Insurance. Augusta shall carry comprehensive general
liability insurance, including contractual liability, personal and bodily injury, and
property damage insurance, on the Parking Deck, with a combined single limit in an
amount sufficient to protect Augusta and Manager,but in no event will such insurance be
in an amount less than a combined single limit of$3,000,000 per occurrence. Manager
shall be named as an additional insured under such insurance. Augusta shall provide
Manager with a certificate of insurance evidencing such coverage no later than thirty
days prior to the commencement of the Operating Term. Augusta's insurance shall
contain a clause stating that there shall be no reduction, cancellation, or non-renewal of
coverage without giving Manager thirty (30) days prior written notice. Such insurance
shall also be endorsed to provide that the insurance shall be primary to and not
contributory to any similar insurance carried by Manager and shall contain a severability
of interest clause.
9.2 Property Insurance. Augusta shall procure and keep in effect during the
Operating Term fire and extended coverage for the Parking Deck and all personal
property in the Parking Deck, including rent loss or business interruption coverage for
periods of no less than twelve (12) months, written on an All-Risk Endorsement and
Replacement Cost basis, with the replacement cost value reasonably acceptable to
Manager. Such policy shall name Augusta and Manager as loss payee, mortgagee, as
their interest may appear. Augusta shall provide Manager with a certificate of insurance
evidencing such coverage no later than thirty days prior to the commencement of the
Operating Term.
9.3 Operational Insurance. Manager shall maintain throughout this
agreement its insruance provided by the Department of Adminsitrative Services.
(Insurance certificate attached.)
9.4 Cost and Expense. Except with respect to insurance premiums that are
paid by Augusta other than with funds held in the Operating Account, insurance
premiums and any costs or expenses with respect to the insurance described in this
Article shall be an Operating Expense of the Parking Deck. Any reserves, losses, costs,
damages or expenses which are uninsured, or fall within deductible limits or self-insured
retentions, shall be treated as a cost of insurance and shall be an Operating Expense.
9.5 Coverage. All insurance described in this Article may be obtained by
endorsement or equivalent means under Manager's or Augusta's blanket insurance
policies, provided that such blanket policies substantially fulfill the requirements
specified herein.
9.6 Policies and Endorsements.
(a) Where permitted, all insurance provided under this Article shall be
carried in the name of Augusta,with additional insureds being Manager, the owner of any
fee or leasehold interest in the Parking Deck other than Augusta, and the holder of the
security deeds covering the Parking Deck, if any; any losses thereunder shall be payable
to the parties as their respective interests may appear. The party procuring such
insurance shall deliver to the other party certificates of insurance with respect to all
policies so procured, including existing, additional and renewal policies and, in the case
of insurance about to expire, shall deliver certificates of insurance with respect to the
renewal policies not less than ten(10) days prior to the respective dates of expiration.
(b) All policies of insurance provided under this Article shall, to the
extent obtainable, have attached thereto an endorsement that such policy shall not be
canceled without at least ten(10) days prior notice to Augusta, Manager, any other fee or
leasehold owner of any portion of the Parking Deck, and any holder of indebtedness
secured by the Parking Deck.
(c) Augusta and Manager agree that with respect to any loss or claim
which is covered by insurance then being carried or required to be carried by them under
this Agreement, the party suffering such loss or claim and carrying or required to carry
such insurance releases the other of and from any and all claims, defense costs and
expenses with respect to such loss or claim. Augusta and Manager further agree that each
of their insurance policies shall provide for an appropriate waiver of subrogation
reflecting this release.
9.7 Indemnification.
(a) Indemnification by Augusta. To the extent permtted by law,
Augusta shall indemnify, defend, and hold harmless Manager, its parent, its subsidiaries,
and its affiliates and their respective officers, directors, agents, and employees, from and
against any and all claims, liabilities, losses, damages, costs, and expenses of any kind or
character, including without limitation indemnity claims , court costs, reasonable
attorneys' fees, interest, fees, and penalties, arising from or related to the management,
operation, or maintenance of the Parking Deck, in all cases to the fullest extent permitted
by law, except to the extent such liabilities are finally determined by a court of competent
jurisdiction to have been the result of the fraud or gross negligence of Manager's
corporate office senior management personnel in the management, operation, or
maintenance of the Parking Deck.
(b) Indemnification by Manager. To the exent permitted by law,
Manager shall indemnify and hold harmless Augusta, its subsidiaries, and its affiliates,
and their respective officers, directors, agents, and employees from and against any and
all claims, liabilities, losses, damages, costs, and expenses of any kind or character,
including without limitation reimbursement of court costs, reasonable attorneys' fees,
interest, fees, and penalties charged to the Parking Deck, to the extent such liabilities are
finally determined by a court of competent jurisdiction to have been the result of the
fraud or gross negligence of Manager's corporate office personnel in the management,
operation, or maintenance of the Parking Deck.
(c) Good-faith Judgment. Notwithstanding any other provision of this
Agreement, Augusta shall not make any claim against Manager based on any alleged
error of judgment if such judgment was made by Manager in good faith or based on any
action taken by Manager at the express direction of Augusta.
(d) Survival. This Section shall survive Termination.
ARTICLE X
GENERAL PROVISIONS
10.1 Actions of a Party. Except for any amendment of this Agreement or
approval of an Annual Plan pursuant to Article VII hereof, each the Augusta and the
Manager shall designate an individual in the Annual Plan to serve as the authorized
designee of a party, with respect to all other matters hereunder, who is authorized to take
any other actions for that party, as may be required from time to time hereunder;
provided,however, that a party may change its designee at any time by a written notice to
the other party. Unless the authorization conferred by a designation is expressly limited
by its terms, such authorization may be presumed to authorize designee to act in behalf of
a party for all other purposes of this Agreement.
10.2 Inspection of Parking Deck. Augusta and its agents, employees, and
designees may go anywhere in the Parking Deck upon reasonable advance written notice
to the Manager for the purposes of inspecting the Parking Deck and inspecting the
performance by Manager of the terms and conditions hereof. Manager shall facilitate the
access permitted under this Section upon request.
10.3 Amendments. The terms, covenants, conditions, and provisions of this
Agreement may be modified or added to only in a writing signed by the parties hereto
provided, in addition, there shall have been delivered to Augusta an Approving Tax
Opinion.
10.4 Time of the Essence. Time is of the essence.
10.5 Notices. All notices hereunder or required by law shall be sent (a) via US
Mail, postage prepaid, certified or registered mail, return receipt requested; or(b) via any
nationally recognized commercial overnight carrier with provisions for a receipt, in either
case addressed to the parties hereto at their respective addresses or numbers set forth
below or as they will have theretofore specified by notice delivered in accordance
herewith:
In case of the Augusta to: With a copy to:
Augusta, Georgia Augusta Legal Department
535 Telfair Street 535 Telfair Street
Suite 901 Building 3000
Augusta, Georgia 30901 Augusta, Georgia 30901
Attn: City Administrator Attn: General Counsel
With a copy to:
Augusta, Georgia
Finance Department
Suite 801
535 Telfair Street
Augusta, Georgia 30901
Attn: Finance Director
In the case of Manager to: With a copy to:
Augusta University Augusta University
1120 15th St. 1120 15th St.
DA 2009 AA 2007
Augusta, Georgia 30912 Augusta, Georgia 30912
Attn: Chief Auxiliary Services Attn: General Counsel
Officer
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10.6 Entire Agreement. This Agreement is the entire agreement between the
parties with respect to the subject matter hereof and no alteration, modification or
interpretation hereof shall be binding unless in writing and signed by the parties hereto.
In the event of a conflict between any provision in this Agreement and in the Parking
Deck Agreement, this Agreement shall control.
10.7 Severability. If any provision of this Agreement or its application to any
party or circumstances will be determined by any court of competent jurisdiction to be
invalid and unenforceable to any extent, the remainder of this Agreement or the
application of such provision to such person or circumstances, other than those as to
which it is so determined invalid or unenforceable, will not be affected thereby, and each
provision hereof will be valid and will be enforced to the fullest extent permitted by law.
10.8 Computation of Time. The time in which any act under this Agreement
is to be done shall be computed by excluding the first day and including the last day. If
the last day of any time period stated herein shall fall on a Saturday, Sunday or legal
holiday, then the duration of such time period shall be extended so that it shall end on the
next succeeding day which is not a Saturday, Sunday or legal holiday. Unless preceded
by the word "business", the word "day" shall mean a calendar day. The phrase "business
day" or "business days" shall mean those days on which the Superior Court of Augusta-
Richmond County, Georgia is located is open for business.
10.9 Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Georgia.
10.10 Waiver. The failure of either party to insist upon a strict performance of
any of the terms or provisions of this Agreement or to exercise any option, right or
remedy herein contained, shall not be construed as a waiver or as a relinquishment for the
future of such term, provision, option, right or remedy, but the same shall continue and
remain in full force and effect. No waiver by either party of any term or provision hereof
shall be deemed to have been made unless expressed in writing and signed by such party
and an Approving Tax Opinion shall have been delivered to Augusta.
10.11 Force Maleure. At Manager's option, Manager's performance under this
Agreement shall be suspended to the extent Manager shall be delayed or hindered in or
prevented from the performance of any act required by reason of strikes, lockouts, labor
troubles, inability to procure materials, failure of power, restrictive governmental laws or
regulations, riots, terrorism, insurrection, war or other reason of a like nature not the fault
of Manager.
10.12 Headings. Headings of Articles and Sections are inserted only for
convenience and are in no way to be construed as a limitation on the scope of the
particular Articles or Sections to which they refer.
[EXECUTION ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal on the day and year first above written.
Signed, sealed and delivered in the Augusta, Georgia
presence of:
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I . Al 0 '4 Hardie Davis, Jr.l„ � 0
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