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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 p Y 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] • t . 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: / , By: ,_ GCJ I . 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