HomeMy WebLinkAboutCONTRACT WITH CYPRESS GOLF MANAGEMENT, LLC_MANAGEMENT AGREEMENT FOR ADDITIONAL PERIOD OF SIXTYTY (60) MONTHS CYPRESS GOLF MANAGEMENT
GOLF COURSE OPERATIONS MANAGEMENT AGREEMENT
THIS AGREEMENT is made thisir—day ofa 2019 (the "Execution Date"),
by and between Augusta, Georgia (hereinafter referred to "Owner"), and Cypress Golf
Management,LLC a Florida Limited Liability Company(hereinafter referred to as"Manager").
WITNESSETH:
WHEREAS,Owner owns a golf property commonly known as the Augusta Municipal Golf
Course, located at 2023 highland Avenue(hereinafter referred to as "AGC"); and
WHEREAS, Owner has the right to own, operate, manage, control, care for, improve,
preserve, and maintain the AGC, including the authority to engage Manager to maintain and
operate the Club and to manage improvements to the AGC that are authorized by Owner; and
WHEREAS, Manager generally is experienced in maintaining and managing operations
at golf course properties, and
WHEREAS, Owner desires to avail itself of the expertise, advice, assistance and other
abilities of Manager for the management,maintenance and operation of the AGC;
NOW,THEREFORE,for good and valuable consideration,including the covenants herein
contained and to be performed by Owner and Manager, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
SECTION 1
APPOINTMENT OF MANAGER- OBJECTIVES
1.1 Annointment of Manager. Subject to the terms of this Agreement, Owner hereby
appoints Manager as its exclusive agent to supervise, direct and control the management,
development,marketing and operation of the AGC, and to supervise all improvements to the AGC
authorized by Owner. Subject to the provisions of this Agreement, Manager, as agent of and for
the benefit of Owner, shall be responsible for all matters and facets relating to the management,
operation, and improvement of the AGC. Manager hereby accepts such appointment, upon and
subject to the terms, conditions and restrictions herein contained, and undertakes and agrees to
perform, as agent of and for the benefit of Owner, all of the services set forth in this Agreement
and to comply with all of the provisions of this Agreement. It is expressly understood and agreed
that this Agreement shall cause Manager to be an independent contractor and shall not create any
employer-employee,joint venture, or partnership relationship, either express or implied, between
Manager(or any person employed by Manager)and Owner.
1.2 Obiectives of the Parties. Owner and Manager acknowledge and agree that their joint
and principal objectives are to protect and maintain the assets of the AGC,properly supervise and
manage the daily operations of the AGC, provide full and accurate accounting for the financial
affairs of the AGC, maximize revenue from the operations of the AGC and take such other
measures, subject to Owner approval, that may serve to enhance the asset value of the AGC to
support the disposition of the property on the most favorable possible terms.
SECTION 2
OPERATIONS- ANNUAL BUSINESS PLAN&BUDGET-RESPONSIBILITY FOR
OPERATING EXPENSES
2.1 Operations. Manager shall be responsible for conducting the day-to-day operations
and management of the AGC in accordance with the Annual Operating Budget as approved by
Owner, and in accordance with the terms of this agreement. Manager shall have assumed
responsibility for the operation and management of the AGC as of 12:01 a.m. on the effective date
of this Agreement which shall be 2019.
2.2 Annual Business Plans and Annual O.eratin' Bud•ets. Within 45 days of
commencing operations management services,Manager shall prepare and submit to the Owner for
approval a proposed business plan("Annual Business Plan"), for the balance of the 2019 calendar
year and a preliminary business plan for the 2020 calendar year. The Annual Business Plan shall
conform to golf industry standards. The proposed Annual Business Plan shall include a line-by-
line budget (the "Annual Operating Budget") for the remainder of the 2019 calendar year and a
preliminary budget for the 2020 calendar year. The Annual Operating Budget shall utilize a chart
of accounts that conforms to golf industry standards.
For 2020 and subsequent years, Manager shall submit proposed Annual Business Plans and
proposed Annual Operating Budgets,conforming to the requirements set forth above,on or before
August 1 of the preceding year. Within thirty(30)days after the receipt of each proposed Annual
Business Plan and Annual Operating Budget, the Owner shall be responsible for reviewing and
approving these documents, or revising these documents in consultation with Manager. Owner
shall have final approval over the Annual Business Plan and Annual Operating Budget, and once
approved by the Owner,these new documents shall replace all prior Business Plans and Budgets.
Owner acknowledges that the performance of the AGC could be affected by circumstances or events
beyond Manager's control,and Manager shall not be deemed to have made any guarantee, warranty
or representation whatsoever in connection with the Annual Business Plan or Annual Operating
Budget. Under no circumstances shall Owner have any claim or cause of action against Manager
in the event that the goals, targets and benchmarks established in the Annual Business Plan and
Annual Operating Budget are not met or achieved.
From time to time Manager may consider it advisable to propose changes to the currently approved
Annual Business Plan or Annual Operating Budget. In that event,Manager shall discuss the proposed
changes with Owner, and Owner shall make the final determination as to what changes, if any,shall
be made.
2.3 Operating Expenses• Owner is responsible for all operating expenses of the AGC; and
Owner shall provide sufficient funds to cover all operating expenses. Manager,acting as agent for
Owner, shall deposit all AGC revenues into an operating account for the AGC and Manager shall
have authority to draw upon the funds in the operating account to cover operating expenses in
accordance with the Annual Operating Budget. In the event that funds in the operating account
are not sufficient to cover operating expenses, Manager shall advise Owner of the shortfall or
potential shortfall and Owner shall deposit additional funds into the operating account in a timely
manner in order to insure that sufficient funds are available to meet the operational requirements
of the AGC as they become due and payable. Manager shall have no obligation to cover an
operating expenses, nor to contribute funds to any AGC Operating Account. y
Manager shall monitor the cash flow and cash requirements of the AGC and shall prepare monthly
cash flow forecasts and reports for Owner. In addition, Manager shall communicate with Owner
on a regular basis with respect to cash flow and funding requirements, so that Owner may
reasonably anticipate the cash flow requirements of the club and to the extent possible, have as
much advance notice as possible relative to the need to provide supplemental funding over and
above the funds available from club operations.
Manager may cause the AGC to incur any expense (i) that is included in the approved Annual
Operating Budget; (ii) that is needed to remedy any emergency situation that, in Manager's
professional judgment is potentially hazardous,unsafe or damaging to the AGC;provided that the
amount required for such remedy does not exceed$5,000,or(iii)is otherwise expressly approved
by Owner. Manager shall not incur any expense that is not consistent with the Annual Operating
Budget without the prior written consent of the Owner, except in the case of an emergency or as
otherwise provided in this Agreement.
Manager may reallocate up to ten percent(10%)of any amount budgeted with respect to any one line
item in the Annual Operating Budget to another line item budgeted therein, provided that the
aggregate expenditures in the Annual Budget are unaffected, and further provided that Owner is
notified in writing of the reallocation within ten (10) days. Unbudgeted minor expenditures
unforeseen at the time of preparation of the Annual Budget, and reasonably deemed necessary by
Manager, may be made without Owner's authorization except that unbudgeted expenditures
aggregating more than $5,000 in any month, or more than $25,000 in any year, may not be made
without Owner's written approval in advance.
SECTION 3
DUTIES, AUTHORITY,AND RESPONSIBILITIES OF MANAGER
3.1 Duties Authority and Responsibilities of Manager. On and after the Effective Date
(hereinafter defined),except as expressly set forth herein,Manager,acting as Owner's agent, shall
be responsible for the management, operation, organization, administration and maintenance of
the AGC. Manager shall have the authority and responsibility to exclusively operate and manage
the AGC and manage capital improvements in such manner as it, in its professional discretion,
deems most likely to accomplish the objectives set forth above, in accordance with the Annual
Business Plan, Annual Operating Budget, and this Agreement. The responsibilities of Manager
under this Agreement shall include,without limiting the generality of the foregoing,the following:
a. Prepare and submit for Owner approval, in accordance with Section 2, above, a proposed
Business and Annual Operating Budget for the AGC.
b. Provide, in accordance with Section 3.2, accounting, financial management and financial
reporting services and support for the AGC.
c. Employ,either directly or through a third-party professional employer or employee leasing
company, all personnel required for the operation and maintenance of the Club, in
accordance with the Annual Business Plan and Annual Operating Budget.
d. In accordance with Section 4 below, assist Owner in obtaining, at Owners expense,
property,casualty and liability insurance coverage for the Club.
e. Acting as agent for Owner,collect all gross operating revenues derived from the operation
the AGC and pay all of the AGC' operating expenses, including management fees to
Manager, and reimbursable expenses of Manager authorized under this agreement, from
these revenues.
f. Develop and implement quality control programs, customer service standards, operating
policies and procedures,employee handbooks and other guidelines for the operation of the
AGC.
g. Develop and implement golf course maintenance standards and practices that shall be
sufficient, in Manager's professional judgment, to provide playing conditions that are
consistent with each AGC's market position and competitive with conditions at comparable
facilities. For purposes of this agreement, Comparable Facilities shall mean the golf
facilities commonly known as the Forest Hills Golf Club located in Augusta, Georgia.
h. Acting as agent for Owner and in accordance with the Annual Operating Budget,enter into
service contracts and vendor agreements as necessary to support the operation and
maintenance of the AGC. Such agreements may include, but may not necessarily be
limited to: janitorial services, waste collection and disposal services, linen or uniform
services,pest control services and the like.
i. Acting as agent for Owner and in accordance with the Annual Operating Budget,purchase
operating supplies, equipment and inventories as necessary to support the operation and
maintenance of the AGC. In the event Manager, in its managerial opinion determines it is
better to lease equipment, the term of such lease shall not be for a term longer than the
unexpired term of this Agreement,unless otherwise agreed to by Owner
j . Develop and implement, in accordance with the Annual Operating Budget, housekeeping
and preventive maintenance programs for all buildings, grounds and facilities at the AGC.
k. Acting as agent for Owner, and subject to Owner approval in advance, and in accordance
with the Annual Business Plan and the Annual Operating Budget, undertake minor repair
and replacement projects of a non-capital nature as defined by generally accepted
accounting principles.
1. Monitor compliance with pre-existing lease obligations or other contractual obligations
previously executed by and recommend new leases or contracts as necessary to support the
operation and maintenance of the AGC.
m. Make best efforts to insure that all AGC facilities and AGC operations conform to the
requirements of local,county,state and/or federal regulations,licenses,orders,permits and
similar requirements.
n. Make best efforts insure that licenses and permits necessary to support the operation and
maintenance of the AGC are kept current and in good standing.
o. Make best efforts to insure that tax reporting and payment obligations of the AGC are
satisfied in a complete, accurate and timely manner.
p. Monitor AGC premises and facilities for situations that are potentially unsafe or potentially
hazardous and if such situations are determined to be present, take immediate steps to
remedy the situation in a cost-effective manner. Manager shall have authority to take such
remedial actions without Annual Budget authorization or other Owner approval,provided
that the cost of the remedy is$5,000 or less.
q. Perform such other tasks, upon the reasonable request of the Owner, as are customary and
usual in the operation of a municipal golf course of a class and standing consistent with the
AGC and Comparable Facilities.
3.2 Financial and Bankin Matters. Owner shall establish or designate one or more bank
accounts as the operating account(s) ("AGC Accounts") for the AGC. AGC Accounts shall not
be combined with any other accounts of Manager, and AGC funds shall not be co-mingled with
any funds of Manager. Manager, as Owner's agent,shall provide centralized accounting services
and financial management functions, which shall be provided from Manager's golf operations
accounting office in Orlando, Florida. Manager shall provide for adequate controls,policies and
procedures to safeguard cash, inventories and all other assets of the AGC. Manager's
responsibilities in this regard shall include, but may not necessarily be limited to,the following:
a. Collect and promptly deposit into the AGC Operating Account all revenue from AGC
operations.
b. Pay all AGC expenses, including all amounts due to the Manager as fees or reimbursable
expenses as long as they are included in the Annual Operating Budget or otherwise
approved in writing by the Owner.Manager shall provide appropriate oversight over AGC
expenditures, including review of all invoices, plus periodic reviews of purchase orders,
delivery tickets,payroll reports and other records of AGC expenditures.
c. Make distributions of excess cash to Owner as Owner may direct.
d. Prepare a daily report of AGC cash receipts in all revenue categories and provide same to
Owner on a weekly or more frequent basis if requested by Owner.
e. Provide appropriate cash controls,including regular reviews and comparisons of daily bank
deposits against cash register tapes,tee sheets and daily revenue reports,and periodic spot
audits of on-site cash control measures.
f. Maintain the chart of accounts and general ledger for said property.
g. Balance all accounts and maintain the balance sheet for said property.
h. Prepare monthly profit & loss statements and other financial reports as requested by the
Bank.
i. Conduct monthly physical count inventories in all departments of the AGC, and match
physical inventory reports to point of sale reports and delivery tickets.
j. Reconcile monthly bank statements.
k. Assist Owner in meeting Owner's obligations with respect to local, state and federal
obligations are met with respect to tax filings, licenses, franchise fees,etc.
1. Within twenty(20) days following the close of each month, Manager shall provide to the
Owner monthly financial reports in such form and containing such information as Owner
may reasonably request, and which shall include a year-to-date report indicating actual
income and expenses compared to budgets for such period. Any substantial variance of
actual income and expenses from the Annual Operating Budget shall be explained in the
report.
m. Manager shall continue to collect a fee of two dollars ($2.00) per eighteen hole round,
($1.00 for nine holes or less) the "Improvement Fee" to be deposited into the Capital
Account. Such funds shall be used, collected and held by Owner in the Capital Account to
fund capital improvements as provided in the Annual Business Plan or held to fund future
capital improvements as determined by owner. The imposition of the fee may be delayed
and/or eliminated in Owner's sole discretion.
3.3 Capital_Irnprovements, As requested by Owner, Manager shall prepare capital
improvement plans and cost estimates for Owner review and approval. Funding for all capital
improvements shall be the Owner's responsibility. No capital improvement project shall be
undertaken by Manager without Owner's written approval in advance. Planning and management
of any capital improvement project provided for in the Annual Business Plan with a total cost of
$25,000 or less shall be considered part of Manager's operations management responsibilities
under this agreement. For Manager's services in planning and managing any capital improvement
project, or series of related projects, with a cost of more than $25,000, Manager shall receive an
additional project management fee as provided for in Section 10 herein. In the event that the Owner
elects to make capital improvements to the AGC that are not provided for in the Annual Business
Plan, either through a request for proposals or request for qualifications bid process or otherwise,
Manager shall have the right to bid on the management of such capital improvement project but
shall not have the automatic right to manage such project (s) due to Manager's designation as
manager under this Agreement.
3.4 Personnel and Employment Matters In accordance with the approved Annual
Business Plan and Annual Operating Budget, Manager shall hire, supervise and discharge any
personnel necessary to be employed in order to properly carry out the objectives of this Agreement,
and fulfill Manager's obligations under this Agreement. Owner acknowledges that it is Manager'
standard practice to employ AGC personnel through a professional employment services
subcontractor or employee leasing company. Employees of the Manager and/or professional
employment services subcontractor or employee leasing company are referred to as employees of
the Manager in this Agreement.
All salaries, wages and other employment-related costs of personnel employed by Manager
hereunder at the AGC, including, if applicable, but not limited to: severance payments, fringe
benefits,medical and health insurance,pension plans,social security taxes,worker's compensation
insurance,administrative charges from the professional services subcontractor or employee leasing
company, and costs associated with employee recruitment or separation, shall be deemed an
operating expense of the AGC and shall be paid by Manager from the AGC Account. In the event
that funds in the AGC Account are not sufficient to cover employment costs, it shall be Owner's
responsibility to provide sufficient funds per the provisions of Section 3.5 below.
3.5 Payroll Funding It shall be Owner's responsibility to insure that sufficient funds are
available in the AGC Accounts to fund all payroll and all other employment-related costs as set
forth in Section 3.4. Advance funding for payroll obligations shall be accomplished via a transfer
of funds from the AGC Accounts to a payroll account designated by Manager or by Manager's
professional services subcontractor or employee leasing company. Manager shall be entitled to make
such payroll transfers in advance of each payday, and in the event that funds on deposit in the AGC
Account are insufficient to fund an upcoming payroll,Manager shall notify Owner and Owner shall
be responsible for immediately depositing additional funds into the operating or payroll account.
3.6 Payroll Escrow ccount. It is not the intent of this Agreement that Manager, or
Manager's professional services subcontractor or employee leasing company, shall ever be
required to fund any portion of payroll obligations for the AGC. To insure that this intent is
fulfilled, Owner shall establish, immediately upon the execution of this Agreement, a designated
escrow account ("Payroll Escrow Account"), and immediately shall deposit into that account an
amount equal to the maximum semi-monthly payroll estimated by Manager for the first year of
this Agreement. In the event that funds in the AGC Account are not sufficient to fund an upcoming
payroll, Manager shall notify Owner in writing of the shortfall. In the event that Owner, after
having received proper notice from Manager,fails to deposit additional funds in the AGC Account
sufficient to cover payroll obligations as provided for in the Annual Operating Budget, Manager
shall have authority, which authority shall be specified in the documents establishing and
governing the Payroll Escrow Account, to withdraw sufficient funds from the Payroll Escrow
Account and deposit said funds in the designated payroll account for the AGC. Manager shall
notify Owner in writing that the Payroll Escrow Account has been used to fund payroll obligations,
and Owner shall have five(5)days to deposit new funds into the Payroll Escrow Account to restore
that account to the original amount agreed upon. Failure by Owner to restore the funding in the
Payroll Escrow Account, after having received proper notice from Manager, shall constitute an
Event of Default hereunder.
3.7 Other Employment Matters. Manager shall be responsible for compliance with all
laws,regulations and tax requirements relative to
payroll and employment,with all such expenses to
be considered operating expenses of the AGC and covered from the AGC Account or other funds
provided by Owner. Manager shall be responsible for resolving any issues related to employee
compensation, unemployment claims and benefits, and all related expenses shall be operating
expenses of the AGC.
Manager shall be responsible for providing (either directly or through a professional services
subcontractor or employee leasing company) Workers Compensation & Employers Liability
Insurance and any Statutory Disability Coverage as may be required for the employees of the
C1ubAGC. The cost of such coverage shall be an operating expense of the AGC and shall be included
in the Annual Operating Budget. Owner shall be an Additional Named Insured,as its interests may
appear,on all Workers Compensation and Employers Liability policies.
3.8 Mortgages. Nothing herein contained shall prevent Owner from causing the AGC or
any portion thereof from being encumbered by a mortgage,deed of trust or trust deed in the nature of
a mortgage. Manager shall use diligent efforts to cause the operation of the AGC to comply with all
terms,conditions,covenants and obligations contained in any mortgage or loan agreement related to
the AGC, including, without limitation, the obligation to prepare and deliver required financial
statements and materials with respect to the AGC, or any substitute therefore of which Manager is
made aware. The rights of Manager under this Agreement,including, without limitation,the right to
receive payment of management fees and reimbursement of expenses, shall not be subordinated to
the rights of any lender under any applicable mortgage.
SEC—--TION 4
INSURANCE
4.1 Insurance: Owner Obli ations. Owner,at Owner's expense as an operating expense of
the AGC,is responsible for the purchase and maintenance of insurance including but not necessarily
limited to the coverage specified below. The Owner shall determine whether this insurance shall be
purchased directly by Owner or purchased by Manager on behalf of Owner. Manager shall
recommend coverage levels and provide Owner with comparative premium costs and other
information required by Owner in order to make such determination. All insurance shall be
maintained by financially sound and reputable insurance companies in at least such amounts as are
usually insured against by Owners of properties similar to the AGC in the same general geographic
area.
All insurance, except insurance to be provided by Manager per Section 4.3 below, shall be an
operating expense of the AGC and shall be paid by Manager from the AGC Accounts. Estimated
insurance premiums shall be included in the Annual Operating Budget.
Owner shall either self-insure or obtain insurance coverages as follows:
a. Commercial General Liability coverage in an amount satisfactory to
g
er and
sufficient by owner to cover Owner's operations and obligations pursuant to this amed
agreeemment.
b. Liquor/Dram Shop liability coverage.
c. Fire and Extended Loss coverage.
d. Protection against loss or damage to real and personal property including but not limited to
Greens,Tees,Fairways,Trees, Shrubs,Plants,Walkways,Cart Paths,Sand Traps,Structures,
Patios,Furniture,Fixtures,Equipment,Awnings, Signs, and Course Accessories.
e. Inland Marine Coverage for Maintenance Equipment and Golf Carts(including loss of use of
same);
f. Boiler and Machinery Coverage.
g. Additional Business Coverage to include Business Interruption,Merchandise for Sale; Food
Spoilage; Valuable Papers;Accounts Receivable;and Employee Dishonesty.
h. Owned and Non-Owned Automobile Liability and Physical Damage to vehicles owned and
or operated by or on behalf of the Owner.
4.2 Insurance Coverage Extended. Manager shall be named under all such policies of
insurance as Additional Named Insured/Loss Payee as its interests may appear. Further, all such
policies of insurance shall maintain a waiver of subrogation in favor of Manager, et al. Owner
shall provide evidence of such coverage to Manager in the form of certificates of insurance and
endorsements to policies, which shall be updated at each anniversary of each insurance policy.
All applicable policies shall contain riders and endorsements adequately protecting the interests of
Owner and Manager as their respective interests may appear including, without limitation,
provisions for at least thirty (30) days notice to Manager and Owner for cancellation or any
material change therein. Owner shall hold all policies of insurance.Manager in consultation with
the Owner and acting as Owner's agent, shall have the right to settle, compromise or otherwise
dispose of any insurance claims; except that Manager shall have no right to settle,compromise or
otherwise dispose of any claims, demands or liabilities in excess of $10,000, whether or not
covered by insurance, without the prior written consent of Owner.
4.3 Insurance:Manager Obligations Manager shall maintain at its own cost and expense in
full force and effect during the term of this Agreement the following types and amounts of
insurance coverage(i)Commercial General Liability(CGL)insurance covering against claims for
contractual liability, personal injury, death and property damage to
rsonal an
advertising injury, products/completed operations ; such CGL policy shall hae limremises, its of not less
than $2,000,000 per occurrence, $2,000,000 products/completed operations, and $2,000,000
general aggregate; (ii) Workers' Compensation in accordance with applicable law; (iii)
Professional Liability insurance with minimum limits of $1,000,000 each incident; (iv)
Crime/Employee Dishonesty with a limits that are reasonable and acceptable to Owner naming
Owner as Loss Payee;and (v)Automobile Liability with limits of$1,000,000 CSL for all owned,
non owned or hired cars. Manager shall require all contractors to provide certificates of insurance
evidencing coverage as set forth in this section which shall be updated at each anniversary of each
insurance policy.Managers policies shall be primary and non contributory and provide for Waiver
of Subrogation in favor of Owner. Manager shall cause all contractors and sub contractors to
maintain the same limits of general liability, automobile liability and workers' compensation as
Manager.
All CGL policies from Manager and any contractors shall name Owner and its parent and affiliates
and their respective officers, directors, employees and agents as additional insured's. Manager is
obligated to provide direct notification of policy cancellation/material change or non-renewal upon
immediate notification by the carrier by either fax or e-mail.
SECTION 5
OBLIGATIONS AND DUTIES OF OWNER
5.1 Obligations and Duties of Owner. Owner shall cooperate with Manager so as to
enable Manager to carry out its obligations and responsibilities under this Agreement. This
cooperation shall include, but shall not be limited to,the following:
a. Performing all contractual obligations to which it is, at any time, a party relating in any
way to the AGC, including, without limitation, those agreements which Manager enters
into on behalf of Owner pursuant to this Agreement;
b. Cooperating with Manager and promptly responding to all inquiries and requests for
information, documentation or approvals to enable Manager to carry out its obligations
under this Agreement.
5.2 Owner Responsibility for Operating Expenses. Owner agrees to pay for all costs of
operating and maintaining the AGC,expressly including all payroll-related costs and Management
fees to Manager, as set forth in the approved Annual Operating Budget or as otherwise provided
for in this Agreement.To the extent funds generated by AGC operating revenues are not sufficient
to fund payroll expenses or other operating expenses, it shall be Manager's responsibility to so
advise Owner, and Owner then shall provide such funds as required, in a timely fashion, by
immediately depositing them into the AGC Operating-Account. Owner shall establish and fund
the Payroll Escrow Account as provided for in Section 3.5 herein,to insure that Manager shall not
be required to fund any payroll obligations of the AGC.
SECTION 6
OWNER'S REPRESENTATIONS AND WARRANTIES
6.1 Owner's Represe mations Owner makes the following representations and
warranties to Manager:
a. Owner is a political subdivision of the State of Georgia. The individual executing this
Agreement on behalf of Owner has full capacity, right, power, and authority to sign the same on
Owner's behalf and to bind Owner thereto. This Agreement shall be binding upon and enforceable
against Owner in accordance with its terms.
b. To the best of Owner's knowledge, neither the execution and delivery of this Agreement
by Owner nor Owner's performance of any obligation hereunder(a)shall constitute a violation of
any law, ruling, regulation, or order to which Owner is subject,or(b) shall constitute a default of
any term or provision or shall cause an acceleration of the performance required under any other
agreement or document to which the AGC or any part thereof is subject.
6.2 Manaer
g 's Representations. Manager makes the following representations and
warranties to owner:
a. Manager is authorized to, and in good standing to, conduct business in the State of Florida
and the State of Georgia. The individual executing this Agreement on behalf of Manager has full
capacity, right, power, and authority to sign the same on Manager's behalf and to bind Manager
thereto. This Agreement shall be binding upon and enforceable against Manager in accordance
with its terms.
b. To the best of Manager's knowledge,neither the execution and delivery of this Agreement
by Manager nor Manager's performance of any obligation hereunder shall constitute a violation
of any law,ruling,regulation,or order to which Manager is subject.
SECTION
EVENTS OF DEFAULT- REMEDIES
7.1 Owner. With respect to Owner it shall be an event of default("Event of Default")
hereunder; if any of the following shall occur:
a. If,upon thirty(30)days'notice Owner shall fail to make or cause to be made any payment to
Manager of any amounts due including the fees and reimbursements required to be made
hereunder;
b. If Owner shall fail to provide funding for all operating expenses of the AGC as set forth herein,
specifically including payroll and employment-related costs, and such default shall continue
for a period of three(3)days after notice thereof by Manager to Owner;
c. If Owner shall fail to keep,observe or perform any other agreement,term or provision of this
Agreement that is required to be kept, observed or performed by it, and such default shall
continue for a period of thirty(30)days after notice thereof by Manager to Owner;
d. If, through no fault of Manager, the licenses (exclusive of liquor license) required for the
operation of the AGC are at any time suspended,terminated,or revoked,and such suspension,
termination, or revocation shall continue un-stayed and in effect for a period of thirty (30)
days consecutively.
7.2 Manager. With respect to Manager, it shall be an Event of Default hereunder if any
of the following shall occur:
a. If Manager shall fail to keep,observe, or perform any material agreement,term or provision
hereof required to be kept,observed,or performed by it,and such failure shall continue for as
long as thirty(30)days after notice thereof shall have been given to Manager by Owner;
b. If any officer or corporate-level employee of Manager,or Manager as a corporate entity,shall
commit any act of fraud,theft or dishonesty against Owner or against the AGC.
7.3 Remedies of Manager. If any Event of Default by Owner shall occur Manager may
(in addition to any other remedy available to it in law or equity if such termination is on account of
the occurrence of an Event of Default) forthwith terminate this Agreement. In such event, Manager
shall be entitled to immediately receive payment of all accrued unpaid amounts due to Manager
pursuant to the terms hereof,with interest at ten percent(10%)per annum until paid,unless prohibited
or limited under applicable law,in which event such charge(s)shall not exceed the amount collectible
under such law, and neither party shall have any further obligations whatever under this Agreement,
except pursuant to the indemnity provisions herein. If all such amounts are not paid immediately,
Manager may exercise its rights at law and equity to recover the amounts due.
7.4. Remedies of Owner. If any Event of Default by Manager shall occur and be
continuing,Owner may, in addition to any other remedy available to it in law or equity on account of
such Event of Default, forthwith terminate this Agreement. In such event Manager shall be entitled
to receive payment of the excess of all unpaid amounts due to Manager pursuant to the terms hereof,
over any monetary loss or damage suffered by Owner as a result of the Event of Default by Manager,
with interest at ten percent (10%) per annum until that excess is paid, unless prohibited or limited
under applicable law, in which event such charge(s) shall not exceed the amount collectible under
such law, and neither party shall have any further obligation whatever under this Agreement,except
pursuant to the indemnity provisions herein.
7.5 Attorne s Fees. If either party hereto brings an action because of any Event of Default
hereunder,the non-prevailing party agrees to pay all costs and reasonable attorney's fees incurred by
the prevailing party in connection with such action.
7.6 Rielrts Cumulative No Waiver. No right or remedy herein conferred upon or reserved
to either parties hereto is intended to be exclusive of any other right or remedy, and each and every
right and remedy shall be cumulative and in addition to any other right or remedy given hereunder,
or now or hereafter legally existing upon the occurrence of an Event of Default hereunder. The failure
of either party hereto to insist any time upon the strict observance or
performance of any
provisions of this Agreement or to exercise any right or remedyas lAgreement,
shall the
not impair any such right or remedy or be construed as a waiver or relinqus provided
tthereof with respect
to subsequent defaults. Every right and remedy given by this Agreement to the parties hereof may be
exercised from time to time and as often as may be deemed expedient by the parties hereto, as the
case may be.
7.7 S ecified excuses for delay or non perfo_ rmance, Manager is not responsible for delay
in performance caused by hurricanes, tornadoes, floods, and other severe and unexpected acts of
nature. In any such event,any applicable fee payment and schedule shall be equitably adjusted.
SECTION 8
TERM AND TERMINATION
8.1 Term. The term of this agreement shall be from the Execution Date through the
calendar year ending 2024. Upon 45 days' written notice in advance to the other party, either party
may terminate this Agreement without penalty. In the event of such termination, Manager will be
paid all installments of the management fee and receive all reimbursements or other payments due
and payable to Manager up to date of such termination.
8.2 Event of Termination. It shall be an Event of Termination hereunder:
a. If Owner closes the AGC for six(6)continuous months or ceases operations for six
(6) continuous months (except to carry out of planned renovations or to recover
from a natural disaster), this Agreement shall terminate upon the closure of the
AGC by Owner.
b. If Owner sells the AGC,or all the equity interests of Owner are transferred,to a third
party not affiliated with Owner, this Agreement shall terminate upon the sale of the
AGC by Owner or transfer of those equity interests.
c. If Owner loses title to the AGC, loses control over the AGC,or is legally required or
obligated to cease operating the AGC, this Agreement shall terminate upon the
occurrence of that event.
d. The AGC is taken in its entirety in a condemnation proceeding or a substantial portion
of the AGC is taken such that Owner determines in its reasonable judgment that the
AGC can no longer be operated (any termination under this clause shall be effective
immediately upon receipt by Manager of written notice of Owner's election to so
terminate.)
e. Manager shall apply for or consent to the appointment of a receiver or trustee for all
of all or a substantial part of its assets; be the subject of a petition in bankruptcy; or
make a general assignment for the benefit of its creditors (termination under this
clause shall be automatic and effective immediately with no further notice or action
by Owner).
8.3 Termination of the contract in whole or in part for the convenience of Augusta,
Georgia. The Owner may terminate this contract in part or in whole upon written
notice to the Manager. The Manager shall be paid for any validated services under
this Agreement up to the time of termination.
8.4 Notice and Payments to Manager. Upon an Event of Termination Manager shall
cooperate with Owner to effect an orderly transition or an orderly closing of the AGC.
Owner shall be obligated to receive payments as follows:
a. Funding for all payroll expenses and any and all other operating expenses for which
Owner normally would be responsible under this agreement;
b. Reimbursement for payroll expenses and any and all other budgeted and approved
expenses for which Manager normally would be entitled to reimbursement under this
agreement;
c. Payment of any and all installments of the Monthly Management Fee and/or Monthly
Accounting Fee due and payable up to the date of termination;
d. Reimbursement of any travel,lodging or other expenses for which Manager normally
would be entitled to reimbursement under this agreement.All such payments shall be
made by Owner on or before the date of termination.
SEC_
INDEMNIFICATION
9.1Owner's Indemnification of Mana er. Except as otherwise provided herein, Owner
shall defend, indemnify, save harmless, and pay all judgments and claims, damages, losses or
expenses against the Manager arising out of or incurred by reason of any act performed or omitted
by Manager, Manager's employees, stockholders, members,
ners, or other lawful
representatives and agents,in connection with the business of the AGC oar arising out of or resulting
from Manager's activities performed under this Agreement, including, without limitation,
reasonable attorneys' fees incurred by Manager in connection with the defense of any action based
on any such act or omission, which attorneys' fees shall be paid as incurred; provided, however
that no such indemnification shall be required of Owner in the event of any claim,damage, loss or
expense arising out of fraud, willful misconduct, or gross negligence on the part of Manager.
9.2 Manager's Indemnification of Owner.Except as otherwise provided herein,Manager
shall defend, indemnify, save harmless, and pay all judgments and claims, damages, losses and
expenses against the Owner incurred by reason of fraud, willful misconduct or gross negligence
by Manager in connection with the business of the AGC or arising out of or resulting from
Manager's activities performed under this Agreement, including, without limitation, reasonable
attorneys' fees incurred by Owner in connection with the defense of any action based on any such
act or omission, which attorneys' fees shall be paid as incurred, provided, however, that no such
indemnification shall be required of Manager in the event of any claim, damage, loss or expense
arising out of fraud, willful misconduct or gross negligence on the part of Owner.
9.3 Procedure Relating to Indemnification. Upon the occurrence of an event that gives
rise to indemnification, the party seeking indemnification shall notify the other party hereto and
provide the other party hereto with copies of any documents reflecting the claim, damage, loss or
expense. The party seeking indemnification is entitled to engage such attorneys and other persons
to defend against the claim, damage, loss or expense, as it may choose. The party providing
indemnification shall pay the reasonable charges and expenses of such attorneys and other persons.
Owner shall support and pay for all legal fees and representations necessary to remove Manager
from any claim,action(administrative or judicial), or lawsuit covered by this provision.
9.4 Survival of Indemnity Obligations. The provisions of this Section shall survive any
expiration or termination of this Agreement.
SECTION 10
COMPENSATION OF MANAGER
10.1 Management Fee. Manager shall be entitled to receive a fixed monthly
management fee or$3,000 per month. This fee will be paid by Owner on or before the 1s`day of the
month for which the fee is payable. Such fees includes all Manager's expenses related to the
management of the AGC (other reimbursable expenses described below) including Manager's
corporate employees and management personnel.
10.2 Direct Payment. Owner expressly agrees that Manager shall be entitled to cause
monthly installments of the Monthly Management Fee and the Monthly Accounting Fee to be paid to
Manager when due,directly from the AGC Account. Owner shall be responsible for insuring that the
AGC operating Account contains sufficient funds for this
for insuring that sufficient funds are available for for just as the Owner is responsible
expenses, payroll and for all other approved operating
10.3 Reimbursable Exvenses. In addition to the Management Fee,during the term of this
Agreement, Manager shall be entitled to receive receivepayment
and lodging
expenses incurred by Manager's corporate employees (asopposed oonaClub-levelbleel employees) in
direct relationship to Manager's responsibilities under this agreement. A budget for such expenses
shall be prepared by Manager, and submitted to Owner for approval, as part of the Annual
Operating Budget.
10.4 Fees for Capital Improvements. As set forth in Section 3.3 herein, Manager's
obligations under this agreement do not include the management of major capital improvement
projects, which for purposes of this agreement are defined as any project, or series of related
projects, with an estimated cost of more than $25,000
10.5 Incentive Managemen t Fee In addition to the Monthly Management Fee as
provided above, Manger shall be paid incentives based on exceeding certain targets with respect
to the financial performance of the AGC during each o eratin
thirty percent 30% of anP g year. The incentive shall equal
y positive Net Operating Cash Flow to Owner for the prior fiscal year of
Owner from the operations of the AGC. For purposes of calculating this incentive,"Net Operating
Cash Flow" shall be defined as the net of all AGC revenues (excluding any Improvement Fees
collected by the Manager),less operating expenses(operating expenses shall include Management
Fees, operating leases,purchase payments and depreciation).
The Incentive Management Fee, if any, is due payable within thirty(30)days of the submittal and
acceptance by Owner(which acceptance shall not be unreasonably withheld) of the year ending
financial statement for the prior operating year. If the Owner does not require such financial
statement for any such operating year,then such payment, if any, is due within thirty(30) days of
the submittal and acceptance by Owner(which acceptance shall not be unreasonably withheld)of
the reports provided for in subsections 2.2 and 2.3.
Should owner terminate this Agreement early without cause (cause being defined as a breach of
this Agreement or a breach of any representation provided for in this Agreement),Owner will pay
to Manager the difference between the sum of $2,000 per month and the actual Incentive
Management Fees, paid to the Manager for the period of time that Manager managed the AGC.
Such payment shall not be considered a penalty but is to compensate Manager for the lost
opportunity to earn Incentive Management Fees for the balance of the term of the Agreement.This
amount would be due within ten (10) business days of acceptance by Manager of the notice of
cancellation of this Agreement.
In the event that bond financing for capital improvements is sought by Owner, and as a condition
of such financing a qualified management agreement is required, the parties agree to
Renegotiate the terms of this Agreement in good faith and upon substantially similar terms and
that this Agreement shall terminate on or about the time of the issuance of such debt and a new
agreement be executed by the parties.
10.6 Defective ricing. To the extent that the pricing provided by Manager is erroneous
and defective,the parties may,by agreement,correct pricing errors to reflect the intent of the parties.
10.7 Georgia Prompt Pa v Act not applicable. The terms of this agreement supersede any
and all provisions of the Georgia Prompt Pay Act.
10.8 Prohibition against contingent fees. The Manager warrants that no person or selling
agency has been employed or retained to solicit or secure this Agreement upon an agreement or
understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide
employees or bona fide established commercial or selling agencies maintained by Manager for the
purpose of securing business and that the Manager has not received any non-Owner fee related to this
Agreement without the prior written consent of the Owner. For breach or violation of this warranty,
the Owner shall have the right to annul this Agreement without liability or at its discretion to deduct
from the Agreement Price of consideration the full amount of such commission, percentage,
brokerage or contingent fee.
SECTION 11
ASSIGNMENT
11.1 Assignment. Except as otherwise provided herein, neither
either whollyor in party hereto may assign,
part, any of its rights or obligations under this Agreement to any other natural
person or legal entity without the prior written consent of the other party hereto, provided,
however,that either party may assign, upon written notice to the other party but without requiring
the other party's consent, its rights and obligations hereunder to a subsidiary or affiliate with
substantially the same ownership,controlling authority,and professional qualifications.
SECTION 12
MISCELLANEOUS
12. 1 Liquor L icense. A liquor license shall be obtained by Owner and then maintained in
good standing by Manager, acting as agent for Owner, in the name of the AGC. Owner shall
provide reasonable cooperation and support to Manager in this regard. Owner shall obtain
adequate insurance concerning the serving of liquor and shall include the Manager as an Additional
Named Insured on such coverage in accordance with Section 4 herein. The expense of obtaining
the liquor license shall be the responsibility of Owner.
12.2Validity cement. The parties warrant that the execution and performance of
this Agreement by such parties does not and shall not conflict with or violate any provision of their
respective Sections of Incorporation, By-laws or operating agreements binding such parties.
12.3 Litieation and Arbitration. All claims,disputes and other matters in question between
Manager and Owner arising out of or relating to the Agreement, or the breach thereof, shall be
decided in the Superior Court of Richmond County, Georgia. The Manager by executing this
Agreement, specifically consents to jurisdiction and venue in Richmond County and waives any
right to contest the jurisdiction and venue in the Superior Court of Richmond County,Georgia.
12.4 Seve_ty. If any portion of this Agreement is held legally invalid or
unenforceable, the parties hereby covenant and agree that such portions are severable from all
other portions of this Agreement, and that such portions as shall remain shall constitute the
Agreement of the parties.
12.5 Bindine Effect: Governing Law: Counterpart. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, their permitted transferees, successors and
permitted assigns. This Agreement shall be governed by and enforced and construed in accordance
with the laws of the State of Georgia, and it may be executed in any number of counterparts, each
of which shall be deemed an original without the production of the other.
12.6 Partnership or Joint Venture. Owner and Manager are not partners or joint venturers
with each other and nothing in this Agreement shall be construed to make them such partners or
joint venturers or impose any liability of such on either of them. The parties hereto hereby
acknowledge that Manager and Owner have no power to bind or obligate the other party except as
set forth in this Agreement.
12.7 Notices. Any notice or request given hereunder or relating hereto must be in writing
and sent either by certified or registered mail (return receipt requested), by hand deliveryor
overnight courier delivery as follows: by
Owner: Augusta, Georgia
Attention:Administrator
Suite 901
535 Telfair Street
Augusta, Georgia 30901
C--gp_y_to= Augusta Law Department
Building 3000
535 Telfair Street
Augusta, Georgia 30901
anager• John Fogel
10524 Moss Park Rd
Suite 204-233
Orlando, FL. 32832
The above noted addresses may be changed by either party by mailing written notice of such
change to the other party at the last designated address of the other party as provided herein, with
such change to be effective upon receipt of said notice.
12.8 Attorney's Fees If any party commences an action against the other party arising
out of or in connection with this Agreement, each party shall be responsible for its own attorney's
fees and costs of suit.
12.9 Hea_ dings. Headings, captions and paragraph headings contained in this Agreement
are for convenience and reference only and in no way define, describe, extend or limit the scope
or intent of this Agreement.
12.10 Complete Agreement This Agreement shall constitute the entire agreement
between the parties hereto and supersedes all prior and contemporaneous agreements and
understandings of the parties and no variance or modification thereof shall be valid or enforceable
except by supplemental agreement in writing, executed and approved in the same manner as this
Agreement.
12.11 Acknowled ement. Manager acknowledges that this contract and any changes to
it by amendment,modification,change order or other similar document may have required or may
require the legislative authorization of the Board of Commissioners and approval of the Mayor.
Under Georgia law, Manager is deemed to possess knowledge concerning Augusta, Georgia's
ability to assume contractual obligations and the consequences of Manager's provision of goods or
services to Augusta, Georgia under an unauthorized contract, amendment, modification, change
order or other similar document,including the possibility that the Manager may be precluded from
recovering payment for such unauthorized goods or services.Accordingly,Manager agrees that if
it provides goods or services to Augusta, Georgia under a contract that has not received proper
legislative authorization or if the Manager provides goods or services to Augusta, Georgia in
excess of the any contractually authorized goods or services, as required by Augusta, Georgia's
Charter and Code, Augusta, Georgia may withhold payment for any unauthorized goods or
services provided by Manager.Manager assumes all risk of non-payment for the provision of an
unauthorized goods or services to Augusta,Georgia,and it waives all claims to paymenty
remedies for the provision of any unauthorized goods or services to Augusta, however
characterized,including,without limitation,all remedies at law or equity."This acknowledgement
shall be a mandatory provision in all Augusta, Georgia contracts for goods and services, except
revenue producing contracts. p
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above.
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