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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. ,+.4:v514.4.41p By: � -= � �_iiii ,, .r e Name: ,.� ' D !. 7 f: ���,e..s, 111 it Ir r' Title: V • b s. f .� Itt 11t® r � Date./11.4202v / /��i , ����f � ,r VI .,„ a S�� ,, > 3 Manager: �c; �,4,' >: s , CYPRES a _ ,, kl O : t ® AGEMENT, LLC xG �, .a'�` Nam�_i._ as ����'s Title: +l► t� r Date: .