HomeMy WebLinkAboutAgenda 06-03-2025; 8-p - Approval of Sportsplex Management Services Agreement 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: June 3, 2025
Action Agenda
Item No. 8-p
SUBJECT: Approval of Sportsplex Management Services Agreement
DEPARTMENT: County Manager's Office
ATTACHMENT(S): INFORMATION CONTACT:
Draft Management Services Agreement Travis Myren, 919-245-2308
John Roberts, 919-245-2318
PURPOSE: To approve a Management Services Agreement between Orange County and
Recreation Factory Partners to operate the Orange County Sportsplex.
BACKGROUND: On December 5, 2005, Orange County entered into an operational agreement
and contract with Recreation Factory Partners ( RFP) for the operation and management of the
Orange County Sportsplex. This agreement was extended for a five year period in June 2007. On
June 19, 2012, the agreement was renewed by the County and RFP effective July 1, 2013 for a
five year period, with a conditional automatic renewal for an additional five years (which was
exercised). The contract was subsequently extended in June of 2023 for a two-year term ending
on June 20, 2025.
Earlier this year, the County issued a Request for Proposal to solicit proposals from vendors to
operate the Orange County Sportsplex. Three (3) vendors responded to the solicitation. A
selection committee comprised of the County Manager, County Attorney, Director of the
Department of Environment, Agriculture, Parks and Recreation, and the Recreation Division
Manager reviewed the proposals and selected two vendors for in-person interviews. Although
both vendors had extensive experience, Recreation Factory Partners was the only vendor with
experience operating a multipurpose facility.
The County has negotiated a new Management Services Agreement with Recreation Factory
Partners (attached) which includes the following key provisions:
• The agreement would be in effect for five years, expiring June 30, 2030.
• As an enterprise fund, the facility will generate sufficient operating revenue to cover
operating costs, including debt service.
• The facility will be operated in a manner that promotes the guiding principles, strategic
priorities, and objectives contained in the Owner's Strategic Plan.
• The operator is obligated to follow the County's Non-Discrimination Policy and Living Wage
policies.
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• The operator is required to offer non-travel house/recreational level youth sports teams
that will primarily serve (greater than 50%) to Orange County residents.
• The operator will offer the same number of recreational level youth sports at the same
frequency, times, and costs (as determined by County) to what has been historically
provided at the Facility.
• The operator will not supplant, or in any way reduce Facility access and use by,
house/recreational level youth sports teams and leagues.
• The operator will offer Orange County families earning 80% or less of Area Median Income
(as determined by the U.S. Department of Housing and Urban Development) access to
recreational level and travel level teams through income-based scholarships or other
substantially reduced cost programs.
• All youth sports shall cater primarily (greater than 50% of participants) to Orange County
residents.
• If the County, at the sole discretion of the Orange County Commissioners, determines that
any of the operator's activities, programs, or projects are detrimental to the residents of
Orange County or detrimental to the access or use of the Facility by the residents of
Orange County, the agreement allows the County to direct the operator to discontinue
such activities, programs, or projects. The County's authority applies to any and all
activities, programs, and projects, including, but not limited to, those specifically
authorized by the Management Services Agreement.
FINANCIAL IMPACT: The annual Management Fee provided by the Agreement is $194,364 for
the initial year. This is the same fee paid to Recreation Factory Partners in 2025 under the current
contract.
Annual percentage increases will be applied on the anniversary date of the contract each year
based on the Consumer Price Index.
ALIGNMENT WITH STRATEGIC PLAN: This item supports:
• GOAL 2: HEALTHY COMMUNITY
OBJECTIVE 8. Invest in services and programs that improve the health and quality of life
of the community (e.g., recreation and public open spaces, arts, etc.)
• GOAL 6: DIVERSE AND VIBRANT ECONOMY
OBJECTIVE 1. Provide family-oriented and inclusive programming or other cultural events
for residents and visitors.
RECOMMENDATION(S): The Manager recommends that the Board approve and authorize the
Manager to sign the Management Services Agreement, subject to final review and approval by
the County Attorney, for the operation of the Orange County Sportsplex between the County and
Recreation Factory Partners.
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SPORTSPLEX MANAGEMENT AGREEMENT
between
ORANGE COUNTY
and
RECREATION FACTORY PARTNERS, INC.
Dated: , 2025
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FACILITY MANAGEMENT AGREEMENT
THIS FACILITY MANAGEMENT AGREEMENT(the "Agreement") is made and entered into this
_____ day of 2025 (the "Effective Date"), by and between Orange County, a political
subdivision of the State of North Carolina (the "Owner"), and Recreation Factory Partners,
Inc., a North Carolina Corporation having its principal office in Hillsborough, North Carolina
(the "Manager").
RECITALS
WHEREAS, Owner owns the infrastructure, buildings, parking, lighting, sports
playing surfaces, sports equipment, and all other hard assets associated with the athletic
facility as the same exist now or may exist in the future including improvements related
thereto specifically located at 101 Meadowlands Drive, Hillsborough, North Carolina 27278,
as the same exist now or may exist in the future, known as the "Orange County Sportsplex"
or any other name(s) that may be identified in the future (hereinafter the "Facility");
WHEREAS, Manager has expertise in providing management services for multi-
purpose athletic facilities throughout the United States;
WHEREAS, Owner and Manager desire for Manager to operate and manage the
Facility subject to the terms and conditions set forth herein;
NOW THEREFORE, in consideration of the promises and covenants herein
contained and other good and valuable consideration, the receipt of which is hereby
acknowledged, Owner and Manager agree as follows:
ARTICLE 1 DEFINITIONS
1.1. Definitions. For purposes of this Agreement, the following terms have the
meanings referred to in this Section:
Affiliate: A person or company that directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with, a specified
person or company.
Agreement: The "Agreement" shall mean this Agreement, together with all exhibits
attached hereto (each of which are incorporated herein as an integral part of this
Agreement), as amended, supplemented or restated from time to time.
Approved Budgets: The "Approved Budgets" consist of the annual operating
budget of the Facility and the annual cash flow budget of the Facility. The cash flow budget
indicates monthly receipts and disbursements from July 1 through June 30 and includes
beginning and ending cash.
Base Management Fee: The "Base Management Fee" shall have the meaning
ascribed to such term in Exhibit B.
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Capital Expenditures: All expenditures for building additions, alterations, repairs or
improvements ("Capital Improvements") where the cost of such expenditure is greater than
Twenty Thousand Dollars ($20,000.00) per project and for purchases of additional or
replacement FF&E ("Capital Equipment"), where the cost of such expenditure is greater
than Five Thousand Dollars ($5,000.00) and the depreciable life of the applicable item in
either case is, according to generally accepted accounting principles in the U.S., in excess
of five (5) years.
Concession Revenue: All revenue accounted for through the sale of food and
beverage or food and beverage vendor contracts. Sponsorships, commissions and rebates
provided from vendors are not included as concession revenue. These items will be
accounted for as Commercial Rights.
Commercial Rights: Naming rights, pouring rights, advertising, sponsorships, the
branding of food and beverage products for resale and memorial gifts at or with respect to
the Facility.
Disbursement Account: A separate account in the name of Manager at a licensed
bank through which all Facility staff and other personnel employed by Manager (including
related payroll taxes), or engaged by Manager as independent contractors, and debt service
are paid. Generally, funds are transferred into the Disbursement Account from the depository
account(s) via bi-weekly requests from the General Manager to Owner.
Early Termination Fee: Has the meaning ascribed in Section 4.3(a).
Emergency Repair: The repair of a condition which, if not performed immediately,
creates an imminent danger of death or substantial harm to persons or property or an
unsafe condition at the Facility threatening imminent danger of death or substantial harm
persons or property.
Event of Force Majeure: An act of God, fire, earthquake, hurricane, flood, riot, civil
commotion, terrorist act, terrorist threat, storm, washout, wind, lightning, landslide, explosion,
epidemic or pandemic, inability to obtain materials or supplies, accident to machinery or
equipment, any law, ordinance, rule, regulation, or order of any public or military authority
stemming from the existence of economic or energy controls, hostilities or war, a labor dispute
which results in a strike or work stoppage affecting the Facility or services described in this
Agreement, or any other cause or occurrence outside the reasonable control of the party
claiming an inability to perform and which by the exercise of due diligence could not be
reasonably prevented or overcome.
Existing Contracts: Service contracts, revenue generating contracts, and other
agreements relating to the day-to-day operation of the Facility existing as of the Effective
Date.
Facility Policy Manual: The Owner-approved policy manual provided by Manager
to the Owner, and updated from time to time, containing certain operating and employment
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policies customarily utilized by Manager in connection with the management of a public facility
such as the Facility. The Facility Policy Manual shall at all times and in all iterations be in
compliance with the terms of this Agreement.
FF&E: Furniture, fixtures, and equipment to be procured for use at the Facility.
Fiscal Year: Each twelve (12) month period during the Term, commencing on July
1 and ending on June 30, and includes the period between the Effective Date and June 30,
2025.
General Manager: The employee of Manager acting as the full-time on-site general
manager of the Facility.
Laws: Means all applicable laws, statutes, rules, regulations, and ordinances.
Manager: The term "Manager" shall have the meaning ascribed to such term in the
first paragraph to this Agreement and includes that Manager's successors and permitted
assigns.
Operating Account(s): A depository account(s) into which revenues are deposited
and a disbursement account through with expenses are paid. Separate interest-bearing
account(s) in the name of the Owner at a licensed bank, to be designated by the Owner,
where Revenue is deposited and from which Operating Expenses are paid.
Operating Budget: A line-item budget for the Facility that includes a projection of
revenues and operating expenses, approved on an annual basis and reviewed on a monthly
basis.
Operating Expenses: All expenses incurred by Manager in connection with its
operation, promotion, maintenance and management of the Facility, including but not
limited to the following:
(i) employee payroll, bonuses and benefits (including payments to any national
benefit system), relocation costs, termination costs (including severance costs and
payments in lieu of termination), and related costs, (ii) cost of operating supplies, including
general office supplies, (iii) advertising, marketing, group sales, and public relations costs,
(iv) cleaning expenses, (v) data processing costs, (vi) dues, subscriptions and membership
costs, (vii) the Base Management Fee, (viii) printing and stationery costs, (ix) postage and
freight costs, (x) equipment rental costs, (xi) minor repairs, maintenance, and equipment
servicing, not including expenses relating to performing capital improvements or repairs,
(xii) security expenses, (xiii) telephone and communication charges, (xiv) Taxes, (xv) cost
of employee uniforms and identification, (xvi) exterminator and trash removal costs, if
applicable (xvii) computer, software, hardware and training costs, (xix) utility expenses,
(xx) office expenses, (xxi) audit and accounting fees, if pre-approved by Owner, (xxii) loss,
costs, damage, liability and any other obligations arising under or incurred under Service
Contracts and other agreements relating to Facility operations, (xxiii) all bond and
insurance costs, including but not limited to personal property, general liability,
professional liability and worker's compensation insurance, (xxiv) commissions and all
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other fees payable to third parties (e.g. commissions relating to food, beverage and
merchandise concessions services and Commercial Rights sales), (xxv) cost of complying
with any Laws, (xxvi) costs incurred by Manager to settle or defend any claims asserted
against Manager arising out of its operations at the Facility on behalf of Owner. The term
Operating Expenses does not include legal fees and costs or litigation damages.
Operating Revenues: Any and all revenues of any kind or nature derived from
owning, operating, managing, and promoting the Facility, including, but not limited to:
license, lease, and Concession Revenue and rentals, revenues from memberships and
Facility user fees, revenues from merchandise sales, advertising and sponsorship sales
and renewals, event sponsorship revenues, equipment rentals, utility revenues, box office
revenues, ticket surcharges, ticket service fees, parking revenues, food services and
concession revenues (however, if such revenues are collected in the first instance by and
retained by the concessionaire, only the amount of such revenues paid by the
concessionaire to the Manager shall be included as Operating Revenues), commissions
or other revenues from decoration and set-up, security and other subcontractors (however
if such revenues are collected in the first instance by and retained by such subcontractors,
only the amount of such revenues paid by such contractors to the Manager shall be
included as Operating Revenues), miscellaneous operating revenues, revenues
generated from separate agreements with Manager Affiliates pertaining to the Facility, and
interest revenues, all as determined in accordance with generally accepted accounting
principles and recognized on a full accrual/cash basis. The parties acknowledge that
revenues from the sale of tickets for events at the Facility are not Operating Revenues, but
are instead revenues of the promoter or performer of each such event.
Operations Manual: The document developed by Manager, in consultation with
Owner, which shall contain terms regarding the management and operation of the Facility
including detailed policies and procedures to be implemented in operating the Facility,
as agreed upon by both the Owner and the Manager.
Owner: The term "Owner" shall have the meaning ascribed to such term in the
first paragraph to this Agreement and includes its successors and permitted assigns.
Regulatory Approvals: All applicable governmental or regulatory approvals,
authorizations, consents, licenses, or permits.
Service Contracts: Agreements for services to be provided in connection with the
operation of the Facility, including without limitation agreements for consulting services,
ticketing, web development and maintenance, computer support services, FF&E
purchasing services, engineering services, electricity, steam, gas, fuel, general
maintenance, HVAC maintenance, telephone, staffing personnel including guards, ushers
and ticket-takers, extermination, elevators, stage equipment, fire control panel and other
safety equipment, snow removal and other services which are deemed by Manager to be
either necessary or useful in operating the Facility. All such contracts shall be listed in a
Schedule of Existing Agreements.
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Taxes: Any and all governmental assessments, franchise fees, excises, license and
permit fees, levies, charges, and taxes, of every kind and nature whatsoever, which at any
time during the Term may be assessed, levied, or imposed on, or that become due and
payable out of or in respect of, (i)activities conducted on behalf of the Owner at the Facility,
including without limitation the sale of concessions, the sale of tickets, and the
performance of events (such as any applicable sales and admissions taxes, use taxes,
excise taxes, occupancy taxes, employment taxes, and withholding taxes), or (ii) any
payments received from any holders of a leasehold interest or license in or to the Facility,
from any guests, or from any others using or occupying all or any part of the Facility.
Term: "Term" shall have the meaning ascribed to such term in Section 4.1 of
this Agreement.
Tournament Revenue: All revenue negotiated as part of a tournament or facility
rental agreement, accounted for through a self-operated tournament, or other vendor
contracts associated with the tournament.
ARTICLE 2 SCOPE OF SERVICES
2.1 Engagement.
(a)Owner hereby engages Manager during the Term to act as the sole and
exclusive manager and operator of the Facility, subject to and as more fully described
in this Agreement, and, in connection therewith, to perform the services described herein
and in Exhibits A and B attached hereto.
(b) Manager hereby accepts such engagement, and shall perform the services
described herein, subject to the limitations expressly set forth in this Agreement.
2.2 Limitations on Manager's Duties. Manager's obligations under this
Agreement are contingent upon and subject to the Owner making available, in a timely
fashion, the funds budgeted for or as budgeted by Manager to carry out such obligations
during the Term. Manager shall not be considered to be in breach or default of this
Agreement and shall have no liability to the Owner or any other party if Manager does not
perform any of its obligations hereunder due to failure by the Owner to timely provide such
funds.
ARTICLE 3 COMPENSATION
3.1 Management Fees. In consideration of Manager's performance of its
services hereunder, Owner shall pay Manager those payments as further set forth in
Exhibit B attached hereto.
ARTICLE 4 TERM; TERMINATION; SUSPENSION
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4.1 Term.The Term of this Agreement shall begin on the Effective Date and, unless
sooner terminated pursuant to the provisions of Section 4.2 below, shall expire on June 30,
2030.
Notwithstanding anything to the contrary herein, Owner's engagement of Manager as
provided herein and Manager's acceptance of such engagement are each expressly
subject to and conditioned upon Manager's presentation of a draft Pro Forma budget, and
Owner's approval of the draft Pro Forma budget, within sixty (60) days after the Effective
Date. If Owner does not approve Manager's draft Pro Forma budget, this Agreement shall
be null and void and Manager shall retain the first two months fees paid to it, as full
compensation for its consulting services in preparing the draft Pro Forma budget.
4.2 Early Termination. This Agreement may be terminated by Owner or
Manager, with or without cause, at any time by providing the other party with written
notice on or before the date such terminating party wishes to terminate this Agreement
(the "Termination Date") as provided in this subsection.
(a) For Owner's Convenience: Owner shall have the right to terminate this
Agreement for any reason or no reason upon twelve (12) months' notice to Manager.
(b) For Manager's Convenience: Manager shall have the right to terminate
this Agreement for any reason or no reason upon twelve (12) months' notice to Owner.
4.3 Effect of Early Termination.
(a) Upon termination or expiration of this Agreement for any reason, (i)
Manager shall promptly discontinue the performance of all services hereunder, (ii) the
Owner shall promptly pay Manager all fees due Manager up to the date of termination or
expiration (subject to proration if the Term ends other than at the end of the Fiscal Year),
(iii) Manager shall make available to the Owner all data, electronic files, documents,
procedures, reports, estimates, summaries, and other such information and materials with
respect to the Facility as may have been accumulated by Manager in performing its
obligations hereunder, whether completed or in process, (iv) Manager shall, in a
commercially reasonable manner, cooperate and assist Owner in the transition of
management to the successor Facility manager, and (v) Manager shall transfer to Owner all
funds in all Operating Accounts.
(b) Without any further action on part of Manager or Owner, the Owner shall, or
shall cause the successor Facility Manager to, assume all obligations arising after the date
of such termination or expiration, under any Service Contracts, Revenue Generating
Contracts, booking commitments and any other Facility agreements entered into by
Manager in furtherance of its duties hereunder. Any obligations of the parties that are
designated herein to survive expiration or termination of this Agreement shall survive early
termination hereof.
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4.4 Suspension. Owner may suspend any portion of this Agreement at any time
and from time to time for Owner's convenience and without penalty to Owner upon three (3)
days' notice to Manager. Upon any suspension by Owner, Manager shall discontinue the
activities related to the suspended portion and shall not resume such activities until notified
to proceed by Owner. No suspension shall exceed fifteen (15) consecutive calendar days.
ARTICLE 5 OWNERSHIP; MANAGEMENT; AND USE OF THE FACILITY
5.1 Ownership of Facility. Data. Eauipment. and Materials. The Owner will at all
times retain ownership of the Facility, including but not limited to real estate, technical
equipment, furniture, displays, fixtures and similar property, including improvements made
during the Term, at the Facility. Any data, equipment or materials furnished by Owner to
Manager or acquired by Manager as an Operating Expense shall remain the property of
Owner and shall be returned to Owner when no longer needed by Manager to perform
under this Agreement or upon the termination of this Agreement. Notwithstanding the above,
Owner shall not have the right to use any third-party software licensed by Manager for
general use by Manager at the Facility and other facilities managed by Manager, the
licensing fee for which is proportionately allocated and charged to the Facility as an
Operating Expense; such software may be retained by Manager upon expiration or
termination hereof.
5.2 Approval of Owner. To the extent that the approval of the Owner is required
under the terms of this Agreement, such approval must be in writing, except for those
amendments and approvals hereto that specifically require consideration by the Orange
County Commissioners, which consideration shall occur at a business meeting of the
Orange County Commissioners.
5.3 Standards of Measurement of Manager's Performance. The Owner is
entering into this Agreement in part based upon Manager's stated expertise and experience
in managing and promoting other facilities similar in nature to the Facility and the
expectation that Manager will utilize all of its good faith commercially reasonable efforts to
manage the Facility in a first-class, high-quality, fiscally responsible manner and in the
Owner's best interest. The parties intend and expect that Manager will use its good faith
commercially reasonable efforts to accomplish the following performance goals in its
management of the Facility:
(a) As an enterprise fund, Manager shall generate sufficient Operating Revenue
to cover Operating Costs;
(b) Net Operating Revenue shall provide debt service coverage of 1.25X as part
of the budget formulation and audited results;
(c) Improving the quality of operations and programming at the Facility;
(d) Operating the Facility in a manner that promotes the Guiding Principles
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contained in the Owner's Strategic Plan.
5.4 Right of Use by Manager. The Owner hereby gives Manager the right of access
and use of the Facility for the Term, and Manager accepts such right of use, for the purpose
of performing the services herein specified, including the operation and maintenance of all
physical and mechanical facilities necessary for, and related to, the operation, maintenance
and management of the Facility.
5.5 Right of Use of Staff by Manager. Manager shall have the right to utilize its
employees as needed to support Manager's organization as a whole, including but not
limited to travel for training and temporary staffing coverage. Manager shall have the
right to utilize the Facility to host events for its employees from time to time for the purpose
of learning and development, at no cost to the operational budget other than that incurred by
the staff who are regularly stationed at the Facility. However, any such utilization of the facility
shall not inhibit or impair use of the Facility by Orange County residents and such use shall
not occur more often than once quarterly. In such event Manager shall provide reasonable
advance written notice to Owner.
5.6 Observance of Agreements and Policies. The Owner agrees to pay, keep,
observe, and perform all payments, terms, covenants, conditions, and obligations under
any agreements, leases, bonds, debentures, loans and other financing and security
agreements to which Owner is bound in connection with its ownership of the Facility
subject to annual appropriations. Manager agrees to pay, keep, observe, and perform all
payments, terms, covenants, conditions, and obligations under any agreements, leases,
bonds, debentures, loans and other financing and security agreements to which Manager is
bound in connection with management of the Facility. Further Manager shall follow all
policies and guidelines of the Owner existing at the time of the Effective Date or that may be
adopted hereafter, as such policies and guidelines may from time to time be amended,
provided Owner notifies Manager in writing that such policies and guidelines are applicable
to the Facility including, without limitation, any methodology pertaining to the allocation of
any costs and expenses by Owner to the Facility as permitted herein. Upon notification of
the applicability of a policy it is Manager's responsibility to remain knowledgeable and
informed regarding such policy and all amendments thereto. Upon receipt of such notice
Manager shall respond and acknowledge the amendment and applicability of such policy to
the Facility and management thereof. Should Manager fail to respond to the notice and
acknowledge the policy directive, such policy shall become effective three (3) calendar days
after the date the notice is sent. As of the Effective Date such policies are further described
in Exhibit C.
ARTICLE 6 PERSONNEL
6.1 Generally. All Facility staff and other personnel shall be engaged or hired by
Manager in its sole discretion, and shall be employees, agents, or independent
contractors of Manager, and not of the Owner. Manager shall select employees in its sole
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discretion subject to the Non-Discrimination Policy and Living Wage Policy of Orange
County. Manager agrees to use reasonable and prudent judgment in the selection and
supervision of personnel. Owner specifically agrees that Manager shall be entitled to
pay its employees, as an Operating Expense, bonuses and benefits in accordance with
Manager's then current employee manual, which may be modified by Manager from time
to time in its sole discretion. Manager shall, to the greatest extent possible, retain all non-
management level employees employed at the Facility as of the Effective Date.
6.2 General Manager and Management-Level Employees. Personnel
engaged by Manager will include a full-time on-site General Manager and other
management level employees. The General Manager will have general supervisory
responsibility for Manager and will be responsible for day-to-day operations of the Facility,
supervision of employees, and management and coordination of all activities associated
with events taking place at the Facility. Manager shall identify the General Manager to the
Owner and any change in the General Manager. The General Manager shall have suitable
knowledge and experience to carry out the required tasks.
6.3 Post-Termination Em Ig_oyment. In the event of termination or expiration of
this Agreement, in order to provide for continuity of operations of the Facility, or in
any case where Owner, or any successor manager, expresses an interest in hiring
any of Manager's employees, Manager may not deny such a request so long as the
Manager's employee does not retain or share with Owner or a successor manager the
Manager's intellectual property material in any such future employment with Owner or a
successor manager. This provision shall not apply to the individual appointed by Manager
to be the General Manager of the Facility. Should Owner or any successor manager wish
to hire or retain the General Manager, Manager must approve such hiring or retention.
ARTICLE 7
PROCEDURE FOR HANDLING INCOME
7.1 Operating Account(s). Except as otherwise agreed to by the parties in writing all
Revenue derived from operation of the Facility shall be deposited by Manager into the
Operating Account(s) as soon as practicable upon receipt (but not less often than once
each business day). The specific procedures (and authorized individuals) for making
deposits to and withdrawals from such account shall be set forth in the Facility Policy Manual,
but the parties specifically agree that Manager shall have authority to sign checks and
make withdrawals from such account, subject to the limitation contained in this Agreement,
without needing to obtain the co-signature of Owner. The Owner shall have access and
visibility to all accounts owned by the Manager related to the Facility.
ARTICLE 8 FUNDING; AUDITS; REPORTS
8.1 Source of Funding. Manager shall pay all items of expense for the operation,
maintenance, supervision and management of the Facility from the Operating Account.
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The Operating Account shall be funded with amounts generated by operation of the
Facility (as described in Article 7 above), or otherwise made available by the Owner subject
to annual appropriations. To ensure sufficient funds are available in the Operating Account,
Owner will deposit in the Operating Account, on or before the Effective Date, the budgeted
or otherwise approved expenses for the month beginning on the Effective Date. The Owner
shall thereafter, on or before the first day of each succeeding month, deposit (or allow to
remain) in the Operating Account the budgeted or otherwise approved expenses for each
such month. Manager shall have no liability to the Owner or any third party if Manager is
unable to perform its obligations hereunder, or under any third-party contract entered into
pursuant to the terms hereof, due to the fact that sufficient funds are not made available to
Manager to pay such expenses in a timely manner.
8.2 Advancement of Funds. Under no circumstances shall Manager be required
to pay for or advance any of its own funds to pay for any Operating Expenses. In the
event that, notwithstanding the foregoing, Manager agrees to advance its own funds to
pay Operating Expenses, Owner shall promptly reimburse Manager for the full amount of
such reasonably advanced funds. Owner will also fund an amount to be included in the
budget, that will be accounted for as Owner's asset, to be used as operating funds and
working capital. The "working capital" will be the baseline account balance for the Operating
Account and Owner will contribute funds as needed to maintain that minimum of amount in
the Operating Account.
8.3 Operating Funds.
(a) Except as otherwise set forth herein, following the approval of the annual
operating budget for a Fiscal Year (including, without limitation, any annual operating
budget applicable to the first Fiscal Year during the term hereof), the Owner shall make
available to Manager all funds necessary to pay all approved expenses pursuant to the
approved budgeted Operating Expenses incurred or accrued in such Fiscal Year, to the
extent Operating Revenues do not equal or exceed Operating Expenses. On or before
January 31st of the Fiscal Year Owner and Manager shall conduct a mid-year review to
examine Operating Revenues and Operating Expenses in order to determine whether and
to what extent operation of the Facility will result in an operating deficit.
(b) The Manager shall operate the Facility within the approved Operating
Budget and subject to the Facility financial policy established by the Owner as described in
Exhibit C.
(c) If Owner appropriates funds at (or reduces appropriated funds to) a level
that, in Manager's reasonable, good faith judgment, renders the management of the Facility
or any part of the Facility unsafe for use for its intended purpose, Manager shall provide its
concerns and preferred solution in writing to Owner within seven (7) days and (i) Manager
and Owner shall, as soon as practicable and in no event later than the date that Manager
has identified as the last date beyond which Manager has determined that it is unsafe to
operate the Facility or any part of the Facility (the date of which shall have been included in
Manager's notice referenced immediately above), agree on the manner in which the Facility
shall be operated or on the increased amount of funding necessary to render the operation
of the Facility safe or (ii) Manager may terminate this Agreement pursuant to Section 4.2.
In the event of a termination under this subsection and if Manager's concerns are addressed
within the twelve (12) month period provided for in Section 4.2, then Manager shall have
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the right to resume management of the Facility by giving written notice within thirty (30) days
of the date such concerns are addressed, provided that this right to resume management
shall expire if not exercised in writing within such thirty (30) day period.
8.4 Annual Budget; Cash Flow Budget. As part of the annual plan described
herein, on or before March 1St of each year, the Manager will prepare a proposed annual
operating budget for the next Fiscal Year to meet the scope of services and objectives under
this Agreement. Such budget shall contain appropriate line items for revenues and
expenses. The Manager shall prepare and submit to the Owner on or before March 1St of
each year a proposed annual cash flow budget for the succeeding Fiscal Year. The annual
budgets referred to above shall be reviewed and are subject to approval by the Owner. On
or before the date of the Orange County Commissioners' last regularly scheduled meeting
prior to the end of each Fiscal Year, the Owner shall notify the Manager of any changes to
the proposed annual operating budget and the proposed cash flow funding budget for the
succeeding Fiscal Year proposed by Manager and with such changes, if any, as are made
by the Owner. If Manager agrees to such changes, which agreement shall not be
unreasonably withheld, conditioned or delayed, such budgets may be approved by the
Orange County Commissioners for the upcoming Fiscal Year and, if the parties cannot
agree on Approved Budgets for the upcoming Fiscal Year, then the previous Fiscal Year's
Approved Budgets shall be the Approved Budgets for such upcoming Fiscal Year until a
new budget is agreed upon by the parties.
8.5 Budget Modifications Initiated bV Manager. Manager may submit to the
Owner at any time prior to April 1 st of each year, a supplemental or revised annual operating
budget or cash flow budget for such Fiscal Year. Upon the written approval of the Owner,
the Approved Budgets shall be deemed amended to incorporate such supplemental or
revised budget. The Approved Budgets may only be amended as set forth in this Article 8.
8.6 Budget Modifications Initiated bV the Owner. If it appears reasonably
likely, in any Fiscal Year during the term hereof, that the actual Net Operating Loss/Profit
for such Fiscal Year will be larger or smaller as the case may be than projected in the annual
operating budget for such Fiscal Year, the Owner may request from Manager a plan for
reduction of Operating Expenses to a level consistent with the budgeted Net Operating
Loss/Profit amount. Manager shall forthwith comply with any such expense reduction
requested by the Owner, whether such reduction was included in Manager's proposed plan
for reduction or not, and the Approved Budgets for such Fiscal Year shall be modified
accordingly, provided that if the Owner's requested reductions, in Manager's reasonable
good faith judgment, could materially interfere, impede, or impair the ability of Manager to
manage and operate the Facility, Manager shall have the right to terminate this Agreement
pursuant to Section 4.2 (with the effect set forth in Section 4.3); and, provided further,
Manager shall not be construed to have breached its obligations under this Agreement if
such alleged breach has been directly caused by the reductions requested by the Owner,
provided that the Owner has been first given reasonable prior written notice by Manager
that such requested reduction is likely to result in interference, impediment, or impairment
of the Manager's ability to manage or operate the Facility and termination by Manager
pursuant to this Section 8.6 is likely to result from such Owner's requested reduction.
8.7 Operating Receipts and Disbursements. Manager shall establish and
maintain, in one or more depositories designated by the Owner, one or more Operating
Accounts for the promotion, operation and management of the Facility, in the name of the
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Owner, with Manager having signature authority in such employees of Manager as Manager
shall reasonably determine provided such employees are properly bonded as specified
herein. All revenues collected by Manager from the operation of or in any way related to the
Facility shall be deposited into such accounts and Operating Expenses shall be paid by
Manager from such accounts. All revenues collected by Manager arising from, related to or
payable in connection with the Facility, including but not limited to revenues from
membership fees, user fees, box office sales, facility or equipment rentals, utility rental
agreements, food and beverage concessions, naming or pouring rights, licensing
agreements, sales, marketing, leasing or other commissions, or any other source, are the
sole property of the Owner, held in trust by Manager for the Owner for application as
provided herein. Any amounts remaining in such accounts upon termination or expiration of
this Agreement for any reason, after payment of all outstanding Operating Expenses, shall
be the sole property of the Owner and shall be promptly paid by Manager to the Owner.
8.8 Ticket Sales Revenues. Manager shall hold in a separate interest-bearing
account in a banking institution depository designated by the Owner any ticket sale
revenues which it receives with respect to an event to be held at the Facility pending the
completion of the event. Such monies are to be held for the protection of ticket purchasers,
the Owner, and Manager, and to provide a source of funds as required for such payments
to performers and promoters and for such payments of Operating Expenses in connection
with the presentation of events as may be required to be paid contemporaneously with the
event. Following the satisfactory completion of the events, Manager shall deposit such ticket
sales revenues into the Operating Account(s), established herein, and shall pay from the
Operating Account all event expenses and provide the Owner with a full event settlement
report along with, upon request of the Owner, copies of paid receipts from all vendors,
promoters, performers, and other payees of any portion of the ticket sale revenues, and/or
other details of such payments. Interest which accrues on amounts deposited in the
Operating Account(s) referred to herein and the ticket account referred to above shall be
considered Operating Revenues. Bank service charges, if any, on such account(s) shall be
considered Operating Expenses. To the extent that Manager collects such ticket sale
revenue on behalf of such promoter or performer, such ticket sale revenue shall be the
source of funds from which Manager collects the rental charges and other event
reimbursements due by such promoter or performer for use of the Facility, which charges
and reimbursements are Operating Revenues hereunder.
8.9 Capital Improvements; Capital Equipment. The obligation to pay for, and
authority to perform, direct, and supervise Capital Improvements and Capital Equipment
purchases shall remain with the Owner. The annual plan submitted by Manager shall
include Manager's recommendation for Capital Improvements and Capital Equipment
purchases to be accomplished during the Fiscal Year and shall be accompanied by an
estimate of the cost of all such items and projects and a request that the Owner budget
funds therefor. The Owner shall retain the sole discretion to determine whether and to what
level to fund Capital Improvements and Capital Equipment purchases to the Facility. Upon
the satisfaction of the foregoing Operating Expenses, the Owner may direct surplus
Operating Expenses toward the costs of Capital Improvements and Capital Equipment,
Facility debt service, and indirect and overhead costs of administrative services provided by
the Owner.
8.10 Funding of Facility. The parties agree the Manager shall not be considered
to have a funding obligation to fund the operation of the Facility in the event that the Owner
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cannot appropriate funds for its operation due to changes in Owner's statutory authority or
severe emergency financial conditions; provided, however, that this Agreement does not in
any manner negate any payment obligations of Manager set forth in this Agreement.
8.11 Inspections and Funds for Emergency Repairs. Manager shall perform
routine inspections of the Facility to document damage or repair issues and shall address
such damage or repair issues within a reasonable time and as provided herein. Manager
shall act to conduct Emergency Repairs, with the consent of the Owner, which consent is
hereby given, in situations which Manager determines to be an emergency with respect to
the life, safety, health, welfare, and protection of the general public, including spending and
committing funds held in the Operating Account(s) of the Facility, even if such expenses are
not budgeted, provided that use of such funds is directly related to addressing the immediate
emergency condition only; provided however, Manager shall have no obligation under any
circumstance to spend or commit funds other than funds then available in such accounts
for any such purpose. Immediately following such action, Manager shall inform the Owner
of the situation and the action(s) taken, and the Owner shall pay into such account(s) the
amount of funds, if any, reasonably spent or committed by Manager pursuant to this section
in excess of budgeted amounts.
8.12 Records and Audits.
(a) Manager shall keep full and accurate accounting records relating to its
activities at the Facility in accordance with generally accepted accounting principles in the
U.S. Manager shall maintain a system of bookkeeping adequate for its operations
hereunder and sufficient to allow the Owner to determine Manager's compliance with this
Agreement and the Facility's complete financial status and performance at any time.
Manager shall adjust its accounting procedures upon request by the Owner to conform with
any applicable requirements of state or federal law or with the Owner's reasonable direction.
Manager shall give the Owner's authorized representatives access to Managers financial
and accounting books and records at any reasonable time. Manager shall keep and
preserve for the greater of three (3) years or the time period required by the 2021 General
Records Schedule: Local Government Agencies, as that schedule is maintained and may
be amended from time to time by the North Carolina Department of Cultural Resources,
following each Fiscal Year all sales slips, rental agreements, purchase orders, sales books,
credit card invoices, records related to social payment apps or other electronic transactions,
digital currency transactions, duplicate deposit slips, electronic or digital banking and
account information, and other evidence of Operating Revenues and Operating Expenses
for such period. In addition, on or before sixty (60) days following the end of each Fiscal
Year for which Manager is managing the Facility hereunder, Manager shall furnish to the
Owner a balance sheet, a statement of profit or loss, and a statement of cash flows for the
Facility for the preceding Fiscal Year, prepared in accordance with generally accepted
accounting principles in the U.S. to be audited by any independent auditor chosen by
Owner. The audit shall contain an opinion expressed by the independent auditor of the
accuracy of financial records kept by Manager and of amounts due to the Owner. The audit
shall also provide a certification by the Manager of the Operating Revenues and Operating
Expenses as defined in this Agreement for such Fiscal Year. The costs of such audit shall
be deemed Operating Expenses.
(b) The Owner shall have the right at any time, and from time to time, to cause
an independent auditor of Owner's choosing to audit all of the books and records of
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Manager relating to Operating Revenues and Operating Expenses, including, without
limitation, cash register tapes, credit card invoices, records of payment apps or other
electronic transactions, duplicate deposit tapes, and invoices. No costs incurred by the
Owner in conducting such audit shall be considered as Operating Expense. If any such
audit demonstrates that the Operating Revenues or Operating Expenditures reflected in any
financial statements prepared by Manager and audited as specified in the foregoing
subparagraph (a) are understated (in the case of Operating Expenses) or overstated (in the
case of Operating Revenues), in either case by more than five percent (5%), or that there
were material inaccuracies or omissions of any other nature which appear to be intentional
or grossly negligent by Manager, Manager shall pay to the Owner the reasonable cost of
such audit. The Owner's right to have such an audit made with respect to any Fiscal Year
shall expire upon the expiration of the Manager's obligation to retain all records associated
with Manager's management of the Facility. Manager shall retain all such records for the
greater of three (3) years or the time period required by the 2021 General Records
Schedule: Local Government Agencies as that schedule is maintained and may be
amended from time to time by the North Carolina Department of Cultural Resources.
8.13 Annual Plan. Manager shall provide to the Owner on or before March 1St of
each year, an annual management plan, which shall include the annual operating budget
described herein for the next Fiscal Year. The annual plan shall include information
regarding Manager's anticipated operations for such Fiscal Year, including planned
operating maintenance activities by Manager, requested Capital Improvements and Capital
Equipment purchases and an anticipated budget therefor, anticipated programs, activities,
and events at the Facility, anticipated advertising and promotional activities, and planned
equipment and furnishings purchases. The annual plan shall be subject to review, revision,
and approval by the Owner. Following review and revision by the Owner, Manager shall
have thirty (30) days to incorporate the Owner's revisions into its plan and resubmit the
revised plan for approval. Upon written approval by the Owner, such annual plan shall
constitute the operating program for the following Fiscal Year.
8.14 Monthly Reports. Prior to the 15th day of each month during the term of this
Agreement, Manager shall provide to the Owner a written monthly report in a form approved
by the Owner setting out the Facility's anticipated programs, activities and events for the
upcoming month and reporting on the prior month's activities and finances; provided,
however, that it shall not be a breach of this agreement if Manager's report is received within
three (3) business days of the 15th Manager shall include in such report a balance sheet,
income statement, and other financial reports (such as a departmental expense report and
event accounting) as Owner may reasonably request. Owner may establish a schedule of
monthly meetings with Manager at which Manager shall report to the Owner, in addition to
other reports at Owner's discretion, all maintenance performed on capital equipment during
the period between monthly meetings.
ARTICLE 9
FACILITY CONTRACTS; TRANSACTIONS WITH
AFFILIATES
9.1 Existing Contracts. To the extent practical or necessary the Owner shall
provide to Manager, on or before the Effective Date, full and complete copies of all
Existing Contracts between the prior Facility manager and its contractors. Manager shall
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administer and use reasonable commercial efforts to ensure compliance with such
Existing Contracts to the extent provided to Manager and to the extent necessary to
maintain operations at the Facility.
9.2 Execution of Contracts. Manager shall have the right to enter into
Service Contracts, Revenue Generating Contracts, and other contracts related to the
operation of the Facility. Any such material agreements shall contain standard
indemnification and insurance obligations on the part of each vendor, licensee or service
provider, as is customary for the type of services or obligations being provided or
performed by such parties. No such contracts shall create an agency relationship between
Owner and Manager. Except as otherwise provided herein, no such contracts shall be
binding upon the Owner.
9.3 Transactions with Affiliates. Manager may purchase or procure such
services, or otherwise transact business with, an Affiliate of Manager, provided that the
prices charged and services rendered by such Affiliate are competitive with those
obtainable from any unrelated parties rendering comparable services. Manager shall,
if requested by Owner, provide reasonable evidence establishing the competitive nature
of such prices and services, including if appropriate, competitive bids from other persons
seeking to render such services at the Facility.
ARTICLE 10
AGREEMENT MONITORING AND GENERAL MANAGER
10.1 Contract Administrator. Each party shall appoint a contract administrator
who shall monitor such party's compliance with the terms of this Agreement and who shall
have authority to make day-to-day decisions regarding the terms of this Agreement.
Manager's contract administrator shall be its General Manager at the Facility, unless
Manager notifies Owner of a substitute contract administrator in writing. Owner shall notify
Manager of the name of its contract administrator within thirty days of the Effective Date.
Any references in this Agreement requiring Manager or Owner participation or approval
shall mean the participation or approval of such party 's contract administrator except that,
unless otherwise provided herein, approval of amendments to this Agreement must be
approved by Owner's governing board.
ARTICLE 11 INSURANCE
11.1 Liability Insurance. Manager shall secure and deliver to the Owner prior to the
commencement of the Term and shall keep in force at all times during any period in which
Manager has operations at the Facility, a commercial liability occurrence insurance policy,
including public liability and property damage, covering the premises and the operations
hereunder, in the amount of Five Million Dollars ($5,000,000.00) for bodily injury and Five
Million Dollars ($5,000,000.00) for property damage, including products and completed
operations and independent contractors. Manager shall also maintain Property Damage
Insurance with a single limit of not less than Five Million Dollars ($5,000,000.00) per
occurrence. Manager shall also maintain umbrella liability insurance from these limits up
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to no less than a limit of Five Million Dollars ($5,000,000). Manager shall be the named
insured under all such policies. The Owner shall be an additional insured under the
foregoing insurance policies, as its interests may appear, and said policies shall contain a
provision for Manager indemnifying. The policy limits shown above are minimums. If
Manager maintains broader coverage or higher limits than the minimums shown herein,
the Owner shall be entitled to the broader coverage and higher limits maintained by
Manager. Any available insurance proceeds in excess of the specified minimum limits of
insurance and coverage shall be available to the Owner. Certificates of insurance naming
Owner and evidencing all the policies required of Manager hereunder along with copies of
the paid receipts therefor shall be delivered to the Owner prior to the commencement of
this Agreement and then at least annually, and at such other times as Owner may request.
Notwithstanding the provisions of this Article 11, the parties hereto acknowledge that the
policies herein may contain exclusions from coverage which are reasonable and
customary for policies of such type. Each such Manager's policy or certificate shall contain
a valid provision or endorsement stating, "This policy will not be canceled or materially
changed or altered without first giving thirty (30) days' written notice thereof to
Orange County, North Carolina, Attention: Orange County Risk Manager, P.O. Box
8181, Hillsborough, NC 27278, sent by certified mail, return receipt requested."
Manager Shall verify its liability coverage includes coverage for injuries related to athletic
programs and provide Owner with copies of all liability wavers.
11.2 Endorsement. The additionally insured endorsement shall further provide the
Owner, its officers, officials, employees, and agents are to be covered as additional
insureds on the commercial general liability policy with respect to liability arising out of
work or operations performed by or on behalf of Manager including materials, parts, or
equipment furnished in connection with such work or operations. General liability coverage
can be provided in the form of an endorsement to Manager's insurance (at least as broad
as ISO Form CG 20 10 11 85 or if not available, through the addition of both CG 20 10,
CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 if a later edition is used). With respect
to policies procured by it, Manager shall deliver to the Owner satisfactory evidence of such
renewal of such policies prior to a policy's expiration date except for any policy expiring on
the termination or expiration date of this Agreement or thereafter. Except as provided in
Sections 11.5 and 11.6, all insurance procured by Manager in accordance with the
requirements of this Agreement shall be primary over any insurance carried by the Owner
and shall not require contribution by the Owner.
11.3 Worker's Compensation Insurance. Unless explicitly exempted under law,
Manager shall, at all times, maintain worker's compensation insurance (including
occupational disease hazards) with an authorized insurance company, through the North
Carolina State Compensation Insurance Fund, or through an authorized self-insurance
plan approved by the State of North Carolina, in all cases insuring its employees at the
Facility in amounts equal to or greater than required under law.
11.4 Fidelity Insurance and Bonds. Manager shall maintain during the term of
this Agreement Fidelity Insurance or Fidelity Bonds covering all of Manager's personnel
employed at the Facility in the amount of Five Hundred Thousand Dollars ($500,000.00)
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for each loss, to reimburse the Owner for Losses experienced due to the dishonest acts of
Manager's employees.
11.5 Property Insurance. Manager shall maintain sufficient property damage or
loss insurance to cover personal property owned by Manager and the Owner at the Facility
and shall maintain such insurance beginning as of the date hereof and continuing
throughout all periods in which Manager has any operations at the Facility. The Owner
shall maintain property insurance covering the premises of the Facility. Certificates
evidencing the existence of the policies shall be maintained with Owner's risk management
department and may be provided to manager upon request. Notwithstanding the provisions
of this Section 11.5, the parties hereto acknowledge that the above policies may contain
exclusions from coverage which are reasonable and customary for policies of such type.
11.6 Certain Other Insurance. If any Agreements signed by Manager prior to the
Effective Date (the "Pre-existing Agreements") consist of agreements with independent
contractors to provide services in respect of the Facility, Manager shall use its best efforts
to cause such contractors to name Owner as an additional insured under any insurance
maintained by such contractors pursuant to the terms of such Pre-existing Agreements
and in such event to deliver to Manager promptly after request therefor a certified copy of
such policy and a certificate evidencing the existence thereof. In addition, if Manager
enters into any agreements during the Management Term and any renewal term with any
independent contractors for the provision of services hereunder, Manager shall have the
right to require such contractors to name Manager as an additional insured under any
insurance required by Manager thereunder and to deliver to Manager prior to the
performance of such services a certified copy of such policy, plus a certificate evidencing
the existence thereof, which policy contains the same type of endorsements and provisions
as provided in Section 11 .2. If Manager does require such contractors to name Manager
as an additional insured under any insurance required by Manager, it shall also require
such contractors to name the Owner as an additional insured and such policies shall
contain the same type of endorsements and provisions as provided in Section 11 .2
Manager shall, within ninety (90) days of the date of this Agreement and at least yearly
thereafter, review the insurance carried by the Owner and Manager covering the Facility
or any of Manager's or the Owner's operations at the Facility, or required of third parties
using the Facility, with regard to Manager's experiences at other similar facilities, and shall
within fifteen (15) days of such review advise the Owner in writing of the results of its review
and of any changes, additions or increases to the insurance requirements hereunder or
applicable to third parties which are advisable under best facility management practices.
The parties hereto shall each immediately notify the other, along with any applicable
insurance carrier(s), in writing of any occurrence or discovery which could result in an
insurance claim hereunder.
(a) Manager shall require reasonable liability insurance from all third-party
licensees, lessees, tenants, and renters of the Facility and shall enforce the
provisions contained in all third-party contracts entered into in connection with
the Facility, including the insurance requirement contained in all Owner
approved event license, concessionaire, subcontractor and other similar
agreements. All such liability insurance shall name Manager and Orange
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County as additional insureds.-All renters shall provide evidence that renter's
liability coverage includes coverage for injuries to athletic participants,
evidence of participant liability waivers that release the Manager and Owner
and, if applicable, accident insurance. Manager shall require all renters to
waive any right to subrogation which any insurer of a renter may acquire by
any means and to require any necessary endorsement to effect this waiver of
subrogation.
(b) Manager shall acquire and maintain sexual abuse or molestation liability
coverage either through separate policy or through endorsement of its general
liability policy. Regardless of method such coverage shall have a limit of not
less than $1,000,000 per occurrence.
(c) Manager shall acquire and maintain automobile liability coverage with
limits of not less than $1,000,000 per occurrence for bodily injury and property
damage.
11.7 Self-insured Retentions (SIR). Owner must approve any SIR by Manager.
The Owner may require Manager to purchase coverage with a lower retention or provide
proof of ability to pay losses and related investigations, claim administration, and defense
expenses within the retention. The policy language shall provide, or be endorsed to
provide, that the SIR shall be satisfied by Manager, but may, at the Owner's sole discretion,
be satisfied by the Owner. The commercial general liability and any policies, including
excess liability policies, may not be subject to SIR that exceed $2,500 unless approved in
writing by the Owner. Any deductibles and SIR shall be the sole responsibility of Manager
and shall not apply to the Owner except as stated in this subsection. Owner reserves the
right to obtain a copy of any policies and endorsements for verification.
ARTICLE 12 COVENANTS AND REPRESENTATIONS; INDEMNIFICATION
12.1 Owner's Covenants and Representations. Owner makes the following
covenants and representations to Manager, which covenants, and representations shall,
unless otherwise stated herein, survive the execution and delivery of this Agreement:
(a) Owner's Status. Owner is a county government duly organized, validly
existing, and in good standing under the laws of the State of North Carolina with full
power and authority to enter into this Agreement and execute all documents required
hereunder.
(b) Authorization. The making, execution, delivery, and performance
of this Agreement by Owner has been duly authorized and approved by requisite action
and this Agreement has been duly executed and delivered by Owner and constitutes a
valid and binding obligation of Owner, enforceable in accordance with its terms and
applicable laws, except as enforceability may be limited by laws affecting creditors' rights
and principles of equity.
(c) Documentation. If reasonably necessary to carry out the intent
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of this Agreement, Owner agrees to execute and provide to Manager, on or after the
Effective Date, any and all other instruments, documents, conveyances, assignments,
and agreements which Manager may reasonably request in connection with the operation
of the Facility.
12.2 Manager's Covenants and Representations. Manager makes the following
covenants and representations to Owner, which covenants, and representations shall,
unless otherwise stated herein, survive the execution and delivery of this Agreement:
(a) Corporate Status. Manager is a corporation duly organized, validly
existing, and in good standing under the laws of the State of North Carolina and is
registered with the North Carolina Secretary of State and authorized to transact business
throughout the United States with full corporate power to enter into this Agreement and
execute all documents required hereunder.
(b) Authorization. The making, execution, delivery, and performance
of this Agreement by Manager has been duly authorized and approved by all requisite
action of the governing authority of Manager, and this Agreement has been duly executed
and delivered by Manager and constitutes a valid and binding obligation of Manager,
enforceable in accordance with its terms and applicable laws.
(c) Effect of Agreement. N either the execution and delivery of this
Agreement by Manager nor Manager's performance of any obligation hereunder (i) will
constitute a violation of any law, ruling, regulation, or order to which Manager is subject;
or (ii) 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 Manager is a
party or is otherwise bound.
(d) Manager agrees it will at all times remain in compliance with all
applicable federal, state, and local laws, rules, and regulations, including
Occupational Safety and Health Administration rules and regulations. Manager
affirmatively states it is not a "restricted company" as that term is described in North
Carolina General Statutes 147-86.58, 147-86.60, 147-86.81, and 147-86.82.
12.3 Indemnification.
(a) INDEMNIFICATION BY MANAGER. MANAGER AGREES TO
DEFEND, INDEMNIFY, AND HOLD HARMLESS THE OWNER AND ITS OFFICIALS,
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS, AND ASSIGNS
AGAINST ANY CLAIMS, CAUSES OF ACTION, COSTS, EXPENSES (INCLUDING
REASONABLE LEGAL FEES AND EXPENSES) LIABILITIES, OR DAMAGES
SUFFERED BY THOSE PARTIES, ARISING OUT OF OR IN CONNECTION WITH: (1)
ANY MATERIAL DEFAULT OR BREACH BY MANAGER OF ITS OBLIGATIONS
SPECIFIED HEREIN; (11) ANY CLAIM AGAINST MANAGER RELATED IN ANY WAY TO
MANAGER'S MANAGEMENT OF THE FACILITY; (III) ANY CLAIM AGAINST OWNER,
ITS OFFICIALS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS,
AND ASSIGNS RELATED TO MANAGER'S MANAGEMENT OF THE FACILITY; AND
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(IV)ANY WRONGDOING, ACT, OR FAILURE TO ACT BY ANY EMPLOYEE, AGENT, OR
CONTRACTOR OF MANAGER. THE INTENT OF THIS PARAGRAPH IS THAT THE
MANAGER DEFEND, INDEMNIFY, AND HOLD HARMLESS THE OWNER TO THE
GREATEST EXTENT AUTHORIZED BY LAW.
(b) Indemnification by Owner. To the extent authorized by North Carolina
law, Owner agrees to defend, indemnify and hold harmless the Manager and its managers,
directors, officers, employees, agents, successors and assigns against any claims, causes
of action, costs, expenses (excluding legal fees and expenses) liabilities, or damages
suffered by those parties, arising out of or in connection with any (i) grossly negligent act
or omission, or willful misconduct, on the part of Owner or any of its employees or agents
in the performance of its obligations under this Agreement; or (ii) breach by Owner of any of
its representations, covenants or agreements made herein.
(c) Conditions to Indemnification. With respect to each separate matter
brought by any third party against which a party hereto ("Indemnitee") is indemnified by the
other party ("Indemnitor") under this Section, the Indemnitor shall be responsible, at its
sole cost and expense, for controlling, litigating, defending and otherwise attempting to
resolve any proceeding, claim, or cause of action underlying such matter, except that (i)
the Indemnitee may, at its option, participate in such defense or resolution at its expense
and through counsel of its choice; (ii) the Indemnitee may, at its option, assume control of
such defense or resolution if the Indemnitor does not promptly and diligently pursue such
defense or resolution, provided that the Indemnitor shall continue to be obligated to
indemnify the Indemnitee hereunder in connection therewith; and (iii) neither Indemnitor
nor Indemnitee shall agree to any settlement without the other party's prior written consent
(which shall not be unreasonably withheld or delayed). In any event, Indemnitor and
Indemnitee shall in good faith cooperate with each other and their respective counsel with
respect to all such actions or proceedings, at the Indemnitor's sole expense. With respect
to each and every matter with respect to which any indemnification may be sought
hereunder, upon receiving notice pertaining to such matter, Indemnitee shall promptly (and
in no event more than fifteen (15) days after any third-party litigation is commenced
asserting such claim) give reasonably detailed written notice to the Indemnitor of the nature
of such matter and the amount demanded or claimed in connection therewith.
(d) Survival. The obligations of the parties contained in this Section
shall survive the termination or expiration of this Agreement.
ARTICLE 13 MISCELLANEOUS
13.1 Relationship. Manager and Owner shall not be construed as joint
venturers or general partners of each other, and neither shall have the power to bind or
obligate the other party except as set forth in this Agreement. Manager understands and
agrees that the relationship to Owner is that of independent contractor, and that it will
not represent to anyone that its relationship to Owner is other than that of independent
contractor. Nothing herein shall deprive or otherwise affect the right of either party to
own, invest in, manage or operate property, or to conduct business activities, which are
24
competitive with the business of the Facility. Manager covenants and agrees that even
though it may have a management responsibility for other similar properties, which from
"time to time" may be competitive with the Facility, Manager shall always represent the
Facility fairly and deal with Owner on an equitable basis.
Manager has the right to display its brand and marks in the Facility and on the
Facility's marketing materials in a manner that does not exceed 10% of the overall
impression of the Facility's own brand. Manager has the right to use and store the
database and contact information of the customers of the Facility. Manager will provide
from time-to-time images and other marketing material that it owns and holds the license
to for use by the Facility. Manager agrees Owner may use those images and that material
at Owner's discretion. Manager has the right to use images and marks from the Facility
for its own marketing and promotions material without restriction while the Manager is
engaged to operate the Facility.
13.2 Assignment. This Agreement shall not be assigned by either party without
the express written consent of the non-assigning party. Any such assignment made
without proper consent shall be deemed void.
13.3 Benefits and Obligations. The covenants and agreements herein contained
shall inure to the benefit of and be binding upon the parties hereto and their respective
heirs, executors, successors, and assigns. There are no third-party beneficiaries of this
Agreement and nothing in this Agreement, express or implied, is intended to confer on any
person other than the parties hereto (and their respective successors, heirs and permitted
assigns), any rights, remedies, or obligations.
13.4 Fees for Legal Advice. Except as otherwise provided in Section 12.3 each
party is responsible for its own legal fees and costs.
13.5 Fees for Other Professional Services. Unless otherwise provided for
herein each party is responsible for its own professional services fees and costs.
13.6 Building Com lip ance. Manager shall notify Owner promptly, or forward to
Owner promptly, any complaints, warnings, notices, or summonses received by Manager
relating to building code compliance or related matters. Manager and Owner shall
promptly determine an appropriate response. Owner represents that to the best of
Owner's knowledge, the Facility and all Capital Equipment contained therein comply with
all applicable building codes.
13.7 Notices. Except as otherwise provided herein, all notices provided for in this
Agreement shall be in writing and served by registered or certified mail, return receipt
requested, postage prepaid, at the following addresses until such time as written notice of
a change of address is given to the other party. Notice to Manager is effective upon receipt
by the Manager or the recipient at any alternate or copied address. The effective date of the
notice is the delivery date shown on the receipt.
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If to Owner:
Orange County
Attention: County Manager
P.O. Box 8181
Hillsborough, NC 27278
With a copy to:
Orange County Attorney
P.O. Box 8181
Hillsborough, NC 27278
If to Manager:
With a copy to:
13.8 Owner Responsible for Payments. Upon termination of or withdrawal
from this Agreement, Owner shall assume the obligations of any contract or outstanding bill
executed by Manager under this Agreement for and on behalf of Owner when Manager was
instructed in writing by Owner to enter such contract or incur such outstanding bill.
13.9 Headlines. All headings and subheadings employed within this
Agreement and in the accompanying schedules and exhibits are inserted only for
convenience and ease of reference and are not to be considered in the construction or
interpretation of any provision of this Agreement.
13.10 Event of Force Majeure. Any delays in the performance of any obligation
of Manager or Owner under this Agreement shall be excused to the extent that such
delays are caused by an Event of Force Majeure and any time periods required for
performance shall be extended accordingly.
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13.11 Rights Cumulative: No Waiver. No right or remedy herein conferred upon
or reserved to either of the parties to this Agreement 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 under this Agreement or now or hereafter legally
existing upon the occurrence of an event of default under this Agreement. The failure
of either party to this Agreement to insist at any time upon the strict observance or
performance of any of the provisions of this Agreement, or to exercise any right or remedy
or be construed as a waiver or relinquishment of such right or remedy with respect to
subsequent defaults. Every right and remedy given by this Agreement to the parties may be
exercised from "time to time" and as often as may be deemed expedient by those parties.
13.12 Applicable Law. This Agreement and its execution, interpretation, and
performance shall in all respects be controlled and governed by the laws of the State of
North Carolina. Any civil action or legal proceeding arising out of or relating to this
Agreement shall be brought in the General Court of Justice sitting in Orange County, North
Carolina. Each party consents to the sole and proper jurisdiction of such court in any such
civil action or legal proceeding and waives any objection to the laying of venue of any such
civil action or legal proceeding in such court. Binding arbitration may not be initiated by
either party, however, the parties may agree to nonbinding mediation of any dispute prior to
the bringing of a suit or action.
13.13 Acknowledgement. The parties hereto acknowledge that they have been
provided with a copy of this Agreement for review prior to signing it, that they have been
given the opportunity to review it prior to signing it, that they have been given the opportunity
to have this Agreement reviewed by their attorney prior to signing it, and that they understand
the purposes and effect of this Agreement.
13.14 Severability. If any provision or provisions of this Agreement shall be held
to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other
provisions of this Agreement, and this Agreement shall be construed and enforced as if
such provision or provisions had not been included.
13.15 Intellectual Property. Owner acknowledges that Manager has certain
intellectual property, trade secrets, and proprietary business techniques ("Intellectual
Property") that it will use on behalf of Owner to meet its obligations under this Agreement.
Owner acknowledges that it obtains no ownership rights whatsoever in any Intellectual
Property of Manager existing prior to the Effective Date and, upon termination of this
Agreement, Manager shall retain all rights to such Intellectual Property and remove such
Intellectual Property from the Facility and its operations. For purposes of this Agreement,
the term Intellectual Property shall include, without limitation, analytical tools and
documented procedures for forecasting, performance tracking, operational and marketing
systems that are unique to Manager's approach, staff training programs, program curriculum
and agendas, rights to certain discounts or programs that Manager has negotiated for
Manager-operated facilities, and other intellectual property which Manager has previously
introduced to the Facility and of which Manager is an author. The term Intellectual Property
also includes anything Manager makes, creates, or has made or created that is Facility-
27
specific including and not limited to photos, drawings, plans, specifications, and media the
ownership of all of which shall be and remain with Owner upon any termination of expiration
of this Agreement.
13.16 Youth Sports. All Orange County recreation facilities are operated
primarily to benefit Orange County residents at reasonable and affordable costs. Manager
may offer adult sports leagues and teams at the Facility. Additionally, the Manager shall
offer non-travel house/recreational level youth sports teams, leagues, matches, and access
at the Facility. Such house/recreational level youth sports teams and leagues shall include
practices and games, matches, festivals, and tournaments at substantially similar (as
determined by Owner) numbers, frequency, times, and costs to what has historically been
provided at the Facility. Priority will be given to introduction, grassroots development, and
growth of house/recreational level youth sports. Manager may offer travel level sports
teams; however, such travel level youth sports teams shall not supplant, or in any way
reduce Facility access and use by, house/recreational level youth sports teams and
leagues. Manager shall offer qualifying 80% Area Median Income (as determined by the
U.S. Department of Housing and Urban Development) Orange County families access to all
such house/recreational level and travel level teams through income based scholarships or
other substantially reduced cost programs. Manager may offer all abilities of youth sports
teams, leagues, and scholarship programs directly or through third party providers. All youth
sports shall cater primarily (greater than 50% of participants) to Orange County residents.
13.17 Owner Use, Access, and Control. Upon reasonable advance notice
Owner may, at Owner's discretion, direct Manager to provide access to the Facility by civic
and nonprofit organizations and, subject to the terms herein, may direct such access be
provided at reduced rates. Further, Owner shall have the right to use the Facility or any part
thereof, upon reasonable advance notice and subject to any pre-existing commitments, for
such purposes as meetings, seminars, training classes, or other uses without the payment
of any rental or use fee, except that direct out-of-pocket expenses incurred in connection
with such uses shall be paid by Owner. Owner reserves a right of entry and access and
may, at Owner's discretion, access the Facility to periodically inspect the Facility and
equipment, for maintenance, repairs, and to respond to emergency situations at any time.
Owner will make reasonable efforts to ensure such access does not impair Manager's
management of the Facility. Should Owner determine, in the sole discretion of the Orange
County Commissioners, that any of Manager's activities, programs, or projects are
detrimental to the residents of Orange County or detrimental to the access or use of the
Facility by the residents of Orange County the Owner may direct the Manager to discontinue
such activities, programs, or projects. This authority of Owner includes any and all activities,
programs, and projects, including, but not limited to, those specifically authorized by this
Agreement. Upon notice of such direction, the Manager shall discontinue the activity,
program, or project within a reasonable time as determined by Owner.
13.18 Passmore Senior Center and Soltys Place. The Facility is part of the
larger structure and facility owned by Owner that includes the Passmore Senior Center,
situated at 103 Meadowlands Drive, Hillsborough, North Carolina and Senior Care of
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Orange County, Inc., DBA Soltys Place situated at 105 Meadowlands Drive, Hillsborough,
North Carolina. Manager shall have no responsibility or authority with regard to these two
facilities. During events at the Facility the Manager shall ensure that sufficient parking for,
and access, ingress, and egress to and from the Passmore Senior Center and Soltys Place
are reasonably maintained and clear of obstruction. If maintenance or repair projects
related to the Passmore Senior Center or Soltys Place require access, ingress, and egress
in, over, under, or through the Facility or Facility parking areas Manager shall fully cooperate
with Owner and Owner's agents, employees, and contractors allowing such access, ingress,
and, egress. The entire facility is as generally depicted in Exhibit D. The larger structure
and facility shares one meter for each utility. Manager shall pay all billed utilities and be
reimbursed, subject to Owner's approval, for the amounts of utilities utilized by the
Passmore Senior Center and Soltys Place.
13.19 Hazardous Substances. Manager shall not cause or permit any
Hazardous Substance (defined below) to be used, stored, generated or disposed of on or
in the Facility. If Hazardous Substances are unlawfully used, stored, generated or disposed
of on or in the Facility, or if the Facility becomes contaminated in any manner for which
Manager is responsible or liable, Manager shall, and as provided herein, indemnify and hold
harmless Owner from any and all claims, damages, fines, judgments, penalties, costs,
liabilities or Losses (including, without limitation, a decrease in value of the Facility or
improvements, damages due to loss or restriction of rentable or usable space, or any
damages due to adverse impact on marketing of the space, and any and all sums paid for
settlement of claims, attorneys' fees, consultant and expert fees) arising during or after the
term hereof and arising as a result of such use, storage, generation, disposal, or
contamination by Manager. This indemnification includes, without limitation, any and all
costs incurred due to any investigation of the site, or any cleanup, removal, or restoration
mandated by a federal, state, or local agency or political subdivision. Without limitation of
the foregoing, if Manager causes or permits the presence of any Hazardous Substance on
the Facility premises and such results in contamination, Manager shall promptly, at its sole
expense, take any and all necessary actions to return the Facility premises to the condition
existing prior to the presence of any such Hazardous Substance on the Facility premises
after first obtaining Owner's approval for such remedial action. Pesticides, herbicides, and
insecticides shall not be used at the Facility without the express consent of Owner. Manager
agrees to comply with all applicable North Carolina and Federal Hazardous Substances and
materials laws in exercising its rights under this Agreement. Manager solely and exclusively
responsible for prohibiting the introduction of Hazardous Substances to the Facility by any
user, licensee, lessee, or tenant and upon the discovery of such introduced substances
shall take immediate action to remove such Hazardous Substances and the offending user,
licensee, lessee, or tenant from the Facility.
"Hazardous Substances" shall mean any hazardous wastes, hazardous
substances, hazardous constituents, toxic substances or related materials, any substance
which is toxic, ignitable, reactive, or corrosive, whether solids, liquids or gases, including
but not limited to substances defined as "hazardous waste", "extremely hazardous waste",
"hazardous substances," "toxic substances," "pollutants," "contaminants," "radioactive
29
materials," or other similar designations in, or otherwise subject to regulation under, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986 (CERCLA), 42
U.S.C. §§ 9601 et seq.; the Toxic Substance Control Act (TSCA), 15 U.S.C. §§ 2601 et
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. §§ 1802 et seq.; the Resource
Conservation and Recovery Act (RCRA), 42 U.S.C. §§ 9601 et seq.; The Clean Water Act
(CWA), 33 U.S.C. §§ 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300(f) et seq.;
the Clean Air Act (CAA), 42 U.S.C. §§ 7401 et seq.; all as amended; any law, rule, or
regulation, federal, state or local, now or hereafter in existence, governing or relating to the
creation, use, storage, sale, retention, or transportation of hazardous or toxic substances
and wastes; in the plans, rules, regulations or ordinances adopted, or other criteria and
guidelines promulgated pursuant to the preceding laws or other similar laws, regulations,
rule or ordinance now or hereafter in effect; and any other substances, constituents or
wastes subject to environmental regulations under any applicable federal, state or local law,
regulation or ordinance now or hereafter in effect. "Hazardous Substance" includes but is
not restricted to asbestos, polychlorobiphenyls ("PCBs"), and petroleum (in any form or
nature).
Hazardous Substances shall not include fuel maintained on site to fuel any
emergency power generators and other required equipment used at the Facility and shall
not include typical cleaning supplies, all of which Manager shall use, hold, and store in in
commercially reasonable quantities and conditions for use in accordance with label
instructions.
13.20 States of Emergency. During any state of emergency affecting Orange
County that is declared or proclaimed pursuant to the authority granted by Article 1A of
North Carolina General Statute 166A the Owner may suspend the terms of this Agreement,
restrict access to the Facility, and utilize the Facility as may be needed if it is determined by
Orange County officials that doing so will assist in addressing the cause or effects of the
emergency. Action taken pursuant to this section shall not constitute a default or breach of
the Agreement by either party.
13.21 Non-Appropriation. Manager acknowledges that Owner is a
governmental entity, and the validity of this Agreement is based upon the availability of
public funding under the authority of its statutory mandate. If public funds are unavailable
or not appropriated for the performance of Owner's obligations under this Agreement, then
this Agreement shall automatically expire without penalty to Owner immediately upon
written notice to Manager of the unavailability or non-appropriation of public funds. In the
event of a change in the Owner's statutory authority, mandate, or mandated functions, by
state or federal legislative or regulatory action or state or federal judicial action, which
adversely affects Owner's authority to continue its obligations under this Agreement, then
this Agreement shall automatically terminate without penalty to Owner upon written notice
to Manager of such limitation or change in Owner's legal authority.
13.22 Signatures. This Agreement together with any amendments or
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modifications may be executed electronically. All electronic signatures affixed hereto
evidence the consent of the parties to utilize electronic signatures and the intent of the
parties to comply with Article 11A and Article 40 of North Carolina General Statute Chapter
66.
13.23 Priority. In any dispute regarding the meaning of any term or provision
herein or of the responsibilities of the parties the parties may reference the Owner's Request
for Proposals together with attachments ("RFP"), the Facility Policy Manual, and the
Manager's Proposal together with attachments and such documents may inform the parties
regarding the dispute. In any conflict between the terms the priority of documents shall be
as follows: This Agreement, the Facility Policy Manual, the Owner's RFP together with
attachments, Manager's Proposal together with attachments.
13.24 Confidentiality. In connection with the performance of Manager's services
hereunder, the Owner acknowledges that Manager may provide the Owner and its
employees, agents, and contractors (including without limitation any engineering firm that
may be retained by Manager for the Facility) with Confidential Information as defined below.
In addition, in connection with the performance of the services hereunder, Manager may
provide to the Owner and its employees, agents, and contractors with materials that are
protected by copyright or trademark of Manager.
a. The Owner agrees that it shall keep secret and confidential any and all
Confidential Information already disclosed or to be disclosed to it by Manager which has
been designated as confidential in writing by Manager, and the Owner shall not divulge any
such Confidential Information, in whole or in part, to any third party except as is expressly
permitted below or as may be required by state or federal law.
b. "Confidential Information" means any and all information disclosed (orally, in
writing, by inspection, or otherwise) to the Owner by Manager pursuant to this Agreement
which information has been designated as confidential in writing by Manager. Such
information includes, and is limited to, The restrictions upon
confidentiality and use of Confidential Information set forth in this section do not apply to
information which the Owner can demonstrate was publicly available or lawfully in its
possession at the time of its disclosure to the Owner by Manager.
c. With respect to any information or material which is protected by copyright or
trademark of Manager, no part of such materials may be reproduced, stored in a data base
and retrieval system, or transmitted in any form or by any means graphic, electronic,
photocopying, recording, mechanical, or otherwise without the prior written permission of
Manager. Within thirty (30) days of the Effective Date Manager shall provide Owner with a
written listing of all such copyrighted and trademarked information and materials.
d. The Owner agrees that the provisions of this section are reasonable and necessary
to protect the interests of Manager and that Manager's remedies at law for a breach of any
of the provisions of this section are inadequate and that, in connection with any such breach,
31
Manager will be entitled, as its sole remedy whether at law or in equity, to temporary and
permanent injunctive relief without the necessity of proving actual damage or immediate or
irreparable harm, or of the posting of a bond. Notwithstanding the foregoing, if a court of
competent jurisdiction shall determine any of the provisions of this section to be
unreasonable, Manager agrees to such provisions will be of no effect.
e. The Owner acknowledges the Confidential Information claim of Manager
contained in this section. If a public records request seeks Confidential Information the
Owner agrees, consistent with the public records law of North Carolina, to assert that claim.
The Owner and Manager acknowledge that the Owner is a local government and a political
subdivision of the State of North Carolina and as such is subject to the Public Records Laws
of the State of North Carolina. The Owner's agreement contained in this section to assert
this claim does not require the Owner to violate any such laws and does not require the
Owner to litigate and pay for the litigation of the right to withhold access to or copies of such
claimed Confidential Information. The Owner agrees to notify Manager of any such request
it receives under the Public Records Laws of North Carolina for access, copies, or use of
the Confidential Information and agrees that Manager may, at its election and expense,
direct its attorneys to defend the claim in the Owner's name provided Manager agrees in
writing, before undertaking such a defense, to indemnify and hold the Owner, its officials,
officers, and employees, harmless from any consequence of the defense. Nothing in this
section requires the Owner, its officials, officers, or employees, to subject itself and
themselves to criminal or civil liability and each may independently act in good faith to
protect itself and themselves from criminal and civil liability. The Manager is fully and solely
responsible for all money damages, litigation fees and costs, and legal fees and costs
resulting from the defense against producing Confidential Information. The Owner agrees,
in good faith, to take all reasonable steps to prevent the unauthorized access, use, or
transfer of the Confidential Information.
13.25 Entire Agreement. This Agreement, including any specified attachments
or exhibits, constitutes the entire agreement between Owner and Manager with respect to
the management and operation of the Facility and supersedes and replaces any previous
management agreements entered into or negotiated between Owner and Manager relating
to the Facility covered by this Agreement. Except as otherwise provided herein, no change
to this Agreement shall be valid unless made by supplemental written agreement executed
and approved by Owner and Manager. Except as otherwise provided herein, any
amendments, additions, or deletions to this Agreement shall be null and void unless
approved by Owner and Manager in writing. Each party to this Agreement hereby
acknowledges and agrees that the other party has made no warranties, representations,
covenants, or agreements, express or implied, to such party, other than those expressly set
forth herein, and that each party, in entering into and executing this Agreement, has relied
upon no warranties, representations, covenants, or agreements, express or implied, to such
party, other than those expressly set forth herein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
32
as of the day and year first above written.
For Orange County For
By: By:
Orange County Manager
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EXHIBIT A MANAGEMENT SERVICES
During the Term, Manager will be responsible for all aspects of oversight for the staffing,
marketing, maintenance, event management, sponsorship and advertising sales, and day-
to-day operations of the Owner's Facility. In addition to all other obligations, responsibilities,
and requirements of this Agreement the Manager shall have the following specific
responsibilities:
1. Provide a full-time on-site General Manager and other employees as
required to meet the operational needs of the Facility.
2. Produce an annual plan pursuant to Section 8.13. Owner and the Manager
agree to use good faith efforts to resolve any differences regarding the annual plan and
any portion thereof so that agreement on the annual plan can be reached as soon as
possible after the date Manager submits the annual plan.
3. Present the then current staffing, the incentive bonus plan for employees, and
all salaries and payments to employees through the Disbursement Account in the Annual
Operations Budget. It is understood by all parties that reductions and additions to various
positions may be made at Manager's discretion throughout the year due to business tempo,
trends, opportunities, and budget requirements. If a change is recommended that will
require expense above the budgeted percentage of labor, the change will be submitted for
Owner 's review and approval by Owner via reforecast and revised annual plan or budget.
4. Develop, install, and maintain reasonably appropriate accounting, operating,
and administrative controls governing the financial aspects of the Facility, such controls to
be consistent with generally accepted accounting principles in the U.S and the Facility
financial policy described in Exhibit C.
5. Establish, at a banking institution or institutions subject to the approval of
Owner, the Operating Account and Disbursement Account as provided in this Agreement.
6. Subject to the Manager's written notices to Owner as herein, Owner
acknowledges that it is solely responsible for all Operating Expenses and capital
expenditures required for or on behalf of the Facility provided that such Operating Expenses
and capital expenditures are made in accordance with the terms of this Agreement.
7. Administer relationships with all subcontractors, concessionaires, and all other
contracting parties to pre-existing agreements, assume responsibility for any and all
negotiations, renewals, and extensions relating to any pre-existing agreements, and enforce
any such pre-existing agreements.
8. Negotiate, execute, deliver, and administer any and all licenses, occupancy
agreements, rental agreements, booking commitments, advertising agreements, concession
agreements, supplier agreements, service contracts (including without limitation, contracts for
cleaning decorating and set-up, snow removal, general maintenance and maintenance and
34
inspection of all systems, elevators, equipment, fire control panel and other safety equipment,
staffing and personnel needs, and other services which are necessary or appropriate) and all
other contracts and agreements in connection with the management, promotion and
operation of the Facility, provided that if any such license, agreement, commitment, or
contract other than those involving the license, lease, or rental of the Facility in the ordinary
course has a term that extends beyond the remaining Term, such license, agreement,
commitment or contract shall be approved and executed by Owner (which approval shall not
be unreasonably withheld) provided however, that if Manager desires to propose additional
services by Manager, Manager shall present all such proposals to the Owner for its approval.
9. To the extent Operating Revenues or funds supplied by Owner are made
available therefor, Manager shall maintain the Facility, provided that Owner shall be
responsible for undertaking all Capital Improvements and Capital Equipment purchases as
provided herein.
10. To the extent Operating Revenues or funds supplied by the Owner are made
available therefor, rent, lease, or purchase all equipment and maintenance supplies
necessary or appropriate for the operating and maintenance of the Facility, provided that the
Owner shall be responsible for undertaking all Capital Improvements and Capital Equipment
purchases as provided herein and Regulatory Approvals related thereto.
11. Establish and adjust membership fees and user fees consistent with the
Facility Policy Manual, prices, rates, and rate schedules for the aforesaid licenses,
agreements, and contracts and any other commitments relating to the Facility to be
negotiated by Manager in the course of its management, operation, and promotion of the
Facility. In determining such fees, prices, and rate schedules, Manager shall evaluate
comparable charges for similar goods and services at similar and competing facilities and
shall consult with the Owner about any adjustments to the fees, prices, and rate schedules at
the Facility to be made by Manager. Manager shall ensure membership and user fees for
Owner's employees remain discounted at similar rates and percentages as have been
historically maintained at the Facility. Such discounts shall be reflected and further described
in the Facility Policy Manual.
12. To the extent that Operating Revenues or funds supplied by the Owner are
made available therefor, pay, when due, all Operating Expenses from accounts established
as provided herein.
13. After consultation with the Owner, institute or defend, at reasonable expense
of the Owner, with counsel agreed to by both parties, such legal actions or proceedings as
Manager may deem necessary or appropriate in connection with the operation of the Facility,
including, without limitation, to collect charges, rents, or other revenues due or to cancel,
terminate, or sue for damages under, any license, use, advertisement, or concession
agreement for the breach thereof or default thereunder by any licensee, user, advertiser, or
concessionaire at the Facility. Owner must agree to any such legal actions or proceedings in
writing.
35
14. In consultation with the Owner, shall operate the Facility using any and all
reasonable energy conservation devices, techniques, and policies.
15. Operate the Facility in conformance with Orange County's recycling policies
and procedures as communicated by the Owner.
16. Maintain a master set of all booking records and schedules for the Facility.
17. Provide day-to-day administrative services in support of its management
activities pursuant to approved budgets and annual plans described herein, including, but not
limited to, the acquisition of services, equipment, supplies and facilities, internal budgeting
and accounting, maintenance and property management, personnel management, record-
keeping, collections and billing, and similar services.
18. Engage in such advertising, solicitation, and promotional activities as Manager
deems necessary or appropriate to develop the potential of the Facility and the cultivation of
broad community support (including without limitation selling advertising inventory and
securing product rights for the Facility). Manager shall work with the Orange County
Economic Development Commission and Visitor's Bureau, Chamber of Commerce, alliance
of business groups and government groups as designated by Owner to market the Facility
for conventions, trade shows and public entertainment shows. In connection with its activities
under this Agreement, including without limitation advertising relating to the Facility, Manager
shall be permitted to use the terms "Orange County Sportsplex" and logos for such names in
its advertising, subject to the approval of the Owner.
19. Market and secure new Commercial Rights sales for the Facility.
20. As set forth in the Agreement, submit all budgets, annual plans, financial
reports, and other reports detailing Manager's activities regarding the Facility to the Owner in
a timely manner.
21. Within thirty days of the Effective Date, and bi-annually thereafter, provide
Owner with an up-to-date Schedule of Existing Agreements showing all current Service
Contracts.
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EXHIBIT B MANAGER COMPENSATION
During the Term of this Agreement, Manager shall receive compensation from the
Owner subject to annual appropriation according to the following:
t. Base Management Fee
I. Base Management Fee. Beginning and continuing thereafter on the first
day of each month throughout the remainder of the Term, Owner shall pay a monthly
fee to Manager (the "Base Management Fee") in equal monthly installments of
per month. Each installment will be due and payable on the first day
of each successive month. The Base Management Fee shall not exceed
per Fiscal Year.
37
EXHIBIT C APPLICABLE OWNER POLICIES
The Orange County Living Wage Policy (available at
https://www.orangecountync.gov/744/Contracts)
The Orange County Non-discrimination/Retaliation Policy (available at
https://www.orangecountync.gov/744/Contracts)
Orange County's policy that its recreation facilities shall primarily benefit the
residents of Orange County at the lowest reasonable costs
The Orange County Board of Health Smoke Free Public Places Rule (available at
https://www.orangecountync.gov/460/Smoke-Free-Public-Place)
The Orange County Sportsplex Financial Policy (the Facility financial policy,
available at https://www.orangecountync.gov/744/Contracts)
38
EXHIBIT D DIAGRAM OF FACILITY, ADJOINING FACILITIES, AND PARKING
39
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