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MANAGEMENT AGREEMENT
Fullerton Municipal Golf Course
THIS MANAGEMENT AGREEMENT (“Agreement”) is made and entered into as of the 1st day of December, 2025 (“Effective Date”) by and between the City of Fullerton, a California Municipal Corporation (“City”), and Fullerton Golf, LLC , a California Corporation (“Contractor”). City and Contractor are at times collectively referred to as the “Parties.”
RECITALS
WHEREAS, the City leases that certain real property located in the City of Fullerton, State of California, commonly known as the Brea Dam Flood Control Basin (Lease No. DACW09- 1- 68-22) from the United States Army Corps of Engineers for public park and recr eation purposes, which includes the Fullerton Municipal Golf Course; and WHEREAS, by Supplemental Agreement No. 4 to the Brea Dam Flood Control Basin Lease dated June 26, 2001, the term of the lease was extended to June 26, 2051; and WHEREAS, the City entered into a lease agreement (“Prior Lease”) with American Golf Corporation in from 1979 to 2025 for the operation of the Fullerton Municipal Golf Course an 18- hole golf course and amenities including a driving range, clubhouse, cart storage facility, maintenance facility, and other buildings, structures and improvements related thereto located at 2700 N. Harbor Blvd., in the Brea Dam Flood Control Basin, (hereinafter the “Facility”) and more particularly described in Exhibit “A” attached hereto, for the purposes of operating and managing a public golf course; and
WHEREAS, City is in need of a professional manager of the complete organization of the Facility, including, but not limited to, accounting and administration of all receipts and disbursements, marketing and sales, supervision of all employees , procurement of all insurance and maintenance of the Facility and equipment.
WHEREAS, City has solicited and received a proposal from Contractor, has reviewed the previous relevant experience and evaluated the expertise of Contractor , and desires to retain Contractor to render services under the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the promises and the respective and mutual agreements contained herein, said parties hereby agree as follows:
ARTICLE 1 - DEFINITIONS
As used in this Agreement, the following terms shall have the respective meanings indicated below:
Agreement means this Management Agreement.
Annual Budget Plan means the document as described in Section 3.3.1.
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Affiliate means any and all corporations, partnerships, trusts, limited liability companies and other entities directly or indirectly controlled by, controlling, or subject to direct or indirect common control of an entity or person.
Capital Improvements means any alteration or addition to, or rebuilding or renovation of, the Facility, the cost of which is not charged to property operation and maintenance.
Cash Register Bank or Petty Cash Funds, as described in Section 6.1.1.
City means City of Fullerton, a California Municipality or any successor to City’s interest under this Agreement.
City Account shall have the meaning described in Section 6.1.1 of this Agreement.
Commencement Date means the date upon which Contractor assumes its obligations under this Agreement to manage and operate the Facility, which date shall be December 1, 2025.
Comparable Facilities means other municipal golf course facilities located in Orange County, charging comparable green fees, with a comparable level of maintenance standards and a comparable quality of improvements and amenities.
Compensation means the direct salaries and wages paid to or accruing for the benefit of any manager or other employee, together with all fringe benefits payable to or accruing for the benefit of such manager or other employee, including employer’s contribution under t he Federal Insurance Contributions Act (“FICA”); unemployment compensation, or other employment taxes; pension fund contributions, worker’s compensation, group life and accident and health insurance premiums as well as any payments made by Cont ractor which fall within the deductible amounts of any such policies; retirement; disability; and other similar benefits.
Contract Administrator shall have the meaning set forth in Section 7.2 of this Agreement.
CPI means The United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for all urban consumers (all items for the Los Angeles -Riverside-Orange County metropolitan area on the basis of 1982 - 1984 equals 100). Notwithstanding the foregoing, if the format or components of the CPI are materially changed after the date hereof, then Contractor shall substitute an index which is published by the Bureau of Labor Statistics or similar agency and which is most nearly equivalent to the CPI in effect as of the date hereof. The substitute index shall be used to calculate the increase in the Base Line NOI unless City objects to such index in writing within fifteen (15) days after the date Contractor notifies City of Contractor’s substitute index. If City objects to the substitute index, then Contractor and City shall submit the selection of the substitute index for binding arbitration in accordance with the rules and regulations of the American Arbitration Association at its office closest to the Facility. The costs of arbitration shall be borne equally by City and Contractor.
Effective Date means the date of the Management Agreement.
Facility has the meaning set forth in the third recital of this Agreement.
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Facility Accounts means a bank account established by Contractor, for the sole purpose of the Facility articulated in the Agreement as set forth in Section 6.1 Furnishings and Equipment means all furniture, furnishings, trade fixtures, apparatus and equipment, including golf course maintenance vehicles and equipment, golf carts, driving range pickers and pullers, mats, buckets, cash registers, rental golf clubs, ball washers, benches, uniforms, and other personal property used in or held in storage for use in the operation of the Facility, other than Operating Inventory and fixtures attached to and forming part of the Improvements.
Gross Revenues means all money received as a result of the operation of the Facility and the sale of goods and services at the Facility, determined in accordance with generally accepted accounting principles consistently applied. Gross Revenues shall include, but are not limited to, all green fees; annual fees; rental fees for golf carts, golf clubs and bags, and other rental items; range balls; reservation fees; fees for golf handicap service; food and beverage sales; liquor sales; revenue generated from s pace rentals and from event -related meetings, banquets, parties, tournaments, and other group gatherings; merchandise sales; golf instruction fees; revenues from golf schools; gross receipts received by licensees or concessionaires (if applicable); proceeds from insurance; any amount received by Contractor in connection with any claim, demand, or lawsuit; and all other revenues generated by the Facility. Gross Revenues shall be reduced by any cash refunds or credits allowed on returns by purchasers. Gross R evenues shall not include the following: (a) sales taxes, excise taxes, gross receipts taxes and other similar taxes now or later imposed upon the sale of food, beverages, merchandise or services and paid to the appropriate taxing authority, whether added to or included in the selling price; (b) the amount of any gratuities to Facility employees, or service charges added to customer billings which represent gratuities to Facility employees; (c) proceeds of any borrowings by Contractor or City; (d) any initial operating funds and funds subsequently provided by City to satisfy the working capital needs of the Facility, if any; (e) any operating funds provided or authorized by City to Contractor to subsidize and/or support ongoing operations in the event revenu es do not meet expenses; and (f) refunds for the value of merchandise, Supplies or equipment returned to shippers, suppliers or manufacturers.
Impositions means all taxes, assessments, water, sewer or other similar rents, rates and charges, levies, license fees, permit fees, inspection fees and other authorization fees and charges, which at any time may be assessed, levied, confirmed or imposed on the Facil ity or the operation of the Facility (excluding federal and state taxes imposed on the income earned by Contractor or its employees hereunder).
Improvements means the buildings, structures (surface and subsurface) and other improvements now or hereafter located on the Land.
Insurance Requirements means all requirements of each insurance policy, and all orders, rules, regulations and other requirements of the National Board of Fire Underwriters (or any other body exercising similar functions) applicable to the Facility or the operation of the Facil ity; this term shall not, however, include recommendations of insurance carriers.
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Land means the parcel or parcels of land described in Exhibit “A” attached to this Agreement and incorporated herein by this reference.
Legal Requirements means all laws, statutes, ordinances, orders, rules, regulations, permits, licenses, authorizations, directives and requirements of all governments and governmental authorities, which now or hereafter may be applicable to the Premises and the operation of the Premises.
Major Capital Improvements has the meaning set forth in Article 10.
Management Fee has the meaning set forth in Section 5.1.
Net Operating Income means Gross Revenues from the Facility, minus all operating expenses which are attributable (in accordance with generally accepted accounting principles) to the use and operation of the Facility, including, without limitation: employee costs, operating expenses, Centralized Services, the Management Fees, expense reimbursements, all insurance costs related to the operation of the Courses, personal property taxes (limited to an amount allocable to the Facility), and golf cart leases and o perating costs; provided, however, such expenses shall not include any charges for amortization, depreciation, capital expenditures, debt service, and State and Federal income taxes, overhead allocations, or any Incentive Management Fees paid to Contractor hereunder.
Operating Period means the period beginning on the Commencement Date and ending on the earlier to occur of (a) the last day of the term of this Agreement, or (b) if this Agreement is terminated pursuant to Article 7 below, the effective date of such termination (“Last Ope rating Day”).
Operating Inventory means consumable items used in or held in storage for use in the operation of the Facility, including scorecards and cart tickets, driving range balls, professional shop merchandise, food and beverages, paper and plastic ware, fuel, cleaning materials, fertilizers, pesticides, linens, glassware, sanitation supplies and other similar items.
Operating Year means the calendar year, from January 1
st to December 31st, except that (a)
the first Operating Year shall be the period beginning on the Commencement Date and ending on the following December 31, and (b) the last Operating Year shall be the period beginning on January 1 of such year and ending on the Last Operating Day.
Other Contractor Facilities means all other golf course facilities within the United States owned, leased and/or operated, directly or indirectly, by Contractor.
Premises means a collective term for the Land and Improvements and City’s interest in the Land and Improvements, and any greater estate or interest hereafter acquired, together with all entrances, exits, rights of ingress and egress, easements and appurtenances belonging or pertaining to the Premises.
Special Services has the meaning set forth in Section 3.4.
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ARTICLE 2 - TERM OF AGREEMENT
2.1 Term. The term of this Agreement shall commence on the Effective Date as shown on Page One (1) of this Agreement and shall terminate on December 1, 2030, (the “Initial Term”) unless terminated sooner pursuant to Article 8 of this Agreement. The term of this Agreement may be extended for two (2) additional five (5) year terms (each a “Renewal Term”) with the extensions to commence upon the expiration of the Initial Term or any Renewal Term, at City’s sole discretion (hereinafter the phrases “Initial Term” and “Renewal Term,” if any shall be collectively referred to as the “Term”). The Contract Administrator may extend this Agreement on behalf of City.
2.2 Time of Performance. Time is of the essence in the performance of the Agreement and the Services shall be performed to completion in a diligent and timely manner. The failure by Contractor to perform the Services in a diligent and timely manner may result in termination of the Agreement by City.
ARTICLE 3 – SERVICES TO BE PROVIDED BY CONTRACTOR; OPERATING
RESPONSIBILITIES
3.1 Services. Subject to the terms and conditions set forth in the Agreement, Contractor shall provide to City all labor, materials, tools, equipment, services, permits, transportation, and incidental and customary work necessary to fully and adequately supply the services necessary for the efficient operation of the Facility (“Services”). The Services are more particularly described in Fullerton’s Request for Proposal (“RFP”) No. 2526-RFP-002 and Contractor’s Proposal dated August 7, 2025, both attached hereto as Exhibit “B” and incorporated herein by this reference.
3.2 Grant to Contractor. Except as otherwise expressly provided in this Agreement, City grants to Contractor the right to manage and operate the Facility pursuant to the terms of this Agreement, and Contractor agrees it will manage and operate the Facility in accordance with the approved Annual Budget Plan and in a manner comparable to and consistent with the management and operational practices of Comparable Facilities to the extent established in the Annual Budget Plan and approved by City ( except as otherwise set forth in this Agreement) . Contractor shall perform its services in a professional, timely and diligent manner. Without in any way limiting Contractor’s right to manage and operate the Facility in accordance with the terms of this Agreement, Contractor, subject to the approval of City and in accordance with the approved Annual Budget Plan and terms of this Agreement, shall have the authority and responsibility to: (a) implement each approved Annual Budget Plan; (b) determine, establish, and implement the policies, standards, and schedules for the operation and maintenance of the Facility and all matters affecting customer relations; (c) hire, train, and supervise the general manager, course superintendent, and all Facility employees; (d) supervise and direct all phases of advertising, sales, marketing and business promotion for the Facility; and (e) establish accounting and payroll procedures and functions for the Facility. To the extent the foregoing duties are discussed, detailed, or included in the Annual Budget Plan, Contractor will carry out such duties consistent therewith.
City agrees it will reasonably cooperate with Contractor to permit and assist Contractor to carry out its duties under this Agreement , provided Contractor obtains reasonably advance notice for such cooperation and assistance. Contractor shall work with, and obtain any necessary approvals from, City’s Contract Administrator.
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3.3 Annual Budget Plans.
3.3.1 Preparation. Contractor will submit to City ’s Contract Administrator on an annual b asis at least sixty (60) days in advance of each Operating Year (except for the first Operating Year for which the Annual Budget Plan (transitional) shall be submitted thirty (30) days prior to the Commencement or Effective Date) an “Annual Budget Plan” consisting of (a) a budget which shall include for the ensuing year (or portion thereof) bona fide good faith estimates of all projected revenues of the Facility (broken down on a line item basis) and the projected expenditures for (i) property operation and maintenance, (ii) Capital Improvements which constitute normal repairs, replacements, and alterations, (iii) Furnishings and Equipment and Operating Inventory, (iv) advertising, sales, and business promotion, (v) emergency expenditures, and (vi ) employee Compensation and (b) an operating/business plan for the Facility setting forth in detail a marketing and promotions plan, a schedule of proposed golf charges, an operating schedule (which shall include hours of operation and staffing levels) and a maintenance plan. City acknowledges that the budget will not constitute a guarantee of the actual revenues or expenses of operating the Facility.
The parties understand that, as provided in Article 11, budgets for Major Capital Improvements will be treated separately and will not form part of the Annual Plans.
3.3.2 Approvals. Each Annual Budget Plan shall be subject to the prior written approval of City’s Contract Administrator, and the new Annual Budget Plan for a given Operating Year shall not become effective without such approval, which approval shall not be unreasonably withheld. It is contemplated by the parties that the Annual Budget Plan will be agreed upon by the parties not later than thirty (30) days following delivery of the Annual Budget Plan by Contractor to City. If City fails to either approve the Annual Budget Plan within said 30- day period or to advise Contractor of its objections to the Annual Budget Plan within such period, then City shall be deemed to have approved the Annual Budget Plan as submitted. In the event of a dispute with regard to an Annual Budget Plan, the parties shall use good faith efforts to resolve such dispute.
Pending the resolution of such dispute, Contractor shall continue to manage and operate the Facility in accordance with the standards set forth in this Agreement and the most recent approved Annual Budget Plan, as it may have been mutually amended by the parties during the pr eceding year in accordance with this Agreement , at a level of expenditures comparable to those of the preceding year subject to reasonable increases in Operating Expenses (as defined herein) requested by Contractor due to (a) increases in the number of guests using the Facility, (b) increases in Gross Revenues (as defined herein), or (c) other matters beyond the reasonable control of Contractor (e.g., without limitation, increases in utility charges, etc.), plus an amount equal to the increase, if any, in t he CPI during the prior Operating Year. Once approved, Contractor may propose amendments or revisions to the Annual Budget Plan to take into consideration variables or events that did not exist, or could not be anticipated by Contractor at the time the Annual Budget Plan was prepared. Any such proposed amendments or revisions shall be submitted in writing and shall be subject to City’s prior approval, which approval shall not be unreasonably withheld or delayed.
3.3.3 Compliance. Contractor shall comply, to the extent reasonably and commercially practicable, with the applicable Annual Budget Plan, and shall not deviate by more than ten percent (10%) from the Annual Budget Plan without City’s prior consent, which consent will not be unreasonably withheld.
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3.3.4. Emergency Expenditures. Notwithstanding anything in this Agreement to the contrary, in the event of an emergency which arises by act of God or any event or act beyond the control of Contractor , or a dangerous condition exists that requires immediate repair, or a governmental directive or order is issued to City, Contractor is authorized to take such actions as may in its reasonable discretion be required (including expending any funds reasonably necessary to respond to such condition or event); provided, however, that if an emergency occurs which requires funds not otherwise budgeted for in the Emergency Expenditures of the annual budget, Contractor shall immediately notify City of the occurrenc e of any of the situations referenced herein and the action Contractor proposes to take, or has taken (including the amount of any expenditures). If Contractor is unable to contact City, or circumstances require immediate action, then Contractor shall be authorized to make reasonable emergency expenditures which in the aggregate do not exceed the amount budgeted therefore in the Annual Budget Plan. Provided that an emergency expenditure was justified, the line item in the Annual Budget Plan for emergency expenditures shall be deemed increased by the amount of the emergency expenditures made by Contractor so that at all times, the line item amount for emergency expenditures shall remain at the approved level.
3.4 Technical Assistance Services . During the Operating Period, Contractor will provide, as needed, certain supervisory and consulting services to the Facility from Contractor ’s regional and corporate technical assistance services program, including business planning and budgeting, Capital Improvement planning, training, security, marketing and sales, central purchasing, merchandising, food and beverage, maintenance, human resources, legal compliance, financial reporting, and accounting. Except as provided in Section 3.5 below, these services will be provided by Contractor without any additional charge to City.
3.5 Special Consulting Services. In addition to the services described in Section 3.4 above, upon City’s prior written request and approval, Contractor may provide to the Facility such additional consulting services not contemplated by this Agreement which would not otherwise be performed in the ordinary course of day-to-day operations of the Facility, including but not limited to special legal consultation, (as necessary and as approved by City in advance), construction and design consultation and construction supervision related to Major Capital Improvements (“Special Services”). City shall reimburse Contractor for all costs and expenses associated with Contractor’s providing such Special Services which shall be the total of (i) the actual cost of labor, (ii) the actual cost of supplies and materials, and (iii) all related travel, subsistence and similar expenses incurred by Contractor’s personnel associated with the performance of the Special Services, but not to exceed the budget approved by the City as set forth in the immediately succeeding sentence. Upon City’s request for the performance of a Special Services project, Contractor shall prepare a scope of work and budget and submit to City for review and approval. Contractor shall not commence any Special Services project without City’s prior approval.
3.6 Responsibilities of Contractor. Without in any way limiting Contractor’s right and obligation to manage and operate the Facility in accordance with and subject to the Annual Budget Plans, Contractor shall, in its own name perform the following services or cause the same to be performed for the Facility:
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a) Enter into such contracts for the furnishing of utilities and maintenance, and other services to the Facility in Contractor’s name, provided however that (i) any such contract which is for a term greater than twelve (12) months and for an aggregate cost in excess of five thousand dollars ($5,000.00) and is not otherwise approved via the Annual Budget Plan shall be approved in advance by City, and (ii) in the event of a termination of this Agreement for any reason, City or City’s designee shall assume any such contracts which are then in effect and unexpired at the time of such termina tion and indemnity and hold harmless Contra ctor from and against any additional obligations thereunder which may have accrued after termination of this Agreement; b) make all repairs, decorations, revisions, alterations, and improvements to the Facility as shall be reasonably necessary for maintenance of the Facility in good and sanitary order, condition and repair;
c) incur such expenses, as Operating Expenses of the Project, as shall be necessary for the operation and maintenance of the Facility to the quality standards contemplated by this Agreement and the Annual Budget Plans, including without limitation incurring lease expenses for Furnishings and Equipment and costs for Operating Inventory; expenses for insurance premiums in accordance with insurance coverage required hereunder, and payment of attorneys’ fees and other costs of legal compliance and/or legal settlement as approved by City’s Contract Administrator in advance;
d) maintain a level of Operating Inventory necessary to satisfy the quality standards contemplated by this Agreement and the Annual Budget Plans and to supply the needs of the Facility and its customers;
e) apply for, and use its commercially reasonable best efforts to obtain and maintain, all licenses and permits reasonably required by City (or by applicable Legal Requirements, as defined herein) in connection with the operation and management of the Facility in the Contractor’s name or in the name of an Affiliate of Contractor ; and City agrees to execute any and all applications and such other documents as shall be reasonably required and to otherwise cooperate, in all reasonable respects, with Contractor in the application for, and obtaining and maintenance of, such licenses and permits; and Contractor agrees that it shall maintain a City of Fullerton business license during the Term of this Agreement; f) use its best efforts to do, or cause to be done, all such acts and things in and about the Facility as shall be reasonably necessary to comply with all Insurance requirements and Legal Requirements, and to discharge any lien, encumbrance, or other charge on the Facility; including, with City’s prior written consent, hiring legal representation and paying attorneys’ fees, as an Operating Expense of the Facility, as necessary to comply with any Legal Requirements and defend the Facility against legal claims; and
g) pay all Impositions and insurance premiums when due, if City requests in writing that Contractor assume responsibility on City’s behalf for the payment of such Impositions and insurance premiums; and
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h) maintain a method of accounting in accordance with generally accepted accounting principles consistently applied (“GAAP”) which accurately reflects the Gross Revenues and Operating Expenses and disbursements of Contractor in connection with the Facility’s operations.
3.7 Personnel.
3.7.1 General. Subject to the Annual Budget Plan and the terms of this Agreement, Contractor shall employ all of the employees of the Facility, and all such employees shall be deemed employees of Contractor and not employees of City or joint employees of City and Contractor. Contractor shall recruit, hire, train, discharge, promote and supervise the management staff of the Facility (i.e., the general manager or course manager, the assistant managers, the course superintendent, department heads and other key personnel), and Contractor shall supervise through the management staff the recruiting, hiring, training, discharge, promotion, and work of all other employees of the Facility. Contractor shall provide any legally mandated training, safety training in accordance with industry standards, and training in Contractor’s cash handling and inventory control procedures for all Contractor employees.
Further, Contractor will use reasonable efforts to provide a safe work environment for Contractor employees and a workplace free from illegal harassment or illegal discrimination. For a period of one year after the date of termination of this Agreement pursuant to Section 8.1, City shall not solicit or hire as an independent contractor, agent, consultant or employee any general manager or superintendent previously hired or employed after the Effective Date for the Facility without the consent of Contractor . In the event that City is dissatisfie d with the performance of any Contractor personnel, the following procedure shall be followed: (i) City shall communicate any complaints regarding personnel below the rank of general manager to the general manager and shall communicate complaints regarding the general manager to Contractor ’s regional manager for the region in which the Facility is located, and (ii) Contractor shall reasonably and promptly investigate and take appropriate action , as determined by Contractor , with respect to City’s complaints. All employees of the Facility shall be properly qualified for their positions . The Compensation of the management staff and all other Facility employees shall be approved by City as part of the Annual Budget Plan (or, in the event that a change in management staff occurs during an Operating year and after the Budget has been finalized, then as otherwise approved in writing by City) and be an Operating Expense of the Project payable by City in accordance with this Agreement.
3.7.2 Benefit Plans. Contractor shall have the right to provide eligible employees of the Facility with profit sharing and other employee retirement benefits and disability, health and welfare benefits and other benefit plan or plans now or hereafter available to employees of Other Contractor Facilities, if such benefits have been approved in the Annual Budget Plan, and to charge the Facility with its allocable share of such Contractor plan or plans.
3.7.3 Temporary Assignment of Other Contractor Personnel. If Contractor shall reasonably deem it advisable, and after City’s prior approval, Contractor may temporarily assign to the Facility the general manager, the head golf professional and other members of the
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management staff from the employees of Contractor or Affiliates of Contractor or from the staff of Other Contractor Facilities. During such time as these employees are temporarily assigned to the Facility, all such employees will be paid their regular Compensation (as defined herein), and the pro- rata share of such employees’ Compensation equal to the actual time such employees worked at the Facility shall be an Operating Expense of the Facility, either payable directly by City or in the event Contractor paid such Compensation reimbursed to Contractor by City as provided in Section 3.8 below.
3.8 Reimbursements to Contractor. Within thirty (30) days after written receipt of a written request together with invoices and other appropriate back-up documentation, City shall reimburse Contractor for all costs and expenses incurred by Contractor as the result of Contractor’s performance under this Agreement, and allowed under the Annual Budget Plan, including without limitation (a) all costs incurred by Contractor pursuant to Sections 3.6 and 3.7 hereof and (b) the deductible amounts under any worker’s compensation or health insurance policies maintained by Contractor for its employees pursuant to this Agreement.
3.9 Restrictions on Use of Facility
(a) The Facility shall be used solely for the operation of an eighteen (18) hole championship golf course, and retail golf shop, bar and restaurant, banquet facility, driving range and such other uses and amenities as may be approved by City and are compatible with the operation of an eighteen (18) hole championship golf course includi ng, by way of illustration, a golf school, a health spa, a sports and entertainment facility and banquet facilities. (b) Contractor agrees not to allow the use of the Facility for or carry on or permit any dangerous activity or nuisance. Further, Contractor agrees not to use the Facility for any purpose which would increase existing rates of insurance or cause cancellation of any insurance policy carried by City or Contractor. Contractor shall cause the Facility to comply with all Legal Requirements relating to the condition, use and occupancy of the Facility.
ARTICLE 4 - INSURANCE AND INDEMNIFICATION
4.1 Insurance Policies. Without limiting City’s right to indemnification, it is agreed that Contractor shall maintain in full force and effect, at the expense of the City in accordance with the Agreement, the following minimum insurance coverages:
4.1.1 General Liability, Automobile Liability, and Liquor Liability Insurance. Contractor shall obtain and maintain, through the term of this Agreement, the following policies of insurance placed with insurers authorized to do business in California, with a current A.M. Best rating of no less than A: VII or its equivalent, against injury/death to persons or damage to property.
a. Commercial General Liability Insurance on an occurrence basis, at least as broad as Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001), with $2,000,000 per occurrence and $4,000,000 aggregate limit for bodily injury or
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death and property damage, and shall include Personal Injury and Sexual Misconduct coverage, as well as Failure to Maintain.
b. Automobile Liability Insurance with coverage at least as broad as Insurance Services Office form CA 0001, Code 1 (any auto), for vehicles used in the performance of this Agreement with limits of not less than $1,000,000 per accident combined single limit (CSL).
c. Liquor Liability Insurance with limits of $1,000,000 per occurrence and $2,000,000 aggregate.
d. The General Liability, Automobile Liability, and Liquor Liability policies shall not be cancelled or materially changed without at least thirty (30) days prior written notice to City and Contractor and are to contain, or be endorsed to contain, the following provisions:
i. The City, its officers, officials, employees , volunteers, and the United States Army Corps of Engineers are to be covered as additional insureds as respects:
liability arising out of activities performed by or on behalf of the Contractor; products and completed operations of the Contractor; premises owned, occupied, or used by the Contractor; or automobiles owned, leased, hired or borrowed by the Contractor. ii. The Contractor’s insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, volunteers, and the United States Army Corps of Engineers . Any insurance or self -insurance maintained by the City, its officers, officials, employees, volunteers or United States Army Corps of Engineers shall be excess of the Contractor’s insurance and shall not contribute with it. iii. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the City, its officers, officials, employees, volunteers or the United States Corps of Engineers.
iv. The Contractor’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability.
e. Contractor shall either require each subcontractor, licensee, concessionaire, or tenant providing services under this Agreement to procure and to maintain Commercial General Liability and Automobile Liability Insurance in the amounts specified in Subsections (a) and (b), above, or shall insure the activities of subcontractors in the policies specified therein.
4.1.2 Workers’ Compensation Insurance. During the term of this Agreement, Contractor shall secure payment of statutory Workers' Compensation benefits to Contractor ’s employees at the Facility in accordance with the Labor Code of the State of California and Employers Liability Insurance in an amount not less than $1,000,000 per accident, disease or injury, and an endorsement for waiver of subrogation, and shall sign and file with City the
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following certification, or a copy of the Workers’ Compensation Insurance Certificate, prior to commencing any work under this Agreement:
“The undersigned is aware of, and will comply with, Division 4 and 5 of the California Labor Code by securing, paying for, and maintaining in full force and effect for the duration of the Agreement, complete workers compensation insurance, and shall furnish a certificate of insurance to City prior to the commencement of the term of the Agreement.” Contractor shall not commence the performance of any services under this Agreement until City is provided with a certificate of insurance issued by an insurance company licensed to write Worker’s Compensation Insurance in the State of California. Such a certificate shall evidence workers’ compensation insurance meeting all statutory requirements of the State of California and employer’s liability insurance. The certificate of insurance shall include the name of the carrier and the expiration date of the i nsurance. If City does not receive a certificate of insurance, including all required endorsements, from Contractor ’s insurance carrier, or broker reflecting the effective maintenance of the required policies of insurance as specified in this Article, City may proceed to procure insurance coverage as required in this Article with the cost of insurance to be expense of the Facility payable to the City.
After the prior approval of City (which approval shall not be unreasonably withheld) Contractor shall have the right to raise the minimum amount of any insurance to be maintained with respect to the Facility under this Article to make such coverage comparable to the amount of insurance carried with respect to other Contractor Facilities, taking into account the size, character and location of the Facility.
Contractor shall ensure that all of the employees of any subcontractor, licensee, concessionaire or tenant providing services under this Agreement are similarly covered by worker s' compensation and employer’s liability insurance.
City shall not be responsible for any claims in law or equity occasioned by the failure of Contractor to comply with this Section 4.1.2 or with the provisions of California law related to workers' compensation insurance.
City agrees to procure and maintain, at the expense of the Facility, at any time during the Operating Period during which the City supplements the staffing of the Facility with its own employees, workers compensation insurance covering all Facility employees who are City’s employees.
4.1.3 Commercial Crime Insurance. Contractor shall obtain and keep in full force and effect during the term of this Agreement a commercial crime policy which includes, without limitation, a blanket bond for all employee dishonesty in the amount of $1,000,000; coverage for theft, disappearance and destruction of monies and securities in or on the Facility Premises or outside the Facility Premises in an amount not less than $35,000; and depositor’s forgery in the amount of $250,000.
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4.1.4. Pollution Liability and/or Asbestos Pollution Liability Insurance .
Contractor shall maintain pollution liability and/or asbestos liability insurance covering the insured against obligations or costs associated with third party environmental claims, remediation and contaminated media management necessitated by the presence of unknown Hazardous Materials, or new regula tory requirements associated with the presence of Hazardous Materials on, under, about or threatening the Facility Premises. Such poli cy shall include limits of not less than $2,000,000 per claim or occurrence and $2,000,000 aggregate per policy period of one year. The policy shall not be cancelled or materially changed without at least thirty (30) days prior written notice to City and shall contain, or be endorsed to contain, the following provisions:
a. The City, its officers, officials, employees, volunteers, and United States Army Corps of Engineers are to be covered as additional insureds as respects liability arising out of work or operations performed by or on behalf of the Contractor including materials, parts or equipment furnished in connection with such work or operations. b. The Contractor’s insurance coverage shall be primary insurance as respects the City, its officers, officials, employees , volunteers, and United States Corps of Engineers. Any insurance or self -insurance maintained by the City, its officers, employees , volunteers of United States Corps of Engineers shall be excess of the Contractor ’s insurance and shall not contribute with it.
4.1.5 Business Interruption Insurance . Business interruption insurance covering actual losses sustained due to (i) fire, lightning and other perils insurable under the form of “all risk” coverage then available (including specifically irrigation and/or sprinkler system leakage damage, vandalism and malicious mischief, if available); and (ii) explosion of or damage to boilers, air conditioning systems, refrigeration and heating apparatus, pressure vessels and pressure pipes installed at the Facility (but such coverage shall be required only in t he event that there are fired pressure vessels or boilers on the Premises), in an amount equal to the annual business interruption values and with no co- insurance provisions. The City of Fullerton shall be named as loss payee.
4.1.6 All-Risk Property Insurance. All Risk Property insurance covering all real and personal property of Contractor utilized or stored at Facility.
4.2 Certificates of Insurance. Contractor shall complete and file with the City, within fifteen (15) days of its execution of this Agreement, and prior to engaging in any operation or activity set forth in this Agreement, certificates of insurance and endorsements evidencing the coverage’s specified ab ove, which shall provide that no cancellation, change in coverage or nonrenewal by the insurance company company(s) will be made during the term of this Agreement, without thirty (30) days ’ prior written notice to City. All certificates shall be signed by a person authorized by the insurance company to bind coverage on its behalf. Neither the procuring of insurance by Contractor nor the delivery by Contractor to City of certificates of insurance evidencing such coverages shall be construed as a limitation of Contractor ’s indemnity obligations under Section 4.8 of this Agreement. In the event that a claim or other legal action is filed against City, and if City, in its good faith opinion, believes it may have coverage under any of the insurance required herein, then City has the right to demand, and to receive within a
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reasonable time period, copies of the insurance policies related to such required insurance; provided, however, that this provision shall not apply if the parties agree that Contractor shall fully defend, hold harmless, and indemnity City against any such claim or other legal action.
4.3 Inspection of Policies: Change in Coverage Amounts. Contractor shall permit City, at all reasonable times, to inspect any policies of insurance of Contractor covering risks upon the Premises. City reserves the right to change coverage limits of the insurance policies set forth above as City may deem advisable, in City’s sole and absolute discretion; provided that City shall increase the applicable Budget(s) reasonably to account for any increase in insurance premiums.
4.4 Deductible. Contractor shall disclose all deductibles to City and obtain City’s written consent for any deductible amount.
4.5 Blanket Policies. Any insurance policies provided by City or Contractor under this Article 4 may be affected under policies of blanket insurance which cover other properties in addition to the Facility, and in such c ase an allocable portion of the premium for such blanket policies of insurance shall be charged to the Facility upon reasonable agreement between the parties of the appropriate allocable portion.
4.6 Waiver of Subrogation. Contractor shall not assert against the City and waives any claims and rights of recovery for any losses, damages, liability, or expenses (including attorneys’ fees) incurred or sustained on account of injury to persons or damage to property arising out of its operation and maintenance of the Facility to the extent that the same are covered by the insurance required under this Article 4. Contractor hereby grants on behalf of any insurance company providing insurance covering the Facility a waiver of any right of subrogation which any insurer or party may acquire by virtue of payment of any loss under any insurance policy.
Contractor shall give notice to the insurance companies providing insurance under this Agreement of the waiver of subrogation contained in this Section 4.2.
4.7 Excess Liability Insurance Coverage: The limit of Excess Liability Insurance Coverage, in excess of the Comprehensive General Liability Insurance shall be in an amount, that, when combined with the Comprehensive General Liability Insurance will be not less than $5,000,000 per occurrence and, if written with an aggregate limit, such limit shall be not less than $10,000,000.
4.7 Insurance Remedies. In addition to other remedies City may have if Contractor fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, City may, at its sole option: (1) Order Contractor to stop work under this Agreement and/or withhold any payment(s) which become due to Contractor hereunder until Contractor demonstrates compliance with the requirements hereof; or (ii) Terminate this Agreement.
Exercise of any of the Insurance Remedies, however, is an alternative to other remedies City may have and is not the exclusive remedy for Contractor ’s failure to maintain insurance or secure appropriate endorsements.
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4.8 City’s Insurance. City may, at its sole election, procure and maintain property insurance with respect to the Facility during the term of this Agreement.
4.9 Indemnification and Hold Harmless . Contractor shall fully defend, indemni fy, and hold harmless City and its elective and appointive boards, commissions, officers, agents, employees, volunteers , United States Army Corp of Engineers , at Contractor’s cost, from and against any and damages, liabilities, claims, costs or expenses, including but not limited to reasonable attorneys’ fees and costs, for economic damage to third parties, property damage or bodily injury, including, but not limited to death:
a) Which results from any act or omission by Contractor or any officer, director, employee, or subcontractor of Contractor in connection with Contractor ’s performance under this Agreement;
b) Which result from any action taken by Contractor relating to the Facility (i) that is prohibited by this Agreement, or (ii) that is not within the scope of Contractor’s duties under this Agreement, or (iii) that is not within Contractor's delegated authority under this Agreement; c) Which result from Contractor ’s violation of Insurance Requirements or Legal Requirements; or
d) Which City, by reason of any alleged breach of a “non- delegable duty, is subject to, because of the Contractor’s violation of any national, state, or local law, regulation or order which pertains to providing safe working conditions for Contractor’s employees, or because of Contractor’s employees; or
e) Which result from fines imposed by administrative or regulatory bodies for actions caused by Contractor or its officers, employees or agents; f) As respects acts, errors or omissions in the performance of professional services, Contractor to the extent arising directly out of Contractor’s (or Contractor’s contractors’ or subcontractors”, if any) negligent acts, errors or omissions in the performance of professional services under this Agreement but only to the extent such Claims are covered by valid and collectible insurance proceeds.
The obligations set forth in this indemnification provision (i) shall be in effect without regard to whether or not City, Contractor , or any other person maintains, or fails to maintain, insurance coverage, or a self -insurance program, for any such Claims; and (ii) and shall survive the termination of this Agreement.
This section shall not apply to damages, liabilities, claims, costs, or expenses to the extent caused by City’s sole negligence or will misconduct. The provisions of this Section shall survive the expiration of this Agreement.
4.10 Responsibility for Damages or Injury
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4.10.1 City and all officers, employees and representatives thereof shall not be responsible in any manner for any loss or damage to any of the materials or other things used or employed in performing work at the Facility or for injury to or death of any person as a result of Contractor’s performance of the services required hereunder; or for damage to property from any cause arising from the performance under this Agreement by Contractor, or its subcontractors, or its workers, or anyone employed by either of them.
4.10.2 Contractor shall be responsible for any liability imposed by law and for injuries to or death of any person or damage to property resulting from defects, obstructions or from any cause arising from Contractor ’s work under this Agreement, or the work of any subcontractor or supplier selected by Contractor.
4.10.3 Contractor shall perform all work under this Agreement in a manner to minimize public inconvenience and possible hazard, to restore other work areas to their original condition and former usefulness as soon as possible, and to protect public and private property.
Contractor shall be liable for any private or public property damaged during the performance of work under this Agreement.
4.10.4 The rights and obligations set forth in this Section shall survive the termination of this Agreement.
4.11 Handling of Claims . Contractor shall be responsible for handling all claims for any losses, damages, liability, and expenses (including without limitation personal injury and property damage claims) arising out of the operation, maintenance, repair, or improvement of the Facility, whether or not such claims are covered by the insurance required under this Article 4.
Handling such claims shall include without limitation responding to such claims, investigating such claims, and retaining legal counsel or experts to defend such claims. All claims handling responsibilities shall be in accordance with Contractor and insurance company requirements, and shall be subject to City’s prior written approval, which shall not be unreasonably withheld or delayed, and paying any losses, damages, and expenses relating to such claims and obtaining fully executed settlement releases on behalf of the City. Contractor shall provide City with monthly and annual reports of claims activities on a schedule and in a format reasonably acceptable to the City.
City understands and agrees that with respect to all policies of insurance required under this Article 4 (whether such policies are maintained by City or Contractor), the portion of any losses, damages, and expenses paid with respect to such claims which is subject to a deductible amount or a self - insurance or a self-assumption amount shall be the sole responsibility of City. If at any time during the term of this Agreement, City desires to assume responsibility for handling of claims, the parties may amend this provision as provided in Section 12.8 Modifications and Changes, subject to (i) the approval of the applicable insurance companies; and (ii) the reasonable approval of the Contractor.
ARTICLE 5 - MANAGEMENT FEES
In addition to the costs and expenses to be reimbursed to Contractor pursuant to this Agreement, City shall pay Contractor the Management Fee computed and payable as follows:
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5.1 Management Fee. In consideration of Contractor’s services during the Operating Period, City shall pay to Contractor a “Management Fee.” For the first twelve (12) months of the term of this Agreement, the Management Fee shall equal Ninety-five Thousand Dollars ($95,000) per annum (i.e., ($7,917) per month). The Management Fee shall increase on each anniversary of the Effective Date (until termination of this Agreement) by three percent (3%) of the Management Fee in effect prior to the applicable increase. The Base Management Fee shall be paid to Contractor, in equal monthly installments.
5.2 Bond Repayment. City and Contractor agree that 50% of all Net Operating Income in excess of $4.0 million actually received by City in the prior fiscal year shall be remitted by City towards repayment of the City RZED Bond annually until fully repaid. For the purpose of illustration only, in the event the Net Operating Income received by City in a fiscal year during which the RZED Bond remains unsatisfied is 5.5 million then $750,000 (50% of the $1,500,000.00) shall be directed toward repayment of the bond. This repayment obligation shall immediately expire upon repayment and complete satisfaction of the RZED Bond.
5.2.1 Incentive Management Fee. In addition to the Management Fee set forth in Section
5.1, commencing on the first day of the month following the full satisfaction and repayment of the RZED Bond, Contractor shall be entitled to an Incentive Management Fee. Contractor understands and a grees that under the terms of the RZED Bond, the City may not provide an Incentive Management Fee and Contractor shall not be entitled to receive an Incentive Management Fee until and unless the RZED Bond has been fully satis fied and repaid. The Incentive Management Fee shall be calculated as 10% of Gross Revenues in excess of $4.0 million actually received by City in the preceding fiscal year not to exceed an amount equal to 50% of the Management Fee.
5.3 Payment Schedule. City shall pay Contractor the Management Fee in advance, no later than five (5) days following the first day of each month during the Term of the Agreement.
City shall permit and hereby authorizes Contractor to pay Contractor, from the Operating Account, all Fees which are legally due on and owing hereunder.
5.3.1 Payment of Incentive Management Fee. Contractor shall submit to CITY a written statement detailing Net Operating Income received for each fiscal year (or portion thereof in the event of termination prior to the end of an Operating Year) no later than 21 days following the end of such period, including a calculation of any Incentive Management Fee due. Subject to City’s approval, which shall not be unreasonably withheld, City shall pay Contractor the Incentive Management Fee no later than thirty (30) days following receipt of th e statement and such supporting documents as City may reasonably request.
5.4 Accounting Services . In addition to management services herein, Contractor shall provide accounting services to the City, including services pertaining to payment disbursement and financial reporting. Contractor may provide these services or may employ accountants or outside services to provide some or all of such services. For these accounting and administrative services City shall pay Contractor, in addition to the Fixed Management Fee and Incentive Management Fee, a separate “Accounting Fee” in the amount of Twenty-one Thousand Dollars ($ 21,000) per annum (i.e., ($ 1,750) per month), to be adjusted annually by CPI beginning in year two.
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5.5 City Council Appropriation . All Parties recognize that the continuation of this Agreement after the close of any fiscal year of City, which fiscal year ends on June 30, of each year, shall be subject to budget approval providing for or covering such contract items as an expenditure in said budget. City does not represent that said budget item will be actually adopted, said determination being the determination of the City Council at the time of the adoption of the budget herein. No penalty should accr ue to City in the event this provision shall be exercised.
Should termination be accomplished in accordance with this Section, a settlement shall be negotiated by the Parties on items delivered, services provided, monies paid and monies due.
5.6 Renewal Term Fees . For any Renewal Term, the Contract Administrator and Contractor shall negotiate and agree upon any adjustment to the Fees ninety (90) days prior to the commencement of the Renewal Term.
ARTICLE 6 - ACCOUNTS; WORKING FUNDS; RECORDS AND REPORTS
6.1 Bank Accounts. In connection with the operation and management of the Facility, the following bank accounts shall be provided by City and Contractor in a bank or banks approved by City, and shall be subject to City’s audit and inspection (the “Bank Accounts”):
6.1.1 City Account and Facility Account. City shall identify a bank account for the Facility at a banking institution or institutions reasonably selected by City, such account to be in City’s name (the “City Account”). Contractor shall also establish a bank account for the Facility at a banking institution or institutions reasonably approved by City, such account to be in Contractor’s name and sole control (the “Facility Account”). Contractor will collect, receive, and deposit into the City Account all Gross Revenues received by Contractor from the operation of the Facility. City shall provide all funds required to be furnished by City as working capital funds under 6.4 of this Agreement into the Facility Account, and Contractor will disburse those monies from the Facility Account only for the purposes set forth in this Agreement. Notwithstanding the provisions of the foregoing, Contractor shall be entitled to maintain funds in reasonable amounts in “cash register banks” or in petty cash funds at the Facility but Contractor shall not open any other bank accounts related to the Facility except for the Facility Account. All records and bank statements shall be subject to access and inspection by City pursuant to the terms recited herein.
All Gross Revenue (as defined herein) of the Facility shall be collected, received, and deposited by Contractor exclusively through the City Account. Upon termination of this Agreement for any reason, any funds remaining in the Facility Account after payment of all final expenses, costs and obligations of the Facility incurred during the Term shall be paid to City.
6.2 Expenditures. Contractor is authorized to pay such amounts at such times as are required in connection with the operation, maintenance, repair, and improvement of the Facility and related facilities in accordance with any approved Annual Budget Plan and/or budget, subject to the provisions of this Agreement , including but not limited to all amounts specifically payable to or reimbursable to the Contractor as follows: the Compensation and expenses of the management staff and other employees of the Facility; and
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(a) all costs and expenditures incurred or made in connection with the items described in Section 3.3 and all other expenditures which Contractor is permitted or required to make under any other provision of this Agreement;
(b) reimbursements and other amounts due to Contractor and Affiliates of Contractor under Section 3.8 or under any other provision of this Agreement;
(c) premiums for any insurance maintained by City or Contractor in accordance with the provisions of Article 4 (Insurance Requirements); (d) the Management Fee and Incentive Management Fee, computed in accordance with the provisions of Article 5. Upon request of City from time to time, Contractor shall distribute from the Facility Accounts to accounts controlled solely by City such funds which are in excess of the amounts required to maintain working capital needs of the Facility and for Contractor to perform pursuant to this Agreement.
6.3 Excluding Expenditures. The following costs are not considered Expenditures, and shall not be reimbursed or included in the Annual Budget. (a) Any penalties or fines imposed by any governmental agency, except for those penalties or fines caused by the act of omission of City or not reasonably related to the acts or omissions of Contractor.
(b) Expense of Contractor’s corporate office, except for the Accounting Fee. (c) Employee salaries or any compensation of any corporate or regional employee of Contractor.
(d) Employee claims, fines, lawsuits, etc. resulting from Contractor’s breach of the Agreement; any costs and expenses not authorized by this Agreement or approved by the Fullerton City Manager; any costs, claims covered by Contractor’s indemnity obligations hereunder, any costs incurred by Contractor to repair or replace any Facilities to the extent of damage resulting from the intentional misconduct or negligence of Contractor.
6.4 Working Capital Fund Funding Requirements . Within seven (7) days after Contractor’s written request, City shall provide funds, to be deposited in the Facility Accounts, sufficient at all times to assure the uninterrupted and efficient operation of the Facility, in accordance with this Agreement and any approved plans and/or Annual Budget Plan, including without limitation sufficient funds to pay all of the items described in Section 6.2 of this Agreement, including funds for Contractor to timely fund any Operating Deficits (as defined herein), if any. If Contractor is unable to perform any of its agreements or covenants under this Agreement because of the failure on the part of City to provide the funds pursuant to this Section
6.3, such failure of performance on the part of Contractor shall not be deemed a default on the part
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of Contractor and shall not give rise to any right of termination, damages or any other remedy against Contractor. On the first day of each month during the Term. Contractor shall notify City of the total funds then in the Facility Account, and within three (3) business days following such notification, City shall provide additional funds for the Facility Account in the amount required to bring the Facility Account balance to an amount equal to $100,000. So, for instance, if Contractor notified City that, as of the first day of a given month the balance in the Facility Account is $60,000, then City will provide an additional $40,000 for the Facility Account within seven (7) business days. Contractor shall not, under any circumstances, be required to, or be deemed to have any duty to, advance any of its own funds for the Operation of the Facility. Contractor shall analyze all bills received for services, work and supplies in connection with maintaining and operating the Facility. Contractor shall pay, on behalf of City, all such bills in accordance with any plan and/or Annual B udget Plan as and when the same shall become due and payable . Contractor shall exercise commercially reasonable efforts to pay all bills within the time required to obtain any discounts which may be available. If there are insufficient funds in the Facility Account to make any payment, Contractor shall promptly notify City prior to any delinquency so that City shall have an opportunity to provide sufficient funds for Contractor to make such payment prior to the imposition of any penalty or late charge as provided herein. In the event that Co ntractor should advance any of its own funds for the operation of the Facility due to the failure of City to timely fund the Working Capital Amount as required hereunder, or to make any payment to Contractor required hereunder, Contractor shall be entitled, without any further approval or authorization of City, to reimburse itself for such advances, from the Facility Account upon funding of the Facility Account by City.
6.4 Insufficient Funds. Contractor shall monitor the Facility’s cash flow and shall provide to City a report detailing projected cash flow in the event that Contractor projects an Operating Deficit to occur within thirty (30) days of providing such report. If at any time funds in the Facility Account, including the anticipated monthly funding of the Working Capital Amount by City as set forth in Section 6.3, shall be projected to be or are insufficient to pay the Facility’s Expenses for the following month (“Operating Deficits”), Contractor shall notify City and request a sufficient amount (“Additional Working Capital”) to satisfy same so that Contractor will have sufficient funds in the Facility Account to prevent any delinquency in payment for such expenses, and City agr ees to provide such f unds within seven (7) days after Contractor notifies City.
Contractor shall not be obligated to advance any of its own funds to or for the account of the Facility or City, nor to incur any liability unless City has furnished Contractor with funds necessary for the discharge thereof. In the event City fails to timely provide Contractor sufficient Additional Working Capital to pay expenses, Contractor shall be under no obligation to pay any bill if there are insufficient funds in the Facility Account. Notwithstanding the foregoing, if Contractor advances any funds in payment of an expense authorized by any Annual Budget Plan or budget, or an emergency expenditure, Contractor may reimburse itself from the Facility Account.
6.5 Accounting Procedures/City’s Right to Audit
6.5.1 Books and Records . Contractor shall keep records and invoices in connection with the Services to be performed under this Agreement. Contractor shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any
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services, expenditures and disbursements charged to City, for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Contractor under this Agreement. All such records and invoices shall be clearly identifiable. Contractor shall allow a representative of City to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement during regular business hours. City shall have the right to audit Contractor’s accounting procedures and internal controls of Contractor’s financial systems and to examine any cost, revenue, payment, claim, other records or supporting documentation resulting from any transactions under this Agreement. Contractor shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment to Contractor under this Agreement.
6.6 No Default Due to Lack of Funds . If Contractor is unable to perform any of its Services or covenants under this Agreement because of the failure on the part of the City to provide the funds pursuant to Section 6.4, such failure of performance on the part of Contractor shall not be deemed a default on the part of Contractor and shall not give rise to any right of termination, damages, or any other remedy against Contractor, unless the failure to provide the funds is due to the occurrence of a breach of this Agreement by Contractor or the gross negligence, willful misconduct or fraud by Contractor.
6.7 Reports to City. Contractor will deliver, or will cause to be delivered, to City the following forecasts and statements:
(a) within twenty (20) days after the end of each calendar month, an update to any approved plans and/or budgets with monthly and year -to-date financial statements which shall include a balance sheet, a profit and loss statement showing the results of operation of the Facility for such month and for the year to date; and
(b) within sixty (60) days after the end of each Operating Year (as defined herein), financial statements, including a balance sheet, a profit and loss statement and actual versus budget comparison showing the results of operation of the Facility for such year (it being understood and agreed that such annual statement will reflect the annual Base Management Fee paid to Contractor). If requested by City, and at City’s expense, the financial statements shall be accompanied by an opinion rendered by an independent certified public accounting firm. (c) at least sixty (60) days in advance of each Operating Year (except the first Operating Year), an estimated profit and loss statement and an estimated cash flow projection for the ensuring Operating Year.
6.8 Contractor Accounting Software; Other Personal Property Owned by Contractor. The parties acknowledge and understand that the accounting software used at the Facility is owned by Contractor, and City shall have no rights or interests in such software. Upon the expiration or earlier termination of this Agreement, the accounting software and other personal property located at the Facility owned by Contractor shall be removed from the Facility by Contractor; provided, however, the financial data of and related to the Facility shall remain the property of City.
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6.9 Payroll. The parties acknowledge and agree that a payroll processing company will be processing the payroll for the Facility employees. Prior to the date of a pa yroll payment, Contractor will be notified by the payroll processing company of the amount of the payroll payment. On the date of the payroll payment, the payroll processing company will automatically withdraw the amount of the payroll payment from the Facility Accounts and deposit such amount in a central payroll account on which payroll checks will be drawn.
6.10 Accounting Firm. Contractor shall, if requested by City and at City’s expense, hire an independent certified public accounting firm selected by City to audit the financial statements required under this Agreement. Contractor shall train the accounting firm with respect to the use and application of Contractor’s accounting software at the Facility, and Contractor shall supervise the work of the accounting firm. All fees and charges of the accounting firm shall be an expense of the Facility payable from the Facility Accounts.
ARTICLE 7 – MANAGEMENT – ADMINISTRATION - PERFORMANCE
7.1 GENERAL MANAGER. Contractor shall designate a General Manager, who shall coordinate the Services. This General Manager shall be available to City at all reasonable times during the Term of this Agreement. It is expressly understood that the experience, knowledge, capability, and reputation of the General Manager is a substantial inducement for City to enter into this Agreement. Therefore, the General Manager shall be responsible during the Term of this Agreement for directing all activities of Contractor and devoting sufficient time to personally supervise the provision of Services hereunder.
7.2 ADMINISTRATION. The following employees of City shall be authorized to take the following actions pursuant to this Agreement:
(i) The Director of Parks and Recreation shall be the Contractor Administrator authorized to take any and all actions on behalf of City set forth herein, including, but not limited to Budget approval and termination of Services in accordance with the terms of Section 8 of this Agreement (Termination Rights).
(ii) The Contract Administrator is authorized to take those specific actions set forth herein and to review and approve all Services performed by Contractor under this Agreement. The Contract Administrator shall not be authorized to approve Extra Work, change prices or billing rates, or terminate Services under this Agreement.
7.3 PERFORMANCE
7.3.1 Standard of Services. Contractor and his entire staff shall provide all of its services in a professional and workmanlike manner and shall conduct themselves whenever on City’s property such that they shall, at all times, be able to deal effectively and properly with the golfing public as managers of a public facility. All staff shall wear uniforms in a manner approved by City at all times with name tags. All staff shall complete training as prescribed by the Contract
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Administrator upon hiring. The quality and range of the products and services offered must be approved by City.
7.3.2 Presence of General Manager. Contractor’s General Manager is expected to be on site at the Facility during the days and hours normally expected of a working General Manager attending diligently to his duties and responsibilities personally. At such times as the General Manager is not on site, the General Manager shall specifically designate a Manager o n Duty and shall provide, from time to time, City with the names of those employees qualified for this position. One of the so-named parties shall be on duty at all times that the General Manager is absent.
7.3.3 Professional Standards. As a material inducement to City entering into this Agreement, Contractor represents and warrants that Contractor is a provider of first class work and services and Contractor is experienced in performing the work and services contemplated herein and, in light of such status and experience, Contractor covenants that it shall follow the highest professional standards in performing the work and services required hereunder and that all materials will be of good quality. For purposes of this Agreement, the phrase “highest professional standards” shall mean those standards of practice recognized by one or more first -class firms performing work under similar circumstances.
7.3.4 Contract Administrators for Facility. Contractor is responsible for keeping the Contract Administrator and/or his/her duly authorized designee informed of on a regular basis regarding the status and progress of the Services, activities performed and planned, and any meetings that have been scheduled or are desired. Contractor agrees to work closely and cooperate fully with City’s designated Contract Administrator and any other agencies that may have jurisdiction or interest in the work to be perform ed. City agrees to cooperate with the Contractor at the Facility.
7.3.5 Debris. Contractor shall keep City’s property free from undue accumulation of waste and rubbish caused by Contractor ’s performance of the Services, and Contractor shall remove all debris resulting from the work on City’s property at the end of each day’s work. Contractor shall limit its storage of materials and equipment on City’s property to areas designated by City.
7.3.6 Familiarity with Work. By executing this Agreement, Contractor represents and warrants that Contractor : (i) has thoroughly investigated and considered the Services to be performed; (ii) has carefully considered how the Services should be provided; and (iii) fully understands the facilities, difficulties and restrictions attending the provision of the Services under this Agreement. Should Contractor discover any latent or unknown conditions materially differing from those inherent in the provision of such Services or as represented by City, Contractor shall immediately inform City of such fact and shall not perform any Extra Work without the approval of the Contract Administrator and written amendment of this Agreement.
7.3.7 City Ownership of Equipment. Contractor acknowledges that City owns all of the equipment. Contractor agrees to repair or cause to be repaired all of City’s equipment and furnishings, and to maintain in good condition all of City’s premises used in concession
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operation. Contractor will obtain City’s prior written consent for any modifications to the type, location, or quality of some or all of the equipment, and furnishings. Upon termination of this Agreement, all equipment and furnishings, shall remain in the possession of and owned by City.
7.3.8 Alcoholic Beverages. Contractor is not restricted by this Agreement as to the selection of brands of alcoholic beverages to be sold at Facility. Contractor expressly agrees to observe and comply with all federal, state, and city laws and ordinances and with all rules promulgated by City with respect to alcohol sales at the Facility and to maintain in effect all licenses and permits required for sale of alcoholic beverages at Contractor ’s sole expense. The current contractor American Golf Corporation will relinquish the existing on- sale general liquor license issued by the State of California to Contractor and in Contractor’s name permitting the sale of alcoholic beverages (including beer, wine and liquor) at the Facility at no expense, except for transfer fees to be paid by Contractor as an Operating Expense. Contractor, as City’s agent, shall be solely responsible for the alcoholic beverage sales at the Facility. As an Operating Expense of the Facility, Contractor shall maintain in its name or in the name of an Affiliate (and City shall reasonably cooperate with Contractor in maintaining) the liquor license(s) in good standing, pay all required fees in connection therewith, and otherwise ensure that the proper right and permission to sell alcoholic beverages at the Facility. Contractor agrees that, in the event Contractor is succeeded by another contractor after termination of this Agreement, Contractor shall, without charge to City, relinquish said license at no expense to such successor, except for transfer fees to be paid by the successor. From and after the termination date and continuing until the date which is six (6) months thereafter, Contractor shall cooperate with City in City’s efforts to obtain its own liquor license(s) (or a transfer of Contractor ’s liquor licenses) to serve alcoholic beverages at the Facility.
7.3.9 Independent Contractor. Except as expressly provided herein, City, nor any of its employees, shall have any control over the manner, mode or means by which Contractor, its agents or employees, perform the services required herein. Except as expressly provided herein, City shall have no voice in the selection, discharge, supervision or control of Contractor ’s employees, servants, representatives, or agents, or in fixing their number, compensation or hours of service. Contractor shall perform all services required herein as an i ndependent contractor of City and shall remain at all times to City a wholly independent contractor with only such obligations as are c onsistent with that role. Contractor shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of City. City shall not in any way or for any purpose become or be deemed to be a partner of Contractor in its business or otherwise a joint venturer or a member of any joint enterprise with Contractor. In consideration for the compensation paid to Contractor by City, Contractor agrees that City shall not be obligated to provide, and instead agrees that Contractor shall provide on City’s behalf, any benefits, including, but not limited to, workers' compensation, disability, retirement, life, unemployment, health or any other benefit and Contractor agrees that it shall not sue or file a claim, petition, or application therefor against City or any of its officers, employees, agents, volunteers, representatives or sureties.
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7.3.11 Public Records Any and all written information created, submitted to, and/or obtained by Contractor from City or any other person or entity having to do with or related to this Agreement and/or the Facility, either pursuant to this Agreement or otherwise, may be subject to disclosure pursuant to the California Public Records Act (Government Code § 6250 et seq.) as now in force or hereafter amended, or any act in substitution thereof, or otherwise made available to the public. Contractor hereby agrees to notify City within 10 days of any claim that a requested records is not a public record or that the same is a trade secret, or confidential, or not subject to inspection by the public.ARTICLE 8 - TERMINATION RIGHTS
8.1 Termination by City. City shall have the right to terminate this Agreement upon the occurrence of any one of the following events:
(a) Contractor fails to keep, observe or perform any material covenant, agreement, term or provision of this Agreement to be kept, observed or performed by Contractor including, without limitation, Contractor’s failure to maintain, market, and promote the Facility in the manner required by this Agreement, and such default continues for a period of thirty (30) days after written notice of such default by City to Contractor; or
(b) Contractor’s (i) application for, consent to, or suffering of, the appointment of a receiver, trustee or liquidator for all or a substantial portion of its assets; (ii) making a general assignment for the benefit of creditors; (iii) being adjudged bankrupt; (iv) filing a voluntary petition or suffering an involuntary petition under any bankruptcy, arrangement, reorganization or insolvency law (unless in the case of a n involuntary petition, the same is dismissed within thirty (30) days of such filing); or (v) suffering or permitting to continue unstayed and in effect for thirty (30) consecutive days any attachment, levy, execution or seizure of all or a substantial portion of Contractor’s assets or of Contractor’s interests hereunder.
City’s right to terminate this Agreement pursuant to this Section 8.1 shall be exercised upon thirty (30) days’ additional written notice to Contractor given at any time after the applicable grace period has expired. City’s termination notice shall specify the effective date of such termination, which date shall not be more than sixty (60) days after the date of City’s termination notice.
Notwithstanding anything else herein to the contrary, the parties agree that should this Agreement be terminated pursuant to Section 5.4 (City Council Appropriation), City must provide Contractor with written notice of such termination specifying the effective date of such termination, which shall not be less than ninety (90) days after the date of any such termination notice, and certifying that no golf course operation or activities will be conducted at the Facility for at least six (6) months after any such termination.
8.2 Termination by Contractor. Contractor shall have the right to terminate this Agreement upon the occurrence of any one of the following events:
(a) City fails to provide funds to be deposited in the Facility Accounts in accordance with the Section 6.3 of this Agreement, and such failure shall continue for a period of ten (10) days after written notice by Contractor requesting that such funds be so provided; or
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(b) City fails to keep, observe, or perform any other material covenant, agreement, term, or provision of this Agreement to be kept, observed or performed by City, and such default continues for a period of thirty (30) days after notice of such default by Contractor to City; or
(i) City applies for or consents to the appointment of a receiver, trustee or liquidator of City or of all or a substantial part of its assets;
(ii) City files a voluntary petition in bankruptcy or commences a proceeding seeking reorganization, liquidation, or an arrangement with creditors;
(iii) City files an answer admitting the material allegations of a bankruptcy petition, reorganization proceeding, or insolvency proceeding filed against City;
(iv) City admits in writing its inability to pay its debts as they come due;
(v) City makes a general assignment for the benefit of creditors; or
(vi) an order, judgment or decree is entered by a court of competent jurisdiction, on the application of a creditor, adjudicating City a bankrupt or insolvent or approving a petition seeking reorganization of City or appointing a receiver, trustee or liquidator of City or of all or a substantial part of the assets of City, and such order, judgment or decree continues unstayed and in effect for any period of sixty (60) consecutive days;
(c) Contractor’s right to terminate this Agreement pursuant to this Section 8.2 shall be exercised upon written notice to City given at any time after the applicable grace period has expired. Contractor ’s termination notice shall specify the effective date of such termination . which date shall not be less than thirty (30) days or more than sixty (60) days after the date of Contractor’s termination notice.
8.3 Curing Defaults . Any default by Contractor or City under the provisions of Section 8.1 or 8.2, as the case may be, which is susceptible of being cured shall not constitute a basis for termination of this Agreement if the nature of such default shall not permit it to be cured within the grace period allotted; provided that within such grace period the alleged party in default shall have given notice of its intent to cure, has commenced to cure such default, and is proceeding to complete the cure in good faith and with reasonable diligence by a date which is not more than six (6) months after the date of notice of default.
8.4 Effect of Termination. The termination of this Agreement under the provisions of this Article 8 shall not affect the rights of the terminating party with respect to any damages it has suffered as a result of any breach of this Agreement, nor shall it affect the rights of either party with respect to any liability or claims accrued, or arising out of events occurring, prior to the date of termination.
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8.5 Remedies Cumulative. Neither the right of termination, nor the right to sue for damages, nor any other remedy available to a party under this Agreement shall be exclusive of any other remedy given under this Agreement or now or hereafter existing at law or in equity.
8.6 Indemnification re Future Business . City shall indemnify and hold harmless Contractor and its officers, directors, and employees from all costs, expenses, claims, damages, and liabilities arising or resulting from the failure of City following the expiration or earlier termination (for whatever cause) of this Agreement to provide any of the services contracted for under this Agreement (or contracted for prior to the Commencement Date) relating to the management and operation of the Facility, which services are to be provided after the expiration or termination of this Agreement, including without limitation tournaments, banquets, meetings, and other group functions to be held at the Facility.
ARTICLE 9 - TITLE MATTERS; ASSIGNMENT; SUBLETTING
9.1 Title to Facility. City covenants that, subject to the terms and conditions of this Article 9, throughout the term of this Agreement it will maintain full leasehold interest in the Facility and good title to the Furnishings and Equipment and all other personal property necessary for the operation and maintenance of the Facility.
9.2 Assignment/Subcontracting. . Contractor acknowledges that City is entering into this Agreement in reliance on the unique skill and experience of Contractor and its employees.
Contractor shall not subcontract or assign all or any part of its right or obligations under this Agreement, unless approved in writing by the Parks Director. Any change in the control of Contractor, including, without limitation, any transfer or acquisition of a controlling percentage of Contractor’s equity or stock, shall constitute an assignment for purposes of this Agreement.
9.3 Prohibited Assignments. The Parties recognize that a substantial inducement to City for entering into this Agreement is the professional reputation, experience, and competence of Contractor. Except as provided in Sections 9.2.2 and 9.2.3, neither party shall assign this Agreement without the prior written consent of the other party. Any such purported assignment, transfer, encumbrance, pledge, subuse, or permission given without such consent shall be void as to City. Said consent shall not be unreasonably withheld, conditioned, or delayed. It is understood and agreed that any consent granted by a party to any such assignment shall not be deemed a waiver of any consent required under this Section 9.2.1 as to any future assignment.
9.3.2 Permitted Assignment by Contractor. Contractor shall have the right, without the consent of City, to assign this Agreement to any Affiliate of Contractor or in connection with the sale of all or a substantial portion of Contractor ’s assets provided that the key personnel at the Facility remains substantially intact.
9.3.3 Permitted Assignment by City. In connection with the sale or transfer of the Facility by City, City shall have the right, without the consent of Contractor , to assign this Agreement provided that the purchaser expressly assumes all of City’s obligations hereunder.
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9.3.4 Remedies. Any assignment by either party of this Agreement in violation of the provisions of this Section 9.2 shall be null and void and shall result in a termination of this Agreement. In addition to any other remedies available to the parties, the provisions of this Section
9.2 shall be enforceable by injunctive proceeding or by a suit for specific performance.
9.4 Successors and Assigns. Subject to the foregoing, this Agreement shall inure to the benefit of and be binding upon the parties and their respective heirs, legal representatives, successors, and assigns.
9.5 Subcontracting. Except for those subcontractors set forth in the Scope of Services, if any, Contractor shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the Contract Administrator. Contractor shall be fully responsible to City for all acts and omissions of any approved subcontractor. Nothing in this Agreement shall create any obligation on the part of City to pay or to see to the payment of any monies due to any such subcontr actor other than as otherwise required by law. City is an intended beneficiary of any work performed by any subcontractor for purposes of establishing a duty of care between the subcontractor and City pursuant to this Agreement.
ARTICLE 10 - DAMAGE OR DESTRUCTION; EMINENT DOMAIN
10.1 Damage or Destruction . Should the Facility be destroyed or substantially damaged by fire, flood or other casualty, City, by written notice to Contractor given within sixty (60) days following the occurrence of such event, shall have the right to terminate this Agreement, and in such event neither party shall have any further obligation to the other party under this Agreement, except with respect to liabilities accruing, or based upon events occurring, prior to the effective date of such termination. For the purpose of this Se ction 10.1, the Facility shall be deemed to have been substantially damaged if, in the reasonable opinion of City, full and productive economic use of the Facility cannot be made and the estimated length of time required to restore the Facility substantially to its condition and character just prior to the occurrence of such casualty shall be in excess of six (6) months. If this Agreement is not terminated in the event of damage to the Facility because the damage does not amount to substantial damage as described above, then City shall proceed with all due diligence to commence and complete restoration of the Facility to its condition and character just prior to the occurrence of such casualty.
ARTICLE 11 - MAJOR CAPITAL IMPROVEMENTS
11.1 Any Capital Improvement involving an addition to the Facility or renovation or refurbishing designed to upgrade or change the nature or image of the Facility shall be deemed to be a “Major Capital Improvement.” Any Major Capital Improvement project is in City’s sole control and discretion, and all costs and expenses of any Major Capital Improvement shall be paid solely by City. The parties acknowledge and agree that this Agreement imposes no responsibilities or obligations on the part of Contractor with respect to any aspect of a Major Capital Improvement project, including design, construction, or supervision. In the event City desires Contractor to be involved in any capacity in a Major Capital Improvement project, the parties will enter into a separate agreement setting forth the terms and conditions of such involvement.
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ARTICLE 12 - GENERAL PROVISIONS
12.1 Purchases by Contractor . Contractor shall use reasonable efforts to obtain the optimum combination of quality, price, and terms for all purchases for the Facility utilizing its extensive contacts and experience in purchasing golf course related items. Contractor shall not be entitled to any additional compensation for this undertaking other than as set forth herein. In connection with any purchases made by Contractor or an Affiliate of Contractor for the account of City, it is understood that Contractor or such Affiliate may perform services as a representative of the manufacturer to secure the benefits of lower costs, and that any resulting savings shall be passed on to City, including representatives’ fees. In addition, all trade discounts, rebates, and refunds pertaining directly to purchases for the Facility (but excluding refunds and rebates received by Contractor in connection with purchasing or leasing related to all Other Contractor Facilities) shall accrue to the benefit of City.
12.2 Purchases from Contractor Affiliates. If any purchases of goods or services for the Facility are made from or through an Affiliate of Contractor, the charges to the Facility for such goods or services shall be on the same terms as those made to Other Contractor Facilities, and such charges shall not exceed the market prices for such goods and services. Contractor shall disclose to City the prices paid by its Affiliates for any such goods and services.
12.3 Facility Names. The Facility shall be known by such trade name and/or trademark or logo as may from time to time be determined by City. All names, logos and designs used at the Facility shall be the exclusive property of City. However, during the term of this Agreement Contractor shall have a non-exclusive license to use such names, logos, and designs in connection with the operation of the Facility. Contractor may identify the Facility as a golf course managed and operated by Contractor and may use the name “_______” or the initials “ Contractor” or the ___________ logo alone or in conjunction with other words or names or designs owned by Contractor or any of its Affiliates. It is recognized that the name “ ___________” and the initials “Contractor,” together with any other names, logos or designs owned by Contractor or any of its Affiliates and used in the management and operation of the Facility (including without limitation any such names, logos or designs used in connection with the restaurant, banquet rooms and meeting rooms in and about the Facility), together with appurtenant goodwill, are the exclusive property of Contractor or its Affiliates (collectively, the “ Contractor-Owned Names”).
Accordingly, City agrees that no right or remedy of City for any default on the part of Contractor under this Agreement shall, nor shall any provision of this Agreement, confer upon City or its successors or assigns the right to use Contractor-Owned Names in the operation of the Facility or otherwise. In the event of any breach of this covenant by City, Contractor , in addition to any remedies available to it under this Agreement or at law or in equity, shall have the right to injunctive relief. Anything contained in this Section 12.3 to the contrary notwithstanding, upon the expiration or earlier termination of this Agreement, City shall have the right to continue to use any and all items of Operating Inventory then on hand bearing any Contractor -Owned Names, but shall not have the right to reorder any such items. In lieu of perm itting City to continue to use such items of Operating Inventory bearing any Contractor-Owned Names, Contractor shall have the option to purchase any or all of such items at a price equal to City’s cost of such items.
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12.4 Notices. All notices and communications pursuant to this Agreement shall be addressed as set forth below or as either party may hereafter designate by written notice and may be delivered by any one of the following methods: (a) by personal delivery; (b) by deposit with the United States Postal Service as certified or registered mail, return receipt requested, postage prepaid to the addresses stated below; or (c) by deposit with an overnight express delivery service.
Such notices and communications shall be deemed effective when actually delivered.
CITY
City Clerk
City of Fullerton
303 West Commonwealth Avenue
Fullerton, CA 92832
Parks and Recreation Department
City of Fullerton
303 W. Commonwealth Ave.
Fullerton, CA 92832
Contractor
Fullerton Golf, LLC
5341 Old Redwood Hwy, Suite 201
Petaluma, CA 94952
Attention: Michael Sharp
(707) 763-0335
Each party shall have the right to designate a different address within the United States of America by the giving of notice in conformity with this Section 12.5.
12.6 Attachments. This Agreement includes the following, which are attached hereto and made a part hereof:
Exhibit A – Facility Map
12.7 No Partnership or Joint Venture. Nothing contained in this Agreement shall be construed to be or create a partnership or joint venture between City and its successors and assigns, on the one part, and Contractor and its successors and assigns, on the other part.
12.8 Modification and Changes . This Agreement may be amended or modified in writing approved as to for m by the City Attorney and any such amendment shall be properly executed by both parties.
12.9 Compliance with all Laws . In performing the Services, Contractor shall, as an Operating Expense, comply with all statutes, ordinances, regulations, and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. In addition, all work prepared by Contractor shall conform to applicable local,
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county, state and federal laws, rules, regulations, and permit requirements and be subject to approval of the Contract Administrator. Before providing any services under this Agreement, Contractor shall, as an Operating Expense of the Facility, obtain and maintain any certificates, licenses and permits which may be required to permit Contractor to do business in the City, including the City of Fullerton. For clarity and the avoidance of doubt, nothing in this section shall require Contractor to expend its own funds to obtain all necessary licenses, permits and certificates required for the operation of the Facility and the business conducted at the Facility, the costs of which will be an Operating Expense of the Facility.
12.10 Conflicts or Inconsistencies. In the event there are any conflicts or inconsistencies between this Agreement and the Exhibits or any other attachments attached hereto , the terms of this Agreement shall govern.
12.11 Conflicts of Interest . The Contractor or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the “Act”), which: (1) requires such persons to disclose any financial interest that may foreseeably be materially affected by the work performed under this Agreement; and (2) prohibits such persons from m aking, or participating in making, decisions that will foreseeably financially affect such interest. If subject to the Act, Contractor shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for immediate termination of this Agreement by City. Contractor shall indemnity and hold harmless City for any and claims for damages resulting from Contractor 's violation of this Section.
12.12 Understandings and Agreements . This Agreement and the Exhibits hereto, constitutes all of the understandings and agreements of whatever nature or kind existing between the parties with respect to Contractor ’s management and operation of the Facility. No agreement, statement or promises made by either Contractor or City which is not contained herein, shall be valid or binding. No prior agreement, understanding or representation pertaining to any such matter shall be effective for any purpose.
12.13 Interpretation. Each Party acknowledges that he/she/it has had the benefit of advice of competent legal counsel with respect to its decision to enter into this Agreement. The provisions of this Agreement shall be interpreted to give effect to their fair meaning and sha ll be construed as prepared by both Parties.
12.14 Headings. The Article, Section and Subsection headings contained in this Agreement are for convenience and reference only and are not intended to define, limit, or describe the scope or intent of any provision of this Agreement.
12.15 Consents. Each party agrees that it will not unreasonably withhold any consent or approval requested by the other party pursuant to the terms of the Agreement, and that any such consent or approval shall not be unreasonably delayed or qualified. Similarly, each party agrees that any provision of this Agreement which permits such party to make requests of the other party shall not be construed to permit the making of unreasonable requests.
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12.16 Survival of Covenants. Any covenant, term, or provision of this Agreement which in order to be effective must survive the termination of this Agreement shall survive any such termination.
12.17 Third Parties. None of the obligations under this Agreement of either party shall run to or be enforceable by any party other than the party to this Agreement or by a party deriving rights under this Agreement as a result of an assignment permitted pursuant to the ter ms of this Agreement.
12.18 Waivers. No failure by Contractor or City to insist upon the strict performance of any covenant, agreement, term, or condition of this Agreement or to exercise any right or remedy consequent upon the breach of this Agreement shall constitute a waiver of any such breach or any subsequent breach of the same covenant, agreement, term or condition. No covenant, agreement, term or condition of this Agreement and no breach of this Agreement shall be waived, altered, or modified except by a written instrum ent. A waiver of any breach of this Agreement shall only affect this Agreement to the extent of the specific waiver, and all covenants, agreements, terms, and conditions of this Agreement shall continue in full force and effect.
12.19 Applicable Law. This Agreement shall be construed and interpreted in accordance with, and shall be governed by, the laws of the State of California and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange.
12.20 No Presumption Regarding Drafter. City and Contractor acknowledge and agree that the terms and provisions of this Agreement have been negotiated and discussed between City and Contractor, and that this Agreement reflects their mutual agreement regarding the subject matter of this Agreement. Because of the nature of such negotiations and discussions, it would be inappropriate to deem either City or Contractor to be the drafter of this Agreement, and therefore no presumption for or against the drafter shall be applicable in interpreting or enforcing this Agreement.
12.2 Enforceability of Any Provision. If any term, condition, covenant, or obligation of this Agreement shall be determined to be unenforceable, invalid, or void, such determination shall not affect, impair, invalidate, or render unenforceable any other term, condition, covenant, or obligation of this Agreement , and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
12.22 Remedies Cumulative. The remedies given to City and Contractor herein shall be cumulative and are given without impairing any other rights given City or Contractor by statute or law now existing or hereafter enacted and the exercise of any one (1) remedy by City or Contractor shall not exclude the exercise of any other remedy.
12.23 Discrimination. Contractor agrees not to discriminate against any person or class of persons by reason of sex, color, race, creed, religion, marital status, handicap, ancestry, national origin, or other prohibited basis in its provisions of Services or hiring of subcontractors or employees. To the extent this Agreement provides that Contractor offers accommodations or
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services to the public, such accommodations or services shall be offered by Contractor to the public on fair and reasonable terms.
12.24 United States Currency. All amounts payable pursuant to this Agreement shall be paid in lawful money of the United States of America.
12.25 Counterparts. This Agreement and any amendment may be executed in counterparts, and upon all counterparts being so executed each such counterpart shall be considered as an original of this Agreement or any amendment and all counterparts shall be considered together as one agreement.
12.26 Attorneys’ Fees. In the event of a dispute involving the non- performance by a party hereto of its obligations under this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees and all other expenses reasonably incurred in connection with such dispute, whether or not litigation is commenced, in addition to all other relief to which the party is entitled. If the successful party recovers judgment in any legal action or proceeding, the attorneys’ fees and all other expenses of litigation shall be included in and made a part of any such judgment.
12.27 Gender and Number. Whenever appropriate in this Agreement, the singular shall be deemed to refer to the plural and the plural to the singular, and pronouns of certain gender shall be deemed to include either of both of the other genders.
12.28 Further Assurance. City and Contractor agree that at any time or from time to time after the execution of this Agreement, each shall, upon the request of the other, execute and deliver such further documents and do such further acts and things as such party may reasonably request in order to fully effect the purpose of this Agreement.
12.29 Waiver of Jury Trial. The parties hereby waive trial by jury and any action, proceeding, or counterclaim brought by either of the parties hereto on any matter whatsoever arising out of or in any way connected with this Agreement.
12.30 Authority. Each individual executing this Agreement on behalf of a corporation, nonprofit corporation, partnership or other entity or organization, represents and warrants that he or she is duly authorized to execute and deliver this Agreement on behalf of such entity or organization and that this Agreement is binding upon the same in accordance with its terms.
Contractor shall, at City’s request, deliver a certified copy of its governing board’s resolution or certificate authorizing or evidencing such execution.
12.31 Effective Date. This Agreement shall be effective on the date on which this Agreement is executed by City (“Effective Date”).
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IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first above written.
CITY OF FULLERTON
______________________________
Daisy Perez, Deputy City Manager
ATTEST
_____________________________
Lucinda Williams, City Clerk
Contractor
By:_______________________________
Name:Michael Sharp
Title: CEO/President
APPROVED AS TO FORM:
_______________________________
City Attorney
Fullerton Golf Course Management Agreement