09/17/2008 Agreement
DANNY L. KOLHAGE
CLERK OF THE CIRCUIT COURT
DATE:
October 28. 2008
TO:
Suzanne A. Hutton
County Attorney
ATTN:
Kathy M. Peters
Executive Assistant
FROM:
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Isabel C. DeSantis, 1".1
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Deputy Clerk
At the BOCC meeting on September 17, 2008 the Board granted approval and authorized
execution of a Revenue Guaranty Agreement with Hyannis Air Service, Inc. d/b/a Cape
AirINantucket Airlines to provide Cape Air with a revenue guaranty to provide scheduled air
service between Fort Myers, Florida and the Florida Keys Marathon Airport.
Attached hereto are two fully executed duplicate originals ofthe subject document for
your handling. Should you have any questions, please do not hesitate to contact this office.
cc:
File /
Finance
REVENUE GUARANTY AGREEMENT
T'Ji.s Revenue Guaranty Agreement (this "Agreement") made and entered into as
of the I' - day of S-4YT- 2008, is between Hyannis Air Service, Inc. dba Cape
AirlNantucket Airlines, ("Cape Air" or "Airline" or "9K") and MONROE COUNTY
BOARD OF COUNTY COMMISSIONERS ("Guarantor").
Recitals:
Monroe County Board of County Commissions is the government entity operating
the Marathon / Florida Keys Airport. Cape Air is an airline providing scheduled air
transportation in the United States. Guarantor desires that Cape Air provide scheduled air
service between Fort Myers, Florida (RSW) and the Marathon / Florida Keys Airport,
Florida (MTH), and Guarantor is willing to provide Cape Air with a revenue guaranty for
operating such service. In consideration of the revenue guaranty provided by Guarantor,
Cape Air is willing to provide RSW-MTH service on the terms and conditions set forth
herein.
The parties agree as follows:
1. Definitions:
The defined terms set forth below shall have the meanings assigned to them:
1.1 "Average Fare" shall mean the Total Passenger Revenues for the
applicable Scheduled Service divided by the number of revenue passengers traveling on
such Scheduled Service, for the period of time defined in this contract.
1.2 "Revenue Guarantee per Departure" shall mean the amount specified in
Exhibit A multiplied by the number of one way Scheduled Flights operated as part of the
applicable Scheduled Service.
1.3 "Passenger Revenue" shall mean the ticketed passenger revenue received
by Cape Air for the MTH-RSW segment, using Cape Air's usual and customary
practices.
1.4 "Scheduled Flight" shall mean each scheduled flight operated on the
applicable Scheduled Service during the revenue guaranty period.
1.5 "Minimum Revenue Amount" (or "Minimum Revenues") shall mean the
amount of revenue Cape Air is guaranteed to receive for each flight. The dollar amount
shall be specified in Exhibit A.
1.6 "Scheduled Service" shall mean nonstop scheduled air transportation
service by Cape Air between MTH and RSW using nine-passenger Cessna 402
equipment, in accordance with the schedule set forth in Exhibit A. The schedule times
and frequency in Exhibit A are approximate and may be adjusted by Cape Air with
agreement of Guarantor, with agreement not to be unreasonable withheld, to maximize
Fort Myers connections and to accommodate seasonality oftraffic demand.
2. Scheduled Service.
2.1 In consideration of the revenue guaranty provided by Guarantor (as
described in Section 3 hereof) Cape Air agrees to operate the Scheduled Service during
the Revenue Guaranty Period defined in Exhibit A.
2.2 Cape Air reserves the right to cancel any Scheduled Flight for any reason,
including for weather, maintenance or operational reasons. If a Scheduled Flight is
cancelled, such flight will not be counted for purposes of this Agreement, and passengers,
tickets and revenues for such flights will not be included in calculating Average Fare,
Minimum Revenues, Passenger Revenues, Scheduled Flight or Scheduled Service.
3. Revenue Guaranty.
3.1 Guarantor has agreed to guaranty that Cape Air will receive the applicable
Minimum Revenues for operating the applicable Scheduled Service during the Revenue
Guaranty Period, defined in Exhibit A. Upon the completion of the Revenue Guaranty
Period, Cape Air will calculate the number of Scheduled Flights operated, Passenger
Revenues and Minimum Revenues, and Cape Air will deliver a report summarizing this
data to Guarantor. Cape Air shall issue this operational report within sixty (60) days
following the close of the revenue guaranty period.
3.2 If the applicable Passenger Revenues exceed the applicable Minimum
Revenue Amount during the revenue guaranty period, then no payment by Guarantor will
be due to Cape Air with respect to such Scheduled Service.
3.3 If the applicable Minimum Revenues exceed the applicable Passenger
Revenues with respect to such Scheduled Service, then Guarantor shall remit the
difference (the "Guaranty Payment") to Cape Air within thirty (30) days of receipt of
Cape Air's operational report by electronic funds transfer. Cape Air's calculation of
Scheduled Flights operated, Passenger Revenues and Minimum Revenues in the report
shall be binding and conclusive on Guarantor, absent manifest error.
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3.4 The Guaranty Payment shall not exceed Two Hundred and Fifty Thousand
and 00/1 00 Dollars ($250,000.00) (the "Guaranty Cap").
3.5 Cape Air and Guarantor will mutually agree on airfare pricing strategy.
4. Reports.
4.1 On a weekly basis beginning no later than sixty (60) days prior to the start
of the Revenue Guaranty Period, Cape Air shall provide Guarantor with a report
enumerating advance bookings for the MTH-RSW market, by week of travel. During the
Revenue guaranty period, such reports shall include the passenger loads for the Scheduled
Flights flown the previous week.
4.2 On or before thirty (30) days following the end of each month during the
Revenue guaranty period, Cape Air shall provide Guarantor with a statement setting forth,
for the market during the applicable month, the following data:
Number of revenue passengers flown by day;
Passenger Revenues received by Cape Air by day, and;
. The variance between Passenger Revenues received and the Minimum Revenues
for Scheduled Flights operated
These figures shall be provided for the prior month and, on an aggregate basis, for
all Scheduled Flights operated to date. Cape Air's calculations included in such
statements shall be binding and conclusive on Guarantor, absent manifest error.
5. Air Service Marketing
Guarantor agrees to support the Scheduled Service with a marketing and
promotional effort as outlined in Appendix B.
6. Term and Termination
6.1 This Agreement shall be effective on the first date of Cape Air service, as
outlined in Exhibit A, between Marathon and Fort Myers and shall continue until April
27,2009, however, that either party may terminate this Agreement at any time upon sixty
(60) days prior written notice to the other party. The termination ofthis Agreement, either
at its end or prior to its end, shall not affect outstanding rights and obligations.
6.2 Either party may terminate the Agreement upon the occurrence of an
"Event of Default." For purposes of this Agreement an "Event of Default" shall be
defined as a party's failure to comply with the material terms of this Agreement within
thirty (30) days of receipt of written notice from the non-defaulting party.
7. Miscellaneous.
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7.1 This Agreement constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings relating thereto. This Agreement may be modified and amended only
by a writing signed by the party against whom enforcement of the modification or
amendment is sought. All indemnities, agreements and covenants made by any party
herein shall survive any termination of this Agreement.
7.2 Neither this Agreement nor any of the rights or obligations hereunder may
be assigned or transferred, by operation of law or otherwise, by either party without the
prior written consent of the other party, such consent not to be unreasonably withheld or
delayed. Any attempted assignment or transfer without such consent shall be of no force
or effect.
7.3 All notices, requests, demands, consents and other communications
to or upon the parties to this Agreement shall be in writing and shall be delivered
by email, hand or sent by facsimile transmission or other written
telecommunication in any such case with mechanical or other proof of delivery or
deposited in the mail by first-class registered or certified mail, return-receipt
requested, postage prepaid, addressed as follows:
Notices to Guarantor:
Monroe County Board of County Commissioners
Mr. Peter Horton,
Director of Airports
Key West International Airport
3491 South Roosevelt Blvd.
Key West, Florida 33040
Fax: 305 292 3578
Notices to Cape Air:
Cape Air / Nantucket Airlines
Mr. Andrew Bonney
Vice President of Planning
660 Barnstable Road
Hyannis, MA 02601
abonney@flycapeair.com
Fax: 508-778-1870
or to such other address as may be hereafter designated in writing by the respective
parties hereto by notice similarly given. All notices shall be effective upon receipt
thereof, provided that absent such receipt, no notice shall be deemed to have been
given.
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7.4 No third party is jntP.lVled to beoefit from. nor may any third party seek
to enforce any of the provisions of, this Agreement.
7.S Neither party wiD be liable fur delays or 1iIiIure in iQ pm.fbnomc., umIer
the Program caused by any act of God, war, strike, labor dispute, work stoppage,
substantial reduelion of services from any COUDtry or region, fire, act of go"~
or lpIy other cause, whether similar or di...nmilar, beyond the control of that party (any
.
siDgIe or combination of such excuses is a "Force Majeure Event").
7.6 EACH PARTY WAIVES AND RELEASES THE OTHER PARTY
FROM ANY AND AIL CLAIMS FOR CONSEQUENTIAL DAMAGES, IN
CONNECTION WITH TInS AGREEMENT.
7.7 The parties exp.lessly agree that the laws of the State of Florida will govern
this A8I"I'>('MeN and the validity, llOOSl:ruCtion, iate.p"..alion, and eImct of this ~.
widIout regard to p.~ of coofIids ofkws. Each party agrees, that any civil suit or
8Ction brought "8l'"- it as a result of any ofiQ obIigIdioos UDder this Agreeo._ may be
brought l\tV':..ot it either in the slate or federal courts and venue sball lie in Monroe
County, Florida, and each party hereby irrevocably submits to the jurisdiction of such
courts and ~ waives, to the fullest flXIeIJt pe.witttd by law, any~ that it
may now or heae.dba have to the layiDg of the _ of such civil suit or 8Ction and any
claim that such civil suit or action has been brought in an ioconvenieot furum, and each
party further agrees that fioaI ,vtgr.- in any such civil suit or action sball be CQII('.Iumw.
and hindiqg upon it and shaD be ....ro..-bIt. 'Igl'inot it by suit upon such jJlolgJ-nt in any
00lJrt of ~...I juri~ FIIllIB, the parties rmtuaIly agree that they will waive
trial by jury in any acIion, ~"8 or couotercIaim brought by either party ~ the
other arising out of or in any way ct'fIIH"'IM with the Agreement.
7.8 Cape Airs service shall be operated UDder the CwI:.~..... Connection
brand. As an affiIi_ of Ctn.I:.~.t'" Aidines ("C<n..:.~....1j, C4:...I:'~.I",,1 has some
CODIroI over Cape Airs schedule, reservatioDs systems, revawe """"'8""n...4 systems and
- which cities may be served with the brand. Cape Air shall use best e1furts with
c...:'~.lal to afIilct the service as deIIaibed. but GuoI.lIIilor acImowJedges that Cape Air
is b6~ to O....j.....II~J on some trey.lD8treall. C...I:.~oI.d's inputs to Cape Air shall be
consideredjfln:e 1IIOje1Ire.
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8. R~lationship of the Parties. For the purposes of this Agreement, neither party
shall be deemed to be the agent, partner, employee, joint venture, or fiduciary ofthe other
party.
9. Severabilitv. If any clause or provision of this Agreement shall be held to be
invalid in whole or in part, then the remaining clauses and provisions, or portions thereof,
shall nevertheless be and remain in full force and effect.
10. Attornev's Fees. If either party hereto shall bring any suit or action against the
other for relief, declaratory or otherwise, arising out of this Agreement, the substantially
prevailing party shall have and recover against the other party, in addition to all court
costs and disbursements, such sum as the Court may adjudge to be reasonable attorneys'
fees, at the time such judgment becomes a final judgment, following exhaustion of all
appeals.
11. Binding Effect. The terms, covenants, conditions, and provISIons of this
Agreement shall bind and inure to the benefit of the Guarantor and Cape Air and their
respective legal representatives, successors, and assigns.
12. Authoritv. Each party represents and warrants to the other that the execution,
delivery and performance of this Agreement have been duly authorized by all necessary
County and corporate action, as required by law.
13. Claims for Federal or State Aid. Guarantor and Cape Air agree that each shall be,
and is, empowered to apply for, seek, and obtain federal and state funds to further the
purpose of this Agreement; provided that all applications, requests, grant proposals, and
funding solicitations shall be approved by each party prior to submission.
14. Adiudication of Disputes or Disagreements. Guarantor and Cape Air agree that
all disputes and disagreements shall be attempted to be resolved by meet and confer
sessions between representatives of each of the parties. If no resolution can be agreed
upon within 30 days after the first meet and confer session, the issue or issues shall be
discussed at a public meeting of the Board of County Commissioners. If the issue or
issues are still not resolved to the satisfaction of the parties, then any party shall have the
right to seek such relief or remedy as may be provided by this Agreement or by Florida
law.
15. Cooperation. In the event any administrative or legal proceeding is instituted
against either party relating to the formation, execution, performance, or breach of this
Agreement, Guarantor and Cape Air agree to participate, to the extent required by the
other party, in all proceedings, hearings, processes, meetings, and other activities related
to the substance of this Agreement or provision of the services under this Agreement.
Guarantor and Cape Air specifically agree that no party to this Agreement shall be
required to enter into any arbitration proceedings related to this Agreement.
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16. Nondiscrimination. Guarantor and Cape Air agree that there will be no
discrimination against any person, and it is expressly understood that upon a
determination by a court of competent jurisdiction that discrimination has occurred, this
Agreement automatically terminates without any further action on the part of any party,
effective the date of the court order. Cape Air agrees to comply with all Federal and
Florida statutes, and all local ordinances, as applicable, relating to nondiscrimination.
These include but are not limited to: I) Title VI of the Civil Rights Act of 1964 (PL 88-
352) which prohibits discrimination on the basis of race, color or national origin; 2) Title
IX of the Education Amendment of 1972, as amended (20 USC ss. 1681-1683, and 1685-
1686), which prohibits discrimination on the basis of sex; 3) Section 504 of the
Rehabilitation Act of 1973, as amended (20 USC s. 794), which prohibits discrimination
on the basis of handicaps; 4) The Age Discrimination Act of 1975, as amended (42 USC
ss. 6101-6107) which prohibits discrimination on the basis of age; 5) The Drug Abuse
Office and Treatment Act of 1972 (PL 92-255), as amended, relating to
nondiscrimination on the basis of drug abuse; 6) The Comprehensive Alcohol Abuse and
Alcoholism Prevention, Treatment and Rehabilitation Act of 1970 (PL 91-616), as
amended, relating to nondiscrimination on the basis of alcohol abuse or alcoholism; 7)
The Public Health Service Act of 1912, ss. 523 and 527 (42 USC ss. 690dd-3 and 290ee-
3), as amended, relating to confidentiality of alcohol and drug abuse patent records; 8)
Title VIII of the Civil Rights Act of 1968 (42 USC s. et seq.), as amended, relating to
nondiscrimination in the sale, rental or financing of housing; 9) The Americans with
Disabilities Act of 1990 (42 USC s. 1201 Note), as maybe amended from time to time,
relating to nondiscrimination on the basis of disability; 10) Any other nondiscrimination
provisions in any Federal or state statutes which may apply to the parties to, or the subject
matter of, this Agreement.
17. Covenant of No Interest. Guarantor and Cape Air covenant that neither presently
has any interest, and shall not acquire any interest, which would conflict in any manner or
degree with its performance under this Agreement, and that only interest of each is to
perform and receive benefits as recited in this Agreement.
18. Code of Ethics. Guarantor agrees that officers and employees of the Guarantor
recognize and will be required to comply with the standards of conduct for public officers
and employees as delineated in Section 112.313, Florida Statutes, regarding, but not
limited to, solicitation or acceptance of gifts; doing business with one's agency;
unauthorized compensation; misuse of public position, conflicting employment or
contractual relationship; and disclosure or use of certain information.
19. Public Access. The Guarantor and Cape Air shall allow and permit reasonable
access to, and inspection of, all documents, papers, letters or other materials in its
possession or under its control subject to the provisions of Chapter 119, Florida Statutes,
and made or received by the Guarantor and Cape Air in conjunction with this Agreement;
and the Guarantor shall have the right to unilaterally cancel this Agreement upon
violation of this provision by Cape Air.
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20. Non-Waiver of Immunity. Notwithstanding the provisions of Sec. 768.28, Florida
Statutes, the participation of the Guarantor and Cape Air in this Agreement and the
acquisition of any commercial liability insurance coverage, self-insurance coverage, or
local government liability insurance pool coverage shall not be deemed a waiver of
immunity to the extent of liability coverage, nor shall any contract entered into by the
Guarantor be required to contain any provision for waiver.
21. Privileges and Immunities. All of the privileges and immunities from liability,
exemptions from laws, ordinances, and rules and pensions and relief, disability, workers'
compensation, and other benefits which apply to the activity of officers, agents, or
employees of any public agents or employees of the Guarantor, when performing their
respective functions under this Agreement within the territorial limits of the Guarantor
shall apply to the same degree and extent to the performance of such functions and duties
of such officers, agents, volunteers, or employees outside the territorial limits of the
County.
22. Legal Obligations and Responsibilities: Non-Delegation of Constitutional or
Statutory Duties. This Agreement is not intended to, nor shall it be construed as,
relieving any participating entity from any obligation or responsibility imposed upon the
entity by law except to the extent of actual and timely performance thereof by any
participating entity, in which case the performance may be offered in satisfaction of the
obligation or responsibility. Further, this Agreement is not intended to, nor shall it be
construed as, authorizing the delegation of the constitutional or statutory duties of the
Guarantor, except to the extent permitted by the Florida constitution, state statute, and
case law.
23. Non-Reliance bv Non-Parties. No person or entity shall be entitled to rely upon
the terms, or any of them, of this Agreement to enforce or attempt to enforce any third-
party claim or entitlement to or benefit of any service or program contemplated
hereunder, and the Guarantor and Cape Air agree that neither the Guarantor nor Cape Air
or any agent, officer, or employee of either shall have the authority to inform, counsel, or
otherwise indicate that any particular individual or group of individuals, entity or entities,
have entitlements or benefits under this Agreement separate and apart, inferior to, or
superior to the community in general or for the purposes contemplated in this Agreement.
24. No Personal Liability. No covenant or agreement contained herein shall be
deemed to be a covenant or agreement of any member, officer, agent or employee of
Guarantor in his or her individual capacity, and no member, officer, agent or employee of
Guarantor shall be liable personally on this Agreement or be subject to any personal
liability or accountability by reason of the execution of this Agreement.
25. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be regarded as an original, all of which taken together
shall constitute one and the same instrument and any of the parties hereto may execute
this Agreement by singing any such counterpart.
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26. Section Headings. Section headings have been inserted in this Agreement as a
matter of convenience of reference only, and it is agreed that such section headings are
not a part of this Agreement and will not be used in the interpretation of any provision of
this Agreement.
27. Federal. State and Local Law. Cape Air shall comply with all federal, state,
county and local laws, ordinances, rules and regulations now and hereafter in force which
may be applicable to the operation of its business at the airport, including the minimum
standards for commercial use of the airport, as amended from time to time.
28. Mutual Review. This agreement has been carefully reviewed by Guarantor and
Cape Air, therefore this agreement is not to be construed against either party on the basis
of authorship.
29. Books, Records and Documents. Cape Air shall maintain, during the Revenue
Guaranty Period and for four (4) years thereafter, all books, records, and documents that
may be reasonably necessary for Guarantor to verifY the accuracy of any statements or
reports that Cape Air is required to provide to Guarantor hereunder (collectively, the
"Records"). Guarantor, acting through its Finance Director or other authorized
representative, shall have the right to inspect and audit the Records, provided, any such
inspection and audit shall occur during normal business hours and not interfere with the
day to day operations of Cape Air. Cape Air retains the right to have one or more
representatives present during any inspection or audit by Guarantor. Ten (10) business
days notice must be given to Cape Air by Guarantor of its intent to audit the Records to
allow Cape Air sufficient time to schedule said presence. Nothing contained within this
section waives attorney/client or attorney work product privilege.
(Remainder of Paf!e lntentionallv Left Blank!
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IN WITNESS WHEREOF, the parties have signed this agreement by their undersigned
duly authorized representatives.
Hyannis Air Service, Inc.
By:
Monroe County Board of County
C_i"i = A
Name:
Name: Mario DiGennaro
Title:
Title: M,qynr/r.h,qirm;;m
(SEAL)
ATTEST: DANNY L. KOLHAGE, ClERK
BY~C.~~
DEPUTY CLERK
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EXHIBIT A: Representative Schedules
[To the Agreement between Cape Air and Monroe County Board of County
Commissioners]
Minimum Revenue Amount
MTH-RSW: $ 664.00 per flight subject to adjustment per fuel price
adjustment clause below.
Revenue Guaranty Period December 19 2008 to Anril 27 2009
Winter Schedule
Depart MTH 7:10AM arrive RSW 8:10AM Daily.
Cape Air and Guarantor will work Depart MTH 12:50pm arrive RSW I :50PM Daily
together to adjust schedules to Depart MTH 3:45PM arrive RSW 4:45PM Daily
demand and in accordance with
other airline schedule changes at Depart RSW II :30AM arrive MTH 12:30PM Daily
Fort Myers. Depart RSW 2:10PM arrive MTH 3:10PM Daily
Depart RSW 7:20PM arrive at MTH 8:20PM Daily
Note: Cape Air will make its best efforts to schedule MTH - RSW flights as online thru
or online connection flights to and from Tampa via existing Cape Air service Fort
Myers - Tampa. Timing and frequency shown is representative.
Fuel Price Adiustment Clause - In order to reflect fuel price variations on the cost of
operating Cessna 402 aircraft, the per-segment guarantee will be adjusted monthly as
follows:
A base all-in fuel price of $4.20 USD per gallon is established as the base cost upon
which the $664 per flight total cost is computed. Fuel burn between RSW and MTH is
36.5 gallons per flight segment operated. On a monthly basis, Cape Air will adjust the per
flight minimum revenue per flight amount upward or downward based on the actual price
paid for fuel that month minus $4.20 times the 36.5 times the number of segments
flown.
Example 1 = Fuel price for the month $5.00 minus base price of $4.20 equals $.80 cents
x 36.5 gallons equals $29.20 additional cost or a revenue target for that month of
$693.20 per flight.
Example 2 = Fuel price for the month $4.00 minus base price of $4.20 equals $.20 x 36.5
gallons equals $7.30 lower cost or a revenue target for that month of $656.70.
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----,--..^._--~..._._,
EXHIBIT B: Scheduled Service Marketing Plan
[To the Agreement between Cape Air and Monroe County Board of County
Commissioners]
Marathon Marketing Cooperation Plan
Station Presence - Signage
. Cape Air or Continental Connection sign age at counter, gate and any other advantageous
locations at airport
. Banner(s) production - creative from 9K and/or Continental Airlines
. Duratran or signage opportunities by baggage claim
. Review of street signage to Marathon Airport, and changes as needed
Press Releases
. Media support and work on press releases pre- and post-launch in conjunction with 9K
Director of Communications
Direct Marketing
. Access to, and distribution of, 9K information via airport customer database
Online
. 9K presence on homepage or 20d level of any airport and airport affiliated websites - link
to 9K site for online booking
Advertising
. Suggest a media plan including time frame and budget with most appropriate venues ie
print, radio, public access TV, etc.
. CaDe Air and the Tourism DeveloDment Council District Advisory Committee III will
each DUt UD $15.000 for advertlslna and Dromotlon.
. Provide iocal information on who are the key iocal travei generators and what they are
looking for. Target markets for 9K to establish creative
. Provide competitive information and performance results
Memberships
. Provide contact information and recommendations on local chambers and business
organizations
Community Affairs/Events
. Provide local support and presence at appropriate community events/trade shows
Updates
. Provided weekly updates and review of plans
. Provide pricing ideas/recommendations
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