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HomeMy WebLinkAboutTayman Park Golf Group 2006-05-24AGREEMENT FOR GOLF PROFESSIONAL AND GOLF COURSE CONCESSION SERVICES THIS AGREEMENT made and entered on May 24, 2006 ("Effective Date"), in Ukiah, California, by and between the City of Ukiah, a general law city ("City") and Tayman Park Golf Group, Inc., a California for-profit corporation ("Contractor"); RECITALS: 1. The City owns the Ukiah Municipal Golf Course, an eighteen hole public facility with a Pro Shop, clubhouse, food and beverage service, and surrounding grounds located at 599 Park Blvd., Ukiah, CA (the "Golf Course"). 2. It is the desire of the City to contract for Golf Professional and Golf Course Concession Services at the Ukiah Municipal Golf Course. 3. The City has solicited proposals for the services as set forth herein. 4. Contractor has submitted a proposal in response to the City's solicitation, and was determined, based on its submission, interviews with its principals, and background investigation to have the experience, financial resources, qualifications, past performance and integrity sought by the City. AGREEMENT: In consideration of the above-recited facts and the terms and conditions as set forth below, the parties agrees as follows. 1. TERM. a. The initial term of this Agreement shall commence on the Effective Date and shall terminate on March 1, 2015. The term of this Agreement may be extended for two (2) additional periods of five (5) years each upon the mutual written consent of both parties. 2. PRO SHOP LICENSE. City hereby grants to Contractor an exclusive license for the use of the Pro Shop for the term of this Agreement. The license to use the Pro Shop shall coincide with the term of this Agreement, and shall terminate when this Agreement terminates. For the purposes of this Agreement, the "Pro Shop" shall include the sales area of the clubhouse and exterior deck area which are more particularly shown on Exhibit A attached hereto. Except as otherwise specifically stated in this agreement, the Pro Shop does not include any fixtures, equipment, supplies, inventory, furniture or other personal property. Contractor will provide at its expense any such items that are required for the operation of the Pro Shop. Except as otherwise specifically stated in this Agreement, title to all such property shall remain with Contractor. Contractor shall use the Pro Shop only for the management and operation of the Golf Course, and the sales and rental of golf related products and for no other purpose. 3. INDEPENDENT CONTRACTOR. The Contractor's relationship to the City in the performance of this Agreement is that of an independent contractor. The personnel performing services under this Agreement shall at all times be under the Contractor's control and exclusive direction, and shall be employees of the Contractor, and not employees of the City, and shall not be entitled to the benefits provided by the City to its employees, including but not limited to pension plans, health insurance and unemployment insurance 4. OBLIGATIONS OF CONTRACTOR. a. Contractor shall manage, operate and supervise play on the Golf Course, including but not limited to: • Manage all Pro Shop operations including collection and accounting of all fees, categorical recording of rounds played, and selecting and acquiring all golf related merchandise and supplies for retail merchandising adequate to respond to demand. • Develop and implement critical business systems including but not limited to scheduling all tournaments/events and daily tee times, collecting all fees, preparing and submitting audits, completing asset inventories, paying all applicable taxes, and providing monthly reports and accounting of business activity to the City. • At no cost to the City, purchase, implement, and maintain an integrated accounting and electronic point of sale system designed specifically for golf operations and capable of tee- time reservations; rapid daily close out with a detailed summary; member statements displaying detailed or summarized transactions; efficient inventory control with bar code scanning; full accounting package; integrates retail sales, accounts receivable, accounts payable, member billing, purchase orders, inventory control and payroll into general ledger; full daily, monthly, quarterly, and annual operating statements; expansive report library customized specifically to the needs of operations and programs; budgeting function to measure actual performance; and quick touch point-of-sale designed for fast check-in and customer sales in pro shop. During the term of this Agreement, the ownership of this system shall remain with Contractor. Upon termination of this Agreement, Contractor shall provide the data in the system to the City for its subsequent use. If permitted by the terms of its software license, upon City's request, Contractor shall sell the accounting software to the City at its, then, fair market value. If the City does not exercise its right to purchase the accounting software or the Contractor is not permitted under the terms of its license to sell the software to the City, the data shall be furnished in a form that can be converted for use in another accounting program. • At no cost to the City, implement and maintain an on-line marketing program equivalent to that offered by Legendary Marketing that would include a website, hosting, collection of customer data and a platform to advertise services and discounts. • At no cost to the City, implement and maintain an electronic on-line tee reservation system that is fully integrated with the point of sale system and website. • Operate and maintain a fleet of carts adequate to respond to demand for public rental. • Maintain rental sets of men's, women's, and youth golf clubs and push carts adequate to respond to public demand. • Maintain a pro shop lounge area that shall include (at a minimum) seating, tables, and one large screen television with cable/satellite programming. • Develop a golf instruction program and employ at least one fulltime golf professional with sufficient knowledge and experience to provide quality golf instruction. • Develop and implement a junior golf development program. • In the event that a driving range is established, develop a complete and comprehensive golf instruction program and junior golf development program. 2 • In cooperation with the City and at the City's cost, develop and implement a comprehensive print, radio, and television marketing strategy for promotion of the golf facility including but not limited to promotion of special group and tournament play programs and recruitment of out of area play, particularly during low play periods. • Act as liaison between the City and various golf organizations affiliated with the golf course and actively representing the City to the public in matters related to the Golf Course and its operation. • Actively coordinate golf activities with golf course maintenance to minimize interference with play and smooth administration of tournaments and special events. • Provide professional advice, oversight and recommendations for course maintenance activities and improvements including but not limited to the following: o Work with and maintain communications with the Golf Supervisor and/or other staff identified by the City in order to coordinate an efficient golf maintenance operation. o Conduct a weekly inspection of the course and golf facilities to document and communicate to the City any maintenance issues or recommendations. The inspection report shall be presented and communicated at weekly meetings with City maintenance personnel. o Provide weekly operational advice and recommendations to the City on course maintenance including, but not limited to, mowing, watering, planting, fertilizing, and maintenance of trees, greens, fairways, and turf. o Assist the City in identifying community golf needs, goals, priorities, and objectives. o Assist the City with the development of the Course's annual maintenance budget. o Under the direction of the City, the Contractor shall develop a comprehensive Golf Course Operations Plan which shall provide recommendations on daily course maintenance operations, staffing, equipment, and minor improvement projects. This Plan is due January 31, 2007, and shall be updated annually thereafter as necessary. Under the direction of the City, the Contractor shall prepare a report that identifies and recommends capital improvement projects. Projects shall be specifically identified in a successive order based upon priority with estimated costs. This Report is due January 31, 2007, and shall be updated annually thereafter as necessary. Provide food and beverage concessions of sufficient quality and variety to meet customer demand including but not limited to sandwiches, hot dogs, chips and snack foods, soda, bottled water and alcoholic beverages. For purposes of this Agreement, the provision of beer shall be deemed to satisfy the "alcoholic beverage" requirements; provided, however, that wine shall be added at such time as changes in food service would allow for the conversion of the existing Type 40 on-sale beer license from the Alcoholic Beverage Control Board ("ABC") to a Type 41 on-sale beer and wine license. In cooperation with the City, explore the feasibility for the operation of a full service food and beverage facility on site. • In cooperation with the City, explore the feasibility of a full service practice range facility on or off-site. • Enforcement of all rules and regulations which are adopted by the City Council, which rules and regulations so long as they remain in effect shall be deemed to be incorporated herein and by reference made a part of this Agreement. 3 • Maintain appropriate insurance in accordance with the attached Exhibit T." • Regulating the rate of play and play and conduct of the players in such a way as to provide for the safety of the player and others. • Daily policing of the Golf Course through a regularly scheduled marshalling program at key times, minimizing slow play and preserving order, including keeping off trespassers, preventing injury to the Golf Course by players and others. • Preventing any person from playing without first having paid green fees unless otherwise directed by City. • Acting as starter of play, and supervising cart usage. • Keeping the Golf Course and practice area open for play during a schedule of reasonable hours approved by City. • Administration of the privately owned cart program for the golf course including collection of registration certificates, registration or other applicable fees, and certificates of insurance. b. Rental Carts. Contractor shall provide and maintain at its sole expense a fleet of golf carts adequate to respond to demand, including tournaments, including the responsibility for the following: • Assigning the golf cart to the proper individual. • Instructing the renter how to use the cart properly, and enforcing proper usage on the Golf Course. • Directing the renter to and from first and tenth tee as needed. • Requesting driver's license or other suitable identification from renter as a deposit. • Moving carts in and out of proper housing daily. • A thorough washing of each cart as frequently as needed • Fuel for carts (electric and/or gas), provided, however, that City shall supply gasoline from its onside, above-ground fuel tank, using City staff and Contractor shall reimburse City for its costs to supply the gas, including its cost for the gasoline and the time of City employees to make gas available for golf carts and to pump the gas into golf carts. • Proper repair of body damage to carts. • 90% of all carts must be operable at all times. • Proper maintenance each time cart is brought in to ensure safe mechanical condition. C. Other limitations Contractor shall not do any of the following without having first obtained the written consent of City thereto, which the City in its sole discretion may deny: • Install or permit installation or use of any vending machine, pinball machine or similar equipment. 4 Attach, hang, or otherwise affix any sign or advertising matter anywhere on the Golf Course, except in the ordinary course of merchandising and/or promoting the golf course, its merchandise, programs and services, and as approved by the Director of Community Services. • Allow any newspaper rack or other object to be placed and maintained outside of the Pro Shop whether attached thereto or freestanding, or anywhere on the Golf Course. • Permit vendors to display or sell goods, wares or merchandise either within the interior or exterior of the Pro Shop, or anywhere on the Golf Course, except in the ordinary course of merchandising and/or promoting the golf course, its merchandise, programs and services, and as approved by the Director of Community Services. d. Standard of Performance Contractor agrees to provide a high standard of performance in the execution of all obligations and duties as herein provided, particularly with respect to service given directly to publicizing the golf course. The City reserves the right through the office of the City Manager to instruct the Contractor as to the standard of performance when deemed necessary. e. Contractor Employees Contractor shall employ Frank Johnson as the head golf professional, or another qualified golf professional approved by Contractor and the City Manager. Contractor shall notify City not less than ninety (90) days in advance, if Frank Johnson or another approved golf professional will no longer provide golf professional services under this Agreement. City shall have the right, in its sole discretion, to terminate this agreement, if Frank Johnson or another approved golf professional will no longer provide golf professional services. Contractor shall retain at all times at least one person on the premises during hours of operation who is experienced in the operation of golf courses, is an employee of Contractor and is authorized to represent and act for Contractor in matters pertaining to the exercise of the requirements hereby stated and to the performance of the duties and obligations required in this agreement. Contractor shall keep City informed in writing of the status of key positions. Employees of the Contractor who have contact with the public shall be clean, courteous and neat in appearance and demeanor at all times. Contractor shall have an employee at least 21 years of age present at all times during hours of operation to serve alcoholic beverages. Contractor shall at all times have sufficient personnel at the premises to provide a level of service customary in the industry. f. No Preferential Treatment. Contractor shall not grant any preferential treatment to any individual or group of individuals, including but not limited to granting of starting time or playing privileges, except as authorized in the rules and regulations adopted by the City. All Complimentary rounds of play must be approved by City in writing prior to granting by Contractor. 6. SHARED REVENUE BY THE CONTRACTOR. a. Definition of Gross Revenue The term "Gross Revenue" as used in this Agreement shall mean the gross selling price of all products and services sold or rented in or from the Pro Shop or Golf Course by Contractor, its employees, sub-contractors or agents, whether for cash or on credit, without exclusion, except as specifically excluded by this subsection or as otherwise agreed to in writing by City. Gross Revenue shall include the value of all products or services given away or traded. Gross Revenue shall not include sales and use taxes collected from customers. Gross Revenue does not include dishonored checks or credit card charges which have been determined to be uncollectable or bad debts in accordance with GAAP. The term "Merchandise Gross Revenue" as used in this Agreement shall mean all Gross Revenue attributable to the sale or rental of products or merchandise. The term "Cart Rental Gross Revenue" as used in this Agreement shall mean all Gross Revenue attributable to the rental of golf carts, with the exception of money received from outside tournament cart rentals only if they do not generate profit to Contractor. The term "Golf Lesson Gross 5 Revenue" shall mean all Gross Revenue attributable to golf lessons given at the Golf Course or Driving Range. b. Amount of Payments In consideration of the license of the Pro Shop and the right to operate the Golf Course, City shall retain the following percentages of Gross Revenue as defined above, and the balance shall be paid to Contractor: Six percent (6%) of Merchandise Gross Revenue Six percent (6%) of Golf Cart Gross Revenue Zero percent (0%) of Golf Lesson Gross Revenue Six percent (6%) of Food and Beverage Gross Revenue c. Payment of Credit Card Fees Contractor shall pay credit card fees for purchases of food and beverages, merchandise, and golf lessons and for golf cart related charges and fees. The City shall pay credit card charges for green fees, cart path fees and annual membership fees. The parties shall each pay one-half of credit card costs which are not transaction specific, such as monthly statement fees. 7. SHARED REVENUE BY CITY. a. Greens Fees In consideration of the operation of the Golf Course by Contractor, City shall pay to Contractor the sum of six percent (6%) of gross revenue received from greens fees and memberships. 8. FEES AND PRICES. Green fees, cart path fees, reservation fees, and tournament fees (collectively "Golf Fees") shall be fixed by a resolution of the City Council adopted from time to time, which resolution, so long as it remains in effect, shall be deemed to be incorporated herein by reference and made a part of this Agreement. Other fees and prices, including, but not limited to, cart rental fees, merchandise prices, food and beverage prices, and lesson fees shall be set by Contractor but in any case shall be comparable to those of other public golf courses in the area. 9. RECEIPT OF REVENUE AND PAYMENT. a. Register of Receipts All Gross Revenue, including but not limited to all Golf Fees, Merchandise Gross Revenue, Food and Beverage Gross Revenue, Cart Rental Gross Revenue, and Lesson Gross Revenue shall be processed through the point of sale system and in the manner prescribed by City. Such system shall include a record of golf lessons or other goods or services provided for free or at a reduced rate. b. Deposits All Gross Revenue shall be deposited daily in accordance with written instructions provided by City. Such deposits shall include all cash and checks received together with credit card payments. c. Fiduciary Responsibility Contractor shall hold in a fiduciary capacity, and not make any personal or other use of Golf Fees, or the portion of other gross revenue received or collected by Contractor. d. Errors Contractor shall be responsible for any shortages in monies collected on behalf of and required to be paid to City. e. Access Without Fee Contractor shall not allow any person to play golf, use a golf cart, or use any facilities of the Golf Course who has not first paid the prescribed fees, unless otherwise agreed to by the Community Services Director. 6 f. Activity Reports Contractor shall prepare and deliver to City a monthly report of the number of rounds played by each class of players and the amounts collected for each class of player. g. Payment to the Contractor City shall make payments to the Contractor on a monthly basis. Requests for payment along with the necessary financial documentation to verify the claim shall be submitted by the Contractor to the City. The City shall pay the amount due within 15 days of receipt of the request, notwithstanding any discrepancies identified in the financial documentation. The City shall have the right to reconcile any payments due to the City including but not limited to utilities, under Section 22 of this Agreement, and credit card processing fees as identified in this agreement. The City shall provide documentation to the Contractor verifying the payments due to the City. 10. ACCOUNTING AND FINANCIAL STATEMENTS. a. Financial Record Keeping. Contractor shall install and maintain a system of cash management, records and accounts, in a form approved by the City, and which complies with Generally Accepted Accounting Principals ("GAPP"), consistently applied, from which the amounts of fees, gross revenues from all sources, and other financial data necessary to fulfill the requirements of this Agreement readily can be ascertained. Contractor shall permit City, through its designated representatives, to inspect and audit such accounts and all other records of Contractor pertaining to the performance of this Agreement at any time upon demand. On or before the 15`h day of each month during which this Agreement remains in force, Contractor shall deliver to City a statement showing the total amounts of money collected or received by Contractor from all sources during the preceding calendar month. b. Accounting. Contractor shall keep true and accurate books and records in accordance with GAPP, consistently applied, which reflect Gross Revenues of the Golf Course by type, and tee time reservations and categorical rounds played at the Golf Course, and which are subject to audit in accordance with GAPP, showing all transactions related to the operations covered by this Agreement. Contractor, within ninety (90) days after the close of each fiscal year of July 1 through June 30 ("Fiscal Year") for the term of this Agreement, shall provide the City in a form satisfactory to the City, an accounting of all transactions related to the operations covered by this Agreement during the preceding Fiscal Year and balanced sheets, income and expense statements and other information pertaining to the Ukiah Golf Course operations. The accounting shall include, but not be limited to, all Gross Revenue by type. The Contractor shall furnish a written statement and an opinion directed to the City prepared by the Certified Public Accountant that the deposits of the preceding year have been made within the terms and conditions of this Agreement and that all revenues are completely and accurately reported. Such statement shall contain a list of the revenues as shown upon the books and records of the Contractor which were used to compute the payments to the City during the period covered by the statement. 11. MAINTENANCE. a. City Responsibility City shall be responsible for the maintenance of the Golf Course grounds and ancillary buildings, and the exterior of the Pro Shop and Clubhouse, including, structural and mechanical equipment. City shall also provide once daily maintenance on the Pro Shop restrooms and furnish and pay all costs in connection with janitorial supplies within the Pro Shop. b. Contractor Responsibility Provide routine custodial maintenance of the Pro Shop including but not be limited to cleaning of windows (inside and outside), floor coverings and walls, and the routine maintenance to include but not be limited to maintenance of electric lights, keeping all locks and fasteners and other interior furnishings, equipment, and fixtures in a state of repair. Contractor shall keep the Shop in a clean and sanitary condition and reasonably free from rubbish at all times to the satisfaction of City which expressly retains and reserves the right to inspect the Shop 7 at all times by and through its authorized representatives. Contractor further agrees to provide for the security of the Pro Shop and keep lavatories open at all times the course is open for play or the pro Shop is open for business. 12. CONDITION OF PREMISES. Contractor agrees that neither City or City's agents have made any representations or promises with respect to the physical condition of the Pro Shop, the Golf Course, parking lots, cart storage, revenues or expenses of the operation, or any other matter related to the Golf Course and associated facilities except as herein expressively set forth in the provisions of the Agreement. Contractor agrees that neither City nor any agent of the City has made any representation or warranty as to the suitability of the Pro Shop for the conduct of the Contractor's business. 13. HAZARDOUS MATERIALS. a. Definition As used herein, the term "Hazardous Material" shall mean any waste, material or substance (whether in the form of a liquid, a solid, or a gas and whether or not air-borne), which is or is deemed to be a pollutant or a contaminant, or which is or is deemed to be hazardous, toxic, ignitable, reactive, corrosive, dangerous, harmful or injurious, or which presents a risk, to public health or to the environment, or which is or may become regulated by or under the authority of any applicable local, state or federal laws, judgments, ordinances, orders, rules, regulations, codes or other governmental restrictions, guidelines or requirements, or any amendments or successor(s) thereto. b. Hold Harmless Contractor and City shall indemnify, defend and hold harmless the other party and its officers, officials, employees and agents with respect to all losses arising out of or resulting from the release of any Hazardous Material in or about the Golf Course, or the violation of any law enacted for the protection of the environment or regulating Hazardous Material, by that party or that party's agents, contractors, or invitees. This indemnification includes all losses, liabilities, obligations, penalties, fines, claims, actions (including remedial or enforcement actions of any kind and administrative or judicial proceedings, orders, or judgments), damages (including consequential and punitive damages), and costs (including attorney, consultant, and expert fees and expenses) resulting from the release or violation. This indemnification shall survive the expiration or termination of this Agreement. C. Allowable Materials Contractor shall not use or bring onto the Golf Course any Hazardous Material other than Hazardous Materials commonly used for the operation of vehicles and equipment or household hazardous materials commonly used in connection with cleaning. Contractor may use other Hazardous Materials for the maintenance of the Golf Course only with the prior written consent of City. Contractor shall use, store and dispose of all such Hazardous Material in strict compliance with all applicable statutes, ordinances and regulations in effect during the term of this Agreement. 14. WASTE. Contractor shall not use, or suffer or permit any person or persons to use the Pro Shop or Golf Course in any manner that will tend to create waste or nuisance.. 15. PROMOTION OF FACILITIES. Contractor shall, in good faith and with all reasonable diligence, use its best efforts, suitable advertising and other means, to promote the use of the facilities covered by this agreement. Cost for such promotional activities shall be equally shared by City and Contractor 8 16. PARKING AND CART STORAGE. a. Contractor shall have the non-exclusive right to use the existing golf course parking lots for guest and employee parking. City reserves the right to establish reasonable regulations concerning the location of employee parking within such lots. b. City shall continue to provide, at no cost to Contractor, an area sufficient to house up to 35 of the Contractor's carts within the existing cart barn located on the Golf Course. In the event that the Contractor converts to electric carts, the City, at its cost, will provide facilities that will deliver sufficient power from the City's utility system to supply a charging system in the manner which is commercially reasonable for similar golf course operations. The Contractor, at its cost, will be responsible for installing and maintaining at the cart barn the meter and such other electrical utility improvements required for the charging station, and for all applicable fees and charges by the City's Public Utilities Department, as shall be necessary to provide for the charging of and to charge the carts in the manner which is commercially reasonable for similar golf course operations. 17. FURNISHINGS AND EQUIPMENT. Contractor shall furnish the following in connection with the operation of the Pro Shop at no Cost to the City, all of which shall remain the property of Contractor and shall be removed by the Contractor upon termination of this Agreement, except for items the City expressly authorizes the Contractor to leave on the premises. Upon removal of this property, the Contractor shall restore the Pro Shop to the condition it was in before this property was installed: High quality fixtures, counters, showcases, equipment and other interior furnishings or devices required to operate the Shop as may be necessary which items shall be approved by City prior to their installation; provided that prior to exercising any rights or privileges under this Agreement, the Contractor shall file with City a signed inventory of all furnishings and equipment owned by Contractor, which inventory shall be maintained on a current basis. The foregoing items shall be maintained by Contractor in good condition and working order and shall be replaced as necessary to keep such items at a high level of quality. • An adequate stock of golf merchandise, supplies and equipment for sale. • Furnish an adequate supply of golf clubs and other golf equipment for rent in connection with the operation of a first-class course. 18. TAXES. a. Definition. As used in this Agreement, the term "Taxes" shall include any form of tax or assessment, license fee, license tax, tax or excise on rent, or any other levy, charge, expense or imposition (individually and collectively "impositions") imposed by any Federal, State, County or City, on any interest of Contractor in the Golf Course or Pro Shop, its improvements, fixtures, inventory, or any other aspect of its business. b. Payment of Taxes by Contractor._ Contractor shall pay all taxes attributable to the Pro Shop and related facilities when due and payable. In the event any such Taxes are not separately assessed against the Pro Shop, such Taxes shall be prorated by multiplying the entire cost of such Taxes by a fraction, the numerator of which is the gross area of the Pro Shop and the denominator of which is the gross leasable area of the entire clubhouse. 19. INSURANCE. Contractor shall at all times during the term hereof, produce and continue in force Comprehensive General Liability Insurance, Automobile Insurance, Fire insurance on Contractor's 9 inventory, equipment and fixtures, and Workers' Compensation and Employer's Liability Insurance in accordance with Exhibit "B" of this agreement. City may require increases in all of Contractor's insurance policy limits for all insurance to be carried by Contractor as set forth in this Article, if such increases are commercially reasonable. City shall at all times during the term hereof maintain property loss insurance, including loss resulting from fire, or similar coverage with a program of self-insurance and pooled risk through the Redwood Empire Municipal Insurance Fund with commercially reasonable limits insuring the Golf Course, the Pro Shop and the other improvements on the Golf Course for the value covered under the REMIF memorandum of coverage._Neither party shall be required to carry earthquake insurance. Each party shall provide liability insurance or, in the City's case, equivalent coverage through REMIF, to cover its respective exposure to claims arising in the areas subject to this Agreement, and shall provide evidence of such coverage to the other party. 20. WAIVER OF SUBROGATION. Contractor and City hereby waive and release any and all right of recovery against the other, including employees and agents, arising during the Term for any and all loss or damage to any property located within or constituting a part of the building in which the Pro Shop is located, including loss of rental income, which loss or damage arises from the perils covered by Fire and Extended Coverage Policy to the extent such loss or damage is not within a deductible and is actually paid under the policy. This mutual waiver is in addition to any other waiver or release contained in this Agreement. City and Contractor shall each have their insurance policies issued in such form as to waive any right of subrogation which might otherwise exist. 21. INDEMNITY. Contractor shall indemnify, defend, and hold harmless City and its officers, officials, employees, agents and volunteers from and against any and all liability, loss, damage, expense, costs (including without limitation costs and fees of litigation) of every nature occurring at the Pro Shop, or arising out of or in any way connected with Contractor's operations under this Agreement, except such loss or damage which was caused by the sole negligence or willful misconduct of City. Contractor shall promptly notify City or any death, serious injury or substantial property damage occurring on or about the Golf Course or Pro Shop. City shall not be liable to Contractor for any damages to Contractor arising from any act or neglect of the operator of the restaurant, banquet facilities and snack bar located in the Clubhouse. 22. UTILITIES. City shall pay seventy percent (70%) of the utilities, including electric, sewer, and water for the Pro Shop and Clubhouse. Contractor agrees to pay thirty percent (30%) of utilities, including electric, water, and sewer for the Pro Shop and Clubhouse as well as all charges for CATV, and any other utility services used exclusively in and upon the Pro Shop during the entire agreement term, and shall maintain all equipment utilized with respect to said utilities in good working order, at its sole expense. This section shall apply only to such Pro Shop related uses and not for Golf Course uses, which are on separate utility meters. Currently, electricity used in the Pro Shop is on the same meter as the remainder of the Clubhouse. City shall provide Contractor with a written claim together with documentation of Contractor's share of each monthly utility bill. Regardless of the entity which supplies any of the Contractor's Utilities or provides any service referred to in this Agreement, City shall not be liable, under this Agreement, in damages for any failure or interruption of any utility or service, unless caused by an act or failure to act by City. No failure or interruption of any utility or service, unless caused by City, shall entitle Contractor to terminate this Agreement; provided, however, that this provision does not apply to the acts or omissions of the City's Public Utilities Department. For purposes of determining the liability of the Public Utilities Department for damages caused by the operations of the City's electrical system, Contractor shall be treated as any other customer and shall be entitled to remedies and damages for failures or interruption of service to the same extent, if at all, as any other customer. Contractor shall not be responsible for any connection, 10 development or similar fees related to such utilities, nor for any changes to the same, which shall be paid by City. 23. REPAIRS AND MAINTENANCE. a. Contractor's Duties. Contractor shall be responsible for keeping the areas subject to the license provided by this Agreement in a clean and orderly condition. The Contractor shall also maintain, repair and replace all fixtures, appliances, equipment, furniture and Contractor installed improvements. The City shall be responsible for maintaining, repairing and replacing the interior and exterior of the buildings and grounds licensed to Contractor, including , but not limited to, the following: the interior surface of exterior walls; all windows, doors, door frames, and door closures; all plate glass, storefronts and showcases; all carpeting and other floor covering; and all interior plumbing and sprinkler systems, doors, door locks, display windows, window casements, light bulbs, installed therein. The City shall as necessary, or when required by governmental authority, make modifications or replacements of the foregoing The parties acknowledge that the premises are public property which the City has a responsibility to ensure are used in a manner which effectively serves the public. Accordingly, the City has a greater interest than most owners in ensuring the quality of the maintenance and operation of the premises. At all times, Contractor shall maintain and operate the Pro Shop and all other facilities and services offered in connection therewith in a first-class manner, and furnish and maintain a standard of service at least equal to the better class of similar businesses during the entire term of this agreement. Contractor shall keep all fixtures, furnishings and equipment within those portions of the facility occupied by Contractor clean, neat, safe, sanitary, in good order and in first-class condition and repair at all times. Contractor shall maintain and operate the Pro Shop in accordance with the highest commercial standards of cleanliness and shall keep the Pro Shop and surrounding deck clean and free from rubbish. b. City Duties. City shall, at its sole cost and expense, maintain, repair and replace the following: the foundation, roof, roofing, building exteriors, and structural portions of the Pro Shop. City shall repair any damage or defects caused by the negligence of City, its agents or contractors, or by any previous City work done improperly. Contractor shall give City notice of such repairs as may be required under the terms of this Article, and City shall proceed forthwith to effect the same with reasonable diligence, but in no event later than thirty (30) days after having received notice. If the time required to make the repairs exceeds thirty (30) days, the City shall commence the repairs within that time and exercise due diligence to complete them in a reasonable time. C. Right of Entry. The License granted to Contractor does not restrict the City and its authorized officers, employees or contractors from entering the Pro Shop at any time for any legitimate municipal purpose, including, but not limited, to inspection, repair, maintenance or emergency response. City shall exercise due care when entering the Pro Shop to avoid harm to or loss of trade fixtures, inventory, equipment or other personal property owned by Contractor which is located within the Pro Shop. 24. ALTERATIONS. a. Prior Consent. Contractor shall not, without City's prior written consent, make any structural alterations, improvements, or additions of a structural nature, or exterior design modifications in, or install any exterior signs, decoration or painting, or build any fences, or install any radio or television antennae, loud speakers, sound amplifiers or similar devices on the roof or exterior of the Pro Shop, or make any changes to the exterior of the Pro Shop or any of the surrounding areas (hereinafter "Alterations") without City's prior written consent. b. Proposal for Improvements. Any Alterations shall be presented to City in written form for conceptual approval. If conceptually approved, Contractor shall submit proposed detailed plans. City shall respond to any such submission promptly within thirty (30) working days after receipt. If City fails to respond within such thirty-day period, Contractor may give City ten (10) days written notice of 11 its intention to proceed with the proposed Alteration. If City fails to respond within such ten-day period, City shall be deemed to have given its consent to the proposed Alteration. If City shall give its consent, the consent shall be deemed conditioned upon Contractor acquiring a permit to do the work from appropriate governmental agencies, the furnishing of a copy thereof to City prior to the commencement of the work and the compliance by Contractor of all conditions of said permit in a prompt and expeditious manner. C. Quality of Work All work with respect to alterations must be done in a good and professional manner and diligently prosecuted to completion to the end that the improvements on the Golf Course or Pro Shop shall at all times be a completed unit except during the period of work. Any such Alterations shall be performed and done strictly in accordance with the laws and ordinances relating thereto. Contractor shall have the work performed in such a manner so as not to unreasonably obstruct the access of any other Contractor in the Building. 25. MECHANICS LIENS. a. Responsibility for Payment Contractor hereby agrees that it will pay or cause to be paid all costs for work done by it or caused to be done by it on the Pro Shop, and it will keep the Pro Shop free and clear of all mechanics' liens on account of work done by Contractor or persons claiming under it. b. Security If Contractor shall desire to contest any claim of lien, it shall furnish City adequate security pursuant to Section 3143 and such other applicable provisions of the California Civil Code, plus estimated costs and interest, or a bond of a responsible corporate surety in such amount as is necessary to release the lien, or provide City with evidence that enforcement of the lien is stayed. If a final judgment establishing the validity or existence of a lien for any amount is entered, Contractor shall pay and satisfy the same at once. C. In Case of Default If Contractor shall be in default in paying any charge for which a mechanics' lien claim and suit to foreclose the lien have been filed, and shall not have given City security to protect the Golf Course or Pro Shop and City against such claims of Lien, then City may, but shall not be obligated to, pay the said claim and any costs, and the amount so paid, together with reasonable attorneys' fees incurred in connection therewith, shall be immediately due and owing from Contractor to City, and Contractor agrees to and shall pay the same with interest at the legal rate. d. Notice of Lien Should any claims of lien be filed against the Golf Course or Pro Shop or any action affecting the title to such property be commenced, the party receiving notice of such lien or action shall forthwith give the other party written notice thereof. 26. DAMAGE AND DESTRUCTION. In the event of the partial or total damage or destruction of the building of which the Pro Shop is a part during the Term or any extensions thereof, from any cause, City shall, to the extent of insurance proceeds available to City, forthwith repair and reconstruct said building to substantially the same condition which said building was in immediately prior to such damage or destruction, provided such repairs or reconstruction can be made under then existing laws and regulations. During any period that the Pro Shop is not reasonably available for its full and intended use by Contractor under this Agreement as a result of such partial or total damage or destruction, the City, at its cost, may provide commercially reasonable temporary housing for the Pro Shop. In the event the City elects not to provide such temporary housing, if needed, and/or to reconstruct the Pro Shop as described above, then Contractor may elect to terminate this Agreement by giving notice of such termination within ninety (90) days after the occurrence of such damage or destruction; provided that, with respect to the occurrence of an event specified above, if Contractor elects to terminate this Agreement, City shall have thirty (30) days after receipt of such notice of termination to notify Contractor of its election to provide any needed temporary housing and/or repair and rebuild the buildings and other 12 improvements so damaged or destroyed at its cost and expense in which event this Agreement shall not be terminated, such repairs and rebuilding to be performed as soon as reasonably possible. If there is a partial destruction of the Pro Shop building but the Contractor can reasonably continue to operate the Pro Shop, notwithstanding such destruction and prior to the repair of such damage, the Contractor shall continue to perform under this Agreement. 27. CONTRACTOR DEFAULTS. The occurrence of any one or more of the following events shall constitute a material default and breach of this Agreement by Contractor: a. Material default and breach: (1) Any failure by Contractor to make any payment to City required hereunder as and when due where such failure continues for ten (10) days after receiving written notice from City of such failure. (2) The abandonment of the Pro Shop by Contractor. The failure of Contractor to occupy the Pro Shop for any period of 24 consecutive business hours shall be deemed an abandonment and vacation except when prevented by fire, earthquake, war, strike or other calamity beyond its control. (3) A failure by Contractor to observe and perform any other provisions of this Agreement to be observed or performed by Contractor, where such failure continues for thirty (30) days after written notice thereof by City to Contractor; provided, however, that if the nature of such default is such that the same cannot reasonably be cured within such thirty (30) day period, Contractor shall not be deemed to be in default if Contractor shall within such period commence such cure and thereafter diligently prosecute the same to completion. (4) Repeated material defaults of the same provision of this agreement for an unreasonable number of times. Contractor shall be deemed to have committed a repeated violation for an unreasonable number of times if Contractor fails to perform the same provision more than three times over the course of this agreement and each time City gives Contractor notice of such violation, even if Contractor subsequently cures the violation. (5) The making by Contractor of any general assignment for the benefit of creditors; the filing by or against Contractor of a petition to have Contractor adjudged a bankrupt of or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Contractor, the same is dismissed within sixty (60) days); the appointment of a trustee or receiver to take possession of substantially all of Contractor's assets located at the Golf Course or Pro Shop, or of Contractor's interest in this Agreement, where possession is not restored to Contractor within thirty (30) days; or the attachment, execution or other judicial seizure of substantially all of Contractor's assets located at the Golf Course or Pro Shop or of Contractor's interest in this Agreement, where such seizure is not discharged within thirty (30) days. Without limiting the foregoing, the parties agree and will not contest in any proceeding, including a proceeding in the United States Bankruptcy Court, that this Agreement is an executory contract or lease under 11 U.S.C. § 365, which Contractor would be required to either assume or reject within 60 days of filing the bankruptcy petition, and under which the Contractor must not be in default and with respect to which the Contractor would be required to provide adequate assurances that it would fully perform in the future. The parties further agree that Contractor's failure to make all deposits and payments due under this Agreement after a bankruptcy petition is filed shall constitute " cause," as that term is defined under Section 362(d)(1) of the Bankruptcy Code, and shall require the bankruptcy court, following a hearing on an order shortening time, to lift the automatic stay to permit recovery by City of the licensed premises. Customer agrees that all post-petition deposits and payments due hereunder 13 are administrative obligations and that they shall be so treated in any plan to be submitted by a debtor-in-possession. b. In the event of any such default by Contractor, then in addition to any other remedies available to City at law or in equity, City shall have the immediate option to terminate this Agreement and all rights of Contractor hereunder by giving written notice of such intention to terminate. 28. PERFORMANCE EVALUATIONS Performance evaluations will be conducted on an annual basis. These evaluations are intended to encourage discussion and communication between the Contractor and the City. Special evaluations may be given upon request, or if deemed necessary by the City. The goal of these evaluations is to maintain quality performance, communication, and customer satisfaction as well as to address any issues that may have arisen. 29. CITY DEFAULTS If City should be in default in the performance of any of its obligations under this Agreement, which default continues for a period of more than thirty (30) days after receipt of written notice from Contractor specifying such default, or if such default is of a nature to require more than thirty (30) days for remedy and continues beyond the time reasonably necessary to cure (provided City must have undertaken procedures to cure the default within such thirty (30) day period and diligently pursue such efforts to cure to completion), Contractor may, in addition to availing itself of any other remedies available at law and in equity, at its option, upon written notice, terminate this Agreement. 29. SURRENDER OF PREMISES. Upon expiration or termination of this Agreement, Contractor shall quit and surrender the Pro Shop with all the improvements thereon in as good state and condition as the same were when Contractor commenced the use thereof pursuant to this Agreement, reasonable wear and tear excepted. Upon expiration or termination of this Agreement, Contractor agrees, unless otherwise permitted in writing by City, to remove all personal property belonging to Contractor. Contractor shall, at its own expense, repair all damage to the Golf Course or Pro Shop including, but not limited to, any damages caused by the removal of its personal property. All improvements shall remain the property of the City and shall not be removed by Contractor. All personal property belonging to the City or purchased with City funds shall remain the property of the City and shall not be removed by Contractor. 30. SUBORDINATION. Contractor shall, upon City's request, subordinate this Agreement in the future to any first lien placed by City upon the Golf Course or Pro Shop or building of which the Pro Shop forms a part with an insurance company, bank or any other institutional lender, provided that such lender executes a nondisturbance agreement providing that if Contractor is not then in default under this Agreement, this Agreement shall not terminate as a result of the foreclosure of such lien, or conveyance in lieu thereof, Contractor's rights under this Agreement shall continue in full force and effect and its possession be undisturbed except in accordance with the provisions of this Agreement. 31. ASSIGNMENT. Contractor acknowledges that City has entered into this Agreement based upon the unique qualifications of Contractor. Accordingly, Contractor shall not assign this Agreement, sublet the Pro Shop, enter into franchise, license or concession agreements with respect thereto or otherwise transfer this Agreement or any interest, right or obligation therein (collectively "Assignment" or 14 "Assign") without first procuring the written consent of City. Moreover, Contractor shall not permit a Change of Control of Contractor without the prior written consent of City. "Change of Control" means that anyone other than Frank Johnson and James Stewart acquire more than 50% of the stock of the Contractor or anyone other than Frank Johnson and James Stewart acquire a controlling interest in the Contractor by any means. Notwithstanding anything contained herein to the contrary, City may assign, in whole or in part, City's interest this Agreement, and may sell all or part of the Building subject to this Agreement. In the event of any sale or exchange of the Golf Course or Pro Shop by City and/or an assignment by City of this Agreement, City shall be and is hereby entirely freed and relieved of all liability under any and all of its covenants and obligations contained in or derived from this Agreement arising out of any act, occurrence or omission relating to the Golf Course or Pro Shop or to this Agreement occurring after the consummation of such sale or exchange and/or assignment, provided such purchaser or exchange has assumed City's obligations under this Agreement. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. 32. NOTICES. Whenever notice, payment or other communication is required or permitted under this Agreement, it shall be deemed to have been given when personally delivered, fax or deposited in the United States mail with proper first class postage affixed thereto and addressed as follows: CONTRACTOR Tayman Park Golf Group, Inc. Attn: James Stewart 927 So. Fitch Mtn. Rd. Healdsburg, CA 95448 CITY City of Ukiah c/o City Manager Ukiah Civic Center 300 Seminary Ave. Ukiah, CA. 95482 FAX: 707 433 7846 FAX: 707 463 6204 Service by fax shall bear a notation of the date and place of transmission and the facsimile telephone number to which transmitted. Either parry may change the address to which notices must be sent by providing notice of that change as provided in this paragraph. 34. WAIVER OF BREACH. One or more waivers of a breach of any covenant, term or condition of this Agreement by either party shall not be construed by the other party as a waiver of a subsequent breach of the same covenant, term or condition. The consent or approval of either party to or of any act by the other party of a nature requiring consent or approval shall not be deemed to waive or render unnecessary consent to or approval of any subsequent similar act. If either party's consent or approval is required, it shall not be unreasonably withheld or delayed. 35. RELATIONSHIP OF PARTIES. Nothing herein contained, either in the method of computing rent or otherwise, shall create between the parties hereto, or be relied upon by others as creating, any relationship of partnership, association, joint venture, employer/employee or otherwise. The sole relationship or the parties hereto shall be that of an independent contractor. 15 36. LAWS OF CALIFORNIA. The laws of the State of California shall govern the validity, performance and enforcement of this Agreement. Should either party institute legal suit or action for enforcement of any obligation contained herein, it is agreed that the venue of such suit or action shall be in Ukiah, Mendocino County. 37. INTEGRATION OF REPRESENTATIVES. It is understood that there are no oral agreements or representations between City and Contractor which affect this agreement. This agreement supersedes and cancels any and all previous agreements, negotiations, arrangements, advertisements, or representations and understandings between the City and Contractor or displayed to Contractor by city with respect to the Golf Course or Pro Shop operation. There are no other representations or warranties between the parties. 38. MODIFICATIONS OF AGREEMENT. No modification to the terms of this Agreement shall be enforceable, unless approved by Contractor and the City and set forth in a written addendum or amendment of this Agreement signed by authorized representatives of the parties. The parties shall discuss modifications of this Agreement that would transfer more responsibility for golf course operations to Contractor, up to and including Contractor assuming full responsibility for the operation, maintenance and improvement of the entire 18 hole golf course, the Todd Grove Community Room, any developed driving range facility and any other golf related facility or concession not part of the agreement as currently written. Such negotiations may take place in stages with multiple amendments or addenda over time and may include all terms and conditions under which Contractor would assume and exercise some or all of such responsibility, including alternative arrangements for allocating golf course revenues, expenses and control. 38. TITLES. The titles of Articles and sections herein are for convenience only and do not in any way define, limit or construe the contents thereof. 39. VOID PROVISIONS. If any provision of this Agreement shall be determined to be void by any court of competent jurisdiction, then such determination shall not affect any other provisions of this Agreement and all such other provisions shall remain in full force and effect; and it is the intention of the parties hereto that if any provision of this Agreement is capable of two constructions, only one of which would render the provision valid, then the provision shall be the meaning which renders it valid. 40. FORCE MAJEURE. Any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, inability to obtain labor or other materials or reasonable substitutes therefore, governmental restrictions, governmental regulations, governmental controls, enemy or hostile governmental action, civil commotion, fire or other casualty, and other causes beyond the reasonable control of the party obligated to perform any term, covenant or condition of this Agreement, shall excuse the performance by such party for a period equal to any such prevention, delay or stoppage except the obligations imposed with regard to rental and other charges to be paid by Contractor pursuant to this Agreement. 41. TIME IS OF THE ESSENCE. Time is of the essence in the performance of each provision of this Agreement. 16 42. COMPLIANCE WITH GOVERNMENT REGULATIONS. Contractor shall promptly comply with all Fire Code, Building Code and State Fire Marshal requirements and make necessary corrections in a timely manner. Contractor shall include Fire Safety as part of the training program for new employees, especially managers. In addition, Contractor shall promptly comply with all laws, ordinances, orders, and regulations promulgated by any governmental agency and affecting the Golf Course or Pro Shop and their cleanliness, safety, occupation and use, including the maintenance of all permits and licenses required by law for the sale or consumption of alcoholic beverages in the areas under the Contractor's control or supervision. This paragraph shall not be deemed as requiring Contractor to make any improvement or addition to the Pro Shop or the Golf Course to comply with any such law, ordinance, order or regulation, the responsibility for which shall lie with the City. Contractor shall not perform any acts or carry on any practices that may damage the facilities and improvements located upon the Golf Course or Pro Shop or that may be a nuisance or menace to customers. 43. INSPECTIONS. City or its duly authorized representatives, or agents and other persons for it, may enter upon the Pro Shop at any and all reasonable times during the term of this agreement for the purpose of determining whether or not Contractor is complying with the terms and conditions hereof or for any other purpose incidental to right of City. 44. INTEREST IN OTHER COURSES. Contractor shall not have any financial or other interest in the control, operation or promotion of any other golf course, driving range or golf establishment within a twelve (12) mile radius of the City of Ukiah without first obtaining written permission from the City Manager. 45. ORGANIZATIONS. Contractor shall not become an officer or member of any golf club or organization of golfers formed or to be formed at the Golf Course or in any organization in which participation would conflict with the orderly and efficient operation of the course, and particularly in the granting of starting time or playing privileges. 46. AUTHORITY. Contractor shall have no authority to bind and shall not attempt to bind, City to any contracts or other obligations of any nature. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. Attest: City Clerk Cont or: Appro d s To Forn . B CiG t City Alt6r-ney Its: -,9C- 17 EXHIBIT B INSURANCE REQUIREMENTS Pro shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Pro, his agents, representatives, employees or subcontractors. A. MINIMUM SCOPE OF INSURANCE Coverage shall be at least as broad as: 1. Insurance Services Office from number GL 002 (ed. 1/73) covering Comprehensive General Liability and Insurance Services Office form number GL 0404 covering Broad Form Comprehensive General Liability; or Insurance Services Office Commercial General Liability coverage ("occurrence" form CG 0001). 2. Worker's Compensation insurance as required by the Labor Code of the State of California and Employers Liability insurance. B. MINIMUM LIMITS OF INSURANCE Pro shall maintain limits no less than: 1. General Liability: $1,000,000 combined single limit per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. 2. Workers' Compensation and Employers Liability: Workers' compensation limits as required by the Labor Code of the State of California and Employers Liability limits of $1,000,000 per accident. C. DEDUCTIBLES AND SELF-INSURED RETENTIONS Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City, either the insurer shall reduce or eliminate such deductibles or self- insured retentions as respects the City, its officers, officials, employees and volunteers; or the Pro shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. D. OTHER INSURANCE PROVISIONS The policies are to contain, or be endorsed to contain, the following provisions: 1. General Liability and Automobile Liability Coverages a. The City, its officers, officials, employees and volunteers are to be covered as insureds as respects; liability arising out of activities performed by or on behalf of the Pro, products and completed operations of the Pro, premises owned, occupied or used by the Pro, or automobiles owned, leased, hired or borrowed by the Pro. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, officials, employees or volunteers. b. The Pro's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees and volunteers. Any insurance or self- insurance maintained by the City, its officers, officials, employees or volunteers shall be excess of the Pro's insurance and shall not contribute with it. c. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the City, its officers, officials, employees or volunteers. d. The Pro'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. 2. Workers' Compensation and Employers Liability Coverage The insurer shall agree to waive all rights of subrogation against the City, its officers, officials, employees and volunteers for losses arising from work performed by the Pro for the City. 3. All Coverages Each insurance policy required by this clause shall be endorsed to state that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the City. E. ACCEPTABILITY OF INSURERS Insurance is to be placed with insurers with a Best's rating of no less than ANN. F. VERIFICATION OF COVERAGE Pro shall furnish the City with certificates of insurance and with original endorsements effecting coverage required by this clause. The certificates and endorsements for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. The certificates and endorsements are to be on forms provided by the City. Where by statute, the City's workers' compensation related forms cannot be used, equivalent forms approved by the Insurance Commissioner are to be substituted. All certificates and endorsements are to be received and approved by the City before work commences. mThe City reserves the right to require complete, certified copies of all required insurance policies, at any time. G. SUBCONTRACTORS Pro shall include all subcontractors as insureds under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein. 2