ORDINANCE _________________

AN ORDINANCE relating to the City's municipal golf courses; authorizing the Superintendent of Parks and Recreation to extend and to enter into one or more management contracts for the operation of the City's municipal golf courses; increasing the 2003 Adopted Budget of the Department of Parks and Recreation to reflect a new management structure for the City's three eighteen hole golf courses; transferring money; and ratifying the assumption of unpaid financial obligations and lease arrangements from the former golf operator; all by a three-fourths vote of the City Council.

WHEREAS, the Seattle City Council authorized an agreement for the operation of its three municipal golf courses by Municipal Golf of Seattle (MGS), a not-for-profit corporation, through Ordinance 117663 in 1995; and

WHEREAS, as authorized by Ordinance 120028, the City entered into an Agreement regarding Assignment of Golf Course Operation between Frontier Bank ("Bank"), MGS and the City to allow MGS to borrow funds to make capital improvements to the golf courses; and

WHEREAS, by late 2002, MGS' deteriorating financial condition led both MGS and the City to conclude that MGS was unable to continue to operate the courses; and

WHEREAS, between 2002 and July 2003, MGS failed to pay the Department of Parks and Recreation for approximately $2.1 million in maintenance services that were provided on the golf courses by the Department's staff; and

WHEREAS, on May 9, 2003, the City notified the Bank that MGS was in default of the Golf Course Operation Agreement; and

WHEREAS, on July 3, 2003, the Bank held MGS' bank loan in default, accelerated the entire indebtedness of the loan, and exercised its right of setoff against MGS' bank accounts; and

WHEREAS, the Department explored options to provide for the orderly transition of golf management to a responsible entity and concluded that the Interbay Golf Center's then-current operator, Premier Golf Centers, LLC (Premier), was uniquely suited to manage the three municipal courses until the Department could conduct a search for a permanent operator; and,

WHEREAS, in order to prevent closure of the facilities, the Superintendent of Parks and Recreation entered into an emergency agreement with Premier to operate the three municipal golf courses; and

WHEREAS, the Superintendent of Parks and Recreation entered into a mutually agreeable termination agreement with MGS and a Settlement and Mutual Release with the Bank on July 11, 2003; and

WHEREAS, Premier has been satisfactorily managing the City's Interbay Golf Center since March 1, 2001, under a similar management agreement to what the Executive has proposed as an interim operating arrangement for the City's three municipal golf courses; and the City wishes to extend that agreement through December 31, 2004 and enter into an agreement with Premier for the City's three municipal golf courses, NOW, THEREFORE,

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. The Superintendent of Parks and Recreation is authorized to extend the Interim Management Contract for Interbay Golf Center with Premier Golf Centers, LLC substantially in the form of Attachment '1' to this ordinance, until December 31, 2004.

Section 2. The Superintendent of Parks and Recreation is authorized to enter into an Interim Management Contract with Premier Golf Centers, LLC, until December 31, 2004, substantially in the form of Attachment '2' to this ordinance to manage the three eighteen hole golf courses, Jackson Park, Jefferson Park and West Seattle Golf Course, (the "Three Municipal Golf Facilities").

Section 3. In order to pay for necessary costs and expenses incurred or to be incurred in 2003, but for which insufficient appropriations were made, the appropriation for the following in the 2003 Budget is increased from the fund shown, as follows:

Department

Fund

Budget Control Level

Amount

Parks and Recreation

Park and Recreation Fund (10200)

Park Cleaning, Landscaping, and Restoration (K3220)

$2,300,000

The above appropriation shall provide for expenditures made by the Department of Parks and Recreation for the operation of the Three Municipal Golf Facilities, including management fees, and other direct and indirect expenses of the Department of Parks and Recreation that are related to the Three Municipal Golf Facilities.

Section 4. Revenues from the operation of the Three Municipal Golf Facilities shall be deposited into the Park and Recreation Fund.

Section 5. The assumption by the Department of Parks and Recreation, pursuant to the termination agreement with MGS, of certain MGS debts and obligations, as well as the equipment leases which had been previously authorized by MGS, is hereby ratified.

Section 6. To support the appropriation made in Section 7 below, cash is hereby transferred as shown in the following table:

Fund

Amount Transferred

Cumulative Reserve Subfund Unrestricted (00164)

$125,000 transferred in

Park and Recreation Fund (10200)

$125,000 transferred out

Section 7. In order to pay for necessary costs and expenses incurred or to be incurred in 2003, but for which insufficient appropriations were made, the appropriation for the following in the 2003 Budget is increased from the fund shown, as follows, contingent upon and only to the extent of the execution of the transfer authorized in Section 6 above:

Fund

Department

Budget Control Level/CIP Program

Amount

Cumulative Reserve Subfund Unrestricted (00164)

Parks and Recreation

K72553: Jefferson Golf Crew Headquarters

$125,000

Section 8. In accordance with RCW 35.32A.060, by reason of the facts above stated, the foregoing appropriations are made to meet actual necessary expenditures of the City for which insufficient or no appropriation has been made due to causes which could not reasonably have been foreseen at the time of the making of the 2003 Budget.

Section 9. Any act consistent with the authority and prior to the effective date of this ordinance is hereby ratified and confirmed. In particular, the decision of the Superintendent of Parks and Recreation to enter into an emergency contract with Premier Golf Centers, LLC for the operation of the Three Municipal Golf Facilities is hereby ratified and confirmed. Golf fees that have been charged to the playing public since the termination of the MGS Agreement are hereby ratified and confirmed.

Section 10. This ordinance shall take effect and be in force thirty (30) days from and after its approval by the Mayor, but if not approved and returned by the Mayor within ten (10) days after presentation, it shall take effect as provided by Municipal Code Section 1.04.020.

Passed by a three-fourths (3/4) vote of all the members of the City Council the ____ day of _________, 2003, and signed by me in open session in authentication of its passage this _____ day of __________, 2003.

_________________________________

President __________of the City Council

Approved by me this ____ day of _________, 2003.

_________________________________

Gregory J. Nickels, Mayor

Filed by me this ____ day of _________, 2003.

____________________________________

City Clerk

(Seal)

Attachment 1: Interim Management Contract for Interbay Golf Center with Premier Golf Centers, LLC

Attachment 2: Interim Management Contract with Premier Golf Centers, LLC

Sarah Welch

MGSord

10/31/03

Version #9

Attachment 1: Interim Management Contract for Interbay Golf Center with Premier Golf Centers, LLC

FIRST AMENDMENT TO

THE CITY OF SEATTLE

INTERIM MANAGEMENT AGREEMENT FOR THE

OPERATION AND MAINTENANCE OF THE

INTERBAY GOLF COURSE AND RELATED FACILITIES

THIS FIRST AMENDMENT (the "Amendment") is entered into by and among THE CITY OF SEATTLE ("City"), a municipal corporation of the State of Washington, acting by and through its Department of Parks and Recreation (the "Department") and the Superintendent thereof, and Premier Golf Centers, LLC, a California Limited Liability Company, (referred to herein as "OPERATOR").

WHEREAS, the City and the OPERATOR (the "Parties") have entered into an Interim Management Agreement for the Operation and Maintenance of the Interbay Golf Course and Related Facilities (the "Agreement") the term of which ends on December 31, 2003; and

WHEREAS, the Parties desire to extend the termination date of the Agreement until December 31, 2004; and

WHEREAS, the Parties mutually desire to execute certain other amendments to the Agreement;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Section 4.1 of the Agreement is amended to extend the Term of the Agreement until December 31, 2004.

2. Section 6.1 is amended as follows:

Annual Budget. OPERATOR shall submit to the City, for its review and approval, an annual budget ("Annual Budget") for each Operating Year. The Annual Budget for the first Operating Year shall be submitted by OPERATOR to the City within 30 days of the Effective Date. The City shall approve, disapprove or conditionally approve the Annual Budget within thirty days of its receipt thereof, and the City's approval shall not be unreasonably withheld. For all subsequent Operating Years, OPERATOR shall submit to the City an Annual Budget on or before November 1 of the Operating Year immediately preceding the Operating Year at issue in the Annual Budget. The City shall approve, disapprove or conditionally approve these Annual Budgets on or before January 1 of the Operating Year at issue in the Annual Budget, and the City's approval shall not be unreasonably withheld. Each Annual Budget shall be in a format acceptable to City and shall include: (1) an optimistic budget which sets forth a budget assuming the most favorable business conditions and results; and (2) a realistic budget which sets forth a budget assuming the most likely, reasonable conditions and results. Each Annual Budget also shall include, but not be limited to, the prices as set forth in Section 6.12, the projected number of employees, a detailed description of all employee incentive compensation and employee benefits, the projected number of employees, the projected number of rounds of golf played and Driving Range buckets of golf balls purchased, and the Projected Gross Revenue, Projected Gross Course Revenue, Projected Gross Range Revenue, Projected Gross Pro Shop Revenue, Projected Gross Lesson Revenue and Projected Gross Restaurant Revenue, Projected Gross 18 Hole Putting Course Revenue, Projected Other Revenue and the projected amount of Direct Costs, Capital Expenditures, and major maintenance expenditures, a marketing plan, and any proposed plans for any improvements, upgrading or changes to the Interbay Golf Center. After written notice to and consultation with OPERATOR, the Superintendent shall have the authority to make reasonable changes to the Annual Budget including, but not limited to, the method of allocation for costs, expenditures and revenues.

3. Subsections 7.1B. and C. are amended as follows:

B. Incentive compensation programs for the Class "A" PGA Golf Professional and qualified golf instructors. Only costs of incentives for the Class "A" PGA Golf Professional and qualified golf instructors paid in accordance with incentive compensation programs approved by the Superintendent in the Annual Budget as set forth in Section 6.1 or other benefits given to the Class "A" PGA Golf Professional and qualified golf instructors as set forth in the Golf Course Manual (Exhibit B) shall be Direct Costs.

C. Employee benefits including vacation, sick leave, health insurance, disability insurance, worker's compensation insurance and incentive payments. Only costs of incentive payments paid in accordance with the Annual Budget approved by the Superintendent as set forth in Section 6.1 or other benefits given to employees as set forth in the Golf Course Manual (Exhibit B) shall be Direct Costs.

4. Except as specifically amended by this Amendment, all other terms and conditions of the Agreement shall remain unchanged and in full force and effect. Capitalized terms used herein shall have the same meaning as defined in the Agreement.

DATED this ______ day of ____________, 200__.

PREMIER GOLF CENTERS, LLC THE CITY OF SEATTLE

By: By: ______

Its: ______________________ SUPERINTENDENT OF THE DEPARTMENT OF PARKS AND RECREATION

1 Attachment 1 to MGSord

Attachment 2: Interim Management Contract with Premier Golf Centers, LLC

THE CITY OF SEATTLE

MANAGEMENT AGREEMENT FOR THE

OPERATION AND MAINTENANCE OF THE

CITY GOLF COURSES AND RELATED FACILITIES

THIS GOLF COURSE MANAGEMENT AGREEMENT (the "Agreement") is entered into by and among THE CITY OF SEATTLE ("City"), a municipal corporation of the State of Washington, acting by and through its Department of Parks and Recreation (the "Department") and the Superintendent thereof, and PREMIER GOLF CENTERS, LLC, a California Limited Liability Company, ("OPERATOR"), and is effective as of ________, 2003 (the "Effective Date").

RECITALS:

Pursuant to Article XI of the Seattle Charter, the Superintendent has the responsibility for the operation and control of the Parks and Recreation system of the City.

The City owns the Jackson, Jefferson and West Seattle Golf Courses and related facilities ("Golf Courses") more particularly described in Exhibit A attached hereto and incorporated herein by this reference.

The City desires to provide for the interim overall management and operation of the Golf Courses and the collection of fees therefrom to insure the highest quality of golf programs and related benefits for the public.

OPERATOR is well-qualified through its experience to manage and operate the Golf Courses facilities on an interim basis.

The City and OPERATOR agree that the primary objectives for OPERATOR'S performance under this Agreement are as follows:

a. Seamless transition from the previous operator, Municipal Golf of Seattle, to OPERATOR;

b. Continuation and, where possible, improvement of existing operations, maintenance, and customer service;

c. Continuation of affordable golf and related services; and

d. Increases in public use and associated revenues.

e. Due to the unexpected cessation of the management and operation of the Golf Courses by the prior operator, it was necessary for the City to enter into an agreement with OPERATOR to manage and operate the courses on an emergency basis. The parties now desire to replace that emergency agreement with this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1. DEFINITIONS

The following terms shall be defined as follows for the purposes of this Agreement:

1.1 Actual Gross Course Revenue. "Actual Gross Course Revenue" shall mean any and all revenues earned during an Operating Year attributable to operations directly relating to the Golf Courses.

1.2 Actual Gross Lesson Revenue. "Actual Gross Lesson Revenue" shall mean any and all revenues earned during an Operating Year attributable to operations directly relating to Golf Lessons.

1.3 Actual Gross Range Revenue. "Actual Gross Range Revenue" shall mean any and all revenues earned during an Operating Year attributable to operations directly relating to the Driving Range.

1.4 Actual Gross Restaurant Revenue. "Actual Gross Restaurant Revenue" shall mean any and all revenues earned during an Operating Year attributable to operations directly relating to the Restaurants.

1.5 Actual Gross Shop Revenue. "Actual Gross Shop Revenue" shall mean any and all revenues earned during an Operating Year attributable to operations directly relating to the Pro Shops.

1.6 Actual Gross Golf Car Rentals. "Actual Gross Golf Car Rental" shall mean all revenues earned during an Operating Year attributable to operations directly related to the rental of golf cars.

1.7 Actual Other Revenue. "Actual Other Revenue" shall mean any and all revenues derived from sources other than those in sections 1.1 through 1.6.

1.8 Actual Gross Revenue. "Actual Gross Revenue" shall mean any and all revenues earned attributable to operations directly relating to the Golf Courses including, but not limited to, green fees, merchandise sales, Driving Range fees, Golf Lesson fees, Golf Car Rentals and food and beverage sales. The sum of the Actual Gross Course Revenue, Actual Gross Lesson Revenue, Actual Gross Range Revenue, Actual Gross Restaurant Revenue, Actual Other Revenue and Actual Gross Shop Revenue shall equal the Actual Gross Revenue.

1.9 Annual Budget. "Annual Budget" shall have the meaning set forth in Section 6.1 of the Agreement.

1.10 Annual Gross Revenue. "Annual Gross Revenue" shall mean any and all revenues earned during an Operating Year attributable to operations directly relating to the Golf Courses including, but not limited to, green fees, merchandise sales, Driving Range fees, Golf Lesson fees, Golf Car Rentals and food and beverage sales. The sum of the Actual Gross Course Revenue, Actual Gross Lesson Revenue, Actual Gross Range Revenue, Actual Gross Restaurant Revenue, Actual Other Revenue and Actual Gross Shop Revenue for an Operating Year shall equal the Annual Gross Revenue for that Operating Year.

1.11 Capital Expenditure. "Capital Expenditure" shall have the meaning set forth in Section 7.4 of the Agreement.

1.12 Direct Cost. "Direct Cost" shall have the meaning set forth in Section 7.1 of the Agreement.

1.13 Superintendent. "Superintendent" shall mean the Superintendent of the Department of Parks and Recreation or his or her authorized and appointed designee.

1.14 Driving Range. "Driving Range" shall mean the golf ball driving practice facility located at the Jefferson Golf Course and shown on the diagram attached hereto in Exhibit A.

1.15 Golf Courses. "Golf Courses" shall mean all of the buildings, grounds, fixtures, structures, restrooms, equipment, computers, irrigation and controls, tools, vehicles, fencing and all appurtenances thereto involving the Jefferson, Jackson and West Seattle Golf Courses as shown in Exhibit A.

1.16 Golf Course Manual. "Golf Course Manual" shall mean the manual for the operation of the Golf Courses attached hereto as Exhibit B and all reasonable revisions thereto promulgated by the Superintendent from time to time made after written notice to and consultation with OPERATOR.

1.17 Golf Lessons. "Golf Lessons" shall mean the professional golf instruction given at the Golf Courses by either the Class "A" PGA Golf Professional or qualified golf instructors employed or subcontracted there by OPERATOR.

1.18 Operating Year.

A. The first Operating Year shall commence on the Effective Date and end on December 31, 2003.

B. Each Operating Year thereafter shall comprise the period of twelve (12) full calendar months, commencing on January 1 and ending on December 31.

1.19 Projected Gross Course Revenue. "Projected Gross Course Revenue" shall mean the projected amount of revenues to be earned during an Operating Year attributable to operations directly relating to the Golf Courses.

1.20 Projected Gross Revenue. "Projected Gross Revenue" shall mean the projected amount of revenues to be earned during an Operating Year attributable to operations related to the Golf Courses including, but not limited to, green fees, merchandise sales, Driving Range fees, Golf Lesson fees, food and beverage sales, and other revenue. The sum of the Projected Gross Course Revenue, Projected Gross Lesson Revenue, Projected Golf Car Revenue, Projected Gross Range Revenue, Projected Gross Restaurant Revenue, Projected Other Revenues and Projected Gross Pro Shop Revenue for an Operating Year shall equal the Projected Gross Revenue for that Operating Year.

1.21 Projected Gross Lesson Revenue. "Projected Gross Lesson Revenue" shall mean the projected amount of revenues to be earned during an Operating Year attributable to operations directly relating to the Golf Lessons.

1.22 Projected Gross Range Revenue. "Projected Gross Range Revenue" shall mean the projected amount of revenues to be earned during an Operating Year attributable to operations directly relating to the Driving Range.

1.23 Projected Gross Restaurant Revenue. "Projected Gross Restaurant Revenue" shall mean the projected amount of revenues to be earned during an Operating Year attributable to operations directly relating to the Restaurants.

1.24 Projected Gross Pro Shop Revenue. "Projected Gross Pro Shop Revenue" shall mean the projected amount of revenues to be earned during an Operating Year attributable to operations directly relating to the Pro Shops.

1.25 Projected Gross Golf Car Revenue. "Projected Gross Golf Car Revenue" shall mean the projected amount of revenues to be earned during an Operating Year attributable to the operations directly relating to Golf Car Rentals.

1.26 Projected Other Revenue. "Projected Other Revenue" shall mean the projected amount of any and all revenues derived from sources other than those in sections 1.19 and 1.21 through 1.26.

1.27 Pro Shops. "Pro Shops" shall mean the golf professional and merchandise facilities located at the Golf Courses and shown on the diagram attached hereto in Exhibit A.

1.28 Restaurants. "Restaurants" shall mean the food and beverage dining facilities located at the Golf Courses and shown on the diagram attached hereto in Exhibit A.

1.29 Starting Balance. "Starting Balance" shall have the meaning set forth in Section 9.3 of the Agreement.

1.30 "City" means The City of Seattle.

1.31 "Department" means the Department of Parks and Recreation of the City.

1.32 "Effective Date" shall mean July 14, 2003.

1.33 "OPERATOR" means Premier Golf Centers, LLC, and its subsidiary, PGC Interbay, LLC.

1.34 "Maintenance Agreement" shall mean that certain Maintenance Agreement set forth in Exhibit C.

1.35 "First Tee Agreement" shall mean the USE AGREEMENT between the City and SEATTLE JUNIOR GOLF FOUNDATION, dba FIRST TEE OF SEATTLE, a Washington non-profit corporation, attached hereto as Exhibit F.

1.36 "Property" means the real property upon which the Golf Courses are located. The Property is described in Exhibit A hereto.

1.37 "Term" shall have the meaning set forth in Article 4.

1.38 Interpretation of Terms. In the event of any conflict in the definition or interpretation of any word, responsibility, service or schedule between this Agreement and the exhibits attached hereto, such conflict or inconsistency shall be resolved by giving precedence in the following priority order: first to the Agreement; then to the Maintenance Agreement attached hereto in Exhibit C; and then to the Golf Course Manual attached hereto in Exhibit B.

2. RETENTION OF OPERATOR

2.1 Golf Courses. The City hereby retains OPERATOR for the interim management and operation of the Golf Courses, including, but not limited to, the Golf Courses, Pro Shops, Storage Spaces, Restaurants, Driving Range, Golf Car Rental, restrooms and all other buildings located at the Golf Courses.

3. ACCEPTANCE

3.1 Inspection. Prior to the effective date of this Agreement, OPERATOR has made an inspection of the Golf Courses and hereby accepts the condition of it for purposes of this Agreement on an "as is" basis.

4. TERM

4.1 Term of Agreement. The initial term of this Agreement shall begin on the Effective Date and terminate (unless extended by mutual agreement) on December 31, 2004.

4.2 Effect of Termination. Upon termination of the Agreement, all employees and agents of OPERATOR shall vacate the premises of the Golf Courses and shall have no further rights or duties thereon, except to ensure and organize a proper transfer of the premises, property and records of the Golf Courses.

5. OPERATOR'S BASIC SERVICE OBLIGATIONS

5.1 Golf Professional Services. OPERATOR shall sell, rent, store and repair golf equipment, sell golf related clothing and supplies, provide instructional services in the playing of golf, and operate the Golf Courses, Pro Shops, Golf Car Rentals and Driving Range as set forth in this Agreement. OPERATOR shall employ Class "A" PGA Golf Professionals at the Golf Courses, subject to the approval of the Superintendent, which approval shall not be unreasonably withheld.

A. Merchandise. OPERATOR shall provide and maintain in the Pro Shops such inventory of golf merchandise as is deemed necessary by the Superintendent to adequately meet the demand of the public. After written notice to and consultation with OPERATOR, the Superintendent shall have the right to prohibit the sale and rental of any item of merchandise on finding(s) that the item(s) is of such inferior quality as to not be in the public interest to be offered for sale or that such item(s) is not necessary or desirable for proper service to the public.

B. Golf Instruction. OPERATOR shall provide for golf instruction by employing qualified instructors accredited by the PGA and the PGA apprentice program. OPERATOR shall cause all golf instructors including the Class "A" PGA Golf Professional to comply with the rules and regulations of the Golf Course Manual.

C. Junior Golf Program. OPERATOR shall implement and promote a junior golf program as provided in the Golf Course Manual by providing group lessons, range balls and general golf instructions, and by conducting junior tournaments. OPERATOR shall comply with the terms of the FIRST TEE AGREEMENT.

D. Minimum Hours of Operation. At a minimum, the facilities shall be open and available to the public in accordance with the following daily hours of operation:

Facility

Hours of Operations

Driving Range

6:00 a.m. to 10:00 p.m. during Peak Season

8:00 a.m. to 10:00 p.m. during Off Season

(10:00 a.m. on Mondays)

Golf Courses

Dawn to dusk

Pro Shops

Dawn to dusk

Restaurants

7:00 a.m. to dusk during Peak Season

8:00 a.m. to dusk during Off Season

For purposes of this Agreement, Peak Season shall mean the months of April through October and Off Season shall mean the months of November through March. The above minimum daily hours of operation may be reasonably changed or revised by the Superintendent from time to time made after written notice to and consultation with OPERATOR.

5.3 Building and Equipment Maintenance Services. OPERATOR shall keep and maintain the premises of the Golf Courses, excluding grounds maintenance which shall be provided by the City in accordance with the Maintenance Agreement, including but not limited to, the Pro Shops, restrooms, storage spaces, the Driving Range, Golf Car Rentals and Restaurants, and all buildings, structures, improvements, fixtures, equipment and utility systems which may now or hereafter exist on or in the premises, in good, operable, usable and sanitary order and repair and in a good condition throughout the term of this Agreement, providing for such repairs, replacements, rebuilding and restoration as may be required in compliance with this Agreement. All such replacements, rebuilding and restoration, but not repair, shall be approved by the Superintendent prior to implementation, which approval shall not be unreasonably withheld.

5.4 Improvements. Any improvements, additions, alterations or changes (collectively, "improvements") to the Golf Courses made by OPERATOR shall be subject to, prior to the commencement of the improvements work, written approval by the Superintendent and the securing of applicable permits, and compliance with such terms and conditions as may be imposed by the Superintendent and shall be reimbursable under 7.4 of this contract.

5.5 City Ownership. Ownership of all Golf Courses structures, buildings or improvements thereto or thereon, merchandise, hand cars and Golf Course maintenance equipment constructed or acquired by the City, or OPERATOR on behalf of the City, and all alterations, additions or betterments thereto, shall remain with and owned by the City.

5.6 Failure to Perform. Should OPERATOR fail, after thirty (30) days notice from the City of the need therefor, to perform its obligations under this Article 5, the City may enter upon the premises of the Golf Courses and perform OPERATOR's obligations. Notwithstanding the preceding sentence, in the event of an emergency, the City may immediately enter upon these premises without notice to OPERATOR to perform emergency repairs and restoration. The cost of such repairs and restoration that are incurred by OPERATOR will be considered a Direct Cost unless they constitute a Capital Expenditure.

6. OPERATING RESPONSIBILITIES

6.1 Annual Budget. OPERATOR shall submit to the City, for its review and approval, an annual budget ("Annual Budget") for each Operating Year. The Annual Budget for the first Operating Year shall be submitted by OPERATOR to the City within 30 days of the Effective Date. The City shall approve, disapprove or conditionally approve the Annual Budget within thirty days of its receipt thereof, and the City's approval shall not be unreasonably withheld. For all subsequent Operating Years, OPERATOR shall submit to the City an Annual Budget on or before November 1 of the Operating Year immediately preceding the Operating Year at issue in the Annual Budget. The City shall approve, disapprove or conditionally approve these Annual Budgets before January 1 of the Operating Year at issue in the Annual Budget, and the City's approval shall not be unreasonably withheld. Each Annual Budget shall be in a format acceptable to City and shall include, but not be limited to, the prices as set forth in Section 6.12, the projected number of employees, a detailed description of all employee incentive compensation and employee benefits, the projected number of rounds of golf played and Driving Range buckets of golf balls purchased, and the Projected Gross Revenue, Projected Gross Course Revenue, Projected Gross Range Revenue, Projected Gross Pro Shop Revenue, Projected Gross Lesson Revenue, Projected Gross Golf Car Revenue and Projected Gross Restaurant Revenue, Projected Other Revenue and the projected amount of Direct Costs, Capital Expenditures, and major maintenance expenditures, a marketing plan, and any proposed plans for any improvements, upgrading or changes to the Golf Courses. After written notice to and consultation with OPERATOR, the Superintendent shall have the authority to make reasonable changes to the Annual Budget including, but not limited to, the method of allocation for costs, expenditures and revenues.

6.2 Annual Reports. OPERATOR shall submit to the City, for its review and approval, on or before February 15 of each Operating Year, not including the first Operating Year, an annual report ("Annual Report"). Each Annual Report shall include a summary regarding the physical condition of the Golf Courses and any repairs or improvements made during the most recently concluded Operating Year. Each Annual Report also shall include a summary of the financial condition of the Golf Courses including the Annual Gross Revenue, Actual Gross Course Revenue, Actual Gross Range Revenue, Actual Gross Shop Revenue, Actual Gross Lesson Revenue, Actual Gross Restaurant Revenue, Actual Gross Golf Car Revenue, Actual Other Revenues, the total amount of Direct Costs, the total amount of Capital Expenditures, and the total amount of major maintenance expenditures for the Operating Year described in the Annual Report.

6.3 Compliance with Laws. The parties shall comply with all municipal ordinances and all state and federal laws and regulations applicable to the terms and conditions of this Agreement. The parties shall not knowingly permit any illegal activities to be conducted on or at the premises of the Golf Courses. If any permits or licenses are required, OPERATOR shall obtain all such required permits or licenses from the appropriate regulatory agency before undertaking the regulated activity.

6.4 Compliance with Rules and Regulations. OPERATOR shall comply with all rules and regulations set forth in the Golf Course Manual and will enforce all such rules at the Golf Courses.

6.5 OPERATOR's Obligations to Refrain From Discrimination. OPERATOR agrees to comply with all state and local laws prohibiting discrimination with regard to creed, religion, race, age, color, sex, marital status, sexual orientation, gender identity, political ideology, ancestry, national origin, or the presence of any sensory, mental or physical handicap.

During the performance of this Agreement, OPERATOR agrees as follows:

OPERATOR will not discriminate against any employee or applicant for employment because of creed, religion, race, age, color, sex, marital status, sexual orientation, gender identity, political ideology, ancestry, national origin, or the presence of any sensory, mental or physical handicap, unless based upon a bona fide occupational qualification. OPERATOR will take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their creed, religion, race, age, color, sex, national origin, marital status, political ideology, ancestry, sexual orientation, gender identity or the presence of any sensory, mental or physical handicap. Such action shall include, but not be limited to the following: employment, upgrading, demotion, or transfer, recruitment or recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. OPERATOR agrees to post in conspicuous places available to employees and applicants for employment, notices to be provided by the contracting officer setting forth the provisions of this nondiscrimination clause. OPERATOR will take affirmative action to ensure that all of its employees, agents and subcontractors adhere to these provisions; provided, nothing herein shall prevent an employer from giving preference in employment to members of his/her immediate family.

OPERATOR will, upon the request of the Director (as used herein Director means the Director of Executive Administration, or his/her designee) furnish to the Director on such form as may be provided therefor, a report of the affirmative action taken by OPERATOR in implementing the terms of this provision, and will permit access to his records of employment, employment advertisements, application forms, other pertinent data and records requested by the Director for the purpose of investigation to determine compliance with these provisions.

If, upon investigation, the Director determines that there is probable cause to believe that OPERATOR has failed to comply with any of the terms of these provisions, OPERATOR shall be so notified in writing. The contracting authority shall give OPERATOR an opportunity to be heard, after ten (10) days' notice. If the contracting authority concurs in the findings of the Director, it may suspend or terminate this Agreement in accordance with law.

Failure to comply with any of the terms of these provisions shall be material breach of this Agreement.

The foregoing provisions will be inserted in all subcontracts entered into under this Agreement.

6.6 Signs. OPERATOR shall not post any signs, other than normal day-to-day operating prices and activity signs, at the Golf Courses without the prior approval of the Superintendent.

6.7 Public Use: Marketing. OPERATOR shall use its best efforts to maximize the public use of the Golf Courses. OPERATOR shall use its best efforts to effectively market and promote the Golf Courses to insure its financial and operating success. For each Operating Year, OPERATOR shall submit to the City a report along with the Annual Report concerning all activities undertaken by OPERATOR with respect to the approved marketing and promotion plan for the applicable Operating Year.

6.8 Utilities. Upon commencement of the term of this Agreement, OPERATOR shall be responsible for arranging for the utility services required by the Golf Courses, including, but not limited to, water, gas, electricity, sewer service and trash removal. OPERATOR acknowledges that during the term of this Agreement there may be a defect, deficiency or impairment of any utility system, water system, water supply system, drainage system, waste system, heating or gas system, or electrical apparatus or wires serving the Golf Courses. Any expenses incurred by OPERATOR to correct any such defect, deficiency or impairment shall be a Direct Cost.

6.9 Safety. OPERATOR shall immediately correct any unsafe conditions to the premises of the Golf Courses, or notify the City of any potentially unsafe conditions, as well as any potentially unsafe practices occurring thereon, that are known by OPERATOR or should have been known by OPERATOR. OPERATOR shall obtain emergency medical care as soon as reasonably possible for any member of the public on or at these premises who is in need thereof because of illness or injury. OPERATOR shall cooperate fully with the City in the investigation of any accidental injury or death occurring at the Golf Courses and shall submit to the Superintendent promptly an accident report describing any injuries or deaths at the Golf Courses. An incident log will be maintained at the Golf Courses.

6.10 Use of Facilities Restrictions. OPERATOR shall obtain from the Superintendent prior written approval of (1) any events or activities not otherwise specifically provided for or authorized under the Agreement, or (2) any extraordinary events or activities requiring the exclusive use of the Golf Courses or any portion thereof.

6.11 Meetings. Representatives of OPERATOR and the Superintendent shall meet on a quarterly schedule and at such other times as may be required by the City to review OPERATOR's performance under this Agreement, review the monthly financial reports submitted by OPERATOR, and discuss any problems or matters as determined by the City.

6.12 Fee Structure. With the prior approval in writing of the Superintendent, the OPERATOR shall set in-season fees for rounds of golf, cart fees, driving range fees and fees for all other golf services at the Golf Courses. The OPERATOR, in the exercise of its professional judgment, shall set such fees at such rates that will best meet the goals of maximizing Golf Courses net revenue and the positive golfing experience of golfers of all ages and skills. The OPERATOR will set and implement seasonal fees at or below the established maximum fees stated in this Agreement. The maximum fees (tax included) for the following services shall be as follows:

a. Greens Fees

* (18 holes) $35.00

* (9 holes) $19.00

b. Cart Rentals

* Golf Cars $27.00

* Pull Carts $5.00

c. Driving Range Balls (Bucket Size)

* Small (30 balls) $4.00

* Medium (60 balls) $7.00

* Large (90 balls) $10.00

d. Club Rentals

* 9-holes $7.50

* 18 holes $15.00

e. Restaurants/Pro Shops/Lessons

* The OPERATOR shall set prices in the restaurants at such levels as to meet or exceed the Projected Gross Restaurant Revenues in the Annual Budget.

* The OPERATOR shall set prices in the Pro Shops at such levels as to meet or exceed the Projected Gross Pro Shop Revenues in the Annual Budget.

* The OPERATOR shall set prices for Lesson at such levels as to meet or exceed the Projected Gross Lessons Revenues in the Annual Budget.

The OPERATOR, in the exercise of its professional judgment and to meet its goals of maximizing Golf Courses net revenue and the positive golfing experience of golfers of all ages and skills, also may establish: 1) off-season fees for rounds of golf, cart fees, driving range fees and fees for all other golf services at the Golf Courses and provide written notice to the Department within seven (7) days of the implementation of such off-season fees; and/or 2) temporarily lower fees, provide discounts, or conduct promotional programs.

In the event that the OPERATOR desires an increase in the maximum fees authorized under this Agreement, the OPERATOR shall submit such proposed changes to the Department for approval at least 90 days prior to the proposed implementation date. The parties recognize that any increase in the maximum fees authorized under this Agreement can be approved only by ordinance, and that, in the event that the Superintendent is in agreement with the proposed increases, the 90 day period is intended to give the Department time to seek ordinance approval for the proposed increases.

A. Goods and Services. OPERATOR shall at all times maintain a complete list or schedule of the prices charged for all goods and services supplied to the public by or at the Golf Courses. Such list or schedule of prices shall be included in each Annual Budget and provided to the Superintendent upon his request. Such prices shall be fair and reasonable based on the following considerations: that the Golf Courses are intended to serve the needs of the public with the goods and services supplied at a fair and reasonable cost; that the prices charged should be comparable to prices charged for similar goods and services in the general area; and that the profit margin should be reasonable considering the cost of providing the goods or services in compliance with the obligations of this Agreement. If the Superintendent notifies OPERATOR that fee or a price being charged is not fair and reasonable, OPERATOR shall have the right to confer with the Superintendent and justify such fee. Following reasonable conference and consultation thereon, OPERATOR shall make such fee/price adjustments as may be ordered by the Superintendent and provided that the City shall not price any item below its wholesale cost.

B. Green and Driving Range Fees. OPERATOR shall set forth in each Annual Budget the green fees, driving range fees, hand car rental fees and other equipment rental fees for the Operating Year at issue; provided, however, during the term of the Agreement, after written notice to and consultation with OPERATOR, the City may change the green fees, Driving Range fees hand cart rental fees and other equipment rental fees to be charged by OPERATOR. Changes in green fees and Driving Range fees may be made by OPERATOR in accordance with Section 6.12.

6.13 Business License and Permits. OPERATOR shall obtain the state and local licenses and permits necessary to conduct business at the Golf Courses. The costs, fees and charges incurred in obtaining and maintaining these licenses and permits shall constitute Direct Costs.

7. COSTS AND EXPENDITURES

7.1 Direct Cost. The normal and ordinary costs of operating and maintaining the Golf Courses ("Direct Costs") shall be paid by OPERATOR from OPERATOR'S bank account in accordance with Section 9.3. A Direct Cost shall be any cost which is directly related to the normal and ordinary staffing, operations or maintenance of the Golf Courses, including, but not limited to, the following:

A. Employee salaries.

B. Incentive compensation programs for the Class "A" PGA Golf Professional and qualified golf instructors. Only costs of incentives for the Class "A" PGA Golf Professional and qualified golf instructors paid in accordance with incentive compensation programs approved by the Superintendent in the Annual Budget as set forth in Section 6.1 or other benefits given to the Class "A" PGA Golf Professional and qualified golf instructors as set forth in the Golf Course Manual (Exhibit B) shall be Direct Costs.

C. Employee benefits including vacation, sick leave, health insurance, disability insurance, worker's compensation insurance and incentive payments. Only costs of incentive payments paid in accordance with the Annual Budget approved by the Superintendent as set forth in Section 6.1 or other benefits given to employees as set forth in the Golf Course Manual (Exhibit B) shall be Direct Costs.

D. Lease and/or rental of equipment.

E. Repair and maintenance of golf and hand carts, irrigation systems and capital equipment.

F. Uniforms, laundry and linens.

G. Operating supplies, office supplies, cleaning supplies and other miscellaneous supplies.

H. Audit.

I. Advertising and marketing expenses.

J. Travel.

K. Telephone, postage and freight.

L. Fees, Permits and Licenses

M. Utilities, including natural gas, water, electric power, telephones, garbage and trash collection.

N. Parking lot maintenance.

O. Necessary start-up materials referenced in Section 9.3.

P. Insurance Premiums, and, in the event of a claim on the liability insurance required by Section 11.1.B, the amount paid up to the deductible.

Q. Inventory, merchandise, food and beverage.

R. Business and Occupation taxes on the Direct Costs or reimbursement of same.

7.2 Direct Cost Budget. The Direct Cost Budget is the annual budget setting forth all projected Direct Costs and shall be part of the Annual Budget. The Direct Cost Budget may be amended or modified from time to time, in accordance with the City policies and procedures, to reflect actual operating circumstances, after written notice to and consultation with OPERATOR.

7.3 Excluded Operating Costs. Those operating costs that are paid by the City and not included in the Direct Cost Budget include and are limited to the following:

A. Leasehold Excise Taxes, if any.

B. Those maintenance and/or operating costs that are due to any reason beyond OPERATOR'S reasonable control (an "occurrence of force majeure") including, without limitation, acts of God, riots, strikes, fires, provided, however, that such expense shall continue only during the pendency of the particular occurrence of force majeure. Such excluded costs must exceed $5,000.00 per incident, and are subject to the prior approval of the Superintendent which approval will not be unreasonably withheld. If such costs do not exceed $5,000.00 per incident, they shall be treated as Direct Costs.

C. Base Management Fees and Incentive Bonuses.

D. Golf Course Maintenance Expenses including the golf course maintenance equipment leases and the golf car leases.

7.4 Capital Expenditures. A Capital Expenditure is any expenditure for new or replacement capital equipment or improvements to the Golf Courses that have a life expectancy greater than or equal to one year and a cost of no less than $5,000.00. A Capital Expenditure is not a Direct Cost and must be approved by the Superintendent before it may be undertaken. The cost of a Capital Expenditure shall be borne by the City. A list of capital equipment owned or possessed by the City relating to this Agreement as of the Effective Date is attached hereto in Exhibit D. The City may have the OPERATOR contract for and make capital improvements and reimburse the OPERATOR for these improvements.

8. OPERATOR COMPENSATION

8.1 Monthly Fee to OPERATOR. During the term of the agreement, City shall pay OPERATOR, on a monthly basis, a fixed amount of $20,200 per month; provided, however, that the monthly payment for the month of the Effective Date shall be made pro rata based upon the number of days remaining in the month including and after the effective date; and, provided further, that once the City funded working capital account specified in Section 9.3.B is established, the monthly management fee shall revert to $18,000. The City will pay the Monthly Fee upon receipt of an invoice from the Operator. The Monthly Fee is to be paid monthly on the first business day of the following month.

Bonus to Operator. At the end of each calendar month, a bonus shall be paid as follows: Operator to be paid a bonus equal to 12% of the amount that the Actual Gross Revenues of the just completed calendar month is in excess of Actual Gross Revenues for the same month of the preceding year. The City will pay the monthly bonus upon receipt of an invoice from the Operator.

8.2 Payment Procedures. After receipt from OPERATOR of applicable invoices, the City shall pay OPERATOR the monthly fee of Section 8.1 within five business days after receipt of an invoice following the end of the month, and City shall pay OPERATOR the Monthly Bonus, if any, no more than 30 days after the end of the applicable month and receipt of an invoice from the Operator.

9. FINANCIAL AND ACCOUNTING PROCEDURES

9.1 Bank Account. The City has established a bank account ("City's Bank Account") for the purposes of accepting deposits of revenues under this Agreement. The funds in this account are the property of the City. Payments by OPERATOR from this account are prohibited.

A. Revenues. All revenues from green fees, cart rentals, the Golf Course, Driving Range, Golf Car Rentals, Pro Shop, Restaurant, merchandise sales, Golf Lessons, equipment rentals, interest income and any other revenues from the Golf Courses are the property of the City and not part of the fees or consideration paid to OPERATOR and shall be deposited into the City's Bank Account daily. No deposits of Golf Courses' revenues may be made into any other bank account for any purpose or under any circumstances.

9.2 Monthly Reports and Transactions. OPERATOR shall provide to the City monthly reports of the previous month's transactions and financial status of the Golf Courses.

A. Within twenty (20) days of the end of each month, OPERATOR shall provide the City with a monthly and year-to-date balance sheet, cash flow report and income statement.

B Within three (3) days of the end of each month, OPERATOR shall provide the City with a monthly revenue report that separates the revenue by type of revenue.

C. The OPERATOR will provide to the City on a weekly basis a copy of every bank deposit slip and a copy of every credit card batch settlement.

D. After review of the above items, the City may request additional reports that detail previous transactions.

9.3 Beginning Working Capital. Within one (1) day of the Effective Date, OPERATOR shall deposit in its bank account sufficient funds based upon the projected calendar of needs ("Starting Balance") so as to provide sufficient working capital to commence operations at The Courses. On or before the Effective Date, OPERATOR shall provide the City with a list of the necessary start-up materials, attached hereto as Exhibit E, to be purchased with this working capital. The cost of these necessary start-up materials shall be Direct Costs. OPERATOR may invoice the City for expenditures it has incurred in the operation of the Golf Courses. Such expenditures must be supported by receipts, checks or other documentation and have been contemplated in the Annual Budget for the then current Operating Year. Upon approval of such expenditures, which approval shall not be unreasonably withheld, the City shall reimburse the OPERATOR for such approved expenditures.

A. Reimbursement for Expenses. OPERATOR may submit invoices on a twice-a-week basis, on Monday and Thursday, and the Department agrees to reimburse OPERATOR by inter-account transfer or wire transfer to OPERATOR'S account within four business days from receipt of an invoice and supporting documentation from the Operator. City will return the backup documents included with the twice weekly billings to OPERATOR for filing. OPERATOR will deliver all backup documents to City at the termination of the agreement. In addition, OPERATOR shall provide the City with the total amount of the bimonthly payroll with documentation reasonably satisfactory to the City at least two business days prior to each bimonthly payroll disbursement date. Provided that OPERATOR has met the requirements of the foregoing sentence, the City shall inter-account transfer or wire transfer to OPERATOR'S payroll account an amount equal to the total amount of the payroll on or before the payroll disbursement date.

B. The City without delay will pursue the establishment of a City funded working capital account. Until such time as a City funded working capital account is established, the monthly management fee shall be increased to $20,200 per month. Once the City funded working capital account is established, the monthly management fee shall revert to $18,000.

10. BUSINESS RECORDS

10.1 Types of Records. OPERATOR shall maintain a method of accounting for all the revenues and expenses in connection with the operation of the Golf Courses which shall in accordance with generally accepted accounting principles correctly and accurately reflect the gross receipts and disbursements received or made by OPERATOR from the operation of the Golf Courses. OPERATOR shall establish and implement adequate internal controls for this operation. The method of accounting, including bank accounts, established for the operation shall be separate from the accounting system used for any other business operated by OPERATOR. Such method shall include the keeping of the following records and documents:

A. Regular books of account such as general ledgers;

B. Journals including any supporting and underlying documents such as vouchers, checks, tickets, bank statements, etc.

C. Sales tax returns and checks and other documents proving payment of sums shown;

D. Cash register tapes or computerized records for the identification of day-to-day sales;

E. Logs showing the dates and times of Driving Range and greens usage and Golf Lessons at the Golf Courses; and

F. Any other accounting records that the City, in its sole discretion, deems necessary for proper reporting of receipts.

10.2 Audit of Records. All documents, books and accounting records kept by OPERATOR pursuant to this Article shall be open for inspection by the City at any reasonable time during the term of this Agreement and for at least three (3) years thereafter. All books and records will be turned over to the City after three (3) years for retention in City archives. In addition, the City or its authorized representative may, from time to time, conduct an audit of the books of the operation of the Golf Courses and observe the operation of the business. The City will use its best efforts to minimize the interruption with the normal operation of the Golf Courses during any inspection or audit performed pursuant to the provisions of this Section. The City and OPERATOR will independently conduct and jointly conduct "surprise" cash and inventory audits as each deems appropriate. The results of the audits will be documented in a written report, a copy of which will be given to both parties.

10.3 Annual Financial Statements. OPERATOR shall submit audited financial statements for the operation of the Golf Courses including a copy of the applicable audited statement of gross receipts and the audit management letter to the City within one hundred twenty (120) days of the close of each Operating Year during the term of this Agreement. The audit shall be performed by an independent certified public accountant designated by the City, and the cost of the audit shall be included as a Direct Cost of operation.

10.4 Public Records. All information obtained in connection with the City's inspections of the records or audits may be or become subject to public inspection and/or reproduction as public records.

11. INSURANCE AND INDEMNITY

11.1 Insurance.

A. Worker's Compensation Insurance. OPERATOR shall obtain and keep in full force and effect during the term of this Agreement worker's compensation insurance for all workers employed pursuant to this Agreement and, in case any work is sublet, OPERATOR shall require its suboperator(s) similarly to provide worker's compensation insurance for all of the latter's employees unless all the employees are covered by such protection afforded by OPERATOR.

B. Liability Insurance. OPERATOR shall obtain and keep in full force and effect, during the term of this Agreement commercial general liability insurance (including Premises/Operations, Products/Completed Operations, Personal Injury/Advertising Injury, Contractual Liability, Independent Contractors, Stop Gap/Employers Contingent and Commercial Liquor Liability), business auto liability and umbrella liability insurance with total limits of liability of not less than $6,000,000 per occurrence Combined Single Limit Bodily Injury and Property Damage. OPERATOR shall also obtain and keep in full force and effect during the course of this agreement aircraft liability insurance with limits of liability of liability of not less than $1,000,000 per occurrence Combined Single Limit Bodily Injury and Property Damage, including Passenger Legal Liability with no sublimit. The City and its respective officers, agents and employees shall be named as additional insureds under each policy whether liability is attributable to OPERATOR or the City and the policies shall stipulate that the insurance will be primary and noncontributory with any insurance or self-insurance maintained by the City.

C. Property Insurance. The City shall insure all real property and personal property, including new buildings and additions under construction on City premises (but excluding land such as greens, fairways, trees and landscaping), inventory and mobile equipment (including leased mobile equipment) subject to various deductibles and shall insure said property for the benefit of both the City and Operator. The City shall obtain from its property insurer a waiver of subrogation in favor of Operator to the extent that property insurance applies to any loss. In addition, the City agrees to waive subrogation for claims involving damage to City property in excess of $1,000 for any loss within the applicable deductible amount up to the attachment point of property insurance coverage. Operator shall be liable for claims less than $1,000 involving damage to City property only to the extent to which it is responsible for the damage.

D. Commercial Crime Insurance. OPERATOR shall obtain and keep in full force and effect, during the term of this Agreement, a commercial crime insurance policy in the amount of $250,000 for employee dishonesty and coverage for theft, disappearance and destruction of or to monies or funds of, in or at the Golf Courses in an amount as dictated by the exposure at any given time, but in no event less than $50,000. All amounts set forth in this Section 1l.lD shall be per occurrence and in the aggregate. OPERATOR also shall purchase a fidelity bond on behalf of the City whereby in the event any officer, employee, agent or subcontractor of OPERATOR embezzles, steals or otherwise fraudulently or improperly takes or obtains City funds, money or property, the City shall be reimbursed for the total amount of funds taken up to $250,000 per occurrence.

E. Certificates of Insurance and Endorsements. OPERATOR shall timely complete and file with the City certificates of insurance, copies of declarations pages and schedules of endorsements for all insurance required pursuant to this Agreement. Each policy of insurance required hereunder shall be endorsed to provide that no cancellation, non-renewal or reduction in coverages or limits to less than those required in this Section 11.1 shall be made during the term of this Agreement without thirty (30) days' prior written notice by certified mail to:

The City of Seattle

Risk Management Division

700 5th Avenue, Suite 1715

Seattle, WA 98104-5042

F. Cost of Insurance. The cost of the insurance required by this Section 11.1 and any deductible that the Operator pays for claims on the liability insurance required by Section 11.1.B shall be Direct Costs and shall be borne by the City.

11.2 Indemnity.

A. OPERATOR undertakes and agrees to defend, protect, indemnify and hold harmless the City and all of its elective and appointive boards, commissions, officers, officials, volunteers, agents and employees from and against all suits, judgments, causes of action, claims, losses, demands and expenses, including, but not limited to, attorney's fees and costs of litigation, damage and liability of any kind or nature whatsoever, for death or injury to any person or damage or destruction of any property of the City, OPERATOR or third party, arising in any manner from, by reason of, or incident to the negligent performance of or failure to perform under this Agreement by or on the part of OPERATOR or ITS officers, agents, subcontractors or employees.

B. OPERATOR shall defend, indemnify and hold harmless the City for any fines imposed by administrative regulatory bodies, except for fines resulting from and directly related to action for which the City is solely and completely responsible. In the event the City is only partially responsible for said action or inaction, OPERATOR shall defend, indemnify and hold harmless the City for the full amount of such fines.

C. The City does not and shall not waive any rights against OPERATOR which it may have by reason of the indemnity clause of Section 11.2 because of the acceptance by the City of any of the insurance policies described in Section 11.1.

D. The indemnity clause of Section 11.2 shall apply to all damages and claims for damages of every kind suffered, or alleged to have been suffered, by reason of any of the operations of this Agreement, regardless of whether or not the insurance policies referred to herein shall have been determined to be applicable to any of such damages or claims for damages.

12. REPRESENTATIONS AND WARRANTIES

12.1 Organization and Authority. As of the date of this Agreement and thereafter, OPERATOR hereby represents and warrants that (a) it is a Limited Liability Company duly organized, validly existing and in good standing under the laws of the State of California and is qualified to do business in all other states where necessary in light of its business or properties and has all requisite power and authority to conduct its business and own its properties, (b) it has all necessary power and authority to execute, deliver and perform its obligations under this Agreement, (c) the execution, delivery and performance by OPERATOR under this Agreement has been duly authorized by all necessary action and this Agreement has been duly and validly executed and delivered by OPERATOR, and (d) this Agreement constitutes the legal, valid and binding obligation of OPERATOR and is enforceable against OPERATOR in accordance with its terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization or moratorium or other similar laws relating to the rights of creditors generally.

12.2 No Conflict. As of the Effective Date and thereafter for the term of this Agreement, OPERATOR hereby represents and warrants that the execution, delivery and performance by OPERATOR of this Agreement does not and will not (a) conflict with or violate any provision of its articles of incorporation or bylaws, (b) result in a material breach or violation of any term or provision of, or constitute a material default under, any material agreement or instrument to which OPERATOR is a party or by which OPERATOR or any of its assets are bound, or (c) contravene or constitute a material default under any provision of applicable law or regulation.

12.3 Accuracy of Representations and Warranties. The representations and warranties contained in this Agreement do not contain any untrue statement of a material fact or omit any material fact necessary in order to make the statements contained herein not misleading or incomplete.

12.4 Survival of Representations and Warranties. The representations and warranties set forth by OPERATOR in this Article 12 shall survive the date of this Agreement and shall terminate only upon the fifth anniversary of the date of termination of this Agreement.

13. MISCELLANEOUS

13.1 Entire Agreement. This Agreement and the documents expressly referred to herein constitute the entire agreement among the parties with respect to the subject matter hereof and supersede any prior agreement or understanding among the parties with respect to such subject matter.

13.2 Severability. If any provision of this Agreement or the application of such provision to any party or circumstance shall be invalid, the remainder of this Agreement or the application of such provision to other parties or circumstances shall not be affected thereby.

13.3 Notices. All notices, requests, demands, consents and other communications required or permitted to be given by this Agreement shall be in writing and personally delivered or placed in the United States mail, properly addressed and with full postage prepaid, certified and return receipt requested. Such notices shall be deemed received at the earlier of (a) the date actually received, or (b) 5 business days after such mailing. Such notices shall be sent to the parties at the following addresses, unless other addresses are furnished by appropriate notice:

If to the City, to:

The City of Seattle

Department of Parks and Recreation

100 Dexter Avenue N.

Seattle, Washington 98109-5119

If to OPERATOR, to:

Premier Golf Centers, LLC

840 Apollo Street, Suite 213

El Segundo, CA 90245

Attention: William Schickler

13.4 Assignment; Subcontract. This Agreement shall be binding on, and shall inure to the benefit of, the parties to it and their respective heirs, legal representatives, successors and assigns. OPERATOR shall not assign any of its rights or delegate any of its duties under this Agreement to a third party unless (a) the City approves the third party contract prior to execution, and (b) the third party contract is consistent and complies with the terms and conditions of this Agreement.

13.5 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall constitute one in the same instrument.

13.6 Headings. The article and section headings in this Agreement are for convenience of reference only, and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

13.7 Construction. This Agreement shall be construed and enforced according to the laws of the State of Washington without regard to any otherwise governing principals of conflicts of laws. This Agreement shall be construed neutrally and not in favor of or against any party.

13.8 Amendment. This Agreement shall not be modified or amended except by a written agreement executed by both of the parties.

13.9 Further Actions. Each party shall execute and deliver such other certificates, agreements and documents, and take such other actions, as may reasonably be required to carry out the provisions or the intent of this Agreement.

13.10 Prior Agreement. This Agreement supercedes the previous agreement between the parties entitled "The City of Seattle Interim Management Agreement for the Operation and Maintenance of the City Golf Courses and Related Facilities" ("Prior Agreement") with an effective date of July 14, 2003. The intent of the parties is to not to extinguish any right or obligation of any party under the Prior Agreement for the period between July 14, 2003 and the effective date of this Agreement, but that the Prior Agreement shall have no force and effect after the effective date of this Agreement.

DATED this ______ day of ______, 2003.

PREMIER GOLF CENTERS, LLC THE CITY OF SEATTLE

By: By:

Its: _______________________ SUPERINTENDENT OF THE DEPARTMENT OF PARKS AND RECREATION

EXHIBITS

A. Golf Courses Real Property Descriptions

B. Golf Course Manual

C. Maintenance Agreement

* Jackson Park Golf Club Best Management Practices

* Jackson Park Golf Club Integrated Pest Management Plan Table of Contents

* Jackson Park Golf Club Integrated Pest Management Plan

* Jackson Park Golf Club Water Quality Monitoring Program

* Jefferson Park Golf Course Best Management Practices

* Jefferson Park Golf Course Integrated Pest Management Plan Table of Contents

* Jefferson Park Golf Course Integrated Pest Management Plan

* West Seattle Golf Club Best Management Practices

* West Seattle Golf Club Integrated Pest Management Plan Table of Contents

* West Seattle Golf Club Integrated Pest Management Plan

* West Seattle Golf Club Water Quality Monitoring Program

D. Capital Equipment Owned or Possessed by the City Relating to this Agreement

E. List of Necessary Start-Up Materials

F. Use Agreement between the City of Seattle and Seattle Junior Golf Foundation, dba First Tee of Seattle

Attachment 2 to MGSord

Exhibit A to Attachment 2 to MGSord: Golf Courses Real Property Descriptions

INTERBAY GOLF COURSE PROPERTY DESCRIPTION

That part of E1/2NE1/4 of Section 23, Township 25 North, Range 3 East W.M. described as follows:

The following blocks and portions of blocks of Gilman's Addition

Block 21 less that portion condemned for street purposes by condemnation Ordinance 86751;

Blocks 123,124,125;

Blocks 126,136, less the west 25 feet deeded to the Municipality of Metropolitan Seattle , Ordinance 94155;

Blocks 137,138,139;

Lots 1 through 6, inclusive and Lot 23, Block 140;

Block 147, less portion condemned for street purposes by Ordinance 86751 and less the south 15 feet condemned for street purposes by Ordinance 23041;

Block 148, less the south 15 feet condemned for street purposes by Ordinance 23041;

Block 149 less part of Lot 30 condemned for street purposes by Ordinance 23041;

Block 150, less the west 25 feet and south 13.7 feet of Lot 24 deeded by Ordinance 94155 and that portion condemned for street purposes by

condemnation Ordinance 23041;

Together with those alleys and portions of 16th Avenue W, 17th Avenue W, 18th Avenue W, W. Armour Street, W. Raye Street, Gilman Avenue W. vacated by Ordinances 18078 and 92373, excepting the west 25 feet of W. Armour Street and W. Raye Street and the north half of W. Wheeler Street.

Also excepting the Interbay P-Patch, located in part of Block 147 and vacated 16th Ave W adjoining.

JACKSON PARK GOLF

Part of the East Half of Section 20, Township 26 North, Range 4 East W.M.

described as follows:

The W1/2 NE1/4 together with the W1/2 E1/2 NE1/4 and the N1/2NW1/4SE1/4;

All of Block 9 and Tracts 1,2 of Block 10, Paramount Park Addition, together with the vacated portions of 12th Ave. N.E. and vacated N.E. 137th, vacated by Ordinance 85539;

Excepting:

The West 30 feet of the W1/2NE1/4, being a part of of 5th Ave N.E.

The North 30 feet of the W1/2NE1/4 and the north 30 feet of the W1/2E1/2NE1/4, being a part of NE. 145th Street;

Also, excepting the North 110 feet of the West 90 feet of the W1/2NE1/4(less the west 30 feet and north 30 feet thereof) being the Seattle City Light Substation.

JEFFERSON GOLF PROPERTY DESCRIPTION

EIGHTEEN HOLE GOLF COURSE

S1/2NW1/4, E1/2SW1/4 of Section 16, Township 24 North, Range 4 East, W.M. lying south of South Spokane Street, east of Beacon Avenue South and north of South Alaska Street.

NINE HOLE GOLF COURSE AND CLUBHOUSE

Part of the N1/2SW1/4 of Section 16, Township 24 North, Range 4 East, W.M. lying south of the north line of South Dakota Street produced easterly, west of Beacon Avenue South, north of the northerly boundary of Government Lot 5 and east of Jefferson Park Playfield.

DRIVING RANGE

Part of the SW1/4NW1/4 andNW1/4SW1/4 of Section 16, Township 24 North, Range 4 East, W.M., lying north of the north line of South Dakota Street produced easterly, west of Beacon Avenue South, east of Jefferson Reservoir, and south of Jefferson Community Center.

WEST SEATTLE GOLF PROPERTY DESCRIPTION

That portion of the SW1/4 of Section 13, Township 24 North, Range 3 East, W.M. and

That portion of the NW1/4 of Section 24, Township 24 North, Range 3 East. W.M. lying within the following described boundaries:

Southerly of the south margin of S.W. Genesee Street; westerly of the west margin of the alley adjoining blocks 1,3,4,5,9,10 of Cottage Grove Addition; northerly of the north margin of S.W. Brandon Street ; easterly of the east margin of 35th Avenue S.W.

Except that portion of said SW1/4 of Section 13 commonly known as the West Seattle Stadium;

And except that portion of said NW1/4 of Section 24 commonly known as Camp William G. Long.

1 Exhibit A to Attachment 2 to MGSord

Exhibit B to Attachment 2 to MGSord: Golf Course Manual

Premier Golf Centers, LLC

Seattle Golf Courses

GOLF COURSE

MANUAL

Premier Golf Centers, LLC

Seattle Golf Courses

Jackson Park Golf Course

Jefferson Park Golf Course

West Seattle Golf Course

GOLF COURSE MANUAL

Purpose

The purpose of the Golf Course Manual is to establish uniform rules, procedures and operating policies for the operations of Jackson Park Golf Course, Jefferson Park Golf Course, and West Seattle Golf Course (The Golf Courses).

The Golf Course Manual provides direction and valuable information for golf course operations. It is the City's desire that The Golf Courses be a major community service program which enhances the quality of life of participants of all ages.

All matters pertaining to the operation of The Golf Courses, fee and policy changes shall be directed to the Seattle Department of Parks and Recreation Manager of Golf.

Table of Contents

DEFINITIONS

4

I.

GOLF SHOP OPERATIONS

5

II.

FOOD & BEVERAGE OPERATIONS

9

III.

GOLF CAR OPERATIONS

12

IV.

STARTING AND MARSHALING

12

V.

COURSE RULES, REGULATIONS AND ETIQUETTE

18

VI.

TOURNAMENTS

21

VII.

SCHOOL TEAM PLAY

25

VIII.

JUNIOR GOLF PROGRAM

27

IX.

RECOGNIZED CLUBS

29

X.

DRIVING RANGE OPERATIONS

31

XII.

LESSON PROGRAMS

32

DEFINITIONS

In order to facilitate the use of the Golf Course Manual the following definitions will apply:

1. The City of Seattle will hereinafter be referred to as "City."

2. Premier Golf Centers, LLC. will hereinafter be referred to as "OPERATOR."

3. Jackson Park Golf Course, Jefferson Park Golf Course, and West Seattle Golf Course will hereinafter be referred to as the "Golf Courses".

4. The men's, women's and junior clubs at the Golf Courses will hereinafter be referred to as the "Recognized Clubs."

5. The daily diary of the golf course activity will hereinafter be referred to as "Log Books."

6. The following professional organizations will hereinafter be referred to by their abbreviated titles:

The Professional Golfers' Association of America as the "PGA."

The Ladies Professional Golfers' Association of America as the "LPGA."

The United States Golf Association as the "USGA."

7. The Course Manager will be an employee of, report directly to, and receive instructions and guidance from the OPERATOR.

8. The Class "A" Superintendent in charge of maintenance will hereinafter be referred to as "The Superintendent."

9. Golf Course maintenance staff will be referred to as "Crew" or "Crews."

10. Junior rates shall apply to youths 17 and under.

11. Senior rates shall apply to all adults 62 years of age and over.

12.

Manager of Golf is the Manager of Golf, City of Seattle Department of Parks and Recreation.

I. GOLF SHOP OPERATIONS

A. Operating Philosophy

1. Operating Goal

a. Provide quality service in all activities to insure the enjoyment of all patrons, and to generate revenue for the City.

2. Professional Staff Functions

a. Maintain the functions in a manner consistent with the desires and the policies of the City and the OPERATOR to include:

1) Pro shop sales

2) Power and Hand cart rental and maintenance

3) Golf Club Rentals

4) Lesson promotion and programs

5) Course marketing activities

6) Driving range operations

7) Starting, course Marshaling, tournament promotion and booking activities

8) Cleanliness and maintenance of the facility

9) Customer relations

10) Revenue collection

3. Merchandising (Pro Shop)

a. Maintain a well-stocked and attractive pro shop offering merchandise commensurate with wants and needs of the patrons.

4. Accountability

a. Establish and maintain accurate records regarding the following:

1) All revenue, as per management agreement

2) Tournament bookings

3) Lesson activity

4) Rounds of golf

5) Cart usage

6) Daily weather

7) Starting times

8) Driving range revenue

5. Customer Relations

a. Professional image and courtesy

1) Maintain a well dressed and well groomed appearance at all times.

2) Maintain a standard of integrity and philosophy consistent with the policies and procedures outlined in this manual.

3) Address all customers in a friendly and courteous manner.

4) Make every attempt to greet customers by name.

B. City Responsibility

1. The City is responsible for establishing major operating policies,

such as the rate schedule for green fees, range fees, and hours of operation.

The process for changing policies is to make a request to the Department of Parks and Recreation Manager of Golf.

C. Management Responsibilities

1. General Responsibilities of Course Manager

a. The direction and supervision of all golf course administrative, operational, and procedural activities, and the personnel assigned to those activities.

c. Perform other duties as assigned by the OPERATOR.

2. Specific Responsibilities of Course Manager

a. Conduct various golf tournaments and initiate and promote golf activities for the golfing public.

b. Cooperate with the Recognized Clubs and their various committees and render professional advice, opinions, assistance and services as required.

c. Administer and train a staff of employees, as necessary, to perform duties and meet requirements for sales, rentals and services which are, in the opinion of the City and the OPERATOR, necessary to carry out the provisions of the management agreement.

d. Operate and maintain a golf shop for repairs handling, storage, sales, leasing, and services relating to golf, equipment, golf cars and hand carts.

e. Be available, as necessary, to attend regular and special meetings of the Recognized Clubs and to discuss areas both within the realm of his/her duties and those for the benefit of the Course and the City.

f. Supervise the starting of play by golfers, and the proper charging of green fees and other fees, as necessary, and required.

g. Operate and supervise a Marshal Program.

h. Ensure that golf be taught only by qualified instructors.

i. Hire, discipline and discharge personnel.

j. Plan and schedule the assignment of personnel to cover a seven day per week operation.

k. Ensure that golf cars are maintained and in operable and safe condition.

l. Recommend public safety measures and maintain a continuous safety program in compliance with applicable laws.

m. Provide security for all maintenance buildings and equipment, service yards, materials, supplies, and, especially, toxic chemicals.

n. Report any emergency, unusual condition or incident to the CITY immediately.

o. Inspect the Course daily to ensure proper maintenance and operation, and, as required, make decisions concerning the closing of the Course.

p. Ensure that the Course Manager and/or a designated representative is on duty at the start and close of the scheduled work day.

q. Sell, rent, store and/or repair golf equipment, clothing and supplies, sell instructional services in golf play, rent golf cars, and operate a driving range.

r. Represent the OPERATOR/City before civic and private groups for discussion of Course operations.

s. Maintain the golf course Log Book in accordance with established rules and procedures.

II. FOOD & BEVERAGE OPERATIONS

A. Operating Philosophy

1. Operating Goal

a. Provide quality breakfast, lunch and (where applicable) dinner service to ensure the enjoyment of all patrons.

2. Professional Staff Functions

a. Maintain the functions in a manner consistent with the desires and the policies of the City and the OPERATOR to include:

1) Restaurant marketing activities

2) Cleanliness and maintenance of the facility

3) Customer relations

4) Revenue collection

3. Merchandising (Restaurant)

a. Maintain a well-planned menu designed to maximize sales volume as well as margins and offer dining commensurate with wants and needs of the patrons.

5. Accountability

a. Establish and maintain accurate records regarding restaurant revenue and expenses.

6. Customer Relations

a. Professional image and courtesy

1) Maintain a well dressed and well groomed appearance at all times.

2) Maintain a standard of integrity and philosophy consistent with the policies and procedures outlined in this manual.

3) Address all customers in a friendly and courteous manner.

4) Make every attempt to greet customers by name.

B. Management Responsibilities

1. General Responsibilities of Restaurant Manager

a. The direction and supervision of all food service personnel.

b. The appearance and cleanliness of the dining and kitchen area is of prime importance, and the Restaurant Manager is responsible for the general maintenance and decor of the restaurant as necessary to maintain the quality and appearance levels.

2. Specific Responsibilities of Restaurant Manager

a. Host various club and group functions and parties and initiate and promote dining opportunities to the general public as well as users of the golf facilities.

b. Administer and train a staff of employees, as necessary, to perform duties and meet standards for service which are, in the opinion of the City and the OPERATOR, necessary to carry out the provisions of the management agreement.

c. Ensure that alcoholic beverages be served by licensed food servers of legal age.

d. Hire, discipline and discharge personnel.

e. Plan and schedule the assignment of personnel to cover a seven day per week operation.

f. Ensure that kitchen equipment is maintained and in sanitary, operable, and safe condition.

g. Recommend public safety measures and maintain a continuous safety program in compliance with applicable laws.

h. Report any emergency, unusual condition or incident to the Course Manager immediately.

i. Inspect the Restaurant daily to ensure proper maintenance, cleanliness and operation.

j. Ensure that the Restaurant Manager and/or a designated representative is on duty at or before the start and at or after the close of the scheduled Restaurant hours.

k. In conjunction with the OPERATOR, maintain a continuous training program on restaurant maintenance and related subjects, and plan, schedule, and coordinate maintenance programs with personnel in other divisions and departments.

l. Sell food and beverage services.

III. GOLF CAR OPERATIONS

A. Vehicle Operation

1. No vehicle other than golf cars supplied by the OPERATOR, and private golf cars for which a trail fee has been paid shall be permitted (except as required for maintenance purposes).

2. Golf Cars and hand carts must not be taken over aprons, greens, tees, sand traps, or areas between the greens and traps surrounding the green.

3. When play has reached the green, golf cars and hand carts must be left on cart paths or at least 30 feet away from the side of the green.

4. Cars or carts of any kind should not be driven or pulled through wet or muddy areas or over sprinkler heads.

IV. STARTING AND MARSHALING

A. Starter Responsibilities

1. Get the golfing public on the Course for play by reservation, or off the waiting list, with the least delay and discomfort and in the best possible frame of mind.

2. Use every expediency at his/her command to keep the golf operations running efficiently and without undue delay or commotion.

3. Start golfers on time according to the reservations and in compliance with the waiting list. Fivesomes will be allowed at the discretion of the Starter.

4. Assign fivesomes or less for play, making certain there is a green fee and recorded name on the Starter Sheet for every tee time on the golf Course.

5. Inform each golfer to retain his/her cash register receipt throughout his/her round of golf play as he may be asked to show the receipt to authorized persons.

6. Keep score cards and pencils at the counter and give them to golfers who request them.

7. Be properly groomed and attired.

8. Know the types of grass in the tees, fairways and greens; be familiar with maintenance operations and requirements of the Course, be familiar with other public fee golf courses in the area and with all types of tournaments and prominent golf organizations, such as, USGA, PGA, LPGA, PUBLIC LINKS, etc.

9. Be fair and considerate of golf patrons at all times, treating everyone equally, and at all times being courteous, friendly, helpful, tactful, effective and impartial.

10. Patiently and courteously answer all questions of patrons and explain to them golf rules and policies and etiquette, in compliance with local rules and USGA rules.

11. Note in the Log Book all complaints and suggestions concerning the operation or maintenance of the Course, and inform the complainant that his/her complaint will be referred to the Course Manager.

12. Inform golfers called from the waiting list of the players with whom they will be playing.

13. Practice good housekeeping while on duty by keeping the Starter area clean.

B. Rules of Play

1. The speed of play can be increased by observing strictly the USGA and local rules of golf, the etiquette of golf and the traditions of the game. It is important to play as quickly as possible and avoid unnecessary delays. The golden rule is applicable to play on the Golf Course. Practice ready golf.

C. Marshaling Responsibilities

1. OPERATOR shall provide the services of a Marshal to be on duty at all appropriate times, with the exception of periods of inclement weather. The services of the Marshal may be provided by volunteers. The primary purpose of the Marshal's duties shall be to expedite play on the Course at all times. A secondary duty will be to ensure compliance with all Golf Course Rules and Regulations.

2. Under no circumstances will playing golf be considered as course Marshaling during the scheduled work week.

3. The Marshals will require players to maintain their position on the Course to speed up play and verify that golfers have required equipment.

4. Players will be required to observe golf course etiquette, replace fairway divots, rake sand bunkers and repair ball marks on the greens. The Marshals will assure safe practices by all golfers.

5. The Marshals will enforce regulations concerning the use of golf cars and electric hand and pull carts.

6. Periodically during the day, inform golfers to please keep their positions on the Course, replace their divots on the fairways and repair their ball marks on the greens, as we are striving to maintain excellent playing conditions.

D. Non Reserved Players Policy

1. Golfers who do not have a reserved starting time must register with the Starter on the daily waiting list (Call Sheet) prior to play.

2. Golfers without reservations who are at the Course and ready to play may register on the Call Sheet as a single or in groups of two, three, four, or five (upon Starter's discretion).

3. Playing group vacancies, cancellations, and open or unreserved starting times will be filled only from the Call Sheet on a first-come, first-served basis with priority determined by the time of registration with the Starter. Those who have registered as a group will be called for play as openings become available for the number of players in the group.

4. When sufficient players are available from the Starter Sheet and/or the Call Sheet, the Starter will send groups of four to the starting tee. If fewer than four players are available, the Starter may send out groups of two or three. A single player may be sent out alone only if no other golfers are available and if it appears they will not be available within a reasonable time.

5. As players on the Call Sheet are sent to the first tee their names will be scratched from the sheet.

6. The golf course Starter on duty is responsible for assigning foursomes, and for scheduling and starting all players in accordance with Reservation/Call Sheet rules and regulations. Golfers are not permitted to buy, sell, or transfer starting times or Call Sheet positions. Only those golfers who are properly registered and who are called by the Starter will be allowed to start play.

7. The golf course Starter may switch or interchange starting times if in his/her judgment such change would prevent delays, eliminate confusion, correct a problem, or be of general benefit to the players involved and to those following.

8. The Starter will call players to the tee by the starting and/or by name. After calling the group due on the tee, the following group will be given an on deck warning call by tee time and/or name. The next group will then be given an in the hole warning call by tee time and/or name.

E. Reservation Policy

1. Starting time reservation requests for daily play will be accepted at the Course Starter's office, or on the internet tee time reservation system up to eight days in advance of playing date desired. Requests may be made, in person by automated reservation system or by phone.

2. Reservations will be made only for groups of two, three, four, or five players, and openings in a group will be filled from the Call Sheet on the day of play. Reservations will not be accepted for a single player, except as a fill in to another group of three or less.

3. Only two reserved times per person is allowed, and that person must be a member of the group for which the reservation is made (unless there are acceptable extenuating circumstances).

5. The name of the person making the reservation will be recorded on the Starter sheet, or electronic tee sheet, opposite the time assigned. On the day of play, players names will be marked to recognize their green fee has been collected.

6. A reservation may be forfeited if the golfer making same does not check in with the Starter at least ten minutes prior to the assigned starting time. A reservation may also be forfeited when only one of a group having a reserved time is present ten minutes prior to tee-off time. If a reservation is forfeited, the players involved may be registered on the Call Sheet in priority order if they so desire.

7. Reservations are not transferable to another player. If a reservation is canceled, the Starter will offer the time to the next applicant, or if the time is open on the day of play, it will be filled with names from the Call Sheet in the order listed.

8. Permanent starting times will not be assigned at any time, however, the OPERATOR may have one reserved time per hour on Saturday, Sunday and holidays to allow for possible human error during the reservation process.

9. If, for any reason, the Course is closed the entire day, all golf play reservations for that day will be canceled. If the Course is closed only temporarily, players whose reservations are the earliest starting time of the day will be the first group off the tee and all other times will follow in sequence. The Starter will make every effort to get all players on the golf course as soon as possible. Players unable to begin at their assigned starting times due to inclement weather will be reassigned starting times at the discretion of the Starter.

10. The City may schedule use of the golf course as a setting for official business. Appropriate activities include promotion of economic development or intergovernmental relations. Such use shall be directly related to City business and shall not include purely personal use of the golf course by City officials or their families. For official business, the City may reserve a tee time more than one week in advance. In such cases, the following procedure should be used:

a. The Manager of Golf must approve the proposed use.

b. The use will not pre-empt any previously scheduled tournament or event.

c. All requests will be routed through Manager of Golf

The Superintendent of Parks and Recreation has the ability to schedule two (2) special golf outings per year (including one for City employees, if desired) without the minimum, number of player requirements for either weekend or weekdays,

F. Closing Course

1. OPERATOR is responsible for decisions concerning temporary or all day closing of the Course. In making such decisions, due consideration will be given to the welfare of the general public and golf course.

V. COURSE RULES, REGULATIONS AND ETIQUETTE

A. General

1. The following activities are prohibited on grounds or facilities except as authorized by OPERATOR or City.

a. Storage of private or personal property.

b. Solicitation of any kind.

c. Circulation or posting of handbills, petitions, advertising matter, promotional material, and literature

d. Selling of any goods, wares, or merchandise.

e. Carrying or discharging any firearm, air gun, sling shot, or fireworks of any kind.

f. Use of the Course for any purpose other than to play golf in the accepted manner.

2. All beverages taken on the Course must be purchased from the OPERATOR. No coolers can be brought on premises.

3. Throwing trash (paper cups, candy wrappers, etc.) anywhere on the Course is prohibited.

4. It shall be unlawful for any person to loiter on the premises, and unauthorized persons are not permitted.

5. Dogs, cats, or any other animals shall not be brought on the Course under any circumstances.

6. Picnicking or recreational play, other than golf, is prohibited.

7. Overnight or day camping is not allowed on any part of the Course.

8. Cars must be parked in designated parking areas only, and overnight parking in the parking lot is not allowed.

9. Reserved parking may be provided for the Starter, Golf Professionals and Course Manager within the clubhouse parking area.

10. If necessary, the Seattle Police Department may be called upon for assistance in enforcing these regulations.

11. Holes must be played in sequence, and a golfer in the wrong fairway must give way to players playing that hole.

12. No more than one golfer shall play out of one bag. Each player must have his/her own set of clubs.

13. It is the responsibility of each player to replace divots, rake and smooth traps, and repair ball marks or other damage on the greens.

14. Golfers are responsible for injuries or damages resulting from their golf shots.

15. Starter shall have the right to allow spectators only for special events with prior approval from the City and OPERATOR.

16. In the interest of all, players must play without delay, and all groups must keep their place on the Course or allow following players to play through.

17. OPERATOR reserves the right to cancel playing permits for individuals or organizations using Course facilities if at any time conditions justify such action.

18. Golfers may be refused playing privileges, or they may be removed from the Course for:

a. Submitting false information for the purpose of securing golfing privileges.

b. Playing golf without paying a green fee or registering with the Starter.

c. Obvious inability to play golf and to maintain their position on the Course.

d. Intoxication, disorderly conduct, use of abusive or profane language, inappropriate dress or other behavior detrimental to the normal and orderly operation of the Course.

e. Failure to comply with the existing rules and regulations governing golf play, practice, operation of carts or pull carts, personal conduct, and appropriate dress.

B. Dress Code

1. Appropriate golf attire must be worn at all times.

a. Swim trunks and bathing suits are not allowed in the clubhouse, or on the Course and Driving Range.

b. Shirts must be worn on both the Course and Driving Range at all times.

c. Shoes must be worn on the Course and must be appropriate for golf.

d. In addition to these specific guidelines, it is up to the discretion of the Starter to determine appropriate golf attire.

e. Marshals will assure that these guidelines are adhered to on the golf Course and Driving Range.

C. Golf Play

1. USGA Rules of Golf and posted local rules will govern play at all times.

2. No play is allowed on the Course when it has been closed for any reason.

3. Golfers under the age of fourteen (14) years may play on the Course only when they have demonstrated appropriate knowledge of golf course etiquette and are accompanied by an adult responsible for child. At the discretion of the Starter, golfers under the age of fourteen may be able to play without being accompanied by an adult.

4. All players must be registered with the Starter before playing any part of the golf Course.

5. All players must have a current cash register receipt or a valid daily ticket in their possession during play.

6. Practicing anywhere on the Course at any time is prohibited. Players must use the driving range, putting green, and other designated practice facilities for practice.

7. The starter has the authority to pair multiple parties to fill the Tee-Time.

8. When sufficient players are registered, four persons will be scheduled in each playing group on tee #1.

9. Fivesomes are allowed at the discretion of the Starter.

10. Unless prior permission is given, golfers will tee off only between the appropriate tee markers.

VI. TOURNAMENTS

A. General Information

1. Any golf club, company, golf association, or other organization may request authorization to hold a golf tournament on a first come, first served, basis.

2. All tournaments must have a Tournament Agreement requiring multiple reserved starting times with a minimum of 16 players.

3. Tournament fees and charges will be set by the OPERATOR subject to the approval of the Superintendent of Parks and Recreation. Fees and charges will include at least $8.00 per player prize fund and $2.00 per player administration fee, and shall be subject to change without prior written notice. Tournament fees will be based on fees and charges in effect on the date of the tournament. All fees and charges in effect on date of tournament must be paid and received 30 days prior to day of tournament.

4. All pre-scheduled tournament events will be charged at the current daily fee per player.

5. Individual starting time reservation requests will not be accepted for starting times which fall within a scheduled tournament period, however, the Course may fill any unfilled or late starting time with players from the daily call sheet.

6. Unless otherwise authorized by the OPERATOR, tournament playoffs to settle a tie will not be permitted.

7. Refunds on tournament green fees will not be made except when the Course is officially closed due to inclement weather or other adverse conditions.

8. If the Course is closed prior to, or during a tournament and does not reopen in a reasonable amount of time, green fees for those participants who have not commenced play will be refunded in accordance with established procedures.

9. Tournament participants must observe all prevailing rules and regulations covering use of the Course, personal conduct, dress, and golf play as prescribed by the City and the OPERATOR.

10. Tournament sponsors are liable for any personal injury, property damages or repairs resulting from tournament play.

11. Tournament sponsoring organizations must agree that, during use of the Course facilities, no person will be excluded from participation, denied any benefit, or otherwise be subjected to discrimination because of his/her race, creed, color, or national origin.

12. All scheduled tournaments will be posted on the Course bulletin board for information to the general public at least two weeks in advance of the tournament dates.

13. The following information on each scheduled tournament will be entered in the Log Book by the OPERATOR or the designated representative.

a. Name of the organization holding the tournament.

b. Date and time of play.

c. Number of players.

d. Name, address, and phone number of the tournament chairperson.

B. Tournament Procedures

1. Tournament requests will be taken beginning in December of the prior year for the following year, (i.e. December 1, 2003 for January 1 through December 31, 2004).

2. No tournament will be confirmed until the following:

a. A tournament contract, accompanied by a $250.00 nonrefundable deposit, is signed by the organization representative booking the tournament and the OPERATOR.

b. A check for 10% of the total charges for the tournament is received.

c. The total remaining fees must be paid in full no later than 30 days prior to the scheduled tournament or the tournament will be canceled.

3. The 10% deposit may be waived at the discretion of the OPERATOR.

4. The Recognized Clubs may schedule a one day weekend tournament per month. The Recognized Club tournament event can start at 7:00 a.m.

5. The Recognized Clubs may have one (1) multiple-day event per year for their club championships.

6. In order to receive a refund of the 10% deposit, OPERATOR must receive written notification of cancellation at least 60 days prior to the date of the scheduled tournament

7. All tournament fees are calculated on the current fees charged on the day the tournament is held. These fees are subject to change requiring no notification to the organization or individual responsible for booking the tournaments.

8. On receipt of tournament fees within the time allocated, the OPERATOR will immediately fill out and sign the approved two-part receipt for the fees paid. The original copy will be sent to the applicant and one copy will be placed on file with the contract. Receipt of payment will be noted in the Log Book

9. Starting times for which advance payment has been made and for which a Tournament Contract has been executed will be blocked out on the Starter Sheet, or automated Tee Sheet for the day of the tournament.

C. Tournament Categories

1. Prepaid use

a. Permits use of golf course for those starting times reserved by the tournament sponsoring organization. A 10% deposit is required at the time the tournament contract is signed and the tournament is scheduled.

2. Shotgun Tournaments

a. Shotgun tournaments (tournaments where all golfers start at the same time on a different hole) may be permitted under certain conditions and restrictions and must be approved by the OPERATOR and are subject to the following requirements:

1) Generally must be held Monday through Thursday only.

2) Pay for a minimum of 144 players.

3) Shotgun tournaments are not generally exclusive-use tournaments and the playing privilege cannot be transferred to any other group. Starting times after the tournament will be made available to the general public, and the OPERATOR reserves the right to fill incomplete foursomes within the tournament group from the daily Call Sheet.

3. Group League Play

a. Group play must be approved by the OPERATOR and is subject to the following restrictions:

1) Permitted Monday through Friday only, exclusive of holidays.

2) Must pay prevailing green fees.

4. Junior Tournaments

a. The OPERATOR may schedule an annual City sponsored Junior Tournament for boys and girls who are not yet 18 years of age. Participating junior golfers will pay a special discounted tournament entry fee to the course.

b. Course Manager will coordinate appropriate varsity golf team practices and league matches during their golf season. (High School and College.)

D. Accounting

1. The Course Manager will receive payment for tournament fees by mail or in person at the Course. In the absence of the Course Manager, the Starter on duty may accept payment and issue appropriate receipts.

2. On the date of the tournament, play will be recorded on that day's Starter Sheet in the usual manner. A ticket will be rung for all paid players in the tournament and the tournament representative will be issued a cash register receipt.

VII. SCHOOL TEAM PLAY

A. Purpose

1. To provide young people the opportunity to participate in organized competition in a sport that is not always accessible to all social and economic levels of our society.

2. To provide young people with the opportunity to develop an interest in a lifetime sport through involvement with the schools.

B. Policy and Procedures

1. Letter applications for school team play, for the following year, must be submitted to the OPERATOR between September 15 and November 1. Applications will not be accepted prior to September 15, and those applications received during the specified period for submission will be processed in the order received. Priority will be given to schools within the Seattle School District boundaries.

2. In processing an application for school team play, the OPERATOR will:

a. Make every effort to comply with the school request.

b. Designate and assign the days and times for school play.

c. Issue a letter authorizing use of the Course, including dates and times.

d. Prior to January 2 of each year, meet with the golf coach or other designated faculty representatives of the requesting schools to make necessary arrangements, discuss procedures, rules, and regulations, and to schedule the school team play.

3. Each school authorized for team play must submit a team roster and schedule for practice and league play to the OPERATOR at least two weeks prior to the opening of the season. Team members must meet standard eligibility requirements at the junior high, high school or college level.

4. School golf teams will not be allowed on the Course unless accompanied at all times by a golf coach or other designated faculty representative. Teams will be classified as a group, and the assigned coach or faculty member will represent them and be held responsible for their conduct.

5. Each school may be permitted to play at junior rates for a period of twenty weeks between September 1 and May 31 of each year.

6. Team members may play one 18-hole round on the assigned day or days.

7. Team practice and/or league play will be permitted only on those weekdays (excluding holidays) assigned by the OPERATOR. School golf teams shall report to the Course between the hours of 2:00 p.m. and 3:00 p.m. on the days scheduled for play. Any changes or exceptions must be approved by the OPERATOR.

8. Each participating school is allowed four foursomes and a coach or faculty member for practice matches and for scheduled league matches. Only one match may be scheduled on any one day.

9. For school team practice rounds and team league play, the golf coach or designated faculty representative will pay the prevailing junior fee for each participating team member. Payment may be in cash or by first party check for the exact amount due.

10. The golf coach or designated faculty member will pay the prevailing junior green fee when playing golf while supervising the school team activity. Regular green fees will be paid for play at any other time.

11. School team players will be required to show their student identification cards.

12. School golf team members, golf coaches, and faculty representatives will be expected to observe and adhere to the rules of conduct, dress, and golf play prescribed by the City. The OPERATOR reserves the right at all times to cancel a playing permit if conditions justify such action.

VIII. JUNIOR GOLF PROGRAM

A. Purpose

1. Create a future interest in golf by providing opportunities for young people to learn the game of golf.

2. Establish guidelines that will enable young golfers to integrate comfortably with adult players on the Course.

3. Ensure an ongoing program of education for young people interested in sports (specifically golf) as a contribution to their own personal development.

B. Junior Certification Program

1. The Certification Program for junior golfers under 15 years of age is the responsibility of the OPERATOR.

2. The Certification Program is designed to improve the golfing skills of junior boys and girls, and to enhance their knowledge and awareness of the rules of golf, golf etiquette, and golf course care.

3. To complete the Certification Program, junior golfers must:

a. Take and pass a written examination on USGA Rules of Golf, golf etiquette, and golf course care.

b. Successfully demonstrate their golfing skill and ability on the driving range and the putting green.

c. Become familiar with and understand the Course Rules and Regulations.

d. Graduate from a junior golf camp.

4. Appropriate study material covering the subjects included in Certification Program written examinations will be made available to junior golfers through the OPERATOR. Certification applicants will be encouraged to read and study the material provided before taking the written examination, and study material will be returned to the OPERATOR for reissue to other applicants.

5. Each junior under 15 years of age will also be required to complete one semester of junior golf instruction and/or be able to pass a field playing proficiency test.

6. The OPERATOR will present a junior Certification Card to each applicant who successfully completes the Certification Program.

7. Notification of the junior Certification Program will be posted on the bulletin board and in the Starter office, and all required information will be recorded on the approved index card by the OPERATOR.

C. General Policies

1. The OPERATOR is required to establish, promote, and maintain:

a. A Junior Golf Club.

b. Four Junior Golf Tournaments per year.

2. Juniors will be defined as children 17 years old and under.

3. Parental permission will be required for Junior Golf participation.

IX. RECOGNIZED CLUBS

A. Purpose

1. To offer a vehicle for organized competition, handicapping and fellowship for the Course patrons.

2. To establish a nucleus of patrons for the Course.

B. Policy

1. Recognized club status is granted at the sole discretion of the OPERATOR. The PNGA currently allows no more than four (4) clubs with 18 hole formats and two(2) clubs with 9 hole formats to be designated affiliated clubs.

2. The Recognized Clubs must be totally self supporting through their own dues structure. The Recognized Clubs must coordinate amongst themselves the maintenance of the GHIN system at their host course. Maintenance includes the cost of telephone lines, computer equipment purchase and maintenance, and other items associated with maintaining the GHIN system.

3. Each Recognized Club must establish a Board of Directors. This Board must have at least four members as follows:

a. President

b. Treasurer

c. Tournament Chairman

d. OPERATOR representative

4. OPERATOR will aid in the establishment of the above clubs.

5. The Recognized Clubs' bylaws must be approved by the OPERATOR and the City.

6. The Recognized Clubs must belong to the appropriate amateur golf regulatory association, (i.e. Washington Golf Association, as applicable to the Course).

7. The Recognized Clubs use of the Course for organized playing activities will be subject to the policy established in this manual.

8. Each Recognized Club is encouraged to purchase their tournament prizes from the OPERATOR per the fee schedule.

9. No cash prizes for tournament winners will be permitted unless approved by the OPERATOR.

10. Reservation privileges for the Recognized Clubs' members will be limited to the reservation policy established in this manual.

11. Organized tournament privileges for Recognized Clubs will be limited to policies established in this manual.

X. League Play Policy

A. Purpose

1. To offer a vehicle for organized league play for the Course patrons.

2. Policy

1. League events may be scheduled in accordance with the following policy

2. Leagues are required to schedule a minimum of 12 consecutive weeks on the same day of the schedule among the week; traveling leagues may schedule among the three courses (Jackson Park, Jefferson Park, or West Seattle) for a minimum of 12 weeks and must be played on the same day of the week.

3. An application fee of $250.00 payable to the respective course must accompany an application form. The Operator cannot schedule league use without a completed application and the application fee.

4. Leagues may be scheduled to tee off anytime on the weekdays; traveling leagues may tee off at 10:00 AM or later on weekdays. The City does not allow league play on holidays or weekends.

5. Each league must sign up for a minimum of 4 tee times (16 players) per play date.

6. Leagues are required to pay $40.00 per player per season, based on the peak number of players. $30.00 per player of will be distributed in the form of credit book accounts established at the league course for each person who earns prize money. The league coordinator will need to supply the operator with a list of league players who are to receive prize money so that the operator can set up accounts for them.

7. Upon approval of the play dates, a contract will be mailed to the league coordinator. The signed contract must be returned within 30 days of the mail date and must be accompanied by a non-refundable $250.00 deposit. The deposit will be credited toward fees due.

8. The balance of fees is due 30 days before the first league play date. At that time, a credit book account will be established in the league's name and the prize funds will be made available to the league coordinator for any advance purchases.

XI. DRIVING RANGE OPERATIONS

A. Hours of Operation

1. The driving range hours of operation will be as stated in the Management Agreement.

B. General Policies

1. The OPERATOR shall provide a quality of range ball that will meet the needs and desires of the golfers.

2. The OPERATOR will be required to maintain the following amenities for the patrons' enjoyment:

a. Properly maintained standing mats and brushes.

b. Accurate and aesthetically pleasing yardage indicators.

c. Signs indicating safety procedures for all patrons.

d. Adequate quantities of range balls to allow for peak usage periods.

3. The OPERATOR shall have clubs available for rental use on the driving range.

XII. LESSON PROGRAMS

A. Purpose

1. To provide a service to all levels of golfers so that they may enjoy golf by improving their individual skill levels.

2. To provide a means of introducing new golfers to the game of golf therefore improving revenue potential and Course usage.

3. To provide different types of instruction to fit the needs and incomes of all people desiring to play the game of golf.

B. Types of lessons available

1. The OPERATOR is required to provide the following types of professional instruction:

a. Private instruction available by the half hour, hour or in a series structure.

b. Junior golf "swing classes" for beginners at least once per week on a perpetual basis.

c. Adult group lessons for beginning, intermediate, and advanced players on a perpetual basis.

d. Periodic clinics for the Recognized Clubs demonstrating various aspects of the golf game.

e. Playing lessons.

Exhibit B to Attachment 2 to MGSord

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