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HomeMy WebLinkAboutPotential 2018-Golf Course Management Agreement-As of 1-3-18-reviewed by CFO-Attorneys GOLF COURSE MANAGEMENT AGREEMENT Teton Lakes and Rexburg Municipal Golf Courses Page: 1 of 15 GOLF COURSE MANAGEMENT AGREEMENT for Teton Lakes and Rexburg Municipal Golf Courses This GOLF COURSE MANAGEMENT AGREEMENT is made and entered to be effective as of January 1, 2018, by and between JDM Golf Management, LLC, an Idaho limited liability company, AND the City of Rexburg, an Idaho municipal corporation, together with the Board of County Commissioners of Madison County for the management of the Teton Lakes Golf Course and the Rexburg Municipal Golf Course. RECITALS WHEREAS, the City of Rexburg and Madison County of Idaho (the Owners) have joined together in the ownership and operation of two golf courses: the Teton Lakes Golf Course and the Legacy Municipal Golf Course (the Courses); and WHEREAS, the Owners desire to promote and provide for the management of the Courses, the Pro Shop, attached buildings, and appurtenances thereto; and WHEREAS, the Owners desire to retain Manager to perform some of these said functions, including the management of the pro shop; NOW, THEREFORE, in consideration of the mutual covenants and conditions herein contained, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties hereby agree as follows: ARTICLE I DEFINITIONS For purposes of this Agreement, unless the context specifically indicates otherwise, the following terms used in this Operating Agreement shall have the following meanings: 1.1 "Agreement" means this Golf Course Management Agreement as originally executed and as duly amended from time to time. 1.2 "Courses" refers to the Teton Lakes Golf Course and the Legacy Municipal Golf Course, collectively. 1.3 "Expenses" is defined in Section 4.3(c) of this Agreement. 1.4 "Facilities" means the Pro Shop and the basement locker room areas 1.5 "Golf Board" means the Rexburg-Madison Golf Course Advisory Board. 1.6 "Manager" refers to JDM Golf Management, LLC. 1.7 "Notice" refers to BOTH the City of Rexburg and the Board of County Commissioners of Madison County. 1.8 "Owners" refers to the City of Rexburg and the Board of County Commissioners of Madison County, collectively. 1.9 "Parties" means the Manager and the Owners, collectively. 1.10 "Person" means any individual or Entity, and the heirs, executors, administrators, legal representatives, successors and assigns of such "Person," where the context so permits. 1.11 “Grounds Maintenance Manager” refers to the employee hired by Owners to manage the grounds maintenance of the courses. GOLF COURSE MANAGEMENT AGREEMENT Teton Lakes and Rexburg Municipal Golf Courses Page: 2 of 15 1.12 “Concessions” means a for-sale, on-site offering of a variety of beverages (e.g. water, soda, lemonade, etc.) and snack items (e.g. chips, candy bars, etc.) to the general public. 1.13 "Prepared Food" means a for-sale, on-site offering of a variety of prepared on site food items (e.g. hot dogs, fries, hamburgers, sandwiches, etc.) to the general public. ARTICLE II TERM 2.1 TERM OF AGREEMENT. The term of this Agreement shall begin on January 1, 2018 and shall end on December 31, 2020. 2.2 RENEWAL. The Parties may agree to renew this contract for a two year extension beginning on January 1, 2021, and ending December 31, 2022, and for a second two year extension beginning January 1, 2023 and ending December 31, 2024. ARTICLE III MANAGER’S RIGHTS, RESPONSIBILITIES, AND DUTIES 3.1 GENERAL DUTIES. Manager shall operate the day to day golf activities, which shall include, but not be limited to, the collection and disbursement of all monies, the employment of all employees (excluding the ground maintenance staff and part time clubhouse help provided by the Owners (see section 3.6 below)), the management of the golf courses in conjunction with the staff provided by the Owners, the purchase and sale of merchandise, and supplies, and the performance of all other day-to-day non-grounds maintenance activities relating to the operation of the Facilities. 3.2 MAJOR ACTIVITIES. Manager shall submit to Owners for approval a proposal for major activities, improvements, or events, including, but not limited to, capital improvements, expenditures, and any activity or change requiring a total expenditure in excess of $1,000.00 that is not part of a then-approved budget for the Facilities. Manager shall secure Owners’ prior approval before engaging in the proposed activity, and shall meet annually with the Owners to submit recommendations for facility improvements, upgrades and grounds maintenance concerns. 3.3 STANDARDS. Manager shall, to the best of its ability, operate the Facilities in accordance with professional standards for golf course management, including the Code of Ethics of the Professional Golf Association (PGA), and in an efficient manner in accordance with the reasonable rules, regulations, policies, procedures and/or standards as implemented by Owners and/or the Rexburg-Madison Golf Course Advisory Board. 3.4 PERSONNEL. Other than golf professionals and assistant golf professional(s), all personnel required for the operation of the Facilities and golf course properties, including all on-site management personnel, and others deemed by Manager to be appropriate for the operation of the Facilities as governed by this Agreement, shall be hired and employed by Owner’s at Owner’s expense, however, Manager may, in its discretion, elect to have routine functions, such as ranger services, performed by independent contractors rather than employees, at Manager’s expense. The Owners will work in conjunction with the Manager to hire or contract for janitorial functions at the Owners expense. The Owners will take input from the Manager on the hiring of part-time employees, but have the ultimate decision of who they hire and at what wage. The Manager will be required to co- manage at least one PGA apprentice that will be hired by the Owners. The Owners will be responsible GOLF COURSE MANAGEMENT AGREEMENT Teton Lakes and Rexburg Municipal Golf Courses Page: 3 of 15 for designating someone to schedule hours in the Pro Shops in coordination with the Manager. The schedules of the greens maintenance staff will be determined by the Owners in conjunction with the Greens Maintenance Supervisors input. All part-time employees hired by the Owners will be limited in their hours not to exceed a 29 hour average per week per year. Part-time employees hired by the Owners will not be permitted to earn overtime, unless approved by the Owners. All part-time employees hired by the Owners must be hired to work under one of the following formats: 1) The employees hours can never exceed 20 hours in a week, but they can work year round. 2) The employees may be hired on a Seasonal basis and must work less than eight consecutive months in a year and reapply for a position the following year. Part-time employees hired in the Pro Shop by the Owners may be allowed to sell inventory in behalf of the Manager, but will not manage inventory during the hours provided by the Owners, however they may be able to perform other functions as agreed between the Owners and Manager. The Owners, with input from the Golf Board, must approve the Assistant Golf Professional to be hired by the Manager, to help with the succession planning for the future management of the golf activities at the courses. a. The Owners reserve the right to reject any golf professional(s) for cause. Such cause may be, but shall not be limited to behavior unbecoming of a Golf Professional. 3.5 TOURNAMENTS. The Golf Manager shall be responsible for the management of all golf tournaments and the proceeds of said tournaments shall be allocated to the Owners. The grounds maintenance personnel will be hired and employed by the Owners at Owner’s expense. Manager agrees to coordinate efforts with the Grounds Maintenance Manager as needed to promote a successful course. 3.6 PART TIME HOURS PROVIDED BY OWNERS AT PRO SHOPS. All part-time employees hired by the Owners for the Pro Shops, shall be limited in cumulative hours worked per day as follows: a. January: 0 hours b. February: 0 hours c. March: 4 hours d. April: 12 hours e. May: 16 hours f. June: 22 hours g. July: 22 hours h. August: 22 hours i. September: 14 hours j. October: 0 hours k. November: 0 hours l. December: 0 hours This schedule of hours per day is the combined total for both of the Pro Shops at the Legacy and Teton Lakes courses and these hours can be re-allocated within the months as needed with the approval of both the Owners and Manager. The Owners will determine the wages of these employees. This contract provides a total of 3,424 labor hours per year for part-time Pro Shop Employees. Any work which the Manager requires of part time employees which exceeds the maximum allowed hours of 3,424 hours, shall be deducted from the Manager’s compensation in the final payment to be distributed in October. GOLF COURSE MANAGEMENT AGREEMENT Teton Lakes and Rexburg Municipal Golf Courses Page: 4 of 15 3.7 INSURANCE. Manager shall maintain worker’s compensation insurance with respect to its employees, fire and property insurance with respect to its equipment and personal property, and general liability insurance, including injury to person or property, with respect to Manager’s activities pertaining to the Facilities. Manager shall have City of Rexburg and Madison County named as additional insured’s under Manager’s general liability insurance and send proof of insurance to Owners each year. 3.8 SPECIFIC DUTIES. In addition to the other duties contained herein and those as may be required, Manager shall perform the following specific duties with respect to the Facilities: a. Coordinate efforts with the Grounds Maintenance Manager. The responsibility will fall upon the Owners and the Grounds Maintenance Manager to maintain the grounds to professional golf course standards, including, but not limited to: mowing, fertilization, and watering of golf course greens and fairways; watering and maintenance of trees and shrubbery; arranging the layout of the greens and fairways; and maintaining the waterworks and ponds. b. Keep clean the Clubhouse and Cart equipment, fixtures, structures ornamentation, and lighting. c. Collect fees, regulate play and conduct of players on the Courses, and enforce the rules and regulations. d. Employ a capable golf professional (Manager may fill this role) and assistant golf professional, both of whom shall be available at scheduled times to give lessons and instructions in golf to the public at the Facilities, and who shall provide other services customarily provided by a golf professional, as approved by the Owners. e. Perform routine maintenance and repair of Clubhouse equipment used in the operation of the Facilities consistent with best practices; provided, however, Owners shall supply and pay for all parts required for maintenance and repair of such equipment. f. Operate and manage the driving range and practice greens in behalf of the Owners. g. Operate, manage, and maintain golf pro shops located on the Facilities. i. Manager shall be exclusively responsible for maintaining the inventory of the golf pro shop. h. Provide golf starter services including management of timely play by use of either an on course ranger, or a conspicuous contact number to be called in case of inappropriate play. i. Promote and stage golf tournaments subject to prior approval by Golf Board and Owners. 3.9 GOLF BOARD. Manager will consult with the Rexburg-Madison Golf Course Advisory Board regularly and will make a representative available as reasonably requested by the Board to meet and discuss the Facilities and the management of the Courses. 3.10 TEMPORARY CLOSURE. Owners recognize and agree that, from time to time, it may be necessary for the Facilities (or parts thereof) to be temporarily closed in order for Manager to properly perform its duties under this Agreement. Owners shall be notified in advance of any such closures, which shall be limited to the extent reasonably required for Manager to perform its duties under this Agreement. 3.11 EQUIPMENT. a. Hand golf carts, golf clubs, and all other equipment necessary to play the game of golf by the public on a rental basis shall be provided by the Owners. GOLF COURSE MANAGEMENT AGREEMENT Teton Lakes and Rexburg Municipal Golf Courses Page: 5 of 15 b. Golf carts for the use by the public on the golf courses on a rental basis to reasonably meet the public demand for such golf carts shall be provided by the Owners. Manager shall regulate the use of private self-propelled golf carts, subject to Standard Operating Policies and Procedures established by the Owners. Beginning January 1, 2018, the Owners shall own and operate the golf cart and golf club rental concessions. The responsibility for the costs associated with golf carts shall be assumed by the Owners. It is the desire of the Owners to purchase the used rental inventory from the Manager. The Parties agree to assess the value of the driving carts, pull carts, and golf club inventory at fair market value prior to the opening of Teton Lakes in the spring of 2018. Once an agreed upon price is determined, the Owners will purchase the equipment from the Manager with a separate contract over a 5 year period. If the Owners and Manager cannot agree upon a purchase cost, the Owners will have the right to purchase rental inventory elsewhere. c. Private carts will be allowed on the golf course and the owners thereof will be required to pay a trail fee which shall be allocated to the Owners. The Trail Fee Policy for both courses is shown below: Trail Fee Policy for Teton Lakes and Legacy Golf Course It is recommended by the Rexburg Golf Board that the following policy and fees should be adopted by the Course Owners regarding the use of privately owned golf carts:  Privately owned push and riding carts will be allowed on both the Legacy and Teton Lakes Golf Courses (All-Terrain Vehicles-such as side by sides or four wheelers will not be allowed on the course)  The Manager will still continue to regulate such use, subject to Standard Operating Policies and Procedures established by the Owners (see Golf Course Management Agreement Section 3.12 b).  No fee will be charged for privately owned push carts, whether self-propelled or manually propelled.  A fee of half the regular cart rental rate will be established for use of privately owned riding carts and such revenues will be the sole property of the Course Owners. For Example: If you could rent a Teton Lakes Golf Cart for two people and 18 holes for $25, then the fee would be $12.50 to bring your own riding cart for two people. d. Portable display platforms, signs and equipment and/or devices for the purpose of advertising or demonstrating the merchandise and/or equipment for sale at the pro shops shall be provided by the Manager. Any equipment necessary for the reasonable management of timely and responsible play (e.g. rangering the Facilities) shall be provided by the Owners 3.12 SHOWCASES. The Manager may provide counters, showcases and other movable objects in addition to those provided by Owners for the purpose of storing, displaying, renting or selling merchandise and/or equipment at the pro shops, on the condition that Manager shall promptly supply Owners with a descriptive list of such items as they are obtained. Such items shall remain the property of Manager. 3.13 FIXTURES. Any fixtures permanently attached to the Facilities in connection with the operation of the Courses shall become the property of Owners upon the termination of this Agreement; however, Manager shall not install any fixtures or other improvements that are permanently attached to the Facilities, or any part thereof, without prior written consent of the Owners. GOLF COURSE MANAGEMENT AGREEMENT Teton Lakes and Rexburg Municipal Golf Courses Page: 6 of 15 3.14 INVENTORY. Manager shall maintain a sufficient inventory of golf merchandise, clothing, golf supplies, golf clubs, bags, shoes and other golf equipment in keeping with public demand. Such merchandise shall be sold or rented at prices consistent with those prevailing at similar golf course facilities in the surrounding area for the same or similar merchandise. 3.15 SECURITY and INSPECTION. Manager shall be responsible for the security of the pro shops in accordance with the rules and regulations pertaining to the operation of the golf courses and Owners shall not be liable for any losses incurred by theft or destruction of inventory. The Facilities shall be open to inspection by authorized representatives of Owners at all reasonable times. 3.16 GREEN FEES, RANGE FEES, RENTAL FEES. Manager shall collect and process all monies paid as green fees, range fees, and rental fees through the Point of Sale equipment to be provided by Owners, and in a manner to be prescribed by Owners. All such fees shall be collected on behalf of Owners by Manager in a fiduciary capacity, being deposited daily in an account or drop safe designated by Owners. Manager shall not make any personal or other use of such green fees and shall be held strictly liable for any and all cash shortages. At the end of each fiscal year, a transfer of season pass fee revenues will be shifted from the Teton Lakes revenue accounts to the Legacy golf course revenue accounts based on the respective course utilization of season pass history from the point of sale system. 3.17 DEPOSIT OF REVENUES All revenues (including the revenues collected from the sale of inventory) of the Owners and Manager will be deposited daily in an account or drop safe designated by the Owners. A reconciliation of all revenues received will be performed by the Owners on a monthly basis using the records of the Point Of Sale System and the Managers share of the revenues will be deposited in the account of the Manager or paid out with a check by the 12th of each Month. 3.18 GREEN FEE WAIVERS. Manager will be dutiful in collecting green fees and shall not waive any such fees except as authorized by the Owners. 3.19 PASSES. The golf professional, assistant golf professional, and or part-time pro shop employees provided by the Owners will electronically sell/track all green fee annual passes, punch passes, and other fee cards. 3.20 TELEPHONE. Manager shall maintain the telephone services for the Facilities and Owner shall pay for all telephone charges, taxes, and fees. 3.21 EXCLUDED WORK. Notwithstanding any other provision of this Agreement, the following are expressly excluded from Manager’s duties: a. The purchase of any capital asset, including but not limited to, pumps, irrigation equipment, trees, plants, or other growing things. That is, Manager’s obligations under this Agreement are for management services only, not replacement or provision of capital assets or improvements. b. Capital costs for correction or repair of damage to the Facilities (including but not limited to the irrigation system) caused by any reason other than mismanagement or negligence on the part of Manager or its employees, licensees, lessees, or assigns, including, but not limited to, damage caused by new construction, vandalism, weather, or acts of God. 3.22 ADDITIONAL DUTIES. Consistent with past practices and subject to the availability of Manager’s personnel, to the extent the following work may be scheduled and performed within GOLF COURSE MANAGEMENT AGREEMENT Teton Lakes and Rexburg Municipal Golf Courses Page: 7 of 15 normal work hours exercising Manager’s best scheduling efforts (without requiring overtime), Manager shall perform the following: a. Temporary changes, modifications, or enhancements to the Facilities necessitated by special events initiated by Manager, the Owners, or at the Owners’ direct or indirect request. b. Extraordinary, unusual or uncommon repairs, rehabilitation, or maintenance required for operations, maintenance or events initiated or requested by the Owners. c. Maintenance, repair or improvement of the building or any other building located within the Facilities. 3.23 MARKETING. Manager shall develop a viable marketing plan each year and present the plan to the Board by March 7th of each year. As an essential term of this Agreement, Manager shall be responsible to effectuate the approved marketing plan of the Board and help maintain a website used (at least in part) for the marketing of the Courses. 3.24 POINT-OF-SALE SYSTEM. A point-of-sale (POS) system for each of the Courses shall be implemented and maintained by Owners and Manager and all receipts of revenue shall be entered into and maintained by that system. Manager shall pay twenty five percent (25%) of the hardware, software, and maintenance costs of the POS system, with the remaining seventy five percent (75%) to be paid by the Owners. Owners shall provide technical assistance as may be required in implementing and maintaining the point-of-sale system, including paying the costs of and maintaining an internet connection for the use of the system. 3.25 REIMBURSEMENT. Manager shall submit all requests for reimbursement for any expenses to the Owners in accordance with Owners’ purchase order and payment policies. 3.26 CREDIT CARD FEES. The Owners will set up the credit card merchant accounts and pay all of the credit card fees each month. The Owners will reconcile and collect the Managers share of the credit card fee expenses as a deduction from their final payment in October. The Owners will also pay the Manager for their share of the credit card convenience fees as part of the annual reconciliation in October. 3.27 LICENSES, PERMITS, and TAXES. Manager shall obtain any and all permits or licenses which may be required by law to conduct the operation of the Facilities. Manager shall pay all withholding taxes applicable to employees of Manager, all personal property taxes assessed against the property of Manager, and all sales taxes applicable to the sale of goods and merchandise for Manager’s account at the pro shops. 3.28 NO PROPERTY INTEREST. Nothing contained in this Agreement shall be deemed to create or shall be construed as creating in Manager any property interest in the Facilities. 3.29 CONCESSIONS/RESTAURANT. The Owners shall be responsible for all matters relating to any concessions, restaurants, or other food services operated at the Teton Lakes or Legacy Golf Courses. ARTICLE IV OWNERS’ RIGHTS, RESPONSIBILITIES, AND DUTIES 4.1 OWNERS AUTHORIZATION. Owners hereby grant and delegate to Manager the authority and the responsibility necessary to permit Manager to perform its duties under this Agreement and agree to take such additional steps as necessary to evidence this authority as is reasonably requested by Manager. GOLF COURSE MANAGEMENT AGREEMENT Teton Lakes and Rexburg Municipal Golf Courses Page: 8 of 15 4.2 EXCLUSIVITY. Owners hereby grant to Manager the exclusive management rights for the golf activities at the courses and Facilities during the term of this Agreement, or any renewal hereof, for said purposes, unless otherwise stated in the terms of this Agreement. Except for the reserved right to grant a license to an on-site concessions/prepared food operator to sell concessions on the grounds of the Courses, Owners shall not grant to any third party any management or similar rights to the use or occupancy of all or any part of the Facilities during the term of this Agreement. Manager shall be entitled to use of all of the Facilities for the performance of its duties under this Agreement, including, but not limited to, use of the driving range and range balls, and area ponds on the golf courses and those portions of the clubhouses on the golf courses designated for the pro shops for the displaying, selling or renting of merchandise and maintaining golf course office facilities. 4.3 DUTIES OF OWNERS. Owners shall have the following obligations and duties: a. Maintenance. Owners shall keep and maintain exterior and interior portions of the clubhouses, maintenance building, and other improvements within the Facilities in a good state of repair. Manager may assist in the maintenance of such golf course facilities for the purpose of giving the pro shops an attractive and appealing appearance. b. Equipment. Owners shall provide Manager all equipment reasonably necessary for the management and operation of the Facilities. Owners shall supply and pay for all parts required for maintenance and repair of such equipment. c. Expenses. Except for employees of Manager and supplies, inventory, and golf equipment to be provided by Manager as expressly provided in this Agreement, Owners shall pay all Expenses relating to the Facilities as approved in the Owners’ Budgets or by the Board in accordance with applicable rules and regulations governing such expenditures. “Expenses” shall mean all cash expenditures made in connection with the Facilities, including but not limited to: i. Owners’ insurance costs, but not the cost of Manager’s insurance on its own property; ii. Payments for advertising and promotion of the Facilities with prior approval of the Board; iii. Acquisition costs, lease payments and debt service payments for equipment, furniture, fixtures and other capital items as budgeted or approved by the Owners and the Board; iv. License fees, dues and subscriptions for the benefit of the Facilities as budgeted or approved by the Owners and the Board; v. Costs of maintaining and improving the golf course pro shops, clubhouse, maintenance building and other parts of the Facilities as budgeted or approved by the Owners and the Board; vi. Costs for all other supplies, e.g. fertilizers, chemicals, fuels, etc.; vii. Costs of electric power, water and other utilities as budgeted or approved by the Owners and the Board; viii. Costs of equipment, other than labor for Manager’s employees; and routine repair and replacement parts for repairs. ix. Costs of grounds maintenance wage and benefits. GOLF COURSE MANAGEMENT AGREEMENT Teton Lakes and Rexburg Municipal Golf Courses Page: 9 of 15 4.4 GOLF PASSES. At the beginning of each year, Owners shall provide Manager five (5) Individual Season Passes and two (2) Family Season Passes to be used by Manager in its sole discretion, including without limitation to provide to individuals in return for ranger services (which may be performed by an independent contractor). 4.5 MANAGER COMPENSATION. In consideration of Manager’s services under this Agreement, Manager shall receive the following: a. Manager shall receive compensation in the amount of $95,000.00 per year, which shall be paid quarterly as follows: January $25,000 April $25,000 July $25,000 October $20,000 The quarterly payments will be made no later than the second city council check run in each respective month, which normally occur prior to the 22nd of each month. b. The owners maintain the right to contract the management of the Legacy Municipal Golf Course to another Manager during the term of this contract. If such a change is to be made, advance notice of ninety (90) days must be provided to the current Manager. If this change is made, the Manager compensation would be reduced by $5,000 per year and an appropriate pro-rated adjustment to this number would be made based on an annual start date of January 1st. 4.6 INSURANCE. Owners shall maintain, consistent with past practice, fire and property insurance, general liability insurance, including injury to person or property, with respect to the Facilities, the improvements thereon, and Owners’ equipment. This Insurance shall be in addition to that required of Manager as set forth in Article III above. 4.7 TAXES. Owners shall be responsible to pay all taxes applicable to its real property and taxes for all fees collected by Manager. 4.8 RULES AND REGULATIONS. The Owners, in conjunction with Manager, shall promulgate reasonable rules and regulations for the operation of the Facilities, including pro shops, driving range, practice greens and golf courses. A copy of the rules and regulations shall be provided to Manager and a copy shall be placed on file with the Rexburg City Clerk and the Madison County Clerk. ARTICLE V BREACH AND TERMINATION 5.1 BREACH. Any one or more of the following events, unless cured in accordance the provisions herein, shall constitute a breach of this Agreement by Manager: a. Any material breach of the obligations of Manager contained in this Agreement; b. The sale or discontinuance by Manager of its business and/or abandonment of its activities at the Facilities, or the filing of bankruptcy by Manager; OR c. Serious criminal conduct, gross incompetence, gross negligence, fraud or dishonesty, and/or malfeasance on the part of Manager, its employees, assigns, licensees, lessees, owners, or managers, in connection with the Facilities and/or the management of the Courses. GOLF COURSE MANAGEMENT AGREEMENT Teton Lakes and Rexburg Municipal Golf Courses Page: 10 of 15 A cause for breach is not limited to these bases for breach and the Parties do not intend this term to limit any cause of action or basis for relief that may arise out of a breach of this Agreement not delineated herein. 5.2 TERMINATION FOR CAUSE. At any time during the term of this Agreement or any renewal hereof, Owners shall have the option of terminating this Agreement in the event of breach of this Agreement by Manager as. Should Owners exercise this option, they must send written notice to Manager of their intent to terminate the Agreement for cause specifying, in detail, the nature and circumstances of the breach or breaches. 5.3 CURE OF BREACH. Manager shall have thirty (30) days after the receipt of written notice from Owners notifying it of the breach, within which to cure the breach, or such longer period as may be reasonably required provided that Manager promptly commences the remedying of the breach and diligently continues to make good faith efforts complete the cure within a reasonable amount of time. Manager shall not have any cure period for a breach under paragraph 5.1(b) or (c) or in the event paragraph 5.5 is triggered and exercised. 5.4 TERMINATION PROCEDURE. In the event of a breach of this Agreement, Owners may terminate this Agreement upon expiration of the cure period described in paragraph 5.3 if the Manager has not timely cured, or, if no cure period is provided for, then upon immediate action, by delivering to Manager written notice of Owners’ election to terminate this Agreement, which notice shall include a) the stated basis(es) for termination with detailed explanation, and b) the effective date of termination of the Agreement (which may be immediate or on a date certain). 5.5 TERMINATION BY INCAPACITY OF KEY MAN. Notwithstanding any other provisions contained herein, the personal involvement of J. Duffy Mcfarland, the Owner and Manager of JDM Golf Management, LLC, in the management of the Courses is a key consideration of this Agreement; therefore, in the event of his death, incapacity (mental or physical) for a period exceeding ninety (90) consecutive days, malfeasance, gross incompetence, gross negligence, conviction of a serious criminal offense, or his failure to meaningfully participate in the operation and duties of JDM Golf Management, LLC, specifically in that entity’s management of the Courses for a period exceeding sixty (60) days, the Owners may terminate this Agreement in accordance with paragraph 5.4 herein. ARTICLE VI OTHER PROVISIONS 6.1 RELATIONSHIP OF THE PARTIES. The relationship between Owners and Manager shall be and at all times remain that of owner and independent contractor, respectively. Neither Owners nor Manager shall be construed or held to be a partner, limited partner, associate or agent of the other, or be joint ventures with one another. 6.2 INDEMNIFICATION BY MANAGER. Manager shall defend, save, and hold harmless, and indemnify Owners, their successors and assigns, from and against any and all claims, losses or damages to property or injuries to or death of any persons relating in any manner whatsoever, directly or indirectly, from the negligence or misconduct of Manager or its employees or agents or from any equipment furnished to the public by Manager. 6.3 INDEMNIFICATION BY OWNERS. Owners shall defend, save, and hold harmless, and indemnify Manager, its shareholders, directors, officers, employees and agents from and against GOLF COURSE MANAGEMENT AGREEMENT Teton Lakes and Rexburg Municipal Golf Courses Page: 11 of 15 any and all claims, losses, liabilities or damages to property or injuries to or death of any persons relating in any manner whatsoever, directly or indirectly, from the negligence of Owners. 6.4 NOTICE OF CLAIMS. Manager and Owners shall provide each other with prompt written notice of any event covered by the indemnity sections of this Agreement; and, in the event a claim or action is filed, each party may employ attorneys of its own choosing to appear and defend the claim or action on its behalf. Failure to provide such notice, however, shall not limit any party’s indemnity obligations hereunder. 6.5 COVENANT OF COOPERATION. Manager shall provide Owners with prompt written notice of any material injuries or damages suffered at the Facilities, significant complaints, whether written or otherwise, about the Facilities or its management, and actual or anticipated disputes with or claims by third parties, including, but not limited to, adjacent landowners. Manager further covenants to cooperate with Owners in resolving any such complaints, disputes or claims and Owners covenants to cooperate with Manager in resolving any such complaints, disputes or claims. 6.6 MEMBERSHIPS AND ORGANIZATIONS. Preferential treatment of any membership or organization is expressly forbidden. Neither Manager nor the golf professional or assistant golf professional shall become an officer or member of any golf club or organization of golfers formed or to be formed at the Facilities or of any organization with which participation would conflict with the orderly and efficient operation of the Facilities. 6.7 NO PREFERENTIAL TREATMENT. Neither Manager nor the golf professional or assistant golf professional shall, in the operation of the Facilities, and particularly in the granting of starting times or playing privileges, grant any preferential treatment to any individual or group of individuals, except as authorized by the rules and regulations pertaining to the Facilities. 6.8 NOT A LEASE. It is expressly agreed and understood that neither the Facilities nor any part thereof are leased to Manager; that Manager’s right to occupy and use the Facilities or any parts thereof is granted herein subject to the performance of Manager’s duties under this Agreement, and that Manager’s right to possess and use the Facilities shall terminate upon termination of this Agreement. 6.9 ASSIGNMENT AND SUBLETTING PROHIBITED. This Agreement may not be assigned to any other person or persons, in whole or in part, nor may any portion of the Facilities be sublet in any manner by Manager to any person or persons, unless specifically approved in writing by Owners. 6.10 OWNER’S REPRESENTATIONS AND WARRANTIES. To induce Manager to enter into this Agreement, Owners make the following representations and warranties to Manager to best of Owners’ knowledge: a. Owners have full power and authority and all legal rights to enter into and perform this Agreement. The person or persons executing this Agreement on behalf of Owners are duly, properly and fully authorized to execute this Agreement. b. This Agreement has been duly authorized, and when executed and delivered by the parties hereto, shall create a valid and binding obligation on the part of Owners, enforceable against Owners in accordance with its terms. c. Owners shall at all times supply such water, electrical power and other utilities as may be reasonably required for Manager to carry out its duties under this Agreement and for the GOLF COURSE MANAGEMENT AGREEMENT Teton Lakes and Rexburg Municipal Golf Courses Page: 12 of 15 operation and grounds maintenance of the Facilities, including, but not limited to water and power necessary to properly operate, maintain and irrigate the Facilities. d. Owners, at its expense, shall at all times during the term of this Agreement supply, replace as necessary and provide to Manager for Manager’s exclusive use, such operating and maintenance equipment as may from time to time be reasonably necessary for Manager to perform its services under this Agreement and for operation of the Facilities. 6.11 MANAGER’S REPRESENTATIONS AND WARRANTIES. To induce Owners to enter into this Agreement, Manager represents and warranties to Owners that Manager has the full power and authority an all legal rights to enter into and perform this Agreement. This Agreement, when executed and delivered by the parties hereto, shall create a valid and binding obligation on the part of Manager, enforceable against Manager in accordance with its terms. 6.12 OWNER’S REPRESENTATIVE. Owners shall designate in writing one person who shall act as Owners’ representative in connection with the administration of this Agreement. Manager shall report to and communicate with Owners through such designated representative. Until otherwise notified in writing, Owners hereby designates the Golf Board as its designated representative. 6.13 APPROPRIATIONS. The City of Rexburg and Madison County shall each seek to pass annual appropriations sufficient to pay the obligations of Owners under this Agreement as required by applicable state law. Owners’ obligations each year under this Agreement, and Manager’s obligation to perform under this Agreement, shall be contingent upon the adoption or approval of such annual appropriations to the extent they are necessary to the performance of this Agreement by Owners under applicable state law. 6.14 NOTICES. Except as otherwise specifically provided herein, any and all notices required or permitted under this Agreement shall be in writing and shall be deemed delivered upon personal delivery to a duly authorized agent or three (3) days after mailing thereof when properly addressed and deposited in the United States Mail, first-class postage prepaid, registered or certified mail, return receipt requested. Notices shall be properly addressed if addressed to the parties as follows: To Owners: City of Rexburg P.O. Box 280 Rexburg, Idaho 83440 To Manager: JDM Golf Management, LLC P.O. box 408 Rexburg, Idaho 83440 AND Madison County 134 E. Main Rexburg, Idaho 83440 The addresses for notices to any party may be changed by written notice given to the other party as provided above. 6.15 FURTHER ACTS. Each party to this Agreement agrees to execute and deliver all documents and instruments and to perform all further acts and to take any and all further steps that may be reasonably necessary to carry out the provisions of this Agreement and the transactions contemplated herein. GOLF COURSE MANAGEMENT AGREEMENT Teton Lakes and Rexburg Municipal Golf Courses Page: 13 of 15 6.16 SECTION HEADINGS. The section headings in this Agreement are for convenience and reference only and shall in no way define, limit, extend or interpret the scope of this Agreement and the transaction contemplated herein. 6.17 INTERPRETATIONS. Unless the context requires otherwise, words used in the singular number shall include the plural and vice-versa; words used in the masculine shall include the feminine and vice-versa. 6.18 AMENDMENTS AND WAIVERS. This Agreement shall be modified only by written instrument executed by the parties hereto. The failure of either party, in any one or more instances, to insist upon strict performance of any of the provisions of this Agreement or to exercise any rights herein conferred shall not be construed as a waiver or relinquishment to any extent of such party’s right to assert or rely upon such terms or rights in any other instances. Any waiver of any provision of this Agreement shall be made only in writing executed by the party who could demand fulfillment of such waived provision. 6.19 RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies provided by this Agreement are cumulative, and the use of any one right or remedy by any party shall not preclude or waive the right to use any other remedy. Said rights and remedies are given in addition to any other legal rights the parties may have. 6.20 TIME MEASUREMENT. Measurements of time indicated herein accrue the first full day following the day of the event triggering the measurement (or first full non-government-holiday business day following the triggering event if the duration of time is less than one week). In no event shall a deadline fall upon a weekend or government holiday, but shall extend until the first non-government-holiday business day following the day upon which the deadline would otherwise fall. 6.21 CONSTRUCTION. Whenever the singular conjugation is used in this Agreement and when required by the context, the same shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa. 6.22 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns. 6.23 GOVERNING LAW. This Agreement shall be construed under and in accordance with the laws of the State of Idaho. 6.24 COUNTERPARTS. This Agreement and all amendments and supplements to it may be executed in counterparts and all such counterparts shall constitute one agreement binding on both of the parties. 6.25 SEVERABILITY. Should one or more of the provisions of this Agreement be determined to be illegal or unenforceable, the other provisions nonetheless shall remain in full force and effect. The illegal or unenforceable provision or provisions shall be deemed amended to conform to applicable laws so as to be valid and enforceable, if such an amendment would not materially alter the intention of the parties. 6.26 ENTIRE AGREEMENT. This Agreement (together with any attached Exhibits) constitutes the entire agreement between the parties concerning the subject matter of this Agreement, and supersedes all prior agreements, arrangements, understandings, restrictions, representations or warranties, whether oral or written, between the parties relating to the subject matter of this Agreement. GOLF COURSE MANAGEMENT AGREEMENT Teton Lakes and Rexburg Municipal Golf Courses Page: 14 of 15 6.27 COMPLIANCE WITH LAW. Manager shall conduct its duties under this Agreement in accordance with applicable local, state and federal laws and regulations. 6.28 ATTORNEY’S FEES AND COSTS. Should suit be brought or legal action commenced by Owners or Manager as a result of a breach, or in order to enforce, any or the provisions of this Agreement, the prevailing party shall be entitled to recover from the other party reasonable attorney’s fees and costs incurred, whether such suit or action is brought to judgment or otherwise. Failure to promptly notify the other party of an action subject to the indemnity of the other shall constitute a basis for the award of fees and costs directly resulting from the delayed or withheld disclosure. 6.29 FORCE MAJEURE. No party shall be liable for damages due to delay or failure to perform any obligation under this Agreement, if such delay or failure results directly or indirectly from circumstances beyond the reasonable control of such party. Such circumstances shall include, but shall not be limited to, acts of God, acts of war, civil commotions, riots, strikes, acts of governments, accident, fire, flood, earthquake, or other natural disasters or inclement weather. GOLF COURSE MANAGEMENT AGREEMENT Teton Lakes and Rexburg Municipal Golf Courses Page: 15 of 15 IN WITNESS WHEREOF, the Parties hereby execute this Agreement: _________________________________ ___________________________________ DATE J. DUFFY MCFARLAND Manager JDM Golf Management, LLC STATE OF IDAHO ) : ss. County of Madison ) On this ______ day of _____________________, 2018, before me the undersigned, a Notary Public for the State of Idaho, personally appeared J. DUFFY MCFARLAND, known or identified to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year first above written. ____________________________________ Notary Public (SEAL) Residing at: My commission expires: EXECUTED and ENTERED INTO by the City of Rexburg and the Board of Madison County Commissioners: BOARD OF MADISON COUNTY COMMISSIONERS CITY OF REXBURG This ____ day of ___________________, 2018. BY: JON WEBER Chairman This ____ day of _________________, 2018. BY: JERRY MERRILL Mayor ATTEST: KIM M. MUIR Madison County Clerk ATTEST: BLAIR KAY Rexburg City Clerk