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a) Inventory. OPERATOR shall procure and maintain in the Pro Shop such inventory of golf merchandise as deemed necessary or appropriate to adequately meet public demand and consistent with the goal in Section 3.02.2. b) Mark Down of Merchandise. Merchandise that can reasonably be classified as "stale" or "unsellable" may be marked down. After six(6) months, if OPERATOR determines that any aged merchandise in the Pro Shop cannot be sold or should not be sold because of the reputation or image of the Pro Shop,then OPERATOR may sell the merchandise at less than cost and include the payment for the merchandise in the Gross Revenues. 4.01.2 Golf Instruction. OPERATOR shall provide for golf instruction by qualified instructors supervised by the Golf Professional. All instructors shall be PGA or LPGA Class A golf professionals or apprentices, unless otherwise approved by Director. All golf instructors shall be employees, unless OPERATOR proposes an alternative plan that is approved by the Director.OPERATOR shall cause all golf instructors to comply with the rules and regulations set forth in the Golf Course Manual.It is expected that the Golf Professional and instructors will provide tips and mini-lessons at no cost to golfers. All golf instructors shall carry insurance covering their work and the CITY shall be named as an additional insured under such policies. In all events, golf instructors shall indemnify and defend the CITY for any and all claims of any nature arising out of or related to any actions taken by, or not taken by, any such golf professionals,apprentices,or instructors. a) Availability. There shall be a PGA or LPGA Class A golf professional or apprentice available to answer questions and address customer concerns in the Pro Shop. b) City-Sponsored Recreation Classes. The OPERATOR shall work in conjunction with the Director to provide group lessons at the driving range, putting greens and Course as a part of the CITY-sponsored Library and Recreation Department classes. c) Junior Golf Programs.As provided in the Manual,OPERATOR shall organize and implement junior golf programs through CITY's Library and Recreation Department,Recreation Division. 4.01.3 Golf Carts. OPERATOR shall procure by lease on behalf of the CITY and maintain in good condition power-driven golf carts in sufficient numbers to meet the public demand as set for in the Golf Course Manual. If the term of such leases extend beyond the term of this Agreement, OPERATOR shall assign, and CITY shall assume, such leases. The Director shall have the right, in Director's sole and absolute discretion, to require a change in the number or types of golf carts in use at the Golf Course; provided, however, that the CITY shall increase or decrease the applicable Direct Cost Budget(s) reasonably to account for resulting increased or decreased Direct Costs. Prior to procuring golf carts, OPERATOR shall give Director written documentation concerning the type of golf cart to be leased. OPERATOR shall lease golf carts in accordance with Director's written approval. All carts shall be 4- wheel, electric vehicles, aside from those carts necessary to accommodate ADA golfers, and shall be equipped with canopies,windshields,and sand and seed containers and holders.OPERATOR may prohibit the use of golf carts on the Golf Course whenever weather conditions expose the user to danger of the Golf Course to damage. OPERATOR shall employ an on-site mechanic who is able to repair and maintain the golf carts. 4.01.4 Driving Range. OPERATOR shall operate and manage all driving range operations, and procure and maintain all equipment necessary and appropriate to meet the goal set forth in Section 3.02.2. Driving range balls shall be of high quality, and all cracked and worn range balls shall be removed in a timely manner.OPERATOR shall be solely responsible for the safe operation of the driving range and shall fully indemnify and defend the CITY against any Claims related thereto or arising from its use. Page 4 of 8