The Iron Horse Golf Club

Market-Based Pricing Policy, Membership Plan

Membership Resale – Members in good standing may arrange for the Club to resell their Golf or Social Membership according to the Iron Horse Golf Club “Market Based Pricing Policy”.

An Iron Horse member wishing to sell their membership must submit their Resale Price in writing to the Club prior to 8:00 am the last day of a month. Such membership shall be placed on the Club’s Membership Sales List. The submitted price becomes effective the first day of the following month and is binding until modified or revoked in writing. It cannot be revoked if a sale has already been agreed upon.

  • The lowest priced membership will be resold first.
  • If said membership has not sold in a given month, the Selling Member may change their price and such change will be effective the first day of the next month.
  • Selling prices must be in increments of $1,000.
  • Only members in good standing (i.e., no past due accounts) are eligible to participate.
  • The Club will post the range, lowest and highest, of membership pricing available each month.
  • If more than one membership has the same Resale Price, they will be sold in priority of membership tenure.
  • At the time of sale, a “Capital Contribution” shall be paid by the Member in the amount of $15,000 for Golf and $6,000 Social or 20% of sales price (whichever is greater). The Club will deduct the Capital Contribution from the 20% share of the sales price that the Club is entitled to upon reissuance of your membership. If the Club’s 20% share is less than the Capital Contribution then the shortfall will be deducted from the Member’s 80% share and will be retained by the Club. Any additional shortfall must be paid at the time of transfer.
  • The Club will communicate to prospective members the lowest Resale Price available. A prospective member may reserve a membership by submitting an application and a check for the purchase price. If the applicant is approved, they will be billed the pro-rated dues on their first monthly statement.
  • The Club reserves the right to purchase memberships at any time.
  • This policy does not inhibit a member’s ability to sell their membership with a real estate transaction.
  • The Club will sell Club owned memberships based on the lowest Resale Price available.
  • Iron Horse Golf Club shall have the right to sell Club owned memberships according to the “Market Based Pricing Policy” on a ratio of 1 to 1 (i.e.- for every 1 reissued membership the Club may sell a Club unissued membership) at any time the number of active memberships is less than the Membership Cap.
  • The Initial Membership Cap shall be set by the BOD at 285 Golf Memberships and 10 Social Memberships. The Membership Cap will be set by the BOD at its Annual Meeting, but shall never exceed 300 Golf Memberships and 25 Social Memberships.
  • A member who has resigned his or her membership in the Club may continue to use the Club Facilities and will continue to be obligated to pay all dues, fees, assessments and charges associated with the membership being resigned until the resigned membership is reissued by the Club.

SECOND AMENDMENT TO BYLAWS
OF
IRON HORSE GOLF CLUB, INC.

This Second Amendment to Bylaws of Iron Horse Golf Club, Inc. (the “Second Amendment”) amends the Bylaws of Iron Horse Golf Club, Inc., as amended by the Amendment to the Bylaws and Plan for the Offering of Memberships of the Iron Horse Golf Club, Inc.

A.  Amendment to Sections 1, 6 and 10 of Article X – Equity Memberships. Sections 1, 6 and 10 of the Bylaws of Iron Horse Golf Club, Inc. are hereby amended and replaced in their entirety with the following Sections 1, 6 and 10:

 1.  Number of Members; Membership Cap.
Two categories of Equity Membership are offered by the Club: Golf Membership and Social Membership. The Board of Directors, at its annual meeting, shall have the right to set a maximum number of active Golf Memberships and Social Memberships to be issued in the Club (the “Membership Cap”); provided, however that the maximum number of active Golf and Social Memberships permitted to be issued in the Club will not exceed 300 Golf Memberships and 25 Social Memberships. Suspended memberships (i.e. memberships not in good standing) shall not count toward the membership cap.

6. Membership Contributions.
Persons desiring to be Members of the Club must pay the Club a membership contribution to become a Member. The amount of the membership contribution shall be the lowest Resale Price (as defined below) listed on the Club’s Membership Sales List (as defined below) as of the date application to become a Member is made and the prospective member delivers a refundable check in the full amount of the membership contribution to the Club.

10. Resignation and Transfer of Memberships – Market Based Pricing.

a. Equity Memberships are not transferable or assignable except as provided in this Section 10 or Section 11 of Article X.

b. All transfers, assignments or changes in ownership of Equity Memberships must be made through the Club by resigning the Equity Membership to the Club and arranging for the Club to reissue the membership to a successor member (a “Transfer”). All membership Transfers, except Transfers by Members who own a residential home or homesite in the Community and whose membership will be reissued to the purchaser of the resigning Member’s home or homesite, which Transfers are controlled by Section 10.c, below, shall be in accordance with the following procedures (the “Market Based Pricing Policy”)

i. A Member wishing to Transfer their membership (the “Transferring Member”) must submit a signed document, in a form to be approved by the Club, to the Club stating the price which the Transferring Member will accept for the Transfer of their membership (the “Resale Price”). All memberships for which the Club has received a signed Resale Price notice prior to 8:00 a.m. on the last day of a month, shall be included on the Club’s list of memberships available for reissuance (the “Membership Sales List”) in the following month. The Club will update the Membership Sales List on the first day of each month. A Member’s Resale Price shall be binding once it has been received by the Club unless it is modified or revoked as provided below. A Member may modify their Resale Price by delivering a written document setting forth the revised Resale Price to the Club; however, such modified Resale Price shall not become effective until the first day of the following month. A Member may remove their membership from the Membership Sales List by delivering a written document directing the Club to remove such membership at any time prior to the time that the Club has received a membership application for the purchase of the Transferring Member’s membership interest.

ii. Resale Prices must be in increments of $1,000.00.

iii. Only Members in good standing with the Club shall be permitted to list their membership on the Membership Sales List. For purposes of this Section, “in good standing” means that the Member has no unpaid or delinquent dues, fees, assessments or charges.

iv. At the beginning of each month, the Club shall post the lowest and highest prices of the memberships listed on the Membership Sales List.

v. The Club shall reissue the membership with the lowest Resale Price first. If there are multiple memberships with the same Resale Price, those memberships will be sold in priority of membership tenure, with the membership of the member having the longest tenure being sold first.

vi. Unless otherwise provided in the Transferring Member’s Membership Purchase Agreement, the amount of the resale price to be refunded to the Transferring Member (the “Member’s Share”) upon the Transfer of a membership is eighty percent (80%) of the amount of the Resale Price paid by the successor member. The Club shall have the right to deduct any dues, fees, assessments, charges, or other amounts that the Transferring Member owes to the Club from the Member’s Share prior to payment of the Member’s Share to the Transferring Member. The Club will retain the other twenty percent (20%) of the amount of the Resale Price paid by the successor member (the “Club Share”).

vii. Upon the Club reissuing a membership interest to a successor member, the Transferring Member shall pay a “Capital Contribution” to the Club. The Capital Contribution due upon the Resale of a Golf Membership shall be the greater of $15,000.00 or 20% of the Resale Price. For a Social Membership, it shall be the greater of $6,000 or 20% of the Resale Price. The Capital Contribution shall first come out of the Club Share. If the Club Share is less than the required amount, the shortfall shall be deducted from the Member’s Share and retained by the Club. Any additional shortfall must be paid at the time of resale.

viii. Prospective members will be informed of the lowest Resale Price listed and available on the Membership Sales List. Prospective members may reserve a membership by submitting a membership application together with a check for the full amount of the Resale Price.

ix. The Club shall have the right to purchase memberships listed on the Membership Sales List at any time so long as after the purchase is completed: (a) the Club will be able to pay its debts as they become due in the usual course of its activities; and (b) the Club’s total assets will at least equal the sum of its total liabilities.

x. At any time that the Club owns memberships and the current Club membership is less than the “Membership Cap” then in effect, the Club shall have the right to sell the Club owned memberships in accordance with the Market Based Pricing Policy. Any memberships sold by the Club shall be sold at the lowest Resale Price listed on the Membership Sales List as of the date the Club elects to sell a Club owned membership. Upon the Club’s election to sell a Club owned membership, the Club owned membership will have priority and will be the next membership sold. Club owned memberships shall be sold on a 1 to 1 ratio with Member owned memberships (i.e., for every one Club owned membership that is sold, one Member owned membership will be reissued from the Membership Sales List).

c. An Equity Member who owns a residential home or homesite in the Community may arrange for the Club to Transfer his or her membership to the subsequent purchaser of the home or homesite upon approval of the subsequent purchaser’s membership application by the Club. The Transfer of such a membership is not subject to any waiting lists and is not required to be listed on the Membership Sales List. The procedure for such a Transfer shall be as follows:

i. The resigning Equity Member who owns a residential home or homesite in the Community must submit a resignation in writing, in a form prescribed by the Club, stating: (a) that such Member is selling such Member’s residential home or homesite in the Community; (b) that the resignation shall become effective following the closing and transfer of title to the home or homesite and the acceptance of the purchaser as a Member; and (c) the Resale Price for the resigned membership;

ii. The purchaser must make application for membership;

iii. Upon the resignation becoming effective, as hereinabove provided, the resigning Member shall deliver to the Secretary of the Club such Member’s membership certificate; and

iv. The membership contribution to be paid to the Club by such purchaser shall be the Resale Price agreed upon by the resigning Member and the purchaser. After the purchaser’s membership application has been approved and upon the Club’s receipt of the purchaser’s membership contribution, the Club shall promptly remit to the resigning Member the refund of the Member’s Share of the membership contribution, less any dues, fees, charges, assessments or capital contribution amounts owing to the Club, calculated in accordance with Section 10.b.vi and 10.b.vii, above. As soon as practical thereafter, the Secretary of the Club shall cancel the membership certificate of the resigning Member and issue a new membership certificate to the purchaser.

d. If a resigning Member does not so arrange for their membership to be reissued to the subsequent purchaser of their home or homesite, the resigning member shall submit their Resale Price to the Club and the resigned membership will be placed on the Membership Sales List and sold in accordance with the Market Based Pricing Policy.

e. An Equity Member may Transfer his or her membership to his or her adult child over the age of 18 through the Club. The Transfer will be subject to the approval of the Club and to such capital contribution or transfer fee determined by the Club from time to time. The membership will not be subject to any waiting lists.

f. The Club shall be obligated to refund the Member’s Share of the membership contribution, less any dues, fees, assessments, charges or capital contributions owed to the Club, to the resigning Member only after the membership has been reissued by the Club to a successor member who has paid the membership contribution in full to the Club. The Club, in its sole discretion, may refund the Member’s share of the membership contribution to the resigning Member prior to the payment of the membership contribution by a successor member.

g. A Member may resign from the Club by giving written notice to the Secretary of the Club. If a membership is reissued during a membership year, the resigned Member will be entitled to a refund of a pro rata portion of any dues paid in advance for the remainder of the membership year in which the reissuance occurs.

h. A Member who has resigned his or her membership in the Club may continue to use the Club Facilities and will continue to be obligated to pay all dues, fees, assessments and charges associated with the membership being resigned until the resigned membership is reissued by the Club. Any amount owed will be deducted from the amount paid to the resigned Member upon the Club’s reissuance of his or her membership.

i. A Social Member may upgrade to a Golf Membership only through the purchase of a Club owned Golf Membership, subject to the “Membership Cap”.

A. Bylaws Control. In the event of a conflict or inconsistency between the Bylaws, the Iron Horse Golf Club, Inc. Plan for the Offering of Memberships, the Iron Horse Golf Club, Inc. Rules and Regulations or the Iron Horse Golf Club, Inc. Frequently Asked Questions, the terms of these Bylaws will prevail and control.

B. Miscellaneous. All terms not defined in this Second Amendment shall have the same meaning stated in the Bylaws of Iron Horse Golf Club, Inc.

C. Effect of Amendment. Except as amended by this Second Amendment, all of the terms and conditions of the Bylaws of Iron Horse Golf Club, Inc., shall remain in full force and effect.

D. Waiver of Company Rights. The Company has waived any rights it may have to review or approve this Second Amendment pursuant to a Letter Agreement between the Club and the Company dated May 31, 2012. Thus, the Company’s consent to this Second Amendment is not required.

E. Certification. We, the undersigned, hereby certify:

1. That the foregoing Second Amendment was presented to and approved by a majority of all of the members of the Board of Directors at the meeting of the Board of Directors held on June 6, 2012;

2. That the foregoing Second Amendment was attached to the notice of annual meeting dated June 15, 2012, which was sent to all Equity Members of the Club who were entitled to vote at the annual meeting;

3. That the foregoing Second Amendment was presented to the Equity Members at the annual meeting of the Members of the Club held on July 13, 2012;

4. That a quorum consisting of ______ of the voting members of the Club were in attendance, either in person or by proxy, at the annual meeting of the Members of the Club held on July 13, 2012, and that _____ votes were cast in favor of the foregoing Second Amendment and ______ votes were cast against the foregoing Second Amendment; and

5. That the Second Amendment was declared duly proposed, considered and passed in due form and the Secretary of the Club was directed to place the Second Amendment in the corporate book of the Club.

IRON HORSE GOLF CLUB, INC.
_____________________________
By:__________________________
Its: President

Attest:

________________________________
By:_____________________________
Its: Secretary

Questions and Answers

In an effort to attract new members and provide a workable methodology to help members sell their memberships, we have looked into several other private clubs around the country to see what they are doing. Some of them are using a market-based plan and their success rate is much greater than with a set initiation fee. We want to make the process of selling memberships easier for our members, while providing a much more transparent way to buy memberships. Currently, unless you own property the only way to sell your membership is via the Seller’s Waiting List (SWL) which requires memberships to be sold at a price of $75,000. The last member to sell a membership from the Seller’s Waiting List was in 2008. With a market-based plan, the Club puts the power in your hands to set the price of your membership and create a more competitive market.

The Board at its Annual Meeting intends to set the initial cap at 285 Golf and 10 Social memberships. Under this approved plan the Club may not increase the Membership Cap above 300 Golf and 25 Social memberships.

The Club would most likely set a new initiation fee and continue to have the option of selling memberships at a 4:1 ratio (4 Club memberships: 1 Seller’s Waiting List membership) or with the transfer of property. Regardless, the sellers would be in the queue on a SWL as before. The seller would be subject to the order and the price and not have the flexibility that the MBP offers.

Under the current program, 20% of the selling price is paid to the Club. This equates to $15,000 for Golf and $6,000 for Social. Under the Market-Based Pricing Plan we need to establish a minimum that would be similar to the previous level.

We are trying to create a better value for the membership, while maintaining the quality of the members’ experience.

We acquired the remaining 18 Developer memberships for a total of $250,000 paid from the Club’s operating funds. This expenditure does not require an assessment or dues increase.

Under the original Turnover Agreement, the Developer retained certain rights and privileges until all Developer memberships were sold. By the Club controlling these memberships, we are no longer subject to any Developer control or influence.

There are 22 members on the current Seller’s Waiting List who are part of the 4:1 ratio.

Yes. If we implement the Market Based Plan, the board at its discretion may issue memberships on a 1:1 ratio (1 MBP: 1 Club) as long as the current membership count is below the Membership Cap. Obviously once the Club is at the cap only resales from the MBP will take place.

275 Golf and 10 Social (Active in Good Standing)

The current Seller’s Waiting List will no longer exist. Members currently on the list will be contacted by the Club to see if they would like to participate in the new program.

Yes, but it would be possible only by a vote of the membership and another amendment to Club Bylaws.

No. This policy does not inhibit a member’s ability to sell their membership with a real estate transaction.

The First Amendment to the Bylaws was the vote for early Turnover, which was approved by a vote of the membership in 2008.