Ordinance No. 15,916 ORDINANCE NO. 15,916
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS,
AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE AND
THE CITY CLERK TO ATTEST TO A GOLF FACILITY MANAGEMENT
AGREEMENT WITH TROON GOLF, LLC IN AN AMOUNT NOT TO EXCEED
NINE-HUNDRED SEVENTY-FOUR THOUSAND, FIVE-HUNDRED, FIFTY-THREE
AND 44 100 DOLLARS ($974,553.44); AND PROVIDING FOR THE EFFECTIVE
DATE THEREOF.
*****************************************************************************
WHEREAS, on May 7, 2024, the City Council of the City of Baytown, Texas passed Ordinance
No. 15,793 authorizing a short-term Golf Facility Management Agreement with Troon Golf, LLC
("Troon") in an amount not to exceed ONE-MILLION, NINE-HUNDRED THOUSAND 00, 100
DOLLARS ($1,900,000.00); and
WHEREAS on July 25, 2024, the City of Baytown advertised RFQ 24-0842 for Golf Course
Consulting Management Services; and
WHEREAS, three(3)companies responded to RFQ 24-0842; and
WHEREAS, Troon was determined to be a qualified firm based on its response; and
WHEREAS, the short term Golf Facility Management Agreement with Troon Golf is set to
expire on September 30, 2024; and
WHEREAS, NINE-HUNDRED SEVENTY-FOUR THOUSAND, FIVE-HUNDRED, FIFTY-
THREE AND 44 100 DOLLARS ($974,553.44) of the funds authorized by the City Council under the
short term Golf Facility Management Agreement still remain. NOW THEREFORE
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,TEXAS:
Section 1: That the City Council of the City of Baytown, Texas, hereby authorizes and
directs the City Manager and City Clerk of the City of Baytown to execute and attest to a Golf Facility
Management Agreement with Troon Golf, LLC in an amount not to exceed NINE-HUNDRED,
SEVENTY-FOUR, FIVE-HUNDRED, FIFTY-THREE AND 44. 100 DOLLARS ($974,553.44). A copy
of said Agreement is attached hereto, marked Exhibit "A" and incorporated herein for all intents and
purposes.
Section 2: This ordinance shall take effect immediately from and after its passage by the
City Council of the City of Baytown.
INTRODUCED, READ, and PASSED by the of ive vote of the City Council of the City of
Baytown, this the 26"day of September, 2024.
�— RANDON CAPET LO, yor
�TTEST: 4 0�Y70I"''f
T O V,
- O
O
A GELA J KS N t
APPROVED AS T FO OF
SCOTT LE O ,City Attorney
R:Ordinances and Resolutions Ordinance Drafts%.2024-09-26%Troon Golf Facility Mgt Agt.doc
EXHIBIT "A"
GOLF FACILITY
MANAGEMENT AGREEMENT
FOR
Baytown Golf Club
Date: , 2024
GOLF FACILITY MANAGEMENT AGREEMENT
THIS GOLF FACILITY MANAGEMENT AGREEMENT(the"Agreement") is made and
entered into as of , 2024, by and between the City of Baytown, a home-rule municipality
located in Harris and Chambers Counties,Texas("Owner"),and TROON GOLF L.L.C.,a Delaware
limited liability company("Troon").
RECITALS:
A. Troon is engaged in the ownership, management, and operation of golf facilities.
B. Owner owns approximately fifty (50) acres upon which Owner is developing and
operating that certain golf facility that includes an 18-hole golf course, pro shop and dining
facilities known as "Baytown Golf Club" (the "Golf Course"), together with the Improvements
(as defined below) located thereon in Baytown,Texas.
D. Owner desires to utilize the services and experience of Troon in connection with
the management and operation of the Facility(as defined below),and Troon desires to render such
services, upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained, Owner and Troon hereby agree as follows:
1. Definitions.
(a) As used herein the following terms shall have the respective meanings indicated
below:
Affiliate any corporation or other entity controlled by,controlling or under common control
with Troon or Owner, as applicable. The words "control", "controlled" and "controlling" mean
ownership,directly or indirectly,of 50%or more of the legal or beneficial ownership interest of such
corporation or other entity or, as to Owner, the appointment of a majority of members to an entity's
governing body.
Affiliated Facilities -all golf course facilities managed or operated by Troon throughout the
world (including, without limitation, if designated as such by Troon, golf facilities operated by an
Affiliate of Troon).
Employee Costs -- all costs pertaining to employees at the Facility arising out of the
employment, management or termination of such employees during the Term, including, without
limitation, salaries, fringe benefits, bonuses, relocation costs, costs of recruitment (including
applicable agent fees), vested and non-vested benefits, vacation pay, accrued sick days, seniority
rights,severance,unemployment compensation,compliance with governmental laws and regulations
and insurance,and any other similar employee liability costs and expenses. All Employee Costs shall
be approved by Owner and included in the Annual Plan(defined below)for each Fiscal Year(defined
below).
2
Facility a collective term for the Golf Course,the Improvements,and the FF&E(as defined
below).
FF&E - all fixtures, furnishings, furniture, and equipment required for the operation of the
Facility.
GAAP--Generally Accepted Accounting Principles.
Gross Revenues-all revenues and income of any nature derived directly or indirectly from
the Facility or from the use or operation thereof, including greens fees, gross sales proceeds from
monthly dues from members of the Facility(if applicable),rental fees for golf carts, golf clubs and
other rental item fees, lesson fees (but only to the extent such fees are retained by the Facility),
range ball fees, food and beverage sales, liquor sales, telephone, revenue generated from space
rentals and from meetings, banquets, parties, receptions, tournaments and other group gatherings,
merchandise sales, rental or other payments from lessees and sublessees (but not including the
gross receipts of such lessees and sublessees), and the proceeds of business interruption, use,
occupancy or similar insurance. There shall be excluded from Gross Revenues: (i) any gratuities
or service charges distributed as compensation to the Facility's employees; (ii) any credits or
refunds made to customers, guests or patrons; (iii) any sums and credits received by Owner for
lost or damaged merchandise; (iv) any sales taxes, excise taxes, gross receipt taxes, admission
taxes, entertainment taxes, tourist taxes or charges; (v) any proceeds from the sale or other
disposition of the Facility, FF&E, or other capital assets; (vi) any property and/or liability
insurance proceeds(other than business interruption insurance); (vii)any condemnation awards or
receipts from sales of FF&E or other capital assets under the threat of condemnation other than
any award made in a temporary taking and in the nature of an award for lost income; (viii) any
proceeds of financing or refinancing of the Facility; (ix) amounts contributed by Owner pursuant
to the terms of this Agreement; (x)income or interest derived from the Facility Accounts(defined
below) and (xi) the proceeds from initiation fees received by the Facility from the sale of
memberships at the Facility (if applicable). Gross Revenues shall be determined on an accrual
basis and in accordance with GAAP with the exception of membership initiation fees included
within the definition of Gross Revenues as noted above(if applicable). For the avoidance of doubt,
amortization of initiation fees in accordance with GAAP shall be excluded from the definition of
Gross Revenues.
Improvements the Facility clubhouse, practice facilities and all other buildings, structures
and improvements now located or hereafter constructed on the land encompassing the Golf Course
(the"Site") and all fixtures and equipment attached to, forming a part of and necessary or desirable
for the operation of such clubhouse and other buildings, structures or improvements (including,
without limitation, heating, lighting, plumbing, sanitary system, air-conditioning, refrigeration,
kitchen, elevators and similar items) and such (i) restaurants, bars and banquet, meeting and other
guest areas, (H) commercial space, including concessions and shops, (iii) garage and parking space,
(iv) storage and service areas, (v) recreational facilities and areas, (vi) grounds and gardens for
common use of the guests, (vii) permanently affixed signage and (viii) other facilities and
appurtenances, all as presently exist on the Site or are hereafter added thereon during the Term.
Operating Costs - the sum of the costs and expenses (including Employee Costs) of
maintaining, operating, and supervising the operation of the Facility which are not properly
3
capitalized but instead are normally charged as a current expense under GAAP, including the
following:
(i) The cost of the supplies and equipment necessary to operate the Facility;
(ii) The Base Management Fee(defined below);
(iii) Employee Costs;
(iv) Advertising and promotional expenses incurred directly by the Facility,administrative
and general expenses of the Facility, the cost of Administrative Services (defined
below),utility and energy costs,operating licenses,fees and permits,and grounds and
landscaping maintenance costs;
(v) All expenditures made for routine maintenance and repairs to keep the Facility in
good condition and repair;
(vi) All reimbursable expenses due Troon;
(vii) All insurance premiums for all insurance obtained pursuant to the requirements of
Section 18 (other than property insurance premiums);
(viii) Reasonable reserves for uncollectible accounts receivable as set forth in the Annual
Plan;
(ix) Credit card and travel agent commissions; and
(x) All state taxes or impositions of any kind (with the exception of income taxes on
revenues earned by Troon) associated with the operation of the Facility and the
performance of Troon's obligations under this Agreement, including but not limited
to sales tax,use tax or other similar taxes,whether imposed upon Owner or Troon.
There shall be expressly excluded from Operating Costs the following costs and expenses of
the Facility,which shall be defined as"Fixed Charges":
(A) Depreciation of the Improvements (if applicable) and FF&E, and amortization of
financing costs,pre-opening expenses, organizational and other costs;
(B) All debt service (including interest and principal)on any indebtedness related to the
Facility;
(C) Rental payments pursuant to any real property lease(s);
(D) The cost of external (third-party)audits of Facility operations and/or with respect to
Owner's legal entity;
4
(E) Recurring and non-recurring Owner ownership costs, such as Owner's legal entity
administration and servicing fees;
(F) The Incentive Management Fee(defined below);
(G) Real estate (if applicable) and personal property taxes and assessments (including
payments to tax escrow accounts, but without duplication with respect to taxes
subsequently paid out of such tax escrow accounts);
(H) Payments pursuant to any equipment leases or installment sales contracts;
(1) Such other cash expenditures, including capital replacements and major capital
improvements as part of the Restoration Project(defined below)and otherwise,which
are normally treated as a capital expenditure under GAAP; and
(J) Property insurance premiums.
All Operating Costs shall be approved by Owner in writing and shall be included by Troon in the
Annual Plan for each Fiscal Year.
Owner Proprietary Information - all intellectual property relating to Owner and/or the
business affairs of Owner,whether owned by or licensed to Owner,including,without limitation: (i)
the Owner Marks (defined below); (ii) proprietary documents, drawings, designs, materials or
software (including, without limitation, manuals, software programs, internal correspondence,
operating standards manuals, agronomic standards manuals, and other items of a proprietary nature
created by Owner) specifically acquired,developed or modified in whole or in part by or for Owner,
including specifically any of the foregoing that are used in the operation of Facility;and(iii)any trade
secrets and copyrightable or patentable subject matter developed or acquired by Owner, or licensed
to Owner, in the ownership and operation of the Facility, and all intellectual property rights relating
to any of the foregoing, including, but not limited to,the course design.
Troon Proprietary Information — all intellectual property relating to Troon or any of its
Affiliates,the business affairs of Troon or any of its Affiliates,or any golf club,golf course or facility
or other similar operation or similar facility which Troon or any of its Affiliates owns, leases or
operates, including, without limitation: (i)the Troon Marks; (ii)proprietary documents, materials or
software (including, without limitation, manuals, software programs, internal correspondence,
operating standards manuals, agronomic standards manuals, and other items of a proprietary nature
created by Troon or its Affiliates)specifically acquired,developed or modified in whole or in part by
or for Troon or its Affiliates, and used in the operation of Facility or in any Affiliated Facility; (iii)
guest and player data; and (iv) any trade secrets and copyrightable or patentable subject matter
developed, acquired,or licensed by Troon or any of its Affiliates in the operation of the Facility or in
any Affiliated Facility,and all intellectual property rights relating to any of the foregoing.
5
(b) Other Definitions
As used herein, the following terms have the meanings set forth in the respective Sections
indicated below:
Annual Plan -Section 15(a)
Base Management Fee-Section l 6(b)
Centralized Services -- Section 13
Commencement Date-Section 7
Conversion Termination Notice-Section 9
Cooperative Sales and Marketing Services-- Section 12
CPI-Section 16(a)
Defaulting Party - Section 22(b)
Event of Default Section 22(a)
Executive Employees - Section 2(c)
Facility Account Section 19(a)
Facility Tradename - Section 26(a)
Fiscal Year -- Section 15(a)
Fixed Charge Section 1
Golf Course---Recital B
Incentive Management Fee -Section 17(a)
Initial Tenn - Section 7
Losses Section 24(a)
Management Fee-- Section 16
Minimum Balance Section 19(d)
Non-Defaulting Party -Section 22(b)
Operational Standards Section 3
Optional Shared Services Section 4(b)
Original Agreement -Section 2(b)
Owner Marks -Section 26(a)
Payroll Account- Section 19(b)
Renewal Period- Section 8
Sale Termination Notice- Section 10
Site Section 1
Term -- Section 7
Troon Marks - Section 26(b)
Troon Services Section 2(c)
2. Engagement of Troon.
(a) Troon represents it is an experienced manager and operator of first-class golf facilities
and understands that Owner is relying on Troon's expertise in managing first-class golf facilities in
entering into this Agreement. Subject to Owner's input and oversight,Owner hereby grants to Troon
for the purpose of satisfying its obligations hereunder, the right to supervise and direct the
management and operation of the Facility for and on the account of Owner,and Troon hereby accepts
said grant and agrees that it shall supervise and direct the management and operation of the Facility,
all pursuant to the terms of this Agreement, and Owner shall reasonably cooperate so as to permit
Troon to carry out its duties hereunder.
6
(b) Owner and Troon are parties to that certain Agreement for Golf Facility Management
Services, dated May 4, 2024, (the "Second Agreement"). This Agreement shall replace and
Supersede the Second Agreement.
(c) The services to be performed by Troon (the "Troon Services") shall include those
services described on exhibit "A" and incorporated herein, along with the following services: (i)
supervise, manage and administer daily operations and act as general manager for all functions
relating to or in connection with the Facility, (ii) establish, implement and amend, as needed,
policies, standards and schedules for the day-to-day management, operation and maintenance of
the Facility and for all matters affecting guest relations; (iii) hire, train, discipline, discharge,
promote and supervise the Facility's general manager and all Facility employees that directly
report to the general manager (collectively, the "Executive Employees") and all other Facility
employees; (iv) establish implement and amend, as needed, standards for agronomic conditioning
of the Golf Course; (v) establish pricing (including rates and prices for guest greens fees, rental
fees and other similar fees and charges for usage at the Facility); (vi)externally communicate and
coordinate activities with Facility guests and devise strategies (including interaction with media
outlets around the Facility) to preserve, protect and enhance Owner's status and reputation, and
attend area golf and trade shows and staff booths at such events, provided, however, that nothing
herein is intended to exclude, restrict, or otherwise prohibit, Owner from communicating or
otherwise interacting with media outlets in any way with regard to the Facility and Improvements,
including, but not limited to, this Agreement, the Troon Services, management and operations,
budgets, and!or Owner's Obligations (except as prohibited by law); (vii) establish accounting and
payroll procedures and functions for the Facility; (viii) receive, hold and disburse funds, and
maintain bank accounts relating to the Facility, subject to the provisions of Section 16; (ix)
establish entertainment, labor and credit policies; (x) supervise food and beverage services at the
Facility including, without limitation, managing banquet services and establishment menu prices
and other guest charges; (x)procure inventories, supplies and services for the Facility; (xi) assess
and make recommendations with respect to technology requirements, as well as supervise and
coordinate technology-related issues, either directly or through third-party vendor relationships;
(xii) manage the caddie program at the Facility, if any; (xiv)manage special events at the Facility;
(xiii) establish and maintain marketing and communication programs for guests of the Facility,
provided,however,that nothing herein is intended to exclude,restrict,or otherwise prohibit Owner
from establishing and maintaining its own marketing and communication programs regarding the
Facility and Improvements; (xiv)provide HR support and training for all Facility employees; (xv)
provide access to Troon in-house legal team for legal guidance and support, in conjunction with
Owner's legal team, relating to the Facility; and (xvi) provide an opportunity for the Facility to
participate in Troon's insurance program which would entitle Owner to obtain advice from Troon's
risk management team.
(e) In addition to the services described in Section 2(d)above, considering the specific
situational needs of Owner relative to the history of the Golf Course and the needs of Owner to
operate the Golf Course, Troon shall also provide the following additional services: (i) establish
new contractual relationships with operational vendors, suppliers and construction contractors for
golf course operations and buildout of Facility infrastructure; (ii) provide guidance and oversight
of construction and project management of buildout of facility infrastructure; (iii) create and
manage a transition plan for Facility operations; (iv)cooperate with Owner on the creation of new
7
branding and intellectual property; and(v) make commercially reasonable efforts to negotiate any
existing account balances between vendors and former operators in order to maintain relationships
with vendors (subject to Owner approval); provided, however, Owner acknowledges that Troon
does not control the vendors and can't guarantee any particular results.
(t) In the event that Troon enters into any lease or contract on behalf of the Facility for
the use of property or the provision of services related to the Facility and this Agreement is
terminated or expires in accordance with the terms hereof, Troon, upon Owner's request, shall
assign any and all third party contracts and other agreements for the operation of the Facility to
the Owner or its designee(as requested by the Owner), and the Owner or its designee shall assume
all Troon's continuing obligations pursuant to said contracts. Troon shall make reasonable efforts
to ensure that any and all contracts entered into by it in connection with the operation of the Facility
shall specifically authorize the assignment of such contracts to the Owner or its designee without
restrictions or conditions. In the absence of such contractual language, Troon shall make
reasonable efforts to have such contracts assigned to the Owner without additional cost to the
Owner.
(g) Troon acknowledges that the Golf Course is owned by the City. Without limitation,
Troon shall provide access to the Golf Course, clubhouse, food and beverage outlets, meeting
rooms and other amenities as requested by Owner for events sponsored by Owner. Owner agrees
to pay for any food and beverage and merchandise utilized during any such events and would take
reasonable measures to avoid use of the amenities during peak business times and not to interfere
with normal business or scheduled events at the clubhouse or Golf Course.
3. Operational Standards. Troon shall cause the Facility to be operated in a
professional manner as a first-class facility in accordance with the terms of this Agreement and the
operational standards established by Troon (the"Operational Standards"), as the same may, from
time to time be modified by Troon as determined by Troon in its commercially reasonable discretion.
Troon shall determine and implement the operating policy, standards of operation,quality of service
and any other matters affecting guest relations and the efficient management and operation of the
Facility. The Operational Standards shall be available to Owner and Owner and Troon shall mutually
agree to the applicability of Operational Standards to be implemented at the Facility.
4. Personnel.
(a) All personnel employed at the Facility shall at all times be employees of Troon or an
Affiliate of Troon. If an employee of Troon or an Affiliate of Troon that is not employed at the
Facility is assigned temporarily or on a part-time basis to perform services at the Facility, the
employee costs associated with such employee shall be reimbursed to Troon,subject to any applicable
restrictions and the limitations provided in Owner's Travel Policy for employees as it exists at the
time of travel. Troon shall hire, train, discipline, discharge, promote and supervise all employees at
the Facility, fix their compensation and fringe benefits, and, generally, establish and maintain all
policies relating to employment and employment benefits. Owner shall have the right to approve the
hiring of the Facility's Executive Employees, for which approval shall not be unreasonably withheld.
All Employee Costs of every kind and nature pertaining to all employees at the Facility arising out of
employer-employee relations shall be included in the Operating Costs.
8
(b) After the Commencement Date,upon Owner's written approval,Troon shall provide
to the Facility its optional corporate-based shared employee services to include (a) a regional
controller, (b)an area retail manager,and(c) Shared Accountant(the"Optional Shared Services"),
which typically replace certain elements of the on-site Facility functions with a suite of services
provided from Troon's corporate office to Affiliated Facilities on an allocated basis. if Owner elects
in writing to receive the Optional Shared Services, the fee for such services shall be approved in
writing by Owner and included in the Annual Plan.
5. Owner's Obligations.
(a) Troon shall assist Owner with obtaining all necessary licenses and permits required
by applicable law to be held by Owner at the Facility so as to permit Troon to manage and operate
the Facility in accordance with the Operational Standards during the Term. Troon shall ensure that
all necessary licenses and permits required by applicable law or otherwise to be held by Troon, as
manager of the operation of the Facility and to carry out Troon's duties as provided herein have been
obtained and are maintained by Troon during the Tenn. Troon shall use commercially reasonable
efforts to comply with any conditions set out in any such licenses and permits,whether held by Owner
or Troon, and Troon shall at all times operate and manage the Facilities in accordance with such
conditions and any other legal requirements. Troon and Owner will cooperate in assigning any
licenses and/or permits that either of them may hold relating to the Facility to one another, during the
Term and thereafter,as needed to comply with applicable laws and regulations.
(b) Owner agrees to provide all funds necessary to pay all Employee Costs and all other
costs related to the provision of the Services at the Facility as provided in the then-applicable Annual
Plan as approved in writing by Owner,and shall cause all such costs to be timely paid.
(c) Owner shall pay(or reimburse Troon if applicable),as parting of the Operating Costs,
all federal and state taxes or impositions of any kind associated with the operation of the Facility and
the performance of Troon's obligations under this Agreement(excepting any state or federal income
taxes attributable to amounts paid to or received by Troon),including but not limited to sales tax,use
tax,payroll tax or other similar taxes,whether imposed upon Owner or Troon.
6. Authority and Control. Owner shall maintain the right to oversee and approve
Troon's implementation of all operating budgets, policies, standards of operation, quality of service
and any other matters affecting guest relations or the efficient management and operation of the
Facility. Notwithstanding anything to the contrary contained in this Agreement, if Troon is unable to
perform any of its obligations under this Agreement solely because of the failure on the part of Owner
to provide funds as required by Section 5 above, such inability of performance shall not be deemed a
default on the part of Troon and shall not give rise to any right of termination, damages or other
remedy against Troon.
7. Term. Troon shall begin its obligations hereunder for the period of time beginning
on October 1, 2024 (the "Commencement Date") and ending on December 31, 2025 (the "Initial
Term").
8. Renewal. The Initial Term shall thereafter be automatically renewed for consecutive
one(1)year renewal periods(each a"Renewal Period")unless either party delivers written notice to
9
the other that the Initial Term or then current Renewal Period shall not be renewed,which notice must
be given at least ninety(90)days prior to the expiration of the Tenn or then current Renewal Period
if applicable. The Initial Term,together with any applicable Renewal Periods, shall be referred to as
the"Term".
9. Termination based on Conversion of Use. (a) Notwithstanding any provision of
this Agreement to the contrary,this Agreement may be terminated in connection with the conversion
of the Facility from a golf course to another use. The Owner shall provide a written notice of
termination to Troon setting forth the anticipated conversion date (the "Conversion Termination
Notice"), which date shall be not less than ninety(90) days after Troon's receipt of the Conversion
Termination Notice. As a condition to such termination, Troon shall be paid all Base Management
Fees, Incentive Management Fees and all other amounts due Troon under this Agreement for the
period of time through the effective date of termination of this Agreement;provided,however,Troon
shall not be entitled to receive any termination fee or other similar payment upon such termination.
10. Termination Upon Sale. Notwithstanding any provision of this Agreement to the
contrary, from and after the Commencement Date,Owner shall have the right to either terminate this
Agreement, without cause, in connection with a bona fide sale of the Facility to any unaffiliated and
unrelated third party, or to assign this Agreement upon the sale pursuant to the terms of this Section
10. In connection with any such sale, Owner shall provide a written notice of termination to Troon
setting forth the anticipated closing date of such sale (the "Sale Termination Notice"), which date
shall be not less than ninety(90) days after Troon's receipt of the Sale Termination Notice. Subject
to the remaining provisions of this Section 10, if Owner provides a Sale Termination Notice and the
sale closes,this Agreement shall terminate on the actual closing date of the sale(regardless of the date
set forth in the Sale Termination Notice), but in no event earlier than the date set forth in the Sale
Termination Notice. Accordingly, Owner shall have the right, upon reasonable notice to Troon, to
extend the closing date of such sale(and thus the effective date of termination) from that set forth in
the Sale Termination Notice based on delays in closing the sale. As a condition to any termination
under this Section 10, Owner shall pay to Troon (i) all Base Management Fees and Incentive
Management Fees and other amounts due Troon under this Agreement for the period of time prior to
the termination,and(ii)all costs and liabilities incurred by Troon as a result of Owner's changing the
closing date of such sale (and thus the effective date of termination) under the preceding sentence.
Owner shall not be required to pay a termination fee associated with any termination pursuant to this
Section 10. Owner shall not be required to obtain Troon's consent or approval of any sale pursuant to
which Owner exercises its right to terminate this Agreement under this Section 10.
11. Termination Without Cause. Notwithstanding any provision of this Agreement to
the contrary, beginning on January 1, 2027, Owner shall have the right to terminate this Agreement.
without cause, in accordance with the following sentence. Owner shall exercise this right by
providing written notice thereof to Troon, which notice shall specify a termination date of not less
than ninety(90) days after the date the notice is given. If Owner timely provides such notice, then
this Agreement shall,subject to the remaining provisions of this Section 11, automatically terminate
at midnight on the specified date of termination. As a condition to such termination,Owner shall pay
to Troon all Base Management Fees,Incentive Management Fees and other amounts due Troon under
this Agreement for the period of time prior to the termination,but Owner shall not be required to pay
any penalty or termination fee upon such termination.
10
12. Cooperative Sales and Marketing Services.
(a) Troon shall provide cooperative sales and marketing services(the"Cooperative Sales
and Marketing Services") to the Facility which shall include: (i) Troon system-wide sales and
marketing activities for the Facility in substantially the same manner as relates to all Affiliated
Facilities, including national and international advertising, group sales promotion, public relations
and direct selling efforts for the benefit of the Facility and the collective business development at
all Affiliated Facilities; (ii) participation in the Troon central reservation system which provides a
regional,national and international toll-free system for inquiries regarding customer bookings and for
making, changing and canceling reservations at the Facility and/or Affiliated Facilities; (iii)
representation at golf industry sales and trade shows; (iv) inclusion on, and a hyperlink from, the
Troon world wide web site to the Facility world wide web site;and(v)such other additional sales and
marketing services as Troon may determine may benefit the Facility and the Affiliated Facilities or
develop and promote further the Facility or the Troon brand.
(b) Troon's provision of the Cooperative Sales and Marketing Services shall be included
in the Base Management Fee and there shall not be another separate fee or charge;provided,however,
Owner acknowledges that the Facility shall be responsible to pay any third-party charges or costs
associated with the Cooperative Sales and Marketing Services which relate specifically to the Facility
(and not third-party charges or costs that relate to the Cooperative Sales and Marketing Services for
the Facility along with one or more of the Affiliated Facilities)that are paid by Troon,without mark-
up or premium,as a component of the Operating Costs.
13. Centralized Services.
(a) Subject to the Annual Plan and Owner's prior written approval, Troon shall cause to
be furnished to the Facility certain services ("Centralized Services")which are furnished generally
on a central or regional basis to other Affiliated Facilities. Centralized Services shall include the
following categories of services: (i) "Human Resources Compliance", which includes the provision
of Troon's standardized materials for conducting compliance training(e.g.standards implementation,
safety (including OSHA compliance), and harassment prevention), recruitment, and administration
of employee reward and recognition programs; (ii)"Technology Support",which includes oversight
of the Facility's information technology guidance and support; (iii) "Payroll Processing" for Troon
Employees;(iv) "Employee and Benefit Administration"which includes administration of employee
benefits for Troon Employees; (v) "Controls & Compliance" which includes periodic oversight,
through Troon's centralized internal audit function, of the Facility's operational and accounting
control procedures; and (vi) "EPL Fraud Insurance", which includes the cost of insurance for the
Employers Practices Liability insurance and the Crime Coverage Policy for Troon Employees. For
the avoidance of doubt,the Centralized Services shall be provided by Troon to the Facility as long as
Troon employs the Facility employees.
(b) Troon may from time to time propose that additional central or regional services be
furnished and included as part of Centralized Services for the benefit of the Affiliated Facilities or in
substitution for services now performed at individual Facilities which may be more efficiently
performed on a group basis. Any modification to the foregoing list of Centralized Services shall be
made by Troon in conjunction with the Annual Plan and submitted to Owner for prior written
approval. Costs of Centralized Services shall be payable monthly as an Operating Cost and shall be
included in the Annual Plan.
11
14. Procurement Services. Troon shall make available its centralized purchasing
programs and/or other group buying techniques in connection with the Facility's purchase of operating
supplies,operating equipment, inventories,and services. Troon may receive and retain a fee or other
compensation from vendors and service providers in exchange for Troon's services in taking
advantage of the benefit of volume purchases available to the Facility or negotiating and
implementing the arrangements with such vendors or providers,provided the total cost thereof to the
Facility is competitive with that which would be charged by non-affiliated third-party vendors in an
arms-length transaction. When using its centralized purchasing programs and/or other group buying
techniques, Troon shall, to the extent required by federal and state procurement laws, make its
purchases in accordance with Owner's Procurement Policy.
15. Annual Plan.
(a) The fiscal year of the Facility shall be the twelve (12) month period commencing
January I and ending December 31 (the"Fiscal Year"). Troon shall prepare a budget for the Facility,
which shall include an estimated profit and loss statement and an estimated cash flow projection for
Fiscal Year as well as estimates of all expenditures with reasonably sufficient detail, including
expenditures for(i) property operations(including employee expenses)and maintenance; (u) FF&E,
operating equipment and operating supplies; (iii) advertising, sales and business promotion; and (iv)
a budget for capital replacement items. Beginning with the 2025 Fiscal Year and continuing for each
Fiscal Year throughout the Tema, the annual budget shall be prepared by Troon and submitted to
Owner at least sixty(60)days prior to the commencement of the Fiscal Year. The annual budget shall
be subject to the prior written approval of Owner and, as approved, shall be referred to hereafter as
the"Annual Plan". In order for Troon to assist Owner in the preparation of the Annual Plan,Troon
shall have access to all books and records relating to Owner and the Facility on an as-needed basis.
In the event of any disagreement with respect to any line item in the Annual Plan, pending the
resolution of such disagreement, Troon shall continue to manage and operate the Facility in
accordance with the Operational Standards and the requirements set forth in this Agreement at a level
of expenditures comparable to those of the preceding Fiscal Year's Annual Plan. Troon may seek
approval from Owner to amend or revise the Annual Plan to take into consideration variables or events
that did not exist, or could not be anticipated by Troon, at the time the Annual Plan was prepared,
with such amendment(s)or revision(s) to be formally implemented into the applicable Annual Plan
upon Owner's written approval thereof. Owner shall indicate in writing, within thirty(30)calendar
days following delivery, whether it, in Owner's sole and absolute discretion, approves any such
amendments or revisions to the Annual Plan.
(b) Troon shall use commercially reasonable efforts to comply with each Annual Plan,
and shall not deviate in any material respect from the Annual Plan, except when agreed upon by
Owner in writing. Notwithstanding the provisions of the foregoing sentence,Troon shall be entitled
to make additional expenditures not authorized under the then applicable Annual Plan in the event of
an emergency at the Facility.
16. Base Management Fee. In addition to all costs and expenses to be reimbursed to
Troon pursuant to this Agreement, in consideration of the management and operation of the Facility
by Troon, Owner shall pay to Troon a Base Management Fee and Incentive Management Fee
(collectively, the"Management Fee"), to be computed and payable as follows:
12
(a) From and after October 1, 2024, a base management fee (the "Base Management
Fee") equal to Eight Thousand Five Hundred Dollars($8,500)for each full Month during the Term,
to be equitably pro-rated for any partial month during the Term. Commencing on January 1, 2026,
and continuing on each January 1 thereafter.the Base Management Fee amount for such Fiscal Year
shall be the Base Management Fee amount applicable to the last day of the inunediately preceding
Fiscal Year as increased by the percentage increase, if any, in the CPI during such immediately
preceding Fiscal Year. For purposes hereof, "CPI" means the Consumer Price Index for All Urban
Consumers (1982-84==100) published by the United States Department of Labor, Bureau of Labor
Statistics. If such index shall be discontinued,then it shall mean such substitute comparable index as
shall be designated by Troon, and approved by Owner, which approval shall not be unreasonably
withheld
(b) The Base Management Fee shall be paid monthly, in advance,on the first(1'h day of
each calendar month during the Term. For each Fiscal Year in which the Base Management Fee is
adjusted under Section 16(a) above, until such time as the CPI adjustment is known, the monthly
payments during such Fiscal Year shall be the same as the December payment in the immediately
preceding Fiscal Year, with the parties making the necessary payments between themselves with
respect to such months at the time the CPI adjustment is known.
(c) Upon written agreement of the parties, the Base Management Fee and Incentive
Management Fee compensation structure may be modified or cancelled in favor of an alternate
compensation method. By way of example only: a lease.
17. Incentive Management Fee.
(a) After the Initial Term,an annual incentive management fee(the"Incentive Management
Fee") equal to twenty-five percent (2510) of the Base Management Fee amount for the applicable
Fiscal Year in the event that the Facility meets or exceeds the Net Operating Income amount described
in the Annual Plan for the applicable Fiscal Year pursuant to the financial statement prepared pursuant
to Section 20,provided, however, that(i) the Incentive Fee will only be paid from a portion of Net
Operating, Income that exceeds operating expenses within the applicable Fiscal Year and (ii) no
Incentive Fee shall be paid if to do so would cause expenses to exceed revenues within the applicable
Fiscal Year.
(b) The Incentive Management Fee described in Section 17(a),if any,shall be paid within
thirty(30)days following Owner's receipt of the annual financial statement for the applicable Fiscal
Year, prepared in accordance with Section 20. The Incentive Management Fee shall be computed
separately for each Fiscal Year,or portion thereof.
18. Reimbursement of Out-of-Pocket Expenses. Subject to the Annual Plan and,in the
event of Troon's deviation therefrom,Owner's prior written approval,Owner shall reimburse Troon
and any Affiliates for any commercially reasonable and necessary actual out-of-pocket costs incurred
by them, without mark up or premium, in the performance of this Agreement as an Operating Cost.
Troon shall aggregate such expenses into a consolidated invoice and provide such invoice to Owner
on regular billing intervals provided by Troon and provide reasonably sufficient detail, including
receipts as available,relating to each line item expense. Troon shall be entitled to reimbursement of
these expenses from the Facility Account.
13
19. Bank Accounts and Funding.
(a) Troon shall establish such account(s) in its name at a banking institution designated
by Troon and approved by Owner (collectively, the "Facility Account") as are necessary for the
operation of the Facility,which account shall be utilized subject to the terms of this Agreement. The
Facility Account shall be separate and distinct from any other bank accounts, reserves or deposits
required by this Agreement and Troon's designees shall be the only parties authorized to draw upon
the Facility Account. Troon shall appoint at least two such designees, which designees shall be
bonded or otherwise insured as Owner and Troon shall mutually agree. Checks or other items of
withdrawal shall be signed only by such designees,acting singly or jointly. Upon request,Troon shall
provide Owner copies of any and all requested account statements from the banking institution.
(b) All payments made by Troon hereunder shall be made from the Facility Account and
petty cash funds and such payments shall be made by Troon for the sole purpose of operating and
managing the Facility in performance of its obligations under this Agreement. Troon shall not be
required to make any advance or payment for Owner or the Facility except out of such funds, and
Troon shall not be obligated to incur any liability or obligation for Owner's or the Facility's account
without assurances that Owner shall provide all necessary funds for the discharge thereof.
(c) Upon the Commencement Date, Owner shall deposit in the Facility Account a sum
that will bring the Facility Account balance to at least Seventy-Five Thousand Dollars($75,000)(the
"Minimum Balance"), and thereafter the Facility Account shall maintain a minimum balance
equal to at least the Minimum Balance. The Minimum Balance shall serve as working capital for
the Base Management Fee, Incentive Management Fee, and or the payment of Troon's payroll
obligations for the Facility's employees,only. Owner shall deposit into the Facility Account,within
ten (10) calendar days of Troon's written request, sufficient funds to make up any deficiency in
the Minimum Balance. Troon shall give Owner immediate written notice in the event Troon
anticipates that any draw by Troon from the Facility Account will result in an overdraw of the Facility
Account(taking into account any outstanding checks issued by Troon which have not yet cleared in
the Facility Account).
(d) In addition to the Facility Account,Troon shall utilize its central payroll account(the
"Payroll Account")which shall be under the sole ownership and control of Troon or its designee, for
the payment of its payroll obligations for the Facility's employees. Amounts disbursed or to be
disbursed by Troon from its Payroll Account shall be paid to, and transferred by, Troon from the
Facility Account. Such payment and transfer of funds may occur at such time (whether prior or
subsequent to the release by Troon of checks drawn on its payroll account) as Troon determines is
necessary to assure that it will have sufficient funds from Gross Revenues to satisfy its liabilities to
the employees of the Facility. Troon and Owner agree that the funds transferred from the Facility
Account into the Payroll Account shall not exceed the amounts necessary to satisfy Troon's liabilities
to the employees of the Facility. Upon request, Troon shall provide Owner copies of any and all
requested account statements from the banking institution.
20. Reports to Owner. In addition to any other reports to be provided to Owner
hereunder,Troon shall cause to be delivered to Owner the following:
14
(a) Within twenty(20)calendar days after the end of each calendar month,a consolidated
Troon-prepared report showing the results of operation of the Facility for such month and for the year
to date; and
(b) Within thirty (30) calendar days after the end of each Fiscal Year, a consolidated
report prepared or reviewed by Troon's accounting/finance team showing the results of operation of
the Facility for such Fiscal Year, and a computation of the Base Management Fee and Incentive
Management Fee for such Fiscal Year.
(c) Upon reasonable advance notice by Owner to Troon, Troon shall pen-nit Owner, its
accountants,attorneys,and agents to examine and make copies of Troon's books and records relating
to the Facility (Troop reserving the right to redact the same in the event they contain information
unrelated to the Facility)wherever such books and records are located during normal business hours.
21. Insurance.
(a) All insurance policies provided for under this Section shall be issued by insurance
companies that have sound financial strength and maintain a rating of A VIII in Am Best's Key
rating guide,or equivalent.
(b) Subject to Section below, Troon shall procure and maintain the insurance policies
covering the Facility set forth on Exhibit "B", with all premiums therefor being a component of
the Operating Costs and any deductibles therefor, as applicable, to be paid by Owner in addition
to and outside of the Operating Costs. Such policies may be procured and maintained through
Troon's comprehensive insurance program, provided the policies within such program otherwise
comply with all of the requirements set forth in Exhibit "B". All insurance procured by Troon
shall be written in the name of Troon with the Owner named as an additional named insured and
loss payee thereon, except for worker's compensation insurance and any other insurance with
respect to which it is impractical or inappropriate to name Owner, or any other parties as a named
insured, additional insured or loss payee.
(c) Certificates of insurance shall be delivered to Owner, as applicable, on or before
the Commencement Date, or as soon thereafter as practicable, at the addresses shown in
Section 27 below and all insurance policies shall be renewed (or replaced, as applicable) prior to
their respective expiration dates.
(d) All such policies of insurance shall also be endorsed specifically, to the fullest
extent allowed by each applicable carrier, to the effect that such policies shall not be canceled or
materially changed without at least thirty (30) calendar days' prior written notice to Owner and
Troon. Each policy shall provide that the insurer shall not have any rights of subrogation to any
claim which either party hereto may have or may acquire against the other. Neither Owner nor
Troon shall have any claim against the other with respect to the failure of any insurance carrier to
provide the coverage or protection placed with such carrier as contemplated by this Agreement.
(e) The cost of procuring and maintaining all required insurance policies required
hereunder shall be incorporated into the Operating Costs. Owner acknowledges and agrees that in
order to maintain insurance on Troon's insurance program, this Agreement (i) shall remain in
15
effect and shall not terminate or expire; and (ii) the employees shall be employed by Troon on
Troon's employment platform according to Troon's policies and procedures as applicable at the
Facility.
(f) If the Facility is insured on Troon's insurance program, Troon shall provide claim
management services for any claim at no cost to Owner. Therefore, in the event of a claim,Owner
shall not engage or utilize a public adjuster to manage any claim at the Facility unless it is mutually
agreed upon in writing by Owner and Troon.
(g) In connection with all significant construction at the Facility,Owner shall cause the
general contractor to maintain with a reputable insurer commercial general liability insurance(with
products, completed operations and independent contractor's coverage) in at least the amount of
Ten Million Dollars ($10,000,000), with Owner and Troon being named thereon as additional
insureds and loss payees.
22. Event of Default,Termination of Agreement.
(a) It shall be an event of default hereunder ("Event of Default") if any one or more
of the following events shall occur:
(i) By Troon, if Troon fails to timely make any payment to Owner in accordance with
the tenns of this Agreement;
(ii) By Troon, if Troon fails to timely perform any material obligation under this
Agreement required to be performed by Troon;
(iii) By Troon, in the event that (1)Troon applies for or consents to the appointment of
a receiver, trustee or liquidator of Troon or of all or a substantial part of its assets; (2) Troon files
a voluntary petition in bankruptcy or commences a proceeding seeking reorganization, liquidation
or an arrangement with creditors or an involuntary petition therefor is filed naming Troon as the
debtor and not dismissed within sixty (60) days following such filing; (3) Troon files an answer
admitting the material allegations of a bankruptcy petition, reorganization proceeding, or
insolvency proceeding filed against Troon; (4)Troon admits in writing its inability to pay its debts
as they come due; (5) Troon makes a general assignment for the benefit of creditors; or (6) an
order,judgment or decree is entered by a court of competent jurisdiction, on the application of a
creditor, adjudicating Troon bankrupt or insolvent or approving a petition seeking reorganization
of Troon or appointing a receiver, trustee or liquidator of Troon or all or a substantial part of its
assets,and such order,judgment or decree continues unstayed and in effect for any period of sixty
(60) consecutive days;
(v) By Owner, if Owner fails to timely pay the Management Fee or to provide funds
for the operation of the Facility in accordance with the terms of this Agreement;
(vi) By Owner, if Owner fails to timely perform any other material obligation under this
Agreement required to be performed by Owner; or
16
(vii) By Owner, in the event (a) Owner applies for or consents to the appointment of a
receiver, trustee or liquidator of Owner or of all or a substantial part of its assets; (b) Owner files
a voluntary petition in bankruptcy or commences a proceeding seeking reorganization, liquidation
or an arrangement with creditors or an involuntary petition therefor is filed naming Troon as the
debtor and not dismissed within sixty (60) days following such filing; (c) Owner files an answer
admitting the material allegations of a bankruptcy petition, reorganization proceeding, or
insolvency proceeding filed against Owner; (d) Owner admits in writing its inability to pay its
debts as they come due; (e) Owner makes a general assignment for the benefit of creditors; or (f)
an order,judgment or decree is entered by a court of competent jurisdiction, on the application of
a creditor,adjudicating Owner bankrupt or insolvent or approving a petition seeking reorganization
of Owner or appointing a receiver, trustee or liquidator of Owner or all or a substantial part of its
assets, and such order,judgment or decree continues unstayed and in effect for any period of sixty
(60)consecutive days.
(b) Upon the occurrence of any Event of Default under Section 22(i),(ii), (iv) or(v) by
or with respect to one of the parties hereto (the "Defaulting Party"), the other party hereto (the
"Non-Defaulting Party")shall,after giving written notice to the Defaulting Party setting forth the
nature of the Event of Default, have the right to terminate this Agreement if the Defaulting Party
fails to remedy such Event of Default within ten (10)calendar days (or such longer period, to the
extent reasonably necessary to cure, so long as the Defaulting Party continuously uses its best
efforts to cure such Event of Default) after its receipt of such written notice of default.
(c) With respect to the occurrence of an Event of Default under Section 22(a)(iii) or
vii , this Agreement shall terminate, at the election of the Non-Defaulting Party as indicated in
written notice delivered to the Defaulting Party: (i)upon such occurrence or (ii) at any time after
such occurrence, in each case as specified by such Non-Defaulting Party in the applicable written
notice to the Defaulting Party, provided such Event of Default has not been remedied prior to the
Defaulting Party's receipt of such written notice from the Non-Defaulting Party.
(d) Owner and Troon shall be entitled to exercise any right or remedy provided by
applicable law or in equity, whether for damages, injunctions, specific performance or otherwise,
notwithstanding the termination of this Agreement by Owner or Troon as provided in this
Agreement.
23. Post-Termination Matters.
(a) Upon the expiration or earlier termination or of this Agreement for any reason (i)
Owner shall return to Troon any Troon Proprietary Information and Troon shall return to Owner any
Owner Proprietary Information,and(ii)Owner shall retain any Owner Proprietary Information.
(b) Upon the effective date of termination or expiration, Owner shall pay to Troon (i) its
reasonable out-of-pocket costs incurred by reason of requests by Owner for assistance after
termination or expiration of this Agreement beyond those that would be incurred by Troon in the
orderly termination of its operations at the Facility, (ii)all Employee Costs, and (iii)any unpaid fees
and other charges and reimbursements due Troon hereunder. This Section shall survive the expiration
or earlier termination of this Agreement.
17
(c) Upon the effective date of termination or expiration, Troon shall make available to
Owner such books, records, software, files, information, books, records and systems supporting the
general ledger and the like respecting the Facility (including those from prior years, subject to
applicable statutory retention requirements and to Troon's reasonable records retention policy) as
reasonably requested by Owner to continue to operate the Facility and to prepare accounting
statements for the Facility for the year in which termination occurs and for any subsequent year. Upon
the effective date of termination or expiration,Troon shall assign to Owner or to the new manager all
operating licenses,permits and other instruments used in operating the Facility that have been issued
in Troon's name and take such further acts reasonably related to such assignment. Troon agrees to
peacefully vacate and surrender the Facility to the Owner and assist in a seamless transition of the
Troon Employees to Owner's or Owner's new manager's employment platform.
(d) Upon the expiration or earlier termination of this Agreement, Troon shall cooperate
with Owner to ensure a seamless transition from the Facility.
(e) The provisions of this Section 23 shall survive the expiration or sooner termination
of this Agreement.
24. Assienment. Troon acknowledges that this Agreement contemplates the provision of
professional services by Troon to Owner and, as such, this Agreement is a personal services
agreement between Troon and Owner. Except with respect to an assignment by either party to an
affiliate of such party in which the controlling ownership is the same as the controlling ownership of
such party, a subsidiary of such party in which such party maintains a controlling interest or of a
party's right to receive payments hereunder,neither party shall have the right to assign its rights and
interests under this Agreement without the prior written consent of the other party, which consent
may be granted, withheld, or conditioned in the sole and absolute discretion of the other party, and
provided that Troon or Owner,as applicable,will remain responsible as the primary obligor hereunder
notwithstanding such assignment.
25. Responsibility for Claims. (a) Troon shall be responsible for any losses
suffered by Owner(including damages,liabilities,settlements,costs,expenses and attorneys' fees)in
connection with,or in any way relating to,Troon's activities under this Agreement to the extent such
losses result from either (i) the negligence, gross negligence, fraud or other misconduct by Troon's
corporate office or any Executive Employees (including, without limitation, negligence in failing
either to properly hire, train or supervise non-Executive Employees at the Facility or to properly
administer compliance with employment-related laws at the Facility), or (ii) Troon's breach of this
Agreement.
(b) By this Agreement, the Owner does not consent to litigation or suit, and the Owner
hereby expressly revokes any consent to litigation that it may have granted by the terms of this
Agreement or any other contract or agreement, any charter, or applicable state law. Nothing herein
shall be construed so as to limit or waive the Owner's sovereign immunity. Troon assumes Rill
responsibility for its services performed hereunder and hereby releases, relinquishes and discharges
the Owner,its officers,agents,and employees from all claims,demands,and causes of action of every
kind and character, including the cost of defense thereof, for any injury to or death of any person
(whether they be either of the parties hereto, their employees, or other third parties) and any loss of
or damage to property(whether the property be that of either of the parties hereto, their employees,
18
or other third parties)that is caused by or alleged to be caused by,arising out of,or in connection with
Troon's services to be performed hereunder. This release shall apply with respect to Troon's services
regardless of whether said claims, demands, and causes of action are covered in whole or in part by
insurance.
26. Tradenames.
(a) During the Term,the Facility shall be known by such tradename as may from time
to time be determined by Owner (the "Facility Tradename"). Troon acknowledges that the
trademarks, tradenames and/or service marks "Bavtown Golf Club," "736 Golf Bavtown," and/or
"T36 Golf at Baytown,"and all intellectual property relating to the Facility and Owner's business
operations, together with any other names, service marks, trademarks, slogans, logos, designs or
the like owned by Owner or created by Owner prior to,during and after the Term,whether now or
hereafter used in the ownership, management,and operation of the Facility("Owner Marks")are
and will remain the sole property of Owner, and any access to or use thereof by Troon to provide
the Services and fulfill Troon's obligations as provided herein shall be by and through a limited,
non-assignable license from Owner to Troon for use only in connection with the Facility and
Troon's fulfillment of its obligations herein, which limited license will expire at the expiration or
earlier termination of the Term. Troon shall not contest the unrestricted and exclusive ownership
of the Owner Marks or other such intellectual property by Owner or its right to grant others licenses
to use the Owner Marks,and Troon shall not acquire any right,title or interest of any kind or nature
whatsoever in or to the Owner Marks or the goodwill associated therewith. Troon shall not use
the Owner Marks without Owner's prior written approval in each instance. Owner shall have the
sole right and responsibility to handle disputes with third parties concerning the use of all or any
part of the Owner Marks,and Troon shall cooperate with Owner in all such matters. Owner need
not initiate suit against imitators or infringers and may settle any dispute by grant of a license or
otherwise. Troon shall not initiate any suit or proceeding to enforce or protect the Owner Marks.
(b) Owner acknowledges that the trademarks and or service marks "Honours"",
"Indigo Sports", "Troon Golf"" and "Troon Prive"" are and shall continue to be the sole property
of Troon, together with any other names, service marks, trademarks, slogans, logos, designs, tag
lines or the like owned by Troon or created by Troon during the Term and are now or hereafter
used in the management and operation of the Facility or any Affiliated Facilities (collectively,
"Troon Marks"),Troon shall have the right to identify the Facility as a golf facility managed and
operated by Troon and use the Troon Marks in any locations at the Facility specifically authorized
by Owner in writing. Owner shall not contest Troon's unrestricted and exclusive ownership of the
Troon Marks or its right to grant others licenses to use the Troon Marks and Owner shall not
acquire any right, title or interest of any kind or nature whatsoever in or to the Troon Marks or the
goodwill associated therewith. Owner shall not use the Troon Marks without Troon's prior written
approval in each instance. Troon shall have the sole right and responsibility to handle disputes
with third parties concerning the use of all or any part of the Troon Marks, and Owner shall
cooperate with Troon in all such matters. Troon need not initiate suit against imitators or infringers
and may settle any dispute by grant of a license or otherwise. Owner shall not initiate any suit or
proceeding to enforce or protect the Troon Marks. Nothing in this Agreement is intended to
exclude, restrict, or otherwise prohibit, the Owner from photographing, videographing, or
otherwise making reproductions of, the Facility or Improvements for purposes of marketing the
19
Golf Course or communicating with the public,City officials,or other third persons about the Golf
Course in the normal course of business.
(c) In the event of any breach by either party of the covenants set forth in this Section
26,the other party shall be entitled to relief by injunction, and to all other available legal rights or
remedies. The provisions of this Section 26 shall survive the expiration or sooner termination of
this Agreement.
27. Notices. Unless otherwise expressly provided in this Agreement, all consents,
approvals, notices or other communications provided for in this Agreement shall be in writing and
shall be delivered personally, or sent by a nationally recognized overnight delivery service (such as
FedEx)as follows:
If to Owner: City of Baytown
P.O. Box 424
Baytown,Texas 77522-0424
Attn: City Manager
Phone No.
Email.
If to Troon: Troon Golf, L.L.C.
15044 North Scottsdale Road, Suite 300
Scottsdale, Arizona 85254
Attn: Jeff Hansen, EVP&General Counsel
Phone No. 480-477-0439
E-mail. jhansen@troon.com
or at such other addresses(and email addresses)as from time to time are designated by notice to the
other party. Any notice personally delivered shall be deemed given on the date of delivery or refusal.
Any notice sent by overnight delivery service shall be deemed given upon the date such notice was
properly deposited and prepaid,with the overnight delivery service for delivery the following business
day; provided, however, the time period within which a response to any such notice must be given
shall not commence to run until the following business day. A copy of any such notice shall,
concurrently with such delivery or sending,be transmitted by email to the receiving party at the email
address indicated.
28. No Representations.
(a) Owner and Troon acknowledge there have been no representations, inducements,
promises, or agreements made by Troon or Owner other than those specifically set forth herein,
including those found in the Exhibits hereto.
(b) Financial projections, budgets or similar forecasts as may have been prepared or in
the future are prepared by Troon or its Affiliates do not take into account, nor make provisions for,
any rise or decline in local or general economic conditions or other factors beyond the control of
Troon. Troon and its Affiliates cannot, and do not, warrant or guaranty in any way said financial
20
projections,budgets or other forecasts. Any financial projections,budgets or forecasts provided have
been prepared on the basis of information available at the time of such preparation and Troon's and
its Affiliate's experience in the club and hospitality industry. Said financial projections,budgets and
forecasts have been prepared for information only and not as an inducement for action. Owner hereby
acknowledges that in entering into this Agreement, Owner has not relied on any projection of
earnings, statements as to the possibility of future success, or other similar information which may
have been prepared by Troon or its Affiliates. Owner further understands and acknowledges that no
guaranty, other than to the extent expressly provided herein, is made or implied by Troon or its
Affiliates as to the cost,or the future financial success or profitability,of the Facility.
29. Force Maieure.
(a) Operation of Facility. If at any time during the Term it becomes necessary in Troon's
reasonable opinion to cease operation of the Facility in order to protect the Facility and/or the health.
safety and welfare of the guests and/or employees of the Facility for reasons of force majeure
including,but not limited to,acts of war,insurrection,civil strife and commotion,labor unrest or acts
of God, including pandemic,then in such event Troon may close and cease operation of all or part of
the Facility,reopening and commencing operation when Troon deems that such may be done without
jeopardy to the Facility, its guests and employees. The Facility, or the Golf Course, may also be
voluntarily closed (e.g., in connection with a renovation project), as agreed to in writing by Owner
and Troon.
(b) Extension of Time. With respect to any obligation to be performed by either party
during the Term (other than an obligation to pay or fund money pursuant to this Agreement), such
party shall in no event be liable for a failure to perform such obligation when such non-performance
is attributable to any force majeure event beyond the reasonable control of such party such as a strike,
lockout, breakdown, accident, order or regulation of or by any governmental authority, failure or
inability, notwithstanding the exercise of commercially reasonable diligence,to obtain supplies,parts
or employees necessary to perform such obligation, or war or other emergency. The time within
which such obligation shall be performed shall be extended for a period of time equivalent to the
delay from such cause. Notwithstanding the foregoing, any party whose performance obligation(s)
is are suspended due to a force majeure event shall use best efforts to continue performing whatever
other obligations may be partially or fully performed during the existence of such force majeure event.
30. Miscellaneous.
(a) Entire Agreement. This Agreement contains the entire agreement between the parties
with respect to the subject matter hereof, and all prior discussions, negotiations, writings, or oral or
written understandings with respect to the subject matter hereof are replaced and superseded by this
Agreement.
(b) Controlling Law. This Agreement shall be governed by and construed in accordance
with the laws of Texas, without regard to any state's choice of law principles that would cause the
application of the laws of any jurisdiction other than the State of Texas. Any proceeding seeking to
enforce any provision of,or based on any right arising out of, this Agreement must be brought in the
courts of the State of Texas,County of Harris,or in the United States District Court for the Southern
District of Texas, and each of the parties irrevocably consents to the jurisdiction of such courts (and
21
of the appropriate appellate courts) in any such proceeding and irrevocably waives any objection to
venue laid therein.
(c) No Partnership. Nothing contained in this Agreement is intended to give rise to nor
shall be construed to give rise to or create a partnership,joint venture or lease between Owner and
Troon.
(d) Interest. Any amount payable to either party hereunder, which amount has not been
paid when due,shall accrue interest at the lesser of: (i)the highest legal limit,or(H)two percent(2°o)
over the rate of interest announced by the Wall Street Journal as its prime rate, as the same may be
changed from time to time.
(e) Cooperation. The parties shall reasonably cooperate with each other to execute and
deliver such instruments and documents and take such actions as may be reasonably required, or as a
party may reasonably deem desirable, to effectuate the provisions and intent of this Agreement. If,
during the Term or any time thereafter, either Troon or Owner shall reasonably require the
participation of officers or employees then employed by any other party to aid in the investigation,
defense, or prosecution of any action, suit, litigation, charge, arbitration, proceeding, mediation,
hearing,inquiry,audit,examination,or investigation,and so long as there exists no conflict of interest
between the parties,the party receiving the request shall make such officers and employees reasonably
available to participate in the same.
(f) Confidentiality. The parties agree that the matters set forth in this Agreement and the
parties' access to and use of the Owner Marks and the Troon Marks are strictly confidential. Except
as disclosure may be required (i) to obtain the advice of professionals or consultants, (H) to obtain
financing for the Facility from a lender, (iii) in furtherance of a permitted assignment of this
Agreement or sale of any part of the Facility, (iv) as may be required by law or by the order of any
government, governmental unit or tribunal, or(v) in connection with a public or private offering of
either parties' securities, each party shall make every effort to ensure that such information is not
disclosed to the press or to any other third person(other than the parties' employees, contractors and
professional advisors on a"need to know"basis)or entity without the prior consent of the other party,
which consent may be withheld in such party's sole and absolute discretion. The obligations set forth
in this Section 30(f)shall survive any termination of this Agreement.
(g) Amendments. The parties acknowledge that this Agreement was prepared and
executed in an expedited manner to allow Troon to commence the provision of its services at the
Facility on the Commencement Date. In the event there are additional changes and/or issues that arise
that require modifications to this Agreement,the parties will cooperate in a commercially reasonable
manner to amend this Agreement to incorporate any and all such changes and address any new issues.
(h) Survival. The provisions of this Section 30 shall survive the expiration or
sooner termination of this Agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
22
IN WITNESS WHEREOF,the parties have executed or caused this Agreement to be executed
as of the day and year first written above.
OWNER: TROON:
CITY OF BAYTOWN TROON GOLF, L.L.C.,
a home-rule municipality located in a Delaware limited liability company
Harris and Chamber Counties,Texas
By: _ _ By:
Its: Its:
ATTEST:
ANGELA JACKSON, City Clerk
APPROVED AS TO FORM:
SCOTT LEMOND,City Attorney
23
STATE OF ARIZONA §
COUNTY OF MARICOPA §
Before me on this day personally appeared Jeff Hansen, in his/her capacity as EVP and
General Counsel, on behalf of such Troon Golf, L.L.C.,
X known to me;
❑ proved to me on the oath of ; or
❑ proved to me through his/her current
{description of identification card or other document issued by the federal
government or any state government that contains the photograph and signature of
the acknowledging person}
(check one)
to be the person whose name is subscribed to the foregoing instrument and acknowledged to me
that he executed the same for the purposes and consideration therein expressed.
SUBSCRIBED AND SWORN before me this _ _ day of 120
Notary Public in and for the State of Arizona
24
EXHIBIT "A"
ADDITION MANAGEMENT SERVICES TO BE PERFORMED BY TROON
a. Golf Industry Trends& Best Practices:
i. Incorporation of current and future local,regional,and national trends
ii. Analysis of the local market
iii. Strategies for duplicating successes at similar courses
iv. Recommendations and strategies specific to working relationships with municipalities
and other governmental entities (including any Baytown area, Greater Houston area,
and/or State of Texas considerations)
b. Evaluation and recommendations concerning golf course operations:
i. Options for course maintenance&operations
ii. Landscaping approaches and recommendations
iii. Golf course performance projections& improvements
iv. Financial analysis&recommendations
v. Structure of agreements for operations&possible lease approach
vi. Golf course equipment for maintenance&operations
vii. Food&beverage services
viii. Golf course long-term planning and capital projects
ix. Water use and irrigation approach
c. Contract development and implementation for course maintenance& operations:
i. May be through a management services contract,lease approach,or other method
to provide the best possible outcome for the City.
ii. Combined approach for the selected firm to provide both consulting&course
management services.
iii. Facilitated approach for the consulting firm to contractually engage an outside firm
for services requested by the City which the consulting firm cannot provide.
d. If directed by the City Council,coordinate termination of operations,decommissioning
of the site,and disposition of the improvements& land where the course is located(to
possibly also include adjacent areas):
i. Development of necessary parameters for terminating course operations as a part
of a management contract or lease agreement.
ii. Coordinate the process of terminating course operations to include a timeline and
advanced notice period for a gradual approach.
iii. Assist with the planning and marketing of the site and any identified adjacent
areas for redevelopment or disposition.
e. Assistance with developing future new amenities& development initiatives:
i. Feedback and recommendations for new amenities/initiatives to be developed
and implemented by the course operator(if a 3'party management firm is
utilized),the City,or other development partner.
ii. Project management services for development and implementation of these
items.
iii. Assistance with approved adjacent City projects to enhance the area and/or
increase activity at and near the golf course.
iv. Recommendations for contractual amendments or new agreements needed for the
maintenance and operations of these items.
25
Additional Services
It is anticipated that during the negotiations for and during the term of the contract,the City and the
selected firm may identify tasks and services not specifically called out in this RFQ, but still relevant to
golf course consulting services and management of operations for the course.These will be addressed and
documented as needed through specific work orders,task assignments,or contract amendments as needed
26
EXHIBIT "B"
SCHEDULE OF REQUIRED INSURANCE
1. Property and Business Interruption Insurance.
A. All risk property insurance for the full replacement value covering physical loss or
damage to all buildings and improvements now existing or hereafter erected upon or above the
Site, which shall include extended coverage against such perils of fire, lightning, windstorm,
collapse, and sprinkler leakage. Such policy shall also provide comprehensive boiler and
machinery coverage, including pressure vessels, air tanks, boilers, machinery pressure piping,
heating, and air conditioning. Such policy shall also cover all equipment, fixtures, motors,
machinery, furnishings, and furniture installed and owned or leased by Owner and used in
connection with the Facility or with the buildings and improvements upon or above the Site,
including all alterations, rebuilding, replacements and additions thereto(as hereinafter defined) at
the option of Owner. If any insurer, or any governmental agency or authority having jurisdiction
over the Facility, shall at any time require that the foundations be insured in order to relieve the
insured from the responsibility as a co-insurer or for any other purpose,the obligations with respect
to insurance herein shall henceforth be increased to the extent so required.
B. Business Interruption Insurance providing coverage in an amount equal to twelve
(12) months of Net Operating Income at the Facility, or such other amount as is mutually
satisfactory to Troon and Owner.
II. Liability Insurance.
A. Commercial general liability insurance against claims for bodily injury, death,
property damage and sexual abuse and molestation occurring on, in or about the Facility;
Employee Benefits Liability insurance with a combined single limit for each occurrence involving
personal injury, death or property damage (including any loss of use resulting therefrom) in an
amount not less than that generally provided with respect to the Affiliated Facilities, but in no
event shall the limits of such coverage be less than One Million Dollars($1,000,000) per location
and per single occurrence and Two Million Dollars($2,000,000) in the aggregate per location. For
the avoidance of doubt, this policy shall be a location-based policy.
B. Liquor liability insurance having coverage terms at least as broad as those found in
standard ISO forms. Such policy shall have an aggregate limit of at least One Million Dollars
($1,000,000) per single occurrence and in the aggregate. Troon shall be entitled, from time to
time, to designate such higher limits as it deems reasonably necessary (or as required under any
loan and/or plan documents). In the event that Troon,or Troon's Affiliate,holds the liquor license
for the Facility,Troon shall be the named insured (and Owner shall be an additional insured)with
respect to the foregoing insurance coverage.
27
C. Automobile liability insurance on vehicles operated in conjunction with the Facility
against claims for damages on owned vehicles, non-owned vehicles, and uninsured motorist
coverage (where required by statute), with a combined single limit for each occurrence involving
personal injury, death or property damage (including any loss of use resulting therefrom) in an
amount not less than that generally provided with respect to the Affiliated Facilities, but in no
event shall the limits of such coverage be less than One Million Dollars ($1,000,000) per
occurrence.
D. Umbrella liability insurance with limits of not less than Five Million Dollars
($5,000,000)per single occurrence and in the aggregate.
E. Pollution insurance policy (including, but not limited to Herbicide and Pesticide
coverage) with a limit of not less than One Million Dollars ($1,000,000) per single occurrence,
including coverage for on-site and off-site clean up as well as third party coverage for on-site and
off-site third-party claims for bodily injury and property damage.
F. Privacy liability insurance covering employee and guest data at the Affiliated
Facilities with limits as determined by Troon and Owner. This coverage does not apply to
computers at facilities not on the Troon network or networks managed by Troon.
III. Workers Compensation and Employer's Liability.
A. Workers' compensation and Employer's liability insurance as may be required
under applicable laws covering all employees employed at the Facility.
B. Comprehensive crime insurance covering employee theft and dishonesty with a
limit of at least One Million Dollars($1,000,000) per occurrence.
C. Employment practices liability insurance covering Facility employees with a limit
of at least One Million Dollars($1,000,000) per occurrence.
28