Ordinance No. 15,793 ORDINANCE NO. 15,793
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 SHORT-TERM GOLF FACILITY
MANAGEMENT AGREEMENT WITH TROON GOLF, LLC IN AN AMOUNT NOT
TO EXCEED ONE-MILLION, NINE-HUNDRED THOUSAND DOLLARS
($1,900,000.00); AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.
*****************************************************************************
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 short-term Golf
Facility Management Agreement with Troon Golf, LLC in an amount not to exceed ONE-MILLION,
NINE-HUNDRED THOUSAND DOLLARS ($1,900,000.00). 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 affirmative vote of the City Council of the City of
Baytown,this the 7"'day of May, 2024. 10f TOy' DON CAPETILLO, Ma or
ATTEST: ,°° °
l s I
n_0
ANGELA CKSON, City Clerk
APPROVED A T FORM:
SCOTT LE D, City Attorney
R:'.scowTroon Golf Facility Mgt Agt.doc
EXHIBIT "A"
GOLF FACILITY
MANAGFMENT AGREEMENT
FOR
Baytown Golf Club
Date: May 4, 2024
GOLF FACILITY MANAGEMENT AGREEMENT
THIS GOLF FACILITY MANAGEMENT AGREEMENT(the"Agreement") is made and
entered into as of May 4,2024,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 "13aylown Golf'C'lub" (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, TIIERLFORE, 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
2
below).
Facility a collective term for the Golf Course,the Improvements, and the FUL, (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 pail 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, (ii) 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.
3
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
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 co,t5•
(v) All expenditures made Ior routine maintenance and repairs to keep the Facility in
good condition and repair:
(vi) All reimbursable expenses due 1'roon;
(vii) All insurance premiums Ior all insurance obtained pursuant to the requirements of
Section 18 (other than property insurance premiums);
(viii) Reasonable reserves for uncollectible accounts receivable as set lorth 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);
4
(D) The cost of external (third-party)audits of Facility operations and/or with respect to
Owner's legal entity;
(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;
(I) 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:
Accrued Balance- Section 2(c)
Accrued Balance Payment Date Section 2(c)
Annual Plan - Section 12(a)
Base Management Fee Section 13(b)
Commencement Date Section 7
Cooperative Sales and Marketing Services Section 9
Defaulting Party -- Section 19(b)
Event of Default-Section 19(a)
I;xecutive Fmployees-- Section 2(c)
Facility Account-Section 16(a)
Facility Tradename--Section 25(a)
Fiscal Year Section 12(a)
Initial "Term -Section 7
Losses - Section 24(a)
Non-Defaulting Party Section 19(b)
Operational Standards -Section 3
Original Agreement -Section ?(b)
Owner Marks-Section 25(a)
Payroll Account - Section 16(b)
"Perm -Section 7
'Troon Marks Section 25(b)
Troon Misconduct Section 24(a)
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"froon 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 pen-nit
Troon to carry out its duties hereunder.
(b) Owner and Troon are parties to that certain Agreement for Golf Facility Management
Services, dated April 12, 2024, (the "Original Agreement"). This Agreement shall replace and
Supersede the Original Agreement.
(e) As additional consideration for Troon to enter into this Agreement, Owner and Troon
have agreed to continue Golf Course operations in the manner mutually agreed upon by Owner and
6
Troon. As part of the continuity of the Golf Course operations, Owner shall pay Troon an amount
equal to One Hundred Eighty-Six Thousand Dollars($186,000)on or before May 16,2024 in a single
lump sum payment upon delivery of an invoice by Troon to Owner. In the event this Agreement is
terminated prior to May 16, 2024, Owner shall pay Troon the amount described herein on or before
the date this Agreement terminates.
(d) The services to be performed by Troon (the "Troon Services") shall include: (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 amendment, 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; (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; (xiv) provide I IR 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
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.
7
(f) 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 al l 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
io pry flor any (ood and beverage and merchandise utilized during any such events and would take
reasonable measures to avoid use of the amenities during peak business limes 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"I roon 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 l roon 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.
(c) 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
8
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 Term. Troon shall use cornmercially 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 ofthe 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"Croon), 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 May 4, 2024 (the"Commencement Date") and ending on July 31, 2024 (the"Initial Term").
S. Renewal. The Initial Term shall thereafter be automatically renewed for consecutive
thirty-day renewal periods (each a "Renewal Period") unless either party delivers written notice to
the other that the Initial Term or then current Renewal Period shall not be renewed,which notice must
be given at least thirty (30)days prior to the expiration of the Term or then current Renewal Period if
applicable. This Agreement shall be limited to no more than two (2) autornatic Renewal Periods;
however, additional Renewal Periods may be agreed to in writing by the parties. The Initial Term,
9
together with any applicable Renewal Periods, shall be referred to as the"Term".
9. Cooperative Sales and Marketine Services.
(a) Croon 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 ofthe 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 tho Facilit) 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 shal I 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.
10. 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) "I luman 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
l;mployees;(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
13-mployers 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
Iroon 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
10
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. 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.
12. Annual Plan.
(a) The fiscal year of the Facility shall be the twelve (12) month period commencing
January l and ending December 31 (the`'Fiscal Year"). Troon shall review and provide advice with
regard to preparation of the Facility budget for the 2024 Fiscal Year. Thereafter,Troon shall prepare
a budget for the Facility, which shall include an estimated profit and loss statement and an estimated
cash flow projection for the ensuing Fiscal Year as well as estimates of all expenditures with
reasonably sufficient detail, including expenditures for (i) property operations (including employee
expenses)and maintenance; (ii) FF&F,,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 Term, 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 amendments) 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.
11
13. 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 -Croon a Base Management Fee and Incentive Management Fee
(collectively. the "Management Fee"), to be computed and payable as follows:
(a) From and after November 1, 2023, a base management fee (the"Base Management
Fee")equal to Ten Thousand Dollars ($10,000)for each full Month during the"Tenn, to be equitably
pro-rated for any partial month during the Term.
(b) The Base Management Fee shall be paid monthly, in advance, on the first (I")day of
each calendar month during the Term.
14. Termination Without('ause. Notwithstanding any provision of this Agreement to
the contrary, 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
1 roon, which notice shall specify a termination (late of not less than nuiety (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 14, automatically terminate at midnight on the specified date of
termination. As a condition to such termination, Owner shall pay to "Croon all Base 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 flee upon such
termination.
15. Reimbursement of Out-of-Pocket ExpCnSeS. 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. 1 roon shall be entitled to reimbursement of
these expenses from the Facility Account.
16. Bank Accounts and Funding.
(a) Troon shall establish such accounts) in its name at a banking institution designated
by 1 roon 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 'I roon's designees shall be the only parties authorived 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 -Croon shall mutually agree. Checks or other items of
withdrawal shall be signed only by such designees,acting singly or jointly. Upon request,"Croon shall
provide Owner copies of any and all requested account statements from the banking institution.
(b) In addition to the Facility Account, Troon shall utilize its central payroll account(the
12
"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, `l roon 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.
(c) 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 snake 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.
(d) Upon the Commencement Date, Owner shall deposit in the Facility Account 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. "fhe Minimum
Balance shall serve as working capital for Facility operations. 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).
17. 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:
(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 permit Owner, its
accountants, attorneys,and agents to examine and make copies of Troon's books and records relating
to the Facility (Troon 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.
13
18. 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 V III 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 "A", 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
l'roon's comprehensive insurance program, provided the policies within such program otherwise
comply with all of the requirements set forth in Exhibit "A". 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 o► loss pa)co.
(e) 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 26 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
effect and shall not terminate or expire; and (ii) the employees shall be employed by Troon on
`froon'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
'Fen Million Dollars ($10,000,000), with Owner and Troon being named thereon as additional
14
insureds and loss payees.
19. 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:
W By Troon, if Troon fails to timely make any payment to Owner in accordance with
the terms 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 fiends
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
(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 pail 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 tiled 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.
15
(b) Upon the occurrence of any Event of Default under Section 19(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 ibrth 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 F.vent of Default under Section 19(a)(iii
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
Dcliuulting Party's receipt of such written notice from the Non-Defaulting Party.
(d) Owner and Iroon 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.
20. Intentionally Omitted.
21. 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 tees
and other charges and reimbursements due Troon hereunder. "This Section shall survive the expiration
or earlier termination of this Agreement.
(e) t ipon 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
16
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 tenmination of this Agreement, Troon shall cooperate
with Owner to ensure a seamless transition from the Facility.
(e) The provisions of this Section 21 shall survive the expiration or sooner termination
of this Agreement.
22. Assignment. 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
parry'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.
23. Responsibility for Claims. (a) I roon 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 full
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 pat-ties 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,
or other third patties)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.
24. Tradenames.
17
(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 "Baytown Golf Club," "736 Golf Baytown," and/or
`736 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 1 roon's obligations as provided herein shall be by and through a limited,
non-assignable license from Owner to Croon 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
ol'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 appro\al 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 'Croon 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", "-Croon Gott'"" and "'Croon 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 o► the like owned by Troon or created by 1 roon during the 1'erm 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 "Croon Marks in any locations at the Facility specifically authorized
by Owner in writing. Owner steal I not contest Troon's unrestricted and exclusive ownership of the
I roon Marks or its right to grant others licenses to use the Croon 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. I roon 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 al I 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.
(c) In the event of any breach by either party of the covenants set forth in this Section
24, the other party shall be entitled to relief by injunction, and to all other available legal rights or
remedies. The provisions of this Section 25 shall survive the expiration or sooner termination of
this Agreement.
25. 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
18
shall be delivered personally, or sent by a nationally recognized overnight delivery service (such as
Fedl:x) 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 I Iansen, 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 refi.rsal.
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.
26. 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
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.
19
27. Forcc Maicure.
(a) Operation of Facility. If at any time during the'Perm 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 Tenn (other than an obligation to pay or find money pursuant to this Agreement), such
party shall in no event be liable for a failure to perlbrm 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,pails
or employees necessary to perform such obligation, or war or other emergency. 'fhe 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 16regoing, any party whose performance obligation(s)
is/are suspended due to a force majeure event shall use best efforts to continue perlbrming whatever
other obligations may be partially or fully performed during the existence of such fiorce majeure event.
28. 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 or, 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
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.
20
(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%)
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 patties,the party receiving the request shall make such officers and employees reasonably
available to participate in the same.
(f) Confidentiality. The patties 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 processionals 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
goverment, governmental unit or tribunal, or (v) in connection with a public or private offering of
either patties' 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 patty,
which consent may be withheld in such party's sole and absolute discretion. The obligations set forth
in this Section 28(o 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 l roon 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 28 shall survive the expiration or sooner
termination of this Agreement.
(SIGNATURES APPEAR ON FOLLOWING PAGEI
21
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
i Iarris and Chamber Counties,Texas
13y' I3y.:
�
Its:
AI'LEST:
ANGELA JA SON, City Clerk
APPROVED T FORM:
SCOTT LLM ND, City Attorney
22
STATE OF ARIZONA §
COUNTY OF MARICOPA §
Before me on this day personally appeared Jett 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.
SUBSCRIBFD AND SWORN before me this 2-n day of a , 2014.
ary Public in and for the State of Arizona
ANGELA M. MARNELL
Notary Pub1c-State of Arizona
MARICOPA COUNTY
Commission 0 620103
Expires February 18,2020
�.3
EXHIBIT "A"
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 upr?n 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 anti 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 IOUndations 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.
R. 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 ot'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 ofdaubt, this policy shall be a location-based policy.
B. Liquor liability insurance having coverage terms at least as broad as those round in
standard ISO Ibrms. Such policy shall have an aggregate limit of at least One Million Dollars
($1,000,000) per single occurrence and in the aggregate. "Croon 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.
24
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 oft-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.
Ill. 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.
25