HomeMy WebLinkAboutDecember 03, 2013 AgendaAGENDA
CITY OF DENTON CITY COUNCIL
December 3, 2013
After determining that a quorum is present, the City Council of the City of Denton, Texas will
convene in a Work Session on Tuesday, December 3, 2013 at 4:00 p.m. in the Council Work
Session Room at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items
will be considered:
WORK SESSION
1. Citizen Comments on Consent Agenda Items
This section of the agenda allows citizens to speak on Consent Agenda Items only. Each
speaker will be given a total of three (3) minutes to address any items he /she wishes that
are listed on the Consent Agenda. A Request to Speak Card should be completed and
returned to the City Secretary before Council considers this item.
2. Requests for clarification of agenda items listed on the agenda for December 3, 2013.
3. Receive a report, hold a discussion and give staff direction regarding replacement of the
Eureka! Playground in South Lakes Park.
4. Receive a report, hold a discussion and give staff direction regarding a proposed
Hotel /Convention Center.
Following the completion of the Work Session, the City Council will convene in a Closed
Meeting to consider specific items when these items are listed below under the Closed Meeting
section of this agenda. The City Council reserves the right to adjourn into a Closed Meeting on
any item on its Open Meeting agenda consistent with Chapter 551 of the Texas Government
Code, as amended, or as otherwise allowed by law.
CLOSED MEETING
1. Closed Meeting:
A. Consultation with Attorney — Under Texas Government Code Section 551.071;
and Deliberations regarding Economic Development Negotiations — Under Texas
Government Code Section 551.087.
1. Receive a report, hold a discussion, and give staff direction regarding a
Reimbursement Agreement with Rayzor Investments, Ltd. for Tax
Increment Reinvestment Zone Two (TIRZ II) with respect to
infrastructure improvements within TIRZ IL This discussion shall include
commercial and financial information the City has received from Rayzor
Investments, Ltd. which the City Council seeks to enter into a
Reimbursement Agreement for TIRZ II, where City Council seeks to have
commercial or industrial businesses locate, stay, or expand in or near the
territory of the city, and with which the City Council is conducting
economic development negotiations; including the offer of financial or
other incentives.
City of Denton City Council Agenda
December 3, 2013
Page 2
B. Consultation with Attorney — Under Texas Government Code Section 551.071
1. Consultation with the City's attorneys regarding legal advice concerning
the leasing of land and financing of a proposed Hotel /Convention Center
facility of University of North Texas property located at I -35 and North
Texas Boulevard where a public discussion of this legal matter would
conflict with the duty of the City's attorneys to the City Council under the
Texas Disciplinary Rules of Professional Conduct of the State Bar of
Texas.
2. Receive a report and hold a discussion with the City's attorneys regarding
the City of Denton's Sign Ordinance.
C. Deliberations regarding Real Property — Under Texas Government Code Section
551.072; Consultation with Attorneys — Under Texas Government Code Section
551.071.
I. Discuss, deliberate, and receive information from staff and provide staff
with direction pertaining to the potential purchase of certain real property
interests located in the James Perry Survey, Abstract No. 1040, John Scott
Survey, Abstract No. 1222, John Bacon Survey, Abstract No. 1541, and
the John Davis Survey, Abstract No. 326, City of Denton, Denton County,
Texas, and generally located along Western Boulevard between Airport
Road and Jim Christal Road. Consultation with the City's attorneys
regarding legal issues associated with the potential acquisition and
condemnation of the real property described above where a public
discussion of these legal matters would conflict with the duty of the City's
attorneys to the City of Denton and the Denton City Council under the
Texas Disciplinary Rules of Professional Conduct of the State Bar of
Texas, or would jeopardize the City's legal position in any administrative
proceeding or potential litigation.
ANY FINAL ACTION, DECISION, OR VOTE ON A MATTER DELIBERATED IN A CLOSED
MEETING WILL ONLY BE TAKEN IN AN OPEN MEETING THAT IS HELD IN COMPLIANCE
WITH TEXAS GOVERNMENT CODE, CHAPTER 551, EXCEPT TO THE EXTENT SUCH FINAL
ACTION, DECISION, OR VOTE IS TAKEN IN THE CLOSED MEETING IN ACCORDANCE WITH
THE PROVISIONS OF §551.086 OF THE TEXAS GOVERNMENT CODE (THE `PUBLIC POWER
EXCEPTION'). THE CITY COUNCIL RESERVES THE RIGHT TO ADJOURN INTO A CLOSED
MEETING OR EXECUTIVE SESSION AS AUTHORIZED BY TEX. GOV'T. CODE, §551.001, ET
SEQ. (THE TEXAS OPEN MEETINGS ACT) ON ANY ITEM ON ITS OPEN MEETING AGENDA
OR TO RECONVENE IN A CONTINUATION OF THE CLOSED MEETING ON THE CLOSED
MEETING ITEMS NOTED ABOVE, IN ACCORDANCE WITH THE TEXAS OPEN MEETINGS
ACT, INCLUDING, WITHOUT LIMITATION §551.071- 551.086 OF THE TEXAS OPEN MEETINGS
ACT.
Regular Meeting of the City of Denton City Council at 6:30 p.m. in the Council Chambers at
City Hall, 215 E. McKinney Street, Denton, Texas at which the following items will be
considered:
REGULAR MEETING
City of Denton City Council Agenda
December 3, 2013
Page 3
1. PLEDGE OF ALLEGIANCE
A. U.S. Flag
B. Texas Flag
"Honor the Texas Flag — I pledge allegiance to thee, Texas, one state under God, one and
indivisible."
2. PROCLAMATIONS/PRESENTATIONS
A. Proclamations /Awards
1. Police Appreciation Day
2. Denton Calvary Academy Lady Lion Volleyball Appreciation Day
3. CITIZEN REPORTS
A. Review of procedures for addressing the City Council.
B. Receive citizen reports from the following:
1. Carol Soph regarding disclosure policy for urban development.
4. CONSENT AGENDA
Each of these items is recommended by the Staff and approval thereof will be strictly on
the basis of the Staff recommendations. Approval of the Consent Agenda authorizes the City
Manager or his designee to implement each item in accordance with the Staff recommendations.
The City Council has received background information and has had an opportunity to raise
questions regarding these items prior to consideration.
Listed below are bids, purchase orders, contracts, and other items to be approved under
the Consent Agenda (Agenda Items A — D). This listing is provided on the Consent Agenda to
allow Council Members to discuss or withdraw an item prior to approval of the Consent Agenda.
If no items are pulled, Consent Agenda Items A — D below will be approved with one motion. If
items are pulled for separate discussion, they may be considered as the first items following
approval of the Consent Agenda.
A. Consider approval of a resolution casting votes for membership to the Board of
Directors of the Denton Central Appraisal District; and declaring an effective
date.
B. Consider adoption of an ordinance of the City of Denton, Texas authorizing the
approval of a First Amendment to a contract for vehicle and equipment parts, by
and between Genuine Parts Company dba NAPA Integrated Business Solutions
and the City of Denton, Texas, providing for the expenditure of funds therefor;
and providing an effective date (Bid 4739 — Providing for an additional expenditure
amount of $2,700,000 with the total contract amount not -to- exceed
$11,804,355.53).
C. Consider adoption of an ordinance of the City of Denton authorizing an
agreement between the City of Denton, Texas and Denton Holiday Lighting;
providing for the expenditure of funds therefore; and providing for an effective
date. ($1,000)
City of Denton City Council Agenda
December 3, 2013
Page 4
D. Consider adoption of an ordinance authorizing execution of a franchise agreement
with the City of Denton, acting through its electric utility, granting a franchise to
maintain, and operate facilities within the City of Corinth for the delivery and sale
of electricity; providing for the payment of a fee for the use of the public rights -
of -way; providing that such fee shall be in lieu of other charges; setting forth the
term of the franchise; and providing an effective date. (Third Reading)
5. ITEMS FOR INDIVIDUAL CONSIDERATION
A. Consider nominations /appointments to the City's Boards and Commissions.
1. Airport Advisory Board
2. Community Development Advisory Committee
3. Human Services Advisory Committee
4. Public Art Committee
5. Zoning Board of Adjustment
6. Citizens Bond Advisory Committee
6. PUBLIC HEARINGS
A. Hold a public hearing and consider making a recommendation to the City Council
regarding amendments to the City's Gas Well Ordinance, Denton Development
Code Subchapter 22, pertaining to certain definitions and to the sequence of
permits necessary for constriction, drilling, and production activities. (DCA 13-
0003) The Planning & Zoning Commission recommends approval (7 -0).
7. CITIZEN REPORTS
A. Review of procedures for addressing the City Council.
B. Receive citizen reports from the following:
8. CONCLUDING ITEMS
A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries
from the City Council or the public with specific factual information or recitation
of policy, or accept a proposal to place the matter on the agenda for an upcoming
meeting AND Under Section 551.0415 of the Texas Open Meetings Act, provide
reports about items of community interest regarding which no action will be
taken, to include: expressions of thanks, congratulations, or condolence;
information regarding holiday schedules; an honorary or salutary recognition of a
public official, public employee, or other citizen; a reminder about an upcoming
event organized or sponsored by the governing body; information regarding a
social, ceremonial, or community event organized or sponsored by an entity other
than the governing body that was attended or is scheduled to be attended by a
member of the governing body or an official or employee of the municipality; or
an announcement involving an imminent threat to the public health and safety of
people in the municipality that has arisen after the posting of the agenda.
B. Possible Continuation of Closed Meeting under Sections 551.071 - 551.086 of the
Texas Open Meetings Act.
City of Denton City Council Agenda
December 3, 2013
Page 5
CERTIFICATE
I certify that the above notice of meeting was posted on the bulletin board at the City Hall of the
City of Denton, Texas, on the day of 2013 at o'clock
(a.m.) (p.m.)
CITY SECRETARY
NOTE: THE CITY OF DENTON CITY COUNCIL CHAMBERS IS ACCESSIBLE IN
ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT. THE CITY WILL
PROVIDE SIGN LANGUAGE INTERPRETERS FOR THE HEARING IMPAIRED IF
REQUESTED AT LEAST 48 HOURS IN ADVANCE OF THE SCHEDULED MEETING.
PLEASE CALL THE CITY SECRETARY'S OFFICE AT 349 -8309 OR USE
TELECOMMUNICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1- 800- RELAY-
TX SO THAT A SIGN LANGUAGE INTERPRETER CAN BE SCHEDULED THROUGH THE
CITY SECRETARY'S OFFICE.
AGENDA INFORMATION SHEET
AGENDA DATE: December 3, 2013
DEPARTMENT: Parks and Recreation
ACM: John C. Cabrales, Jr. Yt
SUBJECT
Receive a report, hold a discussion and give staff direction regarding replacement of the Eureka!
Playground in South Lakes Park.
BACKGROUND
The Eureka! Playground is currently 19 years old. The concepts for the design of the Eureka!
Playground came from the community and it was Denton residents who actually constricted it.
The firm that designed and guided the constriction of this playground, Leathers and Associates
states that a playground of this type and vintage should have a 20 -year life expectancy. This
playground has become a very popular, heavily -used location and many times in the spring it is
difficult to find a parking place due to all of the yellow school buses parked in the lot.
DISCUSSION
The Denton Park Foundation has offered to take on the task of raising funds to assist with the
replacement of this playground. Before fundraising can begin, it will be necessary for the City to
define the vision for Eureka H! Accurate constriction costs can be determined once the design
has been chosen and fundraising becomes much easier once a design has been selected and
accurate estimates are available.
OPTIONS
1) Leave Eureka! as is and maintain until repair is no longer feasible
2) Tear Eureka! down and convert the area to additional park space
3) Replace Eureka! with a more conventional steel and plastic playground
4) Hire a firm to seek citizen input into a design; direct a community -built Eureka H!
at City expense, which will include improved access for special needs children.
RECOMMENDATION
Give staff direction to hire a design firm and prepare plans for Eureka H!
PRIOR ACTION/REVIEW (Council, Boards, Commissions)
None
EXHIBITS
Park Foundation Communication from Tim Crouch dated July 25, 2013.
Respectfully submitted:
Emerson Vorel, Director
Parks and Recreation
601 E. Hickory, B
Denton, TX 76205
(940) 349 -8272
July 25, 2013
Mr. George Campbell, City Manager
City of Denton
215 E. McKinney St.
Denton, TX 76201
Dear Mr. Campbell,
EXHIBIT
As part of the 2013 -2014 budget process, the Parks and Recreation
Department requested a Supplemental Package in the amount of $35,000 that
EXECUTIVE would be used to hire a half -time Executive Director for the Park Foundation.
BOARD This would be a contract position and not a City Employee.
Tim Crouch
President The Park Foundation would like to extend the offer that if the City could find
a way to fund this request for a three year period, the Foundation would
Marc Culp volunteer to organize a fundraising campaign to replace the Eureka!
Vice President Playground with the goal of removing the cost of this project from the
Simone Royster proposed 2014 Capital Improvement Program.
Treasurer Thank you for considering our request. I look forward to discussing this
Dr. Don Edwards proposal with you in the near future.
Secretary
"ulcer 'y
Dr. Bettye Myers
Past President „
.I "in, Croticli, Chairman
DIRECTORS Denton Parks Foundation
Aimee Bissett cc: John Cabrales, Assistant City Manager
Vicki Byrd Jon Fortune, Assistant City Manager
Bryan Langley, Assistant City Manager
Amanda Crocker Howard Martin, Assistant City Manager
Mayor Mark Burroughs
Mark Huff Denton City Council Members
Dr. Jean Keller
Linnie McAdams
Mary Ann McDuff
Mike Pope
Mission. To enhance the ability of the City of Denton to provide
Shelly Renfro excellent pai*s and mcmational oppoitunities for the community.
Priscilla Sanders www.pad&oundation.com
AGENDA INFORMATION SHEET
AGENDA DATE: December 3, 2013
DEPARTMENT: City Manager's Office
ACM: Jon Fortune H.,
SUBJECT
Receive a report, hold a discussion, and give staff direction regarding a proposed
Hotel /Convention Center.
BACKGROUND
The City has considered many proposals to constrict a convention center over the past few years
pursuant to the long standing objective to provide adequate convention center facilities to meet
community needs and to encourage and promote economic development through convention and
tourism related activity. More recently, staff received a proposal from O'Reilly Hospitality
Management (OHM) that we believe has all the necessary elements for a successful project. The
major development concepts of the OHM proposal were originally identified in January 2012, in
a non - binding Memorandum of Preliminary Agreement (MOPA) between the City, OHM and
the University of North Texas (UNT). Since then, staff has been working from the MOPA to
negotiate and draft a proposed Development Agreement to build a convention center and
convention center hotel.
This past September and October staff provided the City Council an update on the project to
discuss the financial proforma and financing of the convention center, and in November, staff
presented the draft development agreements. This agenda item was scheduled to provide the
Council another chance to review and discuss any outstanding questions related to the Master
Development Agreement, related leases, sublease, and professional service agreements. Since the
last presentation in November, additional modifications have been made to address outstanding
items. Staff has provided updated documents to the Council with the minor changes and will be
prepared to discuss them and answer any final questions during the December 3, Work Session
discussion. Please note that these are preliminary drafts at this time, and while they are
substantially complete, staff is still working to complete them prior for your final consideration
on December 10. During the Work Session, as questions of a legal nature arise, a Closed Session
has also been posted on the December 3 agenda should you have the need to seek advice from
the City Attorney.
At the time of writing this agenda information sheet, staff is waiting to receive a copy of a Non -
Disturbance and Attornment Agreement between UNT and OHPD, the Hospitality Management
Program Agreement, and the OHM management agreement for the Sublease. In addition, staff is
Agenda Information Sheet
December 3, 2013
Page 2
awaiting final revisions to the OHPD -UNT land lease. These items will be included in the
backup material if they are received prior to distribution. If not, these documents will be
provided prior to December 10.
At the November 19 Council Meeting, a request was made to create a summary of the project
related decisions and steps that occur during the feasibility periods as defined in the Master
Development Agreement. Once approved, it is necessary to accomplish the following feasibility
steps prior to the completion of final design and initiation of constriction.
• Approval of design development drawings
• Approval of guaranteed max Price constriction contract
• Finalize convention center development budget and determine overall project
affordability
• OHPD to provide hotel funding commitment
• OHPD to provide hotel franchise commitment
• Initiate creation of TIRZ and determine possible participation by other governmental
entities
• City evaluates favorability of market conditions
• City initiates the sale of bonds to fund constriction of the convention center
• City issues debt
If approved, the convention center and convention center hotel will be built on UNT property
which will be leased to the City to build and own the convention center, and to O'Reilly Hotel
Partners Denton (OHPD) to build and own the Hotel. The proposal includes plans for the City to
lease the convention center to OHPD which would be operated and managed by OHM (same
operator as the hotel). It is important to note that the City would be funding the convention center
only and not the hotel. The hotel is planned to be an Embassy Suites of approximately 318 rooms
(twelve stories tall), but at a minimum will have 275 rooms (nine stories tall) and includes a
Houlihan's restaurant. Both would be funded by OHPD and represent an approximate $60
million investment.
The convention center is currently proposed to be an approximate 100,000 sq /ft facility and
includes an approximate 30,000 sq /ft ballroom. It will be designed to handle very large events
and be able to accommodate approximately 2,000 for banquet style seating. The City would fund
and own the convention center which is estimated to cost $25 million.
Financing of the convention center is anticipated through the issuance of Certificates of
Obligation Bonds which would be self supported from project related revenue, and includes an
annual rent from OHPD to the City necessary to satisfy the City's debt obligation. The project
also anticipates the creation of a Tax Increment Investment Zone (TIRZ) to capture the growth in
appraised value of the project. Both the County and DISD will be invited to participate, though
there have been no formal commitments to do so.
Agenda Information Sheet
December 3, 2013
Page 3
The following is the anticipated schedule for final review and approval of the project.
• December 3 - City Council Work Session for discussion of Convention Center Agreements
• December 5 - UNT Board of Regents Meeting for consideration and approval of Agreements
• December 10 -City Council Meeting for consideration and approval of Agreements
PRIOR ACTION/REVIEW
September 2011 — Received proposal from O'Reilly Hospitality Management (OHM)
January 2012 — City, OHM and UNT reach non - binding agreement on guiding principles to
negotiate a development agreement (the Memorandum of Preliminary Agreement.)
March 2012 — City and OHM meet with local hotel operators at the Quarterly Convention and
Visitor Bureau Hospitality Meeting to present the proposed project.
May 2012 — City Council Work Session to receive overview of proposed project and meet with
the prospective developer, Tim O'Reilly.
December 2012 — City and OHM present proposed project to the DISD Trustees during a Trustee
Meeting.
March 2013 — City Council Work Session discussion and update on proposed project.
September 2013 — City Council Work Session discussion and update on proposed project.
October 2013 - City Council Work Session discussion and update on proposed project.
November 19, 2013 — City Council Work Session discussion and review of development
agreements.
December 2, 2013 — Presentation of proposed project to joint City Council and DISD Board
Trustees meeting.
December 3, 2013 — Presentation of proposed project to Economic Development Partnership
Board.
FISCAL IMPACT
The proposed Hotel and Restaurant are estimated to cost $60 Million and will be funded and
owned by OHPD. The Convention Center, which will be owned by the City, is estimated to cost
$25 Million and will be funded through the issuance of Certificates of Obligation Bonds. Project
related revenue (Hotel Occupancy Taxes, TIRZ revenue and sales taxes) plus rent payments by
OHPD will be dedicated to meet the required annual debt obligations to fund the Convention
Center.
EXHIBITS
PowerPoint Presentation
Master Development Agreement
Preliminary Site Plan
City -UNT Land Lease
City -OHPD Sublease
OHPD -UNT Land Lease (not included)
Professional Services Agreement — Constriction Manager Agent
Professional Services Agreement — Design
Non - Disturbance and Attornment Agreement
Hospitality Program Management Agreement
Payment and Completion Guidelines
OHPD -OHM Operating Management Agreement
Respectfully Submitted:
Jon Fortune
Assistant City Manager
Proposed Hotel and
Convention Center
Final Document Review
City Council Meeting
December ber 3, 2013
Agenda
pi, Process Feasibility and Timeline
pi, Document Review
pi, Pending Items
pi, Schedule for Consideration of Approval
Convention Center Feasibility & Timeline
IGN DEVELOPMENT P
of
3
City Council
Initiates bond
Sale Process
and publishes
Initiate Creation
City Council
of the TIRZ, &
bond Notice
Approval of
Period &
of the Overall
Approval of
GNIP
Market
Feasibility
Design Dev.
Construction
Drawings
Contract
,,, �! ��jjI //II //I/��/ �� trei✓f5w k
�
ri
ff
Finalize Budget
Create Design
Solicit
GMP
& Receive
Development
Construction
OHPD
Architectural
Proposals
&
Franchise and
Drawings ,
Evaluate Price
Funding
Commitment
of
3
City Council
Initiates bond
Sale Process
and publishes
Initiate Creation
Conclusion of
of the TIRZ, &
bond Notice
Final Evaluation
Period &
of the Overall
Evaluation of
Project
Market
Feasibility
Conditions
OHPD Franc
and Funding
Cite
Issues
Debt
OHPD & City
Close on
Respective
Financing
Commitments
CONSTRUCTION'
PHASE
Approval
of Final
Available, Final
Design Construction
Completed & Phase Begins
Finalize Creation
of TIRZ
Master Development Agreement
pii^ Definitions (Article 1)
pii^ Project Overview (Article 11)
pii Design Development Activities (Article III)
pii^ Construction Activities (Article IV)
pii Financing of the Project (ArticleV)
pii Purchasing Services (Article VI)
oii Additional Obligations of OHPD (ArticleVll)
pii^ Maintenance and Insurance (ArticleVlll)
pii Conditions, Representations & Warranties (Articles IX & X)
pii^ Termination Provisions (Article XI)
pii Defaults and Remedies (Article XII)
pii Cost Savings and Expense Requirements (Article XIII)
pii^ Miscellaneous (Article XIV)
„� 4
Preliminary Site Plan
University
of
North Texas
QA
r a
r/
F
�� t Conve coq /
6
._stadIM —'
Site fylam
� � ( � LnMSrmpetlN Y oiv. ft�9.�5s�1 IN —
/
�, i / 133atrea
/ r
S pitdimlharydesip�lor umx
_ Embassy Smtes Hotel
/ ir�,i•i� M 'un. City Of DtYnimn OOnventlon C-,
I F-
Uui^ Casualty (Article 9)
Uui Assignment & Subletting (Article I o)
Uui^ Surrender (Article 1 1)
Ulu^
Defaults (Articles 12 & 13)
Uui^ Miscellaneous (Articles 14 - 17)
7
Other Docraents
�u1111, Professional Services - Design Services
�u1111, Professional Service - Construction Manager Agent
�u1111, Non- Disturbance and Attornment
�u1111, Hospitality Program Management Agreement
11,11, Payment and Completion Guidelines
�uii, OHPD -OHM Operating Management Agreement
Schedule for Consideration
�u1111, Dec 3 — City Council Review
�u1111, Dec 5 — UNT Regents Consider Approval
�u1111, Dec 10 — City Council Consider Approval
ro
PRELIMINARY DRAFT
MASTER DEVELOPMENT AGREEMENT
DENTON CONVENTION CENTER PROJECT
Dated: December 10, 2013
4338720.19
PRELIMINARY DRAFT
TABLE OF CONTENTS
ARTICLE I
1.1 Definitions .............................................................................................. ..............................2
ARTICLE II
PROJECT OVERVIEW
2.1 Summary of Project Development ........................................................ .............................10
2.2 Project Overview .................................................................................. .............................10
2.3 Project Phases ....................................................................................... .............................11
2.4 Term ...................................................................................................... .............................12
ARTICLE III
DESIGN DEVELOPMENT ACTIVITIES
3.1
OHPD Services- Hotel ..........................................................................
.............................12
3.2
Agency of OHM for the City ................................................................
.............................12
3.3
OHM Services — City Facilities ............................................................
.............................13
3.4
Project Agreements ...............................................................................
.............................18
3.5
Reciprocal Access Agreement ..............................................................
.............................22
3.6
Hotel Franchise Agreement ..................................................................
.............................22
3.7
Cooperation ...........................................................................................
.............................23
3.8
Consultation ..........................................................................................
.............................23
3.9
Requirements ........................................................................................
.............................23
3.10
Control of the Convention Center Site ..................................................
.............................23
3. I I
Tax Increment Reinvestment Zone .......................................................
.............................23
3.12
Buduet Adiustments ..............................................................................
.............................24
ARTICLE IV
CONSTRUCTION ACTIVITIES
4.1
Agency by OHM for OHPD .................................................................
.............................24
4.2
Construction Permits .............................................................................
.............................24
4.3
Payment and Performance Bonds .........................................................
.............................24
4.4
Hotel and Restaurant Constriction .......................................................
.............................24
4.5
Construction Phase ................................................................................
.............................25
(i)
4338720.19
PRELIMINARY DRAFT
ARTICLE V
FINANCING OF THE PROJECT
5.1 Design Development Phase .................................................................. .............................27
5.2 Construction Phase ................................................................................ .............................30
5.3 City Financing Contribution Limitation ............................................... .............................30
ARTICLE VI
PURCHASING SERVICES
6.1 Purchasing Services .............................................................................. .............................30
6.2 Payment for FF& E ................................................................................ .............................32
6.3 Infrastructure ....................................................................................... ............................... 3 2
6.4 Easements ............................................................................................. .............................33
6.5 Waiver of Development Standards ....................................................... .............................33
6.6 No Relinquishment of Municipal Regulatory Authority ...................... .............................33
6.7 Title Search ........................................................................................... .............................33
6.8 Extensions of Deadlines ........................................................................ .............................34
ARTICLE VII
ADDITIONAL OBLIGATIONS OF OHPD
7.1 Assignment, Transfer Lease .................................................................. .............................34
7.2 Compliance with Applicable Law ........................................................ .............................35
7.3 Project Quality and Operation .............................................................. .............................35
7.4 Payment of Taxes .................................................................................. .............................36
7.5 Limitation on Tax Exemption ............................................................... .............................36
7.6 Survival of Obligations ......................................................................... .............................36
ARTICLE VIII
MAINTENANCE AND INSURANCE
8.1 Maintenance .......................................................................................... .............................36
8.2 Insurance ............................................................................................... .............................37
8.3 Policy Requirements ............................................................................. .............................39
ARTICLE IX
CONDITIONS
9.1 Conditions to Performance ................................................................... .............................39
4338720.19
PRELIMINARY DRAFT
ARTICLE X
REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1 Representations and Warranties of the City .......................................... .............................41
10.2 OHM's and OHPD's Representations and Warranties ......................... .............................41
10.3 UNT's Representations and Warranties ................................................ .............................42
ARTICLE XI
TERMINATION PROVISIONS
11.1 Termination Events ............................................................................... .............................43
11.2 Termination upon Default ..................................................................... .............................44
ARTICLE XII
DEFAULT AND REMEDIES
12.1
Default by OHPD ..................................................................................
.............................44
12.2
Default by OHM ...................................................................................
.............................45
12.3
Default by the City ................................................................................
.............................46
12.4
Default by UNT ....................................................................................
.............................47
12.5
Remedies ...............................................................................................
.............................48
12.6
OHM /OHPD's Remedies ......................................................................
.............................48
12.7
City's Remedies ....................................................................................
.............................49
12.8
Accounting ............................................................................................
.............................49
ARTICLE XIII
cost savings and expense reimbursement
13.1 Cost Savings .......................................................................................... .............................49
13.2 Shared Costs and Expenses ................................................................... .............................49
13.3 Monthly Draw Requests ....................................................................... .............................50
13.4 City Payments ....................................................................................... .............................50
ARTICLE XIV
MISCELLANEOUS
14.1
Naming Rights ...................................................................................... .............................50
14.2
Signage on Hotel ................................................................................... .............................50
14.3
Coordination with UNT College of Merchandising, Hospitality and Tourism .................50
14.4
Standard of Care ................................................................................... .............................51
14.5
Contractors, Specialists and Consultants .............................................. .............................51
14.6
Operation and Maintenance of the Hotel .............................................. .............................51
14.7
Assignment ........................................................................................... .............................51
4338720.19
PRELIMINARY DRAFT
14.8
Brokers ..................................................................................................
.............................52
14.9
Conflicts ................................................................................................
.............................52
14.10
Counterparts ..........................................................................................
.............................52
14.11
Entire Agreement ..................................................................................
.............................52
14.12
University Liability ...............................................................................
.............................52
14.13
City Liability .........................................................................................
.............................52
14.14
Governing Law .....................................................................................
.............................52
14.15
General Provisions ................................................................................
.............................52
14.16
Extensions of Deadlines ........................................................................
.............................54
14.17
Independence of Action ........................................................................
.............................54
14.18
No Joint Venture ...................................................................................
.............................54
14.19
Notices ..................................................................................................
.............................55
14.20
Severability ...........................................................................................
.............................56
14.21
Time ......................................................................................................
.............................56
14.22
Counterparts ..........................................................................................
.............................56
(iv)
4338720.19
PRELIMINARY DRAFT
STATE OF TEXAS §
COUNTY OF DENTON §
MASTER DEVELOPMENT AGREEMENT
This Master Development Agreement ( "Agreement ") is entered into as of December 10,
2013 (the "Effective Date ") by and between the City of Denton, Texas, a municipal corporation
and political subdivision of the State of Texas ( "City ") the University of North Texas, an
institution of higher education of the State of Texas ( "UNT "), O'Reilly Hotel Partners Denton,
LLC ( "OHPD "), a Missouri limited liability company, and O'Reilly Hospitality Management,
LLC ( "OHM "), a Missouri limited liability company. The City, UNT, OHPD, and OHM are
sometimes referred to collectively as the "Parties."
RECITALS
WHEREAS, UNT is a component institution of higher education of the University of
North Texas System, an agency of the State of Texas, the owner of that certain real property as
more particularly described on Exhibit "D" attached hereto and incorporated herein for all
purposes (the "Project Site "); and
WHEREAS, the City and OHPD are desirous of developing a hotel, restaurant and
Convention Center project on the Project Site (as further defined below), in order to promote
travel, tourism, meetings, conventions, and events for the economic development and growth of
the UNT and City of Denton community and for the economic benefit of the Parties; and
WHEREAS, the City will lease from UNT the Convention Center Site (as defined herein)
pursuant to the terms of a long term land lease with UNT ( "City -UNT Land Lease ") (as defined
below), and will constrict the Convention Center, with OHM acting as Constriction Manager
Agent ( "CMA ") and Architect on behalf of the City pursuant to Professional Services
Agreements (described more particularly herein), (as further defined below); and
WHEREAS, upon completion of the Convention Center and improvements to the
Convention Center Site, the City will sublease the Convention Center to OHPD pursuant to the
terms of a sublease between the City and OHPD ( "City -OHPD Convention Center Sublease" or
"City Facilities Sublease ") (as defined below); and
WHEREAS, OHM will operate and maintain the Convention Center on behalf of the
City, as public facilities in accordance with the terms, provisions and requirements of the City
Facilities Sublease; and
WHEREAS, OHPD will lease from UNT the Hotel Site (as defined herein) pursuant to
the terms of a long term land lease with UNT ( "OHPD -UNT Land Lease "), and will constrict
the Hotel and Restaurant (as further defined below); and
WHEREAS, OHPD will finance and constrict the Hotel and Restaurant pursuant to the
OHPD -UNT Land Lease and this Agreement;
-1-
4338720.19
PRELIMINARY DRAFT
NOW THEREFORE, in consideration of the foregoing and the mutual promises
contained herein, and other valuable consideration the sufficiency and receipt of which are
hereby acknowledged, the Parties agree as follows:
ARTICLE I
1.1 Definitions. As used herein the following terms are defined as set out below
"Applicable Law" means all laws or statutes, riles or regulations, and any amendments
thereto, of the State or the United States by which the City and its powers, securities, operations
and procedures are, or may be governed or from which its powers may be derived, including all
City codes, ordinances and development standards. All City codes, ordinances, riles and
development standards shall be applicable to this agreement and the Project, irrespective of
whether such codes, ordinances, riles and development standards would otherwise normally
apply.
"Approved Franchise" means a franchise agreement approved by the City and UNT with
an Approved Franchisor for a term of no less than eighteen (18) years from the date the Hotel
opens for business, whereby OHPD is permitted to operate the Hotel and Restaurant using the
name and reservation system of any Approved Franchisor.
"Approved Franchisor" means, initially, an Embassy Suites and a Houlihan's Restaurant
& Bar, or some other restaurant of similar or higher quality; provided that from and after the date
the Hotel opens for business to the public throughout the term of the Approved Franchise and in
the event, after the expiration of the Approved Franchise, another Franchise is entered into, such
term after approval by UNT and the City in their reasonable discretion, shall also include a
national or international hotel franchisor for a specific hotel product of the same or higher quality
than Embassy Suites, approved by the City and UNT in their reasonable discretion.
"Approved Plans' shall mean the architectural and engineering drawings, plans and
specifications relating to the Project as development in accordance with the Master Development
Agreement entered into between the City, UNT and OHPD.
"Base Rent" means the amount set forth in the City -OHPD Convention Center Sublease.
Base Rent shall commence on the date set forth in the City -OHPD Convention Center Sublease.
"Bond Debt Payments" means the semi - annual debt service payments made by the City
on its Certificates of Obligation issued to fund the constriction of the Convention Center.
"City Facilities" means the Convention Center and related automobile parking spaces as
determined to be required by the City's development standards.
"City Financing Contribution" means the net proceeds of the City's issuance of
Certificates of Obligation, the principal amount of which shall be determined by the City based
upon the Total Convention Center costs; provided that the City shall not be obligated to
contribute more than $25,000,000 (total, including design and constriction costs) to the City
-2-
4338720.19
PRELIMINARY DRAFT
Facilities. The City may contribute additional funds or resources to the City Facilities, pursuant
to this Agreement, but the City shall not contribute more than $25,000,000 in net proceeds of its
debt financing for the total cost of the City Facilities.
"City -OHPD Convention Center Sublease" or "Sublease" or "City Facilities Sublease"
means the sublease agreement to be executed by OFIPD and the City, whereby OFIPD will
sublease the Convention Center and Convention Center Site from the City, which sublease shall
be in form and content attached hereto as Exhibit "B," as same may be modified, amended,
extended or renewed from time to time upon the approval of the Parties.
"City -UNT Land Lease" means the lease agreement to be executed by the City and UNT,
whereby the City will lease the Convention Center Site from UNT, which land lease shall be in
form and content attached hereto as Exhibit' A," as same may be modified, amended, extended
or renewed from time to time with the unanimous agreement by the Parties.
"Closing" means a date specified by the Parties, on which the City has issued its debt and
receives money to fund the City Financing Contribution and OFIPD receives money to fund its
Private Financing Contribution, as evidenced to the City.
"Closing Deadline" means the earlier of (a) 45 days after the date the City sells its debt in
the public market, and (b) one - hundred twenty (120) days after the Financing Viability Deadline.
"Commencement of Constriction," "Constriction Commences" on, and /or a party will be
deemed to "Commence Constriction" on an improvement in the Project when a party obligated
to constrict has:
(a) obtained all necessary permits and approvals from the City and any
other governmental body having jurisdiction over the constriction of the
improvement to allow the constriction thereof,
(b) entered into a contract with a constriction contractor which
requires such contractor to constrict the entirety of the improvement with all
reasonable diligence;
(c) issued a "Notice to Proceed" or the equivalent to the contractor
authorizing the contractor to commence and pursue all of the work necessary to
complete the improvement with all reasonable diligence in accordance with the
aforementioned contract;
(d) obtained from general contractor a duly recorded Affidavit of
Commencement of Constriction in accordance with §53.124 of the Texas
Property Code;
(e) actually commenced substantial site work on the improvement
under its constriction contract, with the intent of prosecuting all work until
completion in accordance with the terms of the contract;
4338720.19
PRELIMINARY DRAFT
(f) with respect to the Hotel only, entered into a loan or credit
agreement with a commercial bank or similar financial institution (a "Commercial
Lender "), having the financial capability to perform its obligations under such
agreement, which provides constriction and permanent financing upon terms
typical for "constriction /mini - perm" financing (not subject to any contingency or
condition other than those typically associated with such loans), which loan must
be in a principal amount sufficient, together with other available funds committed
by OHPD to the satisfaction of the City and UNT, to pay all costs and expenses
for the design, development, constriction and furnishing of the Hotel. Upon
reasonable notice, a representative of the City and UNT shall be permitted, during
normal business hours, to review the loan or credit agreement and accompanying
security instruments relating to the Hotel and Restaurant financing; and
(g) In addition to (a) -(f) above, with respect to the Hotel only, the
Approved Franchise has been obtained prior to the Feasibility Deadline.
"Comparable Convention Centers" means the operation and maintenance of the
Convention Center in a manner such that the condition of the Convention Center shall
demonstrate refined, high quality and fully functional appointments; furniture, fixtures and
equipment; exterior and interior finishes; landscaping; and mechanical, electrical and structural
components consistent with convention centers of comparable size and operation within the State
of Texas that are affiliated with Comparable Hotel Properties. For purposes of the City -OHPD
Convention Center Sub- Lease, the term Comparable Convention Centers shall include, as of the
Effective Date (but which may not be included in the future if such properties no longer meet the
definition of "Comparable Convention Centers "), the San Marcos, Texas convention center and
the Frisco, Texas convention center. The City shall inspect the Convention Center on an annual
basis to determine compliance with the operation of the Convention Center in the manner of
Comparable Convention Centers. Reasonable exceptions to this standard of Comparable
Convention Centers may be agreed to by the Parties.
"Comparable Hotel Properties" means a hotel that (i) is a, full- service, "convention -
oriented hotel" (not including so- called "budget' or "limited service" hotels or motels) or, (ii)
has at least two hundred fifty (250) keys, (iii) contains features, finishes and amenities that are
available in hotels of similar age that are at all times during the term of the OHPD -UNT Land
Lease, maintained so as to be considered an upscale, full- service, "convention- oriented" or full -
service hotel, as applicable, that is operated and maintained according to standards similar to
those of the Embassy Suites brand as such brand standards exist on the Effective Date of this
Agreement, and (iv) is located within the State of Texas. For purposes of the OHPD -UNT Land
Lease, the term Comparable Hotel Properties shall initially include, as of the Effective Date (but
which may not be included in the future if such properties no longer meet the definition of
"Comparable Hotel Properties "), Embassy Suites — San Marcos, Texas and Embassy Suites —
Frisco, Texas.
"Completion of Constriction" of any improvement will be deemed to have occurred
when the constricting party has accomplished all of the following tasks and the improvement has
been substantially completed in accordance with the requirements of this Agreement, including
"Punch List Items ":
-4-
4338720.19
PRELIMINARY DRAFT
(a) The constricting party has obtained, for the Hotel, an AIA
standard Certificate of Substantial Completion for the improvement, or for the
Convention Center, a Certificate of Substantial Completion for the improvement
in a form approved by the City, executed by the party's project architect;
(b) The general contractor has provided an Affidavit of Completion
and Waiver of Liens and provided proof of payment of all subcontractors and
suppliers and waivers or releases of liens for each; and
(c) The constricting party has obtained a permanent certificate of
occupancy or such similar document for the improvement, permitting continuous
uninterrupted legal use thereof.
"Constriction Deadline" means the date on which the Constriction Phase commences
pursuant to Section 5.2 herein, such date being no later than one hundred eighty (180) days after
Closing.
"Convention Center" means an "upscale" convention center facility of approximately
100,000 square feet (but no less than 90,000 square feet) in size under roof and constricted upon
the Convention Center Site, containing meeting rooms, and one (1) large ballroom sufficient to
lawfully accommodate approximately 2,000 people for a banquet -style event, and related
improvements, including landscaping, the required parking spaces as determined by the City's
development standards, and required infrastructure.
"Convention Center Budget" means the budget for the design, constriction and FFE of
the Convention Center and Convention Center Site improvements as described in Article III.
"Convention Center Site" means that part of the Project Site whereon the Convention
Center and related improvements shall be constricted, as depicted on Exhibit "D" attached
hereto.
"Convention Center Design Development Architectural Drawings" means the design of
the City Facilities that reflect an approximately 35% completion rate, more commonly known in
the architectural profession as a "Design Development" or "DD ": set of architectural and
engineering drawings, in order to obtain drawings and specifications necessary to obtain a
"proposal package" to constrict the City Facilities.
"Contractor Payment Guidelines" means those guidelines attached hereto as Exhibit "G."
"Design Development Phase" means the Period of time commencing upon the execution
of this Agreement; provided this Agreement is not terminated in accordance with Article XI prior
thereto, and ending upon the date that the Constriction Phase commences, as such date may be
extended by mutual agreement of the Parties (provided that the Design Development Phase shall
terminate no later than the Constriction Deadline), during which the Parties shall diligently and
in good faith attempt to accomplish and mutually agree upon all of the matters enumerated in
Article III hereof.
-5-
4338720.19
PRELIMINARY DRAFT
"Developer" means, with respect to the City Facilities, O'Reilly Hospitality
Management, LLC, a Missouri Limited Liability Company or an Affiliate.
"Development Deadline" means the earlier of (1) the expiration of the Design
Development Phase when all Design Development Phase activities have been completed and the
Project is ready for constriction pursuant to the Constriction Phase, or (2) the Constriction
Deadline.
"Development Fees" means the fees paid to the City by OHPD as developer of the
Project, pursuant to Applicable Law, which shall include, but shall not be limited to, building
permits, utility fees and other technical fees associated with the development and constriction of
the Hotel and Restaurant.
"Effective Date" is defined in the preamble.
"Event of Bankruptcy or Insolvency" means the dissolution or termination of a party's
existence as a going business, insolvency, appointment of receiver for any part of the party's
property and such appointment is not terminated within ninety (90) days after such appointment
is initially made, or any general assignment for the benefit of creditors, or the commencement of
any proceedings under any bankruptcy or insolvency laws by or against a party (and, in the case
of involuntary proceedings, such proceedings are not dismissed within ninety (90) days after the
filing thereof).
"Feasibility Deadline" means, the date that the City has adopted its resolution authorizing
Notice of Intent provided that all requirements and /or conditions of Article III and Article V
herein that are required to be met/occur prior to the Feasibility Deadline are met pursuant to the
provisions of those Articles.
"Final Site Plan" means the final architectural plan, landscape architecture document, and
a detailed engineering drawing of the proposed Hotel and Restaurant and /or City Facilities,
including building footprints, travelways, parking, drainage facilities, sanitary sewer lines, water
lines, trails, lighting, and landscaping elements for either or both the Hotel and Restaurant and /or
City Facilities.
"Financing Viability Deadline" means the date that is ten days subsequent the sale date of
the City's debt obligations published in the Notice of Intent. (The City may sell its debt on or
after such published sale date).
"Force Majeure" means any contingency or cause beyond the reasonable control of a
party including, without limitation, acts of God or the public enemy, acts of terrorism, war, riot,
civil commotion, insurrection, government or defacto governmental action (unless caused by acts
or omissions of the party), fires, explosions, rain or other weather delays, floods, strikes,
slowdowns or work stoppages.
"Franchise Agreement" shall have the meaning set forth in Section 3.6 hereof.
-6-
4338720.19
PRELIMINARY DRAFT
"Full- Service Hotel" means mid - price, upscale or luxury hotel with a restaurant, lounge
facilities and meeting space as well as minimum service levels including bell service and room
service.
"GMP Contract" means the guarantee maximum price contract(s) for the constriction of
the City Facilities and /or the Hotel and Restaurant.
"Gross Revenues" means all revenues and receipts of every kind derived from operating
the Hotel, Restaurant and the Convention Center, including, but not limited to: income (from
both cash and credit transactions), before commissions and discounts for prompt or cash
payments, from rental of rooms, stores, offices, meeting, exhibit or sales space of every kind;
license, lease and concession fees and rentals (not including gross receipts of licensees, lessees,
and concessionaires from their operations); income from vending machines; health club
membership fees; food and beverage sales; wholesale and retail sales of merchandise; service
charges and proceeds, if any, from business interruption or other loss of income insurance. Gross
Revenues shall not include (a) gratuities, including tips, paid to Hotel or Convention Center
employees by third parties; (b) federal, state, and municipal excise, sales, and use taxes or similar
impositions collected directly from patrons or guests or included as part of the sales price of any
Hotel or Convention Center rooms, goods, or services; (c) the proceeds realized from the sale of
City Facilities FF &E no longer necessary to the operation of Convention Center (which sale shall
be in accordance with the City's ordinances and procurement procedures), which shall be
deposited in the City AR &R Fund and the proceeds from the sale of the FF &E for the Hotel
which shall be deposited into the Hotel Capital Expenditure Fund, as the case may be; (d)
proceeds of any insurance other than business interruption insurance (or other insurance against
loss of income); (e) condemnation awards; (f) gross receipts received by lessees, licensees, or
concessionaires of the Hotel and Conference Center; (g) proceeds from any financing or
refinancing; (h) proceeds of any judgment or settlement not received as compensation for actual
or potential loss of Gross Revenues or operating profit (i.e., Gross Revenues over Operating
Expenses); (i) interest earned on the Hotel Capital Expenditure Fund, which shall be deposited
therein; and 0) any funds supplied by OHPD to the Hotel Capital Expenditure Fund.
"Hotel" means a Full- Service Hotel (i) constricted and operated pursuant to and in
accordance with the standards of an Approved Franchise and pursuant to the terms of this
Agreement and any related agreements, (ii) constricted upon the Hotel Site in accordance with
the Approved Plans, and (iii) consisting of at least 9 (nine) stories and containing a minimum of
two - hundred seventy -five (275) guestrooms, or such other number as is agreed to by the Parties,
and a restaurant, recreational amenities, adequate on -site parking, and other related amenities and
space for providing the services customarily found in a full- service upscale hotel, open to the
public and serving the Convention Center, adjacent business community, the UNT community
and citizens of the City. Notwithstanding anything to the contrary herein, OHPD shall have the
right upon the expiration or termination of any Approved Franchise to operate the Hotel and
Restaurant without a franchise so long as such facilities are kept in an Upscale Condition and in
compliance with the OHPD -UNT Land Lease. The names of any non - franchise Hotel and
Restaurant shall be suggested by OHPD and approved by UNT and the City, with such approval
not to be unreasonably withheld.
-7-
4338720.19
PRELIMINARY DRAFT
"Hotel Budget" means the budget for the design, constriction and FFE for the Hotel,
Restaurant and related Hotel Site improvements.
"Hotel Design Development Architectural Drawings" means the design of the Hotel and
Restaurant that reflect approximately 35% completion more commonly known as a "Design
Development" or "DD" set of architectural and engineering drawings, in order to obtain
drawings and specifications necessary to obtain a "bid package" to constrict the Hotel and
Restaurant.
"Hotel Site" means that part of the Project Site wherein the Hotel and Restaurant and
related improvements shall be constricted, depicted on Exhibit "D" attached hereto.
"Notice of Intent" means the notice authorized by the City Council and published in a
newspaper of general circulation in the City that notifies the public that the City intends to issue
certificates of obligation pursuant to Chapter 271, Texas Local Government Code, as amended,
to fund the constriction of the Convention Center.
"OHPD -UNT Land Lease" means the lease agreement to be executed by OHPD and
UNT, whereby OHPD will lease the Hotel Site from UNT, which lease shall be in form and
content attached hereto as Exhibit "A," as same may be modified, amended, extended or
renewed from time to time upon approval by the Parties.
"OHM Development Fee" means the fee paid to OHM by the City as the City's CMA for
the City Facilities, as such fee is set forth in the Professional Services Agreement.
"Operator" means OHM, or its Affiliate, or such other management entity as UNT, the
City, and OHPD may mutually approve.
"Parties" means OHM, OHPD, UNT and the City.
"Private Financing Contribution" means the private funds, raised by OHPD which,
together with certain equity contributions, will equal an amount sufficient for the purpose of
developing, constricting, furnishing and equipping the Hotel and Restaurant pursuant to the
GMP Contract for the Hotel. OHPD's obligations hereunder are conditioned upon obtaining
binding commitments from credible financing sources satisfactory to the City and UNT in their
sole reasonable discretion (i.e., loan commitment) that contain no conditions to funding the
Private Financing Contribution, other than the City's delivery of its City Financing Contribution
pursuant to Article VI herein.
"Person" means any individual, public or private corporation, limited or general
partnership, joint venture, association, joint stock company, trust, limited liability company,
unincorporated organization, governmental authority or any other form of entity.
"Project" means the Hotel, Restaurant and the City Facilities and related site
development on the leased site.
"Project and Financing Plan" means the required project plan for the TIRZ pursuant to
Chapter 311, Texas Tax code, setting forth the projects and participation in the TIRZ.
-8-
4338720.19
PRELIMINARY DRAFT
"Project Site" means the Hotel Site and the Convention Center Site, collectively
"Punch List Items" means details of constriction, decoration and mechanical adjustment
which, individually and in the aggregate, are minor in character and do not, either by their nature
or because of the repair or completion work necessary, materially interfere with the use or
enjoyment of the improvement.
"Reasonable and Prudent Hotel Operator" means an operator of hotel projects similar in
scope, size and complexity to the Hotel seeking to perform its contractual obligations and in so
doing and in the general conduct of its undertakings exercises that degree of skill, diligence,
prudence and foresight which would reasonably and ordinarily be expected from a skilled and
experienced Approved Franchisor of Comparable Hotel Properties complying with all
Applicable Laws and engaged in the same type of undertaking.
"Restaurant" or "Restaurant and Bar" shall mean a Houlihan's Restaurant and Bar, or
another restaurant of similar or higher quality and style, that will be located on the Hotel Site as
depicted on the Preliminary Site Plan (defined below).
"Preliminary Site Plan" means a preliminary architectural plan, landscape architecture
document, and a detailed engineering drawing of the proposed Hotel and Restaurant and /or City
Facilities, including building footprints, travelways, parking, drainage facilities, sanitary sewer
lines, water lines, trails, lighting, and landscaping elements for either or both the Hotel and
Restaurant and /or City Facilities.
"Tax Increment Reinvestment Zone" or "TIRZ" shall mean the Tax Increment
Reinvestment Zone created by the City pursuant to Chapter 311, Texas Tax Code, as amended,
the boundaries of which are coterminous with the Project Site.
"Three Diamond Rating" means a Three Diamond Rating under the AAA Diamond
Rating Process or if the AAA Diamond Rating Process is not available, a comparable rating
under the successor rating process pursuant to the terms of the City -UNT Land Lease with
whatever rating system used to include reasonable exceptions to or variations from such rating
standards to the extent they: (a) differ from Embassy Suites standards during the existence of the
Approved Franchise; or (b) would require significant alterations or additions to the structural,
mechanical, electrical, electronic, operational, communications, audio visual or entertainment
systems of the Hotel that exceed the Embassy Suites standards, or if Embassy Suites does not
exist, the standards for Comparable Hotel Properties; provided however, that in no event shall
the Hotel be operated in a manner that falls below the standard or quality of a Comparable Hotel
Property. In no circumstance shall the Three Diamond Rating result in a standard with respect to
the design, development, constriction, furnishing, opening and operation of the Hotel which is
less than what would be required of by Three Diamond Rating as it exists of the Effective Date,
subject to the exceptions or variations as stated above.
"Total Convention Center Costs" means all fees, expenses, and costs for any materials,
labor, and services required to design, constrict, and furnish the Convention Center.
"Total Hotel Costs" means all fees, expenses, and costs for any materials, labor and
services required to design, constrict, furnish and fund the Hotel and Restaurant.
-9-
4338720.19
PRELIMINARY DRAFT
"True Interest Cost" means the rate necessary to discount the amounts payable on the
respective principal and interest payment dates to the purchase price received for the City's debt
obligations issued to fund the City Financing Contribution.
"Upscale Condition" means, with respect to the Hotel, the operation of the Hotel in a
manner such that the condition of the Hotel shall demonstrate refined, high quality and fully
functional appointments; furniture, fixtures and equipment; exterior and interior finishes;
landscaping; and mechanical, electrical and structural components consistent with Comparable
Hotel Properties, normal wear and tear excepted, that is consistent with the standards of
operations and operating plans that an Approved Franchisor, acting as a Reasonable and Prudent
Hotel Operator, would reasonably be expected to undertake and follow for the operation of a
Comparable Hotel Property in order to obtain a Three Diamond Rating; provided, however,
OHPD, as tenant, shall not be required as a result of the aforesaid covenant to (a) provide
amenities or facilities that are impracticable as a result of the Hotel Final Design, (b) undertake
any actions prohibited by the OHPD -UNT Land Lease, (c) actually obtain a Three Diamond
Rating for the Hotel. UNT and the City shall have the right to inspect the Hotel on an annual
basis to determine compliance with the operation of the Hotel in an Upscale Condition.
Reasonable exceptions to this standard of Upscale Condition may be agreed to by the Parties and
the Parties may agree to commission an independent experienced hotel industry consultant to
assist in their evaluation and /or to identify necessary repairs or replacements necessary to bring
such facilities to the property condition consistent with an Upscale Condition.
"Upscale Manner" means the process of developing, designing, constricting and
maintaining the Hotel as required so that it will exist in an Upscale Condition.
ARTICLE II
PROJECT OVERVIEW
2.1 Summary of Proiect Development. Subject to the terms and conditions of this
Agreement and of the other instruments and agreements to be entered into pursuant to this
Agreement, the City and OHPD shall cause the Project to be developed and constricted as
follows:
2.2 Proiect Overview.
2.2.1 City Facilities. The City shall commit the City Financing Contribution
for development, in the manner provided in this Agreement for the City Facilities:
The City Facilities shall be constricted of a quality comparable to and
compatible with the standards of quality and efficiency found in the Hotel, and
otherwise in accordance with designs, plans and specifications approved by the
City, UNT, and OHPD, as provided herein, and in accordance with all applicable
building codes and other ordinances and laws, and all requirements of the City.
The City Facilities are public facilities and must be open to the public as
required by state and federal law.
-10-
4338720.19
PRELIMINARY DRAFT
2.2.2 Hotel. OHPD must obtain and expend the Private Financing
Contribution for development on behalf of OHPD, in the manner provided in this Agreement, of
the Hotel and Restaurant, and appropriate support facilities such as a restaurant(s), a lounge(s) or
bar(s), supporting back -of -the -house areas, food preparation facilities, a swimming pool, spa, and
fitness center, together with such other amenities and features characteristic of a full- service
hotel, to be operated pursuant to the Franchise Agreement or otherwise in an Upscale Manner.
The Hotel shall be constricted of a quality comparable to and compatible with the standards of
quality and efficiency found in the Convention Center as an adjacent, but operationally
independent, facility to the Hotel, subject to the approved Hotel Budget and otherwise in
accordance with designs, plans and specifications approved by OHPD, the City and UNT, and in
accordance with all Applicable Laws.
2.3 Proiect Phases. The Parties shall undertake the design, planning, development
and constriction of the Project and shall perform their various obligations as outlined in this
Agreement in accordance with the following schedule of phases:
2.3.1 Design Development Phase. During the Design Development Phase,
the City and OHPD shall prepare the Convention Center Design Development Architectural
Drawings and UNT and OHPD shall prepare the Hotel Design Development Architectural
Drawings for the Convention Center and Hotel, respectively, sufficiently complete and detailed
so as to obtain guaranteed maximum price proposals or best - valued responses from qualified
contractors, all as set forth in Article III below. Upon obtaining a guaranteed maximum price
proposal from the Convention Center Design Development Architectural Drawings and the Hotel
Design Development Architectural Drawings and entering into a GMP contract, and once the
Feasibility Deadline and Financing Viability Deadline have expired, OHPD and the City shall
proceed with Closing of their respective financings as set forth in Article V and pursuant to
Article V, OHPD and the City shall then complete the Final Design and Final Hotel Design as
well as prepare, negotiate and finalize the form of the various documentation necessary for the,
development, constriction, completion and ongoing occupancy, use, operation, maintenance and
repair of the Project, as set forth in Article III below.
23.2 Construction Phase. Following the Closing and on or before the
Constriction Deadline, OHPD shall complete any necessary modifications to the final
constriction plans and specifications for the Hotel and Restaurant and any resulting
modifications to the GMP contracts, as approved by the City and UNT, each that conform to all
Applicable Law. OHPD and OHM shall obtain applicable building permits from the City, and
shall commence constriction of the Project in accordance therewith. During constriction,
OHPD, with respect to the Hotel and Restaurant, and OHM, with respect to the Convention
Center, shall coordinate and oversee all aspects of the development and constriction of the
Project in conjunction with UNT and the City, all in accordance with Article IV, and assist the
City with services with respect to FF &E for the Project as set forth in Article VI. OHM shall
follow the City's Contractor Payment Guidelines set forth in Exhibit "G" with respect to the City
Facilities.
2.3.3 Pre and Post Construction Operation of the City Facilities. Prior to
Completion of Constriction of the City Facilities and their sub -lease to OHPD pursuant to the
City Facilities Sublease, OHPD shall engage Operator to oversee the pre- opening operations
-11-
4338720.19
PRELIMINARY DRAFT
preparation, hiring, sales and marketing efforts and upon the Completion of Constriction, the
use, operation, management, maintenance and repair of the Hotel and the City Facilities pursuant
and subject to the OHPD -UNT Land Lease and the City Facilities Sublease, respectively, and
subject to the Approved Franchise.
2.4 Term. This Agreement shall commence on the Effective Date and shall continue
for the term of the City -OHPD Convention Center Sublease.
ARTICLE III
DESIGN DEVELOPMENT ACTIVITIES
3.1 OHPD Services - Hotel. OHPD shall initiate design of the Hotel and Restaurant.
OHPD shall produce, with assistance from subcontractors including architects and engineers,
Hotel Design Development Architectural Drawings acceptable to the City and UNT. OHPD
shall produce Hotel Design Development Architectural Drawings acceptable to UNT and the
City, with such acceptance not to be unreasonably withheld; provided, the design conforms with
reasonable standards. The City and UNT will appoint designated representatives that will have
substantial day to day involvement with OHM in the development of the Hotel Design
Development Architectural Drawings. OHPD shall solicit bids based upon the Hotel Design
Development Architectural Drawings in order to obtain a guaranteed maximum price ( "GMP ")
bids and shall execute a GMP contract for the constriction of the Hotel and Restaurant
contingent on the City and OHPD obtaining appropriate financing for the Project as set forth in
Article V. It is anticipated that the architect for the Hotel and Restaurant will be the same as for
the Convention Center Facilities. If the architect and engineers selected by OHPD to conduct the
Hotel Design Development Architectural Drawings is not the same as selected by the City's
process in 3.3 below, or is not a full -time employee of OHPD, OHPD, subject to UNT's and the
City's approval, shall select the architect and engineers on the basis of demonstrated competence
and qualifications. The costs of the Hotel Design Development Architectural Drawings shall be
paid as set forth in Section 5.1.2 herein.
3.1.1 OHPD shall select a general contractor for the Hotel and Restaurant
based on the Hotel Design Development Architectural Drawings and GMP contract for the Hotel
constriction, subject to City and UNT approval, not to be unreasonably withheld. OHPD shall
pay all costs relating to the selection and hiring of a general contractor. It is anticipated that the
same general contractor shall be selected for the Hotel and Restaurant and the Convention Center
Facilities pursuant to Section 33.1 below. As such, OHPD shall ensure that the work for the
Hotel and Restaurant is separate and apart from the work for the Convention Center Facilities
and that no City Financing Contribution shall go to pay for the work on the Hotel and Restaurant.
3.1.2 Prior to the Feasibility Deadline, OHPD shall obtain a letter of
commitment or other evidence acceptable to the Parties from the Hotel Franchisor indicating its
commitment to enter into an Approved Franchise at or prior to Closing, subject to satisfaction of
the Hotel Franchisor's criteria and conditions.
3.2 Agency of OHM for the City. OHM will act as the City's "Constriction
Manager - Agent" ( "CMA "), pursuant to the terms of Chapter 2269 of the Texas Local
Government Code (the "Code "), and specifically Subchapter E, sections 2269.201 through
-12-
4338720.19
PRELIMINARY DRAFT
2269.208, for the constriction of the Convention Center, and said parties shall execute the
"Professional Services Agreement - CMA" which is attached hereto as Exhibit "E," and
incorporated herein by reference. Pursuant to the same code provisions set forth above, and also
subsequent to and contingent upon the approval of this Agreement by the City Council the City
will hire OHM to act as its Architect for the development of the Convention Center Site and
Convention Center, and said parties shall execute the "Professional Services Agreement -
Architect" attached hereto as Exhibit "F" and incorporated herein by reference. The City and
OHM agree to abide by all aspects of the Code sections referred to above, this Agreement,
Exhibit "F" and all Applicable Law. The Professional Services Agreement shall be subject to
and provide for the City's 5% retainage of fees, as set forth therein. The City and UNT shall
approve any architectural services provided by third -party contractors. The only fee paid to
OHM for its services for the City Facilities shall be the OHM Development Fee received by
OHM as the City's CMA, the City's agent, for the City Facilities. The City acknowledges that
all costs to constrict the City Facilities, including soft costs, shall be funded by the City from the
City Financing Contribution, and such costs shall include fees from third parties not employed
by OHM in addition to the OHM Development Fee. OHM shall, as the City's agent, assist the
City in obtaining a GMP contract for the constriction of the City Facilities. If the engineer or
architect is not a full -time employee of OHM, OHM, subject to UNT's and the City's approval,
shall assist the City in the selection of the engineer or architect on the basis of demonstrated
competence and qualifications as provided by Section 2254.004, Government Code. The method
of selecting a general contractor for constriction must comply with Chapter 252 and Chapter
271, Texas Local Government Code
3.3 OHM Services —City Facilities. OHM shall coordinate with the City to produce
the Convention Center Design Development Architectural Drawings. The City and UNT will
appoint designated representatives that will have substantial day to day involvement with OHM
in the development of the Convention Center Development Architectural Drawings. The
Convention Center Design Development Architectural Drawings shall be used by the City, with
assistance from OHM, to solicit GMP proposals and a GMP contract for the constriction of the
City Facilities pursuant to Section 33.1 below. The costs of the Convention Center Design
Development Architectural Drawings shall be paid as set forth in Section 5. 1.1 herein.
3.3.1 City Facilities — Convention Center Design Development
Architectural Drawings. OHM shall provide or cause to be provided, in conjunction with the
City and UNT, the following services to the City during the Design Development Phase with
respect to the Convention Center Design Development Architectural Drawings:
(a) Preparation of schematic design concepts and drawings and
specification for the Project in accordance with design criteria approved by UNT
and the City and their consultants and design professionals;
(b) Preparation of a development and constriction schedule and
projected opening date for the Project;
(c) Preparation of the preliminary Convention Center Budget and
preliminary Hotel Budget, which shall include any improvements necessary for
development of the Project. OHPD shall pay the costs attributable to the Hotel
-13-
4338720.19
PRELIMINARY DRAFT
and Restaurant as a part of its Private Financing Contribution and the City shall
pay the costs attributable to the Convention Center, as a part of its City Financing
Contribution;
(d) Provide general descriptions of the categories of the FF &E,
operating supplies, fixed asset supplies and the like anticipated to be required for
the City Facilities for approval by the City and its consultants, and OHM;
(e) Preparation of a recommended listing of and qualifications for
proposed general contractors for the Hotel and Restaurant and the City Facilities
for approval by the City (those potential contractors ultimately approved by the
City being referred to herein as the "City of Denton Contractor Contact List ").
The City, UNT, OHM and OHPD shall work together to develop criteria for the
selection of a general contractor, but final selection of the general contractor shall
be at the discretion of the City. The City of Denton shall communicate the
solicitation for the general contractor as required by Texas statutes;
(f) Preparing a proposal package in compliance with state law
regarding such design development plans and specifications and soliciting
responses from the City of Denton Contractor Contact List, notification in the
local newspaper, and notification to Historically Underutilized Businesses as
required by Texas Government Code, Chapter 252, as amended;
(g) After approval of the Convention Center Design Development
Architectural Drawings by all parties, OHM shall submit such Convention Center
Design Development Architectural Drawings to the City to administer the
procurement process for the Convention Center constriction and shall submit
listings for the City of Denton Contractor Contact List. The City shall administer
such procurement process pursuant to applicable law and the process set forth in
Exhibit "F" hereto. The City shall issue a solicitation, receive, evaluate, value
engineer (if necessary) and proceed to negotiate final contractual terms, with the
assistance of OHM, for the City Facilities. In a separate procurement process,
OHM shall administer the procurement process for the Hotel and Restaurant, in
compliance with Applicable Law. During this process all parties will be involved
in all steps of the process and shall provide input and suggestions as to all matters
pertaining to the process. The City of Denton shall perform the administrative
process of collecting all responses submitted to the solicitation, in accordance
with the statutory provisions of Texas Local Government Code Chapters 252, 271
and 2269, as amended. OHM may provide assistance to the City of Denton in the
evaluation process, provided that OHM shall assist the City in selecting a general
contractor for the City Facilities (the "General Contractor ") in accordance with
the provisions of Texas Local Government Code, Chapters 252, 271 and Texas
Government Code 2269, as amended. Any General Contractor selected by the
City shall comply with the City's requirements for payment and performance
bonds and the Contractor Payment Guidelines set forth in Exhibit "G" and shall
be subject to the City 5% retainage of fees; and
-14-
4338720.19
PRELIMINARY DRAFT
(h) Upon the completion and approval of the Convention Center
Design Development Architectural Drawings, OHM shall assist the City with the
process of negotiating, reviewing, evaluating and finalizing the GMP contracts
with the General Contractor whose response is ultimately selected for approval by
the City, it being understood that it is anticipated that there shall be separate
constriction contracts for the Hotel on the one hand, and for the City Facilities on
the other hand, but that all subcontractors shall (whenever possible) propose on a
single, combined basis for the Hotel and for the City Facilities. The City shall
retain the General Contractor pursuant to a GMP contract for the constriction of
the Convention Center Facilities to be entered into by the City prior to the
Feasibility Deadline and Financing Viability Deadline. However, such GMP
contract for the constriction of the City Facilities shall be subject to, payable from
and contingent upon the City Closing in Section 5.1.7. OHPD shall retain the
General Contractor pursuant to a GMP contract for the constriction of the Hotel
and Restaurant. The City agrees to retain the General Contractor pursuant to a
GMP contract entered into under a method provided by Chapter 271, Subchapter
H, Texas Local Government Code, or Chapter 2257, Texas Government Code, for
the constriction of the City Facilities, and OHM shall assist the City in
administration of such contract on the City's behalf as development manager for
the City during the constriction phase of the general contract. The contracts with
the General Contractor shall require the General Contractor to provide payment
and performance bonds in accordance with general Texas law applicable to
municipalities and shall provide for a 5% retainage to the City and shall comply
with the Contractor Payment Guidelines set forth in Exhibit "G."
3.3 .2 Proiect Feasibility.
(a) Prior to the Feasibility Deadline, OHM shall submit to the City and UNT, for their
approval, the Convention Center Design Development Architectural Drawings and the Hotel
Design Development Architectural Drawings including the preliminary Convention Center
Budget and the preliminary Hotel Budget. The City and UNT shall: (1) approve the Convention
Center Design Development Architectural Drawings and preliminary Convention Center Budget,
and the Hotel Design Development Architectural Drawings and preliminary Hotel Budget; (2)
reject the Convention Center Design Development Architectural Drawings and preliminary
Convention Center Budget, and the Hotel Design Development Architectural Drawings and
preliminary Hotel Budget; or (3) conditionally approve of the Convention Center Design
Development Architectural Drawings and preliminary Convention Center Budget, and the Hotel
Design Development Architectural Drawings and preliminary Hotel Budget with requested
changes to such Convention Center Design Development Architectural Drawings and Hotel
Design Development Architectural Drawings and to the preliminary budgets for the City
Facilities and Hotel and Restaurant to be provided within thirty (30) days of receipt thereof. If
neither approval, rejection nor comments or changes to such Convention Center Design
Development Architectural Drawings or Hotel Design Development Architectural Drawings or
the respective preliminary budgets have been received from City or UNT by OHM and /or OHPD
within such thirty (30) day period, then such Convention Center Design Development
Architectural Drawings and Hotel Design Development Architectural Drawings shall be deemed
approved by the City and UNT. Should OHM and OHPD receive any comments or changes
-15-
4338720.19
PRELIMINARY DRAFT
pursuant to this process, they shall work diligently with UNT and the City to address such
changes and incorporate them into the design documents if reasonably feasible, and shall
complete such revisions within ten (10) days of receive thereof. Any Party may request from the
other Parties an extension of the time periods set forth in the Section, which consent shall not be
unreasonably withheld but in no event shall exceed ninety (90) days.
(b) Upon approval of the Convention Center Design Development Architectural
Drawings and preliminary Convention Center Budget and the Hotel Design Development
Architectural Drawings and preliminary Hotel Budget or upon receipt by OHM of comments or
changes by the City to the Convention Center Design Development Architectural Drawings and
preliminary Convention Center Budget and any changes by UNT to the Hotel Design
Development Architectural Drawings and preliminary Hotel Budget, if any, as well as the
expiration of the ten (10) day period set forth in (a) above, the City shall proceed with obtaining
a GMP contract pursuant to section 33.1 herein. After execution of the GMP contracts for the
City Facilities and Hotel and Restaurant, OHM shall, within twenty (20) days or less, provide
OHPD, the City and UNT with the final Convention Center Budget and the final Hotel Budget
and the Parties shall make a determination within thirty (30) days of receipt of the final budgets,
unless a different time period is agreed to by the Parties, but in any event, prior to the expiration
of the Feasibility Deadline, as to whether they believe the Project is feasible. If, based on the
Convention Center Design Development Architectural Drawings, the budgets and the GMP
contracts for the City Facilities and Hotel Design Development Architectural Drawings
(incorporating the comments and changes of the City to the Convention Center Budget and any
comment and changes of UNT to the Hotel Budget pursuant to (a) above), the City, UNT or
OHM determines that the Project is not feasible, then any Party making such a determination
shall notify the other Parties in writing, and the obligations to proceed with the Project pursuant
to this Agreement shall terminate.
(c) Notwithstanding the determination of feasibility in (b) above, if the Private
Financing Contribution is not in place pursuant to 5. 13 herein, or the Approved Franchise
requirement of 3. 1.2 has not been met, this Agreement shall terminate pursuant to Article XI
herein.
3.3.3 Financing Viability. On or immediately before the Financing Viability
Deadline, unless another date is agreed upon by the Parties, the City shall notify OHPD of the
current market conditions for the issuance of the City's debt to fund the City Financing
Contribution, including current interest rates and the estimated debt service schedule. If the
projected True Interest Cost of the City's obligations, as calculated by the City's financial
advisor (which calculations shall be provided to OHM and OHPD), is in excess of 6.00 %, then
the City or OHPD may terminate this Agreement pursuant to Article XI herein, and all
obligations to proceed with the Project pursuant to this Agreement shall terminate.
3.3 .4 City Facilities — Final Design. After the expiration of the Feasibility
Deadline and the Financing Feasibility Deadline, and upon the election of all Parties to proceed
with the Project and upon availability of the City Financing Contribution, OHM shall provide the
following services to the City during the Design Development Phase to reach the final design,
specifications and Final Site Plan for the City Facilities (the "Final Design "). Costs of the Final
Design shall be paid from the proceeds of the City Financing Contribution available at Closing.
-16-
4338720.19
PRELIMINARY DRAFT
(a) On or before the Development Deadline OHM shall deliver to the
City and UNT, the Final Design, Final Hotel Design (as defined below), the
revised Convention Center Budget and revised Hotel Budget for the Project,
based upon the GMP contracts for the Convention Center and the Hotel, and the
"Final Constriction Drawings" for the entirety of the Project and ancillary
improvements, which are based on the Final Design and Final Hotel Design, and
any additional revisions thereto. The constriction evidenced by the Final Site
Plan and Final Constriction Drawings, and the Final Design and Final Hotel
Design, as well as the Final Constriction Drawings themselves must comply with
all Applicable Laws. The City and UNT shall have a maximum of thirty (30)
days within which to review such documents and deliver any objections and /or
required revisions to OHM. Upon receipt of such objections and /or required
revisions, OHM shall, within ten (10) days thereafter, cause the Final
Constriction Drawings, Final Design, the Final Hotel Design and the revised
budgets to be revised and resubmit same to the City for review and approval. If
changes requested by the City or UNT are substantial, the Parties may agree on
the date for delivery of such revised documents. For purposes hereof, the "Final
Design and Final Hotel Design" means design documents for the Convention
Center, Hotel, Restaurant and ancillary improvements consisting of architectural
drawings and other documents illustrating the style and relationship of the
components of the improvements, including, the exterior and interior of the Hotel,
Convention Center and Project that are required by Applicable Law sufficient to
secure a Building Permit.
(b) OHM shall work with the City and its consultants to enhance
compatibility of the final architectural drawings for the City Facilities with other
elements such as interior design, front desk design, kitchen and laundry facilities
and the like;
(c) OHM shall consult and work with the City in the selection and
designation of names of ballrooms, suites, and rooms within the Convention
Center;
(d) OHM shall prepare a final development schedule for the City
Facilities, in conjunction with the development schedule for the Hotel;
(e) Wherever the terms of this Agreement call for or reference, City's
and UNT's approval of any architectural or other drawings and /or specifications
relating to constriction of the Project or any component thereof, it is expressly
agreed that City's and UNT's approval of such drawings and /or specifications
will constitute City's and UNT's approval of the general design and layout
scheme described in such drawings and /or specifications only and will not,
however, make City or UNT responsible in any way for the technical adequacy of
such drawings or for any liabilities arising out of any constriction undertaken in
accordance therewith.
-17-
4338720.19
PRELIMINARY DRAFT
(f) OHM shall obtain, for itself and on behalf and with the cooperation
and assistance of UNT and the City, all building, development and other permits
necessary to commence constriction of the Project;
3.3 .5 Hotel and Restaurant — Final Hotel Design. On or before the
Development Deadline, OHPD shall complete the final design, specifications and Final Site Plan
for the Hotel and Restaurant (the "Final Hotel Design ") and constriction of the Hotel and
Restaurant shall occur simultaneously with the City Facilities and shall attempt, without
guaranteeing, to complete constriction of the Hotel on approximately the same day the City
Facilities are completed. OHM shall work with UNT and its consultants to enhance
compatibility of the final architectural drawings for the Hotel and Restaurant with other elements
such as interior design, front desk design, kitchen and laundry facilities and the like and OHM
shall consult and work with UNT in the selection and designation of names of suites, and
meeting /conference rooms within the Hotel. The costs of the Final Hotel Design shall be paid
from the Private Financing Contribution. During the final design process of the Design
Development Phase and prior to commencement of constriction of the Hotel, OHPD shall
provide UNT and the City the documents listed below as well as any other documents reasonably
required, and where necessary shall make the requisite filings of such documents with
appropriate officials:
(a) Two copies each of the Final Hotel Design for the Hotel and
Restaurant, which OHPD will submit to the City and UNT in accordance with
Section 33.4;
(b) A certificate of insurance evidencing that all insurance required
hereunder with respect to the Project has been procured;
(c) The final Hotel Budget;
(d) Preliminary operating projections for the Hotel, Restaurant and the
City Facilities;
(e) A development schedule for the Hotel and Restaurant, and a
development schedule for the City Facilities;
(f) An executed copy of the Approved Franchise which shall have
been obtained prior to the Feasibility Deadline pursuant to 3. 1.2 herein; and
(g) Such other documentation, including plans and specifications,
schematic drawings and renderings of the Hotel and Restaurant, as may
reasonably be requested by the City or UNT to ensure the orderly development of
the Project.
3.4 Proiect Agreements. During the Design Development Phase, UNT, the City,
OHM and the Operator (with respect to the Approved Franchise) shall diligently and in good
faith negotiate mutually acceptable final forms of the following agreements to be entered into at
the Closing. In the event of discrepancies between this Agreement and the final agreements listed
below in sections 3.4.1 through 3.43, the terms of each individual agreement shall control:
-18-
4338720.19
PRELIMINARY DRAFT
3.4.1 Hotel Lease. The OHPD -UNT Land Lease, containing the following
minimum terms:
(a) primary term of fifty (50) years, with renewal options of ten (10)
and ten (10) years, respectively, with rent in the amount of $1.00 per annum for
the first three (3) years after opening of the Hotel, then rent in the amount of one
and a half percent (1.5 %) of the Gross Revenue of the Project, as adjusted by the
amount of the contributions set forth in the OHPD -UNT Land Lease and minus
$100,000 per year in each year that OHPD pays any rent to the City in order to
pay the debt service cost on the City's debt issued to fund the City Financing
Contribution, through Lease Year 25.
(b) provisions relating to OHPD and UNT's agreements relating to the
College of Hospitality working in concert to further their respective aims with
respect to the integration of UNT students into the Hotel operating process.
(c) OHPD shall have a right of first refusal to purchase the Hotel Site
if sold by UNT.
(d) OHPD shall establish an asset replacement and renewal reserve
account for capital expenditures in connection with the operation and maintenance
of the Hotel and Restaurant and for repairs and replacements by OHM of all
portions of the Hotel and Restaurant that are subject to deterioration, including the
Hotel and Restaurant FF &E and other relevant items, in the for the Hotel and
Restaurant (the "Hotel Capital Expenditure Fund "). OHPD shall annually
contribute to the Hotel Capital Expenditure Fund, an aggregate amount equal to
two percent (2 %) of such Gross Revenues. Funds in the Hotel Capital
Expenditure Fund shall only be used for capital expenditures for the Hotel.
OHPD shall annually provide UNT with a five (5) year budget for the Hotel
Capital Expenditure Fund which shall be subject to approval by UNT, which
approval shall not be unreasonably withheld. In addition, OHPD shall provide
UNT with thirty (30) days prior notice of expenditures from the Hotel Capital
Expenditure Fund. If OHPD makes expenditures from the Hotel Capital
Expenditure Fund in excess of the approved budgeted amounts, OHPD shall
provide UNT, as a part of its 30 -day notice, documentation and explanations
regarding the expenditures. UNT shall have the right to annually review the
expenditure of the Hotel Capital Expenditure Fund to ensure budgeted funds have
been expended to keep the Hotel in an Upscale Manner. The Parties acknowledge
that the City shall have no control over the funds in the Hotel Capital Expenditure
Fund or the expenditures made with such funds.
(e) The form of the OHPD -UNT Land Lease attached hereto as
Exhibit "C" is hereby approved with such changes and modifications as may be
agreed to by UNT and OHPD. The Parties acknowledge that the Project cannot
proceed without an equity source or lender for OHPD and that such parties will
likely have comments on the form of the OHPD -UNT Land Lease and
accordingly, UNT agrees to give reasonable consideration to changes in the MDA
-19-
4338720.19
PRELIMINARY DRAFT
and the OHPD -UNT Land Lease that may be requested by the equity source or
lender for OHPD's Private Financing Commitment. If UNT and OHPD fail to
mutually agree upon the final form of the OHPD -UNT Land Lease by Closing
then either OHPD or UNT can terminate this Agreement upon written notice.
3.4.2 City -UNT Land Lease. The City -UNT Land Lease, containing the
following minimum terms:
(a) a primary term of fifty (50) years, with renewal options of ten (10)
and ten (10) years, respectively, for a rent equal to $1.00 per year during the
Phase that the City's debt financing for the Convention Center is outstanding, and
$175,000 per year beginning in year 26, and continuing for a period of ten years.
Beginning in year 37, rent shall increase in the amount of 1.7% each year until
termination of the City -UNT Land Lease.
(b) at the end of its primary term and of any option Phases extending
the term of the City -UNT Land Lease, UNT shall receive possession of the City
Facilities; and
(c) if at any time, UNT shall desire to sell the Convention Center Site,
the City shall have the right of first refusal to purchase such site pursuant to the
terms set forth in the OHPD -UNT Land Lease and subject to the City Facilities
Sublease.
(d) If the City does not exercise its right of first refusal pursuant to (c)
above, OHPD shall then have the right of first refusal to purchase such site
pursuant to reasonable terms substantially similar to those terms offered to the
City by UNT; provided, that should OHPD exercise such right of first refusal, no
modifications of the rights or roles of either OHPD or the City or any
modification of this Agreement or the City -OHPD Convention Center Sublease
shall occur without the mutual written agreement of the parties.
(e) The form of the City -UNT land lease attached hereto as
Exhibit "A" is hereby approved, with such modifications as may be approved by
the City Manager and City Attorney.
3.4.3 City Facilities Sublease. The City Facilities Sublease between the City
and OHPD, containing the following minimum terms:
(a) a primary term of fifty (50) years, with options of renewal for ten
(10) and ten (10) years, respectively, with fixed rent equal to the amount set forth
in the City -OHPD Convention Center Sublease in each year for the Period of time
the City's debt is outstanding and thereafter $1.00 per year during the primary
term, and $1.00 per year during each option Phase;
(b) an obligation of OHPD to operate and maintain the City Facilities
in keeping with Comparable Convention Centers for the term of the City Facilities
Sublease;
-20-
4338720.19
PRELIMINARY DRAFT
(c) an express requirement that OHPD shall take the property on an
"as is" basis and that the City Facilities Sublease shall be a "triple -net lease," and
shall clearly and unequivocally state that the City shall have no obligation or
responsibility, financial or otherwise, to operate or maintain the City Facilities
during the term of the City Facilities Sublease (unless otherwise specified herein);
(d) the creation of an asset replacement and renewal reserve account
for capital replacement expenditures in connection with the operation of the City
Facilities and for capital repairs and replacements of all portions of the City
Facilities that are subject to deterioration, in the City Facilities AR &R Fund (the
"City AR &R Fund ") to be used solely to pay for such capital replacements,
expenditures and repairs and replacements. The City AR &R Fund shall be
segregated and maintained separately from the Hotel Capital Expenditure Fund
and shall be funded in part by the City as set forth in the (e) below;
(e) each year from lawfully available funds, the City shall deposit an
amount to the City AR &R Fund. Such amount shall be determined by the City on
an annual basis during its budget process, shall be subject to annual appropriation
and shall be based upon capital expenditures needed for maintenance of the
Convention Center in a sufficient amount to reasonably keep the City Facilities to
the standard of Comparable Convention Centers as set forth in the City Facilities
Sublease;
(f) the City AR &R Fund shall be controlled by the City and such
funds shall be limited to appropriate expenditures as included in the annual capital
budgets for the City Facilities approved by the City in accordance with the City
Facilities Sublease or as required in an emergency, or otherwise with the approval
of the City. The City may utilize the City AR &R Fund for such purposes in the
event of a failure by OHPD to perform such capital expenditures or repairs and
replacements;
(g) a clear list of events of default by OHPD and specific remedies for
such defaults including self -help remedies with reimbursement and for the hiring
of a third party management consultant to mediate disputes as to whether the City
Facilities are being operated and maintained in the manner provided in the City
Facilities Sublease;
(h) a provision providing the City with the right to audit OHM and /or
OHPD to determine whether or not the City AR &R Fund obligations
contemplated under the City Facilities Sub -Lease have been properly conducted
or honored;
(i) an obligation by OHPD to maintain the Approved Franchise, and
to maintain and operate the Hotel in an Upscale Manner (regardless of whether a
franchise is maintained with respect to the Hotel), and cross default provisions for
defaults under the Hotel Loan Agreement and the Approved Franchise. After the
expiration of the Approved Franchise according to its terms, and in the event there
-21-
4338720.19
PRELIMINARY DRAFT
is no renewal of the Approved Franchise or a replacement Approved Franchisor
pursuant to the City -UNT Convention Center Sublease, OHPD shall continue to
operate the Hotel in an Upscale Manner throughout the term of the City -OHPD
Convention Center Sublease;
0) provisions as reasonably required by the Hotel Lender providing
that the Hotel Lender shall be given a concurrent copy of any notice of default by
OHPD under the City Facilities Sublease, and the right to cure any such default in
the place and stead of OHPD, and a reasonable time as may be required by the
Hotel Lender to effect such cure and enforce its rights under the Hotel Loan
Agreement and related documents, provided the Franchise Agreement, or a
substitute franchise agreement with an approved Hotel Franchisor remains in full
force and effect during the Period of such cure;
(k) a requirement that OHPD shall pay Base Rent to the City;
(1) The commencement of the Sublease to be on the date set forth in
the Sublease, and to be effective upon the Closing of the City's Financing
Contribution and the Private Financing Contribution; and
(m) an obligation of OHPD to comply with all requirements of the
City -UNT Land Lease.
(n) The form of the City Facilities Sublease attached hereto as
Exhibit "B" is hereby approved with such changes and modifications as may be
agreed to by the City Manager and City Attorney. The Parties acknowledge that
the Project cannot proceed without an equity source or lender for OHPD and that
such parties will likely have comments on the form of the City Facilities Sublease
and accordingly, the City agrees to give reasonable consideration to changes in
the MDA and the City Facilities Sublease that may be requested by the equity
source or lender for OHPD's Private Financing Commitment. If the City and
OHPD fail to mutually agree upon the final form of the City Facilities Sublease
by Closing, then either OHPD or the City can terminate this Agreement upon
written notice.
3.5 Reciprocal Access Agreement. One or more access, easement and use
agreements, in recordable form, between the City, OHPD and UNT, providing for the shared use
of and access to the Hotel and the City Facilities, and creating mutual reciprocal easements
therefor, which shall be considered covenants running with the land and which shall benefit and
bind title to the Hotel and the City Facilities (the "Reciprocal Access Agreement "). The Parties
shall mutually agree on such access agreements and such agreements shall be consistent with the
Preliminary Site Plan.
3.6 Hotel Franchise Agreement. OHPD shall have obtained an Approved Franchise
with an Approved Franchisor. The Approved Franchise shall state that OHPD shall maintain the
Hotel in an Upscale Manner to the standards required of the Approved Franchisor and shall
provide for a furniture, fixture and equipment reserve fund on the Approved Franchisor's
-22-
4338720.19
PRELIMINARY DRAFT
standard terms, subject to approval by UNT and the City. After the expiration of the term of the
Approved Franchise or any replacement Approved Franchise, OHPD shall have the right to
operate the Hotel and Restaurant without a franchise, subject to approval by UNT and the City,
such approval not to be unreasonably withheld. During the term of the Approved Franchise if
the Approved Franchise is terminated pursuant to its terms, OHPD shall be required to obtain a
replacement Approved Franchisor until the end of the term of the initial Approved Franchise.
3.7 Cooperation. OHPD and City shall cause OHM, and its architects and engineers,
or any other agents, architects or design professionals, to design complementary strictures,
landscaping, and related amenities (such as parking), it being understood that the Convention
Center and the Hotel (including the Restaurant) will be separate but connected buildings (with
separate facilities, such as mechanical, electrical and plumbing systems, necessary for the
operation of each), but connected by one or more interior hallways to give the appearance and
function of an integrated building.
3.8 Consultation. OHM and OHPD shall consult with designated representatives of
the City and UNT in connection with the design of the Hotel, Restaurant and Convention Center
and make available to such representatives copies of the plans and specifications for the Hotel
and Convention Center upon the request of the City.
3.9 Requirements. All improvements constricted as part of the Project must:
3.9.1 be designed with an architectural style and materials appropriate to the
Denton, Texas, University of North Texas setting of the Project;
3.9.2 be built and operated in accordance with applicable environmental
standards under federal, state, and local laws and ordinances (the "Environmental Standards ");
3.9.3 be constricted in accordance with LEED (Leadership in Energy and
Environmental Design) practices and procedures; and
3.9.4 comply with all Applicable Law.
3.10 Control of the Convention Center Site. The City and UNT shall execute the
City -UNT Land Lease and the City and OHPD shall execute the City -OHPD Convention Center
Sublease whereby the City will transfer its rights relating to the Convention Center Site to OHPD
pursuant to the terms and conditions thereof.
3.11 Tax Increment Reinvestment Zone. During the Design Development Phase, the
City, subject to the discretion of the City Council, shall begin the process of creating the TIRZ.
The City agrees that the creation of the TIRZ is appropriate and shall diligently pursue the
creation of the TIRZ with the designated project of the TIRZ Project and Financing Plan being
the constriction of the Convention Center Facilities only. No TIRZ revenues shall be expended
on the constriction or operation of the Hotel. The City shall, prior to the expiration of the
Feasibility Deadline, give notice to OHPD of the intent of other taxing jurisdictions within the
TIRZ to participate in the TIRZ and their associated levels of participation.
-23-
4338720.19
PRELIMINARY DRAFT
3.12 Budget Adiustments.
3.12.1 After execution of the GMP contracts has occurred, and throughout the
design and constriction of the Project, OHM shall, on a timely basis, communicate budget
changes to the City and UNT and submit to the City and to UNT all changes to the Convention
Center Budget for the Total Convention Center Costs and all changes to the Hotel Budget for the
Total Hotel Costs for the Hotel and Restaurant. The City and UNT shall review such budget
changes and shall submit additional revisions to such budgets or approve such budgets within
twenty (20) days. No expenditures pursuant to such budget revisions shall be made until the City
and UNT have approved such budget changes and expenditures; provided, however that the
City's Financing Contribution shall be adjusted but it shall never exceed more than $25,000,000
(total, including design and constriction costs).
3.
12.2 All budget changes for the Hotel and Restaurant that exceed the GMP
Contract for the Hotel and Restaurant shall be paid by OHPD. Any increases in the Hotel
Budget that are incurred prior to Closing shall be considered in the calculation of the Private
Financing Contribution and shall be available at closing. Any increases in the Hotel Budget that
are incurred after Closing shall not be approved until OHPD provides assurances satisfactory to
the City and UNT that OHPD will provide funds to pay for the increased costs.
ARTICLE IV
CONSTRUCTION ACTIVITIES
4.1 Agency by OHM for OHPD. OHM shall at all times act as agent for OHPD
pursuant to a Development Agreement and Management Agreement executed by the OHPD and
OHM. OHM and OHPD will be responsible for all design, constriction and operations of the
Hotel.
4.2 Construction Permits. No later than the Commencement of the Constriction
Phase, OHM shall submit and obtain approval of applications for building, plumbing, electrical,
mechanical and other constriction permits for the Project in accordance with applicable
provisions of the Applicable Law. The City will be the code review authority for the
constriction of the Hotel, Restaurant and Convention Center.
4.3 Payment and Performance Bonds. OHM shall obtain all payment and
performance bonds required by the City under Applicable Law.
4.4 Hotel and Restaurant Construction.
4.4.1 Hotel. During constriction of the Hotel, OHPD agrees to the following
conditions and instructions:
(a) To constrict or cause to be constricted the Hotel in conformance
with the final plans and specifications approved by UNT and the City and in
accordance with any and all rights of review or approval of the Hotel Franchisor
and the Hotel Lender, and in accordance with all Applicable Laws, including the
payment of all Development Fees to the City;
-24-
4338720.19
PRELIMINARY DRAFT
(b) To be fully responsible for causing the Hotel to be constricted, to
pay all development costs of the Hotel as they come due, and under no
circumstances require the City or UNT to pay for any labor, materials, or other
costs ordered, purchased, or incurred by OHPD or others in and about the
constriction of the Hotel;
(c) To cause all electric and telephone utility lines and equipment for
the Property to be placed under ground within public rights -of -way or utility
easements located within the Property lines;
(d) To apply for or cause to be applied for the balance of the utility
permits, utility easements, certificates of occupancy and all other licenses and
permits required for the operation of the Hotel, including an alcoholic beverage
permit, with such alcoholic beverage permit to possibly be delayed by six (6)
months or more after opening of the Hotel and Restaurant; and
(e) To pay for the hard surface portion of the landscaping at the Hotel
Site, such as stone, concrete, brick or other approved surfaces, and the irrigation
systems for the Hotel. The Parties also agree that the landscape plan is subject to
Applicable Law and to the approval of UNT, the City and OHPD and is subject to
such modifications and variances, as may be agreed upon by the Parties.
4.5 Construction Phase. OHM will cause to be prepared final constriction plans
and specifications for the City Facilities for the approval of the City and UNT. OHPD will cause
to be prepared final constriction plans and specifications for the Hotel and Restaurant for the
approval of UNT. OHPD (with respect to the Hotel and Restaurant) and OHM (with respect to
the City Facilities) shall cause Commencement of Constriction of the Project to commence
promptly upon receiving a notice to proceed from the City and UNT, and will expeditiously
pursue Completion of Constriction with completion of the constriction to be not later than
twenty (20) months following commencement of constriction, subject to City delay and Force
Maj eure, and any extension pursuant to 6.8 herein. OHPD and OHM estimate constriction to
take approximately 18 months. OHPD and OHM shall consult with the City and UNT regarding
any proposed changes and modifications to the final drawings and specifications of the Project
which may result in a material change in the design or character of the City Facilities or the
Hotel or increase the City Financing Contribution, and coordinating issuance of change orders
with the approval of the City and UNT and other necessary parties. The City may also request
through action of the City Council proposed changes or modifications to the scope or character
of the City Facilities, subject to the approval of OHPD and OHM. Once constriction of the
Project commences, OHM shall serve as constriction manager and shall provide the following
services with respect to the Project:
4.5.1 Providing on -site supervision including, at a minimum, a project
manager /superintendent;
4.5.2 Making physical visits to the job site to review the work and progress of
constriction with the Contractors, and hold community meetings and discussions with interested
citizens of the City about the status and progress of the Project;
-25-
4338720.19
PRELIMINARY DRAFT
4.5.3 Responding to any questions from the City, UNT, or the Hotel
Franchisor regarding the work or progress of constriction, constriction methods, scheduling, and
the like;
4.5.4 Coordinating the acceptance of the City Facilities, as and when the same
are appropriately Substantially Completed, by OHPD as the sub - lessee under the City Facilities
Sublease;
4.5.5 Coordinating efforts by all appropriate Parties to complete the City
Facilities and Hotel and Restaurant substantially in accordance with the final drawings and
specifications, as the same may be amended from time to time with the approval of all necessary
Parties, such efforts to include assisting in the scheduling of inspections and the preparation of
punch lists;
4.5.6 Obtaining, or causing the General Contractor to obtain, on behalf of the
City, a temporary, if applicable, and permanent certificate of occupancy (or other appropriate and
necessary governmental permission to occupy) with respect to the City Facilities;
4.5.7 OHM shall, subject to section 6.8 herein and to events of "Force
Maj eure," cause Commencement of Constriction of the Convention Center to occur on the
Convention Center Site on or before the Constriction Deadline and cause Completion of
Constriction of the same within twenty (20) months after the actual Commencement of
Constriction ( "Completion of Constriction Deadline" ) OHPD and OHM estimate that
constriction will take approximately eighteen (18) months;
4.5.8 The Convention Center must be constricted in a good and workmanlike
manner free of liens in favor of any person or entity providing labor or materials in connection
with such constriction;
4.5.9 The Convention Center must be constricted in accordance with the
approved Final Site Plan, Final Design and this Agreement; and
4.5.10 The Convention Center will be designed and constricted in accordance
with Applicable Law, including the coordination with the City's independent constriction
materials engineering testing and inspection of the facility as required by Texas Government
Code, Chapter 2269.
4.5.11 OHM shall promptly pay or cause to be paid all contractors and
subcontractors on the Project in accordance with the City's Contractor Payment Guidelines.
4.5.12 Constriction Draws.
(a) All draws for the Convention Center constriction will be
submitted to the City, pursuant to a draw request as required by the City. The
City shall approve each draw request and make payment within thirty (30) days of
receiving a draw request from OHM; provided however, such draw requests
(which will include multiple individual draw requests) shall not be submitted to
-26-
4338720.19
PRELIMINARY DRAFT
the City more than one per thirty (30) day period during the development, design
and constriction process.
(b) All Change Orders for the Convention Center constriction shall be
submitted to the City, and such Change Orders shall be reviewed by the City
within thirty (30) days. The City shall not be obligated to approve any Change
Orders that would exceed the City Financing Contribution. "Change Orders" will
be defined as any document submitted to or received from the general contractor
hired to constrict the Convention Center that requires that additional funds be
expended over the Convention Center Budget or that alters the Final Site Plan or
building exterior.
4.5. 13 Conditions to City's Performance. The City's commitment to
constrict the Convention Center is conditioned upon: (a) OHPD and OHM having timely
performed all of their obligations under this Agreement, including the Private Financing
Contribution; (b) OHPD having caused Commencement of Constriction of the Hotel to have
occurred; and (c) the issuance of debt to finance the constriction of the Convention Center (the
issuance of such debt in the sole discretion of the City Council), as set forth in Article VI herein.
ARTICLE V
FINANCING OF THE PROJECT
5.1 Design Development Phase.
5.1.1 Payment of Costs of the Convention Center Design Development
Architectural Drawings. The City shall pay the costs of the Convention Center Design
Development Architectural Drawings in an amount not to exceed $200,000. Upon completion of
the Convention Center Design Development Architectural Drawings, the City may elect to
terminate this Agreement on or before the Feasibility Deadline pursuant to 33.2 and 11.1.2
herein. The City may reimburse itself for expenditures relating to the Convention Center Design
Development Architectural Drawings from the proceeds of its debt issued to fund the City
Financing Contribution.
5.1.2 Payment of Costs of the Hotel Design Development Architectural
Drawings. OHPD shall pay the costs of the Hotel Design Development Architectural Drawings.
5. 13 Private Financing Contribution. On or before the Feasibility
Deadline, OHPD and the equity partners or the lender providing the constriction debt portion of
the Private Financing Contribution (the "Hotel Lender ") in accordance with the Hotel Budget
shall have mutually agreed upon the form of the loan agreement to be entered into at or before
the Closing (the "Hotel Loan Agreement "); and OHPD shall have obtained a binding
commitment acceptable to the City and UNT (containing no conditions other than the City's
Financing Contribution to the Convention Center) for the permanent financing for the Hotel and
Restaurant from the Hotel Lender or a successor Hotel Lender. The Hotel Loan Agreement shall
provide that the Hotel Lender shall not have any liens on the City Facilities or any fund created
to benefit the City. OHPD and the investor or investors providing the equity portion of the
Private Financing Contribution shall have mutually agreed upon the form of the venture
-27-
4338720.19
PRELIMINARY DRAFT
documentation to be entered into at the Closing providing for the investment of such equity
capital. OHPD shall send the Hotel Loan Agreement to UNT and the City for review and
approval. OHPD shall pay the costs of the Final Hotel Design from its Private Financing
Contribution.
5.1.4 Feasibility Deadline
(a) On or before the Feasibility Deadline, the City shall notify OHPD
of its inability or unwillingness to secure the entire amount of the City Financing
Contribution on terms and conditions acceptable to OHPD and UNT. Upon such
notification, the obligations to proceed with the Project pursuant to this
Agreement shall terminate pursuant to Article XI herein.
(b) On or before the Feasibility Deadline, if OHPD is unable or
unwilling to provide written evidence to the City and UNT, in form reasonably
acceptable to the City and UNT pursuant to Section 5. 13 above, that it has
secured the entire amount of the Private Financing Contribution, then the
obligations to proceed with the Project pursuant to this Agreement shall terminate
pursuant to Article XI herein.
(c) If the Parties are able to provide assurances with respect to their
financing contributions, as set forth in (a) and (b) above and all other
requirements that are required prior to the expiration of the Feasibility Deadline
have been met, then the Parties shall proceed to the Final Design of the Design
Development Phase as set forth in Article III and Closing as set forth in Section
5.1.7 herein and the City shall move forward with the publication of the Notice of
Intent. The City shall not issue debt to fund the City Financing Contribution until
the expiration of the Financing Viability Deadline and the Private Financing
Contribution is fully available to the satisfaction of the City and UNT as set forth
in (d) below. The costs of Final Design shall be paid solely from the City
Financing Contribution which will not be available until Closing occurs. The
issuance of debt is in the sole discretion of the City Council.
(d) OHPD acknowledges that the City's contribution of the City
Financing Contribution is subject to the issuance of debt by the City on terms
deemed reasonable by the City Council in its sole discretion and that the issuance
of debt is a discretionary, governmental action of the City Council. The City shall
not issue debt to fund the City Financing Contribution and shall not fund the City
Financing Contribution until it has received from OHPD, an executed loan
commitment or other funding commitment(s) from financial institution(s) or
investors in favor of OHPD in form and content acceptable to the City containing
no conditions to funding except the City's issuance of debt, and in an amount
equal to the Total Hotel Costs. The discretion to issue debt is vested in the City
Council and in no event will the City have any obligation to issue debt pursuant to
this Agreement or have any commitment or obligation to provide funds above the
City Financing Contribution.
-28-
4338720.19
PRELIMINARY DRAFT
5.1.5 Financing Viability Deadline. On or before the Financing Viability
Deadline, the City shall notify OHPD of the current market conditions for the issuance of the
City's debt to fund the City Financing Contribution, including current interest rates and the
estimated debt service schedule. If the projected true interest cost of the City's obligations, as
calculated by the City's financial advisor, is in excess of 6.00 %, then this Agreement shall
terminate pursuant to Article XI herein, unless otherwise agreed to by the Parties.
5.1.6 City Financing Contribution. Upon the obtaining of a GMP Contract
pursuant to Article III and the expiration of the Feasibility Deadline, the City shall begin the
preliminary statutory requirements for the issuance of debt to fund the City Financing
Contribution, which shall include the publication of the Notice of Intent. Upon the expiration of
the Financing Viability Deadline and in the event there is no petition filed during the time period
between publication of the Notice of Intent and the date of the adoption of the City's Ordinance
authorizing the debt, the City shall move forward with the adoption of an ordinance authorizing
the issuance of the City's debt. The timing of the adoption of such ordinance is in the sole
discretion of the City. The City shall not adopt an ordinance issuing its debt and shall not sell its
debt unless the conditions of 5. 13 herein have been met and the Feasibility Deadline and
Financing Viability Deadline have passed. The City shall make a good faith effort to time the
sale of its debt in favorable market conditions in order to lower the overall financing cost of the
City Facilities and shall use all possible urgency and diligence to sell the debt such that the True
Interest Cost does not exceed the range of 6.0% -6.5 %; however, the City shall not close on its
debt until the City Council has approved the funding of the City Financing Contribution and the
conditions in Section 5.1.7(a) herein have been met. Notwithstanding any provision of this
Agreement or this Section, the issuance of debt is subject to the sole discretion of the City
Council. The costs of the Final Design shall be paid by the City from the proceeds of the City's
debt issuance pursuant to Section 5.1.7 below.
5.1.7 Closing. Closing shall occur as follows:
(a) Subject to the City Council's determination to fund the City
Financing Contribution, the City shall sell its debt and close upon the City
Financing Contribution, and OHPD shall close upon the Private Financing
Contribution on or before the Constriction Deadline such that funds are available
for the constriction of the Project (each, the "Closing "). The proceeds of such
financing contributions shall be invested in accordance with their respective terms
and shall be made available for disbursement for constriction of the City
Facilities and the Hotel and Restaurant. The disbursement of the City Financing
Contribution shall be controlled by the City pursuant to its established
disbursement process and procedures.
-29-
4338720.19
PRELIMINARY DRAFT
(i) Upon Closing, OHPD shall lease the Hotel Site and its
improvements from UNT pursuant to the Hotel Lease, and the City will
lease the City Facilities Site from UNT pursuant to the City -UNT Land
Lease, such lease to commence and be effective according to its terms and
shall be contingent on Closing.
(ii) Upon Closing, OHPD, as sub- lessor, and OHPD, as
sublessee, shall sublease the City Facilities Site and its improvements to
OHPD, pursuant to the City Facilities Sublease, such lease to commence
and be effective according to its terms and shall be contingent on Closing.
5.2 Construction Phase.
5.2.1 Payment of Construction Phase Costs. Costs for the constriction of
the City Facilities shall be paid from the proceeds of obligations issued by the City. Costs for the
constriction of the Hotel Facilities shall be paid from OHPD's Private Financing Contribution.
The City's payment of the costs of the City Facilities and OHPD's costs of the Hotel Facilities
are subject to Section 5.1.7 herein.
5.3 City Financing Contribution Limitation. In no event shall any payment
required by this Agreement obligate the City to make any payment in excess of the City
Financing Contribution. In the event the Final Design of the City Facilities and its budgeted
costs as determined in the Design Development Phase exceed the City Financing Contribution,
City and OHM and OHPD will work together to resolve such funding issues. After the
exhaustion of all reasonable means, in the event the Parties cannot reach an agreement as to the
resolution of such funding issues, this Agreement shall terminate. Any costs or expenses for the
Project which arise as a result of Force Majeure during the Constriction Phase shall be divided
among OHPD and the City with the City paying only for costs and expenses related to the City
Facilities, as specified in the constriction contracts and constriction manager contract for the
constriction of the City Facilities.
ARTICLE VI
PURCHASING SERVICES
6.1 Purchasing Services. During the course of development of the Project, OHPD
and /or OHM shall perform or cause to be performed the following services with respect to FF &E
to be installed in the City Facilities and the Hotel and Restaurant:
6.1.1 FF &E Schedule. The Development Plan prepared by OHM with the
approval of the City and UNT shall include a prototypical schedule setting forth by category the
types of FF &E for the Hotel and the City Facilities, consistent with the design and style of the
Hotel and of sufficient quality such that the Hotel will be developed in an Upscale Manner and
be in an Upscale Condition (hereinafter referred to as the "FF &E Schedule ") and the City
Facilities will meet the standards of Comparable Convention Centers.
6.1.2 FF &E Specifications. The FF &E shall be those items specified in
specifications therefor (hereinafter referred to as "FF &E Specifications ") as coordinated by
-30-
4338720.19
PRELIMINARY DRAFT
OHPD and approved by the City, and shall specify the type of FF &E consistent with the design
and style of the Hotel and of sufficient quality such that the Hotel will be developed in an
Upscale Manner and shall be in an Upscale Condition and the City Facilities will meet the
standards of Comparable Convention Centers. The City shall perform the procurement process
for acquisition of the FF &E for the City Facilities, who shall coordinate purchasing of the FF &E
for the City Facilities pursuant to purchase orders naming the City as owner or purchaser. All
purchases applicable to City Facilities under this Article shall comply with Chapter 252 and
Chapter 271, Texas Local Government Code.
6. 13 Approval of FF &E Specifications. OHM shall cause the FF &E
Specifications for the City Facilities to be delivered, prepared and submitted to the City for its
approval as promptly as reasonably practicable during the design development or constriction
phases.
6.1.4 Pricing and Procurement. The City shall diligently seek to obtain the
most favorable prices and terms available in connection with the purchase of the FF &E for the
City Facilities to the extent required by Chapter 252 and Chapter 271, Texas Local Government
Code, subject to the FF &E specifications described in sections 6.1.2 and 6. 13 above. The cost
of the FF &E for the Convention Center shall be a part of the City Financing Contribution.
6.1.5 Delivery Schedule. With regard to the City Facilities, OHM shall assist
the City with the preparation of a projected delivery schedule for goods purchased based on
production and delivery dates furnished by suppliers. OHM shall use reasonable efforts to
coordinate the schedule with the constriction schedule under the constriction contracts. OHM
shall coordinate with the City, the issuance of purchase orders within sufficient time to allow
delivery in accordance with the projected constriction schedule.
6.1.6 Records. OHM shall assist the City with the maintenance of proper,
accurate and complete accounting records including purchasing receipts and delivery tickets
made in connection with the purchase of the FF &E for the City Facilities. Upon receipt and
acceptance of the FF &E Equipment for the City Facilities, OHM will deliver the receipt to the
City within 48 hours, to ensure prompt payment is achieved. OHM shall maintain proper,
accurate and complete accounting records, including competitive bids and proposals, purchase
orders, purchasing receipts and delivery tickets made in connection with the purchase of the
FF &E for the Hotel. OHPD and /or OHM shall make available these records for audit, inspection
and photocopying by UNT and the City, or any other persons designated by the City upon five
(5) business days' notification. Following Final Completion of the Project or termination of this
Agreement, OHPD and /or OHM shall, at OHPD and /or OHM's sole cost, deliver to the City and
UNT a copy of all such records. OHPD and /or OHM shall retain copies of such records for a
Period of three (3) years after Final Completion.
6.1.7 Inventory. OHPD and /or OHM shall provide an inventory of goods and
materials to UNT and the City, or such other persons, as may be designated by the City or UNT,
within ninety (90) days after delivery of the last item of FF &E for the Project.
-31-
4338720.19
PRELIMINARY DRAFT
6.2 Payment for FF &E.
6.2.1 The City shall purchase the FF &E for the City Facilities of the type and
quantity described in the FF &E Schedule as prepared by OHM and approved by the City and
OHM in accordance with the FF &E Budget and this Agreement. The City agrees to make
directly to OHM, in its capacity as development manager for the City, monthly payments based
upon invoices received for purchases of FF &E for the City Facilities, for payments required
during such month not to exceed the amounts specified in the FF &E Budget, as part of the City
Financing Contribution. OHM shall substantiate and provide verifications to the City of goods
received. Purchase of FF &E for the City Facilities are exempt from sales taxes.
6.2.2 The FF &E costs for the Convention Center shall be part of the Total
Convention Center Costs and shall be identified in the Design Development phase as a part of
the budget for the City Facilities. Any costs paid by the City shall be part of the City Financing
Contribution. If the FF &E costs in the Convention Center Budget would cause the City to
exceed the City Financing Contribution, OHM and the City will work to resolve such budget
issues. In the event that the City and OHM cannot resolve such budget and funding issues, the
City shall have the option to terminate this Agreement.
6.2.3 It is understood that all purchase orders and agreements for FF &E for
the City Facilities executed by the City shall specify the FF &E as being acquired for the account
of the City (provided the City shall not be required to contribute to or expend any amount in
connection with the City Facilities in excess of the City Financing Contribution), and OHPD
shall not be responsible for payment of any such purchase orders and agreements, except to the
extent of funds therefor actually received from the City or except to the extent that such amounts
exceed the total amount of the City Financing Contribution.
6.2.4 All FF &E for the City Facilities shall be subject to the terms and
provisions of the City Facilities Sublease.
6.3 Infrastructure.
6.3.1 Storm Water Drainage and Detention.
(a) The Parties will cooperate in connection with the identification and
design of the off -site storm water drainage and detention system for the Project,
including any necessary channels and /or other easements and improvements
necessary to direct and collect storm water discharge from the Project Site. The
costs of any necessary storm water drainage improvements attributable to the
Convention Center shall be included as part of the Total Convention Center Costs
and any costs paid by the City shall be a part of the City Financing Contribution.
The costs of off -site storm water drainage and detention improvements shall be
shared by the Convention Center and Hotel proportionately in accordance with
Section 13.2.
(b) Costs associated with perpetual maintenance of storm water
detention facilities necessitated by the Project, wherever located, shall be borne
-32-
4338720.19
PRELIMINARY DRAFT
equally by the City and OHPD in accordance with Applicable Law and the
requirements of Section 13.2.
6.4 Easements.
6.4.1 Proiect Easements. The Parties agree to cooperate in good faith to
grant to each other, without additional consideration, such easements as may be necessary to
allow the efficient operation of the Project (including, but not limited to, right -of -way, utility,
access, drainage, and cross - parking easements) provided however, nothing in this Section is
intended to impose on any party an obligation to grant any easement if such easement would
materially interfere with the grantor's use or intended use of its own property. Anticipated
Easements are:
(a) for access to the Project Site;
(b) for constriction easements in order to help facilitate the
constriction of the Project;
(c) for utility access as needed for the Project; and
(d) for parking of Hotel, restaurant and Convention Center guests off
site on UNT land;
6.4.2 Any and all such easements shall be set forth in recordable form and the
Parties must agree on the form of and execute and deliver such easements on or before OHPD
Commences Constriction of the Hotel. To the extent either party has granted a lien or other
encumbrance on its respective site prior to the date the easements are executed and recorded,
such party must cause the holder of such lien or encumbrance to execute such instruments as the
other may require to evidence the fact that such holder's interest is subordinate to the easements.
6.5 Waiver of Development Standards. To the extent OHPD or OHM desires any
modification to City development standards, OHM or OHPD shall follow the City's procedures
for obtaining waivers, which request shall be accompanied by detailed plans and specifications
for the Project. City staff will review the plans and specifications with OHPD or OHM to
determine the nature and extent of modifications and waiver of City regulations. The City
Council shall have the sole discretion to grant any waivers.
6.6 No Relinquishment of Municipal Regulatory Authority. Notwithstanding
anything contained in this Agreement to the contrary, the City's and UNT's review and (if
applicable, approval) of proposed architectural plans, specifications, site plans, plats, drawings,
or other submittals from OHPD, OHM or other persons in connection with this Agreement shall
constitute approval for purposes of this Agreement only, and not be deemed to constitute
approval, or replace, the City's and UNT's right to review and approve same, under City's
regulatory authority and /or police power under Texas or local law.
6.7 Title Search. UNT shall conduct a title search of the land constituting the Project
to ensure there are no existing liens or encumbrances that would prevent the development of the
Project. The results of such title search shall be provided to OHPD and OHM.
-33-
4338720.19
PRELIMINARY DRAFT
6.8 Extensions of Deadlines. In the event of a delay of the Project, the parties agree
to a 30 (thirty) day extension of the date for Commencement of Constriction and Completion of
Constriction as is required for the development of the Project. Any further reasonable
extensions will be considered by the Parties and must be agreed to in writing.
ARTICLE VII
ADDITIONAL OBLIGATIONS OF OHPD
7.1 Assignment, Transfer Lease. During the Term, OHPD shall continuously lease
and operate the Hotel and Hotel Site and shall not, without the express written consent of the
City and UNT (which may not be unreasonably withheld), sell, convey, lease, sublease, or
transfer OHPD's leasehold interest in the Hotel, the Hotel Site, or OHPD's leasehold estate
under the Lease or Sublease, or any portion thereof (whether by sale, lease, sublease, assignment,
deed of trust, mortgage, other instrument, transfer of the beneficial interest in OHPD or other
means) (each, a "Transfer"). The City's and UNT's consent to any Transfer, or the occurrence
of a permitted Transfer, shall not constitute, or be deemed or construed as constituting, (i) the
City's or UNT's consent to any future Transfer or (ii) a waiver of City's or UNT's right to
consent to subsequent Transfers. Any Transfer by OHPD, other than a Transfer permitted
hereunder, made without the consent of the City and UNT shall constitute an Event of Default
hereunder without the necessity of any notice or opportunity to cure being given to OHPD.
7.1.1 Conditions to Transfers.
(a) In the event the City and UNT consent to any Transfer, the
permitted assignee, transferee, or sublessee of OHPD must expressly assume all
of the covenants and obligations of OHPD herein and in any related Agreements
in a writing acceptable to the City and UNT in their sole discretion. Furthermore,
no such Transfer shall release, or be deemed or construed as releasing, OHPD
from any obligations and /or liabilities it may have under this Agreement or any
related agreements.
(b) OHPD hereby assigns to UNT the right of OHPD to receive
payment as a result of any approved Transfer (except for Transfers permitted
under Section 7.1.2 below) to the extent (and only to the extent) of the amount of
the unpaid and remaining portion of OHPD's obligations to UNT due under this
Agreement and any related agreements. OHPD hereby authorizes the person or
entity making such payment to pay such amount directly to UNT. The provisions
of this Section 7. 1.1 shall survive termination of this Agreement.
7.1.2 Permitted Transfers. Subject to the transfer provisions in the OHPD-
UNT Land Lease, and without waiving the City's and UNT's right to review and approve any
Transfer that is not otherwise expressly permitted under this Section, and provided that no Event
of Default (defined below) exists hereunder, UNT agrees that OHPD may:
(a) grant a mortgage lien on the Hotel Site and Hotel to the lender(s)
providing OHPD constriction or permanent financing for the Hotel, which
-34-
4338720.19
PRELIMINARY DRAFT
financing must be subordinate to the Hotel Lease, the Declaration, and OHPD's
covenants and obligations under this Agreement (including the obligation to pay
the rents to UNT and the City under the respective Leases); and
(b) enter into leases for retail or gift shops within the Hotel and /or
leases for franchise restaurants within the Hotel, (provided that all of the
foregoing in this Section 7.1.2 must be first approved by UNT and any Approved
Franchisor), such approval not to be unreasonably withheld.
7. 13 Prohibited Transfers. OHPD agrees that the City and UNT are not
obligated to grant its consent for a Transfer if:
(a) the proposed transferee is eligible for exemption from ad valorem
or other taxation under the laws of the State of Texas (an "Exempt Entity ");
(b) the proposed transferee is a third party which, in the City's and
UNT's reasonable discretion, does not have an appropriate level of experience,
and /or reputation for quality, as OHPD or OHM in operating projects such as the
Proj ect;
(c) Completion of Constriction of the Hotel and Convention Center
has not occurred; and /or
(d) The transfer is not permitted under the City -OHPD Convention
Center Sublease.
7.1.4 Transfer to Exempt Entity. If the Hotel is transferred at any time
during the Term of this Agreement to an entity, exempt from the payment of taxes, such Transfer
will, in addition to constituting an Event of Default under the Lease and this Agreement (and
without limiting the City's and UNT's remedies in connection therewith), result in:
(a) an increase in the rent owed pursuant to the terms of the
Convention Center Sublease, all as more particularly set forth therein; and
(b) OHPD will be responsible for yearly payments to the City in an
amount equal to the most recent appraised value used in determining the property
tax revenue which the City in its reasonable discretion expects to receive over the
terms of the City Facilities Sublease and OHPD -UNT Land Lease following the
Transfer.
7.2 Compliance with Applicable Law. All Parties agree to comply with all
Applicable Laws.
7.3 Proiect Quality and Operation. At all times during the Term, OHPD must
cause the Hotel to be continuously operated, and the Hotel and Hotel Site (including, without
limitation, all landscaping constricted and /or placed thereon) to be maintained, in an Upscale
Condition and repair in accordance with the standards of any Approved Franchise. The results of
any quality inspection made by any Approved Franchisor of the Hotel and /or the Convention
-35-
4338720.19
PRELIMINARY DRAFT
Center shall be made available to the City upon request. During the Term, the Hotel must be
operated as a full service, upscale hotel and related amenities, open to the public and operating
under and in accordance with the standards of an Approved Franchise. OHPD shall continuously
maintain and operate the Convention Center and Hotel in accordance with the standards set forth
in the Convention Center Sublease and OHPD -UNT Land Lease.
In keeping with the foregoing, if at any time prior to the expiration of the term of the
OHPD -UNT Land Lease, the Hotel is totally or partially damaged or destroyed by fire, the
elements, unavoidable accident or other casualty, OHPD must, at OHPD's expense, repair and
restore the Hotel to the condition same was in immediately prior to such damage; provided,
however, if the damage occurs during the last five (5) years of the term of the OHPD -UNT Land
Lease and as a result thereof the Hotel is damaged to an extent that the cost to repair same is
greater than fifty percent (50 %) of the then value thereof (exclusive of the value of the land
constituting the Hotel Site), OHPD shall have no obligation to repair or restore the Hotel. If
OHPD is obligated to repair and restore the Hotel in accordance with the terms of this
Section 73, OHPD must commence such repair and restoration within a reasonable timeframe
based on the severity of the damage, as agreed to by UNT and the City, and prosecute same with
all reasonable diligence until completed; provided, however, any and all such repair and
restoration work must be completed no later than one year from the date of damage.
7.4 Payment of Taxes. OHPD shall not permit any real or personal property taxes,
sales taxes, hotel /motel occupancy taxes, or any other tax, assessment, or other charge imposed
by any governmental authority that may be owed by OHPD, its successors and affiliates to the
City or any other applicable taxing unit, or as may be assessed against the Hotel, the Hotel Site,
the Convention Center, the Convention Center Site, and /or the leasehold estate under the Lease,
or any other property owned by OHPD, to become delinquent (provided OHPD shall retain the
right to timely and properly contest such taxes or assessment). This Section 7.4 shall survive the
termination of this Agreement while the OHPD is lessee under the City -OHPD Convention
Center Sublease.
7.5 Limitation on Tax Exemption. Pursuant to a determination of the Denton
Appraisal District, a portion of the Hotel may be or may become eligible for an ad valorem tax
exemption based on its public use. Nevertheless, OHPD agrees that it shall not seek from the
Denton Appraisal District an exemption from the payment of ad valorem taxes on more than
15% of the square footage of the Hotel.
7.6 Survival of Obligations. The obligations of the Parties under this Agreement,
the City -UNT Land Lease, the City Facilities Sublease and the Hotel Lease shall survive during
the Term, and shall survive any conveyance, foreclosure or other transfer of the Hotel, Hotel
Site, Convention Center, Convention Center Site and the Parties interests under this Agreement.
ARTICLE VIII
MAINTENANCE AND INSURANCE
8.1 Maintenance. As further set forth in the City -OHPD Convention Center
Sublease, the OHPD -UNT Land Lease and the City -UNT Land Lease, OHPD and OHM agree to
-36-
4338720.19
PRELIMINARY DRAFT
maintain all improvements hereafter constricted on the Hotel and Restaurant Site in a condition
to satisfy the definition of Upscale Condition, and OHPD and the City (pursuant to its
obligations under Section 3.4.3 herein) agree to maintain all improvements hereafter constricted
on the Convention Center Site (including, without limitation, landscaping), respectively, in a
manner that meets the standard of Comparable Convention Centers. OHPD shall make all
necessary replacements to the Hotel and Restaurant and OHPD, OHM and the City (pursuant to
its obligations under Section 3.4.3 herein) shall make all necessary replacements to the
Convention Center Site so that throughout the term of this Agreement, the Hotel, Restaurant,
Hotel and Restaurant Site, Convention Center and Convention Center Site are maintained in a
manner that meets the standard of Comparable Convention Centers.
8.2 Insurance. OHPD, with respect to the Hotel, Restaurant and the Hotel and
Restaurant Site, OHM or OHPD and the City, with respect to the Convention Center and
Convention Center Site, shall maintain at their respective sole cost and expense pursuant to each
party's responsibilities under this Agreement:
8.2.1 "Special Causes of Loss Form" Commercial Property Insurance on any
improvement now or hereafter constricted on the Project Site. All insurance, unless agreed by
the other party, shall be for the full insurable value of the improvements and contents on the
respective properties, with a deductible amount approved in writing by UNT and no greater than
that retained by owners of similar properties in the State of Texas at the time the policy in
question is obtained. No policy of insurance required under this Section 8.2.1 shall be written
such that the proceeds thereof will produce less than the minimum of coverage required
hereunder by reason of co- insurance provisions or otherwise. The term "full insurable value"
means one hundred percent (100 %) of the actual replacement cost of the improvements
constricted on said property (excluding foundation and excavation costs and costs of
underground flues, pipes, drains and other uninsurable items). Additionally, the Property
Insurance Policy shall provide for Business Income /Interruption coverage with sufficient limits
based on the potential loss of income generated by the Convention Center and Hotel. The
insurance maintained by OHPD and OHM shall name the City and UNT as loss payee.
8.2.2 Commercial General Liability Insurance on a "occurrence" basis against
claims for personal injury, liability and liability for death, bodily injury and damage to property,
products and completed operations, all in limits, from time to time, equal to those customarily
held by owners of similar projects in the State of Texas, with respect to any one occurrence and
the aggregate of all occurrences during any given annual policy Phase. The liability insurance
maintained by OHPD with respect to the Hotel and Hotel Site shall name the City as an
Additional Insured. The City, in its sole discretion, may choose to satisfy the requirements of
8.2.2 through a self - insurance program.
8.2.3 During any Period of constriction on either property, the leaseholder
and owner thereof shall maintain, or cause others to maintain, builder's risk insurance (non -
reporting form) with completed operations coverage of the type customarily carried in the case of
similar constriction for one hundred percent (100 %) of the full replacement cost of work in
place and materials, supplies and equipment that are intended to be installed in the constriction
regardless of whether same are stored at or upon the property or off of the property in question,
-37-
4338720.19
PRELIMINARY DRAFT
except that the parties agree to reasonable deductibles necessary to obtain reasonable insurance
rates.
8.2.4 Business Automobile Liability in an amount not less than $500,000 per
occurrence /$1,000,000 in the aggregate, providing coverage for any Auto, or for Hired non Non -
Owned Vehicles. All business automobile policies shall name the city as an Additional Insured.
8.2.5 OHPD, with respect to the Hotel and Restaurant, and OHM or OHPD
with respect to the Convention Center, shall maintain, or cause to be maintained by any
contractor, subcontractor, vendor or caterer, Liquor Liability insurance with sufficient limits to
cover the provision of alcohol in the restaurant, restaurant bar, Hotel, Hotel bars, and the
Convention Center.
8.2.6 In addition to the foregoing, each party shall cause any contractor
performing work or providing services on its property to provide and maintain commercial
general liability insurance for all employees of the contractor meeting the requirements of
Section 8.2.2 and 8.2.3 above.
8.2.7 In addition to the foregoing, each party shall cause any contractor and
subcontractor or vendor performing work or providing services on the Project to provide
business automobile liability in an amount not less than $500,000 per occurrence /$1,000,000 in
the aggregate, providing coverage for any Auto, or for Hired or Non -Owned Vehicles. All
business automobile policies shall name the City as an Additional Insured.
8.2.8 In addition to the foregoing, each party shall cause any contractor and
subcontractor performing work on the property to provide workers' compensation coverage with
Texas Statutory limits of coverage.
8.2.9 Each policy of insurance (i) shall be issued by one or more insurance
companies each of which must have an A.M. Best Company financial and performance rating of
A -:IX or better and be qualified or authorized by the laws of the State of Texas to assume the
risk covered by such policy (ii) with respect to the insurance maintained by OHPD and OHM
and described under the preceding subsections 8.2.1 and 8.23, shall have attached thereto
standard non - contributing, non - reporting mortgagee clauses in favor of the City and UNT
without contribution to collect any and all proceeds payable under such insurance (iii) shall
provide that such policy shall not be canceled or modified without at least thirty (30) days prior
written notice to City and (iv) shall provide that any loss otherwise payable thereunder shall be
payable notwithstanding any act or negligence of the named insureds which might, absent such
agreement, result in a forfeiture of all or a part of such insurance payment. Each party shall
promptly pay all premiums when due on such insurance and not less than fifteen (15) days prior
to the expiration date of each such policy, deliver to the other acceptable evidence of insurance,
such as a renewal policy or policies marked "Premium Paid," or other evidence satisfactory to
the other parties, reflecting that all required insurance is current and in force. Each party will
immediately give notice to the others of any cancellation of, or material change in, any insurance
policy required to be maintained hereunder. Each party may satisfy any insurance requirement
hereunder by providing one or more "blanket" insurance policies.
-38-
4338720.19
PRELIMINARY DRAFT
8.2.10 The Parties agree to cooperate in the investigation and procurement of
any joint insurance policies that may substantially lower the cost of any insurance required or
which is reasonable for the Project. All insurance policies procured for the Project Site by any
Party shall name the other Parties as "additional insureds" unless such endeavor would interfere
with or jeopardize the insurance coverage, or cause substantial increase in the cost of the
insurance.
8.2.11 OHM shall maintain workers' compensation coverage pursuant to
Section 406.002 of the Texas Labor Code. Coverage shall be maintained throughout the term of
the contract and shall comply with all provisions of Title 5 of the Texas Labor Code to ensure
coverage is maintained. Any termination of workers' compensation insurance coverage shall be
a material breach of this contract. Any workers' compensation policy obtained by OHPD or
OHM must be endorsed to include a waiver of subrogation in favor of the City and must include
the following limits:
Employer's Liability with limits of at least $1,000,000 each accident, $1,000,000 by
disease policy limit and $1,000,000 by disease each employee shall also be obtained and
maintained throughout the term of this Agreement.
8.3 Policy Requirements. The following general requirements shall apply to all
insurance coverage carried by OHPD and OHM pursuant to Section 8.1:
8.3.1 To the extent available, each policy shall contain a clause whereby the
insurer waives all rights of subrogation against the City, UNT, OHM and OHPD;
83.2 The City and UNT shall be named as an additional insured in all liability
policies hereunder as their respective interests may appear;
8.3.3 Such policies shall be with reputable insurance companies reasonably
acceptable to the City and UNT and licensed to do business in the State of Texas;
83.4 OHPD and OHM shall provide the City and UNT with policies or
certificates of insurance evidencing such coverage prior to the start of constriction;
8.3.5 Within thirty (30) days prior to expiration of coverage, or as soon as
practicable, renewal policies or certificates of insurance evidencing renewal and payment of
premium shall be provided by OHPD and OHM; and
83.6 The coverages must be noncancelable unless the carrier provides to the
City and UNT thirty (30) days' prior written notice of cancellation.
ARTICLE IX
CONDITIONS
9.1 Conditions to Performance. This Agreement, and the Parties' obligations
hereunder, shall be subject to the following conditions precedent:
-39-
4338720.19
PRELIMINARY DRAFT
9.1.1 City Contractor. The City selecting a General Contractor for the
Convention Center constriction.
9.1.2 Hotel Financing. OHPD obtaining and retaining sufficient financing
for the constriction of the Hotel.
9. 13 Environmental and Geotechnical Condition of the Project Site.
OHPD's determination, that the environmental condition of the Project Site is acceptable and
does not contain pollutants and contamination of any sort that could present potential liability or
a threat to human health, and the geotechnical (subsurface) condition of the Project Site is
adequate and acceptable for the development and constriction of the Hotel, Restaurant,
Convention Center, Hotel and Restaurant Site and Convention Center Site. UNT will cooperate
in providing any information or reports in its possession or control.
9.1.4 Title or Regulatory Issues. Issuance of a title commitment covering
the Convention Center site and the Hotel Site, showing all matters affecting title and binding the
title company to issue in favor of OHPD, the City and the Hotel Lender at closing
owner /mortgagee policies of title insurance on the standard form of policy, subject to standard
printed exceptions, showing that there are no title issues of any sort that could reasonably delay
or prohibit the intended development or constriction of the Project Site. OHPD shall pay the
basic cost associated with issuance of the title policy and the cost of any endorsements to the title
policy requested by OHPD, OHM, the City, or the Hotel Lender.
9.1.5 No Intervention. No preliminary or permanent injunction or other
order, decree or riling having been issued by a governmental entity and no statute, rile,
regulation or executive order promulgated or enacted by a governmental entity shall be in effect
which restrains, enjoins, prohibits or otherwise makes illegal the consummation of the
transactions contemplated by this Agreement and /or the City's proposed stricture for financing
the cost of its obligations relating to the Convention Center and no proceedings by a
governmental entity shall be commenced or threatened against the City, UNT or OHPD (or any
of their respective affiliates, associates, directors or officers) seeking to prevent or challenge the
transactions contemplated by this Agreement and /or the City's proposed stricture for financing
the cost of its obligations relating to the Convention Center and no proceeding before a court of
competent jurisdiction having been commenced against the City, UNT or OHPD (or any of their
respective affiliates, associates, directors or officers) seeking to prevent or challenge the
transactions contemplated by this Agreement and /or the City's proposed stricture for financing
the cost of its obligations relating to the Convention Center or seeking material damages in
connection therewith.
If any of the foregoing conditions in 9.1.1 — 9.1.5 of this Article X have not been satisfied on or
before the expiration of the Feasibility Deadline, this Agreement shall terminate and thereafter
neither party shall have any further rights or obligations one unto the other hereunder unless, at
such time, the Parties enter into a written agreement acknowledging that this Agreement shall
continue notwithstanding the failure of any such condition to have been satisfied at such time.
Upon the expiration of the Feasibility Deadline, the foregoing conditions in 9.1.1 — 9.1.4 of this
Article X shall no longer apply.
-40-
4338720.19
PRELIMINARY DRAFT
ARTICLE X
REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1 Representations and Warranties of the City. The City hereby represents and
warrants to OHPD and UNT that the following statement is true as of the date hereof.
10.1.1 Due Authority; No Conflict. The City has all requisite power and
authority to execute this Agreement and to carry out its obligations hereunder and the
transactions contemplated hereby. This Agreement has been, and the documents contemplated
hereby will be, duly executed and delivered by the City and constitute legal, valid and binding
obligations enforceable against the City in accordance with the terms subject to principles of
governmental immunity and the enforcement of equitable rights. The consummation by the City
of the transactions contemplated hereby is not in violation of or in conflict with, nor does it
constitute a default under, any of the terms of any agreement or instrument to which the City is a
party, or by which the City is bound, or of any provision of any applicable law, ordinance, rile or
regulation of any governmental authority or of any provision of any applicable order, judgment
or decree of any court, arbitrator or governmental authority.
10.1.2 Due Authority; No Litigation. No litigation is pending or, to the
knowledge of the City, threatened in any court to restrain or enjoin the constriction of the City
Facilities or the City's issuance or delivery of the City's debt issuance, or otherwise contesting
the powers of the City or the authorization of this Agreement or any agreements contemplated
herein.
10.2 OHM's and OHPD's Representations and Warranties. OHPD and OHM,
separately and not jointly, represent and warrant to the City and UNT that the following
representations and warranties are true as of the date hereof.
10.2.1 Due Organization and Ownership. OHPD and OHM are limited
liability companies validly existing under the laws of the State of Missouri and are duly qualified
to do business in the State of Texas; and that the person executing this Agreement on behalf of is
authorized to enter into this Agreement.
10.2.2 Due Authority: No Conflict. OHPD and OHM have all requisite
power and authority to execute and deliver this Agreement and to carry out its obligations
hereunder and the transactions contemplated hereby. This Agreement has been, and the
documents contemplated hereby will be, duly executed and delivered by OHPD and OHM and
constitute OHPD's and OHM's legal, valid and binding obligations enforceable against OHPD
and OHM in accordance with their terms. The consummation by OHPD and OHM of the
transactions contemplated hereby is not in violation of or in conflict with, nor does it constitute a
default under, any term or provision of the organizational documents of OHPD or OHM, or any
of the terms of any agreement or instrument to which OHPD or OHM is a party, or by which
OHPD and OHM is bound, or of any provision of any applicable law, ordinance, rile or
regulation of any governmental authority or of any provision of any applicable order, judgment
or decree of any court, arbitrator or governmental authority.
-41-
4338720.19
PRELIMINARY DRAFT
10.23 Consents. No consent, approval, order or authorization of, or
declaration or filing with any governmental authority is required on the part of OHPD in
connection with the execution and delivery of this Agreement or for the performance of the
transactions herein contemplated by the respective Parties hereto.
10.2.4 Litigation. To the best knowledge of OHPD and OHM, after reasonable
inquiry, there are no pending or, to the best knowledge of OHPD and OHM, threatened, judicial,
municipal or administrative proceedings, consent decree or, judgments which might effect
OHPD's ability to consummate the transaction contemplated hereby.
10.2.5 Legal Proceedings. To the knowledge of OHPD and OHM, after
reasonable inquiry, no preliminary or permanent injunction or other order, decree, or ailing
issued by a governmental entity, and no statute, rile, regulation, or executive order promulgated
to enacted by a governmental entity, shall be in effect which restrains, enjoins, prohibits, or
otherwise makes illegal the consummation of the transactions contemplated by this Agreement.
103 UNT's Representations and Warranties. UNT represents and warrants to the
City and OHPD that the following representations and warranties are true as of the date hereof.
103.1 Due Organization and Ownership. UNT is a component institution of
higher education of the University of North Texas System, an agency of the State of Texas,
validly existing under the laws of the State of Texas; and that the person executing this
Agreement on behalf of is authorized by the Board of Regents of UNT to enter into this
Agreement and any related agreements to which they are a party.
103.2 Due Authority: No Conflict. UNT has all requisite power and
authority to execute and deliver this Agreement and to carry out its obligations hereunder and the
transactions contemplated hereby. This Agreement has been, and the documents contemplated
hereby will be, duly executed and delivered by UNT and constitute UNT's legal, valid and
binding obligations enforceable against UNT in accordance with their terms. The consummation
by UNT of the transactions contemplated hereby is not in violation of or in conflict with, nor
does it constitute a default under, any term or provision of the organizational documents of UNT,
or any of the terms of any agreement or instrument to which UNT is a party, or by which UNT is
bound, or of any provision of any applicable law, ordinance, rile or regulation of any
governmental authority or of any provision of any applicable order, judgment or decree of any
court, arbitrator or governmental authority.
10.3.3 Consents. No consent, approval, order or authorization of, or
declaration or filing with any governmental authority is required on the part of UNT in
connection with the execution and delivery of this Agreement or for the performance of the
transactions herein contemplated by the respective Parties hereto.
103.4 Litigation, Liens and Encumbrances. To the knowledge of UNT, after
reasonable inquiry, there are no pending or, to the best knowledge of UNT, threatened, judicial,
municipal or administrative proceedings, consent decree or, judgments which might effect
UNT's ability to consummate the transaction contemplated hereby, nor are there any liens,
encumbrances, threatened or actual lawsuits or legal claims on the Project Site or surrounding
-42-
4338720.19
PRELIMINARY DRAFT
area which would encumber or in any way affect the Project Site or the land leases intended by
the terms herein.
103.5 Legal Proceedings. To the best knowledge of UNT, after reasonable
inquiry, no preliminary or permanent injunction or other order, decree, or riling issued by a
governmental entity, and no statute, rile, regulation, or executive order promulgated to enacted
by a governmental entity, shall be in effect which restrains, enjoins, prohibits, or otherwise
makes illegal the consummation of the transactions contemplated by this Agreement.
ARTICLE XI
TERMINATION PROVISIONS
11.1 Termination Events. The following events shall allow for termination of this
Agreement and the Project
11.1.1 Termination at Financing Viability Deadline. The City or OHPD
may terminate the Agreement pursuant to Section 5.1.5 on the Financing Viability Deadline.
11.1.2 Termination at Feasibility Deadline. The City or OHPD may
terminate the Agreement pursuant to Sections 5.1.4, 3.1.2 or 33.2 herein on or before the
Feasibility Deadline.
11. 13 Creation of Tax Increment Reinvestment Zone. The City shall have
created or shall be in the process of creating the TIRZ, prior to the expiration of the Feasibility
Deadline. If the City has not created or is not in the process of creating the TIRZ by the
expiration of the Feasibility Deadline, or it if the actual or proposed participation by other taxing
units in the City is not at a level necessary to fund the Convention Center Facilities in an amount
that is approved by OHPD; provided that the City has approved the terms of the TIRZ creation
and Project and Financing Plan, then this Agreement shall terminate and each Party shall be
responsible for its own costs through the date of termination. The City shall notify OHPD of the
proposed participation levels of the participating taxing units in the TIRZ prior to the Feasibility
Deadline and OHPD shall only have the option to terminate this Agreement pursuant to this
Section on or before the Feasibility Deadline.
11.1.4 Satisfaction of Phase Requirements. In the event that any of the items
or agreements as set forth in Article III are not, after the good faith, diligent efforts of the Parties,
completed or agreed -upon on or before the Development Deadline, including the obtaining of
GMP contracts for the Project, then UNT, the City or OHPD may unilaterally terminate this
Agreement by written notice to the other Parties on or before the Development Deadline, and
thereupon this Agreement shall be of no further force or effect, except as expressly set forth
herein. OHPD acknowledges and agrees that any costs advanced by OHPD are not subject to
reimbursement from the other Parties to this Agreement for any reason in the event of a
termination of this Agreement.
11.1.5 Financing Commitments. In the event that OHPD has not obtained the
Private Financing Contribution pursuant to Section 5.13 herein, then this Agreement shall
terminate; or, in the event that OHPD has not closed on the Private Financing Contribution
pursuant to Section 5.1.7 and the City has not closed on the City Financing Contribution
-43-
4338720.19
PRELIMINARY DRAFT
pursuant to Section 5.1.7 by the Closing Deadline, then this Agreement shall terminate. The
failure of the City to fund the City Financing Contribution shall not be an event of default under
this Agreement but shall be deemed a termination event.
11.1.6 Termination for Cost Overruns — City Facilities. In the event the
design of the City Facilities and its budgeted costs exceed the City Financing Contribution, City
and OHM and OHPD will work together to resolve such funding issues. In the event the Parties
cannot reach an agreement as to the resolution of such funding issues, this Agreement shall
terminate upon 30 days written notice by OHPD or the City.
11.1.7 Termination for Cost Overruns - FF &E. If the FF &E costs in the
Convention Center Budget would cause the City to exceed the City Financing Contribution,
OHM and the City will work to resolve such budget issues. In the event that the City and OHM
cannot resolve such budget and funding issues, the City shall have the option to terminate this
Agreement upon 30 days written notice.
11.1.8 Mutual Termination. Prior to the sale of the City's debt in the market,
all parties may mutually agree to terminate this Agreement at any time upon written notice to the
other parties.
11.1.9 Termination for Failure to Meet Conditions. If any of the conditions
in 9.1.1 — 9.1.5 of this Agreement are not satisfied on or before the Feasibility Deadline this
Agreement shall terminate and thereafter neither party shall have any further rights or obligations
one unto the other hereunder unless, at such time, the Parties enter into a written agreement
acknowledging that this Agreement shall continue notwithstanding the failure of any such
condition to have been satisfied at such time.
11.1.10 Termination Pursuant to Leases. If changes to the OHPD -UNT Land
Lease, the City Facilities Sublease or the City — UNT Land Lease as a result of the requests of
the equity source or lender for OHPD's Private Financing Commitment are not agreed to by the
parties pursuant to Sections 3.4.1, 3.4.3 and 3.4.2, respectively, this Agreement may be
terminated by any Party.
11.1.11 Payment of Costs Upon Termination. OHPD acknowledges and
agrees that any costs advanced by OHPD with respect to the Project are not subject to
reimbursement from the other Parties to this Agreement for any reason in the event of a
termination of this Agreement.
11.2 Termination upon Default. This Agreement shall terminate upon a default by
either Party pursuant to Article XII herein.
ARTICLE XII
DEFAULT AND REMEDIES
12.1 Default by OHPD. The occurrence of any of the following shall be an "Event of
Default" by OHPD under this Agreement:
-44-
4338720.19
PRELIMINARY DRAFT
12.1.1 The filing by OHPD of a voluntary proceeding under present or future
bankruptcy, insolvency, or other laws respecting debtors, rights;
12.1.2 The consent by OHPD to an involuntary proceeding under present or
future bankruptcy, insolvency, or other laws respecting debtor's rights;
12. 13 The entering of an order for relief against OHPD or the appointment of a
receiver, trustee, or custodian for all or a substantial part of the property or assets of OHPD in
any involuntary proceeding, and the continuation of such order, judgment or degree unstayed for
any Period of ninety (90) consecutive days;
12.1.4 OHPD's failure to pay or cause to be paid when due any sum of money
owed by OHPD to the City or UNT pursuant to this Agreement, and the continuation of such
failure for fifteen (15) days after written notice from the City or UNT as applicable, specifying
the nature and extent of any such default with opportunity to cure;
12.1.5 The failure of OHPD to perform or to observe any covenant, obligation
or requirement of this Agreement not otherwise specifically named as a default in this
Section 13.1, and the continuation of such failure for thirty (30) days after written notice from
the City or UNT specifying the nature and extent of any such default, or, if such default cannot
reasonably be cured within such thirty (30) -day period, the failure either (i) to commence to cure
such default within such thirty (30) -day period and to diligently continue to pursue such efforts
to cure to completion, or (ii) to cure such default within a reasonable time after the expiration of
the first thirty (30) -day period, in no event to exceed ninety (90) days after the written notice of
default;
12.1.6 The termination of the Approved Franchise and OHPD's failure to
obtain a replacement Approved Franchise for at least the number of remaining years necessary to
reach 18 years from the date the Hotel is operational, pursuant to the City -OHPD Convention
Center Sublease.
12.1.7 The failure of OHPD to begin constriction on the Project by the
Constriction Deadline, or to have the Project Completed within twenty (20) months after
Constriction Deadline, unless the delay in completion is attributable to any Force Majeure, city
delay, or the institution of litigation concerning the Project or any component thereof by a third
party; The deadlines in this section are subject to Section 6.8 herein.
12.1.8 A termination of the City Facilities Sublease resulting from a default by
OHPD thereunder; or
12.1.9 A Transfer by OHPD other than a Transfer permitted under Section 7.1.
12.2 Default by OHM. The occurrence of any of the following shall be an "Event of
Default" by OHM under this Agreement:
12.2.1 The filing by OHM of a voluntary proceeding under present or future
bankruptcy, insolvency, or other laws respecting debtors, rights;
-45-
4338720.19
PRELIMINARY DRAFT
12.2.2 The consent by OHM to an involuntary proceeding under present or
future bankruptcy, insolvency, or other laws respecting debtor's rights;
12.23 The entering of an order for relief against OHM or the appointment of a
receiver, trustee, or custodian for all or a substantial part of the property or assets of OHM in any
involuntary proceeding, and the continuation of such order, judgment or degree unstayed for any
Period of ninety (90) consecutive days;
12.2.4 OEM's failure to pay or cause to be paid when due any sum of money
owed by OHM to the City or UNT pursuant to this Agreement, and the continuation of such
failure for fifteen (15) days after written notice from the City or UNT as applicable, specifying
the nature and extent of any such default with opportunity to cure;
12.2.5 The failure of OHM to perform or to observe any covenant, obligation or
requirement of this Agreement not otherwise specifically named as a default in this Section 12.2
and the continuation of such failure for thirty (30) days after written notice from the City or UNT
specifying the nature and extent of any such default, or, if such default cannot reasonably be
cured within such thirty (30) -day period, the failure either (i) to commence to cure such default
within such thirty (30) -day period and to diligently continue to pursue such efforts to cure to
completion, or (ii) to cure such default within a reasonable time after the expiration of the first
thirty (30) -day period, in no event to exceed ninety (90) days after the written notice of default;
12.2.6 The termination of the Franchise Agreement due to the breach of its
terms by OHPD;
12.2.7 The failure of OHM to begin constriction on the Project by the
Constriction Deadline, or to have the Project Completed within twenty (20) months after
Constriction Deadline, unless the delay in completion is attributable to any Force Majeure, City
delay, or the institution of litigation concerning the Project or any component thereof by a third
party; The deadlines in this section are subject to Section 6.8 herein.
123 Default by the City. The occurrence of any of the following shall be an "Event
of Default" by the City under this Agreement:
12.3.1 The filing by the City of a voluntary proceeding under present or future
bankruptcy, insolvency, or other laws respecting debtors' rights;
123.2 The consent by the City to an involuntary proceeding under present or
future bankruptcy, insolvency, or other laws respecting debtor's rights;
12.3.3 The entering of any order for relief against the City or the appointment
of a receiver, trustee, or custodian for all or a substantial part of the property or assets of the City
in any involuntary proceeding, and the continuation of such order, judgment or decree unstayed
for any Period of ninety (90) consecutive days;
123.4 The City's failure to pay or cause to be paid when due any sum of
money owed by the City to OHPD pursuant to this Agreement, and the continuation of such
-46-
4338720.19
PRELIMINARY DRAFT
failure for thirty (30) days after written notice from OHPD, as applicable, specifying the nature
and extent of any such default with opportunity to cure;
123.5 The failure of the City to perform or to observe any nonmonetary
covenant, obligation or requirement of this Agreement and the continuation of such failure for
thirty (30) days after written notice from OHPD specifying the nature and extent of any such
default, or, if such default cannot reasonably be cured within such thirty (30) -day period, the
failure either (i) to commence to cure such default within such thirty (30) -day period and to
diligently continue to pursue such efforts to cure to completion, or (ii) to cure such default within
a reasonable time after the expiration of the first thirty (30) -day period, in no event to exceed
ninety (90) days after the written notice of default; or
123.6 A termination of the City Facilities Sublease resulting from a material
default by the City thereunder; provided, however, that the City Facilities Sublease may not be
terminated during the period of time the City's debt issuance for the constriction of the
Convention Center is still outstanding, as set forth in the City Facilities Sublease.
12.4 Default by UNT.
12.4.1 The filing by UNT of a voluntary proceeding under present or future
bankruptcy, insolvency, or other laws respecting debtors' rights;
12.4.2 The consent by UNT to an involuntary proceeding under present or
future bankruptcy, insolvency, or other laws respecting debtor's rights;
12.43 The entering of any order for relief against UNT or the appointment of a
receiver, trustee, or custodian for all or a substantial part of the property or assets of UNT in any
involuntary proceeding, and the continuation of such order, judgment or decree unstayed for any
Period of ninety (90) consecutive days;
12.4.4 UNT's failure to pay or cause to be paid when due any sum of money
owed by UNT to OHPD pursuant to this Agreement, and the continuation of such failure for
thirty (30) days after written notice from OHPD, as applicable, specifying the nature and extent
of any such default with opportunity to cure;
12.4.5 The failure of UNT to perform or to observe any nonmonetary covenant,
obligation or requirement of this Agreement and the continuation of such failure for thirty (30)
days after written notice from OHPD specifying the nature and extent of any such default, or, if
such default cannot reasonably be cured within such thirty (30) -day period, the failure either (i)
to commence to cure such default within such thirty (30) -day period and to diligently continue to
pursue such efforts to cure to completion, or (ii) to cure such default within a reasonable time
after the expiration of the first thirty (30) -day period, in no event to exceed ninety (90) days after
the written notice of default; or
12.4.6 A termination of OHPD -UNT Land Lease resulting from a material
default by UNT thereunder.
-47-
4338720.19
PRELIMINARY DRAFT
12.5 Remedies.
12.5.1 Upon the occurrence and continuance of an Event of Default by OHPD
described in Section 12. 1, the City or UNT may elect (after written notice to the Hotel Lender
and subject to the Hotel Lender's right to cure) to terminate this Agreement by giving written
notice of such termination to OHPD, and this Agreement shall terminate as of the date specified
in such notice (which date shall be on or after the date of the notice of termination); provided,
however, that the City or UNT shall have no right to terminate the Agreement unless the City
and UNT delivered to OHPD a second notice which expressly provides that the City or UNT will
terminate within thirty (30) days if the default is not addressed as herein provided.
12.5.2 Upon the occurrence and continuance of an Event of Default by OHM
described in Section 12.2, the City or UNT may elect (after written notice to the Hotel Lender
and subject to the Hotel Lender's right to cure) to terminate this Agreement by giving written
notice of such termination to OHPD, and this Agreement shall terminate as of the date specified
in such notice (which date shall be on or after the date of the notice of termination) ; provided,
however, that the City or UNT shall have no right to terminate the Agreement unless the City
and UNT delivered to OHPD a second notice which expressly provides that the City or UNT will
terminate within thirty (30) days if the default is not addressed as herein provided.
12.53 Upon the occurrence of an Event of Default by the City under
Section 123, OHPD or UNT may elect to terminate this Agreement by giving written notice of
such termination to the City, and this Agreement shall terminate as of the date specified in such
notice (which date shall be on or after the date of the notice of termination); provided, however,
that the OHPD or UNT shall have no right to terminate the Agreement unless the OHPD and
UNT delivered to the City a second notice which expressly provides that the OHPD or UNT will
terminate within thirty (30) days if the default is not addressed as herein provided. UNT and
OHPD have entered into a Non - Disturbance and Attornment Agreement which may contain
additional rights for OHPD upon a City default under the City Facilities Sublease as set forth in
that agreement.
12.5.4 Upon the occurrence of an Event of Default by UNT under Section 12.4,
OHPD or the City may elect to terminate this Agreement by giving written notice of such
termination to UNT, and this Agreement shall terminate as of the date specified in such notice
(which date shall be on or after the date of the notice of termination); provided, however, that the
City or OHPD shall have no right to terminate the Agreement unless the City and OHPD
delivered to UNT a second notice which expressly provides that the City or OHPD will terminate
within thirty (30) days if the default is not addressed as herein provided.
12.6 OHM/OHPD's Remedies. Upon the occurrence of any Event of Default by the
City or UNT, and to the extent permitted by law, OHPD may pursue any legal or equitable
remedies or remedies, including specific performance and termination of this Agreement,
including reasonable attorneys fees, costs, expenses and expert witness fees, as authorized by
Applicable Law; provided, however, that OHPD shall have no right to terminate this Agreement
unless OHPD delivers to the City and UNT a second notice which expressly provides that OHPD
will terminate within thirty (30) days if the default is not addressed as herein provided. All
remedies in the Section shall be cumulative.
-48-
4338720.19
PRELIMINARY DRAFT
12.7 City's Remedies. Upon the occurrence of an Event of Default by OHPD, the
City may pursue any legal or equitable remedy or remedies, including, without limitation,
specific performance, damages, (including reasonable attorneys' fees), and termination of this
Agreement. Termination or non - termination of this Agreement upon an OHPD Event of Default
shall not prevent the City from suing OHPD for specific performance, damages, injunctive relief
or other available remedies with respect to obligations that expressly survive termination. Upon
termination by the City, the City may occupy the Convention Center, and OHPD shall assign to
the City any of its contracts and agreements related to the Convention Center requested by the
City to be so assigned. In the event OHPD fails to pay any of the expenses or amounts or
perform any obligation specified in this Agreement, then to the extent such failure constitutes an
Event of Default hereunder, the City may, but shall not be obligated to do so, pay any such
amount or perform any such obligations and the amount so paid and the reasonable out of pocket
costs incurred by the City in said performance shall be due and payable by OHPD to the City
within thirty (30) days after OHPD's receipt of an itemized list of such costs. The City shall
have no right to terminate this Agreement unless City delivers to OHPD a second notice which
expressly provides that the City will terminate within thirty (30) days if the default is not
addressed as herein provided. All remedies of the City under this Agreement shall be cumulative.
12.8 Accounting. Upon the termination of this Agreement by reason of a default
hereunder, OHPD shall render an accounting to the City and UNT, and, without diminishing the
rights and remedies referred to in Sections 12.5 and 12.7, from and after such date, the City and
UNT shall not have any further rights or obligations under this Agreement.
ARTICLE XIII
COST SAVINGS AND EXPENSE REIMBURSEMENT
13.1 Cost Savings. Cost savings realized in Development Budget categories for the
City Facilities during the course of development thereof may be applied to cost overruns, if any,
in other Development Budget categories for the City Facilities (subject to the approval of the
City), or, if there are no such cost overruns, the cost savings (other than de minimus amounts)
that remain after all revisions to the Convention Center Budget have been made, shall be used by
the City for the following purposes in the following priority: (a) pay debt service on the City's
debt, (b) establish debt service reserves for the payment of debt service in the next year, or (c) for
upgrades to the City Facilities or enhancements to the FF &E for the City Facilities installed
therein.
13.2 Shared Costs and Expenses.
13.2.1 For the cost of improvements that are necessary for the development of
the Project where such improvements benefit both the Hotel and Restaurant and the City
Facilities, if the benefits if such improvements to the City Facilities and Hotel can be reasonably
ascertained, subject to the mutual approval of the City, UNT and OHM, the costs and expenses
of such shared improvements shall be allocated to the Hotel and Restaurant and the City
Facilities in amounts that reflect the respective benefits to each; and
-49-
4338720.19
PRELIMINARY DRAFT
13.2.2 Where the shared benefits to the City Facilities and Hotel of costs and
expenses cannot be reasonably ascertained, the costs and expenses of such shared improvements
shall be allocated between the Hotel and City Facilities on a fifty -fifty basis.
13.3 Monthly Draw Requests. OHM's requests for payments that are due and
payable on contracts with the Contractors for the City Facilities, shall be made by OHM in
written draw requests given monthly by OHM to the City during the term of this Agreement.
Each such draw request shall include documentation of all costs and expenses in reasonably
sufficient detail to permit the City to determine the appropriateness of such reimbursement
payment and, with respect to draw requests during the Period of constriction of the City
Facilities, shall include a certification by the Project Architect of the status of completion of the
City Facilities in accordance with the Constriction Plans, and a partial release of mechanic's
liens from the General Contractor with respect to all portions of the Project for which payment to
the General Contractor has been made. The City shall pay the amounts set forth in such draw
requests to, or as directed by, OHM within thirty (30) days after receipt of each such draw
request.
13.4 City Payments. In any instance in which this Agreement provides that the City
shall make payments to or at the direction of OHM within thirty (30) days of receipt of an
invoice, draw request or the like, the City shall endeavor to make such payment within forty -five
(45) days or such other Phase less than forty -five (45) days to the extent reasonably possible in
light of the City's procedural requirements, but in all events such payments shall be made within
no more than forty -five (45) days after the City's receipt of the applicable documentation.
ARTICLE XIV
MISCELLANEOUS
14.1 Naming Rights. The City has the exclusive authority, control and rights in
selecting the name of the Convention Center as a whole or for any portion thereof.
14.2 Si2nne on Hotel. OHM/OHPD will attempt to include a reference in the Hotel
signage in form and design acceptable to UNT, indicating "University of North Texas," but the
Parties understand and acknowledge that such signage shall be at the discretion of the Hotel
Franchisor pursuant to any Approved Franchise. The Parties agree that the name of the Hotel
shall be designed to take advance of the sales and marketing recognition in the franchise
reservation system, Global Distribution System.
143 Coordination with UNT College of Merchandising, Hospitality and Tourism.
OHM will coordinate with UNT for hospitality sponsorship programs for the benefit of UNT
College of Merchandising, Hospitality and Tourism students and shall provide for and support
such University programs "hands on" participation in hospitality management of the Property
with a designated room for seminars and other elements. OHM and UNT will enter into a
Hospitality Management Program Agreement in substantially the form as set forth on
Exhibit "H" attached hereto and made a part hereof for all purposes.
-50-
4338720.19
PRELIMINARY DRAFT
14.4 Standard of Care. In performing its services hereunder with respect to
development and constriction of the Project, OHM makes no representations or warranties,
express or implied, regarding the sufficiency of any design, plans or drawings prepared by
others, but agrees to work with such persons to correct such designs, plans or drawings with such
corrections to be made at no expense to UNT and at no additional expense to the City if and to
the extent such corrections are not required due to the fault of the City, or its employees, agents,
or other contractors or consultants. Any responsibility of OHM hereunder for development and
constriction of the City Facilities shall be for services directly performed by it; shall be limited
solely to deficiencies that are directly attributable to OHM's failure to exercise the reasonable
care usually exercised by individuals and firms providing similar services; and in no event shall
OHM be liable for defects in materials or workmanship in the City Facilities. OHM shall use
reasonable good faith to protect the economic interests of the City and UNT with respect to
design, development and constriction of the Project. Upon termination of the OHPD -UNT Land
Lease or earlier termination of the Project, OHPD and OHM, as applicable, shall assign (i) to
UNT all warranties from the Contractors and any and all suppliers of goods and /or services to the
Hotel (for OHPD to use in connection with its obligations to maintain and repair the Hotel as the
OHPD thereof), and (ii) to the City all warranties from the Contractors and any and all suppliers
of goods and /or services to the City Facilities. OHPD and OHM shall cooperate fully with the
City and UNT in pursuing such warranties, including without limitation, providing copies of
documentation needed to support such claim.
14.5 Contractors, Specialists and Consultants. OHPD and OHM shall use
reasonable care to ensure that all contractors and professionals selected in connection with the
design and constriction of the Project shall be highly qualified to do the work they are engaged
to perform, and OHPD and OHM shall make reasonable inquiries as to such persons'
background, experience and reputation to assure they are well qualified to undertake such work.
14.6 Operation and Maintenance of the Hotel. OHPD shall continuously operate
and maintain the Hotel in an Upscale Manner for the term of the City -UNT Land Lease.
OHPD's obligation to operate and maintain the Hotel in an Upscale Manner shall survive the
expiration of this Agreement and shall be in effect throughout the primary term and any
extension of the OHPD -UNT Land Lease pursuant to the terms of the OHPD -UNT Land Lease.
14.7 Assignment. The Parties recognize that UNT and the City have selected OHPD
because of its unique abilities to develop the Project, therefore OHPD shall have the right, with
the prior written consent of UNT and the City which shall not be unreasonably withheld, to
assign its rights and obligations under this Agreement to an Affiliate. For purposes of this
Agreement, "Affiliate" shall mean, with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, ten
percent (10 %) or more of the capital stock having ordinary voting power in the election of
directors of such Person, (b) each Person that controls, is controlled by or is under common
control with such Person, and (c) in the case of individuals, the immediate family members,
spouses and lineal descendants of individuals who are Affiliates of the Person. For purpose of
this definition, "control" of a Person shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of its management or policies, whether through the
ownership of voting shares or interests, by contract, by virtue of being an executive officer or a
director or otherwise. A permitted assignment by any Party of its interests in this Agreement
-51-
4338720.19
PRELIMINARY DRAFT
shall not relieve the assigning Party from its obligations under this Agreement unless the
nonassigning Parties shall expressly consent in writing to any such release. Any assignee of any
Party's rights under this Agreement, as a condition of such assignment, shall execute an
assumption of the assigning Party's duties and obligations under this Agreement, such
assumption to be in form reasonably acceptable to the other Parties to this Agreement.
14.8 Brokers. Each party represents to the other party that it has not employed or
retained any broker or finder in connection with the lease of any property and /or transaction
contemplated hereby.
14.9 Conflicts. In the event any one or more of the provisions contained in this
Agreement conflict with any one or more of the provisions contained in any one or more of the
Related Agreements, the provision(s) of the specific Related Agreement(s) shall control.
14.10 Counterparts. This Agreement may be executed in counterparts. Each of the
counterparts shall be deemed an original instrument, but all of the counterparts shall constitute
one and the same instrument.
14.11 Entire Agreement. This Agreement and the agreements described herein
constitute the entire agreement among the Parties with respect to the transactions covered in this
Agreement. There is no other collateral oral or written agreement among the Parties that in any
manner relates to the subject matter of such agreements. This Agreement supersedes the
Memorandum of Preliminary Understanding between the Parties dated January 11, 2012.
14.12 University Liability. The University does not assume and does not have nor is it
subject to any liability or monetary obligation under this Agreement of any kind or in any
amount or for any cause.
14.13 City Liability. This Agreement is not intended to and does not create or
constitute a debt or financial obligation of the City except from the sources herein expressly
provided. Any and all amounts payable by City hereunder are payable solely and exclusively
from amounts provided in the City Financing Contribution and from the sources of such funds.
14.14 Governing Law. The validity of this Agreement and any of its terms and
provisions, as well as the rights and duties of the Parties, shall be governed by the laws of the
State of Texas; and venue for any action concerning this Agreement shall be in the State District
Court of Denton County, Texas.
14.15 General Provisions.
14.15.1 Contractor Failure. OHM shall, subject to exhaustion of all applicable
performance bonds, insurance policies and contractor or subcontractor funds, be solely
responsible for malfeasance, neglect or failure of any Contractors or suppliers to meet their
schedules for completion or to perform their duties and responsibilities under their respective
agreements with respect to the FF &E for the City Facilities.
14.15.2 Cancellation. The City acknowledges that cancellation and return of
FF &E for the City Facilities cannot be made except under terms and conditions acceptable to the
-52-
4338720.19
PRELIMINARY DRAFT
manufacturer and /or vendor thereof, and that custom items of FF &E for the City Facilities are
non - cancelable and non - returnable.
14.15.3 No Warranty. OHM shall use reasonable diligence in making
recommendations regarding the procurement of FF &E for the City Facilities, but OHM extends
no guarantees and makes no warranty, express or implied, of merchantability or fitness for a
particular purpose or otherwise with respect to any of such FF &E for the City Facilities
purchased hereunder. Claims made against such guarantees as may be offered by the
manufacturers or vendors of FF &E for the City Facilities must be settled directly with the
manufacturers or vendors. OHM shall assist and coordinate with the City, however, in the
processing, prosecution and enforcement of such claims provided it incurs no additional costs,
expenses or liability on account thereof. Where OHM has not previously paid for FF &E for the
City Facilities which has been received by the City and, if prior to such payment, OHM
determines that the goods are defective or otherwise do not conform to the contract with such
supplier, OHM shall not pay for such FF &E for the City Facilities and shall make all necessary
provisions, at the vendor's expense, for return of such FF &E for the City Facilities to the
supplier.
14.15.4 Risk of Loss. Unless otherwise agreed to in writing, all FF &E for the
City Facilities shall be shipped to the City Facilities or a warehouse arranged for by OHM on
behalf of the City. OHM shall provide for all such FF &E for the City Facilities to be shipped
"DDP (Denton, Texas, USA)" pre -paid.
14.15.5 Overages. The City hereby acknowledges that it is customary for
manufacturers to ship additional quantities of certain types of FF &E (fabric, wallpaper, carpet,
etc., commonly referred to as "attic stock ") above and beyond the actual amount ordered. This is
a common practice in the industry over which OHM has no control. The City agrees to accept
such overages and to pay for its share of the same; provided, however, in no event shall the City
ever be liable for any costs in excess of the City Financing Contribution without the prior written
approval of the City. All overages in FF &E for the City Facilities shall be the property of the
City but shall be used exclusively by OHPD for the repair and maintenance of the City Facilities.
Allowances for such overages shall be included in the FF &E Budget.
14.15.6 OHPD Indemnity. OHPD hereby indemnify and agrees to hold UNT
and the City, and their respective officers, directors, members, agents and employees, harmless
and defend from and against any and all loss, cost, liability, claim, demand, damage or expense
(including, without limitation, reasonable attorneys, fees and litigation expenses) which any of
the foregoing indemnitees may incur or sustain or which may be claimed or asserted against any
of the foregoing on account of, in connection with, or arising from injuries, death, loss or damage
to persons or property (including, without limitation, the Hotel) including any claim for payment
or demand for payment caused by or in any way whatsoever arising out of, or resulting from (i)
any negligence on the part of OHPD or its members, officers, directors, contractors, agents, and
employees arising out of or resulting from this Agreement or any of the other agreements
contemplated to be entered into with respect to the Project as described herein; (ii) any FF &E for
the City Facilities that OHPD has purchased in the name of the City that does not substantially
conform with the FF &E Specifications due to the negligence, carelessness or willful misconduct
of OHPD, (iii) any material breach of any representation or warranty of OHPD herein contained,
-53-
4338720.19
PRELIMINARY DRAFT
or (iv) any claim arising out of employment, non - employment or discharge of OHPD's
employees or agents; provided, however, the City or UNT, as applicable, shall seek recovery first
from any insurance proceeds which are made available with respect to the liabilities and losses
described above, prior to seeking any recovery directly from OHPD. This indemnity shall
survive the expiration or termination of this Agreement.
14.15.7 OHM Indemnity. OHM hereby indemnify and agrees to hold UNT and
the City, and their respective officers, directors, members, agents and employees, harmless and
defend from and against any and all loss, cost, liability, claim, demand, damage or expense
(including, without limitation, reasonable attorneys, fees and litigation expenses) which any of
the foregoing indemnitees may incur or sustain or which may be claimed or asserted against any
of the foregoing on account of, in connection with, or arising from injuries, death, loss or damage
to persons or property (including, without limitation, the Hotel) including any claim for payment
or demand for payment caused by or in any way whatsoever arising out of, or resulting from (i)
any negligence on the part of OHM or its members, officers, directors, contractors, agents, and
employees arising out of or resulting from this Agreement or any of the other agreements
contemplated to be entered into with respect to the Project as described herein; (ii) any FF &E for
the City Facilities that OHM has purchased in the name of the City that does not substantially
conform with the FF &E Specifications due to the negligence, carelessness or willful misconduct
of OHPD, (iii) any material breach of any representation or warranty of OHPD herein contained,
or (iv) any claim arising out of employment, non - employment or discharge of OHM's employees
or agents; provided, however, the City or UNT, as applicable, shall seek recovery first from any
insurance proceeds which are made available with respect to the liabilities and losses described
above, prior to seeking any recovery directly from OHM. This indemnity shall survive the
expiration or termination of this Agreement.
14.16 Extensions of Deadlines. The parties may agree in writing to reasonable
extensions of any deadlines set forth in this Agreement; provided, however, that in no event shall
any extension exceed one hundred eighty (180) days, unless agreed in writing by the Parties.
14.17 Independence of Action. It is understood and agreed by and among the Parties
that in the design, constriction and development of the Project and any of the related
improvements described herein, and in the Parties' satisfaction of the terms and conditions of
this Agreement, that each party is acting independently, and the City and UNT assumes no
responsibility or liability to any third parties in connection to OHPD's obligations hereunder.
14.17.1 No Third Party Beneficiaries. The provisions of this Section 14.15 are
solely for the benefit of the Parties hereto and are not intended to create or grant any rights,
contractual or otherwise to any third person or entity.
14.17.2 Survival. The entirety of this Section 14.15 shall survive the
termination of this Agreement.
14.18 No Joint Venture. It is acknowledged and agreed by and among the Parties that
the terms hereof are not intended to, and shall not be deemed to, create any partnership or joint
venture among the Parties. The past, present and future officers, elected officials, employees and
agents of the City do not assume any responsibilities or liabilities to any third party in connection
-54-
4338720.19
PRELIMINARY DRAFT
with the development, design, constriction or operation of any of the improvements
contemplated by this Agreement. In addition, OHPD and UNT acknowledge and agree that there
shall be no recourse against any of the aforesaid parties, none of whom will incur any liability in
respect to any claims based upon or relating to the Agreement.
14.19 Notices. All notices or other communications required or desired to be given with
respect to this Agreement shall be in writing and shall be delivered by hand or by courier service,
sent by registered or certified mail, return receipt requested, bearing adequate postage, or sent by
nationally recognized overnight delivery service (such as Federal Express or UPS), or sent by
facsimile, and properly addressed as provided below. Each notice given by mail shall be deemed
to be given by the sender when received or refused by the Party intended to receive such notice;
each notice delivered by hand or by courier service shall be deemed to have been given and
received when actually received by the Party intended to receive such notice or when such Parry
refuses to accept delivery of such notice; each notice given by overnight delivery service shall be
deemed to have been given and received on the next business day following deposit thereof with
the overnight delivery company; and each notice given by facsimile shall be deemed to have
been given and received upon transmission, provided confirmation of receipt is received back by
the sending facsimile prior to 5:00 p.m. local time at the sending location, or on the next business
day if after 5:00 p.m. local time at the sending location. Upon a change of address by either
Party, such Party shall give written notice of such change to the other parties in accordance with
the foregoing. Inability to deliver because of changed address or status of which no notice was
given shall be deemed to be receipt of the notice sent, effective as of the date such notice would
otherwise have been received.
If intended for the City:
Attn: City Manager
City of Denton, Texas
215 E. McKinney
Denton, Texas 76201
Telephone: (940) 349 -8200
Facsimile: (940) 349 -8596
If intended for OHPD:
OHPD
Tim O'Reilly
2808 S. Ingram Mill, Bldg. A -104
Springfield, MO 65804
Telephone: (417) 851 -8700
Facsimile: (417) 890 -1778
4338720.19
With Copies to:
Attn: City Attorney
City of Denton
215 E. McKinney
Denton, Texas 76201
Telephone: (940) 349 -8200
Facsimile: (940) 382 -7923
With Copies to:
Craig Preston, Esq.
O'Reilly, Jensen & Preston, LLC
2808 S. Ingram Mill Road, Bldg A -104
Springfield, MO 65804
Telephone: (417) 890 -1555
Facsimile: (417) 890 -1778
-55-
If intended for UNT:
With Copies to:
PRELIMINARY DRAFT
University of North Texas University of North Texas System
Vice President for Finance and Administration Office of General Counsel
1155 Union Circle #310500
Denton, TX 76203
Telephone: (940) 565 -2055
Facsimile: (417) 565 -4779
1901 Main Street
Dallas, TX 75201
Telephone: (214) 752 -5970
Facsimile: (214) 752 -5980
14.20 Severability. In the event any section, subsection, paragraph, sentence, phrase or
word herein is held invalid, illegal or unconstitutional, the balance of this Agreement, shall be
enforceable and shall be enforced as if the Parties intended at all times to delete said invalid
section, subsection, paragraph, sentence, phrase or word; and such invalid, illegal,
unconstitutional or unenforceable section, subsection, paragraph, sentence, phrase or word shall
be substituted by a section, subsection, paragraph, sentence, phrase or word as near in substance
thereto as may be valid, legal, constitutional and enforceable.
14.21 Time. Time is of the essence for the performance of any obligation under this
Agreement or the Related Agreements. If any date or Phase for performance provided for herein
ends on a Saturday, Sunday, or legal holiday of the City of Denton, Texas, then the applicable
date or Phase will be extended to the first day following such Saturday, Sunday, or legal holiday.
14.22 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together shall comprise but a
single document.
SIGNATURE PAGE FOLLOWS
-56-
4338720.19
PRELIMINARY DRAFT
EXECUTED on this day of , 2013.
CITY OF DENTON, TEXAS
Its:
O'REILLY HOTEL PARTNERS —
DENTON, LLC
A Missouri limited liability company
By:
Tim O'Reilly
Its: Manager
ATTEST:
By:
JENNIFER WALTERS, CITY SECRETARY
UNIVERSITY OF NORTH TEXAS
By:
Its:
O'REILLY HOSPITALITY MANAGEMENT, LLC
By:
Tim O'Reilly
Its: Chief Executive Officer & Manager
-57-
4338720.19
PRELIMINARY DRAFT
List of Exhibits:
Exhibit "A"
— City -UNT Land Lease
Exhibit "B"
— City -OHPD Convention Center Sublease
Exhibit "C"
— OHPD -UNT Land Lease
Exhibit "D"
— Preliminary Site Plan
Exhibit "E"
— Professional Services Agreement — CMA
Exhibit "F" —
Professional Services Agreement - Architect
Exhibit "G"
— Contractor Payment Guidelines
Exhibit "H"
— Hospitality Management Program Agreement
PRELIMINARY DRAFT
EXHIBIT "A"
CITY -UNT LAND LEASE
PRELIMINARY DRAFT
EXHIBIT B"
CITY -OHPD CONVENTION CENTER SUBLEASE
PRELIMINARY DRAFT
EXHIBIT "C"
OHPD -UNT LAND LEASE
PRELIMINARY DRAFT
EXHIBIT "D"
PRELIMINARY SITE PLAN
PRELIMINARY DRAFT
EXHIBIT "E"
PROFESSIONAL SERVICES AGREEMENT - CMA
PRELIMINARY DRAFT
EXHIBIT "F"
PROFESSIONAL SERVICES AGREEMENT - ARCHITECT
PRELIMINARY DRAFT
EXHIBIT "G"
CONTRACTOR PAYMENT GUIDELINES
PRELIMINARY DRAFT
EXHIBIT "H"
HOSPITALITY MANAGEMENT PROGRAM AGREEMENT
%JIL%j 11 ILAI I
0 26 50' 1 GO'
13.3 acres
Convention Center Site:
Hotel site:
Exhibit D
Master Development Agreement
7.00 acres Denton Convention Center Project
6.30 acres Dated: December 10, 2013,
PRELIMINARY DRAFT
EXHIBIT "A"
CITY -UNT LAND LEASE
THIS CITY -UNT LAND LEASE (the "Lease ") is made as of the day of
, 2013 (the "Commencement Date "), by and between University of North Texas,
an institution of higher education of the State of Texas ( "UNT ") and the City of Denton, Texas, a
municipal corporation and political subdivision of the State of Texas ( "City "). UNT and City
sometimes are referred to herein collectively as the "Parties" or singularly as a "Party ".
RECITALS
A. UNT, City, O'Reilly Hotel Partners Denton, LLC, a Missouri limited liability
company ( "OHPD "), and O'Reilly Hospitality Management, LLC, a Missouri limited liability
company ( "OHM ") have entered into that certain Master Development Agreement (the "Master
Agreement "), dated effective , 2013, providing for, among other things, the
constriction and operation by OHPD of a full- service Upscale Hotel and Restaurant on the Hotel
Site, as well as the constriction by City, with OHM acting as Constriction Manager Agent and
Architect on behalf of City, of an Upscale Convention Center facility and related improvements,
including parking areas, on the Convention Center Site containing meeting rooms, exposition
center and one (1) large ballroom sufficient for a banquet -style event adjacent to the Hotel Site.
B. Pursuant to the terms of the Master Agreement, UNT has agreed to lease the
Hotel Site to OHPD in accordance with the terms and conditions of the OHPD -UNT Land Lease
which document has been executed by UNT and OHPD of even date herewith.
C. Pursuant to the terms of the Master Agreement, UNT has agreed to lease the
Convention Center Site to City, and City has agreed to take and lease the same in accordance
with the terms and conditions set forth in this Lease.
D. Pursuant to the terms of the Master Agreement, City has agreed to sublease the
Convention Center Site to OHPD in accordance with the terms of the Sublease, and UNT has
herein consented and agreed to the Sublease.
For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, UNT and City agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. Any capitalized terms used in this Lease which are not
defined in this Article or otherwise in this Lease shall have the meanings assigned to the same in
the Master Agreement.
1.1.1 "Affiliate" shall mean, with respect to any Person: (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or
other fiduciary, ten percent (10 %) or more of the capital stock having ordinary voting
A-1
.=4132210.10
PRELIMINARY DRAFT
power in the election of directors of such Person; (b) each Person that controls, is
controlled by or is under common control with such Person; and (c) in the case of
individuals, the immediate family members, spouses and lineal descendants of
individuals who are Affiliates of the Person. For purpose of this definition, "control" of a
Person shall mean the possession, directly or indirectly, of the power to direct or cause
the direction of its management or policies, whether through the ownership of voting
shares or interests, by contract, by virtue of being an executive officer or a director or
otherwise.
1. 1.2 "Applicable Law" shall mean all laws or statutes, riles or regulations, and
any amendments thereto, of the State or the United States by which the City and its
powers, securities, operations and procedures are, or may be governed or from which its
powers may be derived, including all City codes, ordinances and development standards.
All City codes, ordinances, rules and development standards shall be applicable to this
agreement and the Project, irrespective of whether such codes, ordinances, riles and
development standards would otherwise normally apply.
1.13 "Certificates of Obligation" shall mean the City's Certificates of
Obligation issued to fund the City Financing Contribution for the constriction of the
Convention Center.
1. 1.4 "City Facilities" means the Convention Center and related automobile
parking spaces as determined to be required by the City's development standards.
1. 1.5 "City Facilities FF &E" shall mean those items of furniture; fixtures and
equipment specified in the City Facilities FF &E Specifications purchased for the City
Facilities in accordance with the terms of the Master Agreement.
1. 1.6 "City Financing" Contribution means the net proceeds of the City's
issuance of Certificates of Obligation, the principal amount of which shall be determined
by the City based upon the Total Convention Center costs; provided that the City shall
not be obligated to contribute more than $25,000,000 (total, including design and
constriction costs) to the City Facilities. The City may contribute additional funds or
resources to the City Facilities, pursuant to the Master Agreement, but the City shall not
contribute more than $25,000,000 in net proceeds of its debt financing for the total costs
of the City Facilities.
1. 1.7 "City Repayment Period" shall be the period running from the
Commencement Date through the earlier to occur of: (a) twenty -five (25) years after the
issuance of the Certificates of Obligations by City in order to fund the City Financing
Contribution; or (b) payment in full of the Certificates of Obligation.
1.1.8 "City -UNT Base Rent" shall mean the lease payments for the Leased
Premises provided in Article III below.
1. 1.9 "Commencement Date" shall mean the date first set forth above in the
introductory paragraph of this Lease.
A-2
.=4132210.10
PRELIMINARY DRAFT
1.1.10 "Convention Center Site" shall mean the tract of land situated in Denton,
Texas, as depicted on Exhibit "A" attached hereto and made a part hereof for all
purposes, which Exhibit "A" shall be replaced with a survey and metes and bounds
description of the Convention Center Site provided by OHPD within sixty (60) days of
the Operational Date on review and approval of the same by UNT and City.
1.1.11 "Convention Center" means an "upscale" convention center facility of
approximately 100,000 square feet (but no less than 90,000 square feet) in size under roof
and constricted upon the Convention Center Site, containing meeting rooms, and one (1)
large ballroom sufficient to lawfully accommodate approximately 2,000 people for a
banquet -style event, and related improvements, including landscaping, the required
parking spaces as determined by the City's development standards, and required
infrastructure.
1.1.12 "Environmental Laws" shall refer to and include, without limitation, all
Federal, State, City, and local statutes, laws, ordinances, riles and regulations, now or
hereafter in effect, and as amended from time to time, that are intended for the protection
of the environment, or that govern, control, restrict, or regulate the use, handling,
treatment, storage, discharge, disposal, or transportation of Hazardous Materials.
Environmental Laws specifically include but are not limited to, the National
Environmental Policy Act, the Comprehensive Environmental Response, Compensation
and Liability Act, the Resource Conservation and Recovery Act, the Hazardous Materials
Act, the Toxic Substances Control Act, the Clean Water Act, the Clean Air Act, the
Superfund Authorization and Recovery Act, the Occupational Safety and Health
Administration Hazard Communication Standards, the Texas Hazardous Materials Act,
and the Texas Water Quality Control Act.
1.1.13 "Event of Default" shall have the meaning set forth in Section 9.1 below.
1.1.14 "Force Majeure" means any contingency or cause beyond the reasonable
control of a party including, without limitation, acts of God or the public enemy, acts of
terrorism, war, riot, civil commotion, insurrection, government or defacto governmental
action (unless caused by acts or omissions of the party), fires, explosions, rain or other
weather delays, floods, strikes, slowdowns or work stoppages.
1.1.15 "Hazardous Materials" shall have the meaning set forth in Subsection
7.8.3 below.
1.1.16 "Hotel" means a Full- Service Hotel (i) constricted and operated pursuant
to and in accordance with the standards of an Approved Franchise and pursuant to the
terms of the Master Agreement and any related agreements, (ii) constricted upon the
Hotel Site in accordance with the Approved Plans, and (iii) consisting of at least nine (9)
stories and containing a minimum of two - hundred seventy -five (275) guestrooms, or such
other number as is agreed to by the Parties to the Master Agreement, and a restaurant,
recreational amenities, adequate on -site parking, and other related amenities and space
for providing the services customarily found in a full- service upscale hotel, open to the
A-3
.=4132210.10
PRELIMINARY DRAFT
public and serving the Convention Center, adjacent business community, the UNT
community and citizens of the City.
1.1.17 "Impositions" shall mean taxes including real or personal property taxes
and ad valorem taxes assessed against the Improved Leased Premises or City's interest
therein, if any, during the Term, special assessments, levies and liens for any constriction
performed by or at the direction of City (other than liens, if any, which are payable by
UNT pursuant to written agreements executed by UNT), assessed and becoming due
during the Term and that are levied or assessed against the Improved Leased Premises.
1.1.18 "Improved Leased Premises" shall mean the Leased Premises together
with any Improvements.
1.1.19 "Improvements" shall mean all: (a) buildings, strictures, equipment,
improvements and fixtures, including the Convention Center, installed, constricted,
connected to or situated on the Convention Center Site after the Commencement Date;
(b) Related Infrastructure from time to time installed, constricted, connected to or
situated on the Convention Center Site after the Commencement Date; and (c)
landscaping and parking facilities installed or constricted on the Convention Center Site
after the Commencement Date.
1. 1.20 "Lease" shall mean this Lease by and between UNT, as lessor, and City,
as lessee, covering the Leased Premises.
1.1.21 "Lease Year" shall mean each twelve (12) calendar month period
commencing on October 1 st and expiring on September 30th during the Term, except for:
(a) the period of time included in the Initial Term (as defined in Section 2.2); (b) the first
Lease Year of the Primary Term which shall commence on the Operational Date and end
on the immediately following September 30th; and (c) the final Lease Year of the Term
which shall commence on October 1st following the expiration of the immediately
preceding Lease Year and shall continue until the expiration date of this Lease.
1. 1.22 "Leased Premises" shall mean the Convention Center Site with all existing
improvements, if any, located on the Convention Center Site as of the Commencement
Date, together with any and all non - exclusive easements over and across other properties
of UNT necessary for access to the Convention Center Site or to ancillary parking
facilities for the Convention Center Site provided for in this Lease and /or necessary to
provide utilities to the Convention Center Site.
1. 1.23 "Master Agreement" shall have the meaning set forth in the Recitals.
1. 1.24 "Operational Date" shall mean the date when the Convention Center is
substantially complete and a Certificate of Occupancy has been issued by City and
received by OHPD.
1. 1.25 "OHPD" shall mean in all instances O'Reilly Hotel Partners Denton, LLC,
a Missouri limited liability company, and shall include any assignee or successor of its
rights and obligations under the Sublease.
A-4
.=4132210.10
PRELIMINARY DRAFT
1. 1.26 "Person" shall mean any person or entity.
1. 1.27 "Project Site" shall mean the Hotel Site and the Convention Center Site,
collectively.
1. 1.28 "Related Infrastructure" shall mean any automobile parking areas as
determined to be required by the City's development standards, water or sewer facilities,
plazas, landscaped areas, pedestrian circulation areas or other constriction on the
Convention Center Site in connection with the use or operation of the Convention Center.
1.1.29 "Site Plan" means an architectural plan, landscape architecture document,
and a detailed engineering drawing of the proposed City Facilities, including building
footprints, travelways, parking, drainage facilities, sanitary sewer lines, water lines, trails,
lighting, and landscaping elements for the City Facilities.
1.130 "Sublease" shall mean that certain City -OHPD Convention Center
Sublease between City and OHPD, dated the Commencement Date and covering the City
Facilities on the terms set forth therein, as required pursuant to the terms of the Master
Agreement.
1.13 1 "Term" shall mean the Initial Term, Primary Term and any Extended
Term(s) as provided in Section 2.2 below.
1. 132 "Upscale" shall mean comparable to or better than the Upscale Condition
required for the Hotel which means, with respect to the Hotel, the operation of the Hotel
in a manner such that the condition of the Hotel shall demonstrate refined, high quality
and fully functional appointments; furniture, fixtures and equipment; exterior and interior
finishes; landscaping; and mechanical, electrical and structural components consistent
with Comparable Hotel Properties, normal wear and tear excepted, that is consistent with
the standards of operations and operating plans that an Approved Franchisor, acting as a
Reasonable and Prudent Hotel Operator, would reasonably be expected to undertake and
follow for the operation of a Comparable Hotel Property in order to obtain a Three
Diamond Rating; provided, however, OHPD, as tenant, shall not be required as a result of
the aforesaid covenant to (a) provide amenities or facilities that are impracticable as a
result of the Hotel Final Design, (b) undertake any actions prohibited by the OHPD -UNT
Land Lease, (c) actually obtain a Three Diamond Rating for the Hotel. UNT and City
shall have the right to inspect the Hotel on an annual basis to determine compliance with
the operation of the Hotel in an Upscale Condition. Reasonable exceptions to this
standard of Upscale Condition may be agreed to by the Parties and the Parties may agree
to commission an independent experienced hotel industry consultant to assist in their
evaluation and /or to identify necessary repairs or replacements necessary to bring such
facilities to the property condition consistent with an Upscale Condition.
ARTICLE II
GRANT AND TERM OF LEASE
a -s
.=4132210.10
PRELIMINARY DRAFT
2.1 Leasing Clause. Upon and subject to the terms and provisions contained herein,
UNT does hereby lease, demise and let unto City, and City does hereby take and lease from
UNT, the Leased Premises, to have and to hold the Leased Premises for the Term.
2.2 Term. Unless earlier terminated as provided herein, the initial term of this Lease
shall commence on the Commencement Date and shall continue to the Operational Date (the
"Initial Term "), and the primary term of this Lease shall commence on the Operational Date and
continue for a term of fifty (50) years from the Operational Date ( "Primary Term "), with two (2)
ten (10) -year automatic renewal options (the "Extended Term(s) ") thereafter, which will
automatically extend the Primary Term for such additional ten (10) -year periods without any act
of the Parties, unless such Extended Terms are terminated by City in writing no less than one
hundred eighty (180) days before the expiration of the Primary Term or the initial Extended
Term, as applicable or unless earlier terminated in accordance with the terms hereof.
2.3 Possession. UNT shall deliver possession of the Leased Premises to City
promptly upon the execution of this Lease.
ARTICLE III
LEASE PAYMENT
3.1 City -UNT Base Rent. During the Initial Term and the first twenty -five (25) Lease
Years of the Primary Term, City -UNT Base Rent shall be $1.00 per annum and shall be paid by
City in advance commencing on the Commencement Date and continuing regularly and annually
thereafter on or before each anniversary of the Commencement Date until the expiration of the
twenty -fifth (25th) Lease Year of the Primary Term. After the expiration of the twenty -fifth
(25th) Lease Year of the Primary Term, City -UNT Base Rent shall be paid by City in advance
commencing on January Ist of the twenty -sixth (26th) Lease Year of the Primary Term and
continuing regularly and annually thereafter on or before January 1st of each successive Lease
Year until the expiration or earlier termination of the Lease in the following amounts:
LEASE YEARS AFTER INITIAL TERM
CITY -UNT BASE RENT
26 -35
$175,000 per annum
36 -45
$204,750 per annum
46 -55
$239,557 per annum
56 -65
$280,282 per annum
66 -70
$327,930 per annum
City -UNT Base Rent shall be delivered to UNT at the address set forth in Section 13.5.
A-6
.=4132210.10
PRELIMINARY DRAFT
3.2 UNT's Audit Right. Subject to the terms of this Section, UNT, at UNT's sole
expense, shall have the right no more than once per Lease Year to audit the books and records in
City's possession regarding the financial operations of the Improved Leased Premises. City shall
allow UNT and UNT's authorized auditors reasonable access to the books and records in the
City's possession regarding the financial operations of the Improved Leased Premises for the
purpose of performing such audits; provided that UNT agrees: (a) that any information disclosed
to it or its agents in connection therewith shall not be disclosed to any other person or entity
(except as required by Applicable Law or by court order); (b) the information disclosed to UNT
in any such audit shall be used solely for the purposes stated in this Section; (c) UNT's access to
such records is subject to UNT's giving City reasonable prior notice of its intent to audit such
records and to City's right to restrict such access to reasonable business hours and such periods
of time as use of such records is not necessary for City's own purposes; (d) all audits shall be
solely at the expense of UNT and City shall not incur or be responsible for any costs or expenses
in connection with the audits; and (e) City shall have no liability or responsibility to UNT for the
accuracy or veracity of the information regarding the financial operations of the Improved
Leased Premises provided to City by OHPD, OHM or their respective successors or assign or
any subsequent subtenant or management company.
3.3 Late Payment Charge. Other remedies for nonpayment notwithstanding, if any
installment of City -UNT Base Rent is not received by UNT on or before the tenth (10th) day
after the date on which such payment is due, City agrees to pay UNT a late payment charge in
the amount of five percent (5 %) of such past due amount in addition to all other amounts then
owed under this Lease.
3.4 Holding Over. If City fails to surrender the Improved Leased Premises at the
expiration or termination of the Term, occupancy of the Improved Leased Premises after the
termination or expiration of this Lease shall be that of a tenancy at sufferance. City's occupancy
of the Improved Leased Premised during the holdover shall be subject to all the terms and
provisions of the Lease, and City shall pay to UNT an amount (on a per month basis without
reduction for partial months during the holdover) equal to one - twelfth (1/12) of one hundred fifty
percent (150 %) of one hundred fifty thousand dollars ($150,000.00). No holdover by City or
payment by City after the expiration or termination of this Lease shall be construed to extend the
Term or prevent UNT from immediate recovery of possession of the Improved Leased Premises
by summary proceedings or otherwise. In addition to the payment of the amounts provided
above, if UNT is unable to deliver possession of the Improved Leased Premises to a new tenant,
or to perform improvements for a new tenant, as a result of City's holdover and City fails to
vacate the Improved Leased Premises within thirty (30) days after UNT notifies City in writing
of UNT's inability to deliver possession, or perform improvements, City, to the maximum extent
allowed by law, shall be liable to UNT for all actual damages that UNT suffers from any
holdover.
ARTICLE IV
IMPOSITION AND UTILITIES
4.1 Payment of Impositions. City shall pay, or cause to be paid, all Impositions
before the same become delinquent, and City shall furnish to UNT receipts or copies thereof
A-7
.=4132210.10
PRELIMINARY DRAFT
showing timely payment of such Impositions. City shall be entitled to pay any Impositions in
installments as and to the extent the same may be permitted by the applicable taxing authority or
claimant without additional penalty or interest. UNT agrees to cooperate with City in seeking
the delivery of all notices of Impositions to City directly from the applicable taxing authorities.
UNT shall promptly deliver all notices of Impositions to City that are delivered to UNT. UNT
shall retain the right to pay any and all Impositions related to the Leased Premises that are not
paid before the same become delinquent or subject to interest or penalties; provided however,
UNT agrees not to pay any such Impositions if the City is contesting the same pursuant to
Section 4.2 below. If UNT pays any such Impositions, City shall reimburse UNT within five (5)
business days after written notice thereof from UNT.
4.2 Contest of Impositions. If the levy of any of the Impositions shall be deemed by
City to be improper, illegal or excessive, or if City desires in good faith to contest the
Impositions for any other reason, City may after first notifying UNT in writing, at least three (3)
days before the date of delinquency, at City's sole cost and expense, dispute and contest the same
and file all such protests or other instruments and institute or prosecute all such proceedings for
the purpose of contest as City shall deem necessary and appropriate. Subject to the foregoing,
any item of contested Impositions need not be paid until the earlier of: (a) the time it is finally
adjudged to be valid; or (b) such time as the entity assessing the Impositions could commence
foreclosure proceedings or similar action against the Leased Premises or UNT's interest therein,
it being agreed that City may not take any action or fail to pay any Impositions if such action or
failure would result in the commencement of any such foreclosure procedures or similar action.
City shall be entitled to any refund of any Impositions (and the penalties or interest thereon)
refunded by the levying authority pursuant to any such proceeding or contest, if such Impositions
shall have been either (a) paid directly by City, or (b) paid directly by UNT, and UNT was
reimbursed therefor by City.
4.3 Standing. If City determines that it lacks standing to contest any Impositions
imposed by a governmental authority or to obtain an extended payment period for any
Impositions, UNT (to the maximum extent allowed by law) and at City's sole cost and expense
shall join in such contest or otherwise provide City with sufficient authority to obtain such
standing.
4.4 Utilities. City shall pay, or cause to be paid, all bills for utility service provided to
the Improved Leased Premises after the Commencement Date.
ARTICLE V
IMPROVEMENTS
5.1 Convention Center and Related Infrastructure. UNT agrees that City shall have
the right to constrict or cause the constriction of the Convention Center and Related
Infrastructure on the Convention Center Site in accordance with the terms of the Master
Agreement, and City agrees to constrict or to cause the constriction of the same in accordance
with the terms of the Master Agreement. UNT agrees to join with City in the execution of such
applications for permits and licenses from any governmental authority as may be reasonably
necessary or appropriate in connection with the constriction of the Convention Center and
A -R
.=4132210.10
PRELIMINARY DRAFT
Related Infrastructure or to otherwise effectuate the intents and purposes of this Lease. At all
times during the Term of this Lease, legal and beneficial title to the Improvements, including the
Convention Center, the Related Infrastructure, and the City Alterations (defined below) shall be
vested solely in City, and City alone shall be entitled to all attributes of ownership of the same
including, without limitation, the right to claim depreciation or cost recovery deductions, if
applicable. Upon expiration or termination of the Lease, the Improvements, including the
Convention Center, the Related Infrastructure, and the City Alterations shall become the sole
property of UNT and must be surrendered to UNT by City at no cost to UNT.
5.2 City Alterations. After the completion of the constriction of the Convention
Center and Related Infrastructure, City shall not make or allow to be made any alterations,
physical additions, or improvements (collectively, the "City Alterations ") to the Improved
Leased Premises without complying with all local, state, and federal ordinances, laws, statutes
and without first obtaining the written consent of UNT, which consent shall not be unreasonably
withheld; provided, however, that consent shall not be required for: (a) the initial constriction of
the Convention Center and Related Infrastructure on the Convention Center Site in accordance
with the terms of the Master Agreement; (b) City Alterations to the Convention Center or
Related Infrastructure that will not affect the exterior appearance, the systems, or the structural
elements thereof, or (c) any maintenance, repairs, or replacements of the Improvements. City
shall not interfere with or disrupt the structural integrity of the Convention Center during the
constriction of any City Alterations. Prior to commencing any City Alteration which requires
UNT's consent, City shall provide UNT with a copy of the plans and specifications for such City
Alterations. For any City Alteration which does not require UNT's consent, City shall provide
UNT with a copy of the as -built drawings and specifications for such City Alternations after the
completion of the same.
ARTICLE VI
USE OF PREMISES
6.1 Use. City shall use the Improved Leased Premises during the Term solely for the
constriction and operation of an Upscale Convention Center facility, parking facility, and
ancillary uses for holding conventions, meetings, and exhibits for the benefit of UNT, City and
the general public. City must, throughout the Term of this Lease, continuously maintain the
Convention Center that will be built on the Convention Center Site.
6.2 Compliance with Laws. City agrees not to use the Improved Leased Premises for
any use or purpose in violation of any valid Applicable Law, including, without limitation, the
Americans with Disabilities Act of 1990, as amended; provided, however, there shall be no
violation by City of this provision: (a) so long as City shall, in good faith within a reasonable
time after City acquires actual knowledge thereof, by appropriate proceedings and with due
diligence, contest the alleged violation or the validity or applicability of the law, regulation, or
ordinance; (b) until City has had a reasonable time after a final adjudication that such law,
regulation or ordinance, in fact, has been violated to address any such violation; and (c) so long
as neither UNT nor any portion of the Leased Premises, during the period of such contest, will be
subject to any possible liability, loss, penalty or forfeiture.
A-9
.=4132210.10
PRELIMINARY DRAFT
6.3 Maintenance, Casualty.
63.1 UNT is not required to make any improvements, replacements or repairs
of any kind or character to the Improved Leased Premises during the Term.
63.2 If the Improved Leased Premises fall into a state of disrepair that has a
substantial, detrimental effect to the business activity, aesthetic appeal, functionality, or
long term structural or mechanical viability of the Improved Leased Premises, and same
has not been remedied within sixty (60) days after City's receipt of written notice from
UNT thereof or within such other period of time agreed to by UNT and City or if the
condition is not capable of being remedied in sixty (60) days and City has not
commenced remedying the same within sixty (60) days after City's receipt of written
notice from UNT and thereafter diligently pursued completion, UNT shall have the right
to make such reasonable repairs as it deems necessary, and shall provide all receipts,
plans and documents associated with such repairs to City who shall reimburse UNT for
the reasonable costs of such repairs, within a reasonable timeframe not to exceed thirty
(30) days. UNT shall have the right to periodically inspect the Improved Leased
Premises in accordance with Section 13.1 below.
6.3.3 City shall, at its sole cost and expense, maintain the entirety of the
Improved Leased Premises in good condition and the Convention Center in an Upscale
condition at all times throughout the Term, reasonable wear and tear, obsolescence, loss
by casualty (except to the extent City is required under this Lease to repair casualty
damage) excepted. Without limiting the foregoing, City must make all repairs and
replacements necessary to keep the Improved Leased Premises in the required condition.
Upon termination of this Lease, City shall deliver to UNT the Improved Leased Premises
in the condition existing at the Operational Date reasonable wear and tear, obsolescence,
and loss by casualty (except to the extent City is required under this Lease to repair
casualty damage) excepted.
63.4 To the extent any of the components of the Convention Center that City is
obligated to maintain and repair hereunder are covered by a warranty provided by the
manufacturer thereof, City agrees to take all such actions, including the manufacturer's
required and recommended scheduled maintenance, necessary to maintain the warranty
without impairment. Furthermore, regardless of whether any such component is covered
by a manufacturer's warranty, to the extent the manufacturer of any component of the
Convention Center that City is obligated to repair under this Lease recommends regularly
scheduled maintenance for the component, City shall be obligated to comply with the
manufacturer's recommendations. Specifically included in the foregoing obligation is the
obligation of City to perform all scheduled maintenance recommended by the
manufacturers of the HVAC system servicing any aspect of the Convention Center at the
times recommended by such manufacturer.
63.5 With regard to casualty damage to the Improvements, provided that City
receives the proceeds of the commercial property insurance which City is required to
maintain pursuant to Section 7.3 below, City shall, as soon as reasonably practicable, but
in no event later than ninety (90) days after the date of a casualty, commence the
A-10
.=4132210.10
PRELIMINARY DRAFT
preparation of the plans for and work of repair, reconstruction or replacement of the
damaged Improvements and proceed with all due diligence until completion.
Notwithstanding the foregoing sentence, if the casualty occurs during the last five (5)
Lease Years of the Term and the extent of damage to the Improvements is greater than
fifty percent (50 %) (in City's reasonable business judgment based on objective
information and criteria) of the then replacement value thereof (exclusive of the land
value of the Convention Center Site), City shall have the option, within ninety (90) days
from the date of the occurrence of such casualty damage, to terminate this Lease by
giving written notice of such termination to UNT within said 90 -day period, in which
event: (a) this Lease shall terminate as of the termination date specified in such notice to
UNT, which shall not be less than thirty (30) days after the date of such notice; (b) City
shall no longer be required to pay City -UNT Base Rent for any period subsequent to such
termination date; (c) City shall not be required to repair the damage; (d) all insurance
proceeds available as a result of such damage shall be paid to and be the property of
UNT; and (e) the Parties shall have no further liability of obligations one to the other
except for liabilities incurred or accruing prior to such termination date or as may be
expressly provided for herein.
6.4 Operational Rights and Restrictions, Revenue. Subject to the provisions and
conditions of this Lease and the Master Agreement, City shall have full and exclusive control of
the development, design, constriction, management and operation of and revenues from the
Convention Center, including all booking, room rental, food and beverage and catering rights;
provided, however, that City shall not, without UNT's advance written consent, assign this Lease
or enter into any subleases, management agreements or operating agreements, except as provided
in Article VIII and in the: (a) the Sublease and any other agreements contemplated by the
Master Agreement; or (b) the OHM Management Agreement (as described in the Sublease) or
any Replacement Management Agreement (as described in the Sublease) providing for the
operation, management, and maintenance of the Improved Leased Premises, none of which shall
require UNT's prior written consent.
6.5 Sins. No signs, advertisements, logos, or notices of any type may be erected,
painted, or placed in, on or about the Improved Leased Premises, except those of such color,
size, style, and in such places as are first approved according to the process set forth in the
Master Agreement and which are in compliance with the applicable City code, ordinances and
development standards. City shall not remove any existing signage on the Project Site without
the prior written consent of UNT, which consent shall not be unreasonably withheld.
6.6 Off -Site Parkin. UNT shall allow City, at no additional cost to City, non-
exclusive use of the ancillary parking facility as shown on the Site Plan on an overflow basis
(provided that the parking on the Convention Center Site has already been fully utilized). UNT
shall not be responsible for any liability related to such use of the ancillary parking facility by
City or its patrons. UNT shall, at UNT's sole cost and expense, constrict and maintain a
connector road between the Convention Center Site and the ancillary parking facility in a
location and using materials selected by UNT, in UNT's sole discretion. UNT hereby grants to
City a non - exclusive easement over and across the connector road for purposes of vehicular and
pedestrian ingress and egress between the Convention Center Site and the ancillary parking
facility. UNT shall retain exclusive use and City shall not be entitled to utilize any portion of the
A-11
.=4132210.10
PRELIMINARY DRAFT
ancillary parking facility during any portion of any day on which: (a) there is a UNT home
football game; or (b) in UNT's sole discretion, any other event utilizing the football stadium for
which the ancillary parking facility is required provided that UNT allows City to utilize other
off -site parking facilities in the vicinity of the Convention Center Site, if available. UNT shall
provide written notice to City of the dates of any scheduled events (other than home football
games) which will result in the ancillary parking facility not being available to City and of the
availability of any alternative parking facilities promptly after the same is determined by UNT.
If the ancillary parking facility is not available to City at any time during the Term on a
permanent basis, UNT shall provide and maintain a comparable replacement ancillary parking
facility in the vicinity of the Convention Center Site at UNT's sole cost and expense.
ARTICLE VII
INSURANCE AND INDEMNITY
7.1 Liability Insurance. City agrees, at its sole expense, to obtain and maintain, or to
cause OHPD under the Sublease to obtain and maintain, at its sole expense, commercial general
liability insurance at all times during the Term hereof with reputable insurance companies
authorized to transact business in the State of Texas for bodily injury (including death) and
property damage with minimum limits from time to time of the greater of: (a) $5,000,000 with
respect to any one occurrence and the aggregate of all occurrences during a given policy period;
and (b) those customarily held by owners /operators of similar projects in the State of Texas,
protecting UNT and City against any liability, damage, claim or demand arising out of or
connected with the condition or use of the Improved Leased Premises. Such insurance shall
include contractual liability, personal injury and advertising liability and independent contractor
liability as well as products and completed operations coverage and business automobile liability
insurance (including owned, non -owned and hired). Such insurance coverage must be written on
an "occurrence" basis. The insurance required to be maintained by City or OHPD, may be
maintained by any combination of single policies and /or umbrella or blanket policies, so long as
the level of coverage is not impaired or reduced by the use thereof. UNT (and City and its
elected officials, employees, agents and volunteers for insurance policies maintained by OHPD)
shall be named as an Additional Insured(s), as its or their interests appear, on all insurance
policies required by this Section. If City's or OHPD's liability insurance policies do not contain
the standard ISO Separation of Insured's Provision, or a substantially similar clause, such
liability insurance policies shall be endorsed to provide cross - liability coverage at City's or
OHPD's expense, as applicable. City, in its sole discretion, may choose to satisfy the
requirements of this Section through a self - insurance program.
7.2 Workers' Compensation Insurance. City agrees, at its sole expense, to obtain and
maintain or, to cause OHPD, at its sole expense, to obtain and maintain, workers' compensation
insurance, as required by Applicable Law, during the Term. The policy will be endorsed to
provide a waiver of subrogation as to UNT (and City and its elected officials, employees, agents
and volunteers if the policy is maintained by OHPD). The City, in its sole discretion, may
choose to satisfy the requirements of this Section through a self - insurance program.
a -12
.=4132210.10
PRELIMINARY DRAFT
7.3 Commercial Property Insurance. At all times during the Term of this Lease, City
shall maintain a policy or policies of special causes of loss form commercial property insurance,
with all premiums paid in advance, issued by and binding upon an insurance company
reasonably acceptable to UNT and City, authorized to transact business in the State of Texas,
insuring all buildings and strictures on the Convention Center Site, and covering all City
Facilities FF &E located in the Convention Center, for full replacement cost thereof as of the date
of the loss (exclusive of foundation and excavation cost and costs of underground flues, pipes,
drains, and other uninsurable items) with a retention amount no greater than that retained by
owners of similar properties in the State of Texas at the time the policy is obtained. City shall be
listed as name insured on all such policies. City may require OHPD to reimburse City for the
costs of such policies pursuant to the terms of the Sublease. Any loss under any such insurance
policy required under this Section shall be made payable to City for the benefit of City, to the
end that City shall be entitled to collect all money due under such insurance policies payable in
the event of and by reason of the loss of or damage to the Improved Leased Premises or the City
Facilities FF &E to be applied pursuant to Subsection 63.5 above.
7.4 Builder's Risk. City shall obtain Builder's Risk insurance during any period of
constriction, or cause OHPD or others to maintain, builder's risk insurance (non - reporting form)
with completed operations coverage of the type customarily carried in the case of similar
constriction for one hundred percent (100 %) of the full replacement cost of work in place and
materials, supplies and equipment that are intended to be installed in the constriction regardless
of whether same are stored at or upon the property or off of the property in question, except that
the City agrees to reasonable deductibles necessary to obtain reasonable insurance rates.
7.5 Additional Coverage/Requirements of Policies.
7.5.1 In addition to the insurance required in Sections 7.1, 7.2, 73, and 7.4
above, City must also maintain such other insurance, both in terms of: (a) risks insured
and scope of coverage; and (b) amounts of coverage, as may from time to time during the
Term be customarily carried by owners /operators of properties similar to the Improved
Leased Premises in the State of Texas with the effect that at any given time during the
Term, City shall maintain such additional insurance coverage on the Improved Leased
Premises and its operations thereon equal to that carried by the owners /operators of other
similar Convention Center facilities in the State of Texas. City, in its sole discretion, may
choose to satisfy the requirements of this Section through a self - insurance program.
7.5.2 All insurance required of City under this Article shall be primary and non-
contributing with any insurance that may be carried by UNT. Also, each policy of
insurance required under this Article shall: (a) be issued by one or more insurance
companies each of which must have an A.M. Best Company financial and performance
rating of A -IX or better and be qualified or authorized by the laws of the State of Texas to
assume the risk covered by such policy; (b) provide that such policy shall not be canceled
or modified without at least thirty (30) days prior written notice to UNT and (c) provide
that any loss otherwise payable thereunder shall be payable notwithstanding any act or
negligence of the named insureds which might, absent such agreement, result in a
forfeiture of all or a part of such insurance payment. On the Commencement Date and
thereafter as UNT may require, City shall provide UNT with certificates of insurance, or
a -13
.=4132210.10
PRELIMINARY DRAFT
other evidence and documentation, acceptable to UNT evidencing City's full compliance
with the insurance requirements of this Lease. If requested by UNT, City shall provide
UNT with certified copies of any of the required policies. City shall promptly pay all
premiums when due on such insurance and not less than fifteen (15) days prior to the
expiration date of each such policy, deliver to UNT acceptable evidence of insurance,
such as a renewal policy or policies marked "Premium Paid ", or other evidence
satisfactory to UNT, reflecting that all required insurance is current and in force. City
will immediately give written notice to UNT of any cancellation of, or change in, any
insurance policy required to be maintained hereunder. City may satisfy any insurance
requirement hereunder by providing one or more "blanket" insurance policies or through
a self - insurance program, provided same is reasonably acceptable to UNT, or by causing
OHPD or its successors or assigns or any other subtenant of City to obtain and maintain
any insurance required hereunder.
7.6 Waiver. UNT AND CITY HEREBY WAIVE ALL CLAIMS, RIGHTS OF
RECOVERY AND CAUSES OF ACTION THAT EITHER PARTY OR ANY PARTY
CLAIMING BY, THROUGH OR UNDER SUCH PARTY BY SUBROGATION OR
OTHERWISE MAY NOW OR HEREAFTER HAVE AGAINST THE OTHER PARTY OR
ANY OF THE OTHER PARTY'S PRESENT AND FUTURE SUBSIDIARIES, AFFILIATES,
MEMBERS, PARTNERS, OFFICERS, DIRECTORS, EMPLOYEES, DIRECT OR INDIRECT
STOCKHOLDERS, AGENTS, OTHER REPRESENTATIVES, SUCCESSORS AND
ASSIGNS FOR LOSS OR DAMAGE TO PROPERTY OF UNT OR CITY, EVEN IF CAUSED
BY THE NEGLIGENCE OR FAULT OF THE RELEASED PARTY OR ITS PARTNERS,
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR REPRESENTATIVES, TO THE
EXTENT THAT THE LOSSES OR DAMAGES ARE COVERED BY THE INSURANCE
POLICIES ACTUALLY MAINTAINED PURSUANT TO THIS ARTICLE OR OTHERWISE.
UNT AND CITY EACH SHALL CAUSE THEIR RESPECTIVE INSURANCE CARRIERS
TO ENDORSE, IF REQUIRED TO MAKE THIS WAIVER EFFECTIVE, ALL APPLICABLE
POLICIES WAIVING THE CARRIER'S RIGHTS OF RECOVERY UNDER SUBROGATION
OR OTHERWISE AGAINST THE OTHER PARTY.
7.7 Payment of Losses. Subject to Subsection 63.5 above and City's obligation to
pay UNT in the event of termination of this Lease by reason a casualty loss, any loss under any
insurance policy required under Section 7.3 above shall be made payable to City for the benefit
of City, to the end that City shall be entitled to collect all money due under such insurance
policies payable in the event of and by reason of the loss of or damage to the Improved Leased
Premises, to be applied pursuant to Subsection 63.5 above. Any accumulation of interest on the
insurance proceeds collected by City shall be added to, and become a part of, the fund being held
by City for the benefit of City. The adjustment of losses with the insurer shall be made by City.
7.8 Environmental Investivation and Remediation.
7.8.1 UNT represents to City that to the best of UNT's knowledge: (a) the
Convention Center Site is in compliance with all Applicable Laws pertaining to the
protection of the environment ( "Environmental Laws "); (b) that there are no underground
storage tanks located on the Convention Center Site; (c) the Convention Center Site has
not been used as a landfill or for the deposit or storage of any Hazardous Materials; (d)
a -14
.=4132210.10
PRELIMINARY DRAFT
UNT has not received any notice or claim of and there are no past, pending or threatened
investigations, proceedings or claims against the UNT or the Convention Center Site that
are known to the UNT relating to the presence, release or remediation of any substance
which is a Hazardous Material or for non - compliance with any Environmental Laws with
respect to the Convention Center Site; and (e) no conditions or circumstances with
respect to the Convention Center Site are known to UNT to exist or to have existed that
could impose any liability on the City with respect to any Environmental Laws.
7.8.2 City shall be responsible, at its sole cost and expense, for performing any
environmental investigation and remediation work that may be required as a result of
City's use and occupancy of the Improved Leased Premises after the Commencement
Date and that is caused by the presence of Hazardous Materials which City placed or
released or allowed to be placed or released on the Improved Leased Premises during the
Term, except and to the extent the presence thereof results from the act or omission of
UNT or its agents, employees, contractors, lessees or invitees or was present on the
Convention Center Site on or before the Commencement Date. Such environmental
investigation and remediation work shall be conducted in accordance with all
Environmental Laws. City shall notify and advise UNT before performing any work of
the remediation City desires to undertake and the procedures to be used. City shall
complete the remediation with due diligence and shall comply with, and shall cause its
agents and contractors to comply with all Environmental Laws regarding the use,
removal, storage, transportation, disposal and remediation of Hazardous Materials.
City's obligation as provided herein to undertake environmental investigation and
remediation of the Improved Leased Premises shall be a continuing obligation of City
that shall survive the expiration or termination of the Term for a period of two (2) years.
UNT shall retain responsibility and liability for all environmental conditions, the
presence of Hazardous Materials and violations of Environmental Laws arising: (a) on or
before the Commencement Date; (b) after the Commencement Date due to environmental
conditions, the presence of Hazardous Materials or violations of Environmental Laws on
or in connection with the Improved Leased Premises on or before the Commencement
Date; and (c) from any act or omission of UNT or its agents, employees, contractors,
lessees or invitees.
7.8.3 The term "Hazardous Materials" shall refer to, and include, without
limitation, all substances whose use, handling, treatment, storage, disposal, discharge, or
transportation is governed, controlled, restricted, or regulated by Environmental Laws,
that have been defined, designated or listed by any responsible regulatory agency as
being hazardous, toxic, radioactive, or that may present an actual or potential hazard to
human health or the environment if improperly used, handled, treated, stored, disposed,
discharged, generated or released. Hazardous Materials specifically include, without
limitation, asbestos and asbestos - containing - materials, petroleum products, solvents, and
pesticides, but shall exclude any such items that are necessary for the ordinary
performance of City's or any subtenant's business activities, provided that such are used,
stored or disposed of in compliance with all Applicable Laws. If City breaches its
obligations under this Section and such breach is not cured following notice and within
the applicable cure period specified in Article IX below, UNT may take any and all
A-15
.=4132210.10
PRELIMINARY DRAFT
action reasonably appropriate to remedy such breach, and City shall promptly pay all
reasonable costs incurred by UNT in connection therewith.
7.8.4 The provision of this Section shall survive the termination of this Lease
for a period of two (2) years and are solely for the benefit of UNT and City and shall not
be deemed for the benefit of any other person or entity.
7.9 Limitation of Liability. UNT shall not be liable to City or to City's agents,
servants, employees, customers, invitees, successor, or assigns for any damage to person or
property occurring on the Improved Leased Premises caused by any act, omission, or neglect of
City, its agents, servants, employees, successors, or assigns during the Term of the Lease, nor
shall UNT be liable for any loss, cost, expense, or claim arising out of the ownership or operation
of the Convention Center during the Term of the Lease, except to the extent such claims are
based upon the willful acts or gross negligence of UNT or UNT's agents, servants, employees,
contractors, lessees, customers or invitees or arise from the existing condition of the Convention
Center Site as of the Commencement Date.
ARTICLE VIII
ASSIGNMENT AND SUBLETTING
8.1 Transfers and Assignments. Except as provided in Sections 8.2 and 8.3 below,
City shall not sell, convey, assign, or sublet this Lease or all or any portion of the leasehold
estate created hereby without the express prior written consent of UNT, which consent shall not
be unreasonably withheld; provided, however, in no event shall UNT be obligated to consent to
any assignment if the same is to any Person who, in UNT's reasonable judgment, does not have a
suitable level of experience and reputation for quality in operating convention centers such as the
Convention Center. In connection with any proposed assignment, City shall submit a written
request for approval to UNT with the name, address, financial condition and business references
of any proposed assignee, together with a complete copy of the proposed form of assignment.
UNT shall give City written notice of approval or disapproval of the proposed assignee and the
form of assignment within thirty (30) days of UNT's receipt of a request, and if disapproved,
specific reasons for the disapproval. In the event of UNT's disapproval of any proposed assignee
or form of assignment, UNT and City shall meet within thirty (30) days of the date of the notice
of disapproval and use best effort to resolve any objectionable issues with respect to the
proposed assignee or form of assignment. Nothing contained in this Section shall be construed
as (a) prohibiting City from withdrawing any request or submitting subsequent requests for
approval of proposed assignees and forms of assignment; or (b) entitling UNT to terminate this
Lease in connection with any proposed assignee or assignment. If UNT disapproves any
proposed assignee or form of assignment after the City Repayment Period, City shall be entitled
to terminate this Lease on no less than thirty (30) days' written notice to UNT. Upon approval
by UNT of any proposed assignment of this Lease in its entirety, City shall deliver to UNT a
fully executed assignment, in the form approved by UNT, whereby such assignee shall assume
all obligations of City pertaining to the Improved Leased Premises and accruing under this Lease
after the date of such assignment, and City shall thereafter be released from all obligations and
liabilities under this Lease accruing after the date of such assignment. No subletting by City
a -16
.=4132210.10
PRELIMINARY DRAFT
shall release, or be deemed or construed as releasing, City from its obligations and liabilities
hereunder.
8.2 Sublease(s). UNT hereby consents to City entering into the Sublease and to any
amendments or modifications to the Sublease provided that the same are consistent with the
terms of the Master Agreement and this Lease and that City delivers to UNT fully executed
copies of any such amendments or modifications. In the event of the expiration or termination of
the Sublease prior to the expiration or termination of this Lease, City may submit a written
request for approval to UNT with the name, address, financial condition and business references
of any proposed replacement sublessee, together with a complete copy of the proposed form of
sublease. UNT shall give City written notice of approval or disapproval of the proposed
sublessee and form of sublease within thirty (30) days of UNT's receipt of a request for
approval, and if disapproved, specific reasons for the disapproval. In the event of UNT's
disapproval of any proposed replacement sublessee or sublease, UNT and City shall meet within
thirty (30) days of the date of the notice of disapproval and use best efforts to resolve any
objectionable issues with respect to the proposed replacement sublessees or sublease. UNT shall
not unreasonably withhold, condition or delay its approval of a proposed replacement sublessee
or sublease provided that (a) the replacement sublease is in substantially the same form as the
Sublease, (b) the replacement sublessee has the financial ability to perform the obligations under
the replacement sublease, (c) the replacement sublessee has experience in the hotel /conference
center industry and in operating properties such as the Convention Center, (d) the replacement
sublessee is approved by the Approved Franchisor. Nothing contained in this Section shall be
construed as (i) prohibiting City from withdrawing any request or submitting subsequent requests
for approval of proposed replacement sublessees or subleases; or (ii) entitling UNT to terminate
this Lease in connection with any proposed replacement sublessee or sublease. If UNT
disapproves any proposed replacement sublessee or sublease after the City Replacement Period,
City shall be entitled to terminate this Lease on no less than thirty (30) days' written notice to
UNT. Upon approval by UNT of any proposed replacement sublessee and sublease, City shall
deliver to UNT a fully executed sublease, in the form approved by UNT.
8.3 Management, Operating and Other Agreements. UNT consents to City's
delegation of any or all of its obligations and assignment of any or all of it rights with respect to
the operation, management and maintenance of the Improved Leased Premises to OHPD
pursuant to the Sublease (or any replacement sublease) and to OHPD entering into the OHM
Management Agreement with OHM providing for the operation, management and maintenance
of the Improved Leased Premises as further described in the Sublease. The procedures and terms
set forth in Section 8.2 shall apply to City's submittal and UNT's approval or disapproval of any
proposed replacement management or operating agreements or other agreements which require
UNT's prior approval.
ARTICLE IX
DEFAULT OF CITY
9.1 Default. City shall be in default if any of the following events (each an "Event of
Default ") shall occur and continue beyond any cure period provided for in this Lease: (a) the
failure on the part of City to pay, when due, City -UNT Base Rent or any other payment required
A-17
.=4132210.10
PRELIMINARY DRAFT
pursuant to this Lease (a "Monetary Default ") and the continuation of such failure for thirty (30)
days after UNT has provided to City a written notice of such failure; (b) the sale, conveyance,
assignment or subletting of this Lease or all or any portion of the leasehold estate created hereby
other than as permitted under Article VIII or Section 6.4 above (an "Assignment Default ") if
UNT provides to City written notice within sixty (60) days of the date of such Assignment
Default of its disapproval of the same, but if such notice is not given, an Assignment Default
shall not constitute an Event of Default; (c) the failure on the part of City to comply with any
material term, provision or covenant of this Lease (other than a Monetary Default or an
Assignment Default), and the continuation of such failure for a period of sixty (60) days from
and after the date notice of such failure is given by UNT to City; provided, however, no Event of
Default shall exist if City shall have commenced to cure such failure and shall be proceeding
with reasonable diligence to completely cure such failure (provided such failure must be cured
within one hundred eighty (180) days after such notice); (d) the filing of a voluntary petition in
bankruptcy or a voluntary petition for an arrangement or reorganization under the United States
Federal Bankruptcy Act (or similar statute or law of any foreign jurisdiction) by City or any
guarantor of City's obligations hereunder if not withdrawn or dismissed within one hundred
eighty (180) days of filing; or (e) the appointment of a receiver or trustee for all or substantially
all of City's interest in the Improved Leased Premises or its leasehold estate hereunder if not
removed within one hundred eighty (180) days of such appointment.
9.2 Remedies.
9.2.1 Upon the occurrence of any Event of Default set forth in this Lease, UNT
is entitled to pursue any one or more of the remedies set forth herein after thirty (30) days
prior written notice to City:
9.2.2 Without declaring this Lease terminated, UNT may enter upon and take
possession of the Improved Leased Premises, without judicial process, and, in
compliance with Applicable Law, lock out, expel or remove City and any other Person
who may be occupying all or any part of the Improved Leased Premises without being
liable for any claim for damages unless caused by the negligence or willful misconduct of
UNT or any of its agents or employees, in which event UNT shall be entitled to receive:
(a) all City -UNT Base Rent and other amounts accrued hereunder as of the date of
termination of possession; (b) reimbursement of any reasonable expenditures made by
UNT in order to relet the Improved Leased Premises, including, but not limited to,
leasing commissions, lease incentives, remodeling and repair costs; and (c) all City -UNT
Base Rent and other net sums required hereunder to be paid by the City during the
remainder of the Term, diminished by any net sums thereafter received by UNT though
reletting the Improved Leased Premises during such period, after deducting all costs
incurred by UNT in reletting the Improved Leased Premises. UNT shall not be liable for,
nor shall City's obligations hereunder be diminished because of, UNT's failure to relet
the Improved Leased Premises or to collect rent due for such reletting; provided however,
City shall use commercially reasonable efforts to mitigate damages by reletting the
Improved Leased Premises. City shall not be entitled to the excess of any consideration
retained by reletting over the City -UNT Base Rent due hereunder. Reentry by UNT in
the Improved Leased Premises shall not affect City's obligations hereunder for the
unexpired Term. Unless UNT delivers written notice to City expressly stating that it has
A -1R
.=4132210.10
PRELIMINARY DRAFT
elected to terminate this Lease, all actions taken to dispossess or exclude City from the
Improved Leased Premises shall be deemed to be taken under this Section. If UNT elects
to proceed under this Section, it may at any time elect to terminate this Lease under
Subsection 9.2.4 below.
9.2.3 Without declaring this Lease terminated, UNT may enter upon the
Improved Leased Premises, without judicial process and without being liable for any
claim for damages unless caused by the negligence or willful misconduct of UNT or any
of its agents or employees, and perform any act City is obligated to perform under the
terms of this Lease. City agrees to reimburse UNT on demand for any reasonable
expenses UNT may incur in effecting compliance with City's obligations under this
Lease; further, City agrees that UNT will not be liable for any damages resulting to City
from effecting compliance with City's obligations under this Lease unless caused by the
negligence or willful misconduct of UNT or any of its agent or employees.
9.2.4 UNT may terminate this Lease, in which event City shall immediately
surrender the Improved Leased Premises to UNT, and if City fails to surrender the
Leased Premises, UNT may, without prejudice to any other remedy that it may have for
possession or arrearages in rent, enter upon and take possession of the Improved Leased
Premises, without judicial process, and, in compliance with Applicable Law, lock out,
expel or remove City and any other Person who may be occupying all or any part of the
Improved Leased Premises without being liable for any claim for damages unless caused
by the negligence or willful misconduct of UNT or any of its agents or employees. City
agrees to pay on demand the amount of all loss and actual damage that UNT may suffer
by reason of the termination of this Lease under this Section (but City shall not be liable
for any indirect, consequential and punitive damages), including without limitation, loss
and damage due to the failure of City to maintain and or repair the Improved Leased
Premises as required in this Lease. In addition, upon termination UNT may collect from
City an amount equal to the difference between the amount of all future rentals required
to be paid under this Lease from the date UNT terminates this Lease until the original
termination date, discounted to the present value less the then fair market rental value of
the Improved Leased Premises during such period, both calculated using a discount rate
of five percent (5 %) per annum. Notwithstanding anything contained in this Lease to the
contrary, this Lease may be terminated by UNT pursuant to this Section only by
delivering written notice of such termination to City, and no other act or omission of
UNT constitutes a termination of this Lease.
9.2.5 City hereby expressly waives any and all rights of redemption granted by
or under any present or future laws in the event of City being evicted or dispossessed
pursuant to Section 9.2 or in the event of UNT obtaining possession of the Improved
Leased Premises pursuant to Section 9.2.
9.2.6 UNT's pursuit of any remedy specified in this Lease will not constitute an
election to pursue that remedy only, nor preclude UNT from pursuing any other remedy
available at law or in equity, nor constitute a forfeiture or waiver of any City -UNT Base
Rent or other amount due to UNT as described in this Lease.
a -19
.=4132210.10
PRELIMINARY DRAFT
9.3 Limitation of Remedies. Prior to the expiration of the City Repayment
Period, UNT agrees that it shall not exercise any of its remedies under this Lease or Applicable
Law which would result in the termination of this Lease or City's or its subtenant's right to
possess the Improved Leased Premises, but shall be entitled to exercise any or all other remedies.
ARTICLE X
DEFAULT OF UNT
10.1 Defaults and Remedies. In the event of any default by UNT or if any
representation by UNT is false in any material respect, City shall be entitled to pursue any
available remedies at law or in equity or as otherwise provided in this Lease including, without
limitation, termination of this Lease, but prior to any such action City will give UNT written
notice specifying such default or misrepresentation with particularity, and UNT shall thereupon
have a reasonable period of time in which to cure any such default, but in no event more than
sixty (60) days from and after the date notice of such default or misrepresentation is given by
City to UNT; provided however, if the default or misrepresentation is incapable of being cured or
corrected within sixty (60) days, UNT shall be entitled to up to ninety (90) days to cure or
correct the same provided that UNT proceeds with reasonable diligence to cure or correct such
default or misrepresentation. Unless and until UNT fails to so cure any default or
misrepresentation after notice from the City, City shall not have any remedy or cause of action
by reason thereof.
ARTICLE XI
CONDEMNATION
11.1 Definitions. Whenever used in this Article, the following words shall have the
definitions and meanings hereinafter set forth:
11.1.1 "Condemnation Proceeding" means any action brought for the purpose of
any taking of the Improved Leased Premises, or any part thereof or of any property
interest therein (including, without limitation, the right to the temporary use of all or any
portion of the Improved Leased Premises), by competent authority as a result of the
exercise of the power of eminent domain, including a voluntary sale to such authority
either under threat of condemnation or while such action or proceeding is pending.
11. 1.2 "Taking" or "Taken" means the event and date of vesting of title to the
Improved Leased Premises or any part thereof or any property interest therein (including,
without limitation, the right to the temporary use of all or any portion of the Improved
Leased Premises), pursuant to a Condemnation Proceeding.
11. 13 "Entire Taking" means if all or substantially all of the Improved Leased
Premises shall be Taken in Condemnation Proceedings, this Lease shall terminate as of
the date of the Taking.
11. 1.4 "Partial Taking" means if less than all of the Improved Leased Premises
shall be Taken in any Condemnation Proceeding and the remaining Improved Leased
A-20
.=4132210.10
PRELIMINARY DRAFT
Premises is sufficient to operate the Convention Center as reasonably contemplated by
the Parties hereto.
11.1.5 "Temporary Taking" means if any right of temporary (hereinafter
defined) possession or occupancy of all or any portion of the Improved Leased Premises
shall be Taken, the City -UNT Base Rent shall be reduced during the duration of such
Taking in a fair and equitable manner that reflects the inability of City to use the affected
portion of the Improved Leased Premises. A Taking shall be considered "temporary"
only if the period of time during which City is deprived of usage of all or part of the
Improved Leased Premises as the result of such Taking does not materially interfere with
the ability of City to use and operate the Improved Leased Premises as a Convention
Center in the manner reasonably contemplated by the Parties hereto. Any other "Taking"
that is not "temporary" as described above shall be treated as an Entire Taking or as a
Partial Taking.
11.2 Notice of Condemnation & Settlement with Condemning Authority. UNT and
City shall each promptly notify the other of the commencement of any condemnation, eminent
domain or other similar proceedings with regard to the Improved Leased Premises. UNT shall
not make any settlement with the condemning authority in any Condemnation proceedings nor
convey or agree to convey the whole or any portion of the Improved Leased Premises to such
authority in lieu of condemnation without first obtaining the written consent of City, which
consent will not be unreasonably withheld, conditioned or delayed.
113 Effect of Condemnation on Lease.
113.1 In the event of an Entire Taking, the City -UNT Base Rent shall be fully
abated from and after the date of such Taking and from and after such date City and UNT
shall not have any other obligations under this Lease with respect to the Improved Leased
Premises, except for those obligations that expressly survive the termination hereof.
113.2 In the event of a Partial Taking, this Lease shall terminate as to the portion
of the Improved Leased Premises Taken and a fair and equitable portion of City -UNT
Base Rent attributable to the portion of the Improved Leased Premises Taken shall be
abated from and after the date of such partial Taking and from and after such date City
and UNT shall not have any other obligations under this Lease with respect to the portion
of the Improved Leased Premises that has been Taken, except for those obligations that
expressly survive the termination hereof.
(1) If, following a Partial Taking, the remaining Improved Leased
Premises is not sufficient to operate the Convention Center as reasonably
contemplated by the Parties hereto, then City, at its election by delivering written
notice to UNT, may terminate this Lease, whereupon the City -UNT Base Rent
shall be fully abated from and after such date of such partial Taking, and from and
after such date, City and UNT shall not have any further obligations under this
Lease with respect to the Improved Leased Premises, except for those obligations
that expressly survive the termination hereof. Such election to terminate the
A-21
.=4132210.10
PRELIMINARY DRAFT
Lease must be exercised no later than ninety (90) days after the date of such
Taking.
(2) If City does not elect, or does not have the right, to terminate this
Lease upon any partial Taking, then: (a) the Leased Premises shall be reduced by
the portion thereof Taken, the City -UNT Base Rent payable hereunder shall be
equitably reduced during the unexpired portion of the Term as provided above
and this Lease shall remain in full force and effect; and (b) City shall commence
and proceed with reasonable diligence to repair or reconstruct the remaining
Improvements on the Leased Premises, but only to the extent that repairs or
reconstruction are necessary to operate the Convention Center as reasonably
contemplated by the Parties and provided that City receives a sufficient portion of
the Condemnation award to pay for such repairs or reconstruction.
11.4 Settlement of Condemnation Proceeds. Any condemnation award shall be
divided between UNT and City in accordance with the value of the fee estate to UNT and the
value of the leasehold estate and Improvements to City, and City shall be entitled to any
consequential damages awarded with respect to the on -going operation of the Convention Center
and /or the costs of restoration of or repairs to the Convention Center. UNT shall deliver to City
that portion of any condemnation award that UNT may receive to which City is entitled as
provided in this Section. The provisions of this Section shall survive any termination pursuant to
the terms of this Article XI.
ARTICLE XII
REPRESENTATIONS AND SPECIAL COVENANTS
12.1 UNT's Representations. UNT hereby represents and covenants as follows
12. 1.1 Authority. The University of North Texas System and UNT have all
requisite power and authority to own the Convention Center Site, to execute, deliver and
perform its obligations under this Lease and to consummate the transactions herein
contemplated and any proper action in accordance with all Applicable Law, has duly
authorized the execution and delivery of this Lease, the performance of its obligations
under this Lease and the consummation of the transactions herein contemplated.
12.1.2 Binding, Obligation. This Lease is a valid and binding obligation of UNT
and is enforceable against UNT in accordance with its terms subject to (a) applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, rearrangement,
moratorium, receivership, liquidation and similar laws affecting creditor's rights or (b)
general principles of equity.
12.13 Consents. No permission, approval or consent by third parties or any
other governmental authorities is required in order for UNT to enter into this Lease, make
the agreements herein contained or perform the obligations of UNT hereunder other than
those which have been obtained.
A-22
.=4132210.10
PRELIMINARY DRAFT
12.1.4 Quiet Enjoyment. During the Term of this Lease and subject to the terms
of this Lease, City shall have the quiet enjoyment and peaceable possession of the Leased
Premises and may exercise all of its rights hereunder. UNT agrees to warrant and forever
defend City's right to such occupancy, use and enjoyment and the title to the Leased
Premises against the claims of any and all persons whomsoever lawfully claim the same,
or any part thereof by, through and under UNT, but not otherwise.
12.1.5 Limitations. EXCEPT AS PROVIDED IN SUBSECTION 7.8.1 OR
OTHERWISE EXPRESSLY PROVIDED HEREIN, THIS LEASE IS MADE BY UNT
WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND, EITHER
EXPRESS OR IMPLIED, AS TO THE CONDITION OF THE CONVENTION
CENTER SITE, ITS MERCHANTABILITY, ITS CONDITION OR ITS FITNESS FOR
CITY'S INTENDED USE OR FOR ANY PARTICULAR PURPOSE.
12.1.6 Title and Liens. The University of North Texas System is the sole owner
of and holds good and indefeasible, fee simple title to the Conference Center Site free and
clear of all liens and encumbrances. UNT and the University of North Texas System
shall not create, grant or permit any liens, mortgages, deeds of trust, easements or
licenses against fee title to the Convention Center Site or to otherwise encumber the fee
title to the Convention Center Site during the Term.
12.1.7 Environmental Matters. UNT's representations and warranties with
respect to environmental matters pertaining to the Convention Center Site are set forth in
Subsection 7.8.1.
12.2 City's Representations and Special Covenants. City hereby represents and
covenants as follows:
12.2.1 Existence. City is duly organized and validly existing under the laws of
the State of Texas and is authorized to do business in the State of Texas.
12.2.2 Authority. City has all requisite power and authority to own its property,
operate its business, enter into this Lease and consummate the transactions herein
contemplated, and by proper action have duly authorized the execution and delivery of
this Lease and the consummation of the transactions herein contemplated.
12.23 Binding Obligation. This Lease is a valid and binding obligation of City
and is enforceable against City in accordance with its terms, subject to (a) applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, rearrangement,
moratorium, receivership, liquidation and similar laws affecting creditors' rights, (b)
general principles of equity, and (c) principles of governmental immunity.
12.2.4 No Default. The execution by City of this Lease and the consummation
by City of the transactions contemplated hereby do not, as of the Commencement Date,
result in a breach of any of the terms or provisions of, or constitute a default or condition
which upon notice or the lapse of time or both would ripen into default under, the
organizational documents of City or under any indenture, agreement, instrument or
obligation to which City is a party or is bound.
A-23
.=4132210.10
PRELIMINARY DRAFT
12.2.5 Consents. No permission, approval or consent by third parties or any
other governmental authorities is required in order for City to enter into this Lease, make
the agreements herein contained or perform the obligations of City hereunder other than
those which have been obtained.
12.2.6 Proceedings. There are no actions, suits or proceedings pending or, to the
actual knowledge of City, without independent investigation, threatened or asserted
against City, affecting City at law or at equity or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency, or
instrumentality, domestic or foreign, which restrains, enjoins, prohibits or otherwise
makes illegal the consummation of the transactions contemplated by this Lease.
ARTICLE XIII
MISCELLANEOUS
13.1 Inspection. City shall permit UNT and its agents, upon no less than twenty -four
(24) hours prior written notice (except in cases where UNT reasonably believes that a bona fide
emergency exists, in which event no prior notice will be needed and no limitation on such entry
shall apply), to enter into and upon the Improved Leased Premises during normal business hours
for the purpose of inspecting the same on the condition that any such inspection does not
unreasonably interfere with City's operations at the Improved Leased Premises.
13.2 Estoppel Certificates. City and UNT shall, at any time and from time to time
upon not less than ten (10) business days prior written request by the other Party, execute,
acknowledge and deliver to UNT or City, as the case may be, a statement in writing certifying
(a) its ownership of the interest of UNT or City hereunder, as the case may be, (b) that this Lease
is unmodified and in full force and effect (or if there have been any modifications, that the same
is in full force and effect as modified and stating the modifications), (c) the dates to which the
City -UNT Base Rent and any other charges have been paid, and (d) that, to the then current
actual knowledge, without independent investigation of UNT or City, as the case may be, no
default hereunder on the part of the other Party exists (except that if any such default does exist,
the certifying Party shall specify such default).
13.3 Release. If requested by UNT, City shall, upon termination of this Lease, execute
and deliver to UNT an appropriate release, in form proper for recording, of all City's interest in
the Leased Premises, and UNT is hereby granted an irrevocable power of attorney, which is
coupled with an interest, to execute such release if City fails to do so within ten (10) days after
UNT's written request.
13.4 Interest on Past Due Amount. If City fails to pay any amounts due to the UNT
hereunder when due, the same shall bear interest from the date due until the date of payment at
the lesser of (a) six percent (6 %) per annum above the "Prime Rate" as published in The Wall
Street Journal, Southwest Edition, in its listing of "Money Rates" (or any successor publication),
or (b) the maximum rate under Applicable Law.
13.5 Notices. All payments required to be made by City must be paid to UNT at the
address set forth below. All notices, demands, and other communications required to be given or
A-24
.=4132210.10
PRELIMINARY DRAFT
made hereunder shall be in writing and shall be duly given if delivered by hand, messenger,
facsimile or reputable overnight courier or if mailed by certified or registered mail, first class
postage prepaid, to the respective parties hereto at the addresses set forth below, or to such other
address furnished in writing to the other party hereto, and shall be deemed received upon the
earlier of: (a) actual receipt; and (b) (whether or not actually received) four (4) days after such
mailing or upon receipt of confirmation of successful transmission of facsimile by the
transmitting facsimile.
If to City: If to UNT:
Vice President for Finance
University of North Texas
1155 Union Circle #310500
Denton, TX 76203
Fax: (940) 565 -4779
with copy to: with copy to:
Vice Chancellor & General Counsel
University of North Texas System
1901 Main Street
Dallas, TX 75201
Fax: (214) 752 -5980
13.6 Successors and Assigns. This Lease shall be binding upon and shall inure to the
benefit of the Parties and their permitted successors and assigns.
13.7 Amendment. Except as expressly provided herein, neither this Lease nor any
term hereof may be amended, waived, discharged or terminated, except by a written instrument
signed by the Parties hereto.
13.8 Headings and Subheadings. The headings of the articles, sections, and
subsections of this Lease are for convenience or reference only and in no way define, limit,
extend or describe the scope of this Lease or the intent of any provisions hereof.
13.9 Unavoidable Default and Delays. After the Commencement Date, the time within
which any Party to this Lease shall be required to perform any act under this Lease, other than
the payment, when due, of City -UNT Base Rent or any other payment by City, shall be extended
by a period of time equal to the number of days during which performance of such act is delayed
due to the occurrence of a Force Maj eure event.
13.10 Severability. In the event one or more of the terms or provisions of this Lease or
the application thereof to any Party or circumstances shall, to any extent, be held invalid, illegal
or unenforceable, the remainder of this Lease, and each term and provision of this Lease shall be
valid and enforceable to the fullest extent permitted by law.
13.11 Governing Law. THIS LEASE SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE UNITED
STATES APPLICABLE THERETO AND THE LAWS OF THE STATE OF TEXAS
A-25
.=4132210.10
PRELIMINARY DRAFT
APPLICABLE TO A LEASE EXECUTED, DELIVERED AND PERFORMED IN SUCH
STATE, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW.
13.12 Venue for Actions. The venue for any legal action or dispute arising out of this
Lease shall lie exclusively in Denton County, Texas.
13.13 Attorneys' Fees. Should either Party to this Lease engage the services of
attorneys or institute legal proceedings to enforce its rights or remedies under this Lease, the
prevailing party to such dispute or proceedings shall be entitled to recover its reasonable
attorneys' fees, court costs and similar costs incurred in connection with the resolution of such
dispute or the institution, prosecution or defense in such proceedings from the other Party.
13.14 Relationship of Parties. Nothing contained in this Lease shall be deemed or
construed by the Parties hereto or by any third party as creating the relationship of principal and
agent, partnership, joint venture or any association between the Parties hereto, it being
understood and agreed that none of the provisions contained herein or any acts of the Parties in
the performance of their respective obligations hereunder shall be deemed to create any
relationship between the Parties hereto other than the relationship of landlord and tenant. It is
understood and agreed that this Lease does not create a joint enterprise, nor does it appoint either
Party as an agent of the other for any purpose whatsoever. Neither Party shall in any way
assume any of the liability of the other for acts of the other or obligations of the other. Each
Party shall be responsible for any and all suits, demands, costs or actions proximately resulting
from its own individual acts or omissions.
13.15 Net Lease. It is the intention of the UNT and City that the City -UNT Base Rent
payable under this Lease after the Commencement Date and all Impositions and other costs
related to City's use or operation of the Improved Leased Premises under this Lease, shall be
absolutely net to UNT, and the City shall pay during the Term, without any offset or deduction
whatsoever, all such Impositions and other costs due by City under this Lease. City's covenant
to pay City -UNT Base Rent is independent of every other covenant in this Lease.
13.16 Non - Waiver. No Party shall have or be deemed to have waived any Event of
Default under this Lease by the other Party unless otherwise expressly provided herein or such
waiver is embodied in a document signed by the waiving Party that describes the Event of
Default that is being waived. Further, no Party shall be deemed to have waived its rights to
pursue any remedies under this Lease, unless otherwise expressly provided herein or such waiver
is embodied in a document signed by such Party that describes any such remedy that is being
waived.
13.17 Obligations to Defend Validity of Lease. If litigation is filed by a third party
against City or UNT in an effort to enjoin either Party's performance of this Lease, the Parties
hereto who are named as parties in such action shall take all commercially reasonable steps to
support and defend the validity and enforceability of this Lease. Either Party may intervene in
any such matter in which the other Party hereto has been named as a defendant. Each Party shall
be responsible for its attorneys' fees and costs of litigation.
A-26
.=4132210.10
PRELIMINARY DRAFT
13.18 Survival. All provisions herein which are expressly stated to survive or covenants
in this Lease providing for performance after termination of this Lease shall survive the
termination of this Lease.
13.19 Entire Agreement. This Lease (including the Exhibits attached hereto and
incorporated herein, if any), the Master Agreement and the other documents delivered pursuant
to this Lease or referenced herein constitute the full and entire understanding and agreement
between the Parties with regard to the subject matter hereof. There are no representations,
promises or agreements of UNT or City regarding the subject matter of this Lease not contained
in this Lease, the Exhibits attached hereto or the other documents delivered pursuant to this
Lease or referenced herein.
13.20 Counterparts. This Lease may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one and the same instrument.
13.21 Riht of First Refusal of City Provided that City in not in default of this Lease, in
the event that UNT shall at any time during the Term of this Lease desire to sell the Convention
Center Site on terms acceptable to UNT pursuant to a bona fide offer from a third party unrelated
to UNT (a "Bona Fide Offer") that it shall have received, UNT shall notify City in writing that it
offers City the Convention Center Site at the same price and terms as set forth in such Bona Fide
Offer. City shall have thirty (30) days after receipt of such written notice of such Bona Fide
Offer to notify UNT in writing that it agrees to purchase the Convention Center Site at such price
and terms. If UNT does not receive notice from City that it exercises its right within such thirty
(30) day period, UNT may proceed with the sale of the Convention Center Site without regard to
City's right of first refusal. If the sale to such third party is not consummated, UNT shall notify
City in writing of all other Bona Fide Offers it receives for the purchase of the Convention
Center Site, and City shall have the right to purchase the Convention Center Site at the same
price and terms as set forth in such Bona Fide Offer(s) as provided in this Section. If UNT
timely receives notice from City that it exercises its right within such thirty (30) day period, City
shall purchase the Convention Center Site at the same price and on the same terms as set forth in
the Bona Fide Offer, provided, however, that such purchase by City must be closed and funded
within one hundred eighty (180) days after the date of such timely notice from City or such right
of first refusal shall be null and void. The right of first refusal set forth in this Section is personal
to City and may not be transferred in any manner.
13.22. Right of First Refusal of OHPD. In the event that City does not exercise its right
of first refusal as provided in Section 13.21, then, OHPD shall have the right of first refusal to
purchase the Convention Center Site pursuant to terms acceptable to UNT provided that: (a)
OHPD is the then current subtenant under the Sublease and is not in default under the Sublease,
(b) the leasehold estate or other interests of OHPD created by the Sublease shall not merge with
the fee estate; and (c) no modifications of the rights or roles of either OHPD or City or any
modification of the Master Agreement, this Lease or the Sublease shall occur without the written
consent of City.
13.23 Memorandum. Contemporaneously with the execution of this Lease, UNT and
City shall execute a memorandum of lease and arrange for the same to be recorded in the Real
Property Records of Denton County, Texas. The memorandum of lease shall contain the primary
A-27
.=4132210.10
PRELIMINARY DRAFT
terms of this Lease including, without limitation, the description of the Convention Center Site,
the Term and renewal options, UNT's agreement not to grant, place or permit liens or
encumbrances on the fee title to the Convention Center Site and City's right of first refusal
pursuant to Section 13.21 above. In the event of conflicts between the provisions of the
memorandum of lease and this Lease, this Lease shall control.
13.24 Non - Merger. Notwithstanding the fact that fee title to the Convention Center Site
and to the leasehold estate hereby created may, at any time, be held by the same party, there shall
be no merger of the leasehold estate hereby created unless the owner thereof executes and files
for record in the Real Property Records of Denton County, Texas, a document expressly
providing for the merger of such estates.
SIGNATURE PAGE FOLLOWS
A-28
.=4132210.10
PRELIMINARY DRAFT
IN WITNESS WHEREOF, the Parties hereto have executed and delivered this Lease as of the
date first set forth above.
UNT:
UNIVERSITY OF NORTH TEXAS,
an institution of higher education of the State of Texas
By:_
Name:
Title:
CITY:
CITY OF DENTON, TEXAS,
a municipal corporation and political subdivision of the State of Texas
By:_
Name:
Title:
ATTEST:
IM
Jennifer Walters, City Secretary
A-29
.=4132210.10
PRELIMINARY DRAFT
EXHIBIT "A"
DEPICTION/DESCRIPTION OF CONVENTION CENTER SITE
A-30
.=4132210.10
C3
Preliminary
Site Plan
—L�
0 25 -J 0 1001
Exhibit D
133 acres
Master Development Agreement
Convention Center Site: 7.00 acres
Denton Convention Center Project
Hotel slW 6.30 acres
Dated: December 10, 2013
PRELIMINARY DRAFT
A-31
.=4132210.10
PRELIMINARY DRAFT
CITY -OHPD CONVENTION CENTER SUBLEASE
BETWEEN
CITY OF DENTON, TEXAS
AND
O'REILLY HOTEL PARTNERS - DENTON, LLC
409923.13
PRELIMINARY DRAFT
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS, GRANT OF SUBLEASE AND TERM
1.1 Certain Definitions ................................................................................. ..............................1
1.2 Sublease ................................................................................................. ..............................7
1.3 No Warranty ........................................................................................... ..............................8
1.4 Term ....................................................................................................... ..............................8
ARTICLE 2
SUBLEASE PAYMENTS
2.1
Base Rent ...............................................................................................
..............................8
2.2
Adjustment of Base Rent .......................................................................
..............................9
2.3
Additional Rent ......................................................................................
..............................9
2.4
Late Payment Charge .............................................................................
..............................9
2.5
Holding Over .........................................................................................
..............................9
2.6
Payments ...............................................................................................
.............................10
2.7
Security .................................................................................................
.............................10
2.8
Application of Security .........................................................................
.............................10
ARTICLE 3
IMPOSITIONS
3.1 Payment of Impositions ........................................................................ .............................11
3.2 Payment of Personal Property Taxes .................................................... .............................11
3.3 Contest of Impositions .......................................................................... .............................11
ARTICLE 4
USE OF SUBLEASED PREMISES
4.1 Permitted Use ........................................................................................ .............................12
4.2 Continuous Use ..................................................................................... .............................12
4.3 Availability of Subleased Premises ...................................................... .............................12
4.4 Prohibited Uses ..................................................................................... .............................12
4.5 Signs ...................................................................................................... .............................12
4.6 Reserved Naming Rights ...................................................................... .............................12
4.7 Reserved Right to Enter Subleased Premises ....................................... .............................13
ARTICLE 5
OPERATIONS, MANAGEMENT AND MAINTENANCE
5.1 Exclusive Rights and Obligations ......................................................... .............................13
5.2 Related Obligations ............................................................................... .............................14
5.3 Maintenance .......................................................................................... .............................14
409923.13
5.4
Repair and Maintenance Obligations ....................................................
.............................15
5.5
Capital Repairs ......................................................................................
.............................15
5.6
City Facilities FF& E .............................................................................
.............................16
5.7
OHPD FF& E .........................................................................................
.............................16
5.8
Annual FF &E Inventory .......................................................................
.............................16
5.9
Services .................................................................................................
.............................16
5.10
Operating Expenses ..............................................................................
.............................17
5.11
Liens ......................................................................................................
.............................17
5.12
City's Right to Perform .........................................................................
.............................17
ARTICLE 6
ALTERATIONS
6.1 OHPD Alterations ................................................................................. .............................18
6.2 Additional Requirements for OHPD Alterations .................................. .............................18
ARTICLE 7
REPLACEMENT FORECAST AND AR &R FUND
7.1 Capital Repair and City Facilities FF &E Forecast ............................... .............................19
7.2 AR &R Fund .......................................................................................... .............................19
7.3 City's Right to Audit ............................................................................. .............................20
ARTICLE 8
INSURANCE AND ENVIRONMENTAL PROVISIONS
8.1
Commercial Property Insurance ........................................................... .............................20
8.2
Additional City Insurance ..................................................................... .............................20
8.3
OHPD Insurance ................................................................................... .............................21
8.4
Additional Coverage /Requirements of Policies .................................... .............................22
8.5
Waiver of Subrogation .......................................................................... .............................22
8.6
Adjustment of Losses ............................................................................ .............................23
8.7
Application of Proceeds of Property Insurance .................................... .............................23
8.8
Environmental Investigation, Remediation and Indemnity .................. .............................23
ARTICLE 9
CASUALTY
9.1 Damage or Destruction ......................................................................... .............................24
9.2 Notice and Cooperation ........................................................................ .............................25
ARTICLE 10
ASSIGNMENT AND SUBLETTING
10.1 Assignment and Subletting ................................................................... .............................25
10.2 Permitted Assignments ......................................................................... .............................25
409923.13
ARTICLE 11
SURRENDER
11.1 Surrender ............................................................................................... .............................26
11.2 Holding Over ........................................................................................ .............................26
11.3 Validity of Surrender ............................................................................ .............................26
ARTICLE 12
EVENTS OF DEFAULT
12.1
Events of Default ..................................................................................
.............................26
12.2
Remedies ...............................................................................................
.............................28
12.3
Payment by OHPD ................................................................................
.............................29
12.4
Reentry by City .....................................................................................
.............................29
12.5
Injunction ..............................................................................................
.............................29
12.6
Retention of Monies ..............................................................................
.............................30
12.7
Recovery of Damages or Deficiencies ..................................................
.............................30
12.8
Mitigation of Damages .........................................................................
.............................30
12.9
No Waiver of Obligations .....................................................................
.............................30
12.10
Payments on Account ...........................................................................
.............................30
12.11
No Waiver .............................................................................................
.............................31
12.12
Cumulative Rights and Remedies .........................................................
.............................31
12.13
Attorneys' Fees and Disbursements ......................................................
.............................31
12.14
Sublease Valid until Terminated by City ..............................................
.............................31
12.15
OHPD's Expenses .................................................................................
.............................31
12.16
Hotel Lender Notice and Right to Cure ................................................
.............................31
12.17
Third -Party Consultant ..........................................................................
.............................32
ARTICLE 13
DEFAULT OF CITY
13.1 Defaults and Remedies ......................................................................... .............................32
ARTICLE 14
CONDEMNATION
14.1
Definitions .............................................................................................
.............................32
14.2
Entire Taking ........................................................................................
.............................33
14.3
Partial Taking ........................................................................................
.............................33
14.4
Temporary Taking ................................................................................
.............................33
14.5
Condemnation Award ...........................................................................
.............................33
14.6
Notice of Taking Cooperation ..............................................................
.............................34
ARTICLE 15
REPRESENTATIONS, WARRANTIES AND SPECIAL COVENANTS
15.1 City's Representations, Warranties and Special Covenants ................. .............................34
15.2 OHPD's Representations and Warranties ............................................. .............................34
-iii -
4099523.13
ARTICLE 16
MISCELLANEOUS
16.1
Estoppel Certificates .............................................................................
.............................35
16.2
Release ..................................................................................................
.............................35
16.3
Notices ..................................................................................................
.............................35
16.4
Successors and Assigns .........................................................................
.............................37
16.5
Amendment ...........................................................................................
.............................37
16.6
Headings and Subheadings ...................................................................
.............................37
16.7
Severability ...........................................................................................
.............................37
16.8
Governing Law .....................................................................................
.............................37
16.9
Venue for Actions .................................................................................
.............................37
16.10
Relationship of Parties ..........................................................................
.............................37
16.11
Net Sublease ..........................................................................................
.............................37
16.12
Quiet Enjoyment ..................................................................................
..............................3 8
16.13
Non - Waiver ...........................................................................................
.............................38
16.14
Obligations to Defend Validity of Sublease .........................................
.............................38
16.15
Survival .................................................................................................
.............................38
16.16
Entire Agreement ..................................................................................
.............................38
16.17
Counterparts ..........................................................................................
.............................38
16.18
Brokers ..................................................................................................
.............................39
16.19
Conflicts ................................................................................................
.............................39
16.20
City Liability .........................................................................................
.............................39
16.21
Time ......................................................................................................
.............................39
16.22
Legal Interest ........................................................................................
.............................39
16.23
Memorandum of Lease Agreement ......................................................
.............................39
16.24
Termination of Master Agreement ........................................................
.............................39
16.25
Indemnification of City .........................................................................
.............................39
ARTICLE 17
CITY -UNT LAND LEASE
17.1 City -UNT Land Lease Inclusions and Exclusions ................................ .............................41
17.2 OHPD Assumption of City -UNT Land Lease Obligations .................. .............................41
17.3 No Assumption by City ........................................................................ .............................41
17.4 UNT Defaults: Consents ....................................................................... .............................42
17.5 Termination of City -UNT Land Lease ................................................. .............................42
EXHIBITS
Exhibit A - Depiction /Description of Convention Center Site
Exhibit B - Description of Capital Repair and Replacement Items
Exhibit C - Description of OHPD FF &E
Exhibit D - Form of OHM Management Agreement
_1v_
=4099523.13
PRELIMINARY DRAFT
CITY -OHPD CONVENTION CENTER SUBLEASE
THIS CITY -OHPD CONVENTION CENTER SUBLEASE ( "Sublease ") is made as
of the day of , 2013 (the "Effective Date "), by and between the City of
Denton, Texas, a municipal corporation and political subdivision of the State of Texas, ( "City "),
as sublessor, and O'Reilly Hotel Partners — Denton, LLC, a Missouri limited liability company
( "OHPD ") as subtenant. City and OHPD are sometimes referred to herein collectively as the
"Parties" or singularly as a "Party ".
RECITALS
City, OHPD, the University of North Texas, an institution of higher education of the
State of Texas ( "UNT "), and O'Reilly Hospitality Management, LLC ( "OHM ") entered into that
certain Master Development Agreement dated effective , 2013 (the "Master
Agreement "), providing for, among other terms, the development of a hotel and restaurant on the
Hotel Site (hereafter defined) and a Convention Center (hereafter defined) on the Convention
Center Site (hereafter defined) and for the operation and maintenance of the improvements after
constriction.
Pursuant to the terms of the Master Agreement, City and UNT entered into a ground lease
dated effective , 2013 wherein UNT leased the Convention Center Site to
City ( "City -UNT Land Lease ") for the purpose of the constriction of the Convention Center on
the Convention Center Site.
Pursuant to the terms of the Master Agreement, City agreed to enter into this Sublease
with OHPD, as of the Effective Date with the Term (hereinafter defined) to commence on the
Operational Date on the completion of Convention Center, for the purpose of OHPD's operation
and maintenance of the Convention Center on the terms and conditions set forth herein.
For good and valuable consideration, the receipt and sufficiency of which are
acknowledged, City and OHPD agree as follows:
ARTICLE 1
DEFINITIONS, GRANT OF SUBLEASE AND TERM
1.1 Certain Definitions. Any capitalized terms used in this Sublease which are not
defined in this Section 1.1 or otherwise in this Sublease shall have the meanings assigned to the
same in the Master Agreement or the City -UNT Land Lease, as applicable. The following terms
shall have the meaning set forth in this Section 1.1.
(a) "Affiliate" shall mean, with respect to any Person: (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other
fiduciary, ten percent (10 %) or more of the capital stock having ordinary voting power in the
election of directors of such Person; (b) each Person that controls, is controlled by or is under
common control with such Person; and (c) in the case of individuals, the immediate family
members, spouses and lineal descendants of individuals who are Affiliates of the Person. For
-1-
4099523.13
purpose of this definition, "control" of a Person shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of its management or policies, whether through the
ownership of voting shares or interests, by contract, by virtue of being an executive officer or a
director or otherwise.
(b) "Annual FF &E Inventory" shall mean the annual inventory of the City
Facilities FF &E and the OHPD FF &E as set forth in Section 5.8 of this Sublease.
(c) "Applicable Law" shall mean all laws or statutes, riles or regulations, and
any amendments thereto, of the State or the United States by which the City and its powers,
securities, operations and procedures are, or may be governed or from which its powers may be
derived, including all City codes, ordinances and development standards. All City codes,
ordinances, riles and development standards shall be applicable to this agreement and the
Project, irrespective of whether such codes, ordinances, riles and development standards would
otherwise normally apply.
(d) "AR &R Fund" shall mean the asset, replacement and renewal account to
be established, funded and utilized in accordance with Article 7 of this Sublease.
(e) "AV Taxes" shall mean any and all real or personal property taxes and ad
valorem taxes assessed against the Subleased Premises or OHPD's interest therein during the
Term.
(f) "Base Rent" shall mean an amount in each Sublease Year, except the
Initial Base Rent Period, equal to the City's aggregate Bond Debt Payments, reduced by: (a) the
total hotel occupancy tax, sales tax and City ad valorem tax generated by the Hotel, Hotel Site,
Convention Center and Convention Center Site and paid to City; (b) the TIRZ tax increment
revenue paid to City for the Convention Center pursuant to an agreement between the TIRZ and
City for the applicable Sublease Year ((a) and (b) collectively, the "Tax Revenue(s) "), and (c) a
credit of up to $100,000 per each Sublease Year in which the application of the Tax Revenues
are not sufficient to pay the City's Bond Debt Payments (the "Base Rent Credit "). The Base
Rent Credit shall be in the amount of the deficiency between the Tax Revenues and the City's
aggregate Bond Debt Payments for the applicable Sublease Year, but in no event shall exceed
$100,000 per Sublease Year. The Base Rent Credit shall not be applicable to or given in any
Sublease Year in which the Tax Revenues exceed the amount of the City's aggregate Bond Debt
Payments or after City's payment in full of all Bond Debt Payments. No Base Rent shall be due:
(i) until the earlier to occur of the expiration of twenty -four (24) months after the Operational
Date or the expiration of forty -eight (48) months after date of issuance of the Certificates of
Obligation (the "Base Rent Commencement Date "); or (ii) in any Sublease Year in which the
Tax Revenue generated exceeds the City's aggregate Bond Debt Payments for the applicable
Sublease Year. During the period of time commencing with the Base Rent Commencement Date
and ending on the immediately following September 30th (the "Initial Base Rent Period "), Base
Rent shall mean an amount equal to the City's aggregate Bond Debt Payments due during that
period, reduced by: (a) Tax Revenues; and (b) the Base Rent Credit, if any. Upon City's
payment in full of all Bond Debt Payments, the amount of the Base Rent shall be adjusted in
accordance with Section 2.2. For illustrative purposes only, the following examples for Base
Rent calculations are provided:
-2-
4099523.13
Difference between Bond Payment and Tax Revenue 350,000 50,000 (150,000
Applicable Base Rent Credit (subtract) (100,000) (50,000) -
Total Base Rent 250,000 - -
(g) "Bond Debt Payments" shall mean the semi - annual debt service payments
made by the City on its Certificates of Obligation issued to fund the constriction of the
Convention Center.
(h) "Capital Repair" means any work (including all labor, supplies, materials
and equipment) reasonably necessary to repair, restore, refurbish or replace the equipment,
facilities, stricture or other components of the Subleased Premises described in Exhibit B
attached hereto; provided that such work and costs therefor must be a "capital cost" pursuant to
Generally Accepted Accounting Principles and would be so classified by the City's auditor and
is necessitated by: (a) physical obsolescence (including replacement necessitated by repeated
breakdown of a component of the Subleased Premises despite efforts to repair or restore it short
of such replacement); (b) requirements imposed by the Approved Franchisor; or (c)
modifications required from and after the Operational Date by Applicable Law.
(i) "Certificates of Obligation" shall mean the City's Certificates of
Obligation issued to fund the constriction of the Convention Center.
0) "City" shall mean in all instances the City of Denton, Texas, a municipal
corporation and political subdivision of the State of Texas and shall not include any assignee of
City's rights and obligations under this Sublease.
(k) "City Facilities" shall mean the Convention Center and related automobile
parking spaces as determined to be required by the City's development standards.
(1) "City Facilities FF &E" shall mean those items of furniture, fixtures and
equipment specified in the City Facilities FF &E Specifications purchased for the City Facilities
in accordance with the terms the Master Agreement.
(m) "City -UNT Land Lease" shall have the meaning set forth in the Recitals.
(n) "Comparable Convention Centers" shall mean the operation and
maintenance of the Convention Center in a manner such that the condition of the Convention
shall demonstrate refined, high quality and fully functional appointments; furniture, fixtures and
-J-
4099523.13
Example A
Example B
Example C
City's Annual Aggregate Bond Debt Payment
1,000,000
1,000,000
1,000,000
Tax Revenues (subtract)
(hotel occupancy tax)
(400,000)
(700,000)
(800,000)
(sales tax)
(50,000)
(50,000)
(50,000)
(City ad valorem tax)
(100,000)
(100,000)
(150,000)
(TIRZ revenue)
(100,000)
(100,000)
(150,000)
Tax Revenues sub -total
(650,000)
(950,000)
(1,150,000)
Difference between Bond Payment and Tax Revenue 350,000 50,000 (150,000
Applicable Base Rent Credit (subtract) (100,000) (50,000) -
Total Base Rent 250,000 - -
(g) "Bond Debt Payments" shall mean the semi - annual debt service payments
made by the City on its Certificates of Obligation issued to fund the constriction of the
Convention Center.
(h) "Capital Repair" means any work (including all labor, supplies, materials
and equipment) reasonably necessary to repair, restore, refurbish or replace the equipment,
facilities, stricture or other components of the Subleased Premises described in Exhibit B
attached hereto; provided that such work and costs therefor must be a "capital cost" pursuant to
Generally Accepted Accounting Principles and would be so classified by the City's auditor and
is necessitated by: (a) physical obsolescence (including replacement necessitated by repeated
breakdown of a component of the Subleased Premises despite efforts to repair or restore it short
of such replacement); (b) requirements imposed by the Approved Franchisor; or (c)
modifications required from and after the Operational Date by Applicable Law.
(i) "Certificates of Obligation" shall mean the City's Certificates of
Obligation issued to fund the constriction of the Convention Center.
0) "City" shall mean in all instances the City of Denton, Texas, a municipal
corporation and political subdivision of the State of Texas and shall not include any assignee of
City's rights and obligations under this Sublease.
(k) "City Facilities" shall mean the Convention Center and related automobile
parking spaces as determined to be required by the City's development standards.
(1) "City Facilities FF &E" shall mean those items of furniture, fixtures and
equipment specified in the City Facilities FF &E Specifications purchased for the City Facilities
in accordance with the terms the Master Agreement.
(m) "City -UNT Land Lease" shall have the meaning set forth in the Recitals.
(n) "Comparable Convention Centers" shall mean the operation and
maintenance of the Convention Center in a manner such that the condition of the Convention
shall demonstrate refined, high quality and fully functional appointments; furniture, fixtures and
-J-
4099523.13
equipment; exterior and interior finishes; landscaping; and mechanical, electrical and structural
components consistent with convention centers of comparable size and operation within the State
of Texas that are affiliated with Comparable Hotel Properties . For purposes of this Sublease, the
term Comparable Hotel Properties shall include, as of the Effective Date (but which may not be
included in the future if such properties no longer meet the definition of "Comparable
Convention Centers "), the San Marcos convention center and the Frisco convention center. The
City shall inspect the Convention Center on an annual basis to determine compliance with the
operation of the Convention Center in the manner of Comparable Convention Centers.
Reasonable exceptions to this standard of Comparable Convention Centers may be agreed to by
the Parties.
(o) "Convention Center" means an "upscale" convention center facility of
approximately 100,000 square feet (but no less than 90,000 square feet) in size under roof and
constricted upon the Convention Center Site, containing meeting rooms, and one (1) large
ballroom sufficient to lawfully accommodate approximately 2,000 people for a banquet -style
event, and related improvements, including landscaping, the required parking spaces as
determined by the City's development standards, and required infrastructure.
(p) "Convention Center Site" means that part of the Project Site whereon the
Convention Center and related improvements shall be constricted, as depicted on Exhibit A
attached hereto, which Exhibit A shall be replaced with a survey and metes and bounds
description of the Convention Center Site to be provided by OHPD within sixty (60) days of the
Operational Date on review and approval of the same by UNT and City. OHPD agrees to
provide said survey and metes and bounds description of the Convention Center Site to UNT and
City within sixty (60) days of the Operational Date.
(q) "Effective Date" shall mean the date this Sublease is fully executed by
City and OHPD upon the Closing of the City's Financing Contribution.
(r) "Environmental Laws" shall refer to and include, without limitation, all
Federal, State, City, and local statutes, laws, ordinances, riles and regulations, now or hereafter
in effect, and as amended from time to time, that are intended for the protection of the
environment, or that govern, control, restrict, or regulate the use, handling, treatment, storage,
discharge, disposal, or transportation of Hazardous Materials. Environmental Laws specifically
include but are not limited to, the National Environmental Policy Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Resource Conservation and
Recovery Act, the Hazardous Materials Act, the Toxic Substances Control Act, the Clean Water
Act, the Clean Air Act, the Superfund Authorization and Recovery Act, the Occupational Safety
and Health Administration Hazard Communication Standards, the Texas Hazardous Materials
Act, and the Texas Water Quality Control Act.
(s) "Event of Default" shall have the meaning set forth in Section 12.1.
(t) "Hazardous Materials" shall refer to, and include, without limitation, all
substances whose use, handling, treatment, storage, disposal, discharge, or transportation is
governed, controlled, restricted, or regulated by Environmental Laws, that have been defined,
designated or listed by any responsible regulatory agency as being hazardous, toxic, radioactive,
-4-
4099523.13
or that may present an actual or potential hazard to human health or the environment if
improperly used, handled, treated, stored, disposed, discharged, generated or released.
Hazardous Materials specifically include, without limitation, asbestos and asbestos- containing-
materials, petroleum products, solvents, and pesticides, but shall exclude any such items that are
necessary for the ordinary performance of City's or any subtenant's business activities, provided
that such are used, stored or disposed of in compliance with all Applicable Laws.
(u) "Hotel" means a Full- Service Hotel (i) constricted and operated pursuant
to and in accordance with the standards of an Approved Franchise and pursuant to the terms of
the Master Agreement and any related agreements, (ii) constricted upon the Hotel Site in
accordance with the Approved Plans, and (iii) consisting of at least nine (9) stories and
containing a minimum of two - hundred seventy -five (275) guestrooms, or such other number as is
agreed to by the Parties to the Master Agreement, and a restaurant, recreational amenities,
adequate on -site parking, and other related amenities and space for providing the services
customarily found in a full- service upscale hotel, open to the public and serving the Convention
Center, adjacent business community, the UNT community and citizens of the City.
(v) "Hotel Lender" means the lender that OHPD selects to provide the
required debt financing for the Private Financing Contribution , subject to the provisions of
Section 5. 13 of the Master Agreement.
(w) "Hotel Site" shall mean that part of the Project Site whereon the Hotel and
Restaurant and related improvements shall be constricted.
(x) "Impositions" shall mean taxes including real or personal property taxes
and ad valorem taxes assessed against the Subleased Premises including Improvements thereon
or OHPD's interest therein, if any, during the Term, special assessments, levies and liens for any
constriction performed by or at the direction of OHPD (other than liens, if any, which are
payable by City pursuant to written agreements executed by City), assessed and becoming due
during the Term and that are levied or assessed against the Subleased Premises including
Improvements thereon.
(y) "Improvements" shall mean the Convention Center and all other buildings,
strictures, equipment, improvements, fixtures and Related Infrastructure from time to time
connected, installed or situated on the Convention Center Site, including all landscaping.
(z) "Interest" shall mean a rate per annum equal to the lesser of (a) 6% above
the "Prime- Rate" as published in the The Wall ,Sheet Journal, Southwest Edition, in its listing of
"Money Rates" (or any successor publication), or (b) the maximum under Applicable Law.
(aa) "Maintenance" means all work (including all labor, supplies, materials and
equipment) which is of a routine, regular, and predictable nature and reasonably necessary for
the cleaning and routine upkeep and repair of any property, strictures, surfaces, facilities,
fixtures (including, but not limited to, media plug -ins and cable and all wiring attendant thereto),
equipment or furnishings (including, but not limited to City Facilities FF &E and OPHD FF &E),
landscaping or any other component of the Subleased Premises in order to maintain such items in
a manner comparable to or better than Comparable Convention Centers. Maintenance shall
-5-
409923.13
include, but not be limited to, the following: (a) preventative or routine maintenance that is
stipulated in the operating manuals for the components as regular, periodic maintenance
procedures; (b) periodic testing of building systems, such as mechanical, card -key security, fire
alarm, lighting, and sound systems; (c) ongoing trash removal; (d) regular maintenance and
installation of replacements, if needed, of all landscaping and regular cleaning and maintenance
of all parking lots and spaces; (e) regular maintenance procedures for HVAC, plumbing, and
electrical and structural systems such as periodic cleaning, lubrication, and changing air filters
and lights (other than field lights); (f) touch up painting; (g) cleaning prior to, during and
following all conferences, conventions and other events held at the Subleased Premises; (h)
repairs to the Subleased Premises other than Capital Repair; (i) changing of standard, isolated
light bulbs, fuses and circuit breakers, as they burn out; 0) readying the Subleased Premises for
the upcoming conferences, conventions or other events held on the Subleased Premises; (k) the
labor required to perform routine maintenance on the components of the Subleased Premises
which are subject to Capital Repair; and (1) any other work of a routine, regular and generally
predictable nature that is reasonably necessary to keep the Subleased Premises in a manner
comparable to or better than Comparable Convention Centers. Maintenance shall not include the
financing of Capital Repairs.
(bb) "Master Agreement" shall have the meaning set forth in the Recitals.
(cc) "OHM" shall mean O'Reilly Hospitality Management, LLC, a Missouri
limited liability company.
(dd) "OHPD" shall mean in all instances O'Reilly Hotel Partners — Denton,
LLC, a Missouri limited liability company, and shall not include any assignee of its rights and
obligations under this Sublease.
(ee) "OHPD FF &E" shall mean the furniture, trade fixtures, equipment and
other personal property purchased by OHPD including, without limitation, those items described
in Exhibit C attached hereto, necessary for the use and operation of the Subleased Premises
pursuant to Section 5.7.
(ff) "Operating Expenses" means the following costs and expenses incurred by
OHPD in operating the Convention Center: (a) cost of sales, salaries, wages, fringe benefits,
payroll taxes and other cash payroll costs related to Convention Center employees; (b)
departmental expenses, administrative and general expenses and the cost of advertising and
business promotion, all utility costs including water, heat, light and power, and costs for
Maintenance; (c) the cost of inventories and supplies consumed in the operation of the
Convention Center; (d) a reasonable reserve for uncollectible accounts receivable; (e) all costs
and fees of independent professionals or other third parties who perform services required or
permitted hereunder; (f) the cost and expense of technical consultants and operational experts for
specialized services in connection with non - routine Convention Center work; (g) all costs and
expenses incurred by OHPD in connection with marketing for the Convention Center; (h) all
costs and expenses incurred by OHPD pursuant to the Approved Franchise including, but not
limited to, franchise fees, advertising, chain services, insurance, etc.; provided, however, no
initial licensing fee nor capital expenditure necessary for compliance with the Approved
Franchise; (i) insurance costs and expenses required under this Sublease; 0) all Impositions; (k)
-6-
4099523.13
all costs and expenses incurred by OHPD to obtain and keep in full force and effect all licenses
and permits required for the operation of the Convention Center, including without limitation,
liquor licenses for the sale of alcoholic beverages at all restaurants, bars, lounges, banquet rooms,
meeting rooms and the Convention Center; and (1) such other costs and expenses incurred by
OHPD reasonably necessary for the proper and efficient operation of the Convention Center.
(gg) "Operational Date" shall mean the date when the Convention Center is
substantially complete and a full Certificate of Occupancy has been issued and obtained.
(hh) "Person" shall mean any person or entity.
(ii) "Plans" shall mean the designs, plans and specifications relating to the
Convention Center Site as developed and approved in accordance with the Master Agreement.
0j) "Project" means the Hotel, Restaurant and the City Facilities.
(kk) "Project Site" means the Hotel Site and the Convention Center Site,
collectively.
(11) "Related Infrastructure" shall mean any automobile parking spaces as
determined to be required by the City's development standards, water or sewer facilities, plazas,
landscaped areas, pedestrian circulation areas or other constriction on the Convention Center
Site in connection with the use and /or operation of the Convention Center.
(mm) "Sublease" shall mean this "City -OHPD Convention Center Sublease" by
and between City, as sublessor, and OHPD, as sublessee, covering the Subleased Premises.
(nn) "Subleased Premises" shall mean the City Facilities.
(oo) "Sublease Year" shall mean each twelve (12) calendar month period
commencing on October I" and expiring on September 30th during the Term, except for: (a) the
first Sublease Year of the Term which shall commence on the Operational Date and end on the
immediately following September 30th; and (b) the final Sublease Year of the Term which shall
commence on October 15t following the expiration of the immediately preceding Sublease Year
and shall continue until the expiration date of this Sublease.
(pp) "Term" shall mean the term of this Sublease as provided in Section 1.4
hereof.
(qq) "TW" shall mean a Tax Increment Reinvestment Zone created by City
pursuant to Chapter 311 of the Texas Tax Code, as amended, the boundaries of which are
coterminous with the Project Site."
(rr) "Upscale' shall mean comparable to or better than the Upscale Condition
required for the Hotel pursuant to the Master Agreement.
1.2 Sublease. This Sublease shall be effective and binding between the parties on the
Effective Date; provided however, the grant of the Subleased Premises to OHPD shall not be
-7-
4099523.13
effective until the Operational Date, and OHPD shall not have the right of use or possession of
the Subleased Premises until the Operational Date except for access to the Subleased Premises
solely for the purpose fulfilling any obligation of OHPD pursuant to the Master Agreement in
connection with the design or constriction of the Convention Center (the "Design Activities ")
provided that: (a) OHPD first obtains the prior consent of UNT and City; (b) that such access and
Design Activities do not interfere with, impair or damage any operations, activities or
improvements on the Subleased Premises; and (c) OHPD hereby indemnifies and holds City and
UNT harmless from any claims or damages arising in connection with the Design Activities.
Effective as of the Operational Date and subject to the terms and provisions contained herein,
City subleases and demises to OHPD and OHPD subleases from City, the City Facilities which
are hereinafter referred to as the "Subleased Premises."
1.3 No Warranty. OHPD accepts the Subleased Premises when conveyed in their
then current "as is" condition. City makes no specific warranties, express or implied, concerning
the title, condition, or use of the Subleased Premises, including those uses authorized by this
Sublease, unless otherwise specified in this Sublease. Without limiting City's disclaimer of
warranty, City and OHPD expressly agree that City neither warrants nor bears any responsibility
whatsoever, and expressly disclaims and is released from, any and every warranty whatsoever,
express or implied, related to the Subleased Premises.
1.4 Term. Unless earlier terminated as provided herein and subject to the other terms
and provisions of this Sublease, the initial term of this Sublease shall commence on the
Operational Date and be for a period which is coterminous with the remainder of the Primary
Term of the City -UNT Land Lease (the "Initial Term "). So long as (a) the City -UNT Land
Lease is in force and the term of the same has been extended or City has the unilateral right to
extend the term in accordance with the provisions of the City -UNT Land Lease; and (b) OHPD is
not in default under the terms of this Sublease, the Master Agreement or any related document
described in the Master Agreement, the Initial Term will automatically extend for up to two (2)
terms of ten (10) year each (the "Extended Terms) ") unless OHPD gives written notice to City
of its intent to terminate this Sublease on or before three hundred and sixty -five (365) days prior
to the expiration of the Initial Term or the expiration of the first Extended Term, as applicable.
As used herein, the "Term" shall mean the Initial Term, plus the Extended Term(s).
Notwithstanding the foregoing: (i) in all events this Sublease shall automatically terminate upon
the expiration or termination of the Master Agreement or the City -UNT Land Lease for any
cause; and (ii) the Term of this Sublease shall in no event extend beyond the term of the City -
UNT Land Lease and in all events shall expire no less than one (1) day prior to the expiration of
the City -UNT Land Lease.
ARTICLE 2
SUBLEASE PAYMENTS
2.1 Base Rent. OHPD agrees to pay City for the use of the Subleased Premises the
Base Rent at such place and in such manner as City may designate, without any prior demand,
and without any abatement, deduction or set -off by OHPD whatsoever. For the Initial Base Rent
Period, Base Rent shall be paid on the Base Rent Commencement Date, and thereafter, Base
Rent shall be paid in advance annually on January Ist of each Sublease Year and continuing
regularly and annually thereafter on or before each January Ist of every Sublease Year of the
-8-
4099523.13
Term. On or before thirty (30) days prior to January Ist of the Sublease Year following the
Initial Base Rent Period and each January Ist of every Sublease Year thereafter until the Bond
Debt Payments are paid in full, City shall deliver to OHPD an invoice with a calculation of the
Base Rent due which calculation shall include the aggregate Bond Debt Payments for the
applicable Sublease Year, the estimated Tax Revenues for the applicable Sublease Year based on
Tax Revenues for the immediately preceding Sublease Year and the amount of any Base Rent
Credit for the applicable Sublease Year. Each invoice from City for Base Rent due following the
initial invoice shall include the amount of the actual Tax Revenues for the prior Sublease Year
and any credits due to OHPD or amounts due from OHPD based on the difference between the
estimated and actual Tax Revenues for the applicable Sublease Year (the "True -Up Amount(s)").
Subject to any credits due to OHPD as itemized on the annual invoices from City, OHPD agrees
to pay City the True -Up Amounts itemized on annual invoices from City on October Ist of the
applicable Sublease Years in which the invoices are received.
2.2 Adjustment of Base Rent. Upon City's payment in full of all Bond Debt
Payments, the amount of the Base Rent shall be $1.00 per Sublease Year for the remainder of the
Term which OHPD agrees to pay to City without any invoice from City.
2.3 Additional Rent. In addition to the Base Rent, OHPD agrees to pay City the costs
of the property insurance carried by City pursuant to the terms of Section 8.1 or other insurance
carried by City pursuant to the terms of Section 8.2 hereof at such place and in such manner as
City may designate. OHPD shall pay City such insurance costs annually within thirty (30) days
of OHPD's receipt of City's statement for the same. Any monies or amounts due City from
OHPD at any time during the Term, or otherwise pursuant to the terms of this Sublease, other
than Base Rent, shall be deemed "Additional Rent."
2.4 Late Payment Charge. Other remedies for nonpayment notwithstanding, if any
installment of Base Rent or Additional Rent, as the case may be, is not received by City when the
same is due, OHPD agrees to pay City on demand a late payment charge in the amount of five
percent (5 %) of such past due amount in addition to all other amounts owed under this Sublease.
2.5 Holding Over. If OHPD fails to surrender the Subleased Premises at the
expiration or termination of the Term, occupancy of the Subleased Premises after the termination
or expiration shall be a tenancy at sufferance. OHPD's occupancy of the Subleased Premises
during the holdover shall be subject to all the terms and provisions of the Sublease, and OHPD
shall pay to City an amount (on a per month basis without reduction for partial months during the
holdover) equal to one - twelfth of one hundred fifty percent (150 %) of the amount of the Bond
Debt Payments for the period immediately preceding the holdover or if the Bond Debt Payments
have been paid in full, the last period for which Bond Debt Payments were due. No holdover by
OHPD or payment by OHPD after the expiration or early termination of this Sublease shall be
construed to extend the Term or prevent City from immediate recovery of possession of the
Subleased Premises by summary proceedings or otherwise. In addition to the payment of the
amounts provided above, if City is unable to deliver possession of the Subleased Premises to a
new tenant, or to perform improvements for a new tenant, as a result of OHPD's holdover and
OHPD fails to vacate the Subleased Premises within fifteen (15) days after City notifies OHPD
of City's inability to deliver possession, or perform improvements, OHPD SHALL
INDEMNIFY CITY AND HOLD CITY HARMLESS AGAINST LOSS OR LIABILITY
-9-
409923.13
RESULTING FROM THE DELAY BY OHPD IN SO SURRENDERING THE SUBLEASED
PREMISES, INCLUDING ANY CLAIMS MADE BY ANY SUCCEEDING OCCUPANT
FOUNDED ON SUCH DELAY BY OHPD AND ALL DAMAGES, INCLUDING, WITHOUT
LIMITATION, CONSEQUENTIAL DAMAGES, THAT CITY SUFFERS FROM THE
HOLDOVER.
2.6 Payments. OHPD agrees to make all payments of Base Rent and other rents,
charges, fees or other consideration payable to City required under this Sublease by wire or
electronic transfer of funds (or in such other manner as the City may direct) in accordance with
the directives of City throughout the Term. OHPD shall make all payments required under this
Sublease in lawful currency of the United States of America. OHPD shall make its payments
free from any claim, demand, setoff or counterclaim of any kind against City. OHPD's
agreement to pay Base Rent and any other rents under this Sublease is an independent covenant,
and no act or circumstance, regardless of whether such act or circumstance constitutes a breach
of this Sublease by City, shall release OHPD of its obligation to pay Base Rent or any other rents
required by this Sublease.
2.7 Security. On or before the Financing Viability Deadline, OHPD shall obtain and
deliver to City of the following to secure OHPD's full performance of this Sublease, including
the payment of all fees and other amounts now or hereafter payable to or required to be remitted
to City under this Sublease (the "Security "): an irrevocable direct pay letter of credit or wire or
electronic transfer of funds in the amount of one million dollars ($1,000,000). The form,
provisions and nature of the Security, and the identity of the issuer thereof, shall at all times be
subject to City's approval. The Security shall remain in place at all times throughout the Term
until City's payment in full of all Bond Debt Payments.
2.8 Application of Security. If applicable, City may apply all or part of the proceeds
of the Security to unpaid amounts due under this Sublease, to the unpaid Base Rent or any other
unpaid amount due under this Sublease. The Security shall remain on deposit with City
throughout the Sublease Term, and, in addition to any and all other remedies available to it
hereunder or otherwise, City shall have the right, in its sole discretion and at any time, to draw
upon the entire stated amount of such Security on the occurrence of an Event of Default
hereunder and to hold and apply any proceeds of such draw in excess of amounts then due to
City as a cash deposit hereunder. OHPD hereby agrees to the deposit of any such excess
proceeds with City. City shall have no obligation to draw upon the Security, and neither the
existence of such right nor the holding of the Security itself shall cure any default or breach on
the part of OHPD under this Sublease. Within sixty (60) days after the expiration or earlier
termination of the Sublease and upon request therefor by OHPD, City will return the Security to
OHPD, less any amounts then due from OHPD to City under this Sublease. OHPD hereby
waives any right to any interest which may be earned or accrued on the proceeds of a draw under
the Security during the Sublease and agrees that City shall have no obligation to hold excess
proceeds of a draw under the Security in a segregated account, and City may commingle such
proceeds with its other funds. No trust relationship is created with respect to the Security.
-10-
4099523.13
ARTICLE 3
IMPOSITIONS
3.1 Payment of Impositions. Except as otherwise provided in this Article 31 OHPD
shall timely pay all Impositions prior to delinquency, and OHPD shall furnish to City receipts or
copies thereof showing payment of such Impositions within thirty (30) days of payment of the
same. OHPD shall be entitled to pay any Impositions in installments as and to the extent and in
the manner permitted by the applicable taxing authority or claimant without additional penalty or
interest. City agrees to cooperate with OHPD in seeking the delivery of all notices of
Impositions to OHPD directly from the applicable taxing authorities. City shall promptly deliver
all notices of Impositions to OHPD which are delivered to City. City retains the right to pay any
and all Impositions related to the Subleased Premises that are not paid before the same become
delinquent or subject to interest or penalties; provided however, City agrees not to any such
Impositions if the OHPD is contesting the same pursuant to Section 3.3 below. If City pays any
such Impositions, OHPD shall reimburse City within ten (10) business days after written notice
thereof from City.
3.2 Payment of Personal Property Taxes. To the extent not paid with the payment of
Impositions pursuant to Section 3. 1, OHPD shall pay prior to delinquency all taxes assessed
against or levied upon fixtures, furnishings, equipment and all other personal property of OHPD
contained in the Subleased Premises. OHPD shall cause its personal property to be assessed and
billed separately from the property of City. If any of OHPD's personal property shall be
assessed with City's property, OHPD shall pay City the taxes attributable to OHPD within ten
(10) days after receipt of written statement therefor.
3.3 Contest of Impositions. If the assessment or levy of any of the Impositions shall
be deemed by OHPD to be improper, illegal or excessive, or if OHPD desires in good faith to
contest the Impositions for any other reason, OHPD may, at OHPD's sole cost and expense,
dispute and contest the same and file all such protests or other instruments and institute or
prosecute all such proceedings for the purpose of contest as OHPD shall deem necessary and
appropriate provided that OHPD (a) notifies City that it intends to contest such claim, levy or
assessment, (b) provides City with an indemnity, bond or other security satisfactory to City
assuring the discharge of OHPD's obligations for such claims, levies or assessments, including
interest and penalties, and (c) diligently pursues such contest in good faith to conclusion prior to
the commencement of foreclosure proceedings or similar actions by the governmental authority
which assessed or levied the contested Imposition. OHPD may not take any action or fail to pay
any Impositions if such action or failure would result in the commencement of any such
foreclosure procedures or similar action or a lien on the Convention Center Site, the Subleased
Premises or UNT's or City's interest therein. OHPD shall be entitled to any refund of any
Impositions (and the penalties or interest thereon) refunded by the levying governmental
authority pursuant to any such proceeding or contest, if such Impositions shall have been either
(a) paid directly by OHPD, or (b) paid directly by City and City was reimbursed therefore by
OHPD. Notwithstanding the foregoing, OHPD waives any right it may have and agrees not to
contest the assessment or levy of any AV Taxes or Impositions by City.
ARTICLE 4
USE OF SUBLEASED PREMISES
-11-
4099523.13
4.1 Permitted Use. OHPD shall use the Subleased Premises during the Term solely
for the operation of a convention, meeting and exhibit center for holding conventions, meetings,
and exhibits for the benefit of City, UNT and the general public. OHPD shall, throughout the
Term of this Sublease, continuously operate and maintain the Convention Center in a manner
comparable to or better than Comparable Convention Centers as an Upscale convention center in
strict accordance with the Approved Franchise, to the extent the same is applicable to the
Convention Center (the "Permitted Use ").
4.2 Continuous Use. OHPD shall continuously occupy and use the Subleased
Premises only for the Permitted Use during the Term in accordance with the terms of this
Sublease and with the City -UNT Land Lease.
4.3 Availability of Subleased Premises. OHPD shall make the Subleased Premises
available to the general public on an equal non - discriminatory basis with the goal of increasing
tourism within the City.
4.4 Prohibited Uses. OHPD shall not: (a) use or occupy or allow the Subleased Premises
or any part thereof to be used or occupied for any illegal or unlawful purposes or in violation of any
Applicable Law, certificate of occupancy issued to or for the Subleased Premises or any part thereof or
in any manner which would cause material structural injury to the Subleased Premises or any part
thereof, (b) use or occupy or allow the Subleased Premises or any part thereof to be used or occupied
for any purpose in violation of City's policies and /or ordinances regarding sexually oriented
businesses, as such policies may be amended from time to time; (b) suffer any act to be done or any
condition to exist on the Subleased Premises, or any part thereof, or any action to be brought thereon,
which may be dangerous, or which constitutes a public nuisance or waste, or which may make it
impossible to obtain the insurance provided for herein; (c) use any of the parking spaces or facilities
constituting a portion of the Related Infrastructure for any purpose other than to benefit the
Convention Center and Hotel; (d) do or suffer any waste or damage, disfigurement or injury to the
Subleased Premises or any part thereof, or (e) use, suffer or permit the Subleased Premises, or any
part thereof, to be used by OHPD, any third party or the public, as such, without restriction or in a manner
that impairs UNT's title to or City's leasehold interest in the Subleased Premises. Nothing contained in this
Sublease and no action by City shall be construed to mean that City has granted to OHPD any authority to
do any act or make any agreement that may create any such third party or public right, title, interest, lien,
charge or other encumbrance upon the estate of UNT or City in the Subleased Premises.
4.5 Sins. No signs, advertisements, logos or notices of any type may be erected, painted or
placed in, on or about the Subleased Premises, except those of such color, size, style and in such places as
are first approved according to the process set forth in the Master Agreement and which are in compliance
with the applicable City code, ordinances and development standards. OHPD shall not remove any
existing signage on the Subleased Premises without the prior written consent of City, which consent shall
not be unreasonably withheld, and the prior written consent of UNT pursuant to the terms of the City -UNT
Land Lease.
4.6 Reserved Naming Rights. City shall retain the naming rights for the Convention
Center and any of the ballrooms and meeting rooms located within the Convention Center and
shall be entitled to all revenues generated from and associated with such naming rights. Subject
to the terms of this Sublease, City may, in its sole discretion, assign such rights or grant or enter
into any other agreements of any nature transferring such rights, whether or not such assignment
-12-
4099523.13
or agreement is concomitant with an assignment of this Sublease. OHPD must use the name of
the Convention Center in all of its promotional materials and efforts for the Hotel including,
without limitation, OHPD's website, the website of OHM or any Replacement Manager
approved by City in accordance with Section 5.1 and /or any other website advertising or
promoting the Hotel, if any; provided, however, that OHPD may not use the name of the
Convention Center for any other purpose without the prior written consent of City.
Notwithstanding any of the foregoing to the contrary, City may not name the Convention Center
or any of the rooms located therein in a fashion that would result in a violation of the Approved
Franchise for the Hotel. City further agrees to: (a) consult with OHPD on the proposed names of
the ballrooms and meeting rooms located within the Convention Center to assure that the same
are consistent with and enhance the design of and marketing plan for the Hotel and Convention
Center; and (b) make an effort to select the names of the ballrooms and meeting rooms located
with Convention Centers prior to the Feasibility Deadline .
4.7 Reserved Right to Enter Subleased Premises. OHPD shall permit City, UNT and
their respective authorized representatives to enter the Subleased Premises at all reasonable times
and during normal business hours upon reasonable prior notice to OHPD or its manager (which
shall have the opportunity to have a representative of OHPD present), which may be oral notice,
except in cases of real or apparent emergency (in which case no notice shall be required), for the
purpose of (a) inspecting the same, and (b) in the case of City, making any necessary repairs
thereto and performing any work therein that City may be entitled to make or perform,
respectively, pursuant to the provisions of Section 5.12. Nothing herein shall imply any duty
upon the part of City to do any such work, and performance thereof by City shall not constitute a
waiver of OHPD's default in failing to perform the same. On or before the Operational Date,
OHPD shall provide City with contact information for OHPD's manager for contact purposes,
and if not provided, notice pursuant to this Section 4.7 shall be to OHPD.
ARTICLE 5
OPERATIONS, MANAGEMENT AND MAINTENANCE
5.1 Exclusive Rights and Obligations. Subject to the terms and provisions of this
Sublease and the City -UNT Land Lease, OHPD shall have the exclusive right and obligation to
operate, manage and maintain the Subleased Premises, including all booking and catering rights;
provided, however, OHPD shall not have the right to assign such rights or grant or enter into any
licenses, subleases, management agreements, operating agreements or any other agreements of
any nature transferring such rights except in connection with an assignment of this Sublease
permitted by Section 10.1. OHPD covenants to operate, manage and maintain the Subleased
Premises throughout the Term in a manner comparable to or better than Comparable Convention
Centers in accordance with the terms and provisions of this Sublease and the City -UNT Land
Lease. During the Term, it is intended by OHPD and City that City shall have no obligation, in
any manner whatsoever, for the operation and management of the Subleased Premises.
(a) The foregoing notwithstanding, OHPD has proposed to enter into a
management agreement with OHM in the form attached hereto as Exhibit D to operate, manage
and maintain the Subleased Premises (the "OHM Management Agreement ") and has requested
City's consent for OHPD to enter into the OHM Management Agreement. City hereby consents
to OHPD entering into the OHM Management Agreement provided that: (i) the same form as
-13-
4099523.13
the form attached hereto as Exhibit D be executed, without modification, and a fully executed
copy be provided to City by no later than the Operational Date; (ii) OHPD shall not enter into
any modification, amendment, termination or replacement of the OHM Management Agreement
without the prior written consent of City; (iii) the OHM Management Agreement shall terminate
automatically with the termination of this Sublease or the City -UNT Land Lease; and (iv) OHPD
shall remain primarily liable for the performance of all of the obligations and duties pursuant to
this Sublease and shall cause OHM to perform all of its obligations and duties pursuant to the
OHM Management Agreement and in compliance with this Sublease and the City -UNT Land
Lease.
(b) In the event that OHPD proposes to replace OHM and the OHM
Management Agreement for the operation, management and maintenance of the Subleased
Premises (the "Replacement Management Agreement" ), City's prior written consent to the same
shall be required. City's consent to any Replacement Management Agreement shall be subject to
the following minimum requirements: (i) prior review and written approval by City of the form
of the Replacement Management Agreement and of replacement manager of the Subleased
Premises (the "Replacement Manager "); (ii) inclusion of the following provisions in the
Replacement Management Agreement: (A) City shall be a third -party beneficiary and shall have
the express right, among other rights thereunder, to enforce all rights and remedies of OHPD
thereunder, but has no obligations thereunder; (B) no modification, amendment, termination or
replacement thereof without the prior written consent of City; (C) will terminate automatically
with the termination of this Sublease or the City -UNT Land Lease; (D) express obligation of
Replacement Manager to perform in accordance with the terms of this Sublease and the City -
UNT Land Lease; and (iii) such other terms and provisions as City may require.
Notwithstanding the foregoing, City shall not unreasonably withhold its approval of a proposed
Replacement Manager provided that: (1) the proposed Replacement Manager has a minimum of
ten (10) years of documented experience in operating and managing Comparable Convention
Centers and provides letters of recommendation on request of City; and (2) has a minimum net
worth of twenty -five million dollars ($25,000,000) and good credit standing. In the event that
City approves a Replacement Management Agreement, OHPD shall remain primarily liable for
the performance of all of the obligations and duties pursuant to this Sublease and shall cause any
Replacement Manager to perform all of its obligations and duties pursuant to the Replacement
Management Agreement and in compliance with this Sublease and the City -UNT Land Lease.
5.2 Related Obligations. OHPD further covenants to continuously operate and
maintain the Hotel in an Upscale Manner comparable to or better than Comparable Hotel
Properties for the Term of the Sublease. OHPD's obligation to operate and maintain the Hotel in
an Upscale Manner comparable to or better than Comparable Hotel Properties shall survive the
expiration of this Sublease and shall be in effect throughout the primary term and any extension
of the Hotel Lease.
5.3 Maintenance. Except for Capital Repairs, during the Term OHPD shall, at its
own cost and expense, perform all necessary Maintenance of the Subleased Premises so that the
same are operated in a manner comparable to or better than Comparable Convention Centers and
in compliance with Applicable Law. OHPD's obligation to perform all necessary Maintenance
shall include, without limitations, those items included in the definition of "Maintenance." On
default of OHPD in performing Maintenance that continues after the expiration of any applicable
-14-
4099523.13
notice and cure period provided herein, City may, but shall not be required to, perform such
Maintenance for OHPD's account, and the actual expense thereof, together with Interest thereon,
shall constitute and be collectible as Additional Rent. At least thirty (30) days before the end of
each Sublease Year, OHPD shall deliver to City a certificate from an engineer reasonably
acceptable to City certifying that the building's HVAC, life safety, plumbing, electrical and
mechanical systems have been maintained in accordance with this Section 53. To the extent any
of the components of the Subleased Premises which OHPD is obligated to maintain and repair
hereunder are covered by a warranty provided by the manufacturer thereof, OHPD agrees to take
all such actions, including the manufacturer's required and /or recommended scheduled
maintenance, necessary to maintain the warranty without impairment. Furthermore, regardless of
whether any such component is covered by a manufacturer's warranty, to the extent the
manufacturer of any component of the Subleased Premises that OHPD is obligated to repair
under this Sublease recommends regularly scheduled maintenance for the component. OHPD
shall be obligated to comply with the manufacturer's recommendations. Specifically included in
the foregoing obligation is the obligation of OHPD to perform all scheduled maintenance
recommended by the manufacturers of the HVAC system servicing the Subleased Premises at
the times recommended by such manufacturer. Upon the expiration or termination of this
Sublease, OHPD shall surrender the Subleased Premises to City in the condition existing at the
Operational Date reasonable wear and tear, obsolescence and loss by casualty excepted, except
to the extent OHPD is required under this Sublease to repair casualty damage.
5.4 Repair and Maintenance Obligations. During the Term, it is intended by OHPD
and City that City shall have no obligation, in any manner whatsoever, for the Maintenance of
the Subleased Premises or for those items of maintenance, repair or replacement described on
Exhibit C, whether structural or nonstructural, all of which obligations are intended, as between
City and OHPD, to be those of OHPD. OHPD expressly waives the benefit of any statute now or
in the future in effect which would otherwise afford OHPD the right to perform any Capital
Repairs at City's expense or to terminate this Sublease because of City's failure to make or
finance Capital Repairs.
5.5 Capital Repairs. During the Term, City shall perform all Capital Repairs to the
Subleased Premises described on Exhibit B attached hereto in a manner comparable to or better
than Comparable Convention Centers, subject to the provisions of Section 7.2. It is intended by
OHPD and City that OHPD shall have no obligation to perform Capital Repairs to the Subleased
Premises during the Term, but shall be responsible for performing routine Maintenance on the
components of the Subleased Premises which are subject to Capital Repairs. The routine
Maintenance to be performed by OHPD on the components of the Subleased Premises which are
subject to Capital Repairs shall include, without limitation, cleaning the same and performing
scheduled maintenance recommended by manufactures. Notwithstanding anything to the
contrary herein, if the need for any repair or replacement is caused by the negligence or willful
misconduct of OHPD, its employees, agents or contractors, then the cost of such repair or
replacement shall be paid solely by OHPD immediately upon demand for same by City. Nothing
contained herein entitles OHPD to make any repairs, alterations or additions to the Subleased
Premises at City's expense or to terminate this Sublease based on the physical condition of the
Subleased Premises.
-15-
4099523.13
5.6 City Facilities FF &E. To the extent City purchases any City Facilities FF &E
pursuant to the terms of the Master Agreement, OHPD shall have the right to use the City
Facilities FF &E in connection with its operations at the Subleased Premises. OHPD must
maintain any and all City Facilities FF &E in good condition and repair on a regular and ongoing
basis and promptly replace, at OHPD's sole cost and expense, such City Facilities FF &E with
reasonably comparable items as needed should the same become worn out or obsolete. Upon
termination or expiration of this Sublease, OHPD shall surrender to City the Subleased Premises
with all of the City Facilities FF &E (or reasonably comparable replacements thereof) in the same
condition existing at the Operational Date, loss by casualty and normal wear and tear excepted,
except to the extent OHPD is required under this Sublease to repair casualty damage. Upon
termination or expiration of this Sublease, City shall pay OHPD the then fair market value of any
City Facilities FF &E which OHPD purchased at its sole cost and expense within five (5) years of
the date of such termination or expiration (the "FF &E Reimbursement ").
5.7 OHPD FF &E. Except for the City Facilities FF &E purchased pursuant to the
terms of the Master Agreement, OHPD, at its sole cost and expense, shall purchase all furniture,
trade fixtures, equipment and other personal property necessary for the use and operation of the
Subleased Premises commencing on the Operational Date and continuing throughout the Term
(the "OHPD FF &E "). Any and all such OHPD FF &E must be comparable to or better than the
quality of the City Facilities FF &E and the quality mandated by the Approved Franchisor of the
Hotel. OHPD must, throughout the Term of this Sublease, furnish and equip the Subleased
Premises with such OHPD FF &E as is necessary for the continual operation of the Subleased
Premises in a manner comparable to or better than Comparable Convention Centers. Any OHPD
FF &E shall remain the property of OHPD and may be removed from the Subleased Premises by
OHPD at the expiration of the Term provided that (a) OHPD is not then in default under this
Sublease and (b) OHPD repairs any and all damage caused to the Subleased Premises as a result
of such removal.
5.8 Annual FF &E Inventory. On or before December Ist of each calendar year during
the Term, OHPD must prepare and deliver to City for approval an inventory of the City Facilities
FF &E and any and all replacements of the same and an inventory of the OHPD FF &E (the
"Annual FF &E Inventory "). To the extent any of City Facilities FF &E has become worn out or
obsolete during the preceding twelve (12) month period, OHPD shall note such fact on the
applicable Annual FF &E Inventory and include a description of the replacement equipment
purchased pursuant to Section 5.6 on the applicable Annual FF &E Inventory. Once purchased
by OHPD pursuant to Section 5.6, any such replacement furniture, fixture or equipment shall be
owned by City and be a part of the City Facilities FF &E for all purposes under this Sublease.
City shall have the continual right to audit OHPD's books and records regarding any Annual
FF &E Inventory and to make on -site visits to the Subleased Premises in connection with any
such audits. OHPD shall cooperate fully with City in responding to any such audits and
promptly prepare any necessary revisions to the applicable Annual FF &E Inventory as a result of
such audits.
5.9 Services. During the Term, OHPD shall pay the costs of all utilities and routine
services including, without limitation, drainage fees, electricity, heating, ventilating and air
conditioning, water, natural gas, lighting, replacement for all lights, restroom supplies, telephone
service, window washing, security service, janitor and disposal services, landscaping services
-16-
4099523.13
and such other services as OHPD determines to furnish to the Subleased Premises. To the extent
required by Applicable Law, OHPD shall also pay for all maintenance upon such utilities. City
shall not be in default hereunder or be liable to OHPD for any damage or loss directly or
indirectly resulting from, nor shall Base Rent be abated or a constrictive or other eviction be
deemed to have occurred by reason of, the installation, use or interruption of use of any
equipment in connection with the furnishing of any of the foregoing services, any failure to
furnish or delay in furnishing any such services, whether such failure or delay is caused by
accident or any condition beyond the control of City or OHPD or by the making of repairs or
improvements to the Subleased Premises or otherwise, or any limitation, curtailment, rationing
or restriction on use of water, electricity, gas or any form of energy serving the Subleased
Premises, whether such results from mandatory governmental restriction or voluntary
compliance with governmental guidelines or otherwise. OHPD shall be the named account
holder for all such services and utilities and shall timely pay prior to delinquency for all such
services and utilities directly to the provider thereof.
5.10 Operating Expenses. During the Term, OHPH shall be solely responsible for and
timely pay the costs of all Operating Expenses for the Subleased Premises.
5.11 Liens. OHPD shall not create or permit to be created any lien, encumbrance or
charge upon the Subleased Premises or any part thereof or the income therefrom or the leasehold
estate created by this Sublease, and OHPD shall not suffer any other matter or thing whereby the
estate, rights and /or interest of OHPD and /or City (or any part thereof) in the Subleased Premises
or any part thereof might be encumbered by any such lien, encumbrance or charge. If any
mechanic's, laborer's or materialman's lien shall at any time be filed against the Subleased
Premises or any part thereof, OHPD within thirty (30) days after notice of the filing thereof, will
cause the same to be discharged of record by payment, deposit, bond, order of a court of
competent jurisdiction or otherwise. If OHPD shall fail to cause such lien to be discharged within
the period aforesaid, then, in addition to any other right or remedy City may have hereunder or at
law or equity, City may, but shall not be obligated to, discharge the same, and City shall be
entitled, if City so elects, to compel the prosecution of an action for the foreclosure of such lien
by the lien claimant and to pay the amount of the judgment in favor of the lien claimant with
interest, costs and allowances. Any amount so paid by City and all costs and expenses, including,
without limitation, reasonable attorneys' fees and disbursements, incurred by City in connection
with the discharge of the lien and /or the prosecution of such action, together with Interest thereon
from the respective dates of City's making of the payment or incurring of the cost and expense to
the date OHPD reimburses City for such amount, shall constitute additional rent payable by City
under this Sublease and shall be paid by OHPD to City immediately on demand.
5.12 City's Right to Perform. Upon OHPD's failure to perform any obligation or make
any payment required of OHPD hereunder, City shall have the right (but not the obligation) to
perform such obligation of OHPD on behalf of OHPD and /or to make payment on behalf of
OHPD. OHPD shall reimburse City the reasonable cost of City's performing such obligation on
OHPD's behalf, including reimbursement of any amounts that may be expended by City, plus
Interest.
ARTICLE 6
ALTERATIONS
-17-
4099523.13
6.1 OHPD Alterations. OHPD shall not make or allow to be made any alterations,
physical additions or improvements (collectively referred to herein as "OHPD Alterations ") in or
to the Subleased Premises without complying with all Applicable Law and first obtaining the
written consent of City, which consent shall not be unreasonably withheld, and written consent
of UNT pursuant to the terms of the City -UNT Land Lease. In any event, OHPD shall provide
City with (a) a copy of the plans and specifications for any such OHPD Alterations prior to the
commencement of constriction of such OHPD Alteration, (b) identity of and copies of contracts
with contractors and suppliers prior to the commencement of constrictions, (b) as -built drawings
of any OHPD Alterations after completion of constriction, and (c) such other information and
documents as the City may request. OHPD shall not interfere with the operations of the
Convention Center or take any action which may impair or damage the structural elements or
integrity of the Convention Center during the constriction of or as result of any OHPD
Alteration. OHPD shall not make any OHPD Alterations during the Term that interferes with the
development or use of the Convention Center primarily as a public convention and meeting
facility, other than short term interruptions for constriction as approved by City. Any
alterations, physical additions or improvements to the Subleased Premises made by City or
OHPD shall become the property of City and must be surrendered to City upon the termination
or expiration of this Sublease without compensation or credit to OHPD; provided, however, City,
at its option, may require OHPD to remove any OHPD Alterations or other physical additions
and alterations which the City has not consented to in writing in order to restore the Subleased
Premises to the condition existing at the Operational Date, with all costs of removal and /or
alterations to be borne by OHPD. Notwithstanding the foregoing, OHPD shall not be required to
remove any OHPD Alterations or other physical additions or improvements if City agrees at the
time of approval of such additions or improvements that they do not have to be removed on the
termination or expiration of this Sublease.
6.2 Additional Requirements for OHPD Alterations. All OHPD Alterations shall be
subject in all cases to the following:
(a) All OHPD Alterations shall be made promptly at the sole cost and expense
of OHPD and in a good and workmanlike manner, in a manner comparable to or better than
Comparable Convention Centers and in compliance with all Applicable Law.
(b) The Subleased Premises shall at all times be free of liens for labor and
materials supplied or claimed to have been supplied to the Subleased Premises, subject to the
provisions of Section 5.11.
(c) NOTICE IS HEREBY GIVEN THAT CITY SHALL NOT BE LIABLE
FOR ANY LABOR OR MATERIALS FURNISHED TO OR FOR OHPD. FURTHERMORE,
NOTICE IS HEREBY GIVEN TO OHPD AND OHPD'S MECHANICS, LABORERS AND
MATERIALMEN WITH RESPECT TO THE SUBLEASED PREMISES THAT NO
MECHANIC'S, MATERIALMAN' S OR LABORER'S LIEN SHALL ATTACH TO OR
AFFECT THE REVERSION OR OTHER INTEREST OF CITY OR UNT IN OR TO THE
SUBLEASED PREMISES. Any contract entered into by OHPD for the constriction of such
improvement or alteration must include the foregoing conspicuous notice.
-18-
4099523.13
(d) Worker's compensation and commercial general liability insurance with
respect to the alterations and improvements as required by this Sublease and the Master
Agreement shall be maintained and /or provided.
(e) City's consent to or approval of any OHPD's Alterations (or the plans
therefor) shall not constitute a representation or warranty by City, nor City's acceptance, that the
same comply with sound architectural and /or engineering practices or with all Applicable Laws,
and OHPD shall be solely responsible for ensuring all such compliance.
ARTICLE 7
REPLACEMENT FORECAST AND AR &R FUND
7.1 Capital Repair and City Facilities FF &E Forecast. On or before January 1 st of
each calendar year during the Term, OHPD will prepare and submit to City a proposed
replacement forecast for Capital Repairs for the Subleased Premises and for replacement or
repairs of the City Facilities FF &E (the "FF &E Replacements ") for the subsequent five (5)
calendar year period that takes into account all relevant factors, including the physical condition
or obsolescence of components of the Subleased Premises and of the City Facilities FF &E and
the requirement herein that OHPD operate the Subleased Premises in a manner comparable to or
better than Comparable Convention Centers. Each proposed replacement forecast shall be in
such form and shall be accompanied by such supporting information (including relevant
assumptions made in formulating the proposed forecast) and evidence of funds available to
OHPD to pay the costs of the FF &E Replacements as City may reasonably require. City, in its
reasonable discretion, shall have the right to approve any item in the proposed replacement
forecast for Capital Repairs to be paid from the AR &R Fund and FF &E Replacements to be paid
for by OHPD and shall notify OHPD within thirty (30) business days after receipt of such
proposed replacement forecast if the same is not approved and included with the notice details of
any items of Capital Repairs or FF &E Replacements which are disapproved. OHPD shall within
ten (10) business days of receipt of City's notice of such disapproval submit a revised
replacement forecast to City. If the revised replacement forecast also is disapproved by City,
OHPD shall promptly submit further revisions to the proposed replacement forecast until the
same is accepted and approved by City (the "Approved Replacement Forecast "). OHPD shall
make FF &E Replacements for the Subleased Premises in manner comparable to or better than
Comparable Convention Centers, and City, subject to the terms of Section 7.2, shall make items
of Capital Repair to the Subleased Premises in a manner comparable to or better than
Comparable Convention Centers, in accordance with the then current Approved Replacement
Forecast until a new Approved Replacement Forecast is approved by City. To the extent that it
becomes necessary from time to time to perform any Capital Repair to the Subleased Premises
that is not included in the then current Approved Replacement Forecast, OHPD shall submit
supporting information to City for such Capital Repair and on approval of City which approval
shall not be unreasonably withheld, funds available in AR &R Fund may be used therefore
subject to the terms of Section 7.2.
7.2 AR &R Fund. On or before the Operational Date, City shall establish an account
for the AR &R Fund in accordance with Section 3.43(d) of the Master Agreement. During each
Sublease Year, City shall deposit in the AR &R Fund from lawfully available funds an amount
determined by City during its annual budget process based upon the then current Approved
-19-
4099523.13
Replacement Forecast for Capital Repair. Subject to the provisions of Section 73, the AR &R
Fund shall be used by City solely for items of Capital Repair included in the Approved
Replacement Forecasts and shall not be available to pay for any Maintenance performed by
OHPD or for FF &E Replacements purchased by OHPD. All funds in the AR &R Fund shall be
the sole property of City, and OHPD shall not create, incur, assume, claim or permit to exist any
security interest or lien on the AR &R Fund or any proceeds thereof and shall not be entitled to
any disbursements from the AR &R Fund. Notwithstanding the foregoing, in no event shall City
be required to expend funds for items of Capital Repair for the Subleased Premises if funds are
not appropriated by City or are not lawfully available to City for such purposes.
7.3 City's Right to Audit. OHPD shall keep or cause OHM to keep at the Subleased
Premises a complete and accurate set of books and records regarding the expenditures for FF &E
Replacements required under Section 5.6 and Section 7.1 which shall be preserved for at least
thirty (36) months. City and its agents may, at any reasonable time, inspect copy and /or audit
any or all of OHPD's books and records that in any manner relate to the FF &E Replacements
required under Section 5.6 and Section 7.1 and, at City's request, OHPD shall make all such data
available for such examination at such reasonable times as City shall specify. Upon a failure by
OHPD to make FF &E Replacements as required by Section 5.6 and Section 7.1 or to maintain
the Convention Center in accordance with Section 5.3 that continues after the expiration of any
applicable notice and cure period provided herein, City may, at its election, use funds in AR &R
Fund for the purpose of making the FF &E Replacements required of OHPD under Section 5.6 or
Section 7.1 or for the purpose of maintenance of the Convention Center required by OHPD under
qPCtinn 5',
ARTICLE 8
INSURANCE AND ENVIRONMENTAL PROVISIONS
8.1 Commercial Property Insurance. At all times during the Term of this Sublease,
City shall maintain a policy or policies of special causes of loss form commercial property
insurance, with all premiums paid in advance, issued by and binding upon an insurance company
reasonably acceptable to City and authorized to transact business in the State of Texas, insuring
all buildings and strictures included in the Subleased Premises, and covering all City Facilities
FF &E located in the Subleased Premises, in accordance with the requirements of Section 8.2. of
the Master Agreement. City shall be listed as named insured on all such policies. OHPD shall
be required to reimburse City for the costs of such policies in accordance with Section 2.3
hereof. Any loss under any such insurance policy required under this Sections 8.1 shall be made
payable to City for the benefit of City, to the end that City shall be entitled to collect all money
due under such insurance policies payable in the event of and by reason of the loss of or damage
to the Subleased Premises or the City Facilities FF &E, to be applied pursuant to Section 9.1
below. Additionally, the property insurance policy shall provide for business
income /interruption coverage with sufficient limits based on the potential loss of income
generated by the Convention Center and Hotel. City agrees to use reasonable diligence to obtain
insurance at the best rate possible; however, City and OHPD acknowledge that that price is only
one factor in City's selection of insurance.
8.2 Additional City Insurance. In addition to the commercial property insurance
described in Section 8. 1, at all times during the Term of this Sublease, City shall maintain all
-20-
4099523.13
policies of insurance (or provide through self - insurance programs) required by Section 8.2 of the
Master Agreement, in accordance with the requirements of the Master Agreement. OHPD shall
be required to reimburse City for the costs of such policies in accordance with Section 2.3 hereof
to the extent that such coverage is not provided through City's self - insurance programs. Any
loss under any such insurance policy required under Sections 8.2 thereof shall be made payable
to City for the benefit of City, to the end that City shall be entitled to collect all money due under
such insurance policies payable in the event of and by reason of the loss of or damage to the
Subleased Premises or the City Facilities FF &E, to be applied in City's sole discretion, but
subject to the provisions of Section 8.7 and Section 9.1.
8.3 OHPD Insurance. At all times during the Term of this Sublease, OHPD shall
maintain: (a) all policies of insurance required by Section 8.2 and Section 8.3 of the Master
Agreement, in accordance with the requirements of the Master Agreement; and (b) the following
policies of insurance:
(a) Liability Insurance. OHPD agrees, at its sole expense, to obtain and
maintain commercial general liability insurance at all times during the Term hereof with
reputable insurance companies authorized to transact business in the State of Texas for bodily
injury (including death) and property damage with minimum limits from time to time of the
greater of (i) $5,000,000 with respect to any one occurrence and the aggregate of all occurrences
during a given policy period and (ii) those customarily held by owners /operators of similar
projects in the State of Texas, (a) protecting City and OHPD against any liability, damage, claim
or demand arising out of or connected with the condition or use of the Subleased Premises. Such
insurance shall include contractual liability, personal injury and advertising liability, and
independent contractor liability as well as products and completed operations coverage, and (b)
business automobile liability insurance (including owned, non -owned and hired). Such insurance
coverage must be written on an "occurrence" basis. The insurance required to be maintained by
OHPD, may be maintained by any combination of single policies and /or umbrella or blanket
policies, so long as the level of coverage is not impaired or reduced by the use thereof. City and
its elected officials, employees, agents and volunteers shall be named as Additional Insureds, as
their interests appear, on all insurance policies required by this Sublease or the Master
Agreement. If OHPD's liability insurance policies do not contain the standard ISO Separation of
Insureds Provision, or a substantially similar clause, such liability insurance policies shall be
endorsed to provide cross - liability coverage at OHPD's expense.
(b) Workers' Compensation Insurance. OHPD agrees, at its sole expense to
obtain and maintain workers' compensation insurance, as required by Applicable Law, during
the Term. The policy will be endorsed to provide a waiver of subrogation as to City.
(c) Property Insurance. At all times during the Term of this Sublease, OHPD
shall, at its sole expense, maintain a policy or policies of special causes of loss form commercial
property insurance, with all premiums paid in advance, issued by and binding upon an insurance
company reasonably acceptable to City and authorized to transact business in the State of Texas,
insuring all OHPD FF &E and other personal property of OHPD located in the Subleased
Premises, for the amount of the full replacement cost thereof as of the date of the loss with a
deductible amount no greater than that retained by owners of similar properties in the State of
Texas at the time the policy in question is obtained. Additionally, the property insurance policy
-21-
409923.13
shall provide for business income /interruption coverage with sufficient limits based on the
potential loss of income generated from the Convention Center and Hotel. Furthermore, no
policy of insurance required under this Section 8.3 shall be written such that the proceeds thereof
will produce less than the minimum of coverage required hereunder by reason of co- insurance
provisions or otherwise.
8.4 Additional Coverage /Requirements of Policies. In addition to the insurance
required in Sections 8.3 hereof, OHPD must also maintain such other insurance, both in terms of
(i) risks insured and scope of coverage, and (ii) amounts of coverage, as may from time to time
during the Term be customarily carried by owners /operators of properties similar to the
Subleased Premises in the State of Texas with the effect that at any given time during the Term.
OHPD shall maintain such additional insurance coverage on the Sublease Premises and its
operations thereon equal to that carried by the owners /operators of other similar Convention
center facilities in the State of Texas.
All insurance required of OHPD under this Article 8 shall be primary and non-
contributing with any insurance that may be carried by City. Also, each policy of insurance
required under this Article 8 shall (i) be issued by one or more insurance companies each of
which must have an A.M. Best Company financial and performance rating of A -IX or better and
be qualified or authorized by the laws of the State of Texas to assume the risk covered by such
policy; (ii) provide that such policy shall not be canceled or modified without at least thirty (30)
days prior written notice to City and (iii) provide that any loss otherwise payable thereunder shall
be payable notwithstanding any act or negligence of the named insureds which might, absent
such agreement, result in a forfeiture of all or a part of such insurance payment. On the
Operational Date and thereafter as City may require, OHPD shall provide City with certificates
of insurance, or other evidence and documentation, acceptable to City evidencing OHPD's full
compliance with the insurance requirements of this Sublease. If requested by City, OHPD shall
provide City with certified copies of any of the required policies. OHPD shall promptly pay all
premiums when due on such insurance and not less than fifteen (15) days prior to the expiration
date of each such policy, deliver to City acceptable evidence of insurance, such as a renewal
policy or policies marked "Premium Paid ", or other evidence satisfactory to City, reflecting that
all required insurance is current and in force. OHPD will immediately give notice to City of any
cancellation of, or change in, any insurance policy required to be maintained hereunder. OHPD
may satisfy any insurance requirement hereunder by providing one or more "blanket" insurance
policies provided same is reasonably acceptable to City.
8.5 WAIVER OF SUBROGATION. CITY AND OHPD HEREBY WAIVE ALL
CLAIMS, RIGHTS OF RECOVERY AND CAUSES OF ACTION THAT EITHER
PARTY OR ANY PARTY CLAIMING BY, THROUGH OR UNDER SUCH PARTY BY
SUBROGATION OR OTHERWISE MAY NOW OR HEREAFTER HAVE AGAINST
THE OTHER PARTY OR ANY OF THE OTHER PARTY'S PRESENT AND FUTURE
SUBSIDARIES, AFFILIATES, PARTNERS, OFFICERS, DIRECTORS, EMPLOYEES,
DIRECT OR INDIRECT STOCKHOLDERS, AGENTS, OTHER REPRESENTATIVES,
SUCCESSOR AND ASSIGNS FOR LOSS OR DAMAGE TO PROPERTY OF CITY OR
OHPD, EVEN IF CAUSED BY THE NEGLIGENCE OR FAULT OF THE RELEASED
PARTY OR ITS PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR
REPRESENTATIVES, TO THE EXTENT THAT THE LOSSES OR DAMAGES ARE
-22-
4099523.13
COVERED BY THE INSURANCE POLICIES ACTUALLY MAINTAINED PURSUANT
TO SECTION 8.1, 8.2, 8.3 OR 8.4 OF THIS SUBLEASE. CITY AND OHPD EACH
SHALL CAUSE THEIR RESPECTIVE INSURANCE CARRIERS TO ENDORSE, IF
REQUIRED TO MAKE THIS WAIVER EFFECTIVE, ALL APPLICABLE POLICIES
WAIVING THE CARRIER'S RIGHTS OF RECOVERY UNDER SUBROGATION OR
OTHERWISE AGAINST THE OTHER PARTY.
8.6 Adjustment of Losses. Any loss under any such insurance policy required under
Section 8.3 hereof shall be made payable to City for the benefit of OHPD and City, to the end
that City shall be entitled to collect all money due under such insurance policies payable in the
event of and by reason of the loss of or damage to the Subleased Premises, to be applied pursuant
to Section 8.7 below. Any accumulation of interest on the insurance proceeds collected by
OHPD shall be added to, and become a part of, the fund being held by City for the benefit of
City and OHPD. The adjustment of losses with the insurer shall be made by City.
8.7 Application of Proceeds of Property Insurance. All proceeds payable pursuant to
the provision of any policies of property insurance required to be carried under the terms of
Section 8.3 of this Sublease (net of reasonable expenses of collection) shall be applied for the
following purposes:
(a) All such net proceeds shall first be used, subject to any other terms and
conditions contained in this Sublease, to fund the rebuilding, restoration and repair of the portion
of the Subleased Premises, the City Facilities FF &E and /or the OHPH FF &E which have
become destroyed or damaged for which such proceeds are payable, such funds to be released by
City on such terms and conditions as City may reasonably require; and
(b) Following completion of all work under subsection (a) above, any
proceeds not disbursed pursuant to subsection (a) above shall be applied to offset OHPD's
obligations to pay the Base Rent, or if no Base Rent is payable, to upgrade or repair the
Subleased Premises.
8.8 Environmental Investigation, Remediation and Indemnity.
(a) OHPD represents and warrants that it has undertaken a reasonable
investigation of the environmental condition of the Subleased Premises, and the results of
OHPD's environmental investigation did not identify any condition relating to the environment
that could reasonably be expected to materially and adversely impact OHPD's ability to conduct
its operations at the Subleased Premises. City makes no representation or warranty concerning
the condition of the Subleased Premises. OHPD shall provide to City all reports and assessments
obtained by OHPD with respect to its environmental investigation of the Subleased Premises.
(b) OHPD shall be responsible, at its sole expenses, for performing any
environmental investigation and remediation work which may be required in connection with the
use and occupancy of the Subleased Premises and which is caused by the presence of Hazardous
Materials on the Subleased Premises, except and to the extent the presence thereof results solely
from the act of City or its officers, employees, agents or representatives or was present on the
Subleased Premises before the execution of this Sublease. Such environmental investigation and
-23-
4099523.13
remediation work shall be conducted in accordance with all Applicable Laws including
applicable Environmental Laws. OHPD shall notify and advise City of the remediation OHPD
will undertake and the procedures to be used. OHPD shall complete the remediation with due
diligence and shall comply with, and shall cause its agents and contractors to comply with, all
Applicable Laws including applicable Environmental Laws regarding the use, removal, storage,
transportation, disposal and remediation of Hazardous Materials. OHPD's obligation as provided
herein to undertake environmental investigation and remediation of the Subleased Premises shall
be a continuing obligation of OHPD which shall survive throughout the Term and after the
expiration or termination of this Sublease.
(c) The term "Hazardous Materials" shall exclude any such items that are
necessary for the ordinary performance of OHPD's business activities, provided that such items
are used, stored or disposed of in compliance with all Environmental Laws. If OHPD breaches
its obligations under this Section 8.8 and such breach is not cured following notice an within the
applicable cure period specified in Article 12 below, City may take any and all action reasonably
appropriate to remedy such breach, and OHPD shall promptly pay all reasonable costs incurred
by City in connection therewith.
(d) Indemnity. IN ADDITION TO ANY OTHER INDEMNITIES IN THIS
SUBLEASE AGREEMENT, OHPD SHALL DEFEND, INDEMNIFY THE CITY AND HOLD
HARMLESS CITY FROM ANY AND ALL ENVIRONMENTAL CLAIMS (INCLUDING
REASONABLE ATTORNEY'S FEES, LITIGATION AND INVESTIGATION EXPENSES,
AND COURT COSTS) ARISING OUT OF OR RESULTING IN WHOLE OR IN PART
FROM OHPD' S USE, HANDLING, TREATMENT, STORAGE, DISPOSAL, DISCHARGE,
OR TRANSPORTATION OF HAZARDOUS MATERIALS ON OR AT THE SUBLEASED
PREMISES, THE VIOLATION OF ANY ENVIRONMENTAL LAW BY OHPD, OR THE
FAILURE OF OHPD TO COMPLY WITH THE TERMS, CONDITIONS AND COVENANTS
OF THIS ARTICLE.
(e) The provision of this Section 8.8 shall survive the expiration or
termination of this Sublease and are solely for the benefit of City and OHPD and shall not be
deemed for the benefit of any other person or entity.
ARTICLE 9
f ACTTAT,TV
9.1 Damage or Destruction. Subject to the terms of the City -UNT Land Lease and
provided that City receives the proceeds of the commercial property insurance which City is
required to maintain pursuant to Section 8.1 hereof, if, at any time during the Term, the
Subleased Premises or any part thereof, or the City Facilities FF &E shall be damaged or
destroyed by fire or other casualty of any kind or nature, ordinary or extraordinary, foreseen or
unforeseen, City shall (a) as soon as reasonably practicable, but in no event later than ninety (90)
days after the date of a casualty, commence the preparation of the plans for and work of repair,
reconstruction or replacement and thereafter proceed with all due diligence until completion of
the repair, reconstruction or replacement of the damaged Subleased Premises or part thereof to a
condition similar to that existing prior to such damage or destruction in order that the Subleased
Premises may continue to be operated in a manner comparable to or better than Comparable
-24-
4099523.13
Convention Centers; and (b) as soon as reasonably practicable (provided that City has received
the proceeds of the commercial property insurance policy), replace any damaged or destroyed
City Facilities FF &E with furniture, fixtures and equipment of comparable quality to that
existing prior to the damage or destruction in order that the Subleased Premises may continue to
be operated in a manner comparable to or better than Comparable Convention Centers.
Notwithstanding the foregoing, if the casualty occurs during the last five (5) years of the Term
and the extent of damage to the Subleased Premises is greater than fifty percent (50 %) (in City's
reasonable business judgment based on objective information and criteria) of the then
replacement value thereof (exclusive of the value of the Convention Center Site), City shall have
the option, within ninety (90) days from the date of the occurrence of such casualty damage, to
terminate this Sublease by giving written notice of such termination to OHPD within said 90 -day
period, in which event (i) this Sublease shall terminate as of the termination date specified in
such notice to OHPD which shall not be less than thirty (30) days after the date of such notice;
(ii) OHPD shall no longer be required to pay Base Rent for any period subsequent to such
termination date; (iii) City shall not be required to repair the damage; (iv) all insurance proceeds
available as a result of such damage shall be paid to and be the property of City, subject to
OHPD's right to the FF &E Reimbursement, if applicable; and (v) the Parties shall have no
further liability of obligations one to the other except for liabilities incurred or accruing prior to
such termination date, that survive the expiration or termination of this Sublease or as may be
expressly provided for herein.
9.2 Notice and Cooperation. OHPD shall immediately notify City of any event which
results in damage to or destruction of the Subleased Premises, the City Facilities FF &E or any
part thereof. With respect to any damage to or destruction of the Subleased Premises and the City
Facilities FF &E, City and OHPD covenant and agree to fully cooperate in processing claims
with any insurance carriers in order to maximize the total proceeds paid pursuant to insurance
policies.
ARTICLE 10
ASSIGNMENT AND SUBLETTING
10.1 Assignment and Subletting. OHPD shall not grant, sell, convey, assign,
mortgage, encumber, sublease or otherwise transfer this Sublease or its leasehold interest in the
Subleased Premises, or any portion thereof, without the express written consent of City and UNT
and in accordance with terms and provisions of Section 7.1 of the Master Agreement, not to be
unreasonably withheld.
10.2 Permitted Assignments. A permitted assignment by OHPD of its interests in this
Sublease or any portion thereof shall not relieve OHPD from its obligations under this Sublease
unless the City shall expressly consent in writing to any such release. Any permitted assignee of
any of OHPD's rights under this Sublease, as a condition of such assignment, shall execute an
assumption of OHPD's duties and obligations under this Sublease, such assumption to be in form
reasonably acceptable to City. No permitted assignee of OHPD's interests in this Sublease, or
any portion thereof, permitted in accordance with the terms and provisions of Section 7.1 of the
Master Agreement, shall have any right to grant, sell, convey, assign, mortgage, encumber,
sublease or otherwise transfer this Sublease or its leasehold interest in the Subleased Premises, or
any portion thereof without the express written consent of OHPD, City and UNT.
-25-
4099523.13
ARTICLE 11
SURRENDER
11.1 Surrender. OHPD shall on the last day of the Term, or upon any earlier
termination of this Sublease, or upon any re -entry by City upon the Subleased Premises pursuant
to Article 12 hereof, surrender and deliver the Subleased Premises and, except as otherwise
provided in Section 5.7, the City Facilities FF &E and all other fixtures, equipment and other
personal property then located upon the Subleased Premises into the possession and use of City
in the condition required to operate the Subleased Premises in a manner comparable to or better
than Comparable Convention Centers, reasonable wear and tear and obsolescence excepted and
free and clear of any liens created by OHPD or resulting from the acts or omissions of OHPD.
OHPD shall at no time during the Term remove any fixtures, equipment or other personal
property from the Subleased Premises, except any equipment or other personal property which is
obsolete or unfit for use or which is no longer useful in the operation of the Subleased Premises
so long as such equipment and /or other personal property are promptly replaced with equipment
and /or other personal property, as the case may be, which are fit for use and useful in the
operation of the Subleased Premises and OHPD complies with any applicable provisions of this
Sublease with respect thereto. Nothing in this Article 11 shall in any way be deemed to affect
any of OHPD's obligations as to the Permitted Use for the Subleased Premises.
11.2 Holding Over. If the Subleased Premises are not surrendered when required
under Section 11. 1, OHPD shall be a tenant at sufferance and shall pay to City holdover rent as
provided in Section 2.5 and otherwise comply with the provisions of Section 2.5. The provisions
of Section 2.5 and this Section 11.2 shall not be deemed to limit or constitute a waiver of any
other rights or remedies of City provided herein, at law or at equity.
113 Validity of Surrender. Except for surrender upon the expiration or earlier
termination of the Term, no surrender to City of this Sublease or of the Subleased Premises shall
be valid or effective unless agreed to and accepted in writing by City.
ARTICLE 12
EVENTS OF DEFAULT
12.1 Events of Default. Each of the following events shall be an "Event of Default'
hereunder:
(a) Failure by OHPD in paying when due any Base Rent or any other payment
required pursuant to this Sublease and such default continues for a period of fifteen (15) days
following written notice thereof from City to OHPD;
(b) If the Subleased Premises is used for other than the Permitted Use or if
OHPD breaches the continuous use covenant in Section 4.2 hereof and either of such defaults
continues for a period of thirty (30) days following written notice thereof from City to OHPD;
(c) If OHPD fails to timely maintain, or cause to be maintained, any insurance
required to be maintained under this Sublease and such failure continues for ten (10) days after
written notice thereof City to OHPD;
-26-
4099523.13
(d) If OHPD sells, conveys, assigns, mortgages, encumbers or sublets the
Sublease or all or any portion of the leasehold estate created by this Sublease other than as
permitted in Section 10.1 hereof and Section 7.1 of the Master Agreement;
(e) If OHPD fails to discharge any liens or encumbrances against the
Subleased Premises as required by Section 5.11 hereof,
(f) If an Event of Default occurs under the Master Agreement;
(g) If an Event of Default (as defined in the OHM Management Agreement or
any Replacement Management Agreement) occurs under the OHM Management Agreement or
any Replacement Management Agreement and such default constitutes or causes an Event of
Default to occur under this Sublease or the City -UNT Land Lease;
(h) If an Event of Default occurs under this Sublease or the City -UNT Land
Lease due to acts of or the failure to act by OHM or any Replacement Manager;
(i) If an Event of Default (as defined in the Approved Franchise) occurs
under the Franchise Agreement or the Franchise Agreement is terminated between the
Operational Date and the eighteenth (18t1') year of the Franchise Agreement, for any reason
except the action of City or its employees, agents or other contractors or consultants;
0) If OHPD fails to maintain and operate the Hotel in an Upscale Manner
comparable to or better than Comparable Hotel Properties and in accordance with the
requirements of the Franchise Agreement;
(k) If the leasehold interest in the Hotel is transferred to a tax - exempt entity;
(1) Default by OHPD in observing or performing one or more of the other
terms, conditions, covenants or agreements of this Sublease and the continuance of such default
for a period of thirty (30) days after written notice by City specifying such default (unless such
default requires work to be performed, acts to be done, or conditions to be removed which cannot
by their nature reasonably be performed, done or removed, as the case may be, within such 30-
day period, in which case no such Event of Default shall be deemed to exist so long as OHPD
shall have commenced curing such default within such 30 -day period and shall diligently and
continuously prosecute the same to completion; provided however, such default must be cured
within ninety (90) days after such notice;
(m) If OHPD files a voluntary proceeding under present or future bankruptcy,
insolvency or other laws respecting debtors' rights or if OHM or any Replacement Manager files
a voluntary proceeding under present or future bankruptcy, insolvency or other laws respecting
debtors' right and such action constitutes or causes an Event of Default to occur under this
Sublease or the City -UNT Land Lease;
(n) If OHPD consents to an involuntary proceeding under present or future
bankruptcy, insolvency or other laws respecting debtors' rights or if OHM or any Replacement
Manager consents to an involuntary proceeding under present or future bankruptcy, insolvency
-27-
4099523.13
or other laws respecting debtors' rights and such action constitutes or causes an Event of Default
to occur under this Sublease or the City -UNT Land Lease;
(o) If an order for relief against OHPD or the appointment of a receiver,
trustee or custodian for all or a substantial part of the property or assets of OHPD in any
involuntary proceeding is entered and such order, judgment or degree continues unstayed for any
period of ninety (90) consecutive days or if an order for relief against OHM or any Replacement
Manager or the appointment of a receiver, trustee or custodian for all or a substantial part of the
property or assets of OHM or any Replacement Manager in any involuntary proceeding is
entered and such order, judgment or degree continues unstayed for any period of ninety (90)
consecutive days and such action constitutes or causes an Event of Default to occur under this
Sublease or the City -UNT Land Lease;
(p) If OHPD makes a general assignment for the benefit of creditors or if
OHM or any Replacement Manager makes a general assignment for the benefit of creditors and
such action constitutes or causes an Event of Default to occur under this Sublease or the City -
UNT Land Lease; or
(q) If a final judgment, order or decree of a court of competent jurisdiction
adjudicates OHPH to be bankrupt, and the period for any appeal thereof has expired or if a final
judgment, order or decree of a court of competent jurisdiction adjudicates OHM or any
Replacement Manager to be bankrupt, and the period for any appeal thereof has expired and such
action constitutes or causes an Event of Default to occur under this Sublease or the City -UNT
Land Lease.
12.2 Remedies. Upon any Event of Default, City may, in addition to all other rights
and remedies afforded City hereunder or by law or equity, take any one or more of the following
actions:
(a) Terminate this Sublease by giving OHPD written notice thereof followed
by a second notice of termination in accordance with Section 12.5.1 of the Master Agreement, in
which event OHPD shall pay to City the sum of (1) all Base Rent accrued hereunder through the
date of termination, (2) all amounts due under Section 123, and (3) an amount equal to (A) the
total Base Rent that OHPD would have been required to pay for the remainder of the Term
discounted to present value at a per annum rate equal to the "Prime- Rate" as- published on the
date this Sublease is terminated in the The Wall ,Sheet Journal, Southwest Edition, in its listing
of "Money Rates ", minus (B) the then present fair rental value of the Subleased Premises for
such period, similarly discounted;
(b) Terminate OHPD's right to possess the Subleased Premises without
terminating this Sublease by giving written notice thereof to OHPD, in which event OHPD shall
pay to City (1) all Base Rent accrued hereunder to the date of termination of possession, (2) all
amounts due from time to time under Section 1231 and (3) all Base Rent required hereunder to
be paid by OHPD during the remainder of the Term, diminished by any net sums thereafter
received by City through reletting the Subleased Premises during such period, after deducting all
costs incurred by City in reletting the Subleased Premises. If City elects to proceed under this
Section 12.2(b), City may remove all of OHPD's property from the Subleased Premises and store
-28-
4099523.13
the same in a public warehouse or elsewhere at the cost of, and for the account of, OHPD,
without becoming liable for any loss or damage which may be occasioned thereby. City shall
not be liable for, nor shall OHPD's obligations hereunder be diminished because of, City's
failure to relet the Subleased Premises or to collect rent due for such reletting. OHPD shall not be
entitled to the excess of any consideration obtained by reletting over Base Rent due hereunder.
Reentry by City in the Subleased Premises shall not affect OHPD's obligations hereunder for the
unexpired Term; rather, City may, from time to time, bring an action against OHPD to collect
amounts due by OHPD, without the necessity of City's waiting until the expiration of the Term.
Unless City delivers written notice to OHPD expressly stating that it has elected to terminate this
Sublease, all actions taken by City to dispossess or exclude OHPD from the Subleased Premises
shall be deemed to be taken under this Section 12.2(b). If City elects to proceed under this
Section 12.2(b), it may at any time elect to terminate this Sublease under Section 12.2(a); or
(c) Perform any act OHPD is obligated to perform under the terms of this
Sublease (and enter upon the Subleased Premises in connection therewith if necessary) in
OHPD's name and on OHPD's behalf, without being liable for any claim for damages therefor,
and OHPD shall reimburse City promptly following written notice for any expenses which City
may incur in thus effecting compliance with OHPD's obligations under this Sublease (including,
but not limited to, collection of costs and reasonable legal expenses), plus interest thereon at the
lesser of eighteen percent (18 %) per annum or the maximum rate permitted by Applicable Law.
12.3 Payment by OHPD. Upon any Event of Default, OHPD shall pay to City all
reasonable costs incurred by City (including court costs and reasonable attorneys' fees and
expenses) in (a) obtaining possession of the Subleased Premises, (b) removing and storing
OHPD's or any other occupant's property, (c) repairing, restoring, altering, remodeling, or
otherwise putting the Subleased Premises into condition required hereunder upon surrender, (d)
if OHPD is dispossessed of the Subleased Premises and this Sublease is not terminated, reletting
all or any part of the Subleased Premises (including brokerage commissions and other costs
incidental to such reletting), (e) performing OHPD's obligations which OHPD failed to perform,
and (f) enforcing, or advising City of, its rights, remedies, and recourses arising out of the Event
of Default.
12.4 Reentry by City. If any Event of Default shall occur, or if this Sublease or
OHPD's right to possession shall be terminated as provided in Section 12.2 hereof or by
summary proceedings or otherwise, then, and in any of such events, City may re -enter the
Subleased Premises and dispossess OHPD and the legal representative of OHPD or other
occupant of the Subleased Premises by summary proceedings or otherwise, and remove their
effects and hold the Subleased Premises as if this Sublease had not been made. The terms
"enter," "re- enter," "entry," or "re- entry," as used in this Sublease, are not restricted to their
technical legal meaning.
12.5 Injunction. In the event of a breach or a threatened breach by OHPD of any of its
obligations under this Sublease, the City shall also have the right of injunction. The special
remedies to which City may resort in this Article are cumulative and not intended to be exclusive
of any other remedies or means of redress to which City may lawfully be entitled at any time and
City may invoke any remedy allowed at law or in equity as if specific remedies were not
provided for herein.
-29-
4099523.13
12.6 Retention of Monies. Subject to applicable law, if this Sublease or OHPD's right
to possession shall terminate under the provisions of Section 12.2, or if City shall re -enter the
Subleased Premises as provided herein or in the event of the termination of this Sublease or
OHPD's right to possession, or re- entry, by or under any summary dispossess or other
proceeding or action or any provision of law by reason of default hereunder on the part of
OHPD, City shall be entitled to retain all monies, if any, paid by OHPD to City, whether as
advance rent, security or otherwise, but such monies shall be credited by City against any Base
Rent due from OHPD at the time of such termination or re -entry or, at City's option, against any
damages payable by OHPD under this Article or pursuant to law or equity.
12.7 Recovery of Damages or Deficiencies. Following an Event of Default, suit or
suits for the recovery of damages or deficiencies, or any installments thereof, may be brought by
City from time to time at its election, and nothing contained herein shall be deemed to require
City to postpone suit until the date when the Term would have expired if it had not been so
terminated hereunder, or under any provision of law, or had City not reentered the Subleased
Premises. Nothing herein contained shall be construed to limit or preclude recovery by City
against OHPD of any sums or damages to which, in addition to the damages particularly
provided above, City may lawfully be entitled by reason of any default hereunder on the part of
OHPD.
12.8 Mitigation of Damages. Upon termination of OHPD's right to possess the
Subleased Premises, City shall, notwithstanding Section 12.2(b) or any other provision or
condition of this Sublease, to the extent required by law (and no further), use commercially
reasonable efforts to mitigate damages by reletting the Subleased Premises. City shall not be
deemed to have failed to do so if City refuses to lease the Subleased Premises to a prospective
new tenant with respect to whom City would be entitled to withhold its consent pursuant to
Article 10, or who (a) is an Affiliate of OHPD; (b) not qualified to operate, manage and maintain
the Convention Center or financially solvent; (c) requires improvements to the Subleased
Premises to be made at City's expense; or (d) is unwilling to accept commercially reasonable
sublease terms then proposed by City in good faith, including: (1) subleasing for a shorter term
than remains under this Sublease ; (2) re- configuring or combining the Subleased Premises with
other space, (3) taking only a part of the Subleased Premises; and /or (4) changing the use of the
Subleased Premises.
12.9 No Waiver of Obligations. The failure of City or OHPD to insist upon
enforcement of the other party's obligations of strict performance with the terms of this Sublease
or payment of Base Rent, shall not be deemed to be a waiver of those obligations.
12.10 Payments on Account. No receipt of moneys by City from OHPD after
termination of this Sublease , or after the giving of any notice of termination of this Sublease,
shall reinstate, continue or extend the Term or affect any notice theretofore given OHPD, or
operate as a waiver of the right of City to enforce the payment of Base Rent payable by OHPD
hereunder or thereafter falling due, or operate as a waiver of the right of City to recover
possession of the Subleased Premises, it being agreed that after the service of notice to terminate
this Sublease or the commencement of suit or summary proceedings, or after final order or
judgment for the possession of the Subleased Premises, or after possession of the Subleased
Premises by re -entry by summary proceedings or otherwise, City may demand, receive and
-30-
4099523.13
collect any moneys due or thereafter falling due without in any manner affecting such notice,
proceeding, order, suit or judgment, all such moneys collected being deemed payments on
account of the use and occupation of the Subleased Premises or, at the election of City, on
account of OHPD's liability hereunder.
12.11 No Waiver. No failure of City to exercise any right or remedy consequent upon a
default in any covenant, agreement, term or condition of this Sublease, and no acceptance of full
or partial Base Rent by City during the continuance of any such default, shall constitute a waiver
of any such default or of such covenant, agreement, term or condition. No covenant, agreement,
term or condition of this Sublease to be performed or complied with by either party, and no
default thereof, shall be waived, altered or modified except by a written instrument executed by
that party. No waiver of any default shall affect or alter this Sublease, but each and every
covenant, agreement, term and condition of this Sublease shall continue in full force and effect
with respect to any other then existing or subsequent default thereof.
12.12 Cumulative Rights and Remedies. Except as may be specifically provided
otherwise herein, each right and remedy of City or OHPD provided for in this Sublease shall be
cumulative and shall be in addition to every other right or remedy provided for in this Sublease
or now or hereafter existing at law or in equity or otherwise, and the exercise or beginning of the
exercise by City or OHPD of any one or more of the rights or remedies provided for in this
Sublease or now or hereafter existing at law or in equity or otherwise shall not preclude the
simultaneous or later exercise by City or OHPD of any or all other rights or remedies provided
for in this Sublease or now or hereafter existing at law or in equity or otherwise.
12.13 Attorneys' Fees and Disbursements. In the event of any legal action or
proceeding brought by either party against the other arising out of this Sublease, the prevailing
party shall be entitled to recover reasonable attorneys' fees and costs incurred in such action
(including, without limitation, all costs of appeal) and such amount shall be included in any
judgment rendered in such proceeding.
12.14 Sublease Valid until Terminated by City. Except as may be specifically provided
otherwise herein, even though OHPD may have breached this Sublease, this Sublease shall
continue in effect for so long as City does not terminate OHPD's right to possession, and City
shall have the right to enforce all its rights and remedies under this Sublease, including, without
limitation, the right to recover all Base Rent as it becomes due under this Sublease. Acts of
maintenance or preservation or efforts to relet the Subleased Premises or the appointment of a
receiver upon initiative of City to protect City's interest under this Sublease shall not constitute a
termination of OHPD's right to possession unless written notice of termination is given by City
to OHPD.
12.15 OHPD's Expenses. All agreements and covenants to be performed or observed
by OHPD under this Sublease shall be at OHPD's sole cost and expense and without any
abatement of Base Rent.
12.16 Hotel Lender Notice and Right to Cure. If required by Hotel Lender and if
contact information for Hotel Lender has been provided in Section 16.3, City agrees to give
Hotel Lender written notice of any Event of Default hereunder concurrently with any required
-31-
4099523.13
notice to OHPD. City further agrees that Hotel Lender shall have the right to cure any Event of
Default, on behalf of OHPD, in accordance with the terms of this Article 12 provided that the
Franchise Agreement, or a substitute franchise agreement with an Approved Franchisor remains
in full force and effect during any applicable cure period.
12.17 Third -Party Consultant. In addition to all other rights and remedies of City set
forth in this Article 12, in the event of any dispute between City and OHPD as to whether OHPD
is fulfilling its obligations to operate and manage the Subleased Premises and the Hotel in a
manner comparable to or better than Comparable Convention Centers or Comparable Hotel
Properties, as applicable, in accordance with the terms of Sections 5.1 & 5.2 hereof, City shall
be entitled to engage a third -party management consultant, at the expense of OHPD and City to
be shared equally, to mediate any such disputes, and OHPD shall be required to participate in
any such mediation.
ARTICLE 13
DEFAULT OF CITY
13.1 Defaults and Remedies. In the event of any breach by City of any covenant of
City under this Sublease, OHPD shall have the right to deliver to City a written notice specifying
such breach, and unless within ninety (90) days from and after the date of delivery of such notice
City shall have commenced to remove or to cure such breach or occurrence and shall be
proceeding with reasonable diligence to completely remove or cure such breach or occurrence
(provided such breach or occurrence must be cured within one hundred twenty (120) days after
such notice), then OHPD shall have all remedies available at law or in equity; provided however,
OHPD shall have no right to terminate this Sublease unless OHPD delivers to City a written
notice of intent to terminate no less than sixty (60) days prior to the date of termination.
OHPD's remedies pursuant to this Section 13.1 are cumulative and not intended to be exclusive
of any other remedies to which OHPD may lawfully be entitled.
ARTICLE 14
CONDEMNATION
14.1 Definitions. Whenever used in this Article 14, the following words shall have the
definitions and meanings hereinafter set forth:
(a) "Condemnation Proceeding." Any action brought for the purpose of any
taking of the Subleased Premises, or any part thereof or of any property interest therein
(including, without limitation, the right to the temporary use of all or any portion of the
Subleased Premises), by competent authority as a result of the exercise of the power of eminent
domain, including a voluntary sale to such authority either under threat of condemnation or while
such action or proceeding is pending.
(b) "Taking" or "Taken." The event and date of vesting of title to the
Subleased Premises or any part thereof or any property interest therein (including, without
limitation, the right to the temporary use of all or any portion of the Subleased Premises),
pursuant to a Condemnation Proceeding.
-32-
4099523.13
14.2 Entire Taking. If all or substantially all of the Subleased Premises shall be Taken
in Condemnation Proceedings, this Sublease shall be cease and terminate, Base Rent shall be
fully abated from and after the date of such Taking and from and after such date OHPD and City
shall not have any other obligations under this Sublease with respect to the Subleased Premises,
except for those obligations which expressly survive the termination hereof or that accrued prior
to the date of the Taking.
14.3 Partial Taking.
(a) If less than all of the Subleased Premises shall be Taken in any
Condemnation Proceeding, a fair and equitable portion of the Base Rent (as determined by City)
attributable to the portion of the Subleased Premises Taken shall be abated from and after the
date of such partial Taking, and from and after such date OHPD and City shall not have any
other obligations under this Sublease with respect to the portion of the Subleased Premises that
has been Taken, except for those obligations which expressly survive the termination hereof or
that accrued prior to the date of the Taking.
(b) If, following such Taking, the remaining Subleased Premises are not
sufficient to operate a convention center as intended by the Parties hereto (in OHPD's and City's
reasonable business judgment based on objective information and criteria), then OHPD or City,
at their election, may terminate this Sublease, whereupon the Base Rent shall be fully abated
from and after the date of such partial Taking, and from and after such date OHPD and City shall
not have any further obligations under this Sublease with respect to the Subleased Premises,
except for those obligations which expressly survive the termination hereof or that accrued prior
to the date of the Taking. Such election to terminate must be exercised no later than sixty (60)
days after the date of such Taking.
(c) If neither OHPD nor City elect, or have the right, to terminate this
Sublease upon any Partial Taking, then the Subleased Premises shall be reduced by the portion
thereof Taken, and the Base Rent payable hereunder shall be equitably reduced during the
unexpired portion of the Term as provided above and this Sublease shall remain in full force and
effect.
14.4 Temporary Taking. If any right of temporary (hereinafter defined) possession or
occupancy of all or any portion of the Subleased Premises shall be Taken, the Base Rent shall be
reduced during the duration of such Taking in a fair and equitable manner that reflects the
inability of OHPD to use the affected portion of the Subleased Premises. A Taking shall be
considered "temporary" only if the period of time during which OHPD is deprived of usage of all
or part of the Subleased Premises as the result of such Taking does not materially interfere with
the ability of OHPD to use and operate the Subleased Premises as a convention center in the
manner contemplated by the Parties hereto. Any other "Taking' that is not "temporary" as
described above shall be treated as an entire Taking under Section 14.2 above or as partial
Taking under Section 143 above.
14.5 Condemnation Award. Subject to the terms of the City -UNT Land Lease, City
shall receive the entire condemnation award or other compensation for its interest in the
Subleased Premises; however, OHPD may separately pursue a claim against the condemning
-33-
4099523.13
authority for the value of its leasehold estate. Subject to the terms of the City -UNT Land Lease,
OHPD and City shall each have the right, at its own expense, to appear in any condemnation
proceeding and to participate in any and all hearings, trials and appeals therein.
14.6 Notice of Taking Cooperation. City and OHPD shall each immediately notify the
other of the commencement of any condemnation, eminent domain, or other similar proceedings
with regard to the Subleased Premises. With respect to any condemnation, eminent domain or
similar proceeding involving all or substantially all of the Subleased Premises, City and OHPD
covenant and agree to fully cooperate in such proceedings in order to maximize the total award
receivable in respect thereof.
ARTICLE 15
REPRESENTATIONS, WARRANTIES AND SPECIAL COVENANTS
15.1 City's Representations, Warranties and Special Covenants. The City hereby
represents and warrants to OHPD that the following statement is true as of the date hereof.
(a) Due Authority; No Conflict. The City has all requisite power and
authority to execute this Sublease and to carry out its obligations hereunder and the transactions
contemplated hereby. This Sublease has been, and the documents contemplated hereby will be,
duly executed and delivered by the City and constitute legal, valid and binding obligations
enforceable against the City in accordance with the terms subject to principles of governmental
immunity and the enforcement of equitable rights. The consummation by the City of the
transactions contemplated hereby is not in violation of or in conflict with, nor does it constitute a
default under, any of the terms of any agreement or instrument to which the City is a party, or by
which the City is bound, or of any provision of any applicable law, ordinance, rile or regulation
of any governmental authority or of any provision of any applicable order, judgment or decree of
any court, arbitrator or governmental authority.
15.2 OHPD's Representations and Warranties. OHPD represents and warrants to the
City that the following representations and warranties are true as of the date hereof.
(a) Due Organization and Ownership. OHPD is a limited liability company
validly existing under the laws of the State of Missouri and is duly qualified to do business in the
State of Texas; and that the person executing this Sublease on behalf of it authorized to enter into
this Sublease.
(b) Due Authority: No Conflict. OHPD has all requisite power and authority
to execute and deliver this Sublease and to carry out its obligations hereunder and the
transactions contemplated hereby. This Sublease has been, and the documents contemplated
hereby will be, duly executed and delivered by OHPD and constitute OHPD's legal, valid and
binding obligations enforceable against OHPD in accordance with their terms. The
consummation by OHPD of the transactions contemplated hereby is not in violation of or in
conflict with, nor does it constitute a default under, any term or provision of the organizational
documents of OHPD, or any of the terms of any agreement or instrument to which OHPD is a
party, or by which OHPD is bound, or of any provision of any applicable law, ordinance, rile or
-34-
4099523.13
regulation of any governmental authority or of any provision of any applicable order, judgment
or decree of any court, arbitrator or governmental authority.
(c) Consents. No consent, approval, order or authorization of, or declaration
or filing with any governmental authority is required on the part of OHPD in connection with the
execution and delivery of this Sublease or for the performance of the transactions herein
contemplated by the respective Parties hereto.
(d) Litigation. To the best knowledge of OHPD, after reasonable inquiry,
there are no pending or, to the best knowledge of OHPD, threatened, judicial, municipal or
administrative proceedings, consent decree or, judgments which might affect OHPD's ability to
consummate the transaction contemplated hereby.
(e) Legal Proceedings. To the best knowledge of OHPD, after reasonable
inquiry, no preliminary or permanent injunction or other order, decree, or riling issued by a
governmental entity, and no statute, rile, regulation, or executive order promulgated to enacted
by a governmental entity, shall be in effect which restrains, enjoins, prohibits, or otherwise
makes illegal the consummation of the transactions contemplated by this Sublease.
ARTICLE 16
MISCELLANEOUS
16.1 Estoppel Certificates. OHPD and City shall, at any time and from time to time
(but not more frequently than once per Sublease Year) upon not less than ten (10) days prior
written request by the other Party, execute, acknowledge and deliver to City or OHPD, as the
case may be, a statement in writing certifying (a) the interest of City or OHPD hereunder, as the
case may be, (b) that this Sublease is unmodified and in full force and effect (or if there have
been any modifications, that the same is in full force and effect as modified and stating the
modifications), (c) the dates to which the Base Rent and any other charges have been paid, and
(d) that, to the then current actual knowledge, without independent investigation of City or
OHPD, as the case may be, no default hereunder on the part of the other Party exists (except that
if any such default does exist, the certifying Party shall specify such default).
16.2 Release. If requested by City, OHPD shall, upon termination of this Sublease,
execute and deliver to City an appropriate release, in form proper for recording, of all OHPD's
interest in the Subleased Premises, and City is hereby granted an irrevocable power of attorney,
which is coupled with an interest, to execute such release if OHPD fails to do so within ten (10)
days of City's request. Upon request of OHPD, City will execute and deliver a written
cancellation and termination of this Sublease and release of all claims (if none are then
outstanding) in proper form for recording to the extent such release is appropriate under the
provisions hereof.
163 Notices. All notices or other communications required or desired to be given with
respect to this Agreement shall be in writing and shall be delivered by hand or by courier service,
sent by registered or certified mail, return receipt requested, bearing adequate postage, or sent by
nationally recognized overnight delivery service (such as Federal Express or UPS), or sent by
facsimile, and properly addressed as provided below. Each notice given by mail shall be deemed
-35-
4099523.13
to be given by the sender when received or refused by the Party intended to receive such notice;
each notice delivered by hand or by courier service shall be deemed to have been given and
received when actually received by the Party intended to receive such notice or when such Parry
refuses to accept delivery of such notice; each notice given by overnight delivery service shall be
deemed to have been given and received on the next business day following deposit thereof with
the overnight delivery company; and each notice given by facsimile shall be deemed to have
been given and received upon transmission, provided confirmation of receipt is received back by
the sending facsimile prior to 5:00 p.m. local time at the sending location, or on the next business
day if after 5:00 p.m. local time at the sending location. Upon a change of address by either
Party, such Party shall give written notice of such change to the other parties in accordance with
the foregoing. Inability to deliver because of changed address or status of which no notice was
given shall be deemed to be receipt of the notice sent, effective as of the date such notice would
otherwise have been received.
If intended for the City:
Attn: City Manager
City of Denton, Texas
215 E. McKinney
Denton, Texas 76201
Telephone: (940) 349 -8200
Facsimile: (940) 349 -8596
If intended for OHPD:
OHPD
Tim O'Reilly
2808 S. Ingram Mill, Bldg. A -104
Springfield, MO 65804
Telephone: (417) 851 -8700
Facsimile: (417) 890 -1778
If intended for UNT:
University of North Texas
c /o:
2808 S. Ingram Mill, Bldg. A -104
Denton, Tx xxxxx
Telephone: (xxx) xxx -xxxx
Facsimile: (417) xxx -xxxx
If required by and intended for Hotel Lender:
With Copies to:
Attn: City Attorney
City of Denton
215 E. McKinney
Denton, Texas 76201
Telephone: (940) 349 -8200
Facsimile: (940) 382 -7923
With Copies to:
Craig Preston, Esq.
O'Reilly, Jensen & Preston, LLC
2808 S. Ingram Mill Road, Bldg A -104
Springfield, MO 65804
Telephone: (417) 890 -1555
Facsimile: (417) 890 -1778
With Copies to:
-36-
4099523.13
If required for OHPD's manager pursuant to Section 4.7:
16.4 Successors and Assigns. Subject to the terms and provisions of Article 10 hereof,
this Sublease shall be binding upon and shall inure to the benefit of the Parties and their
permitted successors and assigns.
16.5 Amendment. Except as expressly provided herein, neither this Sublease nor any
term hereof may be amended, waived, discharged or terminated, except by a written instrument
signed by the Parties hereto.
16.6 Headings and Subheadings. The headings of the articles, sections, paragraphs and
subparagraphs of this Sublease are for convenience or reference only and in no way define, limit,
extend or describe the scope of this Sublease or the intent of any provisions hereof.
16.7 Severability. In the event one or more of the terms or provisions of this Sublease
or the application thereof to any Party or circumstances shall, to any extent, be held invalid,
illegal or unenforceable, the remainder of this Sublease, or the application of such term or
provision to persons or circumstances other than those to whom or which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of this Sublease shall
be valid and enforceable to the fullest extent permitted by law.
16.8 Governing Law. THIS SUBLEASE SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE UNITED
STATES APPLICABLE THERETO AND THE LAWS OF THE STATE OF TEXAS
APPLICABLE TO A SUBLEASE EXECUTED, DELIVERED AND PERFORMED IN SUCH
STATE, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW.
16.9 Venue for Actions. The venue for any legal action arising out of this Sublease
shall lie exclusively in Denton County, Texas.
16.10 Relationship of Parties. Nothing contained herein shall be deemed or construed
by the Parties hereto or by any third party as creating the relationship of principal and agent,
partnership, joint venture or any association between the Parties hereto, it being understood and
agreed that none of the provisions contained herein or any acts of the Parties in the performance
of their respective obligations hereunder shall be deemed to create any relationship between the
Parties hereto other than the relationship of landlord and tenant. It is understood and agreed that
this Sublease does not create a joint enterprise, nor does it appoint either Party as an agent of the
other for any purpose whatsoever. Neither Party shall in any way assume any of the liability of
the other for acts of the other or obligations of the other. Each Party shall be responsible for any
and all suits, demands, costs or actions proximately resulting from its own individual acts or
omissions.
16.11 Net Sublease. It is the intention of the City and OHPD that the Base Rent payable
under this Sublease after the Effective Date and all Impositions and other costs related to
-37-
4099523.13
OHPD's use or operation of the Subleased Premises under this Sublease, shall be absolutely net
to City, meaning that during the Sublease Term, City shall not be required to expend any money
or do any acts or take any steps affecting or with respect to the operation, maintenance,
preservation, repair, restoration or protection of the Subleased Premises, except as otherwise
expressly provided in this Sublease. OHPD shall pay during the Term, without any offset or
deduction whatsoever, all such Impositions and other costs due by OHPD under this Sublease.
OHPD's covenant to pay Base Rent and additional rent is independent of every other covenant in
this Sublease.
16.12 Quiet Enjoyment. City covenants and agrees with OHPD that upon OHPD
paying Base Rent and observing and performing all terms, covenants and conditions on OHPD's
part to be observed and performed hereunder, OHPD may peaceably and quietly enjoy the
Subleased Premises hereby demised, subject however, to the terms and conditions of this
Sublease.
16.13 Non - Waiver. No Party shall have or be deemed to have waived any Event of
Default under this Sublease by the other Party unless such waiver is embodied in a document
signed by the waiving Party that describes the Event of Default that is being waived. Further, no
Party shall be deemed to have waived its rights to pursue any remedies under this Sublease,
unless such waiver is embodied in a document signed by such Party that describes any such
remedy that is being waived.
16.14 Obligations to Defend Validity of Sublease. If litigation is filed by a third party
against OHPD or City in an effort to enjoin either Party's performance of this Sublease, the
Parties hereto who are named as parties in such action shall take all commercially reasonable
steps to support and defend the validity and enforceability of this Sublease. Either Party may
intervene in any such matter in which the other Party hereto has been named as a defendant.
Each Party shall be responsible for its attorneys' fees and costs of litigation.
16.15 Survival. All indemnities provided in this Sublease shall survive the expiration or
any earlier termination of this Sublease. Additionally, all provisions which are expressly stated to
survive or covenants providing for performance after termination of this Sublease shall survive
the termination or expiration of this Sublease.
16.16 Entire Agreement. This Sublease (including the Exhibits attached hereto and
incorporated herein, if any) and the other documents delivered pursuant to this Sublease or
referenced herein constitute the full and entire understanding and agreement between the Parties
with regard to the subject matter hereof. There are no representations, promises or agreements of
City or OHPD regarding the subject matter of this Sublease not contained in this Sublease, the
Exhibits attached hereto or the other documents delivered pursuant to this Sublease or referenced
herein.
16.17 Counterparts. This Sublease may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute one and the same
instrument.
-38-
4099523.13
16.18 Brokers. Each party represents to the other party that it has not employed or
retained any broker or finder in connection with this Sublease and /or transaction contemplated
hereby.
16.19 Conflicts. In the event any one or more of the provisions contained in this
Sublease conflict with any one or more of the provisions contained in the Related Document(s),
the provisions of this Sublease shall control.
16.20 City Liability. This Sublease is not intended to and does not create or constitute a
debt or financial obligation of the City except from the sources herein expressly provided. Any
and all amounts payable by City hereunder are payable solely and exclusively from amounts
provided in the City Financing Contribution and from the sources of such funds.
16.21 Time. Time is of the essence for the performance of any obligation under this
Sublease. If any date or period for performance provided for herein ends on a Saturday, Sunday,
or legal holiday of the City of Denton, Texas, then the applicable date or period will be extended
to the first day following such Saturday, Sunday, or legal holiday.
16.22 dal Interest. Notwithstanding any provision of this Sublease to the contrary, it
is the intent of City and OHPD that City shall not be entitled to receive, collect, reserve or apply,
as interest, any amount in excess of the maximum amount of interest permitted to be charged by
Applicable Law. In the event this Sublease requires a payment of interest that exceeds the
maximum amount of interest permitted under Applicable Law, such interest shall not be
received, collected, charged or reserved until such time as that interest, together with all other
interest then payable, falls within the maximum amount of interest permitted to be charged under
Applicable Law. In the event City receives any such interest in excess of the maximum amount
of interest permitted to be charged under Applicable Law, the amount that would be excessive
interest shall be deemed a partial prepayment of Base Rent and treated under this Sublease as
such, or, if this Sublease has expired or terminated, any remaining excess funds shall
immediately be paid to OHPD.
16.23 Memorandum of Lease Agreement. If allowed by the City -UNT Land lease, upon
either Party's request, the other Party shall execute and allow such party to record in Denton
County, Texas, a Memorandum of Lease Agreements with respect to this Sublease. In the event
such a Memorandum is recorded, the parties agree that upon a termination of this Sublease, the
Parties shall execute and record a termination of such Memorandum of Lease Agreement.
16.24 Termination of Master Agreement. In the event the Master Agreement is
terminated prior to constriction of the Hotel, it is expressly agreed that this Sublease shall
terminate as well and neither Party shall have any rights or obligations one unto the other
hereunder. Furthermore, it is expressly agreed that City shall have no obligation to constrict the
Convention Center, and hence no liability hereunder, in the event OHPD fails to constrict the
Hotel pursuant to the terms of the Master Agreement.
16.25 Indemnification of City. OHPD WILL INDEMNIFY AND SAVE HARMLESS
CITY AND ANY AGENT, EMPLOYEE OR REPRESENTATIVE OF CITY AGAINST AND
FROM ALL LIABILITIES, SUITS, OBLIGATIONS, FINES, DAMAGES, PENALTIES,
-39-
409923.13
CLAIMS, COSTS, CHARGES AND EXPENSES, JUDGMENTS AND CAUSES OF ACTION
INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND
DISBURSEMENTS, WHICH MAY BE IMPOSED UPON OR INCURRED BY OR
ASSERTED AGAINST CITY AND /OR ANY SUCH AGENT, EMPLOYEE OR
REPRESENTATIVE BY REASON OF ANY OF THE FOLLOWING OCCURRING DURING
THE TERM, EXCEPT TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF CITY OR ITS AGENTS ESTABLISHED BY A COURT OF
COMPETENT JURISDICTION: (A) ANY WORK OR THING DONE IN, ON OR ABOUT
THE SUBLEASED PREMISES OR ANY PART THEREOF; (B) ANY USE, NONUSE,
POSSESSION, OCCUPATION, RESTORATION, ALTERATION, REPAIR, CONDITION
(INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL CONDITION),
OPERATION, MAINTENANCE OR MANAGEMENT OF THE SUBLEASED PREMISES
OR ANY PART THEREOF; (C) ANY NEGLIGENCE ON THE PART OF OHPD OR ANY
OF ITS AGENTS, CONTRACTORS, SERVANTS, EMPLOYEES, SUBLESSEES,
LICENSEES OR INVITEES; (D) ANY ACCIDENT, INJURY (INCLUDING, WITHOUT
LIMITATION, DEATH) OR DAMAGE TO ANY PERSON OR ENTITY OR PROPERTY
OCCURRING IN, ON OR ABOUT THE SUBLEASED PREMISES OR ANY PART
THEREOF (EXCEPT AS OTHERWISE PROVIDED IN SECTION 8.5); (E) ANY FAILURE
ON THE PART OF OHPD TO PERFORM OR COMPLY WITH ANY OF THE
COVENANTS, AGREEMENTS, TERMS, PROVISIONS, CONDITIONS OR LIMITATIONS
CONTAINED IN THIS SUBLEASE ON ITS PART TO BE PERFORMED OR COMPLIED
WITH; (F) ANY LIEN OR CLAIM WHICH MAY BE ALLEGED TO HAVE ARISEN
AGAINST OR ON THE SUBLEASED PREMISES, UNDER ANY LAW, ORDINANCE,
ORDER, RULE, REGULATION OR REQUIREMENT OF ANY GOVERNMENTAL
AUTHORITY INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LAWS AND
ANY RESTRICTIVE COVENANTS OF RECORD ON OR PRIOR TO THE EFFECTIVE
DATE OR THEREAFTER APPROVED BY OHPD THAT ARE APPLICABLE TO THE
SUBLEASED PREMISES OR ANY PART THEREOF; (G) ANY FAILURE ON THE PART
OF OHPD TO KEEP, OBSERVE AND PERFORM ANY OF THE TERMS, COVENANTS,
AGREEMENTS, PROVISIONS, CONDITIONS OR LIMITATIONS CONTAINED IN ANY
OCCUPANCY AGREEMENTS, CONCESSION AGREEMENTS OR OTHER CONTRACTS
AND AGREEMENTS AFFECTING THE SUBLEASED PREMISES ON OHPD'S PART TO
BE KEPT, OBSERVED OR PERFORMED; (H) OTHER THAN LATENT DEFECTS IN
THE CITY FACILITIES AS DELIVERED TO OHPD, THE CONDITION OF THE
SUBLEASED PREMISES OR OF ANY BUILDINGS OR OTHER STRUCTURES NOW OR
HEREAFTER SITUATED THEREON OR THE FIXTURES OR PERSONAL PROPERTY
THEREON OR THEREIN; OR (I) ANY TAX OR FEE ATTRIBUTABLE TO THE
EXECUTION OR RECORDING OF THIS SUBLEASE OR ANY MEMORANDUM
THEREOF CHARGED BY ANY GOVERNMENTAL AUTHORITY. The obligations of
OHPD under this Section 16.25 shall not in any way be affected by the absence or presence in
any case of covering insurance or by the failure or refusal of any insurance carrier to perform any
obligation on its part under insurance policies affecting the Subleased Premises. In case any
claim, action or proceeding is made or brought against City by reason of any of the foregoing
events described in this Section 16.25, then OHPD, upon written notice from City will, at
OHPD's sole cost and expense, resist or defend such claim, action or proceeding, in Citys name,
if necessary, by counsel approved, in writing, by City, such approval not to be unreasonably
-40-
409923.13
withheld, conditioned or delayed. Notwithstanding the foregoing, City may engage its own
counsel, at City's expense, to defend it or to assist in its defense. The provisions of this Section
16.25 shall survive the termination or expiration of this Sublease.
ARTICLE 17
CITY -UNT LAND LEASE
17.1 City -UNT Land Lease Inclusions and Exclusions. This Sublease is subordinate
and subject to all of the terms of the City -UNT Land Lease with the same force and effect as if
fully set forth herein at length, excepting only as otherwise specifically provided herein. It is the
intention of the parties that, except as otherwise provided in this Sublease, the relationship
between City and OHPD shall be governed by the various articles of the City -UNT Land Lease
as if they were set forth in this Sublease in full, and the words "Landlord," "Tenant," "Lease,"
and "Leased Premises" as used in the City -UNT Land Lease shall read, respectively, "City,"
"OHPD," "Sublease," and "Subleased Premises."
Anything in this Sublease to the contrary notwithstanding, the following provisions of the
City -UNT Land Lease are not incorporated into this Sublease and are deleted for purposes of this
Sublease:
(a) Section 2.2 — Term - Right of City to terminate Extended Terms.
(b) Section 3.1 — City -UNT Base Rent.
(c) Section 3.4 — Holding Over.
(d) Section 5.1 — Convention Center and Related Infrastructure — Constriction
(e) Section 13.21 — Right of First Refusal of City
(f) Section 13.22 — Right of First Refusal of OHPH
Notwithstanding the foregoing, to the extent any of the above provisions of the City -UNT
Land Lease place an obligation on UNT under the City -UNT Land Lease with respect to the
Subleased Premises, OHPD will receive the benefit of the performance of such obligations by
UNT under the City -UNT Land Lease without any obligation of performance by City.
17.2 OHPD Assumption of City -UNT Land Lease Obligations. Except for those
provisions of the City -UNT Land Lease expressly excluded and deleted from the Sublease
pursuant to Section 17.1(a) above, from and after the Operational Date and during the Term,
OHPD will assume, perform and comply with City's obligations as "Tenant" under the City -
UNT Land Lease with respect to the Subleased Premises. OHPD shall not commit any act or
omission that will violate any of the provisions of the City -UNT Land Lease.
17.3 No Assumption by City. Anything in this Sublease to the contrary
notwithstanding, City does not assume the obligations of UNT under the City -UNT Land Lease.
Further, with respect to the performance by UNT of its obligations under the City -UNT Land
Lease, City's sole obligation with respect thereto will be to request the same, on request in
-41-
4099523.13
writing by OHPD, and to use reasonable commercial efforts to obtain the same from UNT;
provided, however, City will have no obligation to institute legal action against UNT.
17.4 UNT Defaults: Consents. Any provision of this Sublease to the contrary
notwithstanding, (i) City will not be liable or responsible in any way for any loss, damage, cost,
expense, obligation or liability suffered by OHPD by reason of or as the result of any breach,
default or failure to perform by UNT under the City -UNT Land Lease, and (ii) whenever the
consent or approval of City and UNT is required for a particular act, event or transaction (A) any
such consent or approval by City will be subject to the consent or approval of UNT, and (B)
should UNT refuse to grant such consent or approval, under all circumstances, City will be
released from any obligation to grant its consent or approval. Notwithstanding the foregoing,
City will not unreasonably withhold, delay or condition their consent or approval.
17.5 Termination of City -UNT Land Lease. If the City -UNT Land Lease is terminated
for any reason whatsoever, this Sublease will terminate simultaneously with the termination of
the City -UNT Land Lease, subject to any rights of OHPD with respect to the Subleased Premises
pursuant to that certain Non - Disturbance and Attornment Agreement dated between
UNT and OHPD. City will not agree with UNT to the voluntary termination of the City -UNT
Land Lease prior to the expiration of the term of the City -UNT Land Lease. Except for any
amendment or waiver required by the terms of the City -UNT Land Lease, City will not agree to
any amendment of the City -UNT Land Lease that (i) increases OHPD's Base Rent in any
manner, (ii) imposes upon OHPD additional obligations under this Sublease, (iii) materially
decreases OHPD's rights under this Sublease, or (iv) waives any of City's rights or remedies
under the City -UNT Land Lease respecting the Subleased Premises, without the consent of the
OHPD. Without limitation upon the foregoing, City will not agree to amend the City -UNT Land
Lease to shorten the term of the City -UNT Land Lease without the consent of OHPD.
-42-
4099523.13
IN WITNESS WHEREOF, the Parties hereto have executed and delivered this Sublease
as of the Effective Date.
OHPD:
O'REILLY HOTEL PARTNERS — DENTON,
LLC, a Missouri limited liability company
0
Tim O'Reilly, Manager
CITY:
CITY OF DENTON, TEXAS
City Manager
ATTEST:
Jennifer Walters, City Clerk
Signature Page to Cozverztzoz ('eater Sublease
409923.13
CITY'S ACKNOWLEDGMENT
STATE OF TEXAS §
COUNTY OF DENTON §
This instrument was acknowledged before me on the day of
2013, by , City Manager of the City of Denton, Texas, a Texas municipal
corporation, on behalf of said corporation duly sworn that he /she is the City Manager of the
corporation, and acknowledged that he /she executed the foregoing instrument as the free act and
deed of the corporation in his /her capacity as City Manager.
Notary Public, State of Texas
My Commission Expires:
409923.13
OHPD'S ACKNOWLEDGMENT
STATE OF MISSOURI §
COUNTY OF §
Before me , Notary Public of the State of Missouri, on this
day personally appeared Tim O'Reilly known to me to be the person whose name is subscribed
to the foregoing instrument and acknowledged to me that he is the Manager of the limited
liability company, and acknowledged that he executed the foregoing instrument as the free act
and deed of the Company in his capacity as Manager.
Given under my hand and seal of office this day of , A. D.,
2013.
[Seal]
Notary Public, State of Missouri
My Commission Expires:
409923.13
EXHIBIT A
DEPICTION/DESCRIPTION OF CONVENTION CENTER SITE
[Attached]
409923.13
EXHIBIT B
DESCRIPTION OF CAPITAL REPAIR AND REPLACEMENT ITEMS
Hardware
Carpet & Pad
Landscape Planting and Material
Vinyl Wall Covering
Tile
Vinyl Composition Tile
Parking Lot Surface Seal and Stripe
Sound System
Telecommunication Equipment
Power Projection Screens
Interior Signage
Public Restrooms
Kitchen Equipment
Ceiling
Doors and Frames
Light Controls
Light Fixtures
MEP Equipment (repair & replace)
Exterior Skin and Fenestration (walls and windows)
Roof System /Skylights
Parking Lot Re- Surface, Sidewalks, curbs and gutter
Exterior Light Fixtures (building mounted and site)
Exterior Signage
Other fixtures not listed that are fixed to the building
Operable Partition Walls
409923.13
EXHIBIT C
DESCRIPTION OF OHPD FF &E
Wall Mounted Artwork
Kitchen Supplies
Soft Seating, Lamps, Tables
Banquet Chairs
Banquet Tables (6'rounds)
409923.13
EXHIBIT D
FORM OF OHM MANAGEMENT AGREEMENT
[ATTACHED]
409923.13
PROFESSIONAL SERVICES AGREEMENT
FOR CONSTRUCTION MANAGER -AGENT
Exhibit E of Contract #
STATE OF TEXAS
COUNTY OF DENTON §
THIS AGREEMENT is made and entered into as of the day of
, 20 , by and between the City of Denton, Texas, a Texas municipal
corporation, with its principal office at 215 East McKinney Street, Denton, Denton County, Texas
76201, hereinafter called "Owner" and O'Reilly Hospitality Management with its corporate office at
hereinafter called "Constriction Manager -Agent (CMA)," acting herein, by and
through their duly authorized representatives.
In consideration of the covenants and agreements herein contained, the parties hereto do mutually
agree as follows:
SECTION I
EMPLOYMENT OF CONSTRUCTION MANAGER -AGENT (CMA)
The Owner hereby contracts with the CMA, which constriction manager -agent services are
defined within Texas Government Code 2269.201, and 2269.202. The service shall include the
following, but not limited to the following: 1) provide consultation and administration services during
the design and constriction phase, 2) manage multiple contracts with various constriction prime
contractor(s). The CMA hereby agrees to perform all services as described within this document and
within Article III and Article IV of the Master Development Agreement entered into as of
, 2013 by and between the City of Denton, Texas, the University of North Texas,
O'Reilly Hotel Partners Denton, and O'Reilly Hospitality Management herein defined as the "Master
Development Agreement." This agreement shall also serve as Exhibit H of the Master Development
Agreement.
The Constriction Manager -Agent represents the Owner in a fiduciary capacity, as stipulated within
Texas Government Code 2269.204.
SECTION II
SCOPE OF SERVICES
The CMA shall perform the following services in a professional manner:
A. The CMA shall perform all those services as necessary and as described in the Master
Development Agreement.
Page 1
uN a c N a xC,ngr a l \ ��,x;NtN a�,
FOR ,.P \ \,u d N ND \,..d N ] 1 l (d d D C x d I , r 2 0 d D C xa,d1, 0 C n\ xflxo N � xhfllr1 N',,, C'1 \ °..' ,xN ,, ON n
' . M d )� ( .d (N ��.A`"r tl�r Yl`v �AmN ae!,e ^w't')d�^,^ e enw Tea N ,0u1 ?ke �I,4'�.d w.'d.tl' �VX` �.II YY•M•�VX 0.��.8 N &��8� ��4 �^8�I`v I•��^v �da*� "U ^p; Aei:em1�'w� 0
�8N8 �8 � 1 N ��B M M .B
u�.,xu��xueu�xua "�xue�u &�u „p�,B N- a'B a3 B6t,.zq „�x „�
B. If there is any conflict between the terms of this Agreement and the exhibits attached to this
Agreement, the terms and conditions of the Master Development Agreement will control over
the terms and conditions of the any attached exhibits.
SECTION III
ADDITIONAL SERVICES
Additional services to be performed by the CMA, if authorized by the Owner, which are not included
in the above - described Basic Services, are described as follows:
A. During the course of the Project, as requested by Owner, the CMA will be available to
accompany Owner's personnel and contractors when meeting with the Texas Commission on
Environmental Quality, U.S. Environmental Protection Agency, or other regulatory agencies.
The CMA will assist Owner's personnel and contractors on an as- needed basis in preparing
compliance schedules, progress reports, and providing general technical support for the
Owner's compliance efforts.
B. Assisting Owner or contractor in the defense or prosecution of litigation in connection with or
in addition to those services contemplated by this Agreement. Such services, if any, shall be
furnished by CMA on a fee basis negotiated by the respective parties outside of and in addition
to this Agreement, and stipulated in Section VI of this agreement.
C. Assist Owner in obtaining and reviewing sampling, testing, or analysis services beyond that
specifically included in Basic Services.
D. Assist Owner in obtaining and reviewing copies of computer aided drafting (CAD) electronic
data bases, drawings, or files for the OWNER's use in a future CAD system.
E. Assist Owner in preparing applications and supporting documents for government grants,
loans, or planning advances and providing data for detailed applications.
F. Assist Owner is appearances before regulatory agencies or courts as an expert witness in any
litigation with third parties or condemnation proceedings arising from the development or
constriction of the Project, including the review of engineering data and reports for assistance
to the Owner.
G. Assist the Owner in obtaining and reviewing geotechnical investigations for the site, including
soil borings, related analyses, and recommendations.
H. The CMA shall assist the Owner in ensuring compliance with Attachment I to the Master
Development Agreement # (Payment Applications and Payments to Contractors).
L The CMA shall assist the Owner with the evaluation of the respondents (General Contractors)
to the solicitation for the constriction of the Convention Center, in an advisory capacity. The
Owner shall procure the constriction services of a general contractor or trade contractor in
accordance with the provisions of Texas Government Code 2269.206.
Page 2
uN acN uxC,ngral \ ��,x;NtNa�,
FOR ,;P N \,u vJ) \1 N] 1V (d � D C xNdm 1(a,.� � D C xa,dm � W � C yak; \,xflxoxN 1 xhfllr6 N',;, C'1 \ °..',xN� xOe on
N„ ' . M )F ( .� (N ��.A`"r Br4Pv �AmN HkteiI ^w'�'P4,: e enw oaaB ,out ?ke P,4'�.� w.':'.tl' �VX` �.II YY•M• �VX 0. �.8 N& 8 ��4 ^8�I`v P,��,�^�a*� ep; AMY �. ^81�'Y ^8XY 7 '��1Y�?d YB P
�8N8 �8 � 1 N ��B M M .B
u�.,xu��xueu�xua "�xue�u &�u „p�,B N- a'B a3 B6t,.zq „�x „
Other services within the scope of this project as requested by the Owner.
SECTION IV
LIMITATIONS ON CONSTRUCTION MANAGER -AGENT
The CMA may not:
1) self - perform any aspect of the constriction, rehabilitation, alteration, or repair of the
facility;
2) be a party to a constriction subcontract for the constriction, rehabilitation, alteration, or
repair of the facility; or
3) provide or be required to provide performance and payment bonds for the constriction,
rehabilitation, alteration, or repair of the facility. However, the CMA shall assist the Owner
in requiring all constriction contractors to comply with Chapter 2253 of the Texas
Government Code (Public Works Performance and Payment Bonds).
SECTION V
PERIOD OF SERVICE
This Agreement shall become effective upon execution of this Agreement by the Owner and
the CMA and upon issue of a notice to proceed or issuance of a Purchase Order by the Owner,
and shall remain in force for the period which may reasonably be required for the completion of
the Project, including Additional Services, if any, and any required extensions approved by the
Owner. This Agreement may be sooner terminated in accordance with the provisions hereof.
Time is of the essence in this Agreement. The CMA shall make all reasonable efforts to
complete the services set forth herein as expeditiously as possible and to meet the schedule
established by the Owner, acting through its City Manager or his designee.
SECTION VI
COMPENSATION
A. COMPENSATION TERMS:
"Subcontract Expense" is defined as expenses incurred by the CMA in employment of
others in outside firms for services under the Master Development Agreement.
2. "Direct Non -Labor Expense" is defined as that expense for any assignment incurred by
the CMA for supplies, transportation and equipment, travel, communications,
subsistence, and lodging away from home, and similar incidental expenses in
connection with that assignment.
B. BILLING AND PAYMENT: For and in consideration of the professional services to be
performed by the CMA herein, the Owner agrees to pay for the CMA Services as defined in the
Master Development Agreement, a maximum fee equal to 3% of the total project costs, which
Page 3
uN acN uxC,ngral \ ��,x;NtNa�,
FOR ,.P N \,u vJ) \:...1 N] 1V (d � D C xNdm 2W � D C xa,dm � W � C yak; \,xflxoxN � xhfllr1 N',,, C'1 \ °..',xN ,, ON n
N„ ' .v M )� ( .� (N ��.A`"r dr Yl`v �v wN�YF.k!�II ^w �7P4Y e en oaa N ,out ?ke PI �r'�.� w.':'.tl' �VX` �.II YY•M• �VX 0. .8 N& 8 ��4 ^8�I`v P,��,�^�a*� ep; AMY �. ^81�'Y ^8XY 7 '��1Y�?d YB P
�8N8 �8 � 1 N ��B M M .B
u�.,xu��xueu�xua "�xue�u &�u „p�,B N- a'B a3 B6t,.zq „�x „�
shall include all hard and soft costs, for the design, constriction and development of the
Convention Center. This not -to- exceed fee shall be inclusive of the final cost of the design for
the Convention Center project, as defined within Exhibit F to the Master Development
Agreement for the Project, and shall be exclusive of fees and costs of architects and engineers
to complete stamped architectural drawings and fees and for other Subcontract Expense
required for the design, development, inspection, procurement and installation of FF &E and
constriction of the Convention Center. After expiration of the Feasibility Deadline and
Financing Viability Deadline, and upon election of all Parties to proceed with the project as
defined in the Master Development Agreement, the Design Professional shall continue with the
final design of the project, completing the stamped architectural drawings for the project, and
the CMA shall assist the owner for constriction management services as described herein as
required in the Master Development Agreement.
The Owner shall compensate the CMA for all services during Design Development and thri
Constriction completion as follows:
BASIC SERVICES
As stipulated in Exhibit F of the Master Development Agreement, the fee for Phase I of the Design
Project '15% Completion of Design shall not exceed: $200,000.
Upon election of both parties to proceed with Phase(s) II -IV of the Design project, the fees shall be
negotiated and defined as indicated Exhibit F of the Master Development Agreement.
The fee for the Constriction Manager /Agent Services shall equal 3% of the total costs for the
Convention Center. The not -to- exceed fee for the CMA services shall be included in the total
project costs of the Convention Center project and shall be exclusive of fees and costs of
architects and engineers to complete stamped architectural drawings and fees and for other
Subcontract Expense required for the design, development, inspection, procurement and
installation of FF &E and constriction of the Convention Center. The not -to- exceed CMA fee
will be fully determined upon final design of the project, and determination of the Final
Convention Center Budget following the award of the constriction contract for the Convention
Center. The CMA fee will be paid in equal monthly installments beginning at the start of
constriction of the Convention Center. At no time will the CMA fee exceed the actual
development cost of the Convention Center.
ADDITIONAL SERVICES
For additional services authorized in writing by the Owner in Section III, the CMA shall be
paid based on the Schedule of Charges at an hourly rate as stated below. Payments for
additional services shall be due and payable upon submission by the CMA, and shall be in
accordance with Article V hereof. Statements shall not be submitted more frequently than
monthly.
Compensation for Additional Services is as follows:
Page 4
uN acN a xC,ngr al \ ��,x;NtN a�,
FOR ,;P N \,u dN ND \,..I N] 1l (d d D'C' dIr 20 d D'C' a,d1, 0 ("'n\ ("O 1 xhfllr6 N',;, C'1
M d )� (2.d (N ��.A`"r tl��. o" �AmN ae!,e ^w't')d�^'^ e enw Tea N '0u1 ?ke �I'4'�.d w.'d.tl' �VX` �.II YY•M• �VX 0.��.8 N &��8� ��4 �^8�I`v I•��^v'4at U ^p; Aei:e'm1�'w� 0
.B
u�.,xu��xueu�xua "�xue�u &�u „p�,B N- a'B a3 B6t,.zq „�x „�
Rate for Additional Services shall not exceed: $_175 per hour
REIMBURSABLE EXPENSES
Reimbursable Expenses shall be compensated for expenses (travel, copies, etc.) related to the
Convention Center design project, and shall not exceed a total of $15,000. Invoices for
reimbursable expenses shall be submitted to the Owner in a timely manner.
Partial payments to the CMA will be made on the basis of detailed monthly statements
rendered to and approved by the Owner through its City Manager or his designee; however,
under no circumstances shall any monthly statement for services exceed the value of the work
performed at the time a statement is rendered. The Owner may withhold the final five percent
(5 %) of the contract amount until completion of the Project.
Nothing contained in this Article shall require the Owner to pay for any work which is
unsatisfactory, as reasonably determined by the City Manager or his designee, or which is not
submitted in compliance with the terms of this Agreement. The Owner shall not be required to
make any payments to the CMA when the CMA is in default under this Agreement.
It is specifically understood and agreed that the CMA shall not be authorized to undertake any
work pursuant to this Agreement which would require additional payments by the Owner for
any charge, expense, or reimbursement above the maximum not to exceed fee as stated, without
first having obtained written authorization from the Owner. The CMA shall not proceed to
perform the services listed in Section III "Additional Services," without obtaining prior written
authorization from the Owner.
C. PAYMENT: If the Owner fails to make payments due the CMA for services and expenses
within thirty (30) days after receipt of the CMA's undisputed statement thereof, the amounts
due the CMA will be increased by the rate of one percent (1 %) per month from the said
thirtieth (30th) day or the rate established within Texas Government Code 2251 (Prompt
Payment Act), and, in addition, the CMA may, after giving seven (7) days' written notice to the
Owner, suspend services under this Agreement until the CMA has been paid in full all amounts
due for services, expenses, and charges, provided, however, nothing herein shall require the
Owner to pay any late charges set forth herein if the Owner reasonably determines that the
work is unsatisfactory, in accordance with this Section V, "Compensation."
SECTION VII
OBSERVATION AND REVIEW OF THE WORK
The CMA will exercise reasonable care and due diligence in discovering and promptly reporting to the
Owner any defects or deficiencies in the work of the CMA or any subcontractors or sub -CMAs.
SECTION VIII
OWNERSHIP OF DOCUMENTS
Page 5
uN a c N a xC,ngr a l \ ��,x;NtN a�,
FOR ,.P N \,u d N ND \,..d N ] 1 l (d d D C x d I , r 2 0 d D C xa,d1, 0 C n\ xflxo N � xhfllr1 N',,, C'1 \ °..' ,xN ,, ON n
' . M d )� ( .d (N ��.A`"r tl�r Yl`v �AmN ae!,e ^w't')d�^,^ e enw Tea N ,0u1 ?ke �I,4'�.d w.'d.tl' �VX` �.II YY•M•�VX 0.��.8 N &��8� ��4 �^8�I`v I•��^v �da*� "U ^p; Aei:em1�'w� 0
�8N8 �8 � 1 N ��B M M .B
u�.,xu��xueu�xua "�xue�u &�u „p�,B N- a'B a3 B6t,.zq „�x „�
All documents prepared or furnished by the CMA (and CMA's subcontractors or sub -CMAs) pursuant
to this Agreement are instruments of service, and shall become the property of the Owner upon the
termination of this Agreement. The CMA is entitled to retain copies of all such documents. The
documents prepared and furnished by the CMA are intended only to be applicable to this Project, and
Owner's use of these documents in other projects shall be at Owner's sole risk and expense. In the
event the Owner uses any of the information or materials developed pursuant to this Agreement in
another project or for other purposes than specified herein, CMA is released from any and all liability
relating to their use in that project.
SECTION IX
INDEPENDENT CONTRACTOR
CMA shall provide services to Owner as an independent contractor, not as an employee of the Owner.
CMA shall not have or claim any right arising from employee status.
SECTION X
INSURANCE
During the performance of the services under this Agreement, CMA shall maintain the insurance with
an insurance company licensed to do business in the State of Texas by the State Insurance Commission
or any successor agency that has a rating with Best Rate Carriers of at least an A or above, and in
accordance with Article 10 of the City of Denton General Conditions for Agreement for Architectural
and Engineering Services.
SECTION XI
ARBITRATION AND ALTERNATE DISPUTE RESOLUTION
The parties may agree to settle any disputes under this Agreement by submitting the dispute to
arbitration or other means of alternate dispute resolution, such as mediation. No arbitration or alternate
dispute resolution arising out of or relating to this Agreement, involving one party's disagreement may
include the other party to the disagreement without the other's approval.
SECTION XII
RESPONSIBILITY FOR CLAIMS AND LIABILITIES
Approval by the Owner shall not constitute, nor be deemed a release of the responsibility and liability
of the CMA, its employees, associates, agents, subcontractors, and sub -CMAs for the accuracy and
competency of their designs or other work; nor shall such approval be deemed to be an assumption of
such responsibility by the Owner for any defect in the design or other work prepared by the CMA, its
employees, subcontractors, agents, and CMAs.
SECTION XIII
NOTICES
All notices, communications, and reports required or permitted under this Agreement shall be
personally delivered or mailed to the respective parties by depositing same in the United States mail to
Page 6
uN a c N a xC,ngr a l \ ��,x;NtN a�,
FOR ,.P N \,u d N ND \,..d N ] 1 l (d d D C x d I , r 2 0 d D C xa,d1, 0 C n\ xflxo N � xhfllr1 N',,, C'1 \ °..' ,xN ,, ON n
' . M d )� ( .d (N ��.A`"r tl�r Yl`v �AmN ae!,e ^w't')d�^,^ e enw Tea N ,0u1 ?ke �I,4'�.d w.'d.tl' �VX` �.II YY•M•�VX 0.��.8 N &��8� ��4 �^8�I`v I•��^v �da*� "U ^p; Aei:em1�'w� 0
�8N8 �8 � 1 N ��B M M .B
u�.,xu��xueu�xua "�xue�u &�u „p�,B N- a'B a3 B6t,.zq „�x „�
the address shown below, certified mail, return receipt requested, unless otherwise specified herein.
Mailed notices shall be deemed communicated as of three (3) days' mailing:
To CMA:
Tim O'Reilly
2808 S. Ingram Mill, Bldg. A -104
Springfield, MO 65804
To Owner:
City of Denton
George Campbell, City Manager
215 East McKinney
Denton, Texas 76201
purchasing c cityofdenton.com
All notices shall be deemed effective upon receipt by the party to whom such notice is given, or within
three (3) days' mailing.
SECTION XIV
SEVERABILITY
If any provision of this Agreement is found or deemed by a court of competent jurisdiction to be
invalid or unenforceable, it shall be considered severable from the remainder of this Agreement and
shall not cause the remainder to be invalid or unenforceable. In such event, the parties shall reform
this Agreement to replace such stricken provision with a valid and enforceable provision which comes
as close as possible to expressing the intention of the stricken provision.
SECTION XV
PERSONNEL
A. The CMA represents that it has or will secure, at its own expense, all personnel required to
perform all the services required under this Agreement. Such personnel shall not be employees
or officers of, nor have any contractual relations with the Owner. CMA shall inform the Owner
of any conflict of interest or potential conflict of interest that may arise during the term of this
Agreement.
B. All services required hereunder will be performed by the CMA or under its supervision. All
personnel engaged in work shall be qualified, and shall be authorized and permitted under state
and local laws to perform such services.
SECTION XVI
ASSIGNABILITY
This agreement shall be binding upon and ensure to the benefit of the City and the CMA and their
respective successors and assigns, provided however, that no right or interest in the agreement shall be
assigned and no obligation shall be delegated or transfer of any interest by the CMA (whether by
assignment, novation, or otherwise) without the prior written consent of the Owner.
Page 7
uN a c N a xC,ngr a l \ ��,x;NtN a�,
FOR ,.P N \,u d N ND \,..d N ] 1 l (d d D C x d I , r 2 0 d D C xa,d1, 0 C n\ xflxo N � xhfllr1 N',,, C'1 \ °..' ,xN ,, ON n
' . M d )� ( .d (N ��.A`"r tl�r Yl`v �AmN ae!,e ^w't')d�^,^ e enw Tea N ,0u1 ?ke �I,4'�.d w.'d.tl' �VX` �.II YY•M•�VX 0.��.8 N &��8� ��4 �^8�I`v I•��^v �da*� "U ^p; Aei:em1�'w� 0
�8N8 �8 � 1 N ��B M M .B
u�.,xu��xueu�xua "�xue�u &�u „p�,B N- a'B a3 B6t,.zq „�x „�
Any attempted assignment or delegation by the CMA shall be void unless made in conformity with this
Section. The Agreement is not intended to confer rights or benefits on any person, firm or entity not a
party hereto; it being the intention of the parties that there are no third party beneficiaries to the
Contract.
SECTION XVII
MODIFICATION
No waiver or modification of this Agreement or of any covenant, condition, or limitation herein
contained shall be valid unless in writing and duly executed by the party to be charged therewith, and
no evidence of any waiver or modification shall be offered or received in evidence in any proceeding
arising between the parties hereto out of or affecting this Agreement, or the rights or obligations of the
parties hereunder, and unless such waiver or modification is in writing and duly executed; and the
parties further agree that the provisions of this section will not be waived unless as set forth herein.
SECTION XVIII
MISCELLANEOUS
A. The following exhibits are attached to and made a part of this Agreement: None
B. The Owner shall have the right to audit and make copies of the books, records and
computations pertaining to this agreement. The CMA shall retain such books, records,
documents and other evidence pertaining to this agreement during the contract period and five
years thereafter, except if an audit is in progress or audit findings are yet unresolved, in which
case records shall be kept until all audit tasks are completed and resolved. These books,
records, documents and other evidence shall be available, within 10 business days of written
request. Further, the CMA shall also require all Subcontractors, material suppliers, and other
payees to retain all books, records, documents and other evidence pertaining to this agreement,
and to allow the Owner similar access to those documents. All books and records will be made
available within a 50 mile radius of the City of Denton. The cost of the audit will be borne by
the Owner unless the audit reveals an overpayment of 1% or greater of the CMA fees. If an
overpayment of 1% or greater occurs, the reasonable cost of the audit, including any travel
costs, must be borne by the CMA which must be payable within five business days of receipt of
an invoice. Failure to comply with the provisions of this section shall be a material breach of
this contract and shall constitute, in the Owner's sole discretion, grounds for termination
thereof. Each of the terms "books ", "records ", "documents" and "other evidence ", as used
above, shall be construed to include drafts and electronic files, even if such drafts or electronic
files are subsequently used to generate or prepare a final printed document.
C. For the purpose of this Agreement, the key persons who will perform most of the work
hereunder shall be . However, nothing herein shall limit
CMA from using other qualified and competent members of its firm to perform the services
required herein.
Page 8
uN a c N a xC,ngr a l \ ��,x;NtN a�,
FOR ,.P \ \,u d N ND \,..d N ] 1 l (d d D C x d I , r 2 0 d D C xa,d1, 0 C n\ xflxo N � xhfllr1 N',,, C'1 \ °..' ,xN ,, ON n
' . M d )� ( .d (N ��.A`"r tl�r Yl`v )Am ae!,e ^w't')d�^,^ e eBpw Tea N ,0u1 ?ke �I,4'�.d w.'d.tl' �VX` �.II YY•M•�VX 0.��.8 N &��8� ��4 �^8�I`v I•��^v �da*� "U ^p; Aei:em1�'w� 0
�8N8 �8 � 1 N ��B M M .B
u�.,xu��xueu�xua "�xue�u &�u „p�,B N- a'B a3 B6t,.zq „�x „�
D. CMA shall commence, carry on, and complete any and all projects with all applicable dispatch,
in a sound, economical, and efficient manner and in accordance with the provisions hereof. In
accomplishing the projects, CMA shall take such steps as are appropriate to ensure that the
work involved is properly coordinated with related work being carried on by the Owner.
E. The Owner shall assist the CMA by placing at the CMA's disposal all available information
pertinent to the Project, including previous reports, any other data relative to the Project, and
arranging for the access thereto, and make all provisions for the CMA to enter in or upon public
and private property as required for the CMA to perform services under this Agreement.
SECTION XIX
GOVERNING LAW
The validity of the Agreement and any of its terms and provisions, as well as the rights and duties of
the Parties, shall be governed by the laws of the State of Texas; and venue for any action concerning
this Agreement shall be in the State District Court of Denton County, Texas.
SECTION XX
ENTIRE AGREEMENT
This Agreement, including the City of Denton General Conditions to Agreement for Constriction -
Manager Agent services, constitutes the complete and final expression of the agreement of the parties,
and is intended as a complete and exclusive statement of the terms of their agreements, and supersedes
all prior contemporaneous offers, promises, representations, negotiations, discussions,
communications, and agreements which may have been made in connection with the subject matter
hereof. This Agreement, consisting of pages includes this executed agreement and the
following documents all of which are attached hereto and made a part hereof by reference as if fully set
forth herein:
City of Denton General Conditions to Agreement for Constriction Manager Agent Services.
2. Attachments A through B. Attachment A — City of Denton Conflict of Interest Form,
Attachment B — City of Denton Substitute W -9 Form.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
CITY OF DENTON
IM
Page 9
uN acN a xC,ngr al \ ��,x;NtN a�,
GEORGE C. CAMPBELL
CITY MANAGER
FOR ,;P N \,u dN ND \,..I N] 1l (d d D'C' dIr 20 d D'C' a,d1, 0 ("'n\ ("O 1 xhfllr6 N',;, C'1
M d )� (2.d (N ��.A`"r tl��. o" �AmN ae!,e ^w't')d�^'^ e enw Tea N '0u1 ?ke �I'4'�.d w.'d.tl' �VX` �.II YY•M• �VX 0.��.8 N &��8� ��4 �^8�I`v I•��^v'4at U ^p; Aei:e'm1�'w� 0
.B
u�.,xu��xueu�xua "�xue�u &�u „p�,B N- a'B a3 B6t,.zq „�x „�
I:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
I:•
WITNESS:
I:
DESIGN FIRM
I:•
Firm's Officer /Representative
(Signature)
Page 10
uN acN a xC,ngr al \ ��,x;NtN a�,
FOR ,;P \ \,u dN ND \,..I N] 1l (d d D'C' dIr 20 d D'C' a,d1, 0 ("'n\ ("O 1 xhfllr6 N',;, C'1 \
M d )� (2.d (N ��.A`"r tl��. o" )Am ae!,e ^w't')d�^'^ e eBpw Tea N '0u1 ?ke �I'4'�.d w.'d.tl' �VX` �.II YY•M• �VX 0.��.8 N &��8� ��4 �^8�I`v I•��^v'4at U ^p; Aei:e'm1�'w� 0
.B
u�.,xu��xueu�xua "�xue�u &�u „p�,B N- a'B a3 B6t,.zq „�x „�
CITY OF DENTON
GENERAL CONDITIONS
TO
AGREEMENT FOR CONSTRUCTION MANAGER -AGENT
ARTICLE 1. CONSTRUCTION MANAGER -AGENT RESPONSIBILITIES
1.1 The services consist of those services for the Project (as defined in the agreement (the "agreement ") and proposal (the "Proposal ") to which these General Conditions are
attached) performed by the Architect or Engineer (hereinafter called the "CMA ") or Cb1A's employees and CMAs as enumerated in Articles 2 and 3 of these General
Conditions as modified by the Agreement and Proposal (the "Services ").
1.2 The CMA will perform all Services as an independent contractor to the prevailing professional standards consistent with the level of care and skull ordinarily exercised by
members of the same profession currently practicing in the sane locality under similar conditions, including reasonable, informed judgments and prompt timely actions (the
"Degree of Care "). The Services shall be performed as expeditiously as is consistent with the Degree of Care necessary for the orderly progress of the Project Upon request of
the Owner, the CMA shall submit for the Owner's approval a schedule for the performance of the Services which may be adjusted as the Project proceeds, and shall include
allowances for periods of time required for the Owner's review and for approval of submissions by authorities having jurisdiction over the Project Time limits established bN
this schedule and approved by the Owner shall not, except for reasonable cause, be exceeded by CMA or Owner, and any to this schedule shall be mutually_
acceptable to both pities.
ARTICLE 2 SCOPE OF BASIC SERVICES
2.1 BASIC SERVICES DEFINED The CM A's Basic Services consist of those described in Sections II -Iy' of the Contract and shall include without limitation normal
services necessary to ensure complete construction management services as defined , as described by required in Texas Government Code 2269.201, and 2269.202. The
Basic Services may be modified by the Agreement.
2.3 DESIGN PHASE
2.3.1 The CAIA shall assist the Owner with review of approved Schematic Design Documents and any adjustments authorized bN the Owner in the program, sche-
dule or construction budget, the CMA shall coordinate for approval by the Owner, Design Development Documents consisting of drawings and other documents to fix
and describe the size and character of the Project as to architectural, structural, mechanical and electrical systems, materials and such other elements as may be
appropriate, which shall comply with all applicable laws, statutes, ordinances, codes and regulations. Noriwithstanding Owner's approval of the documents, CMA
represents that the Documents and specifications will be sufficient and adequate to fulfill the purposes of the Project.
2.3.2 The CMA shall advise and assist the Owner of any adjustments to the preliminary estimate of Construction Cost.
2.4 CONSTRUCTION DOCt?AIENTS PHASE
2.4.1 Based on the approved Design Development Documents and any further adjustments in the scope or quality of the Project or in the construction budget
authorized bN the Owner, the CMA shall review, and submit for approval by the Owner, Construction Documents consisting of Drawings and Specifications setting
forth in detail requirements for the construction of the Project, which shall comply with all applicable laws, statutes, ordinances, codes and regulations. The CMA shall
provide the Owner with any recommendations or suggested modifications to the Construction Documents.
2.4.2 The CMA shall provide assistance to the Owner in the preparation of the necessary bidding or procurement information, bidding or procurement forms, the
Conditions of the contract, and the form of Agreement between the Owner and construction contractor, as requested by the Owner.
2.4.3 The CMA shall review aid advise the Owner of any_ adjustments to previous preliminary estimates of Construction Cost indicated by in requirements or
general market conditions.
2.4.4 The CMA shall review and assist the Owner in connection with the Owner's responsibility for filing documents required for the approval of governmental
authorities having.jurisdiction over the Project
2.5 CONSTRUCTION CONTRACT PROCt?REAIENT
2.5.1 The CMA, following the Owner's approval of the Construction Documents and of the latest preliminar detailed estimate of Construction Cost, shall assist the
Owner (as an advisor) in procuring a construction contract for the Project through any procurement method that is legally applicable to the Project including without
limitation, the competitive sealed bidding process. Although the Owner will consider the advice of the CMA, the award of the construction contract is in the sole
discretion of the Owner.
2.5.2 If the construction contract amount for the Project exceeds the total construction cost of the Project as set forth in the approved Detailed Statement of Probable
Construction Costs of the Project submitted by the Design Professional, then the CA, will review and provide assistance as may be required by the Owner to reduce
or modify the quantity or quality of the work so that the total construction cost of the Project will not exceed the total construction cost set forth in the approved
Detailed Statement of Probable Construction Costs.
2.6 CONSTRUCTION PHASE - ADMINISTRATION OF THE CONSTRUCTION CONTRACT
2.6.1 The Cb1A's responsibility to provide Services for the oversight of the Construction Phase under this Agreement commences with the award of the Contract for
Construction and terminates at the issuance to the Owner of the final Certificate for Pav_ ment bN_ the Construction Contractor, unless extended under the terms of
Subsection 8.3.2.
2.6.2 The CMA shall review and submit for approval by the Owner, a detailed administration of the Contract for Construction as set forth below. For CMAs the
administration shall also be in accordance with ALA document A201, General Conditions of the Contract for Construction, current as of the date of the Agreement as
may be amended by the City of Denton special conditions, unless otherwise provided in the Agreement.
Page 11
FOP y i V y i \ i y y s y y , xWa�x i' '.".�
�. iC k4Qx l lk �.:�` -8N( pti, 1,�'r'XZ N� ��i' 1Q AP ��X�,_1 PPP �G S _�)P � X� � �
��xNa r�x -...) ���xra r�tl �,Q o aW��xrex �aW � �,xWe�x 7 wg rY1 ° A � xq�, �xNex �xw �
2.6.3 Construction Phase duties, responsibilities and limitations of authority of the CNIA shall not be restricted, modified or extended without written agreement of the
Owner and CT\IA, and as defined within Texas Government Code.
2.6.4 The CMA shall be a representative of and shall advise and consult with the Owner (1) during construction, and (2) at the Owner's direction from time to time
during the correction, or warranty period described in the Contract for Construction. The CNIA shall have authority to act on behalf of the Owner only to the extent
provided in the Agreement and these General Conditions, unless otherwise modified by written instrument.
2.6.5 The CNIA shall observe the construction site dodo or os reasonably neeesso - to lidlill the obligations ofthis agreement, while construction is in progress, and
as reasonably necessary while construction is not in progress, to become familiar with the progress and quality of the work completed and to determine if the work is
being performed in a manner indicating that the work when completed will be in accordance with the Contract Documents. CNIA shall provide Owner a weekly
written report of construction activity. On the basis of on -site observations the CNIA shall keep the Owner informed of the progress and quality of the work, and shall
exercise the Degree of Care and diligence in discovering and promptly reporting to the Owner any observable defects or deficiencies in the work of Contractor or any
subcontractors. The CNIA represents that he she will follow Degree of Care in performing all Services under the Agreement The CNIA shall ensure promptly cor-
rective action is taken to any defective designs or specifications furnished by the Design Professional, with immediate notification to the Owner. The Owner's
approval, acceptance, use of or payment for all or any part of the CNIA's Services hereunder or of the Project itself shall in no wav alter the CNIA's obligations or the
Owner's rights hereunder.
2.6.6 The CNIA shall not have control over or charge of and shall not be responsible for construction means, methods, techniques, sequences or procedures, or for
safety precautions and programs in connection with the work. The CNIA shall not be responsible for the Contractor's schedules or failure to cane out the work in
accordance with the Contract Documents except insofar as such failure may result from CNIA's negligent acts or omissions. The CNIA shall not have control over or
charge of acts or omissions of the Contractor, Subcontractors, or their agents or employees, or of any other persons performing portions of the work. The CNIA shall
ensure prompt notification to the Owner of any non - conforming construction means, methods, techniques, sequences or procedures, or unsafe conditions in connection
with the work performance of the General Contractor. The CNIA shall immediately the Owner of any_ non - compliance issues with scheduled completion of the
project by the General Contractor.
2.6.7 The CNIA shall at all times have access to the work wherever it is in preparation or progress.
2.6.8 Except as may otherwise be provided in the Contract Documents or when direct communications have been specially authorized, the Owner and Contractor
shall communicate through the CNIA. Communications by and with the CNIA's staff shall be through the CNIA.
2.6.9 Based on the CNIA's observations at the site of the work and evaluations of the Contractor's Applications for Pay_ ment, the CNIA shall review and assist the
Owner with certification of the amounts due the Contractor.
2.6.10 The CNIA's assistance to the Owner with certification for payment shall constitute a representation to the Owner, based on the CNIA 's observations at the site
as provided in Subsection 2.6.E and on the data comprising the Contractor's Application for Payment, that the work has progressed to the point indicated and that the
quality of the Work is in accordance with the Contract Documents. The foregoing representations are subject to minor deviations from the Contract Documents cor-
rectable prior to completion and to specific qualifications expressed by the CNIA. The issuance of a Certificate for Pavment shall further constitute a representation
that the Contractor is entitled to payment in the amount certified. However, the issuance of a Certificate for Payment shall not be a representation that the CNIA has
(1) reviewed construction means, methods, techniques, sequences or procedures, or (2) ascertained how or for what purpose the Contractor has used money previously
paid on account of the Contract Sum.
2.6.11 The CNIA shall have the responsibility and authority to reject work which does not conform to the Contract Documents. Whenever the CNIA considers it
necessar° or advisable for implementation of the intent of the Contract Documents, the CNIA will have authority to require additional inspection or testing of the work
in accordance with the provisions of the Contract Documents, whether or not such Work is fabricated, installed or completed. However, neither this authority of the
CNIA nor a decision made in good faith either to exercise or not exercise such authority shall give rise to a duty or responsibility of the CNIA to the Contractor,
Subcontractors, material and equipment suppliers, their agents or employees or other persons performing portions of the work.
2.6.12 The CNIA shall review and submit for approval or take other appropriate action upon Contractor's submittals such as Shop Drawings, Product Data and
Samples for the purpose of (1) determining compliance with applicable laws, statutes, ordinances and codes; and (2) determining whether or not the work, when
completed, will be in compliance with the requirements of the Contract Documents. The CNIA shall act with such reasonable promptness to cause no delay in the
work or in the construction of the Owner or of separate contractors, while allowing sufficient time in the CNIA's professional judgment to permit adequate review.
Review of such submittals is not conducted for the purpose of determining the accuracy and completeness of other details such as dimensions and quantities or for
substantiating instructions for installation or performance of equipment or systems designed by the Contractor, all of which remain the responsibility of the Contractor
to the extent required by the Contract Documents. The CNIA's review shall not constitute approval of safety precautions or, unless otherwise specifically stated by the
CNIA, of construction means, methods, techniques, sequences or procedures. The CNIA's approval of a specific item shall not indicate approval of an assembly of
which the item is a component When professional certification of performance characteristics of materials, systems or equipment is required by the Contract
Documents, the CNIA shall coordinate with the Design Professional and rely upon such certification to establish that the materials, systems or equipment will meet the
performance criteria required by the Contract Documents.
2.6.13 The CNIA shall assist in preparation of Change Orders and Construction Change Directives, with supporting documentation and data if deemed necessary by
the CNIA as provided in Subsections 3.1.1 and 3.3.3, for the Owner's approval and execution in accordance with the Contract Documents, and may authorize minor
changes in the work not involving an adjustment in the Contract Sum or an extension of the Contract Time which are not inconsistent with the intent of the Contract
Documents.
2.6.14 On behalf of the Owner, the CNIA shall conduct inspections to determine the dates of Substantial Completion and Final Completion, and if requested by the
Owner shall assist in obtaining issuance of Certificates of Substantial and Final Completion. The CNIA will receive and review written guarantees and related
documents required by the Contract for Construction to be assembled by Contractor and shall issue a final certificate for Pay_ ment upon compliance with the
requirements of the Contract Documents.
2.6.15 The CNIA shall interpret and provide recommendations on matters concerning performance of the Owner and Contractor under the requirements of the
Contract Documents on written request of either the Owner or Contractor. The CNIA's response to such requests shall be made with reasonable promptness and within
any time limits agreed upon.
Page 12
FOR y i V y i \ 1 y y t? y y
Qx l lk �.:�` -8N( pti, 1,�'r'XZ N� ��i 1Q AP ��X�,_1 PPP �G S _()P � X�' � �
��xNa r�x -...) ����;xra r�tl �,Q o aWl�xrex �aW � �,xWe�x 7 wg rY1 °
2.6.16 Interpretations and decisions of the Cb1A shall be consistent with the intent of and reasonably inferable from the Contract Documents and shall be in writing or
in the form of drawings. When making such interpretations and initial decisions, the Cb1A shall endeavor to secure faithful performance by both Owner and
Contractor, and shall not be liable for results or interpretations or decisions so rendered in good faith in accordance with all the provisions of this Agreement and in the
absence of negligence.
2.6.17 The Cb1A shall assist in rendering written decisions within a reasonable time on all claims, disputes or other matters in question between the Owner and
Contractor relating to the execution or progress of the work as provided in the Contract Documents.
2.6.18 The Cb1A (1) shall render services under the Agreement in accordance with the Degree of Care; (2) will assist the Owner in seeking reimbursement for all
damages caused by the defective designs the Design Professional prepares; and (3) by acknowledging payment by the Owner of any_ fees due, shall not be released
from any rights the Owner may have under the Agreement or diminish any of the CMA's obligations thereunder.
2.6.19 The Cb1_A shall ensure that the Owner is provided with four sets of reproducible prints showing all significant changes to the Construction Documents during
the Construction Phase.
ARTICLE 3 ADDITIONAL SERVICES
3.1 GENERAL
3.1.1 The services described in this Article 3 are not included in Basic Services unless so identified in the Agreement or Proposal, and they shall be paid for by the
Owner as provided in the Agreement, in addition to the compensation for Basic Services. The services described under Sections 3.2 and 3.4 shall only be provided if
authorized or confirmed in writing by the Owner. If services described under Contingent additional Services in Section 3.3 are required due to circumstances beyond
the Cb1A's control, the CMA shall notify the Owner in writing and shall not commence such additional services until it receives written approval from the Owner to
proceed. If the Owner indicates in writing that all or part of such Contingent Additional Services is not required, the CMA shall have no obligation to provide those
services. Owner will be responsible for compensating the CMA for Contingent Additional Services only they not required due to the negligence or fault of
CMA.
3.2 PROJECT REPRESENTATION BEYOND BASIC SERVICES
3.2.1 If more extensive representation at the site than is described in Subsection 2.6.E is required, the CMA shall provide one or more Project Representatives to assist
in carrying out such additional on -site responsibilities.
3.2.2 Project Representatives shall be selected, employed and directed by the CMA, and the CMA shall be compensated therefor as agreed by the Owner and CMA.
3.3 CONTINGENT ADDITIONAL SERVICES
3.3.1 Assisting in submission of material revisions in Drawings, Specifications or other documents when such revisions are:
1. inconsistent with approvals or instructions previously given by the Owner, including revisions made necessmv_ by in the Owner's
program or Project budget:
2. required by the enactment or revision of codes, laws or regulations subsequent to the preparation of such documents, or
3. due to changes required as a result of the Owner's failure to render decision in a timely manner.
3.3.2 Providing services required because of significant changes in the Project including, but not limited to, size, quality, complexity, or the Owner's schedule, except
for services required under Subsection 2.5.2.
3.3.3 Assisting with submission of Drawings, Specifications and other documentation and supporting data, and providing other services in connection with Change
Orders and Construction Change Directives.
3.3.4 Providing consultation concerning replacement of work damaged by fire or other cause during construction, and furnishing services required in connection with
the replacement of such work.
3.3.5 Providing services made necessary by the default of the Contractor, by major defects or deficiencies in the work of the Contractor, or by_ failure of performance
of either the Owner or Contractor under the Contract for Construction.
3.3.6 Providing services in evaluating an extensive number of claims submitted by the Contractor or others in connection with the work.
3.3.7 Providing services in connection with a public hearing, arbitration proceeding or legal proceeding except where the CMA is party thereto.
3.3.8 Providing services in addition to those required by Article 2 for preparing documents for alternate, separate or sequential bids or providing services in connection
with bidding or construction prior to the completion of the Construction Documents Phase.
3.3.9 Notwithstanding anything contained in the Agreement, Proposal or these General Conditions to the contrary, all services described in this Article 3 that are
caused or necessitated in whole or in part due to the negligent act or omission of the CMA shall be performed by the CMA as a pat of the Basic Services under the
Agreement with no additional compensation above and beyond the compensation due the CMA for the Basic Services. The intervening or concurrent negligence of
the Owner shall not limit the CMA "s obligations under this Subsection 3.3.9.
3.4 OPTIONAL ADDITIONAL SERVICES
3.4.1 Providing assistance with obtaining financial feasibility or other special studies.
Page 13
FOP y i V y i \ 1 y y t? y y
�. iC k4Qx l lk �.:�` -8N( pti, 1,�'r'XZ N� ��i' 1Q AP ��X�,_1 PPP �G S _()P � X�' � �
��xNa r�x -...) ����;xra r�tl �,Q o aW��xrex �aW � �,xWe�x 7 wg rY1 °
_ 8 Mrs
U,(
`"r tl'YI`v Aw,.W kXY k!e8 ^, -��uk Y�^ v81'& ^* d s8N ^M'B "vBXe k Na *tek w<': sVX "r.�.8 N�8 sVX tl' "II YY�B ��4^ ^v.kk`v key ekaakl�8 , �SY'er.8pY�8N8 k ^'s�1Y��Y8 41AvW 0..e *u 0.'r e�Y88 ^ *uN 0.ie�Y8 e8 �'Y aa.ye�y N' -N ".
3.4.2 Providing assistance in obtaining planning Surveys, site evaluations or comparative studies of prospective sites.
3.4.3 Providing assistance in obtaining special surveys, environmental studies and submissions required for approvals of governmental authorities or others having
.jurisdiction over the Project.
3.4.4 Providing assistance in obtaining services relative to future facilities, systems and equipment
3.4.5 Providing assistance in obtaining services to investigate existing conditions or facilities or to make measured drawings thereof.
3.4.6 Providing assistance in obtaining services to verify the accuracy of drawings or other information furnished by the Owner.
3.4.7 Providing coordination of construction performed by separate contractors or by_ the Owner's own forces and coordination of services required in connection with
construction performed and equipment supplied by the Owner.
3.4.8 Providing detailed quantity sm-veys or inventories of material, equipment and labor.
3.4.9 Providing analyses of operating and maintenance costs.
3.4.10 flaking investigations, inventories of materials or equipment, or valuations and detailed appraisals of existing facilities.
3.4.12 Providing assistance in the utilization of equipment or systems such as testing, adjusting and balancing, preparation of operation and maintenance manuals,
training personnel for operation and maintenance and consultation during operation.
3.4.13 Providing assistance in obtaining interior design and similar services required for or in connection with the selection, procurement or installation of furniture,
furnishings and related equipment.
3.4.14 Providing services other than as provided in Section 2.6.4, after issuance to the Owner of the final Certificate for Pay_ ment and expiration of the Va :an antN
period of the Contract for Construction.
3.4.15 Providing assistance in obtaining services of Design Professional "s for other than architectural, civil, structural, mechanical and electrical engineering portions
of the Project provided as a part of Basic Services.
3.4.16 Providing assistance in obtaining any other services not otherwise included in this Agreement or not customarily in accordance with generallN
accepted architectural practice.
3.4.17 Providing assistance in obtaining a set of reproducible record drawings in addition to those required by Subsection 2.6.19, showing significant changes in the
work made during construction based on marked -up prints, drawings and other data furnished by the Contractor to the Cb1A.
3.4.18 Notwithstanding anything contained in the Agreement, Proposal or these General Conditions to the contrary, all services described in this Article 3 that are
caused or necessitated in whole or in part due to the negligent act or omission of the Cb1A shall be performed by the Cb1A as a pat of the Basic Services under the
Agreement with no additional compensation above and beyond the compensation due the Cb1A for the Basic Services. The intervening or concurrent negligence of
the Owner shall not limit the CMA 's obligations under this Subsection 3.4.18.
ARTICLE 4 ONVNER'S RESPONSIBILITIES
4.1 The Owner shall consult with the Cb1A regarding requirements for the Project, including (1) the Owner's objectives, (2) schedule and design constraints and
criteria, including space requirements and relationships, flexibility, expendability, special equipment, systems and site requirements, as more specifically described in
Subsection 2.2.1.
4.2 The Owner shall establish and update an overall budget for the Project, including the Construction Cost, the Owner's other costs and reasonable contingencies
related to all of these costs.
4.3 If requested by the CnIA the Owner shall furnish evidence that financial arrangements have been made to fulfill the Owner's obligations under this Agreement.
4.4 The Owner shall designate a representative authorized to act on the Owner's behalf with respect to the Project The Owner or such authorized representative shall
render decisions in a timely_ manner pertaining to documents submitted by Cb1A in order to avoid unreasonable delay the orderly sequential progress of the
CMA's serices.
4.5 Where applicable, the Owner shall furnish surveys describing physical characteristics , legal limitations and utility locations for the site of the Project, and a written
legal description of the site. The sm-yeys and legal information shall include, as applicable, grades and lines of streets, alleys, pavements and adjoining property and
structures; adjacent drainage; rights -of -way, restrictions, easements, encroachments, zoning, deed restrictions, boundaries and contours of the site; locations,
dimensions and necessary data pertaining to existing buildings, other improvements and trees; and information concerning available utility services and lines, both
public and private, above and below grade, including inverts and depths. All the information on the sm-vey shall be referenced to a project benchmark.
4.6 Where applicable, the Owner shall furnish the services of geotechnical engineers when such services are requested by the Cb1A. Such services may include but
are not limited to test borings, test pits, determinations of soil bearing values, percolation tests, evaluations of hazardous materials, ground corrosion and resistivity
tests, including necessary operations for anticipating sub -soil conditions, with reports and appropriate professional recommendations.
4.6.1 The Owner shall furnish the services of other Cb1As when such services are reasonably_ required by the scope of the Project and are requested by_ the Cb1A and
are not retained by the Cll1A as part of its Basic Ser ices or Additional Ser ices.
Page 14
oiC k4Qx l lk �.:�` -8N( pti, 1,OXZ P \F AP \D,_1 PPP �G S _()P � D' � �
��rNa r�r -...) ����;xra r�tl �,Q o aW��xrex �aW � �,rWe�r 7 wr rY1 °
4.7 When not a part of the Additional Services, the Owner shall furnish structural, mechanical, chemical, air and water pollution tests, tests of hazardous materials,
and other laboratory and environmental tests, inspections and reports required by law or the Contract Documents.
4.8 The Owner shall furnish all legal, accounting and insurance counseling services as may be necessary at any time for the Project, including auditing services the
Owner may require to verify the Contractor's Applications for Pav_ ment or to ascertain how or for what purposes the Contractor has used the money paid by or on
behalf of the Owner.
4.9 The services, information, surveys and reports required by Owner under Sections 4.5 through 4.8 shall be furnished at the Owner's expense, and the CbIA shall be
entitled to rely upon the accuracy and completeness thereof in the absence of any negligence on the part of the CbIA.
4.10 The Owner shall give prompt written notice to the CbIA if the Owner becomes aware of any_ fault or defect in the Project or nonconformance with the Contract
Documents.
4.11 Cl\IA shall propose Language for certificates or certifications to be requested of the CbIA or CbIA's CMAs and shall submit such to the Owner for review and
approval at least fourteen (14) days prior to execution. The Owner agrees not to request certifications that would require knowledge or services beyond the scope of
the Agreement.
ARTICLE 5 CONSTRUCTION COST
5.1 CONSTRUCTION COST DEFINED
>.1.1 Ine wnstrucnon cost snarl be the total cost or estimated cost to the owner or an elements or the FroJect designed or specmed by the design Froressronar.
5.1.2 The Construction Cost shall include the cost at current market rates of labor and materials furnished by the Owner and equipment designed, specified, selected or
specially provided for by the Design Professional, plus a reasonable allowance for the Contractor's overhead and profit. In addition, a reasonable allowance for con-
tingencies shall be included for market conditions at the time of bidding and for changes in the work during construction.
5.1.3 Construction Cost does not include the compensation of the CMA and staff, the costs of the land, rights -of -way, financing or other costs which are the responsi-
bility of the Owner as provided in Article 4.
5.2 RESPONSIBILITY FOR CONSTRUCTION COST
5.2.1 Evaluations of the Owner's Project budget, preliminary estimates of Construction Cost and detailed estimates of Construction Cost prepared by the Design
Professional represent the Design Professional's best judgment as a Design Professional f..uniliar with the construction industiv. It is recognized, however, that neither
the Design Professional nor the Owner has control over the cost of labor, materials or equipment, over the Contractor's methods of determining bid prices, or over
competitive bidding or market conditions. Accordingly, the Design Professional cannot and does not warrant or represent that bids or cost proposals will not vary
from the Owner's Project budget or from any estimate of Construction Cost or evaluation prepared or agreed to by the Design Professional. The CMA, as the Owner "s
Representative shall review the Owner's Project budget, preliminary estimates of Construction Cost and detailed estimates of Construction Cost submitted by_ the
Design Professional and submit to Owner, and recommendations.
5.2.2 No fixed limit of Construction Cost shall be established as a condition of the Agreement by the furnishing, proposal or establishment of a Project budget, unless
such fixed limit has been agreed upon in writing and signed by the parties thereto. If such a fixed limit has been established, the Design Professional shall be permitted
to include contingencies for design, bidding and price escalation, to determine what materials, equipment, component systems and types of construction are to be
included in the Contract Documents, to make reasonable adjustments in the scope of the Project and to include in the Contract Documents alternate bids to adjust the
Construction Cost to the fixed limit. Fixed limits, if any, shall be increased in the amount of an increase in the Contract Sum occurring after execution of the Contract
for Construction. The CMA, as the Owner's Representative shall review any agreed upon fixed limits and submit to Owner, and recommendations.
5.2.3 If the Procurement Phase has not commenced within 90 days after the Design Professional submits the Construction Documents to the Owner, any Project
budget or fixed limit of Construction Cost shall be adjusted to reflect changes in the general level of prices in the construction industiv between the date of submission
of the Construction Documents to the Owner and the date on which proposals are sought. The CMA, as the Owner's Representative shall review the Owner's revised
Project budget, preliminary estimates of Construction Cost and detailed estimates of Construction Cost submitted by_ the Design Professional and submit to Owner,
and recommendations.
ARTICLE 6 ONYNERSHIP AND USE OF DOCUAIENTS
6.1 The documents prepared by the CMA for this Project are instruments of the Cb1A's service and shall become the property of the Owner upon termination or completion of
the Agreement. The CMA is entitled to retain copies of all such documents. Such documents are intended only be applicable to this Project, and Owner's use of such
documents in other projects shall be at Owner's sole risk and expense. bn the event the Owner uses any of the information or materials developed pursuant to the Agreement in
another project or for other purposes than are specified in the Agreement, the CMA is released from any and all liability relating to their use in that project
6.2 Submission or distribution of documents to meet official regulatory requirements or for similar purposes in connection with the Project is not to be construed as publication
in derogation of the CMA's reserved rights.
ARTICLE 7 TERMINATION, SUSPENSION OR ABANDONMENT
7.1 The CMA may terminate the Agreement upon not less than thirty days written notice should the Owner fail substantially to perform in accordance with the terms of the
Agreement through no fault of the CI\I A. Owner may terminate the Agreement orally phase thereof only with cause and after reasonable prior written notice to the CMA and
reasonable opportunity to cure by the CMA. All work and labor being performed under the Agreement shall cease immediately upon CMA "s receipt of such notice. Before the
end of the thirty (30) day period, CTvIA shall invoice the Owner for all work it satisfactorily performed prior to the receipt of such notice. No amount shall be due for lost or
anticipated profits. all plans, field surveys, and other data related to the Project shall become property of the Owner upon termination of the Agreement and shall be promptly
delivered to the Owner in a reasonably form. Should Owner subsequently contract with a new Cl\IA for continuation of services on the Project, Cl\IA shall cooperate
in providing information.
Page 15
FOP y i V y i \ 1 y y t? y y , xWa�x i' '.".�
�. iC k4Qx l lk �.:�` -8N( pti, 1,�'r'XZ N� ��i' 1Q AP ��X�,_1 PPP �G S _�)P � X� � �
��xNa r�x -...) ���xra r�tl �,Q o aW��xrex �aW � �,xWe�x 7 wg rY1 ° A � xq�, �xNex �xw �
7.2 If the Project is suspended by the Owner for more than 30 consecutive days, the CblA shall be compensated for services satisfactorily performed prior to notice of such
suspension. When the Project is resumed, the CMA's compensation shall be equitably adjusted to provide for expenses incurred in the interruption and resumption of the
CMA's services.
7.3 The Agreement may be terminated by the Owner upon not less than seven days written notice to the CblA in the event that the Project is permanently abandoned. If the
Project is abandoned by the Owner for more than 90 consecutive days, the Cl\lA or the Owner may terminate the Agreement by giving written notice.
7.4 Failure of the Owner to make payments to the Cb1A for work satisfactorily in accordance with the Agreement shall be considered substantial nonperformance
and cause for termination.
7.5 If the Owner fails to make payment to Cb1A within thirty (30) days of receipt of a statement for services properly and satisfactorily performed, the Cb7A may, upon seven
days written notice to the Owner, suspend performance of services under the Agreement
7.6 In the event of termination not the fault of the Cb1A, the CblA shall be compensated for services properly and satisfactorily performed prior to termination.
ARTICLE 8 PAYMENTS TO THE CALF
8.1 DIRECT PERSONNEL EXPENSE
8.1.1 Direct Personnel Expense is defined as the direct salaries of the CMA's personnel engaged on the Project and the portion of the cost of their mandatory and
customary contributions and benefits related thereto, such as employment taxes and other statutory employee benefits, insurance, sick leave, holiday_ s, vacations,
pensions and similar contributions and benefits.
8.2 REIMBURSABLE EXPENSES
8.2.1 Reimbursable Expenses are in addition to compensation for Basic and Additional Services and include expenses incurred by CblA and CMA's employees
and CMAs in the interest of the Project, as identified in the following Clauses.
8.2.1.1 Expense of transportation in connection with the Project: expenses in connection with authorized out -of -town travel; long - distance communications;
and fees paid for securing approval of authorities having.jurisdiction over the Project.
8.2.1.2 Expense of reproductions (except the reproduction of the sets of documents referenced in Subsection 2.6.19), postage and handling of documents.
8.2.1.3 If authorized in advance by the Owner, expense of overtime work requiring higher than regular rates.
8.2.1.4 Other expenses that are approved in advance in writing by the Owner.
8.3 PAYMENTS ON AC'C'Ot?NT OF BASIC SERVICES
8.3.1 Pavments for Basic Services shall be made monthh, and, where applicable, shall be in proportion to services performed within each phase of service, on the
basis set forth in Section 2 of the Agreement and the schedule of work.
8.3.2 If and to the extent that the time initially established in the Agreement is exceeded or extended through no fault of the Cb1A, compensation for any
rendered during the additional period of time shall be computed in the manner set forth in Section 2 of the Agreement
8.3.3 When compensation is based on a percentage of Construction Cost and any portions of the Project are deleted or otherwise not constructed, compensation for
those portions of the Project shall be payable to the extent services are performed on those portions, in accordance with the schedule set forth in Section 2 of the
Agreement based on (1) the lowest bona fide bid or (2) if no such bid or proposal is received, the most recent preliminary_ estimate of Construction Cost or detailed
estimate of Construction Cost for such portions of the Project
8.4 PAYMENTS ON AC'C'Ot?NT OF ADDITIONAL SERVICES
8.4.1 Pavments on account of the CM A's Additional Services and for Reimbursable Expenses shall be made monthly 30 day_ s after the presentation to the
Owner of the CMA's statement of services rendered or expenses incurred.
8.5 PAYMENTS NYITHHELD No deductions shall be made from the CMA's compensation on account of penalty, liquidated damages or other sums withheld from
payments to contractors, or on account of the cost of changes in the work other than those for which the CMA is responsible.
8.6 CALVS ACCOUNTING RECORDS Cb1A shall make available to Owner or Owner's authorized representative records of Reimbursable Expenses and expenses
pertaining to Additional Services and services performed on the basis of a multiple of Direct Personnel Expense for inspection and copying during regular business hours for
three vears after the date of the final Certificate of Pavment, or until any litigation related to the Project is final, whichever date is later.
ARTICLE 9 INDEMNITY
9.1 The Cb1A shall indemnify and save and hold harmless the Owner and its officers, agents, and employees from and against any and all liability, claims, demands,
damages, losses, and expenses, including, but not limited to court costs and reasonable attorney fees incurred by the Owner, and including, without limitation, damages
for bodily and personal injury, death and property damage, resulting from the negligent acts or omissions of the Cb1A or its officers, shareholders, agents, or employees
in the performance of the Agreement.
9.2 Nothing herein shall be construed to create a liability to any person who is not a party to the Agreement, and nothing herein shall waive any of the parties" defenses,
both at law or equity, to any claim, cause of action, or litigation filed by one not a party to the Agreement, including the defense of governmental immunity, which
defenses are hereby expressly reserved.
Page 16
oiC k4Qx l lk �.:�` -8N( pti, 1,0XZ P \j, AP \D,_1 PPP �G S _()P � D' � �
��rNa r�r -...) ����;xra r�tl �,Q o aW��xrex �aW � �,rWe�r 7 wr rY1 °
ARTICLE 10 INSURANCE During the performance of the Services under the Agreement, CbIA shall maintain the following insurance with an insurance
company licensed or authorized to do business in the State of Texas by State Insurance Commission or any successor agency that has a rating with Best Rate
Carriers of at least an A or above:
10.1 Comprehensive General Liability Insurance with bodily injury limits of not less than $1,000,000 for each occurrence and not less than $2,000,000 in the aggregate,
and with property damage limits of not less than $100,000 for each occurrence and not less than $20,000 in the aggregate.
10.2 Automobile Liability Insurance with bodilv injury limits of not less than $00,000 for each person and not less than $00,000 for each accident, and with property
damage limits of not less than $100,000 for each accident.
10.3 Worker's Compensation Insurance in accordance with statutory and Employers" Liability Insurance with limits of not less than $100,000 for each
accident including occupational disease.
10.4 Professional Liability Insurance with limits of not less than $1,000,000 annual aggregate.
10.5 The CMA shall furnish insurance certificates or insurance policies to the Owner evidencing insurance in compliance with this Article 10 at the time of the
execution of the Agreement. The General Liability and Automobile Liability insurance policies shall name the Owner as an additional insured, the Workers'
Compensation policy shall contain a waiver of subrogation in favor of the Owner, and each policy shall contain a provision that such insurance shall not be canceled or
modified without thirty (30) days" prior written notice to Owner and CNIA. In such event, the CbIA shall, prior to the effective date of the change or cancellation,
furnish Owner with substitute certificates of insurance meeting the requirements of this Article 10.
ARTICLE 11 AIISCELLANEOUS PROVISIONS
11.1 The Agreement shall be governed by laws of the State of Texas. Venue of any_ suitor cause of action under the Agreement shall lie exclusively Denton County,
Texas.
11.2 The Owner and CMA, respectively, bind themselves, their partners, successors, assigns and legal representatives to the other party to this Agreement and to the partners,
successors, assigns and legal representatives of such other petty with respect to all covenants of this Agreement The CMA shall not assign its interests in the Agreement
without the written consent of the Owner.
11.3 The term Agreement as used herein includes the executed Agreement, these General Conditions and other attachments referenced in Section 3 of the Agreement which
together represent the entire and integrated agreement between the Owner and CMA and supersedes all prior negotiations, representations or agreements, either written or oral.
The Agreement may be amended only by written instrument signed by both Owner and CMA. When interpreting the Agreement the executed Agreement, these General
Conditions and the other attachments referenced in Section 3 of the Agreement shall to the extent that is reasonably possible be read so as to harmonize the provisions.
However, should the provisions of these documents be in conflict so that they cannot be reasonably harmonized, such documents shall be given priority in the following order:
1. The executed Agreement
2. Attachments referenced in Section 3 of the Agreement
3. These General Provisions
11.4 Nothing contained in the Agreement shall create a contractual relationship with or a cause of action in favor of a third party against either the Owner or CMA
11.5 Upon receipt of prior written approval of Okvner, the CMA shall have the right to include representations of the design of the Project, including photographs of the exterior
and interior, among the Cl\IA "s promotional and professional materials. The CMA's materials shall not include the Owner's confidential or proprietary information if the Owner
has previously advised the CMA in writing of the specific information considered by the Owner to be confidential or proprietary. The Owner shall provide professional credit
for the CMA on the construction sign and in the promotional materials for the Project.
11.6 Approval by the Owner shall not constitute, nor be deemed a release of the responsibility and liability of the CMA, its employees, associates, agents,
subcontractors, and subCblAs for the accuracy and competency of their designs or other work; nor shall such approval be deemed to be an assumption of such
responsibility by the Owner for any defect in the design or other work prepared by the CMA, its employees, subcontractors, agents, and CMAs.
11.7 All notices, communications, and reports required or permitted under the Agreement shall be personally delivered or mailed to the respective parties by depositing
same in the United States mail to the address shown below signature block on the Agreement, certified mail, return receipt requested, unless otherwise specified herein.
All notices shall be deemed effective upon receipt by the party to whom such notice is given, or within three (3) days after mailing.
11.8 If any provision of the Agreement is found or deemed by a court of competent.jurisdiction to be invalid or unenforceable, it shall be considered severable from the
remainder of the Agreement and shall not cause the remainder to be invalid or unenforceable. In such event, the parties shall reform the Agreement to replace such
stricken provision with a valid and enforceable provision which comes as close as possible to expressing the intention of the stricken provision.
11.9 The CbIA shall comply with all federal, state, and local laws, rules, regulations, and ordinances applicable to the work covered hereunder as they now read or
hereinafter be amended during the term of this Agreement.
11.10 In performing the Services required hereunder, the CbIA shall not discriminate against any person on the basis of race, color, religion, sex, national origin or
ancestry, age, or physical handicap.
11.11 The captions of the Agreement are for informational purposes only, and shall not in any way affect the substantive terms or conditions of the Agreement.
11.12 Owner Understands and acknowledges that CbIA, in implementing its fiduciary responsibilities for the Owner, will delegate many of its duties and
responsibilities herein to the general contractor, outside design professionals and other subcontractors hired by CbIA to provide various design, inspection,
Page 17
FOP y i V y i \ 1 y y t? y y
�. iC k4Qx l lk �.:�` -8N( pti, 1,�'r'XZ N� ��i' 1Q AP ��X�,_1 PPP �G S _()P � X�' � �
��xNa r�x -...) ����;xra r�tl �,Q o aW��xrex �aW � �,xWe�x 7 wg rY1 °
procurement, installation and related services. Regardless of such delegation, CILIA will remain absolutely responsible to Owner for the services required hereunder.
Nothing herein shall affect the CIIIAs fiduciary responsibility to the Owner as set forth in Chapter 2269 of the Texas Local Government Code.
CONFLICT OF INTEREST QUESTIONNAIRE FORM CIO
For vendor or other person doing business with local governmental entity
This questionnaire reflects changes made to the law by H.B. 1491, 80th Leg., Regular Session. OFFICE USE ONLY
This questionnaire is being filed in accordance with chapter 176 of the Local Government Code by a Date Received
person who has a business relationship as defined by Section 176.001(1 -a) with a local
governmental entity and the person meets requirements under Section 176.006(a).
By law this questionnaire must be filed with the records administrator of the local government entity
not later than the 7th business day after the date the person becomes aware of facts that require the
statement to be filed. See Section 176.006, Local Government Code.
A person commits an offense if the person knowingly violates Section 176.006, Local Government
Code. An offense under this section is a Class C misdemeanor.
Name of person who has a business relationship with local governmental entity.
3
❑ Check this box if you are filing an update to a previously filed questionnaire.
(The law requires that you file an updated completed questionnaire with the appropriate filing authority not later than the 7t" business
day after the date the originally filed questionnaire becomes incomplete or inaccurate.)
Name of local government officer with whom filer has an employment or business relationship.
Name of Officer
This section, (item 3 including subparts A, B, C & D), must be completed for each officer with whom the filer has an employment or other business
relationship as defined by Section 176.001(1 -a), Local Government Code. Attach additional pages to this Form CIO as necessary.
A. Is the local government officer named in this section receiving or likely to receive taxable income, other than investment income, from the
filer of the questionnaire?
0 Yes 0 No
B. Is the filer of the questionnaire receiving or likely to receive taxable income, other than investment income, from or at the direction of the
local government officer named in this section AND the taxable income is not received from the local governmental entity?
0 Yes 0 No
C. Is the filer of this questionnaire employed by a corporation or other business entity with respect to which the local government officer
serves as an officer or director, or holds an Ownership of 10 percent or more?
0 Yes 0 No
D. Describe each affiliation or business relationship.
Page 18
ou ac u; , ra 1 „��tWt a�, IOp2 N'h \Ij \uxN ND A IN'N 1V`,2QN � D'„ '
��tNa rat -...) ����;xra r�tl �,Q o aWl�xrex �aW � �,tWe�t 7 wt rY1 °
4
Signature of person doing business with the governmental entity Date
Page 19
ou ac u; , ra 1 „��xWt a�, IOp2 N'h \Ij \uxN ND A IN'N 1V`,2QN � D '
��xNa r�x —...) ���x�a r�tl �,Q o aW��xrex �aW � �,xWe�x 7 wg rY1 °
PROFFESSIONAL SERVICES AGREEMENT
FOR ARCHITECT OR ENGINEER
Exhibit F of Contract #
STATE OF TEXAS
COUNTY OF DENTON §
THIS AGREEMENT is made and entered into as of the day of
, 20 , by and between the City of Denton, Texas, a Texas municipal
corporation, with its principal office at 215 East McKinney Street, Denton, Denton County, Texas
76201, hereinafter called "Owner" and O'Reilly Hospitality Management with its corporate office at
hereinafter called "Design Professional," acting herein, by and through their
duly authorized representatives.
In consideration of the covenants and agreements herein contained, the parties hereto do mutually
agree as follows:
SECTION I
EMPLOYMENT OF DESIGN PROFESSIONAL
The Owner hereby contracts with the Design Professional, in accordance with the provisions of
Texas Government Code 2269.205, and Chapter 1051 and 1001 of the Texas Occupations Code to
prepare the constriction documents for the project. Additionally, the Design services shall be under the
supervision of a licensed Texas architect or engineer, as an independent contractor. The Design
Professional hereby agrees to perform all services as described under Article III Design Development
Activities of the Master Development Agreement entered into as of , 2013 by and
between the City of Denton, Texas, the University of North Texas, O'Reilly Hotel Partners Denton,
and O'Reilly Hospitality Management herein defined as the "Master Development Agreement." This
agreement shall also serve as Exhibit G of the Master Development Agreement.
SECTION II
SCOPE OF SERVICES
The Design Professional shall perform the following services in a professional manner:
A. The Design Professional shall perform all those services as necessary and as described in the
Master Development Agreement.
Phase I - Initial 35% Progress Set for Design Development — Design Professional will
conduct a series of meetings with the owner as required by the Master Development
Agreement. The meetings will begin with reviewing the owner's project goals and
Page 1
coded`, Global Agendas `,FORTtTNE AGENDA ITEMS`, 2013`, December 2013 December 3 - 2013`, Convention Center S. Exhibit F Design Services
Convention Center Project 1124 13 JF (3) (2).docx
requirements. Then the program will be refined and a preliminary floor plan and site plan will
be produced. Design Professional will meet with the City of Denton to understand the
constraints and parameters, such as city codes, zoning and platting, affecting the proposed sites.
During this phase the Schematic documents are developed to facilitate the constriction
procurement phase. In this phase the mechanical, electrical, plumbing, and structural systems
are refined. Additionally, architectural details are produced. Design Professional will produce
an approximate 35% completed Design Development Package for the Owner's review and
approval, which shall be sufficient in obtaining constriction services for the project. After
approval from the Owner, the 35% Constriction Documents will be produced and provide to
Owner to facilitate procurement of the constriction services. Services in this phase are defined
in AIA Document BI 01, 3.3.1 and 3.3.3. The Design Professional will also complete a
construction cost estimate as part of this phase of the Design. Upon approval of the Owner, the
Design Professional will submit the constriction set for permit.
Note: After expiration of the Feasibility Deadline and Financing Viability Deadline, and upon
election of all Parties to proceed with the project as defined in the Master Development
Agreement, the Design Professional shall continue with the final design of the project,
completing the remaining 65% of the design for the project, as required in the Master
Development Agreement, and defined further as Phase II of Design project.
Phase II — Final 100% Progress Set for Design Development - During this phase the
Schematic documents are fully developed to facilitate constriction of the project. In this phase
the mechanical, electrical, plumbing, and structural systems are 100% refined. Additionally,
architectural details are produced. Design Professional will produce a 100% completed Design
Development Package for the Owner's review and approval. Design Professional shall submit a
completed coding and zoning research report to the Owner. After approval from the Owner, the
100% Progress Set Documents for Design will be produced and provide to Owner to facilitate
the constriction services. Services in this phase are defined in AIA Document BI01, 3.3.1 and
3.3.3. Upon approval of the Owner, the Design Professional will submit the constriction set for
final permitting.
Phase III — Construction Procurement Phase — During this phase the Design Professional
shall provide assistance to the Owner in providing potential respondents for the constriction
services, attendance at any pre - solicitation meetings, answering any questions from potential
respondents, assistance in preparing addenda for potential changes to the project, and provide
assistance with the evaluation process of the respondents.
Phase IV — Construction Administration Phase — During this phase the Design Professional
will attend weekly meetings during constriction, produce Field Observation reports, review
submittals, produce responses to Request for Information's, and respond in a professional
manner as needed during the constriction process. Services in this phase are defined in AIA
Document BI 01, 3.6 and in AIA Document A201-200 7.
B. If there is any conflict between the terms of this Agreement and the exhibits attached to this
Agreement, the terms and conditions of the Master Development Agreement will control over
the terms and conditions of the any attached exhibits.
Page 2
coded`, Global Agendas `,FORTtTNE AGENDA ITEMS`, 2013`, December 2013 December 3 - 2013`, Convention Center S. Exhibit F Design Services
Convention Center Project 1124 13 JF (3) (2).docx
SECTION III
ADDITIONAL SERVICES
Additional services to be performed by the Design Professional, if authorized by the Owner, which are
not included in the above - described Basic Services, are described as follows:
A. During the course of the Project, as requested by Owner, the Design Professional will be
available to accompany Owner's personnel when meeting with the Texas Commission on
Environmental Quality, U.S. Environmental Protection Agency, or other regulatory agencies.
The Design Professional will assist Owner's personnel on an as- needed basis in preparing
compliance schedules, progress reports, and providing general technical support for the
Owner's compliance efforts.
B. Assisting Owner or contractor in the defense or prosecution of litigation in connection with or
in addition to those services contemplated by this Agreement. Such services, if any, shall be
furnished by Design Professional on a fee basis negotiated by the respective parties outside of
and in addition to this Agreement.
C. Sampling, testing, or analysis beyond that specifically included in Basic Services.
D. Preparing copies of computer aided drafting (CAD) electronic data bases, drawings, or files for
the OWNER's use in a future CAD system.
E. Preparing applications and supporting documents for government grants, loans, or planning
advances and providing data for detailed applications.
F. Appearing before regulatory agencies or courts as an expert witness in any litigation with third
parties or condemnation proceedings arising from the development or constriction of the
Project, including the preparation of engineering data and reports for assistance to the Owner.
G. Providing geotechnical investigations for the site, including soil borings, related analyses, and
recommendations.
H. The Design Professional shall assist the Owner in reviewing proposed constriction changes to
the original design, denying or approving of proposed changes, communicating with the Owner
of such approvals or denials, and ensuring compliance with Attachment I to the Master
Development Agreement # (Payment Applications and Payments to Contractors).
L The Design Professional shall assist the Owner with the evaluation of the respondents (General
Contractors) to the solicitation for the constriction of the Convention Center, in an advisory
capacity. The Owner shall procure the constriction services of a general contractor or trade
contractor in accordance with the provisions of Texas Government Code 2269.206.
J. Other services within the scope of this project as requested by the Owner.
Page 3
coded`, Global Agendas `,FORTtTNE AGENDA ITEMS`, 2013`, December 2013 December 3 - 2013`, Convention Center S. Exhibit F Design Services
Convention Center Project 1124 13 JF (3) (2).docx
SECTION IV
PERIOD OF SERVICE
This Agreement shall become effective upon execution of this Agreement by the Owner and
the Design Professional and upon issue of a notice to proceed by the Owner, and shall remain
in force for the period which may reasonably be required for the completion of the Project,
including Additional Services, if any, and any required extensions approved by the Owner.
This Agreement may be sooner terminated in accordance with the provisions hereof. Time is
of the essence in this Agreement. The Design Professional shall make all reasonable efforts to
complete the services set forth herein as expeditiously as possible and to meet the schedule
established by the Owner, acting through its City Manager or his designee.
SECTION V
COMPENSATION
A. COMPENSATION TERMS:
1. "Subcontract Expense" is defined as expenses incurred by the Design Professional in
employment of others in outside firms for services of Design Development Activities
under the Master Development Agreement.
2. "Direct Non -Labor Expense" is defined as that expense for any assignment incurred by
the Design Professional for supplies, transportation and equipment, travel,
communications, subsistence, and lodging away from home, and similar incidental
expenses in connection with that assignment.
B. BILLING AND PAYMENT: For and in consideration of the professional services to be
performed by the Design Professional herein, the Owner agrees to pay for the completion of the
35% Design Development Phase as defined in the Master Development Agreement for
maximum fee not to exceed $200,000. After expiration of the Feasibility Deadline and
Financing Viability Deadline, and upon election of all Parties to proceed with the project as
defined in the Master Development Agreement, the Design Professional shall continue with the
final design of the project, completing the remaining 65% of the design for the project, as
required in the Master Development Agreement.
The Owner shall compensate the Design Professional for all services during the Design
Development Phase as follows:
BASIC SERVICES
Phase I - Fee for Initial 35% Completion of Design work shall not exceed: $200,000.
Phase II - Fee for Final 100% Completion of Design work (determined upon election to proceed).
Phase III - Fee for Constriction Procurement assistance (determined upon election to proceed).
Page 4
coded`, Global Agendas `,FORTtTNE AGENDA ITEMS`, 2013`, December 2013 December 3 - 2013`, Convention Center S. Exhibit F Design Services
Convention Center Project 1124 13 JF (3) (2).docx
Phase IV - Fee for Constriction Administration (determined upon election to proceed).
As stipulated in Exhibit E to the Master Development Agreement, the Constriction Manager
Agent Services shall equal 3% of the total project costs, (defined as all hard and soft costs for
the design, constriction, and development of the Convention Center). The not -to- exceed fee for
the CMA services shall be exclusive of other Subcontract Expense required for the design,
development, inspection, procurement and installation of FF &E and constriction of the
Convention Center. The not -to- exceed CMA fee will be fully determined upon final design of
the project, and determination of the Final Convention Center Budget following the award of
the constriction contract for the Convention Center.
ADDITIONAL SERVICES
For additional services authorized in writing by the Owner in Section III, the Design
Professional shall be paid based on the Schedule of Charges at an hourly rate as stated below.
Payments for additional services shall be due and payable upon submission by the Design
Professional, and shall be in accordance with Article V hereof. Statements shall not be
submitted more frequently than monthly.
Compensation for Additional Services is as follows:
Rate for Additional Services shall not exceed: $ 175 per hour
REIMBURSABLE EXPENSES
Reimbursable Expenses shall be compensated for expenses (travel, copies, etc.) related to the
Convention Center design project, and shall not exceed a total of $15,000. Invoices for
reimbursable expenses shall be submitted to the Owner in a timely manner.
Partial payments to the Design Professional will be made on the basis of detailed monthly
statements rendered to and approved by the Owner through its City Manager or his designee;
however, under no circumstances shall any monthly statement for services exceed the value of
the work performed at the time a statement is rendered. The Owner may withhold the final five
percent (5 %) of the contract amount until completion of the Project.
Nothing contained in this Article shall require the Owner to pay for any work which is
unsatisfactory, as reasonably determined by the City Manager or his designee, or which is not
submitted in compliance with the terms of this Agreement. The Owner shall not be required to
make any payments to the Design Professional when the Design Professional is in default under
this Agreement.
It is specifically understood and agreed that the Design Professional shall not be authorized to
undertake any work pursuant to this Agreement which would require additional payments by
the Owner for any charge, expense, or reimbursement above the maximum not to exceed fee as
stated, without first having obtained written authorization from the Owner. The Design
Professional shall not proceed to perform the services listed in Section III "Additional
Services," without obtaining prior written authorization from the Owner.
Page 5
coded`, Global Agendas `,FORTtTNE AGENDA ITEMS`, 2013`, December 2013 December 3 - 2013`, Convention Center S. Exhibit F Design Services
Convention Center Project 1124 13 JF (3) (2).docx
C. PAYMENT: If the Owner fails to make payments due the Design Professional for services and
expenses within thirty (30) days after receipt of the Design Professional's undisputed statement
thereof, the amounts due the Design Professional will be increased by the rate of one percent
(1 %) per month from the said thirtieth (30th) day or the rate established within Texas
Government Code 2251 (Prompt Payment Act), and, in addition, the Design Professional may,
after giving seven (7) days' written notice to the Owner, suspend services under this Agreement
until the Design Professional has been paid in full all amounts due for services, expenses, and
charges, provided, however, nothing herein shall require the Owner to pay any late charges set
forth herein if the Owner reasonably determines that the work is unsatisfactory, in accordance
with this Section V, "Compensation."
Invoices shall be sent directly to the City of Denton Accounts Payable Department, 215 E
McKinney St, Denton, TX, 76201 -4299. A pro -forma invoice shall also be sent to the Project
Manager. It is the intention of the City of Denton to make payment on completed orders within
thirty days after receipt of invoice or items; whichever is later, unless unusual circumstances
arise. Invoices must be fully documented as to labor, materials, and equipment provided,
if applicable, and must reference the City of Denton Purchase Order Number in order to
be processed. No payments shall be made on invoices not listing a Purchase Order
Number.
Upon contract award, suppliers are encouraged to receive payments through direct deposit.
SECTION VI
OBSERVATION AND REVIEW OF THE WORK
The Design Professional will exercise reasonable care and due diligence in discovering and promptly
reporting to the Owner any defects or deficiencies in the work of the Design Professional or any
subcontractors or sub- Design Professionals.
SECTION VII
OWNERSHIP OF DOCUMENTS
All documents prepared or furnished by the Design Professional (and Design Professional's
subcontractors or sub- Design Professionals) pursuant to this Agreement are instruments of service, and
shall become the property of the Owner upon the termination of this Agreement. The Design
Professional is entitled to retain copies of all such documents. The documents prepared and furnished
by the Design Professional are intended only to be applicable to this Project, and Owner's use of these
documents in other projects shall be at Owner's sole risk and expense. In the event the Owner uses
any of the information or materials developed pursuant to this Agreement in another project or for
other purposes than specified herein, Design Professional is released from any and all liability relating
to their use in that project.
SECTION VIII
INDEPENDENT CONTRACTOR
Page 6
coded`, Global Agendas `,FORTtTNE AGENDA ITEMS`, 2013`, December 2013 December 3 - 2013`, Convention Center S. Exhibit F Design Services
Convention Center Project 1124 13 JF (3) (2).docx
Design Professional shall provide services to Owner as an independent contractor, not as an employee
of the Owner. Design Professional shall not have or claim any right arising from employee status.
SECTION IX
INSURANCE
During the performance of the services under this Agreement, Design Professional shall maintain the
insurance with an insurance company licensed to do business in the State of Texas by the State
Insurance Commission or any successor agency that has a rating with Best Rate Carriers of at least an
A or above, and in accordance with Article 10 of the City of Denton General Conditions for
Agreement for Architectural and Engineering Services.
SECTION X
ARBITRATION AND ALTERNATE DISPUTE RESOLUTION
The parties may agree to settle any disputes under this Agreement by submitting the dispute to
arbitration or other means of alternate dispute resolution, such as mediation. No arbitration or alternate
dispute resolution arising out of or relating to this Agreement, involving one party's disagreement may
include the other party to the disagreement without the other's approval.
SECTION XI
RESPONSIBILITY FOR CLAIMS AND LIABILITIES
Approval by the Owner shall not constitute, nor be deemed a release of the responsibility and liability
of the Design Professional, its employees, associates, agents, subcontractors, and sub- Design
Professionals for the accuracy and competency of their designs or other work; nor shall such approval
be deemed to be an assumption of such responsibility by the Owner for any defect in the design or
other work prepared by the Design Professional, its employees, subcontractors, agents, and Design
Professionals.
SECTION XII
NOTICES
All notices, communications, and reports required or permitted under this Agreement shall be
personally delivered or mailed to the respective parties by depositing same in the United States mail to
the address shown below, certified mail, return receipt requested, unless otherwise specified herein.
Mailed notices shall be deemed communicated as of three (3) days' mailing:
To Design Professional:
Tim O'Reilly
2808 S. Ingram Mill., Bldg. A -104
Springfield, MO 65804
To Owner:
City of Denton
George Campbell, City Manager
215 East McKinney
Denton, Texas 76201
purchasin���, cityofdenton. com
Page 7
coded`, Global Agendas `,FORTtTNE AGENDA ITEMS`, 2013`, December 2013 December 3 - 2013`, Convention Center S. Exhibit F Design Services
Convention Center Project 1124 13 JF (3) (2).docx
All notices shall be deemed effective upon receipt by the party to whom such notice is given, or within
three (3) days' mailing.
SECTION XIII
SEVERABILITY
If any provision of this Agreement is found or deemed by a court of competent jurisdiction to be
invalid or unenforceable, it shall be considered severable from the remainder of this Agreement and
shall not cause the remainder to be invalid or unenforceable. In such event, the parties shall reform
this Agreement to replace such stricken provision with a valid and enforceable provision which comes
as close as possible to expressing the intention of the stricken provision.
SECTION XIV
PERSONNEL
A. The Design Professional represents that it has or will secure, at its own expense, all personnel
required to perform all the services required under this Agreement. Such personnel shall not be
employees or officers of, nor have any contractual relations with the Owner. Design
Professional shall inform the Owner of any conflict of interest or potential conflict of interest
that may arise during the term of this Agreement.
B. All services required hereunder will be performed by the Design Professional or under its
supervision. All personnel engaged in work shall be qualified, and shall be authorized and
permitted under state and local laws to perform such services.
SECTION XV
ASSIGNABILITY
This agreement shall be binding upon and ensure to the benefit of the City and the Design Professional
and their respective successors and assigns, provided however, that no right or interest in the
agreement shall be assigned and no obligation shall be delegated or transfer of any interest by the
Design Professional (whether by assignment, novation, or otherwise) without the prior written consent
of the Owner.
Any attempted assignment or delegation by the Design Professional shall be void unless made in
conformity with this Section. The Agreement is not intended to confer rights or benefits on any person,
firm or entity not a party hereto; it being the intention of the parties that there are no third party
beneficiaries to the Contract.
SECTION XVI
MODIFICATION
No waiver or modification of this Agreement or of any covenant, condition, or limitation herein
contained shall be valid unless in writing and duly executed by the party to be charged therewith, and
no evidence of any waiver or modification shall be offered or received in evidence in any proceeding
Page 8
coded`, Global Agendas `,FORTtTNE AGENDA ITEMS`, 2013`, December 2013 December 3 - 2013`, Convention Center S. Exhibit F Design Services
Convention Center Project 1124 13 JF (3) (2).docx
arising between the parties hereto out of or affecting this Agreement, or the rights or obligations of the
parties hereunder, and unless such waiver or modification is in writing and duly executed; and the
parties further agree that the provisions of this section will not be waived unless as set forth herein.
SECTION XVII
MISCELLANEOUS
A. The following exhibits are attached to and made a part of this Agreement: None
B. The Owner shall have the right to audit and make copies of the books, records and
computations pertaining to this agreement. The Design Professional shall retain such books,
records, documents and other evidence pertaining to this agreement during the contract period
and five years thereafter, except if an audit is in progress or audit findings are yet unresolved,
in which case records shall be kept until all audit tasks are completed and resolved. These
books, records, documents and other evidence shall be available, within 10 business days of
written request. Further, the Design Professional shall also require all Subcontractors, material
suppliers, and other payees to retain all books, records, documents and other evidence
pertaining to this agreement, and to allow the Owner similar access to those documents. All
books and records will be made available within a 50 mile radius of the City of Denton. The
cost of the audit will be borne by the Owner unless the audit reveals an overpayment of 1% or
greater of the fee for basic services under this agreement. If an overpayment of 1% or greater
occurs, the reasonable cost of the audit, including any travel costs, must be borne by the Design
Professional which must be payable within five business days of receipt of an invoice. Failure
to comply with the provisions of this section shall be a material breach of this contract and shall
constitute, in the Owner's sole discretion, grounds for termination thereof. Each of the terms
"books ", "records ", "documents" and "other evidence ", as used above, shall be construed to
include drafts and electronic files, even if such drafts or electronic files are subsequently used
to generate or prepare a final printed document.
C. For the purpose of this Agreement, the key persons who will perform most of the work
hereunder shall be . However, nothing herein shall limit
Design Professional from using other qualified and competent members of its firm to perform
the services required herein.
D. Design Professional shall commence, carry on, and complete any and all projects with all
applicable dispatch, in a sound, economical, and efficient manner and in accordance with the
provisions hereof. In accomplishing the projects, Design Professional shall take such steps as
are appropriate to ensure that the work involved is properly coordinated with related work
being carried on by the Owner.
E. The Owner shall assist the Design Professional by placing at the Design Professional's disposal
all available information pertinent to the Project, including previous reports, any other data
relative to the Project, and arranging for the access thereto, and make all provisions for the
Design Professional to enter in or upon public and private property as required for the Design
Professional to perform services under this Agreement.
SECTION XVIII
Page 9
coded`, Global Agendas `,FORTtTNE AGENDA ITEMS`, 2013`, December 2013 December 3 - 2013`, Convention Center S. Exhibit F Design Services
Convention Center Project 1124 13 JF (3) (2).docx
GOVERNING LAW
The validity of the Agreement and any of its terms and provisions, as well as the rights and duties of
the Parties, shall be governed by the laws of the State of Texas; and venue for any action concerning
this Agreement shall be in the State District Court of Denton County, Texas.
SECTION XIX
ENTIRE AGREEMENT
This Agreement, including the City of Denton General Conditions to Agreement for Architectural or
Engineering Services, constitutes the complete and final expression of the agreement of the parties, and
is intended as a complete and exclusive statement of the terms of their agreements, and supersedes all
prior contemporaneous offers, promises, representations, negotiations, discussions, communications,
and agreements which may have been made in connection with the subject matter hereof. This
Agreement, consisting of pages includes this executed agreement and the following
documents all of which are attached hereto and made a part hereof by reference as if fully set forth herein:
1. City of Denton General Conditions to Agreement for Architectural or Engineering Services.
2. Attachments A through B. Attachment A — City of Denton Conflict of Interest Form,
Attachment B — City of Denton Substitute W -9 Form.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
IC
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
IC
CITY OF DENTON
:•
GEORGE C. CAMPBELL
CITY MANAGER
DESIGN FIRM
IC
Firm's Officer /Representative
(Signature)
Page 10
coded`, Global Agendas `,FORTtTNE AGENDA ITEMS`, 2013`, December 2013 December 3 - 2013`, Convention Center S. Exhibit F Design Services
Convention Center Project 1124 13 JF (3) (2).docx
WITNESS:
IC
Page 11
coded`, Global Agendas `,FORTtTNE AGENDA ITEMS`, 2013`, December 2013 December 3 - 2013`, Convention Center S. Exhibit F Design Services
Convention Center Project 1124 13 JF (3) (2).docx
CITY OF DENTON
GENERAL CONDITIONS
TO
AGREEMENT FOR ARCHITECTURAL OR ENGINEERING SERVICES
ARTICLE 1. ARCHITECT OR ENGINEER'S RESPONSIBILITIES
1.1 The Architect or Engineer's services consist of those services for the Project (as defined in the agreement (the "Agreement ") and proposal (the "Proposal ") to which these
General Conditions are attached) performed by the Architect or Engineer (hereinafter called the "Design Professional ") or Design Professional's employees and Design
Professionals as enumerated in Articles 2 and 3 of these General Conditions as modified by the Agreement and Proposal (the "Services ").
1.2 The Design Professional will perform all Services as an independent contractor to the prevailing professional standards consistent with the level of care and shill ordinarily
exercised by members of the same profession currently practicing in the same locality under similar conditions, including reasonable, informed judgments and prompt timely
actions (the "Degree of Care "). The Services shall be performed as expeditiously as is consistent with the Degree of Care necessay for the orderly progress of the Project.
Upon request of the Owner, the Design Professional shall submit for the Owner's approval a schedule for the performance of the Services which may be adjusted as the Project
proceeds, and shall include allowances for periods of time required for the Owner's review and for approval of submissions by authorities having: jurisdiction over the Project.
Time limits established by this schedule and approved by the Owner shall not, except for reasonable cause, be exceeded by the Design Professional or Owner, and any
adjustments to this schedule shall be mutually acceptable to both parties.
ARTICLE 2 SCOPE OF BASIC SERVICES
2.1 BASIC SERVICES DEFINED The Design Professional's Basic Services consist of those described in Sections 2.2 through 2.6 of these General Conditions and include
without limitation normal structural, civil, mechanical and electrical engineering services and any other engineering services necessay to produce a complete and accurate set of
Construction Documents, as described by and required in Section 2.4. The Basic Services may be modified by the Agreement
2.2 SCHEAUTIC DESIGN PHASE
2.2.1 The Design Professional, in consultation with the Owner, shall develop a written program for the Project to ascertain Owner's needs and to establish the
requirements for the Project
2.2.2 The Design Professional shall provide a preliminay evaluation of the Owner's program, construction schedule and construction budget requirements, each in
terms of the other, subject to the limitations set forth in Subsection x.2.1.
2.2.3 The Design Professional shall review with the Owner alternative approaches to design and construction of the Project.
2.2.4 Based on the mutually agreed -upon program, schedule and construction budget requirements, the Design Professional shall prepare, for approval by the Owner,
Schematic Design Documents consisting of drawings and other documents illustrating the scale and relationship of Project components. The Schematic Design shall
contemplate compliance with all applicable laws, statutes, ordinances, codes and regulations.
2.2.5 The Design Professional shall submit to the Owner a preliminay detailed estimate of Construction Cost based on current area, volume or other unit costs and
which indicates the cost of each category of work involved in constructing the Project and establishes an elapsed time factor for the period of time from the
commencement to the completion of construction.
2.3 DESIGN DEVELOPMENT PHASE
2.3.1 Based on the approved Schematic Design Documents and anv adjustments authorized by the Owner in the program, schedule or construction budget, the Design
Professional shall prepare for approval by the Owner, Design Development Documents consisting of drawings and other documents to fix and describe the size and
character of the Project as to architectural, structural, mechanical and electrical systems, materials and such other elements as may be appropriate, which shall comply
with all applicable laws, statutes, ordinances, codes and regulations. Notwithstanding Owner's approval of the documents, Design Professional represents that the
Documents and specifications will be sufficient and adequate to fulfill the purposes of the Project.
2.3.2 The Design Professional shall advise the Owner of any_ adjustments to the preliminary_ estimate of Construction Cost in a further Detailed Statement as described
in Section 2.2.5.
2.4 CONSTRUCTION DOCUAIENTS PHASE
2.4.1 Based on the approved Design Development Documents and any further adjustments in the scope or quality of the Project or in the construction budget
authorized by the Owner, the Design Professional shall prepare, for approval by the Owner, Construction Documents consisting of Drawings rawings and Specifications setting
forth in detail requirements for the construction of the Project, which shall comply with all applicable laws, statutes, ordinances, codes and regulations.
2.4.2 The Design Professional shall assist the Owner in the preparation of the necessary bidding or procurement information, bidding or procurement forms, the
Conditions of the contract, and the form of Agreement between the Owner and contractor.
2.4.3 The Design Professional shall advise the Owner of any_ adjustments to previous preliminary_ estimates of Construction Cost indicated by in requirements
or general market conditions.
2.4.4 The Design Professional shall assist the Owner in connection with the Owner's responsibility for filing documents required for the approval of governmental
authorities having.jurisdiction over the Project
2.5 CONSTRUCTION CONTRACT PROCt?REAIENT
2.5.1 The Design Professional, following the Owner's approval of the Construction Documents and of the latest preliminary detailed estimate of Construction Cost,
shall assist the Owner in procuring a construction contract for the Project through any procurement method that is legally applicable to the Project including without
Page 12
codad`, Global Agendas `,FORTUNE AGENDA ITEMS 2013 December 2013 December 3 - 2013 Convention Center S. Exhibit F Design Services Convention Center
Project 1124 13 JF (3) (2).docx
limitation, the competitive sealed bidding process. Although the Owner will consider the advice of the Design Professional, the award of the construction contract is in
the sole discretion of the Owner.
2.5.2 If the construction contract amount for the Project exceeds the total construction cost of the Project as set forth in the approved Detailed Statement of Probable
Construction Costs of the Project submitted by the Design Professional, then the Design Professional, at its sole cost and expense, will revise the Construction
Documents as may be required by the Owner to reduce or modify the quantity or quality of the work so that the total construction cost of the Project will not exceed
the total construction cost set forth in the approved Detailed Statement of Probable Construction Costs.
2.6 CONSTRUCTION PHASE - ADMINISTRATION OF THE CONSTRUCTION CONTRACT
2.6.1 The Design Professional's responsibility to provide Basic Services for the Construction Phase under this Agreement commences with the award of the Contract
for Construction and terminates at the issuance to the Owner of the final Certificate for Payment, unless extended under the terms of Subsection 8.3.2.
2.6.2 The Design Professional shall provide detailed administration of the Contract for Construction as set forth below. For design professionals the administration
shall also be in accordance with AIA document A201, General Conditions of the Contract for Construction, current as of the date of the Agreement as may be
amended by the City of Denton special conditions, unless otherwise provided in the Agreement For engineers the administration shall also be in accordance with the
Standard Specifications for Public Works Construction by the North Central Texas Council of Governments, current as of the date of the Agreement, unless otherwise
provided in the Agreement
2.6.3 Construction Phase duties, responsibilities and limitations of authority of the Design Professional shall not be restricted, modified or extended without written
agreement of the Owner and Design Professional.
2.6.4 The Design Professional shall be a representative of and shall advise and consult with the Owner (1) during construction, and (2) at the Owner's direction from
time to time during the correction, or warranty period described in the Contract for Construction. The Design Professional shall have authority to act on behalf of the
Owner only to the extent provided in the Agreement and these General Conditions, unless otherwise modified by written instrument.
2.6.5 The Design Professional shall observe the construction site at least one time a week, while construction is in progress, and as reasonably necessary while
construction is not in progress, to become familiar with the progress and quality of the work completed and to determine if the work is being performed in a manner
indicating that the work when completed will be in accordance with the Contract Documents. Design Professional shall provide Owner a written report subsequent to
each on -site visit. On the basis of on -site observations the Design Professional shall keep the Owner informed of the progress and quality of the work, and shall
exercise the Degree of Care and diligence in discovering and promptly reporting to the Owner any observable defects or deficiencies in the work of Contractor or any
subcontractors. The Design Professional represents that he will follow Degree of Care in performing all Services under the Agreement. The Design Professional shall
promptly correct any defective designs or specifications furnished by the Design Professional at no cost to the Owner. The Owner's approval, acceptance, use of or
payment for all or any part of the Design Professional's Services hereunder or of the Project itself shall in no way alter the Design Professional's obligations or the
Owner's rights hereunder.
2.6.6 The Design Professional shall not have control over or charge of and shall not be responsible for construction means, methods, techniques, sequences or
procedures, or for safety precautions and programs in connection with the work. The Design Professional shall not be responsible for the Contractor's schedules or
failure to cane out the work in accordance with the Contract Documents except insofar as such failure may result from Design Professional's negligent acts or omis-
sions. The Design Professional shall not have control over or charge of acts or omissions of the Contractor, Subcontractors, or their agents or employees, or of any
other persons performing portions of the work.
2.6.7 The Design Professional shall at all times have access to the work wherever it is in preparation or progress.
2.6.8 Except as may otherwise be provided in the Contract Documents or when direct communications have been specially authorized, the Owner and Contractor
shall communicate through the Design Professional. Communications bv_ and with the Design Professional's Design Professionals shall be through the Design
Professional.
2.6.9 Based on the Design Professional's observations at the site of the work and evaluations of the Contractor's Applications for Pay_ ment, the Design Professional
shall review and certifv the amounts due the Contractor.
2.6.10 The Design Professional's certification for payment shall constitute a representation to the Owner, based on the Design Professional's observations at the site as
provided in Subsection 2.6.E and on the data comprising the Contractor's Application for Payment, that the work has progressed to the point indicated and that the
quality of the Work is in accordance with the Contract Documents. The foregoing representations are subject to minor deviations from the Contract Documents cor-
rectable prior to completion and to specific qualifications expressed by the Design Professional. The issuance of a Certificate for Payment shall further constitute a
representation that the Contractor is entitled to payment in the amount certified. However, the issuance of a Certificate for Payment shall not be a representation that
the Design Professional has (1) reviewed construction means, methods, techniques, sequences or procedures, or (2) ascertained how or for what purpose the Contractor
has used money previously paid on account of the Contract Sum.
2.6.11 The Design Professional shall have the responsibility and authority to reject work which does not conform to the Contract Documents. Whenever the Design
Professional considers it necessary or advisable for implementation of the intent of the Contract Documents, the Design Professional will have authority to require
additional inspection or testing of the work in accordance with the provisions of the Contract Documents, whether or not such Work is fabricated, installed or
completed. However, neither this authority of the Design Professional nor a decision made in good faith either to exercise or not exercise such authority shall give rise
to a duty or responsibility of the Design Professional to the Contractor, Subcontractors, material and equipment suppliers, their agents or employees or other persons
performing portions of the work.
2.6.12 The Design Professional shall review and approve or take other appropriate action upon Contractor's submittals such as Shop Drawings, Product Data and
Samples for the purpose of (1) determining compliance with applicable laws, statutes, ordinances and codes; and (2) determining whether or not the work, when
completed, will be in compliance with the requirements of the Contract Documents. The Design Professional shall act with such reasonable promptness to cause no
delay in the work or in the construction of the Owner or of separate contractors, while allowing sufficient time in the Design Professionals professional judgment to
permit adequate review. Review of such submittals is not conducted for the purpose of determining the accuracy and completeness of other details such as dimensions
and quantities or for substantiating instructions for installation or performance of equipment or systems designed by the Contractor, all of which remain the
responsibility of the Contractor to the extent required by the Contract Documents. The Design Professional's review shall not constitute approval of safety precautions
or, unless otherwise specifically stated by the Design Professional, of construction means, methods, techniques, sequences or procedures. The Design Professional's
Page 13
codad`, Global Agendas `,FORTUNE AGENDA ITEMS 2013 December 2013 December 3 - 2013 Convention Center S. Exhibit F Design Services Convention Center
Project 1124 13 JF (3) (2).docx
approval of a specific item shall not indicate approval of an assembly of which the item is a component. Vdhen professional certification of per %rmance characteristics
of materials, systems or equipment is required by the Contract Documents, the Design Professional shall be entitled to rely upon such certification to establish that the
materials, systems or equipment will meet the performance criteria required by the Contract Documents.
2.6.13 The Design Professional shall prepare Change Orders and Construction Change Directives, with supporting documentation and data if deemed necessary by
the Design Professional as provided in Subsections 3.1.1 and 3.3.3, for the Owner's approval and execution in accordance with the Contract Documents, and may
authorize minor changes in the work not involving an adjustment in the Contract Sum or an extension of the Contract Time which are not inconsistent with the intent
of the Contract Documents.
2.6.14 On behalf of the Owner, the Design Professional shall conduct inspections to determine the dates of Substantial Completion and Final Completion, and if
requested by the Owner shall issue Certificates of Substantial and Final Completion. The Design Professional will receive and review written guarantees and related
documents required by the Contract for Construction to be assembled by the Contractor and shall issue a final certificate for Pav_ ment upon compliance with the
requirements of the Contract Documents.
2.6.15 The Design Professional shall interpret and provide recommendations on matters concerning performance of the Owner and Contractor under the requirements
of the Contract Documents on written request of either the Owner or Contractor. The Design Professional's response to such requests shall be made with reasonable
promptness and within any time limits agreed upon.
2.6.16 Interpretations and decisions of the Design Professional shall be consistent with the intent of and reasonably inferable from the Contract Documents and shall
be in writing or in the form of drawings. When making such interpretations and initial decisions, the Design Professional shall endeavor to secure faithful performance
by both Owner and Contractor, and shall not be liable for results or interpretations or decisions so rendered in good faith in accordance with all the provisions of this
Agreement and in the absence of negligence.
2.6.17 The Design Professional shall render written decisions within a reasonable time on all claims, disputes or other matters in question between the Owner and
Contractor relating to the execution or progress of the work as provided in the Contract Documents.
2.6.18 The Design Professional (1) shall render services under the Agreement in accordance with the Degree of Care; (2) will reimburse the Owner for all damages
caused by the defective designs the Design Professional prepares; and (3) by acknowledging payment by the Owner of any_ fees due, shall not be released from any
rights the Owner may have under the Agreement or diminish any of the Design Professional's obligations thereunder.
2.6.19 The Design Professional shall provide the Owner with four sets of reproducible prints showing all significant changes to the Construction Documents during
the Construction Phase.
ARTICLE 3 ADDITIONAL SERVICES
3.1 GENERAL
3.1.1 The services described in this Article 3 are not included in Basic Services unless so identified in the Agreement or Proposal, and they shall be paid for by the
Owner as provided in the Agreement, in addition to the compensation for Basic Services. The services described under Sections 3.2 and 3.4 shall only be provided if
authorized or confirmed in writing by the Owner. If services described under Contingent additional Services in Section 3.3 are required due to circumstances beyond
the Design Professional's control, the Design Professional shall notify the Owner in writing and shall not commence such additional services until it receives written
approval from the Owner to proceed. If the Owner indicates in writing that all or part of such Contingent Additional Services are not required, the Design Professional
shall have no obligation to provide those services. Owner will be responsible for compensating the Design Professional for Contingent Additional Services only
they are not required due to the negligence or fault of Design Professional.
3.2 PROJECT REPRESENTATION BEYOND BASIC SERVICES
3.2.1 If more extensive representation at the site than is described in Subsection 2.6.E is required, the Design Professional shall provide one or more Project
Representatives to assist in carrying out such additional on -site responsibilities.
3.2.2 Project Representatives shall be selected, employed and directed bv_ the Design Professional, and the Design Professional shall be compensated therefor as
agreed by the Owner and Design Professional.
3.3 CONTINGENT ADDITIONAL SERVICES
3.3.1 flaking material revisions in Drawings, Specifications or other documents when such revisions are:
1. inconsistent with approvals or instructions previously given by the Owner, including revisions made necessmv_ by in the Owner's
program or Project budget:
2. required by the enactment or revision of codes, laws or regulations subsequent to the preparation of such documents, or
3. due to changes required as a result of the Owner's failure to render decision in a timely manner.
3.3.2 Providing services required because of significant changes in the Project including, but not limited to, size, quality, complexity, or the Owner's schedule, except
for services required under Subsection 2.5.2.
3.3.3 Preparing Drawings, Specifications and other documentation and supporting data, and providing other services in connection with Change Orders and
Construction Change Directives.
3.3.4 Providing consultation concerning replacement of work damaged by fire or other cause during construction, and furnishing services required in connection with
the replacement of such work.
Page 14
codad`, Global Agendas `,FORTUNE AGENDA ITEMS 2013 December 2013 December 3 - 2013 Convention Center S. Exhibit F Design Services Convention Center
Project 1124 13 JF (3) (2).docx
3.3.5 Providing services made necessary by the default of the Contractor, by major defects or deficiencies in the work of the Contractor, or by failure of performance
of either the Owner or Contractor under the Contract for Construction.
3.3.6 Providing services in evaluating an extensive number of claims submitted by the Contractor or others in connection with the work.
3.3.7 Providing services in connection with a public hearing, arbitration proceeding or legal proceeding except where the Design Professional is party thereto.
3.3.8 Providing services in addition to those required by Article 2 for preparing documents for alternate, separate or sequential bids or providing services in connection
with bidding or construction prior to the completion of the Construction Documents Phase.
3.3.9 Notwithstanding anything contained in the Agreement, Proposal or these General Conditions to the contrary, all services described in this Article 3 that are
caused or necessitated in whole or in part due to the negligent act or omission of the Design Professional shall be performed by the Design Professional as a part of the
Basic Services under the Agreement with no additional compensation above and beyond the compensation due the Design Professional for the Basic Services. The
intervening or concurrent negligence of the Owner shall not limit the Design Professional's obligations under this Subsection 3.3.9.
3.4 OPTIONAL ADDITIONAL SERVICES
3.4.1 Providing financial feasibility or other special studies.
3.4.2 Providing planning surveys, site evaluations or comparative studies of prospective sites.
3.4.3 Providing special surveys, environmental studies and submissions required for approvals of governmental authorities or others having jurisdiction over the
Project.
3.4.4 Providing services relative to future facilities, systems and equipment
3.4.5 Providing services to investigate existing conditions or facilities or to make measured drawings thereof.
3.4.6 Providing services to verify the accuracy of drawings or other information furnished by the Owner.
3.4.7 Providing coordination of construction performed by separate contractors or bv_ the Owner's own forces and coordination of services required in connection with
construction performed and equipment supplied by the Owner.
3.4.8 Providing detailed quantity sm-vevs or inventories of material, equipment and labor.
3.4.9 Providing analyses of operating and maintenance costs.
3.4.10 flaking investigations, inventories of materials or equipment, or valuations and detailed appraisals of existing facilities.
3.4.12 Providing assistance in the utilization of equipment or systems such as testing, adjusting and balancing, preparation of operation and maintenance manuals,
training personnel for operation and maintenance and consultation during operation.
3.4.13 Providing interior design and similar services required for or in connection with the selection, procurement or installation of furniture, furnishings and related
equipment.
3.4.14 Providing services other than as provided in Section 2.6.4, after issuance to the Owner of the final Certificate for Pay_ ment and expiration of the Warranty
period of the Contract for Construction.
3.4.15 Providing services of Design Professionals for other than architectural, civil, structural, mechanical and electrical engineering portions of the Project provided
as a part of Basic Services.
3.4.16 Providing any other services not otherwise included in this Agreement or not customarily furnished in accordance with generally accepted architectural
practice.
3.4.17 Preparing a set of reproducible record drawings in addition to those required by Subsection 2.6.19, showing significant changes in the work made during con-
struction based on marked -up prints, drawings and other data furnished by the Contractor to the Design Professional.
3.4.18 Notwithstanding anything contained in the Agreement, Proposal or these General Conditions to the contrary, all services described in this Article 3 that are
caused or necessitated in whole or in part due to the negligent act or omission of the Design Professional shall be performed by the Design Professional as a part of the
Basic Services under the Agreement with no additional compensation above and beyond the compensation due the Design Professional for the Basic Services. The
intervening or concurrent negligence of the Owner shall not limit the Design Professional's obligations under this Subsection 3.4.18.
ARTICLE 4 OWNER'S RESPONSIBILITIES
4.1 The Owner shall consult with the Design Professional regarding requirements for the Project, including (1) the Owner's objectives, (2) schedule and design
constraints and criteria, including space requirements and relationships, flexibility, expendability, special equipment, systems and site requirements, as more speci-
fically described in Subsection 2.2.1.
4.2 The Owner shall establish and update an overall budget for the Project, including the Construction Cost, the Owner's other costs and reasonable contingencies
related to all of these costs.
4.3 If requested by Design Professional, the Owner shall furnish evidence that financial arrangements have been made to fulfill the Owner's obligations under this
Agreement.
Page 15
codad`, Global Agendas `,FORTUNE AGENDA ITEMS 2013 December 2013 December 3 - 2013 Convention Center S. Exhibit F Design Services Convention Center
Project 1124 13 JF (3) (2).docx
4.4 The Owner shall designate a representative authorized to act on the Owner's behalf with respect to the Project The Owner or such authorized representative shall
render decisions in a timely manner pertaining to documents submitted by the Design Professional in order to avoid unreasonable delay the orderly sequential
progress of the Design Professional's services.
4.5 Where applicable, the Owner shall furnish surveys describing physical characteristics, legal limitations and utility locations for the site of the Project, and a written
legal description of the site. The survevs and legal information shall include, as applicable, grades and lines of streets, alleys, pavements and adjoining property and
structures; adjacent drainage; rights -of -way, restrictions, easements, encroachments, zoning, deed restrictions, boundaries and contours of the site; locations,
dimensions and necessary data pertaining to existing buildings, other improvements and trees; and information concerning available utility services and lines, both
public and private, above and below grade, including inverts and depths. All the information on the smvev shall be referenced to a project benchmark.
4.6 Where applicable, the Owner shall furnish the services of geotechnical engineers when such services are requested by the Design Professional. Such services may
include but are not limited to test borings, test pits, determinations of soil bearing values, percolation tests, evaluations of hazardous materials, ground corrosion and re-
sistivity tests, including necessary operations for :anticipating sub -soil conditions, with reports and appropriate professional recommendations.
4.6.1 The Owner shall furnish the services of other Design Professionals when such services are reasonably required by the scope of the Project and are requested by
the Design Professional and are not retained by the Design Professional as part of its Basic Services or Additional Services.
4.7 When not a part of the Additional Services, the Owner shall furnish structural, mechanical, chemical, air and water pollution tests, tests of hazardous materials,
and other laboratory and environmental tests, inspections and reports required by law or the Contract Documents.
4.8 The Owner shall furnish all legal, accounting and insurance counseling services as may be necessary at anv time for the Project, including auditing services the
Owner may require to verify the Contractor's Applications for Pav_ ment or to ascertain how or for what purposes the Contractor has used the money paid by or on
behalf of the Owner.
4.9 The services, information, smvevs and reports required by Owner under Sections 4.5 through 4.8 shall be furnished at the Owner's expense, and the Design
Professional shall be entitled to rely upon the accuracy and completeness thereof in the absence of any negligence on the part of the Design Professional.
4.10 The Owner shall give prompt written notice to the Design Professional if the Owner becomes aware of any_ fault or defect in the Project or nonconformance with
the Contract Documents.
4.11 Design Professional shall propose Language for certificates or certifications to be requested of the Design Professional or Design Professional's Design
Professionals and shall submit such to the Owner for review and approval at least fourteen (14) days prior to execution. The Owner agrees not to request certifications
that would require knowledge or services beyond the scope of the Agreement.
ARTICLE 5 CONSTRUCTION COST
5.1 CONSTRUCTION COST DEFINED
5.1.1 The Construction Cost shall be the total cost or estimated cost to the Owner of all elements of the Project designed or specified by the Design Professional.
5.1.2 The Construction Cost shall include the cost at current market rates of labor and materials furnished by the Owner and equipment designed, specified, selected or
specially provided for by the Design Professional, plus a reasonable allowance for the Contractor's overhead and profit. In addition, a reasonable allowance for con-
tingencies shall be included for market conditions at the time of bidding and for changes in the work during construction.
5.1.3 Construction Cost does not include the compensation of the Design Professional and Design Professional's Design Professionals, the costs of the Land,
rights-of-way, financing or other costs which are the responsibility of the Owner as provided in Article 4.
5.2 RESPONSIBILITY FOR CONSTRUCTION COST
5.2.1 Evaluations of the Owner's Project budget, preliminary estimates of Construction Cost and detailed estimates of Construction Cost prepared by the Design
Professional represent the Design Professional's best judgment as a design professional f..uniliar with the construction industiv. It is recognized, however, that neither
the Design Professional nor the Owner has control over the cost of labor, materials or equipment, over the Contractor's methods of determining bid prices, or over
competitive bidding or market conditions. Accordingly, the Design Professional cannot and does not warrant or represent that bids or cost proposals will not vary
from the Owner's Project budget or from any estimate of Construction Cost or evaluation prepared or agreed to by the Design Professional.
5.2.2 No fixed limit of Construction Cost shall be established as a condition of the Agreement by the furnishing, proposal or establishment of a Project budget, unless
such fixed limit has been agreed upon in writing and signed by the parties thereto. If such a fixed limit has been established, the Design Professional shall be permitted
to include contingencies for design, bidding and price escalation, to determine what materials, equipment, component systems and types of construction are to be
included in the Contract Documents, to make reasonable adjustments in the scope of the Project and to include in the Contract Documents alternate bids to adjust the
Construction Cost to the fixed limit. Fixed limits, if any, shall be increased in the amount of an increase in the Contract Sum occurring after execution of the Contract
for Construction.
5.2.3 If the Procurement Phase has not commenced within 90 days after the Design Professional submits the Construction Documents to the Owner, anv Project
budget or fixed limit of Construction Cost shall be adjusted to reflect changes in the general level of prices in the construction industiv_ between the date of submission
of the Construction Documents to the Owner and the date on which proposals are sought.
ARTICLE 6 ONYNERSHIP AND USE OF DOCUAIENTS
6.1 The Drawings, Specifications and other documents prepared by the Design Professional for this Project are instruments of the Design Professional's service and shall
become the property of the Owner upon termination or completion of the Agreement. The Design Professional is entitled to retain copies of all such documents. Such
documents are intended only be applicable to this Project, and Owner's use of such documents in other projects shall be at Owner's sole risk and expense. In the event the
Page 16
codad`, Global Agendas `,FORTUNE AGENDA ITEMS 2013 December 2013 December 3 - 2013 Convention Center S. Exhibit F Design Services Convention Center
Project 1124 13 JF (3) (2).docx
Owner uses anv of the information or materials developed pursuant to the Agreement in another project or for other purposes than are specified in the Agreement, the Design
Professional is released from a nv and all liability relating to their use in that project
6.2 Submission or distribution of documents to meet official regulatory requirements or for similar purposes in connection with the Project is not to be construed as publication
in derogation of the Design Professional's reserved rights.
ARTICLE 7 TERMINATION, SUSPENSION OR ABANDONAIENT
7.1 The Design Professional may terminate the Agreement upon not less than thirty days written notice should the Owner fail substantially to perform in accordance with the
terms of the Agreement through no fault of the Design Professional. Owner may terminate the Agreement or any phase thereof only with cause and after reasonable prior
written notice to the Design Professional and reasonable opportunity to cure by the Design Professional. All work and labor being performed under the Agreement shall cease
immediately upon Design Professional's receipt of such notice. Before the end of the thirty (30) day period, Design Professional shall invoice the Owner for all work it
satisfactorily performed prior to the receipt of such notice. No amount shall be due for lost or anticipated profits. All plans, field surveys, and other data related to the Project
shall become property of the Owner upon termination of the Agreement and shall be promptly delivered to the Owner in a reasonably organized form. Should Owner
subsequently contract with a new Design Professional for continuation of services on the Project, Design Professional shall cooperate in providing information.
7.2 If the Project is suspended by the Owner for more than 30 consecutive days, the Design Professional shall be compensated for sercrces satisfactorily performed prior to
notice of such suspension. When the Project is resumed, the Design Professional's compensation shall be equitably adjusted to provide for expenses incurred in the interruption
and resumption of the Design Professional's services.
7.3 The Agreement may be terminated by the Owner upon not less than seven days written notice to the Design Professional in the event that the Project is perm ly
anent
abandoned. If the Project is abandoned bv_ the Owner for more than 90 consecutive days, the Design Professional or the Owner may the Agreement by giving written
notice.
7.4 Failure of the Owner to make payments to the Design Professional for work satisfactorily in accordance with the Agreement shall be considered substantial non-
performance and cause for termination.
7.5 If the Owner fails to make payment to Design Professional within thirty (30) days of receipt of a statement for services properly and satisfactorily performed, the Design
Professional may, upon seven days written notice to the Owner, suspend performance of services under the Agreement.
7.6 In the event of termination not the fault of the Design Professional, the Design Professional shall be compensated for services properly and satisfactorily performed prior to
termination.
ARTICLE 8 PAYMENTS TO THE DESIGN PROFESSIONAL
8.1 DIRECT PERSONNEL EXPENSE
8.1.1 Direct Personnel Expense is defined as the direct salaries of the Design Professional's personnel engaged on the Project and the portion of the cost of their
mandatory and customary contributions and benefits related thereto, such as employment taxes and other statutory employee benefits, insurance, sick leave, holidays,
vacations, pensions and similar contributions and benefits.
8.2 REIMBURSABLE EXPENSES
8.2.1 Reimbursable Expenses are in addition to compensation for Basic and additional Services and include expenses incurred by Design Professional and
Design Professional's employees and Design Professionals in the interest of the Project, as identified in the following Clauses.
8.2.1.1 Expense of transportation in connection with the Project: expenses in connection with authorized out -of -town travel; long - distance communications;
and fees paid for securing approval of authorities having.jurisdiction over the Project.
8.2.1.2 Expense of reproductions (except the reproduction of the sets of documents referenced in Subsection 2.6.19), postage and handling of Drawings,
Specifications and other documents.
8.2.1.3 If authorized in advance by the Owner, expense of overtime work requiring higher than regular rates.
8.2.1.4 Expense of renderings, models and mock -ups requested by the Owner.
8.2.1.5 Expense of computer -aided design and drafting equipment time when used in connection with the Project
8.2.1.6 Other expenses that are approved in advance in writing by the Owner.
8.3 PAYMENTS ON AC'C'OtTNT OF BASIC SERVICES
8.3.1 Pavments for Basic Services shall be made monthh, and, where applicable, shall be in proportion to services performed within each phase of service, on the
basis set forth in Section 2 of the Agreement and the schedule of work.
8.3.2 If and to the extent that the time initially established in the Agreement is exceeded or extended through no fault of the Design Professional, compensation for any_
services rendered during the additional period of time shall be computed in the manner set forth in Section 2 of the Agreement
8.3.3 When compensation is based on a percentage of Construction Cost and any portions of the Project are deleted or otherwise not constructed, compensation for
those portions of the Project shall be payable to the extent services are performed on those portions, in accordance with the schedule set forth in Section 2 of the
Agreement based on (1) the lowest bona fide bid or (2) if no such bid or proposal is received, the most recent preliminary_ estimate of Construction Cost or detailed
estimate of Construction Cost for such portions of the Project
8.4 PAYMENTS ON ACCOUNT OF ADDITIONAL SERVICES
Page 17
codad`, Global Agendas `,FORTUNE AGENDA ITEMS 2013 December 2013 December 3 - 2013 Convention Center S. Exhibit F Design Services Convention Center
Project 1124 13 JF (3) (2).docx
8.4.1 Pavments on account of the Design Professional's additional Services and for Reimbursable Expenses shall be made monthly within 30 day_ s after the
presentation to the Owner of the Design Professional's statement of services rendered or expenses incurred.
8.5 PAYMENTS NYITHHELD No deductions shall be made from the Design Professional's compensation on account of penalty, liquidated damages or other sums withheld
from payments to contractors, or on account of the cost of changes in the work other than those for which the Design Professional is responsible.
8.6 DESIGN PROFESSIONAL'S ACCOUNTING RECORDS Design Professional shall make available to Owner or Owner's authorized representative records of
Reimbursable Expenses and expenses pertaining to Additional Services and services performed on the basis of a multiple of Direct Personnel Expense for inspection and
copying during regular business hours for three v_ ears after the date of the final Certificate of Pay_ ment, or until any related to the Project is final, whichever date is
later.
ARTICLE 9 INDEMNITY
9.1 The Design Professional shall indemnify and save and hold harmless the Owner and its officers, agents, and employees from and against any and all liability,
claims, demands, damages, losses, and expenses, including, but not limited to court costs and reasonable attorney fees incurred by the Owner, and including, without
limitation, damages for bodily and personal injury, death and property damage, resulting from the negligent acts or omissions of the Design Professional or its officers,
shareholders, agents, or employees in the performance of the Agreement.
9.2 Nothing herein shall be construed to create a liability to any person who is not a party to the Agreement, and nothing herein shall waive any of the parties" defenses,
both at law or equity, to any claim, cause of action, or litigation filed by one not a party to the Agreement, including the defense of governmental immunity, which
defenses are hereby expressly reserved.
ARTICLE 10 INSURANCE During the performance of the Services under the Agreement, Design Professional shall maintain the following insurance with an
insurance company licensed or authorized to do business in the State of Texas by the State Insurance Commission or any successor agency that has a rating with Best
Rate Carriers of at least an A- or above:
10.1 Comprehensive General Liability Insurance with bodily injury limits of not less than $1,000,000 for each occurrence and not less than $2,000,000 in the aggregate,
and with property damage limits of not less than $100,000 for each occurrence and not less than $20,000 in the aggregate.
10.2 Automobile Liability Insurance with bodilv injury limits of not less than $00,000 for each person and not less than $00,000 for each accident, and with property
damage limits of not less than $100,000 for each accident.
10.3 Worker's Compensation Insurance in accordance with statutory and Employers" Liability Insurance with limits of not less than $100,000 for each
accident including occupational disease.
10.4 Professional Liability Insurance with limits of not less than $1,000,000 annual aggregate.
10.5 The Design Professional shall furnish insurance certificates or insurance policies to the Owner evidencing insurance in compliance with this Article 10 at the time
of the execution of the Agreement. The General Liability and Automobile Liability insurance policies shall name the Owner as an additional insured, the Workers'
Compensation policy shall contain a waiver of subrogation in favor of the Owner, and each policy shall contain a provision that such insurance shall not be canceled or
modified without thirty (30) days" prior written notice to Owner and Design Professional. In such event, the Design Professional shall, prior to the effective date of the
change or cancellation, furnish Owner with substitute certificates of insurance meeting the requirements of this Article 10.
ARTICLE 11 AIISCELLANEOUS PROVISIONS
11.1 The Agreement shall be governed by laws of the State of Texas. venue of any_ suitor cause of action under the Agreement shall lie exclusively Denton County,
Texas.
11.2 The Owner and Design Professional, respectively, bind themselves, their partners, successors, assigns and legal representatives to the other party to this Agreement and to
the partners, successors, assigns and legal representatives of such other party with respect to all covenants of this Agreement. The Design Professional shall not assign its
interests in the Agreement without the written consent of the Owner.
11.3 The term Agreement as used herein includes the executed Agreement, these General Conditions and other attachments referenced in Section 3 of the Agreement which
together represent the entire and integrated agreement between the Owner and Design Professional and supersedes all prior negotiations, representations or agreements, either
written or oral. The Agreement may be amended only by written instrument signed by both Owner and Design Professional. When interpreting the Agreement the executed
Agreement, these General Conditions and the other attachments referenced in Section 3 of the Agreement shall to the extent that is reasonably possible be read so as to
harmonize the provisions. However, should the provisions of these documents be in conflict so that they be reasonably such documents shall be given
priority in the following order:
1. The executed Agreement
2. Attachments referenced in Section 3 of the Agreement
3. These General Provisions
11.4 Nothing contained in the Agreement shall create a contractual relationship with or a cause of action in favor of a third party against either the Owner or Design
Professional.
11.5 Upon receipt of prior written approval of Owner, the Design Professional shall have the right to include representations of the design of the Project, including photographs
of the exterior and interior, among the Design Professional "s promotional and professional materials. The Design Professional's materials shall not include the Owner's
Page 18
codad`, Global Agendas `,FORTUNE AGENDA ITEMS 2013 December 2013 December 3 - 2013 Convention Center S. Exhibit F Design Services Convention Center
Project 1124 13 JF (3) (2).docx
confidential or proprietary information if the Owner has previously advised the Design Professional in writing of the specific information considered by the Owner to be confi-
dential or proprietary. The Owner shall provide professional credit for the Design Professional on the construction sign and in the promotional materials for the Project.
11.6 Approval by the Owner shall not constitute, nor be deemed a release of the responsibility and liability of the Design Professional, its employees, associates, agents,
subcontractors, and subDesign Professionals for the accuracy and competency of their designs or other work; nor shall such approval be deemed to be an assumption of
such responsibility by the Owner for any in the design or other work prepared by the Design Professional, its employees, subcontractors, agents, and Design
Professionals.
11.7 All notices, communications, and reports required or permitted under the Agreement shall be personally delivered or mailed to the respective parties by depositing
same in the United States mail to the address shown below signature block on the Agreement, certified mail, return receipt requested, unless otherwise specified herein.
All notices shall be deemed effective upon receipt by the party to whom such notice is given, or within three (3) days after mailing.
11.8 If any provision of the Agreement is found or deemed by a court of competentjurisdiction to be invalid or unenforceable, it shall be considered severable from the
remainder of the Agreement and shall not cause the remainder to be invalid or unenforceable. In such event, the parties shall reform the Agreement to replace such
stricken provision with a valid and enforceable provision which comes as close as possible to expressing the intention of the stricken provision.
11.9 The Design Professional shall comply with all federal, state, and local laws, rules, regulations, and ordinances applicable to the work covered hereunder as they
may now read or hereinafter be amended during the term of this Agreement.
11.10 In performing the Services required hereunder, the Design Professional shall not discriminate against any person on the basis of race, color, religion, sex,
national origin or ancestry, age, or physical handicap.
11.11 The captions of the Agreement are for informational purposes only, and shall not in any way affect the substantive terms or conditions of the Agreement.
11.12 Owner Understands and acknowledges that Design Professional, in implementing its fiduciary responsibilities for the Owner, will delegate many of its duties and
responsibilities herein to the general contractor, outside design professionals and other subcontractors hired by Design Professional to provide various design,
inspection, procurement, installation and related services. Regardless of such delegation, Design Professional will remain absolutely responsible to Owner for the
services required hereunder. Nothing herein shall affect the Design Professional's fiduciary to the Owner as set forth in Chapter 2269 of the Texas Local
Government Code.
Page 19
codad`, Global Agendas `,FORTUNE AGENDA ITEMS 2013 December 2013 December 3 - 2013 Convention Center S. Exhibit F Design Services Convention Center
Project 1124 13 JF (3) (2).docx
CONFLICT OF INTEREST QUESTIONNAIRE FORM CIO
For vendor or other person doing business with local governmental entity
This questionnaire reflects changes made to the law by H.B. 1491, 80th Leg., Regular Session.
OFFICE USE ONLY
This questionnaire is being filed in accordance with chapter 176 of the Local Government Code by a
Date Received
person who has a business relationship as defined by Section 176.001(1 -a) with a local
governmental entity and the person meets requirements under Section 176.006(a).
By law this questionnaire must be filed with the records administrator of the local government entity
not later than the 7th business day after the date the person becomes aware of facts that require the
statement to be filed. See Section 176.006, Local Government Code.
A person commits an offense if the person knowingly violates Section 176.006, Local Government
Code. An offense under this section is a Class C misdemeanor.
Name of person who has a business relationship with local governmental entity.
2
❑ Check this box if you are filing an update to a previously filed questionnaire.
(The law requires that you file an updated completed questionnaire with the appropriate filing authority not later than the 7t" business
day after the date the originally filed questionnaire becomes incomplete or inaccurate.)
TName
of local government officer with whom filer has an employment or business relationship.
Name of Officer
This section, (item 3 including subparts A, B, C & D), must be completed for each officer with whom the filer has an employment or other business
relationship as defined by Section 176.001(1 -a), Local Government Code. Attach additional pages to this Form CIO as necessary.
A. Is the local government officer named in this section receiving or likely to receive taxable income, other than investment income, from the
filer of the questionnaire?
0 Yes 0 No
B. Is the filer of the questionnaire receiving or likely to receive taxable income, other than investment income, from or at the direction of the
local government officer named in this section AND the taxable income is not received from the local governmental entity?
0 Yes 0 No
C. Is the filer of this questionnaire employed by a corporation or other business entity with respect to which the local government officer
serves as an officer or director, or holds an Ownership of 10 percent or more?
0 Yes 0 No
D. Describe each affiliation or business relationship.
4
Signature of person doing business with the governmental entity Date
Page 20
coded`, Global, Agendas`, FORTUNE AGENDA ITEMS 2013 December 2013 `,December 3 - 2013 Convention Center S. Exhibit F Design Services Convention Center
Project 1124 13 JF (3) (2).docx
Adopted 06/29/2007
Page 21
coded`, Global, Agendas`, FORTUNE AGENDA ITEMS 2013 December 2013 December 3 - 2013 Convention Center S. Exhibit F Design Services Convention Center
Project 1124 13 JF (3) (2).docx
STATE OF TEXAS §
COUNTY OF §
NON - DISTURBANCE AND ATTORNMENT AGREEMENT
This Non - Disturbance and Attornment Agreement ( "Agreement ") is made as of the
day of , 2013, among University of North Texas, an institution of higher
education of the State of Texas ( "UNT ") ( "Landlord "), and O'Reilly Hotel Partners- Denton,
LLC, a Missouri limited liability company ( "OHPD ") [the "Subtenant "].
RECITALS
Landlord and the City of Denton, Texas ( "City„) have entered into that certain City - UNT
Land Lease dated , 2013 ( "Lease ") covering the Property described in the Lease
and in exhibit A to this Agreement.
Subtenant is the subtenant under that certain City -OHPD Convention Center Sublease
between the City of Denton, Texas and O'Reilly Hotel Partners- Denton, LLC dated
, 2013, covering the Property (said Sublease, together with any modifications,
renewals, extensions, and /or amendments thereto subsequently approved by Landlord, is
hereafter called the "Sublease ").
Subtenant requires, as a condition to entering into the Sublease, that its rights under the
Sublease be recognized by the Landlord in the event that the Lease is terminated (thereby
terminating the Sublease pursuant to Section 17.5 of the Sublease), and that in the event the
Lease is terminated as to City, the Lease shall not terminate as to Subtenant, and Subtenant shall
become the Tenant under the Lease.
Landlord and Subtenant desire to confirm their understanding with respect to the Lease and
Sublease.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
agreements contained herein, and other valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Landlord and Subtenant agree as follows in the event the Lease
is terminated:
I. Non - Disturbance. Subtenant shall become the Tenant under the Lease, the
Sublease shall terminate, and Landlord and Subtenant agree, as necessary and in good faith, to
negotiate a replacement lease. So long as Subtenant, as Tenant under the Lease, is not in default
(beyond any period expressed in the Lease within which Tenant may cure such default) in the
payment or the performance of its covenants and obligations under the Lease, (i) Tenant's
occupancy of the Property shall not be disturbed by Landlord in the exercise of any of its rights
under the Lease during the term of the Lease (or any extension of said terms); (ii) Landlord shall
AUS- 1389634 -1
honor the terms of the Lease; and (iii) Tenant shall not be joined as a party defendant in any
action or proceeding for the purpose of terminating the Lease.
2. Attornment. In the event that the City's rights under the Lease are terminated,
Subtenant shall attorn to, and shall recognize Landlord as Landlord under the Lease and shall
become Tenant under the Lease ( "Subtenant's Attornment "). Subtenant's Attornment shall be
effective and self - operative without the execution of any further instrument.
3. �hts Reserved. Nothing herein contained is intended, nor shall it be construed, to
abridge or adversely affect any right or remedy of: (a) the Landlord under the Lease against
Tenant in the event of any default by Tenant (beyond any period expressed in the Lease within
which Tenant may cure such default) in the payment of rent or in the performance or observance
of any of the terms, covenants or conditions of the Lease on Tenant's part to be performed or
observed; or (b) the Tenant under the Lease against the Landlord in the event of any default by
the Landlord to pursue claims against the Landlord.
4. Notices. Any notice or communication required or permitted hereunder shall be in
writing, and shall be given or delivered: (i) by United States mail, registered or certified, postage
fully prepaid, return receipt requested, or (ii) by recognized courier service or recognized
overnight delivery service; and in any event addressed to the party for which it is intended at its
address set forth below:
To Landlord: Vice President for Finance
University of North Texas
1155 Union Circle #310500
Denton, Texas 76203
Telephone: (940) 565 -2055
Facsimile: (940) 565 -4779
With Copies to: Vice Chancellor & General Counsel
University of North Texas System
1901 Main Street
Dallas, TX 75201
Facsimile: (214) 752 -5980
To Subtenant: O'Reilly Hotel Partners- Denton, LLC
Tim O'Reilly
2808 S. Ingram Mill, Bldg. A -104
Springfield, Missouri 65804
Telephone: (417) 851 -8700
Facsimile: (417) 890 -1778
With Copies to: Craig Preston, Esq.
O'Reilly, Jensen & Preston, LLC
2808 S. Ingram Mill, Bldg. A -104
Springfield, Missouri 65804
2
AUS- 1389634 -1
Telephone: (417) 890 -1555
Facsimile: (417) 890 -1778
or such other address as such party may have previously specified by notice given or delivered in
accordance with the foregoing. Any such notice shall be deemed to have been given and
received on the date delivered or tendered for delivery during normal business hours as herein
provided.
5. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Texas.
6. No Oral Change. This Agreement may not be modified orally or in any manner
other than by an agreement in writing signed by the parties hereto or their respective successors
in interest.
7. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon Subtenant and Landlord and their respective heirs, personal representatives,
successors and assigns.
EXECUTED on this day of , 2013.
SUBTENANT:
O'REILLY HOTEL PARTNERS- DENTON, LLC,
a Missouri limited liability company
By:_
Name
Its:
Tim O'Reilly
Manager
LANDLORD:
UNIVERSITY OF NORTH TEXAS
By:_
Name:
Its:
AUS- 1389634 -1
EXHIBIT "A"
Property Description
AUS- 1389634 -1
Exhibit H
to Master Development Agreement
Guidelines for Hotel Labs and Hotel Internships
University of North Texas and O'Reilly Hospitality Management, LLC at the Embassy Suites
Denton - Dallas and City of Denton Convention Center
Overview of the Hospitality Management Program at UNT and O'Reilly Hospitality Management,
LLC
The B.S. in Hospitality Management program has a diverse student population of 800 in and one of
the highest retention and graduation rates at UNT. Most graduates are employed in the hospitality
industry or accepted into graduate school Nvithin six months after graduation. The program offers a
comprehensive study of the hospitality industry focused on the operational management of hotels, food
and beverage, events, clubs and resorts, and tourism. All majors complete a minimum of 800 hours of
hospitality industry Nvork experience by graduation including a required pre - internship work experiences
and a required paid internship. The program is accredited by the Accreditation Commission for Programs
in Hospitality Administration (ACPHA). It is the sixth largest undergraduate program in the U.S. and
draws students from allover Texas as Nvell as the U.S. and abroad. The program is poised to grow in
number of majors and program specializations such as Hotel, Food and Beverage, and Event Management
to meet increasing student and industry demands at the local, state and national levels. Given the
program's growth trajectory from less than 400 majors a decade ago, this program has the potential to
grow to over 1,200 majors in the next ten years.
O'Reilly Hospitality Management, LLC (OHM) is a an award Nvinning hotel and restaurant management
company that has been chosen by the City of Denton and O'Reilly Hotel Partners — Denton, LLC to
manage the Embassy Suites Denton -Dallas and City of Denton Convention Center (hereinafter referred to
as "Hotel ") that Nvill be built on the grounds of UNT. OHM Nvelcomes the opportunity to assist UNT by
offering this program for students that Nvill greatly enhance their education by exposing them to the real
business of a first class hotel and convention center and help propel them to future success in the
hospitality industry!
1. Purpose of Hotel Labs and Hotel Internships
1.1 The Hotel Labs Nvill help students identify areas Nvhere they Nvould like to Nvork by exposing them
to and broadening their understanding of the role and responsibilities of personnel in various hotel
departments.
1.2 The Hotel Internships Nvill provide an in -depth senior -level paid Nvork experience in one or more
areas of hotel management responsibilities.
2. Hotel Labs
2.1 The Hotel agrees to offer a minimum of four (4) participating hotel departments N ith each
department scheduling one four -hour lab per N eek during an academic semester (fall, spring, and
summer).
2.2 With respect to the four, four -hour labs, the participating students Neill experience a minimum
rotation in tN -,o (2) of the labs N here they Neill: (1) shadov, supervisors; and (2) perform tasks
assigned by supervisors (e.g. cleaning guest rooms, working banquet set -ups, N orking front desk
tasks, etc.). See Sample Table 1 that follov, s.
Table 1. A Sample Semester Schedule for Hotel Labs
WEEK
IN SEMESTER
HOTEL DEPARTMENTS
TOTAL
NUMBER OF
STUDENTS
PER WEEK
A
B
C
D
2
4
4
4
4
16
3
4
4
4
4
16
4
4
4
4
4
16
5
4
4
4
4
16
6
4
4
4
4
16
7
4
4
4
4
16
8
4
4
4
4
16
9
4
4
4
4
16
10
4
4
4
4
16
11
4
4
4
4
16
12
4
4
4
4
16
13
4
4
4
4
16
14
4
4
4
4
16
Total Students
52
52
52
52
208
Total labs for 104 students
1.1 The Hotel agrees that its hotel department heads Nvill Nvork collaboratively Nvith hospitality faculty
in planning the hotel labs.
1.2 The Hotel agrees to extend the labs to nights and Nveekends.
13 The Hotel agrees to Nvork Nvith the hospitality management program to develop supporting Hotel
Lab experiences should the program expand to include hospitality specializations (i.e., Hotel,
Food and Beverage, Event Management),.
1.4 The hotel labs Nvill start once the Hotel reaches full operation, but not to extend beyond one Near
from its opening. This is in recognition of the time and processes required to open a new hotel
and the timing of its opening (i.e., congruency Nvith academic semesters and lead time in course
registration the semester before a course is offered).
2. Supervision, Training and Assessment of Hotel Labs
2.1 Supervision of students Nvill be done by hospitality faculty.
2.2 Training of students Nvill be done by Hotel Department Heads.
23 Assessment of training effectiveness -will be done each semester by the Chair of the Hospitality
and Tourism Management Department as part of the overall assessment of the academic program.
3. Hotel Internships
3.1 The Hotel agrees to offer a minimum of three (3) paid Hotel Internships per Near to qualified
UNT hospitality students.
3.2 The Hotel Nvill select interns from a competitive applicant pool, and the selection Nvill be at the
Hotel's discretion based on the qualifications and demonstrated competence of the students that
apple. Students are required to apply and secure their oN -,n internships.
3.3 The Hospitality and Tourism Management Internship Coordinator will work with the Hotel on all
aspects of the internship.
3.4 Launch of Hotel Internship program
3.4.1 The Hotel Internship program Nvill start once the hotel reaches full operation, but not to
exceed one gear from opening. This is in recognition of the time and processes required
to open a new hotel and the timing of opening (i.e., congruency Nvith academic semesters
and lead time in offering registration a semester before).
4. Space Requirements in the Hotel
4.1 Office Space
:l
4.1.1 The Hotel agrees to provide a dedicated office space for two hospitality faculty members.
4.2 Classroom Space
4.2.1 The Hotel agrees to provide a dedicated classroom space sufficient in size to hold 52
students.
4.3 Locker Space
4.3.1 The Hotel agrees to provide students Nvith a secure place to store personal items during
the time they are in the Hotel Labs. The ideal storage Nvould be lockers.
Exhibit G
PAYMENTS AND COMPLETION GUIDELINES
The payment and completion guidelines are established by the City of Denton to ensure
compliance with Texas Government Code 2251 (Prompt Payment Act), and additionally, to
effectuate the successful outcome for constriction projects undertaken.
For purposes of this agreement, where referenced as "Owner's representative ", that shall mean
the Constriction Manager -Agent that has been engaged by the City of Denton for the project. In
all instances of payment requests, the CMA shall ensure timely completion of the requested
tasks, and submittal to the City of Denton staff member to ensure payment compliance is
achieved as defined within Texas Government Code 2251.
1. CONTRACT SUM
The Contract Sum is stated in the Building Constriction Services Agreement and, including
authorized adjustments, is the total amount of compensation payable by the Owner to the
Contractor for the performance of the Work under the Contract Documents.
2. SCHEDULE OF VALUES
Before the first Application for Payment, the Contractor shall submit to the
Architect/Engineer a schedule of values allocated to various portions of the Work, prepared
in such form and supported by such data to substantiate its accuracy as the
Architect/Engineer may require. This schedule, when approved by the Architect/Engineer
and the Owner, shall be used as a basis for the Contractor's Application for Payment. The
schedule of values shall follow the trade division of the Specifications. Contractor's
Application for Payment shall be filed on the current version of AIA Form G702
(Application and Certificate for Payment), as approved by the Owner.
3. APPLICATIONS FOR PAYMENT
(a) At least ten (10) days before the date established for each progress payment, the
Contractor shall submit to the Architect/Engineer an itemized Application for Payment
for Work completed in accordance with the schedule of values. The Application shall be
notarized, if required, and supported by data substantiating the Contractor's right to
payment as the Owner or Architect/Engineer may require, including but not limited to
copies of requisitions from Subcontractors and material suppliers, and reflecting the
applicable retainage as required in the Contract Documents. Contractor's Application for
Payment shall also provide other supporting documentation as the Owner or the other
applicable provisions of the Contract Documents may require.
(b) Applications for Payment may not include requests for payment of amounts the
Contractor does not intend to pay to a Subcontractor because of a good faith dispute,
unless the Contractor complies with Paragraph 3(c) of these Payment and Completion
Guidelines, and the Contractor's Payment Bond Surety consents in writing to payment to
the Contractor of the funds deemed to be in dispute.
(c) If, for any reason, the Contractor is withholding payment to a Subcontractor due to a
dispute or other problem with performance, the Contractor shall note the amount
withheld and that payment is in dispute. The Owner may require the Contractor to
document and verify the dispute or other problem in question.
(d) Unless otherwise provided in the Contract Documents, progress payments shall include
payment for materials and equipment delivered and suitably stored at the Project site for
subsequent incorporation into the Work within thirty (30) days after delivery to the
Project site. If approved in advance by the Owner, payment may similarly be made for
materials and equipment suitably stored away from the Project site at a location agreed
upon in writing. Payment for costs incurred in storage of materials or equipment away
from the Project site will NOT be made by Owner unless:
(1) the Owner has given prior approval of such off -site storage in writing;
(2) the materials or equipment are stored in a bonded warehouse located in Denton
County and identified with the Project for which they are stored, as evidenced by
warehouse receipts and appropriate documents of title; and
(3) the materials or equipment stored off -site will be incorporated into the Work within
thirty (30) days after delivery. STORAGE IN FACILITIES OF THE
MANUFACTURER OR THE CONTRACTOR WILL NOT BE PERMITTED OR
PAID FOR, UNLESS THE OWNER HAS EXPRESSLY GIVEN PRIOR
APPROVAL OF SUCH STORAGE IN WRITING.
(4) The Contractor warrants that title to all Work covered by an Application for Payment
will pass to the Owner no later than the time of payment. The Contractor further
warrants that upon submittal of an Application for Payment all Work for which
Certificates for Payment have been previously issued and payments received from the
Owner shall be free and clear of liens, claims, security interests or encumbrances in
favor of the Contractor, Subcontractors, material suppliers, or other persons or entities
making a claim by reason of having provided labor, materials, and equipment relating
to the Work.
(e) All materials or equipment delivered to the Project site earlier than thirty (30) days prior
to an approved schedule for delivery to the Project site shall be classified as an "early
delivery." All early delivery materials or equipment must have the express written
permission of the Owner to be stored on the Project site. If any unauthorized early
delivery occurs, Contractor shall, at Contractor's expense or at the expense of the
responsible Subcontractor or Supplier, cause such early delivery to be removed from the
Project site and stored off -site until required at the Project site. All costs of labor,
transportation and storage will be included as part of the expense. If the Contractor fails
or refuses to remove unauthorized early delivery materials, the Owner may cause such
materials to be removed at the Contractor's sole expense, and amounts may be withheld
from the Contractor's Application for Payment to reimburse the Owner for any costs
incurred in removing unauthorized early delivery materials. OWNER WILL NOT BE
RESPONSIBLE FOR THE PROTECTION OF OR RISK OF LOSS ON ANY EARLY
DELIVERY MATERIALS OR EQUIPMENT, NOR WILL OWNER BE LIABLE FOR
ANY PAYMENT FOR THE EARLY DELIVERY MATERIALS OR EQUIPMENT.
Any materials or equipment classified as early delivery will not be approved for payment
as stored materials prior to thirty (30) days before the incorporation of the materials or
equipment into the Work, unless storage and payment at an earlier date is expressly
approved in writing by the Owner.
(f) If the Contract Sum is equal to or less than $25,000.00 and performance and payment
bonds are not furnished by the Contractor, no payment applied for will be payable under
the Contract until the Work has been Finally Completed and accepted.
4. CERTIFICATES FOR PAYMENT
(a) The Architect/Engineer will, within ten (10) days after receipt of the Contractor's
Application for Payment, either issue to the Owner a Certificate for Payment, with a copy
to the Contractor, for such amount as the Architect/Engineer determines is properly due,
or notify the Contractor and Owner in writing of the Architect/Engineer's reasons for
withholding certification in whole or in part as provided in
City of Denton Payment and Completion Guidelines, Paragraph 5.
The Certificate for Payment shall be issued on the current version of AIA Form G702
(Application and Certificate for Payment) as approved by the Owner.
The issuance of a Certificate for Payment will constitute a representation by the
Architect/Engineer to the Owner, based on the Architect/Engineer's observations at
the site and the data comprising the Application for Payment, that the Work has
progressed to the point indicated and that, to the best of the Architect/Engineer's
knowledge, information and belief, quality of the Work is in accordance with the
Contract Documents. The foregoing representations are subject to an evaluation of the
Work for conformance with the Contract Documents upon Substantial and Final
Completion, to results of subsequent tests and inspections, to minor deviations from
the Contract Documents correctable prior to Final Completion and to specific
qualifications expressed by the Architect/Engineer. The issuance of a Certificate for
Payment will further constitute a representation that the Contractor is entitled to
payment in the amount certified, subject to the Owner's approval. The issuance of a
Certificate for Payment is not a representation that the Architect/Engineer has:
made exhaustive or continuous on -site inspections to check the quality or
quantity of the Work;
ii. reviewed constriction means, methods, techniques, sequences or procedures;
iii. reviewed copies of requisitions received from Subcontractors and material
suppliers and other data requested by the Owner to substantiate the
Contractor's right to payment; or
iv. made examination to ascertain how or for what purpose the Contractor has
used money previously paid on account of the Contract Sum.
(b) Whenever the Application for Payment for Work done since the last previous Application
for Payment exceeds one hundred dollars ($100.00) in amount, Owner will pay a
percentage of the Application, less applicable retainage, to the Contractor within thirty
(30) days following Owner's receipt and approval of the Certificate for Payment certified
by the Architect/Engineer. The Application may include acceptable nonperishable
materials delivered to the Work or stored as provided for in Paragraph 3(d) and the
payment will be allowed on the net invoice value, less taxes and applicable retainage.
(c) The City is required to withhold retainage for public works contracts in which the total
contract price estimate at the time of execution is more than $400,000; however, this
requirement is typically applied by the City for all public works contracts in excess of
$50,000. The City may require varying percentage withholding amounts; however, the
City typically requires five percent. For retainage percentages in excess of five percent,
the City must deposit the retainage into an interest - bearing account and pay the interest
earned to the contractor on completion of the contract. The retainage will be withheld by
the Owner from each progress payment until final completion of the Work by the
Contractor, approval of final completion by the Architect/Engineer, and final acceptance
of the Work by the Owner. Unless otherwise required by state law, the retainage
percentage as specified above is based upon the original Contract Sum, and will not be
affected in the event the original Contract Sum is subsequently increased or decreased by
Change Order.
(d) No progress payments shall be made on contracts where performance and payment bonds
are not required or furnished. In such instances, payment for the Work performed will be
made upon final completion and acceptance by the Owner of all Work.
5. DECISIONS TO WITHHOLD CERTIFICATION
(a) The Architect/Engineer or the Owner may decide not to certify payment and may
withhold a Certificate for Payment in whole or in part, to the extent reasonably necessary
to protect the Owner's interest, if in the Architect/Engineer's or Owner's opinion the
representations to the Owner required cannot be made. If the Architect/Engineer or the
Owner is unable to certify payment in the amount of the Application, the
Architect/Engineer or the Owner will notify the Contractor as provided in Paragraph 4(a).
If the Contractor and Architect/Engineer or the Owner cannot agree on a revised amount,
the Architect/Engineer will promptly issue a Certificate for Payment for the amount for
which the Architect/Engineer is able to make the required representations to the Owner.
The Architect/Engineer or the Owner may also decide not to certify payment or, because
of subsequently discovered evidence or subsequent observations, may nullify the whole
or a part of a Certificate for Payment previously issued to such extent as may be
necessary, in the Architect/Engineer's or Owner's opinion, to protect the Owner from
loss because of:
(1) defective or nonconforming Work not remedied;
(2) third party claims filed or reasonable evidence indicating probable filing of such
claims;
(3) failure of the Contractor to make payments properly to Subcontractors or for labor,
materials, or equipment;
(4) reasonable evidence that the Work cannot be completed for the unpaid balance of the
Contract Sum;
(5) damage to the Owner or another contractor;
(6) reasonable evidence that the Work will not be completed within the Contract Time,
and that the unpaid balance would not be adequate to cover actual or liquidated
damages for the anticipated delay;
(7) persistent failure to carry out the Work in accordance with the Contract Documents;
or
(8) mathematical or other errors that are discovered in the Application for Payment.
(b) When each of the above reasons that existed for withholding certification are removed or
remedied, certification will be made for amounts previously withheld.
(c) The Owner may, at its option, offset any progress payment or final payment under the
Contract Documents against any debt (including taxes) lawfully due to the Owner from
the Contractor, regardless of whether the amount due arises pursuant to the terms of the
Contract Documents or otherwise and regardless of whether or not the debt due to the
Owner has been reduced to judgment by a court.
6. PROGRESS PAYMENTS
(a) After the Architect/Engineer has issued a Certificate for Payment, the Owner shall make
payment in the manner and within the time provided in the Contract Documents, and
shall so notify the Architect/Engineer. The Owner shall not be liable for interest on any
late or delayed progress payment or final payment caused by any claim or dispute, any
discrepancy in quantities, any failure to provide supporting documentation or other
information required with the Application for Payment or as a precondition to payment
under the Contract Documents, or due to any payment the Owner or the
Architect/Engineer has a right to withhold or not certify under the Contract Documents.
Notwithstanding the foregoing, the Owner may refuse to make payment on any
Certificate for Payment (including, without limitation, the final Certificate for Payment)
for any default under the Contract Documents, including but not limited to those defaults
set forth in Paragraph 5(a), Clauses (1) through (8). The Owner shall not be deemed in
default by reason of withholding payment while any Contractor default remains uncured.
(b) The Contractor shall promptly pay each Subcontractor, upon receipt of payment from the
Owner, out of the amount paid to the Contractor on account of each Subcontractor's
portion of the Work, the amount to which said Subcontractor is entitled, reflecting
percentages actually retained from payments to the Contractor on account of such
Subcontractors portion of the Work. The Contractor shall, by appropriate agreement with
each Subcontractor, require each Subcontractor to make payments to Sub - subcontractors
in similar manner.
(c) The Architect/Engineer will, on request, furnish to a Subcontractor, if practicable,
information regarding percentages of completion or amounts applied for by the
Contractor and action taken thereon by the Architect/Engineer and the Owner on account
of portions of the Work done by such Subcontractor.
(d) Neither the Owner nor the Architect/Engineer shall have an obligation to pay or to see to
the payment of money to a Subcontractor except as may otherwise be required by law.
That obligation belongs to the Contractor or, in the event of the Contractor's failure to
pay a Subcontractor, to the Surety on the Payment Bond.
(e) Payment to material suppliers shall be treated in a manner similar to that provided in
Paragraph 6 (b), (c), and (d).
(f) A Certificate for Payment, a progress payment, or partial or entire use or occupancy of
the Project by the Owner shall not constitute acceptance of Work not performed in
accordance with the Contract Documents.
7. SUBSTANTIAL COMPLETION
(a) The Date of Substantial Completion of the Work, or designated portion of the Work, is
the date certified by the Architect/Engineer when constriction is sufficiently completed
in accordance with the City Of Denton General Conditions For Building Constriction.
(a) the Contract Documents such that the Owner may beneficially occupy and use the Work,
or designated portions of the Work, for the purposes for which it is intended and only
trivial and insignificant items remain which do not affect the Work as a whole.
(b) When the Contractor considers that the Work, or the portion of the Work which the
Owner agrees to accept separately, is Substantially Complete, the Contractor shall
prepare and submit to the Architect/Engineer a comprehensive list of remaining items to
be completed or corrected. The Contractor shall proceed promptly to complete and
correct items on the list (hereinafter called the "punch list "). Failure to include an item on
the punch list does not alter the responsibility of the Contractor to complete all Work in
accordance with the Contract Documents. Upon receipt of the punch list, the
Architect/Engineer will make an inspection to determine whether the Work, or designated
portion of the Work, is Substantially Complete. If the Architect/Engineer's inspection
discloses any item, whether or not included on the punch list, which is not in accordance
with the requirements of the Contract Documents and which renders the Work inspected
not Substantially Complete the Contractor shall, before issuance of the Certificate of
Substantial Completion, complete or correct the item upon notification by the
Architect/Engineer. The Contractor shall then submit a request for another inspection by
the Architect/Engineer to determine Substantial Completion. When the Work or
designated portion of the Work is Substantially Complete, the Architect/Engineer will
prepare a Certificate of Substantial Completion which shall establish the date of
Substantial Completion, shall establish responsibilities of the Owner and the Contractor
for security, maintenance, heat, utilities, damage to the Work and insurance, and shall fix
the time within which the Contractor shall finish all items on the punch list
accompanying the Certificate.
(c) The Certificate of Substantial Completion shall be submitted to the Owner and the
Contractor for their written acceptance of responsibilities assigned to them in the
Certificate.
(d) Upon Substantial Completion of the Work or designated portion thereof and upon
application by the Contractor and certification by the Architect/Engineer, the Owner shall
make payment, reflecting adjustment in retainage, if any, for the Work, or portion of the
Work, as provided in the Contract Documents.
8. PARTIAL OCCUPANCY OR USE
(a) The Owner may occupy or use any completed or partially completed portion of the Work
at any stage when such portion is designated by separate Supplemental Agreement with
the Contractor, provided such occupancy or use is consented to by the Insurer and
authorized by public authorities having jurisdiction over the Work. Such partial
occupancy or use may commence whether or not the portion is Substantially Complete,
provided the Owner and Contractor have accepted in writing the responsibilities assigned
to each of them for payments, retainage if any, security, maintenance, heat, utilities,
damage to the Work and insurance, and have agreed in writing concerning the period for
correction of the Work and commencement of warranties required by the Contract
Documents. When the Contractor considers a portion Substantially Complete, the
Contractor shall prepare and submit a list to the Architect/Engineer as provided under
Paragraph 7(b). Consent of the Contractor to partial occupancy or use shall not be
unreasonably withheld.
(b) The stage of the progress of the Work shall be determined by written agreement between
the Owner and Contractor or, if no agreement is reached, by decision of the
Architect/Engineer.
(c) Immediately prior to such partial occupancy or use, the Owner, Contractor, and
Architect/Engineer shall jointly inspect the area to be occupied or portion of the Work to
be used in order to determine and record the condition of the Work.
(d) Unless otherwise agreed upon, partial occupancy or use of a portion or portions of the
Work shall not constitute acceptance of Work not complying with the requirements of the
Contract Documents.
9. FINAL COMPLETION AND FINAL PAYMENT
(a) Upon receipt of written notice that the Work is ready for final inspection and acceptance
and upon receipt of a final Application for Payment, the Architect/Engineer,
accompanied by the Owner's representative, will promptly make final inspection and,
when the Architect/Engineer finds the Work acceptable under the Contract Documents
and the Contract Documents fully performed, the Architect/Engineer will promptly issue
a final Certificate for Payment stating that to the best of the Architect/Engineer's
knowledge, information and belief, and on the basis of the Architect/Engineer's
observations and inspections, the Work has been completed in accordance with terms and
conditions of the Contract Documents and that the entire balance found to be due the
Contractor and noted in said final Certificate is due and payable. The
Architect/Engineer's final Certificate for Payment will constitute a further representation
that conditions listed in Paragraph 9(b) as a condition precedent to the Contractor's being
entitled to final payment have been fulfilled. Owner will normally make final payment
within thirty (30) days after Owner's receipt and approval of the final Certificate for
Payment. Warranties required by the Contract Documents shall commence on the date of
Substantial Completion of the Work, unless otherwise provided by separate agreement
between the Owner and the Contractor.
(b) Neither final payment nor any remaining retained percentage shall become due until the
Contractor submits to the Architect/Engineer:
(1) an affidavit that payrolls, bills for materials and equipment, and other indebtedness
connected with the Work for which the Owner or the Owner's property might be
responsible or encumbered (less amounts withheld by Owner) have been paid or
otherwise satisfied;
(2) a certificate evidencing that insurance required by the Contract Documents to remain
in force after final payment is currently in effect and will not be cancelled or allowed
to expire until at least thirty (30) days prior written notice has been given to the
Owner;
(3) a written statement that the Contractor knows of no substantial reason that the
insurance will not be renewable to cover the period required by the Contract
Documents;
(4) a consent of surety to final payment; and
(5) if required by the Owner, other data establishing payment or satisfaction of
obligations, such as receipts, releases and waivers of liens, claims, security interests
or encumbrances arising out of the Contract, to the extent and in such form as may be
designated by the Owner.
(c) As a precondition to final payment by the Owner under this Contract, the Contractor's
affidavit under Paragraph 9(b) Clause (1) shall state that the Contractor has paid each of
his subcontractors, laborers or materialmen in full for all labor and materials provided to
him for the Work under this Contract. In the event the Contractor has not paid each of his
subcontractors, laborers or materialmen in full, the Contractor shall state in the affidavit
the amount owed and the name of each subcontractor, laborer or materialmen to whom
such payment is owed. IN ANY EVENT, THE CONTRACTOR SHALL BE
REQUIRED TO EXECUTE THE OWNER'S STANDARD AFFIDAVIT OF FINAL
PAYMENT AND RELEASE AS A PRECONDITION TO RECEIPT OF FINAL
PAYMENT.
(d) If, after Substantial Completion of the Work, final completion of the Work is materially
delayed through no fault of the Contractor or by issuance of Change Orders affecting
final completion and the Architect/Engineer confirms the delay, the Owner shall, upon
application by the Contractor and certification by the Architect/Engineer, and without
terminating the Contract, make payment of the balance due for that portion of the Work
fully completed and accepted. If the remaining balance for Work not fully completed or
corrected is less than retainage stipulated in the Contract Documents, and if bonds have
been furnished, the written consent of surety to payment of the balance due for that
portion of the Work fully completed and accepted shall be submitted by the Contractor to
the Architect/Engineer prior to certification of payment. Payment shall be made under
terms and conditions governing final payment, except that it shall not constitute a waiver
of claims.
(e) The acceptance by the Contractor of the final payment shall operate as and shall be a
complete release of the Owner from all claims or liabilities under the Contract, for
anything done or furnished or relating to the Work or the Project, or for any act or neglect
of the Owner relating to or connected with the Work or the Project.
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT ( "Agreement ") dated as of this day of
, 2013, is made and entered into by and between O'Reilly Hotel Partners — Denton, LLC
( "Owner "), and O'Reilly Hospitality Management, LLC, a Missouri limited liability company
( "Manager ")
WITNESSETH:
WHEREAS, Owner has or will have a leasehold interest in real property located at the
University of North Texas campus in Denton, Denton County, Texas, as more particularly
described on Exhibit "A" attached hereto and incorporated herein by reference, which property
consists of real property, and to be constricted improvements including a 318 room Embassy
Suites hotel building, a lease of the City of Denton Convention Center, food and beverage
operations, a Houlihan's restaurant, and related improvements, facilities, furniture, furnishings,
fixtures, equipment and supplies and other personal property (the "Hotel ");
WHEREAS, Manager is in the business of hotel, restaurant, conference and convention
management and has expertise and experience managing hotels, restaurants, conference and
convention facilities;
WHEREAS, Owner desires to engage Manager to manage and operate the Hotel for the
account of Owner, and Manager desires to accept such engagement, all upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
Appointment of Manager
Page I of 34 Initials:
1.1 Appointment. Owner hereby appoints and engages Manager to manage and to
operate the Hotel during the Operating Term hereof (as hereinafter defined), pursuant to the
terms and provisions of this Agreement, and Manager hereby accepts such appointment and
engagement and agrees to so manage and operate the Hotel. The performance of all activities by
Manager hereunder shall be as an independent contractor and not as an agent of Owner.
1.2 Delegation of Authority. The comprehensive operations of the Hotel shall be
under the exclusive supervision, direction and control of Manager, and, except as otherwise
specifically provided in this Agreement, Manager shall be responsible for the operation,
which includes, but is not limited to, promotion, marketing, policy making, management and
maintenance of the Hotel. Except as otherwise specifically provided in this Agreement,
Manager shall be responsible for, and have limited power and authority in, all matters relating
to the operation of the Hotel including, without limitation, specification, pricing, rental of rooms
and meeting space, food and beverage services, complimentary policies, hiring and
employment policies, credit policies; the leasing of premises within the Hotel, the receipt,
holding and disbursement of funds; maintenance of bank accounts; procurement of inventories,
supplies and services; promotion, sales, marketing and publicity; maintenance of operating
licenses (in Manager's name and /or Owner's name as required by local authority);
maintenance of franchise licenses and all actions required to keep the Hotel and Owner in
good standing with any hotel brand that the Hotel is affiliated with; all maintenance, repairs
and cleaning of all improvements and equipment; and, generally, all activities which
Manager may reasonably determine to be necessary for the operation of the Hotel.
13 Operation for Benefit of Owner. Manager shall operate the Hotel, and disburse
such funds of Owner under Manager's control, for the benefit of Owner, as determined
Page 2 of 34 Initials:
appropriate in good faith by Manager and based upon consultation with Owner. Manager shall
have the right to retain Working Capital as it deems appropriate for the proper operations of the
Hotel, as set forth below.
ARTICLE II
Definitions
2.1 Terms Defined Herein. Such terms as "Owner," "Manager" and "Hotel" and all
other terms not specifically defined in this Article II, shall have the meanings attributed thereto in
the applicable portions of this Agreement, unless the context otherwise requires.
2.2 Terms Defined in this Article. As used herein, the following terms shall have the
meanings assigned to them herein, unless the context otherwise requires:
(a) "Building" shall mean and refer to any or all buildings and fixtures
therein and all other improvements to the Property on which such improvements are located.
(b) "Capital Improvements" shall mean (i) routine capital replacements of, or
additions to, FF &E (as defined in this Section 2.2) and (ii) special projects designed to maintain
the Hotel in good condition in accordance with the standards renovation of guest room areas,
public space, food and beverage facilities, which projects generally comprise of non - routine
replacements of or additions to FF &E, including revisions and alterations to the Improvements.
Most of the expenditures for such special projects will be capitalized under generally accepted
accounting principles, however, a portion of such expenditures may be currently expensed, such
as the purchase of smaller items of FF &E, or expenditures which are incidental to the overall
project but which are properly chargeable to property operations and maintenance.
(c) "Effective Date" shall mean and refer to the date and time as of
which this Agreement shall become effective, upon the last execution date of this Agreement as
Page 3 of 34 Initials:
noted on the signature lines below.
(d) "Equipment Leases" shall mean and refer to (i) any presently existing
leases or rental agreements for Operating Supplies or FF &E used in the Hotel, and any
modifications or renewals thereof made subsequent to the date of this Agreement, and (ii) any
similar other equipment leases or rental agreements made subsequent to the date of this
Agreement, with the written consent of Owner.
(e) "Extended Term" shall mean and refer to the period commencing on the
day after the Initial Term and extending annually thereafter until notice is given by Owner as
provided herein in Article 11.
December 31).
(t� "Fiscal Year" shall mean and refer to the calendar year (i.e. January 1 to
(g) "Franchise" and "Franchisor" shall mean and refer to the company,
identity, organization or authority that owns the rights and trade practices of Hotel's brand
affiliation and to which standards the Manager agrees to operate the Hotel.
(h) "Fractional Year" shall mean and refer to, if this Agreement shall
terminate upon any date other than the last day of the Fiscal Year, the period from the first day
of the Fiscal Year during which this Agreement terminates to and including the date of such
termination.
(1) "FF &E" shall mean and refer to fixtures, furniture and furnishings
of rooms, public areas and suites, office furniture and equipment, signs, carpets, televisions,
computers and other electrical and electronic equipment, any vehicles and such other fixtures,
furniture, furnishings and equipment (other than Operating Supplies) as are customarily used
in the operation of the Hotel.
Page 4 of 34 Initials:
(j) "Initial Term" shall mean and refer to that period commencing on the
Effective Date and continuing for forty-eight (48) months after the Hotel opens as an Embassy
Suites and Houlihan's Restaurant & Bar.
(k) "Management Fee" shall mean and refer to the amount of basic
compensation, which shall be payable to Manager for services hereunder that are performed by
its corporate executive personnel not normally located at the Hotel, and for its otherwise non-
reimbursable expenses incurred hereunder, which such services shall include customary
executive supervision, planning, guidance and policy making related to the usual and normal
day -to -day operations of the Hotel, subject to Section 43.
(1) "Monthly Accounting Period" shall mean and refer to the accounting
period of Manager, currently being a calendar month.
(m) "Mortgage" shall mean and refer to (i) any presently existing mortgage,
deed of trust, security agreement, loan agreement, lease or other instrument entered into in
connection with the creation of a lien, encumbrance or security interest in or upon any of the
Real Property or Improvements comprising the Hotel or any of the Equipment Leases and any
modification or renewal thereof made subsequent to the date of this Agreement, and (ii) any
mortgage, deed of trust, security agreement, loan agreement, lease or other instrument entered
into in connection with the creation of a lien, encumbrance or security interest in or upon any of
the Real Property or Improvements comprising the Hotel made subsequent to the date of this
Agreement.
(n) "Mortgage Indebtedness" shall mean and refer to the principal
indebtedness, interest and other charges required to be paid by Owner, which are otherwise
secured, under or pursuant to any Mortgage.
Page 5 of 34 Initials:
(o) "Mortgage Instruments" shall mean and refer to those instruments or
documents evidencing or securing a Mortgage.
(p) "NOV shall mean and refer to Total Revenues less expenses relating to
the operation of the Hotel (including the Management Fee), determined under generally
accepted accounting principles, but not including depreciation, amortization, debt service or
capital improvement reserves.
(c� "Operating Account" shall mean the bank account that contains
Working Capital used for operating the hotel.
(r) "Operating Budget" shall mean an annual twelve - period written budget
containing, at a minimum, expenses associated with the operation of the hotel over the term of
this Agreement.
(s) "Operating Supplies" shall mean and refer to chinaware, glassware,
silverware, disposables, utensils, vacuum cleaners, carts, linens, office supplies, cleaning
supplies, uniforms, maintenance tools and supplies, guestroom supplies and amenities, food and
beverages, advertising, software and licenses, regulatory licenses, contracted services and other
supplies as are utilized or consumed in the operation of the Hotel and other items of a like or
similar nature used in the operation of the Hotel.
(t) "Operating Term" shall mean and refer to the Initial Term, together with
the Extended Term and all extensions thereof in accordance with the provisions of this
Agreement.
(u) "PIP" shall mean and refer to any Property Improvement Plans that are
required by the Franchisor, Lender or desired by Owner for the capital physical improvement of
the Hotel.
Page 6 of 34 Initials:
(tir) "Total Revenues" shall mean and refer to the total of all rents, revenues,
income and receipts (less any refunds actually paid to third party customers) of every kind
derived directly or indirectly from the operation of the Hotel and all departments and parts
thereof, including, without limitation, income (from both cash and credit transactions), before
commissions and discounts for prompt or cash payments, from the rental of rooms, banquet or
other facilities, stores, offices, or exhibit or sales space of every kind; license, lease and
concession fees and rentals (but not including gross receipts of licensees, lessees and
concessionaires); vending and game machines; health and private club membership fees;
food and beverage (including alcoholic beverage) sales; wholesale and retail sales of
merchandise; service charges; and proceeds, if any, from business interruption or other loss
of income insurance. "Total Revenues" shall not include federal, state or local excise, room,
sales or use taxes or similar impositions collected directly from patrons or guests or included as
part of the sales price of any goods or services and required to be remitted to the appropriate
taxing authority.
(w) "Uniform System of Accounts" shall mean and refer to the Uniform
System of Accounts for Hotels, [Tenth Revised Edition (2007)], as published by the Hotel
Association of New York City, Inc., with such modifications thereto as shall be made by
Manager with the prior written approval of Owner.
(Y) "Working Capital" for the Hotel shall mean and refer to the funds that are
necessary for pre- opening expenses and for the ongoing operation of the Hotel, including,
without limitation, the maintenance of the change and petty cash funds and the Operating
Account and funds that are required for pre- opening staff recruitment, payroll and training costs,
to purchase Operating Supplies and to ensure timely payment of payroll, trade payables, taxes,
Page 7 of 34 Initials:
insurance premiums and deductibles, non - insured liabilities, and amounts due Equipment
Leases; provided, however such Working Capital shall not include funds for any accrued
liabilities.
ARTICLE III
Records and Licenses
3.1 Access by Manager to Books and Records. Owner shall use its best efforts to
deliver to Manager, or to provide Manager with adequate access to, at all times after the date of
this Agreement during the Operating Term, copies of relevant books and records regarding the
Hotel which may be in the possession or under the control of Owner.
3.2 Transfer of Licenses to Manager. Owner shall use its best efforts to provide
Manager true, correct and complete copies of all permits, licenses and other authorizations of
governmental authorities with respect to the operation of the Hotel. Manager shall, to the extent
required by law or applicable regulations, and at the expense of Owner, use its best efforts to
assist Owner in applying for any of the permits, licenses and other governmental authorizations,
which are held or issued in the name of Owner.
ARTICLE IV
Compensation and Reimbursement of Manager
4.1 Initial Startup Fee. This fee shall be waived by Manager as it will be covered by a
development fee paid by Owner to Manager pursuant to that certain DevelopmentAgreement that
will be executed by the parties the same date herewith.
4.2 Pre - Opening Fee. Shall be waived by Manager pursuant to previous paragraph of
this Agreement.
Page 8 of 34 Initials:
4.3 Management Fee. Effective upon the date at which the Hotel opens as an
Embassy Suites, as its basic compensation hereunder, Manager shall receive a Management
Fee with respect to the Hotel as specified in Section 2.2 hereof equal to four percent (4 %) of
Total Revenues. The Management Fee shall be determined for each Monthly Accounting
Period and shall be payable by Manager to itself out of the Operating Account for the Hotel
prior to any distributions from such account to Owner.
4.4. Revenue Management Fee. A Revenue Management Fee over and above the
Management Fee will be charged monthly and will be in the amount of the salary and ancillary
employment benefits of a dedicated OHM corporate revenue manager, prorated and apportioned
by room count between all hotels that the revenue manager is engaged to assist, with such fee to be
limited to a total amount of $20,000 annually.
4.5 Capital Improvements Fee. Manager shall be entitled to a fee for
specification and procurement of any PIP or other capital improvements as defined in
Section 2.2 in the amount of ten percent (5 %) of the total cost of such improvements,
payable monthly by Manager to itself out of the Operating Account for the Hotel prior to any
distributions to Owner from such account.
4.6 Manager's Loaned Employee Expense Reimbursement. Manager shall be
entitled to reimbursement from the Operating Account of the Hotel for all wages,
salaries, payroll costs, fringe benefits, employer taxes, reasonable transfer costs, and other
similar employment- related expenses reasonably incurred by Manager in connection with
providing extraordinary services hereunder of its employees from other locations, corporate
staff or Manager's sales and marketing personnel while engaged in the direct operation or
assistance of the Hotel and actively and exclusively engaged on an extended limited -time or
Page 9 of 34 Initials:
part time basis in the direct operation of the Hotel in accordance with the terms and conditions
of this Agreement.
4.7 Travel & Other Expenses Reimbursement. Manager shall be reimbursed for
reasonable out -of pocket travel (mileage, rental car expenses, reasonable commercial airline
and not chartered or private air travel) related costs incurred while directly involved with the
management of the Hotel, including costs associated with attending Franchise sponsored
conferences, in an amount not to exceed $10,000 annually.
4.8 Extraordinary Services. Notwithstanding any other provision in this Agreement
to the contrary, Manager shall not be obligated under this Agreement (not referencing the
Development Agreement executed between the parties) to provide any services of its
constriction, capital project management, architectural, engineering, legal or similar staff or
services, or any other service of an extraordinary or non - routine nature, to or on behalf of Owner
or the Hotel. Any such services as may be requested by Owner and provided by Manager
shall be upon such terms and provisions as may be agreed upon in writing by Manager and
Owner at the time of such services.
ARTICLE V
Bookkeeping, Bank Accounts, Reserves, Reports and Budgets
5.1 Books and Records. Manager agrees to prepare and keep, or cause to be prepared
and kept, books of account and other records for the Hotel in accordance with the Uniform
System of Accounts and Manager's standard accounting practices, which shall be consistently
applied. Owner may, through its duly appointed agents and representatives, inspect such books
and records, at all reasonable times.
5.2 Operating Accounts.
Page 10 of 34 Initials:
(a) Manager shall collect all rents and other charges due from tenants,
occupants and guests of the Hotel with respect to the operations of the Hotel. Such revenues and
funds of the Hotel shall be kept separate and apart from other operations of Manager and shall be
deposited into a segregated account (the "Operating Account "). Manager shall designate the
persons authorized, by manual or facsimile signature, to withdraw funds from the Operating
Account, and no funds shall be permitted to be withdrawn without the manual or facsimile
signature of at least one of the persons so designated by Manager. Manager will be responsible
for the application and disbursement of such monies in accordance with the terms of this
Agreement. Reasonable change and petty cash funds drawn from the Operating Account shall
be maintained by and under the control of Manager.
(b) Owner agrees with Manager to provide Working Capital sufficient to
insure the uninterrupted and efficient operation of the Hotel, including sufficient funds to pay
current liabilities as they fall due (including all obligations due and owing under this
Agreement) and to replace necessary operating inventories as they are consumed. Manager shall
account separately for the total of such working capital, which shall constitute the Working
Capital balance.
(c) Manager shall pay from and to the extent of the balance of the
Operating Account all expenses and other payments relating to the operation of the Hotel as and
when the same shall be due and payable; provided, however, that Manager may withhold
payment of any such expense, which is then being contested by Manager in good faith. Manager
shall disburse from the Operating Account to such account as Owner shall designate any amount
at the end of each Monthly Accounting Period in excess of the Working Capital balance.
5.3 Cost of Improvements. In the event required by a PIP or a Renovation
Page 11 of 34 Initials:
Improvement Program, or in the event that Owner shall otherwise reasonably determine that
replacements of, or additions to, FF &E or other Capital improvements are reasonably necessary or
desirable to maintain the Hotel, Owner shall deposit an amount equal to the costs thereof in the
Operating Account in the event that such funds are not available in Working Capital. Manager
shall use a 5 year capital planning program to ensure that all significant improvements or PIPS
are properly budgeted and planned for to the extent reasonably possible and will use funds
derived from Hotel operating profit for such improvements to the greatest extent possible.
5.4 Source of Disbursements. All payments and disbursements permitted or
required to be made by Manager hereunder shall be made from the Operating Account or
petty cash funds. Manager shall not be permitted or required to make any payments or
disbursements except out of such funds, and Manager shall not be required to incur any
liability or obligation for Owner's account without assurances that the funds necessary for the
discharge thereof will be provided by the Owner.
5.5 Financial Statements and Reports. Manager, within thirty (30) days after the
end of each Monthly Accounting Period, shall deliver to Owner (i) a statement of income and
expenses and a balance sheet, showing the results of operation for the Hotel for such period and
for the portion of the Fiscal Year or Fractional Year ending with such period and containing a
computation of Total Revenues and NOI, and (ii) a statement of the balance of the Operating
Account as of the end of such period.
5.6 Audits.
(a) Owner shall have the right at Owner's expense to have the books of
account and financial records and statements of the Hotel audited or otherwise examined at any
time by an independent firm of certified public accountants selected by Owner. Manager
Page 12 of 34 Initials:
agrees to cooperate with and assist Owner and such accountants in all reasonable respects
with such audit or examination.
(b) If a dispute should arise with respect to the amount or computation of
Total Revenues or NOI, and if Owner and Manager are unable to agree thereon, then the matter
in dispute shall be submitted for binding decision by an independent certified public
accountant of recognized standing as may be jointly selected by the parties hereto. If Owner
and Manager shall be unable to agree on the selection of a certified public accounting firm for
this purpose within thirty (30) days after their failure to agree upon the matter in dispute, then each
parry shall select an independent certified public accountant of recognized standing and the two
appointed shall select the independent certified public accountant of recognized standing
who shall determine the dispute.
ARTICLE VI
Insurance, Taxes and Repairs
6.1 Insurance Procured by Owner. Owner, through the actions of Manager if requested
by Owner, agrees to maintain at all times during the Operating Term, with responsible insurance
companies, insurance as follows with respect to the Hotel at Owner's cost:
(a) General liability and property damage insurance (including insurance
against theft of or damage to tenants' and guests' property in the Hotel), in such amounts as
Owner shall deem necessary, but not less than the following:
person;
(i) $1,000,000/2,000,000 for bodily injury or death to any one person;
(ii) $1,000,000/$2,000,000 for bodily injury or death to more than one
Page 13 of 34 Initials:
(iii) A reasonable amount to insure damage to Property;
(iv) At least $10,000,000 Umbrella Coverage on a per occurrence
basis; or limits as specified by the Franchisor, if applicable, whichever is higher;
(v) Fire insurance and insurance against such other hazards
ordinarily included by an all -risk form of extended coverage endorsement on the Buildings,
Operating Supplies, Furniture, Furnishings and Equipment in an amount equal to at least one
hundred percent (100 %) of the actual replacement cost (without deduction for depreciation)
thereof, and all alterations, substitutions and replacements therefore, and bearing a standard
noncontributory mortgagee loss payable endorsement in favor of the holders of any Mortgage on
the Hotel and providing, if reasonably available, for waiver of subrogation against such holder and
the debt and security of such Mortgage in the event the Hotel is restored;
(vi) Use and occupancy (business interruption) insurance against
loss or damage by fire and the perils customarily covered by an all -risk form of extended
coverage endorsement including the contingencies insured pursuant to paragraph (b) above;
(vii) Any insurance required by the applicable hotel or restaurant
franchisor for the Property.
Manager shall, at Owner's request, obtain within a reasonable amount of time, quotes or
bids with respect to such insurance coverage for the purpose of allowing Owner the opportunity
to acquire comparable coverage in Owner's name at a cost less than that secured by Owner.
All liability insurance policies contemplated by this section shall name Manager as an
additional named insured. All policies shall further provide for waiver of rights of
subrogation, if any, as between Owner and Manager and their insurance carriers, and shall further
Page 14 of 34 Initials:
provide that they shall not be canceled or amended unless the insurer shall have notified each of
the named insured entities in writing at least thirty (30) days prior to the cancellation or
modification of such insurance. Owner shall at the commencement of this Agreement and
upon reasonable request thereafter provide Manager a certificate of insurance for each policy
contemplated by this section reflecting Manager as an additional named insured. Owner shall
indemnify and hold harmless Manager for all claims, demands, losses, expenses and damages,
including attorney's fees, incurred by Manager due to Owner's failure to properly designate
Manager as an additional named insured on all liability insurance policies.
Provided the insurance hereinabove provided for is maintained and in force at the time of
damage or loss, each of the parties hereto waives any and all rights of recover, claims, actions, or
causes of action, against the other party, its agents, officers and employees, for any loss or
damage that may occur to the Buildings, Operating Supplies, Furniture, Furnishings and
Equipment by reason of fire, or any other insured peril, regardless of cause or origin, including
negligence of the parties hereto, their respective agents, officers and employees reserving,
however, any right with respect to uninsured or underinsured loss.
6.2 Insurance Procured by Manager: Manager agrees to maintain at all times during
the Operating Term, with responsible insurance companies, insurance as follows with regard to
the Hotel, the cost of which shall be reimbursed from the Property:
(a) Such worker's compensation, employer's liability or similar insurance as
may be required by law, or such greater amounts which Manager shall deem advisable but
no less than $1,000,000/$2,000,000;
(b) A general liability insurance policy in the amount of at least $1,000,000
Page 15 of 34 Initials:
per person or $2,000,000 per occurrence for bodily injury or death;
(c) Such other insurance against such other operation risks as Manager and
Owner deem advisable to insure against, including, without limitation, auto liability insurance,
liquor liability insurance and fidelity bonds;
(d) Errors & Omissions or Professional Liability Coverage in the amount of
at least $1,000,000.
6.3 Taxes. All real estate and ad valorem property taxes, assessments and similar
charges on or relating to the Hotel (or any part thereat) during the Operating Term shall be paid
by Manager out of the Operating Account prior to the time any fine, penalty or interest is added
thereto or lien is placed thereon, unless payment thereof is in good faith and through appropriate
legal process being contested and enforcement thereof is stayed. Owner shall have the right to
instruct Manager in writing to periodically pay to Owner or any mortgagee reasonable amounts
to be held in reserve by the payee for subsequent payment of such taxes, assessments or similar
charges when due and payable. Owner agrees to forward to Manager promptly upon receipt
copies of any and all notices, statements or bills received from any governmental authority
regarding such taxes, assessments or similar charges.
6.4 Repairs and Maintenance. Manager agrees to keep and maintain the Hotel in
good condition and state of repair (ordinary wear and tear and damage by fire or other
casualty excepted). Manager shall make or cause to be made all repairs ($150,000 or less),
maintenance and alterations as it deems necessary or appropriate from time to time and shall
pay for the same out of the Operating Account. If any major repairs, maintenance or
alterations shall be necessary or appropriate (whether by reason of any violation of any law,
Page 16 of 34 Initials:
regulation or order of any governmental authority or for the continued safe and orderly
operation of the Hotel or otherwise) Manager must first obtain written consent from the
Owner prior to undertaking any such major repairs (more than $150,000). Once written
consent is obtained, Owner shall cooperate with Manager in making the same and shall
promptly provide all funds necessary to pay for such repairs.
ARTICLE VII
Mortgages and Equipment Leases
7.1 Subordination. Manager agrees with Owner that all of the rights and interests of
Manager under this Agreement shall be subject and subordinate to any Mortgage made prior or
subsequent to the date of this Agreement.
7.2 Satisfaction of Obligations. Manager agrees to pay, when due, all Mortgage
Indebtedness due under Equipment Leases, only from and to the extent of the Operating
Account, and to comply with all other covenants and obligations contained in the Mortgage
Instruments and Equipment Leases, but only to the extent that compliance therewith is within the
control of Manager by reason of its management and operation of the Hotel and its agreements
with Owner contained herein. Neither this nor any other provision of this Agreement shall be
deemed to require payment by Manager out of its own funds of any operating or other expense
incurred in the operation of the Hotel.
ARTICLE VIII
Licenses, Permits and License Agreements
8.1 License and Permits. Manager shall maintain (in Manager's name and /or
Owner's name if required by local authority pursuant to Section 3.2) all licenses and permits
Page 17 of 34 Initials:
required for the operation of the Hotel, including all licenses for the sale of alcoholic beverages
at any restaurants, bars, lounges in the Hotel and in any banquet, meeting and guest rooms
situated at the Hotel.
ARTICLE IX
Force Maieure and Condemnation
9.1 Damage by Fire or Other Casualty.
(a) Owner agrees, subject to the provision of Subsections (b) and (c) below,
to repair, restore, rebuild or replace any damage to, or impairment or destruction of the Building,
Operating Supplies or FF &E, or to any portion thereof, resulting during the Operating Term
from fire or other casualty to the extent Owner reasonably determines necessary to continue to
operate the Hotel
(b) If the Building, Operating Supplies or FF &E, shall be destroyed or
substantially destroyed during the Operating Term by fire or other casualty, and the cost of
repairing, restoring, rebuilding and replacing the same shall exceed $10,000,000, Owner shall
have the right and option, upon notice served upon Manager within sixty (60) days after such
fire or other casualty or within fourteen (14) days after ascertaining the amount of such proceeds of
insurance (if later), to terminate this Agreement.
9.2 Condemnation.
(a) If the whole of the Building or the Real Property shall be taken or
condemned by reason of any eminent domain, condemnation, compulsory acquisition, or like
proceeding by any competent authority for any public or quasi - public use or purpose, or if such a
portion thereof shall be taken or condemned as to make it imprudent or unreasonable (as
Page 18 of 34 Initials:
determined by Owner based upon the sole and absolute discretion of Owner), to use the
remaining portion as a hotel of the type and class immediately preceding such taking or
condemnation, then in either of such events, this Agreement shall terminate as of the date on
which Manager shall be required to give up control of the Hotel or such portion thereof by
reason of such taking or condemnation. Owner shall have the right and authority to defend
against any such taking or condemnation, including the right to challenge the right to take, or
to sue for or appeal from any such award, and, in the exercise of such right, to compromise
and settle any such action or award, on such terms as it may deem advisable. The entire
amount of any award shall belong solely to Owner.
(b) If only a portion of the Building or the Real Property shall be taken or
condemned, and the taking or condemnation of such portion does not make it unreasonable or
imprudent (as determined by Owner based upon the sole and absolute discretion of Owner), to
operate the remainder as a hotel of the type and class immediately preceding such taking or
condemnation, this Agreement shall not terminate with respect to the Hotel, but out of the award
to Owner, and subject to the rights of the holder of any Mortgage encumbering the Hotel, so
much thereof as shall be reasonably necessary to repair any damage to the Building or any part
thereof, or to alter or modify the Building or any part thereof, so as to render the Building a
complete and satisfactory architectural unit as a hotel of the same type and class immediately
preceding the taking or condemnation, shall be applied by the Owner for that purpose any
amount remaining shall belong solely to the Owner.
9.3 Provisions Subject to Any Mortgage. The provisions of this Article are
subject to the provisions of any Mortgage encumbering the Hotel.
Page 19 of 34 Initials:
ARTICLE X
Operating Budget and Capital Expenditures
10.1 Operating Budget. On or before December 15th of each year, Manager shall
submit to Owner an Operating Budget and an updated 5 year capital planning budget for the
Hotel for the upcoming calendar year (For the period January 1 thru December 31). Manager
shall exercise its best efforts to prepare and submit the foregoing budgets, which are as
accurate as possible. If the Effective Date is after November 15th, Manager shall exercise its best
effort to submit an Operating Budget in a timely manner to Owner for the remaining partial or the
next full year, whichever is nearest to the Effective Date.
103. Limitation on Capital Expenses. Manager shall make no capital repair or
expense expenditure for any item in excess of One Hundred Fifty Thousand Dollars ($150,000)
without Owner's prior written authorization, except in cases where emergency repairs are
necessary in order to protect assets, guest or staff safety or business relations. Owner will be
notified regarding all significant capital repairs prior to them occurring and shall have an
opportunity to question and object to such repairs.
ARTICLE XI
Term and Termination
11.1 Term. This Agreement shall remain in effect until expiration of the Initial Term.
Thereafter, the Extended Term shall remain in effect unless Manager or Owner give at least 180
days written notice of cancellation of this Agreement. If Owner cancels this Agreement for any
reason during the Initial Term other than according to the conditions and procedures
described in Article XI, Section 11.2 and 113, Owner shall pay Manager a termination fee for
Page 20 of 34 Initials:
the remainder of the Initial Term. The termination fee shall be calculated by taking the average
monthly fee earned over the previous 12 months of the contract and extending it over the
remaining months left in the Initial Term, but not less than the monthly minimum Management
Fee as described in Article IV, and shall be payable by Manager to itself out of the Operating
Account for the Hotel prior to any distributions from such account to Owner.
11.2 Termination Events.
(a) If at any time, or from time to time, during the Operating Term any of the
following events shall occur and be continuing beyond the periods of time hereinafter specified,
each such event shall be deemed to constitute an "Event of Manager's Default" for purposes of
Section 113 hereof:
(i) Manager shall fail to perform or observe any material term or
condition in this Agreement and Manager shall not cure such failure within sixty (60) days after
written notice from Owner to Manager, or if the deficiency or failure is of a nature that cannot be
cured within sixty (60) days, fail to present a plan to cure such failure within sixty (60) days after
written notice from Owner to Manager thereof and promptly and diligently complete the curing
of the same; or
(ii) Manager shall have a petition filed against it under the United
States Bankruptcy Code, now or hereafter enacted, and such proceeding is not dismissed within
ninety (90) days after notice of such default by Owner to Manager; or Manager shall voluntarily
file a petition under such United States Bankruptcy Code, now or hereafter enacted; or
(iii) Manager's interest under this Agreement shall be taken on
execution of a judgment or by other process of law.
Page 21 of 34 Initials:
(b) If at any time, or from time to time, during the Operating Term
the following event shall occur and be continuing beyond the period of time hereinafter
specified, such event shall be deemed to constitute an "Event of Owner's Default" for purposes
of Section 11.4 hereof: Owner shall fail to perform or observe any material term or condition of
this Agreement (including, without limitation, any failure of Owner to deposit any funds
required to be deposited hereunder or to cooperate with Manager in making or paying for any
necessary repairs required pursuant to this Agreement) within sixty (60) days after written
notice from Owner to Manager, or if the deficiency or failure is of a nature that cannot be cure
within sixty (60) days, fail to present a plan to cure such failure within sixty (60) days after
written notice from, and promptly and diligently complete the curing of the same.
113 Termination by Owner. Owner shall have the right to cancel and terminate this
Agreement by written notice to Manager, in the event that and whenever an Event of Manager's
Default shall have proved to have occurred and have proved to be continuing beyond any period
during which Manager is given the right to cure the same, in which event this Agreement and all
right, title and interest of Manager hereunder (except for amounts as described in Article IV, if
any, due Manager hereunder with respect to periods prior to the effective date of such
termination) shall expire and terminate thirty (30) days after the date such notice is given by
Owner, as fully and completely as if that date were the date herein specifically fixed for the
expiration of the Operating Term.
11.4 Termination by Manager. Manager shall have the right to cancel and terminate
this Agreement, in addition to any other rights or remedies which it may have, by written notice
to Owner, in the event that and whenever an Event of Owner's Default shall have proved to
Page 22 of 34 Initials:
occurred and have proved to be continuing beyond any period during which Owner is given the
right to cure the same, in which event this Agreement shall terminate thirty (30) days after the
date such notice is given by Manager, as fully and completely as if that date were the date herein
specifically fixed for the expiration of the Operating Term. In the event Manager so terminates
this Agreement, Manager shall be entitled, in addition to any other rights or remedies which it
may have, to immediate payment from Owner of Fees and Reimbursements as determined by
Article IV.
11.5 Surrender of Hotel. Upon the expiration or earlier termination of this Agreement
with respect to the Hotel, Manager agrees to surrender to Owner the Hotel, including all
replacements of and additions to the related facilities, in good condition and repair (ordinary
wear and tear and damage by fire or other casualty excepted), and to deliver to Owner all funds
in the Operating Account and change and petty cash funds (less any amounts still remaining due
to Manager hereunder), and, upon prompt completion of all accounting functions with respect
thereto, all books and records pertaining to the Hotel. After the delivery of such funds, Owner
shall pay directly all unpaid expenses incurred hereunder by Manager in good faith prior to such
termination. Manager agrees to take any and all actions necessary or appropriate for the transfer
of the management of the Hotel to the successor manager.
ARTICLE XII
Representations and Warranties
12.1 Representations and Warranties by Owner. Owner represents, warrants and
agrees as follows:
(a) Owner is a limited liability company, duly organized and validly
Page 23 of 34 Initials:
existing under the laws of the State of Missouri;
(b) Owner has complete and unrestricted power to enter into, execute, deliver
and perform this Agreement, and this Agreement constitutes the valid and binding obligation of
Owner.
12.2 Representations and Warranties by Manager. Manager represents warrants and
agrees as follows:
(a) Manager is a Missouri limited liability company duly organized, and
validly existing in good standing under the laws of Missouri and authorized to conduct business
in the State of Missouri;
(b) Manager has the corporate power to own and /or manage hotel,
restaurant, convention, conference and meeting properties, including the Hotel, and to carry
on its business as and where such business is now conducted; and
(c) Manager has complete and unrestricted power to enter into,
execute, deliver and perform this Agreement, and this Agreement constitutes the valid and
binding obligation of Manager.
ARTICLE XIII
Hotel Employees
13.1 Hotel Staff. Manager shall provide staff to operate the Hotel in accordance with
the provisions of this Agreement and to provide all services and conduct all activities, which are
customary and usual to such operations. During the Operating Term, all members of the Hotel
staff shall be employees of Manager and not of Owner and shall be under the sole supervision,
direction and control of Manager.
Page 24 of 34 Initials:
13.2 Employment Policies. Manager shall have sole and absolute discretion in all
employment policies and decisions with respect to the Hotel employees, including, without
limitation, hiring, training, directing, supervising, disciplining, terminating, transferring,
promoting and compensating such employees. Owner shall provide input and suggestions
regarding the hiring and retention of any key employees of the Hotel including General Manager,
Director of Sales, Director of Catering or Chief Engineer.
133 Reimbursement of Employee Costs. Manager shall be entitled to
reimbursement from the Operating Account of the Hotel for all wages, salaries, payroll costs,
fringe benefits, employer taxes, and other employment related expenses incurred by
Manager in connection with providing staff to operate the Hotel, including, without
limitation, deductibles or other out of pocket expenses Manager is required to pay in connection
with the defense or resolution of claims or disputes involving misconduct of any kind or nature
by any member of the staff of the Hotel, whether or not said claim or dispute is covered by
insurance.
ARTICLE XIV
Privileges of Owner
14.1 Use of Hotel Facilities. Owner shall have the right to designate to Manager in
writing a limited number of authorized representatives (not to exceed two (2) designated
individuals at any one time) who shall have the authority to authorize complimentary room,
food and beverage services and other amenities at the Hotel for persons designated by the authorized
representative as such need may arise.
14.2 Access to Premises and Books and Records. Owner and its representatives, and
Page 25 of 34 Initials:
any prospective purchaser of the Hotel reasonably believed by Owner to have the interest and
ability to purchase the Hotel, shall have the right to free access to the Hotel and all of its facilities
and to the books of accounts and the records kept by the Manager for the Hotel, at all reasonable
times, for the purpose of inspecting the same. Manager shall not interfere or seek to interfere
with the marketing for sale or the sale of the Hotel and shall fully cooperate with Owner and any
such prospective purchaser in providing the necessary information and documents relating to the
Hotel for the sale thereof and in allowing access to the Hotel and its facilities and to the books
and records relating to the Hotel.
143 Owner's Comments and Recommendations. Except for emergency situations, all
concerns, comments, questions or recommendations, which Owner may have during any visits to
the facilities or at any other time regarding the condition or operation of the Hotel, shall be
directed only to Manager and not to any Hotel employees. Owner and its representatives
shall not do or say anything to any Hotel employee which would cause any undermining or
derogation of the authority of Manager. Nor shall Owner or its representatives criticize directly to
any Hotel employee or direct any Hotel employee to take any specific action or in any way
indicate or imply that Owner or its representative has or is capable of any direct control over
the operation of the Hotel.
ARTICLE XV
Commencement of Management
15.1 Conditions to Oblivations.
(a) Each and every obligation of Manager to be performed after the Effective
Date shall be subject to and conditioned upon satisfaction by Owner of the following conditions:
Page 26 of 34 Initials:
(i) The representations and warranties made by Owner in
Section 12.1 shall be true on and as of the Effective Date with the same effect as though such
representations and warranties had been made or given on and as of the Effective Date;
(ii) Owner shall have performed and complied with all of its
obligations hereunder which are to be performed or complied with by it prior to the Effective
Date in a manner reasonably satisfactory to Manager; and
(iii) No suit, investigation, action or other proceeding shall be
threatened or pending on the Effective Date before any court or government agency which may
result in the restraint, prohibition or obtaining of damages or other relief against Manager in
connection with this Agreement or the performance thereof.
(b) Each and every obligation of Owner to be performed after the
Effective Date shall be subject to and conditioned upon satisfaction by Manager of the
following conditions:
(1) The representations and warranties made by Manager in Section
12.2 shall be true on and as of the Effective Date with the same effect as though such
representations and warranties had been made or given on and as of the Effective Date;
(ii) Manager shall have performed and complied with all of its
obligations hereunder which are to be performed or complied with by it prior to the Effective
Date in a manner reasonably satisfactory to Owner.
ARTICLE XVI
Indemnity
16.1 Indemnity by Manager. As of the Effective Date, Manager shall indemnify,
Page 27 of 34 Initials:
defend and hold harmless the Owner, and all of their respective officers, directors,
employees and agents from and against any and all expenses, losses, claims, costs,
damages or liabilities, including payment of reasonable attorneys' fees, court costs,
expenses, expert witness costs and other costs of litigation, to the extent that they arise
out of (a) any negligent act or omission, any gross negligence or any reckless or willful
misconduct by Manager or by any officer, director, agent employee of Manager, (b) Manager's
non - performance of its obligations hereunder (whether negligent, grossly negligent, reckless
or willful); or (c) any action taken by or on behalf of Manager relating to the Hotel or this
Agreement which is not permitted by, or pursuant to, the provisions of this Agreement or
reasonably necessary to carrying out Manager's duties hereunder.
16.2 Indemnity by Owner. As of the Effective Date, Owner shall indemnify,
defend and hold harmless the Manager, and all of their respective officers, directors,
employees and agents from and against any and all expenses, losses, claims, costs,
damages or liabilities, including payment of attorneys' fees, court costs, expenses, expert
witness fees and other costs of litigation, to the extent that they arise out of (a) any negligent act or
omission, any gross negligence or any reckless or willful misconduct by Owner or by any officer,
director, agent or employee of Owner, (b) Owner's non - performance of its obligations
hereunder (whether negligent, grossly negligent, reckless or willful); or (c) any action taken
by or on behalf of Owner relating to the Hotel or this Agreement which is not permitted by, or
pursuant to, the provisions of this Agreement or reasonably necessary to carrying out lender
(for the Hotel) and /or Owner's duties.
ARTICLE XVII
Page 28 of 34 Initials:
Miscellaneous
17.1 Relationship. Manager and Owner shall not be construed as joint ventures,
landlord and tenant, partners or agents of or with respect to each other and neither shall have the
power to bind or obligate the other except as expressly set forth in this Agreement. Manager is
acting as an Independent Contractor with respect to any and all duties provided for Owner as set
forth herein.
17.2 Assignments. This Agreement and all covenants, agreements, provisions and
conditions herein, shall be binding upon, and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Except as otherwise provided therein, neither party
shall assign or transfer any of its rights and interests in, or delegate any of its duties and
responsibilities under this Agreement without the prior written consent of the other party which
will not be unreasonably withheld.
173 Waiver. The failure of either party to complain of any action or non - action on the
part of the other or to insist upon strict performance of any of the terms or provisions of this
Agreement or to exercise any option, right or remedy herein contained shall not constitute or be
construed as an approval or waiver of such action, non - action, term, provision, option, right or
remedy, with respect to the existing situation or any future situations, unless such party expressly
approves or waives such action, non - action, term, provision, option, right or remedy in writing
and then only to the extent of such written approval or waiver.
17.4 Consents. Wherever in this Agreement the consent or approval of a party is
required, such consent or approval shall not be unreasonably withheld, shall be in writing and
shall be executed by a duly authorized officer or agent of the party granting such consent or
Page 29 of 34 Initials:
approval.
17.5 Notices. All notices, requests, statements, instructions, designations,
observations, recommendations and other communications required or permitted to be given
hereunder shall be in writing and be deemed to have been duly given when delivered by hand
against receipt or sent by certified or registered mail, return receipt requested, postage prepaid:
TO OWNER:
Contact: David O'Reilly
Company: O'Reilly Hotel Partners — Denton, LLC
Address: 2831 S. Ingram Mill Road Springfield, MO 65804
Phone: 417 - 874 -7159
E -mail: doreilly @oreillyauto.com
TO MANAGER:
Tim O'Reilly, Chief Executive Officer
O'Reilly Hospitality Management, LLC
2808 S. Ingram Mill Road, A104
Phone: (417) 851 -8700
Fax No.: (417) 881 -8225
E -mail: tim @ohospitalitymanagement.com
or to such other address or addresses as from time to time may be designated hereunder by the
party entitled to receive the notice.
17.6 Headings. All headings of articles and sections are inserted only for convenience
and reference, and the words contained therein shall in no way be held to explain, modify,
amplify or aid in the interpretation or constriction of the provisions of this Agreement.
17.7 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri.
17.8 Severability. In the event any term or provision of this Agreement or any
Page 30 of 34 Initials:
application thereto to any persons or circumstances, shall be declared invalid or unenforceable
to any extent by a court of competent jurisdiction, the remainder of this Agreement, or the
application of such term or provision to persons or circumstances other than those to which it is
held invalid or unenforceable, shall not be affected thereby and each term or provision of this
Agreement shall be valid and enforceable to the most limited extent permitted by law, unless
such would effect a substantial deviation from the general intent and purpose of the parties or make a
significant change in the economic effect of the Agreement on the party benefited by such term
or provision.
17.9 Entire Agreement. This Agreement, together with all other writings signed
by the parties expressly stated to be supplemental hereto and all instruments to be executed and
delivered pursuant to this Agreement, constitute the entire agreement between the parties and
supersede all prior negotiations, understandings and agreements between the parties. This
Agreement is intended for the benefit of the parties only, and no third party shall have the right to
enforce this Agreement.
17.10 Amendment. This Agreement may be amended, modified, supplemented or
terminated, in whole or in part, only by a written instrument signed by both parties hereto.
Page 31 of 34 Initials:
IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreem 1 ent as of the day and date above first written.
OWNER:
O'REILLY HOTEL PARTNERS - DENTON, LLC
Bv:
David O'Reilly, Authorized Agent
MANAGER:
O'REILLY HOSPITALITY MANAGEMENT, LLC
Bv:
Tim O'Reilly, Chief Executive Officer & Manager
STATE OF
COUNTY OF
Before me , Notary Public of the State of Missouri, on this day
personally appeared David O'Reilly known to me to be the person whose name is subscribed to
the foregoing instrument and acknowledged to me that he /she is the authorized agent and
representative of the O'Reilly Hotel Partners — Denton, LLC, and acknowledged that he /she
executed the foregoing instrument as the free act and deed of the Company in his /her capacity as
Given under my hand and seal of office this day of , 20
My Commission Expires:
Notary Public, State of Missouri
Print Name:
Commission No.:
Page 32 of 34 Initials:
STATE OF MISSOURI
COUNTY OF
Before me , Notary Public of the State of Missouri, on this
day personally appeared Tim O'Reilly known to me to be the person whose name is subscribed
to the foregoing instrument and acknowledged to me that he is the Manager of the limited
liability company, and acknowledged that he executed the foregoing instrument as the free act
and deed of the Company in his capacity as Manager.
Given under my hand and seal of office this day of , 20
My Commission Expires:
Notary Public, State of Missouri
Print Name:
Commission No.:
Page 33 of 34 Initials:
EXHIBIT "A"
LEGAL DESCRIPTION OF THE MANAGED HOTEL SITE
Page 34 of 34 Initials:
AGENDA INFORMATION SHEET
AGENDA DATE: December 3, 2013
DEPARTMENT: Finance
�_A
ACM: Bryan Langley
SUBJECT
Consider approval of resolution casting votes for membership to the Board of Directors of
the Denton Central Appraisal District; and declaring an effective date.
BACKGROUND
The Denton Central Appraisal District (DCAD) notified the City on August 30, 2013 that the
term for members on the current DCAD Board of Directors expires December 31, 2013, and
accordingly they began the process to elect a Board of Directors for the next two -year term.
On October 1, 2013, the City Council approved a resolution nominating Charles Stafford for
the DCAD Board of Directors. Mr. Stafford was also nominated by the Denton ISD.
Nominations from all taxing jurisdictions were received by DCAD, and a memorandum has
now been sent to the City requesting the casting of its votes.
The number of votes a taxing unit has is determined by their proportional share of the total
levy in the district from the prior tax year. There are a total of 5,000 votes throughout the
district. One thousand votes are the maximum number needed to elect a local
representative /nominee to the Board of Directors. In 2011, the City of Denton had 193 votes
and allocated 97 votes to Charles Stafford and 96 votes to Rick Woolfolk to serve on the
DCAD Board of Directors.
This year, the City has 196 votes and DISD has 648 votes. The following is a summarization
of DCAD's nomination process.
Prior to October 1 st - DCAD notifies taxing entities of the number of votes they are entitled
to cast for appointing board members.
Prior to October 15th - Nominations are submitted to DCAD by each jurisdiction.
Prior to October 30th - DCAD compiles a comprehensive list of the nominees and forwards
to each taxing unit in the form of a ballot.
Prior to December 15 - The taxing jurisdictions choose by written resolution the candidate (s)
of their choice. The jurisdiction then submits the name (s) and the votes cast to DCAD.
Prior to December 31 st - DCAD tabulates the votes and forwards the results back to the
jurisdictions. The five candidates that receive the most votes become the Board of Directors
as of January 1 st.
Agenda Information Sheet
December 3, 2013
Page 2
The seven candidates nominated by the taxing jurisdictions are: C.G. Macklin, John Mahalik,
Jimmy Mullis, Connie Smith, Charles Stafford, David Terre, and Tim Trylovich. The
memorandum attached as Exhibit 1 from DCAD lists the seven candidates, a breakdown of
the 5,000 votes by jurisdiction and an information sheet for each candidate. Mr. C. G.
Macklin has stated that he does not seek reappointment to the DCAD Board of Directors due
to his new job duties.
PRIOR ACTION/REVIEW
On October 1, 2013, the City Council approved a resolution nominating Charles Stafford for
the DCAD Board of Directors.
RECOMMENDATION
Staff has included a resolution allocating 196 votes for Mr. Charles Stafford for the DCAD
Board of Directors. If the City Council would like to votes for a candidate other than Mr.
Stafford, this item can be pulled from the Consent Agenda and considered as a regular item.
EXHIBITS
1. DCAD Memorandum
2. 2013 Board of Directors
3. Resolution
Respectfully submitted:
Chuck Springer, 349 -8260
Director of Finance
EXHIBIT 1
DENTON CENTRALAPPRAISALDISTRICT
3911 MORSE STREET, P O BOX 2816
DENTON, TEXAS 76202 -2816
MEMO
TO: All Taxing Jurisdictions
FROM: Rudy Durham, Chief Appraiser
DATE: October 28, 2013
SUBJECT: Candidates to Board of Directors of Denton Central Appraisal District
Candidates to the Denton Central Appraisal District Board of Directors are listed below. The list is
in alphabetical order by last name.
Each voting unit must cast its vote by written resolution and submit it to the Chief Appraiser by
December 15th. The unit may cast all its votes for one candidate or may distribute the votes
among any number of candidates. When a voting unit casts its votes, it must cast the votes for a
person that was nominated and is named on the ballot. There is no provision for write -in
candidates. The Tax Code does not permit the Chief Appraiser to count votes cast for someone
not listed on the official ballot. The five nominees receiving the most votes will become the Board
of Directors.
The candidates nominated by the taxing jurisdictions are:
Candidate
Nominating Jurisdiction
1. C. G. Maclin
City of Frisco, Frisco ISD
2. John Mahalik
City of Coppell, Lewisville ISD, City of Carrollton
3. Jimmy Mullis
Northwest ISD
4. Connie Smith
Lewisville ISD
5. Charles Stafford
Denton ISD, City of Denton
6. David Terre
City of The Colony
7. Tim Trylovich
Denton County
Since some of you may not be familiar with the process of selecting the Board, please do not
hesitate to contact Kathy Williams at (940) 349 -3974 for clarification and /or information.
PHONE: (940) 349 -3800 METRO: (972) 434 -2602 FAX: (940) 349 -3801
JURISDICTIONS
SCHOOL
DISTRICTS:
Sol
ARGYLE ISD
S02
AUBREY ISD
S03
CARROLLTON-1713 ISD
SO4
CELINA ISD
S05
DENTON ISD
S15
ERA ISD
S06
FRISCO ISD
S07
KRUM ISD
S08
LAKE DALLAS ISD
S09
LEWISVILLE ISD
810
LITTLE ELM ISD
S11
NORTHWEST ISD
S12
PILOT POINT ISD
S13
PONDER ISD
S17
PROSPER ISD
S14
SANGER ISD
S16
SLIDELL ISD
SCHOOL DISTRICTS TOTALS
G01
DENTON COUNTY
CITIES:
2012 LEVY
C26
OF VOTES
C01
1.3307%
C31
$8,840,370.49
CO2
37
C49
3.0512%
CO3
$308,150.28
C21
1
C27
12.9739%
C04
$2,442.63
C47
1
C20
6.0001%
COS
$9,999,020.10
C42
42
C30
1.7375%
C07
$343,164,917.76
C36
1436
C32
2.3743%
C39
$66,683,082.51
C22
278
C38
0.4895%
C19
$10,934,843.03
C08
46
C09
0.0741%
C18
$9,786,998.80
CIO
41
Cll
0.0628%
C25
$785.041.868.95
C12
3286
C13
13.04%
C33
33
C24
$25,257,100,57
C14
106
C29
$332.22
C15
1
C48
$94,509.48
C17
1
C16
$522.62
C34
1
C37
$1,304,975.55
C28
5
C44
$9,341,993.25
EXHIBIT 1
DENTON CENTRAL APPRAISAL DISTRICT
2013 DISTRIBUTION OF VOTES
TOWN OF ARGYLE.......
%OF TOTAL
NUMBER
2012 LEVY
LEVIES
OF VOTES
$15,883,144.01
1.3307%
67
$8,840,370.49
0.7407%
37
$36,417,722.56
3.0512%
153
$308,150.28
0.0258%
1
$154,853,076.25
12.9739%
648
$2,442.63
0.0002%
1
$71,615,595.24
6.0001%
299
$9,999,020.10
0.8377%
42
$20,738,009.52
1.7375%
87
$343,164,917.76
28.7511%
1436
$28,338,423.10
2.3743%
119
$66,683,082.51
5.5868%
278
$5,842,374.77
0.4895%
24
$10,934,843.03
0.9161%
46
$883,926.69
0.0741%
4
$9,786,998.80
0.8200%
41
$749,771.21
0.0628%
3
$785.041.868.95
65.772%
3286
$155,597,418.83
13.04%
651
TOWN OF ARGYLE.......
$1,666,289.35
0.1396%
7
CITY OF AUBREY.......
$794,631.49
0.0666%
3
TOWN OF BARTONVILLE..
$467,931.82
0.0392%
2
CITY OF CARROLLTON
$27,833,813.30
2.3320%
116
CITY OF CELINA.........
$3,901.77
0.0003%
1
CITY OF THE COLONY...
$14,843,420.68
1.2436%
62
TOWN OF COPPELL
$691,974.04
0.0580%
3
TOWN OF COPPER CANYON
$533,681.75
0.0447%
2
CITY OF CORINTH......
$8,515,710.85
0.7135%
36
CITY OF CORRAL CITY
$10,965.85
0.0009%
1
CITY OF DALLAS.......
$7,450,524.96
0.6242%
31
CITY OF DENTON.......
$47,057,961.19
3.9426%
196
CITY OF DISH.........
$60,878.38
0.0051%
1
TOWN OF DOUBLE OAK...
$734,725.89
0.0616%
3
TOWN OF FLOWER MOUND.
$31,018,150.98
2.5988%
130
CITY OF FORT WORTH.......
$7,792,417.76
0.6529%
33
CITY OF FRISCO........
$25,257,100,57
2.1161%
106
CITY OF GRAPEVINE.......
$332.22
0.0000%
1
TOWN OF HACKBERRY....
$94,509.48
0.0079%
1
CITY OF HASLET........
$522.62
0.0000%
1
TOWN OF HICKORY CREEK..
$1,304,975.55
0.1093%
5
CITY OF HIGHLAND VILLAGI
$9,341,993.25
0.7827%
39
CITY OFJUSTiN.......
$1,436,780.38
0.1204%
6
CITY OF KRUGERVILLE..
$385,023.85
0.0323%
2
CITY OF KRUM........,
$1,389,049.20
0.1164%
6
CITY OF LAKE DALLAS..
$2,353,939.53
0.1972%
10
CITY OF LAKEWOOD VILLAC
$173,428.34
0.0145%
1
CITY OF LEWISVILLE...
$29,817,168.31
2.4981%
124
TOWN OF LITTLE ELM...
$10,719,949.17
0.8981%
45
TOWN OF NORTHLAKE....
$707,051.32
0.0592%
3
CITY OF OAK POINT....
$1,512,563.16
0.1267%
6
CITY OF PILOT POINT..
$1,314,844.81
0.1102%
6
CITY OF PLANO..........
$4,092,915.00
0.3429%
17
TOWN OF PONDER.......
$503,399.88
0.0422%
2
CITY OF PROSPER
$267,024.17
0.0224%
1
CITY OF ROANOKE......
$4,157,574.90
0.3483%
17
CITY OF BANGER.......
$2,467,115.45
0.2067%
10
TOWN OF SHADY SHORES
$6619528.39
0.0554%
3
CITY OF SOUTHLAKE.......
$545,516.11
0.0457%
2
CITY OF TROPHY CLUB..
$4,950,326.37
0.4147%
21
CITY OF WESTLAKE
$1,501.50
0.0001%
1
CITY TOTAL
$252,933,113,59 21.19% 1063
TOTAL ALL JURISDICTIONS $1,193,572,401.37 100.00% 5000
EXHIBIT 1
Kathy Williams
Subject: FW: DCAD nomination
Attachments: image001 jpg
From: C.G. Maclin
Sent: Monday, October 14, 2013 9:23 AM
To: Kathy Williams
Subject: Fwd: DCAD nomination
Hello Kathy,
In response to your request for completion of the Board election form, here is the email I sent to the elected officials
stating my intent not to run for appointment to the CAD Board in 2014.
Thank you for your assistance.
CG
C. G. Maclin
Denton County Central Appraisal District
Board of Directors
From: CG Maclin
Sent: Wednesday, October 09, 2013 3:31 PM
To: 'Hugh Coleman'
Cc: Maher Maso; 'GPurefo&friscotexas.gov'; Amanda Davenport
Subject: RE: DCAD nomination
Hello Commissioner Coleman,
Due to a recent change in my job duties, I will not be seeking reappointment to the Denton
County Appraisal District Board of Directors.
I have been assigned the responsibility of the International Division of Marketplace Chaplains
and this will require frequent travel to Canada, UK, and Korea. Due to this intense travel
schedule, I am concerned about my availability to regularly attend the CAD Board meetings.
Thank you for your continued support in this endeavor. I have enjoyed the opportunity to serve
the citizens of Denton County, the City of Frisco, and Frisco ISD.
Thanks again for the opportunity to serve,
EXHIBIT 1
Nominee Information
Denton Central Appraisal District Board of Directors
Your name has been submitted as a candidate for the DCAD Board of Directors. The term is for
two years beginning January 1, 2014, and ending December 31, 2015. Please complete the
following information and feel free to attach any additional information. Please return this form
by 0 tober 25 20113 so that a copy can be sent to the lurisdictions with theiryofing ballot
John Mahalik
Name
2648 Newcastle Dr.
Address
Carrollton 75007
City ip
214 - 758 -0880
Daytime Phone
214- 773 -1149
Evening Phone
1. Are you a resident of Denton County and have you resided in Denton
County for at least two years immediately preceding the beginning of this term? Yes /No
2. Are you an employee of a taxing unit that participates in the Denton Appraisal District? Yes /NO
Please provide work or personal experiences that would be applicable to serve on the DCAD
Board of Directors.
I am the current Vice - Chairman of this board and would like to continue to serve.
Carrollton City Councilmember 2005 -2011
B.S. — Finance, MBA — Business Administration, Graduate Certificate — Mediation from S.M.U.
15+ yrs. in Finance /Accounting /Budgeting
Return to:
Kathy Williams
Denton Central Appraisal District
P.O. Box 2816
Denton, TX 76202
EXHIBIT 1
Nominee Information
Denton Central Appraisal District Board of Directors
Your name has been submitted as a candiSate for the DCAD Board of Directors. The term is for
two years beginning January 1, 2014, and ending December 31, 2015. Please complete the
following information and feel free to attach any additional information. Please return this form
before October 25. 2013 so that a cony ca he s ic ons with their, voting
ballot.
� i ►�� rn H�� I�rf. l l� 6
Name
Address
y �... Zlp -____z
clt `
.. , � +� !v � �� %!a ..� 7 .
6� -/S- i�
Daytime Phone
917
EveninWW Phone
e
1. Are you a resident of Denton County and have you resided in Denton
County for at least two years immediately preceding the beginning of this term? es No
2. Are you an employee of a taxing unit that participates in the Denton Appraisal District? Yes Vo
Please provide work or personal experiences that would be applicable to serve on the DCAD
Board of Directors.
Return to:
Kathy Williams
Denton Central Appraisal District
P.O. Box 2816
Denton, TX 76202
L 19S
EXHIBIT 1
Nominee Information
Denton Central Appraisal District Board of Directors
Your name has been submitted as a candiAte for the DCAD Board of Directors. The term is for
two years beginning January 1, 2014, and ending December 31, 2015. Please complete the
following information and feel free to attach any additional information. Please return this form
before October 25 2013 so that a co can be sent to the iuris lctions with their voting
ballot.
1. Are you a resident of Denton County and have you resided in Denton
County for at least two years immediately preceding the beginning of this term? Ye No
2. Are you an employee of a taxing unit that participates in the Denton Appraisal District? Yes'RJ
Please provide work or personal experiences that would be applicable to serve on the DCAD
Board of Directors.
:.. AM. w 'e:..
Return to: ()Vl .
Kathy Williams
Denton Central Appraisal District
P.O. Box 2816
Denton, TX 76202
EXHIBIT 1
Nominee Information
Denton Central Appraisal District Board of Directors
Your name has been submitted as a candidate for the DCAD Board of Directors. The term is for
two years beginning January 1, 2014, and ending December 31, 2015. Please complete the
following Information and feel free to attach any additional information, to s r turn thlok M
ct r 2 t3 s a lot its t hear v tin
ballot•
hiarrle
1403 14i1 .0 1* �,
Address
City Zip
azo
P
r) -S" -S3
Daytime Phone
Evening Phon®
1, Are you a resident of Denton County and have you resided In Denton
County for at least two years Immediately preceding the beginning of this term? Y,e /No
2. Are you an employee of a taxing unit that participates In the Denton Appraisal District? Yes t
Please provide work or personal experiences that would be applicable to serve on the DCAD
Board of Directors.
r °jade !' �
A off Aj
- z
-Te44 S 0k 5CA
Return lo:
Kathy Williams
Denton Central Appraisal District
P.O. Box 2816
Denton, TX 76202
1Z
EXHIBIT 1
Nominee Information
Denton Central Appraisal District Board of Directors
Your name has been submitted as a candiAte for the DCAD Board of Directors. The term is for
two years beginning January 1, 2014, and ending December 31, 2015. Please complete the
following information and feel free to attach any additional information. Please return this form
before October 25 g013, so that a copy can be sent to the iurisdictions with their voting
ballot.
Evening Phone
1. Are you a resident of Denton County and have you resided in Denton
County for at least two years immediately preceding the beginning of this term? (!9/NO
2. Are you an employee of a taxing unit that participates in the Denton Appraisal District? YesG
Please provide work or personal experiences that would be applicable to serve on the DCAD
Board of Directors.
I
.r
3 ,r — — —
N
Return to:
Kathy Williams
Denton Central Appraisal District
P.O. Box 2816
Denton, TX 76202
EXHIBIT 1
Nominee Information
Denton Central Appraisal District Board of Directors
Your name has been submitted as a candidate for the DCAD Board of Directors. The term is for
two years beginning January 1, 2014, and ending December 31, 2015. Please complete the
following information and feel free to attach any additional information. Please return this form
before October 25. 2013 so that a co can be sent to the jurisdictions with their votin
ballot.
1. Are you a resident of Denton County and have you resided in Denton
County for at least two years immediately preceding the beginning of this term? tY NO
2. Are you an employee of a taxing unit that participates in the Denton Appraisal District? Ye 4g)
Please provide work or personal experiences that would be applicable to serve on the DCAD
Board of Directors.
Return to:
Kathy Williams
Denton Central Appraisal District
P.O. Box 2816
Denton, TX 76202
Exhibit 2
2012 -2013
DENTON CENTRAL APPRAISAL DISTRICT
BOARD OF DIRECTORS
CHARLES STAFFORD Chairman
1903 Williamsburg Row
Denton, Texas 76209
JOHN MAHALIK Vice - Chairman
2648 Newcastle Dr.
Carrollton, TX 75007
TOM WASHINGTON Secretary
1805 Countryside
Carrollton, TX 75007
DR. LINDA MONACO Member
3500 Remington Dr.
Denton, TX 76210
CARROLL G. MACLIN Member
8862 Beartooth Drive
Frisco, TX 75034
Ex Officio Member
MICHELLE FRENCH
P.O. Box 90223
Denton, Texas 76202
sAlegal\ our documents \resolutions \13 \dcad casting votes.doc Exhibit 3
RESOLUTION NO.
A RESOLUTION CASTING VOTES FOR MEMBERSHIP TO THE BOARD OF
DIRECTORS OF THE DENTON CENTRAL APPRAISAL DISTRICT; AND DECLARING
AN EFFECTIVE DATE.
THE CITY COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES:
SECTION 1. The City Council of the City of Denton, Texas, hereby casts196 votes for
Charles Stafford for membership to the Board of Directors of the Denton Central Appraisal
District for the County of Denton, Texas.
SECTION 2. This Resolution shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of , 2013.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
I:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
d
Corr se i3O geu..A
AGENDA INFORMATION SHEET
AGENDA DATE: December 3, 2013 Questions concerning this
acquisition may be directed
DEPARTMENT: Materials Management to Terry Kader at 349 -8729
ACM: Bryan Langley � -A
SUBJECT
Consider adoption of an ordinance of the City of Denton, Texas authorizing the approval of a
First Amendment to a contract for vehicle and equipment parts, by and between Genuine Parts
Company dba NAPA Integrated Business Solutions and the City of Denton, Texas, providing for
the expenditure of funds therefor; and providing an effective date (Bid 4739 - Providing for an
additional expenditure amount of $2,700,000 with the total contract amount not -to- exceed
$11,804,355.53).
FILE INFORMATION
On December 15, 2009, City Council awarded a contract for Bid 4739 for the purchase of parts
for the maintenance and repair of City vehicles and equipment. This contract was awarded to
Genuine Parts Company (NAPA) for four (4) years with the option for two (2) one -year contract
renewals. The current contract expires on December 31, 2013. During the next fiscal year, staff
will continue to review the current contract to determine if a new `request for proposal' should
be developed for vehicle and equipment parts or whether to extend the NAPA contract for the
final one (1) year option.
The amount of purchases under this contract has been $1,899,599.05 for FY 2009 -10,
$2,088,364.77 for FY 2010 -11, $2,454,772.85 for FY 2011 -12 and $2,661,618.86 for FY 2012-
13. The total amount expended for the four (4) year time period was $9,104,355.53. Based on
historical purchases, staff is recommending the approval of an expenditure amount of $2,700,000
for the renewal period.
RECOMMENDATION
Award a one (1) year contract extension to Genuine Parts Company (NAPA) for vehicle and
equipment parts in the estimated amount of $2,700,000.
PRINCIPAL PLACE OF BUSINESS
Genuine Parts Company Inc. dba NAPA Integrated business Solutions
Atlanta, GA
Agenda Information Sheet
December 3, 2013
Page 2
ESTIMATED SCHEDULE OF PROJECT
This contract extension will be good through December 31, 2014.
FISCAL INFORMATION
Requisitions for parts are entered by individual departments against Fleet Services, Parts account
820100.7899
Respectfully submitted:
Chuck Springer, 349 -8260
Director of Finance
I -AIS -File 4739
ORDINANCE NO.
CONSIDER ADOPTION OF AN ORDINANCE OF THE CITY OF DENTON, TEXAS
AUTHORIZING THE APPROVAL OF A FIRST AMENDMENT TO A CONTRACT FOR
VEHICLE AND EQUIPMENT PARTS, BY AND BETWEEN GENUINE PARTS COMPANY
DBA NAPA INTEGRATED BUSINESS SOLUTIONS AND THE CITY OF DENTON, TEXAS,
PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN
EFFECTIVE DATE (BID 47-19-PROVIDING FOR AN ADDITIONAL EXPENDITURE AMOUNT
OF $2,700,000 WITH THE TOTAL CONTRACT AMOUNT NOT -TO- EXCEED $11,804,355.53).
WHEREAS, on December 15, 2009 by Ordinance No. 2009 -317, the City awarded a contract
for vehicle and equipments parts to Genuine Parts Company dba NAPA Integrated Business
Solutions, in the estimated annual amount of $1,750,000; and
WHEREAS, the Staff having recommended, and the City Manager having recommended to
the Council this First Amendment be authorized to amend such contract agreement with respect to
increasing the annual contract amount to not -to- exceed $11,804,355.53; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The First Amendment increasing the amount of the parts contract between the
City and Genuine Parts Company dba NAPA Integrated Business Solutions, which is on file in the
office of the Purchasing Agent, in an amount not -to- exceed Two Million Seven Hundred Thousand
and 0 /100 ($2,700,000) Dollars, is hereby approved and the expenditure of funds therefore is hereby
authorized in accordance with said amendment. The total contract amount increases to
$11,804,355.53.
SECTION 2. The City Council of the City of Denton, Texas hereby expressly delegates the
authority to take any actions that may be required or permitted to be performed by the City of Denton
under Bid 4739 to the City Manager of the City of Denton, Texas, or his designee.
SECTION 3. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of , 2013.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
IC •
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
IM
3 -0RD -Bid 4739
Couna,e i3O gnru.. d
AGENDA INFORMATION SHEET
AGENDA DATE: December 3, 2013
DEPARTMENT: City Manager's Office
CM/DCM /ACM: George C. Campbell, City Manager
SUBJECT:
Consider adoption of an ordinance of the City of Denton authorizing an agreement between the
City of Denton, Texas and Denton Holiday Lighting; providing for the expenditure of funds
therefore; and providing for an effective date.
:: �!'�31111►11�
This agreement allows for the total expenditure of $1,000 from Council Contingency Funds.
(Mayor Burroughs $100, Mayor Pro Tern Kamp $200, Council Member Roden $200, Council
Member Gregory $100, Council Member Engelbrecht $100, Council Member Hawkins $200 and
Council Member King $100)
Key provisions of the agreement include:
■ Funds shall be used by the Organization for horse drawn carriage rides during the
Holiday Lighting event.
■ In addition to other reporting requirements, documentation in the form of cancelled
checks and /or corresponding receipts specifically detailing expenditure of funds for the
purpose provided is required for reimbursement from these designated funds.
FISCAL INFORMATION
Funding for the contract will come from Council contingency fund accounts.
Respectfully��:h�d:
George C. Campbell
City Manager
Prepared by:
Linda Holley
Senior Executive Assistant
\ \CODAD \Departments \Legal \Our Documents \0rd1nances \13\Sery Agr- Denton Holiday restival.doe
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING AN AGREEMENT BETWEEN
THE CITY OF DENTON, TEXAS, AND DENTON HOLIDAY FESTIVAL ASSOCIATION;
PROVIDING FOR THE EXPENDITURE OF FUNDS; AND PROVIDING FOR AN EFFECTIVE
DATE.
WHEREAS, the City Council of the City of Denton hereby finds that the Event and the
Agreement between the City and Denton Holiday Festival Association, attached hereto and made a
part hereof by reference (the "Agreement "), serve a municipal and public purpose and is in the public
interest; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings set forth in the preamble of this Ordinance are incorporated by
reference into the body of this Ordinance as if fully set forth herein.
SECTION 2. The City Manager, or his designee, is hereby authorized to execute the
Agreement and to exercise all rights and duties of the City under the Agreement, including the
expenditure of funds as provided in the Agreement.
SECTION 3. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the _ day of 2013.
MARK A. BURROUGHS, MAYOR
ATTEST: '
JENNIFER WALTERS, CITY SECRETARY
17M
APPROVED AS TO LEGAL FORM:
ANITA URGESS, CITY ATTORNEY
SALege110ur Documents \Contracts\131Sery Agr- Holiday Lighting Festival,doc
SERVICE AGREEMENT
BETWEEN THE CITY OF DENTON, TEXAS AND
DENTON HOLIDAY FESTIVAL ASSOCIATION
This Agreement is hereby entered into by and between the City of Denton, Texas, a home rule
municipal corporation, hereinafter referred to as "City ", and Denton Holiday Festival Association, a
Texas not for profit corporation, hereinafter referred to as "Association ".
WHEREAS, City has determined that the proposal for services merits assistance and can
provide needed services to citizens of City and has provided funds in its budget for the purpose of a
donation to Association which provides a benefit to the citizens by featuring a toy drive, lighting of
the tree, performances by various dance and musical groups, visits with Santa and horse -drawn
carriage rides; and
WHEREAS, this Agreement serves a valid municipal and public purpose and is in the public
interest;
NOW, THEREFORE, the parties hereto mutually agree as follows:
I. SCOPE OF SERVICES
Association shall in a satisfactory and proper manner perform the following tasks, for which
the monies provided by City may be used:
The funds being provided shall be used by Association to assist with the costs of the horse -drawn
carriage rides.
II. OBLIGATIONS OF ASSOCIATION
In consideration of the receipt of funds from City, Association agrees to the following terms
and conditions:
A. One Thousand Dollars and no /100 ($1,000.00) shall be paid to Association by City to
be utilized for the purposes set forth in Article I.
B. Association will maintain adequate records to establish that the City funds are used
for the purposes authorized by this Agreement.
C. Association will permit authorized officials of City to review its books at any time.
D. Upon request, Association will provide to City its By Laws and any of its rules and
regulations that may be relevant to this Agreement.
Page 1
SALegal\Our Documcn15\Con(r8C1S \I3 \Scry Agr- Holiday Lighting Festival.doc
E. Association will not enter into any contracts that would encumber City funds for a
period that would extend beyond the term of this Agreement.
F. Association will appoint a representative who will be available to meet with City
officials when requested.
III. TIME OF PERFORMANCE
The services funded by City shall be undertaken and completed by Association within the
following time frame;
The term of this Agreement shall commence on the effective date and terminate September 30,
2014, unless the contract is sooner terminated under Section VII "Suspension or Termination ".
IV. PAYMENTS
A. PAYMENTS TO ASSOCIATION. City shall pay to Association the sum specified in
Article II after the effective date of this Agreement.
B. EXCESS PAYMENT. Association shall refund to City within ten (10) working days of
City's request, any sum of money which has been paid by City and which City at any time thereafter
determines;
1) has resulted in overpayment to Association; or
2) has not been spent strictly in accordance with the terms of this Agreement; or
3) is not supported by adequate documentation to fully justify the expenditure.
V. EVALUATION
Association agrees to participate in an implementation and maintenance system whereby the
services can be continuously monitored. Association agrees to make available its bank statements
for review by City at City's discretion. In addition, Association agrees to provide City the following
data and reports, or copies thereof:
A. An explanation of any major changes in program services.
B. To comply with this section, Association agrees to maintain records that will provide
accurate, current, separate, and complete disclosure of the status of funds received and the services
performed under this Agreement. Association's record system shall contain sufficient documentation
to provide in detail full support and justification for each expenditure. Association agrees to retain
all books, records, documents, reports, and written accounting procedures pertaining to the services
provided and expenditure of funds under this Agreement for five years.
Page 2
S:\LcgallOur DocumentslContracts \l ASery Agr•Holiday Lighting Feslival.doc
C. Nothing in the above subsections shall be construed to relieve Association of
responsibility for retaining accurate and current records that clearly reflect the level and benefit of
services provided under this Agreement.
VI. MEETINGS
Minutes of all meetings of Association's governing body shall be available to City within ten
(10) working days of approval.
VII. TERMINATION
The City may terminate this Agreement for cause if Association violates any covenants,
agreements, or guarantees of this Agreement, the Association's insolvency or filing of bankruptcy,
dissolution, or receivership, or the Association's violation of any law or regulation to which it is
bound under the terms of this Agreement. The City may terminate this Agreement for other reasons
not specifically enumerated in this paragraph.
VIII. EQUAL OPPORTUNITY AND COMPLIANCE WITH LAWS
A. Association shall comply with all applicable equal employment opportunity and
affirmative action laws or regulations.
B. Association will furnish all information and reports requested by City, and will permit
access to its books, records, and accounts for purposes of investigation to ascertain compliance with
local, State and Federal rules and regulations.
C. In the event of Association's non - compliance with the non - discrimination
requirements, the Agreement may be canceled, terminated, or suspended in whole or in part, and
Association may be barred from further contracts with City.
IX. WARRANTIES
Association represents and warrants that:
A. All information, reports and data heretofore or hereafter requested by City and
furnished to City, are complete and accurate as of the date shown on the information, data, or report,
and, since that date, have not undergone any significant change without written notice to City.
B. Any supporting bank statements heretofore requested by City and furnished to City,
are complete, accurate and fairly reflect the financial conditions of Association on the date shown on
said report, and the results of the operation for the period covered by the report, and that since said
data, there has been no material change, adverse or otherwise, in the financial condition of
Association.
Page 3
S: \Legal\Our DocurnentAConlractAMSery Agr- Holiday Lighting Festival.doc
C. No litigation or legal proceedings are presently pending or threatened against
Association.
D. None of the provisions herein contravenes or is in conflict with the authority under
which Association is doing business or with the provisions of any existing indenture or agreement of
Association.
E. Association has the power to enter into this Agreement and accept payments
hereunder, and has taken all necessary action to authorize such acceptance under the terms and
conditions of this Agreement.
F. None of the assets of Association are subject to any lien or encumbrance of any
character, except for current taxes not delinquent, except as shown in the bank statements furnished
by Association to City.
Each of these representations and warranties shall be continuing and shall be deemed to have
been repeated by the submission of each request for payment.
X. CHANGES AND AMENDMENTS
A. Any alterations, additions, or deletions to the terms of this Agreement shall be by
written amendment executed by both parties, except when the terms of this Agreement expressly
provide that another method shall be used.
B. It is understood and agreed by the parties hereto that changes in the State, Federal or
local laws or regulations pursuant hereto may occur during the term of this Agreement. Any such
modifications are to be automatically incorporated into this Agreement without written amendment
hereto, and shall become a part of the Agreement on the effective date specified by the law or
regulation,
C. Association shall notify City of any changes in personnel or governing board
composition.
XI. INDEMNIFICATION
To the extent authorized by law, the Association agrees to indemnify, hold harmless, and defend
the CITY, its officers, agents, and employees from and against any and all claims or suits for injuries,
damage, loss, or liability of whatever kind or character, arising out of or in connection with the
performance by the Association or those services contemplated by this Agreement, including all such
claims or causes of action based upon common, constitutional or statutory law, or based, in whole or in
part, upon allegations of negligent or intentional acts of Association, its officers, employees, agents,
subcontractors, licensees and invitees.
Page 4
SALepIkOur DocumenisTontrecisklMery Agr- Holiday Lighting Festival.doc
XII. CONFLICT OF INTEREST
A. Association covenants that neither it nor any member of its governing body presently
has any interest, direct or indirect, which would conflict in any manner or degree with the
performance of services required to be performed under this Agreement. Association further
covenants that in the performance of this Agreement, no person having such interest shall be
employed or appointed as a member of its governing body.
B. Association further covenants that no member of its governing body or its staff,
subcontractors or employees shall possess any interest in or use his/her position for a purpose that is
or gives the appearance of being motivated by desire for private gain for himself /herself, or others;
particularly those with which he /she has family, business, or other ties.
C. No officer, member, or employee of City and no member of its governing body who
exercises any function or responsibilities in the review or approval of the undertaking or carrying out
of this Agreement shall participate in any decision relating to the Agreement which affects his
personal interest or the interest in any corporation, partnership, or association in which he has direct
or indirect interest.
XIII. NOTICE
Any notice or other written instrument required or permitted to be delivered under the terms
of this Agreement shall be deemed to have been delivered, whether actually received or not, when
deposited in the United States mail, postage prepaid, registered or certified, return receipt requested,
or via hand - delivery or facsimile, addressed to Association or City, as the case may be, at the
following addresses:
CITY ASSOCIATION
City of Denton, Texas
Frances Shelton
Attn: City Manager
Treasurer, Denton Holiday Festival Association
215 E. McKinney
P.O. Box 2765
Denton, TX 76201
Denton, TX 76202
Either party may change its mailing address by sending notice of change of address to the
other at the above address by certified mail, return receipt requested.
XIV. MISCELLANEOUS
A. Association shall not transfer, pledge or otherwise assign this Agreement or any
interest therein, or any claim arising thereunder to any party or parties, bank, trust company or other
financial institution without the prior written approval of City.
B. If any provision of this Agreement is held to be invalid, illegal, or unenforceable, the
remaining provisions shall remain in full force and effect and continue to conform to the original
intent of both parties hereto.
Page 5
SALegal \Our DocumenIAContractAMSery Agr- Holiday Lighting Festival.doc
C. In no event shall any payment to Association hereunder, or any other act or failure of
City to insist in any one or more instances upon the terms and conditions of this Agreement consti-
tute or be construed in any way to be a waiver by City of any breach of covenant or default which
may then or subsequently be committed by Association. Neither shall such payment, act, or
omission in any manner impair or prejudice any right, power, privilege, or remedy available to City
to enforce its rights hereunder, which rights, powers, privileges, or remedies are always specifically
preserved. No representative or agent of City may waive the effect of this provision.
D. This Agreement, together with referenced exhibits and attachments, constitutes the
entire agreement between the parties hereto, and any prior agreement, assertion, statement,
understanding, or other commitment occurring during the term of this Agreement or subsequent
thereto, have any legal force or effect whatsoever, unless properly executed in writing, and if
appropriate, recorded as an amendment of this Agreement.
E. This Agreement shall be interpreted in accordance with the laws of the State of Texas
and venue of any litigation concerning this Agreement shall be in a court of competent jurisdiction
sitting in Denton County, Texas.
IN WITNESS WHEREOF, the parties do hereby affix their signatures and enter into this
Agreement as of the day of ,, 2013 .
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
ANIT BURGESS, CITY ATTORNEY
CITY OF DENTON
GEORGE C. CAMPBELL, CITY MANAGER
DENTON HOLIDAY FESTIVAL ASSOCIATION
BY. FRANCES SHELTON, TREASURER
Page 6
S:\I,egal\Our DocumenlAContracisNI Mery Agr- Holiday Lighting Feslivnl.doc
ATTEST:
RIM
SECRETARY
Page 7
AGENDA INFORMATION SHEET
AGENDA DATE: December 3, 2013
DEPARTMENT: Denton Municipal Electric
ACM: Howard Martin, 349 -8232 �.
SUBJECT
Consider adoption of an ordinance authorizing execution of a franchise agreement with the City
of Denton, acting through its electric utility, granting a franchise to maintain, and operate
facilities within the City of Corinth for the delivery and sale of electricity; providing for the
payment of a fee for the use of the public rights -of -way; providing that such fee shall be in lieu
of other charges; setting forth the term of the franchise; and providing an effective date. (Third
Reading)
BACKGROUND
The prior City of Corinth Agreement expired May 31, 2012. The City of Corinth's City Council
approved a new Agreement on September 19, 2013. The proposed fifteen year Agreement
provides that Denton Municipal Electric Utility (DME) will pay the City of Corinth four percent
(4 %) of its gross revenue from the sale of electric power and energy at retail within the corporate
limits of the City of Corinth as full payment for the right and privilege of using and occupying
the public right—of-way. The first payment was due on August 1, 2013 and subsequent payments
will be made on or before August 1 of each year thereafter. The attached Agreement will expire
May 21, 2028.
RECOMMENDATION
Staff recommends approval of the Agreement.
PRIOR ACTION/REVIEW (Council, Boards, Commissions)
On November 5th and 19th the City Council heard the first and second readings of this
Agreement.
DATE SCHEDULED FOR COUNCIL APPROVAL
The Council will consider adoption of the Agreement at the December 3, 2013 meeting.
FISCAL INFORMATION
The annual City of Corinth franchise fee payment will be approximately $8,500. As electric
sales within the City of Corinth and /or electric rates change the fee will correspondingly change.
EXHIBIT
City of Corinth Ordinance No. 13- 09 -19 -21 and Franchise Agreement Between the City of
Corinth, Texas and The City of Denton, Texas, Municipal Electric Utility
Respectfully submitted:
Phil Williams
General Manager,
Denton Municipal Electric
Prepared by:
Mary Dickinson
Budget Manager
EXHIBIT 1
ORDINANCE NO. 2013-
AN ORDINANCE AUTHORIZING EXECUTION OF A FRANCHISE AGREEMENT WITH
THE CITY OF DENTON, ACTING THROUGH ITS ELECTRIC UTILITY, GRANTING A
FRANCHISE TO MAINTAIN, AND OPERATE FACILITIES WITHIN THE CITY OF
CORINTH FOR THE DELIVERY AND SALE OF ELECTRICITY; PROVIDING FOR THE
PAYMENT OF A FEE FOR THE USE OF THE PUBLIC RIGHTS -OF -WAY; PROVIDING
THAT SUCH FEE SHALL BE IN LIEU OF OTHER CHARGES; SETTING FORTH THE
TERM OF THE FRANCISE; PROVIDING FOR THE RATIFICATION AND RETROACTIVE
APPROVAL OF SAID AGREEMENT; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, on the 15th day of July, 1997 the City Council approved a Franchise
Agreement by and between the City of Corinth, Texas and the City of Denton, Texas Municipal
Electric Utility (the "Prior Agreement'), by Ordinance No. 97 -206; and
WHEREAS, the fifteen -year term provided for in the Prior Agreement has now expired;
the City of Denton, Texas has since that time also renamed its municipal electric utility, as
Denton Municipal Electric; and both the City of Corinth, Texas and the City of Denton, Texas
desire to adopt a new Franchise Agreement, and have its approval to be retroactively effective as
of July 15, 2012; and
WHEREAS, the City of Denton, Texas continues to supply electric services using the
public rights -of -way of the City of Corinth, Texas; and the Corinth City Council by its Ordinance
No. 13- 09 -19 -21 has approved the new Franchise Agreement on the 21st day of September, 2013,
a copy of which ordinance is attached hereto as well; and the Denton City Council accordingly
finds that the new Franchise Agreement, should be in all things approved; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1: The recitations contained in the preamble hereto are true and correct and
are incorporated herewith as a part of this Ordinance.
SECTION 2: The City Manager is hereby authorized to execute the "Franchise
Agreement between the City of Corinth, Texas and the City of Denton, Texas Municipal Electric
Utility" (the "Agreement'), in substantially the form of the Agreement which is attached hereto
as Exhibit "A" and which is incorporated herewith by reference.
SECTION 3: This Agreement is retroactively effective and approved as of July 15,
2012, the date of expiration of the previous Franchise Agreement.
SECTION 4: The expenditure of funds as provided for in the attached Agreement is
hereby authorized.
SECTION 5: The remainder of this ordinance shall become effective upon its passage
and approval.
1
PASSED AND APPROVED this the day of , 2013.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
IM
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
IM
The City of Denton, Texas, acting herein by its duly- constituted City Council, hereby declares
the foregoing Ordinance passed on first reading on the 5th day of November, 2013; and passed on
second reading on the 19th day of November, 2013; and passed on third reading on the -1 day of
December, 2013; and being finally effective as of the -1 day of January, 2014.
/s/ /s/
Mark Burroughs, Mayor
/s/ /s/
Dalton Gregory, Council Member, Place 2
/s/ /s/
James King, Council Member, Place 6
/s/
Joey Hawkins, Council Member, Place 4
Pete Kamp, Mayor- Pro -Tem
Jim Engelbrecht, Council Member, Place 3
Kevin Roden, Council Member, Place 1
2
The above and foregoing ordinance was read, adopted on first reading and passed to second
reading by the following votes, this the 5th day of November, 2013, at a regular session of the
City Council.
Mark Burroughs, Mayor, voting
Pete Kamp, Mayor- Pro -Tem, voting
Dalton Gregory, Council Member, voting
Jim Engelbrecht, Council Member, voting
James King, Council Member, voting
Kevin Roden, Council Member, voting
Joey Hawkins, Council Member, voting
The above and foregoing ordinance as read, adopted on second reading and passed to third
reading by the following votes, this the 19th day of November, 2013, at a regular session of the
City Council.
Mark Burroughs, Mayor, voting
Pete Kamp, Mayor- Pro -Tem, voting
Dalton Gregory, Council Member, voting
Jim Engelbrecht, Council Member, voting
James King, Council Member, voting
Kevin Roden, Council Member, voting
Joey Hawkins, Council Member, voting
The above and foregoing ordinance was read, adopted on third reading and passed by the
following votes, this the -1 day of December, 2013, at a regular session of the City Council.
Mark Burroughs, Mayor, voting.
Pete Kamp, Mayor- Pro -Tem, voting
Dalton Gregory, Council Member, voting
Jim Engelbrecht, Council Member, voting
James King, Council Member, voting
Kevin Roden, Council Member, voting
Joey Hawkins, Council Member, voting
STATE OF TEXAS §
COUNTY OF DENTON §
I, Jennifer Walters, City Secretary of the City of Denton, Texas, do hereby certify that the
above and foregoing is a true and correct copy of the Franchise Agreement Ordinance between
the City of Denton, Texas and the City of Corinth, Texas. The same is now recorded as
Ordinance Number 2013- in the Ordinance Records of the City of Denton, Texas.
WITNESS MY HAND this the day of , 2013.
(SEAL)
ACCEPTANCE
Jennifer Walters, City Secretary
WHEREAS, the City Council of the City of Denton, Texas, did on the -1 day of
December, 2013, enact an Ordinance entitled:
AN ORDINANCE AUTHORIZING EXECUTION OF A FRANCHISE AGREEMENT WITH
THE CITY OF DENTON, ACTING THROUGH ITS ELECTRIC UTILITY, GRANTING A
FRANCHISE TO MAINTAIN, AND OPERATE FACILITIES WITHIN THE CITY OF
CORINTH FOR THE DELIVERY AND SALE OF ELECTRICITY; PROVIDING FOR THE
PAYMENT OF A FEE FOR THE USE OF THE PUBLIC RIGHTS -OF -WAY; PROVIDING
THAT SUCH FEE SHALL BE IN LIEU OF OTHER CHARGES; SETTING FORTH THE
M
TERM OF THE FRANCISE; PROVIDING FOR THE RATIFICATION AND RETROACTIVE
APPROVAL OF SAID AGREEMENT; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, said Ordinance was on the -1 day of December, 2013, duly approved and
subscribed by the Mayor of said City, and the seal of said City was thereto affixed and attested to
by the City Secretary;
NOW, THEREFORE, the City of Corinth, Texas, hereby in all respects ACCEPTS,
APPROVES AND AGREES TO said Ordinance, and the same shall constitute and be a binding
contractual obligation of the City of Corinth, Texas, and of the City of Denton, Texas, without
waiver of any other remedy by the City of Corinth, Texas, or the City of Denton, Texas, and the
City of Corinth, Texas does hereby file this, its written acceptance, with the City Secretary of the
City of Denton, Texas, in her office.
DATED this the day of 1201
ATTEST:
0
THE CITY OF CORINTH, TEXAS
ACCEPTANCE FILED in the Office of the City Secretary of the City of Denton, Texas, this the
day of , 201
Jennifer Walters, City Secretary
k,
ORDINANCE NO. 13- 09 -19 -21
AN ORDINANCE AUTHORIZING EXECUTION OF A FRANCHISE
AGREEMENT WITH THE CITY OF DENTON, ACTING THROUGH ITS
ELECTRIC UTILITY, GRANTING A FRANCHISE TO MAINTAIN, AND
OPERATE FACILITIES WITHIN THE CITY OF CORINTH FOR THE
DELIVERY AND SALE OF ELECTRICITY; PROVIDING FOR THE
PAYMENT OF A FEE FOR THE USE OF THE PUBLIC RIGHTS -OF-
WAY; PROVIDING THAT SUCH FEE SHALL BE IN LIEU OF OTHER
CHARGES; SETTING FORTH THE TERM OF THE FRANCHISE; AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Denton, Texas, through its Electric Utility, supplies electric
services through the public rights -of -way of the City of Corinth to residents of Corinth; and
WHEREAS, the franchise Agreement between the City of Denton and the City of
Corinth having expired and both parties desiring to adopt a new franchise; NOW,
THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. That the Mayor is hereby authorized to execute, on behalf of the City, a
Franchise Agreement with the City of Denton, Texas Municipal Electric Utility (the
"Agreement ") granting a franchise and providing for the payment of a franchise fee in
connection with the furnishing of electric service by the City of Denton Municipal Electric
Utility to customers in the City of Corinth, Texas. A copy of the Agreement is attached hereto
and incorporated by reference herein.
SECTION II. That this ordinance and the Agreement shall become effective as provided
by Article XI of the City Charter of the City of Corinth, and Denton's acceptance shall be
evidenced by its approval and execution of the Agreement
PASSED AND APPROVED this the day of 013.
,\y of- c oR/
V : -MVL RUGGIERE, MA
ATTEST:
TEXAS
KIM PENCE, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
le�m _7511FAINMIUM.Al
Page 2 of 2
FRANCHISE AGREEMENT BETWEEN THE CITY OF CORINTH, TEXAS AND THE CITY
OF DENTON, TEXAS MUNICIPAL ELECTRIC UTILITY
THIS AGREEMENT, made and entered into by and between the City of Corinth, Texas,
hereinafter called "CITY ", 3300 Corinth Parkway, Corinth, Texas 76208, and the City of Denton, Texas,
as owner of Denton Municipal Electric Utility, hereinafter called "DMEU ", 215 East McKinney Street,
Denton, Texas 76201.
WITNESSETH
WHEREAS, DMEU is operating an electric distribution system, including poles, wires,
transformers, meters, and other appurtenances within the City of Corinth, Texas; and
WHEREAS, the Franchise Agreement between the CITY and the DMEU has expired, and it is
the desire of the CITY and DMEU to enter into Franchise Agreement to provide for the use and
occupancy of the present and future streets, alleys, highways, public utility easements, parks and other
public property within the CITY (hereinafter the "Public Right -of- Way ");
NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set
forth, and the mutual benefits to be derived therefrom, the parties hereto agree as follows:
1. That DMEU, its successors or assigns, shall pay annually four percent (4 %) of its gross
revenues from the sale of electric power and energy at retail within the corporate limits of the CITY as
full payment for the right and privilege of using and occupying the Public Right -of -Way of the CITY of
Corinth, Texas.. The first payment shall be due on August 1, 2013 and subsequent payments shall be
made on or before August 1 of each year thereafter. Each payment shall be based on the gross receipts
from the retail sale of electricity within the corporate limits of CITY during the twelve (12) month period
ending May 30 next preceding the payment, and shall be payment for the aforesaid right and privilege
during the twelve (12) month period beginning with August 1 of the year in which the payment is made.
The first payment is based on the revenue collected by DMEU during the twelve month period beginning
June 1, 2012 and ending May 31, 2013. This payment, and this Agreement, covers the street rental
agreement period of August 1, 2012 through July 31, 2013, and provides for subsequent payments to be
rendered by DMEU as previously stated. DMEU shall provide a complete report in support of its
calculations with respect to each such payment and, upon the CITY's written request, shall, within a
reasonable time, provide and allow inspection of all necessary books and records of DMEU. The CITY
and DMEU each agree that this Agreement shall operate in such a manner as to provide for the
continuous payment of franchise payments to the CITY, despite the fact that the previous Franchise
Agreement, had inadvertently expired.
2. CITY agrees to accept such payment as full compensation to be paid by DMEU for the
privilege of using and occupying the streets, alleys, highways, easements, parks, and other public places
within the present and future territorial limits of CITY, while this Agreement is in effect, in lieu of and
shall be accepted as payment for all of DMEU's obligations to pay occupation taxes, assessments,
municipal charges, fees, rentals, pole rentals, wire taxes, license and inspection fees or charges,
administrative and processing fees, utility easement taxes, franchise taxes, street taxes, street or alley
rentals and all other charges, levies, fees, rentals and taxes of every kind, except ad valorem taxes, sales
taxes, and special taxes and assessments for public improvements.
3. That DMEU shall, to the extent permitted by law, indemnify and save whole and harmless the
CITY and all of its officers, agents, and employees from any and all claims for injury or damage to
persons or property occasioned by, or arising out of the construction, maintenance, operation, or repair of
the generation, transmission, or distribution system, or by the conduct of business in the CITY. Provided,
however, nothing herein shall be construed to indemnify the CITY against the CITY's own negligence or
fault. It is understood that it is not the intention of the parties hereto to create liability for the benefit of
third parties, but that this Agreement shall be solely for the benefit of the parties hereto.
4. That all poles to be placed shall be of sound material and reasonably straight, and shall be so
set that they will interfere as little as practicable with the ordinary travel on alleys, streets or sidewalks or
with the flow of water to any gutter or drain. The location and route of all poles, stubs, guys, anchors,
conduits and cables to be placed and constructed by the DMEU in the construction and maintenance of its
electric utility distribution system in the CITY, shall comply with all pertinent requirements of the
National Electrical Safety Code and all rules and guidelines that have been properly promulgated by the
CITY which are not inconsistent with this Agreement, and as may be authorized by State or Federal law.
5. That in any future construction, in new developments, lateral and service distribution lines and
wires shall be placed or constructed underground in all areas designated in advance of construction by the
CITY for all electric utilities in the plat approval process or by zoning ordinances. In such designated
areas, distribution feeder lines may be overhead and transformers and similar equipment may be pad -
mounted. The City Council of Corinth or the City Manager thereof, acting on their behalf, may upon
petition by DMEU, waive the requirement of underground installation if good cause is shown for such
exemption. As used in this section:
"Feeder lines" shall mean those electric lines that emanate from substations to distribute power
throughout an area.
"Lateral lines" shall mean those electric lines that emanate from a feeder line and are used to
distribute power to smaller areas of electric consumers. These electric lines are normally
connected to a feeder line through a sectionalizing device such as a fuse or disconnect switch.
"Service lines" shall mean those electric lines which, through a transformer, connect a lateral line
to a customer's service entrance.
6. DMEU shall provide reasonable notice to the City of planned work within the Public Right -of-
Way and shall, except in cases of emergency conditions or work incidental in nature, obtain a permit if
required by the City's ordinances before commencing work. DMEU shall notify the City as soon as
practicable regarding work performed under emergency conditions.
7. The City reserves the right to lay and permit to be laid, power, sewer, gas, water, and other
pipe lines or cables and conduits, and to do and permit to be done, any underground and overhead work
that may be deemed necessary or proper by the City in, across, along, over and under any Public Right -of-
Way occupied by DMEU, and to change any curb or sidewalk or the grade of any street. In permitting this
work to be done, the City shall not be liable to the DMEU for any resulting damage to DMEU's facilities.
City shall notify DMEU in a reasonable time of any projects that will affect DMEU's facilities located in
the Public Right -of -Way. When required to by City to remove or relocate its facilities located within
Public Right -of -Way that are in conflict with the City project, DMEU shall do so, at its expense, as soon
as practically possible with respect to the scope of the project, unless such work is for the primary
purpose of beautification or to accommodate a private developer. Facilities are deemed to be in conflict to
the extent that the proposed City facilities are determined by DMEU to be inconsistent with electric
distribution industry standard safe operating practices for existing facilities.
Franchise Agreement
Page 2 of 4
8. DMEU shall submit engineering plans of those projects involving significant construction in a
Public Right -of -Way to the City for review prior to construction and promptly after completion of
construction shall provide to the City accurate and complete "as- built" plans showing the nature and
specific location of all work done.
9. The location of all facilities of DMEU shall be subject to approval by the City Manager or the
Manager's designated representative prior to construction; provided however, said approval shall not be
unreasonably withheld. In the event of a conflict between the location of the facilities of DMEU and the
location of the facilities of City or other utility franchisees within the Public Right -of -Way that cannot be
resolved, the City Manager shall resolve the conflict and determine the location of the respective
facilities. DMEU shall not interfere with power, telephone, cable or water facilities, sanitary or storm
sewer facilities or other municipal or public use of the Public Right -of -Way. DMEU has the right to
request City Council review of any actions concerning DMEU's use of the Public Rights -of -Way.
10. DMEU shall be responsible for promptly repairing and restoring, to as good condition as before
the commencement of the DMEU's work, all Public Right -of -Way within a reasonable time after the
completion of the work Such repairs shall be maintained because of defective workmanship by DMEU
for two) years from the date of repairs and restoration. No such street, alley, highway, or public place
shall be encumbered for a longer period than shall be reasonably necessary to execute work. It is
understood that it is not the intention of the parties hereto to create any liability for the benefit of third
parties, but that this Agreement shall be solely for the benefit of the parties hereto.
11. Nothing herein shall enlarge, diminish, amend, affect or otherwise prejudice any certificate of
convenience and necessity granted to either CITY or DMEU.
12. DMEU's property and operations within the corporate limits of CITY shall be subject to such
reasonable rules and regulations of CITY as may be authorized by applicable law for the protection of the
general public. DMEU shall comply with all rules and regulations of CITY generally in effect to the
extent that same are valid and authorized by applicable state or federal law. Charges for installation or
maintenance of street lighting, including extension costs charged to developers, shall be in accordance
with DMEU's tariffs.
13. This Agreement supersedes and cancels any and all prior agreements between CITY and
DMEU relating to the matters herein set forth, and is the entire agreement of the parties.
14. This Agreement shall terminate on May 31, 2028.
15. This Agreement is executed in duplicate originals. Any notices required or desired
to be given from one party to the other party to this ordinance shall be in writing and shall be sent to the
addresses set forth in the preamble of this Agreement.
IN WITNESS WHEREOF, the City of Corinth, Texas has caused this Agreement to be executed by its
duly authorized Mayor; and the City of Denton, Texas has caused this Agreement to be executed by its
duly authorized City Manager on this the day of 92013.
Franchise Agreement
Page 3 of 4
"DMEU"
CITY OF DENTON, TEXAS
A Texas Municipal Corporation
By:
GEORGE C. CAMPBELL, CITY MANAGER
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
"CITY"
pF
CO'Y' "QTY OF CORINTH, TEXAS
fA0LRUG(jIERE,TSdYOR
7EST'
IMP NC , CITV SECRETARY
Franchise Agreement
Page 4 of 4
rl
CITY OF CORINTH
COUNCIL AGENDA ITEM
AGENDA TYPE ❑ Regular ❑ Special ® Consent Reviewed by Finance
Yes
Not Applicable
❑ Workshop ❑ Executive ❑ Public Hearing Reviewed by Legal
Yes
Not Applicable
Council Meeting Date: September 19, 2013 Department: Finance
Dept Head: Lee Ann Bunselmeyer Dept Head Signature:
Agenda Item Coordinator/Phone/Ext. #: 940 - 498 -3221
City Manager Reviewed/Approval ,-Initials Date
ACTION REQUESTED: ❑ORDINANCE # ❑ RESOLUTION # ❑ APPROVAL
❑ CHANGE ORDER ® AGREEMENT ❑ APPROVAL OF BID ® AWARD OF CONTRACT
❑ CONSENSUS ❑ OTHER
AGENDA CAPTION
Consider approval of ordinance authorizing execution of a franchise agreement with the City of Denton,
acting through its electric utility, granting a franchise to maintain and operate facilities within the City
of Corinth for the delivery and sale of electricity; providing for the payment of a fee for the use of the
public rights -of -way; providing that such fee shall be in lieu of other charges; setting forth the term of
the franchise; and providing an effective date.
FINANCIAL SUMMARY
❑N /A ❑GRANT FUNDS ❑OPERATING EXPENSE ❑REVENUE ❑CI P ®BUDGETED ❑NON- BUDGETED
FISCAL YEAR:
PRIOR
YEAR
CURRENT
YEAR
FUTURE
YEARS
TOTALS
Proposed Revenue Amount
$8,638
$8,500
$8,500
FUND(S) TO BE USED: General ®$ $8,500 Utility ❑ $ Special ❑ $
BACKGROUND /SUMMARY OF ITEM
The proposed fifteen year agreement provides that Denton Municipal Electric Utility (DMEU) will pay the City
of Corinth four percent (4 %) of its gross revenues from the sale of electric power and energy at retail within the
corporate limits of the City as full payment for the right and privilege of using and occupying the Public Right -of
Way. The first payment was due on August 1, 2013 and subsequent payments will be made on or before August
1 of each year thereafter. The franchise agreement will expire May 31, 2028.
The following Notice of Franchise was published in the Denton Record Chronicle on August 19, 2013.
The City of Corinth intends to adopt an ordinance granting a franchise to the City of Denton, Texas to
use the City streets and rights -of -way for the purpose of maintaining and operating equipment and
power poles to deliver and supply electricity to customers within the City.
STAFF OPTIONS & RECOMMENDATION
Staff recommends approval of the Franchise Agreement with the City of Denton.
List of Supporting Documents/Exhibits Attached:
Prior Action/Review by Council, Boards, Commissions or Other
Agencies:
1- Franchise agreement between the City of Corinth
and the City of Denton.
Vurdiur du a Vu:d�ruffl
AGENDA INFORMATION SHEET
AGENDA DATE: December 3, 2013
DEPARTMENT: City Manager's Office
ACM: Bryan Langley 4 kl-
SUBJECT
Consider nominations /appointments to the City's Boards and Commissions.
BACKGROUND
Below is the list of outstanding Boards and Commissions nominations and the Council Member
responsible for the nomination:
Airport Advisory Board — Karen Dickson has resigned from the Board. This is a nomination
for Mayor Burroughs.
Community Development Advisory Committee — Bob Gorton has resigned from the
Committee. This is a nomination for Mayor Burroughs.
Human Services Advisory Committee — David Sanchez has resigned from the Committee.
This is a nomination for Council Member Roden.
Public Art Committee — Carol Phillips has served three terms. This is a nomination for Mayor
Pro Tern Kamp.
Zoning Board of Adjustment — There are two alternate positions vacant. These are
nominations for the entire Council.
Citizens Bond Advisory Committee — Attached is the current list of appointed members and a
list of applications that have been submitted. There are still 8 vacant positions to fill.
Nominations could be made and voted on at this meeting should the Council desire. Approval
would be contingent on completion of the confirmation process.
If you require any further information, please let me know.
Respectfully submitted:
Jennifer Walters
City Secretary
2014 CITIZENS BOND COMMITTEE APPOINTMENTS
Appointed by Council Member Engelbrecht
Name: Address:
Phone:
Email address:
Karen DeVinney 1820 West Oak St
940- 380 -0348
drkjdev @aol.com
Alex Lieban 2208 Parkside Dr
940- 597 -8720
alieban @verizon.net
Appointed by Council Member Gregory
940 - 565 -9274
hilltennis @aol.com
Name: Address:
Phone:
Email address:
Sharon Barnhill 3329 Hummingbird Ln
940 - 390 -6303
momster9 @verizon.net
Janet Shelton 4 Timbergreen Circle
940 -300 -4119
jwshelton @verizon.net
Dale Tam pke 2400 Southridge Dr
740 -591 -9021
dale.tampke @unt.edu
Appointed by Council Member Hawkins
Address:
Phone:
Name: Address:
Phone:
Email address:
Joe Alfred
Keith Shelton
Scott Campbell 2420 Oakridge St
940 -535 -8057
rollingsalmon @gmail.com
Glen Farris 108 W. Oak St, Ste D
940- 300 -6743
glenfarris @gmail.com
Larry Parker 2801 Spencer Rd #15101
817- 915 -0568
(parker @dentondepot.com
Appointed by Council Member Kamp
Name: Address: Phone: Email address:
Hank Dickenson
Mary Ann McDuff 2233 Hollyhill Ln 940 - 435 -2300 mamcduff74 @verizon.net
Randy Robinson 2913 Destin Dr 940 -387 -3550
Alyssa Stevenson 311 E. Hickory St #132 409- 363 -3603 aly.m.stevenson @ gmail.com
Name:
Address:
Phone:
Email address:
Tim Crouch
3800 Lariat Rd
940 -565 -9370
tim @thecrouchgroup.com
Reggie Hill
3206 Belmont St
940 - 565 -9274
hilltennis @aol.com
Greg Johnson
1696 S. Loop 288
940 -594 -7717
gjohnson @v - re.com
Gustav Seligmann
6 Oak Forrest Circle
940- 395 -0294
gus @unt.edu
Appointed by Council Member
Roden
Name:
Address:
Phone:
Email address:
Colette Johnson
Keith Shelton
621 Grove St
940 - 387 -4715
shelton @unt.edu
Kimberly Villarreal Thaggard
APPLICATIONS FOR 2014 CITIZENS BOND COMMITTEE
Name:
Address:
Phone:
Email address:
District:
Sharon Barnhill
3329 Hummingbird Ln
940- 390 -6303
momster9 @verizon.net
2
Rosanne Ciccia
3620 Big Horn Trail
214- 766 -1662
rciccia @live.com
4
Tim Crouch
3800 Lariat Rd
940 -565 -9370
tim @thecrouchgroup.com
3
Karen DeVinney
1820 West Oak St
940- 380 -0348
drkjdev @aol.com
3
Jean Greenlaw
2600 Sheraton Rd
940- 383 -4786
j.greenlawl @verizon.net
2
Jamie Harrington
2408 Kariba Ln
817- 797 -0008
jamie@totallythebomb.com
4
Alex Lieban
2208 Parkside Dr
940 -597 -8720
alieban @verizon.net
3
Anyah Martinez
708 Smokerise Circle
940- 595 -4001
anyahmartinez @yahoo.com
4
Mary Ann McDuff
2233 Hollyhill Ln
940 - 435 -2300
mamcduff74 @verizon.net
4
Carol Phillips
2013 Tremont Circle
940- 391 -9608
carol.phillipsl6 @verizon.net
4
Batavia Russel
2302 Jacqueline Dr
214 - 289 -5369
bataviarussell @gmaiLcom
4
Gustav Seligmann
6 Oak Forrest Circle
940- 395 -0294
gus @unt.edu
4
Janet Shelton
4 Tiimbergreen Circle
940- 300 -4119
jwshelton @verizon.net
4
Keith Shelton
621 Grove St
940- 387 -4715
shelton @unt.edu
1
Daniel Speelman
3410 Lipizzan Dr
214 -557 -3900
dlspeelman @verizon.net
4
Dale Tampke
2400 Southridge Dr
740 -591 -9021
dale.tampke @unt.edu
4
Allison Wing
1529 Angelina Bend Dr
817- 229 -5491
allisonmortonwing @gmail.com
1
Applications Received After November Sth:
Name:
Address:
Phone:
Email address:
District:
Claralynn Barnes
2416 Royal Acres Dr
940 -566 -0034
barnesc5 @verizon.net
2
Michelle Bradley
316 Wainwright St Apt #303
940 - 231 -4538
michelle.g.bradley @gmaiLcom
1
Vicki Byrd
2512 Timber Trail
940- 453 -4603
vltbyrd @verizon.net
1
Brendan Carroll
2223 Houston PI
940- 230 -2447
brendan.carroll @2223.org
3
Jim Clark
1220 Tulane Dr
817 - 909 -0566
KC5BHV @yahoo.com
3
Victoria DeCuir
1008 Hillcrest St
940 -594 -7935
victoriadecuir @gmaiLcom
3
Don Edwards
2308 Crestwood PI
940 - 312 -3975
dedwards @twu.edu
2
Sarah Hoffman
3412 Oriole Ln
940 - 368 -6240
sarahgwynne @gmaiLcom
2
Brian Holt
1512 Manten Blvd
214 - 417 -5680
bholt68 @gmaiLcom
2
Don King
1404 Vista Verde Ct
940 -383 -3207
donandjoycemarie @ verizon.net
4
Julie Leal
3513 Chapel Hill Ln
940- 783 -1183
juliealeal @gmail.com
2
Linnie McAdams
1426 Kendolph Dr
940- 206 -4412
I.m.mcadams @att.net
4
Lilyan Prado - Carrillo
6504 Corral Ln
940 - 594 -4509
lilyan.prado @gmaiLcom
4
Dan Proctor
3109 Anyaa Ln
940- 453 -2331
dan @denton- therapy.com
1
Russ Stukel
1005 Ridgecrest Circle
940 - 368 -5512
stukel @unt.edu
4
Applications Received After November 15th:
Name:
Address:
Phone:
Email address:
District:
Jim Clark
1220 Tulane Dr, 76201
817 -909 -0566
kc5bhj @yahoo.com
3
Pudblhc V ieai -hr
AGENDA INFORMATION SHEET
AGENDA DATE: December 3, 2013
DEPARTMENT: Planning and Development
ACM: John Cabrales, Jr.
SUBJECT
Hold a public hearing and consider making a recommendation to the City Council regarding
amendments to the City's Gas Well Ordinance, Denton Development Code Subchapter 22,
pertaining to certain definitions and to the sequence of permits necessary for constriction,
drilling, and production activities. (DCA 13- 0003). The Planning and Zoning Commission
(P &Z) recommended approval with a 7 -0 vote.
BACKGROUND
On October 29, 2013, the City Council adopted Ordinance No. 2013 -304 amending Chapter 29
of the Code of the City of Denton, Texas regarding the adoption of the International Fire Code,
2009 edition, by adding Subsection 105.6.47 and Subsection 34063.9, relating to permits for
drilling and operating gas wells. Subsequently, DCA13 -0003 is intended to clarify the City's
current practice and to remain consistent with the recently updated Fire Code. As such, DCA13-
0003 proposes two amendments.
The first amendment is a revision to the Subchapter 22 definition of Gas Well Permit. The
current definition reads:
— Gas Well Permit. Any written license granted by the City of Denton for the
exploration, drilling, development, production, and operation of natural gas,
issued pursuant to riles and regulations of this Subchapter. A Gas Well Permit
is required for each well.
The proposed new definition states:
— Gas Well Permit. Any written license granted by the Department for
constricting the site; drilling, hydraulic fracturing; completion, production,
and re- working activities; maintenance and repairs; site closure; well plugging
and abandonment; and associated activities related to production, issued
pursuant to riles and regulations of this Subchapter. A Gas Well Permit is
required for each well.
The proposed change identifies the entity issuing the gas well permit as the Department, defined
in the Denton Development Code Subchapter 23 as The Planning and Development Department
of the City. In addition, the revised definition clarifies the City's current practice and includes
Agenda Information Sheet
December 3, 2013
Page 2
additional activities in the definition that are currently described in Denton Development Code
Section 35.22.7 (Gas Well Permit Required).
The second amendment will be to Denton Development Code Section 35.22.4 (Required
Authorization for Gas Well Drilling and Production in City Limits) Paragraph A, by adding a
number 5, to read:
— 5. Approval of a Fire Code operational permit.
The proposed revision will read as follows:
Section 35.22.4.A.1 -5
No gas well drilling or production activities may commence within the City
limits until the following authorizations have been obtained, in the following
sequence:
1. Approval of a Specific Use Permit, where required by Section 35.22.3.13,
approval of a Detailed Plan in a PD district, or site - specific authorization
in a MPC district;
2. Approval of a Watershed Protection Permit, where location of any gas
well drilling or production activities is proposed on land in the flood fringe
or in an Environmentally Sensitive Area (ESA), subject to the application
requirements and standards of Section 35.22.5.A.8;
3. Approval of a Gas Well Development Site Plan, subject to the application
requirements and standards of Section 35.22.6;
4. Approval of a Gas Well Permit, subject to the application requirements
and standards of Section 35.22.7: and
S. Approval of a Fire Code operational permit.
OPTIONS
1. Approve as submitted.
2. Approve with conditions.
3. Deny.
4. Continue the Public Hearing.
5. Table item.
RECOMMENDATION
The Planning and Zoning Commission recommended APPROVAL by a 7 -0 vote.
PRIOR ACTION/REVIEW
November 20, 2013 —Planning and Zoning Public Hearing.
Agenda Information Sheet
December 3, 2013
Page 3
EXHIBITS
1. Draft minutes from the November 20, 2013, Planning and Zoning Commission meeting
2. Draft Ordinance
Respectfully submitted:
J d
Brian Locldey, AICP, CPM
Planning & Development Department Director
Prepared by:
,1,,
Darren Groth, AICP, CPM, REP
Gas Well Administrator
1
2
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
Exhibit I
Draft minutes from the November 20, 2013 P &Z Commission meeting
4. PUBLIC HEARING:
A. Hold a public hearing and consider making, a recommendation to the City Council regarding
amendments to the City's Gas Well Ordinance, Denton Development Code Subcha tee r 22,
pertaining to certain definitions and permits for construction, drilling, and production
activities. (DCA13 -0003. Darren Groth)
Locldey introduced Groth. Groth stated this is a recommendation for City Council to amend
Subchapter 22 of the Denton Development Code (DDC). Groth provided a brief background on
this request. On October 29, 2013 City Council approved Ordinance 2013 -304 to amend City
Code Chapter 29 of the DDC. This is regarding the adoption of the International Fire Code, 2009
Edition. The following are the two subsections that were added: Subsections 105.6.47 and
34063.9; which are in regards to permits for drilling and operating gas wells. The two proposed
amendments to the DDC under DCA13 -0003 are: two amendments to clarify the City's current
practice and remain consistent with the updated International Fire Code.
Groth stated the first amendment revises the definition of Gas Well Permit. This identifies the
issuing entity as the Department Defined in DDC Subchapter 23 as The Planning and
Development Department of the City of Denton. The second amendment adds a number 5 to
DDC Section 35.22.4.A - Required Authorization for Gas Well Drilling and Production in City
Limits, to read: 5. Approval of a Fire Code operational permit. Groth stated the Fire Code
Operational Permit is the last step prior to drilling the well. Groth stated following this Public
Hearing the next step would be a Public Hearing before City Council, which is scheduled on
December 3, 2013. Groth stated staff recommends approval of the proposed Code Amendment.
Briggle referred to the platted areas by the Texas Railroad Commission, Briggle questioned if a
gas well operator were to drill in the City, would they complete this same proposed process.
Groth stated the cities process addresses any operating permit within the City of Denton. Groth
added the current steps would still occur and are required for all gas well applications. Briggle
questioned if the City has any say over where the gas wells are placed if there is a plat through
the Texas Railroad Commission. Groth stated the cities process is why Subchapter 22 of the
DDC was drafted. Briggle thanked Groth on his clarification. Locldey questioned Groth if there
is such a thing as a Texas Railroad Commission plat. Groth stated there is; however, it is a
separate plat than what is applied for through the City.
Schaake opened the Public Hearing.
Cory Littleheles, 3316 Hornbeam Street, Denton, Texas
Littleheles stated his daughter and wife both have respiratory issues, the drilling cause's damages
to innocent children and teens. Littleheles stated allowing drilling this close to residential is
ridiculous. Littleheles referred to all the permitting requirements needed for his commercial
business he owns within the City; a gas well permit should be as strict. Allowing the applicants
to operate under an old permit and not doing anything about it says you don't care for us and the
citizens. There are other ways to go about this.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Alyse Ogletree, 3401 Buckthorn Lane, Denton, Texas
Ogletree stated she moved to this area two years ago, raising a family, and has a three year old
with an immune deficiency. Ogletree stated her son has to do regular breathing treatments.
Ogletree stated she is for the ordinances; however they need to be worked on and a process needs
to be more defined. Ogletree added citizens need to be made aware of gas wells and their
existence in the area.
There was no one else to speak on this item. Schaake closed the public hearing. Taylor stated
these two amendments are good for the City.
Commissioner Devin Taylor motioned, Commissioner Amber Briggle seconded to approve this
request. Motion approved (7 -0).
s:Alegal \our documents \ordinances \13 \dcal3- 0003.doc
ORDINANCE 2013-
AN ORDINANCE OF THE CITY OF DENTON, TEXAS AMENDING SUBCHAPTER 22 OF
THE DENTON DEVELOPMENT CODE,PERTAINING TO CERTAIN DEFINITIONS AND
TO THE SEQUENCE OF PERMITS NECESSARY FOR CONSTRUCTION, DRILLING;
AND PRODUCTION ACTIVITIES; PROVIDING A CUMULATIVE CLAUSE; PROVIDING
A SEVERABILITY CLAUSE; PROVIDING FOR A PENALTY; AND AN EFFECTIVE
DATE (DCA13- 0003).
WHEREAS, the City of Denton, Texas is a home rule city acting under its Charter
adopted by the electorate pursuant to Article XI, Section 5 of the Texas Constitution and Chapter
9 of the Local Government Code and accordingly enjoys broad powers of self governance; and
WHEREAS, the authority of a home rule city to regulate the exploration and production
of natural gas within its city limits and extraterritorial ly, as herein provided, is legislatively
recognized, inter alia, at Section 92.007 of the Texas Natural Resources Code; Chapter 54, 211,
212, 217, and 551 of the Texas Local Government Code; Chapter 26 of the Texas Water Code;
Chapter 382 of the Texas Health and Safety Code; and numerous other legislative and
Constitutional provisions of the State of Texas; and
WHEREAS, the City Council, pursuant to Ordinance No. 2002 -040 adopted the Denton
Development Code (the "Development Code ") wherein contained is the City's gas well drilling
and production regulations, Subchapter 22, attendant with applicable procedures and definitions
in Subchapters 3 and 23; and
WHEREAS, the City amended Ordinance No. 2002 -040 pursuant to Ordinance No.
2013 -013 to further address gas well drilling concerns within the City of Denton; and
WHEREAS, it has come to the attention of the City Council that the City's current
policies for defining and issuing gas well permits in accordance with Development Code
Subchapter 22 require clarification; and
WHEREAS, on October 29, 2013, the City Council amended Chapter 29 of the Code of
the City of Denton, Texas regarding the adoption of the International Fire Code, 2009 edition, by
adding Subsection 105.6.47 and Subsection 3406.3.9, relating to permits for drilling and
operating gas wells; and
WHEREAS, the revised definition of Gas Well Permit in Development Code Subchapter
22 clarifies the identity of the entity responsible for reviewing, approving, and issuing gas well
permits as the City's Planning and Development Department; and
WHEREAS, the revised definition of Gas Well Permit in Development Code Subchapter
22 clarifies the list of specific authorized drilling and production activities upon the issuance of a
Gas Well Permit, as set forth in various sections of Subchapter 22; and
s:Uegakour documents \ordinances\1 3 \dcat3- 0003.doc
WHEREAS, the amendment to Development Code Section 35.22.4.A by adding a
number 5 to read: Approval of a Fire Code operational permit, is consistent with the October 29,
2013 amendments to Chapter 29 of the Code of the City of Denton, Texas and clarifies the City's
current practice of reviewing, approving, and issuing gas well permits; and
WHEREAS, after providing notice and after conducting a public hearing on November
20, 2013 as required by law, the City Council finds that the subject changes to Subchapter 22 of
the Development Code are consistent with the Comprehensive Plan and are in the public interest;
NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. All of the above recitals, including the findings made therein, are hereby
found to be true and correct factual and legislative determined of the City of Denton, Texas and
are hereby approved and incorporated by reference as though fully set forth herein.
SECTION 2. Subchapter 22 of the Denton Development Code ( "Gas Well Drilling and
Production ") is amended to incorporate the specific changes as identified in Exhibit 1, which is
attached and incorporated fully herein by reference.
SECTION 3. All ordinances in conflict herewith, are amended and superseded to the
limited extent of such conflict, and all remaining sections and provisions of such ordinances, not
in direct conflict herewith, are herby made cumulative.
SECTION 4. If any provision of this ordinance or the application thereof to any person
or circumstance is held invalid by any court, such invalidity shall not affect the validity of other
provisions or applications, and to this end the provisions of this ordinance are severable.
SECTION 5. Any person violating any provision of this ordinance shall, upon
conviction, be fined a sum not exceeding $2,000.00. Each day that a provision of this ordinance
is violated shall constitute a separate and distinct offense.
SECTION 6. This ordinance shall become effective fourteen (14) days from the date of
its passage, and the City Secretary is hereby directed to cause the caption of this ordinance to be
published twice in the Denton Record - Chronicle, a daily newspaper published in the City of
Denton, Texas, within ten (10) days of the date of its passage.
sAlegal\our documents \ordinances \13 \dcal3- 0003.doc
PASSED AND APPROVED at the City Council meeting posted and commenced on the
day of , 2013.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
C•
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:.
Olegal \our documents \ordinances \13 \dcal3- 0003.doc
Exhibit 1
1. Section 35.22.2 of the DDC is amended to revise the definition of Gas Well Permit as
follows:
— CURRENT: Gas Well Permit. Any written license granted by the City of
Denton for the exploration, drilling, development, production, and operation
of natural gas, issued pursuant to rules and regulations of this Subchapter. A
Gas Well Permit is required for each well.
— NEW: Gas Well Permit. Any written license granted by the Department for
constructing the site; drilling, hydraulic fracturing; completion, production,
and re- working activities; maintenance and repairs; site closure; well plugging
and abandonment; and associated activities related to production, issued
pursuant to rules and regulations of this Subchapter. A Gas Well Permit is
required for each well.
2. Section 35.22.4 (Required Authorization for Gas Well Drilling and Production in City
Limits) Paragraph A, shall be amended by adding a number 5, to read:
— 5. Approval of a Fire Code operational permit.