2013-143
FILE REFERENCE FORM 2013-143
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FILE(S) Date Initials
Amended by Ordinance No 2013-274 10/15/13 JR
Lease Terminated by Ordinance 2017-385 12/05/2017 TJ
oxD�varrcE No. 2013-143
AN ORDINANCE APPROVING A LEASE AGREEMENT TO BE EXECUTED BY THE
CITY MANAGER, BY AND BETWEEN THE CITY OF DENTON, TEXAS AND MASTER
RECYCLING OF TEXAS, 1NC., A CORPORATION, FOR A CERTAIN 3.5 ACRE TRACT
OF LAND SITUATED IN THE GIDEON WALKER SURVEY, ABSTRACT NUMBER 1330,
1N THE CITY OF DENTON, DENTON COUNTY, TEXAS, COMMONLY KNOWN AS 1301
SOUTH MAYHILL ROAD; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City previously entered into a Lease Agreement (the "Agreement") for a
ground lease of a certain 3.5 acre tract of land, located adjacent to the City's landfill real
property, with Tetra Point Fuels, Inc., a Delaware Limited Liability Company (hereafter "Tetra
Point") for a term of ten-years, on Apri121, 2009, the execution of which Lease Agreement was
approved by the City Council by Ordinance No. 2009-099 on Apri121, 2009; and
WHEREAS, on January 25, 2013, Tetra Point defaulted in its financial obligations to the
City with respect to said Agreement and also failed to develop its operations on the said realty;
thereafter, Staff immediately commenced efforts to locate a suitable tenant to replace Tetra
Point, to occupy the leased premises; negotiations began shortly thereafter and Master Recycling
of Texas, Inc., a Corporation (hereafter "Master Recycling"), thereafter agreed with the City to
bring the financial obligations arising under the Tetra Point Agreement current, and further
expressed its intention to also enter into a new lease for a term if ten-years, with options
contained therein, regarding the leased premises in accordance with its own plans for
development, ha�ing purchased the assets of Tetra Point in March 2013; and
WHEREAS, the City and Master Recycling have completed their negotiations which
have culminated in the proposed Lease Agreement which is attached hereto as Exhibit "A;" and
WHEREAS, on March 25, 2013 this item was presented to the Public Utilities Board, and
the Board recommended approval of the same; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS:
SECTION l. The recitations and statements contained in the Preamble hereto are
incorporated herewith by reference for all purposes, and made a part of this ordinance.
SECTION 2. The City Manager or his designee is hereby authorized to execute the
"Lease Agreement" by and between the City of Denton, Texas and Master Recycling of Texas,
Inc., a Corporation, which is attached hereto as E�ibit "A" and is incorporated herewith by
reference, in substantially the form of the "Lease Agreement" which is attached hereto and made
a part of this ordinance for all purposes.
SECTION 3. The City Manager is authorized to make any expenditures and to perform
such duties as are set forth in the Lease Agreement.
SECTION 4. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the _!`� day of , 2013.
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By, , �
APP VED A TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
�;.
„
By:
Page 2
STATE OF TEXAS
COUNTY OF DENTON
LEASE AGREEMENT
This Lease Agreement (hereafter the "Lease Agreement") is made and entered into effective as
of the Effective Date, as set forth below, by and between THE CITY OF DENTON, TEXAS
(hereinafter sometimes referred to as "LESSOR" and/or "the City"), and MASTER
RECYCLING OF TEXAS, INC. ("LESSEE").
WHEREAS, LESSOR owns the City's Solid Waste Services Site (the "Site"), located in the
vicinity of 1100 Mayhill Road, Denton, Texas and operates a landfill on the Site (the "Landfill");
and
WHEREAS, the City desires to lease to LESSEE an approximate 3.5 acre tract of land located at
the Site, which property is more specifically set forth and described, by metes and bounds on
Exhibit "A" (hereinafter the "Leased Premises"); and
WHEREAS, LESSEE desires to lease the Leased Premises from the City for purposes of
construction and operation of a processing and ethanol production plant to receive containers and
bulk liquids containing sugar conversion of those materials into an ethanol fuel (hereafter the
"Ethanol Production and Processing Agreement" as well as other operations associated with
containerized liquid drink products which may include but not be limited to the packaging and
repackaging of liquid drinlc products to return them to a marketable condition or for use in the
production of ethanol.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements herein
contained, and for $10.00 other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, LESSOR and LESSEE, intending to be legally bound, do
hereby AGREE as follows:
ARTICLE 1
PREMISES
1.1 Lease Premises.
LESSOR hereby leases and lets unto LESSEE, and LESSEE hereby leases and lets from
LESSOR the Leased Premises, which is that certain tract or parcel of real property containing
approximately three point five (3.5) acres, more or less, located at the Site, commonly referred to
as 1301 South Mayhill Road, Denton, Denton County, Texas, as is more particularly described
by metes and bounds on Exhibit "A;" and also as depicted by the field notes as Exhibit "B," both
of which e�ibits which are attached hereto and incorporated by reference herein.
1.2 Use of Premises.
The Leased Premises are to be occupied and used by LESSEE solely for the handling,
processing, storage of biofuels and recyclable materials, the production of biofuels and
associated by-products, and the end products therefrom. As well as other operations associated
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with containerized liquid drink products which may include but not be limited to the packaging
and repacicaging of liquid drink products to return them to a marketable condition or for use in
the production of ethanol. In the event LESSEE for any reason desires hereafter to substantially
modify and/or substantially change its use of any of the Leased Premises, the nature and terms of
such modification and change must be approved in writing by LESSOR and this Lease
Agreement must be amended in writing to authorize the same.
1.3 Lessee Construction on Lease Premises.
LESSEE shall have the right to construct improvements on the Leased Premises and this right
shall continue in effect throughout the term of this Lease Agreement. LESSEE will, as a
consideration for LESSOR's obligations set forth herein and this Lease Agreement, construct, at
LESSEE's sole cost, a building or a series of buildings and structures on the Leased Premises.
Throughout the term of this Lease Agreement and any extension thereof, LESSEE shall have the
right to alter, modify, remodel and demolish any improvements LESSEE has constructed on the
Leased Premises. LESSEE agrees to provide to LESSOR a complete set of plans and
specifications detailing each improvement which LESSEE proposes to construct on the Leased
Premises prior to commencing any construction. The plans and specifications will be reviewed
by LESSOR only for compliance with the municipal code of Denton, Texas as well as any
applicable environmental laws andlor regulations that are applicable to the LESSEE's operations.
LESSOR's Solid Waste Division must approve, within twenty (20) days, or must provide
LESSEE a written statement advising why the construction plans are not approved. Such
approval by the Solid Waste Division will not be unreasonably withheld or delayed. Provided
however, the Solid Waste Division's approval does not apply to any other approval required
from the City's Planning Department, Permitting or Building Permit Departments, or other City
departments. No approval of LESSOR shall be required with respect to any modifications or
alterations or remodeling of the interior of any of the improvements. All improvements
constructed or placed on the Lease Premises by LESSEE shall remain the property of LESSEE
during the term of this Lease Agreement and any renewal or extension hereo£ For real property
fixtures, they shall remain the property of LESSEE, and upon the termination of this Lease, the
LESSEE is under a duty to promptly, within sixty (60) days of the expiration of the term of this
Lease Agreement, remove any and all improvements and fixtures installed or constructed by
LESSEE with no damage to the leased premises. LESSEE agrees to surrender the premises to
LESSOR in broom-clean condition. The LESSEE covenants to LESSOR that upon termination
of this Lease the subject real property shall be free and clear of any and all recyclable materials
or waste that LESSEE abandons on the subject real property. Once the premises have been
surrendered by LESSEE, LESSOR shall determine within twenty (20) days the disposition of the
$5,000 security deposit which LESSEE shall pay to LESSOR before talcing possession of the
above-described Leased Premises at the beginning of this Lease. LESSOR shall advise LESSEE
in writing at its address, as shown herein, of any deductions made regarding any damages
suffered by the LESSOR by reason of LESSEE'S default regarding LESSEE'S covenant to
surrender the leased premises in broom-clean condition. Further, should the operations of the
LESSEE materially change either in size, location, rental amount or scope, then LESSEE and
LESSOR shall confer and arrive at a reasonable additional security deposit amount to further
secure LESSEE's performance of its obligations under this LEASE AGREEMENT.
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1.4 Easements.
LESSOR shall provide to LESSEE, when reasonably required by LESSEE in the conduct of its
business on the Leased Premises, but in no event later than completion of construction, at no
additional consideration, nonexclusive rights-of-way or easements that it has the right to grant
over, across and through the leased property; ingress and egress onto the leased property which
are necessary for the operation of LESSEE's facilities on the Leased Premises as follows:
(a) For connection of water and sanitary sewer facilities to the boundary of the
Leased Premises;
(b) For connection of telephone, electric and gas lines, as approved by the appropriate
utility companies, to those installed at or upon the Leased Premises; and
(c) For connection of on-site streets and/or roads for vehicular traffic, only to roads
immediately adjacent to or near the Leased Premises.
All rights-of-way or easements granted or to be granted shall be located in such a way as to not
unreasonably interfere with the orderly utilization of the LESSOR' S Landfill.
1.5 Environmental Assessments Required by Lessor — Phase I and Phase II.
Both a Phase I and Phase II final Environmental Study shall be conducted on the Leased
Premises upon the termination of the Lease Agreement, by LESSEE's licensed professional
consultant, with the costs of both of such Studies shall be fully and timely paid by LESSEE.
The final Phase I and Phase II Environmental Studies shall commence no later than thirty (30)
days following the termination date of this Lease Agreement. LESSEE agrees to provide
LESSOR with exact copies of all such studies within ten (10) days following LESSEE'S receipt
of such Studies.
The parties agree that the LESSEE shall be solely and exclusively responsible for the satisfactory
cleanup of any environmental contamination disclosed by the final Studies.
1.6 Signs.
LESSEE shall be entitled to erect, install, and maintain on the Leased Premises identification and
advertising signs appropriate to its business; provided, however, that all such signs at all times
shall be subject to the prior written approval of LESSOR as to location, size, shape, color and
content. Said approval is conditioned upon the signs meeting the requirements of the applicable
City ordinances of the City of Denton, Texas.
1.7 Lien Claims.
LESSEE hereby covenants to unconditionally indemnify LESSOR from and against, and hold
LESSOR harmless from any and all lien claims of any nature whatsoever arising out of or in any
manner connected with the construction, installation, erection, maintenance, repair, occupancy,
use and/or operation of any improvements, facilities and/or equipment of LESSEE or any third
person on or about the Leased Premises by or at the direction of or with the permission of
LESSEE; and LESSEE further agrees that it shall, in the event any such liens are filed, forthwith
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effect their removal and/or satisfaction. Provided, however, LESSEE shall have the right, at its
sole cost and expense, and after having given LESSOR prior written notice of its intent to do so,
to promptly contest by appropriate legal proceedings diligently conducted in good faith, the
amount, validity or application, in whole or in part, of any such lien or liens, provided (i) such
proceedings shall suspend the collection of such lien(s); (ii) neither the Leased Premises nor any
rent therefor, nor any portion of same, would be in danger of attachment, forfeiture, loss or
similar consequence; and (iii) that LESSEE shall first furnish security to the City's reasonable
satisfaction to bond said lien or liens off of the Leased Premises.
1.8 Inspection and/or Repair of Leased Premises.
LESSEE shall at all times maintain the Leased Premises including all improvements thereon in
good condition. LESSEE shall be responsible for all maintenance, repair and replacement of the
Leased Premises and all improvements thereon except for repairs or replacements caused by the
acts or negligence of LESSOR, its agents or employees.
1.9 Warranty.
LESSOR represents and warrants that it owns the Leased Premises and that LESSOR is fully
authorized to enter into this Lease Agreement with LESSEE. In addition, LESSOR represents
and warrants that it has not granted any mortgages or pledges of the tract of real property leased
hereunder. It is understood and agreed that any mortgage, pledge, or other encumbrance of the
property leased hereunder shall be subordinate to this Lease Agreement and that any such
mortgage, pledge, or other encumbrance shall contain specific provisions providing that all of
LESSEE's improvements or appurtenances on the property leased hereunder, as well as any
products or other contents in or on said improvements or appurtenances, are excluded from such
mortgage, pledge or encumbrance, and that LESSEE hereunder retains the right to remove any
and all such improvements or appurtenances, as well as any products or other contents in or on
said improvements or appurtenances, in accordance with the terms of this Lease Agreement, and
that in the event of a foreclosure, LESSEE shall have the right to continue to occupy the Lease
Premises pursuant to the terms of this Lease Agreement so long as LESSEE is not in default
hereunder.
ARTICLE 2
LEASE TERM
2.1 Primary Term.
The Primary Term of this Lease Agreement shall be for a term of ten (10) years from and after
June 1, 2013, the Effective Date of this Lease Agreement, unless sooner terminated as provided
for herein; provided that this Lease Agreement is approved by the Denton City Council.
2.2 Renewal Terms.
Provided that LESSEE is not in default, and provided that this Lease Agreement is otherwise in
full force and effect, this Lease Agreement may be extended for two (2) additional terms of five
(5) years each. The decision to extend the Lease Agreement must be a mutual decision made by
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both LESSOR and LESSEE. Negotiations to extend this Lease Agreement are to begin at least
one (1) year before the end of the Primary Term or the First Renewal Term (as the case may be)
of this Lease Agreement, provided that the Lease Agreement is not in default at the time
negotiations for extension are entered into.
2.3 Option to Lease Two Metal Buildings at 1001 South Mayhill Road, Denton, Texas.
It may become necessary or appropriate during the Initial Term of the Lease for the LESSEE to
move its operations. Recognizing this fact, should LESSEE not be in default under the terms of
this Lease Agreement, at the time that LESSEE desires to exercise this option, LESSOR extends
to LESSEE. an option to LESSEE to lease one or two metal buildings, known as "Building 101"
[9,695 square feet of rentable space; 3,128 square feet of office space] and "Building 102" [9,521
square feet of rentable space; 1,804 square feet of ofiice space] located at 1001 South Mayhill
Road, Denton, Denton County, Texas, which are being presently acquired by LESSOR [pending
real estate purchase by the City — legal description to be furnished under separate cover later].
These Buildings are more particularly described in E�ibit "C" attached hereto. LESSEE shall
make its own determinations as to whether or not said building or buildings are suitable for their
operations. The terms of such option, including the rental amount and the term shall be
negotiated separately from this Lease Agreement. If this option is exercised within twelve
months from the Effective Date, the rental amount of Building 101 will be $4.75 per square foot
per year; and the Building 102 rental amount will be $3.95 per square foot per year, payable in
monthly payments, in advance.
2.4 Option to Lease an Additional Tract of Land
During the initial term of the Lease Agreement, should LESSEE not be in default under this
lease, then LESSEE shall have the right to lease an additional tract of land. Said option shall
apply to a not less than five (5) acre but not greater than a ten (10) acre tract of land situated
within the Gideon Walker Survey, Abstract No. 1330, located within the City of Denton, Denton
County, Texas. The said tract of real estate is northwest and adjacent to the Leased Premises
(Exhibit "A"), and is located within the Landfill buffer zone. The selection of this five to ten
acre tract will be established only when LESSEE exercises this option, if ever. Should the
LESSEE choose to lease the tract of land described herein, then the applicable rate and terms
will be the same rental and same provisions that are provided for at that point in time, regarding
this Lease. LESSEE will also have the non-exclusive right to use the LESSOR's (Solid Waste
Department's) private road located within said tract, for ingress and egress access from
LESSEE's site.
2.5 Assignment of Lease Agreement
LESSEE shall not assign, sublet, mortgage or pledge this Lease Agreement or any interest herein
or in the Leased Premises or any part thereof, nor shall any assignment, sublease or transfer of
whatever kind of any interest of LESSEE herein by operation of law or by reason of LESSEE's
banlcruptcy become effective, without the prior written consent of LESSOR, which consent shall
not be unreasonably withheld; provided however, that the City's refusal to give the City's
consent to a potential assignee who is not as creditworthy as LESSEE, shall be deemed to be
reasonable. Notwithstanding the foregoing, LESSEE shall have the right to assign this Lease
Agreement or sublet the Lease Premises to an entity that is controlled by, or under common
control with LESSEE, provided that LESSEE remains fully and primarily liable for all of its
obligations under this Lease Agreement.
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ARTICLE 3
RENTALS
3.1 Rentals.
The rental for the Lease Premises shall be SIXTEEN and ONE-HALF CENTS ($.165) per
square foot, per year for the first five (5) years of the Lease Term. For purposes of this Lease
Agreernent the "Certificate of Occupancy Date" is the date upon which LESSOR issues the
building temporary occupancy permit. The first monthly rental payment due from LESSEE on
June 1, 2013, to LESSOR, payable at the ofiices of LESSOR as set forth in Article 6.2
hereinbelow, on or before the first day of the first month, payable in advance, with equal
payments of rental to be made on the first day of each month thereafter throughout the term of
the Lease; Provided however, that the rental rate will be 50% of the lease rate for the real
property described in this Lease, from the Effective Date of this Lease (June l, 2013) to
whichever of the following two dates first occurs: the date of issuance of the final Certiiicate of
Occupancy for an on-site building, or November 30, 2013,
LESSOR and LESSEE agree that the rental amount is also subject however, to the terms of
Rental Adjustment (indexing) that is reserved in this Article 3.1. The rental rate set forth
hereinabove is for purposes of the Lease and shall be deiined as the "Initial Base Rental
Payment." Such Initial Base Rental Payment will be the rental due under the Lease for years one
(1) through five (5) of the initial ten (10) year term of the Lease (the "Primary Term"). Prior to
the commencement of the first (lst) day of the sixth (6th) year of the Primary Term, and prior to
the commencement of each additional five (5) year period thereafter throughout the entire term
of the Lease, including any renewal terms (a "Renewal Term"), the rental to be paid by LESSEE
to LESSOR under the Lease shall be subject to adjustment based upon adjustments in the
consumer price index, as hereinafter defined. The initial base rental payment shall be adjusted
upward, downward, or unchanged prior to the commencement of the sixth (6th) year of the Lease
to conform to that certain United States Bureau of Labor Statistics "Producer Price Index" now
known as Series ID# PCU531210531210602. That product is named: Real estate brokerage,
nonresidential property leases including land leases. Its base date is December, 2009. The
starting date, for purposes of this Rental Adjustment is June l, 2013. The adjustment at the
beginning of year six (6) of the Lease will be accomplished by multiplying the initial base rental
payment by a fraction, the numerator of which shall be such index as of the most recent date
published prior to the date of adjustment and the denominator of which shall be the most recently
published index as of the Commencement Date. The adjustment for each subsequent five (5)
year period will be calculated in a similar manner except that rather than using the initial base
rental payment as the base rentals from which adjustments will be made, the rental figure for the
then current year will be substituted for such initial base rental payment. In no five (5) year
period may the rental be increased or decreased more than twenty-five percent (25%) of the
rental applicable during the five (5) year period immediately preceding the five (5) year period
for which an adjustment is to be made. If the index above referred to shall be discontinued, the
parties hereto shall attempt to agree upon a substitute index or formula. In the event of dispute
between the parties as to the amount of any adjustment, the rates shall be established through the
dispute resolution procedures.
3.2 Taxes.
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LESSEE agrees to pay all sales and/or use taxes and any and all ad valorem assessments and/or
taxes which may be legally exacted, made, and charged upon and/or levied andlor assessed
against LESSEE's property on the Leased Premises, before the same shall become delinquent;
provided, however, LESSEE shall have the right, at its sole cost and expense and after having
given LESSOR prior written notice of its intention to do so, to contest by appropriate legal
proceedings diligently conducted in good faith, the validity, amount or application, in whole or
in part, of such taxes, levies and/or assessments provided (i) such proceedings will suspend the
collection of the tax, levy, or assessment; and (ii) the Lease Premises, nor any rent therefrom, nor
any portion of it is in danger of seizure, forfeiture, sale, loss or similar consequences.
3.3 Late Charges on Rentals.
If any installment of rental due from LESSEE is not received by LESSOR within twenty (20)
days of the date upon which it is due, without any notice or demand for payment to LESSEE
being necessary, LESSEE will pay to LESSOR the additional sum of Fifty Dollars ($50.00) as a
late charge for each late payment. The late charge represents the reasonable time and efforts of
City staff expended in order to enforce the rental obligation. Acceptance of any late charge shall
not constitute a waiver of LESSEE's default with respect to the overdue amount, nor prevent
LESSOR from exercising any other rights and remedies available to LESSOR.
3.4 No Additional Fees
There shall be no additional fees or assessments made by LESSOR for LESSEE's use or
occupancy of the Lease Premises; provided however, that LESSEE shall remain solely
responsible for any impact fee, connection fee, tap fee, building fees, or any other municipal fees
charged by the City of Denton, Texas that are applicable to the Leased Premises; and LESSEE
shall timely pay same.
ARTICLE 4
OPERATIONS
4.1 Pollution Control.
LESSEE agrees that it shall use its commercially reasonable best efforts to comply with all
applicable federal, state and local laws, regulations and the common law, as they may exist
currently, or as they may be ainended in the future, pertaining to protection of the environment or
human health and safety at the leased premises and/or in the vicinity of any of its operations or
activities that may be permitted hereunder.
4.2 Compliance with Environmental Laws and Indemnification.
During the term of this Lease Agreement, LESSEE shall fully comply with all applicable federal,
state and local laws, regulations and the common law, as they may exist currently or as they may
be amended in the future, pertaining to protection of the environment or human health and safety
at the leased premises.
LESSOR warrants and represents that at the commencement of this Lease Agreement, that to its
knowledge there is no Hazardous Substance (as defined hereinbelow) including any petroleum,
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petroleum product, or other types of hydrocarbons in or on the Leased Premises in contravention
of any federal, state or local laws, regulations or the common law pertaining to protection of the
environment or human health and safety.
Notwithstanding any provision in this Lease Agreement to the contrary, it is expressly
understood and agreed that the LESSOR hereby agrees to indemnify to the extent provided by
applicable law, defend and hold harmless the LESSEE, only to the extent permitted by applicable
law, its officers, employees, contractors, agents, customers, licensees, invitees and/or visitors and
any other person for or on whose behalf LESSOR is liable, harmless from and against any and all
claims, obligations, liabilities, costs, expenses (including attorney's fees), losses, suits, fines,
penalties or demands, made or sought by or on behalf of any person, firms, corporation or
government authority whomsoever, based upon or arising out of any obligation, liability, loss,
damage or expense, of whatever nature or lcind, contingent or otherwise, known or unknown,
incurred under or imposed by any provision of federal, state or local law or regulation, or
common law, pertaining to protection of the environment or human health and safety in or on the
Leased Premises prior to the Effective Date.
Notwithstanding any provision in this Lease Agreement to the contrary, it is expressly
understood and agreed that the LESSOR does not assume or agree to be responsible for, and
LESSEE hereby agrees to indemnify, defend and hold LESSOR, its officers, employees,
contractors, agents, customers, licensees, invitees and/or visitors and any other person for or on
whose behalf LESSOR is liable, harmless from and against any and all claims, obligations,
liabilities, costs, expenses (including attorneys' fees), losses, suits, fines, penalties, or demands,
made or sought by or on behalf of any person, firm, corporation or government authority
whomsoever, based upon or arising out of the handling, storage or disposal of Hazardous
Substances by LESSEE, LESSEE's agent or anyone on or about the Leased Premises by or at the
direction of LESSEE or with the permission of LESSEE during the term of this Lease
Agreement.
For purposes of this Lease Agreement, the term "Hazardous Substance" or "Hazardous
Substances" means that term as defined in Section 9601(14) of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C.
Section 9601, et seq. ("CERCLA"), but it also includes the term "Regulated Substance" as
defined in Section 6991(2), and the term "Hazardous Waste" as defined in Section 6903(5), of
the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Section 6901, et
seq. ("RCRA"), including all regulations issued pursuant to any of the above statutes, as well as
any other contaminant, oil, petroleum, petroleum product or byproduct, radioactive material or
byproduct and any unsafe, noxious, toxic or hazardous substance or similar material regulated as
a hazardous substance under any applicable state, federal or local law, and any other applicable
environtnental, land use or similar act, statute or regulation e�sting as of the date of this Lease
Agreement or thereafter.
The indemnifications provided by this Article shall specifically and reciprocally cover, without
limitation, costs incurred in connection with any investigation of site conditions or any cleanup,
remedial, removal or restoration work required by any federal, state or local governmental
agency or political subdivision or other third party.
The foregoing environmental indemnity provisions shall survive for a period of five (5) years
after the expiration or termination of this Lease Agreement and any renewals hereof.
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4.3 Compliance with Laws and Regulations.
LESSEE's exercise of such rights and/or privileges as may be extended it hereunder shall at all
times be in full compliance with all applicable laws, rules, and regulations, including safety
regulations, of the City of Denton, Texas, the State of Texas, the United States, and other
governmental authorities now or hereafter having jurisdiction thereof and/or any of their duly
empowered agencies and/or instrumentalities. A copy of all building permits, licenses, and
siinilar authorizing documents will be promptly provided to the LESSOR.
4.4 Lessee Insurance.
For the term of this Lease Agreement and any renewal thereof, LESSEE will maintain, at its own
expense, the following insurance coverage:
(a) Workers' Compensation providing statutory beneiits, and Employers' Liability
coverage with minimum limits of $1,000,000 per each occurrence; and
(b) Comprehensive General Liability insurance coverage with minimum limits of
$2,000,000 per occurrence, combined single limit, for bodily injury and property
damage. Coverage shall include contractual liability; and
(c) Automobile liability insurance coverage with minimum limits of $1,000,000 per
occurrence, combined single limit; and
(d) Casualty property insurance on the LESSEE constructed facilities on-site in an
appropriate amount reasonably determined by the agreement of LESSEE and
LESSOR, which amount shall take into account the construction costs of the
LESSEE's facilities and other relevant factors.
LESSEE shall provide LESSOR with a certificate evidencing the insurance required hereunder
together with written evidence of premium payment. All such policies of insurance shall require
that LESSOR and LESSEE be given at least thirty (30) days prior written notice of any
modiiication, termination and/ar cancellation of coverage. The insurance policies described in
(b) and (c) above shall name LESSOR as an additional insured party. All insurance policies
belonging to LESSEE shall be issued through companies that shall have a minimum A.M. Best
Company rating of "A-," in addition to a minimum financial size category of "VI" or "VII," or
alternatively a Standard and Poor's rating of "BBB" or better.
4.5 Lessor's Acceptance of Aqueous By-Product of the Sugar Concentration Process.
LESSOR (the City's Solid Waste Department) agrees to accept from LESSEE during the Term
of this Lease Agreement up to, but no more than fifteen thousand (15,000) gallons per LESSEE's
operating day, of the aqueous-based by-product of the sugar concentration process conducted by
LESSEE, subject however, to the product's acceptability per Texas Commission on
Environmental Quality ("TCEQ") requirements, at no cost to LESSEE; provided that LESSEE
delivers said product to LESSOR's storage tanks, but not otherwise.
4.6 Termination.
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This Lease Agreement shall terminate pursuant upon the expiration of its Term, or extension of
Term (if applicable), or upon the subsequent written agreement of LESSOR and LESSEE. Upon
termination, LESSEE shall be entitled to remove all of its personal property from the building(s)
and any equipment that LESSEE has installed in the building, and shall thereafter promptly quit
and surrender the Leased Premises to LESSOR in broom-clean condition. LESSEE shall
additionally remove all feedstock, recyclables and recycling materials, by-products, end-
products, and chemical supplies from the Leased Premises, and shall thereafter quit and
surrender the Leased Premises to LESSOR; subject to the provisions of Article 1.3 hereinabove.
4.7 Events of Default.
The following shall be "Events of Default" under this Lease Agreement and the terms "Event of
Default" or "Default" shall mean whenever they are used in this Lease Agreement, any one or
more of the following events:
(a) The insolvency, assignment for the benefit of creditors, adjudication as a bankrupt
of LESSEE or the appointment of a receiver for substantially all of the LESSEE's
property and/or LESSEE's interest in this Lease Agreement; or
(b) The issuance of execution against LESSEE's interest in this Lease Agreement or
any legal process which by operation of law would cause LESSEE's interest in this Lease
Agreement to pass to any person other than LESSEE or its successor assignee or
sublessee; or
(c) The failure or refusal of LESSEE to pay or cause to be paid any lease rental
payment, charge and/or assessment hereunder or any installment thereof when due and
the continuance of such failure for a period of twenty (20) days after written notice
thereof has been sent by LESSOR to LESSEE at the address shown herein for LESSEE;
or
(d) The failure or refusal of LESSEE and/or LESSOR to perform any agreement,
covenant, condition, obligation and/or undertaking herein contained or required by
operation of law and/or to observe or comply with any of the terms provisions or
conditions of this Lease Agreement, and the continuance of such for a period of thirty
(30) days after written notice thereof has been sent by LESSOR to LESSEE at the
address shown herein for LESSEE; or
(e) The failure of LESSEE and/or LESSOR in the observance or performance of any
material term, obligation or covenant required to be performed by LESSEE and/or
LESSOR under this Lease Agreement or by operation of law, and the continuance of
such for a period of thirty (30) days after written notice thereof has been sent by LESSOR
to LESEE at the address shown herein for LESSEE.
4.8 Holding Over.
If LESSEE shall, with or without the consent of LESSOR, hold over after the expiration or
sooner termination of the term of this Lease Agreement, the resulting tenancy shall, unless
otherwise mutually agreed upon in writing, shall be on a month-to-month basis only. During
such month-to-month tenancy, LESSEE shall pay to LESSOR the sarne rentals, plus an
additional payment of holdover rent of twenty-five (25) percent, per month, of the then
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applicable rent, payable monthly along with its other rental payment due hereunder, as set forth
herein, unless a different rate(s) shall be agreed upon, and LESSEE shall be bound by all of the
provisions of this Lease Agreement insofar as they may be pertinent. LESSOR shall have the
right, after the expiration of the term and/or extension to provide LESSEE with a 30-day notice
letter notifying LESSEE that the holdover tenancy will end thirty (30) days thereafter.
4.9 Waiver of Breach of Default -- Cumulative Remedies.
Waiver by any party of any breach or Default of this Lease Agreement shall not be deemed a
waiver of similar or other breaches or Defaults, nor shall the failure of any party to take action by
reason of any such breach or Default deprive such party of the right to take action at any time
while such breach or Default continues. The rights and remedies created by this Lease
Agreement shall be cumulative and nonexclusive of those to which the parties may be entitled
pursuant to law. Right of exercise of all such rights and remedies is hereby reserved. The use
and availability of one remedy shall not be talcen to exclude or waive the right to use of another.
In order to entitle any party to exercise any remedy reserved to it in this Lease Agreement, it
shall not be necessary to give any notice, other than such notice as is herein expressly required.
ARTICLE 5
MISCELLANEOUS
5.1 Quiet Enjoyment.
LESSOR covenants that during the term of this Lease Agreement and for so long as LESSEE
shall make timely payment of rentals due hereunder, and shall perform all covenants on its part
to be performed, LESSEE shall and may peaceably and quietly have, hold and enjoy the Leased
Premises.
In the event of banlcruptcy, insolvency, assignment for benefit of creditors, or foreclosure of any
mortgage or other encumbrances, by entry or by sale, LESSEE, if it is not then in default, shall
peaceably hold and enjoy the Leased Premises for the remainder of the unexpired term of the
Lease Agreement upon the same terms, covenants, and conditions as in this Lease Agreement.
5.2 Notices.
All notices and other communications required or permitted to be given by any provision of this
Agreement shall be in writing and mailed (certified or registered mail, postage prepaid, return
receipt requested) or sent by hand or overnight courier, and such notices shall also be sent by
facsimile transmission (with acknowledgment received), charges prepaid and addressed to the
intended recipient as follows, or to such other address or number as may be specified from time
to time by like notice to the Parties. A courtesy copy of such notice or other communication
shall also be sent electronically via e-mail to the e-mail addresses provided in the contact
information below; provided, however, that such e-mail copies will not constitute Notice as
defined in this Section 5.2:
(a) If to the LESSOR:
City of Denton, Texas
215 East McKinney Street
Denton, TX 76201
Attention: City Manager
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Facsimile: 940-349-8596
With a copy to:
City of Denton, Texas
1527 South Mayhill Road
Denton, TX 76208
Attention: General Manager of Solid Waste Services
Telephone: 940-349-8044
Email: Vance.Kemler@cityofdenton.com
If to LESSEE:
Master Recycling of Texas, LLC
Bill Nazaroff, President
1980 Reservoir Street
Pomona, CA 91766
(909) 891-4262
Email: bill(c�inasteirecyclin�.com
Chris Ball
1301 South Mayhill Road
Denton, Texas 76208
(214) 228-2018
E-mail: chris�a,masterrecvclin .� com
Shawn N. Guy, Esq.
Law Office of Shawn N. Guy
P.O. Box 272
Morro Bay, CA 93443
(888) 489-9369
E-mail: sngfirm@gmail.com
Richard C. Seltzer, Esq.
2211 Norfolk Street, Suite 400
Houston, Texas 77098-4044
(713) 522-7333
E-mail: res611(u�aol.com
Any Party may from time to time specify a different address for notices by like notice to the
other Party. All notices and other communications given in accordance with the provisions of
this Lease Agreement shall be effective upon receipt of the same.
5.3 Substitution of Performance by Lessor.
If LESSEE shall fail to do anything required to be done by it under the terms of this Lease
Agreement, except to pay rent and other charges, LESSOR may, after thirty (30) days written
notice to LESSEE, at LESSOR's sole option, do such act or thing on behalf of LESSEE, and
upon notification of the cost thereof to LESSOR, LESSEE shall promptly pay to LESSOR the
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amount of that cost. In case of emergency, LESSOR may perform, but is not obligated to
perform, any act or do anything reasonably necessary on behalf of LESSEE and upon
notification of the cost thereof to LESSEE, LESSEE shall pay said cost to LESSOR within thirty
(30) days from the date of LESSOR' S written claim to LESSEE.
5.4 Eminent Domain.
If all or a portion of the Leased Premises or all or any portion of LESSOR's other property
comprising the Leased Property shall be taken or sold in any proceeding by public authorities, by
means of condemnation, expropriation, appropriation or otherwise be acquired for public or
quasi-public purposes, there shall be an equitable abatement or refund of the rental paid by
LESSEE under Article 3.1 above from any date of award to LESSOR proportionate to the
amount taken. Nothing herein shall affect or diminish LESSEE's right to seek compensation for
any portion of the Leased Premises taken and LESSEE shall be entitled to all such compensation
for its provable loss or damage.
In the event the taking of the Leased Premises or all or a part of LESSOR's other property
comprising the Leased Premises is total, this Lease Agreement shall terminate, and LESSEE
shall be released from all obligations hereunder; except for any sums of money owed to
LESSOR at the date of termination of this lease, which amounts shall be paid to LESSOR within
thirty (30) days.
In the event the taking of the Leased Premises or LESSOR's other property comprising the
Landfill is less than total, then LESSEE shall have the option to terminate this Lease Agreement
if continuation of its operations on the Lease Premises is substantially impaired and
economically impractical.
5.5 Substitution of Performance by Lessee.
If LESSOR shall fail to do anything required to be done by it under the terms of this Lease
Agreement, LESSEE may, after sixty (60) days written notice to LESSOR, at LESSEE's sole
option, do such act or thing on behalf of LESSOR, and upon notification of the reasonable cost
thereof to LESSOR, may deduct said amount from any amount owed by LESSEE to LESSOR.
In case of emergency, LESSEE may perform any act or do anything reasonably necessary on
behalf of LESSOR and upon notification of the cost thereof to LESSOR, may deduct said
amount from the amount of rental then owed by LESSEE to LESSOR. If no amount is presently
owed by LESSEE to LESSOR, then LESSOR shall pay such amount to LESSEE on demand.
5.6 Recordation.
Neither LESSOR nor LESSEE shall record this Lease Agreement without the prior written
consent of the other party. LESSOR and LESSEE may execute and acknowledge a"short form"
memorandum of this Lease Agreement for recording purposes.
5.7 Entire Agreement.
This Lease Agreement embodies the entire agreement between the parties with respect to the
leasing and use of the Leased Premises. There are no representations, terms, conditions,
covenants or agreements between the parties which are not mentioned or contained herein. This
Lease Agreement shall completely and fully supersede all other prior agreements both written
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and oral, between the parties pertaining to the Leased Premises. No party to any such prior
agreement hereafter will have any rights thereunder, but shall look solely to this Lease
Agreement for definition and determination of its rights, liabilities, or responsibilities relating to
the aforesaid matters set forth herein.
5.8 Captions.
The article and the subsection headings and captions contained herein are included for
convenience only and shall not be considered a part hereof or affect in any manner the
construction or interpretation of this Lease Agreement.
5.9 Severability.
The parties agree that if it should ever be held by a court of competent jurisdiction that any one
or more articles, subsections, clauses or provisions of this Lease Agreement are invalid or
ineffective for any reason, any such article, subsection, clause or provision shall be deemed
separate from the remainder of this Lease Agreement and shall not affect the validity and
enforceability of such remainder.
5.10 Successors and Assigns.
The covenants, terms, conditions and obligations set forth and contained in this Lease Agreement
shall be binding upon and inure to the benefit of LESSOR and LESSEE and their respective
successors and assigns.
5.11 Disputes and Governing Law.
This Lease Agreement shall be governed by and construed solely in accordance with the laws of
the State of Texas. Exclusive venue for any claim or cause of action under this Agreement shall
be, as the case may be, either in the District Courts of Denton County, Texas, or the federal
district courts of the Eastern District of Texas, Plano or Sherman Division.
IN WITNESS WHEREOF, this Lease Agreement has been executed by the duly authorized
City Manager of LESSOR; and by the duly-authorized officer of LESSEE, in multiple
counterparts, each of which, for all purposes, shall be deemed an original and all of which shall
evidence but one agreement.
EXECUTED this /ft�i, day �? , 2013; but to be effective, ratified and coniirmed,
from and after the 1 st day of Jun , 2013.
"LESSOR"
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THE CITY OF DENTON, TEXAS
A Texas Municipal Corporation
By: �"`7
GEORGE C. CAMPBELL, City Manager
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By: [.f�
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
By: - Y
Y �
IN WITNESS WHEREOF, this Lease Agreement has been executed by LESSEE in the
presence of the undersigned witnesses, in multiple copies, each of which, for all purposes, shall
be deemed an original and all of which shall evidence but one agreement.
WITNESS:
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"LESSEE"
MASTER RECYCLING OF TEXAS, INC.
A Texas Limited Liability Corporation
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By:
Title: Preside
Date: May 10, 2013
BY� IC��
Kelly Schlose
ATTEST:
CORPORATE SECRETARY:
By:
Billl azarof
APPROVED AS TO LEGAL FORM:
.�.�i=�'r-
ITS LEGAL COUNSEL
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EXHIBITA
Coleman 8�. Assoc. Land Su�-��e}�itig
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llcntnii�'1'c�1s 7(i`?(1'J
Pl�nne (��10)S(i�-821 � 1�ax (f1�0)5G5-9R00 ,
3,500 Acre Tract 1
FIELD NOTES to all of that certain tract of land situated in the G. Waiker Survey Abstract
Number 1330, City of Denton, Denton County Texas and being a part of the called 29.612 acre
tract described in the deed from Hatold C. Coe to City of Denton, Texas recorded under Clerks
File Number 95-R0072063 of the Real Property Records of Denton County, Texas; the subject
tract being more particularly described as follaws (Bearings basis is Texas Coordinate System of
1983, North Central Zone-4202):
BEGINNING for the Northeast corner of the tract being described herein at a 1/2 inch iron rod
with a yellow plastic cap stamped "Coleman RPLS 4001" set (herein after referred to as 1/2"IRS)
in the East line of the said 29.612 acre tract from which a"PK" nail set at the Northeast comer
thereof in Treatment Plant Road bears North 00 Degrees 35 Minutes 46 Seconds West a distance
of 37..9 feet;
THENCE South 00 Degrees 35 Minutes 46 Seconds East with the East line of the said 29.612
acre tract a distance of 280.53 feet to a 1/2"IRS for the Southeast corner of the herein described
tract and the Northeast corner of a 5.614 acre tract;
TI�NCE North 89 Degrees 19 Minutes 47 SeconcFs West a.cross the 29.612 acre tract with the
North Iine of the said 5.614 acre tract a distance of 626.39 feet to a 112"IRS for the Northwest
corner tliereof on the East side of Treatment Plant Road;
THENCE North 27 Degrees 44 Minutes 45 Seconds East along the East side of Treatment Plant
Road across the 29.612 acze tract a distance of 175.54 feet to a 1/2"IRS for the beginning of a
curve to the right having a radius of 265.00 feet;
THENCE Northeasterly along the arc of the said curve an arc length of 188.93 feet (chord
bearing North 48 Degrees 10 Minutes 12 Seconds East a distance of 184.95 feet) to a 1/2"IR5 for
the Northwest corner of the herein described tract;
TI-iENCE South 89 Degrees 13 Minutes 00 Seconds East continuing along the 5outh side of
Treatment Plant Road across the 29.612 acre tract a distance of 403.93 feet to the PLACE OF
BEGINNING and enclosing 3.500 acres of land.
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