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23-086
ORDINANCE NO. 23-086 AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE CITY MANAGER TOEXECUTE AND DELIVER A LEASE AGREEMENT BETWEEN THE CITY OF DENTON.AS LANDLORD, AND CDI HICKORY, LLC, AS TENANT, LEASING APPROXIMATELY l089 SQUARE FEET OF LAND, LOCATED NEAR THE SOUTHWEST CORNER OF EASTHICKORY AND [NDUSTRLAL STREETS, BEING SITUATED WITHIN THE H. SISCOSURVEY, ABSTRACT NUMBER 1184, CITY OF DENTON, DENTON COUNTY, TEXAS.FOR THE CONTINUED OCCUPANCY, USE, AND MAINTENANCE OF AN OUTDOORPATIO; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, CDI Hickory, LLC (“CDI”) is the owner of a tract of land located at the southwest corner of East Hickory and Industrial Streets, being situated within the Sisco Survey, Abstract Number 1184 and being described as a part of Lot 3, Block 20 of the Original Town of Denton (“CDI Property”); and WHEREAS, the City of Denton (“City”) is the owner of the adjacent tract to CDI Property; and WHEREAS, CDI has requested the lease of certain City owned real property, approximately 1,089 square feet, as described in Attachment “C” of the Lease Agreement, as defined below, for the occupancy, use and maintenance of an outdoor patio space for the RustyTaco restaurant; and WHEREAS, the City Council finds that is in the best interest of the citizens of the City to enter into the Lease Agreement (herein so called) in the form attached hereto and made a parthereof as Exhibit "A"; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1, The findings and recitations contained in the preamble of this ordinance are incorporated herein by reference. SECTION 2. The City Manager, or designee, is hereby authorized to execute the Lease Agreement by and between the City of Denton, as Landlord and CDI Hickory, LLC, as Tenant, and any other documents necessary for the lease of an approximate 1,089 square foot tract of land, as described above, substantially in the form attached hereto and made a part hereof as ExhibitA SECTION 3. The City Manager, or designee, is hereby authorized to carry out all duties and obligations to be performed by the City under the Agreement, including, but not limited to, signing ancillary documents such as consents to assignment. SECTION 4. This ordinance shall become effective immediately upon its passage andapproval. The motion to approve tjris ordinance was made by seconded by v Ic I<, B ~/r Jfollowing vote k - a : Jf ss, D,. v , I and passed and approved by thethe ordinance was9 Aye { Nay Abstain Absent Mayor Gerard Hudspeth:Vicki Byrd, District 1 :Brian Beck. District 2: Jesse Davis. District 3 : VACANT. District 4: Brandon Chase McGee, At Large Place 5 : Chris Watts, At Large Place 6: 77 PASSED AND APPROVED this the -i \v day of f- cbr .6.( V 2023 mm:MItbR ATTEST: ROSA RIOS, CITY SECRETARY b\\\\ it : ItV Id APPROVED AS TO LEGAL FORM:MACK REINWAND, CITY ATTORNEY BY: EXHIBIT A THE STATE OF TEXAS )) COUNTY OF DENTON ) Lease Agreement This Lease Agreement, hereinafter referred to as "Lease", made and entered into by and between the City of Denton, a Texas municipal corporation, hereinafter referred to as "City”, as landlord, and CDI HICKORY, LLC, a Texas limited liability company, with its principal place ofbusiness at 3190 Teasley Lane, Denton, Texas, 76205 , hereinafter referred to as "Lessee," astenant WITNES SETH: 1. City, in consideration of the covenants and agreements to be performed by Lessee andupon the terms and conditions hereinafter stated, does hereby lease, demise and let unto Lessee approximately 1,089 square feet of City-owned land for Outdoor patio and dining use only (“Permitted Use”), having a street address of 210 East Hickory Street and being situated in Lot 3, Block 20 of the Original Town of Denton, in the City of Denton, County of Denton, Texas, together with all the rights, privileges, easements and appurtenances belonging to or in any way pertaining to the property patio improvements (as outlined on Exhibit “A”, and depicted on Exhibit “C attached hereto and part hereof), hereinafter collectively referred to as ("Premises”). The term of this lease shall commence upon execution and be for an initial period of 10 years (“Primary Term”). Lessee shall have the right and option to extend the Primary Term, subject to the approval of the City of Denton City Council, for two (2) additional periods of five (5) years, each hereinafter referred to as an “Option Term,” upon the same terms and conditions, at prevailing market rate provided in this lease, by giving the City written notice of Lessee’s election to exercise such extension option no later than one hundred eighty (180) days prior to the expiration of the then- current Term. The “Term” as used herein consists of the Primary Term, and, if exercised, each Option Term. Unless amended in writing by both the City and Lessee, hereinafter referred to as“parties”, all terms, conditions and covenants of this lease shall remain in force and effect throughout the Term. II. Annual Rental Payment For and in consideration for this Lease, Lessee shall pay to City rental payments in the following amounts, commencing upon execution and continuing for the remainder of the Term: Lease Agreement Page ! of 22 February 28, 2023 – March 1, 2028 $ 1,200 annually Lessee, in consideration of being permitted to occupy the Premises, hereby agrees to pay to City the Annual Rental Payment, payable on or before March 1 st each year, beginning on execution of this Lease. The obligation to pay the Annual Rental Payments is an independent covenant. The failure of LESSEE to pay such amount upon demand shall, at City’s option, be an event of defaulthereunder. All Annual Rental Payments to be made by Lessee to City shall be payable to City of Denton atthe address set out hereinbelow, or at such other address as may be specified by notice. III. Insurance Lessee shall obtain and maintain in full force and effect, at Lessee’s sole expense, insurance asdescribed in Exhibit “B”, attached hereto. IV. Lessee Rebuilding Obligation In the event the Premises are rendered partially unusable for the purposes for Permitted Use (which, as used herein, means such destruction or damage as would prevent Lessee from carrying on its business on the Premises to an extent exceeding 50% of its normal business activity) or completely unusable for such purpose by fire, water, natural disaster or other damage or casualty,Lessee shall give immediate notice to City. In such event, Lessee shall utilize insurance proceeds to repair and restore the premises. In event insurance proceeds are insufficient, Lessee may elect to (i) terminate this lease effective as of the date of such damage or casualty by giving written notice thereof to the City within thirty (30) days of such damage or casualty or (ii) repair thedamage and restore the Premises, at Lessee’s sole expense, to substantially their condition immediately prior to the occurrence, and continue with its tenancy pursuant to this agreement. IfLessee elects to terminate, Lessee shall restore premises to substantially same condition prior to this Lease. Such restoration work shall be commenced and completed within 90 days of such damage or casualty. In view thereof, Lessee may elect to terminate this lease, provided however, City shall be entitled to receive and retain any and all insurance proceeds and lessee shall have no further obligations. Lessee shall assume risk of loss or damage to the Premises during the term of this Lease and rent shall only abate in event of a total loss or inability to timely restore and rebuild. Timely being the ability to complete necessary work within 90 days of casualty Lease AgreementPage 2 of 22 V. Definitions “Arises.” An Environmental Claim or Environmental Cleanup Liability shall be deemed to Arise upon each discrete Release of a Chemical Substance. “Chemical Substances” shall mean any chemical substance, including, but not limited to, any sort of pollutants, contaminants, chemicals, raw materials, metals, intermediates, products, industrial,solid, toxic or hazardous substances, materials, wastes, asbestos, asbestos-containing materials, polychlorinated biphenyls, or petroleum products, including crude oil or any derived product or component thereof, including, without limitation, gasoline and any material or substance of any kind containing any of the above. “Environmental Claim” shall mean any claim, demand, action, suit or proceeding for the injury, disease or death of any person (including, without limitation, the Tenant, or Tenant’s successors, assigns, employees, agents and/or representatives), property damage, damage to the environment,or damage to natural resources made, arising or alleged to arise under, or relating to, any Environmental Law. Environmental Claim includes any damages, settlement amounts, fines and penalties assessed or costs of complying with any orders or decrees of courts, administrative tribunals or other governmental entities associated with resolving such claims, demands, actions, suits or proceedings and any costs, expenses and fees, including, without limitation, reasonable attorney’s fees, incurred in the investigation, defense and resolution of such claims, demands, actions, suits and proceedings. “Environmental Cleanup Liability” shall mean any cost or expense of any nature whatsoever incurred to investigate, contain, remove, remedy, respond to, clean up, or abate any Release ofChemical Substances or other contamination or pollution of the air, surface water, groundwater, land surface or subsurface strata related to the operation, occupation, use, maintenance, abandonment or ownership of the Premises, whether such Release, contamination or pollution is located on, within, under or above the Premises or is located on, within, under or above any other lands or property including, but not limited to, any Release of Chemical Substances or other contamination or pollution arising out of or resulting from the manufacture, generation, formulation, processing, labeling, distribution, introduction into environment or commerce, or onsite or off site use, treatment, handling, storage, disposal, or transportation of any Chemical Substance. Environmental Cleanup Liability includes, without limitation, any judgments, damages, settlements, costs or expenses (including, without limitation, attorneys’, consultants, and experts’ fees and expenses) incurred with respect to (i) any investigation, study, assessment, legal representation, cost recovery by a governmental agency or third party, or monitoring or testing inconnection therewith, (ii) the Premises, as a result of actions or measures necessary to implement or effectuate any such containment, removal, remediation, response, cleanup or abatement, and (iii) the resolution of such liabilities. “Environmental Law” means any statutes or legal requirements relating to or regulating pollution, worker, employee and occupational safety and health, protection or cleanup of the environment or damage to or remediation of damage to real property and natural resources (including, but not limited to, ambient air, surface water, groundwater, and land surface or subsurface strata) Lease AgreementPage 3 of 22 including, without limitation, legal requirements contained in the Comprehensive EnvironmentalResponse, Compensation and Liability Act, 42 U.S.C. § 9601, et seq., as amended (CERCLA); the Resources Conservation and Recovery Act, 42 U.S.C. § 6901, et seq., as amended (RCRA); the Superfund Amendments and Reauthorization Act of 1986, Pub. L. 99-499, as amended (SARA);the Clean Air Act, 42 U.S.C. § 7401, et seq., as amended; the Federal Water Pollution Control Act, 33 U.S.C. § 1251, et seq., as amended; the National Environmental Policy Act, 42 U.S.C. § 4321, et seq., as amended (NEPA); and the Safe Drinking Water Act, 42 U.S.C. g 300f, et seq., as amended; and/or any other federal, state or local laws, statutes, ordinances, rules, regulations ororders (including decisions of any court or administrative body) relating to pollution, worker, employee and occupational safety and health, damage to and protection or cleanup of, theenvironment, real property and/or natural resources as described above. Environmental Law shall also mean the Toxic Substance Control Act, 15 U.S.C. § 2601, et seq., as amended (TOSCA), and/or any other federal, state (including, without limitation, laws with respect to trespass, nuisance and other torts or similar legal theories which may be applied to establish liability orresponsibility for Environmental Cleanup or Environmental Claims) or local laws, statutes, ordinances, rules, regulations or orders (including decisions of any court or administrative body) relating to (i) release, containment, removal, remediation, response, cleanup or abatement of any sort of Chemical Substance, (ii) the manufacture, generation, formulation, processing, labeling, distribution, introduction into environment or commerce, use, treatment, handling, storage, disposal or transportation of any Chemical Substance, (iii) exposure of persons, including agents, contractors and employees of Tenant, to any Chemical Substance and other occupational safety or health matters, or (iv) the environmental hazards relating to the physical structure or condition of a building, facility, tank, fixture or other structure, including, without limitation, those relating to the management, use, storage, disposal, cleanup or removal of any Chemical Substance. “Injury” means (a) damage, harm to or impairment or loss of property or its use, including without limitation, personal property, real property and/or natural resources, and (b) harm to or death of aperson “Landlord” means Landlord and its elected officials, agents, employees, invitees, licensees, orvrsrtors. “Release” shall mean any spilling, leaking, pumping, pouring, emitting, spraying, emptying, discharging, escaping, leaching, dumping or disposing, in any way, manner or form, of any Chemical Substance into the environment (including, but not limited to, the ambient air, surface water, groundwater and/or land surface or subsurface strata) of any kind whatsoever (includingwithout limitation the abandonment or temporary abandonment or discarding of barrels, containers, tanks or other receptacles containing or previously containing any ChemicalSubstance). “Tenant” means Tenant and its agents, contractors, employees, invitees, licensees, or visitors. Lease Agreement Page 4 of 22 VI. Clauses and Covenants A. Lessee agrees to: 1. Lease the Premises as described in Exhibit “A“ and depicted on Exhibit “C“ for the entire Primary Term beginning upon execution of the Lease and ending on the earlier to occur of(i) Termination Date; or (ii) upon surrender of the Premises by Lessee to City prior to theTermination Date. 2. ACCEPT THE PREMISES IN THEIR PRESENT CONDITION “AS IS,”“WHERE IS” AND “WITH ALL FAULTS”. TENANT STIPULATES THAT IT HASTHOROUGHLY INSPECTED THE PREMISES AND FINDS THAT THE PREMISES ISCURRENTLY SUITABLE FOR THE PERMITTED USE. LANDLORD MAKES NOREPRESENTATION. COVENANTS OR WARRANTIES, EXPRESSED, MPLIED OR OFANY KIND OR NATURE CONCERNING OR WITH RESPECT TO THE PREMISES,INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY,QUALITY, HABITABILITY, SUITABILITY, OR FITNESS FOR PARTICULAR PURPOSEOR USE. TENANT STIPULATES TO LANDLORD THAT IT HAS PREVIOUSLYOCCUPIED THE PREMISES AND IS AWARE OF THE CONDITION OF THE PROPERTY.TENANT REPRESENTS AND WARRANTS TO LANDLORD THAT THERE HAVE BEENNO CHEMICAL SUBSTANCES CONTAINED OR STORED OR THAT HAVE BEENRELEASED IN OR ON THE PREMISES DUR[NG THE LEASE TERM THAT WOULDRESULT IN AN ENVIRONMENTAL CLAIM OR ENVIRONMENTAL CLEANUPLIABILITY 3. Obey (a) all applicable laws relating to the use, condition, and occupancy of thePremises, and (b) any requirements imposed by utility companies serving or insurance companies covering the Premises. 4. No signs, posters, or other similar devices (“Signage”) shall be placed on the exterior of the Improvements or on any portion of the Leased Premises without the prior written approval ofLessor and, if permitted, shall be in conformance with the Denton City Code. Lessee, at its sole expense, shall be responsible for the creation, installation and maintenance of all such Signage. Lessee shall pay to Lessor any and all damages, injuries, or repairs resulting from the installation, maintenance or repair of any such Signage. Any permitted Signage placed on the Leased Premises shall be maintained at all times in a safe, neat, and good physical condition. All Signage shall be removed from the Leased Premises by Lessee immediately upon receipt ofinstructions for removal of same from Lessor, including without limitation, upon expiration or termination of this Lease Agreement. If Lessee fails to remove the Signage within 90 days after termination or upon instruction by Lessor, as the case may be, then the Lessor may do so at the sole cost and expense of the Lessee. Lessee shall pay Lessor such costs of removal within 30 days after receipt of an invoice from the Lessor. If the invoice is not paid within said time period a lien is hereby granted by Lessee and is established against Lessee’s Property to secure payment. In such case Lessor is authorized to file an affidavit in the Denton County Real Property Records against Lessee’s Property to evidence the lien. Lease AgreementPage 5 of 22 5.Obtain and pay for all utility services used by Tenant. 6.Pay all costs related to the utilities, of any kind or nature, related to the Premises. 7. Allow Landlord to enter the Premises to perform Landlord’s obligations, if any, and inspect the Premises. 8. Maintain the Premises in a good state of condition, normal wear and tear excepted. Notwithstanding the obligation to maintain the Premises, if so desired by Tenant, Tenant may repair and replace any and all parts of the Premises damaged during the Term hereof, in its entirety. In the event Tenant does not desire to repair or replace the Premises, it shall be under no obligation to do so but shall immediately surrender the Premises and remit any proceeds or monies attributable to damage or loss of the buildings, structures, improvements and other facilities that are fixtures to the Property, received by Tenant from insurance coverage required herein to Landlord upon such election. Tenant hereby expressly stipulates that Landlord is not obligated to repair, replace, or maintain, any part or parcel of the Premises. 9. Vacate, in its entirety, the Premises on or before the Termination Date. Tenant shall remove all personal property, trade fixtures and any other property, excepting the buildings, structures, improvements and other facilities that are fixtures, other than trade fixtures, to the Premises (collectively, “Tenant’s Personal Property”) owned by it from the Premises on or before the Termination Date or earlier termination of this Temporary Lease, whichever is earlier to occur, and shall execute a written stipulation waiving any and all rights the Tenant may have to the Premises and such property. 10. AS A CONDITION HEREOF, LESSEE AGREES AND IS BOUND TODEFEND. INDEMNIFY AND HOLD THE CITY, ITS OFFICERS, AGENTS ANDEMPLOYEES. HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS,JUDGMENTS, COSTS AND EXPENSES FOR PERSONAL INJURY (INCLUDINGDEATH), PROPERTY DAMAGE OR OTHER HARM FOR WHICH RECOVERY OFDAMAGES IS SOUGHT, SUFFERED BY ANY PERSON OR PERSONS, THAT MAYARISE OUT OF OR BE OCCASIONED BY THE USE, OCCUPANCY ANDMAINTENANCE OF THE PREMISES OR LESSEE’S INSTALLATIONS ANDIMPROVEMENTS WITHIN THE PREMISES, FROM ANY ACT OR OMISSION OFANY REPRESENTATIVE, AGENT AND/OR EMPLOYEE OF LESSEE, OR BYLESSEE'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS LEASE, ORBY ANY NEGLIGENT OR STRICTLY LIABLE ACT OR OMISSION OF LESSEE, OR ITS OFFICERS, AGENTS, EMPLOYEES OR SUBCONTRACTORS IN THE USE,OCCUPANCY AND MAINTENANCE OF THE PREMISES OR LESSEE’SINSTALLATION AND IMPROVEMENTS WITHIN THE PREMISES; EXCEPT THATTHE INDEMNITY PROVIDED FOR IN THIS PARAGRAPH SHALL NOT APPLY TOANY LIABILITY RESULTING FROM THE SOLE NEGLIGENCE OR FAULT OF THE CITY, ITS OFFICERS, AGENTS, EMPLOYEES OR SEPARATE CONTRACTORS, ANDIN THE EVENT OF JOINT AND CONCURRING NEGLIGENCE OR FAULT OF BOTH Lease Agreement Page 6 of 22 THE LESSEE AND THE CITY, RESPONSIBILITY AND INDEMNITY, IF ANY, SHALLBE APPORTIONED COMPARATIVELY IN ACCORDANCE WITH THE LAWS OFTHE STATE OF TEXAS, WITHOUT, HOWEVER, WAIVING ANY GOVERNMENTALIMMUNITY AVAILABLE TO THE CITY UNDER TEXAS LAW AND WITHOUTWAIVING ANY DEFENSES OF THE PARTIES UNDER TEXAS LAW. THISOBLIGATION TO INDEMNIFY AND DEFEND SHALL ALSO INCLUDE ANY CLAIMFOR DAMAGE THAT ANY UTILITY OR COMMUNICATION COMPANY, WHETHERPUBLICLY OR PRIVATELY OWNED, MAY SUSTAIN OR RECEIVE BY REASON OFLESSEE'S USE OF THE PREMISES OR LESSEE’S IMPROVEMENTS AND EQUIPMENT LOCATED THEREON. IOA. TENANT SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESSLANDLORD. AND ITS SUCCESSORS AND ASSIGNS, FROM AND AGAINST ANY ANDALL ENVIRONMENTAL CLAIMS AND ENVIRONMENTAL CLEANUP LIABILITY,WHICH ARISE DIRECTLY OR INDIRECTLY FROM OR ARE RELATED TO THEUSE, OPERATION, MAINTENANCE, OCCUPATION, OWNERSHIP, ORABANDONMENT OF THE PREMISES (1) BEFORE THE EFFECTIVE DATE,INCLUDING WITHOUT LIMITATION, THE ABOVE-DESCRIBED EVENTS CAUSED,OR CONTRIBUTED TO, IN WHOLE OR IN PART, BY THE NEGLIGENCE OF ANYKIND, TYPE, OR DEGREE, INCLUDING WITHOUT LIMITATION, GROSSNEGLIGENCE, OR FAULT OF LANDLORD, ITS SUCCESSORS AND/OR ASSIGNS;AND (I1) AFTER THE EFFECTIVE DATE, IF CAUSED OR CONTRIBUTED TO, INWHOLE OR PART, BY TENANT. TENANT FURTHER COVENANTS AND AGREESTO DEFEND ANY SUITS OR ADMINISTRATIVE PROCEEDINGS BROUGHTAGAINST LANDLORD, ITS SUCCESSORS AND ASSIGNS, ON ACCOUNT OF ANYSUCH ENVIRONMENTAL CLAIMS OR ENVIRONMENTAL CLEANUP LIABILITYAND TO PAY OR DISCHARGE THE FULL AMOUNT OR OBLIGATION OF SUCHENVIRONMENTAL CLAIMS OR ENVIRONMENTAL CLEANUP LIABILITYINCURRED BY, ACCRUING TO, OR IMPOSED ON LANDLORD AND ITSSUCCESSORS AND ASSIGNS, AS APPLICABLE, RESULTING FROM ANY SUCHSUIT OR SUITS, OR ADMINISTRATIVE PROCEEDINGS, OR ANY AMOUNTSRESULTING FROM THE SETTLEMENT OR RESOLUTION OF SUCH SUIT OR SUITSOR ADMINISTRATIVE PROCEEDINGS. IN ADDITION, TENANT SHALL PAY TOLANDLORD, AND ITS SUCCESSORS AND ASSIGNS, AS APPLICABLE,REASONABLE ATTORNEYS’ FEES INCURRED BY LANDLORD, AND ITSSUCCESSORS AND ASSIGNS, AS APPLICABLE, IN ENFORCING TENANT’SINDEMNITY PROVIDED HEREIN. 11. During the term of this Lease, Tenant will not locate, store or dispose in or on, or release or discharge from (including groundwater contamination) the Premises, any ChemicalSubstances that could result in an Environmental Claim or Environmental Cleanup Liability. 12. Tenant shall, at no cost or expense to Landlord, take all actions necessary to comply with all Environmental Laws affecting the Premises. Lease Agreement Page 7 of 22 13 . Any of Tenant’s Personal Property remaining on the Premises after the Termination Date shall be deemed Abandoned Property, as prescribed by Section E.20., below, and may be disposed of by Landlord in any manner prescribed by Section E.20., below. 13.B. PAYMENT, PENALTY, ADJUSTMENTS. If a payment is not received on or before the 15th day after the due date, a five percent (5%) penalty will be due as of the 16th day. An additional penalty of one percent (1 %) of the unpaid rental amount will be due for each 30 dayperiod thereafter that the payment is delinquent until the unpaid rental payment is made. Notwithstanding the foregoing, if Lessee fails to make its annual lease payment within 90 days of the contract due date, Lessor shall notify Lessee of such failure to make the annual lease payment and if the annual lease payment is not made within 15 days of notice to Lessee, this Lease is terminated without the necessity of any further action by Lessor. In that event, Lessee shall promptly remove any and all improvements made to the Leased Premises and shall restore the Leased Premises to the condition found prior to possession pursuant to the terms stipulated inSection IV. Should any taxes be levied against the Leased Premises or the Improvements, payment of such taxes shall be the sole responsibility of the Lessee. Any provision herein, or any other document executed or delivered in connection herewith, or in any other agreement or commitment, whether written or oral, expressed or implied, to the contrary notwithstanding, Lessor shall not in any event be entitled to receive or collect, nor shall any amounts received hereunder be credited, so that Lessor shall be paid, as interest, if any, a sum greater than the maximum amount permitted by applicable law to be charged to the person, partnership, firm, corporation, or other legal entity primarily obligated to make payments under this Lease Agreement. If any construction of this Lease Agreement indicates a different right given to Lessor to ask for, demand or receive any larger sum as interest, if any, such is a mistake in calculation or wording which this clause shall override and control, it being the intention of the parties that this Lease Agreement shall in all things strictly comply and conform with applicable law. In the event that the aggregate of all consideration which constitutes interest under applicable law that is taken, reserved, contracted for, charged or received under this Lease Agreement, if any, and any other documents executed in connection herewith shall ever exceed the maximum non- usurious rate under applicable law, any sum in excess thereof shall be applied to the accrued and unpaid rent due under this Lease Agreement and if such accrued and unpaid rent is paid in full, the remaining excess, if any, shall be paid to the Lessee. B.Tenant agrees not to: 1 2 3 4. 5 6 7 Use the Premises for any purpose other than the Permitted Use.Create a nuisance. Permit any waste.Use the Premises in any way that would increase insurance premiums or voidinsurance on the Premises. Alter the Premises in any material respect. Allow a lien to be placed on the Premises. Assign this Lease or sublease any portion of the Premises. Lease Agreement Page 8 of 22 C.Landlord agrees to: 1.Lease to Tenant the Premises for the entire Term beginning on the Commencement Date and ending on the earlier to occur of (i) Termination Date; or (ii) upon surrender of the Premises by Tenant to Landlord prior to the Termination Date. D.Landlord agrees not to: 1.Interfere with Tenant’s possession of the Premises as long as Tenant is notin default hereunder. E.Landlord and Tenant agree to the following: 1. Alterations. Any physical additions, improvements or alterations to the Premises made by Tenant must be consented to by Landlord, in its sole and absolute discretion. 2. Insurance. Tenant will maintain the insurance coverages described in the attached Insurance Addendum during the Term of this Lease and, if coverage is afforded on a Claims Made basis, for three (3) years thereafter, as concerns the Environmental Liability coverage. 3. Renewal No later than 120 days before the end of the initial term of this Lease, the parties may agree in writing for two (2) extensions of the lease term for an additional five (5) year term at a new lease rate consistent with fair market value as determined by the Lessor at Lessee’s expense by a property appraisal. The granting of such extension shall be in the sole discretion of the City upon a written request by Lessee to be provided to the City not less than one hundred eighty (180) days from termination. The renewal may be executed by a letter agreement signedby the City Manager, approved by the City Council. However, the foregoing shall not preclude the parties from entering into a new lease to be effective after the expiration of the Lease Term. 5.Condemnation/Substantial or Partial Taking a.If the Premises cannot be used for the purposes contemplated by this Lease because of condemnation or purchase in lieu of condemnation, this Leasewill terminate. b.Tenant will have no claim to the condemnation award or proceeds in lieu ofcondemnation 6. Default by Landlord/ Events . Defaults by Landlord are failing to comply with anyprovision of this Lease within thirty (30) calendar days after written notice. 8. Default by Landlord/Tenant ’s Remedies. Tenant’s remedies for Landlord’s default are solely to terminate this Lease. THE REMEDIES OF TENANT AS SET FORTH HEREIN Lease AgreementPage 9 of 22 ARE SOLE AND EXCLUSIVE AND TENANT WAIVES ANY OTHER RIGHT OR REMEDYTHAT MIGHT BE AVAILABLE. 9. Default hy Tenant/Events. Defaults by Tenant are (a) Tenant abandoning or vacating a substantial portion of the Premises without surrendering the Premises to Landlord, (b) Tenant failing to comply, within five (5) calendar days after written notice, with any provision of this Lease other than the default set forth in (a) above, which shall require no notice of default to Tenant; (c) Tenant shall become insolvent, or shall make a transfer in fraud of creditors, or shall make an assignment for the benefit of creditors; (d) a receiver or trustee shall be appointed for all or substantially all of the assets of Tenant; (e) Tenant shall file a voluntary petition in bankruptcy or admit in writing that it is unable to pay its debts as they become due; (f) Tenant shall apply for or consent to the appointment of a receiver, trustee, custodian, intervener or liquidator of itself or of all or substantial part of its assets; (g) Tenant shall file an answer admitting the material allegations of, or consent to, or default in answering, a petition filed against it in any bankruptcy, reorganization or insolvency proceeding; and (h) any of Tenant’s representations or warranties contained in this Lease are untrue at any time during the Term. 10. Default by Tenant/Landlord’s RemedIes. Landlord’s remedies for Tenant’s default are to (a) enter and take possession of the Premises, (b) terminate this Lease by written notice to Tenant, or (c) Landlord may enter and take possession of the Premises pursuant to the exercise of any right or remedy, without prejudice to any other right or remedy, available to it by law, contract, equity, or otherwise. 11 . Default/Waiver/Mitigation. It is not a waiver of default if the non-defaulting party fails to declare immediately a default or delays in taking any action. Except as to the sole and exclusive remedies of Tenant and Landlord, pursuit of any remedies set forth in this Lease does not preclude pursuit of other remedies in this Lease or provided by applicable law. 12. Holdover . If Tenant does not vacate the Premises following termination of this Lease, Tenant will become a tenant at sufferance. No holding over by Tenant, whether with or without the consent of Landlord, will extend the Term. Tenant stipulates that its possession of the Premises after the expiration of the Term, as a tenant ofsufferance, will cause damage to Landlord in excess of fair market value of rent resulting, in part, due to delays to Landlord construction or other public projects. 13. Lease of Commercial Rental Property. Tenant represents and warrants that the Premises is commercial rental property, as defined in Chapter 93 of the Texas Property Code. 14. Artorney ’s Fees. If either party retains an attorney to enforce this Lease, the party prevailing in litigation is entitled to recover reasonable attorney’s fees and other fees and court andother costs. 15. Venue. EXCLUSIVE VENUE FOR ANY ACTION HEREUNDER IS INDENTON COUNTY, TEXAS, THE COUNTY IN WHICH THE PREMISES ARE LOCATED. Lease Agreement Page 10 of 22 16. Entire Agreement. This Lease, together with the attached exhibits and addendums, comprises the entire agreement of the parties, and there are no oral representations, warranties, agreements, or promises pertaining to this Lease or occupation of the Premises. 17. Amendment of Lease . This Lease may be amended only by an instrument in writing, duly authorized and signed by Landlord and Tenant. Notwithstanding anything to the contraryherein, the authority to amend this Lease by Landlord is not delegated by the City Council ofLandlord. 18. Limitation of Warranties. THERE ARE NO IMPLIED WARRANTIES OFMERCHANTABILITY, QUALITY, SUITABILITY, HABITABILITY, FITNESS FOR APARTICULAR PURPOSE, OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE, ANDTHERE ARE NO WARRANTIES THAT EXTEND BEYOND THOSE EXPRESSLY STATEDIN THIS LEASE. 19. Notices. Any notice given by one party to the other in connection with this Lease shall be in writing and shall be sent by certified mail, return receipt requested, with postage fees prepaid, or via facsimile or electronic mail as follows: A. If to Landlord, addressed to: Denton City Manager 215 E. McKinney Denton, Texas 76201 w/copy to : City of Denton Development Services- Real Estate Division401 N. Elm Street Denton, Texas 76201 B.If to Tenant, addressed to : CDI Hickory, LLC Ann: Stephen Shannon 31 90 Teasley Lane Denton, TX 76205 E-mail: sshannon@colodevelopment.com Notice shall be deemed received for all purposes when placed in the United States mail, as set forth herein, or when delivered by e-mail to the other party at the e-mail address providedabove. Lease Agreement Page 11 of 22 20. Abandoned Property, Landlord may retain, destroy, or dispose of any property, of any kind or type, including without limitation, Tenant’s Personal Property left or remaining on the Premises after the Termination Date (“Abandoned Property”) without liability of any kind to Landlord and without payment of consideration of any kind to Tenant. 21. No Broker . Tenant represents and warrants Landlord that it has not contracted withor otherwise retained any broker or any other third party related to this Lease to whom any commission or other fee may be payable. 22. Authority of Tenant. Tenant represents and warrants to Landlord that it has taken all actions necessary to authorize the party executing this Lease to bind, in all respects, Tenant to all terms and provisions of this Lease, and that such person possesses the authority to execute thisLease and bind Tenant hereto. 23 . Delegation of Authority . Except as otherwise expressly provided herein, any action that is to be or may be taken by Landlord under this Lease is hereby delegated by Landlord, pursuant to approval of this Lease by City Council of Landlord, to the City Engineer of Landlord, or his designee. Lease Agreement Page 12 of 22 LESSEE/rENANT: CDI HICKORY, LLC, a Texas limited liability company ,I.-JLBy:St,'rinted Name),'itle)PI/LO/M ACKNOWLEDGMENT STATE OF TEXAS § COUNTY OF DENTON § This instrument was acknowledged before me on this IPday of -Mw"20©onbyBnnqAp behalf bf said UrbAn a Texas MICHELE OR£Ar' My Nobry ID # 13392 Expires August 11 2020 Lease Agreement Page 13 of 22 S\LESSEErrENANT: CDI HICKORY. LLC, a Texas limited liability company _\a(C ACKNOWLEDGMENT STATE OF TEXAS § COUNTY OF DENTON § This instrument was acknowledged before me on this 3dMIlft –- “"” g&IabIic, State of Texas My commission expires: oq .a }©©8 fC lad !K !b1 \•IFr r '_rb = h Aei8/LN ;:+e ;1::::::i::; !! 11? &i&dbi&i- i &+ at&b t ;} ;{ Lease Agreement Page 13 of 22 LANDLORD : CITY OF DENTON BY N\\\ III tAll III ATTEST: ROSA RIOS, CITY SECRETARY ,(rZZZ<,. r//.Zz') APPROVED AS TO LEGAL FORM: THIS AGREEMENT HAS BEEN BOTH REVIEWED AND APPROVED AS TO Financial and operational obligations andBusiness terms. STATE OF TEXAS § COUNTY OF (>n+on § 2 01B b ;bl i; r:n :::: : : : : =rI;} 151::: : H1 eb n:/eoF: : =t :h:ps ono F =[:(; £®@4b©chGt:b My commissiin expires: la III / dOdD aIF{mHRICHARDS My Way ID#131©8791DWBboHlb# 14, M Lease AgreementPage 14 of 22 Exhibit “A” To Lease Legal Description ALL THAT CERTArN TRACT OR PARCEL OF LAND LYING AND BEING SITUATED INTHE H. SISCO SURVEY, ABSTRACT NUMBER 1 184, DENTON, COUNTY, TEXAS, ANDBEING PART OF A TRACT DESCRIBED IN A DEED TO THE CITY OF DENTON,RECORDED IN VOLUME 175, PAGES 464, DENTON COUNTY, TEXAS, AND PART OFLOT 3. BLOCK 20, ORiGrNAL TOWN OF DENTON, AN ADDITION TO THE CITY OFDENTON, DENTON COUNTY, TEXAS, ACCORDING TO THE PLAT THEREFORERECORDED IN VOLUME 4, PAGE 53, DEED RECORDS, DENTON COUNTY, TEXAS BEG[NNING AT A BRICK BUILDING AT THE NORTHEAST CORNER OF SAID CITY OFDENTON TRACT AND THE NORTHWEST CORNER OF A TRACT DESCRIBED IN A DEED TO THE ADAMS TRUST, RECORDED UNDER DOCUMENT NUMBER 2007-132305, REAL PROPERTY RECORDS, DENTON COUNTY, TEXAS; THENCE SOUTH 00 DEGREES 00 MINUTES 04 SECONDS WEST WITH THE EAST LINEOF SAID CITY OF DENTON TRACT AND THE WEST LINE OF SAID ADAMS TRACT; ADISTANCE OF 80.01 FEET TO A POINT ON THE EAST LINE OF SAID CITY OFDENTON TRACT AND THE WEST LINE OF SAID ADAMS TRACT; THENCE SOUTH 89 DEGREES 38 MINUTES 52 SECONDS WEST, A DISTANCE OF 14.09FEET THENCE NORTH 00 DEGREES 31 MINUTES 05 SECONDS EAST, A DISTANCE OF 80.20FEET TO A POINT ON THE NORTH LINE OF SAID CITY OF DENTON TRACT AND THE SOUTH RIGHT-OF-WAY LINE OF EAST HICKORY STREET; THENCE SOUTH 89 DEGREES 34 MINUTES 28 SECONDS EAST WITH THE NORTHLINE OF SAID CITY OF DENTON TRACT AND THE SOUTH RIGHT-OF-WAY LINE OFEAST HICKORY STREET, A DISTANCE OF 13.37 FEET TO THE POINT OF BEGINNINGAND CONTAINING IN ALL 0.025 ACRES OF LAND Lease Agreement Page 15 of 22 Exhibit “B” To LeaseInsurance SECTION A. LESSEE shall procure, pay for and maintain the following insurance written by companies approved by the State of Texas and acceptable to CITY. The insurance shall be evidenced by delivery to the CITY, at the address shown in SECTION C (a), certificates of insurance executed by the insurer or its authorized agent stating coverages, limits, expiration dates and compliance with all applicable required provisions. The CITY shall be named as an additional insured by endorsement to each policy, where applicable, and thus will be entitled to notice of cancellation,of the policy in accordance with Section 1811 of the Texas Insurance Code. Upon request, the CITY shall be entitled to receive without expense, copies of the policies and all endorsements. SECTION B The CITY reserves the right to review the insurance requirements of this section during the effective period of the work performed by LESSEE and to modify insurance coverages and theirlimits when deemed necessary and prudent by City’s Risk b4anagement Department based upon changes in statutory law, court decisions or other relevant factors. LESSEE shall acquire and ensure execution of requests for deletions, revisions or modifications of particular policy terms, conditions, limitations, or exclusions (except where policy provisions are established by law or regulation binding upon either CITY or LESSEE). SECTION c. REQUIRED PROVISIONS LESSEE agrees, with respect to the required insurance as documented below, all certificate(s) of insurance will contain and state, in writing, the following required provisions: a)The certificate of insurance or policy and endorsements shall be evidenced by delivery to: (i) City of Denton Real Estate Office, Attention: Christopher Singleton, 401 N ElmStreet, Denton, Texas 76201. All certificates of insurance shall identify the service or product being provided, by including the bid number and contract or solicitation name. All certificates of insurance shall name the City of Denton as the Certificate Holder. b) C) Lease Agreement Page 16 of 22 SECTION D. INSURANCE COVERAGE REQUIRED Subject to LESSEE'S right to maintain reasonable deductibles, LESSEE shall obtain and maintain in full force and effect for the duration of its engagement with the CITY and any extension hereof, at LESSEE’S sole expense, insurance coverage in the following type(s) and amounts: 1 WORKERS’ COMPENSATION and EMPLOYERS LIABILITY INSURANCE Workers’ Compensation within the regulations of the Texas Workers’ CompensationAct. The minimum policy limits for Employers Liability are: Bodily Injury by Accident: $100,000 Each Accident Bodily Injury by Disease: $100,000 Each Employee Bodily Injury by Disease: $500,000 Policy Limit The policy shall include: a) An endorsement to waive subrogation in favor of the City of Denton, its officers employees and elected representatives, for bodily injury (including death) or anyother loss. An endorsement to provide thirty (30) days prior written notice in the event ofcancellation to the address as shown in Section C, a (i) and (ii), or in accordance with Section 1811.155 of the Texas Insurance Code, Notice of Cancellation in accordance with the Notice of Insured in the policy for cancellation due to non-payment of b) C) prerrllurn.Provide that LESSEE’S insurance is primary insurance as respects the CITY, its officers, employees and elected representatives. NOTE i. If LESSEE is a non-subscriber or is self-insured, LESSEE shall provide a copy of its Certificate of Authority to Self-Insure from the Texas Department of Insurance, Division of Workers’ Compensation Self Insurance Regulation Program, evidence of alternative coverage and internal safety and injury coverage policies and procedures. 2 COMMERCIAL GENERAL LIABILITY INSURANCECommercial General Liability Insurance including, but not limited to, Premises/Operations, Personal & Advertising Injury, Products/Completed Operations, Independent Contractors and Contractual Liability with minimum combined bodily injury (including death) and property damage limits of $1,000,000 per occurrence and $2,000,00 general aggregate The policy shall include: a) Intended or expected acts in the protection of persons or property. b) An endorsement naming the City of Denton its officers, employees and elected representatives as additional insureds. c) An endorsement to waive subrogation in favor of the City of Denton, its officers and employees, for bodily injury (including death), property damage or any other loss. Lease Agreement Page 17 of 22 d)An endorsement to provide thirty (30) days prior written notice in the event of cancellation to the address as shown in Section C, a (i) and (ii), or in accordance withSection 1811.155 of the Texas Insurance Code, Notice of Cancellation in accordance with the Notice of Insured in the policy for cancellation due to non-payment of prernlurn. Provide that LESSEE’S insurance is primary insurance as respects the CITY, its officers, employees and elected representatives. If this insurance is written on a claims-made form, coverage shall be continuous (by renewal or extended reporting period) for not less than twenty-four (2 O months following completion of the contract and acceptance by the City. Coverage, including any renewals, shall have the same retroactive date as the original policy. e) f) '1).ALL RISK PROPERTY INSURANCE All Risk Property Insurance covering LESSOR’S buildings, including improvements and betterments with insured value equal to 80% replacement cost. Covered perils shall include, but not be limited to, Fire, Extended Coverage, and Vandalism & Malicious Mischief. The City of Denton will be shown as a loss payee, as their interest may appear. The policy shall include: a) An endorsement to provide thirty (30) days prior written notice in the event of cancellation to the address as shown in Section C, a (i) and (ii), or in accordance with Section 1811.155 of the Texas Insurance Code, Notice of Cancellation in accordance with the Notice of Insured in the policy for cancellation due to non-payment of b) prernlurn. Provide that LESSEE’S insurance is primary insurance as respects the CITY, its officers, employees and elected representatives. If this insurance is written on a claims-made form, coverage shall be continuous (by renewal or extended reporting period) for not less than twenty-four (24) months following completion of the contract and acceptance by the City. Coverage, including any renewals, shall have the same retroactive date as the original policy. C) SECTION E. CONSTRUCTION INSURANCE Prior to the commencement of renovation of existing buildings/improvements or construction of any permanent building/improvement, LESSEE shall purchase and maintain, or require LESSEE’S contractor to purchase and maintain, until final completion and acceptance of all work, insurance coverage written by companies approved by the State of Texas and acceptable to the LESSOR in the following types and amounts: 1 Workers’ Compensation within the regulations of the Texas Workers’ Compensation Act. The minimum policy limits for Employers Liability are: Bodily Injury by Accident: $100,000 Each Accident Bodily Injury by Disease: $100,000 Each EmployeeBodily Injury by Disease: $500,000 Policy Limit Lease AgreementPage 18 of 22 The policy shall include: a) An endorsement to waive subrogation in favor of LESSEE and the City of Denton, its officers, employees and elected representatives, for bodily injury (including death) or any other loss.b) An endorsement to provide thirty (30) days prior written notice in the event of cancellation to the address as shown in Section C, a (i) and (ii), or in accordance with Section 1811.155 of the Texas Insurance Code, Notice of Cancellation in accordance with the Notice of Insured in the policy for cancellation due to non-payment of C) prernlum. Provide that CONTRACTOR’S insurance is primary insurance as respects LESSEE and the CITY, its officers, employees and elected representatives. NOTE ii. If CONTRACTOR is a non-subscriber or is self-insured, CONTRACTOR shall provide a copy of its Certificate of Authority to Self-Insure from the Texas Department of Insurance, Division of Workers’ Compensation Self Insurance Regulation Program, evidence of alternative coverage and internal safety and injury coverage policies and procedures. 2.Business Automobile Liability Insurance covering owned, hired, and non-owned vehicles, with a minimum combined single limit for bodily injury (including death) and property damage limit of $500,000 per occurrence. The policy shall include: a) An endorsement naming LESSEE and City of Denton its officers, employees and elected representatives as additional insureds. b) An endorsement to waive subrogation in favor of LESSEE and the City of Denton, its officers and employees, for bodily injury (including death), property damage or any other loss.An endorsement to provide thirty (30) days prior written notice in the event of cancellation to the address as shown in Section C, a (i) and (ii), or in accordance withSection 1811.155 of the Texas Insurance Code, Notice of Cancellation in accordance with the Notice of Insured in the policy for cancellation due to non-payment of C) d) premlurn. Provide that CONTRACTOR’S insurance is primary insurance as respects the LESSEE and the CITY, its officers, employees and elected representatives. If this insurance is written on a claims-made form, coverage shall be continuous (byrenewal or extended reporting period) for not less than twenty-four (24) months following completion of the contract and acceptance by the LESSEE. Coverage, including any renewals, shall have the same retroactive date as the original policy. e) 3 Commercial General Liability Insurance including, but not limited to, Premises/Operations, Personal & Advertising Injury, Products/Completed Operations, Independent Contractors and Contractual Liability with minimum combined bodily injury Lease Agreement Page 19 of 22 (including death) and property damage limits of $1,000,000 per occurrence, $1,000,000 products/completed operations aggregate, $2,000,000 general aggregate The policy shall include: a) Asbestos Abatement (if project involves asbestos). b) Coverage extended to apply to products/completed operations and Explosions, Collapse and Underground (XCU) hazardsc) An endorsement naming the LESSEE and the City, its officers, employees and elected representatives as additional insured using the broadest form of endorsement available, with such status extended to include the extension of the completed operations coverage as described above. d) An endorsement to waive subrogation in favor of the City of Denton, its officers and employees, for bodily injury (including death), property damage or any other loss.e) An endorsement to provide thirty (30) days prior written notice in the event of cancellation to the address as shown in Section C, a (i) and (ii), or in accordance withSection 1811.155 of the Texas Insurance Code, Notice of Cancellation in accordance with the Notice of Insured in the policy for cancellation due to non-payment of f) premIum The Completed Operations coverage must be maintained for a minimum of one (1) year after final completion and acceptance of the Work, with evidence of same filed with the LESSEE and the City of Denton. Provide that CONTRACTOR’S insurance is primary insurance as respects the CITY, its officers, employees and elected representatives. If this insurance is written on a claims-made form, coverage shall be continuous (by renewal or extended reporting period) for not less than twenty-four (24) months following completion of the contract and acceptance by the LESSEE. Coverage, including any renewals, shall have the same retroactive date as the original policy. g) h) SECTION F. SUBCONTRACTING LIABILITY (1) Without limiting any of the other obligations or liabilities of the LESSEE, the LESSEE shall require each Subcontractor performing work under the contract, at the Subcontractor's own expense, to maintain during the engagement with the CITY, types and limits of insurance that are appropriate for the services being performed, comply with all applicable laws and are consistent with industry standards. The Subcontractor’s liability insurance shall name LESSEE as anadditional insured. (2) LESSEE shall obtain and monitor the certificates of insurance from each Subcontractor.LESSEE must retain the certificates of insurance for the duration of the contract and shall have the responsibility of enforcing insurance requirements among its subcontractors. The CITY shall be entitled, upon request and without expense, to receive copies of these certificates. SECTION F. LESSEE LIABILITY Approval, disapproval or failure to act by the CITY regarding any insurance supplied by LESSEE or its subcontractors shall not relieve LESSEE of full responsibility or liability for damages and Lease Agreement Page 20 of 22 accidents as set forth in the contract documents. Neither shall the bankruptcy. insolvency nor denial of liability by the insurance company exonerate LESSEE from liability. SECTION G. INDEMNITY LESSEE agrees to defend, indemnify and hold the CITY, its ofbcers, agents and employees,harmless against any and all claims, lawsuits, judgments, costs and expenses for personal injury (including death), property damage or other harm for which recovery of damages is sought, suffered by any person or persons. that may arise out of or be occasioned by LESSEE’S breach ofany of the terms or provisions of its engagement with the CITY, or by any negligent or strictlyliable act or omission of LESSEE, its officers, agents, employees, or subcontractors, in LESSEE’S performance under its engagement with the CITY; except that the indemnity provided for in this paragraph shall not apply to any liability resulting from the sole negligence or fault of the CITY,its officers. agents or employees and in the event of joint and concurrent negligence or fault of LESSEE and the CITY. responsibility and indemnity, if any. shall be apportioned comparatively in accordance with the laws of the State of Texas, without waiving any governmental immunity available to the CITY under Texas law and without waiving any defenses of the parties under Texas law. The provisions of this paragraph are solely for the benefit of the parties hereto and are not intended to create or grant any rights, contractual or otherwise, to any other person or entity, LESSEE: CDI HICKORY, LLC %=GiFAlih iii;ii Representative NAME: Stephen Shannon, Manager DATE: 2l31 B.kB Lease Agreement Page 2 1 of 22 RQ + ; 74 Hd aDq)oniii ONBqiVIaq),J alalGb-,0alala)bOcaa UaeG cbI0+1G)cg =n•Hl•l a)hICB3VVlOaoy =eg b! !