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Ordinance No. 8,424981022 -1 ORDINANCE NO. 8424 ® AN ORDINANCE AUTHORIZING AND DIRECTING THE MAYOR TO EXECUTE AND THE CITY CLERK TO ATTEST TO A FACILITY MANAGEMENT AGREEMENT WITH EDMUNDSON INTERESTS, L.L.C., FOR THE MANAGEMENT AND OPERATION OF A CONVENTION CENTER AT BAYLAND PARK; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. • BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section 1: That the City Council of the City of Baytown, Texas, hereby authorizes and directs the Mayor and City Clerk of the City of Baytown to execute and attest to a Facility Management Agreement with Edmundson Interests, L.L.C., for the management and operation of a convention center at Bayland Park. A copy of said agreement is attached hereto, marked Exhibit "A," and made a part hereof for all intents and purposes. Section 2: This ordinance shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the City of Baytown this the 22 "d day of October, 1998. PETE C. ALFARO, Mayor ATTEST: EILEEN P DIAL , City Clerk APPROVED AS TO FORM: NACIO RAMIREZ, kOCity Attorney c:klh 113\ Council\ Ordinances\E dmund son f- aciIiIiesManage men tAgreementBayland ® FACILITY MANAGEMENT AGREEMENT STATE OF TEXAS § COUNTY OF HARRIS § THIS FACILITY MANAGEMENT AGREEMENT (the "Agreement ") is made and entered into effective this 22 °d day of October, 1998, by and between EDMUNDSON INTERESTS, L.L.C., a Texas limited liability company whose address is 2445 Stanmore Drive, Houston, Texas 77019 -3423 ( "Manager ") and the City of Baytown, a municipal corporation located in Harris and Chambers Counties, Texas ( "Owner "). RECITALS a. Owner shall construct on the property more specifically described in Exhibit "A," which is attached hereto and incorporated herein for all intents and purposes, a conference center, which shall be known as the Bayland Park Conference Center, hereinafter referred to as "Facility." However, Owner expressly reserves the right to rename the Facility at any time at its sole discretion. b. Owner anticipates that the public opening of the Facility will occur in January of 2000. The Facility will offer space for meetings, conferences, banquets, training sessions, and other events, subject to the terms and conditions hereof. C. Manager holds itself out as an organization whose officers and directors have substantial experience and expertise in the management, operation and marketing of public assembly facilities. Manager understands and agrees that the Facility shall be operated for the benefit of Owner and, as such, shall perform all services and obligations hereunder to further such purpose. d. Owner has determined to grant to Manager, and Manager has agreed to accept the authority and responsibility to manage, operate and market the Facility in accordance with the terms of this Agreement. ARTICLE 1 DEFINITIONS The following words shall, unless the context otherwise requires, have the meanings ascribed to them below. 1.1 "Advertising" shall mean all announcements, acknowledgments, banners, signs, showbills, promotional materials, handouts and promotional products sampling, give- aways, and other audio or visual commercial messages displayed, announced or • otherwise presented in the Facility including, without limitation, video messages. Facility Management Agreement, Page I 0 1.2 "Agreement" shall mean this Facility Management Agreement. 1.3 "Authorized Representative" shall mean the officer, agent, or employee of each party and designated in Section 2.4 hereinbelow. - 1.4 "City Manager" means the City Manager of the City of Baytown, Texas. 1.5 "Day" shall mean a calendar day, including Saturdays, Sundays and legal holidays. 1.6 "Event(s)" shall mean all revenue or non - revenue producing sports, entertainment, cultural, civic and other activities and events which are conducted at the Facility and scheduled by Manager. 1.7 "Facility" shall mean the conference center, including all of the parking areas and garages appurtenant thereto, located on the property more particularly described in Exhibit "A." 1.8 "Fiscal Year" shall mean a period of time beginning on October 1 and ending on the immediately following September 30, inclusive, provided, however, that the Facility's first Fiscal Year shall begin on the Operations Start Date and end on the immediately following September 30, inclusive. 1.9 "General Manager" shall mean the chief financial officer of Manager at the Facility. 1.10 "Manager" shall mean Edmundson Interests, L.L.C., and its assignee(s), if any. 1.11 "Operations Start Date" shall mean the earlier of (a) the date of issuance of a final and unconditional certificate of occupancy issued by Owner and any and all other applicable governmental permit(s) and /or license(s) necessary for the occupancy or operation of the Facility or (b) if requested by Owner or Manager, the date of issuance of any temporary certificate of occupancy issued by Owner and any and all other applicable governmental permit(s) and /or license(s) permitting an Event to be conducted at the Facility; or (c) the date the Facility actually opens to the public. 1.12 "Owner" shall mean the City of Baytown, Texas, a municipal corporation located in Harris and Chambers Counties, Texas. 1.13 "Person" shall means an individual, partnership, association, joint stock company, trust, corporation, or governmental entity. ARTICLE 2 INTRODUCTION 2.1 Grant of Authority. Owner hereby grants to Manager, and Manager hereby accepts, the right and obligation in its own name, as an independent contractor and not as an agent of Facility Management Agreement, Page 2 Owner, to provide those management services to Owner as are set forth in this Agreement in connection with Manager's management, operation and administration of the Facility and, in connection therewith, to perform or furnish or cause to be performed or furnished, subject to the provisions hereof, all of such management services all upon the terms of this Agreement. Manager and Owner acknowledge and agree that Manager shall retain control of the Facility as the manager and operator thereof pursuant to this Agreement, but that Manager may delegate certain specific and limited responsibilities related to the management and operation of the Facility to third parties in accordance with Section 11.13, but shall retain the sole, exclusive obligation and authority to manage and operate the Facility. 2.2 Nature of Relationship. The parties agree that the only relationship created by this Agreement is that between Owner, as owner, and Manager, as an independent contractor, for certain management and operation services assigned to Manager by owner and that Manager is an independent contractor, not an agent, employee, joint venturer or partner of Owner. 2.3 Term. 2.3.1 Initial Term. The term of this Agreement (the "Term ") shall be for a period of ten (10) years beginning on the commencement date as defined in the Ground Lease dated September 24, 1998, executed by and between Owner and Manager (the "Commencement Date ") and shall expire for any and all purposes, unless terminated earlier under the terms of this Agreement, at twelve o'clock midnight on the tenth (10`t') anniversary of the Commencement Date. 2.3.2 Option Term. Subject to the terms and conditions hereof, Manager, upon timely notice, shall have three (3) consecutive ten (10) year options (each option being referred to herein as an "Option" and as applicable to the "Option Period(s) ") to renew this Agreement upon the following terms and conditions. Manager shall give Owner written notice of its desire to exercise each Option no later than one hundred eighty (180) days prior to the expiration of the Initial Term or the then in effect Option Period. Each Option Period, however, is expressly subject to the written approval of Owner and no Option Period shall be deemed effective until after such approval is obtained. Upon the written approval of Owner of the exercise of any Option, this Agreement shall be deemed to be in full force and effect and the Term hereunder shall continue for each Option Period from its then Expiration Date. 23.3 Contingency of Agreement. This Agreement is effective on the effective date first referenced hereinabove (the "Effective Date "). However, Owner shall have the right and option from and after the Effective Date until the Commencement Date to terminate this Agreement without incurring any liability if Owner or Manager terminates the ground lease referenced in Section 2.3.1 or if such ground lease ® otherwise expires due to the failure of Manager to meet the contingency provision contained therein. Facility Management Agreement, Page 3 2.3.4 Contingency of Tenn and Options. However, Owner shall have the right and option from and after the Commencement Date to terminate this Agreement without incurring any liability if Owner or Manager terminates the ground lease referenced in Section 2.3.1. In the event of such termination, Owner shall pay to Manager the portion, if any, of Manager's fees earned through the date of such termination. 2.4 Contract Administration. Owner hereby appoints its City Manager and Manager hereby appoints its President as their respective Authorized Representatives, each of whom shall act as liaison and contact person between the parties in matters concerning the administration of this Agreement. Each party shall have the right to designate a substitute Authorized Representative by providing written notice to the other party. If either party desires to do any act hereunder which requires the other party's approval or consent, such request shall be submitted in writing to the other party's Authorized Representative. If either party fails to approve, deny, or otherwise consent to the request within thirty (30) days after receipt of the written submittal of the request, the request shall be deemed approved. ARTICLE 3 RESPONSIBILITIES OF MANAGER 3.1 Standard of Care. Subject to the limitations set forth in this Agreement, Manager shall exercise its diligent, good faith efforts in managing and operating the Facility. In this connection, the parties agree that Manager, in establishing and implementing its booking policies may schedule not only those events that generate substantial direct revenue to the Facility, but also those events that produce less direct revenue but, in Manager's good faith judgment, generate either a significant economic, cultural or other benefit to Owner or otherwise serve the public interest. However, the parties agree that the booking procedures referenced herein must be approved in writing by Owner prior to the implementation of the same. Owner reserves the right to prohibit Manager from booking events that are not, in the City Manager's sole discretion, in the best interest of Owner and/or the health, safety or welfare of its inhabitants. Owner reserves the right to utilize the Facility at least five (S) days per Fiscal Year. Owner may utilize the Facility, in whole or in part, additional days in a Fiscal Year if (i) the Facility or a portion thereof has not been reserved at least 24 hours prior to Owner's desired date and time or (ii) if the use of the Facility by Owner does not unreasonably interfere with another Event. Any use described in this section by Owner shall be without charge; provided, however, Manager may charge Owner for any set -up, tear -down, clean -up or other services, exclusive of booking services, performed by Manager at reasonable rates in accordance with Manager's standard rate schedule. 3.2 Duty. Manager shall owe to Owner a duty to perform its obligations under this Agreement and to conduct the management and operation of the Facility at all times with integrity and good faith and in a manner which is in the best interest of the Facility and Facility Management Agreement, Page 4 Owner and is consistent with the terms of this Agreement. The Facility shall be managed and maintained in a manner which is satisfactory to Owner and consistent with industry practices for similar facilities. Twice during any one Fiscal Year, Owner may require Manager, at Manager's sole cost and expense, to submit reports detailing its performance of its obligations under this Agreement. Such reports shall contain the information as requested by Owner and shall be in the format, if any, required by Owner in order for Owner to evaluate Manager's performance to ensure that the Facility is being managed and operated as required in this Agreement. Should Owner not be satisfied with Manager's performance, Owner may offer suggestions for better service. 3.3 Pre - Opening Duties and Responsibilities. Subject to the limitations set forth in this Agreement, Manager or person or persons designated by Manager, shall do the following (or cause the same to be performed) prior to the Operations Start Date: (a) Present to Owner goals, objectives, strategies, areas of responsibility of Manager's personnel and Manager's lines of communication; (b) Provide Owner with detailed written recommendations for the best use of the Facility no later than thirty (30) days following the Effective Date; (c) Locate and adequately staff an office for all activities required herein of Manager prior to the Operations Start Date, and provide Owner with a toll -free telephone number affording Owner the opportunity to communicate with Manager from 5:00 a.m. to 5:00 p.m., Monday through Friday, exclusive of holidays recognized and observed by Owner; (d) Attend regular meetings with Owner as often as necessary to facilitate communications and coordination of activities relating to the Facility; (e) Recommend revision to the preliminary space program for the Facility to take into account user requirements, operating requirements and local community requirements and, when requested by Owner, tender such recommendations in writing; (f) Plan, coordinate, and implement all public relations activities for the Facility, including those requested in writing by Owner's Authorized Representative; (g) Make Manager's staff available for press conferences and other public appearances, as and when requested by Owner; (h) Assist in the identification and selection of the various design professionals for the Facility and review with the design professionals the plans submitted by consultants for mechanical, electrical, acoustical, graphics, concession services, landscaping and facility matters for conformity with the operation requirements of the Facility; recommend specifications for furniture, fixtures and equipment for the Facility for Owner's written approval; Facility Management Agreement, Page 5 (i) Plan, coordinate and participate in meetings of the design professionals for the Facility as necessary; () During presentation of working drawings and other documentation by the design professionals for submission for construction bids and contract awards, work with Owner and the design professionals in the (a) review of the documents comprising the working drawing package for design objectives and potential cost savings, as well as performance specifications and warranty performance criteria and (b) review and recommend changes where appropriate to make the Facility more useful, efficient or functional for its intended purposes; (k) Review preliminary and final designs of the mechanical, plumbing and electrical systems for operational cost effectiveness, energy conservation and general efficiency; (l) Evaluate space usage, core plans and efficiency factors; (m) Coordinate the construction and turnover of the Facility for the use, occupancy and operation thereof and assist in the facilitation of the transition from construction to actual use, occupancy and operation of the Facility; (n) Solicit, prepare, negotiate and execute use agreements for events requiring significant advance booking, which agreements shall be subject to Section 3.5; (o) Solicit, prepare, negotiate and execute agreements to maximize the utilization of the Facility, which agreements shall be subject to Section 3.5; (p) Coordinate and solicit specialty events, exhibitions, and other events to be held at the Facility; (q) Recommend and supervise the implementation of a project reporting system with respect to marketing, design, construction, finance and operational requirements; (r) Disseminate to Owner quarterly written reports concerning Manager's marketing and operational efforts; (s) Direct and supervise the procurement of all furniture, fixtures and equipment for the Facility; (t) Assist Owner in determining the Facility's parking requirements; (u) Develop a comprehensive marketing plan and brochure for Owner's approval within one hundred twenty (120) days of the Effective Date and begin • implementation thereof within ten (10) days after such approval; Facility Management Agreement, Page 6 • (v) Develop and implement a comprehensive staffing plan, including job descriptions, and identify, select and train the Facility's full -time and part -time staff, (w) Identify prospective food, beverage, souvenir, novelty and program concessionaires for the Facility, negotiate and execute contracts with those concessionaires, which contracts shall be subject to the provisions of Section 3.5; (x) Identify, negotiate, and execute contracts with all other service contractors providing services to the Facility, which contracts shall be subject to the provisions of Section 3.5; (y) Prepare, recommend and implement written operating policies and procedures and rules and regulations for the Facility which have been approved in writing by Owner and which include the standard operating hours of the Facility; (z) Establish rental rates for the use of the Facility comparable to rates charged by similar facilities; (aa) Plan and coordinate in conjunction with Owner the dedication opening ceremonies for the Facility; (bb) Design and implement a financial accounting system for the Facility; (cc) Select, employ and supervise such personnel as shall be necessary for the operation of the Facility prior to the Operations Start Date; (dd) Plan and coordinate the sale or licensing of Advertising, parking and any other sources of revenue desirable for the Facility and obtain the Owner's written approval of all such sales and licensing contracts; (ee) Perform timely such other consulting, administrative or management services as required; (fo Secure all permits necessary for the sale of alcoholic beverages, food, and all other goods and/or services; (gg) Prepare regular written reports on a monthly basis to Owner of all activities of Manager prior to the second regularly scheduled council meeting of each month. )A Post - Opening Management Duties and Responsibilities. Subject to the limitations set forth in this Agreement, Manager, or person or persons designated by Manager, shall do the following (or cause the same to be performed) throughout the Term and any Options hereof after the Operations Start Date: Facility Management Agreement, Page 7 (a) Manage and operate ''the Facility and ahy facilities appurtenant thereto and contract for its use in a manner that will promote and further the purposes for which the Facility is to be constructed, as set forth in the Recitals to this Agreement; (b) Negotiate, execute and perform all contracts, use agreements, licenses and other agreements (a) with persons who desire to schedule events, performances, telecasts, broadcasts or other transmission in, from or to the Facility or who desire otherwise to use the Facility or any part thereof or (b) that otherwise pertain to the use, operation and occupancy of the Facility or any part thereof, (c) Implement all Advertising, licensing, promotional activities, marketing and public relations for or at the Facility, which shall be subject to the approval of Owner; (d) Negotiate, obtain Owner's written approval, execute and perform all contacts, use agreements, licenses and other agreements (a) for the use of advertising space in or about the Facility and all Advertising rights of whatever kind or nature related to the Facility or (b) for the sale, promotion, marketing and use of all names, trademarks, trade names, logos and similar intangible property relating to the Facility; (e) Operate at and for the Facility, through concessionaires selected by Manager, the sale of food, beverages, souvenirs, novelties and programs; ( Select, schedule and coordinate the efforts of all parties involved in the operation of the Facility and establish and maintain consistent procedures for cost estimating and reporting maintenance and payment of invoices; (g) Plan, coordinate and administer operation of the Facility and continue to identify, select and train the Facility's staff, (h) Retain legal counsel in connection with the discharge of its duties hereunder and cause such counsel to coordinate with Owner's legal department where necessary or appropriate; (i) Coordinate the work of all parties performing work in connection with the operation of the Facility; (j) Make prompt payment of all expenses associated or in any manner connected with the operation and /or management of the Facility; (k) Furnish all services necessary to accomplish the foregoing requirements of this Section 3; (1) Perform such other consulting, administrative or management services as may be required; Facility Management Agreement, Page 8 (m) Provide Owner with a quArterly summary of the operation of the Facility for the previous quarter and prospects for future operations within thirty (30) days after the end of each quarter; (n) Devise and implement procedures (including preventative maintenance procedures) reasonably designed to keep the Facility in good order and condition subject to ordinary wear and tear, and maintain the Facility in such order and condition; (o) Maintain adequate control over the records of the Facility of the acquisition and disposition of all furniture, fixtures and equipment and of all fixed asset supplies and inventories used in the operation of the Facility; (p) Use, operate and maintain the Facility for Owner in accordance with uses and standards prevailing locally in the industry for convention/conference centers of comparable size, class and standing; . (q) Maintain Facility, including, but not limited to, all rooms, furniture, fixtures, equipment and fixed asset supplies in a good condition commensurate with prevailing local industry standards, and repair or replace such items, or cause to be made such repair or replacement, promptly so the Facility remains in such condition at all times; (r) Maintain inventories, furniture, fixtures and equipment and replace the same or make additions thereto so the Facility remains in a good condition commensurate with prevailing local industry standards at all times; (s) Keep all mechanical systems and components in good operating order, operating during all hours the Facility is open except as necessary for repairs; and (t) Inspect all fire hoses, extinguishers and similar equipment regularly and maintain them in good operating order and condition to ensure that all fire fighting systems and equipment remain in the highest degree of readiness at all times. 3.5 Submission of Contract Forms for Approval. Manager shall obtain Owner's prior written approval of the standard contract forms and of all variations thereto, to be entered into by and between Manager and third parties. The Parties agree and acknowledge, however, that Owner's approval authority is limited to the terms and conditions of Manager's standard contract form and Owner shall not have the right to select or approve any specific party with whom Manager must do business. All contract forms must satisfy all of the terms and conditions contained in Section 5.4. Nothing, however, in this section shall affect those contracts which are required to be approved in accordance with Section 3.3(dd), 3.4(c), and 3.4(d). 3.6 Compliance with the Law; Duty. Manager must comply with all applicable federal, state, and local laws, rules, regulations, and ordinances relating to the use and operation of the Facility Management Agreement, Page 9 Facility including, but not limited' to, those with regard to discrimination against or segregation of any person or a group of persons on account of race, color, religion, sex, disability, familial status or national origin. Manager shall perform its obligations hereunder in conformity with the standard to which an operator of a.comparable multi- purpose public conference facility would operate. Manager shall promptly and fully discharge all of its obligations under this Agreement. ARTICLE 4 RECORDS, ACCOUNTS.AND REPORTS 4.1 Books. Manager shall maintain adequate books of accounts with respect to its management and operation of the Facility in accordance with generally accepted accounting principles and industry standards. 4.2 Access to Information. Owner shall have the right to obtain from Manager, at any time upon seven (7) days' prior notice, such information and to inspect such books and records concerning the management and operation of the Facility as may be necessary, as determined by Owner, to inform Owner concerning the Facility and its operations. 4.3 Annual Audit of Facility Operations. Within ninety (90) days after the close of each Fiscal Year, Manager shall furnish, at its sole cost and expense, to Owner a balance sheet, a statement of the profit or loss and a statement of changes in financial condition, prepared in accordance with generally accepted accounting principles and accompanied by an auditor's report containing an opinion of the independent certified public accountant preparing the report. ARTICLE 5 POWER AND FUNCTIONS 5.1 Authority of Manager. Manager shall have the right and authority to exercise, or delegate after obtaining Owner's prior written consent, the exercise of, all rights, powers and duties conferred or imposed on Manager in this Agreement. 5.2 Property. Manager shall have no authority to sell or otherwise dispose of, or to encumber or alienate any personal or real property owned by Owner. Owner shall construct the permanent facility and parking area and shall provide only that personal property determined by Owner's Authorized Representative, in his sole discretion, to be necessary for the proper operation of the Facility. Manager shall provide all personal property, equipment and furnishings necessary for the operation of the Facility, which property equipment and furnishings are not otherwise provided by Owner. At the discretion of Manager, such items may be acquired or obtained by direct purchase or third party vendor leases. Facility Management Agreement, Page 10 ® 5.3 Capital Improvements. Manager shall have no authority to make any alterations or any capital improvements to the Facility without the prior written consent of Owner. Furthermore, Manager shall not at any time encumber with liens, promissory notes or collateral the Facility or other lands, facilities, or improvements owned, in whole or in part, by Owner. 5.4 Contracts. Manager shall have no authority, without the prior written consent of Owner to enter into any contract for the provision of goods and/or services to the Facility at any time beyond the expiration date of the Term or any Option Periods. All contracts entered into by Manager shall provide that the same are assignable to Owner without the vendor's prior consent and, notwithstanding any contrary provision hereof, upon termination of this Agreement for any reason, Manager agrees that Owner shall have the right, but not the obligation, to assume in writing any or all then outstanding contracts affecting the Facility. 5.5 Employees. 5.5.1 Employees now or hereafter hired by Manager in connection with the management services provided by Manager shall be employees of Manager and not of Owner. Subject to the terms herein, Manager shall have complete and absolute discretion and authority with respect to the number, functions, qualifications, compensation and other terms and conditions relating to its employees. Manager agrees to employ only orderly and competent persons, skillful in the performance in the type of work or functions required under this Agreement. Should Owner determine that any of Manager's employees, including its General Manager, is incompetent, unfaithful or disorderly, Manager shall have the obligation to conduct an investigation regarding the matter and shall discharge the employee if Manager determines such discharge is appropriate. Any employee so discharged shall not again be employed by Manager to perform any work or provide any service at or in any way relating to the Facility. 5.5.2 Manager shall select a General Manager. The General Manager and /or his representative will be placed on site at the Facility and will maintain an office at the Facility to conduct Manager's Facility business thereon from at least 8:00 a.m. to 5:00 p.m., Monday through Friday, exclusive of official holidays recognized and observed by Owner. Manager shall notify in writing Owner of its selection of a General Manager and the General Manager's representative. The General Manager and his representative shall be and remain employees of Manager. At all times during the Term and all Option Periods, Manager agrees to have a person designated and performing the duties of the General Manager. In the event that Owner has concerns related to the General Manager's performance of the duties and responsibilities of Manager contained herein, Owner and Manager shall meet 40 to discuss those concerns, and Manager shall be required to conduct an investigation as required in subsection (a) hereinabove. Facility Management Agreement, Page I I ® 5.6 Purchase of Supplies and Services. Manager shall have full authority and discretion as to the purchase of all equipment, materials, supplies and inventories reasonably required by it in the management of the Facility. 5.7 Types of Contracts. Subject to Section 3.5, Manager shall enter into contracts with third parties for (a) the provision of the goods and beverage concessions for the Facility; (b) the use of the Facility; (c) all other services necessary or desirable for the Facility, subject to Section 3.5.; and (d) all other agreements desirable for the operation, management, repair, and/or maintenance of the Facility. 5.8 Owner's Covenant against Interference. Owner covenants and agrees that neither it nor its Authorized Representative shall interfere in any manner with Manager's rights and authority under this Agreement, and specifically, that no such person shall initiate or intervene in any manner whatsoever in negotiations with existing or prospective lessees, users, advertisers, service contractors or other persons doing business or seeking to do business at the Facility nor shall any such person solicit, request or seek any services, contributions, gifts, favors, tickets, gratuities or other benefits from Manager or any person doing business at the Facility. Approving or disapproving any contract required to be approved herein shall not be deemed to violate Owner's covenant to not interfere with Manager's rights and authority under this Agreement. ARTICLE 6 FINANCIAL OBLIGATIONS OF THE PARTIES 6.1 Owner's Financial Responsibilities. 6.1.1 Owner will be responsible for the financing of the Facility. As such, Owner shall retire all debt related to the construction of the Facility, its parking and related items. 6.1.2 Subject to the appropriation and availability of funds immediately after the initial construction of the Facility, Owner may procure audio - visual ( "AN ") equipment for the Facility. The equipment so procured shall be that as deemed. advisable by Owner. Such equipment shall at all times remain the property of Owner, and 40 or shall return the equipment to Owner should Manager decide to replace or no longer use the same. Facility Management Agreement, Page 12 ® 6.1.3 Owner shall maintain the grounds, parking and exterior facade of the Facility. 6.1.4 Owner will upgrade, repair and replace when necessary, as determined in the sole discretion of the City Manager, the following components of the building: (a) exterior walkways, patios and parking areas, associated lighting and signage, (b) HVAC systems, (c) roof, (d) electrical distribution, (e) plumbing, (f) interior and exterior structural systems, (g) slab and support system, and (h) fixtures, which are fixed or attached to the Facility permanently as an appendage, are not removable, and are so related to the Facility that an interest arises in them under real estate law. 6.2 Manager's Financial Responsibilities. Manager shall not receive any remuneration directly from Owner for operating the Facility; however, Manager shall receive and keep all income from the operation of the Facility, the leasing of AN equipment, and food service fees. In exchange for this income, Manager will (a) pay all employee costs, utility bills, advertising and promotion costs; (b) provide, maintain and replace all AN equipment, furnishings, and window coverings; (c) provide routine housekeeping and cleaning service; (d) clean, repair or replace damaged carpet and perform routine repairs and maintenance on interior to include, painting, papering, light plumbing and electrical repairs; (e) provide all supplies necessary for public toilets, kitchen and cleaners; and (fJ pay all permit fees, taxes, rental fees and all other fees and taxes as and when required in this Agreement. Any AN equipment purchased by Manager shall remain the property of Manager; however, such equipment shall be subject to the provisions of Section 9.3. ARTICLE 7 7.1 Insurance Required. Throughout the Term and all Option Periods, Manager at its own expense shall purchase, maintain and keep in force and effect insurance against claims for injuries to or death of persons or damages to property which may arise out of or result from Manager's operations and/or performance of the work and services under this Agreement, whether such operations and/or performance be by Manager, its agents, representatives, volunteers, employees or subcontractors or by anyone directly or indirectly employed by any of them, or by anyone for whose acts any of them may be liable. 7.2 Primary Insurance and Subcontractor's Insurance. Manager's insurance coverage shall be primary insurance with respect to Owner, its officers, agents and employees, including Owner. Any insurance or self - insurance maintained by Owner or its officials, agents and employees shall be considered in excess of Manager's insurance and shall not contribute to it. Further, Manager shall include all subcontractors as additional insureds under its • commercial general liability policies or shall furnish separate certificates and endorsements for each subcontractor. All coverage for subcontractors shall be subject to all of the requirements stated herein. Facility Management Agreement Page 13 7.3 Minimum Coverage Limits. The following is a list of standard insurance policies along with their respective minimum coverage amounts required in this Agreement: (a) Commercial General Liability (CGL) . • General Aggregate: $2,000,000 • Products & Completed Operations Aggregate: $1,000,000 • Personal & Advertising Injury: $1,000,000 • Liquor Liability endorsement. • Per Occurrence: $1,000,000 • Fire Legal Liability: $1,000,000 • Coverage shall be at least as broad as ISO CG 00 01 10 93 • No coverage shall be excluded from standard policy without notification of individual exclusions being attached for review and acceptance. • Fire Legal Liability should be purchased as property coverage with a Legal Liability Coverage Form. (b) Business Automobile Policy (BAP) • Combined Single Limits: $1,000,000 • Coverage for "Any Auto." (c) Real and Personal Property • This coverage will be required should the hotel facility and the convention center be adjoined by a common wall. • Limit: Not less than 80% of insurable value, replacement cost basis (exclusive of cost of excavation, foundations, footings below the surface of the ground and costs of underground flues, pipes and drains). This coverage shall include structure and contents. • Special Form basis to include perils of flood and wind. • "Actual replacement cost" shall be confirmed from time to time (but not more frequently than once in any twelve (12) calendar months) at the request of Lessor, by one of the insurers or, at the option of Lessee, by an appraiser, engineer, architect or contractor approved by the issuer of such insurance policy and paid by Lessee. (d) Workers' Compensation: Statutory Limits • Employer's Liability: $500,000 • Waiver of Subrogation Required. 7.4 Notice of Cancellation. Upon execution of this Agreement, Manager shall file with Owner valid certificates of insurance and endorsements acceptable to Owner. Such certificates shall contain a provision that coverage afforded under the policies will not be canceled, suspended, voided, or reduced until at least sixty (60) days' prior written notice has been given to Owner via certified mail, return receipt requested. Facility Management Agreement, Page 14 ® 7.5 Subcontractor's Insurance._ Manager shall also file with Owner valid certificates of insurance covering all subcontractors. • 7.6 General Requirements for Policies. The following are general requirements which are applicable to all policies: (a) AM Best Rating of A:VII or better. (b) Only insurance carriers licensed and admitted to do business in State of Texas will be accepted. (c) Liability policies must be on occurrence form. (d) Owner, its officials and employees are to be added as Additional Insured to liability policies. (e) Upon request of and without cost to Owner, certified copies of all insurance policies and/or certificates of insurance shall be furnished to Owner's Authorized Representative. Certificates of insurance showing evidence of insurance coverage shall be provided to Owner's Authorized Representative prior to execution of this Agreement. (f) Upon request of and without cost to Owner, loss runs (claims listing) of any and/or all insurance coverage shall be furnished to Owner's Authorized Representative. ARTICLE 8 INDEMNIFICATION 8.1 Indemnification. MANAGER HEREBY AGREES TO INDEMNIFY, HOLD HARMLESS, PROTECT AND DEFEND OWNER, ITS OFFICERS, AGENTS, AND EMPLOYEES, HEREINAFTER COLLECTIVELY REFERRED TO AS "OWNER," FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, DAMAGES, CAUSES OF ACTION, SUITS AND LIABILITY OF EVERY KIND, INCLUDING ALL EXPENSES OF LITIGATION, COURT COSTS AND ATTORNEYS' FEES, FOR ANY INJURY TO OR DEATH OF ANY PERSON OR FOR DAMAGE TO ANY PROPERTY INCURRED IN CONNECTION WITH ANY AND ALL CLAIMS, INCLUDING ANY ACTIONS OR PROCEEDINGS, ARISING FROM, AS A RESULT OF, OR IN ANY WAY RELATED TO MANAGER'S AND MANAGER'S ASSIGNEES', OFFICERS', EMPLOYEES', CONTRACTORS', GUESTS', AND INVITEES', HEREINAFTER COLLECTIVELY REFERRED TO AS "MANAGER," USE OR OCCUPANCY OF THE FACILITY AND ALL FACILITIES APPURTENANT Facility Management Agreement, Page 15 • THERETO ( "FACILITIES ") OR ANY OF THE ACTIVITIES OF MANAGER IN THE FACILITIES, OR ANY -OF THE SERVICES PERFORMED BY MANAGER PURSUANT � TO OR IN CONNECTION WITH THIS AGREEMENT; WHERE SUCH INJURIES, DEATH.-OR DAMAGES ARE CAUSED BY THE JOINT NEGLIGENCE OF OWNER AND ANY OTHER PERSON OR ENTITY AND /OR BY THE JOINT OR SOLE NEGLIGENCE OF MANAGER. IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO, BOTH OWNER AND MANAGER, THAT THE INDEMNITY PROVIDED FOR IN THIS PARAGRAPH IS AN INDEMNITY BY MANAGER TO INDEMNIFY, HOLD HARMLESS, PROTECT, AND DEFEND OWNER FROM (I) THE CONSEQUENCES OF THE NEGLIGENCE OF OWNER, WHERE THAT NEGLIGENCE IS A CONCURRING CAUSE OF THE INJURY, DEATH OR DAMAGE AND /OR (II) MANAGER'S JOINT AND SOLE NEGLIGENCE. FURTHERMORE, THE INDEMNITY PROVIDED FROM THIS PARAGRAPH SHALL HAVE NO APPLICATION TO ANY CLAIM, LOSS, DAMAGE, CAUSE OF ACTION, SUIT OR LIABILITY WHERE THE INJURY, DEATH OR DAMAGE RESULTS FROM THE SOLE NEGLIGENCE OF OWNER UNMIXED WITH THE FAULT OF ANY OTHER PERSON OR ENTITY. 8.2 Defense. In the event that any action or proceeding is brought against Owner by reason of any of the above, Manager further agrees and covenants to defend the action or proceeding by legal counsel acceptable to Owner, which counsel shall be selected by Owner from the approved list of attorneys of the Texas Municipal League. 8.3 Survival. The indemnity provision provided in this article shall survive and remain in full force and effect after the expiration or earlier termination of this Agreement. ARTICLE 9 TERMINATION 9.1 Termination for Cause. Either party may terminate this Agreement for cause by written notice upon the occurrence of a material breach as further described in Section 10.1. 9.2 Automatic Termination. At the sole discretion of Owner, this Agreement may terminate automatically, without prior action or notice by Owner, upon the occurrence of any of the following: Manager files or has filed against it a voluntary or involuntary petition in bankruptcy or a voluntary or involuntary petition or an answer seeking reorganization, an arrangement readjustment of its debts or for any other relief under the Bankruptcy Code, as amended, or any other state or federal insolvency act or law not dismissed within sixty (60) days thereof, or any action by Manager indicating its consent to, approval of, or acquiescence to, the appointment of a receiver or trustee for all or a substantial part of its property; the making by such party of an assignment for the debts as they mature, or the 0 liquidation, dissolution or termination of the corporate partnership existence of Manager. Facility Management Agreement, Page 16 0 9.3 Surrender of Im rovements. 9.3.1 Except as otherwise provided in Section 9.3.2„ upon expiration or termination of this Agreement, Manager shall promptly surrender the Facility to Owner, leaving all equipment, supplies, manuals, books, records and inventories. Manager shall so deliver all documents, records and other non - proprietary work product generated by Manager for Owner during the then current Term or Option Period. 9.3.2 It is expressly understood by Owner and Manager that any AN equipment purchased by Manager for the Facility during the Term or any Option Period shall remain the property of Manager, subject to abandonment. The equipment shall be deemed abandoned if the same is not removed within thirty (30) days after the expiration or termination of this Agreement, which thirty (30) day period may be extended by City Manager in writing at the City Manager's sole discretion. If the equipment is deemed abandoned, Owner may assume ownership of the equipment and may use or otherwise dispose of the abandoned equipment. Yet, in any event, AN equipment shall not be removed from the Facility until the expiration of at least twenty -one (21) calendar days after the expiration or termination of the Agreement, unless otherwise instructed by the City Manager in writing, and shall not thereafter be removed from the Facility unless Manager produces proof of ownership of the equipment along with evidence that Manager has paid and is current in the payment of ad valorem taxes on the same. Any and all indentations and differences in the condition of the walls, ceiling and floor surfaces caused by the removal of the equipment shall be repaired at the sole cost and expense of Manager within fifteen (15) days after notice to repair has been issued by the City Manager. Manager hereby understands and agrees that Manager shall be obligated to leave the Facility in a safe condition and to repair, restore, renovate or redecorate the leased premises by reason thereof to the condition of the Facility when the Owner issued the certificate of occupancy, normal wear and tear as determined at the reasonable discretion of the City Manager being excepted. 9.4 Liquidated_ Damages. Both Manager and Owner understand and agree that a breach of this Agreement as to the time of any payment which may become due or in the failure to surrender the premises as required pursuant to Section 9.3 hereinabove will cause damage to Owner. Such damages, however, cannot be accurately measured and the ascertainment of the same will be difficult. Therefore, as part of the consideration for awarding this Agreement, the parties agree that for each and every calendar day (1) any payment due hereunder or any portion thereof remains delinquent or (ii) the Facilities remain occupied when the same should be abandoned, Owner may charge and Manager shall pay the sum of one hundred dollars ($100) as minimum liquidated damages. However, the foregoing agreement as to liquidated damages constitutes only an agreement by Owner and Manager as to the minimum amount of damages which Owner will sustain in any event by reason of Manager's failure to make payments or abandon the Facility within specified time periods. Should Owner suffer damages over and above the minimum amount specified by reason of Manager's failure to comply with the terms of this Agreement, Owner may recover such additional amount. Owner will have the right to recover such amount from Manager; all such remedies shall be cumulative and Owner Facility Management Agreement, Page 17 shall not be required to elect any one nor deemed to have made an election by proceeding to enforce any one remedy. 9.5 Effect of Termination of this Agreement on the Ground Lease dated September 24, 1998. Manager understands and agrees that should this Agreement be terminated due to a material breach as described hereinbelow by either party, such termination may result in the automatic termination of the Ground Lease dated September 24, 1998, at the sole option of Owner. The Ground Lease may be terminated on the date and at the time this Agreement is terminated and shall be deemed to be terminated for cause by Owner. ARTICLE 10 10.1 Material Breach. Each of the following shall constitute a material breach under this Agreement: (a) Failure to pay when due any amount required to be paid under this Agreement, if the failure continues for five (5) days after written notice has been received by the breaching party; (b) Failure to comply with any of the terms and conditions of the ground lease referenced in Section 2.3.1, which failure results in the termination of such lease; (c) The early termination of the ground lease referenced in Section 2.3.1 Ground Lease by Manager for cause; and (d) Failure to perform any other obligation under this Agreement, if the failure to perform is not cured within thirty (30) days after written notice has been given to the breaching party, except that if the breach cannot reasonably be cured within thirty (30) days, a material breach shall not be deemed to have occurred if the breaching party begins to cure the breach within the thirty (30) day period and diligently and in good faith continues to pursue the cure of the breach, which diligence and good faith shall be determined by the sole discretion of the non - breaching party. 10.2 Interest on Delinquent Payments. Interest shall accrue on any sums not paid when due from the date of delinquency until paid at an annual rate equal to the lesser of twelve percent (12 %) per annum or the maximum non - usurious rate of interest permitted by law. 103 Notice of Breach. Each party shall promptly notify the other party of any act or omission believed to be a material breach of this Agreement. In order to be effective for purposes of Section 10. 1, a notice of a material breach must state that it is a notice of breach and must specify in detail the act or omission alleged to constitute a breach of this Agreement. Facility Management Agreement, Page 18 ® 10.4 Rights of Non-Breaching Party. If a material breach occurs and is not waived in writing by the non - breaching party, then the non - breaching party shall have the following remedies which are not exclusive but cumulative in addition to any other remedies now or later allowed by law or in equity: 0 (a) The right to cure, at the breaching party's cost and expense, any material breach and recover such costs together with interest thereon as provided in Section 10.2 together with reasonable attorney's fees and costs of court; (b) The right to sue to collect any sums not paid when due, together with interests accrued thereon as provided in Section 10.2 together with reasonable attorney's fees and costs of court incurred in collecting the same; (c) The right to sue and to collect damages suffered by the non - breaching party by reason of the occurrence of a material breach other than breach in the payment of money together with reasonable attorney's fees and costs of court incurred in such proceedings; (d) The right to terminate this Agreement; and /or (e) The right to injunctive relief including seeking specific performance of the breached obligation, together with reasonable attorney's fees and costs of court incurred in such proceedings. ARTICLE 11 MISCELLANEOUS 11.1 Notice. As used in this Agreement, notice includes, but is not limited to, the communication of notice, request, demand, approval, statement, report, acceptance, consent, waiver and appointment. No notice of the exercise of any option or election is required unless the provision giving the election or option expressly requires notice. All notices must be in writing, provided that no writing other than the check or other instrument representing the rent payment itself need accompany the payment of rent. Notice is considered given either (a) when delivered in person or by facsimile transmission (however, if a facsimile transmission is received after 5:00 p.m. local time, it shall be deemed received the following day) to the recipient named as below, or (b) three (3) days after deposit in the United States mail in a sealed envelope, wrapper or container, either registered or certified mail, return receipt requested, postage and postal charges prepaid, addressed by name and address to the party or person intended as follows: Facility Management Agreement, Page 19 iNotice to Owner: City of Baytown P. 0. Box 424 Baytown, Texas 77522 Attention: City Manager Fax: (281) 420 -6586 With a copy to: City of Baytown P. 0. Box 424 Baytown, Texas 77522 Attention: City Attorney Fax: (281) 420 -6586 Notice to Manager: Edmundson Interests, L.L.C. 2445 Stanmore Drive Houston, Texas 77019 -3423 Attention: President Fax: (713) 965 -2990 Facsimile notices shall be followed by delivery by first class mail sent on the same date as the facsimile notice as provided above. Either party may, by notice given at any time or from time to time, require subsequent notices to be given to another person, whether a party or an officer or representative, or to a different address, or both. Notices given before actual receipt of notice of change shall not be invalidated by the change. 11.2 Joint and Several Obligations. If either Manager or Owner consists of more than one person, the obligation of all such persons is joint and several. 11.3. Captions, Table of Contents. The table of contents, if any, of this Agreement and the captions of the various Articles, Sections and Subsections of this Agreement are for convenience and ease of reference only and do not define, limit, augment or describe the scope, content or intent of this Agreement or of any part or parts of this Agreement. 11.4 Reasonable Consents and Determinations. Wherever either Manager's or Owner's consent is required or desired, such consent or approval shall not be unreasonably withheld. Similarly, whenever either Manager or Owner is required to make a determination or allowed to make a request of the other party regarding a matter enumerated herein, such determination or request shall be reasonable, not arbitrary or ® capricious. Facility Mana,eazent Acgreement, Page 20 ® 11.5. Gender. The neuter gender includes the feminine and masculine, the masculine includes the feminine and neuter, and the feminine includes the masculine and the neuter, and each includes corporation, partnership or other legal entity when the context so requires. 11.6 Singular and Plural. The singular number includes the plural whenever the context so requires. 11.7 Entire A reement. This Agreement contains the entire agreement between the parties. No promise, representation, warranty or covenant not included in this Agreement has been or is relied on by either party. Each party has relied on his own examination of this Agreement, the counsel of his own advisors and the warranties, representations and covenants in this Agreement itself. The failure or refusal of either party to read the Agreement or to obtain legal or other advice relevant to this transaction constitutes a waiver of any objection, contention or claim that might have been based on such reading or advice. This Agreement may not be changed except by written instrument signed by both Manager and Owner. 11.8 Severability. The invalidity or illegality of any provision shall not affect the remainder of the Agreement. 11.9 Non - Waiver. Failure of,either party hereto to insist on the strict performance of any of the agreements herein or to exercise any rights or remedies accruing thereunder upon default or failure of performance shall not be considered a waiver of the right to insist on and to enforce by an appropriate remedy, strict compliance with any other obligation hereunder or to exercise any right or remedy occurring as a result of any future default or failure of performance. 1110 No Partnership, Joint Venture or Principal -Agent Relationship. Nothing in this Agreement or any acts of the parties hereto shall be construed to create the relationship of principal and agent, or of partnership, or of joint venture, or of any association between the parties. 11.11 Payment of Legal Fees. Any other provision of this Agreement notwithstanding, upon issuance of a final judgement in a court of law, of competent jurisdiction, in an action in which the Court has ruled on a dispute between Owner and Manager, the party against whom the judgement has been rendered shall be responsible for payment of all court costs and the reasonable attorney's fees of the prevailing party. 11.12 Force Majeure. Neither Owner nor Manager shall be deemed in violation of this Agreement if it is prevented from performing any of the obligations hereunder by reasons of strikes, boycotts, labor disputes, embargoes, shortage of material, acts of God, acts of public enemy, acts of superior governmental authority, weather conditions, floods, riots, rebellion, sabotage, or any other circumstances for which it is not responsible or which is not in its control, and the time for performance shall be automatically extended by the period the party is prevented from performing its obligations hereunder. raciIity Mana enient Agreement, Page 2 ! 0 11. 13 Assignment. Manager may not assign this Agreement in whole or in part its obligations hereunder without the prior written consent of Owner. 11.14 Time of Essence. Time is of the essence with respect to the performance of each of the terms, provisions, covenants and conditions contained in this Agreement. 11.15 Litter and Pollutants. Manager hereby guarantees that no pollutant, effluent, liquid or solid waste material, litter, trash or garbage issued from the Facility shall be allowed to collect in the waters or in the vicinity of the Facility. 11.16 Governing Law; Venue. The construction, interpretation, and performance of this Agreement shall be governed by the laws of the State of Texas. Both parties hereby irrevocably agree that any legal proceedings arising out of or in connection with this Agreement shall only be heard in the district courts of Harris County, Texas or in the United States District Court for the Southern District of Texas, Houston, Harris County Division. 11.17 Consent. Owner by this Agreement does not give consent to litigation and Manager hereby expressly revokes any consent to litigation that it may have granted by the terms of this Agreement, charter or applicable state law. 11.1 S Successors. Each and all of the covenants and conditions of this Agreement shall be binding on and shall inure to the benefit of the heirs, successors, executors, administrators, assigns and personal representatives of the respective parties. 11.19 No Third Party Beneficiaries. This Agreement shall not bestow any rights upon any third party, but rather, shall bind and benefit Manager and Owner only. 11.20 Authority to Enter Contract. Each party has the full power and authority to enter into and perform this Agreement, and the person signing this Agreement on behalf of each party has been properly authorized and empowered to enter into this Agreement. The persons executing this Agreement hereby represent that they have authorization to sign on behalf of their respective corporations. 11.21 Ambiguities. In the event of any ambiguity in any of the terms of this contract, it shall not be construed for or against any party hereto on the basis that such party did or did not author the same 11.22 Multiple Originals. It is understood and agreed that this Agreement may be executed in a number of identical counterparts each of which shall be deemed an original for all purposes. 11.2' ) Effective Date. This Agreement is executed on the dates shown below to be effective for all purposes on the date first written above. Facility Management Agreement, Page 22 0 SIGNED this the day of , 1998. CITY OF BAYTOWN, TEXAS M. ATTEST: EILEEN P. HALL, City Clerk APPROVED AS TO FORM: I ACID RAMIREZ, S ity Attorney SIGNED this the day of PETE C. ALFARO, Mayor )1998, EDMUNDSON INTERESTS, L.L.C. STATE OF TEXAS § COUNTY OF HARRIS § WILLIAM L. EDMUNDSON, III, President Before me, , the undersigned notary public, on this day personally appeared William L. Edmundson, Ill, in his capacity as President of Edmundson Interests, L.L.C., on behalf of such corporation, known to me; proved to me on the oath of ; or proved to me through his current {description of identification card or other document issued by the federal government or any state government that contains the photograph and signature of the acknowledging person} �✓ One) Facility Management Agreement, Page 23 ® to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed that instrument for the purposes and consideration therein expressed. 0 1998. Given under my hand and seal of office this day of Notary Public in and for the State of Texas My commission expires: c:klh I I llContractl EdmundsonInterestsTaciIityManagcmcntA nrccmcnt. EdmundsonI nte rests 102093 facility Manacvement Agreement, Pale 24 i ! 0 I f I :7 �U ' 411 Ii 'ti' ?ter � � 1 HOTEL ,/ / it CENTER J RESTAURANT � Akivi r��� EXH1a 47 A II - I EXH1a 47 A II -