BHPFC Resolution No. 4 RESOLUTION NO.
A RESOLUTION OF THE BOARDOF DIRECTORS OF THE BAYTOWN
HOSPITALITY PUBLIC FACILITIES CORPORATION O IZ G A HOTEL
AND CONVENTION CENTER DEVELOPMENTSERVICES AGREEMENT WITH
LD PUBLIC/PRIVATE LLC; AND PROVIDINGTHE EFFECTIVE
ATE THEREOF.
E IT RESOLVED BY THE BOARDOF DIRECTORSOF THE BAYTOWNO T ITY
PUBLIC FACILITIES CORPORATION:
Section l: That the Board of Directors of the Baytown Hospitality Public Facilities
Corporation hereby authorizes a Hotel and Convention Center Development Services Agreement with
GarfieldPublic/Private LLC. A copy of said agreement is attached hereto as Exhibit " " and
incorporated herein for all intents and purposes.
Section 2: This resolution shall take effect immediately from and after its passage by the
Board of Directors of the Baytown Hospitality Public Facilities Corporation.
INTRODUCED, and PASSED by the affirmative vote t e Board of Directors of the
Baytown Hospitality Public Facilities Corporation,this the 7ih day of No em er, 2019.
CHRIS PRESLEY, Vice President
A
u �—antSecretary
A
. , A ' �®
APPROVED AS TOFORM:
c4wwo�—A"�'�"
ACI era Counsel
',"CO FS0I"Legal`KarenTiles\City Council\PFC\ esolution\2019i,November 7`,Development Services Agreement with Garfield.doc
Exhibit "A"
Execudon Copy
HOTEL AND CONVENTION ICENTER
DEVELOPMENT A NT AGREEMENT
between
Baytown Hospitality Public Facilities Corporation
("Hotel Owner")
and
Garfield Public/Private LLC
("Garfield")
(Baytown otel and Convention Center Project)
TABLE OF CONTENTS
Page
ARTICLE1 DEFINITIONS...................................~~~._~.^,,,~,~,..~.,~,,^^,,~.,..,,,,,..,,^,,..,~,,,~,~..~~~,,~.~5
l.l. Preamble....___.......''~-`-'^^_^^^'`^^'`''^^^'''—^'~^'^'^-.^^~`'^'`^'^^'^~^^.'^^~^'^'^~~^^^~^`~ 5
1.2. Definition of 7ermG............. ...................~...............^,,,,,.... ...... ............. .............6
ARTICLE2THOE PROJECT.............................................................`~~~~~~~^^~`^~~~`~~^~^~~~`~~~^~^~~ 14
2.I. Project Development......................... .............. ................ ................ ......... .. ......... 14
ARTICLE 3 PROJECT ^^~~.,.......~~.~..°"^~°^~~^~~..^~~~. 17
3.1. Garfield Services......_....-._..-.........-...................,. .......,,,^..............,,,^^^., 17
3.2. Budget Adjustments................................... -..._...^ ...... .......~..................,_.23
3.3. Project ... ... ..... ............. ........ ................... ....~...^'`.. ...... ^........ � 23 �
ARTICLE4 CONS ......_~~~...^°~-°..~~,~,,,~,,~,~~,,,,,~...~.................24 '
41. Construction Pheme.. ............ ............ ..........~.................^.~,,,..~.,.,,,^,,,,,~,,24
4,2 General. ........ ............. ..... ................ ...............~.~^..~—`^^. ......... .... .......... ..........26
4.3. Activities....... .................___.....................--^ ...... ~ ........................., 28
4.4` Post Construction Phase .................. ......____.......... .____...... ........ ..................28
ARTICLE 5 PROJECT FINANCING ,~,,,~~,,....,~~~,,,,~~,~,_~,~~,~..~~~~,,~,~......~~29
. �
5.l. Pmoi act Development Phase............................_........... ..___......... ....... ................ 29 �
52 ..... ........' ...... ...____...... ^ ... .............^..^ ...........^. .................. ................ 30
ARTICLE 6 PURCHASING SERVICES ~~,.~~~~~..~~~,..,,,,..~,,°,,~.~,~..,..~..,~~,°°,..,,~,,,,..,....30
6.1. Purchasing Services.... .................... .... ........ ........... ..................... ....... ......... ..... 38
6.1 Payment for FF&]B................. .. ........ .............. ..........~..—.~............................... 32
6,3. General Provisions...................... ........^............,,~,..,,,,~.^,,,,,,~,___............ ,32
ARTICLE 7 CITY GOVERNMENTAL AUTHORITY`~~—..^~~~^~`^~..'~~..~~^~`....°°~~~°..°°°°^..34
7.1. No Limitation onCity,s Governmental Fuonctions............ ........... .. ......___........... 35
7.1 Notice t0Pzgceed..........—......... '..~............ .................................... S5
7]. . ...'...^........... .............'.—..............,......~.........~........ 36
7.4� Zoning................'^^^^^^'^'^^^^^^`'^^`^^^''`^^~^^''^—^~'''^'^^'^'^^^'~^^`'~'^^^'''~^~'^^ 36
7.5. Permits.............___... .............._.—................... ........................... ........ ........-. 36
ARTICLE 8 SCOPE OF GARFIELD'S RESPONSIBILITIES.~-~......~~~~.,~..-,~~,,~~~~~~,~36
8.1 Standard of Care .... .............___. .......—,...._........_..._ .............................. ...- .......3b
-r
.2. Contractors, Specialists and Consultants....- ........................................................ ...,.....37
ARTICLE 9 PAYMENT OF COSTS............................. ......... ..............................................37
, . Payment ofHotel and City Facilities Costs.. ..... ........................ ...e.w.,.........,.. ...,......-37
9.2. Cost Savings.......................---..........................................................................--......,.39
9.3. City Contribution Limitation......................m. ......... ......,........................---........,...........
39
9.4. Payment of Development Management F" ........... .........................................................40
ARTICLE10 REPRESENTATIONS.......® ......... . ........ .................. ..... .. ........; .............4
10.1. eld's Representations said Warranties ....— ....... .............. ..............:,.,............ ---40
10.2. Representations and Warranties of Hotel Glum .... ........................................................41
ARTICLE II TERMINATION PROVISIONS..............................®.. ........® ......... .. .. .......42
11.1, Tennination gists— ... ....... .....® : .:m. .a ..on.,.., ,.;e. : ,.,..; ...: : ......... ..a.......®42
11.2. Actions upon Tennination...................................................................... ... ................44
ARTICIX 12 EVENTS
_ REMEDIES...... ........ .........» . .........m ...........45
111. Terms... ....... o.., .... ......... ......... .......°. ......... 45
12.2. Default by Garfield,.,,....... .......... ........ .............
12.3, Default by Hotel Owner.............m,................,........................................., ......... .....,....... 7
12.4. Remedies.....---...................................................................................... .. .............. —..:4 5
53 12.5. Accounting.......................---...........................................................---......---.........
ARTICLE 13 MISCELLANEOUS....... ......... . ....® ...... ......... .......p ......... .......... ....;R.. ....53
13.1. Assignment.................:. .. :.. :.. ......::: ... .,.;::::;.....o; ;;.. .................- .......---...—..,. 53
1 ,2. Hotel Owner Agency........................................................................................................ 5
13.3, Procurement of Goods and Services from istori ally Underutilized Businesses,.......... 5
1 .4w Leadership in Energyd Environmental Design....... ..... ..:;............,,.. .. 54
13.5. Intellectual Property.......................................................................................................... 54
13.6. Controlling Provisions ..........................®.............................................,,.....................,.®... 5
13.7. Insurance........................................................................................................................... 54
13.& Waiver...........4................................................................................................................... 54
13.9, Sew bility......................>,.,.............................,.....q.....................,.,....®............................55
1 .1O1 Exhibits.—. .. . ::............................................................................................................... 55
1.3.11, Documents... ................................................................................................................. - 55
13.11 r Documentation........................................................................................................ 5
1 .13. Interpretation.....................................................................................................................55
13.14. Hotel Owner Approval, Action,or Decision......... ........... ........ 55
13.15. "Including.............,.......................,............................................................,....
13.16. Notices.............— ...........---- --............--............. .......... .............. 5
13.17. Entire Algeement............................... ..----...........................................................,....... 57
13.13. Further Assurances...........................................................®...,...........................,. ............,
57
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_
13.19. Counterparts,,.~,.,,,,,^,^,^.^,,,^,^,^.^,,.,,,,,,,,.,,,,,,,__, ............. .........................57
1120. No Joint Venture....... .~........... ........... ............... ........ ..........................................._....57
1121, Governmental Function ..... ......—.-............----. ...................... .............----....... 57
13.22. Dispute Resolution.... ............. ... ............ ......---............................. ....... ................57
13.23. Governing Law ...---.. ............................---...................................... ........ ............., 58
13.24' Limitation oo Hotel Owner Liability ... . ................ ---............ ................._,^^ ...58
Exhibit A—Description of Property and Project
�
HOTEL
DEVELOPMENT
THIS HOTEL
AGREEMENT(this "Agreement"), is made as of this—day , 2019, by and
between e Baytown HospitalityPublic Facilities Corporation, a Texasnonprofit corporation
("Hotel Owner"), and GarfieldPublic/Private , a Texas limited liability y
("Garfield")
" e ")(individually a"Party,"or collectively, the"Parties").
WHEREAS, the city of Baytown, Texas (the "City") has determinedat it is in its best
interest to construct a full—service, upscale hotel and convention center, with related public
infrastructure and facilities and certain surface or structured parking, landscaping, hardscaping
and other hies (the"Project")that will function as a convention center hotel; and
WHEREAS, the Citycreated the Hotel Owner under Chapter of the Local
Government Code for the purpose of developing, ns c & , and equipping theProject; and
WHEREAS, the City and Garfieldentered into a Pre-Developmente i s Agreement,
datedJuly 17, 2017, indicating the intent the parties thereto to develop the Project (the "Pre-
Development e ices Agreement"); and
WHEREAS, as contemplated e Pre-Development Services Agreement, the Parties
e entering to this Agreement and this Agreementsupersedes e Pre-Development Services
Agreement a all previous Development Services Agreements for the Project, except to the
extent any such obligations are re-stated in this Agreement, in `c event those obligations
shall survive r vi herein; and
WHEREAS, the Parties intend that the development of the Project will proceed
follows: (i) the City will lease to Hotel Owner pursuant to the Groundease, a tract of land
located in Baytown, Texas (t "Property"), on whichle, full-service otel and City
Facilities will be constructed, (ii) Garfield, on behalf of the Hotel , will act as
development manager to construct the publicly owned Hotelof 200 rooms, iii)
Garfield, pursuant to this Agreement, will actdevelopment manager to construct the public,
City-owned convention center facilities, certain surface or structured parking and certain lic
facilities and infrastructure set forth in Exhibit t "City Facilities"), (iv) once completed,
e Hotel will be leased by the Hotel Ownerto the Baytown Municipalv to e t District
(the "District") er an operatingbase ("Operating e"), (v) once completed, the City
Facilities will be conveyedthe Hotel Owner tote City, and the City willlease the City
Facilities to the District under a facilities lease "City Facilities Lease Agreement"), for use as
public meeting convention center facilities and public parking spaces in connection with the
Project, (vi) the District will issue revenue bonds and use the proceeds thereof to pay lease
payments tote Hotel Owner, which will be used by the Hotel Owner to construct, develop,
equip, and operate the Hotel, and (vii) the City will issue certificates of obligation and use the
proceedse to pay for the construction of the City Facilities; and
WHEREAS, the City desires that Hotel Owner (with Garfield as the development
manager) undertake the development of the Project in order to serve the needs of the City by
helping develop adequate meeting and event space to serve the residents of the City and to
promote tourism and the convention and hotel industry within the City. The Project will generate
municipal hotel occupancy taxes, a portion of which may be used to pay debt service on
obligations issued to construct certain public improvements relating tothe Project; and
WHEREAS, Garfield will act as the development manager for the Hotel Owner in the
development, construction, furnishing and equipping of the Hotel and the City Facilities; and
WHEREAS, the City has detennined that the City's proposed convention center cannot
be fully, effectively and economically utilized without the construction and operation of a
convention center hotel adjacent to the City's convention center; and
ATHEREAS, the City believes and has determined that the development, construction,
ownership, and operation of the Hotel by the Hotel Owner will benefit the City and its residents;
and
WHEREAS, the City formed the Hotel Owner to develop and construct the City
Facilities, and develop, construct and own the Hotel as part of a single integrated project so long
as the Hotel Owner has obligations outstanding with respect to the Project; and
WHEREAS, the Hotel Owner now desires to develop, construct, and own the Hotel, to
have the District issue debt obligations to provide for the Hotel Construction Phase Financing(as
defined herein), and to contract with Garfield for development management services for the
Hotel and City Facilities; and
WHEREAS, the City intends to finance the City Facilities through the issuance of
municipal obligations in one or more series and from lawffilly available revenues to provide for
the development, construction, furnishing and equipping of the City Facilities; and
WHEREAS, the District intends to issue tax-exempt bonds, the proceeds of which shall
be sufficient forte purpose of acquiring, developing, constructing, furnishing and equipping the
Hotel.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants herein
contained, and for other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1, Preamble, The findings set forth in the recitals of this Agreement are hereby
found to be true and correct.
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1: ® Definition of Terms. used s Agreement withinitial ital letter or
letters,each of the followingterms shall have the meaning givent below.
"Agreement" e s this Hotel and ConventionCenter Development Management
Agreement between the Hotel Owner and Garfield,
"Applicable Appraisal District" means the Harris County Appraisal District or its
successor.
"Appropriate axin o ®ties"means those entities at assess ad valorem taxes in the
City of Baytown, is County, Texas, including, ut not limited o, the City of Baytown, the
Goose Creek ConsolidatedI , Harris County, the Harris County Flood1 District, the
Port of Houston Authority, the Harris County HospitalDistrict, the Harris CountyDepartment o
Education, and the Lee College District.
"Asset Management t" meansthe assetmanagement agreement to be...entered
to by and betweenthe Hotel Owner and Garfieldor its affiliate).
"Booking Agreement"has the meaning set forth i orb :. a
"Brand" e s the upper-upscale otel brand of the Hotel as approvedy the
Hotel
Ownerthe District.
"City" means the City of Baytown, Texas, a home-rule municipal corporation located i
Harris and Chambers Counties,Texas.
"City do ion" means the ity's net proceeds of the issuance of the i y's debt
obligations, in one or mores 'es, to be used to construct the CityFacilities; provided that the
City shall not be obligatedo contribute more t 1,1 , .00(which amount is inclusive of
e Design and Development s) in net proceeds to fund the design, development and
construction of the City Facilities. The net proceeds of the Ci 's obligations to fund the City
.facilities will be based on a par amount that will be supported revenues the City has
dedicated to the payment of the debt, based on current City projections and market conditions.
In o event shall the City Contribution be in excess of the actual costs to develop the City
Facilities or the maximum amount stated na ove®
"City Facilities"means the public meeting rooms, ballroom, and conventionter areas
along i related infrastructure, other public facilities and surface or structured parki as set
forthdo .1.ILaand in..Exhibit A.
"City Facilities et" means the budget for the design, development and construction
of the City Facilities prepared by Garfieldapproved in writing by the Hotel Owner. The
City Facilitieset and any amendments or changes thereto will only be effective if and tot e
extent approved in writingthe Hotel Owner.
"City Facilities Costs" shall mean costs of the design, development,_construction,
furnishing, equipping, opening of the City Facilities, including hard costs, soft costs, f ,
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operating supplies and equipment, and costs of performing the pre-opening services.
"City Facilities Development ManagementFee"means the fee to be paid by Hotel Owner
out of the City Contribution to Garfield forte work and services to be performed by Garfield
under this Agreement in the design, development and construction of the City Facilities as
described in __.Article 9. This fee consists of an amount equal to 4.25% of the City Facilities
Budget, with the exception of the following budget line items, to the extent applicable to the City
Facilities: legal fees, pre-openin marketing costs, City Facilities Development Fee, Garfield
construction supervisor/project manager costs, FF&E Services Fee, construction loan interest an
miscellaneous closing costs and workingcapital.
"City Facilities FF&E Budget" means the cast budget to be developed for purchasing the
FF&E for the City Facilities and Parking Facilities, and shall include, it out limitation, any
taxes and freight charges incurred in connection with the purchase and delivery of such ,
installation costs and reimbursable expenses related thereto. Such budget shall be approved in
writing byte Hotel Owner Representative and shall be included as part of the City Facilities
Budget.
"City Facilities Intellectual Property Rights"has the meaning set forth in Section 13.6.
"City Facilities Lease" means the lease between the City, as lessor, and the District, as
lessee, regarding the use, occupancy and operation of the City Facilities, including the surface or
structured arki as described in Exhibit A (but not including the parking on the Marina
Parking Site, the leasing for which will be governed by the Marina Site Parking Agreement).
"City Financing Closin "means the closing of the issuance of the it 's debt obligations,
the proceeds of which the City will use to fund the City Contribution, which shall be transferred
to the Hotel Owner to fundthe costs of design, development and construction of the City
Facilities. Such Closing shall occur on a date that is not later than seven (7) business days after
the Hotel Financing Closing; provided, however, in no event shall such City Financing Closing
occur prior tote Hotel FinancingClosing,
"Completed" means, with respect to any portion of the Project, when the Project
Architect certifies in writing tote applicable y(ies) that the construction of such portion o
the Project is substantially completed in accordance with the Development Plan to permit use
thereof for the purposes for which it is intended, which date may precede the full completion o
all punch list items,landscaping and similar design evelo e t functions.
"Construction Deadline" means the date on which the Construction Phase commences,
such date being no later than 60 days after the City Financing Closing, subject to Force Majeure.
"Construction Monitor" if any, means the construction monitor engaged y the Hotel
Owner to monitor the progress oft e Project, initially road us&Associates.
"ConstructionPhase"is described in Section 2.2.3.
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"Contractors" means, collectively, theDesign-Builder its subcontractors for
construction of the Project.
"Contract Documents" has the meaning set forth in the Design-BuildAgreement and
shall include, without limitation, the documents, plans, drawings, specifications, renderings,
studies, u ets, forecasts and schedules evelo e to be developed, in connectioni
Hotel and City Facilities, with the prior consultation and written approval of HotelOwner.
"Dates of Completion" means the dates of Substantial Completion and Fi o le io
f the Project set forth in theDesign-Build eta
" esi uil er" means, or purposes of the Hotel, DPR Construction, Inc., a Texas
corporation, and for purposes of the CityFacilities, a to-be-selected enti .
"Design and Deve o t means City-provided funds _ of to exceed
$1,900,000.00 in casho e payment of Project Development Phase costs of the City Facilities
incurred car to the availability of funds fromthe City Financing Closing.
"Designro e sio als" means the planning, architectural, engineering,_interior design
and other i ists and consultants engaged by Hotel Owner or the Design-Builderor the
design construction of the Project, including e Project Architect.
"Development Bu et" means, collectively, the Hotel Budget and the City Facilities
Budget.
"Development a ent '9 means collectively, the City
Facilities Development
Management ee and the Hotel Development Management Fee.
"Development Plan" means the detailed plan concerninge Project and all items which
will be required to cause Final Completion of the , which shall include, i out limitation,
e final drawings and specifications, evelo e t schedule, and Developmentet
established during the Project Development Phase, as the same shall have been amended
provided r i the Construction Phase of the Project.
"District" e s the Baytown MunicipalDevelopment District, a political subdivision of
the State of Texas.
"Effective ate"means the date of execution oft is Agreement by the last Party to sign
this Agreement.
"Event of Default"or"Events of Default"is defined in Article12.
" "means those items of furnishings, fixtures, equipment, accessories and materials
for use in the operation of the Project or any portionthereof,
" _le"is definedin Section 6.1.1.
"FF&E ServicesFee" means the $308,000.00 fee for additional services provided by
Garfield with regard tat e oversight of the purchase, storage and installation of the FF&E fart e
Project as set forth herein. The FF&E Services Fee shall be paid in accordance with Section
6.1.8.
"FF&E Specifications"is defined in Section 6.1.2.
"Final Completion" means when the Hotel and City Facilities have met the following
requirements: (i) all punch list items, as provided by Garfield, have been completed as required
y the Contract Documents; (ii) the Hotel and City Facilities have achieved "Final Completion"
as described in the Design-Build Agreement-, (iii) any remaining FF&E has been delivered and
installed; (iv) all final permits for the Hotel and City Facilities have been received and
subsequently delivered to the Hotel Owner; (v) all final lien waivers and all bills paid affidavits
have been provided tote Hotel Owner by Garfield, the Design-Builder, and the Project
Architect; (vi) all warranties, manuals, as-built drawings, CADD drawings, equipment cuts,
operating guides and any other documents necessary forte full operation f the Hotel and City
Facilities are delivered to the Hotel Owner; are (vii) Garfield has provided a written certification
t®the Hotel Owner that all of the foregoing conditions to Final Completion have been satisfied.
"First-Class Manner" means the standard for maintenance of any part of the Project that
is consistent with and satisfied by the brand standards required byte Brand in the Hotel
Services Agreement.
"Force a eure" means war, riots, civil commotion, strikes, labor disputes, embargoes,
natural disasters, acts of Cod or any other cause or contingency similarly beyond the reasonable
control of the Parties.
"Garfield" e s Garfield Public/Private L,L,C, a 'Texas limited liability company, or its
affiliate.
"GMP
Contract" or "Design-Build Agreement" eans the guaranteed maximumprice
design/build design/build contract for the Project among Design-Builder and Hotel Owner.
"Goverrunental Authority" means any Federal, state or local governmental entity,
authority (including y Appropriate Taxing Authority) or agency, court, tribunal, regulatory
commission or other body, whether legislative, judicial or executive (or a combination or
permutationthereof) and any arbitrator to whom a dispute has been presented under
Governmental Rule, pursuant tote terms of the Ground Lease, Operating Lease, or the City
Facilities Lease, as applicable, or by agreement of the Parties.
"Governmental Function" means any regulatory, legislative, permitting, zoning,
enforcement(including policepower), licensing or other functions which the City or the District,
or their respective employees or agents are authorized or required to perform in its capacity, as a
home rule municipality and a political subdivision of the State of Texas, respectively, in
accordance with Governmental Rule.
�q-
"Governmental le" means any statute, law, ty, rule, code, ordinance, regulation,
permit, interpretation, certificate or order of any GovernmentalAuthority, or any judgment,
decision, decree, injunction, writ, order or like action of any court, arbitrator or other
Governmental Authority. Governmental1 shall include, but not be limited o, the City
codes.
Lease"means that certain o e and License Agreement of the Property
by the City as lessor to Hotel Owner as lesseeor the construction of the Hotel and CityFacilities
Hotelby the
"Hotel"is defined and describeddo 1.
"Hotel et" means the budget for development and constructionof the Hotel,
preparedy Garfield and HotelOwner, as same may be modified pursuant to this Agreement.
"Hotel Construction Phase Financing" means those certain tax-exempt ba r other
form of ci issued y the District, the net proceeds of whichill be used forfinancing
1 of the costs of completing e design, development and constructionof the Hotel
(including related financing , capitalized t re , reserves for debt service and working
capital, and related attorneys' fees and expenses) pursuant to the Hotel Budget
development and construction the City Facilities, but only to the extent the actual costs of the
City Facilities exceed the amount of the City Contribution.
"HotelCosts" shall costs of the design, development, construction, famishing,
equipping, and opening of the Hotel, including s, soft costs, , operating supplies
and equipment, sts of perfornungepre-opening ices®
"Hotel Costs"is defined in mSection 2.2.lbj.
"Hotel Design Fee"is defined and described Section
1
"Hotel Development ManagementFee" means the fee to be paid y the Hotel Owner to
Garfield or the work and services to be performed by Garfieldthis Agreement in the
design, development and constructionthe Hotel as describedin Article 9. Thisee consists of
amountan al to 4.25% of the approved Hotel Budget, with the exception ate following
budget line items, tote extent applicable tote tel: legal fees, pre-opening ke ` costs,
Garfield construction supervisor/project manager costs, FF&E Services Fee, constructionloan
interest and miscellaneous closing costs and working capital,
"Hotel FF&E Budget" means_ e cost budget to be developed forpurchasing the
for the Hotel, and shall include, without Ifinitation, any taxes and freightcharges incurred i
connection it the purchase and deliveryof c , installation cost ei rsa le
expenses related thereto. Such budget shall be approved in writingy the Hotel Owner
Representative and shall be included as part of the Hotel Budget.
"Hotel Financing Closing"means the closing of the _Hotel Construction Phase Financing,
whichst occur not later t `l , or such at ate as may be extended in writing
-1
by mutual agreement of Hotel Owner and the District, up to an additional thirty ( ) days, but in
any event, to occur prior tot e City Financing Closing.
"Hotel Financing Contribution" means the combined net proceeds from the issuance of
e Hotel Construction ase Financing.
"Hotel Financing Documents" means the trust indenture(s) for the Hotel Construction
Phase Financing, any related bondpurchase agreement other loan agreements, security
documents or instruments pursuant to which Hotel Financing Contribution is made.
"Hotel Intellectual Property Rights"has the meaning set forth in Section 13.5.
"Hotel Owner" means Baytown Hospitality Public Facilities Corporation, a Texas
nonprofit corporation.
"Hotel OwnerDelay" means any delay in completion of construction of the Project
resulting from any act or delay of the Hotel Owner, its officers, employees or agents, other than
delays resulting from acts that the employees or agents are expressly permitted or obligated to
perform su t to this ee ent.
"Hotel Owner Representative" means the President of the Hotel Owner or such other
person as may be designated in writing y the President of the Hotel Owner as its representative
for the Project.
"Hotel Owner Specialists and Consultants" means the planning, architectural,
engineering, interior design and other specialists and consultants engaged byte Hotel Owner to
advise Hotel Owner with respect tote Project.
"Hotel Schedule" shall mean the portion of the Project Schedule pertaining to the Hotel,
as the same is updated, o ifie and/or extended with prior written approval of the Hotel
Owner.
,'Hotel Services Agreement" means the qualified management agreement between the
District and the Brand, for supplying operating ana e ent services forte Hotel and City
Facilities.
"Hotel Technical Services Agreement" means the technical services agreement between
the District and the Brand, for supplying technical services for the Hotel and City Facilities.
"Initial Occupancy"means the first night a person pays for the use or possession of or for
the right to use or possess a room orspace at the Hotel,
"Intellectual Property"means all intellectual ro e y rights of any kind, including patent
rights (whether design or utility), copyrights, trademark and service mark rights, trade dress
rights, utility model rights, moral (personal) rights, rights of publicity, trade secret rights,
industrial esirights, and web site and internet domain rights.
-It-
"Leaschold Mortgagee" means the trustee appointed pursuant to the Hotel Financing
Documents as further describedto12.4.
"Marina Parking_ Site" means e 1. -acre parking area adjoining e City Facilities as
shown on Exhibit A, which areais subject to an existing i e t with teadjoining
which spaces will be public parking spaces open to the public.
"Marina Site Parking Agreement" means the parking tights agreement
between e City,
as lessor, and District, as lessee, regarding the use of approximately 230 spaces located e
Marina ie,
"Notice to Proceed"means written
_notice from the Hotelto Garfield to cornmence
construction of the Project, as provideddo .I.
"Operating Lease" means s that certain agreement e e Hotel Owner and the
District, in whiche Hotel Owner will lease the Hotel tote District formanagement and
operation.
"Parties"means Hotel Owner and Garfield.
"Permitted ® ri i ve " means the following events which cause the City or the
District to not issue its debt obligations to fund the City Contribution or the Hotel Construction
Phase Financing,respectively-
(i) t the time of the proposed sale of the debt ° e public securities market, there
shall have occurred i) any new materialoutbreak of hostilities(including, without
limitation, an act of terrorism), iiescalation f hostilities existing or to the
ate hereof or iii) any other extraordinary event,material national or international
calamity or crisis, or any material adverse change i e financial, political or
economic conditions affecting the United States, the City, or the District;
ii the time of the proposed sale of the debt in the public securities , a
natural disaster shall have occurred within i that has caused a material
disruptionin the operation of the City or the District and a state of emergency has
declaredbeen a lawful authority that includes all or a portionof the orate
boundaries of the City or the District;
(iii) At the time of the proposed sate of the debt in the public securities market,
general suspension of tradingin securities on the Newor tock Exchange or
y other national securities exchange;
(iv) At the time of the proposed sae of the debt in the public securities e ,
general banking moratoriumdeclared y federal, State of New York, or the State
of Texasofficials authorized to do o;
v the time of the proposed sale of the debt in the public securities market, any
amendment to the federal or state Constitution or action by any federal or state
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court, legislative body, regulatory boy (including the Texas State Comptroller),
or other authority has occurred materially adversely affecting the validity,
enforceability, or the collection of the revenues to pay principal of and interest on
the bonds to be issued by the City or the District, as applicable;
(vi) The Attorney General of the State of Texas fails to approve the dot obligations
financing e City Contribution or the Hotel Construction Phase Financing, as
applicable;or
(vii) This Agreement has been terminated pursuant tot e provisions herein,
"Pre-Development ices Agreement"is defined in the Recitals,
"project"means, collectively, the Hotel and the City Facilities together with the FF&E to
e installed therein and the landscaping, hardscaping and other amenities to be included in the
Development Plan.
"Project Agreements" me s this Agreement, the Design-Build Agreement, the Asset
Management Agreement, the Ground Lease, the City Facilities Lease, the Operating Lease, the
Booking Agreement, the Interlocal Agreement, e Hotel Services Agreement, and the Marina
Site Parking Agreement.
"Project Agreements Deadline" means [February 19, 2020 , as such date may be
extended y Hotel Owner Representative and Garfield.
"Project Architect" means, for purposes of the Hotel, BOKA Powell, LL,C, and for
purposes of the City Facilities, a to-be-selected entity.
"Project Development Phase" means the period of time commencing upon the Effective
Date of this Agreement ending on or before the Construction Deadline as such ate may be
extended by mutual agreement of the Parties, during which the Parties shall diligently attempt to
accomplish and mutually agree upon all the matters enumerated in Article 4 hereof.
"Project Funding ea line"means [April 8, 202 ] unless such dates all be extended by
the Hotel Owner Representative.
"Project Schedule" shall mean the development and construction management schedule
pertaining to the Hotel and City Facilities, as the same is updated,modified and/or extended with
prior written approval of the Hotel Owner.
"Property" means the 7.7 5®acre tract of land situated in the City, Harris County, Texas,
owned by the City and more fully described in Exhibit A. attached hereto, together with the
Marina Parking Site.
"Substantial Completion" means when the Hotel and City Facilities have met the
following requirements: (i)the Hotel and City Facilities have achieved "Substantial Completion"
as described in the Design-Build Agreement; (ii) F , and all life safety systems have been
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installed in substantial accordance t s of this Agreement; (iii) the Hotel and City
Facilities are sufficient, 1 1 , and ready to be occupied or its intended oses in
accordance with the DevelopmentPlan, as evidenced by a certificate o roect Architect
and the approval thereof by the ConstructionMonitor and the Brand, if required; (iv) a
punchlist f unfinished items has been preparedel rov y Hotel Owner.
PROJECTARTICLE 2
THE
.1. EiLomec vela e
° ®1 SPpjmga 0 _!"oosedjqeve1qMinent. Subject to the terms and conditions
of this Aee nt and of other instruments agreements to be entered into pursuant
to this Agreement, the HotelOwner shall cause the Project to be developed
constructed as follows,with Garfieldas its development manager:
(a) !qft acilities. The City shall commit the City Contribution for
design,development and constructionof the following:
(i) Public conference rooms and meetingspace of
approximately 33,600 s , ft., including a ballroom of approximately
12,000 square feet, and public facilities or infrastructure tot e
conference rooms and meetingspace; and
(i ) A parking lot or parking structure with approximately 32
spaces adjacent tote Hotel and the public meeting rooms, ballroom, and
convention center portion of the City Facilities, together i
approximately 230 spaces located on the Marina Parking Site portion o
e Property, all of which parkingshall e public
d City Facilities shall be constructed in accordancei s s, plans
and specifications approved n y the Hotel Ownerprovided ei ,
and in accordance wi all Governmental Rules. The City Facilities are public
facilities t be opentote public as required y state law.
) Hotel. The District intends to issue debt obligations to finance
expend the Hotel FinancingContribution, or the Hotel Owner to develop
construct an upscale, lase ice Hotel, having at least two hundred (200) rooms
to include estroo s and sites, appropriate support aci i ' s such a
res a ts), a to e(s) or (s , supporting back-of-the-house areas, and food
preparation facilities, to the extent not constructed as CityFacilities, together with
such other amenities and features characteristic of afull-service hotel (the
"Hotel"), to be operated t to the OperatingLease se the Hotel Services
Agreement. The Hotel shall be constructed ccor ce with designs, plans and
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specifications approved in writing by the Hotel Owner and the Brand, as provide
herein, and in accordance with all applicable ove e tal Rules.
.1.2 Coordinated esi am. Garfield ill manage development of e City
Facilities and the Hotel and will manage or will cause the Design-Builder to manage the
Design Professionals, including the coordination of their efforts with the Hotel Owner
Specialists and Consultants far HotelOwner's staff, The Hotel Owner will have access
tote Project and will have approval rights with respect tote City Facilities. The Hotel
Owner will manage all payments with respect to the design, development, and
construction of the Projecto Garfield will have to coordinate certain approval of
construction and designcriteria for the Project with Hotel Owner and the Brand, and the
Brand ill have certain approval rights with respect to many aspects of the construction
and development of the Project, as may be set forth in the Hotel Services Agreement or
related documents. Notwithstanding the above, the Hotel Owner shall cooperate with
Garfield with ar el 's coordination of the construction of the Project. The Hotel
Owner may retain, at its sole cost and expense, additional otel Owner Specialists an
Consultants necessary to advise the Hotel Owner on the development of the Project.
.1.3 A ointment of Garfield.
(a) The Hotel Owner hereby selects Garfield as development manager
forte Project with respect to design, development and construction of the City
Facilities and the Hotel, and to perfinm the duties and services of Garfield set
forth herein, all in accordance with the terms and conditions of this Agreement.
Garfield shall be an independent contractor and nothing contained in this
Agreement shall be construed to create a partnership, joint venture, or agency
relationship between Garfield and the Hotel Owner. Garfieldagrees to coordinate
all development activities with the Hotel Owner and its staff.
2.1 Project Phases. The Parties shall undertake the design, development
and construction of the Project and performtheir various obligations as outlined in this
Agreement in accordance with e following schedule of phases:
.2.1 Pr ,..n velo w t._ as 4
(a) Following e Effective Date, detailed design development,
planning budgeting for the Project shall occur during the Project
Development Phase, with the objective of preparingplans and specifications for
the Project sufficiently completed detailed to obtain teed maximum
rice bids and to establish a detailed Development Budget therefrom. Duringthe
Project Development Phase, and on or before the Project Agreements Deadline,
s Parties shall also prepare, negotiate and finalize the Project Agreements for
the ffinding, development, construction, completion and ongoing occupancy, use,
operation, maintenance and repair of the Project. On or before the Project Funding
Deadline (if the Project is not terminated as set forth in Article 11), the Parties
shall proceed to the Hotel Financing Closingthe City Financing Closing.
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( ) Following the exec Design-Build t, the Hotel
Owner shall have available from the City the DesignDevelopment for
the design development sts of the City Facilities as well as the fundsort e
design ev 1 t casts of the Hotel "Hotel Costs"). Hotel
Owner shall pay a hotel design fee to the Cityin o t equal to the Hotel
Costs up to a maximumof$2,700,000 ( "Hotel 1Fee") out of the
proceeds e Hotel ConstructionFinancing or other lawfully available
source of funds in return for the transfer of any work productresulting e
expenditure of such of l D&D costs._The Hotel D&D costs initially
Hotel er, on behalfthe City, are in addition to the ity's Contribution,
e funds advanced by the Hotel Owner on behalfof the Cityto cover the Hotel
Costs shall be paid in accordance wi e procedures set forth in Article
below.
2.2.2 Cl i
( ) On or before the Project Funding Deadline, the City shall sell its
certificates of obligation to fund the City Contribution as evidenced y the
approval of the i y's ordinance authorizing e issuance of the it 's certificates
of obligation, the District shall sellits debt obligations o fund the Hotel
Construction Phase Financing as evidencedthe execution of a bond purchase
agreement.
) The proceeds of such financing doss all be available no
later than the Hotel Financing Closingthe City Financing Closingand shall
s made available or disbursement as development of the Project proceeds in
accordance with theDesign-Build Agreement or otherwise applied toward the
Project as agreed amonge Parties in writing.
c e Ground Lease shall become effective, pursuant to which the
City will lease the Property to Hotel Owner, as lessee, for the developmentot e
Hotel i aciliti s. The City Facilities shall be conveyed to the City upon
completion.
( ) The OperatingLease shall become effective pursuant to which the
Hotel Owner will lease the Hotel tote District, as lessee.
( e City Facilities Leases 1 become effective pursuant to which
the City will lease the City Facilities to the District, as lessee.
e other Project Agreements shall become effective.
2.2.3 .�Construction.._Phase. Followinge City FinancingClosing e Hotel
Financing Closing, Garfield shall cause the completion1 design and construction
plans and specifications for the Project, including obtaining a GMP Contract forte City
Facilities and the Hotel, and shall be directed to commence construction of the Project i
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accordance therewith and with Article 4 (the "Construction Phase"). During construction,
Garfield shall act as development manager for the Project on behalf of Hotel Owner and
shall coordinate and oversee all aspects eft e design, development and construction of the
Project in conjunction with the Design-Builder and the Design Professionals all in
accordance with Article 4, and provide services with respect to FF&E forte Project as set
forth in Article 6. In connection with the Project, Ga gelds all at all times employ an
adequate number of qualified persons toperform the construction and development
management services necessary to complete the Project. Garfield shall have a construction
supervisor/project manager fort Project that is approved by the Hotel Owner who is
available to consult with and report tote Hotel ner® The cost forte construction
supervisor/project manager shall be included as part of the Development Budget (which
cost is in addition to, and not included as part of,the Development Management Fee). Any
replacement construction supervisor/project manager for the Project shall require the
written approval of the Hotel Owner Representative.
2.2.4 Post Construction. Prior to the Project Funding Deadline, Hotel Owner
will engage the District to oversee, when the Project is completed, the use, operation,
management, maintenance and repair of the Hotel subject to and in accordance with the
Operating Lease, the Ground Lease, Interlocal Agreement, and the Booking Agreement,
Once the City Facilities have been finally completed and open to the public, the City will
engage the District to oversee the use, operation, management, maintenance and repair of
the City Facilities subject to and in accordance with the City Facilities Lease, Interlocal
Agreement, the Booking Agreement, and any reciprocal use, access and operating
agreements entered into by the Parties with respect tothe various facilities.
ARTICLE 3
PROJECT DEVELOPMENT ACTIVITIES
3.1, Garfield Services. Garfield shall coordinate with Hotel Owner staff and with the
Design Professionals toobtain a final site plan for the Project acceptable to the Hotel Owner, and
final construction drawings and specifications for the Project acceptable to Hotel Owner and
Garfield. The Project construction drawings shall be segregated into those for the City Facilities
and those forte Hotel such that the expenditure of the City Contribution and the Design and
Development Funds can be allocated and tracked to the construction drawings and specifications
for the City Facilities.
3.1.1 City.facilities Services. Garfield shall provide the following services
during the Project Development Phase with respect to the City Facilities:
(a) Provide descriptions of the categories of the FF&E, operating
supplies, fixed asset supplies and the like anticipated to be required for the City
Facilities for approval by the Hotel Owner,
(b) Obtain cost estimates from the Design Professionals and
Contractors and preparation of revisions tote City Facilities Budget for the
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Construction Phase in light of design development. The Cityill not fund costs
exceeding it t ` do the City Facilities Budget shall be approved
in writingthe Hotel Owner. Budgetedcosts may be redistributed be en line
items, including e is do of contingencies, tote extent authorized y
e financing documents authorizing the City'City's debt obligations. However, if any
increase or decrease in any line itern in the City Facilities Budgetexceeds 1 %
from a original budgets as approved in writingy the Hotel Owner, the revised
budget must be approved in writing by the HotelRepresentative, such
approval of to be unreasonably withheld1 ye . In no events all there be
an increase in the budget for the City Facilities that exceeds the total budget as
originally approved in writingy the Hotel Owner unless such excess s are
approved otel Owner and paid for and funded by the Hotel Financing
Contribution;
(c) Prepare a development schedule for the City Facilities in
conjunction with e Hotel Schedule;
( Timely submit to Hotel Owner, for its written approval,
construction ra i s, plans and specifications for the City Facilities including
landscaping p1 s, mechanical and electrical drawings, architectural appearance,
interior design schemes and specialized are s for communicationsystems,
security systems, e like, with sufficient information and de it to obtain
guaranteed maximumpricing o esi it e ;
e Negotiate, review, evaluate and finalize the GMP Contract with the
Design-Builder for the Project. The GMP Contracts 1 require theDesign-
Builder to provide payment and performance bonds in accordance with general
Texaslaw applicable o municipalities, and the contract withthe Project Architect
shall name the Hotel Owner as an additional insured. e GMP Contract must be
in an amount equal to or less than the net constructionproceeds of the City's debt
obligations the Hotel Construction Phase Financing, ; and
( Obtain all building, development and other permits fromthe City
necessary to commence construction of the Project.
3.1.2 Hotel Services. Garfield shall provide the following ices during the
Project Development Phase tote Hotel Owner with respect tote Hotel:
(a) Pursuant to .Section 3. . obtain provide the Hotel Owner
it copy of a term sheet or letter executed y the District, whereby the District
agrees o manage and operate e Hotel in the event Garfield or Hotel Owner
defaults the documents relating to the Bonds or the Operating Lease;
) Prepare and file the application or the foundation permit for the
Hotel;
(c) Coordinate, supervise, and manage the planning, design,
development, construction, completion, famishing, equipping and openingof the
Hotel;
( ) Timely cause the Design-Builder to arrange for the Project
Architect's preparation of the preliminary and final schedules, estimates,
drawings and specifications in accordance with the Design-Build Agreement,
Section 3.1.3 c of this Agreement, and the direction of the Hotel Owner, and
submit the same for approval byte HotelOwner;
(e) Oversee all pre-development and entitlement activities, including
zoning,permitting, licensing, soil-testing pre-construction evaluation;
( Negotiate with all applicable utility companies, whether ui is o
private, for the utility service to be provided tote Hotel and for the installation o
all utility equipment in connection therewith;
( ) Review all material prepared and submitted tote Hotel Owner or
Garfield by Design-Builder;
} Review, assist and participate with the Hotel Owner in the review
and approval of the Contract Documents in accordance with the Design-Buil
Agreement;
(i) Manage and supervise commencement of the construction of the
Hotel on or before the Construction Deadline, and the Substantial Completion and
Final Completion of the Project no later h ates of Completion-,
0) Consult, communicate with, and keepinformed e Hotel Owner
and the Construction Monitor as to the progress and status of theProject;
) File or cause to be filed all required documents fort e approval o
all Governmental Authorities having Jurisdiction over theProject; endeavor to
secure or cause to be secured all necessary ov e tal pen-nits, licenses,
certificates, approvals and authorizations necessary for the completion and
operation of the Project, including governmental approval;
(1) Maintain a continuing relationship and conduct all dealings with
Y Governmental Authorities havin jurisdiction over the Hotel including, upon
the written request and subject tote direction of the Hotel Owner, contesting y
law, ordinance, or regulation which the Hotel Owner determines to adversely
affect the Hotel or the balance of theProject;
(in) Coordinate and review the work activities of the Design-
Builder, Design Professionals, subcontractors, engineers, consultants, material
suppliers, consultants, attorneys, title companies, escrow companies, and other
personnel and independent contractors engaged forte design, development,
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construction, furnishing or equipping of the Hotel or any portionof the Hotel
including, but not limited to, causing e inspection of the progress of
construction at such intervals e o ly required e Hotel Owner or the
Construction Montor;
n) Arrange and attend weekly, i- ee y or monthly construction
progress meetings (as applicable) with the Hotel Ownera e Construction
Monitor r are a report respect thereto for the HotelOwner;
(o) Review and monitor all construction schedules prepared by the
Design-Builder for the Hotel so as to facilitatete orderly process of construction
in keepinge Hotel Schedule, the Project Schedule, and the completion o
e Hotel on or before the Dates of Completion;
Coordinate with the Design-Builder the preparation of all draw
requests for timely submission in accordance with Articlehereof,
( ) Coordinate with the Hotel Owner for the approval of expenditures
necessary unde r the Design-Builde e t, including compe s t io for the
design se and the Construction e and any expenditure s ction
Contingencyand Projecto tin cy, all as set forthe in the Design-
Build Agreement;
r} Review, monitor and coordinate the resolution of all contract,
insurance re y claims, except for final resolution or settlement of a claim
which is subject o the HotelOwner's `o enapproval;
( ) Monitor on a regular aicost of materials,
labor, equipment, services and other costs in the planning, development,
construction tin f the Hotel within e Hotel Budget;
t Retain, or cause to be retained, l inspectors y other experts
appropriate to inspect, st and evaluate the Hotel;
(u) Coordinate and supervise all phases of the design, development,
construction, is i , equipping and opening of the Hotel;
v) Collect from the Design-Builder and deliver to the Hotel Owner
e originals of all permits, licenses, guaranties, warranties, bills of sale and any
other contracts, agreements, r commitments a` or received by the Design-
Builder or the account or benefit of the Hotel i
( Maintain, or cause to be maintained, appropriate security at the
HotelI the design, eve o t, construction, furnishing, equipping
opening of theHotel;
(x) Maintain books, records and accounts with respect to the Hotel,
including all invoices and waivers of lien for labor and materials associated with
theHotel-,
(y) Prepare, or cause to be prepared, income and expense rofo as9
( ) Coordinate the Hotel Owner's testing engineers,recommend, based
upon consultation with e Design-Builder and engineers, any required special
testing, and approve invoices relating thereto;
( Prepare, or cause to be prepared, change orders originated by the
Hotel Owner or those originated by Ga ieI in accordance with this ee ent
and evaluate and report tote Hotel Owner as to change orders under the Design-
Build ee e tp
Supervise the Design-Builder's preparation of "punch lists" o
construction work requiring completion and correction from time to time an
monitor and otherwise take steps necessary to insure that the Design-Builder
completes and corrects said items;
(cc) Collect from the Design-Builder all operating instructions,
manuals, field record information, as-built drawings, samples, chop-drawings, and
product data required to be provided by others to the Hotel Owner in connection
with the Hotel, and deliver the same tote Hotel Owner,
(d ) To the extent necessary, subject tote HotelOwner's prior written
approval, make all necessary arrangements for and coordinate (i) all necessary
surveys, soil and water testing, and associated subsurface examination, and (h)the
availability of all necessary utilities;
(cc) valuate the completion of the work done on the HotelOwner's
behalf in connection t the delivery of certificates of SubstantialCompletion
and of Final Completion fort e Construction Phase of theHotel; and
( Coordinate and supervise e obligations of the District duringthe
planning, esi , development, construction, completion, furnishing, equipping
d opening of the Hotel, including the performance of all District duties and
obligations under the Design Review Agreement with the District and the duties
and obligations of the District under the Operating Lease prior to the opening o
the Hotel with regard tote District and Brand's pre-opening services and the
purchase and installation of operating supplies and equipment.
.1.3 Reg isi e Documents. Prior to commencement of construction of the
Hotel, Garfield shall provide the Hotel Owner Representative the documents listed below
as well as any other documents reasonably required, and where necessary shall make the
requisite filings of such documents with appropriate officials:
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(a) A copy of a term sheet or letter executedr whereby the
Brandagrees to manage and operate the Hotel and the CityFacilities;
) Submission o , negotiating, reviewing, evaluating finalizing
the GMP Contract for the Project with the Design-Builder, as discussed in eci
01"_., above.
(c) Conceptual designdrawings of the Hotel which shall be within the
design standards of the Brand. To the extent that the design of the Hotel is
materially revised o e conceptual drawings and materialsapproved by the
Hotel Owner and the Brand, additional Hotel Owner writtenapproval t be
obtained or the changes; provided,however, the Hotel Owner Representative and
e Brand shall be notified o , and have access to, all revisions tote conceptual
drawings and materials, regardless of scope or design materiality. No revision
shall e made tote conceptual drawings or materials approved by the Hotel
until either (i) the Hotel Owner has approvede material change i
writing o ii) at least to ( ) days have elapsed from the Hotel Owner'sreceipt
of notification of the non-material change and the Hotel Owner Representative
does of object in " to the revision ei act non-material.
Shoulde Hotel Owner Representative object, the change will be deemed
material and subject to the approval the Hotel es Board of Directors. In
o events all there be an increase i the budget for the City Facilities that
exceeds the City Contribution unless such increase is paid for and fundedy the
Hotel Financing Contribution.
( ) Two copies each o (i) the plan of development and construction
drawingsspecifications for the Hotel which Garfieldill submit to City staff
in accordancee City's zoning regulations, and (ii) the application forthe
foundation t for the Hotel;
e) A certificate of insurance evidencing that all insurance required
hereunder or pursuant to the Ground Lease with ct to the Project hasbeen
procured;
e Hotel Budget;
( ) Preliminary operating pro ectio s for the Project;
) A Hotel Schedule in conjunction wi e development schedule
or the City Facilities;
(i) A copy of the Operating Lease;
) A copy of the Booking Agreement;
O A copy of the Hotel Financing documents; and
(1) Such other oc entatio , including plans and specifications,
schematic drawings and renderings of the Hotel, as may reasonably be requested
by the Hotel Owner to ensure the orderly development of the Project. Garfield
must submit of l plans and specifications at the sarne time as the City Facilities
plans and specifications.
3.1.4 Bu et Updates.
(a) Garfield shall cause bath the City Facilities Budget and the Hotel
Budget to be updated as soon as practicable following the completion of the
schematic design documents and the design development documents,
respectively. Such updated budgets shall be delivered timely to the Hotel Owner
for their review and approval, in accordance with the development schedule for
the City Facilities and Hotel prepared by Garfield in accordance with ,Sections
3.1.1 c and 3.1.3 h above.
3.2. Budget Adjustments.
(a) After receipt of the guaranteed maximum price for the Project, the
Development Budget shall be finalized and adjusted, rovi e y such
adjustments must be approved in writing the Hotel Owner. In no event,
however, shall the City Contribution exceed 21,1 0,000.00 (which amount is
inclusive of the Design and Development Funs for the CityFacilities) in net
proceeds of the Cit 's debt obligations for the design, development and
construction oft e City Facilities. Any costs of the City Facilities exceeding the
City Contribution, if approved in writing by the Hotel Owner, shall be provided
for in the Hotel Construction Phase Financing.
( ) Payment of design costs incurred or the Project shall be made as
set forth in Section .1 and in Article 9.
13. _ o°egt._ gr e tints. After the Effective Date of this Agreement, the Parties shall
diligently negotiate mutually acceptable forms of the following agreements to be entered into or
become effective on or before the Project AgreementDeadline:
3.3.1 Ground Lease. The City, as "landlord" therein, and Hotel Owner, as
"tenant"therein, shall enter into the Ground Lease.
3.3.2 Marina _Parking-Site_ gr°ems gj t. The City, as lessors and the District, as
lessee, shall enter into the Mariana Site Parking .Agreement regarding the use of
approximately 230 spaces located on the Marina Parking Site, which spaces will be public
parking spaces open tote public.
33a3 .. pi itieq_Leas m The City as "landlord" or "lessor's therein, and the
District as "tenant" or `lessees' therein, shall enter into the City Facilities Lease for the
public meeting rooms, public convention centers ace, surface parking and such other
related public improvements.
3.3.4 BppkinY-A reement. The City and the District shall enter into a Booking
Agreement setting o' reservation and room lock requirements for the benefit of the
City Facilities and the Hotel that is sufficient to meet the public purpose requirements for
the issuance of the City'sdebt obligations o the CityFacilities ("Booking Agreement").
e Brand shall e directed by the District to comply with District's obligations to the
City under the Bookingt.
.3.5 Dqgig!1:ByildLAUeement.. to the Design-Builder shall
enter into aDesign-Build Agreement or the construction of the City Facilities and the
teL The Hotel Owner acknowledges that theDesign-Build Agreement shall require the
Design-Builder to communicate with and timelyrespond o Garfield withregard to (i) any
matter requiring e Hotel Owner's review or approval r to this Agreement and(ii
y other matter raised by Garfieldrelated to the Project in connectioni its role as
development manager under this Agreement,
3.3.6 In rlo . . red_ . eCity, Hotel Owner, e District shall
enter into local _ ee e in whichcertain agreements on the parties shall be
identified.
. .7 r ti ea_ aThe Hotel Owner, as "landlord o "lessor" therein, and
e District as "tenant" or `lessee" therein, shall enter into the Operating Lease for the
Hotel.
3.3.8 _Hotel Services A e r_ rr . The District shall have obtained a Hotel
Services Agreement with the % that is approved in writing by the Hotel Owner.
ACTIVITIESARTICLE 4
CONSTRUCTION
.1. _ Construction_.__.�. : : Upon satisfaction of all of the conditions requirements to
e completed during the Projectevel e t Phase and executionf the GMP Contract,
Garfield shall cause constructionof the Project to commence promptlyo receiving e Notice
to Proceed frome Hotel Owner and in y event, no later than the Construction Dea l e, and
ill expeditiously purs completion of constructionit letion date not later than five
hundred o y calendar days following the Notice to Proceed, subject to extension
reasonably necessary to account fory Hotel OwnerDelay or Force Majeure. Garfield shall
consult with the Hotel Owner regarding any proposed changes and modifications to the final
drawings and specifications of the Project which mayresult a material change in the design or
character of the Hotel or City Facilities, or an increase of the City Contribution. Garfield may
approve Hotel Facilities change orders in its discretion providedthat: a.) such change
orders are withinet t ci within ity Facilities Budget (and do not exceed
e City Contribution), or the Hotel Budget, as applicable, such change orders do not alter the
scope of the Hotel or the City Facilities as previously approved y the Hotel Owner, c) the
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Hotel Owner Representative is given prig written notice of the change and an opportunity t
object to the same, Notwithstanding, any change order that increases any lie item in the
Development Budget by more than 10% must be submitted tote Hotel Owner Representative
or approval. Once construction the Project commences, Garfield shall serve as development
manager and shall provide the following services with respect toteProject:
4.L1 Cit Facilities. el shall provide the following services m e
construction phase with respect to the City Facilities:
(a) Construct or cause to be constructed the City Facilities in
conformance with the final plans and specifications approved e Hotel
Owner;
) Cause all electric and telephone utility lines and equipment fort e
Property to be placed under ground within public rights-of-way or utility
easements located within the Property lines;
(c) Apply for or cause to be applied forte balance of the building
permits, utility permits, utility easements, certificates of occupancy all other
licenses and permits required fort e operation of the CityFacilities; and
( ) Provide supervision at the Project including, at a minimum, an on-
site construction s e isor/ roject manager who will devote sufficient on-site
time tot e Project to fulfil timely el 's on-site services hereunder and under
the GMP Contract,
(e) Make periodic visits tot e job site to review the work and progress
of construction with the Contractors and the Design Professionalsl
(0 Respondto any questions from the Hotel Owner Representative or
the Brand regarding the work or progress of construction, construction methods,
scheduling, and the like;
( Coordinate the turnover of the City Facilities, as and when the
same are finally completed and ready to be opened o the Public,to the Ci i
( ) Coordinate efforts by all appropriate ersons to complete the City
Facilities in accordance with the final drawings and specifications, as the same
y be arnended fromtime to time with the approval of all necessary persons,
such efforts to include assisting in the scheduling of inspections and the
preparation of punchlistsq an
(i} Obtain, or cause the Project Architect or Design-Builder to obtain,
a temporary, if applicable, and permanent certificate of occupancy (or other
appropriate and necessaryove e to e issio to occupy) with respect tot e
City Facilities.
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4.1.2 Hotel. During constructionof the Hotel, Garfield and Hotel Owner, where
applicable, shall:
( Construct or cause o be constructed the Hotel in conformance i
the conceptualdesign at specifications approved
y Hotel Owner, all rights of review r approval e Brand, all applicable
Governmental Ruls and the provisionsof the Ground Lease;
) Cause the Hotel to be constructed, to _ y all development costs o
the Hotel as they e, and under no circumstances require the City to pay
or any labor or material ordered r purchased by Garfield or Hotel Owner .
about construction the Hotel;
(c) Cause all electric and telephone `la°ty lines and equipmento the
Property to be placede ound within public rights-of-way or utility
easements located withine Property lines;
Apply for or cause to be appliedor the balanceof the building
permits, utility permits, utility easements, certificates of occupancyall other
licenses and permits required fore operation of the Hotel, including
alcoholic beverage permit; and
e) Pay for the hardscape and landscape as set forth in the plans and
specifications.
General. During the Construction Phase of developmentthe Project, Garfield
shall_do thefollowing:
. .I Provide the Hotel Owner with monthly written progressreports that reflect
construction o ess and all costs due or paid under the Development Budget during the
preceding onth and which also reflect a comparison of aggregate costs paido to
items through the end of the precedingcare ith total budgetedo c items;
. .2 Prepare and submit o the Hotel Owner supplements refinements to
the Development Budget for the Hotel Owner'se r v I as development of the
Hotel and City Facilities moves through its various phases to completion, provided
Garfield1 have the right to reallocate the costs of developinge Project amonge
various lie items in the City Facilities Budgeta e Hotel Budget provided that:
such e l cation does not cause the City Facilities Budget to exceed the City
Contribution, ) such reallocation does not alter the scope of the Hotel and CityFacilities
as previously approved e Hotel Owner, (c) such reallocation is authorized by the
financingoc is for the City Contribution and the Hotel Construction
Financing oc e ts, and the HotelRepresentative is given prior writtennotice of
the change and an opportunity o object to the same. Notwithstanding any provision
hereof, any reallocation that increases any line item in the Development Budget by more
t % must be submitted to the Hotel Owner Representative for approval, such
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approval not to be unreasonably withheld or delayed, In no event shall there be an increase
in the budget for the City Facilities that exceeds the City Contribution unless such
increases are paid for and funded by the Hotel Financing Contribution;
4.2.3 Notify the Hotel Owner Representative promptly of any actual or
anticipated increase in the Development Budget of which Garfield becomes aware;
4.14 Notify the Hotel Owner Representative promptly of any actual or
anticipated change or delay in the Development Plan of which Garfield becomes aware;
4.2.5 Pay, or cause to be paid, from proceeds of the Hotel Construction Phase
Financing all cost overruns with respect to amounts exceeding the City Contribution with
respect to the City Facilities as previously approved by Hotel Owner in accordance with
this Agreement and with respect to amounts exceeding the approved Hotel Budget as
approved by Hotel Owner;
4.2.6 Assist in refining the design of the Project (or assist in the process of
approving any changes to the design of the Project) by providing information based on
Garfield's hotel development and operating experience;
41.7 Supervise the timely and efficient performance of Contractors and the
Design Professionals under their respective contracts with Garfield or the Hotel Owner, as
the case may be, to confirm that all or is being performed in a professional and
workmanlike manner; and
4.18 Assure that all design and construction criteria that are specifically
required by the Brand, if any, are correctly integrated into the design and construction of
the Project, and that any on-site inspections and approvals specifically required by the
Brand are arranged and carried out on a timely basis.
4.19 During the course of construction of the Hotel and City Facilities, Garfield
shall provide the Hotel Owner, on or before the fifth (5h) day of each calendar month, a
monthly report for the Hotel and City Facilities forte preceding month (the "Periodic
Report"). Each Periodic Report shall be in the form approved by the Hotel Owner, and
shall include: (i) a narrative description of the progress of construction in the preceding
month, together with progress photos; (ii) a variance report, comparing actual costs, on a
category basis, with the costs and expenses set forth in the Hotel Budget and City
Facilities Budget, as applicable, on with a reasonably detailed explanation of all
material or significant variances (including the then current cumulative cost savings and
the amount by which Hotel Costs and City Facilities Costs exceed the applicable amounts
set forth in the Hotel Budget and City Facilities Budget, respectively, for work performed
and all or to be performed on a line-item basis) and all changes in any time schedules
relating thereto, (iii) any change orders for the preceding month with the concomitant
price change; (iv) any material observations made by Garfield in the course of its physical
inspections of the Hotel and City Facilities or any knowledge of material events received
by Garfield is transpire within the preceding calendar month; (v) any of material
_27®
matteri en o the Hotel or City Facilities of which Garfielda o e or
information; and( ') a certification that no notices been received that any portion of the
tel or the CityFacilities is in violation f any applicable law and, tote actual
knowledge of Garfield, the Hotel and City Facilities are not in material violation of any
law, or, if suchnotice been received or if there be such a violation, a description
thereof The variance report describedin the foregoing its ii)may be in the format used
in the current draw request i or to be submitted by Garfieldpursuant o Article
hereof eel shall timely ro ' e such other reports as may be reasonably requested
by the Hotel `v .
4.3. Rrp-Qgoijil Activities. The Parties each recognize that certain ctivitie must be
undertaken in advance of Final Completion of the Project so that the Project can functionin an
appropriate a orderly er, Accordingly, the Hotel Technical Services Agreement or the
Hotel ices Agreement shall require the Brand to undertake, or cause to be undertaken, the
following steps,procedures and activities with the cooperation and in accordance i theBrand:
4.3.1 Recruit, train and employthe staff required for the operation oft e
Project;
.3.2 Underta e pre-opening ro otio and advertising, including opening
celebrations and related activities. The Brand shall provide on-site or locally assigned
personnel to conduct such activities beginning at least to (1 ) months prior tot e
projected opening of theProject;
4.3.3 'Test and, if necessary, implement o cations tote operations of the
Project,
4.3.4 Applyor the i i i licenses e its required or the operation oft e
Project; and
.5 In general, render such other miscellaneous services incidental the
preparation organization of the roject's operations ay be reasonably required or
the Project to be adequately staffed and capable of operating on opening.
e costs under this Section m. 3 all e allocate between the Hotel the i
Facilities e upon construction value,
Post Construction Phase. The Hotel Owner shall make application with
Applicable Appraisal District to qualify for total exemption from all real property ad valorem
tapes associated withHotelOwner's interests in the Project. In addition, upon FinalCompletion
Garfield shall provide the Hotel Owner with the following:
.1 A copy of the final certificate of occupancy forte Hotel and City
Facilities from the appropriate officials of theCity;
4.4.2 A long formrelease of mechanics' liens executed by the Design-Builde
applicable tote entire Project, or a letter in form reasonably acceptable to Hotel Owner
® -
from a title insurance underwriter acceptable to Hotel Owner stating that it will issue
necessary title policies, and a mortgagee's title policy to the trustee for the Hotel
Construction .Phase Financing, without excepting filed and unfiled mechanics' lies from
coverage under such olicies;
4.43 A certification from the Project Architect that the Hotel and City Facilities
have reached FinalCompletion in accordance with the final plans and specifications;
4.4. An "as-built" survey of all improvements for the City Facilities prepared
y a registered surveyor or engineer; and
4.4.5 A full and complete set o "as-built"plans forte Hotel and any accessory
s c re(s)a
ARTICLE 5
PROJECT FINANCING
M° reject evelo ent base.
5.L l Firms
(a) On or before sixty ( ) days following the Effective Date of this
Agreement, e Hotel Owner shall have available the Design and Development
Funds forte design and development oft e City Facilities, as well as funds for
the Hotel D&D Costs.
n or before the Project Funding Deadline, the District will
arrange its Hotel Construction ase Financing to construct the Hotel an
ancillary facilities and improvements within the Hotel Budget (including n s to
pay the Hotel Design Fee to the City), and the City shall sell its debt obligations
to fund the City Contribution as set forth in Section m51 2..
(c) Notwithstanding any provisions of this Agreement, the Parties
acknowledge that the incurrence of debt obligations by the District is subject to
the sale discretion of the District's Board of Directors.
5.12 Cit , i .._girt Contribution. Ire the event there has been no termination o
this Agreement su t to Article 11 herein, and basedon the approved evelop ent
Budget, the City will, within hive (5) business days of the closing of the Hotel
Construction Phase Financing, provide the City Contribution (to be funded as
development progresses in accordance with the approved City Facilities Budget) in an
amount equal tote City Facilities Budget provided that the City shall never be obligated
to contribute more than $21,100,000.00 to the design,developmenta construction of the
reject® The City's commitment of the City Contribution tote Project is further subject
tote sale of the Hotel Construction Phase Financing. Garfield and Hotel Owner
recognize that the City has only $21,100,000.00 to invest in the design, development and
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construction of the City Facilities, including the DesignDevelopment Management
Fee and FF&E, now and in the future, and that the Cityshall have no further financial
obligationto the Project. Notwithstanding any provisions of this Agreement, the Parties
acknowledge that the issuance of debt by the City is a governmental function and subject
to the sole discretion of the City Council.
5.1.3 Evidencecite Finn ci '• On or before the Project Funding Deadline
and e sale of the City's debt obligations to fund the City Contribution, the District shall
execute reasonably cc to e bond documents evidencing the sale of debtobligations o
e Hotel Construction Phase Financing. The Hotelis obligation to obtain
provide or the Hotel Construction Phase Financing is subject e District's ability to
issue debt obligations on terms and conditions acceptable to the Hotel Owner. Such bond
documents shall not contain conditions o closing on e Hotel Construction Phase
Financing other than those (i) customarily o in bondpurchase agreements and bond
documents in negotiatedfinancing transactions in the Texas bondet for similar
projects, (ii) customarily inc e in indentures loan agreements for bonds for similar
projects e interest on whic ill be exempt from federal incomex, and (iii)required to
comply ith Texas law. Notwithstanding any provisionis Agreement, the Parties
acknowledge that the issuance of debt obligationsy the District is a governmental
function u j t to discretion of the District's Board of Directors.
5.2. Qlgamg. Hotel Financing Closingand City Financing Closingshall occur as
follows:
S® ss Debt. On or before the Project Funding Deadline, subject to
c City's discretionarydetermination to fund the City Financing Contribution, the City
shall sell its debt to fund the City Contribution, e District, subject tote District
Board'sis etianary determination to fand the -Intel Financing Contribution, shall sell
the Hotel ConstructionPhase Financing such that funds are available for the construction
of the City Facilities and Hotel by the City Financing Closingthe Hotel Financing
Closing, respectively. The proceeds of suchfinancing do shall a transferred to
e Hotel Owner, who shall then invest the proceeds in accordance with theirrespective
terms and shall be made available for disbursement for construction of e City Facilities
-and the Hotel. The Hotel Owner shall control such ro s pursuant to its established
process and procedures. e failure to proceed withe City Financing Closingand the
Hotel Financing Closingshall result in a termination of this Agreement pursuant to
5ection 11.1 herein.
ARTICLE
PURCHASING SERVICES
.1. RpEch._ .._i development e Project, c shall perform or
cause to be performed the following services with respect to FF&E to be installed the City
Facilities and the Hotel:
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he
6.Ll FF&E .......Schedule. v l p rat Plan preparedy Garfield with t
approval of the Hotel OwnerRepresentative shall include a prototypical schedule setting
forth y category the types of FF&E for the Hotele City Facilities (hereinafter
referred to as the"FF&E Schedule").
6.1.2 Specifications. The FF&E shall be those items specified i
specifications therefor (hereinafter referred to as "FF&E Specifications") as coordinated
y Garfield and approved in writingy the Hotel Owner Representative. The FF&E
Specifications shall specify e type of FF&E consistent with the design and style of the
Hotel d of sufficient quality such at the Hotel and City Facilities will be developed i
accordance with the standards of the Brand. Garfieldshall serve as ors all appoint a
purchasing agent for the FF&E forte Project, who shall coordinate purchasing oft e
forte Hotel and City Facilities pursuant to purchase orders naming the Hotel
Owner as owner. The Hotel Owner shall convey the FF&E in the City Facilities to the
City along i e City Facilities upon completion.
. .3 Appr_Qy N o ns, Garfield shall cause the
Specifications to be delivered, prepared submitted tote Hotel Owner for their
approval as promptly as reasonably practicable e Project Development o
Construction Phases.
6.1.4 FPriciAg an_d,Procurement. Garfield shalldiligently see to obtain the most
favorable prices and terms available in connection with the purchase of the FF&E.
.5 _Delivery c _d le. Garfield shall prepare a projected deliveryschedule for
goods purchased basedon production and deliverydates mmished by suppliers. a el
shall use reasonable efforts to coordinate the schedule with the construction schedule
under the Design-Build Agre ent and place purchase orders within sufficient e to
allow delivery in accordance with the projected construction schedule.
6.1.6 A Records. Garfield shall maintain or cause to emaintained proper,
accurate are complete_ accounting records including competitive bids and proposals,
purchase orders, purchasing receipts and disbursements made in connection with the
purchase of the FF&E forte City Facilities and the Hotel. Garfield shall make available
tee records for audit, inspection copying by the Hotel Owner Representative, or any
other persons designated by the Hotel Ownerere entativ , upon five( ) business days'
notification. Following Final Completion of the City Facilities or Hotel, as applicable, or
termination of this Agreement and/or upon written request of Hotel Owner Representative
from time to time, Garfield shall deliver to the Hotel Owner Representative an electronic
coy of all such records. Garfield shall retain an electronic coy of such records for a
periodof at least three ( )years from Final Completion.
6,1.7 Iraven c-y. Garfield shall provide an inventory of goods and materials to
e Hotel Owner Representative, or such ter persons, as may be designated by the Hotel
Ownere rese tative, within one hundred twenty 12days after delivery of the last
item of FF&E for the City Facilities and the Hotel, as applicable.
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6.1.8 Coordinator. Garfield shall provide an on-site coordinator at the Projectto
coordinate FF&E deliveryinstallatio or its purchasing services under this Article ,
Garfieldshall e iServices , c is °o to, of ° el i ,
the evelo t e Fee. °s , Services Fee shall be paid in substantially
equal monthly installments e Construction Phase.
6.2. E q
1 Purchase of e Hotel Owner shall purchase or cause to be
purchased e FF&E for the City Facilities and the Hotel of the type and quantity
describedin the FF&E Schedule as preparedel rove tel
Ownerrese t ive, in accordance with the CityFacilities t, the Hotel
Budget this Agreement. Garfield shall substantiate o e verifications to
e Hotel Owner of goods received. Purchase of FF&E for the City Facilities and the
Hotel are intended to be exempt from sales taxes.
. .2 Cas s. The FF&E costs forte Project shall be identified in the Project
Development e as a part of the City Facilities Budgetthe Hotel Budget, as
applicable. casts paid by the Hotel Owner, on e aft e City, shall e part of and
subject tote limits of the City Contribution. Any costs of the FF&E for the City
Facilities above e City Contributionshall be paid by Hotel Owner and included in the
Hotel a s cia ase Financing.
. .3 a, t. It is understood that all purchase orders and agreements for
or the City Facilities executed by the Hotel Owner shall specify ei
acquired for the account of the Hotel Owner, and Garfieldshall not be responsible for
payment of any such rc e orders and agreements, except tote extent of funds
therefor actually received fromthe Hotel Owner.
6.14 All FF&E for the City Facilitiesshall be owned by the Hotel Owner, and
then by the Cityafter conveyance, and subject to the terms and provisions of the City
Facilities Lease.
6.3. General Provisions.
.3.1 Contractor.._tra t ail el shall not e responsible` rmalfeasance,
neglect or failure f ,Contractors or suppliers to meet theirschedules for completion or
to perform their duties and responsibilities under their respective agreements with respect
to the FF&E for"the City Facilities or theHotel; provided, however, Garfield shall be
responsible for such failure(s) if and tote extent, the same is caused to 's
malfeasance,neglect or failure.
6.3.2 Cancellation.
e Hotel Owner acknowledges that cancellation and return
f FF&E cannot be made except under ter-ins and conditions acceptable to the
manufacturer and/or vendor thereof, and thatcustom items of F re non-cancelable
and non-returnable.
-
6.33 No ty° Garfield shall use reasonable dili nce in making
recommendations regarding the procurement of FF&E for the City Facilities and the
Hotel, but Garfield extends no guarantees and makes no warranty, express or implied, of
merchantabilityor fitness for a particular purpose or otherwise with respect to any of such
FF&E purchasedhereunder. ai s made against such guarantees as may be offered y
the manufacturers or vendors of FF&E forte City Facilities or the Hotel must be settle
directly with the manufacturers or vendors. Garfield shall assist and coordinate with the
Hotel Owner, however, in the processing, prosecution enforcement of such claims
provided ie incurs o additional costs, expenses or liability on account thereof
Where Hotel Owner has not previously paid for FF&E which as been received by the
Hotel Owner and, if prior to such payment, Garfield or Hotel Owner determines that the
goodsare defective or otherwise do not conform tote contract, Hotel Owner shall not
ay for such FF&E and Garfield shall make all necessary provisions, at the vendor's
expense, or return of such FF&E tot e supplier.
6.3.4 Risk of boss° Unless otherwise agreed to in writing, all FF&E for the City
Facilities and Hotel shall be shipped tote City Facilities or Hotel, as applicable, or a
bonded e o se arranged for by Garfieldor Design-Builder on behalf of the Hotel
Owner. Garfield shall provide for all such to be shipped "DDP (Baytown, Texas,
USAy'pre-paid,
6.3.5 Overa yes. The Hotel Owner hereby acknowledges that it is customary or
manufacturers to ship additional uantities of certain types of FF&E (fabric, wallpaper,
carpet, etc., commonly referred to as "attic stock") above and beyondthe actual amount
ordered. This is a common ractice in the industry over which fief has no control.
e Hotel Ownera ees to accept such overages and to pay for the same; provided,
however, in o event shall the City ever be liable for any costs in excess of the City
Contribution. All overages in FF&E forte City Facilities shall be the property oft e
Hotel Owner. Allowances for such overages shall be included in the City Facilities
Budget or the Hotel FF&E Budget, as applicable.
6.16 Garfield .ei y°
OFFICERS, GARFIELD HEREBY INDEMNIFIES AND
AGREES TO HOLD THE HOTEL OWNER AND THE DISTRICT AND THEIR
RESPECTIVE DIRECTORS, MEMBERS,
EMPLOYEES (THE "INDEMNIFIED PARTIES") HARMLESS AND DEFEND
LOSS,FROM AND AGAINST ANY AND ALL COST, LIABILITY, CLAIM,
DEMAND, DAMAGE OR EXPENSE } WITHOUT LIMITATION,
REASONABLE ATTORNEYS' FEES AND LITIGATION EXPENSES) WHICH
THE INDEMNIFIED PARTIES MAY INCUR OR SUSTAIN OR WHICH MAY BE
CLAIMED OR ASSERTED AGAINST ANY OF THE FOREGOING ON
ACCOUNT } IN CONNECTION WITH, OR ARISING FROM INJURIES,
DEATH, LOSS OR DAMAGE TO PERSONS OR PROPERTY (INCLUDING,
LIMITATION,WITHOUT
INCLUDING ANY CLAIM FOR PAYMENT OR DEMAND FOR PAYMENT
CAUSED BY OR IN ANY WAY WHATSOEVER ARISING OUT THE HOTEL AND THE CITY FACILITIES)
OR
RESULTING FROM (1) ANY NEGLIGENCE ON THE PART OF GARFIELD OR
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MEMBERS,ITS
AND
OFFICERS, DIRECTORS, CONTRACTORS, AGENTS,
HEREIN;EMPLOYEES ARISING OUT OF OR RESULTING FROM THIS AGREEMENT
OR ANY OF THE OTHER AGREEMENTS CONTEMPLATED TO BE ENTERED
INTO WITH RESPECT TO THE PROJECT AS DESCRIBED
EMPLOYMENT,FF&E THAT GARFIELD HAS PURCHASED IN THE NAME OF AN
INDEMNIFIED PARTY THAT DOES NOT CONFORM WITH THE FF&E
SPECIFICATIONS, (111) ANY BREACH OF ANY REPRESENTATION OR
WARRANTY OF GARFIELD HEREIN CONTAINED, OR (M ANY CLAIM
ARISING OUT OF
GARFIELD NON-EMPLOYMENT OR DISCHARGE OF
OF THE PARTIES HERETO THAT THE INDEMNITIES PROVIDED FOR IN
THIS PARAGRAPH INCLUDE AN INDEMNITY BY GARFIELD TO
INDEMNIFY AND PROTECT THE INDEMNIFIED PARTIES FROM THE
CONSEQUENCES OF yOWN NEGLIGENCE, WHETHER THAT
NEGLIGENCE IS THE SOLE OR A CONCURRING CAUSE OF THE
RESULTING INJURY, DEATH OR DAMAGE. SUCH INDEMNITY SHALL NOT
APPLY,
PARTIES.HOWEVER, TO LIABELITY OF A PARTY THAT IS CAUSED BY OR
RESULTS FROM THE NEGLIGENCE OF THAT PARTY. IN THE EVENT
THAT ANY ACTION OR PROCEEDING IS BROUGHT AGAINST AN
INDEMNIFIED PARTY, GARFIELD FURTHER AGREES AND COVENANTS
TO DEFEND THE ACTION OR PROCEEDING BY LEGAL COUNSEL
ACCEPTABLE TO THE APPLICABLE INDEMNIFIED This indemnity
shall survive the expiration r termination of this Agreement.
.17 Records. Garfield shall assist the Hotel Owner with the maintenance o
proper, accurate complete accounting records including purc i ei is and
delivery tickets made in connection with the purchase`o e FF&E for the City Facilities
and e Hotel. Upon receipt and acceptanceof the FF&E fore City Facilitiesor the
Hotel, Garfield will promptly deliver the receipte Hotel Owner Representative.
Garfieldshall maintain proper, accurate and complete accounting records, including
competitive bids and proposals, purchase orders, purchasing receipts and deliverytickets
made in connection i the purchase of the FF&E for the City Facilitiese Hotel.
Garfieldshall make available these records for audit, inspection and copying by the Hotel
Owner Representative, or any other personsdesignated y the Hotel
Representative, upon five business a notification. ollo Final Completion of
e Project or termination of th®s Agreement, Garfield shall, at Garfield's sole cost, deliver
to the Hotel Ownera copy of all such records. Garfield shall retain copies of suchrecords
or a period of three( after Final Completion.
ARTICLE 7
CITY GOVERNMENTAL AUTHORITY
7. . No _Limitation.. n it 's_..Governmental Funct s. Garfield and Hotel Owner
recognize the authority of the City under its charter and ordinances to exercise its police powers
in accordance with Governmental Rule to protect the public health, safety, and welfare. Such
powersextend to a el 's or its Design-Builder's construction activities on City property, an
Garfield recognizes the ity's authority to take appropriate enforcement action in accordance
with ov e tal Rule to provide such protection. No lawful action taken by the City pursuant
to these police powers shall subject the City to any liability under this Agreement, including
without limitation liability for costs incurred by the Design-Builder, Garfield or Hotel Owner,
and as between Garfield and the City, any such costs shall be the sole responsibility of Garfield
and e Design-Builder.
.1.1 City_ d. Cn Governmental ....Functions. e Parties acknowledge that
(i) all references to `City" herein (which, for the purposes of this provision, shall be
deemed o include any references in this Agreement to City as the owner of the fee interest
in theProperty) shall refer only to City in its capacity owner of the Property an (ii) all
references to "District" herein (which, for the purposes of this provision, shall be deemed
to include any references in this ee ent to the District as the bond issuer) shall refer
only tote District in its capacity as lessee of the Hotel and the City Facilities and as the
bond issuer. The terms "City" and "District" thus exclude any action, omission or duty of
the City carte District when perfon-ning its Governmental Functions° In addition, no
setoff, reduction, withholding, deduction or recoupment shall be made in or against any
payment due (i) by Garfield or the District to the City or (i ) by Garfieldor City to the
District under this Agreement as a result of any action or omission of the City or the
District, as applicable, when perfon-ning its Governmental Function.
7J.2 No Waiver. No representation, consent, approval or agreement y City,
the District, or their respective representatives shall be binding upon, constitute a waiver
by or estop the City or the District from exercising of its rights, powers or duties in
connection with its Governinental Functions nor will any portion of any action by their
designee(s) be deemed to waive any immunities granted to the City or the District when
performing its Governmental Functions, which are provided under Applicable Law,
including Section 101.0215(a), TEXAS CIVIL CTICE AND REMEDIES CODE, as
may be amended or replaced. Further, any consent to jurisdiction by City or the District is
only with respect to matters arising in its capacity as a party tote Agreement and
expressly does not constitute a waiver of the City's or the District's governmental
immunity or a consent to jurisdiction for any actions, omissions or circumstances, in each
case arising out of the performance of the Goverrunental Functions of the City or the
District.
7.24 Notice to Proceed, After such time as the Hotel Owner shall have approved in
writing the Development Plan and the Development Budget, the City Financing Closing and the
Hotel Financing Closing shall have occurred, and Garfieldshall have obtained all necessary
permits for the commencement of construction of the Project, Hotel Ownershall give Garfield
written Notice to Proceed with the construction of the Project.
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7.3" In e" All connection fees, and tap fees for the City Facilities and the
Hotel shall be waived by the City. .All impact fees for the Hotel shall be paid by the Hotel
Owner. The cost of utilities usage,permanent and temporary,for the City Facilities after the date
hereof and prier to the opening of the Project shall be a cost of the City Facilities to be paid by
the Hotel Owner as part of the Development Budget for the City Facilities. The cost of utilities
age, pennanent and ternporary, for the Hotel and any other privately-owned facilities or
i ctre after the date hereof and pricer to the opening of the Project s ll be a cost of the
Hotel to be paid by hotel Owner. From and after the opening of the Project,the cost of utilities
used in the operation of the Hotel and City Facilities shall be paid by the Brand or the District.
7.4. ZoRin . T tel shall sure that e Propertyis properly on for use as a hotel
andconvention/civic center with associated ling to permit development in accordance with
the Development Plan. e Hotel Owner shall cooperate with and assist Garfield as reasonably
required in connection with obtaining the zoning approvals from the City required for
development of the Project"
7.5. Permits. Garfield d all Contractors shall acquire from the City the issuance of
all building p °t applications, plans of development, utility permit applications, utility
easements, requests for certificates of occupancy and such other documents as may reasonably
e required for Garfield, Motel Owner or Design-Builder to obtain building pennits, licenses,
approvals, certificates, utility services and other permits and authorizations as may be necessary
for the development, construction and operation of the Project. It shall be the ultimate
responsibility of Garfield to secure all such licenses and pennits required to be obtained by
Garfield, Design-Builder or Hotel Owner with rcspect to construction, completion and
occupancy of the City Facilities, including any necessary building, occupancy, surer and utility
per its. Garfield shall secure or cause to be secured all such licenses and permits required to be
obtained with respect to the construction, completion and occupancy of the Hotel and the City
Facilities, including any necessary building, occupancy, suer and utility permits.
Notwithstanding any provision of this Agreement or any other Project Agreement to the
contrary, all fees for building pennits, approvals, connection fees, tap fees, and certificates in
connection with the development and construction of the Project are hereby waived in their
entirety.
ARTICLE
SCOPE OF GARFIELD'S RESPONSIBILITIES
8.1. of Care. In perfonning its services hereunder with respect to
development and construction of the Project, neither Garfield.nor Hotel Owner (nor any of their
agents, employees or representatives) makes any representations or warranties, express or
implied, regarding the sufficiency of any design, plans or drawings prepared by others, but
agrees to work with such persons to correct such designs, plans or drawings with such
corrections to be made at no additional expense to the City, if and to the extent such corrections
are not required due in whole to the fault of the City, or its employees, agents, or other
contractors or consultants. Any responsibility of Garfield hereunder for development and
construction of the City Facilities shall be for services directly performed y it; shall be limited
-36-
solely to deficiencies that are directly attributable el 's failure to exercise the reasonable
care usually exercised by individuals and firms providing similar services; and in no events all
Garfield e liable for defects in materials or workmanship in the Project. Garfield shall use
reasonable good faith to protect the economic interests of the City with respect to design,
development and construction oft e City Facilities. Upon completion of the Project or its earlier
termination, Garfield shall assign (i) to Hotel Owner all warranties from the Contractors and any
and all suppliers of goodsand/or services to the Hotel (for Hotel Owner to use in connection
with its obligations to maintain and repair the Hotel as the owner thereof), and (ii) to the Hotel
Owner all warranties from the contractors and any and all suppliers of goods or services to
the City Facilities (which warranties the Hotel Owner shall assign tote City upon final
completion of the City Facilities, which will then be farther assigned tote District in connection
with the District's obligations to maintain and repair the City Facilities as lessee under the City
Facilities Lease)a Garfield shall cooperate fully with Hotel Owner in pursuing such warranties,
including without limitation,providing copies of documentationneeded to support such claim.
. . prt_.�tsar ,_Spq Meal s s_ m .,, Consultants. n connection it the reject, Garfield
shall at all times employ an adequate number of qualifiedpersons to perform the development
management services necessary to complete the Hotel and the City Facilities.
Garfield shall at all times have a dedicated full time construction supervisor/project
manager for the Project that is approved by the Hotel Owner who is available to consult with an
report to the Hotel Owner. The cost forte construction supervisor/project manager shall be
included as part of the Development Budget (bent not included as part of the Development
Management Fee). Any replacement construction supervisor/project manager forte Project
shall require the approval of the Motel Owner. Garfield shall use reasonable care to ensure that
all Contractors and DesignProfessionals selected in connection with the design and construction
of the Project shall be highly qualified to do the work they are engaged to perform, and Garfield
shall make reasonable inquiries as to suchpersons' background, experience and reputation to
assure they are well qualified to undertake such work.
ARTICLE
PAYMENT OF COSTS
9.1. r Hotel and Cit Facilities Cos s.
9.1.1 ra Requests.
sts.
(a) On a monthly basis during the term of this Agreement, Garfield
shall coordinate with the Design-Builder to submit draw requests forte payment
of all Hotel Costs and City Facilities Costs consistent with the Design-Buil
Agreement. All draw requests shall be in the form approved y the Hotel Owner,
which separately itemizes such amounts requested for payment consistent with e
Hotel Budget and City Facilities Budget, as applicable, identifying each
arson or entity for whom el is requesting payment and the amount thereof
e Hotel Owner shall approve a draw request or provide specific objections or
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requests or clarification wi five ( ) business days of receipt of a complete
draw es ,
) Upon approval of a draw request by the Hotel Owner
Construction Monitor, such draw request shall be submitted to and disbursed
e bond trustee i respect to Hotel Costs, or the disbursement agent, if any,
with respect to CityFacilities s, with the consent of the Hotel
subject to and in accordance i terms of the bondy
construction is ent procedures related to the expenditure of funds for City
Facilities Costs required the City, s the case may be. Subjectto the terms and
conditions of the bond indenture and any such construction disbursement
procedures, all draw requests ill be disbursedon or before three 3) business
days prior to the requested dis s t date(which requested is e t date
may be modified to account for additional time o address objections or
clarifications submitted by the Hotelor the Construction Monitor), and to
e extent it ct y the Hotel Owner, disbursements shall be made directly to
e named payee(s).
c requests for payment for design or construction services
performed y the Design-Builder shall be accompaniedthe application for
paymentsubmitted to Garfieldy theDesign-Builder or such construction
services, with such o i documentation required by the HotelOwner.
Draw requests that request payment for construction services performed by other
Contractors shall be accompanied by an applicationor payment in a form
approved otel Owner and shall request payment consistent with such
Contractor's right to payment under the terms of suchrespective separate
construction acto Except with the consent of the Hotel Owner, the draw
request shall not seek paymentor rai a e Garfield is entitled to withhold from
the Design-Builder or other Contractor under the respective contract.
) The structures constituting the components of the Projectwill be
connected withone another as partof an integralo '; Accordingly,the Project
Architect, a y of the subcontractors, ill be providing services on more
than one portion of the Project and in certain situations a subcontract i a
subcontractor ay include or on more than one componente Project. In
these situations, Garfield shall cause the Design-Builder Design-Builder to allocate the cost of any
such subcontract to accurately reflect the cost of the services performed for that
portion of the Project. Garfield shall provide (or cause the Design-Builder to
provide) the Hotel Owner with the reasons and justifications of each subcontract
allocation i the applicable application for payment submitted y theDesign-
Builder pursuant toteDesign-Build Agreement.
(e) Hotel its agents and representatives shall havee
right, but not the obligation, to inspect status of completionof the Hotel and
the City Facilitiesin accordance with the Contract Documents, and particularly
e drawings and specifications a condition to its approval of any draw request.
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Garfield shall cooperate with the Hotel Owner and its agents representatives
in any such inspection.
9.1.2 ��.or mg Funds: Bank,.. Accounts. All amounts paid t® Garfield for the
payment of Hotel Costs and City Facilities Casts pursuant to a draw request shall be used
for the specific oses specified in such raw request, and, as appropriate,shall be kept
separate and shall not be cornmingled withy other funds of or available to Garfield or
any other Person.
9.1.3 _c hi&and��. ._Financial Se ices.
(a) Garfield shall perform or cause to be performed those accounting
and financial services as the Hotel Owner may require to insure the Hotel Owner
compliance with its obligations the provisions of any financing oc e is
and any other r ortinF obligations relating to the Hotel and the City Facilities
which the Hotel Owner may have to investors and/or affiliates or any other
similar parties.
( ) Garfield shall keep proper books and records of all transactions
with respect tote development and construction of the Hotel, City Facilities, and
the parking facilities as reasonably required by the Hotel Owner to insure
compliance with any financing documents or reporting obligations the Hotel
Owner ay have to investors oraffiliates. Garfield shall cooperate with the Hotel
Owner's accountants in any inspection and audit of the documents relating to the
construction and development of the Hotel, City Facilities, or the parking
facilities, and the preparation of financial statements and tax returns.
(c) The Hotel Owner and its representative, including HotelOwner's
accountants, shall have the right, upon notice to Garfield, to inspect, coy and
audit the documents during Garfield's business hours for the term of this
Agreement and for the applicable retention period required by any applicable law,
ordinance or regulation or by any Governmental Authority having jurisdiction
over the Project. Originals of such documents shall be kept for such oses at
Garfield's address stated hereinthe term of this Agreement,
.2. Cost Sayipgs. In the event the Cost of the Work, plus the Design-Builder's Fee
shall e less than the GMP forte Project as adjusted e Orders (as such terms are
defined the Design-Build Agreement), the resulting savings shall be shared by the Hotel
Owner, the Design-Builder, and Garfieldasfollows: forty percent ( %) allocated to the Hotel
Owner, thirty percent (3 %) allocated to the Design-Builder, and thirty percent (3 %) allocate
to Garfield, Any sharing with the Project Architect shall be handled by the Design-Builder.
.3. City ,Contribution,I i ._itationa no event shall any payment required y this
Article obligate the City to make any payment in excess of the City Contribution. In the event
such amounts exceed the City Contribution, such s e t shall be the obligation of Hotel
Owner, with such obligation to be payable solely from the proceeds of the Hotel Construction
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Phase Financing. 1 er y other condition that makes it impossible o City
1 or any portionthe Cityo do , Garfield and Hotelshall have no right to
demand ity Contribution from any other fands of the City.
ue to Garfielde Hotel Owner hereundershall be paid in installments y the Hotel Owner
according to the following schedule:
°1 Forty-five perce 5%) of the Development Management Fee shall be
paid in equal monthlys e is during the Project DevelopmentPhase;
9A.2 Forty-five percent %) of the Development Management Fee shall be
paid to Garfield in equal monthly installments during the Construction Phase;
.3 Five percent ( %) of the Development Management Fee shall be paid to
Garfield o the Substantial Completiondefined in the GMP Contract; and
9.4.4 Five percent % of the Development Management Fee shall be paid to
Garfield on Final Completionas defined in Contract.
Payments of the Development Management Fee that become due during the course of the
developmentand construction as provided in this Section 9.4e payable by the Hotel Owner
withinthirty ( ) days after the appropriate otel Owner staff receives a draw request o
Garfield s t to the draw schedule fors e in accordance with aection 9.1. Each
installment of the DevelopmentManagement e ill be deemed earned uponthe date the
payment obligation accrues in accordance with this Section
ARTICLE l
REPRESENTATIONS
10.1. _' ..-&epreqentations _mand Warranties. Garfield representswarrants to
e Hotel Owner that the following representations and warranties are true as of the date hereof
1 .1.1 Due �uOrganization_of ,�el is a limited liability a y
validly existing tinder the lays of the State of Texas and is duly qualified to do business in
e State of Texas; and that the person executing this Agreement on behalfof is authorized
toe ter into this Agreement.
1 .1.2 Due Autcl ' y _,No Conflict. Garfield has all requisite power and authority
to execute and deliver this Agreement and to carry out its obligations eu er and the
transactions contemplated hereby. is Agreemente documents
contemplated here ill be, duly executed liver el constitutes
Garfield'Garfield's legal, valid i obligations enforc le against Garfield in accordance
with their terms. The consummation by Garfieldof the transactions contemplated hereby
is not in o f of or is , nor doesconstitute a default under, any term or
provision of the organizational doc e is of Garfield, or any of the terms of any
agreement or instrument towhich Garfield is a party, or by is Garfield is bound, or of
any provision of any applicable law, ordinance, rule or regulation of any governmental
authority or of any provision of any applicable order, judgment or decree of any court,
arbitrator or governmental authority.
10.1.3 Consents. No consent, approval,•order or authorization of, or declaration
or filing with any governmental authority is required on the part of Garfield in connection
with the execution and delivery of this Agreement or forte performance oft
transactions herein contemplated by the respective Parties hereto except as contemplated
in Articles 4 and 5 herein.
10.1 A lotgatipp. To the best knowledge of Garfield, after reasonable inquiry,
there are no pending or, tote best knowledge of Garfield, threatened,judicial, municipal
or administrative proceedings, consent decree or,judgments which might affect Garfield's
ability to consummate the transaction contemplated hereby.
10.1.5 seal Ptoccedings. To the knowledge of Garfield, after reasonable
,
inquiry, no preliminary or permanent injunction or other order, decree, or ruling issued by
a governmental entity, and no statute, rule, regulation, or executive order promulgated to
be enacted by a governmental entity, shall be in effect which restrains, enjoins, prohibits,
or otherwise makes illegal the consummation of the transactions contemplated by this
Agreement.
10.1.6 True Codes. Garfield has delivered tote tel Owner true and complete
copies of (i) all material documents, agreements and draft agreements relating tothe
Property, the Project, or any portion thereof in Garfield's possession or control, (ii) all
material title reports, surveys, site plans, environmental reports, engineering reports, soil
report%, and governmental approvals, variances, permits and other authorizations with
respect to the Property, the Project,or any portion thereof in its possession or control; and
(iii) Garfield knows of no material facts in contradiction tote facts described in the
forgoing clauses (i) and(ii).
10.1.7 Corn, sation. Neither Garfield nor any of its Affiliates will get a
commission or other compensation in connection with any of the services performed
other than those specified in this Agreement, the Contract Documents, or the Project
Agreements.
10.2. Representations and Warranties of Hotel Owner. Hotel Owner hereby represents
and warrants to Garfield that the following statements are true as of the date hereof
10.2.1 Due Authorit , No Conflict. Hotel Owner has all requisite power and
authority to execute this Agreement and to carry out its obligations hereunder and the
transactions contemplated hereby. This Agreement has been, and the documents
contemplated hereby will be, duly executed and delivered by Hotel Owner and constitute
legal, valid and binding obligations enforceable against Hotel Owner in accordance with
the terms subject to principles of equity and the enforcement of equitable rights. The
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consummation y Hotel Owner of the transactions contemplated e is not in violation
of or in conflict with, or does it constitute a default under, any of the terms of any
agreement or instrument to which Hotel Owner is a party, or by which Hotelis
bound, or of any provisionof any applicable e or regulation y
governmental a i r of any provision of any applicable order,judgment or decree o
y court, arbitrator orove l authority.
1 .2. i ° `atic . No litigation is pending o , to the knowledgeof Hotel
Owner, threatened in court to restrain or enjointhe constructione Hotel and City
Facilities, or otherwise contesting the po s of Hotelor the authorization oft is
Agreement y agreements contemplated hereinor which might affect Hotel Owner's
ability to consummate the transaction contemplatedhereby.
ARTICLE 11
TERMINATIONI
.1. Termination Events. The following events shall allow for termination of this
Agreement and the Project:
11.1.1 Termination, r n i __9LPgqjWL.Md. ve a t ds,
After the Effective Date of thisAgreement but prior to the expenditure
cover the HotelCosts the expenditure of any of the Designever e
Funds,this Agreement may be terminated by any Party. Upontermination rs t to this
provision, Garfield and Hotel Owner acknowledge and agree that any costs advanced by
Garfield or Hotel Owner are not subject o reimbursement from the other Parties to this
Agreement.
1.1.2 Termina eon P Prior -to Pro'gqt� cements �eadline. Garfield or Hotel
Ownery terminate this Agreement after the Effective Date of this e e t and prior
tote Project Agreements Deadline, and thereupon, this Agreement shall be of no further
force or effect, and Garfieldof c a l e and agree that any costs
advanced el or Hotel Owner are not subject to reimbursement from the other
Parties to this Agreement.
11.1.3 Termination_Prior to ra°ect its line. The Hotel Owner may
terminate this Agreement after the Project Agreements Deadline and prior to the Project
Fundingi e and thereuponthis Agreemente of no further forceoreffect.
Upon a termination during this time period, the Hotel Owner, in connectioni e
Project, shall pay tote City the Hotel Design Fee in an amounte Hotel
Costs incurred to the date of termination. Further, Garfield specifically c o e es
that the Hotel 's obligations under this section shall not constitute a general
obligation of the Hotel Owner or indebtednessthe constitution or laws of the State
of Texas. Uponof the Hotel Designe, Hotel Owner shall retain o receive
ownership ssessio of allor ro c produced as a result of the expenditure of
the Hotel D&D Costs.
11.1.4 Termination For..Excess_ eqLCosts....wri o F nanci� Prior tot e
Project Funding Deadline, i (i) the cost of the City Facilities is greater than the City
Contribution, and Hotel Owner determines not to fund any budgeted costs in excess oft e
City Contribution, or(it)the cost of the Hotel is in excess of what Hotel Owner can or will
issue in Hotel Construction Phase Financing, ten this Agreementshall terminate and
Garfield and Hotel Owner acknowledge and agree Hotel Owner shall ay the City all
Hotel D&D costs but that any other costs incurred y Garfield or Hotel Owner are not
subject to reimbursement from the other Parties tot this Agreement.
11.1.5
f p _ om mn_tt e s. n the event the District of solddebt
obligations to e Hotel Construction Phase Financing by the Project Funding
Deadline or closed on the Hotel Construction hase Financing by the Hotel Financing
Closing or any reason other than a Permitted Non-Fundinggent, there this Agreement
shall terminate pursuant to (a) below. If the District fails to firml the Hotel Construction
Phase Financing fora Permitted Non-Funding Eve t, then this Agreement shall be
suspended and may be terminated pursuanto ) below. If the City has not sold its debt
y the Project Funding Deadline or closed on the City Contribution by the City
Contribution Closing, for any reason other than a Permitted Non-Funding Event, then this
Agreement shall terminate pursuant to (abelow. If the City fails to fund the City
Contribution by the City Contribution Closing fora e itted Non-Funding Ev , then
is Agreement shall be suspended and may be terminated pursuant to ( ) below. The
failure of the City to fund the City Financing Contribution or District to fund the Hotel
Financing Contribution shall of be an event of default under this Agreement.
(a) If this Agreement is ten-ninated as a result of a failure to sell or
close the Hotel Construction Phase Financing or a failure by the City to fund its
City Financing Contributionin each case for any reason other than a Permitted
Non-Funding ve t, then the Hotel Owner shall pay tote City the Hotel Design
Fee in an amount equal tote Hotel D&D Costs incurred up to the date of
termination. Upon a e of the Hotel Design Fee, Hotel Owner shall retain
and/or receive ownership and possession of all work product producedas a result
of the expenditure of the Hotel D&D Costs, Garfield specifically acknowledges
that the Hotel 's obligations er this section shall not constitute a general
obligation of the Hotel Owner or indebtedness under the constitution or laws of
the State of Texas.
) If this Agreement is terminated because the City fails to fund its
City Contribution by the City Contribution Closing or the District fails to fund the
Hotel Construction ase Financing for a Permitted Non-FundingEvent, then for
periodof two years from the date of the termination, this Agreement and the
Project shall be suspended fromthe date of the original planned City Contribution
Closing° If, within two years of such ate, the Permitted Non-Fundingevent is
resolved or is no longer in effect, i) the District may fund the Hotel Construction
Phase Financing if the City agrees to proceed tote City Contribution Closing
and (ii) the City may funde City Contribution, provided thate Hotel
Financing Closing as occurred. f the District cannot obtain the Hotel Financing
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Contribution it ° such two years, then this Agreementshall terminate and the
Hotel Owner shall pay to the CityHotel Design Fee in an amount equal to the
Hotel D&D Costs incurred up to the date of termination. Upa a e t of the
Hotel esiFee, Hotel Owner shallretain or receive
possession of or product produced as a result expenditure of the Hotel
Costs. Garfield specifically acknowledges that the HotelOwner's
obligations under this section shall not constitute a generalobligation of the Hotel
Owneror indebtedness under the constitutionr laws of the State of Texas.
Except it respect to the payment of the Hotel DesignFee, Garfield and Hotel
Owner acknowledge ee that any costs advanced by Garfieldr Hotel
Ownerof subject o reimbursement. If, however, during such o years, the
Permittedo f vet is resolved or is no longer in effect and the Hotel
Financing1 s° occurs and the City fails to fund the City Contribution
seven (7) business days of the HotelFinancing loin (theCity
Contribution Closing") o reason other than a Permitted Non-FundingEvent,
then the City shall reimburse Hotel Owner for its third-party fees and design
development costs less all Hotel D&D costs not paid to date by the HotelOwner.
Hotel Owner and Garfieldspecifically c o e that the City"
obligations under this section shall of constitutea general obligation of the City
or indebtedness under the constitution or laws of the State of Texas.
11. .6 Termi. ig..Pursuant to P .ect Agr
qqrnep theProject is
are not approved by the Project Agreements Deadline,this Agreement shall terminate.
11.1.7 Payment of Costs_yagqa ati _a Other than withrespect tat e
payment of costs upon termination as set forth above, the Parties acknowledge and agree
that any costs advancedy Garfield or Hotelrespect to the Project are not
subject to reimbursement from the other Parties to this Agreementar any reasonin the
event of a termination of this Agreement.
11.1.8 Termination_ o_Default. ThisAgreement all terminate upon an Event
of Default by any Party pursuant to Article 12 herein, and GarfieldHotel Owner
acknowledge and agree that any costs advanced withrespect to the Project are not subject
o reimbursement to the defaulting Party from the other Party to this Agreement for any
reason the event of a termination of this Agreement pursuant to a defaulty such y.
11.1.9 Ex irati __pf AgLeepignt. This Agreement shall expire upon Initial
Occupancy of e Hotel providedthat all requirements and obligations ave been fulfilled
under this Agreement and that the other Project Agreements arei force and effect.
11.2. Aptis e_ i Withinthirty ( calendar after expirationo
earliertermination of isAgreement, Garfield shall promptly account for and deliver to the
Hotel Owner any monies due Hotel Owner under this Agreement and shall delivertote Hotel
Owner r to such other personthe Hotel Owner shall designate in it n , all materials,
supplies, i e t, keys, contracts, documents and other books and re (including
and financial records maintained by eld) pertaining to this Agreement or to the
development, design or construction of the Hotel, the City Facilities, or the parking facilities,
whether in possession of Garfield or a person engaged or employed by Garfield. Garfield shall
also furbish all such information, take all such other actions and shall cooperate with the Hotel
Owner as Hotel Owner shall reasonably require in order toeffectuate an orderly and systematic
termination of Gar eel d's duties and activities. To the extent of available funds, the Hotel Owner
will reimburse Garfield for contractual obligations and expenses due to purchase orders placed
and commitments properly made with respect to the Hotel and City Facilities in accordance with
the provisions oft is Agreement; provided, that, unless the Hotel Owner in writing consented
otherwise, all contracts made by Garfield in connection with the work to be performed hereunder
shall provide either that the Hotel Owner shall have the right to terminate the same if this
Agreement is terminated, or that such contract is tenninable at will. Garfield shall promptly
assign to the Hotel Owner all of Gar field's rights in those purchase orders, commitments and
contracts if so requested in writing by the Hotel Owner. As provided herein, Garfield shall take
such actions as the Hotel Owner may reasonably require toeffect the termination of Garfield and
the substitution of a replacement developer with a third party appointee byte Hotel Owner.
Garfield shall also reasonably cooperate with the Hotel Owner and execute and deliver such
additional documents and instruments and other materials as the Hotel Owner may reasonably
require in connection with such ten-nination.
ARTICLE 12
EVENTS OF DEFAULT AND REMEDIES
111. Terms. The following terms shall have the following meanings under this Article-.
"Affiliate" means any entity owned by Garfield or owners of membership interests in
Garfield, or any other entity that directly or indirectly controls, is controlled by, or is under
common control with Garfield or such owners.
"Change in Control" means the occurrence of any transfer of(i) the ownership, directly
or indirectly, in the aggregate of more than fifty percent (50%) of the beneficial ownership
interests of Garfield or (ii) the possession, directly or indirectly, of the power to vote ten percent
(10%) or more of the outstanding voting securities of Garfield or otherwise direct or cause the
direction of the management policies of Garfield through ownership of voting securities or
beneficial interests,by contract or otherwise.
"Key Person"with respect to Garfield means(i) Ray Garfield and(ii)Greg Garfield,
12.2. Default b,,,,Gar eel d. The occurrence of any of the following shall be an "Event of
Default"by Garfield under this Agreement:
12.2.1 The filing by Garfield of a voluntary proceeding under present or future
bankruptcy, insolvency,or other laws respecting debtors' rights;
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12.2.2 The consent by Garfield to an involuntary proc i e reset or
future tcy, insolvency, r other laws respecting P rights;
. .3 The entering of an orderor relief against el or the appointment of a
receiver, trustee, or custodian fo all or a substantial part of the property or assets o
Garfieldin any involuntary proeee , and the continuation of such order,judgment or
degree unstayed fory period of ninety( consecutive days,
12.2.4 Garfield's failureGarfield' to pay or cause ai sum of money
owed y Garfield to the Hotelr pursuant to this Agreement, and the continuation 0
such failure for t ) days after e notice o o e applicable,
specifying the nature and extent of any such efa It with opportunity cure;
12. .5 Admission by Garfield in writing of its inability to pay its debts as they
mature;
12.2.6 Attachment, execution, or other judicial seizure of all or any substantial
part of e assets of Garfield, and remaining undi ss or undischarged foro 0
thirty ( ) business days after the levy thereof, if the occurrence of such attachment,
execution, or other judicial seizure would reasonablytend to have a materially adverse
effect o the performance by Garfieldof its obligations under thisAgreement;
1 . .7 A generals e t by Garfield for the benefitof creditors;
1 . .8 The failure 1 to perform or to observe t, obligation
or requirement of this Agreement not otherwise specifically as a default in this
Section 12.2. e continuation of such failure for thirty ) days after written notice
Wom the Hotel Owner specifying e nature and extent of any such a lt, o , if such
default cannot reasonably cured within suchy y period, the failure either(i)
to commence to cure such e a It within suchthirty ( ay period and to diligently
continue to pursue such efforts o cure to completion, or (ii) to cure such e It within a
reasonable e after the expiration of the first thirty ( )® e .o , in no event to
exceed ninety( ) days after the written notice of default;
12.2.9 Any action or omission on the part of Garfield,-any Key Person or any of
their respective representatives or Affiliates which o is to gross negligence,fraud,bad
faith, ill is ct or any misappropriationor misapplication of funds which has a
substantial adverse effect on the Project, as determined by the Hotel Owner in its sole
discretion;
12.2.10 Criminal misconduct, which has an adverse effect on the business affairs
of Garfield or the Project, as detenninedy the Hotel Owner in its sole discretion o
commission of a felony by Garfield, any Key Person or any of their respective
representatives orAffiliates;
1 . .11 The failure of Garfield to cause construction on the Project to beginy the
Construction Deadline, or to achieve Final Completion within eighteen (1 months after
the Hotel Owner gives Garfield the Notice To Proceed, unless the delay in completion is
attributable to any Hotel Owner Delay, Force Majeure, or the institution of litigation
concerning the Project or any component thereof by a third party and the continuation of
such failure for thirty (30) days after written notice from the Hotel Owner specifying the
nature and extent of any such default, or, if such default cannot reasonably be cured within
such thirty (30)-day period, the failure either (i) to commence to cure such default within
such thirty (30)-day period and to diligently continue to pursue such efforts to cure to
completion, or(ii) to cure such default within a reasonable time after the expiration oft e
first thirty (30)-day period, in no event to exceed ninety (90) days after the written notice
of default;
12.2.12 A termination of any Project Agreement resulting from an event of default
by Garfield thereunder;
12.2.13 A Change in Control without the prior approval of the Hotel Owner;
12.2.14 Subject tote Hotel Owner's satisfaction of its payment obligations
hereunder, the failure of Garfield to remove or cause to be removed any and all liens for
work done or materials furnished with respect tothe City Facilities within ninety(90)days
after notice to Garfield of the filing thereof, or
12.2.15 Subject tote Hotel Owner's sole and absolute discretion, the Hotel
Owner may, but is not obligated to, default and remove Garfield pursuant to Garfield's
"for cause" default under any agreements related to the Project between Garfield and its
Affiliates and Hotel Owner. Upon the occurrence of a "for cause" default under any of
such agreements, Hotel Owner's Board of Directors shall make a determination regarding
default by Garfield under this Agreement. If the Hotel Owner's Board of Directors
approves to default Garfield under this provision, the Hotel Owner shall notify Garfield
pursuant to 12.4 herein.
12.3. Default—bv Hotel Owner. The occurrence of any of the following shall be an
"Event of Default"by Hotel Owner under this Agreement:
12.3.1 The filing by Hotel Owner of a voluntary proceeding under present or
future bankruptcy, insolvency,or of laws respecting debtors' rights;
12.3.2 The consent by Hotel Owner to an involuntary proceeding under present
or future bankruptcy, insolvency,or of laws respecting debtors' rights;
12.3.3 The entering of an order for relief against Hotel Owner or the appointment
of a receiver, trustee, or custodian for all or a substantial part of the property or assets of
Hotel Owner in any involuntary proceeding, and the continuation of such order,judgment
or degree unstayed for any period of one hundred eighty(180) consecutive days;
12.3.4 Hotel Owner's failure to pay or cause to be paid when due any sum of
money owed by Hotel Owner to the City pursuant to this Agreement, and the continuation
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of such failure for thirty ( ) days after written notice from the City as applicable,
specifying t e nature and extent of any such a It with opportunity to cure;
12.3.5 The failure of Hotelr to perform or to observe any covenant,
obligation r requirement of this Agreement not otherwise specifically named as a default
in s Section 12.3, and the continuation of such Ire for thirty ( ) days after written
notice specifying the nature and extent of any such eault, or, if such a t cannot
reasonably be cured withinsuch (30)-day period, the failure either ( to commence
o cure such e t within suchthirty )w e 'o to diligently continue to pursue
such o to cure to completion, or (ii) to cure sucha ithin a reasonable time
after the expiration of the first thirty ( )® y period, in no event to exceed ninety (90)
says after the written notice of default;
1 .3.6 Any action or omission on the part of Hotel Owner, or any of its
representatives is o is to gross negligence, fraud, badill is ct or
y misappropriation or misapplication of funds;
1 . .7 Criminal misconductis as an adverse effect on the business or
affairs of Hotel Owner or commission of a felony by Hotel Owner, or any of its
representatives;
1 .3.8 The termination of the Operating Lease as a result of an event of default
y Hotel Owner thereunder;
12. .9 A termination of any Project Agreement resulting o event of default
y Hotel Owner thereunder; and
12.3.10 Subject to the District's satisfaction of its payment obligations the
Operating Lease, the failure of Hotel Owner to remove or cause to be removed y and all
liens or work done or materials famished withrespect to the City Facilities within ninety
days after notice to Hotel Owner of the filingthereof
12. . Remedies. Upon the occurrence and conti u ce of an Event of Default
described in Section1 .2, the Hotel Owner may elect (after written noticeo the Leasehold
Mortgagee subject to Leasehold Mortgagee's respective is to cure) to terminate this
Agreement by giving written noticesuch termination to Garfield, and this Agreement sal
terminate as of the date specified such oti (which ate shall be on or after the date of the
notice of f i atio ); provided, however, that the Hotel Owner shall have no right to terminate
the Agreement unless the Hotel Owner deliveredto Garfield a second notice which expressly
provides a e Hotel Owner will terminate withini ) days if the defaultis not
addressed as herein provide&
12. .1 Limited Waiverof ity.
(a) Notwithstanding anything to the contrary herein, Garfield and
tel Owner herebyc o e and agree that to the extent this Agreement i
subject to the provisions of Subchapter I of Chapter1, TEXAS LOCAL
GOVERNMENT CODE, as amended, the immunity of the HotelOwner from sit
is waived only as sett forth in Subchapter I of Chapter 271, TEXAS LOCAL
GOVERNMENT CODE.
) Should a court of competent jurisdiction determine the immunity
of the Hotel Owner fromsnit is waived in any manner other than as provided i
Subehapter I of Chapter 271, TEXAS LOCAL GOVERNMENT CODE, as
amended, the Parties hereby acknowledge and agree that in a suit against e
Hotel Owner for breach of this Agreement:
(i) the total amount of money awarded is limited o actual
damages in an amount not to exceed e balance due and owed by the
Hotel Owner under this Agreement;
(ii) the recovery of damages against the Hotel Owner may not
include consequential da a es or exemplary damages;
(in) the Parties may not recover atto e 's fees; and
(iv) the Parties are not entitled to specific performance or
injunctive relief against the Hotel Owner.
12.4.2 Li_„itation ,ate „Damages. In no events all y Party have any liability
under this.Agreement for any exemplary or consequential damages.
12.4.3 Notices.-to., Leasehold_Mcry_ . If at any time after any security
agreement, 1 e agreement, or collateral assignment (a "Mortgage") is executed
granting a security interest in this ee ent and other Project Agreements, and Hotel
Owner or the secured party under the Mortgage notifies Garfield in writingof the
existence of the Mortgage and furnishes Garfield with the address(es) to which the
Leasehold o a ee desires copies of notices to Hotel Owner and/or Garfield under this
Agreement e sent (each such secured a y under a Mortgage being a "Leasehold
Mortgagee"), then the Hotel Owner or Garfield, as applicable, shall thereafter ai y
certified mail) to each Leasehold o a ee or agent thereof, at the address so given, by
any method of delivery permitted hereunder any notices of default at the same time that
the notices of default are required to be set pursuant to this Agreement, The Hotel
Owner's or a el 's failure to deliver copies of any notices to any Leasehold Mortgagee
will not impair or negate the validity oreffectiveness of any notice delivered to Hotel
Owner and/or Garfield nor delay the Hotel Owner's or a gel 's right to pursue any
available re e y other than termination of this Agreement, but will delay the start of any
cure periods afforded to such ease ofd Mortgagee under this Section until such time as
such notices are delivered to the Leasehold Mortgagee, or, with respect solely to those
Events of Default for which no cure periodis applicable, eay the HotelOwner's or
G ield's right to terminate this Agreementand/or the other Project Agreements for a
period of thirty( )calendar days.
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12AA RighA to Cure, Any Leasehold Mortgagee, at its option, acting either
directly r indirectly through a designee, may, but shall of be obligated to, cure the
default and perform any other obligation of Garfieldnecessary o prevent the
termination of this Agreement and/or the other Project Agreements. All actions taken by
Garfield or the Leaseholdo or its designee will be effective to prevent
forfeiture of the rights of Garfielde or under the other Project Agreements as i
timely done and performedy Garfield. Any Leaschold Mortgagee , if Garfield
desires, provide that, as between any Leaseholdo a e or its designee and Garfield,
Garfield or the LeaseholdMortgagee or its designee, curing any suche a It o
defaults or performing any obligations on the part of Garfield, will be thereby subrogated
to or put in the positionof assignee of anyor all of the rights of Garfield under this
Agreement and the Project Agreements coveredLeasehold a ,
12a .5 Qp1jo.wam.Qf� qw a t. If this Agreement terminates or any reason,
there Hotel Owner or Garfield shall deliver noticeof the termination to all Leasehold
Mortgagees. Upon request by any LeaseholdMortgagee t . ninety( as after the
Leasehold o 's receipt of the notice of termination, of ill enter
intodevelopment etagreement ( "New Agreement") oHotel and
City Facilities with the Leasehold ee or its designee(including i out limitation,
Leasehold o ee Designee, as hereinafter ) on the same terms of this
Agreement promptly the Leasehold Mortgageeits designee satisfied the conditions
set forth in Section12.4.6. If more 1) Leasehold Mortgagee exercises the
foregoing option or a New Agreement, the Hotel Owner shall enter into a New
Agreement with the Leasehold Mortgagee, or its designee, having the highest priority
amongose Leasehold Mortgageeso exercised e option.
12.4.6 Pbliggationto Cure. In orderor any Leasehold Mortgagee or its designee,
including wit o t limitation, ease 1Mortgagee Designee, to become a party to a
New Agreement, the Leasehold Mortgagee or its designee, including wrt out limitation,
St first:
a) Cure any monetarye a It of Hotel Owner and/orGarfield;
e any non-monetary de a It of Hotel Owner or Garfield,
excluding ose that by their nature are incapable of cure by any other s or
entity (provided e successor to Hotel Owner or Garfield shall not be
permittedto continue such defaulto toOwner or Garfield or any similar
default with respect to the new successor o Hotel Owner or Garfield going
forward); and
c) Enter into a New Lease, asdescribed in the Ground
2. .7 Modifications- Surrender. Except in connectioni exercising ote
Owner's remedies following an Event of Default for which any Leasehold Mortgagee(s)
has received notics and beeno y applicable cure periods hereunder as set forth i
this Article 12, the Hotel Owner may not accept any surrender of or agree to any
termination of this Agreement and/or the Project Agreements without the prior written
consent thereto y any Leasehold o a s). Any attempt to do so without such
consentwritten ill be void and of no force and effect.
12.4.8 Rkhts—Cumulative. .All rights of any Leaschold Mortgagee, Leasehold
Mortgagee esi ee, or Leasehold Qualifyingo a ee Designee under this Agreement
e cumulative and non-exclusive.
114-9 ., s.. _p ___.. =a __Des__Desi Lmep. As used in this Agreement, any
"Leasehold o a ee Designee" shall include e designee selected y a Leasehold
Mortgagee, y third y that acquires the light under this Agreement
Leasehold o a e by assignment, as a purchaser, by foreclosure, deed-in-lieu of
foreclosure, sale or otherwise,provided that, in each case, Hotel Owner has approved such
designee in accordance with the terms of this Agreement (each a "Leasehold o a ee
Designee"). Notwithstanding anythingto the contrary herein the Leasehold Qualifying
Mortgagee esi ee (defined below) may assume the rights and obligations (except as set
forth in Section 1 a.6hereof) of Garfield under this ee ant or the other Project
Agreements or become a party to a New Agreement it out the prior written consent of
the Hotel Owner. Any other designee may do so only with the HotelOwner's prior
written approval, not to be unreasonably withheld or delayed. The provisions of this
Section 1 . .9 shall apply both with respect to this Agreement and any New Agreement
entered to under Section 1 . .5 or otherwise. "Leasehold a i ying Mortgagee
Designee" means the Leasehold Mortgagee and any wholly-owned subsidiary oft e
Leasehold Mortga ee.
12.4.10 Consent of Leasehold o ga gee R .?red o cancellation or surrender
of this Agreement y Garfield prior to the commencement of the Initial Term (as defined
in the GroundLease) shall be effective as to any Leaseholdo a ee unless resulting
from a failure or refusal by a Leasehold Mortgagee to comply timely with the provisions
of this Article 12 respecting the dire of Events of Default under this Agreement. No
Leasehold o a ee shall be bound by any material modification of this Agreement or
the other Project Agreements unless such o i icaio is consented to by such ease of
Mortgagee, is consents all not be unreasonably withheld less the modification
adversely affects the value of the Leasehold Mortgagee's collateral.
114.11 tic to_.ease of mtM_Q_qg4,&qp. Notwithstandinganything erein to the
contrary, if any Event of Defaultshall occur, the Hotel Owner shall have no right to
terminate this Agreement or the other Project Agreements unless the Hotel Owner shall
sliver notice to Leasehold o a ee of the HotelOwner's intent to so terminate at least
thirty (30) calendar ys in advance of the proposed effective date of such termination.
This notice of termination shall be in addition to any notices previously copied to the
Leasehold o a ee and shall specify that it is the notice required this Section
.12 belowshall apply if, within such thirty ( )
2. 1 . e provisions o action 12®
calendar ay termination nouce period, any such Leasehold o a ee shall (a) pay or
cause t®be paid all amounts then due and in areas as specified in the termination notice to
such Leasehold o a e which may become due during such i y ( ) calendar
® ®
day period, and (b) cure or cause to be cured the default, in good faith and with reasonable
diligence (excluding those that by it nature are incapable of cure by other person or
entity) or (ii) commence to exercise its rights with respect to Garfield's interest in this
Agreement by foreclosure, assignment in lieu thereof, preparing for a sale or transfer of
Garfield's interests or otherwise with respect to a Leasehold Mortgage (which may
include a petition to lift any stay imposed in bankruptcy proceedings and any application
to remove any injunction limiting its right totake such actions, so to as, in each case,
the same is diligently and continuously pursued). So long as such Leasehold Mortgagee
timely commenced cure under (i) above, and thereafter diligently pursued the same, the
thirty (30) day period shall be extended for so long as Leasehold Mortgagee diligently
prosecutes such cure up to but not to exceed an additional thirty (30) days from the
expiration of the initial thirty (30) day period. So long as such Leasehold Mortgagee
timely commenced the pursuit of the exercise of its rights under (ii) above, and thereafter
diligently pursued the same, the initial thirty (30) day period shall be extended to allow
Leasehold Mortgagee to pursue the exercise of such rights, provided that it continues to
diligently pursue same, but such extension shall not exceed an additional sixty (60) days
from the expiration oft e initial thirty(30)day period.
12.4.12 Procedure on Event of Default.
(a) Transfers After&Misrtipir VRok Event of Def It. Subjeettothe
an
provisions of Section .12.4.6, any Leasehold Qualifying Mortgagee Designee or
other permitted party tote Ground Lease or City Facilities Lease and/ or the
other Project Agreements may, upon acquiring Garfield's rights under this
Agreement and/ or the other Project Agreements, subject to the consent of the
Hotel Owner to the extent required in this Agreement with respect to any such
proposed transfer, sell and assign Garfield's rights under this Agreement and/or
the other Project Agreements on such terms and to such persons (but without
modifying this Agreement) and thereafter shall be relieved of all obligations of
Garfield under this Agreement and/or the other Project Agreements arising after
the too such transfer, provided (i) such transferee assumes in writing for the
benefit of Hotel Owner all of the obligations of Garfield under this Agreement
(except as set forth in ity Section 12.4.6fh) hereof) and the "Tenant" under the
Ground Lease and C i��-i—lities —Lease and (ii) the Hotel Owner is notified of
such transfer and provided a copy of such assumption promptly following such
transfer.
(b) Foreclosure Event a Pem-iitted Transfer. Notwithstanding any
other provisions of this Agreement to the contrary, any Foreclosure Event (as
defined below) shall be deemed to be a permitted transfer to the extent, and only
to the extent, the requirements set forth in this Agreement with respect to a
transfer of Hotel Owner or Garfield's interest herein have been satisfied.
(c) Post-Fore closer
qI Operation Notwithstanding any of provisions
of this Agreement, in the event of the acquisition of Garfield's interest herein
and/or in the other Project Agreements by any Leasehold Mortgagee Designee or
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y permitted purc as at a Foreclosure Event, the operation of the Project by or
on behalf of any such acquirer of ar el 's interest erei under this Agreement
all be subject tote provisions and requirements of this Agreement and the
Ground ease or City Facilities Lease, as applicable.
( "Foreclosure Event" shall mean and refer to any foreclosure of any
lien or security interest or conveyance in lieu of foreclosure with respect to any
Mortgage ursu t to which a Leaseholdo a ee Designee acquires ie '
rights, titles, interests and obligations (save and except those obligations a °se
to the level of a non-monetary default of Garfield, which Leasehold o a e or
Leasehold o a e Designee is not required to cure under this Agreement).
Foreclosure Events 1 not relieve Garfield of any of its obligations under this
Agreement.
12.5. Accounting. Upon the termination of this Agreement by reason of a default under
Section 1 . , Garfield shallrender an accounting tote Hotel Owner, and, without diminishing
the rights and remedies referred to in Section 1 . , from and after such date, the Hotel Owner
shall not have any further rights or obligations under this Agreement except as expressly
provided in this Agreement.
ARTICLE 13
MISCELLANEOUS
1 .1. Agsi enl. This Agreementand the duties and obligations set forth hereunder
are not assignable by any Party except specifically me late in this Agreement; provided
that Hotel Owner may pledge or assign its rights hereunder and under the Project Agreements as
security for the Hotel Construction Phase Financing; provided it is expressly understood that the
Property ownedy the City may not be used as security for such financing, provided, the
leasehold estate of Hotel Owner under the Ground Lease may be used as security fors c
financing.
13a2, cttl . mr► rencA,, Hotel Owner may retain and appoint such consultants and
advisers that it, in its sole discretion, deems necessary or appropriate to advise or represent Hotel
Owner on the development of the Project and otherwise erfo any act and exercise any
decision-makingauthority on behalfof Hotel Owner in relation to this Agreement or any other
agreement related to the Project. Hotel Owner shall notify Garfield as to its delegation in writing
prior tote Project Agreements ea line, and Garfieldmay rely on HotelOwner's delegation
for any purpose under this Agreement. Noticesto Hotel Owner delivereds t tot e
provisions of this Agreement shall be delivered to HotelOwner's designated agent under this
Section. Hotel Owner may at any time designate additional consultants and advisers hereunder
and may further revoke any designationat any time provided written otice of such esi ation
or revocation is provided to the Parties.
_ 3®
1 . . mProcurement� o� Goods andServices from is ,....c ll ..Underutilized_ .__Businesses.
In developing and constructing the Project, Garfield agrees to comply and cause the
Design-
iI er to comply withCity' oFaith Program.
13.4. e .° Mhip.: .mmr ..,and._ .Environmental Design. e construction of the Project
shall be able to meet . Green BuildingCouncil LEED minimumlevel certification
requirements.
1 .5. ,Intellec.. e Hotelill o allIntellectual r related
to the plans and specifications for the construction of the CityFacilities (the "City ac liti
IntellectualProperty Rights'), Garfield hereby assigns to the Hotel Owner all City Facilities
Intellectual ro e y Rights that Garfieldor any other member of the development team has or
may acquire in the future. The City FacilitiesIntellectual o e shall be conveyed
the Hotel Owner to the Cityto i e City Facilities upon its completion. The City will
grant a license to the District and its approved assignees to use, solely with regard tote Project,
all City Facilities IntellectualProperty is that the City will acquire upon completionoft e
City Facilities and may acquire in the future during the period in which the Ground Lease and
City acili i s Lease are in full force and effect. The Hotel Owner will own all Intellectual
Property related tote plans and specifications or the construction of the Hotel (the " oel
Intellectual Pro e"ty Rights").
115.1 The Parties acknowledge and agree the aforesaid assignment and usage o
e City Facilities Intellectual Property Rights are subject to the customary is of and
indemnification for the Project Architect, and are subject tot e terms of the Ground Lease
and City Facilities Lease Agreement.
1 .5.2 The Parties acknowledge and agree the aforesaid ss e t and usage o
e Hotel Intellectual Propertyis are subject to the customary is of
indemnification for the Project Architect and are subj ect to the terms of the Operating
Lease the Hotel Construction Phase Financing.
. . Controllin Provisions. To the extent of any discrepancy between this Agreement
and the provisions of the other ProjectAgreements, the provisions of the other Project
Agreements shall control. It is expressly stagy and agreed that this Agreement supersedes
all previous Development Services Agreements for the Project, except o the extent any such
obligations are re-stated s Agreement, in °c event those obligations shall survive as
provided erei .
1 . ° .In_ . ace. tel Owner all cause insurance to e tin during `o 0
construction on e City Facilities and Hotel as set forth in the GMP Contract. Upon completion,
the Hotel Owner or the District, as applicable, shall cause insurance to be maintained on the
Project during its operation, set forth in the Ground Lease, the City Facilities Lease and the
Operating Lease.
13.8. Waiver. failure of any Party to insist on strict performance of of the
terms or provisions of this Agreement or to exercise any option, right or remedy n in in this
-54-
Agreement, shall not be construed as a waiver or as a relinquishment for the future of such term,
provision, option, t or remedy. No waiver by any Party of any term or provision of this
Agreement shall be deemed to have been made unless expressed in writing and signed such
Party.
13.9. ev ._il v. If any clause or provision of this Agreement is or becomes illegal,
invalid, or unenforceable because of present or future laws or any rule or regulation of any
governmental body or entity, then the remaining parts of this Agreement shall not be affected,
less such invalidity would create undue hardship on a Party or is essential tote rights of any
of them, in which event such as the right to terminate this Agreement on written notice to
the other Parties.
13.10. Exhibits, Each exhibit referred to in this Agreement is attached to and
incorporated y reference in this Agreement.
13.11. Documents. Subject to any limitations which ay be set forth in of the City
Facilities Lease, if any, all as built drawings, plans, specifications and other documents prepared
for the City Facilities pursuant tot is Agreement shall remain the property of the Hotel Owner i
the Project is not completed. Upon termination oft is Agreement prior to Completion oft e
Project, the Hotel Owner shall be granted a perpetual license to use all plans, specifications an
other documents prepared for the Hotel and City Facilities. Such plans shall only be used y the
Hotel Owner on the Property.
13.12. Other Documentation, Each Party will provide tote other Parties any other
information or documentation, reasonably requested and consistent with the terms of this
Agreement.
13.1 . t r r t tiQ o For the purpose of construing this Agreement, unless the context
indicates otherwise, words in the singular number shall be deemed to include words in the plural
number and vice versa, words in one gender shall be deemed to include words in other genders,
and the word"person" shall be deemed to include a corporation, partnership or other legal entity.
Headings of Articles and Sections are inserted only for convenience and are not, and shall not be
deemed, a limitation on the scope of the particular Articles or Sections to which they refer.
1 .1 _ sic�z ® e this Agreement calls or re
approval, action o decisionof the Hotel Owner, its all d e approval, action or decision of
the HotelOwner's Board of Directors, unless the Hotel Owner's o of Directors has
delegated the authority to provide or make such approval, action or decision to the Hotel
Owner's Representative.
13.15. "Including". In t is Agreement, whenever general words or terms are followed
y the word "including" (or other forms of the word "include") and words of particularand
specific meaning, the phrase "including without limitation," and the general words shall be
construed in their widest extent and shall not be limited o persons or things of the same general
kind or class as those specifically etione in the words of particular and specific meaning.
-55-
13.16. Notices. All notices or other communications required or desired to be given with
respect to this Agreement all be in writing and shall be delivered by hand or by courier service,
sent by registered or certified mail, return receipt requested, bearing adequate postage,or sent by
nationally recognized overnight delivery service (such as Federal Express or UPS), or sent by
email or facsimile, and properly addressed as provided below. Each notice given by mail shall be
deemed to be given by the sender when received or refused by the Party intended to receive such
notice; each notice delivered by hand or by courier service shall be deemed to have been given
and received when actually received by the Party intended to receive such notice or when such
Party refuses to accept delivery of such notice; each notice given by overnight delivery service
shall be deemed to have been given and received on the next business day following deposit
thereof with the overnight delivery company; and each notice given by facsimile shall be deemed
to have been given and received upon transmission, provided confirmation of receipt is received
back by the sending facsimile prior to 5:00 p.m. local time at the sending location, or on the next
business day if after 5:00 p.m. local time at the sending location. on a change of address by
either Party, such Party shall give written notice of such change tathe other parties in accordance
with the foregoing. Inability to deliver because of changed address or status of is no notice
was given shall be deemed to be receipt of the notice sent, effective as of the date such notice
would otherwise have been received.
To Hotel Owner: Baytown Hospitality Public Facilities Corporation
2401 Market Street
Baytown, Texas 77520
Attn: President
with a copy to: Winstead PC
401 Congress Ave. Suite 2100
Austin,Texas 78724
Attn: David Dawson
To Garfield: Garfield Public/Private LLC
14785 Preston Road
Suite 480
Dallas, Texas 75254
Attn : Greg Garfield,President
fgtL g4ffigldppb�tj� Yate.com
with a copy to: Garfield Public/Private LLC
14785 Preston Road
Suite 480
Dallas, Texas 75254
Attn: Daniel Hennessy, Esq.
04111", C-0—m-
-56-
1 .17. kftgfirrqe eemgql. This Agreement constitutes the entire agreement among the
Par-ties with respect to the Project and supersedes all prior understandings and writings,
including, without limitation, the Pre-Development Services Agreement is shall be of no
further force oreffect upon execution of this Agreement, and this Agreement may be amended or
modified only by a writing signed y Hotel Owner and Garfield.
13.I , Fu rther Assurances. e Parties covenant to execute such additional oc ets
and instruments as may be reasonably necessary o provide for the coordinated develo e t,
financing and aeration of the Project.
13.19. Coatntei a s. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of whichtogether shall comprise but
single document.
13.20. No Joint Venture. It is acknowledged and agreed by and among the Parties that
the terms hereof are not intended to, and shall not be deemed to, create any partnership or joint
venture among the Parties. The past,present and future officers, elected officials, employees an
agents of the Hotel Owner do not assume any responsibilities or liabilities to any third y i
connection with the development, design, construction or operation of any of the improvements
contemplated y this Agreement. In addition, Garfield acknowledges and agrees that there shall
be no recourse against any of the aforesaid a ies, none of whom ill incur any liability in
respect to any claims based upon or relating tote Agreement.
1 . 1. Governmental Function. The issuance of the Bonds is a Governmental Function
and subject to the sole discretion of the District's Board of Directors, and the failure, inability or
determination not to issue the Bonds shall not be deemed or construed to constitute negligence,
willful misconduct or bad faithder this Agreement or any other Contract Document.
13.22. ispute Resolution. Any dispute, claim or controversy arising out of or relating
to this Agreement or the breach, tennination, enforcement, interpretation or validity thereof,
including the determination of the scope or applicability of this Section 1 .2 , shall be subject to
the following terms, conditions and procedures:
13.22.1 loi ial-, isp t��solulita . if a dispute arises out of or relates to this
Agreement or its breach, the parties shall endeavor to settle the dispute first through direct
discussions. If the dispute cannot be settled through irect discussions, the Parties may
endeavor to settle the dispute by mediation under the rules of the American Arbitration
Association before recourse to litigation. The location of the mediation, if any, shall be in
Harris County, Texas unless the Parties mutually agree otherwise. Once one Party files a
request for mediation with the other contracting party and with the American Arbitration
Association, the Parties agree to endeavor to conclude such mediation within sixty (6 )
says of the filing of the request.
3.2 .2 Work Continuance _.a ient. unless otherwise agreed writing, or
unless there are not available funds to compensate Garfield, Garfield shall continue its
services provided in this Agreement aintai the approved schedules during any
-57-
mediation proceedings. If Garfield continuesto perform, the Hotel Owner shall continue
to make payments in accordance with this Agreement.
13. 2.3 MMul . The Parties agree that all parties necessary to
resolve a claim shall be parties to the same mediation proceeding. Appropriate provisions
shall be included in all other contracts relating tot e services in this Agreement to provide
for the consolidation of mediations.
13.22. Cost_of ise e _Resolution. The Parties shall bear their own costs of
attorney's fees and other expenses incurred in any dispute resolution process unless a
courtawards to a prevailing party.
13.2 . _..ova Law. e validity o s Agreement any o its terms and
provisions, as well as the rights and duties of the Parties, shall be governed by the laws oft e
Late of Texas; and the exclusive venue for any action concerning s Agreement shall be in the
State District Court of Harris County, Texas.
13.24. mLimitation...on HotelLiability.ility. otwit st din i contained in this
Agreement or any of the other agreements or documents referred to herein or otherwise, Hotel
Owner shall not be liable for any costs, expenses, losses, damages, claims or actions, or any kind
or on any theory, under or by reason of or in connection with this Agreement, any of the other
agreements or documents referred to herein, the Project, the financing or otherwise, except
to the extent moneys are available therefor an applied thereto under and in accordance with the
documents pursuant to which the Hotel Financing Contribution is made.
[Execution Page Follows]
-
WITNESS the following signatures:
BAYTOWN HOSPITALITY PUBLIC
FACILITIES CORPORATION
Name:
`I`itl :
GA IELD PUBLIC/PRIVATE LLC
v..
Title:
Signature Page to Hotel and Convention Center Development Management Agreement
Exhibit.A
Exhibit
Exhibit A.
P gac rip—ti Q_n_QQmP_e nty-4-n—d—P rQ LeOt
Hyatt Regency Baytown Convention Center& Hotel
The Project includes a seven-story,208-key hotel,a 12,000-sq.ft.ballroom,4,500 sq.ft.of meeting space,
food and beverage service facilities,laundry and otherancillary functions required to support a full-service
convention center headquarters hotel. Also included are site improvements and surface parking for
approximately 450 cars that will support the Convention Center,Ship Store,Event Center,and Hotel.The
existing 170-car surface lot(lower tier)will be reconfigured to yield 250 parking spaces.200 new parking
spaces will be constructed on the upper-tier adjacent tote Convention Center and Hotel. The total
occupied space is approximately 160,000 GSF,
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