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Ordinance No. 9,305ORDINANCE NO. 9305 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING AND DIRECTING THE CITY MANAGER AND THE CITY CLERK OF THE CITY OF BAYTOWN TO EXECUTE AND ATTEST TO A LEASE OF PREMISES AGREEMENT WITH SOLID WASTE, LTD. INC., FOR OPERATION OF THE MARINA AND SHIP STORE IN THE BAYLAND WATERFRONT DISTRICT; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section 1: That the City Council of the City of Baytown, Texas, hereby authorizes and directs the City Manager and the City Clerk of the City of Baytown to execute and attest to a Lease of Premises agreement with Solid Waste, Ltd. Inc., for operation of the marina and ship store facility in the Bayland waterfront district. A copy of said agreement is attached hereto, marked Exhibit "A," and made a part hereof for all intents and purposes. Section 2: This ordinance shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the City of Baytown this the 24th day of January, 2002. 4? ('. PETE C. ALFARO, ayor ATTEST: J. .Y W. SMi1-1, City Clerk APPROVED AS TO FORM: o� ACIO RAM1REZjSA., City Attorney F:V eanenel My Doc umentsl CcunciNOI-02U anuar5ALeaseoftemiseAMarina &ShipStare BaylandlslandWithsdidWasteLtd .doc 0 LEASE OF PREMISES This lease is signed on this day of January, 2002, between The City of Baytown, Texas, a municipal corporation located in Hams and Chambers Counties, ( "Lessor ") and Solid Waste, Ltd. Inc., having its principal place of business at Baytown, Texas 77520 ( "Lessee "). The Lessor and Lessee agree as follows: DEFINITIONS Lessor: City of Baytown, Texas. Lessee: Solid Waste, Ltd. Inc. Premises Improvements: The Premises Improvements shall, include, but not be limited to, all signs, office equipment, point of sale cash registers, audio and video equipment, permanent fixtures, permanent furniture and permanent decor items, more particularly described on Exhibit "A," which is attached hereto and made a part hereof for all intents and purposes. Premises Improvements shall not include: (a) any consumable items including, but not limited to inventory, office supplies and paper goods, which costs shall be the sole responsibility of the Lessee; (b) site improvements, including but not limited to curb cuts, entryways, parking lots, parking lot lighting, sign pylons, sign monuments, walkways, all utility extensions, sprinkler systems, landscaping materials; and Lessor's Project Improvements: Lessor's Project Improvements shall include the following: (a) Premises Improvements, as more particularly described in Exhibit "A," and (b) all project site improvements constructed in accordance with approved architectural and engineering drawings, which shall include, but not be limited to, curb cuts, entryways, all parking lot lighting, sign pylons, sign monuments, walkways, utility extensions, sprinkler systems, and landscaping materials. Lease Commencement Date: The date this document is signed by all parties. Harbor Master Facility: The Harbor Master Facility shall include a ships store, boating slips, bathhouse, laundromat, and fuel and boat service dock, which will be staffed, operated, and managed by the Lessee in compliance with this Agreement. • Operating C osts: The operating costs shall be comprised of all direct costs associated with the operation of the slip rental and the bathhouse portion of the Harbor Master Facility. EXHIBIT A ./ • ARTICLE 1 Premises 1.01 The Bavland Harbor Development. The Lessor owns the tract of land in Harris County, Texas, more particularly described in Exhibit "B" (the "Premises ") which is a part of the Bayland Development f 1.02 Premises. The Lessor hereby rents and leases unto the Lessee, and the Lessee hereby takes and hires from the Lessor, a portion of the land of the Bayland Development described as follows: (a) The "Premises," which consists of the building outlined in red on the Plan which consists of approximately one thousand five hundred square feet (1,500 ft'-); located on the Premises parcel consisting of approximately thirty -nine thousand two hundred forty -seven square feet (39,247 ft'), together with all improvements, equipment, fixtures, machinery and appliances located therein or installed therein by the Lessor (the "Lessor's Project Improvements ") together with the fueling station and floating docks located on or adjacent to the Premises on which the building is situated. (b) The right of the Lessee and its agents, employees, customers, and invitees to use the parking areas and the other common areas and all rights, alleys, rights -of -way, easements, and appurtenances thereunto belonging or in any way appertaining to the Bayland Development on a non- exclusive basis in common with the general public and other lessees of the Bayland Development and their respective agents, employees, customers and invitees. Such non - exclusive right to use the parking facilities shall be subject to all of the terms and conditions imposed at any time by the Lessor or the Lessor's developer. ARTICLE 2 Term and Rental 2.01 Term. The Basic Term of this lease shall commence on the Lease Commencement Date, as herein defined, and continue thereafter until three (3) years have elapsed. No later than the end of the second year in the initial term, the Lessee shall notify the Lessor of Lessee's intent to extend or terminate the Lease at the end of the initial term. 2.02. Option Period. Provided Lessee has met all of the obligations of this lease, the Lessee is granted the right to extend the Term for an additional period of five (5) years. If the Lessee elects to extend the Term for the first additional period of five (5) years, the Lessee may also elect to extend the Term for a second additional period of five (5) years immediately following the first additional period. If the Lessee elects to extend the Term for the second additional period of five (5) years, the Lessee may also elect to extend the Term for a third additional period of five (5) years immediately following the second additional period. Except as provided by Section 2.01 Term, the option may be exercised by 2 ® giving the Lessor written notice thereof at least one hundred eighty (180) days before the expiration of the applicable term. 1 LJ 2.03. Removal of Lessee's Propert y. Upon expiration of this Lease, the Lessee shall have the right to remove from the premises any and all furniture, fixtures, trade fixtures, equipment and special finish items specifically identified as not having been paid for by the Lessor. All alterations, modifications, and/or repairs to the Premises must be approved in writing by the City Manager prior to such alteration, modification and repair being performed, and the same shall become the property of the Lessor upon installation and shall not be subject to removal as provided by this paragraph. Any and all indentations and differences in the conditions of the walls ceiling and floor surfaces shall be repaired at the sole cost and expense of the Lessee, for the Lessee hereby understands and agrees that the Lessee shall be obligated to repair, restore, renovate or redecorate the Leased Premises by reason thereof to the condition of the premises when the Lessor issued the certificate of occupancy, normal wear and tear as determined at the reasonable discretion of the City Manager, being excepted. The Lessee is also obligated to leave the Leased Premises in a safe condition, to cap off any wiring or plumbing to which the assets or property so removed were attached and to repair damage, if any, to exterior walls and exterior roofing caused by the Lessee in the removal of such assets and property. 2.04. RENTAL PAYMENTS. As rent during the Term of this Lease, Lessee agrees to pay Lessor rent in monthly payments as follows: January 1, 2002 $1.00 February 1, 2002 $1.00 March 1, 2002 $1.00 April 1, 2002 $1.00 May 1, 2002 $1,000.00 June 1, 2002 $1,000.00 July 1, 2002 $1,000.00 August 1, 2002 $2,000.00 September 1, 2002 $2,000.00 October 1, 2002 $2,000.00 November 1, 2002 $2,000.00 December 1, 2002, and the first of each subsequent month throughout the term and any option terms the monthly base rent shall be $3,000.00 per month. Starting January 1, 2004, all rent shall be increased yearly by an applicable CPI adjustment. The first CPI adjustment shall be calculated based upon the base rent due on January 1, 2004, and increased by (i) the Consumer Price Index (Urban) of the twelve months prior to January 1, 2004, or (ii) 12.5 %, whichever is less. The base rent shall again be increased each year thereafter based upon the base rent due the then previous year and either (i) the Consumer Price Index (Urban) of the twelve months prior to the five -year anniversary date or (ii) 12.5 %, whichever is less. The total CPI increase in any five year (5) term shall not exceed 12.5 %. 3 2.05. Additional Rent. Starting on January 1, 2003, and continuing through December 31, 2004, as additional rent, Lessee shall pay Lessor 5% of monthly gross revenues according to the formula below, which additional rent shall be paid monthly within 45 .calendar days after the end of the month. Such additional rent shall be calculated as follows: Additional Rent = 5% x (Monthly Gross Revenues — (Base Rent /.05)) By way of example: If monthly gross revenues in July of 2003 are $40,000 then additional rent would be $0.00. .05 x {40,000 - (3,000/.05)) = .05 x (40,000- 60,000) =.05 x — 20,000 = -1000 therefore no additional rent due. If monthly gross revenues in July of 2003 are $75,000 then additional rent would be $500.00. .05 x {75,000- (3,000 /.05)} = .05 x (75,000- 60,000) = .05 x 10,000 = 500 therefore $500.00 in additional rent would be due. If the above - referenced formula yields a negative product no additional rent shall be due. Total monthly rent shall not exceed $5,000.00 per month. Starting on January 1, 2005, and continuing throughout the term and any option terms, as additional rent, Lessee shall pay Lessor 5% of monthly gross revenues according to the formula below which additional rent shall be paid monthly within 45 calendar days after the end of the month. Such additional rent shall be calculated as follows: Additional Rent = 5% x (Monthly Gross Revenues — (Base Rent /.05)) If the above - referenced formula yields a negative product no additional rent shall be due. "Gross Revenues" as used in this section shall mean all amounts received from whatever source .which are received in connection with the operation of the Premises Improvements subject to offsets only for refunds, credit card company fee charges, employee discounts and sales tax. Lessee shall deliver to Lessor by the 15 th of each month, a report in a format approved by the City Manager the gross revenues of the previous month. Said report shall contain the basis for the payment and an affidavit from an officer of the Lessee verifying that all of the information on the submitted report is true and correct. Lessee must keep such reports and the supporting documentation therefore for at least 4 years. Lessor shall have the right at any time to audit any and all of the books and records which in any way relate to gross revenues or the calculation of additional rent to be paid to Lessor. Lessee shall make all of these records readily available for the examination within ten days of a request therefore. If any audit by Lessor shows a deficiency in the amount of additional rent paid to Lessor by more than five percent (5 %), then the cost of the audit shall be paid by Lessee. The additional rent due and the cost of the audit shall be paid within 10 days' written notice of such deficiency and the cost of the audit.2.06. Gross Lease. Except as otherwise provided for elsewhere in this lease, Lessee's sole monetary responsibility 0 4 • shall be the timely payment of rent as provided for in this Article 2 of the Lease. All payments required herein to be paid by the Lessee shall be due on or before the twentieth (20th) day of each month. If payment is not received at the appointed time, Lessee will be obligated to pay interest on delinquent payment in the amount of one percent (1%) per month. 2.07 No Partnership. Nothing herein contained shall be construed or held to make the Lessor and the Lessee partners in the conduct of any business. The relationship between the parties hereto is and shall at all time remain that of the Lessor and the Lessee. 2.08 Ri aht to Inspect Premises. The Lessor has the right to inspect the Premises at all reasonable times during the period of this Agreement or any extension thereof for inventory control purposes and to ensure compliance with the terms and conditions of this Agreement. 2.09 Emergency Management. In the event an emergency is declared by the Lessor, the Lessee hereby agrees to comply with all orders of the Emergency Management Coordinator or his authorized representative. ;lo 2.10 Construction of Additional Boat Slips._ The Lessor reserves the right to construct additional boat slips at any time in which the Lessor, in its sole discretion, deems it advisable to do so. Such additional slips shall become part of the Premises as herein defined; and the Lessor shall be entitled to additional compensation due to such addition: The amount of such compensation shall be determined at the completion of the construction of the additional slips by the parties. Both the Lessor and the Lessee understand and agree that they will negotiate such amount in good faith and that such amount shall not be less than the amount which the Lessor expend for debt service and additional maintenance. 2.11 Boat Slips for Use by Lessor's Emergency Vessels. The Lessor reserves the right to use at no cost or expense the number of boat slips necessary as determined at the sole discretion of the Lessor to accommodate its emergency vessels. As an alternative to the use of such slips, the Lessor may, again at its sole option, build slips for such purposes on the Premises or attached thereto or to any improvement thereon, including, but not limited to the boat slips and walkways built at the time of this lease or which may hereinafter be constructed. The election of any one option expounded above shall not constitute a waiver for the Lessor to take advantage of the other option at a later date. ARTICLE 3 Use and Occupancy 3.01 Purpose. The Lessee shall not use the Premises for any disorderly or unlawful purpose. The Premises shall be used by the Lessee for the purpose of operating a first -class Harbor Master Facility which shall include the operation and management of a ships store consisting of the sale of marine supplies and equipment of such size and type as is selected by the Lessee, and the sale of food, beverages and miscellaneous items for off - premises consumption, a fueling station and the floating docks /slip E • rentals. This shall not prevent Lessee from holding occasional special events in connection with the marina by obtaining the necessary temporary licenses and/or permits for serving food and alcoholic beverages. Any additional use not expressly mentioned herein must be approved in writing by the City Manager prior to the commencement of such use. 3.02 Operation and Maintenance Tasks. In the operation and maintenance of the Harbor Master Facility, the Lessee hereby understands and agrees to perform all of the following tasks and that such tasks are the sole responsibility of the Lessee: (a) to maintain facilities in a clean and orderly condition at all times; (b) to ensure all equipment, shelving, dispensers and displays are in good repair and are clean; (c) to restock all sales shelves, displays and tanks when inventory falls to twenty-five percent (25 %) of capacity; (d) to purchase and maintain all supplies and inventory; (e) to implement a marketing program geared to attract the general boating public to the ships store and marina; >+ (f) to develop policies and procedures, with approval of the City Manager, governing employee and customer activities and behaviors; (g) to implement and enforce the policies referred to in section 3.02(f); (h) to notify the City Manager without delay in writing of any incident regarding problems with boat owners, visitors, or the general public; (i) to prohibit itself and all third parties fiom undertaking major repairs of any boat that may result in unsightly or unsafe conditions in and around the marina and Harbor Master Facility; () to work, in conjunction with the Lessor to prevent damage to identified wetland habitats by intrusion of the general public or other man -made threats; (k) to develop and implement plans for quick and effective response and control of any threat to the environment, including, but not limited to, the containment of spills as well as notification to the City Manager as well as all appropriate agencies; (1) to develop all legal documents, rules and policies regarding the rental of boat slips; (m) to notify the City Manager without delay of any maintenance problems or equipment failures that require action by the Lessor; (n) to develop and implement a system for the satisfactory disposition of boat owners' complaints and grievances; (o) to manage and handle all complaints regarding the Harbor Master Facility, its operations and its use and to routinely apprise the City Manager of such complaints; 3.03 Maintenance and Utility Responsibilities. The Lessee will perform all janitorial and light maintenance functions at the Harbor Master Facility, which shall include, but not be limited to routine maintenance of docks, fueling station and ships store, and all maintenance pertaining to utility and cable connections at each boat slip. At the ships store, the Lessee shall maintain at all times an adequate inventory of goods. The Lessee shall be responsible for all utility costs associated with the Harbor Master 0 Wacility, except that Lessor shall contribute three hundred twenty-five dollars (5325.00) per month towards the electric bill for common area lighting. • 3.04 Conformance to Law. In conducting its business on the Premises, the Lessee agrees to conform to all applicable state, federal and local laws, ordinances, regulations and licensing requirements. The Lessee shall have the right to contest in good faith and by appropriate means any such law, regulation or licensing requirement. 3.05 Lessor's Covenant of Title and Quiet Enjoyment. The Lessor covenants and warrants that Lessor has the full right and lawful authority to enter into this lease for the full term hereof and that Lessor has good, valid and marketable title to the Premises. 3.06 Successors and Assigns. The covenants and agreements herein contained shall run with the Bayland Development and the Premises and shall be binding upon and inure to the benefit of the parties and their respective heirs, legal representatives, successors and assigns. 3.07 Parking. The Plan shows the Premises and the rest of the Bayland Development. The Lessor agrees and warrants that the Lessee and its agents, employees, customers, and invitees shall have the right (together with the other tenants of the Bayland Development and their respective employees, invitees and customers and the general public) to use all of the parking areas and other common areas shown on the Plan for vehicle parking purposes only. The Lessee understands and agrees that throughout the term of this lease, and any option terms hereof, the parking areas and the modes of ingress and egress may be changed from time to time at the sole option of the City Manager. 3.08 Hours of Business. The Lessee shall continuously during the entire term of the Lease and each extension thereof conduct and carry on the operations of a first -class Harbor Master Facility as above - described on the Premises which is designated for such purpose and shall keep the Premises open for business and cause the Lessee's business to be conducted therein as necessary to meet the level of demand for the facilities and services. Lessor and Lessee agree that the initial hours of operation will be seven days a week with a minimum of 50 hours per week. However, this provision shall not apply if the Premises should be closed and the business of the Lessee temporarily discontinued therein (i) on account of strikes, lockouts or similar causes beyond the control of the Lessee or (ii) in connection with any renovation or alteration of the Premises, which such renovation or alteration and the time allotted for the same has been previously approved in writing by the Lessor; provided, that such closure shall be only for the period of time necessary to complete the renovation or alteration. The Lessee shall to the satisfaction of the Lessor keep the Premises adequately stocked with merchandise and with sufficient sales personnel to care for the patronage, and to conduct said business in accordance with sound business practice. In the event of a breach by the Lessee of any of the conditions contained in this section, the Lessor shall have, in addition to any and all remedies at law or in equity, the right at its sole option to collect not only the minimum monthly rent, which shall be deemed to be the largest monthly rental paid by the Lessee prior to the date of the breach, but additional rent at the rate of one - thirtieth (1 /30th) of such 7 minimum monthly rent for each and every calendar day that the Lessee fails to conduct its business as herein provided. ARTICLE 4 Improvements 4.01 Lessee's Property. The Lessor agrees that all consumables, accessories and/or decor items of whatever kind and nature kept in or installed in the Premises by the Lessee or the Lessee's subtenants or licensees, which such property has not been provided or financed by the Lessor, shall not become the property of the Lessor and may be removed by the Lessee or the Lessee's subtenants or licensees. However, all fixtures (trade or otherwise), machinery, equipment, furniture, and permanent improvements to the building and other property of whatever kind and nature which are affixed in any way to the Premises may not be removed by the Lessee or the Lessee's subtenants or licensees, for such improvements purchased by the Lessee shall be and remain the Lessor's property. 4.02 Lessor's Property. The Lessee agrees that all fixtures (trade or otherwise), machinery, equipment, furniture and other property of whatever kind and nature kept in or installed in the Premises by the Lessee or the Lessee's subtenants or licensees, which such property has been provided or financed by the Lessor, shall not become the property of the Lessee and may not be removed by the Lessee or the Lessee's subtenants or licensees at any time during the term of the Lease or any option terms hereof. 4.03 Signs. The Lessee shall have the right to install as many signs in the format of its own designation as permitted by the Lessor or other governmental body having jurisdiction over the proposed signs. The Lessor's approval of signage shall be required, except when such signage relates to safety issues of the Lessee, its employees, agents, patrons, invitees, etc. Lessor shall design, furnish, install and maintain a sign holder of its choosing for the occupants of Bayland Island. Lessee shall design, install and maintain its individual sign to be placed in the sign holder installed by Lessor. Lessee shall secure a sign permit but shall not be assessed a permit fee for the sign in Lessor's sign holder. 4.04 Lessor to Maintain Utility Connections. The Lessor agrees to maintain necessary main, conduits and other utility lines necessary to supply water, secondary power, and sewerage service to the Premises. The Lessor shall be responsible for maintenance of phone, water, electric and cable lines up to but not including the connections at the box at each boat slip. The Lessor warrants that it has the right and power to maintain the above - referenced utility lines which run over or under the surface of the Bayland Development property. - 4.05 Lessor to Maintain Fuel Facilities and Lift Station. The Lessor will maintain the fuel facilities located on the premises and will provide a pump for sewage. 4.6 Lessor to Realign the Dock System. The Lessor warrants that it will realign the dock system as may be required as determined at the sole discretion of the City Manager. • 1 ARTICLE 5 Maintenance, Repairs and Alterations 5.01 By Lessor. The Lessor, at its sole cost and expense, shall maintain and repair the foundation, the building structure, exterior walls, roof, exterior windows, exterior doors and exterior mounted HVAC units on the roof of the Premises. The Lessor shall also maintain, at its sole cost and expense, the arounds and the landscaping materials adjacent to the Harbor Master Facilities and throughout the Bayland Development, including the daily expenses associated with cleaning and maintenance of the parking lot as well as maintenance of parking lot lighting. At all times during the term of this Lease, the Lessor shall make reasonable efforts to fix or repair any defect in the building, structure, exterior walls, roof, exterior windows and exterior doors of the Premises upon receipt of written notice from the Lessee that such repairs are necessary. The Lessor shall maintain, at its sole cost and expense, the canal which has been earlier dredged from the deeper waters of the bay adjacent to the Marina, in such a manner that boats of a size that are presently using the marina, can traverse to and from the marina by following such canal, without encountering the surface of the bay or other obstruction, which would interfere with such boats coming and going to and from the bay to the marina during normal tidal periods. If maintenance dredging becomes necessary, the Lessor agrees to begin the design and bid process for such maintenance dredging to begin within one year after the date that the Lessee has given the Lessor written notice that such maintenance dredging is needed. 5.02 By Lessee. The Lessee agrees at its own cost and expense to maintain the interior of the Premises in good condition and repair, ordinary wear and tear excepted. All maintenance and repair work undertaken by the Lessee shall be done in a workmanlike manner, leaving the Premises free of liens for labor and materials. In the event that a lien is filed against the Premises for work completed by a contractor or subcontractor, the Lessee shall immediately use its best effort to remove such lien within ten (10) days after the lien is placed on the property. In the event that a lien remains on the property after the expiration of ten days, the Lessee shall execute a bond for the sum of one hundred percent (100 %) of the total lien amount, in standard forms for this purpose, guaranteeing that such lien shall be released from the Lessor's property. Such bonds must be submitted to and approved by the Lessor in order for the Lessee to be in compliance with this provision. 5.03 Alterations. During the term of this lease, the Lessee may, after obtaining prior written approval from the Lessor, at its own expense make such alterations, repairs, and additions within the interior of the building on the Premises as may be permitted by laws and regulations_ in force at the time, as long as such alternations, repairs, and additions do not structurally weaken the building or render the same unsafe. The Lessee shall, at all times, hold the Lessor harmless from the payment for any work performed by the Lessee pursuant to the provisions of this paragraph. The cost of any changes which may be structural in character and not occasioned by alternations or additions made by the Lessee and which are ordered by a governmental authority after the building or improvements provided for under this lease are completed, shall be borne by the Lessor. 6 ARTICLE 6 Insurance, Damage, and Condemnation 6.01 Lessee's Insurance. The Lessee agrees to provide and keep in force, throughout the term of this Lease and any extensions thereof, commercial general liability insurance with an insurance company licensed to do business in the State of Texas who has an AM Best Rating of A or higher with limits of 51,000,000 per occurrence and $2,000,000 aggregate. The Lessee shall at all times during the term of this Agreement and any extension thereof maintain marina operators legal liability insurance in minimum limits of $1,000,000 per occurrence and $2,000,000 aggregate. In all liability policies as maybe required herein, the Lessee agrees to name the Lessor as an additional insured and to provide a notice of cancellation on all insurance of at least sixty (60) days. The Lessee may maintain the insurance required hereunder under a blanket policy only if such policy provides the protection for the Premises as required in this paragraph, and no aggregate policy for multiple premises shall be allowed. All insurance policies of the Lessee must be written on an occurrence basis. Additionally, the Lessee's commercial general liability insurance shall include premises and operations endorsements as well as package liquor liability endorsements, if applicable. All requirements of Texas law regarding the provision of Workers' Compensation insurance and workers' injuries must also be procured and maintained by the Lessee throughout the term of this lease and all extension thereof whether by a Workers' Compensation Insurance policy approved by the Lessor or pursuant to the Lessee's non - subscriber status. Such policies shall contain a waiver of subrogation in favor of the Lessor and all of the applicable above- referenced requirements shall be required for such policy The Lessee shall furnish the Lessor copies of certificates evidencing these policies prior to or simultaneously with the Lessor's issuance of the certificate of occupancy. All insurance policies provided by the Lessor as required herein will be secondary policies and will be subordinate to the Lessee's insurance policies as required herein. 6.02 Fire Extended and Liability Coverage. The Lessor agrees that at all time during the term it will keep the entire Premises continuously insured against the loss or damage by fire and all of the risks covered by a standard extended coverage endorsement in amounts not less than the full replacement value thereof. The Lessor agrees to deposit a copy of all insurance policies or certificates showing such insurance in force with the Lessee during the term of this lease upon request. The policy or certificates shall also include a provision for thirty (30) days written notice to the Lessee in event of any pending change in or cancellation of the insurance. The Lessor will carry liability insurance on the common areas. 6.03 Damage or Destruction by Casualty. If the Leased Premises shall be damaged by fire, an unavoidable accident or other casualty, the Lessor shall cause the damage to be repaired. The Lessor shall not be liable for any damage or destruction to the property on the Premises owned by the Lessee under the terms hereof or belonging to third parties, or for the loss of any such property from the Premises by theft or otherwise. 6.04 Lessee's Casualty Insurance. The Lessee will maintain primary and extended coverage insurance on its leasehold improvements in sufficient amounts as determined by the Lessee at all times 10 during the term of this Lease and any extensions thereof, or the Lessee may elect not to insure its leasehold improvements in any amount. 6.05 Condemnation. If the whole of the Leased Premises shall be acquired or condemned by expropriation or eminent domain for any new public or quasi- public use or purpose, then the term of this lease shall end as of the date that title vests in such proceeding and all rentals shall be paid up to that date_ 6.06 Partial Condemnation. If any part of the Premises shall be acquired or condemned as aforesaid and if the partial taking or condemnation shall render the Premises in both the Lessee's and Lessor's opinions unsuitable for the business of the Lessee, then the term of this lease shall end as of the date that title vests in such proceedings and rent shall be adjusted to the date of the termination. In the event of a partial taking or condemnation that is not extensive enough to render the Premises in both the Lessee's and the Lessor's opinions unsuitable for the business of the Lessee, then the term of this lease shall end as of the date that title vests in such proceedings and rent shall be adjusted to the date of the termination. In the event of a partial taking or condemnation that -is not extensive enough to render the Premises in both the Lessee's and the Lessor's opinions unsuitable for the business of the Lessee, then Lessor shall promptly restore the Leased Premises to a condition comparable to its condition at the time of such condemnation less the portion taken and, if the size of the Premises has been reduced by the taking or condemnation, the rent shall be reduced proportionately. 6.07 Sharing Award. In the event of any condemnation, whether whole or partial, the Lessee shall be entitled to receive any monies expressly apportioned by a court of competent jurisdiction in its final judgment. If no amount is so apportioned, the Lessee shall be entitled to nothing under the terms of this Lease. 6.08 Slip Rental Agreements. Slip rental agreements shall be in a standard form, which shall be preapproved by the City Manager. No change or modification to such form may be made unless preapproved by the City Manager, ARTICLE 7 Common Area Maintenance 7.01 Common Area Maintenance. The Lessor shall, at its sole cost and expense, be responsible for all maintenance and repair of the common areas of the development. Such maintenance and repair shall be of a high level and shall be conducted and performed by the Lessor on a continuing basis. 11 0 ARTICLE 8 Mortgages and Estoppel Certificates 8.01 Lessee's Mortgages. The Lessee shall not have the right to mortgage and encumber its leasehold estate, nor any of the items of personal property provided by or financed by the Lessor, but shall have the right to mortgage and encumber personal property, fixtures, trade fixtures, special finish items unique to the Harbor Master Facility's concept, equipment, furniture and merchandise located in or upon the Premises, which has not been provided or financed by the Lessor. In such event, or events, the Lessor hereby agrees for the benefit of such mortgagees or holders of indebtedness from time to time: A. Equipment Waivers. To sign any document waiving all rights of the Lessor to such equipment or other items of personal property and providing that any such lender or lessor may remove such items from the Premises in the event that the Lessee defaults on its loan or lease agreements., f B. Notices. That Lessor will give to any such mortgagee or holder of indebtedness simultaneously with service on the Lessee a duplicate of any and all notices or demands given by the Lessor to the Lessee from time to time. Such notices shall be given in the manner and be subject to the provisions of Section 9.01 and 11.02 of this Lease; C. Mortgagee's Liability. Except with respect to the period any such parties actually hold the leasehold estate created hereby, no liability for the payment of rental or the performance of any of the Lessee's covenants and agreements hereunder shall attach to or be imposed upon any mortgagee, trustee under any trust deed, or any holder of any indebtedness secured by any mortgage or security agreement upon such personal property, all such liability being hereby expressly waived by the Lessor. 8.02 Lessor's Right to Sell or Mortgage. The Lessor reserves the right to sell, assign, transfer or convey its interest in this Lease and the premises without prior consent of the Lessee, and the Lessor shall further have the right to encumber and mortgage the premises and assign rentals payable by the Lessee to the Lessor to any mortgagee or other secured party who obtains an interest in the land and buildings of which the premises are a part or upon any buildings hereafter placed upon land of which premises form a part; provided, however, that no such sale, assignment, transfer, conveyance or mortgage shall in anyway diminish the rights of the Lessee to use the premises as provided in this Lease, and any person or entity standing in the place of the Lessor as a result of any such sale, assignment, transfer, conveyance, or mortgage shall assume the duties and obligations to the Lessee as provided in this Lease as if such person or entity were the Lessor herein. CJ 8.03 Statement of Performance. The Lessor agrees to furnish the Lessee, and any of the Lessee's mortgagees, upon written request therefore, a statement wherein the City Manager shall, under oath, acknowledge that as of the date of such statement.the Lessee, to the best of the Lessor's knowledge, has performed and observed all of the covenants and conditions herein stated to be performed and observed 12 &by the Lessee, and that to the best of the Lessor's knowledge as of said date the leasehold estate hereby created and granted to the Lessee is free of all defaults hereunder (or if defaults exist, specifying the nature of the default); provided, however, the Lessor shall not be required to furnish the Lessee or any such sublessee or occupant with such statement more than once during any calendar quarter. Nothing contained herein or any statement subsequently issued hereby shall waive any of the Lessor's rights to enforce any of the provisions of this Lease against the Lessee. • Lessee: ARTICLE 9 Lease Defaults 9.01 Defaults by Lessee. The Lessor shall have the right to declare the Lease in default if the (a) Fails to pay any installment of rent or make any other payment of money due hereunder within seventy-two (72) hours after written notice of the failure shall have been given to the Lessee, or (b) Defaults in the performance of any other obligation imposed upon the Lessee hereunder and does not cure the default within fifteen (15) days after written notice describing the default in reasonable detail shall have been given the Lessee (or, if the Lessor in its sole discretion, determines that the default cannot reasonably be cured within the fifteen (15) day period, if the Lessee does not commence curative work within the fifteen (15) day period and prosecute the work to completion with reasonable diligence), or (c) Institutes proceedings, whether voluntary or otherwise, under the provisions of the Federal Bankruptcy Act or any other federal or state law relating to bankruptcy or insolvency, then the Lessor may immediately without any notice terminate this lease, or (d) Makes any assignment, then the Lessor may immediately and without notice terminate this lease or exercise any other rights or remedies available as a matter of law. 9.02 Notice of Default. Unless otherwise stated in this lease, if the Lessee commits a default, the Lessor shall give the Lessee a written notice specifying the default and the Lessee shall have the following periods of time to cure the default: (a) In the case of a failure to pay rent or any other default consisting of the failure to pay money, the Lessee must remedy the default within seventy -two (72) hours from the receipt of the notice, provided that if. (i) The Lessor is required to give the Lessee notice of nonpayment of rent three (3) times in any twelve month period, and 13 ® (ii) Each of the notices contains a reminder of the substance of this subpart 9.02(a), thereafter the Lessor shall no longer be obligated to give the Lessee notice of a default consisting of the nonpayment of rent and the Lessor may immediately terminate the lease. • (b) In all other cases with the exception of those cases hereinabove specified where the lease is subject to immediate termination by the Lessor, the default must be cured within fifteen (15) days from the receipt of the notice or, if the default is not reasonably susceptible of being cured within the fifteen (15) day period, commence curative work within the fifteen (15) day period and prosecute it to completion with diligence. The determinations regarding whether the default is reasonably susceptible to being cured within the above- referenced time frame and whether the Lessee is commencing curative work with diligence shall be made at the reasonable discretion of the Lessor. 9.03 Remedies on default. If any such default occurs and is not cured within the time allowed by paragraph 9.02, the Lessee understands and agrees that the Lessee shall become immediately liable for all amounts due or which would have become due under the term of the lease or any extension thereof. Furthermore, in the event of such default, the Lessor, in addition to any other rights which the Lessor may have under law or under the provisions of this Lease, shall have the following options, subject to the Lessee's rights under paragraph 9.06, below: (a) Immediately to re -enter and remove all persons and property from the Leased Premises. Such property may be removed and stored in a public warehouse or elsewhere at the cost of, and for the account of, the Lessee, all without service of notice or resort to legal process and without being deemed guilty of trespass, or becoming liable for any loss or damage which may be occasioned thereby. Such re- entering and removal of persons or property from the Leased Premises shall not be deemed to preclude the Lessor from exercising any other options granted by this lease. (b) To proceed for past due installments, reserving its rights to proceed later for the remaining installments and to exercise any other option granted by this lease. (c) Immediately to cancel this lease and to proceed in any manner against the Lessee for past due installments. (d) To cancel this lease and re -enter the Leased Premises and to re -let the Premises in the manner set forth below. (e) Otherwise, the Lessor may avail itself of any rights under the laws of the State of Texas to evict the Lessee and obtain occupancy of the Premises and to recover any past due rent and damages until the Premises shall have been released, all as more fully provided in paragraph 9.04 hereafter. 14 ® 9.04 Should the Lessor elect to re- enter, under any provision of this lease, or should the Lessor take possession pursuant to legal proceedings or pursuant to any notice provided for by law, the Lessor shall have the right and the ability to make such alterations and repairs as the Lessor determines is reasonably necessary in order to re -let the Premises and may re -let the Premises or any part thereof. This re- letting shall be for such rental and on such terms as the Lessor may deem advisable, including a lease on a monthly basis or for a term extending beyond the term of this lease. All payments received by the Lessor from such re- letting for the unexpired term of this lease shall be applied: first, to the payment of any costs and expenses of such reletting, including attorney's fees and the cost of such alterations and repairs; second, to the payment of any indebtedness other than rent due from the Lessee to the Lessor; third, to the payment of the present value, at a discount rate of eight percent (8 %), of the rent due and unpaid hereunder. If such rentals received from the re- letting are insufficient to pay the amount owed by the Lessee, then the deficiency shall be paid during that month by the Lessee hereunder, to the Lessor. Such deficiency shall be calculated and paid monthly in the manner provided above. The Lessee may request and shall be granted access to the Lessor's books and records in order to ascertain the status and accuracy of its account with the Lessor. Notwithstanding any other provisions hereof, in making the repairs and alterations, re- letting the premises and exercising its other rights hereunder, the Lessor shall mitigate and minimize the damages suffered by the Lessor and the amounts that shall be due by-the Lessee hereunder. • 9.05 Failure to strictly and promptly enforce the conditions set forth above shall not operate as a waiver of the Lessor's rights. The Lessor expressly reserves the right always to enforce prompt payment of rent and to treat the failure to pay rent in accordance with this lease as a default, regardless of any indulgences or extensions previously granted. The waiver by the Lessor or the Lessee of any breach of this lease shall not be deemed a waiver of any subsequent breach of the same or any other term or condition of this lease shall be deemed to have been waived by the Lessor or the unless such waiver is in writing and signed by the Lessor or the Lessee. 9.06 Any and all defaults reasonably declared by the Lessor shall be final and binding upon the Lessee. If the Lessee receives a default notice but in good faith denies that it is in default (in whole or in part) the Lessee may prevent the Lessor from exercising the rights or remedies set forth in this Section 9 by taking the following steps: (a) The Lessee shall remedy that part of the default as to which there is no dispute within the time allowed by paragraph 9.02. (b) As to the disputed part of the default, the Lessee shall either: (i) Remedy the alleged default within the time allowed by paragraph 9.02 with full reservation of the Lessee's right to recover from the Lessor the amount paid and costs incurred by the Lessee if it is ultimately determined that a default did not exist, or (ii) Furnish the Lessor within the time allowed by paragraph 9.02 with security approved by the Lessor as adequate in amount to cure the default if a default is ultimately 15 • determined to exist, provided that the Lessor may not withhold the approval unreasonably. The security shall consist of cash, obligations of the United States (or any agency thereof), of certificates of deposit issued by a national bank and shall be held by a national bank approved by the Lessor as agent or custodian for the parties. 9.07 In the case of a dispute as to the existence of a default, the Lessee may, in lieu of or in addition to its rights under paragraph 9.06, assert its right and defenses in any other manner permitted by law. ARTICLE 10 MISCELLANEOUS 10.01 Assignment and Subleasing. The Lessee may not assign this lease in whole or in part or sublet all or any part of the Leased Premises without the prior written consent of the Lessor. Notwithstanding any assignment or sublease, the Lessee shall remain dually liable on this lease and shall not be released from performing any of the terms, covenants and conditions of this lease. 10.02 Notices. All notices required or permitted to be given hereunder may be given by letter sent via registered or certified mail, return receipt requested, telegram, or any other form of written communication and shall be deemed to be duly served and given for all purposes: (a) To the Lessor when received at: City of Baytown Attn: City Manager P.O. Box 424 Baytown, Texas 77522 Fax: 281 - 420 -6586 (b) To the Lessee when received at Lessee's office: Solid Waste, Ltd. Inc. Attn: Tim Hazelwood P.O. Box 838 Baytown, Texas 77522 Fax: 281-422-4580 as the case may be. Notices to a mortgagee or a trustee or sublessee shall in like manner be mailed to its or their respective last known addresses. Any party may change the address for the giving of notices to it by giving due notice of the new address to the other parties, provided that the new address must be at a place in the United States where the mail and either mailgrams or telegrams or similar communications 16 • are regularly received. Notice given by mail shall be deemed given three (3) days after the date of the mailing of the same to the above - referenced address. • 10.03 Entire Agreement. This lease, including the exhibits hereto, contains all the agreements between the parties hereto with respect to the Premises and may not be modified orally or in any other manner than by an agreement in writing, signed by all the parties hereto or their respective successors in interest. 10.04 Gender and Name. Words of any gender used in this lease shall be held to include any other gender, and words in the singular number shall be held to include the plural when the sense requires. 10.05 Headings. The headings as to contents or particular articles or sections herein are inserted only for convenience, and they are in no way to be construed as a part of this lease or as a limitation on the scope of the particular sections to which they refer. 10.06 Consents. Wherever either the Lessee's or the Lessor's consent or approval is required or desired, such consent or approval shall not be unreasonably withheld. 10.07 Rent on Termination. Upon any termination of this lease, other than under Article 9 hereof, all rent paid but not earned shall not be refunded. 10.08 Force Maieure. Neither the Lessor not the Lessee shall be deemed in violation of this lease if it is prevented from performing any of the obligations hereunder by reasons of strikes, boycotts, labor disputes, embargoes, shortage of material, acts of God, acts of public enemy, acts of superior governmental authority, weather conditions, floods, riots, rebellion, sabotage, or any other circumstances for which it is not responsible or which is not in its control, and the time for performance, except for payment of monies due the Lessor by the Lessee, shall be automatically extended by the period the party is prevented from performing its obligations hereunder. 10.09 Effective Date of Lease. This lease shall be effective as of the date the last party hereof has executed this lease, and references herein as to the "date this lease is signed" and words of similar import, shall mean such date. 10.10 PnMent of Legal Fees. Any other provision of this Lease notwithstanding, upon issuance of a final judgment in a court of law, of competent jurisdiction, in an action in which the Court has ruled on a dispute between the Lessor and the Lessee, the party against whom the judgment has been rendered shall be responsible for payment of all court costs and the reasonable attorney's fees of the prevailing ply. 10.11 Texas Law. The construction interpretation and performance of this Agreement shall be governed by the laws of the State of Texas. 17 ® 10.1 ? Venue. Both parties hereby irrevocably agree that any legal proceeding arising out of or in connection with this Agreement shall only be brought in the District Courts of Harris County, Texas or in the United States District Court for the Southern District of Texas, Houston, Harris County, Division. • 10.13 Liquidated Damages. Both the Lessee and the Lessor agree that time is of the essence in the payment of all monies due pursuant to this lease and that the time allotted for each monthly payment described herein is reasonable times for the payment of each, taking into consideration all conditions, including but not limited to, the economic environment and conditions prevailing in this locality. The Lessee and the Lessor understand and agree that a breach of this contract as to time of payment will cause damage to the Lessor and further agree that such damage cannot be accurately measured and that ascertainment will be difficult. Therefore, as part of the consideration for the awarding of this lease, the parties agree that for each and every calendar day any payment due hereunder or any portion thereof remains delinquent as set forth in the lease, the Lessor may charge and the Lessee shall pay as part of the monthly lease amount owed the sum of one hundred dollars (S 100) as minimum liquidated damages. However, the foregoing agreement as to liquidated damages constitutes only an agreement by the Lessor and the Lessee as to the minimum amount of damages which the Lessor will sustain in any event by reason of the Lessee's failure to make payments within specified time periods. Should the Lessor suffer damage over and above the minimum amount specified by reason of the Lessee's failure to timely pay in strict accordance with the lease, the Lessor may recover such additional amount. The Lessor will have the right to recover such amount from the Lessee; all such remedies shall be cumulative and the Lessor shall not be required to elect any one nor deemed to have made an election by proceeding to enforce any one remedy. Such per day liquidated damage payment shall terminate and no longer be due and payable from the Lessee to the Lessee upon the happening of either of the following events: (1) re -entry of the Leased Premises by the Lessor, or (ii) termination of this Lease by the Lessor, provided, however, termination of such liquidated damage payment shall not terminate or affect the right of the Lessor to collect such other damages as are set forth and contained in this Lease as a result of the breach of the terms and provisions hereof by the Lessee. 10.14 Litter and Pollutants. The Lessee hereby guarantees that no pollutant, effluent, liquid or solid waste material, litter, trash or garbage issued from the Leased Premises is allowed to collect in the waters or in the vicinity of the Premises. 10.15 Fire System. The Lessee shall be responsible for ensuring that all fire fighting systems and equipment is regularly inspected and remains in the highest degree of readiness. 10.16 Consent. The Lessor by this Agreement does not give consent to litigation and the Lessor hereby expressly revokes any consent to litigation that it may have granted by the terms of this Agreement, charter or applicable state law. 1s • 10.17 INDEMNITY. THE LESSEE AGREES TO AND SHALL INDEMNIFY, HOLD HARyILESS AND DEFEND, THE LESSOR, ITS OFFICERS, AGENTS AND EMPLOYEES, FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, DAMAGES, CAUSES OF ACTION, SUITS AND LIABILITY OF EVERY KIND, INCLUDING ALL EXPENSES OF LITIGATION, COURT COSTS, AND ATTORNEYS' FEES FOR INJURY TO OR DEATH OF ANY PERSON, OR FOR DAMAGE TO ANY PROPERTY, ARISING OUT OF OR IN CONNECTION WITH THE WORK DONE BY THE LESSEE UNDER THIS CONTRACT, WHERE SUCH INJURIES, DEATH OR DAMAGES ARE CAUSED BY THE JOINT NEGLIGENCE OF THE LESSOR AND ANY OTHER PERSON OR ENTITY. IT IS THE EXPRESSED INTENTION OF THE PARTIES HERETO, BOTH THE LESSEE AND THE LESSOR, THAT THE INDE -KNITY PROVIDED FOR IN THIS PARAGRAPH IS AN INDEMNITY BY THE LESSEE TO INDEMNIFY, PROTECT AND DEFEND THE LESSOR FROM THE CONSEQUENCES OF THE LESSOR'S OWN NEGLIGENCE, WHERE THAT NEGLIGENCE IS A CONCURRING CAUSE OF THE INJURY, DEATH OR DAMAGE. FURTHERMORE, THE INDEMNITY PROVIDED FOR IN THIS PARAGRAPH SHALL HAVE NO APPLICATION TO ANY CLAIM, LOSS, DAMAGE, CAUSE OF ACTION, SUIT AND LIABILITY WHERE THE INJURY, DEATH OR DAMAGE RESULTS FROM THE SOLE NEGLIGENCE OF LESSOR UNNHXED WITH THE FAULT OF ANY OTHER PERSON OR ENTITY. 10.18 Guarantor. For the consideration herein expressed which is hereby acknowledged sufficient and received, Tim Hazelwood (the "Guarantor "), hereby guarantees all payments and liabilities of the Lessee and the performance of all obligations of the Lessee under the terms and conditions of this Lease and all extensions thereof. It is expressly agreed by the parties hereto, the Guarantor, the Lessee and Lessor, that throughout the initial term of the lease and all extensions thereof, the guaranty provided in this paragraph is a guarantee by the Guarantor to guaranty the performance of all of the Lessee's obligations under this agreement, including, but not limited to, operating a first -class Harbor Master Facility and the payments of all amounts owed by the Lessee hereunder. 10.19 Severability. All parties agree that should any provision of this Agreement be determined to be invalid or unenforceable, such determination shall not affect any other term of this Agreement, which shall continue in full force and effect. 10.20 No Third Pally Beneficiaries. This Agreement shall not bestow any rights upon any third party, but rather, shall bind and benefit the Lessee and the Lessor only. ® 10.21 Authority to Enter Contract. Each party has the full power and authority to enter into and perform this Agreement, and the person signing this Agreement on behalf of each party has been properly <V authorized and empowered to enter into this Agreement. The persons executing this Agreement hereby represent that they have authorization to sign on behalf of their respective corporations. 10.22 Agreement Read. The parties acknowledge that they have read,understand and intend to be bound by the terms and conditions of this Agreement. 10.23 Multiple Originals. It is understood and agreed that this Agreement may be executed in a number of identical counterparts each of which shall be deemed an original for all purposes. 10.24 Advertising fund. The Lessor shall establish a fund to be used to promote the use and development of the Bayland Island development in general. The fund shall be established in the annual amount no less than $2,500.00 and shall be expended at the sole discretion of the City Manager. 10.25 Pre paid rent. Lessor shall pay to Lessee any rent which were prepaid to Lessor or Lessee's predecessor for periods inclusive of this lease term. Lessee shall cooperate with and assist Lessor in securing any such prepaid rents from Lessee's predecessor. IN WITNESS WHEREOF, the parties hereto have executed this lease as of the day and year opposite their signature, said lease to be effective the first date set forth above. LESSEE (Date) By: tz,--kk-,Solid astes td. Iric. GUARANTOR Tim Haze ood (Date) LESSOR Monte Mercer, City Manager (Date) • City of Baytown, Texas 20 • ATTEST: GARY SMITH, City Clerk APPROVED AS TO FORM: ACIO RAMIREZ, , City Attorney STATE OF TEXAS § COUNTY OF HARRIS § Before me on this day personally appeared Tim Hazelwood,in his capacity as President of Solid Wastes Ltd.,Incd.►m on behalf of such corporation,known to me to be the person whose name is subscribed to the fo; q ,ent and acknowledged to me that he executed the same for the purposes and considelRthe. )sed. Gc+'•7 El SUBS•,:7 D 17411 SWORN before me thi ay of , 2902. Pu lic in for the St exas STATE OF TEXAS COUNTY OF HARRIS § Before me on this day personally appeared Tim Hazelwood, in his capacity as President of Hazelwood Enterprises,Inc.,on behalf of such corporation,known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. (� SUBSCRIBED AND SWORN before ni ?7 day of , 200 ���\011111111NI1/////1��/ � YPU'• ° Not O. lic in for the tate of Texas 73 S- • t. 44tE _ • '••,ExpIRq. 21 �����'/4 /0f25-05``\\``��� 61 STATE OF TEXAS § COUNTY OF HARRIS § Before me on this day personally appeared Monte Mercer, in his capacity as City Manager of the City of Baytown, on behalf of the City of Baytown, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. SUBSCRIBED AND SWORN before me this day of , 2002. Notary Public in and for the State of Texas 0 C: \Documents and Setting\ignacio ramirez\My Documents \Bay and Island \Hazelwood lease \Harbanmsterldoc 22 • • EXHIBIT A List of the premises improvements, office equipment, cash registers, permanent fixtures ext. 0 r1 L� EXHIBIT B DRAWING OF THE SHIPS STORE AND MARINA i {