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Ordinance No. 14,786 ORDINANCE NO. 14,786 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, APPROVING A GROUND LEASE AGREEMENT, CITY FACILITIES UNIT LEASE AGREEMENT, BOOKING AGREEMENT, MARINA SITE PARKING AGREEMENT, INTERLOCAL AGREEMENT, AND A CONDOMINIUM DECLARATION, RELATING TO THE BAYTOWN HOTEL AND CONVENTION CENTER PROJECT; AUTHORIZING THE CITY MANAGER TO EXECUTE CERTAIN DOCUMENTS RELATED TO THE PROJECT; APPROVING OTHER MATTERS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. WHEREAS, the Baytown Municipal Development District(the"District") was created by the City of Baytown(the"City"),pursuant to Chapter 377,Texas Local Government Code(the"Act"); and WHEREAS,the District and the City desire for the District to finance, construct, own and operate a convention center hotel (the "Hotel") and to enter into a facilities lease with respect to operation of a convention center(the"Convention Center," and with the Hotel, the "Project") in the City; and WHEREAS, the Act authorizes and empowers, and the District desires, to issue revenue bonds ("Bonds") to finance the Project; and WHEREAS, the City desires to approve certain agreements to support the financing,construction, and operation of the Project; and WHEREAS, the City has been presented with and examined forms of documents related to the issuance of bonds and the Project, including a Ground Lease Agreement, a City Facilities Unit Lease Agreement, a Booking Agreement, a Marina Site Parking Agreement, an Interlocal Agreement, and a Condominium Declaration(collectively, the "City Documents") each attached as an exhibit hereto; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,TEXAS: Section 1: The facts and recitations contained in the preamble of this ordinance are hereby found and declared to be true and correct. Section 2: The City hereby approves the City Documents, which are attached hereto and incorporated herein for all intents and purposes as follows: Exhibit A Ground Lease Agreement, Exhibit B City Facilities Unit Lease Agreement, Exhibit C Booking Agreement, Exhibit D Marina Site Parking Agreement, Exhibit E Interlocal Agreement, and Exhibit F Condominium Declaration. Section 3: The City hereby authorizes, empowers, directs and ordains that the City Manager of the City, in comiection with the issuance of the Bonds, to perform all acts and things and to execute, acknowledge and deliver the City Documents and all related certificates, financing statements, instruments and other papers,whether or not herein mentioned,as the City Manager may determine to be necessary and desirable in order to carry out the terms and provisions of this ordinance as well as the terms and provisions of the City Documents. Section 4: The City hereby authorizes, empowers, directs and ordains, that the City Clerk of the City, from time to time and at any time, do and perform all acts and things and to give and execute certifications and affix the corporate seal of the City to all City Documents, certificates, financing statements, instruments and other papers,whether or not herein mentioned,as the City Clerk may determine to be necessary and desirable in order to carry out the terms and provisions of this ordinance, as well as the terms and provisions of the City Documents, such determination to be conclusively evidenced by the performance of such acts and things and the execution of any such certificate. Section 5. All actions taken by the City Manager or City Clerk in connection with the above- described agreements are hereby ratified and affirmed in all respects. Section 6: If any section, paragraph, clause or provision of this ordinance is for any reason held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this ordinance. Section 7: 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 v to of the City Council of the City of Baytown this the 5"' day of August, 2021. 06&�� ATTEST: BAY70 LA RA ALVARADO,MayorTennPro F {y • :r �n 8 ANGELA 7 SON, I m CG k �TF E�p APPROVED AS TO FOfRAM:: OF t ��Cx V t 2au KAREN L. HORNER, City Attorney 2 EXHIBIT A Ground Lease Agreement 3 EXHIBIT B City Facilities Unit Lease Agreement EXHIBIT C Booking Agreement EXHIBIT D Marina Site Parking Agreement EXHIBIT E Interlocal Agreement EXHIBIT F Condominium Declaration EXHIBIT F Modified Deed 9 Exhibit "A" GROUND LEASE AGREEMENT between THE CITY OF BAYTOWN,TEXAS, as Lessor and BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT as Lessee City of Baytown Hotel and Convention Center Project Dated as of August ,2021 Table of Contents Page ARTICLE 1 DEFINITIONS, RULES OF CONSTRUCTION...................................................2 Section1.01 Definitions........................................................................................................2 Section 1.02 Rules of Construction .....................................................................................8 ARTICLE 2 GRANT OF LEASE; TERM; RENT......................................................................9 Section2.01 Granting Clause..............................................................................................9 Section 2.02 Covenant of Quiet Enjoyment .......................................................................9 Section2.03 Term.................................................................................................................9 Section 2.04 Permitted Use of Premises..............................................................................9 Section 2.05 Reservations of Rights....................................................................................9 Section2.06 Rent................................................................................................................11 ARTICLE 3 DEVELOPMENT AND CONSTRUCTION OF THE PROJECT....................I I Section 3.01 Lessor's Approval Required for All Future Construction........................11 Section 3.02 Lessor's Approval of Construction Documents for the Project................11 Section 3.03 Lessor Approval of Project Plans and Specifications................................12 Section 3.04 Lessee's Security for Performance..............................................................12 Section 3.05 Default in Construction................................................................................12 Section 3.06 Commencement and Completion of Construction.....................................12 Section3.07 Change Orders..............................................................................................13 Section 3.08 Incomplete Submissions; Resubmissions....................................................13 Section 3.09 Coordination of Construction with Lessor.................................................13 Section 3.10 Payment of Bills for Construction...............................................................13 Section 3.11 All Liens and Rights are Subordinate to Lessor........................................14 Section 3.12 Permits and Ordinances...............................................................................14 Section 3.13 Construction Site...........................................................................................14 Section 3.14 Reports and Information..............................................................................14 Section 3.15 Final Completion of Improvements ............................................................14 ARTICLE4 INSURANCE...........................................................................................................15 Section 4.01 During Construction............................................. ..................15 ...................... Section 4.02 Upon Completion ..........................................................................................15 ARTICLE 5 ADDITIONAL COVENANTS OF LESSEE........................................................15 Section5.01 Taxes...............................................................................................................15 Section5.02 Utilities...........................................................................................................15 Section 5.03 Maintenance of the Premises .......................................................................16 Section 5.04 Compliance with Laws .................................................................................16 Section 5.05 Operation of the Project...............................................................................16 Section 5.06 Mortgaging of the Leasehold .......................................................................17 Section 5.07 Assignment and Subletting...........................................................................17 ARTICLE 6 PROPERTY CONDITION; ENVIRONMENTAL MATTERS.........................17 i Table of Contents (continued) Page Section 6.01 As-Is Condition of the Property...................................................................17 Section 6.02 Environmental Conditions...........................................................................18 Section 6.03 Environmental Covenants of Lessee...........................................................18 ARTICLE 7 CONDOMINIUM ...................................................................................................19 Section7.01 Units ...............................................................................................................19 Section 7.02 Condominium Declaration...........................................................................19 Section 7.03 Effect of Condo Documents..........................................................................19 ARTICLE8 UNIT MORTGAGES.............................................................................................21 Section 8.01 Right to Mortgage Units...............................................................................21 Section 8.02 Default and Termination..............................................................................21 Section8.03 Notice..............................................................................................................22 Section 8.04 Material Notices............................................................................................23 Section 8.05 Non-Disturbance Agreements......................................................................23 Section 8.06 No Lessee Lien on Fee...................................................................................23 Section8.07 Exculpation....................................................................................................23 Section 8.08 Third Party Beneficiary ...............................................................................23 ARTICLE 9 DEFAULTS AND REMEDIES; TERMINATION .............................................23 Section 9.01 Lessee's Default.............................................................................................23 Section 9.02 Lessor's Remedies.........................................................................................23 Section 9.03 Interest Rate..................................................................................................24 Section 9.04 Cumulative Remedies...................................................................................24 Section9.05 No Trespass....................................................................................................24 Section 9.06 Cost Reimbursement ....................................................................................24 ARTICLE 10 CASUALTY AND CONDEMNATION..............................................................24 Section10.01 Casualty .........................................................................................................24 Section 10.02 Condemnation...............................................................................................26 ARTICLE 11 REPRESENTATIONS AND WARRANTIES...................................................27 Section 11.01 Representations of Lessor ............................................................................27 Section 11.02 Representations and Warranties of Lessee.................................................27 ARTICLE 12 LESSOR'S PURCHASE OPTION......................................................................27 Section 12.01 Lessor's Purchase Option.............................................................................27 Section 12.02 Exercise Notice..............................................................................................27 Section 12.03 Purchase Price...............................................................................................27 Section12.04 Closing............................................................................................................28 Section12.05 Title.................................................................................................................28 Section 12.06 Closing Costs .................................................................................................28 ARTICLE 13 GENERAL PROVISIONS...................................................................................28 Section13.01 Notices............................................................................................................28 ii Table of Contents (continued) Page Section 13.02 Estoppel Certificates.....................................................................................29 Section 13.03 No Waiver of Rights by Lessor....................................................................29 Section 13.04 No Liability of Lessor...................................................................................29 Section 13.05 Rights are Cumulative..................................................................................29 Section 13.06 Construction and Binding Effect.................................................................30 Section 13.07 Amendment, Changes and Modifications; Waivers..................................30 Section 13.08 Modifications to City Facilities Lease.........................................................30 Section 13.09 Execution of Counterparts...........................................................................30 Section 13.10 Law Governing Construction of This Lease...............................................30 Section 13.11 Limitation of Liability..................................................................................30 Section 13.12 Memorandum of Lease.................................................................................30 Section 13.13 No Waiver of Sovereign Immunity..............................................................30 Section13.14 No Merger......................................................................................................30 Section13.15 Audits.............................................................................................................30 iii Exhibit A Legal Description of the Property Exhibit B Initial Title Exceptions ,r s. —1— - GROUND LEASE AGREEMENT This GROUND LEASE AGREEMENT(this"Lease")is made and entered into as of 1,2021 (the"Effective Date")by and between THE CITY OF BAYTOWN,TEXAS,a Texas municipal corporation and home-rule city of the State of Texas principally situated in Harris County, Texas ("Lessor" or the "City"), and BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT, a Texas non-profit corporation ("Lessee" or the "MDD"). (Lessor and Lessee are referred to herein individually as a "Party" and collectively as the "Parties".) BACKGROUND: A. Lessor is the owner of that certain parcel of land located in corporate limits of the City of Baytown, County of Harris, State of Texas being more particularly described by metes and bounds on Exhibit A attached hereto and made a part hereof for all purposes (the "Property"); and B. Lessor determined that it is in the best interests of the City and its residents to construct a full- service,upper-upscale hotel and convention center that will include public meeting space and related public infrastructure and facilities as well as certain surface parking, landscaping, hardscaping and other amenities(collectively,the "Project"). C. At an election held on May 5,2001,the citizens of the City authorized the creation of the MDD and the imposition of a sales and use tax at a rate of one-half of one percent for the purpose of financing development projects beneficial to the City and the MDD, pursuant to Chapter 377, Texas Local Government Code,as amended., ,and the Parties desire that the MDD develop,construct,and equip the Project. D. The Parties intend that the development of the Project will consist of two components, including(i) an upper-upscale, full-service hotel, having approximately 208 rooms to include guestrooms and suites, appropriate support facilities such as a restaurant(s), a lounge(s) or bar(s), supporting back- of-the-house areas, and food preparation facilities, to the extent not constructed as City Facilities, together with such other amenities and features characteristic of a full-service hotel (the "Hotel"); and (ii) a public, City-owned convention center facilities, certain surface or structured parking and certain public facilities and infrastructure(the "City Facilities"). E. Concurrently with the execution of this Lease, Lessee shall create and form the Condominium (as defined herein) by the execution (by Lessor, as owner of the fee interest in the Property and by Lessee,as"Declarant")and recordation of the Condominium Declaration(as defined herein), in the Official Public Records of Harris County,Texas,pursuant to which,Lessee,as declarant,shall create two condominium units designated as the "Hotel Unit" (which shall consist of the Hotel), and the "City Facilities Unit" (which shall consist of the City Facilities). F. Upon the creation of the Condominium regime,the MDD will convey the City Facilities Unit to the City pursuant to that certain [CONDO DEED] dated as of the date hereof between the City and the MDD. G. Pursuant to Section 377.073, Texas Local Government Code, the MDD has adopted a bond resolution dated[ ],2021,whereby the MDD has authorized the issuance of(1) its Baytown Municipal Development District First-Lien Hotel Revenue Bonds (Baytown Convention Center Hotel), Series 2021, (ii) its Baytown Municipal Development District Second-Lien Hotel Revenue Bonds (Baytown Convention Center Hotel), Series 2021, and (iii) its Baytown Municipal Development District Combination Third-Lien Hotel Revenue and Limited Sales Tax Revenue - 1 - Bonds (Baytown Convention Center Hotel), Series 2021, in the aggregate principal amount not to exceed $[ ], (collectively, the "Series 2021 Bonds"), for purposes of financing the cost of designing, developing, constructing, equipping and furnishing the Hotel and for funding certain reserves and other required amounts in connection therewith. H. The MDD has issued the Series 2021 Bonds in the aggregate principal amount of$ pursuant to the Indenture(as hereinafter defined),which such amounts shall be used by the MDD to fund the cost of designing, developing,constructing, furnishing and equipping the Project. 1. Upon the conveyance of the City Facilities Unit from the MDD to the City, the City will enter into that certain City Facilities Unit Lease with the MDD,whereby the City will lease the City Facilities Unit to the MDD(the "City Facilities Lease"). J. As the tenant under the City Facilities Lease, the MDD shall use, operate and lease the Project for the benefit of the City,and the revenues from the operation of the Project shall be the primary source of repayment of the Series 2021 Bonds. K. The MDD has entered into a Hotel Services Agreement dated as of even date herewith (the "Hotel Services Agreement")with Hyatt Corporation(the "Operator")pursuant to which the Operator will manage and operate the Hotel for an initial period set forth in the Hotel Services Agreement. L. In order to achieve the foregoing, Lessee desires to lease the Property from Lessor, and Lessor is agreeable to same,subject to the terms and conditions hereinafter set forth herein. ACCORDINGLY, in consideration of the premises, the rental to be paid hereunder, the mutual covenants and agreements herein set forth by each Party to be kept and performed, and for other good and valuable consideration, the receipt, adequacy, and sufficiency of which are hereby expressly acknowledged by each Party,Lessor and Lessee do hereby agree to the terms of this Lease,and do hereby mutually covenant and agree as follows: Article 1 Definitions,Rules of Construction Section 1.01 Definitions. The capitalized terms used in this Lease shall have the meanings given to them in this Section 1.01. Capitalized terms contained this Section 1.01 shall control over any capitalized terms contained in the Preamble or Recitals hereof "Act" means the Texas Uniform Condominium Act, V.C.T.A. §82.001, et seq., as amended from time-to-time. "Applicable Laws" means the Entitlements and all present and future ordinances, laws, rules, regulations, directions, orders, licenses, court decisions and other requirements of all Governmental Authorities(including without limitation health,safety,environmental,and natural resource protection laws) and all covenants, restrictions and conditions now or hereafter of record, in each case applicable to (i) the design, development, construction, installation and furnishing of the Project; and (ii) the use, occupancy, possession and operation of the Premises, or otherwise applicable to Lessee or to the Premises or any part thereof, as the same are enforced or implemented by any Governmental Authority having jurisdiction over or with respect to the Premises. "Additional Bonds" has the meaning given in the Indenture. -2- "Architect" means BOKA Powell LLC. "Bond Documents" has the meaning given in the Indenture. "Bonds" means, collectively, the Series 2021 Bonds (as defined in the Recitals hereof) and any Additional Bonds hereafter issued by the MDD pursuant to and in accordance with the terms of the Indenture. "Change Order" has the meaning given in Section 3.07 hereof. "City" means the City of Baytown, Texas, a home-rule city organized under the constitution and laws of the State. "City Facilities" means a public, City-owned convention center facilities, certain surface or structured parking and certain public facilities and infrastructure as part of the Project to be constructed by Lessee for the benefit of the City,as provided herein and in the Construction Documents. "City Facilities Lease" means that City Facilities Unit Lease Agreement dated concurrently herewith,between the City,as landlord,and the MDD,as tenant,as the same may be amended,supplemented or modified in accordance with the terms hereof and thereof. "City Facilities Unit" means the unit designated as the City Facilities Unit in the Condominium Declaration. "Commencement Date" has the meaning given in Section 2.03 hereof. "Condominium" means the condominium created by the execution and recordation of the Condominium Declaration. "Condominium Association"means the"Association"created under the Condominium Declaration. "Condominium Declaration" means the condominium declaration for the Condominium to be executed by Lessor,as the owner of the Property,and by Lessee,as Declarant thereunder,and to be notarized and recorded in the Official Public Records of Harris County,Texas. "Construction Documents" means, with respect to the Project (i) the Development Management Agreement, (ii) the Design-Build Contract, (ii) the Plans and Specifications, (iii) the Design Services Agreements, (iv) the Pre-Opening Services Agreement, and (v) any other contracts, if any, relating to the design, development,construction, furnishing or equipping thereof. "Contract Price" has the meaning given in Section 3.02 hereof. "Declarant" means the MDD,the declarant under the Condominium Declaration. "Default" has the meaning given in Section 9.01 hereof. "Defaulting Owner" has the meaning given in Section 7.03(b)hereof. "Design-Build Contract" means that certain Design-Build Agreement dated ], 2021 with the Design-Builder for the design, construction, equipping and furnishing of the Project, as amended -3 - by the GMP Amendment, and as may be further amended or modified in accordance with the terms hereof and thereof. "Design-Builder" means DPR Construction, a California general partnership, together with its permitted successors and assigns. "Design Services Agreement(s)" means (i)the [BOKA POWELL CONTRACT], and(ii) any other design services, engineering services, or professional consulting services agreement entered into by the Design-Builder with respect to the Project. "Development Management Agreement" means that certain Development Management Agreement dated October 17, 2019 between Lessee and the Development Manager for the provision of professional development management services with respect to the Project, as amended from time to time. "Development Manager" means Garfield Public/Private LLC, a Texas limited liability company, together with its pennitted successors and assigns. "Effective Date" has the meaning given in the Preamble hereof. "Enforcement Proceeding" has the meaning given in Section 8.02(f)hereof. "Entitlements"mean plats,zoning,site development permits,building permits and any other permits and approvals(or any modifications of the foregoing) from any Governmental Authorities or other Persons under Applicable Laws that are required in connection with the design, development, construction, furnishing, and equipping of the Project. "Environmental Claim"means,but is not limited to,any claim,demand,action,cause of action,suit, loss, cost, damage, fine, penalty, expense, liability,judgment, forfeitures, proceeding, or injury,threatened, sought, brought, or imposed, that seeks to impose costs or liabilities for: (a) pollution or contamination of the air, surface water, groundwater or soil with Hazardous Materials; (b) solid, gaseous, or liquid waste generation, handling,treatment, storage, disposal, or transportation of Hazardous Materials; (c)exposure to Hazardous Materials; (d) the generation, handling, treatment, transportation, manufacture, processing, distribution in commerce, use, storage or disposal of Hazardous Materials; (e) injury to or death of any Persons directly or indirectly connected with Hazardous Materials and directly or indirectly related to the Property;(f)destruction or contamination of any property directly or indirectly in connection with Hazardous Materials; (g) any and all penalties directly or indirectly connected with Hazardous Materials; (h) the costs of removal of any and all Hazardous Materials from all or any portion of the Property; (i) costs required to take necessary precautions to protect against the release of Hazardous Materials at, on, in, about, under, within, near or in connection with the Property in or into the air, soil, surface water, groundwater, or soil vapor, any public domain, or any surrounding areas; 0) costs incurred to comply, in connection with all or any portion of the Property, with all Applicable Laws with respect to Hazardous Materials; (k) the costs of site investigation,response,and remediation of any and all Hazardous Materials at,on,about,under,within, near or in all or any portion of the Property;or(1)any asserted or actual breach or violation of any Applicable Laws with respect to Hazardous Materials. "Environmental Laws" means any federal,state or local statute, law,ordinance,code,common law, rule, regulation, order or decree, regulating, relating to or imposing liability or standards of conduct concerning the protection of the environment,natural resources,health and safety,and/or activities involving any asbestos, asbestos-containing materials, materials presumed by law to contain asbestos, PCBs, petroleum, petroleum byproduct (including but not limited to, crude oil, diesel oil, fuel oil, gasoline, lubrication oil, oil refuse, oil mixed with other waste, oil sludge, and all other liquid hydrocarbons, -4- regardless of specific gravity) natural or synthetic gas products, radioactive materials, and/or hazardous or toxic substances, chemicals or materials, or any other waste, materials, pollutant or contaminant that is regulated to protect the environment, as may now or at any time hereafter be in effect, including without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act, the Resource Conservation and Recovery Act,the Clean Air Act,the Clean Water Act,the Toxic Substances Control Act, the Emergency Planning and Community Right-To-Know Act,and the Occupational Safety and Health Act. "Environmental Reports" means,those certain Phase I and Phase II Environmental Site Assessment Reports covering the Property dated ,2021, prepared by Professional Service Industries,Inc. "Exercise Notice" has the meaning given in Section 12.02 hereof. "Force Majeure" has the meaning given in Section 8.02(d)hereof. "GMP Amendment" has the meaning given in Section 3.02 hereof. "Governmental Authority" or"Governmental Authorities" means any and all federal, state, county and city governments, and quasi-governmental authorities, including but not limited to all agencies, subdivisions and special purpose districts thereof, having jurisdiction over the development, design and construction of the Project or the use of the Premises,or any political subdivisions or special purpose districts with whom Lessee has entered into agreements for funding or other incentives. "Ground Lease Obligations" has the meaning given in Section 1.02(b)(i)(H). "Hazardous Materials" means asbestos, asbestos-containing materials, materials presumed by law to contain asbestos, polychlorinated biplienyls ("PCBs"), petroleum, petroleum byproducts (including but not limited to, crude oil, diesel oil, fuel oil, gasoline, lubrication oil, oil refuse, oil mixed with other waste, oil sludge,and all other liquid hydrocarbons,regardless of specific gravity),natural or synthetic gas products, radioactive materials, and/or any hazardous or toxic substance, chemical or material, or any other environmentally regulated substance or material, waste, pollutant or contaminant, defined as such or regulated by any Environmental Laws. "Hotel"means the upper-upscale,full-service hotel to be constructed by Lessee as part of the Project as provided herein and in the Construction Documents, having approximately 208 rooms to include guestrooms and suites,appropriate support facilities such as a restaurant(s),a lounge(s)or bar(s),supporting back-of-the-house areas, and food preparation facilities, to the extent not constructed as City Facilities, together with such other amenities and features characteristic of a full-service hotel. "Hotel Services Agreement" means that Hotel Services Agreement dated ], 2021 between the MDD and the Operator for the operation of the Project, as the same may be amended, supplemented or modified in accordance with the terms hereof and thereof. "Hotel Unit" means the Unit designated as the Hotel Unit in the Condominium Declaration. "Improvements" means any and all buildings and improvements from time to time located on the Property, including without limitation the Units, all additions, alterations and improvements thereto or replacements thereof and all fixtures, machinery, landscaping, hardscaping, sidewalks, signage and equipment installed therein or affixed thereto necessary for the proper operation of such buildings and improvements. -5 - "Indenture" means that Indenture of Trust dated as of[ , 2021 by and between the MDD, as issuer, and Wells Fargo Bank, N.A., as Trustee, as the same may hereafter be amended, modified or supplemented in accordance with the terms hereof and thereof. "Infrastructure Rights" has the meaning given in Section 2.05(c) hereof. "Initial Title Exceptions" means the exceptions and encumbrances set forth in Exhibit B attached hereto. "Lien" has the meaning given in Section 3.11 hereof. "Lessee" means the MDD,together with its permitted successors and assigns. "Lessor" means the City. "Lessor Provided Utilities" has the meaning given in Section 5.02(b)hereof. "Lessor's Representative" means Broaddus&Associates, Inc. "Material Modification" means any modification to the final approved Plans and Specifications which would constitutes a significant deviation from the final approved Plans and Specifications in terms of the overall concept, quality, scope or purpose of the Project. "MDD" means the Baytown Municipal Development District, a political subdivision of the City pursuant to Chapter 377,Texas Local Government Code,as amended. "Operator"means Hyatt Corporation,a Delaware corporation,together with its permitted successors and assigns. "Owner" means the owner of a leasehold interest or fee simple title in and to a Unit, which in any event, shall include, without limitation, the MDD as the owner of a leasehold interest in the Hotel Unit and as the owner of a sub-leasehold interest in the City Facilities Unit. "Non-Defaulting Owner" has the meaning given in Section 7.03(b). "PLqy" or "Parties" means, individually or collectively, as the context so requires, Lessor and Lessee. "Pedestrian Access Reservation" has the meaning given in Section 2.05(a)hereof. "Permitted Condo Documents" has the meaning given in in Section 7.01 hereof. "Permitted Use" has the meaning given in Section 2.04 hereof. "Person" shall include an individual, corporation, limited liability company, partnership, joint venture,unincorporated association,trust, or any other form of entity. "Plans and Specifications" means the plans and specifications for the Project, as the same shall be approved by Lessor in accordance with the terms hereof. "Premises" means, subject to the Initial Title Exceptions, Lessee's leasehold interest in and to the Property and all current and future rights, licenses, easements,privileges, rights-of-way, and appurtenances -6- thereto or in anywise belonging,and together with all buildings, structures and other Improvements now or hereafter constructed on the Property. "Project" means, collectively, the Hotel and the City Facilities. "Pro er " that certain parcel of land located in corporate limits of the City of Baytown, County of Harris, State of Texas being more particularly described by metes and bounds on Exhibit A. "Purchase Option Closing" has the meaning given in Section 12.04 hereof. "Purchase Option Closing Costs" has the meaning given in Section 12.06 hereof. "Purchase Price" has the meaning given in Section 12.03 hereof. "Rent" has the meaning given in Section 2.06 hereof. "Reservation of Rights" has the meaning given in Section 2.05 hereof. "State" means the State of Texas. "Submission" has the meaning given in Section 3.08 hereof. "Substantial Completion" has the meaning given in the Indenture. "Term" has the meaning given in Section 2.03 hereof. "Termination Date" has the meaning given in Section 2.03 hereof. "Trustee" means Wells Fargo Bank,N.A. "Unit" means any condominium unit created under the Permitted Condo Documents. "Unit Mortgage" has the meaning given in Section 8.01 hereof,and includes,without limitation,the Trustee's Leasehold Deed of Trust,Assignment of Leases and Rents,Security Agreement and Fixture Filing (Hotel Unit) and the Trustee's Assignment of Leases and Rents (City Facilities Unit). "Unit Mortgagee" has the meaning given in Section 8.01 hereof, and includes, without limitation, the Trustee. Section 1.02 Rules of Construction. For all purposes of this Lease, except as otherwise expressly provided or unless the context otherwise requires,the following rules of construction apply in construing the provisions of this Lease: (a) General Rules oJ'Construction. All references in this Lease to exhibits, articles, paragraphs, subparagraphs, sections, subsections and other subdivisions refer to the exhibits, articles, paragraphs, subparagraphs, sections, subsections and other subdivisions of this Lease unless expressly provided otherwise. Titles appearing at the beginning of any subdivisions are for convenience only and do not constitute any part of such subdivisions and will be disregarded in construing the language contained in such subdivisions. The words "this Lease", "herein", "hereof", "hereby", "hereunder" and words of similar import refer to this Lease as a whole and not to any particular subdivision unless expressly so limited. The phrases "this paragraph" and "this subparagraph" and similar phrases refer only to the paragraphs or subparagraphs hereof in -7- which such phrases occur. The word"or" is not exclusive,and the word"including"(in its various forms)means"including without limitation." Pronouns in masculine,feminine and neuter genders will be construed to include any other gender,and words in the singular form will be construed to include the plural and vice versa,unless the context clearly otherwise requires. References to any constitutional,statutory or regulatory provision means such provision as it exists on the Effective Date and any future amendments thereto or successor provisions thereof. (b) References to Agreements. Unless the context clearly otherwise requires or unless otherwise expressly provided herein, the terms defined in this Lease which refer to a particular agreement, instrument or document also refer to and include all renewals, extensions, supplements, modifications, amendments and restatements of such agreement, instrument or document; provided that nothing in this subsection will be construed to authorize any such renewal,extension, supplement,modification, amendment or restatement. (c) Equal Benef t of Bargain. This Lease has been reviewed and revised by legal counsel for both Lessee and Lessor, and no presumption or rule that ambiguities will be construed against the drafting party will apply to the interpretation or enforcement of this Lease. (d) Relationship of the Parties. The relationship between Lessor and Lessee pursuant to this Lease at all times will remain solely that of landlord and tenant and will not be deemed a partnership or a joint venture. (e) Time is of the Essence. Times set forth in this Lease for the performance of obligations shall be strictly construed, time being of the essence of this Lease. All provisions in this Lease which specify or provide a method to compute a number of days for the performance, delivery, completion or observance by a Party hereto of any action, covenant, agreement, obligation or notice thereunder means and refer to calendar days,unless otherwise expressly provided. (f) Severability. If any term or provision of this Lease,or the application of any term or provision of this Lease to a particular situation, is found by a court of competent jurisdiction to be invalid, illegal, void or otherwise unenforceable, the same shall not affect the other terms or provisions hereof or the whole of this Lease, or the application of such term or provision of this Lease to other situations, but such term or provision, or the application thereof to a particular situation, shall be deemed modified to the extent necessary in the court's opinion to render such term or provision (or application thereof) enforceable, and the rights and obligations of the parties shall be construed and enforced accordingly, preserving to the fullest permissible extent the intent and agreements of the parties herein set forth; provided, however, if the applicable term or provision so invalidated, voided or determined unenforceable, as deemed modified, would deprive either Lessor or Lessee of material benefits derived from this Lease, or make performance under this Lease unreasonably difficult, then Lessor and Lessee will meet and confer and will make good faith efforts to amend or modify this Lease in a manner that is mutually acceptable to Lessor and Lessee. Article 2 Grant of Lease; Term; Rent Section 2.01 Granting Clause. For and in consideration of the covenants made by Lessee herein, and in consideration of the mutual benefits set forth herein and otherwise contemplated hereby, subject only to the Initial Title Exceptions, Lessor hereby leases and demises to Lessee, and Lessee hereby leases and takes from Lessor, the Premises, TO HAVE AND TO HOLD the Premises unto Lessee, its permitted su -8- ccessors and assigns, for and during the Term (hereinafter defined), but subject in all respects to the terms and conditions set forth herein. Section 2.02 Covenant of Quiet Enjoyment. Subject to and upon the terms and conditions of this Lease, Lessor covenants and warrants, to the extent authorized under the laws and Constitution of the State of Texas, that, so long as Lessee is not in default hereunder, Lessee shall and may peaceably and quietly have,hold,occupy,use and enjoy and shall have the full and unrestricted use and enjoyment of the Premises during the Term solely and exclusively for the Permitted Use, and subject to the Initial Title Exceptions. Section 2.03 Term. The stated term of this Lease(the "Term") shall be for the period commencing at 12:00 a.m.,local time,on ,202[_](the"Commencement Date")and,unless sooner terminated pursuant to the terms hereof, ending at 11:59 p.m., local time in Baytown, Texas, on the earlier to occur of (x) the day preceding the fortieth (401") anniversary of the Commencement Date, or(y) the date of the full repayment of the Bonds and all other amounts required to be paid or defeased to discharge the lien of the trust estate established under the Indenture (the "Termination Date"). Section 2.04 Permitted Use of Premises. During the Term of this Lease, Lessee shall use the Premises solely for the purposes of inspection, preparation for the construction of the Project, and development and operation of the Project(the "Permitted Use") and for no other purpose without the prior written consent of Lessor. Section 2.05 Reservations of Rights. Lessor reserves the following rights in and to the Property (collectively,the"Reservation of Rights"): (a) Pedestrian/Vehicular Access Reservation. Lessor reserves the right,at any time and from time to time,to construct,install,repair,maintain,remove,and replace one or more pedestrian walkways, connections, overhead walkways, and similar improvements providing pedestrian ingress and egress to and from the Property to other lands or property owned from time to time by Lessor. Additionally, Lessor further reserves for itself and the users and occupants from time to time of land or other property owned from time to time by Lessor the non-exclusive right to use, for vehicular and pedestrian ingress and egress purposes, all roads, streets, drives, sidewalks, plazas, and other areas of the Property that are, from time to time, intended for use for vehicular and pedestrian ingress, egress and enjoyment of the Premises,other than the designated parking areas within the Project. The rights reserved by Lessor in this Section are herein called the "Pedestrian Access Reservation". This easement shall be perpetual, shall be enjoyed and used without cost, fee, or charge, and shall be appurtenant to Lessor's other adjoining property. Lessor expressly agrees that its use of the Pedestrian Access Reservation shall be reasonable, and Lessor shall not take any action in exercise of such rights that would interfere with the development or operation of the Project or the Improvements to be constructed thereon by Lessee pursuant to this Lease. (b) Lessor's Mineral Reservation. Lessor hereby reserves all of Lessor's interest in and to the oil,gas, casinghead gas, condensate, and associated liquid or liquefiable hydrocarbons and all other minerals of any nature whatsoever, including, but not limited to sulfur, coal, lignite, uranium, thorium, fissionable materials, bentonite, Fuller's earth, sand, gravel, building stone, limestone, shale,caliche,and precious metals in,on,and under and that may be produced from the Property. Lessor hereby expressly releases and waives,on behalf of itself and its successors and assigns,all rights of ingress and egress to enter upon the surface of the Property for purposes of exploring for, developing, drilling, producing, transporting, mining, treating, storing or any other purposes incident to the development or production of the oil,gas and other minerals reserved to Lessor(or owned or held by any other persons) as described hereinabove in, on, and under the Property. -9- However, nothing herein contained shall ever be construed to prevent Lessor from developing or producing the oil,gas,and other minerals reserved to Lessor as described hereinabove in,on,and under the Property by pooling, by directional drilling under the Property from well sites located on tracts other than the Property or otherwise so long as no penetration of the subsurface of the Property is made at a depth that is less than three hundred(300) feet below the natural surface of the Property and such production shall not interfere with the development or operation of the Premises or the Improvements to be constructed thereon by Lessee pursuant to this Lease. (c) Irifrastructu►•e Rights. Lessor reserves and retains for itself the right, exercisable by Lessor from time to time in accordance with this Section, to connect to the utility mains, lines, conduit, and other facilities providing water, sanitary sewer, and stormwater discharge service and capacity to the Premises (as a whole or in material part, and as opposed to lines and conduit servicing only particular buildings or a limited set of improvements), and to transmit through such mains, lines, conduits, and other facilities water, sanitary sewer, and stormwater. Any such connections shall be at Lessor's sole cost and expense, coordinated with Lessee so as to minimize any disruption in services to the Premises, and shall only be permitted to be made if, in the reasonable opinion of engineers selected by Lessor, the lines and conduit all are of adequate size to accommodate the incremental flow or transmission capacity resulting from Lessor's intended use (if such lines are not of adequate size, Lessor shall have the right to increase the size at Lessor's sole cost and expense). The rights reserved by Lessor in this Section are herein called the "Infrastructure Rights." Lessor expressly agrees that its use of the Infrastructure Rights shall be reasonable and Lessor shall not take any action in exercise of such rights that would interfere with the development or operation of the Premises or the Improvements to be constructed thereon pursuant to this Lease. (d) Access, Inspection, Modification, and Extension of Lessor-Owned Improvements and Infrastructure. Lessor reserves and retains for itself the right to access, maintain,modify, extend, replace, repair and relocate all structures and infrastructure on or in the property defined by this Lease. (e) Access and Inspection of P►•emises. Lessor and its authorized representatives, agents, employees, and attorneys may,but shall be under no duty to,enter the Premises at reasonable times and hours, subject to the rights of tenants in possession, if any, to inspect the Premises in order to determine whether Lessee is complying with its undertakings, duties, and obligations under this Lease. Nothing herein contained, however, shall be deemed or construed to impose upon Lessor any obligation or liability whatsoever for care, supervision, repair, additions, improvement, change, or alteration to the Premises other than as herein expressly provided. Section 2.06 Rent. Concurrently with the execution of this Lease,Lessee has paid to Lessor nominal rent in the amount of Ten Dollars($10.00) in cash,being the total amount of rent for the entire Term of this Lease("Rent"). It is the general purpose and intent of Lessor and Lessee that Rent payable hereunder shall be absolutely net to Lessor so that this Lease shall yield to Lessor the Rent specified, free of any charges, assessments, or impositions of any kind charged, assessed, or imposed on or against the Premises, and without abatement, counterclaim, deduction, defense, deferment or set off by Lessee, except as hereinafter specifically otherwise provided, and Lessor shall not be expected or required to pay any such charge, assessment or imposition, or be under any obligation or liability hereunder except as herein expressly set forth, and that all costs, expenses and obligations of any kind relating to the maintenance and operation of the Premises, including all alterations, repairs and replacements, that may arise or become due during the Term shall be paid by Lessee. Lessor shall be indemnified and saved harmless by Lessee from and against such costs, expenses, and obligations. Except as set forth in an express provision of this Lease, and except as may be provided by a final, non-appealable judgment or order by a court of competent ju - 10- risdiction, this Lease shall not terminate without the written consent of Lessor, nor shall Lessee be entitled to any abatement, deduction, deferment, or reduction of Rent, nor shall Lessee have any right to terminate this Lease or to be released, relieved or discharged from any obligations or liabilities hereunder, for any reason, it being the intention of the Parties that the Rent and all other sums payable by Lessee under this Lease shall be payable in all events,and that the obligations of Lessee under this Lease shall be separate and independent covenants and shall continue unaffected. Article 3 Development and Construction of the Project Section 3.01 Lessor's Approval Required for All Future Construction. Except as otherwise expressly provided herein, Lessee shall not be permitted to make capital improvements upon the Property, including, but not limited to, the construction of, alteration of,repair of, renovation of or demolition of any future improvement upon the Property without Lessor's prior written approval, such approval not to be unreasonably withheld. Section 3.02 Lessor's Approval of Construction Documents for the Project. Lessee has entered into(i)the Development Management Agreement with the Development Manager,and(ii)the Design-Build Contract (which contemplates the Design-Builder's entering into a Design Services Agreement with the Architect for the design of the Project) with the Design-Builder. Lessor hereby acknowledges receipt of copies of the final form the Development Management Agreement and the Design-Build Contract, and hereby approves of such agreements. Lessee hereby covenants and agrees that the terms of the Development Management Agreement and the Design-Build Contract comply with all Applicable Laws, and that all work relating to the design or construction of the Project shall be performed pursuant to the Design-Build Contract, and no other construction work shall be performed on the Property by any other Person without the prior written consent of Lessor. Lessee shall not permit, nor shall Lessee agree to any assignment of the Development Management Agreement or the Design-Build Contract,or replacement of the Development Manager Design- Builder without the prior written consent of Lessor, which consent may be granted or withheld at Lessor's commercially reasonable discretion. Lessee shall not agree to any material amendment or modification to the terms of the Development Management Agreement or the Design-Build Contract without the prior, written consent of Lessor,which consent may be granted or withheld at Lessor's reasonable discretion. A final schedule of values for the Project shall be included as part of an amendment to the Design- Build Contract (the "GMP Amendment"). The GMP Amendment shall be subject to the prior review and written approval of Lessor, and shall include those hard and soft costs to be incurred by Design-Builder for the performance of the work of the Project in accordance with Applicable Laws, together with a reasonable contractor's contingency. The GMP Amendment shall set forth a guaranteed maximum price for the performance of the work of the Project to be performed by the Design-Builder(the"Contract Price"). Section 3.03 Lessor Approval of Project Plans and Specifications. The final Plans and Specifications for the Project shall be subject to the prior written approval of Lessor. Lessor shall have fourteen (14) calendar days in which to review the proposed final Plans and Specifications upon receipt thereof. The Project shall conform to the final Plans and Specifications as approved by Lessor in all material respects. If at any time during the construction of the Project, the Project shall fail to conform to the final approved Plans and Specifications or to comply with applicable Laws,Lessee shall cause the Design-Builder to notify Lessor and make such modifications as are necessary to conform to the Plans and Specifications and the Applicable Laws at the Design-Builder's sole cost and expense. - 11 - All Material Modifications to the Plans and Specifications shall be subject to the prior written approval of Lessor, which shall not be unreasonably withheld. Lessee shall cause the Design-Builder to submit any proposed Material Modifications to the Plans and Specifications to Lessor, together with a narrative explanation describing the purpose and need for such Material Modifications, and the manner, if any, in which such Material Modifications will affect the critical path for the completion of the Project. Lessor shall have fourteen (14) calendar days in which to review the proposed Material Modifications, and to provide its written approval or disapproval therefor. Section 3.04 Lessee's Security for Performance. Subject to Section 8.08 hereof,as security for the performance of Lessee's obligations hereunder, upon the occurrence of a Default (but subject to the provisions of Article 8 hereof), Lessee hereby assigns and pledges to Lessor, and hereby grants to Lessor a security interest in, all of Lessee's right, title, and interest in and to the Construction Documents, whether now or hereafter existing, and as the same may be further amended, modified, or supplemented, including, without limitation: (i)all rights of Lessee to receive moneys due and to become due under or pursuant to the Construction Documents; (ii)all rights of Lessee to receive proceeds of any insurance, indemnity,warranty, or guaranty with respect to the Construction Documents; (iii)claims of Lessee for damages arising out of or for breach of or default under the Construction Documents; and (iv) the right of Lessee to terminate the Construction Documents, to perform thereunder, and to compel performance and otherwise exercise all remedies thereunder. Section 3.05 Default in Construction. In the event of a material default by the Development Manager under the Development Management Agreement, or the Design-Builder under the Design-Build Contract, subject to the rights of the Trustee under the Bond Documents, Lessee shall exercise all of the rights and remedies available to Lessee in each such agreement in consultation with Lessor and the Trustee. Section 3.06 Commencement and Completion of Construction. Lessee shall cause the Design- Builder to commence and diligently pursue constriction of the Project on the Property in accordance with the project schedule set forth in the Design-Build Contract in a good and workmanlike manner,and endeavor to cause Substantial Completion to occur on or before the Target Completion Date, in accordance with the terms of the Design-Build Contract. All building materials for the Project must be new and of good quality and in accordance with the Plans and Specifications. Section 3.07 Change Orders. Once the Plans and Specifications shall be submitted to and approved by Lessor or the Plans and Specifications shall be deemed approved in accordance with Section 3.03 above, Lessee may order, authorize, or perform any change or substitute work or materials in prosecuting the construction of the Improvements under the Design-Build Contract (a "Change Order"). Lessee shall not approve any Change Order to increase the Contract Price without first securing a source of funding therefor. Any source of funding for an increase to the Contract Price other than available contingency shall be subject to the written approval of Lessor. Section 3.08 Incomplete Submissions; Resubmissions. To the extent that Lessor determines in its reasonable judgment that any item submitted to Lessor for approval hereunder, including the GMP Amendment, the final Plans and Specifications, or any Material Modifications, or any funding approval for a Change Order (collectively, a "Submission") is incomplete or are otherwise lacking in necessary information or supporting documentation for Lessor to make a reasonable determination as to the necessity or appropriateness of such Submission, or its conformity with Applicable Laws, Lessor may notify Lessee of such determination in writing, explaining the need for additional information or supporting documentation,and Lessor shall be granted such additional amount of time to review such Submission after receipt of such additional information or supporting documentation. - 12- Any notification from Lessor that Lessor has disapproved of a Submission shall include a reasonably detailed explanation of the reasons for Lessor's disapproval,and may include recommendations for revising such Submission, the incorporation of which would result in receipt of such approval. After making the necessary revisions, the Submission shall be resubmitted to Lessor for written approval, and Lessor shall have up to an additional seven(7) calendar days in which to review the revised Submission, and to provide its written approval or disapproval therefor. Under no circumstances shall Lessor's failure to timely approve (or provide notice of disapproval)of any Submission be deemed an approval by Lessor. Section 3.09 Coordination of Construction with Lessor. To the extent reasonably possible, development and construction of the Project shall be done so as to minimize disruption of Lessor's operations. All construction activities must be coordinated with the Building Services Department of Lessor and the Lessor's Representative. Lessor reserves the right to monitor the Development Manager, Design- Builder and/or Lessee's construction of the Project from its inception to its completion, including participation in all construction meetings contemplated by the Construction Documents; however, if the occurrence of a construction meeting shall be delayed due to Lessor's requested adjustment of the date of the meeting,if such delay shall cause a delay in the construction schedule,neither Lessee nor the Design-Builder shall be responsible for such Lessor-related delay. Section 3.10 Payment of Bills for Construction. As a construction expense, Lessee covenants and agrees to pay or cause to be paid,currently as they become due and payable in accordance with the terms of the Indenture,as the case may be,all bills for labor,materials,insurance,and bonds,and all fees of architects, engineers, the Development Manager, the Design-Builder, the Architect, and subcontractors and all other costs and expenses incident to any construction in or on the Project;provided,however, that Lessee may, in good faith, in its own name, dispute and contest any such bill, fee, cost, or expense, and in such event, any such item need not be paid until adjudged to be valid. Unless so contested by Lessee,all such items shall be paid by Lessee within the time provided by law, and if contested, any such item shall be paid before the issuance of an execution on a final judgment with respect thereto. The terms and conditions for the payment of applications for payment shall be governed by the applicable agreement. Section 3.11 All Liens and Rights are Subordinate to Lessor. Lessee's rights,as well as the rights of anyone else, including, but not limited to, any mortgagee, architect, independent contractor, assignee, sublessee,sub-contractor,prime or general contractor,mechanic,laborer,materialman,or other lien or claim holder, shall always be and remain subordinate, inferior, and junior to Lessor's title, interest, and estate in the Property. Lessee shall not create or pen-nit to be created or to remain, and shall discharge, any lien, encumbrance,or charge levied on account of any mechanic's,laborer's,or materialman's lien,or any security agreement, conditional bill of sale, title retention agreement, chattel mortgage, or otherwise (a "Lien") that might or does constitute a lien,encumbrance,or charge upon the Premises,or any part thereof,or the income therefrom, having a priority or preference over or ranking on a parity with the estate, rights, or interest of Lessor in the Premises or any part thereof,or the income therefrom. Nothing in this Lease shall be deemed or construed in any way as constituting the consent or request of Lessor,express or implied,by inference or otherwise, to the filing of any Lien against the Premises by any contractor, subcontractor, laborer, materialman, architect, engineer, or other Person for the performance of any labor or the furnishing of any materials or services for or in connection with the Premises or any part thereof. Section 3.12 Permits and Ordinances. Lessee shall, as a construction expense, comply and cause the Development Manager or the Design-Builder and all of its subcontractors to comply in all material respects with all Applicable Laws, including all building, life safety and other codes and laws applicable to Lessee and relate to the construction of the Project, including without limitation, the Americans With Disabilities Act of 1990. Lessee shall not agree to or settle an issue of alleged non-compliance with the Applicable Laws without Lessor's prior consent. - 13- Section 3.13 Construction Site. Lessee shall confine its operations to the Property, and shall not store any material or equipment on property of Lessor outside the boundaries of the Property, except as otherwise expressly contemplated in the Design-Build Contract, or as otherwise approved in writing and subject to such conditions as may be specified and approved by Lessor. Lessee shall cause the Development Manager and the Design-Builder to protect all work and maintain a perimeter fence surrounding the Property, and shall at all times keep and cause its contractors to keep the construction site reasonably clean and free from waste materials and rubbish. Section 3.14 Reports and Information. Lessee shall provide Lessor and the Lessor's Representative with copies of all material documents and correspondence provided to or generated by Lessee in connection with construction of the Project and shall provide or cause the Design-Builder to provide Lessor with monthly progress reports in a fonn reasonably satisfactory to Lessor demonstrating compliance with the construction requirements of the Plans and Specifications, and the Design Services Agreement or the applicable design and construction contracts and this Lease for the previous month. Lessee shall deliver or cause to be delivered to Lessor copies of all soil reports,surveys,hazardous wastes or toxic materials reports, feasibility studies, and other similar written materials prepared for Lessee pursuant to the Design-Build Contract or the applicable design and construction contracts with respect to the Property, copies of which shall also be furnished to the Trustee. Until final completion of the Project,Lessor shall provide the Design- Builder with copies,contemporaneous with delivery to Lessee,of written notices of default tinder this Lease from Lessor to Lessee. Section 3.15 Final Completion of Improvements. Upon the final completion of the Project,Lessee shall furnish Lessor with all warranties, drawings, plans, releases, and other documentation required to be delivered to Lessee under the Design-Build Contract, and as soon as practicable (however, in no event to exceed six(6)calendar months)after the Substantial Completion of the Project,Lessee shall furnish or cause the Design-Builder to furnish to Lessor all other remaining documentation regarding the "as-built" Improvements as required under the Construction Documents. Article 4 Insurance Section 4.01 During Construction. Prior to the earlier of the commencement of construction, Lessee shall obtain or cause the Design-Builder, the Architect, and each of their respective subcontractors and design professionals, to obtain and maintain throughout the Term of this Lease, the insurance policies and coverages, and commercial payment and performance bonds and to otherwise comply with the terms, conditions and requirements set forth in Section II of Exhibit H to the Indenture. Section 4.02 Upon Completion. At all times from and after Substantial Completion of the Project, Lessee shall obtain and maintain throughout the Term of this Lease, the insurance policies and coverages, and to otherwise comply with the terms, conditions and requirements set forth in Section I of Exhibit H to the Indenture. Article 5 Additional Covenants of Lessee Section 5.01 Taxes. Lessee shall pay or cause to be paid, not later than ten (10) days prior to delinquency, all taxes directly to the appropriate Person; provided, however, that Lessee shall not be responsible for the payment of any taxes,if any,on or against Lessor's fee simple estate. Lessee shall prepare and file all reports and returns required by Applicable Laws with respect to any tax and shall furnish copies thereof to Lessor upon written request. - 14- Lessee shall promptly forward to Lessor, upon written request, copies of any bill or assessment respecting any tax. Lessee shall also furnish and deliver to Lessor receipts evidencing the payment of any tax as required by this Lease. If Lessee fails to pay any tax when due, Lessor, without declaring a Default hereunder, may, but shall not be obligated to, pay any such tax and any amount so paid by Lessor, together with all costs and expenses incurred by Lessor in connection therewith,shall constitute Rent hereunder and shall be paid by Lessee to Lessor on demand. Lessee's obligation to pay taxes accruing during the Term shall survive the Termination Date. Lessee shall have the right to contest in good faith the amount or validity of any Tax by appropriate proceedings which operate to prevent or stay the collection of the Tax so contested. Upon the termination of such proceeding, Lessee shall deliver to Lessor proof of the amount of the Tax as finally determined and thereupon Lessee shall pay such Tax. Lessor shall not be subjected to any liability for the payment of any costs or expenses in connection with any proceedings. To the extent permitted by applicable law,Lessee shall, in accordance with Article 7 hereof,protect, indemnify, defend and hold harmless Lessor and the Indemnitees from and against all claims for Lessee's failure to timely and fully pay any and all such taxes, together with any interest, penalties or other sums thereby imposed, and from any sale or other proceeding to enforce payment thereof. Section 5.02 Utilities. (a) General. Lessee shall, at its sole cost and expense, contract and pay (prior to delinquency) all charges for utilities, including any impact fees, related to the construction of the Project. If requested by Lessor, Lessee agrees to join in the grant of easements requested by Lessor and to execute any and all documents,agreements, and instruments and to take all other actions in order to effectuate the same in the event Lessee's joinder is required in connection with any easements affecting any portion of the Property, provided such easements: (i) may only be located within those areas of the Property that will not interfere with the Project;(ii)shall be approved by Lessee in its reasonable judgment as to their location and the form of the easement agreement; and (iii) may only be granted as non-exclusive easements. (b) [Utilities. Lessor agrees to provide utility services and connections for electricity, water, heated and chilled water utilities (collectively, the "Lessor Provided Utilities") for the Project. During the construction of the Project, all Lessor Provided Utilities consumed in connection with the Project shall be charged to the Lessee as a cost of performing the construction work. Upon the Substantial Completion of the Project, (1) all Lessor Provided Utilities consumed by Lessee or the Project shall be charged to Lessee and shall be paid by Lessee pursuant to the terms of the City Facilities Lease as an operating expense. If any Lessor Provided Utility shall be interrupted and shall continue to be interrupted despite Lessor's good faith efforts to remedy the interruption,the Lessor shall not be liable in any respect for damages to the person or property of Lessee and such interruption shall not be construed as grounds for abatement of Rent.] [Confirm] Section 5.03 Maintenance of the Premises. Lessee shall, at all times during the Term of this Lease, at Lessee's sole cost and expense, keep and maintain the Premises and all adjoining areas out to the perimeter pavement,and appurtenances and every part thereof,and any and all buildings,other structures or Improvements that may exist on, in,or be made a part of the Premises, in good order and condition,ordinary wear and tear excepted, and make all necessary repairs thereto, interior and exterior, structural and nonstructural, ordinary and extraordinary, and foreseen and unforeseen, all in compliance with Applicable Laws. If Lessee shall fail to perform any of its obligations as required hereunder, after notice and right to cu - 15 - re pursuant to the terms and provisions hereof, Lessor may(but shall not be required to)perform and satisfy same,and Lessee hereby agrees to reimburse Lessor for the reasonable cost thereof promptly upon demand. All normal maintenance and repair during the term of this Lease shall be complete when the Premises are surrendered to Lessor upon the expiration of the Term of this Lease. Section 5.04 Compliance with Laws. Lessee shall comply with all Applicable Laws. Without limiting the rights of any other governmental authority to enforce any Applicable Laws,Lessor may enforce and apply the Applicable Laws on the Premises,and to any person in or on the Premises,and may authorize the City officials and commissioned peace officers to provide such enforcement,subject to the jurisdictional limitations provided by law. Lessee shall do all things necessary to obtain, maintain, and renew, from time to time, as necessary, all material permits, licenses, and other governmental approvals necessary for the operation and maintenance of the Project. Section 5.05 Operation of the Project. At all times during the Term of this Lease from and after Substantial Completion of the Project, the Project shall be operated, managed and maintained as follows: (a) Operation of the Project. The MDD shall enter into the Hotel Services Agreement with the Operator in form and substance acceptable to Lessor, for the operation of the Hotel. The Hotel shall be operated as a full-service upper-upscale hotel. Notwithstanding the foregoing to the contrary, the Lessee acknowledges that the Project has been commissioned by the City to serve the public purposes of the City by, among other things, improving trade and commerce, and as a condition to entering into the Hotel Services Agreement with the Operator,the Lessee shall,upon the written request of Lessor,request that Operator provide a quote as follows: (i) in the case of a hotel room block, (A) offer, for each specific date that City requires a block of guest rooms as specified in such request, an event room block equal to the actual number of the guest rooms in such request,provided that Operator may elect to subtract any previously offered rooms under this paragraph covering such dates,which offers have either been accepted or are still outstanding,and (B) quote a specific room rate for a standard single room, a double room and any applicable convention center room for such rooms and (ii) in the case of use of the convention center facilities, provide a quote for the use of such facilities. In all respects, the Rate Quote shall be structured in accordance with the Operator's normal booking policies and procedures as provided in the Hotel Services Agreement, and shall be subject to availability.. (b) Additions and Alterations. Lessee will not make any additions or alterations to the Project that would materially adversely affect the value of the Project or the operation thereof without the prior written consent of Lessor. (c) Ifaintenance. Lessee shall maintain the Project in good condition and repair, and in accordance with all Applicable Laws. (d) Compliance With Other Documents. Lessee shall cause the Project to be utilized, operated and maintained in accordance with the terms and requirements of the Bond Documents,and in such a manner that will not result in a breach or default by Lessee under the Unit Mortgage. (e) Penriits, Licenses and Approvals. Lessee shall do all things necessary to obtain, maintain, and renew, from time to time, as necessary, all material permits, licenses, and other governmental approvals necessary for the operation and maintenance of the Project. (f) Non-Permitted Encumbrances. Lessee will not,without Lessor's prior written consent,which may be granted or withheld in Lessor's sole and absolute discretion, create or suffer to exist any - 16- lien, mortgage, security interest or encumbrance upon the Premises other than Permitted Encumbrances. (g) Compliance with Environmental Laws. Lessee covenants, represents, and warrants that Lessee's use of the Project shall not and will not involve the use, storage, generation, or disposal of Hazardous Materials in violation of any Environmental Laws, and that Lessee shall not cause or permit any Hazardous Materials to be brought, used, stored, generated, or disposed on or about the Premises by Lessee,its agents,employees,contractors,subcontractors,or invitees,unless such use shall be in compliance with all laws, including, without limitation, Environmental Laws and with all applicable governmental requirements. Section 5.06 Mortgaging of the Leasehold. Lessee shall not encumber its interest in this Lease or the Premises other than as provided in Article 7,without Lessor's prior written consent,which consent shall be given at Lessor's sole and absolute discretion. Section 5.07 Assignment and Subletting. Except for the City Facilities Lease, or as otherwise provided in Section 5.05, neither Lessee nor any of its successors and assigns shall have the right to assign or transfer this Lease or any interest herein or any right or privilege appurtenant hereto or to sublease the Premises or any portion thereof, without the prior written consent of Lessor, which may be granted or withheld at Lessor's sole and absolute discretion. Any assignment or transfer for which consent is required but which is nevertheless made without such written consent shall be void ab initio. The creation of the Condominium Declaration and the conveyance of Units to Owners shall not require the consent of Lessor. However, no assignment of this Lease, nor any subleasing of the Property, shall exonerate Lessee from its obligations hereunder. Article 6 Property Condition; Environmental Matters Section 6.01 As-Is Condition of the Property. EXCEPT AS MAY BE SET FORTH OR PROVIDED FOR IN THIS LEASE, LESSOR AND LESSEE ACKNOWLEDGE AND AGREE THAT, EXCEPT AS CONTAINED IN SECTION 6.02 HEREOF, NEITHER THE LESSOR NOR ANY OF ITS OFFICERS, AGENTS, EMPLOYEES, OR REPRESENTATIVES MAKES OR HAS MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER,EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY OR ANY PORTION THEREOF,THE PROPERTY'S PHYSICAL CONDITION, INCOME TO BE DERIVED OR EXPENSES TO BE INCURRED WITH RESPECT TO THE PROPERTY,THE PROPERTY'S FITNESS OR SUITABILITY FOR ANY PARTICULAR USE,OR ANY OTHER MATTER OR THING RELATING TO OR AFFECTING THE SAME,AND THERE ARE NO ORAL AGREEMENTS, WARRANTIES, OR REPRESENTATIONS COLLATERAL TO OR AFFECTING THE PROPERTY OR ANY PORTION OF IT, EXCEPT AS MAY BE EXPRESSLY SET FORTH IN THIS GROUND LEASE, AND THAT THE LESSEE HAS INSPECTED THE PROPERTY AND LEASES THE PROPERTY "AS IS, WHERE IS." Section 6.02 Environmental Conditions. To Lessor's knowledge, and except as disclosed in the Environmental Reports,(i)there are no Hazardous Materials that have been spilled,disposed of,or otherwise released at, on, under or about the Premises, that are or have been migrating to or from the Property, or otherwise are located on the Premises, regardless of source; (ii) there are no Hazardous Materials that originated at or otherwise are related to or have affected the Property and have caused or threatened to cause any environmental contamination or otherwise have caused or threatened to cause any liability under any Environmental Laws;(iii)there are no,and to Lessor's knowledge,never have been any underground storage tanks,above ground storage tanks,wastewater impoundments,or areas used for waste treatment,storage,or disposal activities at, on, in, or under the Property; and (iv) there are no activities or co - 17- nditions that exist, and to Lessor's knowledge, have ever existed and remain unresolved at, on, in,under, or otherwise associated with the Premises that violate any Environmental Laws or could reasonably be expected to result in any claim or liability under any Environmental Laws. Section 6.03 Environmental Covenants of Lessee. (a) Prohibition. Lessee shall not, nor shall Lessee cause or permit the use, treatment, generation, storage,disposal, spill, leakage, release, or production on, under or about or transportation to the Premises of any Hazardous Materials, except in minor quantities required for Lessee's uses of the Property as may be reasonably necessary in connection with the Permitted Use,but in such event only to the extent that the Hazardous Materials are acquired,kept,stored,maintained, transported and disposed of in strict accordance with all Applicable Laws. (b) Other Rights. Nothing contained in this Lease shall prevent or in any way diminish or interfere with any rights or remedies, including, without limitation, the right to contribution,which Lessor or Lessee may have against the other party under any Applicable Laws, all such rights being hereby expressly reserved. (c) Notice of Actions. Lessee shall give Lessor immediate written notice of the receipt of any notice or discovery of any information regarding any actual, alleged or potential Environmental Claim relating to the Property, and shall deliver to Lessor copies of any and all orders, notices, permits, reports,and other communications, documents and instruments which Lessee receives pertaining to such Environmental Claim. (d) Assumption of Liability. Lessee hereby covenants and assumes all responsibility for responding to, defending against and complying with any administrative order,request or demand relating to potential or actual contamination on the Property or release of any Hazardous Material from the Property into any adjoining property or the air, soil, surface water or ground water, whether such order, request, demand or claim names Lessor, Lessee or both, or refers to the Property in any way, including responding to such orders, requests, demands and claims on behalf of Lessor and defending against any assertion of Lessor's financial responsibility or individual duty to perform thereunder. Article 7 Condominium Section 7.01 Units. Pursuant to Section 82.056 of the Act, Lessee may impress on the Property a condominium regime affecting all of the Property pursuant to the Condominium Declaration and other documents establishing the condominium regime that have been approved in writing by Lessor,which shall authorize the creation of, initially, the City Facilities Unit and the Hotel Unit (the "Permitted Condo Documents"). Section 7.02 Condominium Declaration. (a) Required Provisions. The Condominium Declaration,shall set forth, at a minimum: (i) the recording information for this Lease; (ii) the date on which this Lease is scheduled to expire; (iii) a legally sufficient description of the Property; - 18- (iv) any right of the Owners to redeem the reversion and the manner in which the Owners may exercise that right, or a statement that the Owners do not have that right; (v) that the Owners do not have any right to remove Improvements after the expiration or termination of this Lease; (vi) any right of the Owners to renew this Lease; (vii) A statement to the effect that Lessor has executed the Condominium Declaration solely as provided by Section 82.056 of the Act and Lessor (in such capacity as lessor under this Lease) shall have no responsibility for the compliance with any provision of the Condominium Declaration and have absolutely no liability or obligation regarding any provision thereof; and (viii) a provision stating: "Owner Assumption of Ground Lease Obligations. Each Owner, with acceptance of a deed to a Unit,shall be deemed to assume any and all obligations(including the obligations to pay rent as provided in the Ground Lease to the extent allocated to such Unit in the Condominium Declaration), liabilities, limitations, rights, waivers, benefits or burdens that are vested or that may in the future become vested in or upon the Lessee pursuant to the Ground Lease and that are applicable to such Unit and as otherwise provided in this Declaration(the "Ground Lease Obligations"). Each Owner shall also pay all taxes, insurance and homeowner's association dues, (if applicable) assessed or against its Unit. The Ground Lease Obligations shall automatically be obligations, liabilities, limitations, rights, waivers, benefits or burdens of the Owners upon the recordation a deed to a Unit. This Section satisfies any assumption requirements set forth in the Ground Lease without any further action." (b) Additional Units. No additional Units shall be created under the Permitted Condo Documents without the prior written consent of Lessor. Section 7.03 Effect of Condo Documents. (a) Application of Lease to Unit O►vners. Notwithstanding any other provision of this Lease, upon the filing of a Condominium Declaration and the creation of the Units, each Owner will hold an undivided interest in the Lessee's leasehold estate in and to the Premises. The provisions of this Section 7.03 are intended to clarify the rights and duties of Lessor,each Owner(and their separate Unit Mortgagees),and the Condominium Association. (b) Effect of a Default of a Unit Ownef-. It is the express intention, agreement and understanding of Lessor and Lessee that if there occurs a Default under this Lease by any Owner (a "Defaulting Owner"): (i) Lessor may not terminate the leasehold estate under this Lease held by any Owner (or exercise any other remedies against such Owner)that is complying with all of the covenants contained in this Lease applicable to such Owner and its Unit (the "Non-Defaulting Owner"), (ii) The acquisition of a leasehold interest appurtenant to a Defaulting Owner's Unit by Lessor by the termination of this Lease with respect to a Defaulting Owner's Unit or the exercise of any of Lessor's remedies to take possession of a Defaulting Owner's Unit hereunder shall not merge the leasehold and fee simple interest in and to the Property, and this Lease shall - 19- continue to remain in full force and effect and the leasehold interest appurtenant to any Non- Defaulting Owner's Unit shall not be otherwise affected thereby. (c) Limitations of Condominium Association. Notwithstanding anything to the contrary contained in the Permitted Condo Documents, the Condominium Association shall have no authority to cause the Condominium Association to take any of the following actions,or to consent to the following actions,without the prior consent of Lessor: (A) intentionally take any action in violation of this Lease; (B) merge or consolidate the Condominium Association with or into any other Person; (C) amend or supplement the. Pennitted Condo Documents, other than to attach or amend the "Plat and Plans" exhibit to the Condominium Declaration to conform to the constructed Improvements; (D) amend or supplement the Permitted Condo Documents to annex additional Units into the Permitted Condo Documents and amend the"Plat and Plans" exhibit to the Condominium Declaration to reflect such Units; provided, however no more than two(2) total Units may be created; (E) change the purpose of the Condominium Association as set forth in the Permitted Condo Documents; (F) dissolve the Condominium Association; or (G) file any voluntary petition under Title 1 I of the United States Code,the Bankruptcy Code,or seek the protection of any other Federal or State bankruptcy or insolvency law or debtor relief statute or consenting to the institution or continuation of any involuntary bankruptcy proceeding or the admission in writing of the inability to pay debts generally as they become due, or make a general assignment for the benefit of creditors. (d) Subordination to Lease. The Permitted Condo Documents are and shall at all times be subject and subordinate to the terns and provisions of this Lease. Article 8 Unit Mortgages Section 8.01 Right to Mortgage Units. It is the intention of the Lessee that Owners of Units will secure mortgage. Notwithstanding anything contained herein to the contrary, each Owner shall have the right, at any time and from time to time, without the Lessor's consent, to mortgage their Unit and to collaterally assign,place any lien,security interest or other encumbrance on any Improvements that presently exist on or which in the future may become permanently attached to the Property. Any such debt or obligation secured by any mortgage, trust deed, collateral assignment, security interests, lien or other encumbrance on a Unit shall not be longer than the term of this Lease. Further, any such debt or obligation secured by any mortgage,trust deed,collateral assignment,security interests,lien or other encumbrance and any amendment or modification of the terms thereof, including without limitation, any extension, renewal or refinancing thereof, is referred to herein as a"Unit Mortgage" and the holder thereof is referred to herein as a "Unit Mortgagee." The execution and delivery of a Unit Mortgage shall not constitute an assumption by a Unit Mortgagee of Lessee's obligations for the performance of any of the covenants or ag -20- reements to be performed by Lessee hereunder. The rights of any Unit Mortgagee under this Lease shall inure to the benefit of its successors and assigns and to any purchaser at a foreclosure sale. From and after the date the Condominium Declaration is filed,all references in this Lease to a Unit Mortgagee means each Unit Mortgagee for the applicable Unit. Section 8.02 Default and Termination. (a) Notice. Notwithstanding anything contained herein to the contrary, Lessor shall give each Unit Mortgagee of which Lessor has notice a copy of each notice which it gives to Lessee or an Owner, including all notices of a Default by an Owner (which shall clearly specify the nature of the Default). No Notice given by Lessor to Lessee shall be binding upon or affect a Unit Mortgagee unless a copy of said notice shall be given to such Unit Mortgagee pursuant to this Section 8.02. In the case of an assignment of a mortgage or other security instrument or change in address of such Unit Mortgagee, such assignee or Unit Mortgagee, by written notice to Lessor, may change the address to which such copies of notices are to be sent. Provided Lessor has been given written notice of such assignment of such mortgage,a copy of the executed assignment,and the name and address of the assignee,such assignee shall thereafter be deemed to be a Unit Mortgagee hereunder with respect to its mortgage. (b) Right to Cure. A Unit Mortgagee shall have the right,but not the obligation,to perform any of an Owner's obligations hereunder,and Lessor shall accept such performance by a Unit Mortgagee as performed by the Owner. A Unit Mortgagee may enter the Property to perform an Owner's obligations hereunder. (c) Cure Period. If a Default by a Defaulting Owner is not remedied within the cure period, if any, set forth in Section 9.01, then the Lessor shall give a Unit Mortgagee further notice that such Default remains unremedied and the Unit Mortgagee shall have sixty (60) days from the date of receipt of such notice to cure any Default. (d) Force Majeure. During any occurrence of Force Majeure (as defined below), all cure periods hereunder shall be automatically extended for the period of time that the efforts of a Unit Mortgagee to cure a Default are prevented by Force Majeure. "Force Majeure"means catastrophic or unusual events such as fires, earthquakes, hurricanes or other acts of God, riots, sabotage, conflicts, insurrection, revolution, war, government actions or other causes beyond a Unit Mortgagee's reasonable control,including an inability to get possession of a Unit when possession is necessary to effect a cure. (e) Disputes. During any bona fide dispute between Lessee or a Unit Mortgagee and Lessor as to whether a Default actually occurred, all cure periods hereunder shall be automatically extended for the period of time necessary to resolve such bona fide dispute. (f) Foreclosure or Appointment of Receiver. The additional cure periods granted a Unit Mortgagee herein shall be automatically extended during the time period in which a Unit Mortgagee is attempting to acquire possession of a Unit or to have a receiver appointed,or to foreclose its Unit Mortgage or to otherwise acquire a Unit("Enforcement Proceeding");provided,however,that any such Unit Mortgagee shall: (i)notify Lessor of its intention to institute an Enforcement Proceeding,(ii)promptly institute and diligently pursue the Enforcement Proceeding,and(iii)pay or cause to be paid to Lessor all then accrued but unpaid Rent as well as all Rent which becomes due during the Enforcement Proceeding period. Foreclosure of any Unit Mortgage, or any sale thereunder, whether by judicial proceedings or by virtue of any power contained in the Unit Mortgage, or any conveyance of an Owner to any Unit Mortgagee or its designee through, -21 - or in lieu of, foreclosure or other appropriate proceedings in the nature thereof, shall not require the consent of Lessor or constitute a breach of any provision of or a default under this Lease, and upon such foreclosure,sale or conveyance Lessor shall recognize the purchaser or other transferee in connection therewith as the Owner hereunder. (g) Limitation Upon Termination Rights of Lessor. If, after the expiration of any applicable cure period of Lessee or the Trustee, Lessor shall elect to terminate this Lease upon the occurrence of a Default of Tenant,the Trustee shall have the right to postpone and extend the Termination Date as fixed by the provisions of this Lease for a period of not more than twelve(12)months from the expiration of the applicable cure period,so long as the Trustee continues to pay the Rent and other charges required to be paid under this Lease, performs all other obligations,duties and covenants of Tenant, and if applicable, maintains the City Facilities Unit and Hotel Unit in good repair and condition during such period. Nothing contained herein shall be deemed to require a Unit Mortgagee to continue with any Enforcement Proceeding or, if a Unit Mortgagee or its nominee or a receiver acquires possession of a Unit, to continue such possession. If the Unit Mortgagee, its nominee, or a purchaser in a foreclosure sale, shall acquire title to a Unit and shall cure all Defaults which are susceptible of being cured by the Unit Mortgagee or by said purchaser,as the case may be,then prior Defaults which are not susceptible to being cured by the Unit Mortgagee or by said purchaser shall no longer be deemed a Default hereunder. In the event that any Unit Mortgagee,or its nominee,fails to avail itself of its rights hereunder, or if, having done so elects not to continue to keep this Lease, or any replacement lease, in effect in accordance with its terms, then Lessor shall be permitted to exercise all rights and remedies under this Lease, or any such replacement lease, to terminate same and obtain possession of the Property and all Improvements located on the Property. Section 8.03 Notice. If requested in writing by a Unit Mortgagee (which request shall specify an address to which notices shall be given), any notice, demand, request, approval or other communication which may be or is required to be given hereunder shall be given contemporaneously to the Unit Mortgagee. Any notice to a Unit Mortgagee shall be sent by certified or registered mail, return receipt requested, or overnight delivery service addressed to the Unit Mortgagee at the address specified in such request or such other address designated by the Unit Mortgagee from time to time in accordance with this Section 8.03. Section 8.04 Material Notices. Each Unit Mortgagee shall have the right, to the same extent that each Owner has such right, to intervene in any and all litigation, arbitration, condemnation proceedings or adjustment of insurance claims and shall be made a party to such proceedings. The parties hereby consent to such intervention. In the event that any Unit Mortgagee shall not elect to intervene or become a party to the proceedings, such Unit Mortgagee shall receive notice and a copy of any award or decision made in connection therewith. Section 8.05 Non-Disturbance Agreements. The lien of any mortgage, deed of trust or indenture encumbering any interest of Lessor in the Property or any part thereof shall either(i)be expressly subject and subordinate to this Lease so that no foreclosure of any mortgage, deed of trust or indenture will affect this Lease or(ii)the holder of any such mortgage,deed of trust or indenture shall expressly agree,in a writing executed in recordable form,that Lessee's rights under this Lease shall not be affected by any foreclosure. Section 8.06 No Lessee Lien on Fee. Under no circumstances shall Lessor be obligated to cause its fee estate in the Property to secure any indebtedness incurred by Lessee. -22- Section 8.07 Exculpation. No Unit Mortgagee or other entity succeeding owning a Unit through or subsequent to an Enforcement Proceeding shall be liable to Lessor under this Lease unless and until such time as it becomes the owner of the Unit and then only for the obligations which accrue during the period of time it owns the Unit; however, no such Unit Mortgagee or other entity succeeding to own a Unit shall be entitled to continue to enjoy the rights as an Owner unless it performs the obligation of the Lessee hereunder, or under any replacement lease,in accordance with its terms. Under no circumstances,however,shall a Unit Mortgagee or any such successor be subject to any personal or corporate liability hereunder and Lessor hereby acknowledges and agrees that it shall have no personal or corporate recourse against the Unit Mortgagee or such successor, but Lessor shall look solely to the leasehold estate and the rents, issues and profits therefrom to satisfy any obligations of the Unit Mortgagee or such successor hereunder. Section 8.08 Third Party Beneficiary. Lessor and Lessee acknowledge and agree that the provisions of this Article 8 are included herein for the purpose of inducing Unit Mortgagees to provide financing to an Owner and may be relied upon and enforced by any Unit Mortgagee as a third party beneficiary of such provisions. Article 9 Defaults and Remedies; Termination Section 9.01 Lessee's Default. The failure of Lessee to materially comply with any obligation contained herein that continues for sixty(60)days following written notice thereof to Lessee shall constitute a Default(herein so called)by Lessee(a "Default"). Section 9.02 Lessor's Remedies. Upon the occurrence of any Default by Lessee, (it being understood that this provision shall apply to an individual Defaulting Owner, not a Non-Defaulting Owner as provided in Section 7.03(b)), Lessor may, subject to the provisions hereinafter set forth regarding Unit Mortgagees, exercise any and all remedies available, at law or in equity, including, without limitation, terminating this Lease and re-entering the Premises under process of law. Notwithstanding any such termination or other action by Lessor, the liability of Lessee for the rents and charges provided for herein shall not be relinquished, diminished, or extinguished. It is further agreed that Lessee will pay, in addition to the rental and other sums agreed to be paid hereunder, such additional sums as a court may adjudge reasonable as attorneys' fees in any suit or action to collect the Rent then due or to become due to Lessor hereunder. Any personalty or other property belonging to Lessee or to any persons holding by, through, or under Lessee otherwise found upon the Property, may be removed therefrom and stored in any public warehouse at the cost of and for the account of Lessee. If Lessee should abandon or surrender said Premises or be dispossessed by process of law, any personal property left upon the Property may be deemed abandoned, at the option of Lessor, and Lessor, its agents or attorneys shall have the right, without further notice or demand,to re-enter and remove all persons and Lessee's property therefrom. Section 9.03 Interest Rate. If Lessor at any time,by reason of any Default by Lessee, is compelled to pay, or elects to pay, any sum of money, or is compelled to incur any expense, including reasonable attorneys' fees, in instituting or prosecuting any action or proceeding to construe or enforce Lessor's rights hereunder, the sum or sums so paid by Lessor, with interest thereon at the rate equal to the sum of(i) the prime rate then in effect at Wells Fargo Bank,National Association(or its successor institution if such bank does not then exist) plus (ii)two percent(2%), shall be deemed to be additional rental hereunder and shall be due from Lessee to Lessor on demand. Section 9.04 Cumulative Remedies. All rights and remedies of Lessor herein enumerated shall be cumulative and none shall exclude any other right or remedy allowed by law, and said rights and remedies may be exercised and enforced concurrently and whenever and as often as occasion therefor arises. -23 - Section 9.05 No Trespass. Lessor shall not be liable in trespass or for constructive eviction or otherwise for exercising any of the rights or remedies granted to Lessor herein in connection with re-entry and/or repossession of the Property. Section 9.06 Cost Reimbursement. Lessee shall be obligated to pay to Lessor, upon demand, all reasonable costs, expenses and disbursements (including reasonable attorneys' fees) incurred by Lessor in taking any remedial action with respect to any Default of Lessee. Article 10 Casualty and Condemnation Section 10.01 Casualty (a) Repair- of Damaged Improvements. Should any building or other structures or Improvements constructed and located by Lessee on or within the Premises be damaged or destroyed by fire or any other casualty whatsoever during the term of this Lease,Lessee,except as hereafter provided in this subsection(a), shall,within ninety (90) days from the date of such damage or destruction, subject to its receipt of insurance proceeds therefor,plus the amount of the applicable deductible under the insurance policy, commence the work of repair, reconstruction, restoration, or replacement and shall prosecute the same with all reasonable dispatch, such that the buildings, other structures or Improvements shall be repaired, reconstructed, or restored as nearly as practicable to the same condition as prior to such damage or destruction. Anything in this Lease to the contrary notwithstanding, the period of time within which Lessee is hereinabove obligated to complete the repair, reconstruction, restoration, or replacement of any buildings or other structures or Improvements so damaged or destroyed shall be extended for the period of any delay in said completion not within the reasonable control of Lessee, which shall include any delay in receipt of insurance proceeds and the amount of the applicable deductible under the insurance policy. Lessor and Lessee specifically agree that, except as otherwise provided in this Lease, damage to or destruction of any building or other structures or Improvements on or within the Property at any time during the Term of this Lease, by fire or any other casualty whatsoever,shall not work a termination of this Lease or authorize Lessee or those claiming by, through or under Lessee to quit or surrender possession of the Premises or any part thereof, and shall not release Lessee in any way from its liability to pay Lessor the Rent herein provided for,or from any of the provisions of this Lease. However, if any building or other structures or Improvements constructed and located by Lessee on or within the Property shall be damaged or destroyed at any time after payment in full of any debt secured by Lessee's interest under this Lease, Lessee shall be relieved of any obligation to repair, reconstruct, restore, or replace the said damaged or destroyed buildings, other structures or improvements upon payment by Lessee to Lessor, in a single total payment, of the net proceeds received by Lessee from the insurance company or companies insuring the same. Lessee shall also be relieved of any such obligation in the event a Unit Mortgagee shall elect to apply insurance proceeds to the reduction of Lessee's outstanding indebtedness as permitted pursuant to subsection (d) of this Section. The release of Lessee from Lessee's obligation to repair, reconstruct, restore, or replace the said damaged or destroyed building or other structures or Improvements shall be conditioned, in addition to the payment by Lessee of the sums herein enumerated, upon delivery by Lessee to Lessor of an instrument releasing, demising,conveying,and transferring to Lessor all of Lessee's rights, title, and interest in and to the Premises. Notwithstanding the above,the Parties recognize that the Bond Documents contain provisions governing the actions of Lessee upon damage or destruction of all or part of the Premises and agree that so long as the Bond Documents are outstanding, (i) the compliance by Lessee with the provisions thereof regarding damage or destruction shall -24- constitute compliance by Lessee hereunder and (ii) this Section shall be interpreted in a manner consistent with the provisions of the Bond Documents,as applicable. (b) Damages.for Failure to Comply with Repair Obligation. If the repair, reconstruction,restoration, or replacement of damaged or destroyed buildings, other structures or Improvements is not substantially completed in accordance with subsection (a) hereof within a reasonable time after the date of such damage or destruction(if such completion date is prior to the end of the Term of this Lease and if Lessee is under the affirmative requirement of such subsection (a) to commence the repair, reconstruction, restoration, or replacement), subject to Article 8 hereof, Lessor may terminate this Lease upon written notice thereof to Lessee and, in such event, subject to Section 10.01(d) below, Lessor shall receive the proceeds of all insurance obtained to the extent such proceeds have not been expended on or committed to such repairs. (c) Termination Prior to Completion of Repair. Subject to Section 10.01(d) below, in the event of the termination of this Lease before the expenditure of the full amount of such insurance proceeds in the repair, reconstruction, restoration, or replacement of such damaged or destroyed buildings, other structures or Improvements, any unexpended balance thereof, including any interest previously earned by such balance, shall inure to and become the sole property of Lessor. (d) Subordination to Interests of Trustee. Notwithstanding anything else herein contained,for so long as the Bonds are outstanding, the provisions of the Indenture shall control in all respects the receipt, handling, and application of any and all insurance proceeds, it being acknowledged and agreed that the Issuer, the Trustee, and any other permitted Unit Mortgagee, as their respective interests may appear, shall have a first and prior security interest therein. Section 10.02 Condemnation. (a) General. The term "condemnation" as used in this Lease means the taking or appropriation of property,or any interest therein,in exercise of the power or right of eminent domain or such taking for public or quasi-public use or any state of facts relating to the taking or appropriation of property that, without an actual taking or appropriation, shall result in direct or consequential damages to the Property or the leasehold interest herein. Such term shall also be deemed to include to the extent not otherwise defined in this paragraph, a temporary taking of the Property or any part thereof or the Improvements thereon for a period of one year or more, and the taking of the leasehold interest created herein. (b) Total Condemnation. If all of the Property(or such substantial portion thereof as shall,in Lessor's reasonable discretion, make it economically unfeasible to continue to operate the remaining portion for the purpose herein) is so condemned,this Lease shall terminate on the date title to the Property vests in the condemnor; provided, however, that such termination shall be without prejudice to the rights of Lessor to recover just and adequate compensation from any such condemnor. If this Lease is terminated as provided in this subsection, Lessee shall pay the Rent for the year in which the Property is taken,up to the Termination Date. The Rent shall be payable within sixty(60)days after the date this Lease is terminated. (c) Division of Award - Total Condemnation. Subject to the controlling provisions of the Bond Documents, if the property is totally condemned as provided in subsection (b) above, the condemnation proceeds shall be paid as follows: -25- (i) Lessee first shall be entitled to receive such portion of the condemnation proceeds as shall equal the principal balance and accrued interest on and all other sums owing under the Unit Mortgage which shall be directly paid to such Unit Mortgagee. (ii) Lessor shall then be entitled to receive the balance of the condemnation proceeds. (d) Partial Condemnation. In the event of a taking of less than a total taking as provided in subsection (b)above, this Lease shall terminate as to the condemned portion of the Property on the date title to the condemned portion of the Property vests in the condemnor; provided, however, that such termination shall be without prejudice to the rights of Lessor to recover just and adequate compensation from any such condemnor. The provisions of this Lease shall remain in full force and effect as to the portion of the Property not condemned. (e) Division ofAward-Partial Condemnation. Subject to the controlling provisions of the Indenture, if the Property is partially condemned as provided in subsection (d) above, the condemnation proceeds shall be paid as follows: (1) Lessee first shall be entitled to receive such portion of the condemnation proceeds as shall equal Unit Mortgagee's equitable portion of the principal balance and accrued interest on and all other sums owing under the Unit Mortgage. Such amount shall be directly paid to such Unit Mortgagee. (ii) Lessor shall then be entitled to receive the balance of the condemnation proceeds. (f) Subordination to Interests of Trustee. Notwithstanding anything else herein contained,for so long as the Bonds are outstanding, the provisions of the Indenture shall control in all respects the receipt, handling, and application of any and all condemnation proceeds, it being acknowledged and agreed that the Issuer,the Trustee,and any other permitted Unit Mortgagee,as their respective interests may appear,shall have a first and prior security interest therein. Article I I Representations and Warranties Section 11.01 Representations of Lessor. Lessor hereby represents to Lessee as follows as of the Commencement Date: (a) The execution,delivery,and performance of this Lease has been duly authorized by all necessary action of Lessor,and does not conflict or constitute on the part of Lessor a violation of,breach of, or default under any statute, indenture, mortgage, deed of trust, resolution, or other agreement or instrument to which Lessor is a party or by which Lessor or its property is bound, or any order, rule, or regulation of any regulatory body or court having jurisdiction over Lessor or any of its activities or properties. (b) No litigation of any nature has ever been filed, or to our actual present knowledge, is pending or threatened, pertaining to, affecting, questioning, or contesting the authority of Lessor to execute and deliver this Lease or the performance of Lessor's obligations hereunder. Section 11.02 Representations and Warranties of Lessee. Lessee hereby represents and warrants to Lessor as follows as of the Effective Date and as of the Commencement Date: -26- (a) The execution, delivery,and performance of the this Lease has been duly authorized by all necessary action of Lessee, and does not conflict or constitute on the part of Lessee a violation of, breach of, or default under any statute, indenture, mortgage, deed of trust, resolution,or other agreement or instrument to which Lessee is a party or by which Lessee or its property is bound, or any order, rule, or regulation of any regulatory body or court having jurisdiction over Lessee or any of its activities or properties. (b) No litigation of any nature has eves- been filed, or to our actual present knowledge, is pending or threatened, pertaining to, affecting, questioning, or contesting the authority Lessee to execute and deliver this Lease or the perfonnance of Lessee's obligations hereunder. Article 12 Lessor's Purchase Option Section 12.01 Lessor's Purchase Option. Lessee, for additional good and valuable consideration, the receipt and sufficiency of which is hereby confirmed, hereby grants to Lessor an option to purchase as provided in this Article 12. Throughout the tern of this Lease, Lessor shall have the right and option to purchase Lessee's right, title, and interest in and to the Premises; subject, however, to any applicable prohibitions under the Indenture with respect to the optional redemption of the Bonds prior to their stated maturity dates. Section 12.02 Exercise Notice. Lessor may exercise such option to purchase Lessee's right,title, and interest in and to the Premises by delivering written notice(the"Exercise Notice")of such exercise to Lessee and any Unit Mortgagee. Section 12.03 Purchase Price. If the option to purchase shall be exercised, the purchase price of Lessee's right, title, and interest in and to the Premises shall be the principal balance then outstanding of all sums secured by any Unit Mortgage then in effect,plus any premium payable on such indebtedness,plus all interest accrued or to accrue on such indebtedness through the date of payment of such indebtedness plus any other charges due and payable under the Bond Documents(the "Purchase Price"). Section 12.04 Closing. The closing of the transfer of Lessee's right, title, and interest in and to the Premises (the "Purchase Option Closing") shall be held on or before the date that is ninety (90) days after the date of the Exercise Notice,on such date and at such time and place as Lessor and Lessee shall mutually agree. At Purchase Option Closing,upon payment of the Purchase Price as required in Section 12.05 below, and all Purchase Option Closing Costs to Lessee or such other parties designated by Lessee, title to the Project shall be conveyed by a special warranty deed in recordable form executed by Lessee. Section 12.05 Title. Upon payment of the Purchase Price, the Project shall be conveyed to Lessor free and clear of all liens, and shall be subject only to the Permitted Encumbrances, and to all matters of record affecting title to or use of the Premises previously approved in writing by Lessor. Section 12.06 Closing Costs. Lessor shall pay all recording fees for satisfaction of Lessee's loans,all transfer taxes in connection with the sale of the Project, and all recording fees in connection with recording of the deed and assignment and all expenses, including, without limitation, reasonable attorneys' fees incurred by Lessee in connection with the closing of the purchase of the Project(collectively,the "Purchase Option Closing Costs"). The Purchase Price shall be paid to the Unit Mortgagee on behalf of Lessee in cash at Purchase Option Closing and the Purchase Option Closing Costs shall be paid to Lessee or such other party as directed by Lessee at Purchase Option Closing. -27- Article 13 General Provisions Section 13.01 Notices. All notices, certificates, or other communications hereunder shall be sufficiently given and shall be deemed given: (a) when mailed by certified mail, postage prepaid, return receipt requested;(b)when dispatched by facsimile transmission;or(c)when delivered by personal delivery; addressed as follows: to Lessor: The City of Baytown, Texas 2401 Market Street Baytown,Texas 77520 Attn: City Manager with a copy to: General Counsel's Office 2401 Market Street Baytown,Texas 77520 To Lesseer: The Baytown Municipal Development District 2401 Market Street Baytown,Texas 77520 Attn: General Manager with a copy to: Winstead PC 401 Congress Ave. Suite 2100 Austin,Texas 78701 to the Trustee: Wells Fargo Bank, N.A. Receipt of notices,certificates,or other communications hereunder shall occur upon actual delivery (whether by mail, facsimile transmission, messenger, courier service, or otherwise)to any person who is an officer of the Party at any location where such person may be found, or to an officer, agent or employee of Party,at the address of such party set forth above,subject to change as provided hereinabove. An attempted delivery in accordance with the foregoing,acceptance of which is refused or rejected,shall be deemed to be and shall constitute receipt; and an attempted delivery in accordance with the foregoing by mail,messenger, or courier service (whichever is chosen by the sender) that is not completed because of changed address of which no notice was received by the sender in accordance with this provision prior to the sending of the notice, certificate, or other communication shall also be deemed to be and constitute receipt. Any Party named in this Section 13.01 may, by notice given to each of the others,designate any additional or different addresses to which subsequent notices,certificates,or other communications shall be sent. Section 13.02 Estoppel Certificates. Lessor and Lessee will execute, acknowledge and deliver to the other promptly upon request by the other Party or a Unit Mortgagee, a certificate certifying as to the following: (a) Validity gI'Lease: that this Lease is unmodified and in full force and effect(or, if there have been modifications,that this Lease is in full force and effect,as modified,and stating the modifications); -28- (b) Pavment of Rent: the dates through which Rent under this Lease has been paid; (c) Amount of Rent Due: the amount of the Rent then payable; and (d) Defaults by Lessee: that no notice has been given by Lessor to Lessee of any failure to comply under this Lease that has not been cured and to the best of its knowledge and belief no Default exists (or, if there has been any notice given or Default exists, describing the same). Section 13.03 No Waiver of Rights by Lessor. No failure of Lessor to exercise any power given Lessor hereunder or to insist upon strict compliance by Lessee with its undertakings, duties and obligations hereunder, and no custom or practice of the Parties at variance with the provisions hereof shall constitute a waiver of Lessor's right to demand exact compliance with the provisions contained in this Lease. Section 13.04 No Liability of Lessor. Lessor shall not under any circumstance be liable to Lessee, or any of its agents, representatives, employees, servants, or invitees, or their respective successors, heirs and assigns for any damage to persons or property due to the condition or design of or any defect in any Improvements or any mechanical,electrical,plumbing or other facilities, systems,components,paved areas or landscaping comprising same located, at any time, on the Property, and Lessee,with respect to itself and its representatives, agents, employees, servants, and invitees, and their respective successors, heirs and assigns hereby expressly assumes all risks and damage to persons and property,either proximate or remote, by reason of the present or future condition of the Property. Section 13.05 Rights are Cumulative. All rights; powers, and privileges conferred herein upon the Parties shall be cumulative. Section 13.06 Construction and Binding Effect. This Lease constitutes the entire agreement of the parties and supersedes any prior agreements. Except as otherwise expressly provided herein,this Lease shall inure to the benefit of and shall be binding upon Lessor, Lessee,and their respective successors and assigns. Section 13.07 Amendment, Changes and Modifications; Waivers. The Parties may from time to time enter into supplements and amendments to this Lease. An executed copy of any of the foregoing amendments,changes or modification shall be filed with the Trustee. Section 13.08 Modifications to Ground Lease. There shall be no cancellation, surrender, termination, or modification of this Lease by the Lessor or Lessee without the prior written consent of the Trustee, except that no such consent shall be required for any amendment of this Lease (i) in connection with the issuance of Additional Bonds pursuant to the terms of the Indenture, (ii) so as to identify more precisely the Hotel Unit or City Facilities Unit,or to add additional land or interests in land,or(lit)to provide for additional Improvements. Notwithstanding the City Facilities Lease (but, in any event, subject to the Trustee's curative rights set forth in Section 4.03 of the City Facilities Lease), nothing in the City Facilities Lease shall be deemed to require Trustee consent for either Landlord's termination of the City Facilities Lease in accordance with the terms thereof. Section 13.09 Execution of Counterparts. This Lease may be executed in several counterparts,each of which shall be an original and all of which shall constitute but one and the same instrument. Section 13.10 Law Governing Construction of This Lease. This Lease is prepared and entered into with the intention that the law of the State,exclusive of the State's rules governing choice of law,shall govern its construction. -29- Section 13.11 Limitation of Liability. Notwithstanding anything herein to the contrary, the liability of Lessee hereunder (including, but not limited to its indemnity obligations) shall be "non-recourse" and, accordingly, Lessor's sole source of satisfaction of such obligations shall be limited to Lessee's interest in the Property and the Project and the rents, issues and surplus related thereto, and Lessor shall not seek to obtain payment from any person or entity comprising Lessee or from any assets of Lessee other than those described herein,notwithstanding the survival of any obligation of Lessee beyond the term hereof. Section 13.12 Memorandum of Lease. The Parties agree to prepare,execute,seal,acknowledge and deliver simultaneously with the execution of this Lease, in recordable form, a memorandum of lease setting forth the basic terms hereof. Section 13.13 No Waiver of Sovereign Immunity. Nothing in this Lease shall be construed to waive the sovereign immunity of the State or any entity thereof, including the sovereign immunity of Lessor, as a political subdivision of the State. Section 13.14 No Merger. So long as any Unit Mortgage is in existence, unless all Unit Mortgagees shall have otherwise agreed in writing,the fee title to the Property and the leasehold created hereby shall not merge but shall remain separate and distinct, notwithstanding the acquisition of said fee title and said leasehold by Lessor or Lessee or by a third party, by purchase or otherwise. Section 13.15 Audits. Lessor may,at its option and at its own expense,and during customary business hours, conduct internal audits of the books, bank accounts, records and accounts of Lessee. Audits may be made on either a continuous or a periodic basis or both, and may be conducted by employees of Lessor or by independent auditors retained by Lessor desiring to conduct such audit,but any and all such audits shall be conducted without materially or unreasonably or unnecessarily interrupting or interfering with the normal conduct of Lessee's business affairs by Lessor. (signature page follows) -30- IN WITNESS WHEREOF, Lessor and Lessee have caused this Ground Lease Agreement to be duly executed in duplicate counterparts to be effective as of the Effective Date. LESSOR: CITY OF BAYTOWN,TEXAS, a Texas home-rile municipality By: Name: Title: LESSEE: BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT, a Texas nonprofit corporation By: Name: Title: (Signantre Page to Ground Lease) -Exxil3rT A LEGAL DESCRIPTION OF THE PROPERTY ., Y IVA \ 41, NS If s11 i I A if lit i , f N a' ' E� • , o :a +loll , •', _ �l ./e VP rrj ita 1 y } s# ,131 .! lit Aik ,+t `4 ��' ,�'; ��'`' � = ii�i��1• ; rpj •. �� i�f 'ss�� I•TI cr lit rfib Ali is r•• g rs �`. •lee 3LxM�d eve 83s3IES1ii�i�S3s: Biif 9a2aaa � 65fi5's:"s55E54fi:cscc:ccaj iieaii �i+ 4n �t4 QimdItIt � i �Ila aax•zs Ri i � , FEEaeG66$Efr&&6E6i5i6f$f s kti�jQi4Gl�tikikli';fit titI �ixik1311 i�01. a. $SII10 D g S��E � ��3�i�iaas� i��uj ipf 554E6iiFESFB�CE&feQFifiFE� 04Sk#i�� :iAak$Z Av— if E6 1SES155Eb5�4@5f f• a : E#f3q Ism ff. s0 �i-s a 1. . :4it a. ir �� • t w -� r i i a a i i F G r R i • ►�►g►@-wrr It ! 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A4 gs use d s °f ppax: an fix. a ex �ta�. za S xa ,Vt9 5a Av a8ft .8�x�.sxJ�AA�. s�y3AA�xv� oEarD:ss=°aEa �saa:aaa��anieaDDaaecxaDaarors:DaYaa=raaYEnaEssayss°s: d; , , MONO a�lip�a��l�l��l��l��#��° �E' ��' .Ilia to xn:s:annas:Dra s sasa:sa r :srs�ssDsarslariirisrascca�ssaY:EDs:s >�s � _ �� wing v d�XI �a ¢Aa lei. RMINIMUM 48t:111 iag •A sAA Ai �a ip �"i a7ei � � r� �a� �s a� iir[f x �� °'s o� #_ u i z ,a mi s� lie4 gill �� z• �_ �"Jill Q 01 -1 � -` All ` EXHIBIT'B INITIAL TITLE EXCEPTIONS Exhibit T" CHICAGO TITLE INSURANCE COMPANY POLICY NO.: PROFORMA SCHEDULE B EXCEPTIONS FROM COVERAGE GF No.: CTH-BTF-CTT19715004 Policy No.: PROFORMA This policy does not insure against loss or damage (and the Company will not pay costs, attorneys'fees or expenses) that arise by reason of the terms and conditions of leases and easements, if any, shown in Schedule A, and the fallowing matters: 1. Those recorded under Film Code No. , Condominium Records, Harris County, Texas. 2. Shortages in area. 3. Standby fees, taxes and assessments by any taxing authority for the year 2021 and subsequent years; but not those taxes or assessments for prior years because of an exemption granted to a previous owner of the property under Section 11.13,Texas Tax Code, or because of improvements not assessed for a previous tax year. Company insures that standby fees, taxes and assessments by any taxing authority for the year 2021 are not yet due and payable. 4. Liens and leases that affect the title to the land, but that are subordinate to the lien of the insured mortgage. 5. (Insert here all other specific exceptions as to superior liens, easements, outstanding mineral and royalty interests, etc.) a. An easement, granted to Gulf Refining Company and Gulf Oil Corporation for pipe line, as set forth in instrument recorded in Volume 2111, Page 552, Deed Records, Harris County,Texas. b. Interest in and to all coal, lignite, oil, gas and other minerals, and all rights incident thereto, contained in instrument dated July 15, 1960, recorded July 28, 1960 at Clerk's File No. B209814 (Volume 4095, Page 586), Deed Records corrected by Clerk's File No. E506182, Official Public Records, Harris County, Texas. Reference to which instrument is here made for particulars. No further search of title has been made as to the interest(s) evidenced by this instrument, and the Company makes no representation as to the ownership or holder of such interest(s). C. Interest in and to all coal, lignite, oil, gas and other minerals, and all rights incident thereto, contained in instrument dated March 16, 1995, recorded April 26, 1995 at Clerk's File No. R367024, Official Public Records, Harris County,Texas. Reference to which instrument is here made for particulars. No further search of title has been made as to the interest(s)evidenced by this instrument, and the Company makes no representation as to the ownership or holder of such interest(s). d. Lease for coal, lignite, oil, gas or other minerals, together with rights incident thereto, dated September 12, 1933, by and between C.W. Harral, trustee, as Lessor, and H.C. Aiken and Van McPhail, as Lessee, recorded September 19, 1933 at Volume 230, Page 429, Contract Records, Harris County, Texas. Reference to which instrument is here made for particulars. No further search of title has been made as to the interest(s)evidenced by this instrument, and the Company makes no representation as to the ownership or holder of such interest(s). e. Lease for coal, lignite, oil, gas or other minerals, together with rights incident thereto, dated December 12, 1933, by and between Miss Johnelle Bryan, individually and as Executrix of the Estate of Caro Bryan Chapman, Deceased, as Lessor, and H.J. De Arman and A.D. Locke, as Lessee, recorded December 14, 1933 at Volume 232, Page 611, Contract Records, Harris County, Texas. Reference to which instrument is here made for particulars. No further search of title has been made as to the interest(s)evidenced by this instrument, and the Company makes no representation as to the ownership or holder of such This is a Pro Forma Policy furnished to or on behalf of the party proposed to be insured for discussion only. It does not reflect the present status of title and is not a commitment to insure the estate or interest as shown herein, nor does it evidence the willingness of the Company to provide any coverage shown herein. Any such commitment must be an express written undertaking issued on the appropriate forms of the Company. FORM T-2: Loan Policy of nile Insurance(01/03114) TX-CT-FOHO-03305.532015-SPS-7239943-1—CTT19715004 CHICAGO TITLE INSURANCE COMPANY POLICY NO.: PROFORMA SCHEDULE B EXCEPTIONS FROM COVERAGE (continued) interest(s). f. Lease for coal, lignite, oil, gas or other minerals, together with rights incident thereto, dated November 10, 1920, by and between Mrs. Caro B. Chapman and Miss Johnelle Bryan, as Lessor, and Gulf Production Company, as Lessee, recorded June 5, 1929 at Volume 178, Page 257, Contract Records, Harris County, Texas. Reference to which instrument is here made for particulars. No further search of title has been made as to the interest(s) evidenced by this instrument, and the Company makes no representation as to the ownership or holder of such interest(s). g. Lease for coal, lignite, oil, gas or other minerals, together with rights incident thereto, dated May 20, 1929, by and between Mrs. Caro B. Chapman and Miss Johnelle Bryan, as Lessor, and S.M. Dunbar, as Lessee, recorded May 31, 1929 at Volume 179, Page 223, Contract Records, Harris County, Texas. Reference to which instrument is here made for particulars. No further search of title has been made as to the interest(s) evidenced by this instrument, and the Company makes no representation as to the ownership or holder of such interest(s). h. Lease for coal, lignite, oil, gas or other minerals, together with rights incident thereto, dated May 30, 1929, by and between C.W. Harrel,trustee, as Lessor, and S.M.Dunbar, as Lessee, recorded July 15, 1929 at Volume 180, Page 163, Contract Records, Harris County, Texas. Reference to which instrument is here made for particulars. No further search of title has been made as to the interest(s)evidenced by this instrument, and the Company makes no representation as to the ownership or holder of such interest(s). i. Lease for coal, lignite, oil, gas or other minerals, together with rights incident thereto, dated September 28, 1941, by and between Mrs. P.B. Bradley, Individually and as Independent Executrix of the Estates of Johnelle Bryan and Caro B. Chapman, Deceased,joined by Mary Bradley Byrne, and her husband, E.E. Byrne, and Gene Bradley Lawless and her husband, James V. Lawless, as Lessor, and H.B. Gunn, as Lessee, recorded March 13, 1942 at Volume 400, Page 649, Contract Records, Harris County, Texas. Reference to which instrument is here made for particulars. No further search of title has been made as to the interest(s) evidenced by this instrument, and the Company makes no representation as to the ownership or holder of such interest(s). j. Lease for coal, lignite, oil, gas or other minerals, together with rights incident thereto, recorded in Volume 576, Page 435; Volume 576, Page 438; Volume 576, Page 441; Volume 576, Page 444; Volume 576. Page 447;Volume 576, Page 450; Volume 576, Page 453; Volume 576, Page 457; Volume 576, Page 459; Volume 576, Page 461; Volume 576, Page 463;Volume 576, Page 466; Volume 576, Page 468; Volume 576, Page 472; Volume 576, Page 475;Volume 576, Page 478; Volume 576, Page 481; Volume 576, Page 487; Volume 576, Page 489;Volume 576, Page 492; Volume 576, Page 495; Volume 576, Page 498; Volume 576, Page 501; Volume 576, Page 503;Volume 576, Page 506; Volume 576, Page 509; Volume 576, Page 512;Volume 576, Page 515; Volume 576, Page 517; Volume 576, Page 519; Volume 576, Page 521; Volume 576, Page 523;Volume 576, Page 526; Volume 576, Page 529, Contract Records, Harris County, Texas. Reference to which instrument is here made for particulars. No further search of title has been made as to the interest(s) evidenced by this instrument, and the Company makes no representation as to the ownership or holder of such interest(s). k. Lease for coal, lignite, oil, gas or other minerals, together with rights incident thereto, recorded in Volume 578, Page 624; Volume 578, Page 626; Volume 581, Page 303; Volume 587, Page 365, Contract Records, Harris County,Texas. Reference to which instrument is here made for particulars. No further search of title has been made as to the interest(s) evidenced by this instrument, and the Company makes no representation as to the ownership or holder of such interest(s). I. All leases, grants, exceptions or reservations of coal, lignite, oil, gas and other minerals, together with all This is a Pro Forma Policy furnished to or on behalf of the party proposed to be insured for discussion only. It does not reflect the present status of title and is not a commitment to insure the estate or interest as shown herein, nor does it evidence the willingness of the Company to provide any coverage shown herein. Any such commitment must be an express written undertaking issued on the appropriate forms of the Company. FORM T-2: Loan Policy of Title lnsurence(01/03/14) TX-CT-FOHO-03305.532015SPS-7239943-1-CTT19715004 CHICAGO TITLE INSURANCE COMPANY POLICY NO.: PROFORMA SCHEDULE B EXCEPTIONS FROM COVERAGE (continued) rights, privileges, and immunities relating thereto, appearing in the Public Records whether listed in Schedule B or not. There may be leases, grants, exceptions or reservations of mineral interest that are not listed. M. The Company shall have no liability for, nor responsibility to defend, any part of the Land against any right, title, interest or claim (valid or invalid)or any character had or asserted by the State of Texas or by any other Government or Governmental Authority or by the public generally(1) in and to portions of the Land which may be within the bed, shore or banks of a perennial stream or lake navigable in fact or in law or within the bed or shores or the beach adjacent thereto of a body of water affected by the ebb and flow of the tide; and (2) in and to portions of the Land which may be between the water's edge and the line of vegetation on the upland or for any claim or right for ingress thereto or egress therefrom. Any titles or rights asserted by anyone including, but not limited to persons, the public, corporations, governments or other entities; (a)to tidelands, or lands comprising the shores or beds of navigable or perennial rivers and streams, lakes, bays, gulfs or oceans, or(b)to lands beyond the line of the harbor or bulkhead lines as established or changed by any government, or(c)to filled-in lands, or artificial islands, or(d)to statutory water rights, including riparian rights, or(e)to the area extending from the line of mean low tide to the line of vegetation, or the rights or interests of access to that area or easement along and across that area. n. Subject property does not have access to a dedicated roadway; rights of ingress and egress are not insured. 0. Any rights, interests, or claims which may exist or arise by reason of the following matters disclosed by survey, Job No.: 17.074.02 Dated: March 23, 2020 Prepared by: Michael F. Carrington, R.P.L.S. No. 5366 Matters shown: 1. Fence does not follow property line. 2. Signs, overhead power lines, guy wire, water lines, power poles, water valves, FOC marker, sanitary line,telephone vault, electric meter, electric box and pull box, together with the rights of utilities and servicing companies in and to the access, use, maintenance and removal of same. 3. Encroachment of curbs, concrete drive, sidewalks and parking lot from adjoining property. 4. Lack of dedicated access from a public right-of-way as noted on survey. 5. Rights and claims of owners in possession of oil well 1 -status unknown. P. Terms, conditions and provisions contained in that certain Lease Agreement dated , by and between Baytown Municipal Development District(tenant)and The City of Baytown, Texas (landlord), a Memorandum of which is filed under Clerk's File No. Official Public Records, Harris County,Texas. q. The matters set forth in the document shown below which, among other things, contains or provides for: certain easements; liens and the subordination thereof; provisions relating to partition; restrictions on severability of component parts; and covenants, conditions and restrictions but omitting any covenants or restrictions, if any, including, but not limited to those based upon race, color, religion, sex, sexual orientation, familial status, marital status, disability, handicap, national origin, ancestry, source of income, gender, gender identity, gender expression, medical condition or genetic information, as set forth in This is a Pro Forma Policy furnished to or on behalf of the parry proposed to be insured for discussion only. It does not reflect the present status of title and is not a commitment to insure the estate or interest as shown herein, nor does it evidence the willingness of the Company to provide any coverage shown herein. Any such commitment must be an express written undertaking issued on the appropriate forms of the Company. FORM T-2: Loan Policy of Title Insurance(01103/14) TX-CT-FOHO-03305.532015-SPS-7239943-1—CTT19715004 CHICAGO TITLE INSURANCE COMPANY POLICY NO.: PROFORMA SCHEDULE B EXCEPTIONS FROM COVERAGE (continued) applicable state or federal laws, except to the extent that said covenant or restriction is permitted by applicable law. Entitled: Condominium Declaration/By-laws Recording Date: Recording No: Film Code No. Condominium Records, Harris County, Texas r. Non-exclusive easements over and through the common area for ingress, egress, public utility, enjoyment, support and repair of the common area and each unit, as provided in the above mentioned declaration. Affects: Common Area S. Assessments, charges and liens as set forth in the document Entitled: Declaration of Condominium Regime for Baytown Hotel & Convention Center Master Condominium Recording Date: Recording No: Film Code No. Condominium Records, Harris County, Texas Said lien for charges and assessments is subordinate to the lien of any mortgage or deed of trust that secures Priority Lien Indebtedness that was recorded prior to the day of any delinquent assessment. This is a Pro Forma Policy furnished to or on behalf of the party proposed to be insured for discussion only. It does not reflect the present status of title and is not a commitment to insure the estate or interest as shown herein, nor does it evidence the willingness of the Company to provide any coverage shown herein. Any such commitment must be an express written undertaking issued on the appropriate forms of the Company. FORM T-2: Loan Policy of Tltle Insurance(01/03114) TX-CT-FOHO-03305.532015-SPS-7239943-1—CTT19715004 Office File Number Policy Jacket Number Date of Endorsement Amount of Insurance Type Premium Code Rule 1 2 3 5 9 r CTT19715004 PROFORMA $75,000,000.00 EN $15,649.50 0885_14 R-29A ENDORSEMENT - T-19 RESTRICTIONS, ENCROACHMENTS, MINERALS Issued By: Attached to Policy Number: Chicago Title Insurance Company PROFORMA 1. The insurance provided by this endorsement is subject to the exclusions in Section 5 of this endorsement; and the Exclusions from Coverage, the Exceptions from Coverage contained in Schedule B, and the Conditions in the policy. 2. For the purposes of this endorsement only: a. "Covenant" means a covenant, condition, limitation or restriction in a document or instrument in effect at Date of Policy. b. "Improvement" means an improvement, including any landscaping, lawn;-shrubbery, or trees, affixed to either the Land or adjoining land that by law constitutes real property. c. "Private Right" means (i) an option to purchase; (ii) a right of first refusal -.(iii)a right of prior approval of a future purchaser or occupant; or(iv)a private charge or assessment. 3. The Company insures against loss or damage sustained by the Insured by reason of: a. A violation of a Covenant that: i. divests, subordinates, or extinguishes the lien of the Insured Mortgage, ii. results in the invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage, or iii. causes a loss of the Insured's Title acquired in satisfaction or partial satisfaction of the Indebtedness; b. A violation on the Land at Date of,Policy of an enforceable Covenant, unless an exception in Schedule B of the policy identifies the violation; c. Enforced removal of an Improvement located on the Land at Date of Policy as a result of a violation, at Date of Policy, of a building setback aline.°shown on a plat of subdivision recorded or filed in the Public Records, unless an exception in Schedule,B of the"policy identifies the violation; d. A notice of a violationi, recorded�in the Public Records at Date of Policy, of an enforceable Covenant relating to environmental protection"r'describing any part of the Land and referring to that Covenant, but only to the extent of the violation of the Covenant referred to in that notice, unless an exception in Schedule B of the policy identifies the notice of the violation; or e. Enforcement of a Private Right in a Covenant affecting the Title at Date of Policy that: i. results in the invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage, or ii. causes a loss of the Insured's Title acquired in satisfaction or partial satisfaction of the Indebtedness. 4. The Company insures against loss or damage sustained by reason of: a. An encroachment of: i. an Improvement located on the Land, at Date of Policy, onto adjoining land or onto that portion of the Land subject to an easement; or This is a Pro Forma Policy furnished to or on behalf of the party proposed to be insured for discussion only. It does not reflect the present status of title and is not a commitment to insure the estate or interest as shown herein, nor does it evidence the willingness of the Company to provide any coverage shown herein. Any such commitment must be an express written undertaking issued on the appropriate forms of the Company. Restrictions,Encroachments,Minerals Endorsement Texas Form T-19(01/03/14) TX-CT-FOHO-03305.532015-SPS-7239943-1--CTT19715004 Attached to Policy No. PROFORMA ii. an Improvement located on adjoining land onto the Land at Date of Policy unless an exception in Schedule B of the policy identifies the encroachment otherwise insured against in Sections 4.a.i. or 4.a.ii.; or b. A final court order or judgment requiring the removal from any land adjoining the Land of an encroachment identified in Schedule B; or c. Damage to an Improvement located on the Land, at Date of Policy that is located on or encroaches onto that portion of the Land subject to an easement excepted in Schedule B, which damage results from the exercise of the right to maintain the easement for the purpose for which it was granted or reserved; or d. Damage to an Improvement located on the Land on or after Date of Policy, resulting from the future exercise of a right to use the surface of the Land for the extraction or development of minerals or any other subsurface substances excepted from the description of the Land or excepted in Schedule B. 5. This endorsement does not insure against loss or damage (and the Company will not pay costs, attorneys' fees, or expenses) resulting from: a. any Covenant contained in an instrument creating a lease; b. any Covenant relating to obligations of any type to perform maintenance, repair, or remediation on the Land; c. except as provided in Paragraph 3.d, any Covenant relating to environmental protection of any kind or nature, including hazardous or toxic matters, conditions, or substances; d. contamination, explosion, fire,fracturing, vibration, earthquake, or subsidence; or e. negligence by a person or an Entity exercising a right to extract or develop minerals or other subsurface substances. This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements. Dated: PROFORMA Issued By: Chicago Title of Texas, LLC PROFORMA Authorized Officer or Agent This is a Pro Forma Policy furnished to or on behalf of the party proposed to be insured for discussion only. It does not reflect the present status of title and is not a commitment to insure the estate or interest as shown herein, nor does it evidence the willingness of the Company to provide any coverage shown herein. Any such commitment must be an express written undertaking issued on the appropriate forms of the Company. Reshictlons,Encroachments,Minerals Endorsement Texas Form T-19(01103/14) TX-CT-FOHO-03305.532015-SPS-7239943-1—CTT19715004 Exhibit "B" CITY FACILITIES UNIT LEASE AGREEMENT between CITY OF BAYTOWN as Landlord and BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT as Tenant Dated as of ,2021 TABLE OF CONTENTS ARTICLE 1 DEFINITIONS, RULES OF CONSTRUCTION.................................................2 Section1.01 Definitions.......................................................................................................2 Section 1.02 Rules of Construction....................................................................................3 ARTICLE 2 GRANT OF LEASE; TERM; RENT....................................................................4 Section 2.01 Lease of City Facilities Unit; Commencement Date...................................4 Section 2.02 Covenant of Quiet Enjoyment......................................................................4 Section2.03 Term................................................................................................................4 Section2.04 Rent.................................................................................................................4 Section 2.05 Delivery of City Facilities Unit.....................................................................4 ARTICLE 3 COVENANTS OF TENANT..................................................................................5 Section 3.01 Compliance with the Terms of the Ground Lease and Condominium Declaration 5 Section 3.02 Absolute Net Lease ........................................................................................5 Section3.03 Audit Rights ...................................................................................................5 Section 3.04 Licenses and Permits.....................................................................................6 Section 3.05 Capital Improvements...................................................................................6 Section 3.06 Assignment and Subletting...........................................................................6 ARTICLE 4 MORTGAGING THE LEASEHOLD...................................................................6 Section 4.01 Landlord Consent Required.........................................................................6 Section 4.02 Consent to Amendment.......................................................................................6 Section 4.03 Notice to Trustee; Opportunity to Cure.............................................................6 Section 4.04 Limitation Upon Termination Rights of Landlord...........................................7 Section4.05 Assignment............................................................................................................7 Section 4.06 Replacement Lease...............................................................................................7 Section 4.07 Additional Rights of Trustee...............................................................................7 Section 4.08 Amendments to Indenture...................................................................................8 ARTICLE 5 DEFAULTS AND REMEDIES..............................................................................8 Section 5.01 Default by Tenant..........................................................................................8 Section 5.02 Remedies of Landlord...................................................................................8 ARTICLE 6 REPRESENTATIONS AND WARRANTIES......................................................9 Section 6.01 Representations and Warranties of Landlord............................................9 Section 6.02 Representations and Warranties of Tenant................................................9 ARTICLE 7 GENERAL PROVISIONS .....................................................................................9 Section7.01 Notices.............................................................................................................9 Section 7.02 Estoppel Certificates....................................................................................10 Section 7.03 No Waiver of Rights by Landlord..............................................................11 Section 7.04 Rights are Cumulative.................................................................................11 Section 7.05 Construction and Binding Effect................................................................11 Section 7.06Amendment,Changes and Modifications; Waivers ........................................11 Section 7.07 Execution of Counterparts..........................................................................11 Section 7.08 Law Governing Construction of This Lease .............................................11 Section 7.09 No Partnership or Agency...........................................................................11 -i- Section 7.10 Limitation of Liability.................................................................................11 Section 7.11 Memorandum of Lease................................................................................11 Section7.12 No Merger.....................................................................................................11 Exhibit A Legal Description of the Property -ii- CITY FACILITIES UNIT LEASE AGREEMENT This CITY FACILITIES UNIT LEASE AGREEMENT(this"Lease"or this"Agreement"),is made and entered into as of this day of ,2021 (the "Effective Date"),between CITY OF BAYTOWN, a Texas home-rule municipality (together with its successors and assigns, "Landlord"), and BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT,a municipal development district(together with its successors and assigns,"Tenant"). Landlord and Tenant arc referred to herein individually as a"Party"and collectively as the "Parties". BACKGROUND: A. Landlord is the fee simple owner of a certain parcel of land located in corporate limits of the City of Baytown, County of Harris, State of Texas being more particularly described on Exhibit A attached hereto and made a part hereof for all purposes(the "Property"). B. Landlord determined that it is in the best interests of the City of Baytown and its residents to construct a full-service,upper-upscale hotel and convention center that will include public meeting space and related public infrastructure and facilities as well as certain surface parking, landscaping,hardscaping and other amenities on the Property(collectively,the "Project"). C. Landlord has entered into that certain Ground Lease Agreement with the Tenant dated as off 1 2021 for the ground lease of the Landlord's fee simple interest in the Property to the Tenant (the "Ground Lease"),upon which Lessee will develop,construct and equip the Project. D. The Parties intend that the development of the Project will consist of two components, including (i)an upper-upscale, full-service hotel, having approximately 208 rooms to include guestrooms and suites, appropriate support facilities such as a restaurant(s), a lounge(s) or bar(s), supporting back-of- the-house areas, and food preparation facilities, to the extent not constructed as City Facilities, together with such other amenities and features characteristic of a full-service hotel (the "Hotel"); and(ii)a public, City-owned convention center facilities, certain surface or structured parking and certain public facilities and infrastructure(the "City Facilities"). E. Concurrently with the execution of the Ground Lease,the Tenant shall create and form the Condominium(as defined herein)by the execution(by Landlord,as owner of the fee interest in the Property and by Tenant,as"Declarant")and recordation of the Condominium Declaration(as defined herein),in the Official Public Records of Harris County,Texas,pursuant to which,Tenant, as declarant, shall create two condominium units designated as the"Hotel Unit"(which shall consist of the Hotel),and the"City Facilities Unit" (which shall consist of the City Facilities). F. Upon creation of the Condominium regime,the Tenant will convey the City Facilities Unit to Landlord pursuant to that certain [CONDO DEED] dated as of[ ], 20[ between Landlord and Tenant. G. The Tenant intends to issue its Series 2021 Bonds in the aggregate principal amount of $r pursuant to the Indenture(as hereinafter defined),the proceeds of which shall be used by the MDD to fund the cost of designing, developing,constructing, furnishing and equipping the City Facilities and the Hotel. H. Upon the conveyance of the City Facilities Unit to the City, City will lease the City Facilities Unit to Tenant and Tenant shall use and operate the City Facilities Unit for the benefit of the City of Baytown. 1. In order to achieve the foregoing, Tenant desires to lease the City Facilities Unit from Landlord,and Landlord is agreeable to same,subject to the terms and conditions hereinafter set forth herein. - 1 - Capitalized terms used herein but not defined shall be given the meanings assigned to them in the Ground Lease. ACCORDINGLY, in consideration of the City Facilities Unit, the rental to be paid hereunder, the mutual covenants and agreements herein set forth by each Party to be kept and performed, and for other good and valuable consideration, the receipt, adequacy, and sufficiency of which are hereby expressly acknowledged by each Party,Landlord and Tenant do hereby agree to the terms of this Lease,and do hereby mutually covenant and agree as follows: Article 1 Definitions,Rules of Construction Section 1.01 Definitions. The capitalized terms used in this Lease shall have the meanings given to them in the Ground Lease or the Indenture(as the case may be)unless the context requires otherwise or unless otherwise defined herein. In addition,certain words and terms used in this Lease are defined herein. When used herein,such words and terms shall have the meanings given to them by the language employed in this Article 1 defining such words and terms,unless the context clearly indicates otherwise. "Assessment" shall mean any assessments created by the Condominium Association under the Condominium Declaration. "Capital Improvements" has the meaning ascribed thereto in Section 3.05 hereof. "City Facilities Unit"shall mean the unit designated as the City Facilities Unit in the Condominium Declaration. "Commencement Date" has the meaning ascribed thereto in Section 2.01 hereof. "Condominium" shall mean the condominium created by the execution and recordation of the Condominium Declaration. "Condominium Association" shall mean the "Association" created under the Condominium Declaration. "Condominium Declaration" shall mean the condominium declaration for the Condominium to be executed by City, as the owner of the Property, and by Tenant, as "Declarant" thereunder, and to be notarized and recorded in the Official Public Records of Harris County,Texas. "Hotel Unit"shall mean the unit designated as the Hotel Unit in the Condominium Declaration "Rent" has the meaning given in Section 2.04 hereof. "Term" has the meaning given in Section 2.03 hereof. "Termination Date" means the date on which the Term shall end by termination or expiration of this Lease. "Trustee"means [Wells Fargo Bank,N.A.],or its successors or assigns. "Trustee Mortgage" means any leasehold deed of trust or collateral assignment of the Tenant's interest in this Lease executed by the Tenant in favor of the Trustee in order to secure the Bonds, as the same may be amended and/or supplemented from time to time as permitted by the Indenture. -2- Section 1.02 Rules of Construction. For all purposes of this Lease,except as otherwise expressly provided or unless the context otherwise requires, the following rules of construction apply in construing the provisions of this Lease: (a) General Rules of Construction. All references in this Lease to exhibits, articles, paragraphs, subparagraphs, sections, subsections and other subdivisions refer to the exhibits, articles, paragraphs, subparagraphs, sections, subsections and other subdivisions of this Lease unless expressly provided otherwise. Titles appearing at the beginning of any subdivisions are for convenience only and do not constitute any part of such subdivisions and will be disregarded in construing the language contained in such subdivisions. The words "this Lease", "herein", "hereof', "hereby", "hereunder" and words of similar import refer to this Lease as a whole and not to any particular subdivision unless expressly so limited. The phrases "this paragraph" and "this subparagraph" and similar phrases refer only to the paragraphs or subparagraphs hereof in which such phrases occur. The word "or" is not exclusive, and the word "including" (in its various forms) means "including without limitation." Pronouns in masculine, feminine and neuter genders will be construed to include any other gender,and words in the singular form will be construed to include the plural and vice versa, unless the context clearly otherwise requires. References to any constitutional, statutory or regulatory provision means such provision as it exists on the Effective Date and any future amendments thereto or successor provisions thereof. (b) References to Agreements. Unless the context clearly otherwise requires or unless otherwise expressly provided herein,the terms defined in this Lease which refer to a particular agreement, instrument or document also refer to and include all renewals, extensions, supplements, modifications, amendments and restatements of such agreement, instrument or document; provided that nothing in this subsection will be construed to authorize any such renewal, extension,supplement,modification,amendment or restatement. (c) Equal Benefit of Bargain. This Lease has been reviewed and revised by legal counsel for both Tenant and Landlord, and no presumption or rule that ambiguities will be construed against the drafting party will apply to the interpretation or enforcement of this Lease. (d) Consents and Approvals of Landlord. This Lease contains various rights of consent and approval in favor of Landlord.In instances in which this Lease expressly provides that Landlord's consent or approval shall not be unreasonably withheld, such consent or approval shall not be unreasonably withheld or delayed, but Tenant agrees and acknowledges that Landlord shall be entitled to exercise its reasonable business judgment, taking into account such factors applicable to Landlord as a sole purpose limited liability company created to act on behalf of the City to serve the City's purpose and mission. In instances where this Lease does not expressly indicate Landlord's standard of review for purposes of approving or consenting to any action or request, Landlord shall have the right to give or withhold such consent or approval in its sole and absolute discretion. Additionally, in all instances in which this Lease requires the consent or approval of Landlord, such consent or approval may only be given expressly and in writing,and in no event shall any consent or approval be implied or imputed by the giving of any other consent or approval or by the taking of any other action. (e) Relationship of the Parties. The relationship between Landlord and Tenant pursuant to this Lease at all times will remain solely that of landlord and tenant and will not be deemed a partnership or a joint venture. (f) Time is of the Essence. Times set forth in this Lease for the performance of obligations shall be strictly construed, time being of the essence of this Lease. All provisions in this Lease which specify or provide a method to compute a number of days for the performance, delivery, -3- completion or observance by a Party hereto of any action, covenant, agreement, obligation or notice thereunder shall mean and refer to calendar days,unless otherwise expressly provided. (g) Severability. If any term or provision of this Lease, or the application of any term or provision of this Lease to a particular situation, is found by a court of competent jurisdiction to be invalid, illegal, void or otherwise unenforceable, the same shall not affect the other terms or provisions hereof or the whole of this Lease, or the application of such term or provision of this Lease to other situations, but such term or provision, or the application thereof to a particular situation, shall be deemed modified to the extent necessary in the court's opinion to render such term or provision (or application thereof)enforceable, and the rights and obligations of the Parties shall be construed and enforced accordingly,preserving to the fullest permissible extent the intent and agreements of the Parties herein set forth;provided,however,if the applicable term or provision so invalidated, voided or determined unenforceable, as deemed modified, would deprive either Landlord or Tenant of material benefits derived from this Lease,or make performance under this Lease unreasonably difficult,then Landlord and Tenant will meet and confer and will make good faith efforts to amend or modify this Lease in a manner that is mutually acceptable to Landlord and Tenant. Article 2 Grant of Lease; Term; Rent Section 2.01 Lease of City Facilities Unit; Commencement Date. For and in consideration of the covenants made by Tenant herein,and in consideration of the mutual benefits set forth herein and otherwise contemplated hereby, Landlord hereby leases the City Facilities Unit to Tenant and Tenant hereby leases the City Facilities Unit from Landlord for a tern commencing on the date the City Facilities Unit is conveyed by the Tenant to the Landlord(the "Commencement Date")and expiring at the end of the Term. Section 2.02 Covenant of Quiet Enjoyment. Subject to and upon the terms and conditions of this Lease, Landlord covenants and warrants, to the extent authorized under the laws and Constitution of the State of Texas, that, so long as Tenant is not in default hereunder, Tenant shall and may peaceably and quietly have,hold,occupy,use and enjoy and shall have the full and unrestricted use and enjoyment of the City Facilities Unit during the Tenn. Section 2.03 Term. Subject to the terms and conditions hereof, the term of this Lease shall commence on the Commencement Date and shall be conterminous with the tern of the Ground Lease (as defined therein) unless earlier terminated pursuant to the terns hereof or by operation of law, or extended by written agreement between the Parties (the "Term"). "Term", as used herein, shall include any valid renewal or extension of the tern of this Lease hereafter agreed to in writing by the Parties(including without limitation as such tern may be modified or extended pursuant to any modification, amendment or restatement of this Lease. Section 2.04 Rent. At all times during the Tenn of this Lease, Tenant shall pay monthly rent to Landlord in the amount of Ten Dollars and 00/100 ($10.00) in advance on the first day of each calendar month. Section 2.05 Delivery of City Facilities Unit. (a) Delivery of City Facilities Unit on Substantial Completion. Landlord shall deliver to Tenant possession of the City Facilities Unit on the substantial completion of the City Facilities Unit as determined by Landlord. Tenant agrees to accept delivery of the City Facilities Unit from Landlord substantially complete in accordance with the terms of this Lease, upon tender of possession by Landlord to Tenant. -4- (b) Rent Commencement. Notwithstanding any other provision of this Lease,Tenant's obligation to pay Rent shall commence on the Commencement Date and shall continue thereafter. Article 3 Covenants of Tenant Section 3.01 Compliance with the Terms of the Ground Lease and Condominium Declaration. At all times during the Term of this Lease,Tenant shall comply with all terms, covenants and agreements of Landlord set forth in the Ground Lease(including,without limitation,(i)Landlord's obligation to restore the City Facilities Unit in the event of a casualty or condemnation of the Project pursuant to Article 11 or 12 of the Ground Lease and(ii)all Ground Lease Obligations)and all terms,covenants and agreements of Landlord set forth in the Condominium Declaration,and shall not take any action or fail to take any action which would constitute a breach or"Default" by Landlord(as Lessor)under the Ground Lease or cause an Assessment lien to be filed on the City Facilities Unit by the Association. Section 3.02 Absolute Net Lease. This is an absolute triple net lease. Tenant recognizes and acknowledges, without limiting the generality of any other terms or provisions of this Lease, that it is the intent of the Parties hereto that Tenant is responsible to pay any and all expenses incurred in connection with the use and operation of the City Facilities Unit, including without limitation the following: (a) Landlord shall not be required to perform any service, make any payment or do any act or thing with respect to the City Facilities Unit, or the Tenant's property located thereon. Tenant shall pay, as they come due and payable, all insurance premiums, maintenance costs, operating expenses and all other charges, costs, and expenses of any nature and all penalties and interest thereon, including but not limited to any Assessments (collectively referred to herein as "Charges")that are assessed or imposed upon the City Facilities Unit or any of Tenant's property located thereon. (b) Tenant assumes complete responsibility and liability for the upkeep of the entire City Facilities Unit. Tenant shall comply with all applicable laws, requirements and guidelines, and the Condominium Declaration. Tenant shall at all times during the term of this Lease,and at its sole cost and expense, keep all buildings, improvements, constructions, fixtures, machinery and equipment that are located on the City Facilities Unit,in good order,condition and repair. Tenant shall, at Tenant's expense, make any and all repairs and replacements of whatsoever nature or character, including, without limitation, structural repairs and replacements that may become necessary to the City Facilities Unit during the term of this Lease. At the expiration or termination of this Lease, Tenant shall surrender the City Facilities Unit in good condition and repair. (c) Landlord shall not be required to furnish to Tenant any Utilities. Tenant shall arrange for the furnishing of all such services upon the City Facilities Unit as contemplated under the Ground Lease. Landlord shall cooperate with Tenant in granting all necessary servitudes as may be necessary to make all necessary utilities available to the City Facilities Unit. Section 3.03 Audit Rights. Landlord may,during customary business hours conduct internal audits of the books, records and accounts of Tenant directly related to the City Facilities Unit, to the extent necessary to verify compliance with this Lease, or any other agreements it enters into pursuant to the authority of this Lease. Audits may be made on either a continuous or periodic basis or both, and may be conducted by employees of Landlord,by independent auditors retained by Landlord, but any and all such audits shall be conducted without materially,unreasonably or unnecessarily interrupting or interfering with the normal conduct of business affairs of the Tenant. Tenant shall cooperate with Landlord and its respective authorized representatives and/or designees in connection with such audit and shall promptly make available to Landlord and its respective authorized representatives and/or designees any and all in -5- formation relating to City Facilities Unit that Landlord may reasonably request in connection with such audit. Section 3.04 Licenses and Permits. Tenant shall obtain or cause to be obtained, in the name of Landlord and/or its authorized assignees and/or designees, and at the Tenant's expense, all approvals required for the maintenance and operation of the City Facilities Unit as and when required under applicable law. Such licenses and permits shall include, by way of example and not limitation, licenses and permits for health and safety systems maintenance, electricity, gas, plumbing, telephone, cleaning, elevator and boiler maintenance, air conditioning maintenance, broadband and high-speed internet access and other technological services as they are developed,use of copyrighted materials(such as music and videos),and such other licenses and permits as Tenant deems advisable. The reasonable costs and fees incurred by the Tenant in connection with obtaining such requested approvals shall paid by Tenant. Section 3.05 Capital Improvements. Tenant shall have the right to construct renovations, improvements, substantive repairs, or replacements of a capital nature relating to the City Facilities Unit ("Capital Improvements"); however, a "Capital Improvement" shall not be deemed to include (i) the construction of a new facility and/or(ii) the re-construction of a facility due to a casualty or other similar event to the City Facilities Unit, with Landlord's prior written consent, not to be unreasonably withheld, delayed or conditioned, at no cost or expense to Landlord. Section 3.06 Assignment and Subletting. Neither Tenant nor any of its successors and assigns shall have the right to assign or transfer this Lease or any interest herein or any right or privilege appurtenant hereto or to sublease the City Facilities Unit or any portion thereof, without the prior written consent of Landlord.Any assignment or transfer for which consent is required but which is nevertheless made without such written consent shall be void ab initio. Article 4 Mortgaging the Leasehold Section 4.01 Landlord Consent Required. Tenant shall not encumber its interest in this Lease or the City Facilities Unit other than the Trustee Mortgage without Landlord's prior written consent, which consent shall be given at Landlord's sole and absolute discretion. Landlord hereby consents to Tenant's encumbrance of its interest in this Lease and the City Facilities Unit pursuant to the Trustee Mortgage and further agrees as set forth in this Article 4. Section 4.02 Consent to Amendment. There shall be no cancellation, surrender, termination, or modification of this Lease by Landlord or Tenant without the prior written consent of the Trustee Mortgagee,except that no such consent shall be required for any amendment of this Lease(i)in connection with the issuance of Additional Bonds pursuant to the terms of the Indenture, (ii) so as to identify more precisely the City Facilities Unit, or to add additional land or interests in land, or (iii) to provide for additional improvements. Notwithstanding the foregoing(but,in any event,subject to the Trustee's curative rights set forth in Section 4.03 hereof), nothing herein shall be deemed to require Trustee consent for the Landlord's termination of this Lease in accordance with the terms hereof. Section 4.03 Notices to Trustee; Opportunity to Cure. Landlord, upon notifying Tenant of an Event of Default, failure to comply, or termination, shall simultaneously deliver a copy of such notice to the Trustee. If Landlord shall notify Tenant of a failure to comply with any term, covenant,condition, or provision hereof, and such failure is of the nature that it can be cured by the Trustee on behalf of Tenant, the Trustee shall then have sixty (60) days following expiration of the cure period as is given to Tenant hereunder to remedy or cause to be remedied such failure, and Landlord shall accept such performance as if it had been done by Tenant. -6- Section 4.04 Limitation Upon Termination Rights of Landlord. If, after the expiration of any applicable cure period of Tenant or the Trustee, Landlord shall elect to terminate this Lease upon the occurrence of an Event of Default of Tenant, the Trustee shall have the right to postpone and extend the Termination Date as fixed by the provisions of this Lease for a period of not more than twelve(12)months from the expiration of the applicable cure period,so long as the Trustee continues to pay the Rent and other charges required to be paid under this Lease,performs all other obligations,duties and covenants of Tenant, and if applicable, maintains the City Facilities Unit in good repair and condition during such period, and provided further,that the Trustee shall forthwith take steps necessary to acquire Tenant's interest and estate in this Lease by foreclosure of the Trustee Mortgage, or otherwise, and shall prosecute such action to completion with due diligence. If at the end of the twelve(12) month period,the Trustee shall be actively engaged in steps to acquire or sell Tenant's interest in this Lease, the time for the Trustee to comply with the provisions of this Section shall be extended for such period as shall be reasonably necessary to complete these steps with reasonable diligence and continuity. Section 4.05 Assignment. Landlord agrees that in the event of any foreclosure under the Trustee Mortgage,either by judicial proceedings or under power of sale contained therein all right,title,and interest encumbered by the Trustee Mortgage may be assigned to and vested in the purchaser at such foreclosure sale without consent of Landlord; and any such assignee shall be vested by virtue of such assignment with any and all rights of the party whose estate shall have been encumbered by such Trustee Mortgage. Section 4.06 Replacement Lease. Landlord agrees that in the event of a termination of this Lease by reason of any Event of Default of Tenant, and subject to the rights granted herein or pursuant to the Bonds to the Trustee, the Trustee shall have the option, but not the obligation, to enter into a replacement lease; provided: (a) The Trustee shall enter into a replacement lease within the twelve(12)month period specified in Section 4.04; (b) the Trustee shall perform and observe all covenants contained in the replacement lease on Tenant's part to be performed during such period of time commencing with the date of the execution of the replacement lease and terminating upon the abandonment or surrender of possession of the City Facilities Unit under the replacement lease; and (c) the Trustee,as Tenant under the replacement lease shall have the same right,title,and interest in and to the City Facilities Unit and the right to use the buildings and improvements thereon as Tenant has under this Lease. Section 4.07 Additional Rights of the Trustee. So long as the Bonds are outstanding, then: (a) any provision of this Lease expressly recognizing or granting rights in or to the Trustee may not be amended in any manner that affects the rights of the Trustee without the prior written consent of the Trustee,such consent not to be unreasonably withheld; (b) in addition subsection (a) of this Section 4.07, the Trustee's consent shall be required for the execution and delivery of any amendment,supplement,or change to or modification of this Lease or for any other action under this Lease expressly requiring the consent of Trustee; (c) to the extent that this Lease expressly confers upon or gives or grants to the Trustee any right, remedy,or claim under,or by reason of,this Lease,the Trustee is hereby explicitly recognized as being a third-party beneficiary hereunder and may enforce any such right, remedy, or claim conferred,given or granted hereunder; (d) nothing in this Lease expressed or implied is intended or shall be construed to confer upon, or to give or grant to, any person, other than Landlord, Tenant, and the Trustee for the benefit of the -7- registered owners of the Bonds, any right, remedy, or claim under or by reason of this Lease or any covenant, condition, or stipulation hereof, and all covenants, stipulations, promises, and agreements contained in this Lease by and on behalf of Landlord and Tenant shall be for the sole and exclusive benefit of Landlord,Tenant,and the Trustee for the benefit of the registered owners of the Bonds;and (e) whenever the Trustee seeks to enforce any right or remedy of Tenant under this Lease,whether as a third party beneficiary or in any other capacity under this Lease,the Trustee shall be subrogated to Tenant and shall have the rights and be subject to all the limitations accruing to Tenant hereunder. Section 4.08 Amendments to Indenture. Tenant covenants and agrees with Landlord that it will not enter into any amendment or modification of, and will not consent to any amendment or modification of, or supplement to the Indenture,without the prior written consent of Landlord, which consent shall not be unreasonably withheld. Article 5 Defaults and Remedies Section 5.01 Default by Tenant. The occurrence of any one or more of the following shall be an "Event of Default" by Tenant under this Lease: (a) Tenant's failure to pay Rent as and when the same has become due; (b) Tenant's failure to pay any Assessment as and when the same has become due; or (c) Tenant shall be in default in the fulfillment of any other material covenants and agreements set forth herein, and such failure continues for sixty (60) days after written notice with respect to such default(which sixty(60)day period shall be reasonably extended with respect to any default that cannot reasonably be cured within such sixty (60) day period provided that Tenant has commenced the cure within such period and is diligently pursuing the same). Section 5.02 Remedies of Landlord. Upon the occurrence of an Event of Default, but only to the extent that such Event of Default constitutes an "Event of Default" under the Indenture as to which the Trustee is entitled to accelerate the Bonds thereunder,Landlord may pursue one of the following remedies in addition to any other right of remedy available at law or in equity: (a) With respect to any failure by Tenant to pay Rent when due, Landlord may seek a writ of mandamus if appropriate and allowed under such circumstances to compel Tenant to pay such Rent or Assessment;or (b) Perform any act Tenant is obligated to perform under the terms of this Lease(and enter upon the City Facilities Unit in connection therewith if necessary)in Tenant's name and on Tenant's behalf, without being liable for any claim for damages therefor,and Tenant shall reimburse Landlord on demand for any expenses which Landlord may incur in thus effecting compliance with Tenant's obligations under this Lease(including,but not limited to,collection costs and legal expenses). (c) Without legal process, enter upon and take possession and control of the City Facilities Unit to the complete exclusion of Tenant. The failure of Landlord to exercise such rights after one or more Events of Default shall not be a waiver of the rights of Landlord upon the occurrence of any subsequent Event of Default. -8- Article 6 Representations and Warranties Section 6.01 Representations and Warranties of Landlord. Landlord hereby represents and warrants to Tenant as follows as of the Commencement Date: (a) The execution,delivery,and performance of this Lease has been duly authorized by all necessary action of Landlord, and does not conflict or constitute on the part of Landlord a violation of, breach of, or default under any statute, indenture, mortgage, deed of trust, resolution, or other agreement or instrument to which Landlord is a party or by which Landlord or its property is bound, or any order, rule, or regulation of any regulatory body or court having jurisdiction over Landlord or any of its activities or properties. (b) No litigation of any nature has ever been filed,or to our actual present knowledge,is pending or threatened, pertaining to, affecting, questioning, or contesting the authority of Landlord to execute and deliver this Lease or the performance of Landlord's obligations hereunder. Section 6.02 Representations and Warranties of Tenant.Tenant hereby represents and warrants to Landlord as follows as of the Effective Date and as of the Commencement Date: (a) The execution, delivery, and performance of the this Lease has been duly authorized by all necessary action of Tenant, and does not conflict or constitute on the part of Tenant a violation of,breach of,or default under any statute,indenture,mortgage,deed of trust,resolution,or other agreement or instrument to which Tenant is a party or by which Tenant or its property is bound, or any order, rule, or regulation of any regulatory body or court having jurisdiction over Tenant or any of its activities or properties. (b) No litigation of any nature has ever been filed,or to our actual present knowledge, is pending or threatened,pertaining to,affecting,questioning,or contesting the authority of Tenant to execute and deliver this Lease or the performance of Tenant's obligations hereunder. Article 7 General Provisions Section 7.01 Notices. All notices, certificates, or other communications hereunder shall be sufficiently given and shall be deemed given: (a) when mailed by certified mail, postage prepaid, return receipt requested; (b) when dispatched by facsimile transmission; or (c) when delivered by personal delivery;addressed as follows: to Landlord: The City of Baytown Texas 2401 Market Street Baytown,Texas 77520 Attn: City Manager citymanager@baytown.org with a copy to: City Attorney's Office 2401 Market Street Baytown,Texas 77520 legal@baytown.org to Tenant: Baytown Municipal Development District 2401 Market Street Baytown,Texas 77520 -9- Attn: General Manager citymanager@baytown.org with a copy to: General Counsel's Office 2401 Market Street Baytown,Texas 77520 legal@baytown.org to the Trustee: Wells Fargo Bank,N.A. Attn: Receipt of notices,certificates,or other communications hereunder shall occur upon actual delivery (whether by mail,facsimile transmission,messenger,courier service,or otherwise)to any person who is an officer of the Landlord or Tenant at any location where such person may be found, or to an officer, agent or employee of the Landlord or Tenant or other party, at the address of such party set forth above,subject to change as provided hereinabove. An attempted delivery in accordance with the foregoing, acceptance of which is refused or rejected,shall be deemed to be and shall constitute receipt;and an attempted delivery in accordance with the foregoing by mail,messenger,or courier service(whichever is chosen by the sender) that is not completed because of changed address of which no notice was received by the sender in accordance with this provision prior to the sending of the notice, certificate,or other communication shall also be deemed to be and constitute receipt. Any party named in this Section 6.01 may,by notice given to each of the others,designate any additional or different addresses to which subsequent notices,certificates, or other communications shall be sent Section 7.02 Estoppel Certificates. Landlord and Tenant will execute, acknowledge and deliver to the other promptly upon request by the other Party or the Trustee, a certificate certifying as to the following: (a) validity of Lease:that this Lease is unmodified and in full force and effect(or,if there have been modifications, that this Lease is in full force and effect, as modified, and stating the modifications); (b) Payment of Rent: the dates through which Rent under this Lease has been paid; (c) Amount of Rent Due:the amount of Rent then payable;and (d) Defaults by Tenant:that no notice has been given by Landlord to Tenant of any failure to comply under this Lease or the Condominium Declaration that has not been cured and to the best of its knowledge and belief no Event of Default exists (or, if there has been any notice given or an Event of Default exists,describing the same). (e) Assessments: that all Assessments due to the Association by the City Facilities have been paid in full and no outstanding Assessment is creating a continuing lien on the City Facilities Unit. Section 7.03 No Waiver of Rights by Landlord. No failure of Landlord to exercise any power given Landlord hereunder or to insist upon strict compliance by Tenant with its undertakings, duties and obligations hereunder,and no custom or practice of the Parties at variance with the provisions hereof shall constitute a waiver of Landlord's right to demand exact compliance with the provisions contained in this Lease. Section 7.04 Rights are Cumulative. All rights,powers,and privileges conferred herein upon the Parties shall be cumulative. - 10- Section 7.05 Construction and Binding Effect. This Lease, the Ground Lease and the Condominium Declaration constitute the entire agreement of the Parties and supersede any prior agreements. Except as otherwise expressly provided herein, this Lease shall inure to the benefit of and shall be binding upon the Landlord and Tenant,and their respective successors and assigns. Section 7.06 Amendment, Changes and Modifications; Waivers. The Parties may from time to time enter into supplements and amendments to this Lease in accordance with the provisions of the Indenture, subject to requirements in Section 4.02 hereof. An executed copy of any of the foregoing amendments,changes or modification shall be filed with the Trustee. Section 7.07 Execution of Counterparts. This Lease may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 7.08 Law Governing Construction of This Lease. This Lease is prepared and entered into with the intention that the law of the State, exclusive of the State's rules governing choice of law, shall govern its construction. Section 7.09 No Partnership or Agency. Nothing in this Lease is intended,or shall in any way be construed, so as to create any form of partnership or agency relationship between the Parties. The Parties expressly disclaim any intention of any kind to create any partnership or agency relationship between themselves. Nothing in this Lease shall be construed to make either Party liable for any of the indebtedness of the other,except as specifically provided herein. Section 7.10 Limitation of Liability. Notwithstanding anything herein to the contrary,the liability of Tenant hereunder(including,but not limited to its indemnity obligations)under this Lease shall be"non- recourse" and, accordingly, Landlord's sole source of satisfaction of such obligations shall be limited to Tenant's interest in the Property and the City Facilities Unit and the rents,issues and surplus related thereto, and except as otherwise expressly contemplated in Section 4.02(a), Landlord shall not seek to obtain payment from any person or entity comprising Tenant or from any assets of Tenant other than those described herein, notwithstanding the survival of any obligation of Tenant beyond the term hereof. Section 7.11 Memorandum of Lease. The Tenant shall execute, seal, acknowledge and deliver simultaneously with the execution of this Lease, in recordable form, a memorandum of lease setting forth the basic terms hereof,such form of memorandum of lease to be approved by Landlord. Section 7.12 No Merger. So long as any City Facilities Unit mortgage is in existence, unless all City Facilities Unit mortgagees shall have otherwise agreed in writing,the fee title to the Property and the leasehold created hereby shall not merge but shall remain separate and distinct, notwithstanding the acquisition of said fee title and said leasehold by Landlord or Tenant or by a third party, by purchase or otherwise. (signature page follows) - 11 - IN WITNESS WHEREOF, the Landlord and Tenant have caused this City Facilities Unit Lease Agreement to be duly executed as of the Effective Date in duplicate counterparts each of which shall be deemed to be an original. 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RECITALS WHEREAS, the Hotel and the City Facilities have been built to serve the residents of the City and to promote tourism, the City's convention industry, the expansion of commerce and the diversification of the economy within the State of Texas and the community; and WHEREAS, under a condominium declaration, a Hotel Unit and City Facilities Unit were created,and the MDD is the owner of the Hotel Unit and the City is the owner of the City Facilities Unit; and WHEREAS, the MDD is the tenant under the City Facilities Unit Lease with the City pertaining to the use and operation of the City Facilities Unit which adjoins the Hotel Unit; and WHEREAS, the City will, on occasion, book hotel rooms and meeting space in the Hotel and City Facilities to support Citywide Events; and WHEREAS,the City considers the ownership and operation of the City Facilities adjoining the Hotel to be a legitimate government burden.The City has required that MDD operate the Hotel for the benefit of the City Facilities and the City and its residents in order to lessen the burdens of the City regarding the operation of the City Facilities, promote economic development and job creation for the residents of the City, and generate revenues to pay for City services provided to its residents; and WHEREAS, MDD is executing and entering into a Hotel Services Agreement with the Operator whereby the Operator will operate, maintain and manage the Hotel,and acknowledge the booking of hotel rooms and meeting space by the City as provided in this Agreement; and WHEREAS, in conjunction with the design, development, construction, furnishing, opening and operation of the Hotel and City Facilities subject to the Ground Lease and City Facilities Unit Lease, MDD and City desire to coordinate their efforts on a day-to-day basis to administer bookings at the Hotel and City Facilities in such a manner that will seek to be mutually beneficial to the parties and promote the ultimate success, and maximize the utilization, revenues and income of the City Facilities and the Hotel over the term of the Ground Lease, subject to the terms of this Agreement, the City Facilities Unit Lease and the Ground Lease; and NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: AGREEMENT ARTICLE I DEFINITIONS Definitions. Each of the following terms used in this Agreement shall have the following meanings: Applicable Laws. Means any statute, law,treaty,rule,code,ordinance,regulation,permit, interpretation, certificate or order of any Governmental Authority, or any judgment, decision, decree, injunction, writ, order or like action of any court, arbitrator or other Governmental Authority. Applicable Laws shall include, but not be limited to, City codes and ordinances. Blackout Date. Means those dates identified on a calendar distributed periodically by the Operator to the Contact which dates reflect major,non-regularly occurring sporting,entertainment, political or other event in the Baytown area, including certain nights leading up to and following such events based on the event type. Provided,however,that the City may reasonably dispute any Blackout Dates on the calendar and the Operator and MDD (represented by the Operator's corporate offices or Hotel general manager) on the other hand, may mutually agree to a resolution of the disputed dates. City. Means the City of Baytown, Texas. City Facilities. Means the public, City-owned convention center facilities, certain surface or structured parking,and certain public facilities and infrastructure. City Facilities Unit. Means the unit designated as the City Facilities Unit in the Condominium Declaration. City Facilities Unit Lease. Means that certain City Facilities Unit Lease Agreement dated as of ,by and between City and MDD with respect to the City Facilities. Citywide Event. Means a convention, trade show or other event which (i)proposes to use an amount of rentable space at the City Facilities which is usual and customary for an event of its size; (ii) utilizes some amount of rentable ballroom and meeting space at the City Facilities; and (iii) requests a minimum of[twenty(20)] guest rooms at the Hotel for one night or more while the event is being held at the City Facilities. Condominium Declaration. Means the condominium declaration for the condominium to be executed by the City, as the owner of the Land, and by the MDD, as declarant thereunder, and to be notarized and recorded in the Official Public Records of Harris County, Texas. Confidential Information. Has the meaning ascribed to it in Section 3.03 of this Agreement. Contact. Means the [ ] or their designee. -2- Event Night. Means any night during a Citywide Event that the number of rooms blocked at the Hotel by the Operator under this Agreement for said Citywide Event is equal to or greater than [twenty (20)] rooms. Governmental Authority. Means any Federal, state or local governmental entity,authority (including any taxing authority) or agency, court, tribunal, regulatory commission or other body, whether legislative, judicial or executive (or a combination or permutation thereof) having jurisdiction. Ground Lease. Means that certain Ground Lease Agreement dated as of , 20_, by and between City and MDD. Hotel. Means the full service upper-upscale hotel, having approximately 208 rooms to include guestrooms and suites, appropriate support facilities, together with such other amenities and features characteristic of a full-service hotel, located on the Land. Hotel Bond Indenture. Means that Indenture of Trust dated as of r 2021 by and between the MDD, as issuer, and Trustee, as the same may hereafter be amended, modified or supplemented in accordance with the terms thereof. Hotel Services Agreement. Means the Hotel Services Agreement Hyatt Regency Baytown —Houston, by and between MDD and the Operator, dated as of Initial Offer. Means the initial proposal of Hotel guest rooms and rates to be offered by Operator to Potential Center Customers for each proposed Citywide Event. Land. Means the parcel of land, more particularly shown and described in the Ground Lease, upon which the Hotel shall be located. Lead. Means when a specific event inquiry by a corporation/association/organization/ independent meeting planner that includes a request for sleeping rooms over a specific set/range of dates is forwarded by the Contact to the Operator. Lead also reflects the status of an inquiry. Notice. Means each and every communication, request, reply, or advice required or permitted to be given, made or accepted by any party to this Agreement to any other party to this Agreement, each of which shall be given, and deemed received by the intended recipient, in accordance with Section 6.02 of this Agreement. Opening. Means the date upon which the Hotel is open to the public for business. Operator. Means Hyatt Corporation (or its successor, if any), which company is performing the functions of operating and managing the Hotel subject to the Hotel Services Agreement,the Ground Lease,and any related agreements with MDD concerning the operation or management of the Hotel. Permitted Person. Has the meaning ascribed to it in Section 3.03 of this Agreement. -3- Potential Center Customer. Means a person, entity, group or association (or any combination thereof) who is planning a Citywide Event for which Hotel rooms are sought to be booked pursuant to Article II of this Agreement. Rate Quote. Has the meaning ascribed to it in Section 3.01(a) of this Agreement. Room Block Request Notice. Is otherwise referred to as a Lead. Term. Has meaning ascribed to it in Section 6.01 of this Agreement. Trustee. Means Wells Fargo Bank,N.A., the trustee under the Hotel Bond Indenture. ARTICLE II ROOM BLOCK COMMITMENT Section 2.01. Room Blocking Rights. City and MDD expressly acknowledge and agree that each party shall have the room booking rights generally described in this Agreement. Operator is not a party to, but acknowledges this Agreement, and MDD shall and does hereby direct Operator (by providing Operator an executed copy of this Agreement) to comply with MDD's obligations (and the obligations delegated to the Operator by MDD)under this Agreement and the Hotel Services Agreement. Section 2.02. Cooperation of Parties. City and MDD each agree to cooperate together and coordinate their efforts on a day-to-day basis to administer bookings at the Hotel and City Facilities for the Citywide Events and Potential Center Customers, subject to Blackout Dates, in accordance with the terms of this Agreement and in such a manner that will seek to be mutually beneficial to the parties and to seek to promote the ultimate success,and maximize the utilization, revenues and income of the City Facilities and the Hotel over the term of the Ground Lease,subject to the terms of this Agreement, the City Facilities Unit Lease and the Ground Lease. The City intends to delegate most of its day-to-day responsibilities under this Agreement to the Contact and MDD shall delegate the day-to-day responsibilities of operating the Hotel(including its obligations under this Agreement) to Operator under and as set forth in the Hotel Services Agreement. Each party anticipates and intends that its respective staff will work closely in conjunction and cooperate with the other party and its staff to implement and adjust from time to time as may be necessary, procedures and policies to be mutually followed in booking Citywide Events and any other Event Nights at the Hotel and/or the City Facilities in order to effectively and efficiently implement the respective booking rights of the City and the MDD consistent with this Agreement. The parties shall use their mutual efforts to reach agreement on the specific booking terms for the Hotel and/or the City Facilities rooms requested in any offer from the City. Section 2.03. Potential Center Customer Bookings. Bookings for Hotel room nights and City Facilities rooms with Potential Center Customers for Citywide Events will be subject to the policies and procedures from time to time agreed upon by the MDD and Operator. Section 2.04. City's Request for Additional Rooms for Citywide Event. At any time,City may request by notice to Operator for additional rooms for a Citywide Event(s),which such request Operator may in its sole but reasonable discretion grant or deny. -4- ARTICLE III ROOM BLOCK PRICING Section 3.01. Event Block Rate. (a) In the Initial Offer, Operator will (i) offer, for each specific date that the Potential Center Customer requires a block of guest rooms as specified in the Room Block Request Notice, an event room block equal to the actual number of the guest rooms in the Room Block Request Notice for each specific date, less any previously offered event room blocks under this Agreement for other Citywide Events covering such dates, which offers have either been accepted or are still outstanding, and (ii) quote a specific room rate for a standard single room, a double room and any applicable convention center room(the"Rate Quote"). The amount of the Rate Quote in the Initial Offer will be reasonably consistent with the then current economic climate,the demand for rooms during the relevant Event Nights and the rates then being charged by other comparable Harris County, TX area hotels (to the extent aggregate or other information is publicly available to Operator),taking into account reasonable differences in quality,amenities, location and suitability. In all respects, the Initial Offer shall be structured in accordance with Operator's normal booking policies and procedures as approved by MDD in the Hotel Services Agreement. (b) After reviewing the Initial Offer, the Contact may consult with the Operator regarding the Rate Quote contained in the Initial Offer. The Contact and the Operator will then work together in good faith to reach an agreement as to the final Rate Quote, provided the Operator's decision, made in accordance with the procedures established in the Hotel Services Agreement, shall be final. Section 3.02. Today's Rate Provision. So that the rates are quoted to Potential Center Customers in a form comparable to the form customarily used to propose bids to potential convention center users,any rates referenced in Section 3.01 may be quoted at"today's rates"(i.e., a rate for the year in which the commitment is given, plus a capped percentage increase). Section 3.03. Confidentiality. (a) To the extent allowed by law in accordance with the provisions of TEXAS GOUT CODE CHAPTER 552,City agrees not to disclose the terms or conditions of any Initial Offer, or any Confidential Information to any person or entity other than the City or a Permitted Person; provided, however, that the restrictions of this Section 3.03 shall not apply to any information which the City shall determine, in its sole but reasonable discretion, is required to be disclosed pursuant to Applicable Law (subject to Section 3.03(b1), or to information that becomes public other than by virtue of a breach of this Section 3.03. "Permitted Person" means: (a) the City's employees, counsel or other consultants, but only on a strictly need-to-know basis in connection with any such person's performance of its duties for the City and subject to the confidentiality obligations of this Section 3.03,(b)the MDD and Operator and their officers,directors,employees, counsel and other consultants,or(c)to any third party as may be required pursuant to a court order as a result of any legal proceeding (or alternative dispute resolution procedure) involving City, MDD and/or Operator provided that City shall use reasonable efforts to obtain confidential treatment of same. "Confidential Information"means information relating to Operator's business -5- that derives actual or potential value from not being generally known to others, including non- public financial information regarding the Hotel (including room rate quotes and pricing strategy), the Operator's standards and policies, and any other documents and information specifically designated by a party orally or in writing as confidential or which by its nature would reasonably be understood to be confidential or proprietary. Confidential Information will not, however, include information that: (a) is already known by the receiving party,free of any obligation to keep it confidential; (b) is or becomes publicly-known through no wrongful act of the receiving party; (c) is received by the receiving party from a third party without any restriction on confidentiality; (d) is independently developed by the receiving party; (e) is disclosed to third parties by the disclosing party without any obligation of confidentiality or is disclosed by any party because of valid order, rule, regulation or law; or(f) is approved for release by prior written authorization of the disclosing party. (b) Without limiting the generality of the foregoing, MDD acknowledges that the City's obligations with respect to protection and disclosure of any such information shall at all times be subject to the Texas Public Information Act(Texas Gov't Code Chapter 552)and all other Applicable Laws. City shall provide timely written notice to MDD and Operator of any request received by City pursuant to the Texas Public Information Act requesting information held by City to which MDD or Operator may assert"confidential business information"or"trade secret"status under the Texas Public Information Act, all for the purpose of providing MDD and Operator an opportunity to seek to protect such information from disclosure. City makes no representation as to how the Attorney General of Texas will rule on any open records request, but, subject to MDD or Operator timely filing a request with the Attorney General of the State of Texas seeking non- disclosure of the requested information,City agrees to withhold disclosure of information covered by this Agreement until required to release it by the Attorney General or a court of competent jurisdiction. Section 3.04. Hotel Meeting Facilities Rates. Based on availability,at any time, an event at the City Facilities may be required to utilize Hotel meeting facilities in the Hotel as overflow or for large center customers, or an event at the Hotel may be required to utilize space at the City Facilities as overflow. Availability, booking and cancellation of Hotel meeting facilities shall be made on the same basis as Hotel rooms,as set forth in Articles II and III;provided that the Contact and MDD may agree to different terms on a case-by-case basis. Meeting room rental rates, when charged, shall be at the prevailing rates at either the City Facilities or the Hotel, as applicable for the specified meeting spaces, with the understanding that rates for utilizing space at the City Facilities will be evaluated based on the total number of room nights representing the event, as well as any ancillary revenues to the City Facilities, and further with the understanding that utilizing space at the City Facilities and Hotel for little or no charge may from time to time be necessary to attract both Citywide and in-house Hotel groups. ARTICLE IV NO LIABILITY FOR POTENTIAL CENTER CUSTOMERS Section 4.01. NO LIABILITY FOR POTENTIAL CENTER CUSTOMERS. IN NO EVENT SHALL THE CITY, ITS OFFICERS, EMPLOYEES, OR ANY DEPARTMENT OR BUREAU OF THE CITY, BE IN ANY WAY RESPONSIBLE OR LIABLE FOR THE -6- PERFORMANCE BY ANY POTENTIAL CENTER CUSTOMER OF SUCH CUSTOMER'S OBLIGATIONS UNDER THE CUSTOMER'S CONTRACT WITH THE OPERATOR FOR ANY CHARGES, LIABILITIES OR OTHER SUMS OWED BY, OR LIABILITIES OF, SUCH POTENTIAL CENTER CUSTOMER (OR FOR THOSE FOR WHOM IT BLOCKS ROOMS) TO THE OPERATOR OR MDD. LIKEWISE, IN NO EVENT SHALL THE OPERATOR OR MDD BE IN ANY WAY RESPONSIBLE OR LIABLE FOR THE PERFORMANCE BY ANY POTENTIAL CENTER CUSTOMER OF SUCH CUSTOMER'S OBLIGATIONS UNDER ANY CONTRACT WITH THE CITY OR ANY DEPARTMENT OR BUREAU OF THE CITY OR FOR ANY CHARGES, LIABILITIES OR OTHER SUMS OWED BY, OR LIABILITIES OF, SUCH POTENTIAL CENTER CUSTOMER TO THE CITY OR ITS DEPARTMENT OR BUREAU. Section 4.02. Exculpation. The liability of MDD(and of any successors hereunder)under this Agreement shall be limited to its respective interest in the Hotel. MDD agrees that this is an Agreement between City and MDD, and the Contact shall not have any liability to MDD hereunder. City agrees that this is an Agreement between City and MDD, and no Operator nor any employee at the Hotel shall have any liability to City hereunder. City agrees that none of the MDD's or Operator's direct or indirect partners, members,managers,joint ventures, shareholders, directors,officers,agents and employees shall have any personal liability with respect to,or arising out of,this Agreement. In no event shall any officer,director,agent,or consultant of City,nor any employee or public official of the City, ever have any personal liability with respect to or arising out of this Agreement. Nothing within this Section 4.02 shall limit the right of any party to seek specific performance of the terms and provisions of this Agreement as provided in Article V. ARTICLE V EVENTS OF DEFAULT Section 5.01. Default. A default under the terms of this Agreement shall occur if any party hereto shall default in the performance of any of the terms,conditions or covenants contained in this Agreement to be performed or observed by it, and such party does not remedy such default within thirty (30) days after Notice or, if the default is of such character as to require more than thirty (30) days to remedy, then if such party fails to commence to cure and correct the default within said thirty (30)-day period and thereafter prosecute such corrective action diligently and without interruption and complete the cure thereof within ninety (90) days following the original Notice of such default(a"Default"). Any Notice of Default to any party shall also be given to the Trustee under the Hotel Bond Indenture. Section 5.02. Limitation on Damages. In no event shall any party or Operator have any liability under this Agreement for any punitive, exemplary or consequential damages. In no event shall the Operator have any liability to either party under this Agreement, and in no event shall the City have any liability to the Operator under this Agreement. Section 5.03. Rights of Unit Mortgagee. The parties agree and acknowledge that any Default by MDD under this Agreement will give rise to certain rights and remedies granted to a Unit Mortgagee (as defined in the Ground Lease) under the Ground Lease, including without limitation, the notice and cure rights afforded a Unit Mortgagee under the Ground Lease. -7- ARTICLE VI ADDITIONAL PROVISIONS Section 6.01. Term. The term of this Agreement (the "Term") shall commence on the earlier to occur of(i) the Opening and(ii)the date the Hotel is included in Operator's reservations systems (in accordance with the terms of the Hotel Services Agreement) and continue until the earlier to occur of the expiration or termination of the Ground Lease. Section 6.02. Notice. For purposes of providing notice under this Agreement: If to City: The City of Baytown 2401 Market Street Baytown, Texas 75520 Attn: City Manager citvmanagerna baytown.org With a copy to: The City of Baytown 2401 Market Street Baytown,Texas 75520 Attn: City Attorney legal(&bavtown.org If to MDD: Baytown Municipal Development District 2401 Market Street Baytown,Texas 77520 Attn: General Manager citymanager i0aytown.org With a copy to: Winstead PC 401 Congress Ave. Suite 2100 Austin, Texas 78701 Attn: David Dawson ddawsonAwinstead.com Any party may change its address for notice by written notice given to the other in the manner provided in this Section. Any such communication,notice or demand will be deemed to have been duly given or served on the date personally served, if by personal service, on the date of facsimile transmission, if sent by facsimile (provided that electronic confirmation of receipt has been obtained prior to 5:00 p.m. Central Standard Time on the day of transmission), one (1) day after the date of dispatch, if by overnight courier, or three (3) days after being placed in the U.S. Mail, if mailed. -8- Section 6.03. Marketing. (a) The City will provide Operator with copies of all materials bearing trademarks, service marks,trade names,designs,and logos of Operator and its affiliates proposed to be utilized by the City,and shall obtain Operator's prior written consent,as applicable,before any use is made thereof. Any marketing materials provided by MDD or the Operator to the City shall be deemed to have been approved by MDD and Operator for use for the purposes provided (but for no other purpose). For avoidance of doubt, MDD and Operator and their affiliates shall have the right to update any such materials from time to time (e.g., to reflect changes in logos, trade names, etc.), whereupon the City shall utilize such updated materials instead of the ones previously provided; provided however, that the MDD or Operator timely distributes renewed marketing materials to the City. The City agrees that all uses of such trademarks, service marks, trade names, designs and logos, including the goodwill and reputation associated therewith, will inure to the benefit of Operator. The City further acknowledges and agrees that it will not acquire any right, title or interest in or to such trademarks, service marks, trade names, designs and logos of Operator and its affiliates pursuant to this Agreement or any of the leases, licenses, development agreements, parking or other agreements the City and MDD or any of their affiliates or representatives enter into in connection with the Hotel and/or City Facilities.Operator and its affiliates and its successors and assigns shall be a direct third-party beneficiary of this Section with all of the legal or equitable rights of enforcement of MDD under this Agreement. Section 6.04. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. Venue for any litigation with respect to this Agreement shall be exclusively in Harris County, Texas. Section 6.05. Waiver,Modification or Amendment. This Agreement may not be waived, modified or amended unless pursuant to a signed writing executed by each of the parties hereto. Failure of either party hereto to enforce any provision of this Agreement shall not be construed to be a waiver of such provision or its right thereafter to enforce such provision or any other provision contained herein. Section 6.06. Severability. If any one or more of the provisions of this Agreement shall for any reason be held invalid,illegal or unenforceable,the remaining provisions of this Agreement shall remain unimpaired and shall continue in full force and effect. Section 6.07. Headings. Headings used in this Agreement are for purposes of convenience of reference only and shall in no way limit or affect the meaning or interpretation of any of the terms hereof. Section 6.08. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter as of the date hereof and supersedes all prior understandings, representations, proposals, discussions, and negotiations whatsoever, whether oral or written,between the parties hereto. Section 6.09. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. -9- Section 6.10. No Joint Venture. It is acknowledged and agreed by and between the parties that the terms hereof are not intended to,and shall not be deemed to,create any partnership or joint venture between the parties. The past,present and future officers,elected officials,employees and agents of the City do not assume any responsibilities or liabilities to any third party in connection with the development, design, construction or operation of any of the improvements contemplated by this Agreement. In addition, (i)MDD acknowledges and agrees that there shall be no recourse against any of the aforesaid parties, none of whom will incur any liability in respect to any claims based upon or relating to this Agreement,and(ii)City acknowledges that there shall be no recourse against the present and future officers,directors and employees of MDD,none of whom shall incur any personal liability in respect to any claims based upon or relating to this Agreement. (Signature pages follow) -10- IN WITNESS WHEREOF, the parties have executed this instrument as of the day and year first above written. CITY OF BAYTOWN, TEXAS By: Name: Title: ATTEST: By: Name: Title: BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT By: Name: Title: ATTEST: By: Name: Title: Exhibit "D" MARINA SITE PARKING AGREEMENT This MARINA SITE PARKING AGREEMENT (this "Agreement") is entered into effective as of the day of , 2021, by and between THE CITY OF BAYTOWN,TEXAS,a Texas municipal corporation and home-rule city of the State of Texas principally situated in Harris County, Texas ("City") and the BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT, a political subdivision of the State of Texas and the City of Baytown ("MDD"). WHEREAS, the Hotel and the City Facilities have been built to serve the residents of the City and to promote tourism, the City's convention industry, the expansion of commerce and the diversification of the economy within the State of Texas and the community; and WHEREAS, under a condominium declaration filed in connection with the project, a Hotel Unit and City Facilities Unit were created, and the MDD is the owner of the Hotel Unit and the City is the owner of the City Facilities; and WHEREAS, the MDD is the tenant under the City Facilities Unit Lease with the City pertaining to the use and operation of the City Facilities Unit which adjoins the Hotel Unit; and WHEREAS, the City considers the ownership and operation of the City Facilities adjoining the Hotel to be a legitimate government burden. The City has required that MDD operate the Hotel for the benefit of the City Facilities and the City and its residents in order to lessen the burdens of the City regarding the operation of the City Facilities,promote economic development and job creation for the residents of the City, and generate revenues to pay for City services provided to its residents; and WHEREAS, MDD is executing and entering into a Hotel Services Agreement with the Operator whereby the Operator will operate, maintain and manage the Hotel; and WHEREAS, as an important component of the operation of the City Facilities and the Hotel, the City and the MDD desire to enter into this agreement whereby the MDD (and the Operator) is authorized to use up to 230 parking spaces in an approximately 299 space surface parking facility owned by the City(the"Marina Parking Site") for use by overnight guests of the Hotel (the "Hotel Guests") and City desires to reserve such spaces within the Marina Parking Site in accordance with the terms set forth herein; and WHEREAS, the Marina Parking Site will serve the general public, the City Facilities and the Hotel; NOW, THEREFORE, for and in consideration of the sum of$10.00 and other good and valuable consideration, the receipt and sufficiency of which is acknowledged and confessed, City and MDD agree as follows: 1 AGREEMENT I. DEFINITIONS Definitions. Each of the following terms used in this Agreement shall have the following meanings: Additional Spaces. Has the meaning ascribed to it in Section XI of this Agreement. Applicable Law. Means any statute, law, treaty, rule, code, ordinance, regulation, permit, interpretation, certificate or order of any Governmental Authority, or any judgment, decision, decree, injunction, writ, order or like action of any court, arbitrator or other Governmental Authority. Applicable Laws shall include, but not be limited to, City codes and ordinances. BAL Insurance. Has the meaning ascribed to it in Section IV.A of this Agreement. Casualty Insurance. Has the meaning ascribed to it in Section IV.A of this Agreement. City. Means the City of Baytown, Texas. City Facilities. Means the public, City-owned convention center facilities, certain surface or structured parking, and certain public facilities and infrastructure. City Facilities Unit Lease. Means that certain City Facilities Unit Lease Agreement dated as of ,by and between City and MDD with respect to the City Facilities. City Indemnitees. Has the meaning ascribed to it in Section IX.A of this Agreement. CGL Insurance. Has the meaning ascribed to it in Section IV.A of this Agreement. Consumer Price Index. Means the Consumer Price Index for All Urban Consumers, All Items, for the market area that includes the Hotel, as published by the Bureau of Labor Statistics of the United States Department of Labor, using the years 1982-84 as a base of 100, or if such index is discontinued, the most comparable index published by any federal governmental authority on which the duties in connection with such index shall devolve or such other official index as agreed by the Parties. Effective Date. , EL Insurance. Has the meaning ascribed to it in Section IV.A of this Agreement. Event of Default. Has the meaning ascribed to it in Section VII.B of this Agreement. Governmental Authority. Means any Federal, state or local governmental entity, authority (including any taxing authority) or agency, court, tribunal, regulatory commission 2 or other body, whether legislative, judicial or executive (or a combination or permutation thereof). Ground Lease. Means that certain Ground Lease Agreement dated as of , 2020, by and between City and MDD. Hotel. Means the full service upper-upscale hotel, having approximately 208 rooms to include guestrooms and suites, appropriate support facilities, together with such other amenities and features characteristic of a full-service hotel, located on the Land. Hotel Guests. Has the meaning ascribed to it in the Recitals of this Agreement. Hotel Services Agreement. Means the Qualified Management Agreement by and between MDD and the Operator, dated as of Land. The parcel of land, defined in the Ground Lease as"Property",upon which the Hotel is located. Operator. Means Hyatt Corporation (or its successor, if any), which company is performing the functions of operating and managing the Hotel subject to the Hotel Services Agreement, the Ground Lease and any related agreements with MDD concerning the operation or management of the Hotel. Term. Has the meaning ascribed to it in Section VII.A of this Agreement. Parking Fee. Has the meaning ascribed to it in Section III.A of this Agreement. Reserved Parking Spaces. Has the meaning ascribed to it in Section II.A of this Agreement. Umbrella Liability Insurance. Has the meaning ascribed to it in Section IV.A of this Agreement. WC Insurance. Has the meaning ascribed to it in Section IV.A of this Agreement. II. LEASED PARKING SPACES A. During the Term of this Agreement, City reserves in favor of MDD, for use only by its designated Hotel Guests so long as they are Hotel Guests in the Hotel, provided such designation is not in violation of the terms and provisions of this Agreement, the use of up to 230 parking spaces in the Marina Parking Site on a daily basis on the terms and conditions set forth in this Agreement. The reserved parking spaces for Hotel Guests shall be located in a designated area convenient to the Hotel("Reserved Parking Spaces"). Members of the public may park in any remaining parking spaces in the Marina Parking Site on a first come-first served basis provided they pay the then current daily rate, if any, charged by the City. If, at any time during the term of this Agreement, the Marina Parking Site is renovated or if a 3 parking garage or similar parking structure is constructed on the location of the existing Marina Parking Site, such parking facility shall be considered the "Marina Parking Site" as such term is used herein and shall be subject to the terms of this Agreement upon completion of such construction and/or renovation, B. The specific location of the Reserved Parking Spaces shall be designated and clearly marked by City (at MDD's sole cost and expense)within the Marina Parking Site. III. PARKING FEE A. Throughout the Term, MDD shall pay City a monthly parking fee equal to $1.00 per month (the"Parking Fee"). B. The Parking Fee shall be due and payable monthly, in arrears,without demand, notice, deduction or setoff,no later than the fifth(5th)day of each month commencing on the first day of the full calendar month following the 1201h day following the commencement of the Term, and continuing for each month thereafter until the expiration of the Term of this Agreement. In the event the Parking Fee is not received within ten (10) days after the date on which such amount is due, MDD shall pay interest on the amount past due at the rate described in Section 2251.015 of the Texas Government Code. C. The monthly Parking Fee shall be paid and delivered to City at the following address (or such other address as City may designate in writing delivered to MDD): 2401 Market Street Baytown,Texas 77520 Attn: Director of Finance The Parking Fee is due and payable each month regardless of whether MDD or any Hotel Guest actually utilizes the Reserved Parking Spaces and constitutes a fair payment for the use of such Reserved Parking Spaces for Hotel parking. Payment of the Parking Fee relieves any burden on the City due to nonuse of the Reserved Parking Spaces. D. MDD, and not the individual Hotel Guest, will pay the Parking Fee for the Reserved Spaces to City. City will not bill individual Hotel Guests. However, MDD may charge Hotel Guests a fee for parking in the Marina Parking Site and use those revenues to pay the Parking Fee to City. E. The City shall maintain and operate the Marina Parking Site at the City's cost and expense, in good condition (including repairs, maintenance and capital improvements). F. For so long as this Parking Agreement remains in effect and except for costs that City has specifically agreed to pay pursuant to the express terms of this Agreement, City shall not be required to make any expenditure, incur any obligation or incur any liability of any kind whatsoever in connection with this Agreement. 4 I V. INSURANCE A. During the Term of this Agreement, MDD shall maintain: (i) Commercial General Liability insurance ("CGL Insurance") with limits of liability not less than $1,000,000 per occurrence with a general aggregate of not less than $2,000,000 covering liability arising from the Marina Parking Site, its operations, independent contractors, product-completed operations,personal injury,and advertising injury,and also shall include a contractual liability endorsement that insures MDD's assumed liability under this Agreement; (ii) Business Auto Liability insurance ("BAL Insurance") with limits of liability not less than $1,000,000 per occurrence covering bodily injury, including death, and property damage for liability arising from use of MDD's owned, non-owned, and hired vehicles; (iii) Workers' Compensation insurance ("WC Insurance") in accordance with all federal and state statutory requirements and Employers' Liability insurance("EL Insurance")in an amount of not less than$1,000,000 per accident for bodily injury and $1,000,000 per employee/aggregate for disease; and (iv) Umbrella Liability insurance ("Umbrella Liability Insurance") with limits of liability of not less than $5,000,000 per occurrence that applies on a"following form"basis and is in excess of the underlying CGL Insurance, BAL Insurance, and EL Insurance limits of liability with the Umbrella Liability Insurance policy listing the CGL Insurance, BAL Insurance, and EL Insurance policies on its schedule of underlying Insurance (collectively, "Casualty Insurance"). B. MDD hereby waives and releases City of and from any and all rights of recovery, claims, actions, or causes of action against City, its employees, officers, directors, subsidiaries,affiliates,agents,or representatives,to the extent covered by Casualty Insurance. Each Casualty Insurance policy must be endorsed to reflect the insurer's acceptance of this waiver of subrogation. The above waiver of subrogation applies whether or not there are any deductibles or self-insured retentions. C. All insurance policies required by this Article IV (i) must be issued by insurance companies having an"A"rating or better by Standard and Poor's,and if not rated by Standard & Poor's, then a rating of"A" by A.M. Best and (ii) may be satisfied by a primary policy or combination of primary and umbrella policies. The insurance provisions in this Article IV set forth the minimum amounts and scopes of coverage to be maintained by MDD and are not to be construed in any way as a limitation on MDD's liability under this Agreement. D. MDD shall not self-insure any of its obligations under this Agreement (other than deductibles in reasonably commercial accounts);provided,however,that MDD may elect not to provide WC Insurance, but only for those employments that are not compulsory according to Governmental Authority. The responsibility to fund any financial obligation for any deductibles shall be assumed by, for the account of, and at the sole risk of MDD. E. MDD shall furnish Certificate(s) of Insurance evidencing all of the above-described insurance policies, waivers of subrogation, additional insured obligations, and separation of insured provision prior to or upon execution of this Agreement and annually not later than ten (10)business days after the expiration of each policy. MDD shall use its best efforts to arrange for all policies shall provide that not less than thirty (30) days' prior written notice of 5 cancellation, material modification, reduction in coverage, or non-renewal shall be given to the City. F. If MDD fails to procure any of the insurance required under this Article IV, or fails to maintain the same in full force and effect continuously during the Term, then City shall have the right to obtain such insurance, and MDD shall reimburse City upon demand for all costs and expenses of obtaining such insurance. G. City shall keep the Marina Parking Site insured against "all risk" of loss for full replacement cost coverage to include windstorm and flood.City shall be named as the insured. V. ASSIGNMENT AND SUBLETTING MDD shall not assign or sublet,in whole or in part,MDD's right to use the Reserved Parking Spaces to any person or entity (other than the Operator subject to the terms and provisions of this Agreement)without the prior written consent of City which may be withheld in City's sole discretion;provided that MDD may,without City's prior consent,but upon prior written notice to City, assign in whole MDD's rights hereunder if the assignment is made in conjunction with MDD's transfer of its interest in the Hotel and such transferee assumes in writing, in a form reasonably acceptable to City, all obligations of MDD hereunder. Delegation of certain rights and obligations by MDD to its Operator shall not be considered an assignment or subletting hereunder. VI. OBLIGATIONS OF CITY A. License. The right of an individual to have access to the Marina Parking Site and use the Reserved Parking Spaces is a license which may be withdrawn at any time and without notice should such licensee fail to conform and follow the rules and regulations established by the City from time to time. City reserves the right to reject any individual parking user for any reason. B. Maintenance and Security. During the Term of this Agreement, City, at its sole cost and expense,shall maintain,or cause to be maintained,the Marina Parking Site as determined in City's reasonable judgment. THE CITY HAS NO OBLIGATION TO PROVIDE ANY SECURITY SERVICES TO THE MARINA PARKING SITE. MDD, ANY COMPANIES, SUBCOMPANIES AND HOTEL GUESTS' USE OF THE MARINA PARKING SITE IS AT THEIR SOLE RISK; provided,however,that if the City installs security cameras in the Marina Parking Site that covers the Reserved Parking Spaces, the City shall provide a video feed to the Operator so long as there is no cost to the City to do so. C. Access.City shall provide Hotel Guests access to the Reserved Parking Spaces twenty- four (24) hours a day, three hundred sixty-five (365) days per year; provided, however, and notwithstanding the foregoing,the Marina Parking Site may be closed for(i)maintenance and repairs with no less than fifteen(15)days' advance notice to Operator,or(ii)due to inclement conditions with written notice to Operator as soon as practicable. 6 D. Compliance with Laws. City and/or MDD shall comply with all laws, statutes, ordinances, court rulings, regulations, public or private restrictions, and requirements now or hereafter adopted by any governmental or other authority or similar body,affecting the Marina Parking Site or this Agreement upon written notice of any violation thereof. E. Annual Appropriation. All obligations, if any, payable by the City under this Agreement, are and shall be payable, if at all, solely from funds subject to appropriation by the City Council in the annual budget and the City's obligations under this Agreement shall not constitute a general obligation of the City or indebtedness under the constitution or laws of the State of Texas. V II. TERM AND TERMINATION A. Term. This Agreement shall begin on the Effective Date as defined in the Ground Lease and shall continue until the Termination Date under the Ground Lease (the "Term"), unless sooner terminated by either party pursuant to the terms of this Agreement. B. Default Termination.City may terminate this Agreement upon written notice to MDD after the occurrence and continuance of one or more of the following events ("Event of Default"): (i) the failure of MDD to pay the Parking Fee or to make any other monetary payment required to be made by MDD hereunder when due and such failure shall continue for thirty (30) days after written notice of such failure from City to MDD, (ii) the failure by MDD to observe and perform any other provision of this Agreement and such failure continues for sixty(60)calendar days after written notice of such failure from City to MDD,provided that if such failure cannot be cured within said sixty(60)calendar day period, MDD shall not be in default hereunder so long as MDD commences curative action within such sixty (60) calendar day period and is diligently pursuing such cure, but such additional cure period shall not exceed thirty (30)calendar days, and (iii) the occurrence of a "Default" (as that term is defined in the Ground Lease) under the Ground Lease after the expiration of any cure period thereunder. C. Rights of Unit Mortgagee. The parties agree and acknowledge that any Event of Default by MDD under this Agreement will give rise to certain rights and remedies of any Unit Mortgagee(as defined in the Ground Lease) under the Ground Lease, including,without limitation, the notice and cure rights afforded to a Unit Mortgagee under the Ground Lease. VIII. COMPLIANCE WITH LAWS AND RULES A. MDD shall comply, and shall notify Hotel Guests to comply, with the rules and regulations applicable to use of the Marina Parking Site,as such rules are promulgated by and 7 may be amended from time to time by the City,a copy of which will be delivered to MDD by City. If such rules and regulations are changed, amended, or modified, City shall promptly provide MDD with a copy of such changed,amended,or modified rules and regulations. City prohibits the parking of vehicles in areas designated as "RESERVED" or "TOW AWAY ZONE,"except as any Hotel Guest maybe authorized to park in such areas.Any unauthorized vehicle parked in these areas will be towed at MDD's expense. B. NOTHING CONTAINED IN THIS AGREEMENT SHALL WAIVE ANY GOVERNMENTAL IMMUNITY AVAILABLE TO THE CITY UNDER APPLICABALE LAW OR IN ANY WAY WAIVE OR LIMIT ANY DEFENSES OF CITY OR ANY CITY INDEMNITEE UNDER GOVERNMENTAL RULE. IX. INDEMNITY A. Damage to Automobiles. MDD releases and shall cause its Hotel Guests to release City and its agents, employees, officers and all legal representatives (the"City Indemnitees") from any liability, cost or expense related to any damage to any automobile which may be parked in the Marina Parking Site, EVEN IF THE DAMAGE OCCURRED AS A RESULT OF THE NEGLIGENCE IN WHOLE OR IN PART OF CITY.This release includes a release from any and all direct damages as well as any liability for any indirect, special or consequential damages. As a condition to allowing a Hotel Guest to enter the Marina Parking Site, MDD will secure from such Hotel Guest a written acknowledgment and consent to this release and waiver of liability for injury. B. Iniuries to Persons. MDD waives and releases and shall cause its Hotel Guests to release City and City Indemnitees from any liability, cost or expense related to the death or injury to MDD (its agents, employees and contractors) or to the Hotel Guests EVEN IF THE INJURY OR DEATH MAY HAVE OCCURRED AS A RESULT OF THE NEGLIGENCE, IN WHOLE OR IN PART, OF CITY. This release and waiver includes a release and waiver from any and all direct damages as well as any liability for indirect, special or consequential damages. As a condition to allowing a Hotel Guest to enter the Marina Parking Site, MDD will secure from such Hotel Guest a written acknowledgement and consent to this release and waiver of liability for injury or death. C. Limited Waiver of Immunity. Notwithstanding anything to the contrary herein, the City and MDD hereby acknowledge and agree that to the extent this Agreement is subject to the provisions of Subchapter I of Chapter 271, TEXAS LOCAL GOVERNMENT CODE, as amended, the City's and the MDD's immunity from suit is waived only as set forth in Subchapter I of Chapter 271,TEXAS LOCAL GOVERNMENT CODE. Should a court of competent jurisdiction determine the City's or the MDD's immunity from suit is waived in any manner other than as provided in Subchapter I of Chapter 271, TEXAS LOCAL GOVERNMENT CODE, as amended, the City and MDD hereby acknowledge and agree that in a suit against the City or MDD, as applicable, for breach of this Agreement: 8 (a) the total amount of money awarded is limited to actual damages in an amount not to exceed the balance due and owed by City or MDD,as applicable,under this Agreement; (b) the recovery of damages against City or MDD, as applicable, may not include consequential damages or exemplary damages; (c) MDD or City, as applicable, may not recover attorneys' fees; and (d) MDD or City, as applicable, is not entitled to specific performance or injunctive relief against the City. X. WAIVER To the fullest extent permitted by Applicable Law, MDD, on behalf of itself and all the Hotel Guests,hereby waives any and all claims against City,and hereby releases City from and against any and all claims and liabilities arising out of, or in connection with, (i) the use of the Reserved Parking Spaces by MDD or any of the Hotel Guests, or (ii) any other act or omission of MDD or any of the Hotel Guests. XI. ADDITIONAL PARKING SPACES Should MDD desire parking spaces in addition to the Reserved Parking Spaces,MDD shall provide written notice to City of MDD's desire for additional parking spaces for special events at the Hotel (as opposed to the region, generally), and if available, a specific number of Additional Spaces desired. Upon MDD providing to City written notice of its desire to reserve Additional Spaces, City shall respond with its written notice of the parking spaces available (as determined by City in its sole discretion after giving priority to the needs of the general public). In the event parking spaces are available sufficient to fulfill MDD's request, City shall provide MDD the option to reserve additional parking spaces (the "Additional Spaces") which are available in the Marina Parking Site. The Additional Spaces shall be reserved on the same terms and conditions then in effect under this Agreement; provided, however, the length of the reservation for such Additional Spaces shall be on a day-to-day basis terminable by either party hereto upon thirty(30) days' written notice to the other party hereto. X I I. CASUALTY In the event that the Marina Parking Site is damaged or destroyed(in part or in whole), City shall promptly give written notice thereof to MDD and the Operator. If City, in its reasonable judgment, determines that Casualty Insurance proceeds will be sufficient for the restoration of the Marina Parking Site, City shall restore the Marina Parking Site as nearly as possible to the condition that existed immediately prior to such loss or damage. If City, in its reasonable judgment, determines that Casualty Insurance proceeds are insufficient for the 9 restoration of the Marina Parking Site, City shall notify MDD, with copies to the Operator, and MDD or City may terminate this Agreement by giving written notice of termination within thirty (30) days after City's notice with no further responsibility to the otherparty. XIII. MISCELLANEOUS A. Estoppel Certificate. City shall, within fifteen (15) days of the written request of any MDD, deliver a commercially reasonable estoppel certificate consisting of commercially reasonable statements which statements shall include,but not be limited to,the following:this Agreement is in full force and effect, MDD is not in default under this Agreement, and such other statements as MDD may reasonably require and City may reasonably approve. If City is unable to make any of the statements contained in the estoppel certificate because the same is untrue, City shall state the specific reason why such statement is untrue. B. Whole Agreement.This Agreement contains all covenants,stipulations and provisions agreed upon by the parties. No agent of either party to this Agreement has authority to alter or change its terms and neither party is bound by any statement or representation not in conformity with this Agreement. C. Notices. For purposes of providing notice under this Agreement: If to City: City of Baytown 2401 Market Street Baytown,Texas 77520 Attn: City Manager With a copy to: City of Baytown 2401 Market Street Baytown, Texas 77520 Attn: City Attorney Email: leeal(&bavtown.org If to MDD: Baytown Municipal Development District 2401 Market Street Baytown,Texas 77520 Attn: General Manager With a copy to: Winstead PC 401 Congress Ave. Suite 2100 Austin,Texas 78701 Attn: David Dawson Email: ddawson@winstead.com E. Severability. If any part of this Agreement is for any reason found to be unenforceable, 10 all other parts remain enforceable. F. Choice of Law. This Agreement is subject to the laws of the State of Texas. Venue for any litigation relating to this Agreement is Harris County, Texas. G. Captions. Captions contained in this Agreement are for reference only, and, therefore, have no effect in construing this Agreement. The captions are not restrictive of the subject matter of any section or subsection in this Agreement. H. Waiver. If either party fails to require the other to perform a covenant or agreement of this Agreement, that failure does not prevent the party from later enforcing that covenant or agreement and all other covenants or agreements. If either party waives the other's breach of a covenant or agreement, that waiver does not waive a later breach of this Agreement. I. Survival.MDD and City shall remain obligated under all clauses of this Agreement that expressly or by their nature extend beyond the expiration or termination of this Agreement, including but not limited to, the indemnity provisions. 11 IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the Effective Date. CITY: CITY OF BAYTOWN By: Name: Title: MDD: BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT By: Name: Title: 12 Exhibit "E" INTERLOCAL AGREEMENT THIS INTERLOCAL AGREEMENT (this "Agreement") is made and entered into as of , 2021 (the "Effective Date"), by and between the City of Baytown, a Texas home- rule city and municipal corporation located in Harris and Chambers Counties, Texas ("City") and the Baytown Municipal Development District, a municipal development district established by the City pursuant to Chapter 377 of the Texas Local Government Code(the"District").Each of the foregoing parties is sometimes referred to herein as a "Party" and collectively as the"Parties". BACKGROUND: A. The City determined it to be in the best interests of the City to develop and construct a hotel and related improvements (the "Hotel Facilities") and convention center with related public infrastructure and facilities(the "City Facilities",the Hotel Facilities and City Facilities referred to collectively as the"Project"as more fully described in Section 1 hereof), and that the Project will serve the public purposes of the City by, among other things, improving trade and commerce. B. The City will lease the land for the Hotel Facilities to the District and the District will facilitate the development and construction of the hotel portion of the Project and related improvements. C. As consideration for the District Lease (as defined below), the District plans to issue one or more series of tax-exempt hotel revenue bonds pursuant to Section 377.073, Texas Local Government Code(the"Bonds"),the proceeds of which will be used to(i)fund the cost of designing,developing, constructing, furnishing and equipping the Hotel Facilities; (ii) fund a lawful debt service reserve for the Bonds and other permitted reserves for the Project; and (iii) pay costs of issuance of the Bonds. D. The City desires that the Project qualify to receive rebates of State hotel occupancy,sales and use, and mixed beverage taxes as provided for under Sections 351.156 and 351.157 of the Texas Tax Code(the"Code"). E. Section 351.155 of the Code provides that a municipality is not entitled to receive revenue under Sections 351.156 or 351.157 of the Code unless the municipality has pledged or committed a portion of the revenue derived from the tax imposed under the Code and collected by the qualified hotel for the payment of bonds, other obligations, or contractual obligations described by Section 351.155(a)of the Code and issued or incurred for the qualified project. ACCORDINGLY, in consideration of the foregoing and the mutual benefits to each Party from the execution and performance of this Agreement, and other good and valuable consideration, the receipt and sufficiency of which each Party acknowledges, the hereby Parties agree as follows: Section 1. The Project.The Project shall consist of two Components,being the City Facilities and the Hotel Facilities(each being a "Component"), each as more fully described in this Section 1. (a) Citv Facilities. The City Facilities shall include (i) the Convention Center, consisting of public meeting rooms, ballrooms, and convention areas of approximately 33,000 square feet, including a ballroom of approximately 12,000 square feet, (ii) a surface parking lot consisting of approximately 325 spaces immediately adjacent to the Convention Center, and (iii) any related common facilities and other shared infrastructure improvements necessary for the development, construction and operation of the City Facilities. (b) Hotel Facilities. The Hotel Facilities shall include an upscale,full-service Hotel having at least 200 rooms, including guestrooms and suites, and related amenities, such as a full-service restaurant, lounge space,bars,fitness center,outdoor swimming pool,back-of-house facilities,including a kitchen and food preparation facilities, other ancillary facilities, and necessary infrastructure improvements. The City hereby designates the Hotel as the hotel that is part of a"qualified project" (as that term is used in Chapter 351 of the Code) consisting of the Convention Center and the Hotel. Section 2. Tax Revenue Pledge. The City hereby pledges an amount of$100,000 annually of the City's hotel occupancy tax revenue imposed under Chapter 351, Texas Tax Code which is received by the City for the use of rooms in the Hotel, or such lesser amount if such annual revenue is less than$100,000. Section 3. General Provisions. (a) Notices. Any notice given hereunder by either Party to the other shall be in writing and may be effected by personal delivery in writing or by registered or certified mail, return receipt requested when mailed to the proper party, at the following addresses (email addresses are included for convenience only): CITY: The City of Baytown Texas 2401 Market Street Baytown,Texas 77520 Attn: City Manager citymanager a,baytown.ore DISTRICT: Baytown Municipal Development District 2401 Market Street Baytown,Texas 77520 Attn: General Manager comanager a baytown.org (b) Other Instruments. The Parties hereto covenant and agree that they will execute other and further instruments and documents as may become necessary or convenient to effectuate and carry out the purposes of this Agreement. (c) Invalid Provision. Any clause, sentence, provision, paragraph, or article of this agreement held by a court of competent jurisdiction to be invalid, illegal, or ineffective shall not impair, invalidate, or nullify the remainder of this Agreement, but the effect thereof shall be confined to the clause, sentence, provision,paragraph, or article so held to be invalid, illegal, or ineffective. (d) Non-Waiver Provision. Nothing in this Agreement shall be construed as a waiver or relinquishment by any of the Parties of their respective rights to claim any or all of the exemptions, privileges, and immunities as may be provided by or allowed under the Constitution of the State of Texas or any other applicable laws. [signature page follows] 2 The Parties have signed this Interlocal Agreement to become effective as of the Effective Date: CITY OF BAYTOWN,TEXAS By: Name: Title: BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT By: Name: Title: SIGNATURE PAGE TO INTERLOCAL AGREEMENT Exhibit T" AFTER RECORDING RETURN TO: ROBERT D. BURTON WINSTEAD PC 401 CONGRESS AVE.,SUITE 2100 AUSTIN,TEXAS 78701 EMAIL:RBURTONC WINSTEAD.COM DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL & CONVENTION CENTER MASTER CONDOMINIUM (A Master Condominium Located in Harris County, Texas) Declarant: Baytown Municipal Development District Copyright © 2020. Winstead PC. All rights reserved. This declaration may be used only in connection with the condominium regime known as Baytown Hotel & Convention Center Master Condominium in Harris County, Texas and the operation of Baytown Hotel & Convention Center Master Condominiicrn Community,Inc. 4825-8979-8840v.5 63325-4 TABLE OF CONTENTS Page ARTICLE1 DEFINITIONS.....................................................................................................................1 ARTICLE 2 PROPERTY SUBJECT TO DOCUMENTS.....................................................................8 2.01. Subject To Documents ...........................................................................................................8 2.02. Recorded Easements and Licenses.......................................................................................9 ARTICLE 3 UNITS AND COMMON ELEMENTS............................................................................9 3.01. Creation of Units;Plat and Plans.........................................................................................9 3.02. Description of Units and Common Elements...................................................................10 3.03. Allocation of Interests in Common Elements...................................................................12 3.04. Inseparability of Units; No Partition..................................................................................12 3.05. Permissible Relationships; Description.............................................................................12 3.06. Mortgage of Unit..................................................................................................................13 ARTICLE 4 USES,RESERVATIONS AND RESTRICTIONS.......................................................13 4.01. Permitted Uses......................................................................................................................13 4.02. Signage Rights.......................................................................................................................13 4.03. Easements..............................................................................................................................13 4.04. Major Decisions ....................................................................................................................14 4.05. Unilateral Decisions.............................................................................................................15 ARTICLE 5 THE MASTER ASSOCIATION AND ASSESSMENTS...........................................15 5.01. General...................................................................................................................................15 5.02. Allocation of Votes in the Master Association.................................................................15 5.03. Appointment of Directors on the Board............................................................................16 5.04. Resolution of Board Deadlock............................................................................................16 5.05. Limitation of Liability of Officers, Directors, Employees and Agents of the Master Association............................................................................................................................17 5.06. Regular and Special Assessments by the Master Association........................................17 5.07. Obligation to Pay Assessments..........................................................................................18 5.08. Lien to Secure Payment of Assessments...........................................................................19 5.09. Commencement of Obligation to Pay Assessments........................................................19 5.10. Notice of Default...................................................................................................................19 5.11. Alternative Actions ..............................................................................................................19 5.12. Statement of Expenses and Access to Records.................................................................20 5.13. Subordination of Lien for Assessments.............................................................................20 ARTICLE 6 MAINTENANCE,ALTERATIONS,AND UTILITIES..............................................20 6.01. Maintenance..........................................................................................................................20 6.02. Additions, Alterations or Improvements by Owner.......................................................23 6.03. Mechanic's Liens;Indemnification.....................................................................................23 6.04. Utilities...................................................................................................................................24 ii 4825-8979-8840v.5 63325-4 TABLE OF CONTENTS Page ARTICLE7 INSURANCE......................................................................................................................24 7.01. Requirements........................................................................................................................24 7.02. Insurance................................................................................................................................24 7.03. Insurance Expenses..............................................................................................................25 7.04. Insurance Trustee for the Owners......................................................................................25 7.05. Annual Review of Policies ..................................................................................................26 7.06. Other Insurance Requirements...........................................................................................26 ARTICLE 8 LOSS AND OBSOLESCENCE.......................................................................................27 8.01. Damaged Common Elements.............................................................................................27 8.02. Damaged Units.....................................................................................................................28 8.03. Obsolescence of Common Elements..................................................................................28 8.04. Obsolescence of the Property..............................................................................................29 8.05. The Master Association as Attorney-in-Fact....................................................................29 8.06. Matters Relating to Restoration and Repairs....................................................................29 ARTICLE 9 CONDEMNATION..........................................................................................................30 9.01. General Provisions...............................................................................................................30 9.02. Taking of All or Substantially All of One Unit.................................................................30 9.03. Partial Taking of a Unit........................................................................................................31 9.04. Taking of Common Elements.............................................................................................31 9.05. Complete Taking of Property.............................................................................................32 9.06. Payment of Awards and Damages ....................................................................................32 ARTICLE 10 RESOLUTION OF DISPUTES .....................................................................................32 10.01. Disputes.................................................................................................................................32 10.02. General...................................................................................................................................33 ARTICLE 11 SPECIAL PROVISIONS REGARDING THE GROUND LEASE..........................34 11.01. Subordination to Ground Lease.........................................................................................34 11.02. Recording Data.....................................................................................................................34 11.03. Expiration Date.....................................................................................................................34 11.04. Legal Description..................................................................................................................34 11.05. No Redemption Right..........................................................................................................34 11.06. No Right to Remove Improvements..................................................................................34 11.07. No Right to Renew...............................................................................................................34 11.08. Execution by Ground Lessor ..............................................................................................34 11.09. Owner Assumption of Ground Lease Obligations for Owner's Unit...........................34 11.10. Self-Help Regarding Ground Lease Default.....................................................................35 11.11. INDEMNIFICATION RELATING TO GROUND LEASE OBLIGATIONS.................35 ARTICLE 12 MISCELLANEOUS.........................................................................................................35 4825-8979-8840v.5 63325-4 TABLE OF CONTENTS Page 12.01. Revocation or Termination of Master Declaration..........................................................35 12.02. Amendment to Master Declaration...................................................................................36 12.03. Partial Invalidity...................................................................................................................36 12.04. Conflicts.................................................................................................................................36 12.05. Captions and Attachments..................................................................................................36 12.06. Usury......................................................................................................................................36 12.07. Use of Number and Gender................................................................................................37 12.08. Governing Law.....................................................................................................................37 12.09. Notice.....................................................................................................................................37 12.10. Estoppel Certificates ............................................................................................................37 12.11. Duration.................................................................................................................................38 12.12. Termination of Declarant's Rights........................:.............................................................38 ARTICLE 13 MORTGAGEE PROTECTION PROVISIONS..........................................................38 13.01. Notice Provisions..................................................................................................................38 13.02. Cure Rights............................................................................................................................39 13.03. No Invalidity of Mortgage Lien..........................................................................................39 13.04. Mortgagee Requirements....................................................................................................39 13.05. Unpaid Amounts..................................................................................................................39 13.06. Books and Records...............................................................................................................40 13.07. Priority of Rights ..................................................................................................................40 iv 4825-8979-8840v.5 63325-4 DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL & CONVENTION CENTER MASTER CONDOMINIUM This Declaration of Condominium Regime for Baytown Hotel & Convention Center Master Condominium is made and established on [ , 20 ] (the "Effective Date"), by Baytown Municipal Development District (the "Declarant"). The Declarant is the owner of the leasehold interest in the Property. The Declarant hereby submits the Property to the terms and provisions of this Master Declaration and the Texas Uniform Condominium Act, Chapter 82 of the Texas Property Code, for the purpose of creating Baytown Hotel & Convention Center Master Condominium. NOW, THEREFORE, it is hereby declared that the Property will be held, sold, conveyed, leased, occupied, used, insured, and encumbered with this Master Declaration, which will run with the Property and be binding upon all parties having right, title, or interest in or to the Property, their heirs, successors, and assigns and will inure to the benefit of each Owner thereof for the duration of the Ground Lease as more particularly described in Section 1.24 of this Master Declaration. ARTICLE 1 DEFINITIONS Unless otherwise defined in this Master Declaration, terms defined in Section 82.003 of the Act have the same meaning when used in this Master Declaration. The following words and phrases, whether or not capitalized, have specified meanings when used in the Documents, unless a different meaning is apparent from the context in which the word or phrase is used. 1.01. "Act" means Chapter 82 of the Texas Property Code, the Texas Uniform Condominium Act, as it may be amended from time to time. 1.02. "Affiliate" means any Person who controls, is controlled by, or is under common control with another Person. 1.03. "Allocated Interests" are (a) the undivided interests of each Owner in the Common Elements, and (b) the Common Expenses and the votes in the Master Association allocated to each Unit as shown on Attachment 1 to this Master Declaration (except as Common Expenses may otherwise be allocated pursuant to the Allocation Document), as may be reallocated in accordance with the Reallocation Percentages, as required from time to time, pursuant to the provisions of this Master Declaration. 1.04. "Allocation Document" means the document entitled 'Baytown Hotel & Convention Center Master Condominium Allocation Document" executed of even date herewith by the Declarant and which is incorporated herein by reference for all purposes. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 1 4825-8979-8840v.5 63325-4 1.05. "Assessments" means the Regular Assessments and Special Assessments and any interest thereon assessed in accordance with Article 5 of this Master Declaration. 1.06. "Board"means the Board of Directors of the Master Association. 1.07. "Building" means the building located on the Land in which the City Facilities Unit and the Hotel Unit are located, including the Structure thereof. 1.08. "Bylaws" mean the bylaws of the Master Association, attached as Attachment 4 to this Master Declaration, as amended from time to time. 1.09. "Certificate" means the Certificate of Formation of the Master Association filed with the Secretary of State of Texas, as the same may be amended from time to time. The Certificate is attached as Attachment 3 to this Master Declaration. 1.10. "City Facilities Unit" means the Unit as more particularly described in Section 3.02 of this Master Declaration and shown on the Plat and Plans. 1.11. "Common Elements" means all portions of the Property, SAVE AND EXCEPT the Units, expressly including the land underlying the Property. All Common Elements are "General Common Elements" except if such Common Elements have been allocated as "Limited Common Elements" by this Master Declaration for the exclusive use of one or more but less than all of the Units. 1.12. "Common Expenses" means the expenses incurred or anticipated to be incurred by the Master Association for preserving and enhancing the Regime, including but not limited to: the operation, maintenance, repair, and replacement of General Common Elements; the management, administration and operation of the Master Association; the administration and enforcement of the Documents; any expense classified as a "Common Expense" under this Master Declaration; reserves for General Common Elements, property owned by the Master Association, and for the operation of the Master Association; and for any expense related to the purposes for which the Master Association was formed. 1.13. "Component Budget" means the budget prepared by the Maintaining Owner, as further described in Section 6.01Lb) of this Master Declaration. 1.14. "County" means Harris County,Texas. 1.15. "Damaged Unit" means one or more Units damaged or destroyed by fire or other casualty. 1.16. "Designee" means a Person acting at the request of another Person, including contractors, subcontractors, employees, agents, representatives and licensees. 1.17. "Director"means a member of the Board. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 2 4825-8979-8840v.5 63325-4 1.18. "Dispute" means any claim, grievance or other dispute, arising out of or relating to: (a) any dispute arising between two (2) or more Owners or the Master Association and one or more Owners (including any conflict or dispute relating to a Major Decision) to the extent that such dispute relates to the Regime; (b) the proper party to bear a cost or expense or the proper amount of the expense, fee or Assessment to be charged or collected pursuant to the Documents; (c) the rights, obligations and duties of any Owner under the Documents; or (d) the authority of the Master Association or an Owner under any Legal Requirement or under the Documents to require any Owner to take any action or not to take any action involving such Owner's Unit. The following shall not be considered "Disputes" unless all parties shall otherwise agree to submit the matter to the dispute resolution provisions of Article 10 of this Master Declaration: (1) any suit by the Master Association or an Owner to obtain a temporary restraining order and such ancillary relief as the court may deem necessary to maintain the status quo and preserve the Master Association or Owner's ability to enforce the provisions of the Documents; (2) any suit if such suit asserts a dispute that would constitute a cause of action independent of any of the Documents; (3) any disagreement that primarily involves title to any Unit or the Common Elements; (4) failure to pay Assessments; or (5) any suit in which the applicable statute of limitations would expire within one-hundred eighty (180) days of the giving of notice as provided in Article 10 of this Master Declaration unless the Persons against whom the Dispute is made agree to toll the statute of limitations for a period of time necessary to comply with Article 10 of this Master Declaration. 1.19. "Documents" mean, individually or collectively as the case may be, this Master Declaration, the Plat and Plans, the Ground Lease, the Ground Lease Obligation Allocation Chart, the Certificate, the Bylaws, the Rules, the Allocation Document, and the Act, as each may be amended from time to time. An appendix, attachment, schedule, or certification accompanying a Document is a part of that Document. 1.20. "Environmental Laws" means any federal, state or local law, statute, ordinance or regulation, whether now or hereafter in effect, pertaining to health, industrial hygiene or the environmental conditions on, under, or about the Land or the Improvements, including without limitation, the following, as now or hereafter amended: Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C.A. § 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No.99-499, 100 Stat. 1613; Resource, Conservation and Recovery Act, 42 U.S.C.A. § 6901 et seq.; the Toxic Substances Control Act, 15 U.S.C.A. § 2601 et seq.; Emergency Planning and Community Right to Know Act of 1986, 42 U.S.C.A. § 11001 et seq.; Clean Water Act, 33 U.S.C.A. § 1251 et seq.; Clean Air Act, 42 U.S.C.A. § 7401 et seq.; and any corresponding state laws or ordinances including, without limitation, the Texas Water Quality Control Act, Texas Water Code Chapter 26; Texas Solid Waste Disposal Act, Texas Health& Safety Code ("THSC") Chapter 361; Texas Clean Air Act, THSC Chapter 382; and regulations, rules, guidelines or standards promulgated pursuant to such laws, statutes and regulations, as such statutes, regulations, rules, guidelines and standards are amended from time to time. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 3 4825-8979-8840v.5 63325-4 1.21. "General Common Elements" means all portions of the Common Elements that are not Limited Common Elements, including those more particularly described in Section 3.02(cl of this Master Declaration. 1.22. "Governmental Authority" means any and all applicable courts, boards, agencies, commissions, offices or authorities of any nature whatsoever for any governmental entity (federal, state, county, district, municipal, or otherwise) whether now or hereafter in existence. 1.23. "Governmental Impositions" means all real estate and personal property taxes, assessments, standby fees, excises and levies, and any interest, costs or penalties with respect thereto, general and special, ordinary and extraordinary, foreseen and unforeseen, of any kind and nature whatsoever, which at any time prior to or after the execution of this Master Declaration, may be assessed, levied or imposed upon the Regime or any Unit therein by any Governmental Authority. 1.24. "Ground Lease" means that certain Ground Lease Agreement dated [ J. The Ground Lease encumbers the Property and is between Ground Lessor and Declarant. 1.25. "Ground Lessor" means The City of Baytown, Texas, a Texas municipal corporation and home-rule city of the State. 1.26. "Ground Lease Default" means a "Default" as defined in Sectioli 9.01 of the Ground Lease. 1.27. "Ground Lease Obligation Allocation Chart" means that certain chart set forth on Attachment 7 attached hereto. 1.28. "Hotel Unit" means the Unit as more particularly described in Section 3.02 of this Master Declaration and shown on the Plat and Plans. 1.29. "Improvements" means the Building and its infrastructure, and the pavement, fencing, landscaping, facilities, Systems and man-made objects of every type, existing or in the future placed on the Land. 1.30. "Insurance Proceeds" means any and all proceeds that an Owner or the Insurance Trustee is entitled to receive from an insurance company as a result of a casualty loss, including such proceeds in connection with a casualty loss to a Unit, the Common Elements or to Improvements within an easement area established pursuant to this Master Declaration. 1.31. "Insurance Trustee"means the Owner of the Hotel Unit. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 4 4825-8979-8840v.5 63325-4 1.32. "Land" means that certain real property located in the County and more particularly described in Attachment 2 to this Master Declaration, together with all and singular the rights and appurtenances pertaining thereto, including any additional real property that becomes part of the Property, and, to the extent appurtenant, any easements established pursuant to this Master Declaration. 1.33. "Legal Requirements" means any and all then-current judicial decisions, statutes, rulings, rules, regulations, permits, certificates or ordinances of any Governmental Authority in any way applicable to any Owner's use and enjoyment of the Regime, any Unit or the Property, including zoning ordinances, subdivision and building codes, flood disaster laws, applicable architectural barrier, health and Environmental Laws and all "Applicable Laws" as defined in the Ground Lease. 1.34. "Limited Common Elements" means those portions of the Common Elements that are allocated by this Master Declaration and the Plat and Plans for the exclusive use of less than all of the Units, including those more particularly described in Section 3.02(d) of this Master Declaration. 1.35. "Maintaining Owner" means the Owner of a Unit who is required to maintain certain components within the Regime, as further described in Section 6.01(b) of this Master Declaration. 1.36. "Maintaining Owner Expenses" means expenses incurred or anticipated to be incurred by such Maintaining Owner, including appropriate replacement reserves set forth in the applicable Component Budget, as further described in Section 6.01(b) of this Master Declaration. 1.37. "Maintenance Standard" means good repair in a first-class condition, including the operation, upkeep, repair and restoration, ordinary wear and tear excepted, to the extent necessary to maintain the Regime or a Unit, as applicable, in a condition reasonably suitable for its intended purpose. 1.38. "Major Decision" means any action initiated by any Owner, the Insurance Trustee, the Master Association or any other Person, relating to: (a) structural changes to the Improvements and/or the Systems that are reasonably likely to have a Material Adverse Effect on another Owner or another Owner's Unit; (b) changes to the Documents that are reasonably likely to have a Material Adverse Effect on another Owner or another Owner's Unit; (c) any modification of the insurance coverage obtained by the Insurance Trustee in accordance with Attachment 6, the distribution of Insurance Proceeds received by the Insurance Trustee from any insurance policies required to be obtained and maintained by the Insurance Trustee in accordance with Attachment 6, or the settlement of any claims under any insurance policies required to be obtained and maintained by the Insurance Trustee in accordance with Attachment 6; (d) any other matter that is reasonably likely to have a Material Adverse Effect on another Owner or another Owner's Unit; or (e) any other matter that might have a Material DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 5 4825-8979-8840v.5 63325-4 Adverse Effect on a Unit or an Owner or cause a Ground Lease Default. Notwithstanding the foregoing, the following action shall not be considered a Major Decision: any modification to, distribution of Insurance Proceeds from, or settlement of an insurance claim under additional insurance coverage obtained at the request of a Unit Owner and pertaining exclusively to such Owner's Unit in accordance with Section 7.02. 1.39. "Majority"means more than half. 1.40. "Master Association" means the Baytown Hotel & Convention Center Master Condominium Community, Inc., a Texas nonprofit corporation organized under the Act and the TNCL and created for the purposes and possessing the rights, powers, authority and obligations set forth in the Documents. 1.41. "Master Budget" means the budget prepared by the Board that includes the anticipated Common Expenses for the ensuing fiscal year. 1.42. "Master Declaration" means this Declaration of Condominium Regime for Baytown Hotel &Convention Center Master Condominium and all amendments thereto. 1.43. "Material Adverse Effect" means any act, event, condition or circumstance that is reasonably likely to materially and adversely affect the business, operations, condition (financial or otherwise), or value of a Unit. 1.44. "Member" means a member of the Master Association, unless the context indicates that member means a member of the Board or a member of a committee of the Master Association. 1.45. "Mortgagee" means any Person that is the holder, insurer or guarantor of any bona fide indebtedness which is the result of an arm's length negotiation, that is secured by an encumbrance upon the Unit or the leasehold estate of a Unit, and which has provided the Master Association with written notice of its name, address and a description of the Unit or the leasehold estate in a Unit(as applicable) encumbered thereby. 1.46. "Occupant" means any Person, including any Owner, tenant or otherwise having a right to occupy or use all or any portion of a Unit for any period of time. 1.47. "Owner" means any Person owning fee title to a Unit, or in the event a Unit, in its entirety, is subject to a ground lease, the leasehold interest under such ground lease, but excluding Ground Lessor and any Person having an interest in a Unit solely as security for an obligation. 1.48. "Owner Maintained Component" means the component of the Regime maintained, repaired and replaced by a Maintaining Owner pursuant to the Allocation Document, as further described in Section 6.01(b) of this Master Declaration. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 6 4825-8979-8840v.5 63325-4 1.49. "Past Due Rate" means the lesser of: (a) 10% per annum, or (b) the maximum lawful rate of interest under the law of the State of Texas. 1.50. "Person" means any individual, corporation, partnership, limited partnership, limited liability partnership, limited liability company, joint venture, estate, trust, unincorporated association, any other legal entity, including any Governmental Authority and any fiduciary acting in such capacity on behalf of any of the foregoing. 1.51. "Plat and Plans" means the plat and plans attached hereto as Attachment 5 and made a part of this Master Declaration, which include a plat of the Land and dimensional drawings that horizontally and vertically identify and describe the Units and/or the Common Elements. 1.52. "Priority Lien Indebtedness" means any bona fide indebtedness, which is the result of an arms-length negotiation that is secured by a first lien or encumbrance upon a Unit or the leasehold estate of a Unit. 1.53. "Property"means the Land and the Improvements. 1.54. "Reallocation Percentage" means the percentage of the undivided interest of each Owner in the Common Elements as set forth in a Recorded amendment to this Master Declaration (if applicable), determined in the same manner as the measurement used to establish the initial Allocated Interests set forth on Attachment 1 to this Master Declaration. 1.55. "Record", "Recordation", "Recorded" or "Recording" means to record or to be recorded in the Official Public Records of the County. 1.56. "Regime" means the Property, Units, General Common Elements, and Limited Common Elements that comprise the condominium regime established by this Master Declaration. 1.57. "Regular Assessments" means the Common Expenses established and assessed by the Master Association pursuant to Article 5 of this Master Declaration. 1.58. "Rules" mean the rules and regulations of the Master Association, if any, adopted in accordance with the Documents or the Act. The Rules may be modified from time to time by the Board. 1.59. "Signage" means any signage, lettering, decorations, banners, advertising or marketing media, awnings, canopies, window covering, or any other form of expression on the Skin or in the interior of the Improvements if the same is visible from the exterior of the Improvements. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 7 4825-8979-8840v.5 63325-4 1.60. "Signage Rights" means the right to affix Signage to the Skin, as described in Section 4.02 of this Master Declaration. 1.61. "Skin" means the exterior surface of the Improvements or the portions thereof, as applicable, but excluding any exterior surface that is structural in nature. 1.62. "Special Assessments" means Common Expenses established and assessed pursuant to Article 5 of this Master Declaration. 1.63. "Structure" means all foundations, footings, columns, flat slabs, sheer walls, girders, support beams, post tension cables or rods and including any and all other structural components that support, uphold or are a part of the Building or any other Improvement. 1.64. "Systems" means all fixtures, utilities, equipment, pipes, lines, wires, computer cables, conduits, circuits,junction boxes, hangers, pull boxes, terminal points, electronic devices, air compressors, air handlers, chillers and other systems used in the production, heating, cooling, ventilation and/or transmission of air, water, gas, electricity, communications, waste water, sewage, audio and video signals, and other utility services including the main switch gear conduits, plumbing chases and mechanical shafts on the Property, including, without limitation, fire and life-safety systems and vertical transportation. 1.65. "Taking" means the taking or threat of taking of all or a portion of the Property for any public or quasi-public use, by eminent domain proceedings or otherwise, by a Governmental Authority or by an action in the nature of eminent domain (whether permanent or temporary) or the sale or other transfer of the Property in lieu thereof. 1.66. "TNCL" means the Texas Nonprofit Corporation Law, as amended from time to time. 1.67. "Unilateral Decisions" means any matter that is governed by the Documents that is not a Major Decision when made or effected by the Master Association, the Insurance Trustee, an Owner or any other Person. 1.68. "Unit" means the physical portion of the Property designated by this Master Declaration for separate ownership, the boundaries of which are shown on the Plat and Plans, and further described in Section 3.02 of this Master Declaration. ARTICLE 2 PROPERTY SUBTECT TO DOCUMENTS 2.01. Subject To Documents. The Property is held, transferred, sold, conveyed, leased, occupied, used, insured, and encumbered subject to the terms, covenants, conditions, restrictions, liens, and easements set forth in this Master Declaration, which run with the DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 8 4825-8979-8840v.5 63325-4 Property, bind all parties having or acquiring any right, title, or interest in the Property and their heirs, successors, and assigns. 2.02. Recorded Easements and Licenses. In addition to the terms, covenants, conditions, restrictions, liens, and easements contained in this Master Declaration, the Property is subject to all easements, licenses, leases, and encumbrances, including those described on the Plat and Plans, and any easements, licenses, leases, and encumbrances shown or referenced on any Recorded plat, each of which is incorporated herein by reference. Each Owner, by accepting an interest in or title to a Unit, whether or not it is so expressed in the instrument of conveyance, covenants and agrees to be bound by such easements, licenses, leases, and encumbrances. ARTICLE 3 UNITS AND COMMON ELEMENTS 3.01. Creation of Units; Plat and Plans. (a) The Units. The Property is hereby divided into leasehold estates composed of two (2) separately designated Units, being the City Facilities Unit and the Hotel Unit, and each such Unit's undivided interest in and to the Common Elements. Each Unit, together with such Unit's undivided interests in the Common Elements is for all purposes a separate parcel of and estate in real property. The separate parcels of and estates in real property designated hereby shall be created on the date this Master Declaration is Recorded, and shall continue until this Master Declaration is revoked or terminated in the manner provided in this Master Declaration. (b) The Plat and Plans. The Plat and Plans set forth the information as is desirable or required pursuant to the Act, including a certification as to compliance with the Act. The measurements set forth on the Plat and Plans as to each Unit are approximate values taken from the plans and specifications for the Property and may not be precisely accurate as to any Unit due to variances in construction or Building dimensions and interior floor plans. NEITHER DECLARANT NOR ANY OWNER SHALL BE LIABLE TO ANY OTHER OWNER OR OCCUPANT AS A RESULT OF ANY DISCREPANCIES IN ACTUAL UNIT MEASUREMENTS FROM THOSE SET FORTH ON THE PLAT AND PLANS, AND EACH OWNER, BY ACCEPTING A DEED TO A UNIT, WAIVES ANY SUCH CLAIM OR CAUSE OF ACTION. Upon completion of the construction of the Improvements, the Owners may Record an amendment to this Master Declaration, amending the Plat and Plans to reflect the actual measurements for each Unit and any other necessary changes based upon completion of construction. (c) Maximum Number of Units. The maximum number of Units which may be created in the Regime is two (2). DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 9 4825-8979-8840v.5 63325-4 3.02. Description of Units and Common Elements. The Units shall consist of the following and any logical extension thereby: (a) City Facilities Unit and Hotel Unit Located inside the Building. The boundaries and identification of the City Facilities Unit and Hotel Unit are shown on the Plat and Plans. The City Facilities Unit is not contiguous and is located inside the Building and outside the Building. The boundaries of each Unit within the Building are further described as follows: (i) Vertical (Perimeter) Boundaries. The vertical or perimeter boundaries of each Unit are (i) for portions of the Unit which adjoin an exterior wall of the Building, the vertical plane created by the inside facing surfaces of the material comprising the exterior wall of the Building, which extends from the lower horizontal boundary of the Unit to the upper horizontal boundary of the Unit as described in Section 3.02(a)(ii); (ii) for portions of the Unit which adjoin a window or exterior glass surface of the Building (including any window or glass wall forming the perimeter of any balcony), the interior-facing surface of the window or other glass surface extending (and projected in the event in the case of any glass forming the perimeter of any balcony within the Unit) from the lower horizontal boundary of the Unit to the upper horizontal boundary of the Unit as described in Section 3.02(a)(ii); (iii) for portions of the Unit which adjoin a wall separating the Unit from another Unit, the vertical plane created by the centerline of such wall, extending from the lower horizontal boundary of the Unit to the upper horizontal boundary of the Unit as described in Section 3.02(a)(ii); (iv) for portions of the Unit which adjoin any Common Element core components, e.g., the area including the stairways, as depicted on the Plat and Plans, the vertical plane created by the outermost unfinished surface of the Common Element wall, extending from the lower horizontal boundary of the Unit to the upper horizontal boundary of the Unit as described in Section 3.02(a)(ii); and (v) for portions of a Unit not otherwise addressed by subsections (i) through (iv) above, the vertical or perimeter boundaries reflected on the Plat and Plans. (ii) Horizontal (Upper and Lower) Boundaries. The upper horizontal boundary of each Unit is the horizontal plane formed by the lowermost unfinished surface of the concrete or other material comprising the permanent ceiling (any dropped soffit areas and/or false ceiling is within the Unit) in the uppermost floor of DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 10 4825-8979-8840v.5 63325-4 the Unit. The lower horizontal boundary of each Unit is the horizontal plane formed by the uppermost surface of the unfinished concrete of the lowermost floor of the Unit. Any decorative or finished flooring, carpet pads, and sub-flooring above or on the unfinished concrete floor is within the boundaries of the Unit. The upper and lower horizontal boundaries of each Unit extend to their intersections with the Unit's vertical boundaries, as described in Section 3.02(a)(i). (b) City Facilities Unit Located outside the Building. The boundary and identification of the portion of the City Facilities Unit located outside the Building is shown on the Plat and Plans. (c) Additional Information to Interpret Unit Boundaries. Except as may be otherwise provided for herein, the Unit boundaries will include any and all attachments to, protrusions from and appurtenances attached to and exclusively serving such Unit (including the spaces located within any balconies intended to serve the Unit). Additionally, to the extent that any Structure, Systems or Improvements exclusively serve or support a Unit, such items will be deemed a part of such Unit whether located within, outside, or below the Unit, and whether or not attached to or contiguous with the Unit. Unless otherwise designated as Limited Common Elements, elevator systems (including, but not limited to elevators, elevator shafts, elevator lobbies and all related mechanical and electrical systems) and stairs that serve a single Unit (including any part of any system or stairs located outside the boundaries of the Unit) will be deemed part of the Unit. Furthermore, if any chutes, flues, ducts, conduits, wires, pipes, chases or other apparatus lies partially within and partially outside of the designated boundaries of the Unit, any portion thereof which serve only that Unit will be deemed to be a part of that Unit, while any portions thereof which serve or may serve more than one Unit will be deemed as part of the General Common Elements unless otherwise designated as Limited Common Elements on the Plat and Plans. In the event that there is a conflict between the boundaries of a Unit as described in this Section 3.02 and as shown on the Plat and Plans, the boundaries of a Unit as set forth in this Section 3.02 will control. It is the express intent of the Declarant that the property described as being part of each Unit will for all purposes herein be treated as and constitute a lawfully described "Unit" as that term is defined in the Act. In the event that there is a final judicial determination by a court of competent jurisdiction that the boundaries of a Unit or any portion thereof are so indefinite and vague so as to not create a legally constituted "Unit" within the meaning of the Act, then that portion of the Unit that has not been adequately described will be severed from the property deemed a part of the Unit (if the remainder of the Unit, excluding the severed portion thereof, constitutes a properly described "Unit" under the Act) and will thereafter be DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 11 4825-8979-8840v.5 63325-4 deemed to be Limited Common Elements reserved to the exclusive use of said Unit, subject to the rights and obligations of other Owners with respect to said property. (d) General Common Elements. The General Common Elements shall include all the Common Elements that are not Limited Common Elements. (e) Subsequent Allocation of Limited Common Elements. A Common Element not allocated by this Master Declaration as a Limited Common Element may be so allocated only in accordance with the Act or the provisions of this Master Declaration. 3.03. Allocation of Interests in Common Elements. The Allocated Interests and votes in the Master Association assigned to each Unit is set forth on Attachment 1 to this Master Declaration, and is calculated as follows: Gross surface area of the lower surface boundary of a Unit as defined in Section 3.02(a)(iijtotal gross surface area of the lower surface boundary of all Units as defined in Section 3.02(a)(ii) If a Unit comprises multiple floors, the calculation of the gross surface floor area of the Unit shall include each floor of the Unit. The same formula will be used in the event the Allocated Interests and votes of each Owner are reallocated as a result of any increase or decrease in the number of Units subject to this Master Declaration. In the event an amendment to this Master Declaration is Recorded which reallocates the Allocated Interests and votes as a result of any increase or decrease in the number of Units, the reallocation will be effective on the date such amendment is Recorded. 3.04. Inseparability of Units; No Partition. Except for: (a) the granting of easements over and across portions of the Property in accordance with the terms and provisions of the Documents; (b) the leasing of all or any portion of a Unit; and (c) as otherwise permitted pursuant to this Master Declaration or the Legal Requirements, each Unit will be inseparable, and will be acquired, owned, conveyed, transferred, leased and encumbered only as an entirety. Except as otherwise permitted by the Act or this Section 3.04, in no event will a Unit be subject to legal partition, and no Owner will bring or be entitled to maintain an action for the legal partition or division of a Unit or Common Elements. Any purported conveyance, judicial sale or other voluntary or involuntary transfer of an undivided interest in the Common Elements without the Unit to which such Common Elements are allocated is void ab initio. 3.05. Permissible Relationships; Description. (a) Ownership of Units. A Unit may be acquired and held by one or more Persons in any form of ownership recognized by the Legal Requirements. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 12 4825-8979-8840v.5 63325-4 (b) Description of Units. Any contract or other instrument relating to the acquisition, ownership, conveyance, transfer, lease or encumbrance of a Unit shall legally describe such Unit as follows: "[insert Unit name] of Baytown Hotel & Convention Center Master Condominium, located in Harris County, Texas," with further reference to the recording data for this Master Declaration (including the Plat and Plans and any Recorded amendments to this Master Declaration). Every such description shall be good and sufficient for all purposes to acquire, own, convey, transfer, lease, encumber or otherwise deal with such Unit, and any such description shall be construed to include all incidents of ownership relating to a Unit. 3.06. Mortgage of Unit. An Owner shall be entitled from time to time to mortgage or encumber a Unit by creating a lien or liens covering a Unit under the provisions of a mortgage or deed of trust, but any lien created thereby shall be subject to the terms and provisions of this Master Declaration, and any mortgagee or other lienholder which acquires a Unit through judicial foreclosure, public sale or any other means shall be subject to the terms and provisions of this Master Declaration. ARTICLE 4 USES, RESERVATIONS AND RESTRICTIONS 4.01. Permitted Uses. Units may be used in accordance with the Legal Requirements. 4.02. Signage Rights. Each Owner, at its sole expense, shall have the right to erect Signage on the interior surfaces of its respective Unit provided that such Signage is in compliance with the Legal Requirements. Each Owner, at its sole expense, shall have the right to maintain Signage on the Skin of the Building provided that such Owner: (a) obtains prior written approval from each Owner, which approval shall not be unreasonably withheld, conditioned or delayed; (b) obtains and maintains all necessary permits and approvals required under all applicable Legal Requirements with respect to the erection and maintenance of its Signage; (c) keeps and maintains its Signage in good condition and repair; and (d) keeps or causes to be kept all lighting and other equipment in connection with its Signage in good condition and repair. The Owner of the Unit utilizing the Signage Rights shall be responsible for the cost to repair Common Elements or other Units if such repairs are necessitated by use or misuse of their respective Signage Rights. EACH OWNER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS EACH OTHER OWNER, THE MASTER ASSOCIATION, GROUND LESSOR, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND MEMBERS, INDIVIDUALLY AND COLLECTIVELY, AGAINST LOSSES DUE TO ANY AND ALL CLAIMS FOR DAMAGES OR LAWSUITS, BY ANYONE, ARISING OR RESULTING FROM THE USE OR MISUSE OF SUCH OWNER'S SIGNAGE. 4.03. Easements. Each Owner accepts a deed conveying title to a Unit subject to the easements granted and reserved, as applicable, in this Section 4.03, which easements (and all DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 13 4825-8979-8840v.5 63325-4 related rights and obligations related to such easements arising on or after the date of any transfer) shall run with the Regime. (a) Access Easement. Declarant hereby grants and reserves a perpetual, appurtenant and non-exclusive easement over, on, under and across each Unit as may reasonably be necessary for the benefit of each Unit and the Master Association, as applicable, for: (i) the maintenance, repair or replacement of any portion of the Regime that the Master Association or an Owner is responsible to maintain; (ii) the right of access as reasonably necessary to access, maintain, repair and replace any Systems which exclusively serve a Unit; (iii) the making of emergency repairs therein necessary to prevent damage to the Common Elements or to any Unit; (iv) the evacuation of all or any part of the Property in the event of an emergency; and (v) such other reasonable purposes as are deemed by the Master Association to be necessary for the performance of the obligations of the Master Association or a Maintaining Owner as described in the Documents. (b) Common Elements Easement. Declarant hereby grants and reserves a perpetual, appurtenant and non-exclusive easement over, on, under and across the Common Elements for the benefit of each Unit (which is an intended beneficiary of such Common Element) and the Master Association for ingress and egress from each Unit and for the use of the Common Elements. (c) Support Easement. Declarant hereby grants and reserves a perpetual, appurtenant and non-exclusive easement over, on, under and across any Structure, the benefit of each Unit, to the extent such portion of the Structure provides support for any Improvements located within a Unit. (d) Systems Easement. Declarant hereby grants and reserves a perpetual, appurtenant and non-exclusive easement over, on, under and across the Systems for the benefit of each Owner and the Master Association for the use of and the connection to any portion of the Systems intended for such Owner's or the Master Association's use, except for any portion of the Systems that are intended to exclusively service a Unit. 4.04. Major Decisions. Notwithstanding anything to the contrary contained in the Documents, the rights of each Owner with respect to Major Decisions shall be identical and each Owner shall be entitled to consent to all Major Decisions that have an effect on such Owner's Unit, and neither the Master Association, the Insurance Trustee, or an Owner shall have the right or authority to act on any matter constituting a Major Decision that has an effect on a Unit, without the prior written approval of the affected Owner. Notwithstanding the foregoing, under no circumstances shall it constitute a Major Decision for an Owner to make changes or modifications to such Owner's Unit, provided that such changes or modifications are (i) limited DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 14 4825-8979-8840v.5 63325-4 to interior components and (ii) do not otherwise affect components or Systems shared with another Unit or the exterior of another Unit. 4.05. Unilateral Decisions. The Master Association, Insurance Trustee or an Owner may make any Unilateral Decision without notifying the other Owners. If the Master Association, Insurance Trustee or an Owner, as applicable, desires to confirm whether an act is a Unilateral Decision, the Master Association, Insurance Trustee or Owner, as applicable, may notify the Master Association and the other Owner(s) (the "Unaffected Owners") in writing of the action to be taken or other effect of the proposed decision. The Master Association and Unaffected Owners shall have ten (10) days after receipt of the original notice to deliver written notice to the party who proposed the decision whether the decision is a Unilateral Decision and if not, the reason or explanation of why the proposed decision is not a Unilateral Decision. If no objection is received by the proposing party within the ten (10) day time period, the proposing party may take all appropriate action necessary or desired to accomplish the purpose of the Unilateral Decision. Additionally, if such Unilateral Decision requires an amendment to this Master Declaration, all Unaffected Owners hereby agree to provide an executed and notarized counterpart consenting to such amendment within ten (10) days after receipt of a written request for such counterpart from the proposing party. ARTICLE 5 THE MASTER ASSOCIATION AND ASSESSMENTS 5.01. General. The Master Association will be formed as a nonprofit corporation under the TNCL. Notwithstanding anything to the contrary contained in this Master Declaration or any other Documents to the contrary, the Master Association shall not take any of the following actions, or consent to the following actions, without the prior consent of the Ground Lessor: (i) intentionally take any action in violation of the Ground Lease; (ii) merge or consolidate the Master Association with or into any other Person; (iii) amend or supplement this Master Declaration or any other Documents, other than to attach or amend the Plat and Plans for the purposes set forth in the Ground Lease; (iv) amend or supplement the Master Declaration or any other Documents to annex additional Units into the Master Declaration and amend the "Plat and Plans" exhibit to the Master Declaration to reflect such Units; provided, however no more than two (2) total Units may be created; (v) change the purpose of the Master Association as set forth in the Documents; (vi) dissolve the Master Association; or (vii) file any voluntary petition under Title 11 of the United States Code, the Bankruptcy Code, or seek the protection of any other Federal or State bankruptcy or insolvency law or debtor relief statute or consenting to the institution or continuation of any involuntary bankruptcy proceeding or the admission in writing of the inability to pay debts generally as they become due, or make a general assignment for the benefit of creditors. 5.02. Allocation of Votes in the Master Association. The number of votes allocated to each Unit is set forth on Attachment 1 to this Master Declaration. Votes allocated to a Unit will DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 15 4825-8979-8840v.5 63325-4 be exercised by the Owner or collective Owners of the Unit to which the votes have been assigned. 5.03. Appointment of Directors on the Board. The Owner of the Hotel Unit shall appoint two (2) duly authorized agents or representatives as Directors in accordance with the Bylaws. The Owner of the City Facilities Unit shall appoint two (2) duly authorized agents or representatives as Directors in accordance with the Bylaws. 5.04. Resolution of Board Deadlock. In the event the Board is deadlocked, meaning a decision of all of the Board cannot be obtained as a result of a disagreement between Board members, the decision will be submitted to alternative dispute resolution as set forth below in a good faith effort to resolve the dispute. (a) Negotiation and Mediation. The members of the Board will make every reasonable effort to meet in person and confer for the purpose of resolving the dispute by good faith negotiation. The Board may appoint a representative to assist the parties in negotiating a resolution of the dispute. If the parties have not resolved the dispute through negotiation within thirty (30) days (or within such other period as the parties may agree upon), the Board will have thirty (30) additional days to submit the dispute to mediation with an independent agency providing dispute resolution services in Harris County,Texas. (b) Arbitration. If the parties do not settle the dispute within thirty (30) days after submission of the matter to mediation, or within such time as may be determined to be reasonable by the mediator, the mediator will issue a notice of termination of the mediation proceedings indicating that the parties are at an impasse and the date that mediation was terminated. In such event, any dispute between the Board as contemplated by this Section 5.04 shall be settled by arbitration administered by the American Arbitration Association in accordance with its commercial arbitration rules. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitration proceedings shall be conducted in Harris, Texas. (c) Settlement. Any settlement of the dispute hereunder will be documented in writing and signed by the parties. If any party thereafter fails to abide by the terms of such agreement, then any other party may file suit or initiate administrative proceedings to enforce such agreement without the need to again comply with the procedures set forth in this Section 5.04. In such event, the party taking action to enforce the agreement or award will, upon prevailing, be entitled to recover from the non-complying party (or if more than one non-complying party, from all such parties in equal proportions) all costs incurred in enforcing such agreement or award, including, without limitation, attorneys'fees and court costs. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 16 4825-8979-8840v.5 63325-4 5.05. Limitation of Liability of Officers, Directors, Employees and Agents of the Master Association. No officer, director, employee or agent of the Master Association shall be liable to any Owner of any Unit, for any claims, actions, demands, costs, expenses (including attorneys' fees), damages or liability, of any kind or nature, except with respect to its own gross negligence or willful misconduct or as otherwise expressly set forth in the Documents, and such officers, directors, employees and agents shall be indemnified in accordance with the provisions of the Documents. 5.06. Regular and Special Assessments by the Master Association. The Master Association shall possess the right, power, authority and obligation to establish and assess: (i) a Regular Assessment for payment of the Common Expenses; and (ii) Special Assessments as provided for in this Master Declaration, in each case as follows: (a) Common Expenses. The Master Association shall establish Regular Assessments sufficient in the judgment of the Master Association to pay all Common Expenses when due and to maintain an adequate reserve fund for such purposes. Regular Assessments are due annually, with monthly installments of the total annual Regular Assessments to be paid on the first calendar day of each month or on such other date or frequency as the Board may designate in its sole and absolute discretion. (b) Budget for Common Expenses. Prior to the commencement of each fiscal year of the Master Association, the Board shall prepare and deliver to each of the Owners a Master Budget in accordance with the Bylaws at least sixty (60) days prior to the effective date of the Master Budget. Such Master Budget shall be in sufficient detail so as to inform each Owner of the nature and extent of the Common Expenses anticipated to be incurred in the upcoming fiscal year and shall be accompanied by a statement setting forth each Owner's monthly share thereof and the date as of which such Regular Assessment commences to be payable. No further communication shall be necessary to establish the amount of each Owner's obligation regarding the Regular Assessment payable hereunder, and the failure of the Master Association to timely deliver such Master Budget shall not excuse or relieve an Owner from the payment of the Regular Assessments contemplated hereby, in which case, each Owner shall continue to pay to the Master Association an amount equal to such Owner's Regular Assessment as established pursuant to the most recent Master Budget delivered to the Owners. Any Master Budget prepared and delivered to the Owners as contemplated in this Article 5 may be amended by the Board as and to the extent reasonably necessary, and the amount of an Owner's Regular Assessment changed to correspond therewith. If any annual Master Budget is not approved by the Board, then the prior year's Master Budget will continue in effect until a new Master Budget is adopted by the Board; provided, however, that the prior year's Master Budget will be increased by the Board to discharge any actual expenses properly incurred by the Master Association and required to be paid by the Master Association in accordance with the Documents or the Act. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 17 4825-8979-8840v.5 63325-4 (c) Special Assessments by Master Association. In addition to the Regular Assessments contemplated by Section 5.06(a), the Master Association shall establish Special Assessments from time to time as may be necessary or appropriate in the judgment of the Master Association to pay non-recurring Common Expenses relating to the proper maintenance, care, alteration, improvement, replacement, operation and management of the Regime and the administration of the Master Association. Except as otherwise set forth in Section 5.06(d), Special Assessments shall be levied by the Master Association based on the Allocated Interests assigned to each Unit. (d) Special Assessments by Insurance Trustee. In the event any Improvements are required to be repaired or replaced in accordance with Section 82.111 of the Act as the result of a casualty, and the insurance proceeds received by the Insurance Trustee prove insufficient for such restoration, the Insurance Trustee shall have the right to levy Special Assessments against each Unit for the purpose of defraying, in whole or in part, the costs of repair and replacement in excess of the insurance proceeds received. If Special Assessments are levied by the Insurance Trustee in accordance with the Master Declaration and are attributable to the repair or restoration of an Owner Maintained Component, the Special Assessment associated with the repair or restoration of such Owner Maintained Component will be allocated based on the expense allocation set forth in the Allocation Document attributable to such Owner Maintained Component. If the Special Assessments levied by the Insurance Trustee in accordance with this Master Declaration are not attributable to the repair or restoration of an Owner Maintained Component, the Special Assessment will be allocated based on the Allocated Interests assigned to each Unit. For purposes of a Special Assessment levied by the Insurance Trustee in accordance with this Section 5.O�d), the Insurance Trustee shall have all the rights and obligations reserved and assigned to the Master Association related to the collection and enforcement of Assessments established by this Master Declaration, and the lien reserved in Section 5.08 is hereby reserved and assigned by the Declarant to the Insurance Trustee (subject to the subordination provisions attributable to such lien) for the purposes of securing the payment of Special Assessments levied by the Insurance Trustee. 5.07. Obligation to Pay Assessments. Each Owner shall be personally obligated to pay the Owner's share of all Assessments duly established pursuant to this Master Declaration to the Master Association. Unpaid Assessments due as of the date of the conveyance or transfer of a Unit shall not constitute a personal obligation of the new Owner (other than the new Owner's pro rata share of any reallocation thereof); however, the former Owner shall continue to be personally liable for such unpaid Assessment and the lien for such unpaid Assessment shall continue to attach to such Unit. No Owner shall be entitled to exemption from liability for the Owner's obligation to pay such Assessments by waiver of the use and enjoyment of the Common Elements by an abandonment of the Unit or by any other action or otherwise. Any Assessment not paid within ten (10) days of the date due shall bear interest at the Past Due Rate, and shall be recoverable by the Master Association, together with interest and all costs and DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 18 4825-8979-8840v.5 63325-4 expenses of collection, including reasonable attorneys' fees, by suit in a court of competent jurisdiction sitting in the County. It shall be the responsibility of the Master Association to collect any such delinquent Assessment, the existence of which shall be made known by written notice delivered to the defaulting Owner and the Owner's Mortgagee. 5.08. Lien to Secure Payment of Assessments. Declarant hereby reserves and assigns to the Master Association a lien, pursuant to the provisions of the Act, against each Unit and the Insurance Proceeds to which an Owner may be entitled to secure the payment of all Assessments, which lien shall be and constitute a lien and encumbrance in favor of the Master Association upon such Unit. The liens established in this Master Declaration shall be prior and superior to all other liens and encumbrances subsequently created upon such Unit and Insurance Proceeds regardless of how created, evidenced or perfected, other than (a) the lien securing the payment of Priority Lien Indebtedness (provided such lien was Recorded prior to the date on which the Assessment became delinquent), and (b) liens securing payment of Governmental Impositions. The liens and encumbrances created in this Master Declaration may be enforced by any means available at law or in equity, including a non-judicial foreclosure sale of the Unit of a defaulting Owner, such sale to be conducted in accordance with Legal Requirements. Each Owner, by acquisition of a Unit, grants to the Master Association a power of sale in connection with the lien reserved hereunder. By written resolution, the Master Association may appoint, from time to time, an officer, agent, trustee or attorney of the Master Association to exercise the power of sale on behalf of the Master Association. The foreclosure of a lien encumbering a Unit in order to satisfy the Priority Lien Indebtedness will extinguish the subordinate lien for any Assessments which became payable prior to the date of such foreclosure sale, provided that in no event shall a defaulting Owner be relieved from liability incurred for past Assessments. 5.09. Commencement of Obligation to Pay Assessments. Each Owner shall be obligated to commence payment of all Assessments on the date a Unit is conveyed to the Owner. If the date a Unit is conveyed to an Owner is other than the first day of a month, then such Owner shall be obligated to pay only a pro rata share of the Assessment against such Unit based on the number of days during such month that the Owner will hold title to the Unit. 5.10. Notice of Default. If an Owner defaults in the Owner's monetary obligations to the Master Association, the Master Association shall notify the Owner's Mortgagee and other lienholders of the default and the Master Association's intent to foreclose its lien. The Master Association shall notify the Owner's Mortgagee and any other holder of a Recorded lien or duly perfected mechanic's lien against a Unit which has given the Master Association a written request for notification of the Owner's monetary default or the Master Association's intent to foreclose its lien. Owner's Mortgagee shall have the right (but not obligation) to cure any breach or default caused by an Owner hereunder as provided in Section 13.02. 5.11. Alternative Actions. Subject to Sections 5.10, 13.01 and 13.02, nothing contained in this Master Declaration shall prohibit the Master Association from taking a deed in lieu of DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 19 4825-8979-8840v.5 63325-4 foreclosure or from filing suit to recover a money judgment for sums that may be secured by the lien. 5.12. Statement of Expenses and Access to Records. Upon request, the Master Association shall promptly provide any Owner, contract purchaser or Mortgagee with a written statement of all unpaid Assessments due with respect to such Unit. The Master Association may impose a reasonable charge for the preparation of such statement to the extent permitted by the Act. The Master Association shall make available during normal business hours for inspection, upon request by the Owners, Mortgagees, and any of their authorized agents, current copies of the books, records and financial statements of the Master Association (including, if such is prepared, the most recent annual audited financial statement available). Any Owner or Mortgagee may have an audited statement of the Master Association prepared at its own expense. 5.13. Subordination of Lien for Assessments. The lien for the payment of Assessments shall be subordinate to the lien of any mortgage or deed of trust that secures Priority Lien Indebtedness that was Recorded prior to the date any such Assessment becomes delinquent under the provisions of this Master Declaration. ARTICLE 6 MAINTENANCE, ALTERATIONS, AND UTILITIES 6.01. Maintenance. (a) Maintenance of Units. All maintenance, repairs and replacements of, in or to any Unit, ordinary or extraordinary, foreseen or unforeseen, including maintenance, repair and replacement of all Systems which are part of such Unit, shall be performed by the Owner of such Unit in accordance with the Maintenance Standard. (b) Allocation Document. Certain components within the Regime, which include the Common Elements, are maintained, repaired and replaced by the Maintaining Owner. Maintaining Owner Expenses incurred or estimated to be incurred by the Maintaining Owner are not Common Expenses and are allocated to each Unit in a manner which may be different from the Allocated Interests. Each Maintaining Owner will maintain, and include within its Component Budget, replacement and repair reserves at a level that anticipates the scheduled replacement or major repair of the Owner Maintained Component. The Owner Maintained Component shall be maintained, repaired and replaced in accordance with the Maintenance Standard. Each Maintaining Owner and the percentage of Maintaining Owner Expenses allocated to each Unit are set forth in the Allocation Document. The Allocation Document may be Recorded and shall be binding upon all the Owners, Mortgagees DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 20 4825-8979-8840v.5 63325-4 and any other party at any time having any interest in the Regime. All of the rights and obligations reserved and assigned to the Master Association related to the collection and enforcement of Assessments established by this Master Declaration, and the lien reserved in Section 5.08, subject to the subordination provisions attributable to such lien, are hereby reserved and assigned by the Declarant to each Maintaining Owner for the purpose of securing the payment of Maintaining Owner Expenses due and payable to the applicable Maintaining Owner in accordance with the Allocation Document. At least ninety (90) days prior to the end of each calendar year, each Maintaining Owner will prepare and distribute to each Owner responsible for payment of Maintaining Owner Expenses and the Board, a Component Budget that includes the anticipated Maintaining Owner Expenses. In the event that a Maintaining Owner does not timely provide a Component Budget. The Maintaining Owner Expenses reflected on a Component Budget will be prepared in good faith and in a commercially reasonable manner. A Maintaining Owner will promptly notify each Owner responsible for payment of Maintaining Owner Expenses of any anticipated or actual variance of greater than ten percent (10%) in any line item in the applicable Component Budget, and will provide an explanation of the reason for the variance and measures being taken in response to the variance. Each Maintaining Owner will maintain adequate books of account and such other records reflecting the actual Maintaining Owner Expenses and the receipt of all Maintaining Owner Expenses, and each Owner responsible for payment of Maintaining Owner Expenses will be entitled to full and unlimited access to such books and records during normal business hours, on reasonable prior notice and in the location such books and records are normally kept. Each Maintaining Owner or its Designee may perform any of the Maintaining Owner's rights and obligations under the Allocation Document. (c) Maintaining Owner Expenses. Each Owner responsible for payment of Maintaining Owner Expenses shall pay its share of the Component Budget in accordance with the Allocation Document in monthly installments on or before the first (1st) day of each month directly to the Maintaining Owner. The Allocation Document may be amended or modified only upon the affirmative vote or consent of all Owners sharing the applicable cost, as to the cost sharing provisions set forth therein. Any Owner may request that the allocations specified in the Allocation Document be reviewed for the next succeeding calendar year by giving written notice to the other Owners thirty (30) days prior to the beginning of the upcoming calendar year, and the Maintaining Owner and each Owner responsible for payment of Maintaining Owner Expenses shall in good faith determine whether adjustment to the allocations is appropriate. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 21 4825-8979-8840v.5 63325-4 Within thirty (30) days after the end of each calendar year, each Maintaining Owner will prepare and distribute to each Owner responsible for payment of Maintaining Owner Expenses and the Board, a statement, itemized in reasonable and sufficient detail, showing the actual Maintaining Owner Expenses incurred by the Maintaining Owner for the preceding calendar year. The Maintaining Owner and each Owner responsible for payment of Maintaining Owner Expenses shall make any necessary adjustments for underpayment or overpayment for such calendar year in accordance with the Allocation Document within thirty (30) days following receipt of such statement. (d) Maintenance of Easements. All maintenance, repairs and replacements of, in or to any easement area established or reserved pursuant to Section 4.03 of this Master Declaration, ordinary or extraordinary, foreseen or unforeseen, including maintenance, repair and replacement of all Systems which are part of such easement area, shall be performed by the Owner of such Unit, or Limited Common Element appurtenant thereto, in which the easement area is located and in accordance with the Maintenance Standard, unless otherwise provided in the Allocation Document. (e) Failure to Maintain Owner Maintained Component. If a Maintaining Owner fails to or neglects to maintain, repair or clean an Owner Maintained Component for which it is allocated responsibility (the "Defaulting Owner") in accordance with the Maintenance Standard, and such failure continues for thirty (30) days after such Maintaining Owner's receipt of written notice from another Owner describing the default in maintenance and steps necessary to resolve the default (the "Default Notice"), then the notifying Owner (the "Non-Defaulting Owner") may, but shall not be obligated to, take reasonable and appropriate steps to perform, or cause to be performed, the maintenance described in the Default Notice. In such case, the Defaulting Owner shall, upon demand, reimburse the Non-Defaulting Owner making such repairs or maintenance, as applicable, for its share of all reasonable third-party costs and expenses incurred by such Non-Defaulting Owner to perform the maintenance described in the Default Notice (the "Remediation Reimbursement Amount"), which Remediation Reimbursement Amount will be based on the percentage allocations for such Owner Maintained Component as set forth on the Allocation Document. In the event a Defaulting Owner fails to perform a specific maintenance, repair or cleaning obligation with respect to a specific Limited Common Element or General Common Element more than once in a calendar year, then, the Defaulting Owner also shall be obligated to pay interest on the Remediation Reimbursement Amount at the Past Due Rate from the date the Non-Defaulting Owner demands payment, which demand shall be accompanied by reasonable supporting documentation. In the event the Defaulting Owner fails to pay the Remediation Reimbursement Amount to the Non-Defaulting Owner, the Non-Defaulting Owner shall have the same rights granted and reserved for the benefit of the Maintaining DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 22 4825-8979-8840v.5 63325-4 Owner in Section 6.01(b) for the purpose of collecting the Remediation Reimbursement Amount. (f) Limitation of Liability. Except to the extent caused by its gross negligence or willful misconduct, a Maintaining Owner shall not be liable: (i) for injury or damage to any person or property caused by the elements or by the Owner or Occupant of any Unit, or any other Person, or resulting from any utility, rain, snow or ice which may leak or flow from or over any portion of the Common Elements or from any pipe, drain, conduit, appliance or equipment which the Maintaining Owner is responsible to maintain hereunder; or (ii) to any Owner or Occupant of any Unit for loss or damage, by theft or otherwise, of any property which may be stored in or upon any of the Owner Maintained Component. (g) Maintaining Owner Easement. Declarant hereby grants and reserves a perpetual, appurtenant and non-exclusive access easement over, on, under and across the Property (including each Unit) as may reasonably be necessary for the maintenance, repair or replacement of any portion of the Regime that the Maintaining Owner is responsible to maintain. The Maintaining Owner shall have the right to temporarily close the Property (including an Owner's Unit) or certain areas therein in order to perform repairs, maintenance and improvements. The Maintaining Owner shall use commercially reasonable efforts to provide prior notice to the Owners of the Units in advance of any such closure(s). 6.02. Additions,Alterations or Improvements by Owner. Each Owner shall, have the right to cause alterations, additions or improvements within such Owner's Unit without the approval of any Person, except as such approval is required pursuant to Section 4.04 of this Master Declaration. All work done in accordance with this Section 6.02 shall be done in compliance with all Legal Requirements and the Documents. THE OWNER MAKING OR CAUSING TO BE MADE SUCH ADDITIONS, ALTERATIONS OR IMPROVEMENTS, AGREES, AND SHALL BE DEEMED TO HAVE AGREED, FOR SUCH OWNER, TO HOLD THE OTHER OWNERS, AND THE MASTER ASSOCIATION, GROUND LESSOR, THEIR OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES HARMLESS FROM AND TO INDEMNIFY AND DEFEND THEM FOR ANY LIABILITY OR DAMAGE TO THE PROPERTY RESULTING FROM SUCH ADDITIONS, ALTERATIONS OR IMPROVEMENTS. 6.03. Mechanic's Liens; Indemnification. No labor or services performed or materials furnished and incorporated in a Unit or any Common Element shall be the basis for the Recording of a lien against any Unit of any Owner not expressly consenting to or requesting the same, or against the Common Elements. EACH OWNER (TO THE EXTENT ARISING THROUGH SUCH OWNER) SHALL INDEMNIFY, DEFEND, AND HOLD THE OTHER OWNERS, GROUND LESSOR AND THE MASTER ASSOCIATION, THEIR OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES HARMLESS FROM AND AGAINST ALL LIABILITIES AND OBLIGATIONS ARISING FROM THE CLAIM OF ANY MECHANIC'S DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 23 4825-8979-8840v.5 63325-4 LIEN AGAINST THE UNIT OF SUCH OWNER, THE UNIT OF SUCH OTHER OWNERS AND/OR THE COMMON ELEMENTS. 6.04. Utilities. Each Owner shall be responsible for and shall pay all charges for gas, electricity, water and other utilities relating to such services used or consumed at or with respect to the occupancy of the Unit, to the extent such charges are separately metered by the respective utility companies. Any utility charges not so separately metered, and charges relating to such services used in connection with the use and maintenance of the Common Elements, shall be allocated in accordance with the Allocated Interests, unless otherwise provided in the Allocation Document. ARTICLE 7 INSURANCE 7.01. Requirements. All insurance coverage required to be obtained pursuant to this Article 7 or purchased at the election of an Owner or the Master Association shall: (a) either: (i) be issued by insurance companies licensed to do business in the State of Texas and shall be rated by AM Best's (or any successor publication of comparable standing) as "B+VII" or better; or (ii) be provided though the Texas Municipal League's Intergovernmental Risk Pool; (b) comply with the terms of the Ground Lease and the Ground Lease Obligation Allocation Chart; (c) not be brought into contribution with insurance purchased by the other Owners or the Master Association, as applicable; and (d) provide that insurance trust agreements shall be recognized. 7.02. Insurance. The Master Association hereby delegates its authority under the Act and the TNCL set forth in the Documents to the Insurance Trustee with respect to insurance coverage required to be obtained and maintained by the Master Association. The Insurance Trustee shall obtain and maintain: (a) all insurance coverage required to be obtained by the Master Association pursuant to Section 82.111 of the Act; and (b) the insurance coverage in such amounts and against such risks as set forth on Attachment 6 to this Master Declaration. For each insurance policy required to be obtained by the Insurance Trustee, such policy shall provide that: (i) each Owner is named as an additional insured under such policies with respect to liability arising out of the Owner's ownership of an undivided interest in the Common Elements; (ii) no action or omission by any Owner will void the policy or be a condition to recovery under the policy; and (iii) such policy is primary insurance if at the time of a loss under the policy any Owner has other insurance covering the same property covered by the policy. The property insurance coverage obtained by the Insurance Trustee will include all of DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 24 4825-8979-8840v.5 63325-4 the Units and the fixtures initially installed therein by the original builder and replacements thereof, but will not include any Improvements or betterments (including wall coverings and fixtures) made by or on behalf of any Owner other than those made by the original builder, and also will exclude furnishings and other personal property of an Owner or Occupant within a Unit. The coverage for each Unit will only repair or reconstruct those portions of the Unit constructed by the original builder. All other portions of the Unit will be considered Improvements or betterments made by or on behalf of the Owner of such Unit. The Insurance Trustee may, but shall have no obligation, obtain additional supplemental insurance coverage, e.g., business interruption insurance, requested by an Owner and pertaining to such Owner's Unit. If the Insurance Trustee elects to obtain the additional insurance requested by a Unit Owner, the incremental premium increase, if any, for the additional insurance will be paid by the requesting Owner to the Insurance Trustee. If the Insurance Trustee elects to obtain such additional insurance coverage on behalf of an Owner, any modification of such insurance coverage, the distribution of Insurance Proceeds received from such coverage, or the settlement of any claims under such coverage must be approved by the Owner of the Unit to which such coverage applies. Insurance Proceeds paid from coverage obtained by the Insurance Trustee at the request of a Unit Owner as described in the paragraph shall be promptly remitted to the Owner of the Unit to which such coverage pertains. The Insurance Trustee will, upon the written request of an Owner, within a reasonable time period after the request, name a tenant of an Owner as an additional insured pertaining to that property insurance coverage already obtained and maintained by the Insurance Trustee for the benefit of the Units in accordance with this Article 7 and Attachment 6. The incremental premium increase, if any, for such supplemental insurance coverage will be paid by the requesting Owner to the Insurance Trustee. Notwithstanding any provision in this Master Declaration to the contrary, the Owner of each Unit will maintain the insurance coverage required to be obtained by an Owner as described in Attachment 6, and may individually obtain and maintain additional insurance on such Owner's Unit if deemed necessary or desirable by the Owner, at such Owner's sole cost and expense. 7.03. Insurance Expenses. Each Owner will pay to the Insurance Trustee an allocated share of the premiums for insurance required to be obtained and maintained by the Insurance Trustee in accordance with this Article 8 and Attachment 6. The allocated share attributable to each Unit shall be determined in accordance with the Allocation Document. 7.04. Insurance Trustee for the Owners. By acceptance of a deed to its Unit, the Owner of the City Facilities Unit shall be deemed to have irrevocably appointed the Owner of the Hotel Unit as the Insurance Trustee with respect to insurance proceeds payable under property insurance policies maintained by the Insurance Trustee. All insurance policies required to be obtained by the Insurance Trustee pursuant to Article 7 and Attachment 6 shall DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 25 4825-8979-8840v.5 63325-4 be issued in the name of the Insurance Trustee and shall name each Owner and each such Owner's Mortgagee as additional insureds and, with respect to liability policies required to be carried by the Master Association, shall name the Master Association as an additional named insured. Loss payable provisions with respect to such policies shall be in favor of the Insurance Trustee as agent for the Master Association and as trustee for each Owner, and each such Owner's Mortgagee. The Insurance Trustee (in its capacity as insurance trustee only) shall be liable for the payment of premiums and the renewal and sufficiency of, such policies, provided that Insurance Trustee receives payment from each Owner of the portion of the applicable premium allocated to such Owner prior to the date such premiums are required to be paid. The Insurance Trustee shall also receive all Insurance Proceeds as are paid under policies required to be maintained and obtained by the Insurance Trustee in accordance with this Article 7 and Attachment 6 and to hold the same in trust for the purposes stated in this Article 7 and in Article 8 of this Master Declaration, and for the benefit of each Owner and such Owner's Mortgagee, if any. 7.05. Annual Review of Policies. The Insurance Trustee, at least once every twelve (12) month period and at least sixty (60) days prior to each policy renewal date, will conduct an insurance review with a third-party insurance consultant with experience in underwriting insurance for mixed-use projects to determine if the policy in force meets the requirements of this Article 8 and Attachment 6 or if the coverage amounts otherwise need to be adjusted based on changed conditions. Additionally, the insurance consultant shall provide an estimated replacement value for each Unit (excluding furnishings, personal property, Improvements and betterments of an Owner or Occupant within a Unit) utilizing a commercially reasonable valuation methodology. The Insurance Trustee will make available to each Owner the insurance consultant's findings at least thirty (30) days prior to each policy's renewal date. The initial allocated share of premiums attributable to the insurance obtained by the Insurance Trustee will be set forth in the Allocation Document, but shall be adjusted on the policy renewal date based on the updated replacement value for each Unit as determined by the insurance consultant. 7.06. Other Insurance Requirements. (a) Neither the Insurance Trustee nor any Owner shall be liable for failure to obtain any insurance coverage required by this Master Declaration or for any loss or damage resulting from such failure, if, in any such case, such failure is because such insurance coverage is not reasonably available. If the insurance required by this Master Declaration is not reasonably available, the Insurance Trustee shall cause notice of that fact to be promptly delivered or mailed to the Master Association, Owners and Mortgagees. (b) Neither the Insurance Trustee nor any Owner shall obtain any policy of insurance where: (i) under the terms of the carrier's charter, bylaws or policy, contributions or assessments may be made against the Owner or Mortgagee or become DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM-Page 26 4825-8979-8840v.5 633254 a lien against the Regime; (ii) by the terms of the carrier's charter, bylaws or policy, loss payments are contingent upon action by the carrier's board of directors, policyholders or members; or (iii) the policy includes any limiting clauses (other than insurance conditions) which could prevent the Insurance Trustee, Owners or Mortgagees from collecting the Insurance Proceeds. (c) The insurance purchased by the Insurance Trustee and the other Owners pursuant to this Article 7 shall not cover claims against any other Owner or its Designees due to accidents occurring within that other Unit, or casualty, theft or loss to the contents of that other Unit. Deductibles payable under each insurance policy shall be allocated to each Unit in accordance with Section 7.03 (the allocation of the deductible between Units and attributable to property insurance is subject to adjustment in accordance with Section 7.05); provided, however, that if the damage or claim is due (i) wholly to an act or omission of an Owner, a guest or invitee of the Owner, or an Occupant of the Owner's Unit, the Owner of such Unit will be solely liable for deductible expense, or (ii) in part to an act or omission of the Owner of the other Unit, a guest or invitee of such other Owner, or an Occupant of such other Owner's Unit, then both Owners will be liable for fifty percent (50%) of the deductible expense. ARTICLE 8 LOSS AND OBSOLESCENCE In the event that any Improvement is damaged or destroyed by fire or other casualty, the provisions set forth in Section 10.01 of the Ground Lease shall govern. 8.01. Damaged Common Elements. The following provisions shall govern if the Common Elements or any part thereof, are damaged or destroyed by fire or other casualty: (a) prompt written notice of any substantial damage or destruction shall be given by (i) the affected Owner or Owners to the Insurance Trustee and Master Association; and (ii) the Master Association to all of the Mortgagees; and (b) the Master Association shall proceed, within ninety (90) days from the date of such damage or destruction, subject to its receipt of insurance proceeds with the full restoration and repair of such damage or destruction unless (i) the Regime is terminated; (ii) repair or replacement would be illegal under any Legal Requirement; or (iii) the Owners holding not less than one hundred percent (100%) of the votes in the Master Association and their respective Mortgagees of Priority Lien Indebtedness vote not to rebuild, to the extent allowed under the Ground Lease. The amount by which such restoration and repair costs exceed collectible Insurance Proceeds shall be and constitute a Special Assessment allocated in accordance with Section 5.06(d) of this Master Declaration, payable by all the Owners within sixty (60) days of the date notice of such Special Assessment is delivered to each Owner. Any excess Insurance Proceeds remaining after such restoration and repair, or any insurance proceeds available absent such restoration and repair, shall be received and held in trust by the Insurance Trustee in separate accounts for each Owner and such Owner's DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 27 4825-8979-8840v.5 633254 Mortgagee, as their interests may appear (with any proceeds attributable to Limited Common Elements allocated among the Owners of the Units to which such Limited Common Elements were assigned in this Master Declaration and any other proceeds allocated in accordance with the Allocated Interests of the Owners), and distributed as follows: first, to the payment of the balance of the Priority Lien Indebtedness of such Owner; second, to the payment of any amounts due to the Ground Lessor under the Ground Lease; third, to the payment of any Governmental Impositions in favor of any assessing entity having authority with respect to the Common Elements or such Unit (as applicable); fourth, to the payment of any delinquent Assessment with respect to such Unit; and the balance, if any, to each Owner entitled thereto. To the extent Insurance Proceeds are received by the Insurance Trustee and attributable to the Common Elements, such Insurance Proceeds shall be promptly remitted to the Master Association unless: (A) the Regime is terminated; (B) repair or replacement would be illegal under any Legal Requirement; or (C) the Owners holding not less than one hundred percent (100%) of the votes in the Master Association and their respective Mortgagees of Priority Lien Indebtedness vote not to rebuild, to the extent allowed under the Ground Lease. 8.02. Damaged Units. The following provisions shall govern in relation to a Damaged Unit: (a) prompt written notice of any substantial damage or destruction shall be given by the Owner of the Damaged Unit to the Insurance Trustee, Master Association and the Mortgagee of the Damaged Unit; (b) the Owner of the Damaged Unit shall promptly proceed, within ninety (90) days from the date of such damage or destruction, subject to its receipt of insurance proceeds, with the restoration and repair of such damage or destruction unless: (i) the Regime is terminated; (ii) repair or replacement would be illegal under any Legal Requirement; or (iii) the Owners holding not less than one hundred percent (100%) of the votes in the Master Association and their respective Mortgagees of Priority Lien Indebtedness, including the Owner and Mortgagee(s) of the Damaged Unit, vote not to rebuild, to the extent allowed under the Ground Lease; and (c) except as otherwise provided in Section 8.06 of this Master Declaration, the Owner of each Damaged Unit shall pay all costs of such restoration, repair and replacement or rebuilding in excess of the net proceeds of the collectible Insurance Proceeds. In the event any damaged portion of the Damaged Unit is: (A) utilized in conjunction with the operation or use of another Unit; or (B) affects the operation or administration of another Unit, the restoration obligations contemplated hereunder shall be undertaken by the Owner of the Damaged Unit. To the extent Insurance Proceeds are received by the Insurance Trustee and attributable to the Damaged Unit, such Insurance Proceeds shall be promptly remitted to the Owner of the Damaged Unit, to the extent allowed under the Ground Lease. 8.03. Obsolescence of Common Elements. If the Owners holding not less than one hundred percent (100%) of the Allocated Interests shall vote, at a meeting of the Master Association duly called for purposes of considering the same, that the Common Elements, or any part thereof (or any Systems which constitute Common Elements and serve only, or are a part of, individual Units), are obsolete, the Master Association shall promptly proceed with the necessary replacements and improvements thereto pursuant to a budget established for such purpose, and the cost thereof shall be and constitute a Special Assessment allocated in DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 28 4825-8979-8840v.5 63325-4 accordance with Section 5.06(c) of this Master Declaration, unless the Common Element is an Owner Maintained Component whereupon the Special Assessment will be allocated based on the expense allocated for the Owner Maintained Component as set forth on the Allocation Document. Special Assessments levied pursuant to this Section 8.03 are payable by all the Owners within sixty (60) days of the date notice of such Special Assessment is delivered to each Owner. 8.04. Obsolescence of the Property. If the Owners holding not less than one hundred percent (100%) of the votes in the Master Association, at a meeting of the Master Association duly called for purposes of considering the same, determine that the Property is obsolete, the Master Association, after first obtaining the written consent of one hundred percent (100%) of the Mortgagees, shall promptly proceed with the sale thereof in its entirety. Any proceeds from such sale shall be received, held and applied for and on account of the Owners as provided in Section 82.068 of the Act. 8.05. The Master Association as Attorney-in-Fact. Subject to the rights of any Mortgagee upon the existence of any "Event of Default" under and as defined in its mortgage, or deed of trust or assignment of leases and rents securing Priority Lien Indebtedness, each Owner, by acceptance of a deed to a Unit, hereby irrevocably makes, constitutes and appoints the Master Association, and each and every one of its successors in interest hereunder, as the Owner's true and lawful attorney-in-fact, for and in the Owner's name, place and stead, upon the damage or destruction of the Property, or any part thereof, or upon any determination by the Owners made pursuant to this Article 8, to take any and all actions, and to execute and deliver any and all instruments, as the Master Association may, in its reasonable discretion, deem necessary or advisable to effect the intents and purposes of this Article 8, hereby giving and granting unto the Master Association full power and authority to do and perform all acts requisite or necessary to be done in and about the premises as fully, to all intents and purposes, as an Owner might or could do, hereby ratifying and confirming whatsoever the Master Association may do by virtue of the provisions of this Master Declaration. The Master Association is hereby authorized, in the name and on behalf of all the Owners, to do and perform all actions necessary or appropriate to effect the intent and purposes of this Article 8, including the power and authority to contract for and with respect to restoration and repair work, contract for and with respect to replacements and improvements to the Common Elements (to the extent authorized as contemplated by Section 8.03), to contract for and with respect to a sale of the Property (to the extent contemplated by Section 8.04) and to execute and deliver all instruments necessary or incidental to any such actions. 8.06. Matters Relating to Restoration and Repairs. Any restoration and repair work undertaken by the Master Association or an Owner pursuant to this Article 8 shall be performed in a good and workmanlike manner in order to restore the Improvements to a condition similar to that existing prior to such damage or destruction or obsolescence;provided, however, that in no event shall the Master Association be responsible for restoring, repairing or replacing any Improvements or betterments to a Unit made by an Owner, or the contents DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 29 4825-8979-8840v.5 63325-4 located in such Unit, which shall be the responsibility of the applicable Owner. All such restoration and repair work, whether done by the Master Association or an Owner, shall be effected in a manner so as to observe all vertical and horizontal Unit boundaries existing prior to such damage or destruction. If an Owner or the Owners decide to rebuild or repair any Unit in excess of its full replacement cost, such Owner or Owners shall be responsible for any such costs exceeding the full replacement value of such Unit; provided, however, that if the Owners holding not less than one hundred percent (100%) of the Allocated Interests shall vote to incur such expenses, such additional expenses, to the extent they exceed the replacement value of such Unit, shall constitute a Special Assessment. ARTICLE 9 CONDEMNATION In the event that any Improvement is subject to a Taking, the provisions set forth in Section 10.02 of the Ground Lease shall govern. 9.01. General Provisions. If all or any part of the Property is subject to a Taking, the Master Association and each Owner affected thereby shall be entitled to participate in proceedings incident thereto at their respective expense. The Master Association shall give notice of such proceeding, as it receives such notice, to all the Owners and to all the Mortgagees; provided, however, that the failure of the Master Association to give such notice shall not prejudice the right of any Mortgagee to participate in such proceedings. The expense of participation in such proceedings by the Master Association shall be a Common Expense. The Master Association is specifically authorized to obtain and pay for such assistance from attorneys, appraisers, architects, engineers, expert witnesses and other persons as the Master Association in its discretion deems necessary or advisable to aid or advise it in matters relating to such proceedings. Any restoration or repair of the Property following a partial Taking shall be performed in accordance with the provisions of this Master Declaration and the Ground Lease. 9.02. Taking of All or Substantially All of One Unit. If a Unit (or a substantial part thereof such that the remnant may not practically or lawfully be used for any purpose permitted by this Master Declaration) is subject to a Taking, the Owner and any Mortgagee of such Owner shall be entitled to the award for such Taking, including the award for the value of such Owner's interest in the Common Elements, whether or not such Common Element interest is acquired, less the portion of the award retained by the Ground Lessor in accordance with the Ground Lease, and, after payment thereof, such Owner and any Mortgagee of such Owner shall be divested of all interest in the Property. In such event, the condemned Unit's entire Allocated Interest and its rights under the Bylaws to elect or appoint and remove Directors shall be automatically reallocated to the remaining Units in proportion to the respective Allocated Interests of those Units before the Taking, unless the decree relating to the Taking provides otherwise. A remnant of a Unit remaining after part of a Unit is the subject of a Taking described in this Section 9.02 shall be a Common Element. If any repair or rebuilding of the DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 30 4825-8979-8840v.5 63325-4 remaining portions of the Property is required as a result of such Taking, the remaining Owners shall determine by the affirmative vote or written consent of the remaining Owners holding not less than one hundred percent (100%) of the votes in the Master Association, with the written consent of their respective Mortgagees of Priority Lien Indebtedness, either to rebuild or repair the Property or to take such other action as such remaining Owners may deem appropriate. If no repair or rebuilding shall be required, or if none is undertaken, the remaining portion of the Property shall be resurveyed, if necessary, and this Master Declaration shall be amended to reflect such Taking. This Master Declaration shall in all circumstances be amended to reflect the reallocated Allocated Interests and rights to elect or appoint and remove Directors following a Taking. 9.03. Partial Taking of a Unit. If only a portion of a Unit is subject to a Taking, such that the remaining portion of such Unit can practically and lawfully be used for any purpose permitted by this Master Declaration, the Owner, subject to the rights of the Mortgagee under its mortgage or deed of trust securing Priority Lien Indebtedness, shall be entitled to the award for such Taking, including the award for the value of such Owner's interest in the Common Elements, whether or not such Common Element interest is acquired, less the portion of the award retained by the Ground Lessor in accordance with the Ground Lease, and the Allocated Interest of the Unit subject to such Taking shall be reduced and the Allocated Interests of the other Units shall be increased in accordance with the Reallocation Percentage. The Owner of such Unit, at its sole cost and expense, shall promptly repair, restore and rebuild the remaining portions of such Unit as nearly as possible to the condition which existed prior to such Taking. 9.04. Taking of Common Elements. If an action is brought to effect a Taking of all or any portion of the Common Elements together with or apart from any Unit, the Board, in addition to the general powers set out in this Master Declaration, shall have the sole authority to determine whether to defend or resist any such proceeding, to make any settlement with respect thereto, or to convey such property to the condemning authority in lieu of such condemnation proceeding unless the action involves a material portion of the Common Elements, in which case the agreement of all the Owners shall be required, with the written consent of their respective Mortgagees of Priority Lien Indebtedness. With respect to any such Taking of the Common Elements only, all damages and awards shall be determined for such Taking as a whole and not for any Owner's interest therein. After the damages or awards for a Taking of the Common Elements are determined, such damages or awards, less the portion of the award retained by the Ground Lessor in accordance with the Ground Lease, shall be held by the Master Association, acting as trustee for each Owner, and their Mortgagees, as their interests shall appear, and any amounts not used for repair or restoration of the remaining Common Elements shall be divided among the Owners in proportion to each Owner's Allocated Interest before the Taking, except that such portion of any such award attributable to the condemnation of a Limited Common Element shall be divided among the Owners of the Units served by such Limited Common Elements, as such Owners' interests existed in the Limited Common Elements condemned. The Owners shall determine by the affirmative vote or written consent of the Owners holding one hundred percent (100%) of the votes in the Master DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 31 4825-8979-8840v.5 63325-4 Association with the written consent of their respective Mortgagees of Priority Lien Indebtedness, either to rebuild or repair the remaining Common Elements or to take such other action as the Owners may deem appropriate. If it is determined that such Common Elements should be replaced or restored by obtaining other land or building additional structures, this Master Declaration and the Plat and Plans attached hereto shall be duly amended by instrument executed by the Board on behalf of the Owners and Recorded. This Master Declaration shall in all circumstances be amended to reflect the reallocated Allocated Interests. 9.05. Complete Takingof f Property. If all of the Property is the subject of a Taking, all damages and awards shall be held by the Master Association, acting as trustee, for the accounts of all the Owners and their Mortgagees, as their interests shall appear, and shall be paid to or for the accounts of the Owners in proportion to their Allocated Interests and this Regime shall terminate upon such payment. 9.06. Payment of Awards and Damages. Any damages or awards provided in this Article 9 to be paid to or for the account of any Owner by the Master Association, acting as trustee, shall be applied first to any Priority Lien Indebtedness on that Unit; second, to the payment of any Governmental Impositions past due and unpaid with respect to that Unit;; third, to the payment of any Assessments charged to or made against the Unit and unpaid; and finally to the Owner. ARTICLE 10 RESOLUTION OF DISPUTES 10.01. Disputes. (a) Mediation. All Disputes, except those relating to equitable remedies, which are not resolved within thirty (30) days after same have arisen (unless such greater time is provided elsewhere in the Documents) shall be submitted for, or determined by, non-binding mediation as a condition precedent to the arbitration required by this Article 10. Mediation of any Dispute shall be initiated by any Owner making a written demand therefor to the other Owner or Owners involved in such Dispute and the Master Association. With respect to such mediation, the parties shall, within ten (10) days after delivery of such written notice to the Master Association, agree upon a mediator who: (i) is a reputable Person actively engaged in the commercial real estate industry for a continuous period of not less than ten (10) years; and (ii) is not an Affiliate of, or has not had material business dealings with, any Owner or any Member of the Master Association. If the parties are unable to agree upon a mediator, a mediator having the qualifications set forth above shall be appointed by the American Arbitration Association office in Baytown,Texas. Such mediation shall occur within thirty (30) days after the mediator has been agreed upon or appointed and shall occur at a mutually acceptable location in Baytown, Texas. The costs of such mediation services shall be shared equally (but each party shall bear the cost of their own travel DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 32 4825-8979-8840v.5 63325-4 and attorneys' fees); provided, however, that if the Dispute is not resolved pursuant to such mediation, the provisions of Section 10.02(a) of this Master Declaration shall govern the payment of attorneys' fees and costs and expenses of mediation and arbitration under this Article 10. (b) Arbitration. If the parties reach an impasse at mediation, as determined by the mediator in the mediator's sole and absolute discretion, or the parties are unable to resolve any Dispute within thirty (30) days of such mediation session, the Dispute shall be submitted to mandatory, binding arbitration, which may be initiated by either party (as the exclusive remedy with respect to a Dispute under this Master Declaration, except those relating to equitable remedies) by making a written demand therefor to the other parties involved in such Dispute no later than forty-five (45) days after the mediator declares that the parties have reached an impasse at mediation or the mediation otherwise fails within such 30-day period. The parties agree to select a single impartial arbitrator from a list taken from the American Arbitration Association of commercial arbitrators within fifteen (15) days of submitting the Dispute to arbitration, and if they cannot agree on an arbitrator, each party shall select a person and those two so selected shall then select the single impartial arbitrator who shall thereafter serve as arbitrator with respect to the Dispute. To the extent rules governing arbitration are deemed necessary by the arbitrator (or by agreement of the parties), the current Rules for Commercial Mediation and Arbitration promulgated by the American Arbitration Association shall apply. 10.02. General. (a) Procedure and Award. In no event shall a Dispute be initiated after the date when institution of legal or equitable proceedings based on such Dispute would be barred by the applicable statute of limitations. In any arbitration of a Dispute, the non-prevailing party shall be responsible for all reasonable, out-of-pocket attorneys' fees, costs and expenses (incurred in connection with the mediation and arbitration of a Dispute under this Article 10) of the prevailing party under this Article 10. (b) Sole Remedy. With respect to any Dispute it is agreed that the dispute resolution provisions of this Article 10 shall be the sole remedy of the parties involved in such Dispute. Notwithstanding any other provisions of this Master Declaration, the foregoing agreement to arbitrate and other agreements to arbitrate with an additional Person duly consented to by the parties shall be specifically enforceable under prevailing arbitration law in any court having jurisdiction thereof. The foregoing agreement to arbitrate shall not constitute an agreement or consent to arbitration of any dispute, claim, controversy or matter that does not constitute a Dispute. The foregoing agreement to arbitrate any Dispute shall not constitute an agreement or consent to arbitration with any Person not named or described in this Master Declaration. Except to the extent permitted by Legal Requirements, any award of the arbitrator shall be DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM-Page 33 4825-8979-8840v.5 63325-4 final, binding and non-appealable upon the parties involved in the Dispute and judgment thereon may be entered by any court having jurisdiction. ARTICLE 11 SPECIAL PROVISIONS REGARDING THE GROUND LEASE 11.01. Subordination to Ground Lease. Each Owner shall be deemed to acknowledge that the Documents are subject and subordinate to the terms and provisions of the Ground Lease, except as otherwise provided in the Ground Lease or the Act. Each Owner acknowledges that any assignment of an Owner's entire interest in such Owner's Unit shall be subject to approval of Ground Lessor to the extent required in the Ground Lease. 11.02. Recording Data. The Ground Lease is evidenced by a Memorandum of Ground Lease recorded as Document No. [ ] of the Official Public Records of Harris County,Texas. 11.03. Expiration Date. The expiration date of the Ground Lease is the earlier to occur of(i) the day preceding the fortieth (401h) anniversary of the Commencement Date (as defined in the Ground Lease), or (ii) the date of the full repayment of the Bonds (as defined in the Ground Lease) and all other amounts required to be paid or defeased to discharge the lien of the trust estate established under the Indenture (as defined in the Ground Lease). 11.04. Legal Description. The Property is the "Premises" defined in and subject to the Ground Lease. 11.05. No Redemption Right. The Owners do not have any right to redeem the reversion held by the Ground Lessor. 11.06. No Right to Remove Improvements. The Owners do not have any right to remove Improvements after the expiration or termination of the Ground Lease. 11.07. No Right to Renew. The Owners do not have any right to renew the Ground Lease. 11.08. Execution by Ground Lessor. The Ground Lessor executes this Master Declaration as provided by Section 82.056 of the Act. The Ground Lessor shall have no responsibility for the compliance with any provision of this Master Declaration and shall have absolutely no liability or obligation regarding any provision hereof. 11.09. Owner Assumption of Ground Lease Obligations for Owner's Unit. Each Owner shall be: (i) deemed to assume any and all obligations (including the obligations provided in the Ground Lease to the extent allocated to such Unit as set forth in the Ground Lease Obligation Allocation Chart set forth on Attachment 7), liabilities, limitations, rights, waivers, benefits, or burdens that are vested or that may in the future become vested in or upon DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 34 4825-8979-8840v.5 63325-4 the "Lessee" pursuant to the Ground Lease and that are applicable to such Unit as otherwise provided in this Master Declaration or the Allocation Document (the "Ground Lease Obligations"); and (ii) released from any and all Ground Lease Obligations that are applicable to the Unit(s) that the Owner does not own. The Ground Lease Obligations, as applicable to each Unit, shall automatically be obligations, liabilities, limitations, rights, waivers, benefits, or burdens of the respective Owners upon the recordation of this Master Declaration. In furtherance, and not in limitation, of the foregoing, by joining in this Master Declaration, the Ground Lessor acknowledges, confirms and agrees that, as to each Unit: (i) the Ground Lease Obligations with respect to such Unit shall be the sole responsibility and liability of the Owner(s) thereof; (ii) the Ground Lessor shall pursue enforcement of the Ground Lease Obligations relating to each Unit solely against the Owner of such Unit; and (iii) in no event shall any Owner(s) have any responsibility or liability whatsoever with respect to any Ground Lease Obligations relating to any Unit such Owner does not own. 11.10. Self-Help Regarding Ground Lease Default. Upon any Ground Lease Default, the Master Association or a non-defaulting Owner, at a non-defaulting Owner's election, shall have the right, but not the obligation, to remedy or cause the remediation of any such default and the cost and expense thereof (together with interest thereon not to exceed the lesser of eighteen percent (18%) per annum or the maximum rate permitted by Legal Requirements from the date paid by the Master Association or a non-defaulting Owner until the date such sum is repaid by the defaulting Owner), including the reimbursement of all reasonable attorney's fees incurred in connection with remedying such Ground Lease Default, shall be assessed against the Owner or Owners creating the default and shall be secured by a lien upon such Owner's Unit, which lien shall be subordinate to any mortgage or deed of trust securing Priority Lien Indebtedness. The Master Association or such non-defaulting Owner shall have the right to cause a notice of the lien to be Recorded, and such lien may be enforced in the same method as is provided for the enforcement of Assessment liens in Article 6 of this Master Declaration. Upon receiving any notice regarding a Ground Lease Default, the Master Association shall immediately notify each non-defaulting Owner of such default. 11.11. INDEMNIFICATION RELATING TO GROUND LEASE OBLIGATIONS. EACH OWNER SHALL INDEMNIFY AND HOLD HARMLESS EACH OF THE OTHER OWNERS, DECLARANT, THE MASTER ASSOCIATION, THE MANAGER, AND THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND MEMBERS, INDIVIDUALLY AND COLLECTIVELY, FROM AND AGAINST ALL LIABILITIES AND OBLIGATIONS ARISING FROM THE INDEMNIFYING OWNER FAILING TO COMPLY WITH ANY GROUND LEASE OBLIGATION. ARTICLE 12 MISCELLANEOUS 12.01. Revocation or Termination of Master Declaration. This Master Declaration may be revoked or the Regime established hereby may be terminated only by an instrument in DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 35 4825-8979-8840v.5 63325-4 writing, duly approved, executed and acknowledged by all the Owners, with the written consent of 100% of the Mortgagees. Any such instrument of revocation or termination shall be duly Recorded. If the Property is to be sold upon termination, the agreement effecting such termination shall also set forth the terms of such sale and comply with the provisions of the Act. 12.02. Amendment to Master Declaration. Unless otherwise provided in this Master Declaration, this Master Declaration may be amended only by a written consent executed by all of the Owners and the written consent of 100% of the Mortgagees. Such amendment shall be evidenced by a written instrument executed and acknowledged by the consenting Owners and by the consenting Mortgagees and Recorded. 12.03. Partial Invalidity. If any provision of the Documents shall be determined by a court of competent jurisdiction to be invalid or unenforceable, such determination shall in no way impair or affect the validity or enforceability of the remainder of the Documents. 12.04. Conflicts. If any of the provisions of the Documents shall be in conflict with the provisions of the Act or the TNCL, the provisions of such statutes shall control. If a conflict exists between the provisions of the Documents, such documents shall control in the following order: (a) the Ground Lease; (b) the Allocation Document; (c) this Master Declaration; (d) the Certificate; (e) the Bylaws; and (f) the Rules (if any). 12.05. Captions and Attachments. Captions used in the various articles and sections of this Master Declaration are for convenience only, and they are not intended to modify or affect the meaning of any of the substantive provisions of this Master Declaration. All attachments are incorporated in and made a part of this Master Declaration. 12.06. UsuKy. It is expressly stipulated and agreed to be the intent of Declarant that at all times the terms of this Master Declaration, the Bylaws and the Rules shall comply strictly with the applicable Texas law governing the maximum rate or amount of interest payable under any provision of this Master Declaration, the Bylaws or the Rules. If Legal Requirements are ever judicially interpreted so as to render usurious any amount contracted for, charged, taken, reserved or received pursuant to this Master Declaration, the Bylaws, the Rules or any other communication or writing by or between the Master Association and/or the Owners related to DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 36 4825-8979-8840v.5 63325-4 the matters set forth in this Master Declaration, the Bylaws or the Rules, then it is the express intent that all amounts charged in excess of the maximum rate allowed by Texas law shall be automatically canceled, ab initio, and all amounts in excess of the maximum rate allowed by Texas law theretofore collected shall be refunded, and the provisions of this Master Declaration, the Bylaws or the Rules shall immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply with Legal Requirements. The Owners hereby agree that as a condition precedent to any claim seeking usury penalties against the Master Association or any billing Owner, any Person will provide written notice to the Master Association or any billing Owner, advising the Master Association or any billing Owner in reasonable detail of the nature and amount of the violation, and the Master Association or any billing Owner shall have 60 days after receipt of such notice in which to correct such usury violation, if any, by either refunding such excess interest to a Person or crediting such excess interest against the obligation then owing by such Person to the Master Association or any billing Owner. 12.07. Use of Number and Gender. Whenever used in this Master Declaration, and unless the context shall otherwise provide, the singular number shall include the plural, the plural number shall include the singular and the use of any gender shall include all genders. 12.08. Governing Law. THIS MASTER DECLARATION AND THE BYLAWS, THE CERTIFICATE OF FORMATION, AND THE RULES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS. VENUE FOR ANY ACTION BROUGHT IN CONNECTION WITH THE REGIME SHALL BE IN THE STATE COURTS OF HARRIS COUNTY, TEXAS. 12.09. Notice. Any notice permitted or required to be given by this Master Declaration shall be in writing and may be delivered personally, dispatched by certified mail, postage prepaid, return receipt requested, or sent by a nationally or regionally recognized reputable express delivery or overnight courier service, addressed to the Person at the address given by such Person to the Master Association for the purpose of service of notices. Such notice shall be deemed effective on the date shown on the delivery record as the date delivered. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given will be deemed to constitute receipt of the notice sent. Such address may be changed from time to time by notice in writing given by such Person to the Master Association in the manner detailed in this Section. 12.10. Estoppel Certificates. Each Owner, from time to time but no more often than twice each calendar year, shall have the right to require the Master Association (as to all items listed in this Section 12.10) and the other Owners (as to Subsections 12.10(c), L, U and Q) to deliver to the requesting Owner a written statement addressed to the requesting Owner and its then or proposed Mortgagee or purchaser of its Unit, as applicable, on or before ten (10) business days after receipt of such request, without payment of any fee or cost certifying: (a) this Master Declaration is unmodified and in full force and effect (or if modified that this Master Declaration as so modified is in full force and effect); (b) this Master Declaration DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 37 4825-8979-8840v.5 63325-4 attached to the certificate is a true and correct copy of this Master Declaration and all amendments hereto; (c) the date through which all Assessments have been paid by the Owner requested to provide the certificate and by the Owner requesting such certificate; (d) to the knowledge of the certifying party, neither the certifying party nor the requesting party is in default of any of its obligations under this Master Declaration (or if the certifying party knows the certifying party or requesting party to be in default, specifying the defaults and the remaining cure period, if any); (e) the certifying party holds no existing liens against the requesting party's Unit; and (f)such other matters as are reasonably requested by the requesting Owner. 12.11. Duration. Unless terminated or amended by Owners and Mortgagees as permitted herein, the provisions of this Master Declaration run with and bind the Property, and will remain in effect perpetually to the extent permitted by the Ground Lease and the Legal Requirements. 12.12. Termination of Declarant's Rights. Upon the sale or other transfer of its Unit(or the first of its Units if Declarant owns more than one Unit), any rights of Declarant remaining hereunder shall automatically terminate, and Declarant agrees to execute and deliver to the Board an instrument in recordable form evidencing the termination of such rights. ARTICLE 13 MORTGAGEE PROTECTION PROVISIONS 13.01. Notice Provisions. All Mortgagees shall be entitled to receive the following notices in writing from the Master Association or any Owner exercising rights affecting that Mortgagee's borrower's rights under this Master Declaration or affecting the Mortgagee's rights, as the case may be, which notice shall be sent promptly following the occurrence of the applicable event: (a) notice of any proposed action which requires the consent of Mortgagees, which notice shall be given not less than thirty (30) days prior to the desired effective date of such action; (b) notice of default by the Owner (the beneficial interest in which Unit is held by that Mortgagee) in the performance of such Owner's obligations or delinquency in the payment of amounts due under this Master Declaration owed by such Owner; (c) notice of any lapse, cancellation or material modification of any insurance policy or fidelity bond required to be maintained hereunder by the Insurance Trustee; (d) notice of any damage or destruction to or condemnation of any portion of the Regime that affects either a material portion of the Property or a Unit, the beneficial DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM-Page 38 4825-8979-8840v.5 63325-4 interest in which is held by that Mortgagee, which notice shall be given promptly upon obtaining knowledge of such damage or destruction; (e) sixty (60) days' notice prior to instituting any foreclosure action or exercising any other right or remedy provided herein on any Unit; and (f) thirty (30) days' notice prior to the effective date of (i) any proposed material amendment to this Master Declaration or the Plat and Plans; and (ii) any proposed termination of the Regime. 13.02. Cure Rights. Any Mortgagee shall have the right, but not the obligation, at any time prior to the termination of this Master Declaration, and without payment of any penalty, to do any act or thing required of such Mortgagee's borrower hereunder; and to do any act or thing which may be necessary or proper to be done in the performance and observance of the agreements, covenants and conditions of such Owner in this Master Declaration. All payments so made and all things so done and performed by any Mortgagee shall be effective to prevent a default under this Master Declaration as the same would have been if made, done and performed by any Owner instead of by said Mortgagee. Any event of default under this Master Declaration which in the nature thereof cannot be remedied by Mortgagee shall be deemed to be remedied if within sixty (60) days (or thirty (30) days for defaults that can be cured by the payment of money) after receiving written notice from the Master Association or the non- defaulting Owner setting forth the nature of such event of default, or prior thereto, the Mortgagee shall: (a) have acquired the property owned by the defaulting party (the "Acquired Property") or commenced foreclosure or other appropriate proceedings in the nature thereof, and shall thereafter diligently prosecute any such proceedings; (b) have fully cured any default in the payment of any monetary obligations owed the non-defaulting party hereunder within such thirty (30) day period and shall thereafter continue to perform faithfully all such non- monetary obligations which do not require possession of the Acquired Property; and (c) after gaining possession of the Acquired Property following a foreclosure or deed in lieu thereof, the Mortgagee performs all future obligations of the defaulting party hereunder as and when the same are due. 13.03. No Invalidity of Mortgage Lien. No violation of this Master Declaration by, or enforcement of this Master Declaration against, any party shall affect, impair, defeat or render invalid the lien of any deed of trust or mortgage that secures any Priority Lien Indebtedness. 13.04. Mortgagee Requirements. Each Owner agrees to cooperate reasonably with any requesting party in regard to the satisfaction of requests or requirements by a Mortgagee; provided, however, such cooperation shall be at the sole cost and expense of the requesting party, and provided, further, that no party shall be deemed obligated to accede to any request or requirement that materially and adversely affects its rights under this Master Declaration. 13.05. Unpaid Amounts. Each Person holding a deed of trust or mortgage secured by any Priority Lien Indebtedness encumbering any Unit, which Person obtains title to such Unit DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 39 4825-8979-8840v.5 63325-4 pursuant to judicial foreclosure, or the powers provided in such mortgage, or a deed in lieu of foreclosure, shall take title to such Unit free and clear of any claims for unpaid Assessments or other amounts due under this Master Declaration against such Unit to the extent the mortgage was Recorded prior to the date on which the Assessments or other amounts due became delinquent. 13.06. Books and Records. All Mortgagees, upon written request, shall have the right to: (a) examine the books and records of the Master Association, including current copies of this Master Declaration, the Bylaws and the Rules and financial statements, during normal business hours; (b) require the Master Association to submit an annual audited financial statement for the preceding fiscal year within one-hundred twenty (120) days of the end of the Master Association's fiscal year, if one is available, or have one prepared at the expense of the requesting Person if such statement is not otherwise prepared by the Master Association; (c) receive written notice of all meetings of the Owners; and (d) designate in writing a representative to attend all such meetings. 13.07. Priority of Rights. No provision of this Master Declaration shall be construed or applied to give any Owner priority over any rights of any Mortgagee if the proceeds or awards are not applied to restoration but are distributed to the Owners after a casualty loss or condemnation of a Unit and/or the Common Elements. List of Attachments: Attachment 1 —Allocated Interests and Votes Attachment 2—Legal Description of the Land Attachment 3—Certificate of Formation Attachment 4—Bylaws Attachment 5—Plat and Plans Attachment 6—Insurance Requirements Attachment 7—Ground Lease Obligation Allocation Chart [SIGNATURE PAGE FOLLOWS] DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Page 40 4825-8979-8840v.5 63325-4 IN WITNESS WHEREOF, Declarant has duly executed this Master Declaration on the day and year first above written. DECLARANT: Baytown Municipal Development District By: Name: Title: STATE OF TEXAS § COUNTY OF § This instrument was acknowledged before me on ,20 ,by of Baytown Municipal Development District, on behalf of said district. (SEAL) Notary Public, State of Texas DEC DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Signature Page 4825-8979-8840v.5 63325-4 The undersigned Ground Lessor under the Ground Lease hereby consents to this Master Declaration in accordance with Section 11.8 of this Master Declaration. GROUND LESSOR: City of Baytown,Texas, a Texas home-rule municipality By: Printed Name: Title: THE STATE OF TEXAS § COUNTY OF TRAVIS § This instrument was acknowledged before me on the day of , 20 by of City of Baytown, Texas, a Texas home-rule municipality, on behalf of said home-rule municipality. [seal] Notary Public, State of Texas DEC DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Signature Page 4825-8979-8840v.5 63325-4 ATTACHMENT 1 Allocated Interests and Votes UNIT ALLOCATED INTEREST VOTES City Facilities Unit 37.71% 38 Hotel Unit 62.29% 62 TOTAL 100% 100 DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 1,Allocated Interest and Votes 4825-8979-8840v.5 63325-4 ATTACHMENT 2 Legal Description of the Land BEING 6.504 acres of land situated in the William Scott Upper League, Abstract No. 66 in Harris County, Texas and being a part of a 10.5668 acre tract (described as Tract 1) and a part of a 45.3774 acre tract (described as Tract 2) in the deed to the City of Baytown recorded in Harris County Clerk's File No. G388038, Official Public Records of Real Property of Harris County, Texas, and part of a 12.34 acre tract described in the deed to the City of Baytown recorded in Harris County Clerk's File Nos. P009416 & R367024, Official Public Records of Real Property of Harris County, Texas, said 6.504 acre tract is described by metes and bounds as follows: COMMENCING at a found five-eighths inch "Terra Surveying" plastic capped iron rod on the southerly right-of-way line of State Highway 146/State Highway 201 Spur, (width varies), said rod marking the west corner of said 12.34 acre tract, the north corner of a 10.0056 acre tract described in the deed to T.W. Laquay Dredging, Inc., recorded in Harris County Clerk's File No. 20070688300, Official Public Records of Real Property of Harris County, Texas, the south corner of a 4.882 acre tract described in the deed to the State of Texas recorded in Volume 1902, Page 397, Deed Records of Harris County, Texas and the east corner of a 14.554 acre tract (described as Parcel "B") in the deed to the State of Texas recorded in Volume 1986, Page 620, Deed Records of Harris County, Texas, from said found rod a found Texas Department of Transportation Disk at the southerly corner of said 14.554 acre tract and the west corner of said 10.0056 acre tract bears along the southerly right-of-way line of said State Highway 146, South 69 degrees 00 minutes 15 seconds West, 894.67 feet; THENCE, South 47 degrees 45 minutes 32 seconds East, with the northeast line of said 10.0056 acre tract, the northeast line of said 45.3774 acre tract and the southwest line of said 12.34 acre tract, passing at 1,388.64 feet, a point on the mean higher high water line of"Bayland Island" in all a total of 1,618.15 feet to a set cut "X" for the POINT OF BEGINNING of the herein described tract; THENCE, North 40 degrees 20 minutes 50 seconds East, 273.71 feet to a set five-eighths inch "Baseline Corp." plastic capped iron rod; THENCE, North 69 degrees 23 minutes 50 seconds East, 62.03 feet to a set five-eighths inch "Baseline Corp." plastic capped iron rod; THENCE, South 40 degrees 48 minutes 46 seconds East, 213.99 feet to a set five-eighths inch "Baseline Corp." plastic capped iron rod; THENCE, North 49 degrees 11 minutes 14 seconds East, 38.86 feet to a set five-eighths inch "Baseline Corp." plastic capped iron rod; DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER—Attachment 2,Legal Description of the Land 4825-8979-8840v.5 63325-4 THENCE, South 40 degrees 48 minutes 46 seconds East, 77.55 feet to a set five-eighths inch "Baseline Corp." plastic capped iron rod; THENCE, North 49 degrees 13 minutes 48 seconds East, 54.00 feet to a set five-eighths inch "Baseline Corp." plastic capped iron rod; THENCE, South 40 degrees 48 minutes 46 seconds East, 172.64 feet to a set five-eighths inch "Baseline Corp." plastic capped iron rod; THENCE, South 49 degrees 11 minutes 14 seconds West, 573.89 feet to a set five-eighths inch "Baseline Corp." plastic capped iron rod; THENCE, South 80 degrees 00 minutes 36 seconds West, 290.21 feet to a set five-eighths inch "Baseline Corp." plastic capped iron rod; THENCE, North 05 degrees 47 minutes 44 seconds West, 326.18 feet to a set five-eighths inch "Baseline Corp." plastic capped iron rod; THENCE, North 40 degrees 20 minutes 50 seconds East, 180.57 feet to the POINT OF BEGINNING and containing 6.504 acres of land. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER—Attachment 2,Legal Description of the Land 4825-8979-8840v.5 63325-4 ATTACHMENT 3 CERTIFICATE OF FORMATION OF BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM COMMUNITY,INC. The undersigned natural person, being of the age of eighteen (18) years or more, a citizen of the State of Texas, acting as incorporator of a corporation under the Texas Business Organizations Code, does hereby adopt the following Certificate of Formation for such corporation: ARTICLE I NAME The name of the corporation is: Baytown Hotel & Convention Center Master Condominium Community,Inc. (hereinafter called the "Master Association"). ARTICLE II NONPROFIT CORPORATION The Master Association is a nonprofit corporation. ARTICLE III DURATION The Master Association shall exist perpetually. ARTICLE IV PURPOSE AND POWERS OF THE MASTER ASSOCIATION The Master Association is organized in accordance with, and shall operate for nonprofit purposes pursuant to, the Texas Business Organizations Code, and does not contemplate pecuniary gain or profit to its members. In furtherance of its purposes, the Master Association shall have the following powers which, unless indicated otherwise by this Certificate of Formation, that certain "Declaration of Condominium Regime for Baytown Hotel &Convention Center Master Condominium," recorded or to be recorded in the Official Public Records of Harris County, Texas, as the same may be amended from time to time (the "Master Declaration"), the Bylaws, or Texas law, may be exercised by the Board of Directors: (a) all rights and powers conferred upon nonprofit corporations by Texas law; DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 3,Certificate of Formation 4825-8979-8840v.5 63325-4 (b) all rights and powers conferred upon condominium associations by Texas law, including the Act, in effect from time to time, provided, however, that the Master Association shall not have the power to institute, defend, intervene in, settle or compromise litigation or administrative proceedings in the name of any Owner as provided in Section 82.102(a)(4) of the Act;and (c) all powers necessary, appropriate, or advisable to perform any purpose or duty of the Master Association as set out in this Certificate of Formation, the Bylaws, the Master Declaration, or Texas law. Terms used but not defined in this Certificate of Formation shall have the meaning ascribed to such terms in the Master Declaration. ARTICLE V REGISTERED OFFICE; REGISTERED AGENT The street address of the initial registered office of the Master Association is 401 Congress Avenue, Suite 2100, Austin, Texas 78701. The name of its initial registered agent at such address is Robert D. Burton. ARTICLE VI MEMBERSHIP Membership in the Master Association shall be determined as set forth in the Master Declaration. ARTICLE VII VOTING RIGHTS Voting rights of the members of the Master Association shall be determined as set forth in the Master Declaration. Notwithstanding the foregoing, cumulative voting is not permitted. ARTICLE VIII INCORPORATOR The name and street address of the incorporator is: NAME ADDRESS Robert D. Burton 401 Congress Avenue, Suite 2100 Austin, Texas 78701 DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM-Attachment 3,Certificate of Formation 4825-8979-8840v.5 63325-4 ARTICLE IX BOARD OF DIRECTORS The affairs of the Master Association shall be managed by an initial Board of Directors consisting of four (4) individuals. The Board shall fulfill all of the functions of, and possess all powers granted to, Boards of Directors for nonprofit corporations pursuant to the Texas Business Organizations Code. The names and addresses of the persons who are to act in the capacity of initial Directors until the selection of their successors are: Directors Appointed by the Hotel Unit [ J Director Appointed by the City Facilities Unit [ l All of the powers and prerogatives of the Master Association shall be exercised by the initial Board of Directors named above until their successors are appointed in accordance with the Bylaws. ARTICLE X LIMITATION OF DIRECTOR LIABILITY A member of the Board of Directors of the Master Association shall not be personally liable to the Master Association for monetary damages for any act or omission in his capacity as a Board member, except to the extent otherwise expressly provided by Legal Requirements. Any repeal or modification of this Article shall be prospective only, and shall not adversely affect any limitation of the personal liability of a member of the Board of Directors at the time of the repeal or modification. ARTICLE XI INDEMNIFICATION DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 3,Certificate of Formation 4825-8979-8840v.5 63325-4 Each person who acts as a member of the Board of Directors, officer or committee member of the Master Association shall be indemnified by the Master Association against any costs, expenses and liabilities which may be imposed upon or reasonably incurred by him/her in connection with any civil or criminal action, suit or proceeding in which he/she may be named as a party defendant or in which he/she may be a witness by reason of his/her being or having been a member of the Board of Directors, officer, or committee member of the Master Association or by reason of any action alleged to have been taken or omitted by him/her in either such capacity. Such indemnification shall be provided in the manner and under the terms, conditions and limitations set forth in the Bylaws of the Master Association. ARTICLE XII DISSOLUTION Upon dissolution of the Master Association, other than incident to a merger or consolidation, the assets of the Master Association shall be dedicated to an appropriate public agency to be used for purposes substantially similar to those for which this Master Association was created. In the event that such dedication is refused acceptance, such assets shall be granted, conveyed, and assigned to any nonprofit corporation, association, trust, or other organization to be devoted to such substantially similar purposes. ARTICLE XIII ACTION WITHOUT MEETING Any action required by law to be taken at any annual or special meeting of the members of the Master Association, or any action that may be taken at any annual or special meeting of the members of the Master Association, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the number of members having the total number of votes of the Master Association. ARTICLE XIV AMENDMENT This Certificate of Formation may only be amended by unanimous consent of the members of the Board of Directors. In the case of any conflict between the Master Declaration and this Certificate of Formation, the Master Declaration shall control; and in the case of any conflict between this Certificate of Formation and the Bylaws of the Master Association, this Certificate of Formation shall control. IN WITNESS WHEREOF, the undersigned has hereunto set his hand, this day of 20 Robert D. Burton, Incorporator DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 3,Certificate of Formation 4825-8979-8840v.5 63325-4 ATTACHMENT 4 BAYTOWN HOTEL &CONVENTION CENTER MASTER CONDOMINIUM COMMUNITY,INC. BYLAWS ARTICLE 1 INTRODUCTION 1.1. Property. These Bylaws of Baytown Hotel & Convention Master Center Condominium Community, Inc. (the "Master Association") provide for the governance of the condominium regime known as Baytown Hotel & Convention Center Master Condominium, established on certain real property in Harris County, Texas (the "Property"), as more particularly described in that certain Declaration of Condominium Regime for Baytown Hotel& Convention Center Master Condominium, recorded or to be recorded in the Official Public Records of Harris County,Texas (the "Master Declaration"). 1.2. Parties to Bylaws. All present or future Owners of Units and all other Persons who use or occupy the Property in any manner are subject to these Bylaws, the Master Declaration, and the other Documents as defined in the Master Declaration. The mere acquisition or occupancy of a Unit will signify that these Bylaws are accepted, ratified, and will be strictly followed. 1.3. Definitions. Words and phrases defined in the Master Declaration have the same meanings when used in these Bylaws. Article 1 of the Master Declaration is incorporated herein by reference. 1.4. Nonprofit Purpose. The Master Association is organized to be a nonprofit corporation. 1.5. General Powers and Duties. The Master Association, acting through the Board, has the powers and duties necessary for the administration of the affairs of the Master Association and for the operation and maintenance of the Property as may be required or permitted by the Documents and Texas law. The Master Association may do any and all things that are lawful and which are necessary, proper, or desirable in operating for the best interests of its Members, subject only to the limitations upon the exercise of such powers as are expressly set forth in the Documents. ARTICLE 2 BOARD OF DIRECTORS 2.1. Governance. The Board will consist of four (4) Board members. The Owner of the Hotel Unit shall have the right to appoint or elect and remove two (2) duly authorized agents or representatives as Directors. The Owner of the City Facilities Unit shall have the right DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 4,Bylaws 4825-8979-8840v.5 63325-4 to appoint or elect and remove two (2) duly authorized agents or representatives as Directors. Directors need not be Members or residents of the State of Texas. 2.2. Removal of Directors. 2.2.1. Removal by Members. Only the Owner or a Majority of the collective Owners entitled to appoint a particular Board member in accordance with Sectiolz 2.1 above may remove that Board member. 2.2.2. Removal by Directors. A Director may not be removed by the officers or by the remaining Directors unless approved by the Owner(s) entitled to appoint the Director to be removed in accordance with Section 2.1 above. 2.3. Meetings of the Board. 2.3.1. Organizational Meeting of the Board. Within ten (10) days after the annual meeting, the Directors will convene an organizational meeting for the purpose of electing officers. The time and place of the meeting will be fixed by the Board and announced to the Directors. 2.3.2. Regular Meetings of the Board. Regular meetings of the Board may be held at a time and place that the Board determines, from time to time,but at least one (1) such meeting must be held annually. Notice of regular meetings of the Board will be given to each Director, personally or by telephone, written, or electronic communication, at least three (3) days prior to the date of the meeting. 2.3.3. S12ecial Meetings of the Board. Special meetings of the Board may be called by the president or, if the president is absent or refuses to act, by the secretary, or by any Director. At least three (3) days' notice will be given to each Director, personally or by telephone, written, or electronic communication, which notice must state the place, time, and purpose of the meeting. 2.3.4. Emergency Meetings. In case of an emergency, the Board may convene a meeting after making a diligent attempt to notify each Director by any practical method. 2.3.5. Conduct of Meetings. The president presides over meetings of the Board and the secretary keeps, or causes to be kept, a record of resolutions adopted by the Board and a record of transactions and proceedings occurring at meetings. When not in conflict with law or the Documents, the then current edition of Robert's Rules of Order governs the conduct of the meetings of the Board. 2.3.6. Ouorum. At meetings of the Board, a quorum for the transaction of business shall require the presence of at least a Majority of the Directors. Except for Major Decisions or as otherwise expressly provided herein or in the Master Declaration, DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 4,Bylaws 4825-8979-8840v.5 63325-4 actions of a Majority of the Board members present at meetings of the Board in which a quorum is present are the acts of the Board. Directors may not participate by proxy at meetings of the Board. If at any meeting of the Board of Directors there shall be less than a quorum present, the Directors present may adjourn the meeting from time to time and, at the adjourned meeting at which a quorum is present, any business that might have been transacted at the meeting as originally called may be transacted without further notice to any Director. 2.3.7. Open Meetings. Regular and special meetings of the Board are open to Members of the Master Association, subject to the following provisions to the extent permitted or required by the Act: i. No audio or video recording of the meeting may be made, except by the Board or with the Board's prior express consent. ii. Members who are not Directors may not participate in Board deliberations under any circumstances, and may not participate in Board discussions unless the Board expressly so authorizes at the meeting. iii. The Board may adjourn any meeting and reconvene in executive session to discuss and vote on personnel matters, litigation in which the Master Association is or may become involved, and orders of business of a similar or sensitive nature. The nature of business to be considered in executive session will first be announced in open session. iv. The Board may prohibit attendance by non-Members, including representatives, proxies, agents, and attorneys of Members. V. The Board may prohibit attendance by any Member who disrupts meetings or interferes with the conduct of Board business. vi. The Board may but is not required to publish to Members the time, date, and place of Board meetings, but will provide the information if requested in writing by a Member on a meeting by meeting basis. 2.3.8. Telephone Meetings. Members of the Board or any committee of the Master Association may participate in and hold meetings of the Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such meeting constitutes presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 4,Bylaws 4825-8979-8840v.5 63325-4 2.3.9. Action without a Meeting. Any action required or permitted to be taken by the Board at a meeting may be taken without a meeting if all of the Directors consent in writing to the action. The written consent must be filed with the minutes of Board meetings. Action by written consent has the same force and effect as a unanimous vote. This Section does not apply to actions that require meetings under the Act. 2.4. Liabilities and Standard of Care. In performing their duties, the Directors are required to exercise certain standards of care and are subject to certain liabilities, including but not limited to the following provisions of State law: Sections 82.103(a) and (f) of the Act, and Sections 3.102, 3.105, 22.221, 22.223, 22.224, 22.225, 22.226, 22.227 and 22.230 of the Texas Business Organizations Code. 2.5. Powers and Duties. The Board has all the powers and duties necessary for the administration of the Master Association and for the operation and maintenance of the Property. The Board may do all acts and things except those which, by law or the Documents, are reserved to the Members and may not be delegated to the Board. Without prejudice to the general and specific powers and duties set forth in laws or in the Documents, or powers and duties as may hereafter be imposed on the Board by resolution of the Master Association, the powers and duties of the Board include,but are not limited to, the following: 2.5.1. Appointment of Committees. The Board, by resolution, may from time to time designate standing or ad hoc committees to advise or assist the Board with its responsibilities. The resolution may establish the purposes and powers of the committee created, provide for the appointment of a chair and committee Members, and may provide for reports, termination, and other administrative matters deemed appropriate by the Board. Members of committees will be appointed from among the Owners and Occupants. 2.5.2. Manager. The Board may employ a manager or managing agent for the Master Association, at a compensation established by the Board, to perform duties and services authorized by the Board. 2.5.3. Fidelity Bonds. Any person handling or responsible for Master Association funds, including officers, agents, and employees of the Master Association, must furnish adequate fidelity bonds. The premiums on the bonds may be a Common Expense of the Master Association. ARTICLE 3 OFFICERS 3.1. Designation. The principal officers of the Master Association are the president, the secretary, and the treasurer. The Board may appoint one (1) or more vice-presidents and other officers and assistant officers as it deems necessary. The president and secretary must be DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 4,Bylaws 4825-8979-8840v.5 63325-4 Directors. Other officers may, but need not, be Members or Directors. Any two (2) offices may be held by the same person, except the offices of president and secretary. If an officer is absent or unable to act, the Board may appoint a Director to perform the duties of that officer and to act in place of that officer, on an interim basis. 3.2. Election of Officers. The officers are elected every two (2) years by the Directors and hold office at the pleasure of the Board. Except for resignation or removal, officers hold office until their respective successors have been designated by the Board. 3.3. Removal and Resignation of Officers. The Directors, by unanimous consent, may remove any officer, with or without cause, at any regular meeting of the Board or at any special meeting of the Board called for that purpose. A successor may be elected at any regular or special meeting of the Board called for that purpose. An officer may resign at any time by giving written notice to the Board. Unless the notice of resignation states otherwise, it is effective when received by the Board and does not require acceptance by the Board. The resignation or removal of an officer who is also a Director does not constitute resignation or removal from the Board. 3.4. Standard of Care. In performing their duties, the officers are required to exercise the standards of care provided by Sections 82.103(a) and (f) of the Act and by Section 3.105 of the Texas Business Organizations Code. 3.5. Description of Principal Offices. 3.5.1. President. As the chief executive officer of the Master Association, the president: (i) presides at all meetings of the Master Association and of the Board; (ii)has all the general powers and duties which are usually vested in the office of president of a corporation organized under the laws of the State of Texas; (iii)has general supervision, direction, and control of the business of the Master Association, subject to the control of the Board; and (iv) sees that all orders and resolutions of the Board are carried into effect. 3.5.2. Sect. The secretary: (i) keeps the minutes of all meetings of the Board and of the Master Association; (ii) has charge of such books, papers, and records as the Board may direct; (iii) maintains a record of the names and addresses of the Members for the mailing of notices; and (iv) in general, performs all duties incident to the office of secretary. 3.5.3. Treasurer. The treasurer: (i) is responsible for Master Association funds; (ii) keeps full and accurate financial records and books of account showing all receipts and disbursements; (iii) prepares all required financial data and tax returns; (iv) deposits all monies or other valuable effects in the name of the Master Association in depositories as may from time to time be designated by the Board; (v)prepares the annual Master DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 4,Bylaws 4825-8979-8840v.5 63325-4 Budget and supplemental budgets of the Master Association; (vi) reviews the accounts of the managing agent on a monthly basis in the event a managing agent is responsible for collecting and disbursing Master Association funds; and (vii) performs all the duties incident to the office of treasurer. 3.6. Authorized Agents. Except when the Documents require execution of certain instruments by certain individuals, the Board may authorize any person to execute instruments on behalf of the Master Association. In the absence of Board designation, the president and the secretary are the only persons authorized to execute instruments on behalf of the Master Association. ARTICLE 4 MEETINGS OF THE MASTER ASSOCIATION 4.1. Annual Meeting. An annual meeting of the Master Association will be held once during each twelve (12) month period on a date and at a time determined by the Board. At each annual meeting the Members may appoint Directors in accordance with these Bylaws. The Members may also transact such other business of the Master Association as may properly come before them. 4.2. Special Meetings. A special meeting of the Master Association may be called by any one (1) Director, or by a Member or Members having not less than fifty percent(50%) of the total votes of the Master Association. The meeting must be held within thirty (30) days after receipt of the written demand. The notice of any special meeting must state the time, place, and purpose of the meeting. No business, except the purpose stated in the notice of the meeting, may be transacted at a special meeting. 4.3. Place of Meetings. Meetings of the Master Association may be held at the Property or at a suitable place convenient to the Members, as determined by the Board. 4.4. Notice of Meetings. At the direction of the Board, written notice of meetings of the Master Association will be given to an Owner of each Unit at least ten (10) days but not more than sixty (60) days prior to the meeting. Notices of meetings will state the date, time, and place the meeting is to be held. Notices will identify the type of meeting as annual or special, and will state the particular purpose of a special meeting. Notices may also set forth any other items of information deemed appropriate by the Board. 4.5. Voting Members List. The Board will prepare and make available a list of the Master Association's voting Members in accordance with Section 22.158(b) of the Texas Business Organizations Code. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 4,Bylaws 4825-8979-8840v.5 633254 4.6. Quorum. At any meeting of the Master Association, a quorum shall be present if the Members entitled to cast one hundred percent (100%) of the total votes of the Master Association are present in person or proxy at the beginning of the meeting. 4.7. Lack of Quorum. If a quorum is not present at any meeting of the Master Association for which proper notice was given, Members representing at least a Majority of the votes present at the meeting, although not constituting a quorum, may vote to recess the meeting for not more than twenty-four (24) hours in order to attain a quorum, provided the place of the meeting remains as stated in the notice. 4.8. Votes. Except as otherwise expressly provided herein or in the Master Declaration, the vote of Members representing all of the votes cast at any meeting at which a quorum is present binds all Members for all purposes. Cumulative voting is prohibited. 4.8.1. Co-Owned Units. If a Unit is owned by more than one Member, the vote appurtenant to that Unit is cast in accordance with Section 82.110(a) of Act, which is summarized as follows. If only one of the multiple Owners of a Unit is present at a meeting of the Master Association, that person may cast the vote allocated to that Unit. If more than one of the multiple Owners is present, the vote allocated to that Unit may be cast only in accordance with the Owners' unanimous agreement. Multiple Owners are in unanimous agreement if one of the multiple Owners casts the vote allocated to a Unit and none of the other Owners makes prompt protest to the person presiding over the meeting. 4.8.2. Entity-Owned Units. If a Unit is owned by a corporation or a limited liability company, the vote appurtenant to that Unit may be cast by any officer of the corporation or limited liability company in the absence of the corporation's or limited liability company's written appointment of a specific person to exercise its vote. The vote of a partnership may be cast by any general partner in the absence of the partners' written appointment of a specific person. The person presiding over a meeting or vote may require reasonable evidence that a person voting on behalf of a corporation, limited liability company or partnership is qualified to vote. 4.9. Proxies. Votes may be cast in person or by written proxy at any meeting of the Master Association. To be valid, each proxy must: (i)be signed and dated by a Member or such Member's attorney-in-fact; (ii) identify the Unit to which the vote is appurtenant; (iii) name the person or title (such as "presiding officer") in favor of whom the proxy is granted, such person having agreed to exercise the proxy; (iv) identify the meeting for which the proxy is given; (v)not purport to be revocable without notice; and (vi) be delivered to the secretary, to the person presiding over the Master Association meeting for which the proxy is designated, or to a person or company designated by the Board. Unless the proxy specifies a shorter or longer time, it terminates eleven (11) months after the date of its execution. Perpetual or self-renewing proxies are permitted, provided they are revocable. To revoke a proxy, the granting Member DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 4,Bylaws 4825-8979-8840v.5 63325-4 must give actual notice of revocation to the person presiding over the Master Association meeting for which the proxy is designated. Unless revoked, any proxy designated for a meeting which is adjourned, recessed, or rescheduled is valid when the meeting reconvenes. 4.10. Conduct of Meetings. The president, or any person designated by the Board, presides over meetings of the Master Association. The secretary keeps, or causes to be kept, the minutes of the meeting which should record all resolutions adopted and all transactions occurring at the meeting, as well as a record of any votes taken at the meeting. The person presiding over the meeting may appoint a parliamentarian. The then current edition of Robert's Rules of Order governs the conduct of meetings of the Master Association when not in conflict with the Documents. Votes should be tallied by Members appointed by the person presiding over the meeting. 4.11. Order Of Business. Unless the notice of meeting states otherwise, or the assembly adopts a different agenda at the meeting, the order of business at meetings of the Master Association is as follows: Determine votes present by roll call or check-in procedure Announcement of quorum o Proof of notice of meeting Approval of minutes of preceding meeting o Reports of Officers (if any) Unfinished or old business e� New business 4.12. Adjournment of Meeting. At any meeting of the Master Association, a vote of Members representing one hundred percent (100%) of the votes cast at any meeting at which a quorum is present may adjourn the meeting to another time and place. 4.13. Action without Meeting. Subject to Board approval, any action which may be taken by a vote of the Members at a meeting of the Master Association may also be taken without a meeting by written consents. The Board may permit Members to vote by any method allowed by Sections 22.160(b), (c) and (d) of the Texas Business Organizations Code, which may include hand delivery, mail, fax, email, or any combination of these. If an action is taken without a meeting, the Board shall distribute a written consent to every Member entitled to vote on the matter. The consent shall set forth the proposed action, provide an opportunity to specify approval or disapproval of any proposal, and provide a reasonable time within which to return the consent to the Master Association. Approval by written consent. shall be valid only when the number of votes cast by consent within the time period specified equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve the proposal at a regular or special meeting authorizing the action. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 4,Bylaws 4825-8979-8840v.5 63325-4 4.14. Telephone Meetings. Members of the Master Association may participate in and hold meetings of the Master Association by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in the meeting constitutes presence in person at the meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. ARTICLE 5 MASTER ASSOCIATION RECORDS 5.1. Records. The Master Association will keep the records required by Section 82.114(a) of the Act. 5.2. Inspection of Books and Records. Books and records of the Master Association will be made available for inspection and copying pursuant to Section 82.114(b) of the Act and Sections 3.151, 3.153 and 22.351 of the Texas Business Organizations Code. 5.3. Resale Certificates. Any officer may prepare or cause to be prepared, certify, and execute resale certificates in accordance with Section 82.157 of the Act. The Master Association may charge a reasonable fee for preparing resale certificates. The Master Association may refuse to furnish resale certificates until the fee is paid. Any unpaid fees may be assessed against the Unit for which the certificate is furnished. ARTICLE 6 NOTICES 6.1. Co-Owners. If a Unit is owned by more than one person, notice to one co-Owner is deemed notice to all co-Owners. 6.2. Delivery of Notices. Any written notice required or permitted by these Bylaws may be given personally, by mail, by fax, or by any other method permitted by Texas law. If mailed, the notice is deemed delivered when deposited in the U.S. mail addressed to the Member at the address shown on the Master Association's records. If transmitted by fax, the notice is deemed delivered on successful transmission of the facsimile. 6.3. Waiver of Notice. Whenever a notice is required to be given to an Owner, Member, or Director, a written waiver of the notice, signed by the person entitled to the notice, whether before or after the time stated in the notice, is equivalent to giving the notice. Attendance by a Member or Director at any meeting of the Master Association or Board, respectively, constitutes a waiver of notice by the Member or Director of the time, place, and purpose of the meeting. If all Members or Directors are present at any meeting of the Master Association or Board, respectively, no notice is required and any business may be transacted at the meeting. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM-Attachment 4,Bylaws 4825-8979-8840v.5 63325-4 ARTICLE 7 AMENDMENTS TO BYLAWS 7.1. Authority. These Bylaws may be amended by the unanimous consent of the Directors on the Board. 7.2. Proposals. The Master Association will provide to each Owner a detailed description, if not exact wording, of any proposed amendment. 7.3. Effective. To be effective, each amendment must be in writing, must recite the recording data for the Bylaws, and must be Recorded. ARTICLE 8 GENERAL PROVISIONS 8.1. Compensation. A Director, officer, Member, or Occupant may not receive any pecuniary profit from the operation of the Master Association, and no funds or assets of the Master Association may be paid as a salary or as compensation to, or be distributed to, or inure to the benefit of a Director, officer,Member, or Occupant. Nevertheless: i. Reasonable compensation may be paid to a Director, officer, Member, or Occupant for services rendered to the Master Association in other capacities. ii. A Director, officer, Member, or Occupant may, from time to time, be reimbursed for his actual and reasonable expenses incurred on behalf of the Master Association in connection with the administration of the affairs of the Master Association, provided the expense has been approved by the Board. iii. The Board may budget and use Master Association funds to purchase awards, certificates, a celebratory meal, or other customary tokens or demonstrations of appreciation for volunteer activities. iv. This provision does not apply to distributions to Owners permitted or required by the Master Declaration or the Act. 8.2. Conflicting Provisions. If any provision of these Bylaws conflicts with any provision of applicable law, the conflicting Bylaws provision is null and void, but all other provisions of these Bylaws remain in full force and effect. In the case of any conflict between the Certificate of the Master Association and these Bylaws, the Certificate controls. In the case of any conflict between the Master Declaration and these Bylaws, the Master Declaration controls. 8.3. Severability. Whenever possible, each provision of these Bylaws will be interpreted in a manner as to be effective and valid. Invalidation of any provision of these DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 4,Bylaws 4825-8979-8840v.5 63325-4 Bylaws, by judgment or court order, does not affect any other provision which remains in full force and effect. 8.4. Construction. The effect of a general statement is not limited by the enumerations of specific matters similar to the general. The captions of articles and sections are inserted only for convenience and may not be construed as defining or modifying the text to which they refer. The singular is construed to include the plural, when applicable, and the use of masculine or neuter pronouns includes the feminine. 8.5. Fiscal Year. The fiscal year of the Master Association will be set by resolution of the Board, and is subject to change from time to time as the Board determines. In the absence of a resolution by the Board, the fiscal year is the calendar year. 8.6. 'Waiver. No restriction, condition, obligation, or covenant contained in these Bylaws may be deemed to have been abrogated or waived by reason of failure to enforce the same,irrespective of the number of violations or breaches thereof which may occur. 8.7. Indemnification. To the fullest extent permitted by applicable law, the Master Association will indemnify any Person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that such Person is or was a Director, officer, committee member, employee, servant, or agent of the Master Association against expenses (including attorneys' fees, judgments, fines, and amounts paid in settlement) actually and reasonably incurred by such Person in connection with such action, suit or proceeding if it is found and determined by the Board or a court that such Person: (i) acted in good faith and in a manner which such Person reasonably believed to be in, or not opposed to, the best interests of the Master Association; or (ii) with respect to any criminal action or proceeding,had no reasonable cause to believe such conduct was unlawful. The termination of any action, suit, or proceeding by settlement, or upon a plea of polo contendere or its equivalent, will not of itself create a presumption that the Person did not act in good faith or in a manner reasonably believed to be in, or not opposed to, the best interests of the Master Association, or, with respect to any criminal action or proceeding, had reasonable cause to believe that such conduct was unlawful. 8.8. Preparer. These Bylaws were prepared by Robert D. Burton, Esq., Winstead, PC, 401 Congress Ave.,Suite 2100,Austin,Texas 78701. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 4,Bylaws 4825-8979-8840v.5 63325-4 ATTACHMENT 5 Plat and Plans [Attached] DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM-Attachment 5,Plat and Plans 4825-8979-8840v.5 63325-4 14.554 ACRES (PARCEL FOUND ALUMINUM STATE "B") T0: (VARIABLE 4G TATE F►►G►►wAY ► TXDOT MONUMENT VOLUME 1986E TEXAS WIDTH PAGE 620 R.O.W) POINT OF C O,R.H.C.T FOUND OMMENCING� 4.882 ACRES TO• "TERRA Y1 IRON ROD yy� (PARCEL 5.CEL ACRES SURVEYING" PLASTIC CAP VOLUME 90OF 2, TEXAS (PA STADEL "A-) TO• A . S69'00'15"W PAGE 397 VOLUME 1986E TEXAS **4 894.67' D•R.H.C.T PAGE 620 11YNM D.R.H.C.T. T. 10,0056 ACRES H.C. ---. W LAQUAY DREDGING INC. F, No. 20070688 C. 300 O,P-R-R-PH.C.T. POINT OF\COMMENCING TO POINT OF\BEGINNING 0 100' 200' 400 S47.45'32"R 1,618.15' PASSING AT 1,388.64' MEAN HIGHER HIGH I\ WATER LINE �p C2� MARINA BASIN 0 apt BLACK DUCK BAY P`coNpREzel SET . L2 12" WATER LINE MEAN HIGHER OINT O HIGH WATER BEGINNING �, w e \ SET LINE v SET CUT "X" • 0.3903 ACRE LEASE TRACT L11 W i ORY� 1n H.C.C.F. No. E ASSIGNED �, p�/y/P J BAYLR.P.H. LA LEASE ASSIGNED T0: T 's Gp�cfL p`h'Oa �j BAYLAND ISLAND DEVELOPMENT, L.C. H.C.C.F. No. X864211 1 Q J�1E O.P.R.R.P.H.C.T. P�SPP R L4 SET avf \� Sr ? S 5Fa6 d7 a \SET L6�r pcPe 6.504 ACRES J o DPP�a� c�c SETS SET v P M fY�tf,RS G tTSTORYBEBU11- 114.3' J W03 B I, MICHAEL F, CARRINGTON, DO 214.7.1_1 -__ I \ SET SET HEREBY CERTIFY THAT THIS PLAT 354.9'J REPRESENTS A SURVEY PERFORMED ON THE GROUND UNDER MY SUPERVISION $'• \ �g 10.5668U ACRES ON DECEMBER 18, 2019, AND MEETS OR 49 (TRACT 1) EXCEEDS THE MINIMUM PROFESSIONAL CITY OF BAYTOWN AND TECHNICAL STANDARDS RESIDUE OF SET H.C.C.F. No. G388038 PROMULGATED BY THE TEXAS BOARD OF 45.3774 ACRES (TRACT 2) O.P.R.R.PH.C.T. PROFESSIONAL LAND SURVEYORS, CITY OF BAYTOWN RESIDUE OF / 12 34 ACRES H.C.C.F. No. G388038 17.194 ACRES SUBJECT TO THE NOTES SHOWN HEREON.THIS PLAT CONTAINS ALL INFORMATION O.P.R.R.PH.C.T. RESIDUE OF CITY OF BAYTOWN H.C.C.F. Nos. REQUIRED FOR PLATS BY SECTION 13.70 ACRES P009416, R367024 / 82.059 OF THE TEXAS PROPERTY CODE (OVERALL O.P.R.R.PH.C.T. DATE OF MAP: APRIL 3, 2020 \ BAI2AND ISLAND)\ "9Cp TABBS BAY\ MICHAEL F. CARRINGTON, R LS MICHAELF.&I;RZTON TEXAS REGISTRATION NO. 5366 ............... MEAN HIGHER HIGH MFC®BASELINESURVEYORS.NET <1';°,fl 5366 Q`7'Q WATER LINE BASELINE CORPORATION 9'•�F �•'O 1TBPLS 0030200 FIRM REGISTRATION NO.: SURN�y DATE: APRIL 3, 2020 BAYTOWN HOTEL CONVENTION CENTER C MASTER CONDOMINIUM DRAWN BY: MFC A6.504 ACRE SITE BASELINE CORPORATION APPROVED BY: SEW IN THE WILLIAM SCOTT UPPER LEAGUE Professional surveyors JOB No.: 17.074.02 ABSTRACT66 Baseline Corporation l TzSury F-10030200 HARRIS COUNTY,TEXAS 1750 Seamist Or,Ste 160,Houston.TK 77008 PAGE 1 OF 5 (ON BAYLAND ISLAND) 713.869.01551 BasellneSurveym.net H:\2017\17074 City of Boytown—Bayland Island Topo\1707402 — ALTA and Plot\Doto\dwg\1707402 6.504 ACRE condo calc.dwg Apr 03.2020 — 7:16am mfc, rn OHIO o I M I M Z OWA x OJaP Oc J��p3t'P Jt G < o. a o a om-, o>- -PA� 0 r9 F cq<i c0 a, Goose w Lake t� 9 T BLACK dp2Q�p N BAYK y0 F 61as LINE TABLE ® 3Q Line # BEARING DISTANCE 4 ® Park H � Lt N40' 20' 50"E 273.71' U� L2 N69' 23' 50"E 62.03' BLACK L3 S40' 48' 46"E 213.99' DUCK BAY L4 N49- 11' 14"E 38.86' SUBJECT PROPERTY L5 S40' 48' 46"E 77.55' L6 N49' 13' 48"E 54.00' Q N TABBS BAY L7 S40' 48' 46"E 172.64' LB S49' 11' 14"W 537,89' L9 SBO' 00' 36"W 290.21' L10 N05' 47' 44"W 326.18' HOGG ISLAND L11 N40- 20' 50"E 180.57' VICINITY MAP ABBREVIATIONS NOT TO SCALE H.C.C.F. = HARRIS COUNTY CLERKS FILE O.P.R.R.P.H.C.T. = OFFICIAL PUBLIC RECORDS OF REAL I, MICHAEL F, CARRINGTON, DO HEREBY CERTIFY THAT THIS PLAT PROPERTY HARRIS COUNTY, TEXAS REPRESENTS A SURVEY PERFORMED ON THE GROUND UNDER MY D.R.H.C.T. = DEED RECORDS OF HARRIS COUNTY, TEXAS SUPERVISION ON DECEMBER 18, 2019, AND MEETS OR EXCEEDS THE MINIMUM PROFESSIONAL AND TECHNICAL STANDARDS PROMULGATED BY THE TEXAS BOARD OF PROFESSIONAL LAND SURVEYORS, SUBJECT TO THE NOTES SHOWN HEREON. THIS PLAT CONTAINS ALL INFORMATION REQUIRED FOR PLATS BY SECTION 82.059 OF THE TEXAS PROPERTY CODE DATE OF MAP: APRIL 3, 2020 CO �• MICHAEL F. CARRINGTON, PLS MICRAE... F.CAR..... N TEXAS REGISTRATION NO. 5366 '0 5366 MFC@BASELINESURVEYORS.NET `qy OpfsBtO�?ypQ BASELINE FRMCORPORATION REGISTRATION NO.: 10030200 SURN� RAYTOIAN Is"wenc- BAYTOWN HOTEL S CONVENTION CENTER MASTER CONDOMINIUM � A DRAWN BY: MFC A 6.504 ACRE SITE eASE IECORPOM aN APPROVED BY: SEW IN THE WILLIAM SCOTT UPPER LEAGUE Profa3310aa1 SUNayeR JOB No.: 17.074.02 ABSTRACT66 Baseline Corporation l TxSury F-10030200 HARRIS COUNTY,TEXAS 1750 Seannisl Or,Ste 160,Houston,TX 77008 PAGE 2 OF 5 (ON SAYLAND ISLAND) 713.869.0155I Baseline5umaym.nel H:\2017\17074 City of Baytown—Baytand Island Topo\1707402 — ALTA and Plat\Data\dwg\1707402 6.504 ACRE condo coic.dwg Apr 03,2020 — 7:18am mfc NOTES 1. THIS SURVEY DOES NOT PROVIDE ANY DETERMINATIONS OR LOCATIONS OF WETLANDS, FAULT LINES, TOXIC WASTE, OR OTHER ENVIRONMENTAL ISSUES. 2. THE BEARINGS SHOWN HEREIN WERE DERIVED FROM REDUNDANT RTK GPS OBSERVATIONS AND ARE BASED ON THE TEXAS COORDINATE SYSTEM, SOUTH CENTRAL ZONE (4204) NAD 83 CORS ADJUSTMENT. THE DISTANCES SHOWN HEREON ARE SURFACE DATUM. TO CONVERT TO GRID, MULTIPLY BY A COMBINED PROJECT ADJUSTMENT FACTOR OF 0.999888442481. 3. THIS TRACT OF LAND LIES WITHIN THE "SPECIAL FLOOD HAZARD AREA SUBJECT TO INUNDATION BY THE 1% ANNUAL CHANCE OF FLOOD" ZONE ••AE ACCORDING TO F.E.M.A. FLOOD INSURANCE RATE MAP No. 48201CO955M, DATED JANUARY 6, 2017. 4. ALL MONUMENTS LABELED SET ARE 5/8" IRON RODS WITH YELLOW PLASTIC CAPS LABELED "BASELINE CORP.". 5. SURVEYED ON THE GROUND IN NOVEMBER OF 2017, APRIL OF 2019, AND DECEMBER OF 2019. 6. THE 6.504 ACRE TRACT CONFIGURATION WAS PROVIDED BY JOE HILLIARD WITH BOKAPOWELL ARCHITECTS. THE 6.504 ACRE TRACT DOES NOT HAVE DEDICATED ACCESS TO THE TRACT FROM A PUBLIC RIGHT-OF-WAY. THE PROPOSED ACCESS EASEMENT SHOWN COVERS AN EXISTING ROAD BUT DOES NOT CONTINUE ONTO ISLAND AS CURRENTLY SHOWN. 7. A METES & BOUNDS DESCRIPTION WAS PREPARED IN CONJUNCTION TO THIS PLAT (SHEETS 4 & 5 HEREOF). 8. ALL IMPROVEMENTS AND LAND REFLECTED ON THE PLAT ARE DESIGNATED AS GENERAL COMMON ELEMENTS, SAVE AND EXCEPT PORTIONS OF THE REGIME DESIGNATED AS LIMITED COMMON ELEMENTS OR UNITS: (1) IN THE DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL & CONVENTION CENTER MASTER CONDOMINIUM (THE 'DECLARATION") OR (II) ON THE PLATS AND PLANS OF THE REGIME. 9. OWNERSHIP AND USE OF CONDOMINIUM UNITS IS SUBJECT TO THE RIGHTS AND RESTRICTIONS CONTAINED IN THE DECLARATION. 10. THE UNITS, LIMITED COMMON ELEMENTS AND GENERAL COMMON ELEMENTS ARE SUBJECT TO ALL SPECIAL DECLARANT RIGHTS AS SET FORTH IN SECTION 82.003(A)(22) OF THE TEXAS PROPERTY CODE AND CERTAIN ADDITIONAL RIGHTS AND RESERVATIONS IN FAVOR OF THE DECLARANT AS SET FORTH IN THE DECLARATION AND APPENDIX "A" ATTACHED THERETO. 1, MICHAEL F, CARRINGTON, DO HEREBY CERTIFY THAT THIS PLAT REPRESENTS A SURVEY PERFORMED ON THE GROUND UNDER MY SUPERVISION ON DECEMBER 18, 2019, AND MEETS OR EXCEEDS THE MINIMUM PROFESSIONAL AND TECHNICAL STANDARDS PROMULGATED BY THE TEXAS BOARD OF PROFESSIONAL LAND SURVEYORS, SUBJECT TO THE NOTES SHOWN HEREON. THIS PLAT CONTAINS ALL INFORMATION REQUIRED FOR PLATS BY SECTION 82.059 OF THE TEXAS PROPERTY CODE DATE OF MAP: APRIL 3, 2020 OF T A,. 7gA•F./- Co. 9N F. ON MICHAEL F. CARRINGTON, PLS MICHAEL..............V. TEXAS REGISTRATION NO. 5366 'O 5366 BASELINEECORPORATIONLINESU RS.NET <9,y Q�ESS\o?yOQ TBPLS FIRM REGISTRATION NO.: 10030200 SURN� BAD DATE: APRIL 3, 2020 BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM DRAWN BY: MFC A6.504 ACRE SITE BABELINECOR APPROVED BY: SEW IN THE WILLIAM SCOTT UPPER LEAGUE profeaslonei sumeyarsneyora JOB No.: 17.074.02 ABSTRACT66 Baseline Corporation l TxSurt F-f0030200 HARRIS COUNTY,TEXAS 1750 Seamist Dr,Ste 160,Houston,TX 77008 PAGE 3 OF 5 (ON BAYLAND ISLAND) 713.869.01551 Baseline5urveym.net H:\2017\17074 City of Baytown—Bgand Island Topo\1707402 — ALTA and P1at\Data\dwg\1707402 6.504 ACRE condo calc.dwg Apr 03,2020 — 7:19am mfc, METES AND BOUNDS DESCRIPTION 6.504 ACRES OF LAND IN THE WILLIAM SCOTT UPPER LEAGUE, ABSTRACT No. 66 CITY OF BAYTOWN, HARRIS COUNTY, TEXAS PORTION OF BAYLAND ISLAND BEING 6.504 acres of land situated in the William Scott Upper League, Abstract No. 66 in Harris County, Texas and being a part of a 10.5668 acre tract (described as Tract 1) and a part of a 45.3774 acre tract(described as Tract 2) in the deed to the City of Baytown recorded in Harris County Clerk's File No. G388038, Official Public Records of Real Property of Harris County, Texas, and part of a 12.34 acre tract described in the deed to the City of Baytown recorded in Harris County Clerk's File Nos. P009416 & R367024, Official Public Records of Real Property of Harris County, Texas, said 6.504 acre tract is described by metes and bounds as follows: COMMENCING at a found five-eighths inch "Terra Surveying" plastic capped iron rod on the southerly right-of-way line of State Highway 146 / State Highway 201 Spur, (width varies), said rod marking the west corner of said 12.34 acre tract, the north corner of a 10.0056 acre tract described in the deed to T.W. Laquay Dredging, Inc., recorded in Harris County Clerk's File No. 20070688300, Official Public Records of Real Property of Harris County, Texas, the south corner of a 4.882 acre tract described in the deed to the State of Texas recorded in Volume 1902, Page 397, Deed Records of Harris County, Texas and the east corner of a 14.554 acre tract (described as Parcel "B") in the deed to the State of Texas recorded in Volume 1986, Page 620, Deed Records of Harris County, Texas, from said found rod a found Texas Department of Transportation Disk at the southerly corner of said 14.554 acre tract and the west corner of said 10.0056 acre tract bears along the southerly right-of-way line of said State Highway 146, South 69 degrees 00 minutes 15 seconds West, 894.67 feet; THENCE, South 47 degrees 45 minutes 32 seconds East, with the northeast line of said 10.0056 acre tract, the northeast line of said 45.3774 acre tract and the southwest line of said 12.34 acre tract, passing at 1,388.64 feet, a point on the mean higher high water line of"Bayland Island" in all a total of 1,618.15 feet to a set cut "X" for the POINT OF BEGINNING of the herein described tract; THENCE, North 40 degrees 20 minutes 50 seconds East, 273.71 feet to a set five-eighths inch "Baseline Corp." plastic capped iron rod; THENCE, North 69 degrees 23 minutes 50 seconds East, 62.03 feet to a set five-eighths inch "Baseline Corp." plastic capped iron rod; THENCE, South 40 degrees 48 minutes 46 seconds East, 213.99 feet to a set five-eighths inch "Baseline Corp." plastic capped iron rod; THENCE, North 49 degrees 11 minutes 14 seconds East, 38.86 feet to a set five-eighths inch "Baseline Corp." plastic capped iron rod; 4of5 THENCE, South 40 degrees 48 minutes 46 seconds East, 77.55 feet to a set five-eighths inch `Baseline Corp." plastic capped iron rod; THENCE, North 49 degrees 13 minutes 48 seconds East, 54.00 feet to a set five-eighths inch 'Baseline Corp." plastic capped iron rod; THENCE, South 40 degrees 48 minutes 46 seconds East, 172.64 feet to a set five-eighths inch 'Baseline Corp." plastic capped iron rod; THENCE, South 49 degrees 11 minutes 14 seconds West, 573.89 feet to a set five- eighths inch "Baseline Corp." plastic capped iron rod; THENCE, South 80 degrees 00 minutes 36 seconds West, 290.21 feet to a set five- eighths inch 'Baseline Corp." plastic capped iron rod; THENCE, North 05 degrees 47 minutes 44 seconds West, 326.18 feet to a set five- eighths inch "Baseline Corp." plastic capped iron rod; THENCE, North 40 degrees 20 minutes 50 seconds East, 180.57 feet to the POINT OF BEGINNING and containing 6.504 acres of land. The bearings hereon were derived from redundant RTK GPS observations and are based on the Texas Coordinate System, South Central Zone (4204) NAD 83 CORS Adjustment. The distances shown are surface datum. To convert to grid multiply by a combined project adjustment factor of 0.999888442481. This description was prepared in conjunction with a survey made on the ground in December of 2019 and with a survey drawing prepared by Baseline Corporation bearing the same date as this description. March 23, 2020 By: BASELINE CORPORATION TX Survey Firm No. 10030200 OF p yP.-O%sT&R�IyN P O ICHAEL F.CARRINGTON ..................... <-*:°q F5366o P-k _ .y�.Fss9 �y SUF-4 Michael F. Carrington, RPLS Texas Registration No. 5366 5 of 5 Baytown Hotel & Convention Center Master Condominium Architect's Declaration That I, Donald R. Powell,Jr.,do hereby certify to knowledge, information,and belief that the plans and elevations contained herein contain all information required by section 82.059 of the Texas Property Code. PQ W a � o �k Yo a P� OF 05/04/2020 Donald R. Powell,Jr.,AIA, NCARB Texas Registration No. 7206 1) All improvements reflected on the plans are designated as general common elements, save and except portions of the regime designated as limited common elements or units: (i) in the Declaration of Condominium Regime for Baytown Hotel & Convention Center (the "Declaration") or(ii)on the plat or plans of the regime. 2) Ownership and use of condominium units is subject to the rights and restrictions contained in the Declaration. 3) The Units, Limited Common Elements and General Common Elements are subject to all special declarant rights as set forth in Section 82.003(a)(22) of the Texas Property Code and certain additional rights and reservations in favor of the Declarant as set forth in the Declaration. 4) The real property legally described on these plans is leasehold property. Q 0 z D r r_ x c czi czco 32 6�B 1 t 2 � ➢ x _. O I rm- ` Apm I - � M 0 Z Z Z Z 1 "' " m O I z ' O z z z Z I m 1 Z N O w m 1 w Z I x m z I M m 3 D W M m A 0 O m Z I w 0 m �- 213.99' z m rn c 3 77.55' A O O 172.64' W M m v --A—T �_ m n maoonEl �SNer N 2 o n m 0 o n m 0 T i c v o m D m o 0 > m GLZ] ? mczi < xos� Z mm am r NfNIi mm vmnvn O O s4� O 0 moSF? y C A A A fN�o- m 0 0 W1D a 1 i 1 1 1 1 1 1 4 4 z� = 1 ne oc m 1 � 1 z ( m m 1 '- � 1 ij i or. cn YyO m 1 0 A 1 Q 0 1 Z 0 1 O z 1 c 1 I I m 1 < 1 _Co 1 .. ... ... D .V .. ...... .................. � C) 0 m a D o ❑❑❑ y LI T(J�m 0�1n0� r N C 2'T>K,4 m 0 0 Q A O n o�.=ip m z r N O'O T TZ mgm 0 m C m < mrt� i Z N yZ C m0 OZop yCZC r- O 0 ZO 3 m o x m o 'CNmi o�z D o c n Z� 4zT� -1 z a 0m bygm o n' =m m$Dy m y v o z O y I A A I C LEGEND . .. .. .. ... .... . . ............................ 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ELEVATIONS ON LEVEL 4 ARE FROM 1 1 AN ELEVATION OF 59'4'TO fig'0'. EEPTIONS ON EVATION OF 69E L 5 R8 0'TO FROM AN . 1 1 ELEVATIONS ON LEVEL 6 ARE FROM 1 1 AN ELEVATION OF 78'-8'TO 88W. ALL THESE ARE BASED ON A FINISHE 1 1 FLOOR ELEVATIONOF 2P-0-AT GROUND LEVEL OF HOTEL LOBBY. 1 1 1 1 BUILDING SECTOR LEVEL 2-6 0 7 1_0:1 C7,, 1 A C E G J 1 7P 1 B D F H K 1 1 03 0 oa -1 4I 1 0' 2.5' V 10, 142 - - --1- - ----- ------ ------ - --- -- - --- -- -- --- -------- -- -1 --- 1 C D 1 PLAN TRUE I c F I H NORTH NORTH t30KQr'S`:^J3i : LEVEL THROUGH 6-AREA E 04/09/2020 CP202E LEGEND ' � ' ❑ HOTEL UNIT I ❑CITY FACILITIES UNIT C _ -------- -- --- ❑ GENERAL COMMON ELEMENTS D i i H L[ f- 7 _ sr sr sr LEVEL 2 THROUGH 6 ELEVATIONS " 1 ELEVATIONS ON LEVEL 2ARE FROM ' IT 79 V LT � ' AN ELEVATION OF40'-0'TO49'-8'. ' z.11 ELEVATIONS ON LEVEL J ARE FROM AN ELEVATION OF 49'-8'TO 59'4'. 7 ELEVATIONS ON LEVEL 4 ARE FROM N AN ELEVATION OF 59'-4'TO fi9'0'. 711 0] 0.7 ELEVATIONS ON LEVEL 5 ARE FROM AN ELEVATION OF 69'-0'TO 78'-8'. ELEVATIONS ON LEVEL 6 ARE FROM _ AN ELEVATION OF 78'-8'TO 88'-0'. ALL THESE ARE BASED ON A FINISHE I e ' FLOORLEV F 20 AT GROUND LEVEL OF HOTEL LOBBY. S BUILDING SECTOR LEVEL 2.6 1 ' j--------- _l IM.I' 0 0' 2.5' 5' 10' D F F H PLAN TRUE NORTH NORTH LEVEL 2 THROUGH 6—AREA F 04/09/2020 CP202F LEGEND ❑ HOTEL UNIT E 'G G ' J ❑ CITY FACILITIES UNIT ' ❑ GENERAL COMMON ELEMENTS LEVEL 2 THROUGH 6 ELEVATIONS ' ELEVATIONS ON LEVEL 2 ARE FROM ' 1E' ' AN ELEVATION OF 40'-0"TO 4S-8'. - .1 ELEVATIONS ON LEVEL 3 ARE FROM AN ELEVATION OF 49'8"TO 59'-0'. 12.5'.. ___ . -_ ELEVATIONS ON LEVEL 4 ARE FROM f 1 AN ELEVATION OF 59'-0'TO 69'-0'. 1 ' ELEVATIONS ON LEVEL 5 ARE FROM AN ELEVATION OF 69'-0'TO 78'-8". ELEVATIONS ON LEVEL 6 ARE FROM ' AN ELEVATION OF 78'-B'TO 88'4". 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I I 1 1 1 1 I i I 1 I BUILDING SECTOR 1 LEVEL7 1 1 u------- .___ A C I E G J _.- I B D F J H K 246 1 1 0' 2.5' 5' 10, 1 15 1 1 1 1 1 F H H K PLAN TRUE NORTH NORTH BOKAPowell LEVEL 7-AREA H 04/09/2020 CP207H Q 0 x — —=------= ----- - ------- 6. 1 1 1 0: 1 a> 1 1 i 1 _ 140 _ Zil 1 Aso iti 1 1 1 1 p, — 1 1 M f 1 03 V IES' •45 35 V 1 v 1 1 1 1 1 1 1 L] 1 I oo� 1 ,, 1 1 1 �F 6r =f�- - Or_1 a _ I r 1 m I m 1 r m Aom Am o N min m iAm�n m N n x c omn'zo < z 7 0 r m<om0 J s n r GO m <Z ��zn0 m r y Z mw r 3 o 0 2 rm xo"z< < m 2m J� ON=Om z OA p ro mn O N AC A mnopzr Z r m � < o z ti - N m 0 ..............................CD —�-- oa 6s 1 _ 1 1 o- 1 os 1 1 I 1 1 �5 1 1 t 1 6 — - 49e 1 ~05'.1,09 is 1 1 1 �> 1 0.5 1 1 1 O6' I Vo0 _231, m 1 es 1 1 1 Q 1 1 770 1 I r 1 m 1 r 1 V 1 A m i �_ c�rmrm � { ooL�< m oN L, mn ` f- �mymo z o ��o N Zm on mpyomo M > ym O >,< m zrm m� �z>~m M o + rm 2020z 2olmo� < 3 m Op mm O m N AC .l1 r0>�ym Z O ATTACHMENT 6 INSURANCE REQUIREMENTS Commencing upon Recordation of this Master Declaration, the Insurance Trustee and Owners, as applicable, shall obtain and maintain insurance coverage as required by this Attachment 6, or the equivalent thereof if such insurance is provided through the Texas Municipal League's Intergovernmental Risk Pool. TYPE WHO MUST CARRY MINIMUM AMOUNT OTHER REQUIREMENTS 1. Commercial Insurance 1. Commercial General Liability 1. The Master Association shall General Trustee insurance against claims for be named as an additional Liability and personal injury, bodily injury, named insured, and Ground Excess/Umbrell death or property damage Lessor, each Owner and each a Liability occurring upon, in or about the Owner's Mortgagee shall be Insurance Property, with such insurance, additional insureds. (A) Being written on an 2. Upon the written request of "occurrence" form; an Owner, a tenant of an Owner (B) with limits of liability of will be named as an additional $500,000 each accident or insured. occurrence and $1,000,000 3. The insurance shall provide, general aggregate policy limit, without limitation, coverage for and premises-operations, explosion, (C) providing coverage for at collapse, and underground least the following hazards, as hazards, products-completed contained in the CG00-01 operations, blanket contractual Commercial General Liability liability insurance, broad form form or a similar form: (1) property damage, bodily injury premises and operations, (2) (employee exclusion deleted), products and completed independent contractors and operations, (3) independent cross-liability coverage. contractors, and (4) blanket contractual liability; 2. Automobile Liability insurance covering operations of all owned, hired and non-owned vehicles with limits of liability for each accident of not less than Five Hundred Thousand Dollars ($500,000) combined single limit with respect to bodily injury, DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 6,Insurance Requirements 4825-8979-8840v.5 633254 TYPE WHO MUST MINIMUM AMOUNT OTHER REQUIREMENTS CARRY death and property damage, if applicable; 3. If applicable, Garage Keepers Liability insurance in the amount of $1,000,000 each accident or occurrence and $2,000,000 general aggregate, and inclusive of Bailee's coverage; 4. If applicable, Liquor Liability insurance in the amount of $1,000,000 each accident or occurrence and $2,000,000 general aggregate; 5. Excess/Umbrella Liability insurance in an amount not less than $50,000,000 per occurrence and $50,000,000 general aggregate policy limit in excess of the primary limits required under clauses 1, 2, 3 and 4 in clause above. This policy shall be excess of primary policies and shall not be more restrictive than the primary policies; and 6. Workers' compensation, subject to the statutory limits and employer's liability insurance with limits of liability of $100,000 bodily injury each accident, $500,000 bodily injury by disease policy limit and $100,000 bodily injury by disease each employee. All insurance maintained pursuant to clauses 1 through 6 shall contain waivers of subrogation and the Board and the Owners each hereby waive and agree that they shall make DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 6,Insurance Requirements 4825-8979-8840v.5 63325-4 TYPE WHO MUST MINIMUM AMOUNT OTHER REQUIREMENTS CARRY no claim for recovery against each other for damages to or loss of the Common Elements and/or any Unit, or any improvements and betterments thereon or therein, and injury or damage arising out of operations if such damage injury or loss is covered by valid and collectible insurance protecting the Board and the Owners and which contains a clause permitting the insured to waive such rights prior to the occurrence of a loss. 2. All-Risk Insurance 1. "All Risk" Property insurance 1. Ground Lessor, each Owner Property Trustee on the Units and the fixtures and each Owner's Mortgagee Insurance initially installed therein by the shall be additional insureds. original builder (hereinafter 2. The amount of coverage shall referred to as "the Property") be reviewed at least annually (A) including, without and modified, as necessary, such limitation, fire, flood, that the amount is at all times windstorm, sprinkler leakage 100% of replacement cost. and water damage: 3. Upon the written request of (B) in an amount equal to one an Owner, a tenant of an Owner hundred percent (100%) of the will be named as an additional "Full Replacement Cost," of the insured. The incremental Property which for purposes of premium increase, if any, for this Master Declaration shall such supplemental insurance mean actual replacement value coverage will be specifically (exclusive of costs of assessed to the Owner of the excavations, foundations, Unit that requested that the underground utilities and tenant be named as an footings) with a waiver of additional insured. depreciation; 4. The Insurance Trustee shall (C) containing an agreed amount satisfy any and all co-insurance endorsement or provision with requirements. respect to the Property and waiving all co-insurance provisions; DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 6,Insurance Requirements 4825-8979-8840v.5 63325-4 TYPE WHO MUST MINIMUM AMOUNT OTHER REQUIREMENTS CARRY (D) providing for no deductible in excess of $250,000 for such insurance coverage other than catastrophic exposures; (E) providing coverage for contingent liability from Operation of Building Laws, Demolition Costs and Increased Cost of Construction Endorsements and containing an "Ordinance or Law Coverage" or "Enforcement" endorsement applicable if the Property or the use of the Property shall at any time constitute legal non- confirming structures or uses; (F) if the Property or any portion of it is currently, or at any time in the future, located in a "special flood hazard area" designated by the Federal Emergency Management Agency, flood hazard insurance in an amount equal to the maximum amount of such insurance available under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as each may be amended; and (G) earthquake insurance in an amount deemed appropriate in the event the Property is located in an area with a high degree of seismic risk. Insurance maintained pursuant to clauses (F) and (G) above shall be on terms consistent with the DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 6,Insurance Requirements 4825-8979-8840v.5 63325-4 TYPE WHO MUST MINIMUM AMOUNT OTHER REOUIREMENTS CARRY "all risk" property insurance policy required under this clause (i); 2. Boiler and Machinery insurance, if applicable, on terms consistent with the "all risk" property insurance required under clause 1 above; 3. Loss of Rents insurance or Business Interruption insurance (including extra expense), as applicable, (A) covering all risks required to be covered by the insurance required to be maintained in clause 1 above; (B) which provides that after physical loss to the Property occurs, the loss of rents or income, as applicable, will be insured until completion of restoration, notwithstanding that the policy may expire prior to the end of such period; and (C) which contains an extended period of indemnity endorsement which provides that after the physical loss to the Property has been repaired, the continued loss of income will be insured until such income either returns to the same level it was at prior to the loss, or the expiration of twelve (12) months from the date of the repairs or replacement, whichever occurs first, and notwithstanding that the policy may expire prior to the end of such period. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 6, Insurance Requirements 4825-8979-8840v.5 63325-4 TYPE WHO MUST MINIMUM AMOUNT OTHER REQUIREMENTS CARRY 3. Directors Insurance Directors and Officers Liability The Directors and Officers and Officers Trustee, as insurance with limits of liability liability shall cover the directors Liability agent for the of $5,000,000 or such higher and officers of the Master Master limits as the Board may from Association. Association time to time deem reasonable and proper. 4.Fidelity Insurance Fidelity bond or crime insurance The Fidelity or crime insurance Bond or Crime Trustee, as with limits of liability of shall cover the person(s) Insurance agent for the $1,000,000 or such higher limits responsible for handling the Master as the Board may from time to Master Association Funds. Association time deem reasonable and proper covering any person handling or responsible for Master Association Funds. 5. Pollution Insurance Pollution legal liability insurance The Master Association shall be and Trustee including clean-up costs with a named as an additional named Remediation limit of not less than $2,000,000 insured, and Ground Lessor, Legal Liability per claim and in the aggregate. each Owner and each Owner's Mortgagee shall be additional insureds. 6. Commercial Each Owner 1. Commercial General Liability General insurance against claims for Liability and personal injury, bodily injury, Excess/Umbrell death or property damage a Liability occurring upon, in or about the Insurance Owner's Unit, with such insurance, (A) Being written on an "occurrence" form; (B) with limits of liability of $500,000 each accident or occurrence and $1,000,000 general aggregate policy limit; and (C) providing coverage for at least the following hazards, as contained in the CG00-01 Commercial General Liability form or a similar form: (1) DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 6,Insurance Requirements 4825-8979-8840v.5 63325-4 TYPE WHO MUST MINIMUM AMOUNT OTHER REQUIREMENTS CARRY premises and operations, (2) products and completed operations, (3) independent contractors, and (4) blanket contractual liability; 2. Automobile Liability insurance covering operations of all owned, hired and non-owned vehicles with limits of liability for each accident of not less than One Million Dollars ($1,000,000) combined single limit with respect to bodily injury, death and property damage, if applicable; 3. If applicable, Garage Keepers Liability insurance in the amount of $1,000,000 each accident or occurrence and $2,000,000 general aggregate, and inclusive of Bailee's coverage; 4. If applicable, Liquor Liability insurance in the amount of $1,000,000 each accident or occurrence and $2,000,000 general aggregate; 5. Excess/Umbrella Liability insurance in an amount not less than $50,000,000 per occurrence and $50,000,000 general aggregate policy limit in excess of the primary limits required under clauses 1, 2, 3 and 4 in clause above. This policy shall be excess of primary policies and shall not be more restrictive than the primary policies; and 6. If applicable, Workers' compensation, subject to the DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 6,Insurance Requirements 4825-8979-8840v.5 63325-4 TYPE WHO MUST MINIMUM AMOUNT OTHER REQUIREMENTS CARRY statutory limits and employer's liability insurance with limits of liability of$100,000 bodily injury each accident, $500,000 bodily injury by disease policy limit and $100,000 bodily injury by disease each employee. All insurance maintained pursuant to clauses 1 through 6 shall contain waivers of subrogation and the Board and the Master Association each hereby waive and agree that they shall make no claim for recovery against each other for damages to or loss of the improvements and betterments thereon or therein, and injury or damage arising out of operations if such damage injury or loss is covered by valid and collectible insurance protecting the Board and the Master Association and which contains a clause permitting the insured to waive such rights prior to the occurrence of a loss. 7. Special Each Owner 1. "All Risk" Property insurance The insuring Owner shall satisfy Form Property on any improvements and any and all co-insurance Insurance betterments thereon or therein requirements. the Unit. (A) including, without limitation, fire, flood, windstorm, sprinkler leakage and water damage: (B) in an amount equal to one hundred percent (100%) of the "Full Replacement Cost," of the improvements and betterments DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 6,Insurance Requirements 4825-8979-8840v.5 63325-4 TYPE WHO MUST MINIMUM AMOUNT OTHER REQUIREMENTS CARRY thereon or therein the Unit, which for purposes of this Master Declaration shall mean actual replacement value with a waiver of depreciation; (C) providing for no deductible in excess of $250,000 for such insurance coverage other than catastrophic exposures; 2. Boiler and Machinery insurance, if applicable, on terms consistent with the "all risk" property insurance required under clause 1 above; 3. Loss of Rents insurance or Business Interruption insurance (including extra expense), as applicable, (A) covering all risks required to be covered by the insurance required to be maintained in clause 1 above; (B) which provides that after physical loss to the Property and any improvements or betterments thereon or therein the Unit occurs, the loss of rents or income, as applicable, will be insured until completion of restoration, notwithstanding that the policy may expire prior to the end of such period; and (C) which contains an extended period of indemnity endorsement which provides that after the physical loss to the Property and any improvements and betterments thereon or therein the Unit has been repaired, the continued loss of DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM-Attachment 6,Insurance Requirements 4825-8979-8840v.5 63325-4 TYPE WHO MUST MINIMUM AMOUNT OTHER REQUIREMENTS CARRY income will be insured until such income either returns to the same level it was at prior to the loss, or the expiration of twelve (12) months from the date of the repairs or replacement, whichever occurs first, and notwithstanding that the policy may expire prior to the end of such period. DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER MASTER CONDOMINIUM—Attachment 6,Insurance Requirements 4825-8979-8840v.5 63325-4 ATTACHMENT 7 GROUND LEASE OBLIGATION ALLOCATION CHART Ground Lease Reference City Facilities Unit Hotel Unit a Must comply Must comply Section 5.01 ("Taxes"). Each Owner shall with Section 5.01 with Section pay taxes on such Owner's Master Unit of the Ground 5.01 of the in accordance with Section 5.01 of the Lease as it Ground Lease Ground Lease. pertains to City as it pertains Facilities Unit to Hotel Unit Must comply Must comply Section 5.02 ("Utilities"). Each Owner with Section 5.02 with Section shall contract and pay for all utilities on of the Ground 5.02 of the such Owner's Master Unit in accordance Lease as it Ground Lease with Section 5.02 of the Ground Lease. pertains to City as it pertains Facilities Unit to Hotel Unit Must comply Must comply Section 5.03 ("Maintenance"). Each with Section 5.03 with Section Owner shall maintain Improvements on of the Ground 5.03 of the such Owner's Master Unit in accordance Lease as it Ground Lease with Section 5.03 of the Ground Lease. pertains to City as it pertains Facilities Unit to Hotel Unit Must comply Must comply Section 5.04 ("Applicable Laws"). Each with Section 5.04 with Section Owner shall comply with all Applicable Laws on such Owner's Master Unit in of the Ground 5.04 of the accordance with Section 5.04 of the Lease as it Ground Lease Ground Lease. pertains to City as it pertains Facilities Unit to Hotel Unit DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER—Attachment 7,Ground Lease Obligation Allocation Chart 4825-8979-8840v.5 Ground Lease Reference City Facilities Unit Hotel Unit Must comply Must comply Section 5.05 ("Operation"). Each Owner with Section 5.05 with Section shall operate, manage and maintain such of the Ground 5.05 of the Owner's Master Unit in accordance with Lease as it Ground Lease Section 5.05 of the Ground Lease. pertains to City as it pertains Facilities Unit to Hotel Unit DECLARATION OF CONDOMINIUM REGIME FOR BAYTOWN HOTEL&CONVENTION CENTER—Attachment 7,Ground Lease Obligation Allocation Chart 4825-8979-8840v.5