15 - Grand Theater Management AgreementItem No. 15
TO: Mayor & Council
FROM: John Godwin, City Manager
SUBJECT: GRAND THEATER MANAGEMENT AGREEMENT
DATE: July 24, 2018
BACKGROUND: We have been working with a group for several years to develop a plan to get
the old Grand Theater facility rejuvenated and ultimately back in operation. For about a year we
have been specifically working on an agreement between the Paris Grand Theater Project, Inc.,
which has organized as a 501(c)(3) not-for-profit corporation, and the city. The theater is a
potential gem for our downtown; reopened for theatrical performances, meetings, movies, etc. it
will become a huge draw and have a tremendous impact on development of the entire area.
STATUS OF ISSUE: Although much more detailed, the agreement is somewhat similar to that
which we have in place with the chamber of commerce for operation of the Love Civic Center in
that although the city retains ownership, the organization takes over the facility's operations and
maintenance as if it were theirs, though of course in this case the city provides no funding. The
agreement specifies the duties, rights, and authority to improve and repair the theater, as well as
operate it as the organization sees fit. The city retains the right to approve restoration plans,
enforce all relevant codes, and use the facility from time to time at no charge. There are
reasonable insurance requirements, a plan to develop a capital maintenance reserve, and other
common sections in the final negotiated agreement. In order to provide the organization
sufficient time to fund -raise (donations, grants, endowments, etc.), organize, invest in and
complete work, and maintain on-going operations, the initial agreement term is for thirty years,
with two ten-year extensions available at their option.
Julia Trigg -Crawford will be present at the council meeting in support of the agreement and to
make a brief presentation on behalf of the theater group.
BUDGET: NA
RECOMMENDATION: Approve attached agreement.
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GRAND THEATER MANAGEMENT LEASE AGREEMENT
This Grand Theater Management LEASE Agreement (hereinafter LEASE) shall be between the
City of Paris, Texas, a home rule municipal corporation of the State of Texas (hereinafter CITY), and
the Paris Grand Theater Project, Inc., a 501(c) (3) not-for-profit corporation (hereinafter PROJECT),
which in consideration of the mutual covenants, agreements, stipulations, and payments, do hereby
contract and agree as follows. CITY and PROJECT sometimes are referred to herein collectively as
the "Parties" or singularly as a "Parry."
RECITALS
WHEREAS the goal of the Paris Grand Theater Project is to advocate for, assist in, and lead the
refurbishment, promotion, and operation of the historic Grand Theater in Paris, Texas, bringing it back for
the enjoyment and economic, educational, and cultural benefit of citizens of the community and visitors to
the area; and
WHEREAS, the objectives of the Paris Grand Theater are: to identify, organize, and unify diverse groups
and individuals into one group focused on refurbishing and revitalizing the Grant Theater; the
establishment of a multi-level and multi-year fundraising program to acquire financial donations, gifts -in-
kind, endowments, grants, and other monetary resources; to design a venue that both pays homage to the
rich history of the Grand Theater, and creates opportunities for new activities and events; to promote the
Grand Theater to a wide variety of performers, acts, activities, organizations, and events; and leverage the
potential of the Grand Theater to better market the city of Paris, Texas; and
WHEREAS, the City of Paris is the owner of the Grand Theater, and CITY is in full support of the goals
and objectives of the Paris Grand Theater Project;
CITY hereby agrees to LEASE the Grand Theater to PROJECT, and PROJECT agrees to LEASE said
theater from CITY, on the terms and conditions set forth herein below.
AGREEMENT
NOW, THEREFORE, for the sum of $10 a year and in consideration of the recitals set forth above and
the mutual covenants and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are acknowledged and confessed by each of the parties hereto, the
parties hereto have agreed and, intending to be legally bound, do hereby agree as follows:
ARTICLE 1. Grant, Term of LEASE, and Certain Definitions
1.1. Leasing Clause. CITY does hereby LEASE, demise and let unto PROJECT, and PROJECT does
hereby take and LEASE from CITY, the Leased Premises, to have and to hold the Leased Premises,
together with all the rights, privileges, easements and appurtenances belonging to or in any way
pertaining to the Leased Premises, for the term and subject to the provisions hereinafter provided.
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1.2. Term. The term of this LEASE shall become effective upon its execution by both parties hereto.
Recognizing the need of PROJECT to invest and reinvest in the leased facilities, and to consider long-term
professional services agreements and programming for the promotion of the Theater, this Agreement shall
remain in full force and effect for a period of thirty (30) years, unless earlier terminated in accordance with
the provisions of this LEASE, or is extended as provided herein below.
1.3. Definitions. The following terms shall have the meaning set forth.
Mageure. Any unforeseeable causes beyond a Party's control and without such Party's fault or
negligence, including, but not limited to, acts of God, acts of the public enemy, acts of the federal
Government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, lockouts,
freight embargoes, and unusually severe weather or unforeseen environmental or archaeological
conditions requiring investigation/mitigation by federal, state or local laws.
Irppq„ itions. Taxes and assessments against the Leased Premises or PROJECT's interest therein that
accrue during and are applicable to the Term.
Imlgo,yements. All buildings, structures, equipment, improvements, fixtures and related infrastructure
from time to time connected, installed, or situated on the Leased Premises, including landscaping.
Lease -Year. Each successive 12 -month period during the term from and including the Operational Date.
Leased Premises. The Grand Theater, Improvements and Related Infrastructure, together with all other
rights, privileges, easements and appurtenances benefiting, belonging to or in any way appertaining
thereto, including, without limitation: (a) any and all rights, privileges, easements and appurtenances of
CITY as the owner of fee simple title to the Land now or hereafter existing, (b) subsurface rights
below the surface of the Land, (c) reversions which may hereafter accrue to CITY as owner of title to
the land by reason of the closing of any adjacent street, sidewalk or alley or the abandonment of any
rights by any governmental authority, (d) and any and all strips and gores relating to the land.
Related _Infrastructure. Any motor vehicle parking areas, road, street, water or sewer facility, plaza,
pedestrian circulation area or other on-site or off-site improvement that relates to and enhances the
use, value, or appeal of the Theater, including, without limitation, areas adjacent to the Theater and
any items reasonably necessary to reconstruct, improve, renovate or expand the Theater, excluding
environmental remediation.
ARTICLE 2. Impositions and Utilities
2.1. Payment ofImpositions. Except as provided elsewhere in this Article, PROJECT shall pay all
Impositions, if any, before the same become delinquent, and PROJECT, at the request of CITY, shall
furnish to CITY receipts or copies thereof showing payment of such Impositions. PROJECT shall be
entitled to pay any Impositions in installments as and to the extent the same may be permitted by the
applicable taxing authority or claimant. CITY agrees to cooperate with PROJECT in seeking the
delivery of all notices of Impositions to PROJECT directly from the applicable taxing authorities. CITY
shall promptly deliver all notices of Impositions to PROJECT which are delivered to CITY. In no event
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shall PROJECT be in default under this LEASE for failure to pay any Impositions before the same
become delinquent for which the notice of such Impositions shall have been delivered to CITY and not
forwarded or delivered to PROJECT at least thirty (30) days before the date the same become delinquent.
2.2. Contest ofImpositions. If the levy of any Imposition shall be deemed by PROJECT to be
improper, illegal, or excessive, or if PROJECT desires in good faith to contest an Imposition for any
other reason, PROJECT may, at PROJECT's sole cost and expense, dispute and contest the same and
file all such protests or other instruments and institute or prosecute all such proceedings for the purpose
of contest as PROJECT shall deem necessary and appropriate. CITY will cooperate with PROJECT
regarding such protests. Subject to the foregoing, any item of contested Imposition need not be paid until
it is finally adjudged to be valid, unless otherwise required by law. PROJECT shall be entitled to any
refund of any Imposition (and the penalties or interest thereon) refunded by the levying authority
pursuant to any such proceeding or contest, if such Imposition shall have been either (a) paid directly
by PROJECT, or (b) shall have been paid directly by CITY and CITY was reimbursed therefor by
PROJECT.
2.3. Standing. If PROJECT determines it lacks standing to contest any Impositions imposed by a
governmental authority other than CITY, or to obtain an extended payment period for any such non -
CITY Impositions, CITY (to the maximum extent allowed by law) and at PROJECT's expense shall
join in such contest or otherwise provide PROJECT with sufficient authority to obtain such standing.
2.4. Utilities. PROJECT shall pay all bills for utility, telecommunications, internet service, and any and
all other utilities provided to the Theater.
ARTICLE 3. Improvements
3.1. Funding. PROJECT shall use best efforts to actively raise funds for the purpose of completing all
repair and restoration work necessary to open and operate the Grand Theater. CITY shall support and
cooperate in all such efforts to raise and otherwise secure funding for restoration, maintenance, and
operations of the theater, including assisting with and supporting the acquisition of local Hotel Occupancy
Tax revenues, grant funds, and other sources where applicable and available.
3.2. Reconstruction/restoration.
a) PROJECT shall undertake all reasonable measures to perform all work required to return the
Grand Theater to its historically accurate look and function.
b) CITY shall have the right to review and approve all plans for design and recon-
struction/restoration work by PROJECT prior to commencement of said work.
c) PROJECT shall comply with all state statutes and city ordinances pertaining to the
construction, maintenance, use, and operation of leased facilities, including any required
interior sprinklering of the facility as required by fire or other building codes and the
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acquisition and compliance with all permits. CITY shall waive all permit fees associated with
all aspects of reconstruction and restoration of the theater.
d) PROJECT shall fully comply with any and all statutes pertaining to asbestos or other
hazardous materials or substances as may be required by state or federal regulations.
e) PROJECT shall comply fully with all city signage ordinance requirements.
f) CITY shall assist where feasible with utilities construction that may be required for
reconstruction and restoration of the Grand Theater.
g) PROJECT shall have the right, at its option and sole expense (subject only to the
express restrictions set forth in this LEASE) to develop, alter, add to, reconstruct,
reconfigure, or remodel any and all portions of the Leased Premises and to enhance
improvements at the theater for any lawful purposes, as long as such development does not
materially interfere with the development or use of the theater for its intended purpose.
3.3.Oeration and maintenance.
a) PROJECT shall use best efforts to operate, support, fund, staff, and otherwise maintain an
active theater industry within the City of Paris consistent with the highest practicable
standards.
b) PROJECT shall have sole responsibility for all costs associated with the maintenance,
upkeep, operation, and repair of the Grand Theater of the Leased Premises, including all
capital expenditures necessary to maintain the facilities in a fully functional, safe, and
aesthetically pleasing condition throughout the term of LEASE.
c) PROJECT shall use best efforts to open, manage, operate, and maintain theater facility in a
manner that shall serve to broaden the appreciation of the theater to persons both inside and
outside of Paris, and also to support an appreciation of the arts in general.
d) PROJECT shall endeavor to position the theater as a vital part of downtown Paris and its
future revitalization and economic development, fully integrated into its surroundings and
downtown activities and events.
e) PROJECT may, at its discretion, contract with qualified third parties to provide high
quality promotion of the theater, its activities, downtown Paris, and local tourism.
f) PROJECT may permit the use and/or sale of alcoholic beverages if all state and local
permitting requirements are satisfied.
g) PROJECT shall make reasonable business efforts to promote public access to and use by as
wide a variety of persons as practicable, regardless of income.
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h) PROJECT shall make every reasonable effort and accommodation to ensure accessibility to
the theater by persons with disabilities.
i) The board of directors of PROJECT shall meet with CITY at least annually to discuss
maintenance and upkeep of the Theater and to make decisions about necessary repairs and/or
improvements.
3.4. Furnishings. All furniture, movable trade fixtures and equipment installed by PROJECT, and not
owned by or otherwise the property of CITY, may be removed by PROJECT at the expiration or
earlier termination of this LEASE if PROJECT so elects, and provided that PROJECT repairs any
damages caused to the Grand Theater by the removal of any trade fixtures and equipment, and shall be
so removed if required by CITY, or if not so removed shall, at the option of CITY, become the
property of CITY.
ARTICLE 4. Use of Premises
4.1. Use. PROJECT shall at all times use and operate the Grand Theater during the Term for the
operation of a performing arts, theater, meeting, and exhibit center, and for other events and activities
designed to attract tourists and other visitors and for the benefit of the CITY, downtown Paris, and
the general public.
4.2. CO Dliance. with Laws. PROJECT agrees not to knowingly use the Leased Premises for any use
or purpose in violation of any valid and applicable law, regulation or ordinance of the United States,
the State of Texas, the City or other lawful governmental authority having jurisdiction over the
Leased Premises.
4.3. Maintenance.
(a) PROJECT shall keep all improvements that from time to time may be erected or placed
on the premises in a state of good repair on a regular and ongoing basis consistent with the
standards of maintenance and repair of comparable facilities, reasonable wear and tear,
obsolescence, acts of God and loss by casualty (except to the extent PROJECT is
required under this LEASE to repair casualty damage) excepted. Upon termination of
this LEASE, PROJECT shall deliver up the Leased Premises then situated thereon in
good condition, reasonable wear and tear, obsolescence, acts of God and loss by casualty
(except to the extent PROJECT is required under this LEASE to repair casualty damage)
excepted.
(b) With regard to casualty damage to the Theater, PROJECT shall, as soon as reasonably
practicable but in no event later than 180 days after the date of a casualty, commence
the work of repair, reconstruction, and/or replacement of the damaged improvement.
Notwithstanding the foregoing sentence, if the casualty occurs after the eighteenth (20th)
LEASE Year and the extent of damage to the Leased Premises is greater than thirty
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percent (30%) of the then replacement value thereof (exclusive of the value of the land)
PROJECT shall have the option, within one hundred eighty (180) days from the date of the
occurrence of such casualty damage, to terminate this LEASE by giving written notice of
such termination to CITY within said 180 -day period, in which event: this LEASE shall
terminate as of the termination date specified in such notice to CITY, which shall not be
less than thirty (30) days after the date of such notice; PROJECT shall not be required to
repair the damage; all insurance proceeds available as a result of such damage shall be
paid to and be the property of CITY; and the Parties shall have no further liability or
obligations one to the other except as may be expressly provided for herein.
4.4,. 0:erat tional Rig➢„its, Revenue.
(a) PROJECT shall receive all revenues generated from and associated with the Grand
Theater for the duration of the LEASE.
(b) Subject to the terms and provisions of this LEASE, PROJECT shall have full and
exclusive control of the management and operation of the Grand Theater, including all
booking and catering rights. During the term of this LEASE, PROJECT shall have the
sole right to grant and enter into licenses, rights, subleases, management agreements,
operating agreements and any and all other agreements of any nature relating to the Leased
Premises or the name thereof on such terms as PROJECT deems appropriate, and PROJECT
shall own all revenues of any source generated by or from the Leased Premises or the
operation or management or the name thereof.
f
.5. CITY Use of T heater. Subject to availability, CITY shall have the right to reserve up to six (6)
months in advance the Theater's main performance hall and other smaller rooms. CITY shall be
allowed to use the performance hall one time per calendar year and small meeting rooms up to six
times per calendar year without paying any room rental fees; provided, however, CITY shall reimburse
PROJECT for any damages, and shall make every reasonable effort to use facilities on weekdays instead
of weekend days.
ARTICLE 5. Capital Maintenance and Reserves
5.1. Capital,, Mante,,,nance. PROJECT shall be responsible for the capital maintenance of all
improvements, including all capital equipment maintenance and replacement.
5.2. Capital MamtenancewReserye. Beginning on the third anniversary of the opening of the theater to
regular use, and to the extent there are net revenues remaining from the theater's operations and all other
funding following payment of operating costs and any annual debt service for the Grand Theater,
PROJECT shall establish with CITY a capital maintenance reserve account. PROJECT shall deposit no
less frequently than annually, an amount equal to $25,000 in Year 3, $30,000 in Year 4, $35,000 in Year 5,
$40,000 in Year 6, $45,000 in Year 7, and $50,000 in Year 8 and each year thereafter.
PROJECT'.s...Rght,,,,to....Reimbursement. PROJECT shall have the right, upon submission of a written
request accompanied by such supporting documentation as CITY may require, to reimbursement from
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funds held in the Capital Reserve Account for monies spent by PROJECT for capital maintenance and
improvement items approved by CITY and related to the Grand Theater during the term of this
Agreement, which approval shall not be unreasonably withheld.
ARTICLE 6. Insurance and Indemnity
6.1. Liabilitw Insurance. PROJECT agrees, at its sole expense, to obtain and maintain public liability
insurance at all times during the Term hereof with reputable insurance companies authorized to transact
business in the State of Texas for bodily injury (including death) and property damage with minimum
limits of $5,000,000 Combined Single Limit protecting CITY and PROJECT against any liability,
damage, claim or demand arising out of or connected with the condition or use of the Leased Premises.
Such insurance shall include contractual liability, personal injury and advertising liability, business
automobile (including owned, non -owned and hired) and independent contractor liability. Such
insurance coverage must be written on an "occurrence" basis. It may be maintained by any combination
of single policies and/or umbrella or blanket policies. CITY and its elected and appointed officials, and
employees shall be named as additional insured, as their interests appear, on all insurance policies
required by this Section.
6.2. Workers' Compensation Insurance. PROJECT agrees, at its sole expense, to obtain and maintain
workers' compensation insurance, as required by applicable law, during the Term. The policy will be
endorsed to provide a waiver of subrogation as to CITY.
6.3. Property Insuran,,c„e. At all times during the Term of this LEASE, PROJECT shall, at its sole expense,
keep all buildings and structures included in the Leased Premises insured against "all risk" of loss for
full replacement cost coverage, to include direct loss by fire, windstorm, hail, explosion, riot, civil
commotion, aircraft, vehicles, smoke, boiler and machinery, and flood. Coverage must be written by
reputable insurance companies authorized to transact business in the State of Texas. CITY shall be
named as an additional insured or additional loss payee, as appropriate.
6.4. Policies. All insurance policies required by this Article shall provide for at least thirty (30) days
written notice to CITY before cancellation and certificates or copies of policies of insurance shall be
delivered to CITY. If any blanket general insurance policy of PROJECT complies with the terms of
this Article, the naming of CITY therein as an additional insured shall be deemed compliance with
the requirements for the insurance coverage provided in any such blanket policy. PROJECT shall
provide copies of each of the policies required herein to the City no later than the 15'h day after said
policies are issued.
6.5. Adjustment of Losses. Any loss under any such insurance policy required under this Article
shall be made payable to PROJECT for the benefit of PROJECT and CITY, to the end that
PROJECT shall be entitled to collect all money due under such policies payable in the event of and
by reason of the loss of or damage to the theater Premises, to be applied as described below. Any
accumulation of interest on the insurance proceeds collected by PROJECT shall be added to, and
become a part of, the fund being held by PROJECT for the benefit of CITY and PROJECT. The
adjustment of losses with the insurer shall be made by PROJECT.
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_ of Proceeds Prort�r,Insurance. All proceeds payable pursuant to the provision
6.6. A kation
of any policies of property insurance required to be carried under the terms of this LEASE (net of
reasonable expenses of collection) shall be applied for the following purposes:
(a) All such net proceeds shall first be used, subject to any other terms and conditions
contained in this LEASE, as a fund for the rebuilding, restoration, and repair of the
portion of the Leased Premises which become destroyed or damaged and for which such
proceeds are payable; and
(b) Following completion of all work under subsection (a) above, any proceeds not disbursed
pursuant to subsection (a) above shall be applied to or as directed by CITY in its sole
discretion.
6.7 Indemnification. PROJECT does hereby agree to release, indemnify, and hold CITY and its
officers and employees harmless from and against any and all demands, debts, liabilities, suits,
claims, and causes of action of every land and character whatsoever including but not limited to
demands, debts, liabilities, suits, claims and causes of action for damage or injury (including death)
to persons and/or property occurring on the Leased Premises and resulting from PROJECT'S
invitees, guests, agents, servants, or employees' presence upon, use, occupancy or enjoyment of the
theater and/or from PROJECT's business dealings, of whatsoever character, with third parties.
CITY shall not be liable to PROJECT invitees, guests, agents, servants, employees, or visitors due to
the improvements located thereon, or hereafter constructed, or any other condition of the Theater
facilities being improperly constructed, maintained, or being or becoming out of repair. PROJECT
hereby waives any defects on the theater facilities and agrees to hold and save City harmless from
all claims for any such damages or injuries. This indemnification by PROJECT includes, but is not
limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or
defending against any litigation commenced or threatened or any claim whatsoever, including, but
not limited to, attorneys' fees.
ARTICLE 7. Assignment and Subletting
7.1. Assignment. During the Term, PROJECT shall continuously own and operate the theater and
shall not sell, convey or assign any of the leasehold estate created hereby without the express written
consent of CITY; provided, however, PROJECT may, with the consent of CITY, assign or
transfer this LEASE, or any interest herein to a financially qualified third party subject to the
reasonable approval of City. Upon any such assignment, the assignee shall execute and deliver to
CITY a Written Assumption in a form and substance reasonably satisfactory to CITY, of all of the
obligations of PROJECT pertaining to the Grand Theater and accruing under this LEASE after such
assignment. Upon the CITY's acceptance of such assignment, the PROJECT shall be released from
all terms and conditions of this LEASE.
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7.2. Subletting. PROJECT shall have the right at any time, to sublease or otherwise assign the rights
of use to concessions, retail areas, restaurants and other portions, but not all, of the Leased Premises
incident to the full use and operation thereof as and on such terms PROJECT shall desire, provided
that nothing in any such sublease shall discharge PROJECT from any of the terms and condition of
this Lease Agreement. No Sub -lessee shall have any right to sublease or otherwise assign or encumber
its interest in the Leased Premises.
7.3. General Provisions. PROJECT shall, in connection with any assignment or sublease, provide
notice to CITY of the name and address of any assignee or Sub -lessee, together with a complete
copy of the assignment agreement or sublease.
ARTICLE 8. Default of PROJECT
8.1. Default and reedies. PROJECT shall be in default if any of the following events shall occur:
(a) any breach by PROJECT of any covenant of PROJECT under this Management LEASE and such
breach has not been cured within thirty (30) days from and after the date notice of such breach is
given by CITY to PROJECT; provided, however, no Event of Default shall exist if PROJECT shall
have commenced to remove or to cure such breach and shall be proceeding with reasonable diligence
to completely remove or cure such breach (provided such breach must be cured within 120 days after
such notice); (b) the making of any general assignment for the benefit of creditors by PROJECT; (c) the
filing of a voluntary petition in bankruptcy or a voluntary petition for an arrangement or reorganization
under the United States Federal Bankruptcy Act (or similar statute or law of any foreign jurisdiction) by
PROJECT; (d) the appointment of a receiver or trustee for all or substantially all of PROJECT's interest
in the theater Premises or its leasehold estate hereunder if not removed with 120 days; (e) the entry
of a final judgment, order or decree of a court of competent jurisdiction adjudicating PROJECT to be
bankrupt, and the expiration without appeal of the period, if any, allowed by applicable law in which to
appeal therefrom; or (f) the loss of forfeiture by PROJECT of its 501(c)(3) non-profit corporation status.
8.2. Remedies,,, available. Upon the occurrence and during the continuance of an Event of Default, CITY
shall have all remedies available at law or in equity, including, without limitation, termination,
injunction and specific performance.
8.3. Waiver. All remedies of CITY under this LEASE shall be cumulative, and the failure to assert any
remedy or the granting of any waiver by City of any event of default by PROJECT of the terms, covenants,
conditions, or provisions of the LEASE shall not be deemed to be a waiver of any other breach of the same
or other term, covenant, condition, or provision of this LEASE terminated for any of the reasons set out
above and shall not bar the right of City to subsequently terminate this Management LEASE for any of the
reasons set out above.
8.4. Defeasance. Should PROJECT cease to exist, the theater facility, including all improvements made
by PROJECT, shall revert back to control of CITY.
ARTICLE 9. Default of CITY
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9.1 Defaults and remedies. In the event of any breach by CITY of any covenant of CITY under this
remedies.
LEASE, PROJECT shall have the right to deliver to CITY a written notice specifying such breach
or non-payment, and unless within thirty (30) days from and after the date of delivery of such notice
CITY shall have commenced to remove or to cure such breach or occurrence and shall be proceeding with
reasonable diligence to completely remove or cure such breach or occurrence (provided such breach or
occurrence must be cured within 120 days after such notice), then PROJECT shall have all remedies
available at law or in equity, including, without limitation, termination, injunction and specific
performance. All remedies of PROJECT under this LEASE shall be cumulative, and the failure to assert
any remedy or the granting of any waiver of any event of default shall not be deemed to be a waiver of
such remedy or any subsequent event of default.
ARTICLE 10. Condemnation
10.1. Definitions. Whenever used in this Article, the following words shall have the definitions and
meanings hereinafter set forth:
"Condemnation Proceeding": Any action brought for the purpose of any taking of the theater, or any
part thereof or of any property interest therein (including, without limitation, the right to the temporary
use of all or any portion of the theater), by competent authority as a result of the exercise of the power
of eminent domain, including a voluntary sale to such authority either under threat of condemnation
or while such action or proceeding is pending.
"Taking or Taken": The event and date of vesting of title to the theater or any part thereof or any property
interest therein (including, without limitation, the right to the temporary use of all or any portion of the
Leased Premises), pursuant to a Condemnation Proceeding.
10.2. Efforts to Prevent Taking. CITY shall use its best efforts to cause all other competent
authorities with the power of eminent domain to refrain from instituting any Condemnation Proceedings
or exercising any other powers of eminent domain with respect to the Leased Premises, or any part
thereof or any interest therein, during the Term of this LEASE.
10.3. Entire Taking. If all or substantially all of the Leased Premises shall be Taken in Condemnation
Proceedings, from and after the date of such Taking and PROJECT and CITY shall not have any
other obligations under this LEASE with respect to the Leased Premises, except for those obligations
which expressly survive the termination hereof.
10.4. Partial Taking.
If less than all of the theater shall be Taken in any Condemnation Proceeding, from and after
the date of such partial Taking PROJECT and CITY shall not have any other obligations
under this LEASE with respect to the portion of the theater that has been Taken, except for
those obligations which expressly survive the termination hereof.
1'a) If, following such Taking, PROJECT determines that the remaining leased area is
insufficient to operate a theater as intended by the Parties hereto, then PROJECT, at its
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election, may vacate the theater, and from and after such date PROJECT and CITY shall not
have any other obligations under this LEASE with respect to the Leased Premises, except for
those obligations which expressly survive the termination hereof. Such election to vacate
must be exercised no later than ninety (90) days after the date of such Taking.
(c) If PROJECT does not vacate the theater upon any partial Taking, then the Leased Premises
shall be reduced by the portion thereof taken in the Condemnation Proceedings, and
PROJECT shall commence and proceed to repair or reconstruct the remaining
Improvements on the theater, if any; provided, however, PROJECT's obligation to so repair
or reconstruct the remaining Improvements shall be limited to the proceeds of the
condemnation award actually awarded to and received by PROJECT.
10.5. Condemnation Award. Any condemnation award shall be divided between CITY and PROJECT
in accordance with the relative amounts expended by each Party for capital costs pertaining to the
Leased Premises. CITY shall deliver to PROJECT that portion of any condemnation award that CITY
may receive to which PROJECT is entitled as provided in this Section.
10.6. Settlement of,.ProceedinL,. CITY shall not make any settlement with the condemning authority in
any Condemnation Proceedings nor convey or agree to convey the whole or any portion of the
Leased Premises to such authority in lieu of condemnation without first obtaining the written consent of
PROJECT.
ARTICLE 11. Representations, Warranties and Special Covenants
11.1. CITY's ,Rel),resentations Warranties &Si:-2ecal Covenants. CITY hereby represents, warrants, and
covenants as follows:
(a) Existence. CITY is a home rule municipal corporation of the State of Texas duly
incorporated and currently existing pursuant to the constitution and laws of the State of
Texas, including the Texas Local Government Code and Texas Government Code.
b Authority. CITY has all requisite power and authority to own the Grand Theater, to execute,
deliver and perform its obligations under this LEASE and to consummate the transactions
herein contemplated and, by proper action in accordance with all applicable law, has duly
authorized the execution and delivery of this LEASE, the performance of its obligations under
this LEASE, and the consummation of the transactions herein contemplated.
(c) Binding Obligation. This LEASE is a valid and binding obligation of CITY and is
enforceable against CITY in accordance with its terms.
(d) Consents. No permission, approval or consent by third parties or any other
governmental authorities is required in order for CITY to enter into this LEASE, make the
agreements herein contained or perform the obligations of CITY hereunder other than
those which have been obtained.
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(e) Quiet Enjoyment. During the Term of this LEASE and subject to the terms of this LEASE,
PROJECT shall have the quiet enjoyment and peaceable possession of the Leased
Premises against hindrance or disturbance by CITY or any person or entity acting by, through
or under CITY.
(f) Proceedings. There are no actions, suits or proceedings pending or, to the reasonable best
knowledge of CITY, threatened or asserted against CITY affecting CITY or any portion of
the Leased Premises, at law or at equity or before or by any federal, state, municipal or
other governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign.
(g) hM� ositions. CITY has not received any notice of any condemnation actions, special
assignments or increases in the assessed valuation of taxes or any Impositions of any nature
which are pending or being contemplated with respect to the Leased Premises or any portion
thereof.
(h) Compliance with Laws. CITY has not received any notice of any violation of any ordinance,
regulation, law or statute of any governmental agency pertaining to the theater or any portion
thereof.
(i) Encumbrances. CITY has fee simple title to the Grand Theater, Improvements and Related
Infrastructure which are subject to no liens or security interests, and CITY has not placed or
granted any liens or security interests against the Leased Premises. There are no actions
pending, to the knowledge of CITY, which would result in the creation of any lien on any
portion of the Leased Premises, including, without limitation, water, sewage, street paving,
electrical or power improvements which give rise to any lien, completed or in progress.
CITY shall not grant any liens or security interest on all or any portion of the theater other
than encumbrances which will not affect PROJECT's use or enjoyment of the property.
0) Limitations. Except as otherwise expressly provided herein this LEASE is made by CITY
without representation or warranty of any kind, either express or implied, as to the condition
of the Grand Theater, its merchantability, its condition or its fitness for PROJECT's intended
use or for any particular purpose.
m ' .m.._ ..1 ........... ...... —..... _ .._ ... Covenants.
11. . PROJECT's s Re�rresentations Warranties andSecial Covenan,
(a) Existence. PROJECT is duly organized and validly existing under the laws of, and is
authorized to do business in, the State of Texas.
(b) PROJECT covenants and agrees it is an independent contractor and not an officer, agent,
servant or employee of CITY; that PROJECT shall have exclusive right and authority to
control services to be performed hereunder and all persons performing same, and shall be
responsible for the acts and omissions of its officers, agents, employees, contractors,
subcontractors, and consultants; and that nothing contained herein shall be construed as
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creating a partnership or joint enterprise between PROJECT and CITY for the purpose of this
Agreement and shall, in no manner, incur expense or liability on behalf of CITY.
(c) Authority. PROJECT has all requisite power and authority to own its property,
operate its business, enter into this LEASE and consummate the transactions herein
contemplated, and by proper action has duly authorized the execution and delivery of this
LEASE and the consummation of the transactions herein contemplated.
(d) Binding,_..Obligation. This LEASE is a valid and binding obligation of PROJECT and is
enforceable against PROJECT in accordance with its terms.
() Consents. No permission approval or consent by third parties or any other governmental
authorities is required in order for PROJECT to enter into this LEASE, make the
agreements herein contained, or perform the obligations of PROJECT hereunder other than
those which have been obtained.
(f) As -Is. Except as provided for above, PROJECT accepts the leasehold interest in the
theater granted by this LEASE on an "as -is" basis with all faults.
ARTICLE 12. Miscellaneous
12.1. Inspection. PROJECT shall permit CITY and its agents, upon no less than twenty- four (24)
hours prior written notice, to enter into and upon the Leased Premises during normal business hours
for the purpose of inspecting the same on the condition that PROJECT's and PROJECT's tenants'
and invitees' quiet enjoyment of the same is not interfered with; provided, however, that all customary
or required governmental function inspections shall not require consent or notice as provided in this
Article.
12.2. Estolhrel Certificates. PROJECT and CITY shall, at any time and from time to time upon not
less than ten (10) days' prior written request by the other Party, execute, acknowledge and deliver to
CITY or PROJECT, as the case may be, a statement in writing certifying (a) its ownership of the
interest of CITY or PROJECT hereunder, as the case may be, (b) that this LEASE is unmodified and
in full force and effect (or if there have been any modifications, that the same is in full force and
effect as modified and stating the modifications), and (c) that, to the best knowledge of CITY or
PROJECT, as the case may be, no default hereunder on the part of the other Party exists (except that
if any such default does exist, the certifying Party shall specify such default.)
12.3. Release. If requested by CITY, PROJECT shall, upon termination of this LEASE, execute and
deliver to CITY an appropriate release, in a form proper for recording, of all PROJECT's interest in the
theater, and upon request of PROJECT, CITY will execute and deliver a written cancellation and
termination of this LEASE and release of all claims (if none are then outstanding) in a proper form
for recording to the extent such release is appropriate under the provisions hereof.
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12.4. CITY's Ri hA _to Perform PROJECT's11111 — ,.Covenants. If PROJECT shall fail in the performance of
any of its covenants, obligations or agreements contained in this LEASE, and such failure shall
continue without PROJECT curing or commencing to cure such failure within all applicable grace and/or
notice and cure periods, CITY after ten (10) days additional written notice to PROJECT specifying such
failure (or shorter notice if imminent danger to the safety of persons or of substantial damage to
property exists) may (but without any obligation to do so) perform the same for the account and at the
expense of PROJECT, and the amount of any payment made or other reasonable expenses (including
reasonable attorneys' fees incurred by CITY for curing such default), with interest thereon at the rate
of twelve percent (12%) per annum or the highest rate then allowed by law, shall be payable by
PROJECT to CITY on demand, or, if not so paid, shall be treated at CITY's option as a monetary
default hereunder pursuant to and subject to all of provisions herein.
12.5. Notices.,. All notices, demands, payments and other communications required to be given or made
hereunder shall be in writing and shall be duly given if delivered by hand, messenger, telecopy or
reputable overnight courier or if mailed by certified or registered mail, first class postage prepaid, and
shall be effectively received upon the date of such delivery or two (2) days after such mailing, to the
respective parties hereto at the addresses set forth below, or to such other address furnished in writing to
the other party hereto.
If to PROJECT: President
Paris Grand Theater Project
P. O. Box 1934
35 South Plaza
Paris, TX 75461-1934
If to CITY: City Manager
City of Paris
P. O. Box 9037
Paris, TX 75461-9037
12.6. Su,c,pessors and AssigLs. Except as expressly provided herein, this LEASE may not be assigned
without the prior written consent of the other Party hereto. Subject to the foregoing, this LEASE shall
be binding upon and shall inure to the benefit of the parties and their permitted successors and assigns.
12.7. Amendment,, Except as expressly provided herein, neither this LEASE nor any term hereof may
be amended, modified, altered, waived, discharged or terminated, except by a written instrument dated
subsequent to the date of this LEASE, and duly executed by the parties to this LEASE.
12.8. Headings an, dwSubheadings. The headings of the articles, sections, paragraphs and subparagraphs of
this LEASE are for convenience or reference only and in no way define, limit, extend or describe the
scope of this LEASE or the intent of any provisions hereof.
12.9.
Unavoidable Default and Delays. After the date of execution of this LEASE, the time within
which any party to this LEASE shall be required to perform any act under this LEASE shall be extended
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by a period of time equal to the number of days during which performance of such act is delayed by
casualty, damage, strikes or lockouts, acts of God, governmental restrictions, failure or inability to
secure materials or labor, reason of priority or similar regulations or order of any governmental or
regulatory body, enemy action, civil disturbance, fire, unavoidable casualties or any other cause beyond
the reasonable control of the party seeking the extension. The provisions of this section shall not operate
to excuse either Party from prompt payment of any payments required by the terms of this LEASE.
12.10. ,Severability. In the event one or more of the terms or provisions contained in this LEASE shall, to
any extent or for any reason, be held by a court of competent jurisdiction to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other
provision of the Agreement, and this Agreement shall be construed as if the invalid, illegal, or
unenforceable provision had never been included in the Agreement.
12.11. ,Governing; Law. This LEASE shall be governed by, and construed and enforced in accordance
with the laws of the United States applicable thereto and the laws of the state of Texas applicable to a
LEASE executed, delivered, and performed in such state, without regard to any otherwise applicable
principles of conflicts of law.
12.12. Venue for Actions. The venue for any legal action arising out of this LEASE shall lie exclusively
in Lamar County, Texas.
12.13 Attornew s'Fees. Should either Party to this LEASE engage the services of attorneys or institute
legal proceedings to enforce its rights or remedies under this LEASE, the prevailing Party to such
dispute or proceedings shall be entitled to recover its reasonable attorneys' fees, court costs, and similar
costs incurred in connection with the resolution of such dispute or the institution, prosecution, or defense
in such proceedings from the other Party.
12.14. R, ationslur of„Parties. Nothing contained herein shall be deemed or construed by the Parties
hereto or by any third party as creating the relationship of principal and agent, partnership, joint
venture, or any association between the Parties hereto, it being understood and agreed that none of the
provisions contained herein or any acts of the Parties in the performance of their respective obligations
hereunder shall be deemed to create any relationship between the Parties hereto other than the
relationship of Lessor and Lessee. It is understood and agreed that this LEASE does not create a joint
enterprise, nor does it appoint either Party as an agent of the other for any purpose whatsoever. Neither
Party shall in any way assume any of the liability of the other for acts of the other or obligations of the
other. Each Party shall be responsible for any and all suits, demands, costs, or actions proximately
resulting from its own individual acts or omissions.
12.15. Le,ssor's._.,,,,,Lien . Waiver. CITY hereby waives all landlord's liens that CITY might hold,
statutory or otherwise, to any of PROJECT's (or any Sub -lessee's) inventory, trade fixtures, equipment
or other personal property now or hereafter placed on the Leased Premises.
12.16. Non„ -Waiver. No Party shall have or be deemed to have waived any default under this LEASE by
the other Party 'unless such waiver is embodied in a document signed by the waiving Party that
describes the default that is being waived. Further, no Party shall be deemed to have waived its rights to
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pursue any remedies under this LEASE, unless such waiver is embodied in a document signed by
such Party that describes any such remedy that is being waived.
12.17. Obluahons.,,,to_ Defend Validity of &seement. If litigation is filed by a third party against
PROJECT or CITY in an effort to enjoin either Party's performance of this LEASE, the Parties
hereto who are named as parties in such action shall use reasonable efforts to support and defend the
validity and enforceability of this LEASE. Either Party may intervene in any such matter in which the
other Party hereto has been named as a defendant. Each Party shall be responsible for its attorneys'
fees and costs of litigation except as set forth in the indemnification contained in Article 6 hereinabove.
12.18. Survival. Covenants in this LEASE providing for performance after termination of this LEASE
shall survive the termination of this LEASE.
12.19. Entire Agreement. This LEASE (including the Exhibits attached hereto and incorporated herein,
if any) and the other documents delivered pursuant to this LEASE or referenced herein constitute the full
and entire understanding and agreement between the Parties with regard to the subject matter hereof, and
supersedes any prior understandings or written or oral agreements between the parties respecting the
subject matter of this Agreement. However, this Agreement may be executed in duplicate originals, and
each shall be considered an original document.
12.20. Counterparts. This LEASE may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one and the same instrument.
Waiver of Consequential, Damages. Notwithstanding anything in this LEASE, to the contrary,
CITY hereby waives any consequential damages, compensation or claims for inconvenience, loss of
business, rents or profits as a result of any injury or damage, whether or not caused by the willful or
wrongful act of PROJECT or its representatives, agents or employees. Anything to the contrary in this
LEASE notwithstanding, PROJECT hereby waives any consequential damages, compensation or claims
for inconvenience, loss of business, rents or profits as a result of any injury or damage, whether or not
caused by the willful or wrongful act of CITY or its representatives, agents or employees.
12.22. Memorandum of LEASE ALreement. Upon either party's request, the other party shall execute
and allow such party to record in Lamar County, Texas a Memorandum of LEASE Agreement with
respect to this LEASE. In the event such a memorandum is recorded, the parties agree that upon a
termination of this LEASE, the parties shall execute and record a termination of such Memorandum of
LEASE Agreement.
ARTICLE 13. Extensions of the Term
13.1. Extensions. PROJECT, at its option, may extend the Term for two (2) successive ten-year periods
by delivering to CITY a written notice of extension not later than one hundred eighty (180) days prior
to the end of the Term or any then effective ten-year extension of the Term, as the case may be. During
any extension of the Term as provided above, the rights and obligations of CITY and PROJECT under this
LEASE shall continue throughout such extension period except that (i) the " Term" as used in this
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LEASE shall be extended to include such applicable extension period and (ii) the Base Rent charged
to PROJECT during such period shall be a total of $10 per year. To the extent permitted by state law, at
the end of the primary LEASE term and all its options, PROJECT will have the option to purchase
the theater at its then fair market value.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this LEASE as of the date and
year first set forth above written.
ATTEST:
By:
Janice Ellis, City Secretary
APPROVED AS TO FORM:
By: .........
Stephanie Harris, City Attorney
PARIS GRAND THEATER PROJECT, INC.
By:....�.�.�______.�______mm
President
STATE OF TEXAS
COUNTY OF LAMAR
CITY OF PARIS, TEXAS
By:
Dr. Steve J. Clifford, Mayor
This instrument was acknowledged before me on the day of
My Commission Expires:
17
Texas Notary Public
2018, by