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HomeMy WebLinkAboutContract 31734 CITY SECRETARY , CONTRACT NO. 1 ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Agreement") is entered into by and between the CITY OF FORT WORTH ("City"), a home rule municipal corporation organized under the laws of the State of Texas, and OMNI FORT WORTH PARTNERSHIP, L.P. ("Omni") as of the last date set forth on the signature page hereto. RECITALS The City and Omni hereby agree that the following statements are true and correct and constitute the basis upon which the City and Omni have entered into this Agreement: A. The City has created an Economic and Community Development Department in order to, among other things, oversee economic development programs authorized by Texas law and approved by the City Council, including those authorized by Chapter 380 of the Texas Local Government Code, to promote state and local economic development and to stimulate business and commercial activity in the City, as further outlined in Resolution No. 2704, adopted by the City Council on January 30, 2001. B. In accordance with the 2005 Comprehensive Plan adopted by the City Council pursuant to M&C G-14691 on February 22, 2005, the City's economic development programs are based on a model of custom-designed incentives and partnership programs with private businesses on a case-by-case analysis of individual projects to help ensure the growth and diversification of the local economy. C. The 2005 Comprehensive Plan recognizes that tourism, both for business and for pleasure, is a significant component of the City's economy and cites the importance of the Convention Center and surrounding hotels as critical elements in the City's efforts to promote tourism in the City. D. A study undertaken in 2002 on behalf of the City by HVS International (the "HVS Study")reveals that if the City is to be competitive amongst its peers, both in Texas and throughout the nation, in its ability to attract convention business to the Convention Center, the City needs to have a hotel with at least 600 first class guest rooms located adjacent to the Convention Center. E. Based on the recommendations of the HVS Study, on July 15, 2003 the City issued a request for proposals for development of a first-class, 600-room Convention Center headquarters hotel. Nine proposals were submitted to the City as of August 28, 2003. A review of those proposals and subsequent negotiations during the fall of 2003 and winter of 200314 led the City to select Omni as the developer of such Center headquarters hotel. w 11 �41[ �; �5QD0 i°ti1 Page 1 CITY Economic Development Program Agreement �� '" U:� between City of Fort Worth and Omni Fort Worth Partnership,L.P. F. Omni is willing to construct the Project, including the Hotel, on real property owned by the City and in accordance with the terms and conditions of this Agreement. This property is located within Tax Increment Reinvestment Zone Number Eight, City of Fort Worth, Texas (the "TIF") and is subject to development under the TIF's project plan, as defined by Section 311.011 of the Texas Tax Code, which has been approved by the City Council. G. Based on all information previously known or provided to the City Council, including, but not limited to, the HVS Study, the City Council believes that this Project will (i) bring additional convention business to and generate increased tourism in the City; (ii) provide increased employment opportunities to citizens of the City; (iii) cause new private development to occur in the vicinity of the Hotel Property; (iv) generate additional net tax revenues immediately from Residential Units that may be constructed on top of the Hotel and upon expiration of the economic development Program established herein from all improvements located on the Hotel Property. Therefore, The City Council hereby finds and determines that by entering into this Agreement, the potential economic benefits that will accrue to the City under the terms and conditions of the Program and this Agreement are consistent with the City's economic development objectives of the City, as set forth in, among other things, the 2005 Comprehensive Plan. H. Omni is considering the construction of Residential Units on top of the Hotel. These Residential Units will be created as separate legal parcels from the Hotel pursuant to a condominium regime and will be fully taxable by the City and will not be subject to or benefit from any of the grants, financial incentives or other benefits granted to Omni pursuant to this Agreement. I. In connection with the development and operation of the Project, Omni has filed or will file a Condominium Declaration in the real property records of Tarrant County, and Omni has formed or will form a Master Condominium Association whereby Omni will own separate condominium units representing ownership of the Hotel, the Hotel Garage and the Residential Units. The City has agreed to cooperate with Omni in any manner reasonably necessary to create this condominium regime and to file the Condominium Declaration in the real property records of Tarrant County. J. In connection with this Agreement, the City and Omni (or an affiliate of Omni) have entered into various agreements contemporaneously, including (i) the Tax Abatement Agreement; (ii) the Ground Lease; (iii) the Room Block Agreement; (iv) the Completion Guaranty; (v) a Contract for Exclusive Food, Beverage and Alcoholic Beverage Services at the Convention Center; and (vi) an Option Agreement to Enter into Retail Lease Agreement pertaining to the City Retail Space (collectively, the "Development Documents"). K. This Agreement is authorized by Chapter 380 of the Texas Local Government Code. Page 2 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: AGREEMENT 1. INCORPORTION OF RECITALS. The City Council hereby finds, and the City and Omni hereby agree, that the recitals set forth above are true and correct and form the basis upon which the City has entered into this Agreement. 2. DEFINITIONS. In addition to terms defined in the body of this Agreement, the following terms shall have the definitions ascribed to them as follows: Central City means the area of the corporate limits of the City within Loop 820 (i) consisting of all Community Development Block Grant ("CDBG") eligible census block groups; (ii) all Enterprise Zones; and (iii) all census block groups that are contiguous by seventy-five percent (75%) or more of their perimeter to CDBG eligible block groups or Enterprise Zones, as well as any CDBG-eligible block in the corporate limits of the. City outside Loop 820, as more specifically depicted in the map attached hereto as Exhibit "A", which is hereby made a part of this Agreement for all purposes. Central City Resident means an individual whose principal place of residence is located within the Central City. City Hotel Occupancy Tax Revenue means the amount of revenue from the hotel occupancy tax lawfully assessed and collected by the City pursuant to Chapter 351 of the Texas Tax Code and Chapter 32 of the City Code that is derived from or attributable to the Hotel and paid in a given year to the City. City Hotel Sales Tax Revenue means the amount of revenue from a municipal sales tax lawfully assessed and received by the City pursuant to Texas Tax Code §§ 321.101(a) and 321.103 that is derived from or attributable to sales transacted in the Hotel only, whether by Omni or another person or entity, for merchandise physically located in the Hotel and/or the Hotel Garage. City Hotel Sales Tax Revenue specifically excludes all revenue from (i) the Crime Control District Sales Tax imposed by the City pursuant to Texas Tax Code §323.105 and Local Government Code §363.005 and (ii) the Transit Authority Sales Tax paid to the City by the Fort Worth Transportation Authority Page 3 Economic Development Program Agreement o2 U between City of Fort Worth and Omni Fort Worth Partnership,L.P. ( A o �"° under City Secretary Contract No. 19689, as previously or subsequently amended or restated, from the sales tax imposed by the Fort Worth Transportation Authority pursuant to Texas Tax Code Chapter 322. City Retail Space means those portions of the ground floor of the parking garage owned by the City and located to the north of the Hotel Property which are dedicated for retail operations and leased by the City to Omni. City Sources Capped Amount means an amount equal to $37,000,000 that is attributable to (a) those portions of Program Grants calculated on the basis of City Hotel Occupancy Tax Revenue and City Hotel Sales Tax Revenue, plus (b) the value of abatements received by Omni pursuant to the Tax Abatement Agreement, but excluding (i) any sums payable by the City to Omni as a Lease-Based Grant, as defined in and in accordance with Section 6; (ii) any sums payable by the City to Omni as a Completion Grant, as defined in and in accordance with Section 7; (iii) any sums payable by the City to Omni as a Hotel Property Sale-Based Grant, as defined in and in accordance with Section 8; (iv) any sums payable by the City to Omni as a State Substitute Grant, as defined in and in accordance with Section 9, including any interest on the Guaranteed State Amount, as defined in and in accordance with Section 9.3; and (v) any interest on the unpaid Guaranteed City Amount, as defined in and in accordance with Sections 10.2 and 10.3. Completion Date means the date as of which both the entire Hotel and the Hotel Garage are Substantially Complete. Completion Deadline means 1,230 calendar days from the Effective Date of this Agreement, as may be extended by Force Majeure. Completion Guaranty means the guaranty from Omni's ultimate parent company, TRT Holdings, Inc. in the form attached hereto as Exhibit "B", which is hereby made a part of this Agreement for all purposes and pursuant to which TRT Holdings, Inc. guarantees, at no cost to the City, the timely completion and payment of costs associated with construction of the Project. Convention Center means the Fort Worth Convention Center located in the City at 1201 Houston Street. CPR Mediation Procedure means the mediation procedure promulgated by the CPR Institute for Dispute Resolution. Enterprise Zone means a zone designated as such pursuant to the Texas Enterprise Zone Act, Chapter 2303, Subchapter F of the Texas Government Code. Excluded Hotel Revenue means any City Hotel Occupancy Tax Revenue, City Hotel Sales Tax Revenue, State Hotel Occupancy Tax Revenue and/or State Hotel Sales Tax Revenue not used to calculate the amount of a Program Grant payable by the City to Omni under this Agreement, whether on account of a reduction in the amour 6T or a Page 4 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. Q, ; M FQ ' 4G1 suspension of any such Program Grant or on account of the City Sources Capped Amount being met. First Tier Flatz means one of the following brand names under which the Hotel is operating and marketing itself: Westin; Sheraton; Marriott; Hilton; Renaissance; Hyatt, Omni; or another first-class hotel brand name that has specifically been approved by the City Council of the City for purposes of this Agreement, which approval shall not be unreasonably withheld. Force Majeure means (i) with respect to Omni, an event beyond Omni's reasonable control, including, without limitation, acts of God, fires, strikes, national disasters, wars, riots, material or labor restrictions, delays caused by unforeseen structural issues, weather delays, injunctions or other legal proceedings brought by third parties, unreasonable delays by the City in issuing any permits, consents or certificates of occupancy or conducting any inspections of or with respect to the Hotel and/or the Hotel Garage, delays caused by the City's failure to complete "Lessor's Work" as provided for and defined in the Ground Lease, or delays caused by unforeseen construction or site issues, but shall not include construction delays caused due to purely financial matters involving Omni, such as, without limitation, delays in the obtaining of adequate financing, and (ii) with respect to the City, an event beyond the City's reasonable control, including, without limitation, acts of God, fires, strikes, national disasters, wars, riots, material or labor restrictions, or acts of third parties. Fort Worth Certified MAIVBE Company means a minority or woman-owned business that has received certification as either a minority business enterprise (MBE) or a woman business enterprise (WBE) by either the North Texas Regional Certification Agency (NTRCA) or the Texas Department of Transportation (TxDOT), Highway Division, and has a principal office located within the corporate limits of the City. Fort Worth Company means a business that has a principal office located within the corporate limits of the City. Fort Worth Resident means an individual whose principal place of residence is located within the corporate limits of the City. Full-time Equivalent Job means a job held by one (1) or more individuals employed by Omni (or its Hotel manager and any other sublessee or subcontractor operating within the Hotel and the Hotel Garage) with respect to the Hotel or the Hotel Garage for a period of forty(40) hours per week. Ground Lease means that certain lease agreement pursuant to which the City will lease the Hotel Property to Omni. Hard Construction Costs means the following site development and building costs expended directly in connection with the Hotel and the Hotel Garage: actual construction costs, signage costs, and the costs of labor, supplies and materials, including Page 5 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. �' ��� tl �� all costs and fees paid to Omni's general contractor, subcontractors and suppliers. Hotel means a hotel with, among other things, approximately six hundred (600) guest rooms; two (2) full-service restaurants; a lobby bar; approximately 48,000 square feet of dedicated meeting space; an exercise facility; an outdoor pool with sundeck; valet parking service; business center; wireless Internet access in guest rooms, lobby and public spaces; and other supporting facilities commensurate with a full-service convention center hotel. The Hotel Garage and the Residential Units are not part of the Hotel. Hotel Garage means the parking garage for the Hotel and the Residential Units with at least four hundred (400) spaces and other related improvements constructed by Omni on the Hotel Property. Hotel Property means the City-owned land on which the Hotel, the Hotel Garage and the Residential Units will be constructed and located and excludes any improvements thereon, including the Hotel, the Residential Units and the Hotel Garage themselves. A diagram of the Hotel Property is attached hereto as Exhibit "C". Minimum Hotel Operating Standards means the operating criteria (but not the facilities standards) necessary for a hotel property to receive either a three (3)-star rating by Mobil Travel Guide or the operating criteria(but not the facilities standards) necessary for a hotel property to receive a four (4)-diamond rating by the American Automobile Association, both of which are described and set forth in Exhibits "D-1" and "D-2", respectively, which Exhibits are attached hereto and hereby made a part of this Agreement for all purposes. Omni shall at no time be required to demonstrate receipt or maintenance of such ratings. Program means the economic development program, established in general by City Council Resolution No. 2704, and outlined specifically in this Agreement, which is authorized by Chapter 380 of the Texas Local Government Code. Program Grants means the economic development grants paid by the City to Omni in accordance with this Agreement and as part of the Program. Pro'ect means the Hotel, Hotel Garage and Residential Units. Residential Units means the condominiums or apartments constructed on top of the Hotel and initially owned by Omni. Room Block Agreement means the written agreement between the City and Omni under which Omni will cause the Hotel to have reserved specific percentages of the Hotel's standard guest rooms and suites for specific periods of time in the future for attendees, participants and planners of conventions and/or trade shows at the Convention Center. Page 6 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. State Hotel Occupancy Tax Revenue means the amount of revenue from the hotel occupancy tax lawfully assessed and collected by the State of Texas pursuant to Chapter 156 of the Texas Tax Code and refunded to the City by operation of Section 351.102 of the Texas Tax Code, and that is derived from or attributable to the Hotel. State Hotel Sales Tax Revenue means the amount of revenue from a sales tax lawfully assessed and collected by the State of Texas pursuant to Texas Tax Code § 151 that is derived from or attributable to sales transacted in the Hotel, whether by Omni or another person or entity, for merchandise physically located in the Hotel and/or the Hotel Garage, and refunded to the City by operation of Sections 351.102 and 151.429 of the Texas Tax Code. Substantially Complete means that a final or temporary certificate of occupancy has been issued for all of the Hotel (including, but not limited to, all guest rooms and public areas) and the Hotel Garage, and both the Hotel and the Hotel Garage are lawfully open for business to the general public. Supply and Service Expenditures means expenditures made for supplies and services provided directly in connection with the operation and maintenance of the Hotel and the Hotel Garage. Tax Abatement Agreement means that agreement between the City and Omni pursuant to which the City will abate certain real and personal property taxes payable by Omni to the City and attributable to the Hotel and, subject to certain conditions set forth in the Tax Abatement Agreement, the Hotel Garage, but specifically excluding any of the Residential Units. 3. TERM. This Agreement shall be effective as of the date of execution by both parties (the "Effective Date") and, unless terminated earlier as provided by and in accordance with this Agreement, shall expire upon the date as of which the City has paid to Omni (i) all required Performance-Based Grants, as defined in and pursuant to Section 5; (ii) all Lease-Based Grants, as defined in and pursuant to Section 6; (iii) the Completion Grant, as defined in and pursuant to Section 7; (iv) if applicable, the Hotel Property Sale-Based Grant, as defined in and pursuant to Section 8; (iii) any required State Substitute Grant or Grants, as defined in and pursuant to Section 9; and (v) any required City Substitute Grants, as defined in and pursuant to Section 10 (the "Term"). Page 7 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. 4. OMNI'S OBLIGATIONS AND COMMITMENTS. 4.1. Ground Lease. The City and Omni shall execute the Ground Lease simultaneously upon execution of this Agreement. Subject to Section 7 of this Agreement and as permitted by Section 272.001(b)(6) of the Texas Local Government Code, the Ground Lease shall grant Omni an option to purchase the Hotel Property from the City, and shall grant the City the right to put the Hotel Property to Omni, for the fair market value of the Hotel Property at the time, which value shall be determined by an appraiser that is selected by the City and reasonably acceptable to Omni. 4.2. Construction and Completion of Hotel and Hotel Garage. Omni agrees that by the Completion Deadline and in accordance with the schedule attached hereto as Exhibit "E", which is hereby made a part of this Agreement for all purposes, (i) at least $59,360,000 in Hard Construction Costs shall have been expended or incurred for the Hotel and the Hotel Garage and (ii) the Hotel and the Hotel Garage shall be Substantially Complete. Construction work on the Hotel and the Hotel Garage may not begin until the Ground Lease has been executed by both the City and Omni. For any sums incurred but not yet paid as of the Completion Date, Omni shall provide the City with proof that such amounts were paid promptly following actual payment. 4.3. Desip-n and Architectural Standards and Style of Hotel. The Hotel will be Texas-themed, and the design of any above-ground portion of the Hotel Garage will complement the design of the Hotel. The City will have the right to approve the preliminary and final plans and specifications for the Hotel and the Hotel Garage prior to Omni's causing any work to be undertaken on the Hotel, which approvals shall not unreasonably be withheld. Prior to approval by the City of the final plans and specifications for the Hotel and the Hotel Garage, Omni (i) will meet monthly with a committee of individuals designated by the City to discuss and receive comment with respect to the preliminary plans and specifications and (ii) agrees to make not more than two (2) presentations to the City Council of the City at times reasonably designated by the City. If the City does not notify Omni in writing of any concerns or objections that the City has with regard to any information or documents that must be approved by the City pursuant to this Section 4.3 within ten (10) business days following receipt of same (the "City Review Period"), the City shall be deemed to have approved any such information or documents. If the City does notify Omni in writing of any concerns or objections that the City has with regard to any such information or documents within the City Review Period, Omni and the City will diligently work to resolve City's concerns and objections. If Omni and the Page 8 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. City are unable to resolve any such concerns within ten (10) business days following the end of the City Review Period (the "Design Resolution Deadline"), the parties shall endeavor to settle the dispute by mediation pursuant to the then-current CPR Mediation Procedure, in which case the Completion Deadline shall be extended by the number of days that elapse between the Design Resolution Deadline and final resolution of the City's concerns and objections, whether by mediation or otherwise. If the parties are not able to settle the dispute by mediation, the dispute shall be settled pursuant to and in accordance with the arbitration procedure set forth in Section 12.4.3. Omni agrees that it shall not make any material modification to the plans and specifications approved by the City unless it notifies the City in writing and receives approval from the City in accordance with the procedure set forth above. 4.4. Completion and Performance Guaranty. Because neither the Hotel nor the Hotel Garage will be owned or paid for by the City at any time, Omni will not be subject to statutory competitive bidding requirements applicable to the City. The Completion Guaranty shall be used to assure that the Hotel and the Hotel Garage will be Substantially Completed at no cost to the City in a manner that fully protects the City from liability pursuant to operation of Section 2253.027 of the Texas Government Code. Notwithstanding the foregoing, the City and Omni acknowledge and agree that this Agreement and all other Development Documents will automatically terminate (and the parties will have no further rights or obligations thereunder) if the Completion Guaranty is not delivered to the City within eight (8) months from the Effective Date, with the understanding that Omni may not commence or cause to be commenced any Project construction work on the Hotel Property unless and until the Completion Guaranty has been delivered to the City. The Completion Guaranty shall allow the City to collect from TRT Holdings, Inc. any overpayments of any Program Grants that reporting "true-ups" or audits undertaken pursuant to this Agreement confirm to have occurred, with the understanding that the City shall first seek reimbursement for any such overpayment from Omni. Notwithstanding anything to the contrary herein, if the City enforces the Completion Guaranty in order to complete the Project, the City shall not have a right to terminate this Agreement, nor shall the City have the right to reduce any Program Grant, for Omni's failure by the Completion Deadline to expend minimum Hard Construction Costs for the Hotel or to Substantially Complete the Hotel and the Hotel Garage. 4.5. Construction Spending Commitments. 4.5.1. Fort Worth Companies. By the Completion Date, Omni agrees to have spent or incurred the lesser of(i) $11,872,000 in Hard Construction Costs for the Hotel and the Hotel Garage or (ii) twenty percent (20%) of all Hard Construction Costs for the Hotel and the Hotel Garage with Fort Worth Companies. For any sums incurred but not yet paid as of the Completion Date, Omni shall Page 9 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. provide the City with proof that such amounts were paid promptly following actual payment. 4.5.2. Fort Worth Certified M/WBE Companies. By the Completion Date, Omni agrees to have spent or incurred the lesser of(i) $5,936,000 in Hard Construction Costs for the Hotel and the Hotel Garage or (ii) ten percent (10%) of all Hard Construction Costs for the Hotel and the Hotel Garage with Fort Worth Certified M/WBE Companies. Dollars spent with Fort Worth Certified M/WBE Companies shall also count as dollars spent with Fort Worth Companies for purposes of the commitment set forth in Section 4.5.1. This commitment has been approved by the City's Minority and Women Business Enterprise Advisory Committee. For any sums incurred but not yet paid as of the Completion Date, Omni shall provide the City with proof that such amounts were paid promptly following actual payment. 4.6. Employment Commitments. In the event that material portions of the Hotel are closed on account of casualty or renovation and Omni is diligently pursuing repair or renovation of the Hotel, the City and Omni will negotiate in good faith and mutually agree to equitable adjustments of the employment commitments set forth in this Section 4.6, taking into account the circumstances existing at the time with respect to the casualty or renovation and the degree of repair or renovation required. 4.6.1. Overall Employment. From the Completion Date through the end of the Term of this Agreement (as measured for each Annual Reporting Month, in accordance with and defined in Section 4.11.5 hereof), Omni agrees that at least two hundred fifty (250) Full-time Equivalent Jobs shall be provided and filled in the Hotel and the Hotel Garage. 4.6.2. Fort Worth Residents. From the Completion Date through the end of the Term of this Agreement (as measured for each Annual Reporting Month, in accordance with and defined in Section 4.11.5 hereof), Omni agrees that at least one hundred twenty-five (125) Full-time Equivalent Jobs provided in the Hotel and the Hotel Garage shall be held by Fort Worth Residents. Residency of an employee shall be determined by the address of residence provided by the employee. 4.6.3. Central City Residents. From the Completion Date through the end of the Term fi Page 10 v� Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. :s'�7rt C Otlt Yay Agreement (as measured for each Annual Reporting Month, in accordance with and defined in Section 4.11.5 hereof), Omni agrees that at least sixty- two (62) Full-time Equivalent Jobs provided in the Hotel and the Hotel Garage shall be held by Central City Residents. A Full-time Equivalent Job held by a Central City Resident shall also count as a Full-time Equivalent Job held by a Fort Worth Resident for purposes of the commitment set forth in Section 4.6.2. Residency of an employee shall be determined by the address of residence provided by the employee. 4.7. Supply and Service Expenditure 'Commitments. 4.7.1. Fort Worth Companies. Beginning with the calendar year in which the Completion Date occurs, and in each subsequent year of the Term of this Agreement, Omni will cause at least $100,000 in Supply and Service Expenditures to be made with Fort Worth Companies; provided, however, that if the Completion Date occurs on a date other than January 1, then only for the calendar year in which the Completion Date occurs, this commitment shall be reduced to an amount equal to the product of$100,000 multiplied by a fraction, the numerator of which is the number of days remaining in the year after the Completion Date and the denominator of which is 365. Omni's compliance with this Section 4.7.1 shall be subject to the grace period allowed by Section 5.3.4. 4.7.2. Fort Worth Certified M/WBE Companies. Beginning with the calendar year in which the Completion Date occurs, and in each subsequent year of the Term of this Agreement, Omni will cause at least $50,000 in Supply and Service Expenditures to be made with Fort Worth Certified M/WBE Companies; provided, however, that if the Completion Date occurs on a date other than January 1, then only for the calendar year in which the Completion Date occurs, this commitment shall be reduced to an amount equal to the product of$50,000 multiplied by a fraction, the numerator of which is the number of days remaining in the year after the Completion Date and the denominator of which is 365. Dollars spent with Fort Worth Certified M/WBE Companies shall also count as dollars spent with Fort Worth Companies for purposes of the commitment set forth in Section 4.7.1. This commitment has been approved by the City's Minority and Women Business Enterprise Advisory Committee. Omni's compliance with this Section 4.7.2 shall be subject to the grace period allowed by Section 5.3.5. Page 11 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. 4.8. Minimum Hotel Operating Standards. Throughout the Term and to the extent that Omni is operating the Hotel, the Hotel shall at all times be operated in accordance with the Minimum Hotel Operating Standards, as defined in Section 2. 4.9. Competitive Name Brand. Throughout the Term and to the extent that Omni is operating the Hotel, the Hotel must be operating and marketing itself under a First Tier Flag brand name that includes the words "Fort Worth". So long as Omni owns the Hotel, the Hotel will be branded as the "Omni Fort Worth Hotel." 4.10. Room Block Agreement. The City and Omni shall execute the Room Block Agreement simultaneously upon execution of this Agreement. The Room Block Agreement shall be in effect and in full force as of the date it is first executed and at all times thereafter until the expiration date set forth therein. 4.11. Reports and Filings. 4.11.1. Plan for Use of Fort Worth Certified M/WBE Companies. Omni's plan as to how it will attain its construction spending commitments for Fort Worth Certified M/WBE Companies, as outlined in Section 4.5.2, is to make such commitments part of the bid conditions for the Hotel and Hotel Garage construction contract and to require the selected general contractor to comply with such requirements. Omni shall also monitor the general contractor's compliance with such requirements. Omni agrees to meet with the City's M/WBE Office and Minority and , Women Business Enterprise Advisory Committee from time to time as reasonably necessary for assistance in implementing such plan. 4.11.2. Monthly Spending Repos. From the date as of which Omni receives a permit to initiate construction of the Hotel and/or the Hotel Garage until the Completion Date, in order to enable the City to (i) assist Omni in meeting its commitment for construction spending with Fort Worth Certified M/WBE Companies and (ii) calculate the amount of each Completion Grant that is payable pursuant to Section 7, Omni will provide the City with a monthly report (due no later than the last day of each month for the preceding calendar month) in a form reasonably acceptable to the City that specifically outlines the (i) then-current aggregate Hard Construction Page 12 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. Costs expended by and on behalf of Omni for construction of the Hotel and the Hotel Garage as well as such Hard Construction Costs expended since the last date reported in the previous month's report (the "Incremental Construction Expenditures") and (ii) the then-current aggregate Hard Construction Costs expended by and on behalf of Omni with Fort Worth Certified M/WBE Companies for construction of the Hotel and the Hotel Garage. If final information is not available when the monthly report is filed, such information shall be included on the next monthly report following availability of such information. Omni agrees to meet with the City's M/WBE Office and Minority and Women Business Enterprise Advisory Committee from time to time as reasonably necessary for assistance in implementing such plan and to address any concerns that the City may have with such plan. 4.11.3. Construction Spending Reports. Once Omni has caused to be expended at least $59,360,000 in Hard Construction Costs for the Hotel and the Hotel Garage, Omni will make available to the City data that specifically outlines such expenditures, together with supporting invoices and other documents necessary to demonstrate that such amounts were actually paid by Omni. In addition, as soon as practicable but within one hundred eighty (180) calendar days following the Completion Date, Omni will provide the City with a report in a form reasonably acceptable to the City that specifically outlines all Hard Construction Costs expended by Omni for construction of the Hotel and the Hotel Garage, together with supporting invoices and other documents necessary to demonstrate that such amounts were actually paid by Omni. This report shall also include Hard Construction Costs expended by Omni for construction of the Hotel and the Hotel Garage with Fort Worth Companies and with Fort Worth Certified M/WBE Companies, together with supporting invoices and other documents necessary to demonstrate that such amounts were actually paid by Omni to such companies. This report is required in order for the City to assess Omni's compliance with its construction spending commitments for Fort Worth Companies and Fort Worth Certified M/WBE Companies, as set forth in Sections 4.5.1 and 4.5.2, respectively, for purposes of calculating Performance-Based Grants paid by the City in accordance with Section 5 of this Agreement. 4.11.4. Ouarterly Supply and Service Spending Report. Beginning on the Completion Date and through the tenth anniversary thereof, within thirty (30) calendar days following the end of each calendar quarter Omni will provide or cause to be provided a report to the City in a form reasonably acceptable to the City that specifically Page 13 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. outlines the then-aggregate Supply and Service Expenditures made in the same calendar year with Fort Worth Companies and Fort Worth Certified M/WBE Companies. Omni agrees to meet with the City's M/WBE Office and Minority and Women Business Enterprise Advisory Committee from time to time as reasonably necessary for assistance in any given calendar year in attaining its commitment for Supply and Service Expenditures with Fort Worth Certified M/WBE Companies, as set forth in Section 4.7.2, or to address any concerns arising from the report. 4.11.5. Employment Data. On or before ninety (90) calendar days following the last day of each Annual Reporting Month during either the period between the Completion Date and the tenth anniversary thereof or the period between January 1 following the Completion Date and the tenth anniversary thereof, whichever is selected by Omni at the outset, Omni shall make available or cause to be made available to the City data that sets forth (i) the total number of Full-time Equivalent Jobs in the Hotel and the Hotel Garage that were provided and filled during the month of October (or another month selected by Omni) (each an "Annual Reporting Month") and (ii) the total number of Full-time Equivalent Jobs in the Hotel and the Hotel Garage that were held during the Annual Reporting Month by Fort Worth Residents and by Central City Residents, together with reasonable documentation regarding the residency of each such employee (the "Employment Report"). For purposes of measuring attainment of the employment commitments set forth in Sections 4.6.1, 4.6.2 and 4.6.3, employment numbers for each Annual Reporting Month shall be deemed to apply to the entire calendar year in which the Annual Reporting Month occurs. 4.11.6. FF&E Reserve Data. Following the Completion Date, upon request by the City (but no more than two (2) times per year) Omni shall make available to the City data that sets forth the balance of the FF&E Reserve, as defined in Section 4.14, any expenditures made from the FF&E Reserve and the nature thereof and, if any such expenditures were made, evidence that is reasonably satisfactory to the City that Omni has deposited sufficient sums necessary for the FF&E Reserve to meet the requirements of Section 4.14. 4.12. Inspection of Hotel and Hotel Garage. At any time during the Term of this Agreement (but no more frequently than six (6) times per year), following reasonable advance notice to Omni, the City shall have, and Omni shall provide or cause to be provided, access to the Hotel and the Hotel Garage in order for the City to inspect the same to ensure-- Page 14 Economic Development Program Agreement u between City of Fort Worth and Omni Fort Worth Partnership,L.P. `��;<V'�;�� � L�, compliance with this Agreement. Omni may require that any individuals inspecting the Hotel and the Hotel Garage on behalf of the City be escorted at all times by an employee or authorized representative of Omni. However, Omni, its officers, agents, servants, employees, contractors and subcontractors, shall cooperate fully with the City during any such inspection. 4.13. Audits. Omni agrees that no more than once per year during the Term of this Agreement the City will have the right to audit, at the City's own expense, (i) the financial and business records of Omni that relate to the Hard Construction Costs expended by Omni in constructing the Hotel and the Hotel Garage, including Hard Construction Cost expenditures with Fort Worth Companies and Fort Worth Certified M/WBE Companies; (ii) the employment records of Omni solely in order to ascertain the residency of any employees that Omni has claimed as Fort Worth Residents or Central City Residents; (iii) the financial and business records of Omni with regard to Supply and Service Expenditures with Fort Worth Companies and Fort Worth Certified M/WBE Companies (collectively "Hotel- Related Records"). Omni shall make all Hotel-Related Records available for review by the City at the Hotel or at another location in the City acceptable to both parties following reasonable advance notice by the City and shall otherwise cooperate fully with the City during any audit. 4.14. FF&E Reserve. Omni shall reserve in book entry form the following percentage of the Hotel's revenues for repairs or replacements of furniture, fixtures and equipment in the Hotel (the "FF&E Reserve") and necessary maintenance of and repairs to the Hotel: (i) in the year in which the Completion Date occurs, 0.0%; in the first full calendar year following the Completion Date, 1.0%; in the second full calendar year following the Completion Date, 2.0%; in the third full calendar year following the Completion Date and in each year thereafter, 3.5%. The reinvestment of the FF&E Reserve shall be calculated over the life cycle of the assets to be replaced (and such reinvestment shall be guaranteed by Omni). The FF&E Reserve will be utilized by Omni from time to time in a commercially reasonable manner and, in any event, as necessary to operate the Hotel in accordance with all Minimum Hotel Operating Standards. 4.15. Pre-Marketing of Hotel. In accordance with its normal practices for opening a new hotel, Omni shall fund expenses for pre-marketing of the Hotel (including construction of a model room and location of pre-opening sales offices within the Convention Center in space provided by the Convention Center at no cost) and shall prepare a pre-marketing strategy in coordination with the City. Page 15 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. 4.16. Restrictive Covenant. As part of the consideration under this Agreement, Omni agrees that it will not, without the prior written consent of the City, directly or indirectly own, manage, market or otherwise participate in any other Omni Hotel located within a five (5)-mile radius of the Convention Center. 4.17. Lease of City Retail Space. The City and Omni shall execute an option to lease the City Retail Space simultaneously upon execution of this Agreement. The City Retail Space shall be raw, shell space and will be leased to Omni at its fair market value at the time, which value shall be determined by an appraiser that is selected by the City and reasonably acceptable to Omni. 4.18. City Job Training Program. The City and a third party provider selected by the City shall administer a job training program pursuant to which participating individuals selected by the City and reasonably acceptable to Omni will receive the basic skills instruction and on-site training necessary for those individuals to be qualified for employment by Omni in Full-time Equivalent Jobs at the Hotel (the "Job Training Program"). Solely from funds paid by Omni to the City pursuant to and in accordance with Sections 5.3.1, 5.3.2 and 5.3.3, if any, Omni shall provide funding for the Job Training Program if it is determined that Omni failed to meet the Overall Employment Commitment, the Fort Worth Employment Commitment and/or the Central City Employment Commitment, as those terms are defined in Sections 5.3.1, 5.3.2 and 5.3.3, respectively. The City, the third party provider and Omni will consult and work together in developing the guidelines and an appropriate curriculum for the Job Training Program. As part of the Job Training Program, Omni will provide the City and the third party provider with a list of open Full-time Equivalent Jobs and will give hiring preference to interns who have successfully completed the Job Training Program. At least fifty percent (50%) of funds contributed by Omni to the Job Training Program shall be used to fund salaries for individuals participating in the Job Training Program. 5. PERFORMANCE-BASED GRANT. Subject to Sections 12.4 and 12.5 and all other terms and conditions of this Agreement, the City will pay Omni a Program Grant each quarter for forty (40) consecutive calendar quarters, beginning with the first full quarter following the Completion Date, that is based on the degree to which Omni met its various commitments to (i) expend minimum Hard Construction Costs for the Hotel with Fort Worth Companies and Fort Worth Certified M/WBE Companies; (ii) annually employ a minimum number of individuals, Fort Worth Residents and Central City Residents in the Page 16 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. Hotel and the Hotel Garage; and (iii) annually make minimum Supply and Service Expenditures with Fort Worth Companies and Fort Worth Certified NI/WBE Companies, all as more specifically outlined in this Section 5 (each a "Performance-Based Grant"). 5.1. Base Amount of Each Performance-Based Grant. The base amount of each quarterly Performance-Based Grant shall equal the sum of(i) 100% of the City Hotel Occupancy Tax Revenue received by the City during the previous quarter plus 100% of the City Hotel Sales Tax Revenue received by the City during the previous quarter (provided, however, that City Hotel Occupancy Tax Revenue and City Hotel Sales Tax Revenue shall cease to be used in calculating all or any portion of a Performance-Based Grant once the City Sources Capped Amount has been reached),plus (ii) 100% of the State Hotel Occupancy Tax Revenue received by the City during the previous quarter, plus (iii) 100% of the State Hotel Sales Tax Revenue received by the City during the previous quarter (collectively, the "Base Amount" of each Performance-Based Grant). 5.2. City Credits for Omni's Failure to Meet All Construction Commitments. Notwithstanding anything to the contrary herein, the City shall receive an aggregate credit towards its obligation to pay Omni Performance-Based Grants based on the degree to which Omni failed to meet its construction spending commitments with Fort Worth Companies and Fort Worth Certified M/WBE Companies, as follows: 5.2.1. Failure to Meet Construction Spending Commitment with Fort Worth Companies. If, by the Completion Date, Omni failed to spend or incur at least the lesser of(i) $11,872,000 in Hard Construction Costs for the Hotel and the Hotel Garage or (ii) twenty percent (20%) of all Hard Construction Costs for the Hotel and the Hotel Garage with Fort Worth Companies, as outlined in Section 4.7.1 (the "Fort Worth Construction Commitment"), the City will receive a credit toward its obligation to pay Omni Performance-Based Grants equal to the number of dollars by which Omni failed to meet the Fort Worth Construction Commitment less the amount of any credit received by the City pursuant to Section 5.2.2. For example, if the Fort Worth Construction Commitment was $11,872,000 and only $9,122,000 in Hard Construction Costs for the Hotel and the Hotel Garage were spent with Fort Worth Companies (and assuming the City receives no credit pursuant to Section 5.2.2), then the City would receive a credit toward its obligation to pay Omni Performance-Based Grants equal to $2,750,000. In the event that any amounts reported as incurred are subsequently determined to have not actually been expended, Page 17 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. the City, at the City's election, may collect any Program Grant overpayment(s) either through a "true-up" of the City credit set forth herein or through reimbursement from Omni. 5.2.2. Failure to Meet Construction Spending Commitment with Fort Worth Certified M/WBE Companies. If, by the Completion Date, Omni failed to spend or incur the lesser of(i) $5,936,000 in Hard Construction Costs for the Hotel and the Hotel Garage or (ii) ten percent (10%) of all Hard Construction Costs for the Hotel and the Hotel Garage with Fort Worth Certified M/WBE Companies, as outlined in Section 4.7.2 (the "M/WBE Construction Commitment"), the City will receive a credit toward its obligation to pay Omni Performance-Based Grants equal to the number of dollars by which Omni failed to meet the M/WBE Construction Commitment. For example, if the Fort Worth Construction Commitment was $5,936,000 and only $4,386,000 in Hard Construction Costs for the Hotel and the Hotel Garage were spent with Fort Worth Companies, then the City would receive a credit toward its obligation to pay Omni Performance-Based Grants equal to $550,000. In the event that any amounts reported as incurred are subsequently determined to have not actually been expended, the City, at the City's election, may collect any Program Grant overpayment(s) either through a "true-up" of the City credit set forth herein or through reimbursement from Omni. 5.2.3. Application of City Credit. The sum of any City credit calculated in accordance with Sections 5.2.1 and 5.2.2, if any, shall be applied toward the City's obligation to pay Omni a Performance-Based Grant beginning with the first quarter following the Completion Date. For example, suppose that the Base Amount of the Performance-Based Grant for that first quarter is $200,000 and the aggregate amount of the City's credit is $150,000. In that case, the amount of the Performance-Based Grant that the City would be required to pay Omni in that quarter would be $50,000 ($200,000 Base Amount minus $150,000 aggregate City credit), and the $150,000 credit shall be retained by the City as Excluded Hotel Revenue. 5.2.4. Application Toward City Sources Capped Amount. Any credit retained by the City as Excluded Hotel Revenue pursuant to this Section 5.2 shall first be deemed attributable to the City Hotel Occupancy Tax Revenue and the City Hotel Sales Tax Revenue received during the previous quarter and will be added for purposes of calculating the City Sources Capped Amount. In other words, using the example in Section 5.2.3, if the Base Amount of the Performance-Based Page 18 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. Grant in the first quarter following the Completion Date is $200,000, $100,000 of which is attributable to the City Hotel Occupancy Tax Revenue and the City Hotel Sales Tax Revenue and $100,000 of which is attributable to the State Hotel Occupancy Tax Revenue and the State Hotel Sales Tax Revenue, the $150,000 aggregate City credit shall first be deemed attributable to the City Hotel Occupancy Tax Revenue and the City Hotel Sales Tax Revenue, meaning that $100,000 of the $150,000 credit would be applied toward the City Sources Capped Amount. If the aggregate City credit is less than the City Hotel Occupancy Tax Revenue and the City Hotel Sales Tax Revenue received during the previous quarter, then all of the City's aggregate credit would be applied toward the City Sources Capped Amount. 5.2.5. Carry Over. If the City's aggregate credit under this Section 5.2 exceeds the Base Amount in any calendar quarter, then (i) the Performance-Based Grant payable in that quarter shall be $0 and any remaining balance of such credit shall be applied toward the City's obligation to make Performance-Based Grant(s) in the following quarter(s), and (ii) the City shall nevertheless be deemed to have made a Performance-Based Grant in that quarter and such year shall count toward calculating the remaining number of quarters in which a Performance-Based Grant is owed. 5.3. Effect of Failure to Meet Annual Commitments. If in the previous calendar year Omni failed to meet any of its commitments to employ a minimum number of individuals, Fort Worth Residents and Central City Residents in the Hotel and the Hotel Garage and to make minimum Supply and Service Expenditures with Fort Worth Companies and Fort Worth Certified M/WBE Companies, the following provisions shall apply: 5.3.1. Failure to Meet Overall Employment Commitment. If during the Annual Reporting Month of a calendar year fewer than two hundred fifty (250) Full-time Equivalent Jobs were provided and filled in the Hotel and the Hotel Garage, as required by Section 4.8.1 of this Agreement (the "Overall Employment Commitment"), then in accordance with and subject to Section 5.3.7, Omni shall pay the City an amount equal to $4,500 for each Full-time Equivalent Job by which the Overall Employment Commitment was missed; provided, however, that the amount owed by Omni to the City pursuant to this Section 5.3.1 shall be reduced by (i) all of the amount owed by Omni to the City pursuant to Section 5.3.2 below and (ii) one-half(1/2) of the amount owed by Omni to the City pursuant to Section 5.3.3 below. Page 19 Economic Development Pro p gram Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. 5.3.2. Failure to Meet Fort Worth Resident Employment Commitment. If during the Annual Reporting Month of a calendar year fewer than one hundred twenty-five (125) Full-time Equivalent Jobs in the Hotel and the Hotel Garage were held by Fort Worth Residents, as required by Section 4.8.2 of this Agreement (the "Fort Worth Employment Commitment"), then in accordance with and subject to Section 5.3.7, Omni shall pay the City an amount equal to $4,500 for each Full-time Equivalent Job by which the Fort Worth Employment Commitment was missed; provided, however, that the amount owed by Omni to the City pursuant to this Section 5.3.2 shall be reduced by one-half (1/2) of the amount owed by Omni to the City pursuant to Section 5.3.3 below. 5.3.3. Failure to Meet Central City Resident Employment Commitment. If during the Annual Reporting Month of a calendar year fewer than sixty-two (62) Full-time Equivalent Jobs in the Hotel and the Hotel Garage were held by Central City Residents, as required by Section 4.8.3 of this Agreement (the "Central City Employment Commitment"), then Omni shall pay the City an amount equal to $9,000 for each Full-time Equivalent Job by which the Central City Employment Commitment was missed. 5.3.4. Failure to Mxeet Fort Worth Company Supply and Service Expenditure Commitment. If in any calendar year less than $100,000 in Supply and Service Expenditures were made with Fort Worth Companies, as required by Section 4.9.1 of this Agreement (the "Fort Worth Supply and Service Commitment"), then, subject to Omni's right to cure in accordance with the sentence below, the amount of the Performance-Based Grant(s) payable in the following quarter(s) shall be reduced by an amount equal to the product of the number of dollars by which the Fort Worth Supply and Service Commitment was missed times three (3). Notwithstanding the foregoing, if Omni causes to be spent an amount equal to the number of dollars by which the Fort Worth Supply and Service Commitment was missed by June 1 of the following year, the amount of the Performance- Based Grant(s) payable in the following quarter(s) will not be subject to reduction pursuant to this Section 5.3.4, with the understanding that no such expenditures shall count toward the Fort Worth Supply and Service Commitment for that calendar year. Any amount owed by Omni to the City pursuant to this Section 5.3.4 shall be reduced by the amount owed by Omni to the City pursuant to Section 5.3.5 below. Page 20 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. 5.3.5. Failure to Meet Fort Worth Certified M/WBE Company Supply and Service Expenditure Commitment. If in any calendar year less than $50,000 in Supply and Service Expenditures were made with Fort Worth Certified M/WBE Companies, as required by Section 4.9.2 of this Agreement (the "M/WBE Supply and Service Commitment"), then, subject to Omni's right to cure in accordance with the sentence below, the amount of the Performance- Based Grant(s) payable in the following quarter(s) shall be reduced by an amount equal to the product of the number of dollars by which the M/WBE Supply and Service Commitment was missed times three (3). Notwithstanding the foregoing, if Omni causes to be spent an amount equal to the number of dollars by which the M/WBE Supply and Service Commitment was missed by June 1 of the following year, the amount of the Performance-Based Grant(s) payable in the following quarter(s) will not be subject to reduction pursuant to this Section 5.3.5, with the understanding that no such expenditures shall count toward the M/WBE Supply and Service Commitment for that calendar year. 5.3.6. No Offsets. A deficiency in attainment of any of the commitments set forth in Sections 4.8.1, 4.8.2, 4.8.3, 4.9.1 and/or 4.9.2 may not be offset by exceeding other such commitments. 5.3.7. Use of Omni's Payments for Failure to Meet Employment Commitments. All payments by Omni to the City for any failure of Omni to meet the Overall Employment Commitment, the Fort Worth Employment Commitment and the Central City Employment Commitment, as provided in Sections 5.3.1, 5.3.2 and 5.3.3, must be paid in full within ninety (90) calendar days following the date that the Employment Report is due. If all such payments have not been received by the City by such time, the City may suspend payment of any Program Grants due hereunder, without interest, until all such amounts are paid. The City agrees that all such sums shall be deposited into a segregated City account or sub-account and used only for the Job Training Program outlined in Section 4.18. Following the tenth anniversary of the Completion Date, any remaining funds for the Job Training Program will be retained by the City for any legally permissible use. 5.4. Deadline for Payment of Performance-Based Grant; Nature of Funds. Subject to Section 5.3.7, each quarterly Performance-Based Grant owed pursuant to and in accordance with this Section 5 will be paid by the City to Dian; Page 21 N �'I �• , %�1 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. �� > on or before the forty-fifth (45th) calendar day following the end of the previous calendar quarter. It is understood and agreed that all Performance-Based Grants paid pursuant to this Agreement shall come from currently available general revenues of the City and not directly from any specific taxes or tax revenues, including, but not limited to, City Hotel Occupancy Tax Revenue, City Hotel Sales Tax Revenue, State Hotel Occupancy Tax Revenue or State Hotel Sales Tax Revenue. 6. LEASE-BASED GRANT. Subject to all other terms and conditions of this Agreement, in each year in which rent is paid under the Ground Lease, the City will pay Omni a Program Grant or Grants equal to (i) the amount of the annual rental paid in the same calendar year to the City by Omni pursuant to Section 3.2 of the Ground Lease less Ten Thousand Dollars ($10,000) and (ii) the amount of any taxes and assessments levied by the City against the Leased Premises (defined in the Ground Lease) which are not subject to abatement under the Tax Abatement Agreement and which are paid by Omni in accordance with Section 5.2 of the Ground Lease (each a "Lease-Based Grant"). Each respective Lease-Based Grant will be paid by the City to Omni within five (5) business days following receipt of all rent then due and payable to the City under the Ground Lease (in the case of a Lease-Based Grant under clause (i) above), or within forty-five(45) calendar days following the end of the calendar quarter in which any such taxes and assessments payable to the City under Section 5.2 of the Ground Lease were received by the City (in the case of a Lease-Based Grant under clause (ii) above). It is understood and agreed that all Lease-Based Grants paid pursuant to this Agreement shall come from currently available general revenues of the City and not directly from any specific taxes or tax revenues of the City. The City shall have no right to withhold a Lease-Based Grant on account of a non-monetary default by Omni under the Ground Lease. 7. GRANT UPON COMPLETION OF HOTEL AND HOTEL GARAGE. Subject to all other terms and conditions of this Agreement, within ten (10) business days following the City's receipt from Omni of the monthly construction spending reports required by Section 4.11.2 of this Agreement, the City will pay Omni a Program Grant equal to fifty percent (50%) of the Incremental Construction Expenditures reported for that month (each a "Completion Grant") until such time as the City has paid Omni aggregate Completion Grants equal to $6,300,000. The Completion Grants shall account for the City's full and complete reimbursement to Omni for a portion of the cost of the Hotel Garage and the cost of making the Hotel Property "pad ready". It is understood and agreed that each Completion Grant shall come from currently available general revenues of the City and not directly from any specific taxes or tax revenues of the City. Page 22 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. 8. HOTEL PROPERTY SALE-BASED GDA NT. Subject to all other terms and conditions of this Agreement, if, pursuant to Article IX of the Ground Lease, Omni exercises its option to purchase the Hotel Property from the City or the City exercises its option to put the Hotel Property to Omni, the City will pay Omni a Program Grant in an amount equal to the purchase price of the Hotel Property received by the City less One Million Dollars ($1,000,000) (the "Hotel Property Sale-Based Grant"). The Hotel Property Sale-Based Grant will be paid by the City to Omni within five (5) business days following receipt by the City of all proceeds from,the sale of the Hotel Property. It is understood and agreed that each Completion Grant shall come from currently available general revenues of the City and not directly from any specific taxes or tax revenues of the City. 9. STATE SUBSTITUTE GRANTS. 9.1. Calculation of State Substitute Grants. If at any time between the Completion Date and the tenth anniversary thereof the City fails to receive State Hotel Occupancy Tax Revenue based on a rate of six percent (6%) and/or State Hotel Sales Tax Revenue based on a rate of six and one-quarter percent (6.25%), thereby causing a deficiency in the amount of any quarterly Performance-Based Grant payable by the City, the City agrees that, subject to Section 9.5, an amount equal to twenty-five percent (25%) of the difference between (i) the full amount of the State Hotel Occupancy Tax Revenue and the State Hotel Sales Tax Revenue that would have been received in the previous quarter by operation of Section 351.102 of the Texas Tax Code and (ii) the amount, if any, of the State Hotel Occupancy Tax Revenue and the State Hotel Sales Tax Revenue that the City actually received in that quarter by operation of Section 351.102 of the Texas Tax Code will be carried forward as a continuing obligation of the City for payment following payment of the fortieth (40th) quarterly Performance-Based Grant. The aggregate amount of such sums, plus any interest earned and accrued thereon in accordance with Section 9.3, shall be defined as the "Guaranteed State Amount". Upon payment of any Performance-Based Grant, the City will notify Omni in writing of the then-current balance, if any, of the Guaranteed State Amount. Beginning in the calendar quarter following payment of the fortieth (40th) quarterly Performance-Based Grant and in accordance with this Section 9, the City will pay Omni a Program Grant or quarterly Program Grants, as necessary, until Omni has received the Guaranteed State Amount (the "State Substitute Grants"). The amount of each State Substitute Grant payable by the City will be based on an available universe of funds for the year in which a State Substitute Grant is due, as provided in Section 9.2. Page 23 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. 9.2. Basis of Calculation. The amount of funds available each quarter for any State Substitute Grant shall equal the sum of the following revenues received by the City in the previous calendar quarter: (i) 100% of the City Hotel Occupancy Tax Revenue plus (ii) 100% of the City Hotel Sales Tax Revenue plus (iii) 100% of any personal property tax revenue attributable to the Hotel, excluding the Hotel Garage and any of the Residential Units. The City Sources Capped Amount does not apply to, and shall not serve to limit the amount of, State Substitute Grants. Notwithstanding anything to the contrary, the City may elect to pay any portion or all of the then-current balance Guaranteed State Amount prior to the date of payment of the fortieth (40th) quarterly Performance-Based Grant from any sources of funds legally available to the City. 9.3. Interest on Guaranteed State Amount. Subject to Section 12.4.4.1, beginning on the date that the first Performance-Based Grant is paid to Omni, the then-current balance of the Guaranteed State Amount, if any, shall bear interest calculated at a fixed rate equal to fourteen percent (14%) per annum, compounded annually as of December 31, which rate has been negotiated and agreed to by the parties after giving consideration to Omni's investment analysis with regard to the Project. 9.4. Deadline for Payment of State Substitute Grants; Nature of Funds. Each State Substitute Grant will be paid by the City to Omni on or before the forty-fifth (45th) calendar day following the end of the previous calendar quarter. It is understood and agreed that all State Substitute Grants paid pursuant to this Agreement shall come from currently available general revenues of the City and not directly from any specific taxes or tax revenues of the City, including, but not limited to, City Hotel Occupancy Tax Revenue, City Hotel Sales Tax Revenue or any personal property tax revenues of the City. 9.5. Credit Against Guaranteed State Amount. Notwithstanding anything to the contrary contained elsewhere in this Section 9, if any calendar quarter during or between the quarter in which the Completion Date occurs and payment by the City of the fortieth (40th) quarterly Performance-Based Grant there is a change in the Texas Tax Code or other applicable statute so that (i) the rate upon which the State Hotel Occupancy Tax Revenue is based is greater than six percent (6%) and/or the rate upon which the State Hotel Sales Tax Revenue is based is greater than six and one-quarter percent (6.25%), and/or (ii) the rate upon which the City Hotel Occupancy Tax Revenue is based is greater than nine percent (9%) and/or the rate upon which the City Hotel Sales Tax Revenue is based is greater than one percent (1%), then an such Page 24 Economic Development Program Agreement �� between City of Fort Worth and Omni Fort Worth Partnership, L.P. increased amount shall be credited against the Guaranteed State Amount, if any, on a dollar-for-dollar basis, and the Guaranteed State Amount shall be recalculated in accordance therewith. This credit shall be applied on the date as of which a Program Grant including such increased amounts is paid to Omni, subject to any reduction or suspension imposed in accordance with this Agreement. 10. CITY SUBSTITUTE GRANTS. 10.1. Calculation of City Substitute Grants. If at any time between the Completion Date and the tenth anniversary thereof, a change in applicable law after the Effective Date causes the City Hotel Occupancy Tax Revenue to be based on a rate that is less than nine percent (9%) of the taxable Hotel room revenue and/or the City Hotel Sales Tax Revenue to be based on a rate that is less than one percent (1%), thereby causing a deficiency in the amount of any quarterly Performance-Based Grant that would otherwise have been payable by the City absent such a change in law, the City agrees that, subject to Section 10.5, an amount equal to the difference between (i) the full amount of the City Hotel Occupancy Tax Revenue and the City Hotel Sales Tax Revenue that would have been received in the previous quarter by operation of Section 351.102 of the Texas Tax Code and Sections 321.101(a) and 321.103 of the Texas Tax Code, respectively, but for a change in applicable law after the Effective Date and (ii) the amount of the City Hotel Occupancy Tax Revenue and the City Hotel Sales Tax Revenue that the City actually received in that calendar year by operation of Section 351.102 of the Texas Tax Code and Sections 321.101(a) and 321.103 of the Texas Tax Code, respectively, will be carried forward as a continuing obligation of the City for payment following payment of the fortieth (40th) quarterly Performance-Based Grant (provided, however, that such obligation shall not apply once the City Sources Capped Amount has been reached . The aggregate amount of such sums, plus any interest earned and accrued thereon in accordance with Section 10.3, shall be defined as the "Guaranteed City Amount". Upon payment of any Performance-Based Grant, the City will notify Omni in writing of the then-current balance, if any, of the Guaranteed City Amount. Beginning in the later of the calendar quarter following payment of the fortieth (40th) quarterly Performance-Based Grant or, if applicable, the calendar quarter following receipt by Omni of the Guaranteed State Amount through the payment of State Substitute Grants, and otherwise and in accordance with this Section 10, the City will pay Omni a Program Grant or quarterly Program Grants, as necessary, until Omni has received the Guaranteed City Amount (the "City Substitute Grants"). The amount of each City Substitute Grant payable by the City will be based on an available universe of funds for the year in which a City Substitute Grant is due, as provided in Section 10.2. Page 25 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. 10.2. Basis of Calculation. The amount of funds available each quarter for any City Substitute Grant shall equal the sum of the following revenues received by the City in the previous calendar quarter: (i) 100% of the City Hotel Occupancy Tax Revenue plus (ii) 100% of the City Hotel Sales Tax Revenue plus (iii) 100% of any personal property tax revenue attributable to personal property located in the Hotel, but specifically excluding any personal property tax revenue attributable to the Hotel Garage and any of the Residential Units. The City may elect to pay any portion or all of the then-current balance Guaranteed City Amount prior to the date of payment of the fortieth (40th) quarterly Performance-Based Grant from any sources of funds legally available to the City. Notwithstanding anything to the contrary, once the City Sources Capped Amount has been reached, the City shall no longer be obligated to pay any City Substitute Grants (although the City's obligation to pay interest on the unpaid Guaranteed City Amount accrued up to the date that the City Sources Capped Amount is reached, as provided by Section 10.3, will continue in effect, with the understanding that the City shall only pay such interest from the same universe of funds in which the City Substitute Grants were payable). 10.3. Interest on Guaranteed City Amount. Subject to Section 12.4.4.1, beginning on the date that the first Performance-Based Grant is paid to Omni, the then-current balance of the Guaranteed City Amount, if any, shall bear interest calculated at a fixed rate equal to fourteen percent (14%) per annum, compounded annually as of December 31, which rate has been negotiated and agreed to by the parties after giving consideration to Omni's investment analysis with regard to the Project. 10.4. Deadline for Payment of City Substitute Grants; Nature of Funds. Each City Substitute Grant will be paid by the City to Omni on or before the forty-fifth (45th) calendar day following the end of the previous calendar quarter. It is understood and agreed that all City Substitute Grants paid pursuant to this Agreement shall come from currently available general revenues of the City and not directly from any specific taxes or tax revenues of the City, including, but not limited to, City Hotel Occupancy Tax Revenue, City Hotel Sales Tax Revenue or any personal property tax revenues of the City. 10.5. Credit Against Guaranteed City Amount. Notwithstanding anything to the contrary contained elsewhere in this Section 10, if any calendar quarter during or between the quarter in which the Completion Date occurs and payment by the City of the fortieth (40th) quarterly Performance-Based Grant there is a change in the Texas Tax Code or other applicable statute so that (i) the rate upon which the City Hotel Occupancy Tax Revenue is based is greater than nine percent (9%) and/or the rate upon which the Page 26 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. City Hotel Sales Tax Revenue is based is greater than one percent (1%), and/or (ii) the rate upon which the State Hotel Occupancy Tax Revenue is based is greater than six percent (6 %) and/or the rate upon which the State Hotel Sales Tax Revenue is based is greater than six and one-quarter percent (6.25 %), then any such increased amount shall be credited against the Guaranteed City Amount, if any, on a dollar-for-dollar basis, and the Guaranteed City Amount shall be recalculated in accordance therewith; provided, however, that if at that time there is a positive balance on both the Guaranteed State Amount and the Guaranteed City Amount, the credit shall first be applied to the Guaranteed State Amount and the remainder, if any, shall then be applied to the Guaranteed City Amount. This credit shall be applied on the date as of which a Program Grant including such increased amounts is paid to Omni, subject to any reduction or suspension imposed in accordance with this Agreement. 11. RETENTION BY THE CITY OF EXCLUDED HOTEL REVENUE. Omni understands and agrees that any Excluded Hotel Revenue received by the City and retained in accordance with this Agreement may be used by the City for any lawful purpose that the City deems necessary in the carrying out of its business as a home rule municipality and will not serve as the basis for calculating the amount of any future Program Grant to Omni. 12. DEFAULT, TERMINATION, SUSPENSION OF OBLIGATIONS AND FAILURE BY OMNI TO MEET VARIOUS COMMITMENTS. 12.1. Failure to Complete Hotel and Hotel Garage. Subject to Section 4.4, Omni shall be in default under this Agreement if by the Completion Deadline (i) at least $59,360,000 in Hard Construction Costs for the Hotel and the Hotel Garage have not been expended or incurred or (ii) the Hotel and the Hotel Garage are not both Substantially Complete. In such an event, the City shall notify Omni in writing of the existence of such default. If Omni has not cured such default within ninety (90) calendar days following receipt of such notice, the City shall have the right to terminate this Agreement by notifying Omni in writing. 12.2. Termination of Tax Abatement Agreement and Room Block Agreement. Upon any lawful termination of the Tax Abatement Agreement or the Room Block Agreement on account of an uncured breach or default by Omni in accordance with the respective terms and conditions of those agreements, the City shall have the right to terminate this Agreement by providing Omni at least ninety (90) calendar days' advance written notice. _ Page 27 CIT 6!�`1_41N 1Uff Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. ci � els. 12.3. Failure to Pay City Taxes. After payment of the fortieth (40th) quarterly Performance-Based Grant, an event of default shall occur under this Agreement if any (i) real property taxes attributable to the Hotel or the Hotel Garage; (ii) any personal property taxes attributable to personal property owned or leased by Omni and located in the Hotel or the Hotel Garage; (iii) any hotel occupancy taxes attributable to the Hotel and owed to the City pursuant to Chapter 351 of the Texas Tax Code and Chapter 32 of the City Code; or(iv) any municipal sales taxes owed to the City pursuant to Sections 321.101(a) and 321.103 of the Texas Tax Code become delinquent and Omni does not either pay such taxes or properly follow the legal procedures for protest and/or contest of any such taxes. Upon the occurrence of such default, the City shall notify Omni in writing and Omni shall have (i) thirty (30) calendar days to cure such default or (ii) if Omni has diligently pursued cure of the default but such default is not reasonably curable within such time, then such amount of time that the City reasonably agrees is necessary to cure such default. If the default has not been fully cured by such time, the City, as its sole and exclusive remedy, shall have the right to terminate this Agreement immediately by providing written notice to Omni and shall have all other rights and remedies that may be available to it under the law with respect to the collection of any such delinquent taxes. 12.4. Failure to Comply with Minimum Hotel Operating Standards. 12.4.1. Initial Notification by City. If at any time during the Term of this Agreement the City believes that the Hotel has ceased to be operated in accordance with all Minimum Hotel Operating Standards, as required by Section 4.8, the City shall provide written notice to Omni that specifically sets forth the basis of the City's opinion. If Omni agrees with the City's opinion, Omni shall have one (1) calendar year from the date of the City's notice to bring the Hotel into operating compliance with all Minimum Hotel Operating Standards, during which time the City will continue to pay all Program Grants in accordance with this Agreement. If Omni disagrees with the City's opinion or fails within ten (10) business days of receipt to respond to the City's notice, the City may submit the matter to arbitration for resolution in accordance with Section 12.4.3. 12.4.2. Resumption of Minimum Hotel Operating Standards. Once Omni determines that the Hotel has resumed operating in accordance with all Minimum Hotel Operating Standards, Omni will notify the City in writing. If the City notifies Omni in writing of its agreement with Omni's determination within ten (10) business days, the matter will be resolved and the City will continue to pay all Program Grants in accordance with this Agreement. If the City disagrees with Omni's determination or fails to respond to Omni's determination within Page 28 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. ten (10) business days following receipt of Omni's notice, Omni may submit the matter to arbitration for resolution in accordance with Section 12.4.3. If the arbitrator finds that the Hotel has resumed operating in accordance with all Minimum Hotel Operating Standards, the matter will be resolved and the City will continue to pay all Program Grants in accordance with this Agreement. If(i) the arbitrator finds that the Hotel has not resumed operating in accordance with all Minimum Hotel Operating Standards or (ii) Omni fails within one (1) calendar year following the City's initial notice to notify the City in writing that Omni believes that the Hotel has resumed operating in accordance with all Minimum Hotel Operating Standards, the City's obligation to pay any Program Grants to Omni shall cease in accordance with Section 12.4.4. 12.4.3. Arbitration. Any dispute between the City and Omni as to whether the Hotel is operating in accordance with all Minimum Hotel Operating Standards shall be submitted to binding arbitration in accordance with Section 12.9 hereo f. 12.4.4. Cessation or Pro-rated Payment of Proeram Grants. 12.4.4.1. Failure to Comply with Minimum Hotel Operating Standards for Full Quarter. If the Hotel is not operated in accordance with all Minimum Hotel Operating Standards, as determined by the arbitrator in accordance with Section 12.4.3, for any full calendar quarter, then Omni shall waive, and the City will not be required to pay, any Program Grant that would otherwise be payable in the following quarter. In such an event, (i) for any quarter in which a Performance-Based Grant is waived, the City shall nevertheless be deemed to have made a Performance-Based Grant in that quarter and such quarter shall count toward calculating the remaining number of quarters in which a Performance-Based Grant is owed; (ii) no sums shall be added to the balance of the Guaranteed State Amount and/or the Guaranteed City Amount that are attributable to the calendar quarter in which the Hotel was not operated in accordance with all Minimum Hotel Operating Standards; (iii) that portion of any Program Grant attributable to the City Hotel Occupancy Tax Revenue and the City Hotel Sales Tax Revenue and that would otherwise have been payable to Omni will be added for purposes of calculating the City Sources Capped Amount; (iv) for any quarter in which a State Substitute Grant and/or City Substitute Grant is waived, the amount of the State Substitute Grant that would otherwise have been owed shall be deducted from the Guaranteed State Amount for purposes of calcul t' Page 29 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. l , .. ✓A:UINt U'�c�, amount of future State Substitute Grants and the amount of the City Substitute Grant that would otherwise have been owed shall be deducted from the Guaranteed City Amount for purposes of calculating the amount of future City Substitute Grants, if any; and (v) no interest on the balance of any Guaranteed State Amount and/or Guaranteed City Amount shall be earned or accrued for the quarter in which the Hotel was not operated in accordance with all Minimum Hotel Operating Standards, in which case any interest earned for the calendar year in which such quarter occurred shall be prorated in accordance with the number of calendar days in that quarter. 12.4.4.2. Failure to Comply with Minimum Hotel Operatinp-Standards for Portion of a Quarter. If the Hotel is not operated in accordance with all Minimum Hotel Operating Standards, as determined by the arbitrator in accordance with Section 12.4.3, for a portion of any calendar quarter, then any Program Grant that would be payable in the following calendar quarter and any sums that would otherwise be added to the Guaranteed State Amount and/or the Guaranteed City Amount, as well as any interest that would otherwise have been earned thereon, shall be reduced by multiplying such amount by a fraction, to be expressed as a percentage, where (i) the numerator is the number of days in that quarter in which the Hotel was not operated in accordance with all Minimum Hotel Operating Standards, and (ii) the denominator is the number of days in that quarter. In addition, an amount equal to that portion of any Program Grant attributable to the City Hotel Occupancy Tax Revenue and the City Hotel Sales Tax Revenue and that would otherwise have been payable in full to Omni multiplied by a fraction where (i) the numerator is the number of days in that quarter in which the Hotel was operated in accordance with all Minimum Hotel Operating Standards and (ii) the denominator is the number of days in that quarter will be added for purposes of calculating the City Sources Capped Amount Sources Capped Amount. 12.5. Failure to Maintain Competitive Name Brand. 12.5.1. For Full Ouarter. If the Hotel is not operated and marketed under a First Tier Flag brand name, as required by Section 4.9, for any full calendar quarter, then Omni shall waive, and the City will not be required to pay, any Program Grant that would otherwise be payable in the following quarter. Page 30 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. In such an event, (i) for any quarter in which a Performance-Based Grant is waived, the City shall nevertheless be deemed to have made a Performance-Based Grant in that quarter and such quarter shall count toward calculating the remaining number of quarters in which a Performance-Based Grant is owed; (ii) no sums shall be added to the balance of the Guaranteed State Amount and/or the Guaranteed City Amount that are attributable to the calendar quarter in which the Hotel was not operated and marketed under a First Tier Flag brand name; (iii) that portion of any Program Grant attributable to the City Hotel Occupancy Tax Revenue and the City Hotel Sales Tax Revenue and that would otherwise have been payable to Omni will be added for purposes of calculating the City Sources Capped Amount; (iv) for any quarter in which a State Substitute Grant and/or City Substitute Grant is waived, the amount of the State Substitute Grant that would otherwise have been owed shall be deducted from the Guaranteed State Amount for purposes of calculating the amount of future State Substitute Grants and the amount of the City Substitute Grant that would otherwise have been owed shall be deducted from the Guaranteed City Amount for purposes of calculating the amount of future City Substitute Grants, if any; and (v) no interest on the balance of any Guaranteed State Amount and/or Guaranteed City Amount shall be earned or accrued for the quarter in which the Hotel was not operated and marketed under a First Tier Flag brand name, in which case any interest earned for the calendar year in which such quarter occurred shall be prorated in accordance with the number of calendar days in that quarter. 12.5.2. Fora portion of a Quarter. If the Hotel is not operated and marketed under a First Tier Flag brand name, as required by Section 4.9, for a portion of any calendar quarter, then any Program Grant that would be payable in the following quarter and any sums that would otherwise be added to the Guaranteed State Amount and/or the Guaranteed City Amount, as well as any interest that would otherwise have been earned thereon, shall be reduced by multiplying such amount by a fraction, to be expressed as a percentage, where (i) the numerator is the number of days in that quarter in which the Hotel was not operated and marketed under a First Tier Flag brand name, and (ii) the denominator is the number of days in that quarter. In addition, an amount equal to that portion of any Program Grant attributable to the City Hotel Occupancy Tax Revenue and the City Hotel Sales Tax Revenue and that would otherwise have been payable in full to Omni multiplied by a fraction where (i) the numerator is the number of days in that quarter in which the Hotel was operated and marketed under a First Tier Flag brand name and (ii) the denominator is the number of days in that quarter will be added for purposes of calculating the City Sources Capped Amount Sources Capped Amount. - Page 31 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. 12.6. Failure to Meet Construction Cost Spending, Employment and/or Supply and Service Spending Commitments. The failure to meet any Hard Construction Cost spending commitments, as specifically set forth in Sections 4.5.1 and 4.5.2, or to meet any employment and/or Supply and Service Expenditure commitments in any given year, as specifically set forth in Sections 4.6.1, 4.6.2, 4.6.3, 4.7.1 and 4.7.2, shall not constitute a default hereunder or provide the City with the right to terminate this Agreement, but, rather, shall only serve to reduce the amount of the Performance- Based Program Grants, State Substitute Grants and City Substitute Grants that the City is required to pay pursuant to and in accordance with this Agreement. 12.7. Failure to Submit Reports or Make Data Available to the City. If Omni fails to submit all or any reports or make data available to the City, as the case may be and as required by Sections 4.11.3, 4.11.4, 4.11.5 and/or 4.11.6, the City will notify Omni in writing and the City's obligation to pay any future Performance-Based Grant shall be suspended until Omni has provided such report(s) or made such data available for review by the City. 12.8. Other Breaches. In the event that Omni breaches this Agreement and such breach is not covered by Sections 12.1, 12.3, 12.4, 12.5, 12.6 or 12.7, the City shall notify Omni in writing, which notice shall specify the nature of the breach, and Omni shall have thirty (30) calendar days to cure the breach, or if such breach is not reasonably curable within thirty (30) calendar days, such additional time as may be reasonably necessary to cure the breach provided that Omni is diligently pursuing cure. If the breach has not been fully cured within such time, the City shall have all rights and remedies available under the law or in equity other than termination of this Agreement, including, but not limited to, the right to demand specific performance to cure the breach and to collect damages plus reasonably attorneys' fees incurred in the enforcement of this Agreement. 12.9. Arbitration. If the parties are in disagreement regarding any provision of this Agreement, the parties shall submit disputes to mandatory arbitration in accordance with the provisions of this Section 12.9. Each of the City and Omni waives the right to commence an action in connection with this Agreement in any court and expressly agrees to be bound by the decision of the arbitrator determined in this Section 12.9; provided, however, the waiver in this Section 12.9 will not prevent the City or Omni from commencing an action in any court for the sole purposes of enforcing the obligation of the other party to submit to binding arbitration or the enforcement of an award granted by arbitration Page 32 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. herein. Any dispute between the City and Omni as to the interpretation of any provision of this Agreement or the rights and obligations of any party hereunder shall be resolved through binding arbitration as hereinafter provided in Fort Worth, Texas. Notwithstanding the foregoing, prior to submitting any dispute hereunder to arbitration, the City and Omni shall first attempt in good faith, for thirty (30) days after the first notice given under this Agreement regarding such dispute, to resolve any such dispute promptly by negotiation between executives of each party who have authority to settle the dispute, which shall include an in person meeting between such executives in Fort Worth, Texas. 12.9.1 Selection of Arbitrator. If arbitration is required to resolve a dispute between the City and Omni, the City and Omni shall agree upon one (1) arbitrator to resolve the dispute. The arbitrator must be a neutral party having at least five (5) years experience in commercial real estate in general and hotel buildings in particular in the Fort Worth, Texas area and must be mutually acceptable to both parties. 12.9.2 Rules of Arbitrator. The arbitrator selected pursuant to Section 12.9.1 above will establish the rules for proceeding with the arbitration of the dispute, which will be binding upon all parties to the arbitration proceeding. The arbitrator may use the rules of the American Arbitration Association for commercial arbitration but is encouraged to adopt the rules the arbitrator deems appropriate to accomplish the arbitration in the quickest and least expensive manner possible. Accordingly, the arbitrator may (1) dispense with any formal rules of evidence and allow hearsay testimony so as to limit the number of witnesses required, (2) minimize discovery procedures as the arbitrator deems appropriate, and (3) limit the time for presentation of any party's case as well as the amount of information or number of witnesses to be presented in connection with any hearing. In any event, the arbitrator (A) shall permit each side no more than two (2) depositions (including any deposition of experts), which depositions may not exceed four (4) hours each, one set of 10 interrogatories (inclusive of sub-parts) and one set of five (5) document requests (inclusive of sub-parts), (B) shall not permit any requests for admissions, (C) shall limit the hearing, if any, to two (2) days, and (D) shall render his or her decision within sixty (60) days of the filing of the arbitration. 12.9.3 Arbitration Award. The arbitrator will have the exclusive authority to determine and award costs of arbitration and the costs incurred by any party for its attorneys, advisors and consultants. _ IK Page 33 Economic Development Program Agreement 4 between City of Fort Worth and Omni Fort Worth Partnership,L.P. , 12.9.4 Bindinp_Nature. Any award made by the arbitrator shall be binding on the City, Omni and all parties to the arbitration and shall be enforceable to the fullest extent of the law. 12.9.5 Applicable La::'. In reaching any determination or award, the arbitrator will apply the laws of the state in which the Hotel is located. Except as permitted under Section 12.9.3 above, the arbitrator's award will be limited to actual damages and will not include consequential, special, punitive or exemplary damages. Nothing contained in this Agreement will be deemed to give the arbitrator any authority, power or right to alter, change, amend, modify, add to or subtract from any of the provisions of this Agreement. All privileges under state and federal law, including, without limitation, attorney-client, work product and party communication privileges, shall be preserved and protected. All experts engaged by a party must be disclosed to the other party within fourteen (14) days after the date of notice and demand for arbitration is given. 13. ENTERPRISE PROJECT DESIGNATION. The City will use its best efforts to nominate the Project as an enterprise project subject and pursuant to and in accordance with the Texas Enterprise Zone Act, Chapter 2303, Subchapter F of the Texas Government Code and to give the Project first priority with respect to such designation in comparison with other projects being considered by the City for designation as enterprise projects. Omni understands and agrees that the City does not warrant and cannot guarantee such designation by the State of Texas. 14. WAIVER OF CITY FEES. Omni will be required to apply for and receive all permits and other licenses and certificates required by the City with respect to the Project. However, unless otherwise provided herein or prohibited by applicable law, ordinance, rule or regulation, the City hereby agrees to waive the following fees related to the Project that would otherwise be charged by the City: (i) all building permit, plan review, inspection, and re-inspection fees related to any and all aspects of the Project that would otherwise by charged by the City, including fees for inspections by City personnel performed during or outside of normal business hours, whether for review of original plans, or changes, additions, or revisions thereto, and specifically including, but not limited to, fees associated with all electrical, mechanical, HVAC, and plumbing systems, building signage, and swimming pool or other systems; and (ii) temporary and permanent encroachment fees. Page 34 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. Notwithstanding anything to the contrary herein, in no event will the City waive or reimburse Omni for (i) any water or sewer impact fees or(ii) fees of any nature assessed by third parties, such as third party inspection fees. Notwithstanding anything to the contrary set forth herein, the City and Omni agree that the specific fees to be waived under this Agreement shall subsequently be established conclusively in writing by both the City and Omni after plans and specifications for the Project have been agreed to and before Omni applies for a permit from the City to initiate construction. 15. COUNTY TAX ABATEMENT. The City will use its best efforts to facilitate communications with Tarrant County with regard to an ad valorem tax abatement from Tarrant County. Omni understands and agrees that the City does not warrant and cannot guarantee that any such tax abatement will be effectuated. 16. INDEPENDENT CONTRACTOR. It is expressly understood and agreed that Omni shall operate as an independent contractor in each and every respect hereunder and not as an agent, representative or employee of the City. Omni shall have the exclusive right to control all details and day- to-day operations relative to the Project and shall be solely responsible for the acts and omissions of its officers, agents, servants, employees, contractors, subcontractors, licensees and invitees. Omni acknowledges that the doctrine of respondeat superior will not apply as between the City and Omni, its officers, agents, servants, employees, contractors, subcontractors, licensees, and invitees. Omni further agrees that nothing in this Agreement will be construed as the creation of a partnership or joint enterprise between the City and Omni. 17. INDEMNIFICATION. OMNI AGREES TO DEFEND, INDEMNIFY AND HOLD THE CITY, ITS OFFICERS, AGENTS SERVANTS AND EMPLOYEES, HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS, ACTIONS, COSTS AND EXPENSES OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, THOSE FOR PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS TO OMNIS BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR PERSONAL INJURY, INCL UDING DEATH, THAT MAY RELATE TO, ARISE OUT OF OR BE OCCASIONED BY (i) OMNIS BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT OR (ii)ANY ACT OR OMISSION OF OMNI OR ANY OF ITS AFFILIATES, THEIR OFFICERS, AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE CITY) OR SUBCONTRACTORS, RELATED TO THE PROJECT, ANY OPERATIONS OR ACTIVITIES ON THE HOTEL PROPERTY OR IN ANY IMPROVE Page 35 v�UL JSP i1 i1U� Economic Development Program Agreement ;„�uRU ^ between City of Fort Worth and Omni Fort Worth Partnership,L.P. THEREON, OR TO THE PERFORMANCE OF THIS AGREEMENT; EXCEPT THAT THE INDEMNITY PROVIDED FOR IN THIS PARAGRAPH SHALL NOT APPLY TO ANY LIABILITY RESULTING FROM THE SOLE NEGLIGENCE OF THE CITY OR ITS OFFICERS, AGENTS, EMPLOYEES OR SEPARATE CONTRACTORS, AND IN THE EVENT OF JOINT AND CONCURRENT NEGLIGENCE OF BOTH OMNI AND CITY, RESPONSIBILITY, IF ANY, SHALL BE APPORTIONED COMPARATIVELY IN ACCORDANCE WITH THE LA WS OF THE STATE OF TEXAS. 18. NOTICES. All written notices called for or required by this Agreement shall be addressed to the following, or such other party or address as either party designates in writing, by certified mail, postage prepaid, or by hand delivery: City: Omni: City of Fort Worth c/o Omni Hotels Corporation Attn: City Manager Attn: General Counsel 1000 Throckmorton 420 Decker Drive Fort Worth, TX 76102 Irving, TX 75062 Tel. No.: (817) 392-6111 Tel. No.: (972) 871-5619 Fax No.: (817) 392-6134 Fax No.: (972) 871-5666 with copies to: with a copy to: the City Attorney and Winstead, Sechrest &Minick, P.C. Economic/Community Development Attn: Andrew Dow Director at the same address 5400 Renaissance Tower Tel. No. (C.A.): (817) 392-7600 1201 Elm Street Fax No. (C.A.): (817) 392-8359 Dallas, TX 75270-2199 Tel. No. (ECD): (817) 392-6103 Tel. No.: (214) 745-5400 Fax No. (ECD): (817) 392-2431 Fax No.: (214) 745-5883 19. ASSIGNMENT AND SUCCESSORS. Prior to the Completion Date and for three (3) years thereafter, Omni may not assign, transfer or otherwise convey any of its rights or obligations under this Agreement. Thereafter, provided that Omni is not in default of any of its obligations under this Agreement, the Tax Abatement Agreement, the Room Block Agreement or the Ground Lease, Omni may assign, transfer or otherwise convey any of its rights and obligations under this Agreement to another party upon receipt in advance of the written consent of the City, which consent shall not be unreasonably withheld or delayed, conditioned on (i) the prior approval of the assignee or successor and a fording by the City Council that the Page 36 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. proposed assignee or successor will operate and market the Hotel under a First Tier Flag brand name and is financially capable of operating the Hotel in accordance with the Minimum Hotel Operating Standards and (ii) prior execution by the proposed assignee or successor of a written agreement with the City under which the proposed assignee or successor agrees to assume all covenants and obligations of Omni under this Agreement. Any lawful assignee or successor in interest of Omni under this Agreement shall be deemed "Omni" for all purposes under this Agreement. 20. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND REGULATIONS, ALL GRANTS SUBJECT TO APPROPRIATION. This Agreement will be subject to all applicable federal, state and local laws, ordinances, rules and regulations, including, but not limited to, all provisions of the City's Charter and ordinances, as amended. Notwithstanding anything to the contrary herein, all obligations of the City to pay Program Grants to Omni hall be subject to annual appropriation by the City Council. The City's staff shall use its best efforts to include in each annual budget, for consideration and approval by the City Council (such approval, however, being solely within the discretion of the City Council), such amounts as would be sufficient to satisfy all of the City's obligations to Omni under this Agreement during the forthcoming City fiscal year. 21. GOVERNMENTAL POWERS. It is understood that by execution of this Agreement, the City does not waive or surrender any of it governmental powers or immunities. 22. NO WAIVER. The failure of either party to insist upon the performance of any term or provision of this Agreement or to exercise any right granted hereunder shall not constitute a waiver of that party's right to insist upon appropriate performance or to assert any such right on any future occasion. 23. VENUE AND JURISDICTION. If any action, whether real or asserted, at law or in equity, arises on the basis of any provision of this Agreement, venue for such action shall lie in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas — Fort Worth Division. This Agreement shall be construed in accordance with the laws of the State of Texas. Page 37 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. 24. NO THIRD PARTY RIGHTS. The provisions and conditions of this Agreement are solely for the benefit of the City and Omni, and any lawful assign or successor of Omni, and are not intended to create any rights, contractual or otherwise, in any other person or entity. 25. FORCE MAJEURE. In addition to those instances where Force Majeure is addressed elsewhere in this Agreement, it is expressly understood and agreed by Omni and the City that if the performance by either party of any obligation hereunder is delayed by reason of Force Majeure, the time period applicable to performance of such obligation shall be extended for a period of time equal to the period of the specific event of Force Majeure. 26. INTERPRETATION. In the event of any dispute over the meaning or application of any provision of this Agreement, this Agreement shall be interpreted fairly and reasonably, and neither more strongly for or against any party, regardless of the actual drafter of this Agreement. In the event of any direct conflict between the terms and conditions of this Agreement and those of the Tax Abatement Agreement, the Room Block Agreement and/or the Ground Lease, this Agreement shall control. 27. CAPTIONS. Captions and headings used in this Agreement are for reference purposes only and shall not be deemed a part of this Agreement. 28. SEVERABILITY. If any provision of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. 29. ESTOPPEL CERTIFICATES. Omni shall have the right to request the City, from time to time, to issue an estoppel certificate so long as the certificate is requested in connection with a bona fide business purpose. Any estoppel certificate shall be delivered by the City within twenty (20) days (or such additional time as reasonably may be required under the circumstances), addressed to Omni or, at Omni's request, to another party and Page 38 �B �" I(Ko'�II Economic Development Program Agreement � ��. between City of Fort Worth and Omni Fort Worth Partnership, L.P. ii;:1 yup ' 06� include, but not necessarily be limited to, statements by the City as to whether this Agreement is in full force and effect, whether the City is aware of any default hereunder by Omni or the City (and if so, the nature of that default and the curative action taken and/or necessary to effect cure), and the anticipated remaining term of this Agreement. 30. ENTIRETY OF AGREEMENT. This Agreement, including any exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and agreement between the City and Omni, and any lawful assign and successor of Omni, as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent in conflict with any provision of this Agreement. Notwithstanding anything to the contrary herein, this Agreement shall not be amended unless executed in writing by both parties and approved by the City Council of the City in an open meeting held in accordance with Chapter 551 of the Texas Government Code. 31. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall be considered an original, but all of which shall constitute one instrument. EXECUTED as of the last date indicated below: CITY OF FORT WORTH: OMNI FORT WORTH PARTNERSHIP, L.P.: BY: By:Omni Fort Worth GP Corporation, Joe Pg a Delaware corporation and its sole Assist t ' y Manager General Partner By:_ Na e: 5* Jpkn, &I Title: ASV(S(T1w�Gt)• V to Date: 4-27^DS Date: 4-27-0S Page 39 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. APPROVED AS TO FORM AND LEGALITY: By: Peter Vaky 67 Assistant City Attorney M&C: 0--20621 3-27-05- Attested By: NlartyHendrLx City Secretary Page 40 CATEconomic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. EXHIBITS "A" —Map of Central City "B"—Completion Guaranty "C"—Diagram of Hotel Property "D"—Minimum Hotel Operating Standards (D-1 for Three Star Lodging Establishment, D-2 for Four Diamond) "E"—Project Construction Schedule Page 41 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. Exhibit "A" 1' Z �tl ar t CL cps ; :O r � n `r f A pm d y r'. *t � w • u 4q� r C N V v V 0 �jl � cv EXHIBIT "B" GUARANTY In consideration of entering into that certain Economic Development Program Agreement (as same may be amended from time to time, the "380 Agreement") dated 2005, between the City of Fort Worth, Texas, a Texas home-rule city ("CLAY'), and Omni Fort Worth Partnership, L.P., a Delaware limited partnership ("Omni'), relating to the development of a hotel (the "Hotel") and a parking garage (the "Hotel Garage") located in Fort Worth, Tarrant County, Texas and more specifically described in the 380 Agreement, TRT Holdings, Inc. (the "Guarantor") hereby unconditionally guarantees (i) that the Hotel and the Hotel Garage will be Substantially Completed at no cost to the City (the "Completion Obligation"), and (ii) the payment of any amounts determined to be an overpayment of any Program Grant (as that term is defined in the 380 Agreement) that are discovered by a reporting "true-up" or during an audit undertaken pursuant to the 380 Agreement that the City is not able to recover from Omni (the "380 Payment Obligation") (the Completion Obligation, and the 380 Payment Obligation are collectively referred to herein as the"Guaranteed Obligations'). For purposes of the Completion Obligation, the term "Substantially Completed" means that a temporary or final certificate of occupancy has been issued for all of the Hotel (including but not limited to all guest rooms and public areas) and the Hotel and Hotel Garage are lawfully open to the public for business. Guarantor further promises to pay all of City's costs and expenses (including reasonable attorneys' fees) incurred in endeavoring to enforce the Guaranteed Obligations or incurred in enforcing this Guaranty, as well as all damages that the City may incur by operation of Section 2253.027 of the Texas Government Code. 1. If the City enforces the Completion Obligation against Guarantor and Guarantor is performing such obligation hereunder, then, notwithstanding any provision of the 380 Agreement or the Tax Abatement Agreement to the contrary, the City may not terminate the 380 Agreement or the Tax Abatement Agreement and may not reduce the amount of any Program Grant under the 380 Agreement or the value of any abatement under the Tax Abatement Agreement on account of Omni's failure to by the Completion Deadline (as defined in the 380 Agreement)to expend minimum Hard Construction Costs (as defined in the 380 Agreement) for the Hotel or to Substantially Complete the Hotel and the Hotel Garage, nor may the'City reduce the amount of any Program Grant or abatement. As used herein, the term "Tax Abatement Agreement" means that certain Tax Abatement Agreement entered into between Omni and the City and dated of even date with the 380 Agreement. 2. City may at any time and from time to time, without notice to or consent by Guarantor, take any or all of the following actions without affecting or impairing the liability and obligations of Guarantor on this Guaranty: Exhibit B—Page 1 r �j'i`a Economic Development Program Agreement iN r LI , �M "Iff between Cit of Fort Worth and Omni Fort Worth Partnership,L.P. Y p (a) grant an extension or extensions of time for performance of any Guaranteed Obligation; (b) grant an indulgence or indulgences in the performance of any Guaranteed Obligation; (c) accept other guarantees or guarantors; and/or (d) release any person primarily or secondarily liable hereunder or under the 380 Agreement or under any other guaranty. The liability of Guarantor under this Guaranty will not be affected or impaired by any failure or delay by City in enforcing the Guaranteed Obligation or this Guaranty or any security therefor or in exercising any right or power in respect thereto, or by any compromise, waiver, settlement, change, subordination, modification or disposition of the Guaranteed Obligation or of any security therefor. In order to hold Guarantor liable hereunder, there will be no obligation on the part of City, at any time, to resort to Omni or to any other guaranty or to any security or other rights and remedies for performance, and City will have the right to enforce this Guaranty irrespective of whether or not other proceedings or actions are pending or being taken seeking resort to or realization upon or from any of the foregoing; provided, however, that the City shall first seek payment from Omni of any 380 Payment Obligation before enforcing this Guaranty against Guarantor for collection of such amount. 3. Guarantor waives all diligence in collection or in protection of any security, presentment, protest, demand, notice of dishonor or default, notice of acceleration or intent to accelerate, notice of acceptance of this Guaranty, notice of any extensions granted or other action taken in reliance hereon and all demands and notices of any kind in connection with this Guaranty or any Guaranteed Obligation. 4. Guarantor hereby acknowledges full and complete notice and knowledge of all the terms, conditions, covenants, obligations and agreements relating to the construction of the Hotel and the Hotel Garage set forth in the 380 Agreement. 5. The payment by Guarantor of any amount pursuant to this Guaranty will not in any way entitle Guarantor to any right, title or interest (whether by subrogation or otherwise) of Omni under the 380 Agreement or to any security being held for any Guaranteed Obligation. 6. This Guaranty will be continuing, absolute and unconditional and will remain in full force and effect until the Guaranteed Obligations are performed and all obligations of Guarantor under this Guaranty are fulfilled. 7. This Guaranty will also bind the successors and assigns of Guarantor and will inure to the benefit of City and City's successors and assigns. 8. This Guaranty will be governed by and construed according to the laws of Exhibit B—Page 2 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. the State of Texas and will be performed in the county identified in the first paragraph of this Guaranty. The situs for the resolution (including any judicial proceedings) of any disputes arising under or relating to this Guaranty will be the county referenced in the first paragraph of this Guaranty. 9. If this Guaranty is executed by more than one person, all singular nouns and verbs herein relating to Guarantor will include the plural number, the obligations of the several guarantors will be joint and several and City may enforce this Guaranty against any one or more guarantors without joinder of any other guarantor (hereunder or otherwise). 10. City and Guarantor intend and believe that each provision of this Guaranty comports with all applicable law. However, if any provision of this Guaranty is found by a court to be invalid for any reason, the remainder of this Guaranty will continue in full force and effect and the invalid provision will be construed as if it were not contained herein, and if such a finding reduces or eliminates any benefit to City hereunder, the City and Guarantor will mutually work together in good faith to amend this Guaranty promptly so that the full intended benefit to the City provided hereunder is restored. 11. Guarantor will, from time to time, within ten (10) days after written request by City, execute and deliver to such persons as City may designate, an estoppel agreement certifying that this Guaranty is in full force and effect and further certifying such other matters as City may reasonably require. 12. This Guaranty and Guarantor's liability hereunder is only related to the Guaranteed Obligations and nothing set forth herein shall be deemed to impose on Guarantor any liability or obligation to guaranty the performance of any other obligations or covenants of Omni under the 380 Agreement or under any other agreement entered into between the City and Omni. 13. This Guaranty will terminate with respect to the Completion Obligation, and Guarantor will be released from all liability hereunder relating thereto, when the construction of the Hotel is Substantially Completed. This Guaranty will terminate with respect to the 380 Payment Obligation, and Guarantor will be released from all liability hereunder relating thereto, upon the expiration of the 380 Agreement and the satisfaction of Omni's obligations thereunder relating to the 380 Payment Obligation. Upon satisfaction of the Completion Obligation and upon expiration of the 380 Agreement, the City shall deliver a written instrument signed by the City acknowledging that the applicable Guaranteed Obligation has been satisfied, which instrument shall be delivered to Guarantor within fifteen (15) days after receipt of written request therefor from the Guarantor. The City's delivery of such instrument, however, is not a condition precedent to the termination of this Guaranty pursuant to this Paragraph 13. 14. If, during the term of this Guaranty, Guarantor's net worth, as shown on Guarantor's annual audit prepared in accordance with generally accepted accounting principles, decreases to an amount equal to Two Hundred Million Dollars Exhibit B—Page 3 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. ($200,000,000.00) or less, the City may require Guarantor obtain payment and performance bonds in a form reasonably acceptable to the City to secure the Substantial Completion of the construction of and full payment for construction of the Hotel and the Hotel Garage, by delivering written notice to Guarantor. Within thirty (30) days after receipt of such notice, Guarantor shall cause such bonds to be delivered to the City. If Guarantor has not delivered the such bonds to the City within such time period, City may obtain such bonds on Guarantor's behalf, the cost of which will be repaid to the City as an offset against the Lease-Based Grant under the 380 Agreement; provided, however, before obtaining such bonds, the City must first meet and consult with Guarantor to determine the status of Guarantor's efforts in obtaining the bonds. If Guarantor delivers the bonds as required by this Paragraph 14, Guarantor shall be released of all further liability under this Guaranty with respect to the Completion Obligation. The City shall have the right, no more often than once per calendar quarter, to verify the net worth of Guarantor by reviewing the financial information of Guarantor(including the compliance certificates prepared by Guarantor for review by its institutional lenders), which shall serve as conclusive evidence as to whether the net worth requirement is satisfied. The City's review must take place at the office of Guarantor and the City shall not be permitted to make copies of any documentation reviewed at Guarantor's office. The City shall give Guarantor at least fifteen (15) days written notice in order to set a meeting at Guarantor's office for such review. [Signature page follows.] Exhibit B—Page 4 Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty this day of 12005. GUARANTOR: TRT HOLDINGS, INC., a Delaware corporation By: Name: Title: ADDRESS: TRT Holdings, Inc. 420 Decker Drive Irving, Texas 75062 Attn: President With a copy of notices to: Omni Hotels Corporation 420 Decker Drive Irving, Texas 75062 Attn: Michael G. Smith Exhibit B—Page s '��'� Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. EXHIBIT "C" DIAGRAM OF HOTEL PROPERTY The Hotel Property consists of roughly the southern 2/3 of Blocks 7 and 8, Tarrant County Convention Center Addition, an addition to the City of Fort Worth, Tarrant County, Texas, as recorded in Volume 388-59, Page 14, Plat Records, Tarrant County Texas. A diagram of such property is attached hereto. Once the exact location of the Project has been determined and final plans and specifications for the Hotel and the Hotel Garage have been approved by the City in accordance with Section 4.3 of this Agreement, the Hotel Property will be replatted as agreed to by and between the City and Omni. Exhibit"C" Economic Development Program Agreement between City of Fort Worth and Omni Fort worth Partnership,L.P. Ul 4p 17- cn w4p X*C& rat -Zv ip00 JENNINGS AVE 4p cp ot, W0 ................ MONROE ST Co TAYLOR ST EXHIBIT "D" MINIMUM HOTEL OPERATING STANDARDS [The Minimum Hotel Operating Standards appear on Exhibit "D-1" and Exhibit "D-2"] Exhibit D—Solo Page Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership,L.P. Exhibit D-1 Lodging Criteria and Expectations 'Note: The following criteria are suggested criteria of what a guest can generally expect at each star level. They are not individually mandated nor are they limited to those items listed below. These are merely a representative sampling of the hundreds of points covered during our inspection process. Additionally, at each level the lodging establishment is required to meet or exceed the requirements of the previous star rating. For example, a Two-Star hotel meets the criteria expectations of a Two-Star hotel as well as the One-Star hotel. A Three- Star hotel meets the criteria expectations of a Three-Star hotel, a Two-Star hotel and One-Star hotel, and so forth. One-Star Lodging Establishment is a clean, comfortable, and reliable, limited service establishment. Courteous service and good housekeeping, including daily maid service, are standard. Characteristics of a One-Star Hotel or Motel include: Services Detail - Staff is well-groomed with professional, neat and well-maintained attire. -All staff encountered are pleasant and professional in their demeanor. -Coffee, hot tea and breakfast pastry are available on-site (could be in-room). * * .Two-Star Lodging Establishment provides clean, comfortable and reliable accommodations along with expanded amenities and services, such as a full-service restaurant on-site. Guests at a Two-Star Hotel, Resort or Inn can expect to find all of the qualities for a One-Star Hotel, or Resort plus the following characteristics: Services Detail - Front desk staff are articulate, smile and make eye contact. -Staff is attired in well-fitting, consistent uniforms. - Baggage assistance is available on request. -The front desk is staffed twenty-four hours. - Restaurant on-site serving three meals daily. - If Inn, twenty-four hour guest service available on-call * * * Three-Star Lodging Establishment is an establishment that is well-appointed,with full services and expanded amenities. Guests at a Three-Star Hotel, Resort or Inn can expect to find all of the qualities for a Two-Star Hotel or Resort plus the following characteristics: Services Detail -Turndown service is available upon request. -Valet parking is available. - Baggage assistance is automatic. - Same day laundry and dry cleaning available five days/week. - Complimentary newspapers are delivered to room automatically. - Complete room service is available. -Workstation is available where guest can access Intemet. - Basic fitness equipment is provided, including treadmills and cycles. - If Inn, restaurant on-site which serves full breakfast is available. ___. -.If Resortrcomptimeatanl-aews�Prs_(or-newsfaxes)_are delivered to room.automatically. .J '"-,'moi s�;`' ��'���s•�+'•s}����� - - • - ��t � �. zY'mo- W °v h ,��w. -• "C cry �.. —,-, r 7.�. ��S�' .1• • viz-Y•��`4 `z rt�,.: �r�fl+�,�'.s' - 1• • • • •: • h 31 IN • Y .eu r - ➢ r 4-_ .s* -r 3 fit- 4 K-a I�f``4"w�If�z �L�i "`��Y� • .l -"��3.-r cr uta c� �uS,' .� •. • • •' •• •' • ..rt. a Yt�` T•1. .t t�' _ _ _ Ly' `� mak' �,y��kr.51�`Z�r4+'u : •. •- • • • _ • tis E+ hi k= '' •. • • • �'R�' �1ST k,f�Yk '�+`H s��{�. � •. •• • _ • - • • �. ' :. t L �c - yi-�x � �}q�'1., ,,,�' '17_x'.'. •- -• :• 1 • • • • ._.tea..s c, 7••. •.• _ :y f 3 r t p . � i t . tic-�k,1 .stt,�t�. .• _ a• • . Aj^7' �+,.-• J k t�i�A r»i v1J6.,�� �• • • • •- • �- • 1 i �• it ,.J �c'y�k s"Tr�, `,��£� #r`�`'"%a���C.X%�a'Kt'•�ey{:'�",a+'� 1, �t�F R�'x• '�] z 3 Exhibit D-2 7' 705 M nn pv... .. ���V'r7r�t 9N;,{� ArL. 4 �fl+r_ Service number is answered within three.1 cgs . . Ulf` f1f9- Operator provides a warm andsincere greeting, R t using guest's-name: Operator asks appropriate questions and repdes An a professional`manner Operator repeats order to guest Operator gives time estimate for delivery: (within 3U:minutes) Operator':offers a warm and sincere closing " 00erator'calls to advise guest if order will be late or,items ordered are not available "''.; -' y� • 'tom Special express'services are available br. breakfast orders ti - °'"� Delivered within five minutes of time promised Morning newspaper delivered to door or with �e Q breakfast(If delivered to guest door,the paper is presented.with breakfast) Attendant offers a suggestion as to tra&bid Y i' placement Attendant.reviews,guest ordgr Attendant prepares table getup grid removes food covers with guest perrpiss�on Food presentatiorta[irl qualify 01.1 r I reflects an<dpscale ezpeneflce All appropriate dishware and(mens are Qfkaey; - - r upscale quality „ F AN foodered.aXltnaproper ternRetax�r���f ”' (hon f{CiodillQf�i�1d C;otd fiabd;cold) A�fa�od�s'}�,�epare�`�gsdesed 3, �,�; Atteetfdqubever~age ,.; Attendant provide&,wrtttea or verbal instruetio r: for the tableltra}r removal, , Attendant offers a warm and sincere dosing Prompt removal of tray&UNes upon: uesE k e Service number is answe.reef within twee nn f Operator provides.a warm and sincere greet O using guest's name Operator offers to retrieve Car or amac >t3ieK -Nj transportation �Qperator offers a warm,and:s >x. _-' 8el�tarl arrives flrr;�i�itiy if i�©t w�t(ii�'fike`�'; mi t.4 esi guest�s riotifle�of delayYathttte b�°. • ii regtuest m� a BeltmaR pipvides S.wamti and Sincere greetg, " t using gt(esY5 r]artie:: �.r Bellrftan inquires about gue staff`-, Bellriian is eonvecsant wdtn_gueSt wtiie povidmg% X } assista%e. r - :�:� p Bell_.marrotfera�,W���gd�iticere glosing , . Exhibit D-2 fiY�3'rlg j`'y'Y+''Y� ". sxi�"= *�;�` �;et W P 0-:;4_150's a" ►y7�14�i►��Mi7 j alis©',i t� �*s, ROVty�;s�. . he �YT?y�i`i?��"s� .�.�,. T��:•E.�_a�.,: �S?.r""�^„?..'.r� uL,`3."�. ' Express check out services are available 24 hours/seven days a week Attendant provides a warm and sincere greeting; recognizes guest appropriately Attendant acknowledges guests waiting in line with a warm and welcoming greeting Attendant inquires about guest's stay Attendant provides a copy of bill for review into the guest's hand Attendant confirms payment method Attendent confirms payment method Attendant places check-out folio into the guest's hand e � Attendant expresses a warm and sincere thank- you for staying at the property Attendant offers a warm and sincere closing Guest does not wait more than five minutes for transportation Attendant provides a warm and sincere greeting, using guest's name i Attendant is conversant pertaining to the guest's stay Attendant opens and closes door for guest(s) Attendant offers a warm and sincere closing Accurate pre-programmed phones Concierge service number is answered within three rings I' If by phone,operator provides a warm and sincere greeting,using guest's name Attendantloperator is knowiedgeable of all area attractions and services Attendantloperator asks if there are any other ways to be of service Attendant/operator offers a warm and sincere closing Attendant/operator addresses guest by name during closing Overnight valet and laundry available Miscellaneous charges are billed directly to the guest's room Food and beverage outlets reflect the characteristics of the property All associates exhibit a professional vocabulary All associates consistently maintain eye contact with guests All associates are appropriately attired;name tags v r � EXHIBIT "E" PROJECT CONSTRUCTION SCHEDULE EVENT DEADLINE Engage Architect and Design Team 60 days from Effective Date Final Plans and Specifications in Place 420 days from Effective Date Commencement of Construction 510 days from Effective Date Substantial Completion of Hotel/Hotel Garage 1,230 days from Effective Date Economic Development Program Agreement between City of Fort Worth and Omni Fort Worth Partnership, L.P. City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 3/29/2005 - Ordinance Nos. 16354-03-2005 & 16355-03-2005 CONTINUED FROM A PREVIOUS WEEK DATE: Thursday, March 24, 2005 LOG NAME: 170MNI EDPA REFERENCE NO.: C-20621 SUBJECT: Authorize Execution of Economic Development Program Agreement with Omni Fort Worth Partnership, L.P.; Adopt Supplemental Appropriation Ordinance and Authorize Transfer of Funds RECOMMENDATION: It is recommended that the City Council: 1. Make the findings speciafically set forth in the atttached Economic Development Program Agreement; 2. Authorize the the City Manager to execute the attached Economic Development Preogram Agreement with Omni Fort Worth Partnership, L.P.; 3. Adopt the attached supplemental appropriation ordinance increasing appropriations in the Culture and Tourism Fund by $6,300,000 and decreasing the unreserved fund balance by the same amount; 4. Authorize the transfer of $6,300,000 from the Culture and Tourism Fund to the Specially Funded Capital Projects Fund; and 5. Adopt the attached appropriation ordinance increasing estimated receiptes and appropriations in the Specially Funded Capital Projects Fund by $6,300,000 from avaliable funds. DISCUSSION: In response to a Request for Proposals issued by the City, Omni Fort Worth Partnership, L.P. (Omni) proposes to construct a full-service hotel on two tracts of land owned by the City and located directly to the west of the Fort Worth Convention Center. The hotel will have approximately 600 rooms, two full-service restaurants, a lobby bar, approxiamtely 48,000 square feet of dedicated meeting space and other supporting facilities commensurate with a full-service convention center hotel. The hotel will be Texas-themed, and the City will have the right to approve the preliminary and final plans and specifications. Omni will also construct a parking garage, all or a portion of which will be located below ground, on the same tracts of land. Omni may construct residential condominiums on top of the hotel. Omni has committed to expend at least $59,360,000 in hard construction costs for the hotel and parking garage. Within eight months following execution of the attached agreement, TRT Holdings, Inc., Omni's parent company, will deliver the City a guaranty under which TRT Holdings, Inc., guarantees completion of the hotel and parking garage. Omni will also have the right to lease retail space in a newly constructed parking garage owned by the City and located directly to the north of the hotel property and, with certain exceptions, will have an exclusive right to provide catering services at the Convention Center. Logname: 170MNI EDPA Paee 1 of 3 OMNI COMMITMENTS As part of this project, Omni has made the following commitments: * Construction Spending. Omni will spend the lesser of $11,872,000 or 20% of hard construction costs for the hotel/garage with Fort Worth companies. Omni will also spend at least $5,936,000 or 10% of hard construction costs with Fort Worth M/ BE companies. Expenditures with Fort Worth MANBE companies also count toward the commitment for spending with Fort Worth Companies. if Omni fails to meet any of these commitments, the City will receive a credit towards its obligation to pay certain economic development grants (as outlined below) equal to the number of dollars by which the commitments were not met. * Employment. Omni annually will provide at least 250 full-time equivalent jobs (FTEs) in the hotel and hotel garage, of which at least 125 must be residents of the City of Fort Worth and 62 must be residents of the Central City. Jobs provided to residents of the Central City will also count as jobs provided to residents of the City of Fort Worth. If Omni fails to meet any of these commitments, Omni will pay the City of Fort Worth $4,500 for each FTE below the 250 overall commitment; $4,500 for each FTE below the 125 City of Fort Worth commitment; and $9,000 for each below the Central City commitment. All such payments will be used to fund a job-training program at the hotel. * Supply and Service Spending. Omni will spend at least $100,000 per year with Fort Worth companies and at least $50,000 per year with Fort Worth MMBE companies in discretionary supplies and services for the hotel and the hotel garage. Spending with Fort Worth M/WBE companines shall also count toward the spending commitment for Fort Worth Companies. If Omni fails to meet any of these commitments, the City may deduct the number of dollars by which Omni failed to meet the commitments from future payments of certain economic development grants (as outlined below). * Room Block Agreement. Omni will enter into an agreement with the City to reserve blocks of rooms for users of the Fort Worth Convention Center. * Operating Standards. Omni will operate the hotel in accordance with those operating standards attributable to a 3-star/4 diamond hotel. If Omni fails to continue operating the hotel at such standards after a 1-year notice and cure period, the City may suspend payment of certain economic development grants (as outlined below) until Omni has resumed operating the hotel at such standards. CITY INCENTIVES In return for the economic benefits, increased employment and commercial stimulation that the City of Fort Worth is anticipated to receive from the hotel in the form of increased Convention Center bookings, additional tourism and private development around the hotel site, the City will pay Omni various economic development grants authorized by Chapter 380 of the Texas Local Government Code and in accordance with the City's Chapter 380 Economic Development Program previously approved by the City Council, as follows: * Completion Grants. Once construction is initiated, the City will pay Omni monthly grants equal to 50% of the hard construction costs expended by Omni in the previous month. These monthly grants will continue until the City has paid $6.3 million. * Quarterly Incentive Grants. Once the hotel opens and for 10 years thereafter, the City will pay Omni quarterly grants equal to the City hotel occupancy tax and 1% City sales tax received in the previous quarter (capped at $37 million over the course of the program), plus, without the cap or limitation, the state hotel occupancy tax and sales tax rebated to the City because, as provided by state law, the hotel is located within 1,000 of a convention center and is located on property owned by the City. In the event that the City tax rates are lowered, the City will pay Omni the difference between what Omni received and what Omni would have received without the change in rates. In the event that the City does not receive the anticipated Lo2name: 170MNI EDPA Page 2 of state taxes because of a change in rates or the law, the City will pay Omni an amount equal to 25% of the difference. In both instances, the unpaid difference will carry interest at 14% per annum until fully paid. `Lease-Based Grants. The City will pay Omni an annual grant equal to the amount of rent paid to the City on the hotel property, which will continue to be owned by the City, less $10,000. (The hotel and the hotel garage themselves will be owned by Omni). Sale-Based Grant. If Omni exercises its right to purchase the property on which the hotel and parking garage are constructed after the tenth year of the hotel's opening, the City will pay Omni a one-time grant equal to the purchase price, less $1 million. In addition, the City will waive development-related fees for the project, as specified in the Agreement, and will use best efforts to nominate the hotel project for designation as a state enterprise project. The attached Agreement is subject to alll applicable laws, ordinances, rules and regulations. It is anticipated that construction on the hotel will begin December 2005 and that it will be open for business by not later that April 2008. Fort Worth Omni Hotel will be located in COUNCIL DISTRICT 9. FISCAL INFORMATION/CERTIFICATION: The Finance Director certifies that upon approval of the above recommendations and adoption of the attached appropriation ordinances, funds will be available in the current capital budget, as appropriated, of the Specially Funded Capital Projects Fund. TO Fund/AccounVCenters FROM Fund/Account/Centers 3)GG04 538070 0246000 $6,300,000.00 4)GG04 538070 0246000 $6,300,000.00 45)C291 472004 251050022480 $6,300,000.00 5)C291 5391020 2510500224780 $6,300,000.00 Submitted for City Manager's Office IbT. Joe Paniagua (6191) Dale Fisseler (6140) Originating Department Head: Tom Higgins (6192) Additional Information Contact: Peter Vaky (7601) Loaname: 17OMNI EDPA Page 3 of 3