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2017-29963 Resolution RESOLUTION NO. 2017-29963 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, APPROVING THE TERM SHEET BETWEEN THE CITY AND ART BASEL U.S. CORP., ATTACHED AS EXHIBIT "A" TO THE COMMISSION MEMORANDUM ACCOMPANYING THIS RESOLUTION, FOR A MULTI-YEAR LICENSE AGREEMENT FOR USE OF THE MIAMI BEACH CONVENTION CENTER FOR THE 2019-2023 ART BASEL SHOWS; AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND FINALIZE THE LICENSE AGREEMENT WITH ART BASEL U.S. CORP. AND GLOBAL SPECTRUM, L.P. D/B/A SPECTRA VENUE MANAGEMENT; AND FURTHER AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE THE FINAL AGREEMENT FOLLOWING THE CONCLUSION OF SUCCESSFUL NEGOTIATIONS BY THE ADMINISTRATION AND FORM APPROVAL BY THE CITY ATTORNEY. WHEREAS, Art Basel in Miami Beach (ABMB) was established in 2000 as the sister event of Switzerland's Art Basel, the world's most prestigious art fair for the past 42 years; and WHEREAS, ABMB has become the preeminent contemporary art fair in the western hemisphere and an established destination for artists, galleries, collectors, museum groups, and other individuals interested in top quality art; and WHEREAS, economists have estimated $400 million to $500 million annually in related economic impact as a result of ABMB; and WHEREAS, ABMB generates thousands of hotel room nights annually within the City of Miami Beach, including 3,338 rooms on the peak night of the show during the 2014 Art Basel show; and WHEREAS, based on ABMB's room night confirmations, the City Commission designated ABMB as a Marquee Event pursuant to the Miami Beach Convention Center ("MBCC") Booking Policy; and WHEREAS, ABMB has requested that the City, as part of the Miami Beach Convention Center Renovation Project, undertake certain additional improvements, including an additional escalator, elevator and related work, with a design and construction cost of approximately $2.8 million ("Additional Improvements"); and WHEREAS, the City is willing to undertake the Additional Improvements in consideration for a long-term commitment from ABMB to host the annual Art Basel Show at the Miami Beach Convention Center for at least five (5) years; and WHEREAS, the City and ABMB have further discussed the proposed rental rates for use of the Miami Beach Convention Center following the completion of the MBCC Renovation Project, which would result in significant additional license fee revenues to the City; and WHEREAS, the Administration recommends approval of the Term Sheet, attached as Exhibit "A" to the Commission Memorandum accompanying this Resolution, outlining the essential terms for a five-year commitment for the Art Basel Show at the Miami Beach Convention Center (commencing with the 2019 Annual Show), plus one additional five (5) year renewal option, along with terms for ABMB to compensate the City for the Additional Improvements in the event of an early termination without cause; and WHEREAS, the Administration further recommends that the City Commission authorize the Administration to negotiate and finalize a License Agreement consistent with the Term Sheet; and further authorize the Mayor and City Clerk to execute the final agreement following the conclusion of successful negotiations by the Administration, and form approval by the City Attorney. NOW, THEREFORE, BE IT DULY RESOLVED BY THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA that the Mayor and City Commission hereby approve the Term Sheet between the City and Art Basel U.S. Corp., attached as Exhibit "A" to the Commission Memorandum accompanying this Resolution, for a multi-year License Agreement for use of the Miami Beach Convention Center for the 2019-2013 Art Basel Shows; authorize the City Manager to negotiate and finalize the License Agreement with Art Basel U.S. Corp. and Global Spectrum, L.P. D/B/A Spectra Venue Management; and authorize the Mayor and City Clerk to execute the final agreement following the conclusion of successful negotiations by the Administration and form approval by the City Attorney. -T / PASSED AND ADOPTED this p26' day of Jit! , 2017. '/ s f. waaq%41 ,i 5.` '• r 4,01 BATTEST: / , :: • ti'•, I , // t. * WCORP ORATED. C Y CLERK �^�CH 26'•• ;,\C)•r ���4Op��a �. APPROVED AS TO FORM&LANGUAGE &FOR r-- ION A--/Afrikei.; 4- 3 I 9--- y , f Date LICENSE AGREEMENT MIAMI BEACH CONVENTION CENTER THIS LICENSE AGREEMENT(the"Agreement")is made and entered into this �day of August,2017(the"Effective Date"),by and between Global Spectrum,L.P.,d/b/a Spectra Venue Management,a Delaware limited partnership,having an office at 3000 N.W.125th Street,Miami, FL 33167,as agent on behalf of City of Miami Beach Florida("Licensor"),and Art Basel U.S.Corp,a Florida corporation, having an address at 1111 Brickell Ave, Ste. 1700,Miami,FL 33131,C/O MCH Swiss Exhibition(Basel)Ltd.P.O.Box,CH-4005 Basel, Switzerland ("Licensee"), and the City of Miami Beach, Florida,a municipal corporation, having an address at 1700 Convention Center Drive, Miami Beach,Florida("Owner")(collectively referred to as"Parties", or singularly as a"Party",as the case may be). RECITALS WHEREAS,the Owner owns the Miami Beach Convention Center,located in Miami Beach, Florida(the"Center"),and has engaged Licensor to manage and operate the Center on the Owner's behalf;and WHEREAS, Licensor is authorized to enter into agreements on behalf of the Owner for use of space within the Center;and WHEREAS, Licensee desires to license space within the Center for the production and operation of the annual art show entitled'Art Basel in Miami Beach'(the"Annual Show"or"Event"),and Licensor agrees to license such space,under and subject to the terms and conditions set forth herein. AGREEMENT NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND, AND IN CONSIDERATION OF THE MUTUAL COVENANTS AND PROMISES CONTAINED IN THIS AGREEMENT, AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED,THE PARTIES HERETO AGREE AS FOLLOWS: SECTION 1. SPECIFIC TERMS OF LICENSE. A. PREMISES, LICENSE PERIOD FOR EACH ANNUAL SHOW,AND LICENSE FEE Portion of Facility(Premises) License Period for Each Annual Show License Fee Halls A-D, all new and existing 2019 $750,000.00; plus$52,500.00 for 7% Florida ballroom areas(including the North State Rental Tax. Total$802,500.00. and South Junior Ballrooms, the 11/17(7:00 A.M.)—12/03/2019 Move-In new Grand Ballroom and the 12/04(Wed)- 12/08/2019(Sun) Show Rooftop Specialty Ballroom), all 12/09- 12/13/2019(11:59 P.M.) Move-Out* Number of Days=26 Days new and existing meeting room and (excluding Thanksgiving) office space areas,the Carl Fisher Clubhouse,the park located on the (Thur., 11/28/2019 is Thanksgiving Day; option for Any additional days in excess of the 26 day north side of the Center Licensee to use for Move-in upon notice, with the annual License Period referenced herein, if (sometimes referred to as the"21st License Fee to be adjusted on a pro rata basis for each requested by Licensee, shall be subject to . Street Park"), and on a non- additional day, in an amount equal to 1/26`h of the mutual agreement of the parties, with the exclusive basis, areas ancillary applicable License Fee due for that year's Annual Show. License Fee to be adjusted on a pro rata basis thereto within the Center and for each additional day,in an amount equal to common areas, including, without *Specific dates for Move In,Show,and Move-Out may be 1/26t of the applicable License Fee due for limitation, the east lobbies, west changed by mutually agreed to written amendment to this the 2019 Annual Show. lobbies, ballroom prefunction Agreement, provided license period is generally within spaces, the public and service Nov.20 to Dec. 15 period. corridors and loading docks (collectively,the"Premises") The Premises 2020 $750,000,subject to adjustment by the greater of (x) two percent (2%), or (y) inflation 11/15(7:00 A.M.)—12/01/2019 Move-In measured by utilizing the United States 12/02(Wed)-12/06/2019(Sun) Show Bureau of Labor Statistics, Consumer Price 12/07- 12/11/2019(11:59 P.M.) Move-Out* Index for All Urban Consumers; US City Average (on an October 1 to September 30 fiscal year basis) ("2020 License Fee"), plus (Thur., 11/26/2020 is Thanksgiving Day; option for 7% Florida State Rental Tax. Licensee to use for Move-in upon notice, with the License Fee to be adjusted on a pro rata basis for each Number of Days=26 Days additional day,in an amount equal to 1/26th of the 2020 (excluding Thanksgiving) License Fee. Any additional days in excess of the 26 day *Specific dates for Move In,Show,and Move-Out may be annual License Period referenced herein, if changed by mutually agreed to written amendment to this requested by Licensee, shall be subject to Agreement, provided license period is generally within mutual agreement of the parties, with the Nov.20 to Dec. 15 period. License Fee to be adjusted on a pro rata basis 1 for each additional day,in an amount equal to 1126th of the 2020 License Fee. The Premises 2021 2020 License Fee, subject to adjustment by the greater of (x) two percent (2%), or (y) 11/14(7:00 A.M.)—11/30/2019 Move-In inflation measured by utilizing the United 12/01 (Wed)- 12/05/2019(Sun) Show States Bureau of Labor Statistics, Consumer 12/06-12/10/2019(11:59 P.M.) Move-Out* Price Index for All Urban Consumers;US City Average (on an October 1 to September 30 fiscal year basis)("2021 License Fee") , plus (Thur., 11/25/2021 is Thanksgiving Day; option for 7%Florida State Rental Tax. Licensee to use for Move-in upon notice, with the License Fee to be adjusted on a pro rata basis for each Number of Days=26 Days additional day,in an amount equal to 1/26th of the 2021 (excluding Thanksgiving) License Fee. Any additional days in excess of the 26 day annual License Period referenced herein, if *Specific dates for Move In,Show,and Move-Out may be requested by Licensee, shall be subject to changed by mutually agreed to written amendment to this mutual agreement of the parties, with the Agreement, provided license period is generally within License Fee to be adjusted on a pro rata basis Nov. 19 to Dec. 15 period. for each additional day,in an amount equal to 1/26th of the 2021 License Fee. The Premises 2022 2021 License Fee, subject to adjustment by the greater of (x) two percent (2%), or (y) 11/13(7:00 A.M.)—11/29/2019 Move-In inflation measured by utilizing the United 11/30(Wed)- 12/04/2019(Sun) Show States Bureau of Labor Statistics, Consumer 12/05- 12/09/2019(11:59 P.M.) Move-Out* Price Index for All Urban Consumers;US City Average (on an October 1 to September 30 fiscal year basis)("2022 License Fee"), plus (Thur., 11/24/2022 is Thanksgiving Day; option for 7%Florida State Rental Tax. Licensee to use for Move-in upon notice, with the License Fee to be adjusted on a pro rata basis for each Number of Days=26 Days additional day, in an amount equal to 1/26th of the 2021 (excluding Thanksgiving) License Fee. Any additional days in excess of the 26 day annual License Period referenced herein, if *Specific dates for Move In,Show,and Move-Out may be requested by Licensee, shall be subject to changed by mutually agreed to written amendment to this mutual agreement of the parties, with the Agreement, provided license period is generally within License Fee to be adjusted on a pro rata basis Nov.20 to Dec. 15 period. for each additional day,in an amount equal to 1/26th of the 2022 License Fee. The Premises 2023 2022 License Fee, subject to adjustment by the greater of (x) two percent (2%), or (y) 11/19(7:00 A.M.)—12/05/2019 Move-In inflation measured by utilizing the United 12/06(Wed)-12/10/2019(Sun) Show States Bureau of Labor Statistics, Consumer 12/11 - 12/15/2019(11:59 P.M.) Move-Out* Price Index for All Urban Consumers;US City Average (on an October 1 to September 30 fiscal year basis) ("2023 License Fee"), plus (Thur., 11/23/2023 is Thanksgiving Day; option for 7%Florida State Rental Tax. Licensee to use for Move-in upon notice, with the License Fee to be adjusted on a pro rata basis for each Number of Days=26 Days additional day, in an amount equal to 1/26th of the 2023 (excluding Thanksgiving) License Fee. Any additional days in excess of the 26 day annual License Period referenced herein, if *Specific dates for Move In,Show,and Move-Out may be requested by Licensee, shall be subject to changed by written amendment to this Agreement, mutual agreement of the parties, with the provided license period is generally within Nov. 20 to License Fee to be adjusted on a pro rata basis Dec. 15 period. for each additional day,in an amount equal to 1/26th of the 2023 License Fee. B. EVENT DESCRIPTION: Art Basel Miami Beach C. EXPECTED ATTENDANCE: Approximately 77,000(based on 2017 attendance estimates) 2 D. DEPOSIT: 2019: $52,500.00 January 15,2019 $375,000.00 June 15,2019 $375,000.00 October 15,2019 In advance of each Annual Show thereafter, Licensee shall pay a deposit as follows: January 15th: Initial deposit consisting of sales tax on License Fee due for that year's Annual Show June 15`h: 50%of License Fee due for that year's Annual Show October 15th: 50%of License Fee due for that year's Annual Show(as may be adjusted pursuant to Section 1.A) E. ADDITIONAL IMPROVEMENTS FOR BENEFIT OF LICENSEE. Owner shall design and construct an additional elevator,escalator and related improvements at the Center to provide for a direct connection from the exhibit halls to the new second-floor grand ballroom("Additional Improvements")prior to the 2019 Annual Show, substantially as set forth in the sketch layout (Sketch # SKA-201a and SKA201b) prepared by Fentress Architects("Fentress"),dated August 3,2017,attached hereto as combined Exhibit A, and subject to the final layout to be prepared by Fentress. The Owner shall be responsible for all costs relating to the Additional Improvements at the Center. The current estimated cost of the Additional Improvements is$2,875,000.00(the"Estimated Cost"). The Owner shall have no obligation to construct the Additional Improvements,and shall not commence with construction thereof,until such time as the Owner and Licensee have entered into this Agreement. F. CANCELLATION OF ANNUAL SHOW OR TERMINATION OF AGREEMENT BY LICENSEE: The provisions of Section 11.16 of this Agreement shall govern in the event of cancellation of any Annual Show, or other termination of this Agreement,without cause, prior to the conclusion of the 2023 Annual Show. G. SPECIAL CONDITIONS: i. Initial Meeting Room Set-Up:Licensor shall provide a complimentary one-time per Annual Show set-up of equipment to include tables, chairs, podium, and risers will be provided in the meeting rooms based on available inventory. Any changes, re-sets or additional equipment will be charged at the prevailing rates set forth in the MBCC Building Users Guide. ii. Air Conditioning: Air conditioning will be provided by the Licensor in all the Halls and the Meeting Quadrant of the Premises during show days only. If air conditioning is required in the Meeting Quadrant during non-show days in the Hall, Licensee shall be charged at the then prevailing rates,provided,however,that such rates shall not exceed 50% greater than the hourly or daily rate set forth in the 2017 MBCC Building Users Guide(or,if this Agreement is renewed for the 2024-2028 Annual Show, such rates shall not exceed 50%greater than the hourly or daily rate charged for the 2023 Annual Show during such renewed term). iii. Stagehand Labor: Stagehand labor at prevailing rates required for technical AN needs relating to sound, lights and microphone hook-up. All stagehand labor estimates must be paid prior to the Annual Show. iv. Box Office and Ticketing: Licensee will be solely responsible for box office operations,including credit card terminals and build-out of any ticketing box offices for the provision of on-site sales at the Premises. v. Competing Event Protection Clause: Licensor and Owner agree that they will not lease or license any portion of the Center, Premises or surrounding spaces and facilities to any Competing Event for the period commencing 30 days before Licensee's first show day,and concluding 30 days after Lessee's last show day(the"Protection Period"). A"Competing Event"is hereby defined as an art fair or any other similar commercial art event,including,without limitation,an event where the primary purpose of the show is for an art auction(but excluding any auction that may be incorporated as part of a fund-raiser,gala,or other event at the Center).The determination of whether or not an event is a"Competing Event" shall be within the reasonable discretion of the Licensee, and shall be based upon the product lines in the proposed event's show(with the understanding that any type or style of fine art, other than jewelry, may be competitive). The Parties further agree that the event show titled"Design Miami"shall not constitute a Competing Event for purposes of this subsection, provided that Design Miami continues its primary programming as a furniture design show exhibiting museum-quality furniture, lighting and objects d'art. vi. Separate Agreement Required for Use of Miami Beach Botanical Garden. The Premises shall not include the Miami Beach Botanical Gardens, and any rental of the Miami Beach Botanical Gardens shall be the subject of a separate agreement. vii. Limitation on Use of Certain Areas Within the Premises. The portion of the Premises consisting of the Grand Ballroom, the Sunset Vista Lounge,and the Carl Fisher Clubhouse shall be available for Licensee use and programming,provided, however, that in view of the finishes therein, in no event shall the foregoing areas be used for art-related storage or storage of crates. 3 viii. City of Miami Beach Special Events Permit. Licensee shall be solely responsible for obtaining a special events permit from the City for each Annual Show and paying all reasonable costs directly related to obtaining the same. ix. Parking. Any use of the Parking Garage Facility located within the Center shall be subject to separate agreement, subject to prevailing rates and terms consistent with Owner's Series 2015 Parking Revenue Bonds requirements, provided;however,that Licensee shall be provided a right of first refusal to enter into an agreement related to the use of the Parking Garage Facility during the Annual Shows,and provided further that such parking shall be available for use by the general public. Valet parking arrangements shall also be subject to separate agreement. x. Right of First Refusal and Renewal. Notwithstanding any other provision contained within this Agreement,provided that Licensee has at all times fully complied with its obligations under this Agreement, and subject to the terms of this paragraph, Licensee shall have the Right of First Refusal and Renewal to hold the Annual Show at the Center for an additional five consecutive Annual Shows. "Right of First Refusal and Renewal"shall mean the right,before any other licensee or potential licensee,to use the Center for the 2024-2028 Annual Show,on the same or similar financial terms as contained within this Agreement (including, without limitation, the License Fee rate structure and the annual adjustments specified herein). In order to exercise the Right of First Refusal and Renewal, Licensee must give written notice to the Licensor and Owner by no later than December 31,2022,after which the Licensee,Licensor and Owner shall negotiate,in good faith,to enter into a license agreement for the 2024-2028 dates in a form acceptable to all Parties prior to June 30,2023,or another mutually agreed upon date(the"Right of First Refusal Period"). In the event Licensee fails to give written notice exercising the Right of First Refusal and Renewal by December 31,2022,Licensee's Right of First Refusal and Renewal shall be null and void,and Licensor shall be free to license the Center to any third party on or after January 1,2024,in its discretion. xi. Right of First Refusal for P-Lot Park. The Parties understand and acknowledge that Design Miami may hold events during the License Period for Annual Shows in a new park that may be created in the current P-Lot parking area("New Park"). In the event that Design Miami does not use or ceases to use the New Park for any reason whatsoever,Owner and Licensor hereby agree that Licensee shall have a right of first refusal to enter into an agreement with Owner and Licensor for the use of the New Park for any subsequent License Periods. xii. Most Favored Nation. In recognition of the importance to Owner of having the Annual Shows held in Miami Beach,and as consideration for Licensor entering into a long-term agreement,Owner and Licensor hereby agree and warrant that the license fee charged to other users of the entirety of the Premises(as generally defined herein)shall not be more favorable to such other users than the License Fee charged to Licensee for each Annual Show for the same calendar year. In such event,the License Fee charged to Licensee shall be reduced on a pro-rata basis with such lesser fee. xi ii. Art Basel Zone. The Parties acknowledge that certain Letter of Understanding between the Owner and Licensee,dated May 12,2015,regarding the establishment of the"Art Basel Zone"(as defined therein),attached hereto as Exhibit B(the "LOU"). The Parties further agree that, provided Licensee is not in default of this Agreement, the LOU shall remain in effect during the term of this Agreement in its current form, unless otherwise mutually agreed to by the Parties. xiv. Convention Center Hotel. The Parties understand and acknowledge that a convention center hotel may be built on or adjacent to the site of the Center during the License Period or term of this Agreement(the"Hotel"). As such,the Owner and Licensor agree with Licensee as follows:(a)to provide Licensee with at least one(1)year advance written notice of the beginning of actual construction for the Hotel;(b)that the terms of the Competing Event Protection Clause set forth in Section I.G.v shall be applicable to the Hotel;and(c)the terms of the LOU shall be applicable to the Hotel. xv. Convention Center Drive. The Parties hereby agree that Convention Center Drive shall remain open and accessible to unimpeded vehicular and pedestrian traffic during each Annual Show. Licensee shall be provided the ability to use Convention Center Drive(on the east lane adjacent to the Center)as a marshalling area during the respective Move-in and Move-out periods,provided that Convention Center Drive remains open to vehicular traffic at all times. H. MISCELLANEOUS PROVISIONS: i. RECITALS.The recitals set forth above are true and correct in all respects and are incorporated herein by this reference. ii. SECTION II TERMS AND CONDITIONS CONSTITUENT PARTS OF THE AGREEMENT. a) Unless specified otherwise, the terms of Section I of this Agreement are subject to Section II of this Agreement [Terms and Conditions] attached hereto following the signature page. The Parties agree that Section II of this Agreement is hereby incorporated into this Agreement,and form an integral part of this Agreement. iii. ENTIRE AGREEMENT.The Parties hereby agree that this Agreement is the entire agreement between the parties. This Agreement cannot be amended or modified, unless agreed to in writing by all Parties. iv. GUARANTY. Owner shall cause for Licensor,as agent of the Owner,to perform its obligations hereunder in accordance with the terms of this Agreement. In the event Licensor's Management Agreement with Owner expires or is otherwise terminated, Owner shall cause for any successor Licensor to join as a Party to this Agreement, and to perform its obligations hereunder in accordance with the terms of this Agreement. v. REMEDIES. The rights and remedies provided by this Agreement are cumulative, and the use of any one right or remedy by any party hereto shall not preclude or constitute a waiver of its right to use any or all other remedies. Such rights and remedies are given in addition to any other rights and remedies a party may have by law,statute,or otherwise. vi. COUNTERPARTS. This Agreement may be executed in one or more counterparts and by electronic or facsimile signature,which signature shall be effective as if original signatures were exchanged,and all such counterparts shall constitute a single instrument. 4 (SIGNATURE PAGE TO FOLLOW) 5 IN WITNESS WHEREOF,the undersigned have duly executed this Agreement by their authorized representatives on the date set forth below. LICENSOR: LICENSEE: GLOBAL SPECTRUM, L.P., ART BASEL U.S.CORP. d/b/a SPECTRA VENUE MANAGEMENT By: By: Name: Matt Hollander Name: René Kamm Title: General Manager Title: President Date: Date: OWNER: CITY OF MIAMI BEACH By: Aliff Zoe" By: Name: Phili. - Name: Noah Horowitz Title: May; Title: Director Americas Date: 1 7 \ `li"144144 •ate: ifs * INCORP ORATEI; �1 'k .*•-. A .�cr�s ATTEST: �C'H 26,,�,\-c .4,' 4 ',A.-, APPROVED AS TO ?ttfitel I . Granado,City Clerk FORM&LANGUAGE &FOR EXECUT • dgllIllr*b-_CAIIe' '1e; IXZ/--Y---- Attorney Date lir 1� 6 IN WITNESS WHEREOF,the undersigned have duly executed this Agreement by their authorized representatives on the date set forth below. LICENSOR: LICENSEE: GLOBAL SPECTRUM, L.P., ART BASEL U.S.CORP. d/b/a SPECTRA VENUE MANAGEMENT By: By: Name: Matt Hollander Name: Rene Kamm Title:General Manager/ Title: President ag— Date: 9— / 7 Date'. OWNER: CITY OF MIAMI BEACH By: By: Name: Philip Levine Name: Noah Horowitz Title: Mayor Title: Director Americas Date: Date: APPROVED AS TO FORM&LANGUAGE &FOR EXECUT,ON Attorney- .- / )2 7i' r//' )._ Date '� , Vi i° / 6 IN WITNESS WHEREOF,the undersigned have duly executed this Agreement by their authorized representatives on the date set forth below. LICENSOR: LICENSEE: GLOBAL SPECTRUM, L.P., ART BASEL U.S. CORP. d/b/a SPECTRA VENUE MANAGEMENT By: By. Name: Matt Hollander Name: René Kamm Title: General Manager Title: President Date: Date: August 4,2017 OWNER: CITY OF MIAMI BEACH By: Name: Philip Levine ifp s.• Title: Mayor By: Date: Name: Noah Horowitz Title: Director Americas Date: - 6 SECTION II.TERMS AND CONDITIONS 1. Grant of License;Premises. Subject to the terms and conditions herein set forth,Licensor hereby grants to Licensee the right and license to use the Premises as described in Section I.A for the limited purpose of holding the Annual Show described within this Agreement,and not for any other purpose. Licensee shall not have access rights or privileges in or to any other part of the Center besides the Premises,except for the privilege of ingress and egress through the public and service corridors in the Center,on a non-exclusive basis,as well as use of the loading docks,each as necessary to utilize the Premises. 2. Dates of Use;License Period;Term. Unless this Agreement is earlier terminated pursuant to the provisions hereof,Licensor grants to Licensee the right to use the Premises for each Annual Show on the date(s)and time(s)set forth in Section I.(the"Term"). The'Term"of this Agreement shall begin on the date and time in which this Agreement is executed by the Parties,and shall end upon expiration of the 2023 License Period as indicated in Section I.A above.The Term may not be extended by Licensee without obtaining Licensor's prior written permission(which permission may be withheld in Licensor's sole discretion). In the event the Term is extended pursuant to the preceding sentence,Licensee shall be responsible for any additional fees and costs required by Licensor in connection therewith. 3. Duties of Licensor. Except as may be otherwise specified in Section I.G,Licensor shall,at the sole cost and expense of Licensee,provide(or cause to be provided),any and all personnel as may be required by Licensor(in its sole discretion)to properly staff the Center for each Annual Show and for the proper and safe presentation of each Annual Show,including without limitation personnel to crowd control,first aid(EMT),fire personnel,badge checkers,supervisors,janitorial staff, telecommunications staff,intemet technology staff,ticket takers,concession and catering staff(depending on the optional exclusivity set forth in Section 11.7 hereof) and other necessary support services customarily provided by Licensor for a like event,as applicable,and additional items,equipment,personnel and services(such as telephone,intemet and other services and utilities)which Licensee requests to be provided in connection with each Annual Show and which Licensor is reasonably able to provide,all of which shall be subject to the approval of Licensor. It is understood by Licensee that services,labor and equipment will be provided only to the extent of existing available inventory and in consideration of other Center events and activities. 4. Non-Refundable Deposit. A non-refundable deposit in the amount as provided in Section I.D is due and payable to Licensor according to the payment schedule set forth in Section I.D. Such deposit shall be credited to the License Fee and reimbursable expenses described below. Licensee shall not be entitled to the payment of any interest whatsoever on the deposit paid to Licensor.This deposit is non-refundable without regard to whether Licensee makes use of the Premises. If the deposit(or any portion thereof)is not paid on or before the due date(s)specified in I.C,Licensor may terminate this Agreement,in its sole discretion,by providing written notice of termination to Licensee. Any such termination shall be in addition to any other right or remedy available to Licensor at law or in equity arising out such breach by Licensee,including Licensor's right to recover damages. Notwithstanding anything to the contrary within this Agreement,the foregoing is subject to subsections 16,18,or 19 of Section II of this Agreement. 5. License Fee;Other Costs and Expenses. A. License Fee. In consideration of the license granted hereunder,Licensee agrees to pay to Licensorthe License Fee for each Annual Show in the amount set forth in Section I for each Annual Show. The License Fee shall be paid by Licensee in accordance with the terms set forth in Section I.D. B. Other Costs and Expenses. In addition,unless otherwise set forth in Section I.F above,the Licensee agrees to reimburse Licensor for any and all costs incurred by Licensor directly in connection with Licensee's use of the Premises,including,without limitation,costs incurred for the provision of the items, services and personnel described in Section 11.3 above pursuant to the MBCC Building Users Guide,or otherwise requested by Licensee,at the then- prevailing rates(the"Other Costs and Expenses");provided,however,that such prevailing rates for costs and expenses directly charged bythe Owner(as opposed to those provided by third party providers,including other branches of the Miami Beach city government,such as EMT,police and fire personnel, etc.)shall not exceed 50%greater than the rates charged for the 2017 Annual Show(or,if this Agreement is renewed for the 2024-2028 Annual Show,the rates shall not exceed 50%greater than the rates charged for the 2023 Annual Show during such renewed term);all such costs shall be paid by Licensee ten(10)days prior to each Annual Show, in accordance with the MBCC Building Users Guide and estimates provided by Licensor and approved by Licensee. Unless otherwise provided for within this Agreement,subject to Section 13 below,any Other Costs and Expenses relating to changes in the Annual Show requirements shall, unless otherwise agreed by Licensor,be billed to Licensee as part of the final settlement,provided;however,that Licensor shall notify Licensee of any Other Costs and Expenses in excess of$5,000 per expense on or before such Other Costs and Expenses are incurred. Except with respect to the provision of EMTs,police,and fire personnel for each Annual Show,all of which must be provided through the Licensor,and the food&beverage/catering services(which shall be governed by the provisions of Section 11.7 hereof),in the event that Licensee does not accept the prevailing rates set forth in the MBCC Building Users Guide with respect to any items or services set forth therein,Licensee shall have the option to contract with other third-party vendors for such services. Licensee's third-party vendors,if any,must hold the requisite licenses to perform the contracted- for work or services at the Center,must meet Licenser's insurance requirements(which shall be the same as those required for other authorized vendors at the Center),and shall be subject to Licensor's advance written approval,which approval shall not be unreasonably withheld or delayed. C. In the event Licensee fails to remit payment when due of any amounts(whether License Fee or Other Costs and Expenses),interest shall accrue on such overdue amounts at the rate of 0.5%per month(6%per annum,non-compounded),or the maximum rate permitted by law,whichever is less. Unless otherwise agreed by Licensor,payments shall be made by money order,wire transfer,or certified check. 6. Delay of Possession: A. In the event Licensor is not able to tender possession of the Premises or any part thereof to Licensee because of any delay,then as long as such inability continues,the License Fee shall be reduced pro-ratably. Licensor shall also be liable to pay any and all costs incurred by Licensee including,but not limited to,personnel overtime costs,as a result of Licenser's inability to tender possession of the Premises,unless such delay is caused by an Event of Force Majeure(as provided in Section 11.19),in which case the provisions of Section 11.19 shall take precedence and control. Such reduction of costs and expenses shall be in addition to,and not in lieu of,any other rights or remedies Licensee may have,at law or in equity,in the event of a breach or cancellation of this Agreement by Licensor. B. Should Licensee fail to vacate and surrender the Premises at the end of the License Period,Licensee shall pay to the Licensor Licensee shall pay to the Licensor$500.00 per hall,per hour for use and occupancy for that portion of the Premises that has not been vacated and surrendered. Further,the Licensor may,as a bailee,using reasonable care,remove and store all goods and chattels at the sole expense of the Licensee and may dispose of any such property if,after the expiration of fifteen(15)calendar days after the expiration of the License Period,the Licensee has failed to remove the property from the possession of the Licensor,upon prior written notice. The Licensor shall not be liable to the Licensee on account of so removing,storing,or disposing of any property as provided by this subsection and Licensee shall save and hold Licensor harmless from any liability from another licensee who is prevented from occupying their licensed portion of the Premises due to the holding over of the Licensee. 7 7. Food and Beverage:Licensor shall have the exclusive right to provide food and beverage services in connection with the Annual Show at the Center,acting through the Center's contracted food and beverage provider,Centerplate("F&B Provider"). No other individual or organization is permitted to bring food or beverage products into the Center without the express written consent of Licensor(other than as may be set forth below). Notwithstanding anything to the contrary herein contained,the parties agree that F&B Provider shall also release its exclusivity with respect to catering services for the Annual Show;provided,however,that this release shall not preclude F&B Provider from providing services at Art Basel should F&B Provider be selected by Art Basel as its food and beverage(F&B)service provider. Should Licensee elect to use outside food&beverage services,F&B Provider may still provide F&B services to ancillary Art Basel events,such as Net Jets and UBS,but only if requested by the promoter/producer of the events. In releasing its exclusivity for Licensee,F&B Provider shall incur no costs and shall be entitled to collect ten percent(10%)of gross receipts from Licensee derived from the use of any replacement F&B Provider (or such other lump sum fee as may otherwise be agreed upon in writing between F&B Provider and the Licensee),but exclusive of F&B Provider's gross receipts for services directly provided by F&B Provider. In addition,Licensor shall be entitled to collect ten percent(10%)of gross receipts from Licensee derived from the use of any replacement F&B Provider(or such other lump sum fee as may otherwise be agreed upon in writing). In the event that Licensee elects to use a replacement F&B Provider,such replacement F&B Provider shall be permitted to use the existing kitchen facilities at the Center,subject to and contingent upon the Licensee(or replacement F&B Provider)making appropriate arrangements with F&B Provider(including,without limitation,compensation to F&B Provider)for use of any such kitchen space and/or equipment therein. Notwithstanding the foregoing,Licensor and Owner shall have no obligation to make available,or to cause for F&B Provider to make available,any kitchen space to F&B Provider,unless the arrangements set forth in the preceding sentence are fully and completely satisfied. Licensor represents and warrants to Licensee that F&B Provider is fully licensed with all governing regulatory or administrative agencies for any and all services that may be provided by F&B Provider during the Annual Show at the Center or at any other location.Licensor further represents and warrants to Licensee that Licensor shall require F&B Provider to comply with all federal,state,and local,laws,ordinances,including without limitation,the Florida Beverage Law and all mandated food service and handling laws. Licensor further represents and warrants that F&B Provider annually provides training to its employees consistent with the requirements of the Florida vendor qualification act contained in§561.705, Florida Statutes. Notwithstanding anything to the contrary contained herein,the sale and service of all alcoholic beverages at the Center shall be provided through F&B Provider,as F&B Provider holds the requisite State of Florida alcoholic beverage license for the Premises. In the event Licensee selects a provider other than the F&B Provider,Licensee and its third-party caterers shall be solely responsible for all arrangements with respect to the preparation and service of food in accordance with all applicable laws and food safety requirements. Licensee represents and warrants to Licensor that its third- party caterers,if any,shall be fully licensed with all governing regulatory or administrative agencies for any and all services that may be provided by such caterers during the Annual Show at the Center or at any other location.Licensee further represents and warrants to Licensor that Licensee shall require its third-party caterers, if any,to comply with all federal,state,and local,laws,ordinances,including without limitation,the Florida Beverage Law and all mandated food service and handling laws. 8. Annual Requirements. Licensee shall provide to Licensor all necessary set-up instructions(personnel,equipment,utilities,layout,etc.)for each Annual Show no later than sixty(60)days prior to the commencement of the License Period. Such instructions shall include a copy of a full and complete floor plan for any planned exhibition at the Annual Show. If such instructions are not provided to Licensor by such date,or if changes are made to such instructions after they have been provided to Licensor and Licensor incurs additional costs or expenses as a result of such changes,Licensee shall be responsible for such additional costs and expenses at Licenser's prevailing rates,and shall be included as part of the Other Costs and Expenses described in Section 11.6.13 above. No set-up of any exhibits may begin without proof of approval of such floor plan by the Fire Marshal of the City or County in which the Center is located,as applicable,and by the Licensor, which such approval by Licensor shall not be unreasonably withheld. 9. Advertising and Promotion. Licensee shall not publicize,or permit to be publicized,the Annual Show prior to execution of this Agreement by Licensor. Licensee warrants that all advertising of the Annual Show will be accurate and truthful,and will include accurate information of event times and ticket prices(if applicable). All advertising of the Annual Show shall be subject to the prior written approval of Licensor(which shall not be unreasonably withheld). All print and broadcast materials associated with the Annual Show shall use the official facility name. Licensor reserves the right to display or sell,without limitation,advertising and promotions within and about the Center,and to retain all income from such display or sale,provided,however,that Licensee shall have the option to use Licensors video monitors and "buy-out"all advertising or other displays during each Annual Show,for the lesser of(x)the then prevailing rates for each Annual Show;or(y)$15,000. Licensee shall not interfere with,block,remove or otherwise disturb advertising or promotions within or about the Center without the prior written consent of Licensor. Signs containing commercial or sponsored advertising messages must be approved in advance in writing by Licensor,which such approval shall not be unreasonably withheld. 10. Licenses;Permits. Licensee shall secure prior to commencement of the License Period,with the Licensor's and the Owner's reasonable cooperation and assistance(at Licensee's expense),all licenses,permits and approvals that may be required in connection with the use of the Premises for the Annual Show,including without limitation,the City of Miami Beach Special Events Permit,those required by ordinances,rules and/or regulations of governmental authorities,and all licenses required by any performing arts societies such as ASCAP or BMI for music or other copyrighted works to be utilized or displayed at the Annual Show;provided, however, Licensee shall not be required to secure any permits for the general occupancy of the Center,or any music licenses from SESAC(each of which has previously been secured by Licensor or the Owner). Licensee shall defend,indemnify and hold harmless Licensor and the Owner from any and all claims,fees, expenses,costs or damages, including reasonable attorneys'fees and court costs,suffered or incurred by such parties in connection with any breach of this paragraph. The requirement of Owner's reasonable cooperation and assistance shall be limited to Owner's role in its proprietary capacity as the owner of the Center, and shall not apply to or be otherwise be construed to limit any action that may be taken by Owner in its regulatory capacity through any agencies having jurisdiction over the Center or the conduct of activities within the Center or the Annual Show(i.e.,Building Department,Fire Department,Police Department,etc.). 11. Insurance. A. Coverage. Licensee shall obtain,at its own cost and expense,with insurance companies currently rated A VIII or better by Best's Key Rating Guide,commercial general liability insurance that insures all operations of Licensee contemplated by this Agreement. Such insurance shall name Global Spectrum, L.P.and the City of Miami Beach as additional insureds. Such insurance shall be written with a limit of at least One Million Dollars($1,000,000)per occurrence combined single limit for bodily injury,property damage and personal injury. Licensee shall also maintain,at its own cost and expense,with insurance companies currently rated A VIII or better by Best's Key Rating Guide,commercial automobile liability insurance,including coverage for the operation of owned,leased,hired and non-owned vehicles,in the minimum amount of One Million Dollars($1,000,000)per accident(PI and PD combined single limit). Such commercial general liability insurance shall be primary to and not contributory with any insurance coverage or self-insured program of Licensor and Licensee and their insurance shall have no right of recovery or subrogation against the Licensor. Licensee shall also maintain,at its own cost and expense,workers'compensation insurance in respect of all employees and any borrowed,leased or other person to whom such compensation may be payable by Licensee. B. Certificates. Certificates evidencing insurance required pursuant to this Section 11 shall be provided to Licensor not less than thirty(30)days prior to commencement of the License Period,provided that if this Agreement is executed and delivered less than thirty(30)days prior to the License Period,the certificates shall be provided immediately upon execution of this Agreement. The policies shall also provide,and the certificate shall so note,that the coverage may not be canceled or that a major change in coverage may not be implemented without at least thirty(30)days'prior written notice given to Licensor. 8 12. Indemnity;Limitation on Liability. A. Indemnification. Licensee hereby agrees to indemnify,defend,and hold harmless Licensor and the Owner and their respective officials,officers, directors,agents,employees,successors and assigns from and against any and all claims,damages,expenses,costs(including,without limitation,reasonable attorneys'fees)and liabilities(collectively,"Claims")arising or alleged to arise from(i)any breach of this Agreement by Licensee,(ii)any alleged or actual violation or infringement by Licensee or its employees,agents or contractors of any copyright or other intellectual property right of a third party in connection with the Annual Show or activities occurring at the Annual Show,(iii)the use of occupancy of the Center by Licensee,its employees,agents,contractors,exhibitors,invitees,guests or patrons,and(iv)the acts or omissions,or violation of any applicable law,rule,regulation or order,of or by Licensee or any of its employees,agents,contractors, exhibitors,invitees,guests or patrons. Notwithstanding the foregoing,the obligations of Licensee in this subparagraph shall not apply to the extent the Claims or Costs arise out of the gross negligence or intentional misconduct of Licensor or Owner, or their respective officials,officers, directors, agents,employees or successors. B. Condition of Premises. Owner and Licensor represent,warrant and covenant that the Premises will be suitable for the purpose for which the Premises are licensed, and the Premises will be in good and satisfactory condition. Other than the completion of the current construction and the Additional Improvements,Owner has made no representations as to the repair of the Premises,and no other promises to alter,remodel or improve the Premises have been made by Owner. Licensor and Owner further expressly represent to Licensee that the Premises or any portion thereof shall comply with all applicable laws and regulations,including,without limitation,the ADA and local zoning codes and ordinances(or has obtained valid variances or exceptions). C. Limitation on Liability. Neither party shall be liable under any circumstances to the others or to any third party for any indirect,special,punitive or consequential damages,or loss of revenue or profits,arising in connection with this Agreement,even if such party has been advised of the possibility of such damages. Furthermore,Licensor shall not be responsible or liable for any injury or death to person or loss or damage to property sustained by Licensee, its employees, agents, exhibitors, contractors, or any other person claiming through Licensee resulting from any condition,accident or occurrence in or upon the Premises,unless such injury,loss or damage is due to the gross negligence or intentional misconduct of Licensor or its employees or agents. D. Survival. The provisions of this Section 12 shall survive any expiration or termination of this Agreement. 13. Compliance With Laws and Rules of the Premises;Taxes. The Parties shall fully abide by,conform to and comply with,and shall cause every person under its direction or control who is connected with the performance of any aspect of this Agreement to fully abide by,conform to and comply with all applicable laws,rules, regulations and ordinances of the United States of America,the State of Florida,the County of Miami-Dade,the City of Miami Beach and their respective agencies,as well as(in the case of Licensee)all rules,regulations and policies of Licensor for the use,occupancy and operation of the Premises. Licensee agrees to pay promptly all taxes assessed on its activities at the Center hereunder,including any sales tax on the payment of Licensee's fees hereunder(which shall be in addition to the amounts due hereunder). Licensee agrees to pay promptly all requisite taxes assessed on its activities at the Center hereunder,including applicable Florida state and municipal sales and use tax on the licensing of the Premises. Licensor acknowledges that all applicable Florida state and municipal sales and use tax on the licensing of the Premises has already been included in calculation of the estimated License Fee,as detailed and separately stated in Section I.A above.The Licensor and Licensee agree and acknowledge that licensor shall be responsible for collecting and remitting any and all applicable Florida state and municipal sales and use tax associated with the License Fee. To the extent that there are additional costs,expenses or services incurred in accordance with this Agreement(e.g.,Section 5(Other Costs and Expenses)or Section 7(Food&Beverage))the Licensor agrees that it shall separately invoice each such additional cost,expense or service,where practical,or shall otherwise itemize such costs,expenses or services,and separately state any applicable Florida state and municipal sales and use tax associated with such cost,expense or service. 14. Use of the Premises. A. Duty of Care;Return of Premises. Licensee shall use the Premises in a safe and careful manner. Licensee agrees not to do or allow to be done any act which shall damage,mar,deface or injure any part of the Premises. Licensee shall not change or rearrange any equipment or other property on the Premises without Licensor's prior approval,which such approval shall not be unreasonably withheld,or paint or affix any adhesive signs or other wall treatments on any portion of the Premises,without Licensor's prior written approval. Upon expiration of the License Period,Licensee shall deliver up to Licensor the Premises in as good condition and repair and in the condition received at the beginning of the License Period for each Annual Show,excepting usual wear and tear. Upon expiration of the License Period for each Annual Show,Licensee shall remove from the Center any and all property,goods,or other effects belonging to,or brought into the Center by, Licensee, its employees,agents,contractors,representatives,guests or invitees. If Licensee fails to do so,Licensor may store or cause to be stored any such property at Licensee's expense. Alternatively,Licensor may deem such property to be abandoned and sell such property in such a manner and to such an extent as is permitted by applicable law,and apply the proceeds of such sale(s)in a manner determined by Licensor in its sole discretion. B. Licensor Access and Control. Licensee shall,and shall cause its employees,agents and exhibitors and contractors to,follow any and all rules, regulations and policies of the Center,including any instructions of Licensor's representatives regarding Licensee's use and occupancy of the Center. In licensing the use of the Premises to Licensee,it is understood that Licensor does not relinquish the right to control the management thereof and to enforce all necessary rules and regulations. Licensor shall at all times have the right to limit the number of people attending the Annual Show,for the purpose of ensuring the safety of people and property at the Premises. C. Disorderly Conduct. Licensor reserves the right at all times to refuse admission to or to cause to be removed from the Annual Show,the Premises and/or the Center any disorderly person,including Licensee's employees,agents,contractors,exhibitors,guests and invitees,as determined by Licensor in its sole discretion,and in the event of the exercise of such authority,Licensee hereby waives any and all claims for damages against Licensor and the Owner on account thereof. D. Broadcasting. Licensee shall not televise or broadcast the Annual Show or any part thereof without the prior written approval of Licensor(which may be withheld in Licenser's reasonable discretion,and may be conditioned on Licensee paying an additional fee for the privilege to broadcast the Annual Show,or Licensee procuring additional insurance to cover such broadcasting activities). E. Drayage. The Licensor and the Owner and their respective officials,officers,directors,agents,employees,successors and contracted service providers will not be responsible for the acceptance of any and all drayage,to include:crates,packages,equipment and/or any other chattels,before,during or after the License Period for each Annual Show.All drayage must be delivered and accepted by an authorized official,officer,director,agent,employee and/or General Service Contractor on or after the first day Licensee takes possession of the licensed area(s)outlined in Section I.of the Agreement.Drayage delivered to the Center beyond the licensed Term will be deemed undeliverable and returned to the original origin. 15. Tickets/Box Office. A. Generally. Unless otherwise agreed to in writing,Licensee shall provide all ticket and/or box office services in connection with the Annual Show. Licensee shall have complete control over the box office,which will sell tickets to the Annual Show only on the days of the Annual Show. B. Ticket Proceeds. Licensee shall have complete and sole custody and control of any and all monies received from the sale of tickets. 9 C. Sale of Tickets. Licensee agrees that all tickets to the Annual Show shall be sold at the prices as advertised by Licensee. Licensee shall be responsible for all check and credit card service charges and other similar fees,charges and expenses incurred in connection with the sale of tickets for the Annual Show. Licensee shall be responsible for the credit worthiness of its guests and patrons,and shall cover and be responsible for any invalid or fraudulent checks,checks returned due to insufficient funds or for any other reason,credit card penalties and similar or related penalties,fees,charges and/or expenses incurred by Licensor in connection herewith. Licensee will not permit tickets or passes to be sold or distributed in excess of the maximum capacity of the Premises,as determined by Licensor in its sole discretion. D. Taxes. Licensee shall be responsible for filing of any required federal,state or local tax or information returns and the payment of all sales,admission, excise and other taxes due,if any,in connection its obligation due with respect to with the Annual Show or admissions thereto.Licensee does not take responsibility for any taxes that is the legal obligation of Licensor. 16.Cancellation of Annual Show. In the event of a cancellation by Licensee of any Annual Show upon less than twelvemonths prior written notice to Licensor and Owner (except as may be authorized herein or by Section 18 or 19),no deposit refund shall be made,and Licensee shall be obligated to pay the full amount of the License Fee contemplated to be due hereunder had the Annual Show actually occurred. The parties agree that Licensor will be damaged by any such cancellation,and that the exact amount of such damages would be either impossible or inconvenient to prove,and that the amounts set forth in the preceding sentence are a reasonable estimate of the amount of such damages. The parties further agree that such amount shall constitute cancellation fees,and not a penalty of any kind. In the event of a cancellation by Owner or Licensor of any Annual Show upon less than twelve months prior written notice to Licensee(except as may be authorized herein or by Section 18 or 19),all deposits shall be refunded to Licensee. The parties agree that Licensee will be damaged by any such cancellation,and that the exact amount of such damages would be either impossible or inconvenient to prove and that the applicable License Fee is a reasonable estimate of the amount of such damages. The remedies set forth in this section are in addition to,and not in lieu of,any other rights or remedies any Party may have,at law or in equity,in the event of a breach or cancellation of this Agreement by another Party hereto. Licensor shall use reasonable efforts to re-rent the Premises,and license fees received by Licensor in the re-renting of the Premises shall reduce cancellation fees owed by Licensee by a like amount,with such reduction not to exceed the full amount of the cancellation fees owed. In consideration for the Additional Improvements,in the event Licensee terminates this Agreement without cause,or otherwise cancels more than one consecutive Annual Show without cause,prior to the conclusion of the 2023 Annual Show(for reasons other than a termination pursuant to subsection 18,or an Event of Force Majeure pursuant to subsection 19 of Section II of this Agreement),Licensee shall reimburse the Owner,as full and complete liquidated damages for the Additional Improvements, an amount equal to the lesser of the Estimated Cost or the actual cost of the Additional Improvements,as follows: A. 100%of the Additional Improvements costs,if Licensee terminates prior to the conclusion of the 2019 Annual Show; B. 80%of the Additional Improvements costs,if Licensee terminates prior to the conclusion of the 2020 Annual Show; C. 60%of the Additional Improvements costs,if Licensee terminates prior to the conclusion of the 2021 Annual Show; D. 40%of the Additional Improvements costs,if Licensee terminates prior to the conclusion of the 2022 Annual Show; E. 20%of the Additional Improvements costs,if Licensee terminates prior to the conclusion of the 2023 Annual Show;and F. 0%of the Additional Improvements costs,if Licensee terminates after the conclusion of the 2023 Annual Show or thereafter. 17. Coat Checkroom. Unless otherwise agreed by Licensor in writing,Licensor reserves the exclusive right to operate,or contract for the operation of a coat checkroom. 18. Termination. Either party may terminate this Agreement in the event the other party fails to perform any of its material obligations under this Agreement,and such failure has not been cured within fifteen(15)days(or 5 days in the event of a payment default),after the date on which the breaching party receives written notice describing such breach in reasonable detail. Notwithstanding the foregoing,in the event Licensee fails to provide the insurance certificate required herein by the date due hereunder,or if Licensor may suffer irreparable harm as a result of the breach by Licensee,Licensor shall not be required to wait any period of time before terminating this Agreement or pursuing any remedies hereunder or under applicable law. Notwithstanding the foregoing,in the event that Licensor or Owner breach the terms hereof during the period of an actual Show which,as a result,Licensee may suffer irreparable harm as a result of such breach by Owner or Licensor, Licensee shall not be required to wait any period of time before terminating this Agreement or pursuing any remedies hereunder or under applicable law. Any termination of this Agreement shall not prejudice any other right or remedy available to the non-breaching party at law or in equity. In the event Licensor terminates this Agreement due to a breach or default by Licensee,Licensor may retain as damages any fees paid by Licensee under this Agreement(including the deposit), without prejudice to any other legal rights or remedies Licensor may have. Similarly,in the event Licensee terminates this Agreement due to a material breach or default by the Licensor or Owner,Licensor shall return the full amount of any and all fees,costs or expenses paid to the Licensor or Owner,which shall include, without limitation,the License Fee,and any advance payments for Other Costs and Expenses pursuant to Section 11.5. 19. Force Maieure. A. Should Licensor and Owner be unable to tender possession of the Premises to Licensee,or should Licensee otherwise be unable to take possession of the Premises,or present the Annual Show or to perform its obligations hereunder,when such failure,directly or indirectly,is caused by or in any manner arises from an Event of Force Majeure(defined herein),then the Parties shall not have any liability under the Agreement and Licensee,as its sole remedy and relief,shall receive a refund of any uncommitted or cancelable advance payments,including any deposits made pursuant to Section I.D,less any expenses directly incurred by Licensor in preparing for the Annual Show. The term"Event of Force Majeure"shall mean any and all acts of God,strikes,lock-outs,acts of the public enemy,laws,rules and regulations of governmental or quasi-governmental entities,wars or warlike action,arrest or other restraint of government(civil or military),blockades,insurrections, riots,terrorism or terrorist threats,epidemics,earthquakes,hurricanes,storms,floods,washouts,fire or other casualty,civil disturbances,explosions,threats of bombs or similar interruptions,confiscation or seizure by any government or public authority,nuclear reaction,radioactive contamination,accidents,or any other causes, whether of the kind herein enumerated or otherwise that are not reasonably within the control or caused by the party claiming the right to delay the performance on account of such occurrence;provided,however,in no circumstances shall the monetary inability of a party to perform any obligation contained in this Agreement be construed to be an Event of Force Majeure. Upon removal or cessation of the Event of Force Majeure,the parties'respective rights and obligations hereunder shall be reinstated for any and all subsequent sessions of the Annual Show remaining in the Term(if any);provided;however,that the declaration and notice of an Event of Force Majeure and subsequent cessation of the cause of such Event of Force Majeure shall not require Licensee to move forward with the Annual Show if,in Licensee's reasonable belief,it will result in significantly diminished attendance and/or cancellations or cause Licensee an unduly burdensome financial impact.The parties hereto agree and acknowledge that entering into this Agreement while an Event of Force Majeure is existing or foreseeable,is not an affirmative waiver of such party's right to subsequently declare an Event of Force Majeure for substantially the same or other reasons and causes. B. The Parties acknowledge that by virtue of climate conditions and the City's status as a major tourism destination that attracts many foreign visitors,the City cannot make any guarantees with respect to mosquito borne virus transmissions,including but not limited to the Zika virus. In the event of the occurrence of any such transmissions, Licensee shall have access to the same general information that the City provides to the general public with regard to transmission risks and prevention efforts. The City encourages Licensee to post relevant public health-related information on its website and if possible,other marketing channels,for the benefit of its guests and patrons,as necessary. The Parties expressly acknowledge and agree that the occurrence of mosquito borne virus transmissions,including 10 but not limited to Zika virus transmissions within the City of Miami Beach,Florida or elsewhere shall not constitute an Event of Force Majeure under this Agreement, unless a governmental entity or other public authority having jurisdiction issues a mandatory evacuation order or a travel ban that precludes attendees from traveling to the City of Miami Beach for the Annual Show. Notwithstanding anything to the contrary herein,cancellation of any Annual Show due to an Event of Force Majeure, as provided in this Section 11.19,shall not result in liquidated damages related to the Additional Improvements as set forth in Section 11.16. 20. Non-Discrimination 1 Americans With Disability Act. Licensee agrees not to discriminate against any employee or applicant for employment to be employed in the performance of or in relation to this Agreement,with respect to the hire,tenure,terms,conditions or privileges of employment,or any other matter directly or indirectly related to such employment,whether on account of race,marital status,color,religion,national origin,ancestry,age,sex,sexual orientations or handicap except where based on a bona-fide occupational qualification. With respect to the Annual Show,Licensee recognizes that it is subject to the provisions of Title III of the Americans with Disabilities Act,as amended("ADA"). To the extent that Licensee reconfigures,modifies,alters,rearranges,or otherwise prepares or"sets up"the Premises or any other portion of the Center in order to accommodate the Annual Show,Licensee shall be responsible for ensuring that such areas comply(and continue to comply throughout the Term)in all respects with the ADA,including without limitation with regard to accessibility,usability,and configuration. Licensee shall be solely responsible for providing auxiliary aids or any modification of the Premises or other portions of the Center that may be required in order to accommodate the Annual Show, and for ensuring that the policies,practices,and procedures it applies in connection with the Annual Show are in full compliance with the ADA. 21. Miscellaneous. A. Entire Agreement:Amendments;Governing Law. This Agreement represents the entire understanding of the parties hereto with respect to the subject matter hereof and supersedes any and all prior understandings,written or oral,among the parties hereto. This Agreement may only be modified or amended by a subsequent written agreement signed by an authorized representative of Licensor and by Licensee. This Agreement shall be governed by the laws of the State of Florida applicable to contracts made and to be performed in such state,without regard to conflicts of laws principles. B. WAIVER OF JURY TRIAL. AS PART OF THE CONSIDERATION FOR ENTERING INTO THIS AGREEMENT,EACH PARTY HERETO HEREBY WAIVE THEIR RIGHTS TO TRIAL BY JURY. C. Notices. Notices by Licensor and Licensee to each other shall be deemed duly given if(i)delivered personally with a signed receipt evidencing such delivery,(ii)transmitted by telecopierwith confirmation of transmission,(iii)mailed by certified mail,return receipt requested,postage prepaid, or(iii)delivered by duly recognized air courier service to the addresses indicated in the opening paragraph hereof. All notices sent to Licensorshall be sent to the attention of General Manager at Global Spectrum,3000 N.W.125th Street,Miami,Florida 33167(Fax:305-673-7435;Email:matt_hollander@miamibeachconvention.com)and also to Global Spectrum,3601 S.Broad Street,Philadelphia, Pennsylvania Attn:General Counsel,Fax 215-952-5651 and City of Miami Beach,1700 Convention Center Drive,Miami Beach,Florida 33139 Attn: Eva Silverstein,Fax 305-673-7063. All notices sent to Licensee shall be sent to the following: Art Basel U.S.Corp. C/O MCH Swiss Exhibition(Basel)Ltd. Messeplatz 10,CH-4005 Basel,Switzerland Attention:Maureen Bruckmayr,Head of Business and Management,Americas Fax at 011-41-58-206-31-32 Art Basel U.S.Corp. C/O MCH Swiss Exhibition(Basel)Ltd. Messeplatz 10,CH-4005 Basel,Switzerland Attention: Noah Horowitz,Director Americas Fax at 011-41-58-206-31-32 D. Assignment. This Agreement shall not be assigned nor shall Licensee's right to use the Premises be sublicensed by Licensee without the prior written consent of Licensor in each instance,which may be withheld in Licensor's sole discretion. Licensor may assign this Agreement at any time to any party including,without limitation,any successor owner or operator of the Premises. E. No Agency. The relationship between Licensor and Licensee is that of independent contractors and not agents or employees. Under no circumstances shall this license be considered a contract of partnership or joint venture. Neither party shall be liable for any of the debts,accounts,obligations or other liabilities of the other party,its agents or employees,and neither party shall have any authority to obligate or bind the other party in any manner except as may be expressly provided herein. F. Waivers. No waiver shall be effective unless in writing and executed by the party to be charged with such waiver. No waiver shall be deemed a continuing waiver in respect of any subsequent breach or default,whether of similar or dissimilar nature,unless expressly so stated in writing. G. Severability. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof,and this Agreement shall be construed in all respects as if such invalid or unenforceable provision were omitted. H. Effectiveness of Agreement. This Agreement will not be effective or binding upon a Party hereto until it has been executed and delivered by each Party hereto. I. Rules and Regulations. The Rules and Regulations as contained in the MBCC Building Users Guide are hereby incorporated into this agreement. J. Complimentary Space.Allowance of a 5%cap of the total net square footage utilized available for verified and approved complimentary booths: Approved complimentary booths would typically include not-for-profit organizations,educational exhibitors,or other community service-oriented displays generating no direct or indirect revenues or expense to the Show Management/Licensee. K. Licensee Outside United States.The Licensee hereby represents,warrants and covenants that(a)Licensee and any of its owners,affiliates, officers,directors,employees and agents involved in providing services under this Agreement,will comply with all applicable anti-corruption laws in connection with the Annual Show,including the U.S.Foreign Corrupt Practices Act and the UK Bribery Act and any other applicable jurisdiction;(b)in carrying out its responsibilities under the Agreement,neither the Licensee nor any of its owners,affiliates,officers,directors,employees or agents will offer,promise or give anything of value, directly or indirectly,to(i)any Government Official in order to influence official action or otherwise obtain an improper business advantage,(ii)any other person while 11 knowing that all or any portion of the money or thing of value will be offered or given to a Government Official or(iii)any other person in order to induce them to perform their work duties disloyally or otherwise improperly;(c)neither the Licensee nor any of its owners or affiliates is directly or indirectly owned or controlled,in whole or in part,by any Government Entity or Government Official and no owner,partner,officer,director or employee of the Licensee or of any parent or subsidiary company of the Licensee is or will become a Government Official during the term of this Agreement;and(d)no government is investigating or has in the past five years conducted,initiated or threatened any investigation of the Licensee or any of its owners,affiliates,officers,directors or employees for alleged violation of anti- corruption laws. "Government Entity"means a national government,political subdivision thereof,or local jurisdiction therein,an instrumentality,board,commission, court or agency,whether civilian or military,or any of the above,however constituted,a government-owned or government-controlled association,organization, business or enterprise,a political party. The term"Government Entities"also includes public international organizations,i.e.organizations whose members are countries,or territories,governments of countries or territories,other public international organizations or any mixture of the foregoing. "Government Official"means any public or elected official or officer,employee(regardless of rank),or person acting on behalf of a national,provincial,or local government,including a department, agency,instrumentality,state-owned or state-controlled company, public international organization(such as the United Nations or World Bank),or political party,party official or any candidate for political office. Officers,employees(regardless of rank),or persons acting on behalf of an entity that is financed in large measure through public appropriations,is widely perceived to be performing government functions,or has its key officers and directors appointed by a government should also be considered"Government Officials." [END OF AGREEMENT] 12 EXHIBIT 6 I 7 f~1 3 ,r'. 1 23'-0" I, — a �:� u,no,20'-11 1/2",,,,112'-0 1/2-. I r-co L6 I I \ ' 3 A 2 I 108.04 a _ , ;� I --- ----' H� o - T i1.08.23 i S L1 -'� I 9'-10 1/4" I c 0 �-0.. 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FIEll 07 9500.G7 EJS-17(INT) 1 A1 lig N 1 - - ❑ ISI — — — 1 'it • % -r ■ ;DrO a $ I I, i Z.I , t Preliminary Not for Construction v DRAWING TITLE: scAE�: Ir.1.-o•LEVEL 1 CONNECTOR IDATE. °''°° ZFENTRESS( SKETCH LOCATION: C ARCHITECTS PROJECTSIIEET : DETAIL t , ISSUED FOR REVIEW SHEET0 0110! Mr" MIAMI BEACH CONVENTION CENTER RENOVATION&EXPANSION REVISION Dna:onmew PROJECT 1,201.0021 a 77 16) f 23'-0" 9.Q. . _ Lk \ __I .. - - X B'-9" - 10 1/2' 8'-2 12" q 1■ N " " . �} • \_=._. Y N 1 /---\ 1°I L7— (-----',i 2.08.03 —- i-—- L-.0 2.06.42 'i• i ‘.._.,./ S VICE CORRID R \-._./ LANDING 2.08.'6 2.08.26 p F-23 o 1. ��`w 4 4 m 05 731 1 u w 08.13 y M A EXPANSION ! ��� s �1 L7 JOINT ' � 2.08. — j—_�' I''- I 1 O En I I A 1 2 i I e \ N. i 4 1/8'-- 9'-6'la — I Ij I — _ .h d t III.\ I EL' A'•R ` — \ 4> 1 \ i I 1 EL.a 01 a • \\ SERVICE CORRIDOR I 2.07.16 1 1 F-23 .1 ist 4 44 \ `', STAIR 7 \ ('T.2.00.04 t 1100�i I r 26 ,th. � YRVICE _ I _,I �� F4-S C �Al2\ 8 r J 3 I. a I \ - i 2.08.02 €11 _..- o SP — TY P.AT ALL CORNERS_ E. '. . IN SERVICE CORRIDOR I` WHERE NO BOLLARD `Dt a \ i A 2, I 3 \ 11 ESCALATOR ES. STORAGE PANELS \ F-29-29 J 8 I 2F 267 ESCALATORN \ ES.08.01 ; Q F-29 N i I 7 2.08.07 .1 I\ ;-' 1 1 R iv� 1 v 1 Preliminary Not for Construction -1 cn DRAWING TITLE SCALE.va<-I-O DATE 2317411003 LEVELCONNECTOR SKETCH LOCATION OS Z FENTRESS I DETAILA, tv C ARCHITECTS PROJECT: Q m ISSUED FOR.REVIEW SHEET*A2204 A MIAMI BEACH CONVENTION CENTER RENOVATION 8 EXPANSION R?NSION DATE 2011N003 MAGI/4 20,40012 1 I EXHIBIT B MIAMIBEACH City of Miami Beach, 1700 Convention Center Drive,Miami Beach,Florida 33139,www miamibeachfl.gov OFFICE OF THE CITY MANAGER Tel:305.673.7010,Fax 305.673 7782 May 12, 2015 Mr. Marc Spiegler, Director Art Basel US Corp. c/o Garber and Goodman 300 415t Street, Suite 214 Miami Beach, Florida 33140 Attention: Bob Goodman Email: b000dman(u?garberandgoodman.com CC: MCH Swiss Exhibition (Basel) LTD Art Basel,Art Basel Miami Beach Messeplatz 10 CH—4005 Basel, Switzerland RE: Letter of Understanding (LOU) between the City of Miami Beach, Florida (City), and Art Basel US Corp(ABUSCo)regarding the"Art Basel in Miami Beach"event held on Miami Beach (the ABMB Event). Dear Mr. Spiegler: The following LOU shall confirm the understanding between the City and ABUSCo regarding certain terms pertaining to the ABMB Event pursuant to Resolution No. 2012-27884 which established an "Art Basel Zone,"and a copy of which is attached hereto as Appendix A. Subject to ABUSCo's compliance with its contractual obligations pertaining to the holding of the annual ABMB Event at the Miami Beach Convention Center (MBCC), including, without limitation, those set forth in that certain License Agreement between Global Spectrum and ABUSCo., dated January 26, 2015, and as may be amended or subsequent License Agreement executed from time to time (hereinafter, the ABUSCo License); and provided ABUSCo is good standing and free of default(s) under such License, the City agrees to take the following actions, in further support of the annual ABMB Event: 1. Pursuant to Resolution No. 2012-27884, the City's Special Events Requirements and Guidelines establish an"Art Basel Zone"which, accomplishes the following: a.) The establishment of a zone, the effective term and duration of which is only intended to run concurrent with the actual ABMB Event dates, as set forth in the ABUSCo License, and which zone is bounded by 23rd Street to the north; by Lincoln Lane South to the south; by Alton road to the west; and by the Atlantic Ocean to the east(hereinafter the Art Basel Zone). b.) The Art Basel Zone is established for the purpose of precluding the City from issuing a special event permit,for the use of public property within the Art Basel Zone during the term/duration that such Zone is in effect,without first obtaining the prior written consent of ABUSCo.Accordingly, the City shall provide ABUSCo with at least thirty (30) calendar days prior written notice of any special event applications received by the City for the use of public property within the Zone during the ABMB Event date(s) (the City's Approval Request). ABUSCo shall have ten (10)calendar days from the date of the City's Approval Request to approve or deny the Request. ABUSCo's approval or denial of the Request must be in writing and, if a denial, must specifically set forth the reason(s)therefore. In the event that ABUSCo fails to approve or deny a Request within the ten (10) day time period and, further, in accordance with the procedures set forth herein, then ABUSCo shall have waived its right to deny such Request, and the City may proceed with the event (that was the subject of such Request) as if approved by ABUSCo, and without any further notice and/or other obligation to ABUSCo. c.) Notwithstanding the establishment of the Art Basel Zone, and/or any other term or condition in this letter of understanding, (i) special events held on private property, and (ii) demonstrations, pickets, and free speech activities, as such terms are defined in the Guidelines, and as same may be amended from time to time, shall be EXEMPT from the requirements of this letter of understanding and,accordingly, shall NOT require ABUSCo's approval. d.) The Art Basel Zone shall automatically sunset and terminate at the conclusion of the ABMB Event for calendar year 2015,. without further action required by the parties, unless a new or amended ABUSCo License Agreement is executed for ABMB Event for following calendar year. For the sake of clarity and avoidance of doubt, this LOU and the Art Basel Zone shall automatically be extended and remain in force for each successive calendar year ABMB Event, provided an ABUSCo License Agreement has been executed in relation to such respective calendar year. 2. The City shall use reasonable commercial efforts to inform ABUSCo of any special event applications for use of public City-owned property outside the Art Basel Zone that the City may receive for the installation and/or display of art and/or art works during the term/duration of,the ABMB Event. 3. The City shall use reasonable commercial efforts to consider the needs and requirements of the ABMB Event as plans for the City's proposed expansion and renovation of the MBCC are developed. In the event that any claim or controversy arises with respect to this LOU,ABUSCo and the City hereby knowingly and voluntarily waive their rights to assert any argument or defense alleging inadequate or insufficient consideration. The City and ABUSCo shall each appoint a contract administrator who shall monitor the parties' compliance with the terms of this LOU. Unless otherwise notified, the contract administrators for each party are as follows: For the City: Max Sklar,Tourism and Cultural Development Director Tourism and Cultural Development Department City of Miami Beach 2 1700 Convention Center Drive Miami Beach, Florida 33139 305-673-7577 For ABUSCo: Art Basel US Corp. c%MCH Swiss Exhibition(Basel)Ltd. Attention: Maureen Bruckmayr 4005 Basel, Switzerland +41 58 206 31 32 Facsimile +41 58 206 27 51 Telephone — Maureen.Bruckmayr@a artbasel.corn ABUSCo agrees to defend, indemnify and hold harmless the City, and its officials, directors, officers,employees,agents, contractors,servants,successors,and assigns, against any claims, causes of actions, costs, expenses, (including reasonable attorney's fees), liabilities, or damages arising out of or in connection with any negligent act or omission, or intentional misconduct on the part of ABUSCo or any of its officials, directors, officers, employees, agents, contractors, servants, successors and assigns, in the performance of its obligations under this LOU. The indemnification and hold harmless requirements in the preceding paragraph shall survive the termination or expiration of this LOU. This letter of understanding may be terminated by either party, for convenience (and without cause), upon sixty(60)days prior written notice to the other party. All written notices and communications required or permitted hereunder may be delivered personally to the respective representatives of ABUSCo and the City listed below or may be mailed by registered mail, postage prepaid (or air-mailed if addressed to an address outside of the city of dispatch). Until changed by notice in writing, all such notices and communications shall be addressed as follows: TO ABUSCo: Art Basel US Corp. do MCH Swiss Exhibition(Basel)Ltd 4005 Basel, Switzerland +41 58 206 31 32 Facsimile +41 58 206 27 51 Telephone Mau reen.Bruckmavrc artbasel.com Attention: Maureen Bruckmayr With copy to: Art Basel US Corp. do Garber and Goodman 300 41$`Street, Suite, 214 Miami Beach, Florida 33140 Attention Bob Goodman Email: bgoodman©garberandgoodman.com 3 TO CITY: City of Miami Beach 1700 Convention Center Drive Miami Beach, Florida 33139 Attn: Max Sklar, Tourism, Culture, and Economic Development Director (305)673-7000, Ext. 6116 Email: maxsklar@miamibeachfl.gov Notices hereunder shall be effective: If delivered personally, on delivery; if mailed to an address in the city of dispatch, on the day following the date mailed; and if mailed to an address outside the city of dispatch on the seventh day following the date mailed. This letter of understanding shall be governed by, and construed in accordance with, the laws of the State of Florida, both substantive and remedial, without regard to principles of conflict of laws. The exclusive venue for any litigation arising out of this letter of understanding shall be Miami-Dade County, Florida, if in state court, and the U.S. District Court, Southern District of Florida, if in federal court. BY ENTERING INTO THIS LETTER OF UNDERSTANDING, CITY AND ABUSCO EXPRESSLY WAIVE ANY RIGHTS EITHER PARTY MAY HAVE TO A TRIAL BY JURY OF ANY CIVIL LITIGATION RELATED TO, OR ARISING OUT OF, THIS LETTER OF UNDERSTANDING. Neither party may assign this letter of understanding. Neither this letter of understanding, nor any of its terms, may be changed, modified, or otherwise amended except by an instrument in writing, signed by an authorized representative, which shall be the City Manager (on behalf of the City), and Show Manager and Director (on behalf of ABUSCo). The City and ABUSCo acknowledge and agree that they are not joint venturers, partners, or joint owners with respect to this letter of understanding. Nothing contained herein shall be construed as creating a partnership, joint venture or similar relationship between the City and ABUSCo. Additionally, for purposes of this letter of understanding (or otherwise) no officer, director, employee, agent, or contractor of ABUSCo shall be deemed to be an agent or employee of the City, and shall not attain any rights or benefits under the Civil Service or Pension Ordinance of the City, or any right generally afforded Classified or Unclassified employees' or be deemed entitled to Florida Worker's Compensation benefits as an employee of the City, or accumulation of sick or annual leave. If the aforestated meets with your approval, please acknowledge and execute same in the space provided below. Upon execution by the City Manager (on behalf of the City), we will forward a fully executed copy to you for your records. Very truly yours, Raul J.Aguila City Attorney 4 I have read this letter agreement and fully understanding same, agree to be bound by the terms and conditions contained herein. Art Basel US Corp. City of Miami Beach By: 71(1,/%..-4.-- By: _ 4 Marc Spiegl JI my L 'o ales Director,Art Basel iy Manager —CI \f �,'-7,0 t c (-It 742, 206 Date Date i By: a r r/IGG kfn G'�CA/I - aureen Bru ayr General Manager Tot( / 9 ,a015 APPROVED AS TO Date FORM&LANGUAGE &FOR EXECUTION RJA/ed g‘torc,_. 1,(til City Attom r tl.N' F:1INF01$ALL1Max1TCD\Special Events\BASEL1Art Basel Letter Agreement 2015.doc 5 Psk 74 WO NON-BINDING TERM SHEET BETWEEN THE CITY OF MIAMI BEACH, FLORIDA AND ART BASEL U.S. CORP. FOR MULTI-YEAR MIAMI BEACH CONVENTION CENTER LICENSE AGREEMENT This term sheet summarizes the principal terms with respect to a long term agreement the between Art Basel U.S. Corp. ("ABMB") and the City of Miami Beach, Florida ("City") for the licensing and use of the of the Miami Beach Convention Center(the "Center") for the production and operation of the annual art show entitled 'Art Basel in Miami Beach' (the "Annual Show"). This term sheet is intended solely as a basis for further discussion and is not intended to be and does not constitute a legally binding obligation of the parties. No legally binding obligations on the parties will be created, implied, or inferred until appropriate documents in final form are executed regarding the subject matter of this term sheet and containing all other essential terms of an agreed upon transaction and delivered by all parties (the "Definitive Agreement"). The performance by either party prior to execution of a formal contract of any of the obligations which may be included in a contract between the parties when negotiations are completed shall not be considered as evidence of intent by either party to be bound by this term sheet. The parties are discussing a transaction on the following principal terms: 1. The City shall design and construct an additional elevator, escalator and related improvements at the Center to provide for a direct connection from the exhibit halls to the new second-floor grand ballroom ("Additional Improvements") prior to the 2019 Annual Show. The City shall be responsible for all costs relating to the Additional Improvements at the Center. The current estimated cost of the Additional Improvements is $2,875,000.00, subject to confirmation by ABMB upon review of cost estimates and Clark's change order proposal regarding the same (the "Estimated Cost"). 2. City shall have no obligation to construct the Additional Improvements, and shall not commence with construction thereof, until such time as the City and ABMB have entered into the Definitive Agreement, consistent with the terms set forth herein. 3. ABMB agrees to license the Center for the Annual Show with the premises thereof generally consisting of Exhibition Halls A-D, all new and existing ballroom areas (including the North and South Junior Ballrooms, the new Grand Ballroom and the Rooftop Specialty Ballroom), all new and existing meeting room and office space areas, and the Carl Fisher Clubhouse (collectively, the "Premises"), for a period of five (5) years, beginning with the 2019 Annual Show, with one optional five (5) year extension 1 . .• on substantially the same terms. For the sake of clarity, the Premises shall not include the Miami Beach Botanical Gardens, and any rental of the Miami Beach Botanical Gardens shall be the subject of a separate agreement. The Grand Ballroom, the Sunset Vista Lounge, and the Carl Fisher Clubhouse shall be available for ABMB- related programming, but in view of the finishes therein, in no event shall the foregoing areas be used for art-related storage or storage of crates. 4. The license period for each Annual Show shall extend for a maximum period of 26 consecutive days (excluding Thanksgiving, but including load-in, event days, and load-out), and shall take place each year on or about the same dates (November 20 through December 15 of each year). Any additional days in excess of the 26 day annual License Period referenced herein, if requested by ABMB, shall be subject to mutual agreement of the parties, and at rates mutually agreed to by the parties. 5. ABMB shall be solely responsible for obtaining a special events permit from the City for each Annual Show and paying all reasonable costs directly related to obtaining the same. 6. In consideration of entering into a long term agreement, the base rental fee ("License Fee") for the use of the Premises for the 2019 Annual Show shall be $750,000.00, plus all applicable sales or other taxes. For each year thereafter, commencing with the 2020 Annual Show, the License Fee shall be calculated by reference to the 2019 License Fee, subject to annual adjustment by the greater of (x) two percent (2%), or (y) inflation measured by utilizing the United States Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers; US City Average (on an October 1 to September 30 fiscal year basis). The License Fee does not include any food/beverage commissions or fees, such as those related to third-party events that may use the Premises during the License Period with ABMB's approval, or any of the costs or expenses referenced in Section 7 below. 7. Subject to final negotiation as part of the Definitive Agreement, for each Annual Show, ABMB shall reimburse the City or its Convention Center operator/manager, as applicable, for all costs and expenses incurred in connection with ABMB's use of the Premises (including, without limitation, equipment, building services and labor costs), in accordance with the Convention Center Users Guide, as the same may be amended by the City and/or the Center operator from time to time, at their sole discretion. All costs and expenses shall be charged at the then-prevailing rates, as set forth in the Convention Center Users Guide, including costs for new programming, technologies or related services that may be developed following completion of the renovations, such as rates for use of video monitors, digital and other advertising, and the like. 2 8. As the Parking Garage Facility at the Convention Center is part of the City's Parking System and constructed with Series 2015 Parking Revenue Bonds, any use of the Parking Garage Facility shall be subject to separate agreement, subject to prevailing rates and terms consistent with all Series 2015 Parking Revenue Bonds requirements. Valet parking arrangements shall also be subject to separate agreement. 9. In the event ABMB terminates the Definitive Agreement without cause prior to the conclusion of the Annual Show occurring during calendar years 2019-2023, ABMB shall reimburse the City, as full and complete liquidated damages, an amount equal to the lesser of the Estimated Cost or the actual cost of the Additional Improvements, as follows: a. 100% of the Additional Improvements costs, if ABMB terminates prior to the conclusion of the 2019 Annual Show; b. 80% of the Additional Improvements costs, if ABMB terminates prior to the conclusion of the 2020 Annual Show; c. 60% of the Additional Improvements costs, if ABMB terminates prior to the conclusion of the 2021 Annual Show; d. 40% of the Additional Improvements costs, if ABMB terminates prior to the conclusion of the 2022 Annual Show; e. 20% of the Additional Improvements costs, if ABMB terminates prior to the conclusion of the 2023 Annual Show; and f. 0% of the Additional Improvements costs, if ABMB terminates after the conclusion of the 2023 Annual Show or thereafter. 3 8/3/2017 Coversheet New Business and Commission Requests-R9 AK MIAMI BEACH COMMISSION MEMORANDUM TO: Honorable Mayor and Members of the City Commission FROM: Jimmy L.Morales, City Manager DATE: July 26,2017 SUBJECT: DISCUSSION ITEM IN REGARDS TO A LONG-TERM AGREEMENT WITH ART BASEL MIAMI BEACH FOR USE OF THE MIAMI BEACH CONVENTION CENTER. Legislative Tracking Tourism, Culture and Economic Development ATTACHMENTS: Description ❑ Memorandum https://miamibeach.novusagenda.com/agendapublic/CoverSheet.aspx?ItemID=4504&MeetinglD=296 1/1 MIAMI BEACH City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov COMMISSION MEMORANDUM TO: Mayor Philip Levine and Members of the City Commission FROM: Jimmy L. Morales, City Manager DATE: July 26, 2017 SUBJECT: DISCUSSION ITEM IN REGARDS TO A LONG-TERM AGREEMENT WITH ART BASEL MIAMI BEACH FOR USE OF THE MIAMI BEACH CONVENTION CENTER BACKGROUND The City Manager was recently provided with the attached term sheet (Attachment 1) outlining the basic rent structure and terms proposed by Art Basel Miami Beach (ABMB) for a long-term agreement to lease the Miami Beach Convention Center (MBCC) for the production and operation of the annual art show entitled Art Basel in Miami Beach. In light of the $615 million dollar renovation to MBCC, as well as the greatly expanded footprint including new ballroom spaces and the newly renovated Carl Fisher Club House, and given that the MBCC rental rates have not seen an increase in more than a decade, our MBCC operator (Spectra), our convention center consultants (JLL), and City staff created and proposed a new rental structure to take effect in 2019. Following several conversations and an initial proposal to standardize ABMB's 2019 rates in line with the new rate structure, the City Manager presented a second and deeply discounted proposal to ABMB on July 21, 2017. This proposal for $888,000 in annual base rent imagined ABMB would have exclusive use of MBCC, excluding the Rooftop Specialty Ballroom and the Carl Fisher Club House. This proposal also included no charge for the First Floor North Ballroom (as has traditionally been the case) and no penalty pricing for longer set up and take down periods. This proposal represented a discount of$581,000 for ABMB. In prior years, ABMB has used a total of 624,353 gross square feet (all exhibit halls, meeting rooms, and junior ballrooms). The City proposal for 2019 reflected a total of 673,472 gross square feet (all exhibit halls, meeting rooms, junior ballrooms, and Grand Ballroom). On July 25, 2017, ABMB proposed an alternate agreement, with a $750,000 annual rental fee, to commence in 2019, for exclusive use of the entire Convention Center, including all new ballroom spaces and the Carl Fisher Club House. This reflects a total of 698,108 gross square feet (all exhibit halls, meeting rooms, junior ballrooms, and Grand Ballroom, plus the Carl Fisher Club House and Rooftop Specialty Ballroom). Integral to the consideration of this agreement is the timeline and financing for an elevator/escalator connection, as requested by ABMB in order to create a direct connection between the exhibit halls and the Grand Ballroom on the second floor. Given the current stage of construction, the deadline for approval of the budget and construction for this elevator/escalator connection is concurrent with the July 26, 2017 Commission meeting. Any delay beyond this date will delay the project and increase the cost impact. In the attached term sheet, ABMB has outlined penalty fees for early termination of the lease, in which case ABMB would be responsible for a varying degree of repayments on the elevator/escalator project (referenced in the term sheet as Additional Improvement costs). CONCLUSION: Administration seeks approval for the City Manager to negotiate and finalize terms for a long-term agreement with ABMB, and to delegate authority to the Mayor and Clerk to execute the final agreement following the conclusion of successful negotiations by the Administration, and form approval by the City Attorney. Further, Administration requests Commission approval to proceed with the elevator/escalator project, should the final terms of the long-term agreement be finalized and an agreement executed by all parties no later than August 4, 2017. Attachment 1: Term Sheet JLM/KB/ES