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Completion Guarantee #15 J COMPLETION GUARANTEE This COMPLETION GUARANTEE (this "Guarantee") is made as of the ZO day of $eyJ~ , 1996, by LOEWS CORPORATION, a Delaware corporation (the "Guarantor"), in favor of MIAMI BEACH REDEVELOPMENT AGENCY, a public body corporate and politic (herein referred to as the "Agency" or the "Owner"). RECITALS: The Agency is contemporaneously herewith entering into that certain Agreement of Lease (the "Ground Lease"), dated as of the date hereof, between the Agency, as Owner, and MB Redevelopment, Inc., a Florida corporation, as Tenant, pursuant to which Developer (hereinafter defined) has agreed to lease the Land (as defined in the Ground Lease) on which the Hotel (as defined in the Ground Lease) will be constructed. The Agency is also contemporaneously herewith entering into that certain Hotel Development Agreement (the "Hotel Development Agreement"), dated as of the date hereof, between the Agency, as Owner, and MB Redevelopment, Inc., a Florida corporation (the "Developer"), as Developer. The Agency is also contemporaneously herewith entering into that certain Garage Development Agreement (the "Garage Development Agreement"), dated as of the date hereof, between the Agency, and St. Moritz Hotel Corp., Inc., a Florida corporation ("SMHC"), an affiliate of Developer, in order to document the respective rights and obligations of Owner and SMHC relating to the design, development and construction of the "Project", as defined in the Garage Development Agreement (including the Roadway Extension (as defined in the Ground Lease), the "Garage Project"). Pursuant to the Ground Lease and the Hotel Development Agreement, Developer will be required to develop, construct, furnish and equip the Hotel in accordance with the terms thereof. In consideration of the foregoing premises and for other good and valuable consideration the receipt and legal sufficiency of which is hereby acknowledged, Guarantor hereby agrees for the benefit of the Agency as follows: 1. Capitalized terms defined and used herein are used herein with the meanings assigned herein to such terms. Unless the context otherwise requires, capitalized terms which are used herein without definition and which are defined in the Hotel M1962430.013 Development Agreement, are used herein with the meaning assigned to such capitalized terms in the Hotel Development Agreement. 2. Provided that the Owner is not in default (beyond any applicable notice and cure period) of any of the terms, covenants, conditions or obligations under Section 6.1 of the Hotel Development Agreement or under Subsections 21.1, 21.3 and 21.4 of the Ground Lease, Guarantor hereby absolutely and irrevocably guarantees to the Agency the performance of the obligations of Developer to Substantially Complete the Project (as defined in the Hotel Development Agreement) by the Completion Deadline. Notwithstanding anything to the contrary contained in this Guarantee or the Hotel Development Agreement, the Project shall be deemed "Substantially Completed" for the purpose of this Guarantee if (i) the Project shall have been substantially completed in accordance with the Plans and Specifications, as certified by the Architect and (ii) all of the Improvements in the Project shall have been issued temporary certificates of occupancy; provided, however, that to the extent the reason such temporary certificates of occupancy shall not have been issued is due to the Owner's failure to substantially complete the (a) Garage Project, which includes, but is not limited to, the issuance by the applicable governmental authority of a temporary certificate of occupancy or completion or a certificate of occupancy or completion for the Garage Project so that Owner can occupy and use the Garage Project for its intended purpose and provide Developer with the "Easement" for 560 "Parking Spaces" in the "Facility," as such terms are defined in that certain Garage Easement Agreement dated as of the date hereof between Owner and Developer and (b) Broadwalk Extension (as defined in the Ground Lease), then this clause (ii) shall be deemed satisfied. The obligations being guaranteed by Guarantor pursuant to this Section 2, are hereinafter collectively referred to as the "Completion Obligation". 3. If the Completion Obligation is not performed by Developer by the Completion Deadline, then, upon demand of the Agency, Guarantor shall perform the Completion Obligation in accordance with this Guarantee. The Agency agrees to accept performance by the Guarantor of all or any of the covenants, conditions or agreements on the Developer's part to be performed under the Hotel Development Agreement with the same force and effect as though performed by the Developer thereunder. 4. Guarantor shall not be deemed to have failed to perform its obligations hereunder until Guarantor shall have failed to perform the Completion Obligation within the cure period provided to Developer under the Hotel Development Agreement and all cure periods provided to Guarantor shall run concurrently with the cure periods provided to Developer under the Hotel Development Agreement. 5. Guarantor expressly agrees that the Agency may, in its sole and absolute discretion, without notice to or further assent of Guarantor and without in any way M1962430.013 -2- releasing, affecting or impairing the obligations and liabilities of Guarantor hereunder: (a) waive compliance with, or any default under, or grant any other indulgences with respect to the Hotel Development Agreement; (b) modify, amend or change any provision of the Hotel Development Agreement, or effect any release, compromise or settlement in connection therewith; or (c) assign its entire interest in this Guarantee and the Hotel Development Agreement to the City or any instrumentality of the Agency or, in accordance with the Ground Lease, any other Person, or the City which succeeds to the rights of the Agency under the Ground Lease in accordance with the terms thereof. Notwithstanding the foregoing, (i) Guarantor's obligations and liabilities hereunder shall be deemed to be released, affected or impaired to the extent that Developer's obligations and liabilities under the Hotel Development Agreement are so waived, modified, amended, changed, released, compromised, settled or in any other way altered, and (ii) no amendment or modification to the Hotel Development Agreement which increases the liability of Developer thereunder shall be made without the express consent of Guarantor. 6. Except as otherwise expressly set forth in Section 2 and the last sentence of Section 5 of this Guarantee, the obligations of Guarantor under this Guarantee shall be unconditional, absolute and irrevocable, irrespective of the genuineness, validity, regularity or enforceability of the Hotel Development Agreement or any security which may have been given therefor or in connection therewith or any other circumstances which might otherwise constitute a legal or equitable discharge of a surety or guarantor. This Guarantee and the obligations of Guarantor hereunder shall not be affected, impaired, modified or released by reason of (a) the making by Developer, any Affiliate of Developer or Guarantor of any assignment for the benefit of creditors or the bankruptcy or insolvency of Developer, any Affiliate of Developer or Guarantor, (b) any action taken by Developer, any Affiliate of Developer or Guarantor in any bankruptcy or insolvency proceeding, including, without limitation, disaffirmance of the Hotel Development Agreement or the Ground Lease, (c) any default by Developer under the Hotel Development Agreement or the Ground Lease, (d) the liquidation or dissolution of Developer, any Affiliate of Developer or Guarantor, (e) any change in or termination of Guarantor's ownership interest in Developer, (f) the enforcement by the Agency of any of its rights under the Hotel Development Agreement or the Ground Lease, or (g) the sale, conveyance, transfer or assignment by Developer of all or any portion of its interest under the Hotel Development Agreement or the Ground Lease; it being agreed that in the event of any of the foregoing, the liability of Guarantor hereunder shall continue hereunder as if such event had not occurred. 7. Except as otherwise expressly set forth in Section 2 and the last sentence of Section 5 of this Guarantee, the liability of Guarantor under this Guarantee shall be primary, direct and immediate, and not conditional or contingent upon pursuit by the Agency of any remedies it may have against Developer or any other Person with M1962430.013 -3- respect to the Hotel Development Agreement, any of the Project Documents or any other agreement, whether pursuant to the terms thereof or by law or pursuant to any other security agreement or guaranty. Guarantor and the Agency each acknowledge and agree that this Guarantee is a guarantee of performance in respect of the Completion Obligation. Anyone or more successive or concurrent actions may be brought hereon against Guarantor with respect to the Completion Obligation, either in the same action or proceeding, if any, brought against Developer or any other Person, or in separate actions as often as the Agency, in its sole discretion, may deem advisable. Guarantor may be joined in any action against Developer in connection with the Hotel Development Agreement solely with respect to the Completion Obligation. With respect to the Completion Obligation, recovery may be had against Guarantor in such action or in any independent action against Guarantor without the Agency first pursuing or exhausting any remedy or claim against Developer or any other Person, as the case may be, or their respective successors or assigns. Until termination of this Guarantee in accordance with the provisions hereof, the liability of Guarantor under this Guarantee shall continue after (i) any assignment or transfer by Developer, or any subsequent developer under the Hotel Development Agreement, of its interest under the Hotel Development Agreement or (ii) any assignment or transfer by Developer, or any subsequent tenant under the Ground Lease, of its interest under the Ground Lease. 8. Except as otherwise expressly set forth in this Guarantee, Guarantor hereby expressly waives: (a) presentment and demand for payment and protest of non- payment; (b) notice of acceptance of this Guarantee and of presentment, demand and protest; (c) notice of all indulgences under the Hotel Development Agreement or the Ground Lease; (d) demand for observance or performance of, or enforcement of, any terms and provisions of this Guarantee or the Hotel Development Agreement or the Ground Lease; and (e) all other notices and demands otherwise required by law which Guarantor may lawfully waive. Guarantor also waives, but only if and to the extent that Guarantor may lawfully so do, trial by jury in any action brought on or with respect to this Guarantee. 9. Guarantor shall not enforce any right of subrogation it may now or hereafter have against Developer by reason of any payments or acts of performance by Guarantor in compliance with the obligations of Guarantor hereunder, and Guarantor shall not enforce any remedy which Guarantor now or hereafter shall have against Developer by reason of anyone or more payments or acts of performance in compliance with the obligations of Guarantor hereunder unless and until all of the obligations of Guarantor hereunder have been fully discharged, performed and satisfied, whereupon Guarantor shall have such subrogation rights as may be allowed under applicable law. M1962430.013 -4- 10. No setoff, counterclaim or crosse/aim, reduction or diminution of an obligation or any defense of any kind or nature (other than performance of the Guaranteed Obligations) shall be available to Guarantor in any action or proceeding brought by Owner to enforce the Guaranteed Obligations; provided, however, that the foregoing shall not be deemed a waiver of the right of Guarantor to assert any compulsory counterclaim arising from a claim brought by Owner hereunder, nor shall the foregoing be deemed a waiver of or prejudice in any manner whatsoever, Guarantor's right to assert any claim which constitutes a defense, setoff, counterclaim or crossclaim of any nature whatsoever against Owner in any separate action or proceeding. Guarantor agrees that if at any time all or any part of any amounts at any time received by the Agency from Developer, Guarantor, any Affiliate of Developer or Guarantor, or any other Person, as the case may be, for or with respect to the Completion Obligation is or must be rescinded or returned by the Agency by reason of any judgment or decree of any court having jurisdiction (including, without limitation, by reason of the insolvency, bankruptcy or reorganization of Developer, Guarantor, any Affiliate of Developer or Guarantor, or any other Person), then Guarantor's obligations hereunder shall, to the extent of the amount rescinded or restored, be deemed to have continued in existence notwithstanding such previous receipt by the Agency and the obligation guaranteed hereunder which was to have been discharged by such rescinded or restored amount shall continue to be effective or reinstated, as the case may be, to the extent of such amount, whether or not this Guarantee has terminated, and the obligations of the Guarantor in this sentence shall survive the termination hereof. 11. The rights and remedies afforded to the Agency in this Guarantee are cumulative and are not exclusive of any other right or remedy against Guarantor or any other Person provided by law, in equity or under any other agreement or instrument and all such rights and remedies may be exercised singly or concurrently. No delay or omission by the Agency in exercising any such right or remedy shall operate as a waiver thereof. No waiver of any right or remedy hereunder shall be deemed made by the Agency unless in writing and shall apply only to the particular instance specified therein and shall not impair the further exercise of such right or remedy or of any other right or remedy of the Agency, and no single or partial exercise of any right or remedy hereunder shall preclude any other or further exercise thereof or of any other right or remedy. 12. If any provision of this Guarantee or any portion thereof is declared or found by a court of competent jurisdiction to be unenforceable or null and void, such provision or portion thereof shall be deemed stricken and severed from this Guarantee, and the remaining provisions and portions thereof shall continue in full force and effect. .13. This Guarantee shall inure solely to the benefit of the Agency, and the City or any instrumentality of the Agency or the City or any other Person which succeeds to the M1962430.013 -5- rights of the Agency under the Ground Lease and in accordance with the terms thereof, and shall be binding solely upon Guarantor, its successors and assigns. 14. This Guarantee shall be governed by and construed in accordance with the laws of the State of Florida applicable to agreements made and to be wholly performed within the State of Florida. 15. This Guarantee shall constitute the entire agreement of Guarantor with the Agency with respect to the subject matter hereof. This Guarantee may not be modified or amended, except by an agreement in writing executed by all of the parties hereto. 16. In order to induce the Agency to enter into this Guarantee, Guarantor represents and warrants to the Agency that as of the date hereof: (i) Guarantor is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware; (ii) Guarantor has the requisite corporate power and authority to enter into and carry out the terms and provisions of this Guarantee, and the execution, delivery, and performance of this Guarantee have been duly authorized and approved by all requisite corporate action; (iii) This Guarantee constitutes a valid and binding obligation of Guarantor enforceable against Guarantor in accordance with its terms (subject to any bankruptcy, insolvency, reorganization, receivership, moratorium or similar laws affecting the rights and remedies of creditors generally, and subject to the effect of general principles of equity, whether applied by a court of law or equity); (iv) Guarantor's execution and performance of this Guarantee will not result in a breach or violation of, or default under, any Requirements applicable to Guarantor or any agreement, order, commitment, judgment, or decree by which Guarantor is bound; (v) Guarantor is an Affiliate of Developer by virtue of Guarantor's indirectly owning all of the issued and outstanding stock of Developer; and the person executing this Guarantee on behalf of Guarantor has all requisite authority to do so, as a duly authorized officer of Guarantor; and M1962430.013 -6- (vi) Guarantor is solvent and will not be rendered insolvent by reason of this Guarantee. 17. Whenever it is provided herein that notice, demand, request, consent, approval or other communication shall or may be given to, or served upon, either of the parties by the other, or whenever either of the parties desires to give or serve upon the other any notice, demand request, consent, approval or other communication with respect hereto, each such notice, demand, request, consent, approval or other communication (herein referred to in this Section 17 as a "Notice") shall be in writing and shall be effective for any purpose only if given or served by (i) certified or registered U.S. Mail, postage prepaid, return receipt requested, (ii) personal delivery with a signed receipt or (iii) a recognized national courier service, addressed as follows (or to such other addresses as a party may direct by a Notice to the other party hereto; provided, however, that the number of parties to receive such Notice, together with copies thereof, shall not be increased): if to Guarantor: Loews Corporation 667 Madison Avenue New York, New York 10021 Attention: Corporate Secretary with a copy to: Hughes Hubbard & Reed 201 S. Biscayne Boulevard, Suite 2500 Miami, Florida 33131 Attention: William A. Weber, Esq. if to the Agency: Miami Beach Redevelopment Agency Executive Director 1700 Convention Center Drive Miami Beach, Florida 33139 and with a copy to: Squire, Sanders & Dempsey Two Renaissance Square Phoen~,Arizona 85004 Attention: Richard F. Ross, Esq. Any Notice may be given, in the manner provided in this Section, on behalf of any party by such party's attorneys as designed by such party by Notice hereunder. Every Notice shall be effective on the date actually received, as indicated on the receipt therefor or on the date delivery thereof is refused by the recipient thereof. M1962430.013 -7- 18. The acceptance by the Agency of this Guarantee shall constitute its acceptance of the terms and provisions hereof. 19. This Guarantee shall terminate, and Guarantor shall be released from any and all further obligations and liabilities hereunder, at such time as the Completion Obligation has been performed (except as otherwise provided in Section 9 or Section 10 hereof). 20. This Guarantee and the obligations of Guarantor hereunder are solely corporate obligations of the Guarantor, and no personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers, directors or employees of the Guarantor, or of any successor corporation, or any of them, under or by reason of the obligations, covenants or agreements contained in this Guarantee or implied therefrom; and any and all such personal liability, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer, director or employee, as such, or under or by reason of the obligations, covenants or agreements contained in this Guarantee or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution and delivery of this Guarantee by Guarantor. EXECUTED as of the day and year first above written. LOEWS CORPORATION, a Delaware corporatio / By: ( ATTEST: ~ Name: Roy E. Posner By: Title: Senior Vice President Name: _ Garv W. Garson rP~Secretary M1962430.013 -8-