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Letter #22/23 "p ) flughes IIubbard & Reed LLP 201 South Biscayne Boulevard Miami, Florida 33131-4332 Telephone: 305-358-1666 Facsimile: 305-371-8759 September 20, 1996 City of Miami Beach 1700 Convention Center Drive Miami Beach, Florida 33139 Re: Agreement of Lease, dated as of the date hereof, between Miami Beach Redevelopment Agency, as Owner, and MB Redevelopment, Inc., as Tenant, and joined in by the City of Miami Beach for the limited purposes set forth therein (the "Lease") Ladies and Gentlemen: We have acted as counsel for MB Redevelopment, Inc., a Florida corporation ("MB") and Loews Hotel Holding Corporation, a Delaware corporation ("LHHC" and MB and LHHC sometimes hereinafter collectively the "Loews Corporations"), in connection with the Lease and the transactions contemplated thereby or consummated in connection therewith (the "Transactions"). In such capacity and for purposes of rendering our opinion set forth herein, we have reviewed originals or copies of the following documents (the "Transaction Documents"), all of which are dated as of the date hereof and are being executed in connection with the Transactions: 1. The Lease; 2. Hotel Development Agreement between the Miami Beach Redevelopment Agency, a Florida public body corporate and politic (the "Agency"), as Owner, and MB, as Developer, and joined in by the City of Miami Beach (the "City") for the limited purposes set forth therein; 3. Condominium Unit Lease between the Agency, as Owner, and MB, as Tenant, and joined in by the City for the limited purposes set forth therein; 4. Master Lease between the Agency, as Landlord, and MB, as Tenant, and joined in by the City for the limited purposes set forth therein; 5. Easement Agreement by the Agency and the City and joined in by MB; and One Batlery Park Plaza New York, NY 10004-1482 212-8)7-(,000 47, Avenue Georges Mandel 75II6 Paris, France ())) (I) 44.05.80.00 IjOO I Srreet, N.W. Washington, D.c:. 20005-))0(, 201-40H-36oo )50 South Grand Avenue Los Angeles, CA 90071-5442 2I)-(,Ij-2800 lfughes Hubbard & Reed lLP City of Miami Beach Page 2 6. Hotel Owner. Convention Center Agreement between the City, as Owner, and MB, as We have not made any investigation of, and do not express an opinion with respect to, any matters of title to or the description of any property (whether real, personal or mixed) or the creation, perfection, enforceability or priority of leases, liens or other encumbrances. In rendering the following opinions with respect to MB, we have examined (i) the Articles of Incorporation and By-Laws of MB, as the same are currently in force and effect, and (ii) minutes, resolutions, certificates, documents and other matters of fact and law we have deemed appropriate, and have obtained such other certificates and made inquiry of such persons as we deemed necessary or appropriate in rendering the opinions set forth below. In rendering the following opinions, we have relied, with your approval, as to factual matters that affect our opinions, solely upon the Certificate as to Resolutions of MB, the Officer's Certificate of MB and the factual representations and warranties contained in the Transaction Documents to which MB is a party and have made no independent verification of the facts asserted to be true and correct in the aforesaid Resolutions, Officer's Certificate and Transaction Documents, although, to our knowledge (as such term is hereinafter defined), such facts are true and correct. The aforesaid Corporate Resolutions, Officer's Certificate and representations and warranties contained in the Transaction Documents to which MB is a party are hereinafter collectively called "the factual matters upon which we have relied." Based upon the foregoing, and subject to the assumptions, qualifications and exceptions herein contained, we are of the opinion that: 1. Based solely on the Certificate of Good Standing of MB issued by the Florida Secretary of State, MB is a corporation validly existing and in good standing under the laws of the State of Florida. MB possesses the corporate power and authority to own its property and carry on its business as now conducted; MB possesses all of the powers and authority requisite for it to execute, deliver and perform its obligations under the Transaction Documents to which it is a party; and all necessary corporate action has been taken to authorize such execution, delivery and performance. 2. The execution, delivery and performance by MB of the Transaction Documents to which it is a party do not violate the Articles of Incorporation or By-Laws of MB. To our knowledge based solely on the factual matters upon which we have relied, the execution, delivery and performance by MB of the Transaction Documents to which it is a party do not (a) violate or conflict with any court order, writ, judgment or decree to which MB is subject, (b) violate or conflict with or constitute an event of default under any agreement to which MB or MI%2680.004 lIughes Hubbard &Reed LLP City of Miami Beach Page 3 any of its assets is bound, or (c) result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon the property or assets of MB. 3. To our knowledge based solely on the factual matters upon which we have relied, there are no actions or proceedings pending against MB or overtly threatened against MB, in writing, before any court, governmental agency or arbitrator which purport to affect the validity or enforceability of the Transaction Documents to which MB is a party or which would, if adversely determined, result in a material adverse change in the business, properties or financial condition ofMB. 4. Each of the Transaction Documents to which MB is a party has been duly executed and delivered by MB, constitutes the legal, valid and binding obligations of MB and is enforceable against MB in accordance with the terms thereof. 5. The execution and delivery of the Transaction Documents by MB, and the performance by MB of its obligations under each such Agreement to which it is a party do not contravene any material law, rule or regulation applicable to MB and no governmental consents, permissions or authorizations are required in connection with the execution and delivery of the Transaction Documents to which MB is a party except for any such governmental consents, permissions or authorizations that have been obtained. 6. Each of the Transaction Documents to which LHHC is a party is a legal, valid and binding obligation, enforceable against LHHC in accordance with its terms and the execution, delivery and performance of the obligations of LHHC under the Transaction Documents to which it is a party do not breach any material law, rule of or regulation applicable to LHHC. In rendering the foregoing opinion, we have assumed, with your consent: i. The genuineness of all signatures (other than officers of MB), the authenticity of documents submitted as originals and the conformity to originals of documents submitted as copies, and that all public records reviewed are accurate and complete; 11. The legal capacity of all natural persons executing the Transaction Documents; 111. That each party to the Transaction Documents (other than MB) is duly organized, validly existing and in good standing under the laws of the state of its organization and that, if such state is other than the State of Florida, such party is qualified to do business in the State of Florida and is in good standing under the laws of the State of Florida; MI962680.004 lIughes llubbard&ReedLLP City of Miami Beach Page 4 iv. That each party to the Transaction Documents (other than MB) has all requisite power and authority to execute and deliver the Transaction Documents to which it is a signatory and to carry out the transactions contemplated thereby and the covenants and agreements contained therein; v. That the Transaction Documents accurately describe and contain the mutual understanding of the parties; vi. That each of the parties to the Transaction Documents (other than MB) has duly and validly executed and delivered each Transaction Document to which such party is a signatory; vii. That except with respect to MB, no consents, penmsslOns or authorizations are required in connection with the execution and delivery of the Transaction Documents, except for any such consents, permissions and authorizations that have been obtained; Vlll. That the obligations of each of the parties (other than the Loews Corporations) under the Transaction Documents are the legal, valid and binding obligations of such party, enforceable against such party in accordance with their respective terms; and ix. That each person (other than officers of MB) executing and entering into any of the Transaction Documents, whether individually or on behalf of an entity, is duly authorized to do so. We confirm to you that, without undertaking any independent investigation, we are aware of no facts or circumstances which would render false, misleading or inaccurate in any material respect any of the assumptions set forth in (i) through (ix) above, with respect to the Loews Corporations or any person executing any of the Transaction Documents on behalf of the Loews Corporations. The opinion set forth above is subject to the following qualifications and limitations: a. When reference is made in this letter to our "knowledge", such reference does not include constructive knowledge of factual matters and is further limited to the knowledge of those attorneys of this firm who have provided legal services to MH. Further, unless otherwise stated, reference to our "knowledge" does not include independent investigation or verification. MI962680.004 lIughes Hubbard & Reed LLP City of Miami Beach Page 5 b. The enforceability of the Transaction Documents may be subject to or limited by federal and state bankruptcy, insolvency, reorganization, fraudulent conveyance, arrangement, moratorium, or other similar laws relating to or affecting the rights of creditors generally and by judicial decisions with respect to such laws; c. The enforceability of the Transaction Documents is subject to general principles of equity and the discretion of courts in granting specific remedies; and d. The enforceability of the Transaction Documents is further subject to the qualification that certain waivers, procedures, remedies, and other provisions of the Transaction Documents may be unenforceable under or limited by the law of the State of Florida; however, such law does not, in our opinion, substantially prevent the practical realization of the benefits intended by the Transaction Documents. The opinions expressed in this letter are based upon the law in effect on the date hereof, and we assume no obligation to revise or supplement this opinion should such law be changed by legislative action, judicial decision, or otherwise or if we become aware after the date of this letter of any facts that might change the opinions expressed above. We express no opinion with respect to the effect of any law other than the laws of the State of Florida and the laws of the United States of America; provided, however, that no opinion is expressed with respect to federal securities laws or state securities or "blue sky" laws. The opinions expressed in this letter may not be relied upon by or quoted to any person or entity other than you and your permitted successors and permitted assigns under the Transaction Documents without, in each instance, our prior written consent. Very truly yours, 7++ l~ -rtW I-l--1 MI962680.004 IIughes I-Iubbard &Reed LLP 201 South Biscayne Boulevard Miami, Florida 33131-4332 Telephone: 305-358-1666 Facsimile: 305-371-8759 .11' ) September 20, 1996 Miami Beach Redevelopment Agency 1700 Convention Center Drive Miami Beach, Florida 33139 Re: Agreement of Lease, dated as of the date hereof, between Miami Beach Redevelopment Agency, as Owner, and MB Redevelopment, Inc., as Tenant, and joined in by the City of Miami Beach for the limited purposes set forth therein (the "Lease") Ladies and Gentlemen: We have acted as counsel for MB Redevelopment, Inc., a Florida corporation ("MB"), St. Moritz Hotel Corp., a Florida corporation ("Moritz"), Loews Hotels Holding Corporation, a Delaware corporation ("LHHC"), Loews Corporation, a Delaware corporation ("LC"), and Loews Miami Beach Operating Company, Inc., a Delaware corporation ("Operating Company" and MB, Moritz, LHHC, LC and Operating Company are sometimes hereinafter collectively called the "Loews Corporations") in connection with the Lease and the transactions contemplated thereby or consummated in connection therewith (the "Transactions"). In such capacity and for purposes of rendering our opinion set forth herein, we have reviewed originals or copies of the following documents (the "Transaction Documents"), all of which are dated as of the date hereof (unless otherwise indicated) and are being executed in connection with the Transactions: 1. The Lease; 2. Hotel Development Agreement between the Agency, as Owner, and MB, as Developer, and joined in by the City of Miami Beach, a Florida municipal corporation (the "City"), for the limited purposes set forth therein; 3. Garage Development Agreement between the Agency, as Owner, and Moritz, as Developer; 4. Garage Easement Agreement between the Agency, as Owner, and MB, as Grantee; 5. Declaration of Condominium for Loews Miami Beach Hotel, a Condominium, between the Agency and MB, as Co-Declarants; One Battery Park Plaza New York, NY 10004-1482 212-837-6000 47, Avenue Georges Mandel 7\116 Paris, France ell) (I) 44.0\.80.00 IJOO I Street, N.W. Washington, D.C 2000\-3106 202-408-3600 J\O South Crand Avenue Los Angeles. CA 90071-3442 21J-61J-2800 lIughes Hubbard & Reed LLP Miami Beach Redevelopment Agency Page 2 6. Condominium Unit Lease between the Agency, as Owner, and MB, as Tenant, and joined in by the City for the limited purposes set forth therein; 7. Bill of Sale between the Agency, as Grantor, and MB, as Grantee; 8. Attornment Agreement among the Agency, MB and Operating Company; 9. Master Lease between the Agency, as Landlord, and MB, as Tenant, and joined in by the City for the limited purposes set forth therein; 10. Easement Agreement by the Agency and the City, and joined in by MB; 11. Stock Purchase Agreement between the Agency, as Stockholder, and LHHC, as Buyer, dated September 19, 1996; and 12. Completion Guarantee given by LC, as Guarantor, in favor of the Agency, as Owner. We have not made any investigation of, and do not express an opinion with respect to, any matters of title to or the description of any property (whether real, personal or mixed) or the creation, perfection, enforceability or priority of leases, liens or other encumbrances. In rendering the following opinions with respect to MB and Moritz, we have examined (i) the Articles of Incorporation and By-Laws of MB, as the same are currently in force and effect, and (ii) minutes, resolutions, certificates, documents and other matters of fact and law we have deemed appropriate, and have obtained such other certificates and made inquiry of such persons as we deemed necessary or appropriate in rendering the opinions set forth below. In rendering the following opinions, we have relied, with your approval, as to factual matters that affect our opinions, solely upon the Certificate as to Resolutions of MB, the Certificate as to Resolution of Moritz, the Officer's Certificate of MB, the Officer's Certificate of Moritz and the factual representations and warranties contained in the Agreements to which MB, or Moritz or both MB and Moritz are parties and have made no independent verification of the facts asserted to be true and correct in the aforesaid Resolutions, Officer's Certificate and Agreements, although, to our knowledge (as such term is hereinafter defined), such facts are true and correct. The aforesaid Corporate Resolutions, Officer's Certificate and representations and warranties contained in the Agreements to which MB or Moritz or both MB and Moritz is a party are hereinafter collectively called "the factual matters upon which we have relied." Based upon the foregoing, and subject to the assumptions, qualifications and exceptions herein contained, we are of the opinion that: MI962680.005 IIughes Hubbard & Reed LLP Miami Beach Redevelopment Agency Page 3 1. Based solely on the Certificate of Good Standing of MB issued by the Florida Secretary of State, MB is a corporation validly existing and in good standing under the laws of the State of Florida. MB possesses the corporate power and authority to own its property and carry on its business as now conducted; MB possesses all of the powers and authority requisite for it to execute, deliver and perform its obligations under the Agreements to which it is a party; and all necessary corporate action has been taken to authorize such execution, delivery and performance. 2. The execution, delivery and performance by MB of the Agreements to which it is a party do not violate the Articles of Incorporation or By-Laws ofMB. To our knowledge based solely on the factual matters upon which we have relied, the execution, delivery and performance by MB of the Agreements to which it is a party do not (a) violate or conflict with any court order, writ, judgment or decree to which MB is subject, (b) violate or conflict with or constitute an event of default under any agreement to which MB or any of its assets is bound, or (c) result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon the property or assets ofMB. 3. To our knowledge based solely on the factual matters upon which we have relied, there are no actions or proceedings pending against MB or overtly threatened against MB, in writing, before any court, governmental agency or arbitrator which purport to affect the validity or enforceability of the Agreements to which MB is a party or which would, if adversely determined, result in a material adverse change in the business, properties or financial condition ofMB. 4. Each of the Agreements to which MB is a party has been duly executed and delivered by MB, constitutes the legal, valid and binding obligations of MB and is enforceable against MB in accordance with the terms thereof. 5. The execution and delivery of the Agreements by MB, and the performance by MB of its obligations under each such Agreement to which it is a party do not contravene any material law, rule or regulation applicable to MB and no governmental consents, permissions or authorizations are required in connection with the execution and delivery of the Agreements to which MB is a party except for any such governmental consents, permissions or authorizations that have been obtained. 6. Moritz is a corporation validly existing and in good standing under the laws of the State of Florida. Moritz possesses the corporate power and authority to own its property and carry on its business as now conducted; Moritz possess all of the powers requisite for it to execute, deliver and perform its obligations under the Agreements to which it is a party; and all necessary corporate action has been taken to authorize such execution, delivery and performance. MI962680.005 I-Iughes I-Iubbard & Reed LLP Miami Beach Redevelopment Agency Page 4 7. The execution, delivery and performance by Moritz of the Agreements to which it is a party do not violate the Articles of Incorporation or By-Laws of Moritz To our knowledge based solely on the factual matters upon which we have relied, the execution, delivery and performance by Moritz of the Agreements to which it is a party do not (a) violate or conflict with any court order, writ, judgment or decree to which Moritz is subject, (b) violate or conflict with or constitute an event of default under any agreement to which Moritz or any of its assets is bound, or (c) result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon the property or assets of Moritz. 8. To our knowledge based solely on the factual matters upon which we have relied, there are no actions or proceedings pending against Moritz or overtly threatened against Moritz, in writing, before any court, governmental agency or arbitrator which purport to affect the validity or enforceability of the Agreements to which Moritz is a party or which would, if adversely determined, result in a material adverse change in the business, properties or financial condition of Moritz. 9. Each of the Agreements to which Moritz is a party has been duly executed and delivered by Moritz, constitutes the legal, valid and binding obligations of Moritz and is enforceable against Moritz in accordance with the terms thereof. 10. The execution and delivery of the Agreements by Moritz, and the performance by Moritz of its obligations under each such Agreement to which it is a party do not contravene any material law, rule or regulation applicable to Moritz and no governmental consents, permissions or authorizations are required in connection with the execution and delivery of the Agreements to which Moritz is a party except for any such governmental consents, permissions or authorizations that have been obtained. II. Each of the Agreements to which LHHC is a party is a legal, valid and binding obligation, enforceable against LHHC in accordance with its terms and the execution, delivery and performance of the obligations of LHHC under the Agreements to which it is a party do not breach any material law, rule of or regulation applicable to LHHC. 12. Each of the Agreements to which Operating Company is a party is a legal, valid and binding obligation, enforceable against Operating Company in accordance with its terms and the execution, delivery and performance of the obligations of Operating Company under the Agreements to which it is a party do not breach any material law, rule of or regulation applicable to Operating Company. 13. Each of the Agreements to which LC is a party is a legal, valid and binding obligation, enforceable against LC in accordance with its terms and the execution, delivery and performance of the obligations of LC under the Agreements to which it is a party do not breach any material law, rule of or regulation applicable to LC. MI962680.005 l-Iughes Hubbard &Reed LLP Miami Beach Redevelopment Agency Page 5 In rendering the foregoing opinion, we have assumed, with your consent: i. The genuineness of all signatures (other than officers of MB and Moritz), the authenticity of documents submitted as originals and the conformity to originals of documents submitted as copies, and that all public records reviewed are accurate and complete; ii. The legal capacity of all natural persons executing the Transaction Documents; III. That each party to the Transaction Documents (other than MB and Moritz) is duly organized, validly existing and in good standing under the laws of the state of its organization and that, if such state is other than the State of Florida, such party is qualified to do business in the State of Florida and is in good standing under the laws of the State of Florida; iv. That each party to the Transaction Documents (other than MB and Moritz) has all requisite power and authority to execute and deliver the Transaction Documents to which it is a signatory and to carry out the transactions contemplated thereby and the covenants and agreements contained therein; v. That the Transaction Documents accurately describe and contain the mutual understanding of the parties; vi. That each of the parties to the Transaction Documents (other than MB and Moritz) has duly and validly executed and delivered each Transaction Document to which such party is a signatory; vii. That except with respect to MB and Moritz, no consents, permissions or authorizations are required in connection with the execution and delivery of the Transaction Documents, except for any such consents, permissions and authorizations that have been obtained; VIII. That the obligations of each of the parties (other than the Loews Corporations) under the Transaction Documents are the legal, valid and binding obligations of such party, enforceable against such party in accordance with their respective terms; and IX. That each person (other than officers of MB and Moritz) executing and entering into any of the Transaction Documents, whether individually or on behalf of an entity, is duly authorized to do so. MI962680.005 IIughes Hubbard & Reed LLP Miami Beach Redevelopment Agency Page 6 We confirm to you that, without undertaking any independent investigation, we are aware of no facts or circumstances which would render false, misleading or inaccurate in any material respect any of the assumptions set forth in (i) through (ix) above, with respect to the Loews Corporations or any person executing any of the Transaction Documents on behalf of the Loews Corporations. The opinion set forth above is subject to the following qualifications and limitations: a. When reference is made in this letter to our "knowledge", such reference does not include constructive knowledge of factual matters and is further limited to the knowledge of those attorneys of this firm who have provided legal services to MB and Moritz. Further, unless otherwise stated, reference to our "knowledge" does not include independent investigation or verification. b. The enforceability of the Transaction Documents may be subject to or limited by federal and state bankruptcy, insolvency, reorganization, fraudulent conveyance, arrangement, moratorium, or other similar laws relating to or affecting the rights of creditors generally and by judicial decisions with respect to such laws; c. The enforceability of the Transaction Documents is subject to general principles of equity and the discretion of courts in granting specific remedies; and d. The enforceability of the Transaction Documents is further subject to the qualification that certain waivers, procedures, remedies, and other provisions of the Transaction Documents may be unenforceable under or limited by the law of the State of Florida; however, such law does not, in our opinion, substantially prevent the practical realization of the benefits intended by the Transaction Documents. The opinions expressed in this letter are based upon the law in effect on the date hereof, and we assume no obligation to revise or supplement this opinion should such law be changed by legislative action, judicial decision, or otherwise or if we become aware after the date of this letter of any facts that might change the opinions expressed above. We express no opinion with respect to the effect of any law other than the laws of the State of Florida and the laws of the United States of America; provided, however, that no opinion is expressed with respect to federal securities laws or state securities or "blue sky" laws. The opinions expressed in this letter may not be relied upon by or quoted to any person or entity other than you and your permitted successors and permitted assigns under the Transaction Documents without, in each instance, our prior written consent. MI962680.005 Very truly yours, ff+ >>~ -t fk,J L-d