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Garage Easement Grty #17 ...:If '/ GARAGE EASEMENT GUARANTEE This GARAGE EASEMENT GUARANTEE (this "Guarantee") is made as of the ""20 day of ~~ ,1996, by the CITY OF MIAMI BEACH, a Florida municipal corporation (the "Guarantor"), in favor of MB REDEVELOPMENT, INC., a Florida corporation ("Grantee"). RECITALS: Grantee is contemporaneously herewith entering into that certain Agreement of Lease (the "Lease"), dated as of the date hereof, between the Miami Beach Redevelopment Agency, a public body corporate and politic (the "Owner"), as Owner, and Grantee, as Tenant, pursuant to which Grantee has agreed to lease the Grantee Land (as defined in the Garage Easement Agreement (hereinafter defined)) on which the Hotel (as defined in the Garage Easement Agreement) will be constructed. Grantee is also contemporaneously herewith entering into that certain Garage Easement Agreement (the "Garage Easement Agreement"), dated as of the date hereof, between Owner and Grantee, pursuant to which, among other things, the Owner has granted to Grantee a non-exclusive easement over the Land (as defined in the Garage Easement Agreement) and the Facility (other than the Retail Space) (as such terms are defined in the Garage Easement Agreement) in order to provide to Grantee such parking spaces and access, ingress and egress for pedestrian and vehicular passage and traffic upon and subject to the terms and conditions of the Garage Easement Agreement. 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 Grantee 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 Garage Easement Agreement, are used herein with the meaning assigned to such capitalized terms in the Garage Easement Agreement. 2. Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Grantee the following: (a) For so long as the Owner, the Guarantor or any instrumentality of the Guarantor or the Owner, owns or holds any interest (other than a lienor's interest or W6-MI962620.064 other interests with respect to affidavits of non-compliance, notices of violation, special assessments, fees, charges, resort taxes, city code or special master fines, grant agreements, or similar matters and interest accrued on any of the foregoing) in the land or the Facility and, in the event of a Total Taking, for so long as the Owner, the Guarantor or any instrumentality of the Guarantor or the Owner owns or holds any interest (other than a lienor's interest or other interests with respect to affidavits of non- compliance, notices of violation, special assessments, fees, charges, resort taxes, city code or special master fines, grant agreements, or similar matters and interest accrued on any of the foregoing) in the land or garage facility subject to the New Easement Agreement (hereinafter defined) (the "New Garage"), the (i) due and punctual payment and satisfaction of all amounts required to be paid by the Owner under and in accordance with the terms and provisions of the Garage Easement Agreement or, in the event of a Total Taking, any new easement agreement which is contemplated by and entered into pursuant to the provisions of Section 13(a) of the Garage Easement Agreement (the "New Easement Agreement") (collectively, the "Payment Obligation") and (ii) due and punctual performance of all the other terms, covenants, conditions and obligations on the part of the Owner to be discharged, performed or satisfied under and in accordance with the terms and provisions of the Garage Easement Agreement or, in the event of a Total Taking, the New Easement Agreement (collectively, the "Performance Obligation"). The Payment Obligation and Performance Obligation include, without limitation, the Parking Obligation (hereinafter defined). Notwithstanding anything to the contrary contained in this Guarantee, the obligation of Guarantor to duly and punctually pay, perform, satisfy and discharge the Payment Obligation and the Performance Obligation shall continue in the event of (a) any sale, conveyance, assignment or other transfer by Owner of any of its interest in the land and the Facility to a Successor Owner, which sale, conveyance, assignment or other transfer is not permitted pursuant to or consummated in accordance with the terms of the Garage Easement Agreement or (b) any sale, conveyance, assignment or other transfer by Owner, Guarantor or any instrumentality of Owner or Guarantor, of any of its interest in the New Garage to any Person that is not the Owner, Guarantor or any instrumentality of Owner or Guarantor (a "New Garage Successor Owner"), which sale, conveyance, assignment or other transfer is not permitted pursuant to or consummated in accordance with the terms of the New Garage Easement Agreement. (b) From and after the date that the land and the Facility are owned or held by a Successor Owner (including, without limitation, by reason of a Total Taking), the due and punctual payment, performance and satisfaction of all (i) the amounts to be paid by the Owner in accordance with the terms and provisions of subsection 7(h) of the Garage Easement Agreement and (ii) the other terms, covenants, conditions and obligations on the part of the Owner to be discharged, performed or satisfied under and in accordance with the terms and provisions of subsection 7(h) of the Garage Easement Agreement (the "Parking Obligation"), without regard to the reason that any Parking Obligation may arise. It is specifically understood and agreed that the Parking Obligation, and subject to the penultimate sentence of subsection 2(a), above, only the Parking Obligation, shall be and remain in full force and effect whether or not the -2- W6-MI962620.064 Owner, the Guarantor or any instrumentality of the Guarantor or the Owner, owns or holds any interest in the land or the Facility or in the land and garage facility subject to the New Easement Agreement. The Payment Obligation, the Performance Obligation and the Parking Obligation being guaranteed by Guarantor pursuant to this Section 2, are sometimes hereinafter collectively referred to as the "Guaranteed Obligations". 3. If any of the Guaranteed Obligations are not duly and punctually performed, paid, satisfied or discharged by Owner on or before the time such Guaranteed Obligations are to be performed, paid, satisfied or discharged by Owner in accordance with the provisions of the Garage Easement Agreement and, in the event of a Total Taking, the New Garage Easement Agreement (the Garage Easement Agreement and the New Easement Agreement sometimes together hereinafter referred to as the "Easement Agreement"), then, upon demand of Grantee, Guarantor shall, prior to the expiration of any applicable cure period, perform, pay, satisfy or discharge such Guaranteed Obligations in the manner required by and in accordance with the provisions of the Easement Agreement and this Guarantee. Grantee agrees to accept performance by the Guarantor of all or any of the terms, covenants, conditions or agreements on the Owner's part to be performed under the Easement Agreement with the same force and effect as though performed by the Owner thereunder. 4. Guarantor shall not be deemed to have failed to pay, perform, satisfy or discharge its obligations hereunder until Guarantor shall have failed to pay, perform, satisfy or discharge the Guaranteed Obligations within the cure period, if any, provided to Owner under the Easement Agreement and all cure periods, if any, provided to Guarantor shall run concurrently with the cure periods, if any, provided to Owner under the Easement Agreement. It is specifically acknowledged and agreed that in the event of a breach of the covenant to provide Substitute Spaces pursuant to the Garage Easement Agreement, Guarantor shall immediately provide the substitute parking and Substitute Spaces in accordance with the requirements of Section 7(h) of the Garage Easement Agreement notwithstanding any efforts by Owner to cure such breach by attempting to make Substitute Spaces available. 5. Guarantor expressly agrees that Grantee may, in its sole and absolute discretion, without notice to or further assent of Guarantor and without in any way 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 Easement Agreement; (b) modify, amend or change any provision of the Easement Agreement, or effect any release, compromise or settlement in connection therewith; (c) convey, assign, or otherwise transfer its interest in this Guarantee to Grantee's permitted successors and assigns pursuant to the lease or to a Grantee land Owner (hereinafter defined); or (d) assign, pledge, Mortgage (as defined in the lease) or otherwise encumber its interest in this Guarantee in connection with an assignment, pledge, Mortgage, or other encumbrance by Grantee or its permitted - 3 - W6-MI962620.064 successors and assigns all in accordance with and pursuant to the lease or by New Tenant (hereinafter defined) and New Tenant's permitted successors and assigns in accordance with and pursuant to the New Tenant's Documents (hereinafter defined), or by a Grantee land Owner as permitted pursuant to the provisions of Section 13 hereof. Notwithstanding the foregoing, (i) until the lease is terminated, Grantee or New Tenant is granted no greater rights by virtue of the right to assign, pledge or mortgage its interest in this Guarantee than Grantee has been granted under the lease, or New Tenant has been granted under the New Tenant's Documents, to assign, pledge or mortgage Tenant's Interest in the Premises (as defined in the lease) and (ii) no amendment or modification to the Easement Agreement that increases the liability of Owner thereunder shall be made without the express consent of Guarantor. Any amendment or modification to the Garage Easement Agreement between Grantee or its permitted successors and assigns and a Successor Owner or New Garage Successor Owner, as applicable, without the consent of Guarantor, which (i) reduces the amount of Parking Spaces to be provided to Grantee or its permitted successors and assigns pursuant to the Garage Easement Agreement by such Successor Owner or New Garage Successor Owner, and its affiliates, shall reduce, by the same number, the number of Parking Spaces to which this Guarantee relates or (ii) lessens the obligations of the Successor Owner or New Garage Successor Owner, and its affiliates, under subsection 7(h) of the Garage Easement Agreement, shall similarly reduce the obligations to which this Guarantee relates. 6. Except as otherwise expressly set forth in 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 Easement 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 Owner, any Affiliate of Owner or Guarantor of any assignment for the benefit of creditors or the bankruptcy or insolvency of Owner, any Affiliate of Owner or Guarantor, (b) any action taken by Owner, any Affiliate of Owner or Guarantor in any bankruptcy or insolvency proceeding, including, without limitation, disaffirmance of the Easement Agreement, (c) any default by Owner under the Easement Agreement, (d) the liquidation or dissolution of Owner, any Affiliate of Owner or Guarantor, (e) any change in or termination of Guarantor's ownership interest in any Person, (f) the enforcement by Grantee of any of its rights under the Easement Agreement, or (g) the sale, conveyance, assignment or transfer by Owner of all or any portion of its interest in the land and/or the Facility except to the extent provided in Section 2(b) hereof; 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 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 Grantee of any remedies it -4- W6-MI962620.064 may have against Owner or any other Person with respect to the Easement Agreement, or any other agreement, whether pursuant to the terms thereof or by law or pursuant to any other security agreement or guaranty. Guarantor and Grantee each acknowledge and agree that this Guarantee is a guarantee of payment and performance and not of collection in respect of any Guaranteed Obligations. Anyone or more successive or concurrent actions may be brought hereon against Guarantor with respect to the Guaranteed Obligations, either in the same action or proceeding, if any, brought against Owner or any other Person, or in separate actions as often as Grantee, in its sole discretion, may deem advisable. Guarantor may be joined in any action against Owner in connection with the Easement Agreement solely with respect to the Guaranteed Obligations. With respect the Guaranteed Obligations, recovery may be had against Guarantor in such action or in any independent action against Guarantor, without Grantee first pursuing or exhausting any remedy or claim against Owner 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 of Section 20 hereof, (i) the liability of Guarantor under this Guarantee for the payment, performance, satisfaction and discharge of all of the Guaranteed Obligations shall continue after (a) any sale, conveyance, assignment or other transfer by Owner of its interest in the land and/or the Facility to the Guarantor or any instrumentality of the Guarantor or the Owner (b) any sale, conveyance, assignment or other transfer by Owner, Guarantor or any instrumentality of Owner or Guarantor of its interest in the New Garage to the Owner, Guarantor or any instrumentality of the Owner or Guarantor, (c) any sale, conveyance, assignment or other transfer by Owner of its interest in the land and/or the Facility to a Successor Owner, which sale, conveyance, assignment or other transfer is not permitted pursuant to or is not consummated in accordance with the terms of the Garage Easement Agreement and (d) any sale, conveyance or other transfer by Owner, Guarantor or any instrumentality of Owner or Guarantor of its interest in the New Garage to a New Successor Owner, which sale, conveyance, assignment or other transfer is not permitted pursuant to or is not consummated in accordance with the New Garage Easement Agreement and (ii) the liability of Guarantor under this Guarantee for the payment, performance, satisfaction and discharge of the Parking Obligation shall continue after any sale, conveyance, assignment or other transfer by Owner (including, without limitation, by reason of a Total Taking or Partial Taking) to any Person of its interest in the land and/or the Facility or in the land and garage facility subject to the New Easement Agreement. 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 Easement Agreement; (d) demand for observance or performance of, or enforcement of, any terms and provisions of this Guarantee or the Easement Agreement; 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. - 5 - W6-MI962620.064 9. Guarantor shall not enforce any right of subrogation it may now or hereafter have against Owner 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 Owner 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 paid, discharged, performed and satisfied, whereupon Guarantor shall have such subrogation rights as may be allowed under applicable law. 10. No setoff, counterclaim or crossclaim, reduction or diminution of an obligation or any defense of any kind or nature (other than payment and/or performance of the Guaranteed Obligations) shall be available to Guarantor in any action or proceeding brought by Grantee 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 Grantee 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 Grantee 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 Grantee from Owner, Guarantor, any Affiliate of Owner or Guarantor, or any other Person, as the case may be, for or with respect to the Guaranteed Obligations is or must be rescinded or returned by Grantee by reason of any judgment or decree of any court having jurisdiction (including, without limitation, by reason of the insolvency, bankruptcy or reorganization of Owner, Guarantor, any Affiliate of Owner 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 Grantee 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 Grantee 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 Grantee 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 Grantee 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 Grantee, 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. If the Guarantor does not perform, pay, satisfy or discharge the Guaranteed Obligations in accordance with the provisions of the Easement Agreement and this Guarantee, -6- W6-MI962620.064 Guarantor acknowledges and agrees that all remedies available to Grantee under the Easement Agreement in the event of a default by Owner under the Easement Agreement (after expiration of any applicable cure period) shall be available to Grantee hereunder and enforceable against Guarantor hereunder. 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 (i) Grantee, and its permitted successors and assigns pursuant to the lease, (ii) any New Tenant (as defined in the lease) that enters into New Tenant's Documents (as defined in the lease) in accordance with the provisions of Section 11.5 of the lease, and any successors and assigns of such New Tenant permitted pursuant to the New Tenant's Documents, and (iii) if Grantee or its permitted successors or assigns exercises the Purchase Option (as defined in the lease) or the option to purchase the Owner's Interest in the Premises (as defined in the lease) pursuant to the lease or the New Tenant's Documents or otherwise acquires title to the Owner's Interest in the Premises, Grantee and its successor or assigns as owner of Owner's Interest in the Premises (the "Grantee land Owner"); and, shall be binding solely upon Guarantor, its successors and assigns. This Guarantee may be assigned, pledged, mortgaged to a Mortgagee or otherwise encumbered by Grantee or its permitted successors and assigns pursuant to the lease or by New Tenant and New Tenant's permitted successors and assigns pursuant to the New Tenant's Documents, in connection with an assignment, pledge, Mortgage, or other encumbrance by Grantee or its permitted successors and assigns pursuant to the lease of Tenant's Interest in the Premises or by New Tenant and New Tenant's permitted successors and assigns pursuant to the New Tenant's Documents of New Tenant's leasehold interest in the Grantee land, and when so assigned, pledged, mortgaged or otherwise encumbered, Guarantor shall be liable to the assignees of this Guarantee without in any manner affecting the liability of Guarantor hereunder. This Guarantee may also be assigned, pledged, mortgaged or otherwise encumbered by the Grantee land Owner in connection with an assignment, pledge, mortgage or other encumbrance by the Grantee land Owner of its interest in the Grantee land, and when so assigned, pledged, mortgaged or otherwise encumbered, Guarantor shall be liable to the assignees of this Guarantee without in any manner affecting the liability of Guarantor hereunder. Notwithstanding the foregoing, until the lease is terminated, Grantee or New Tenant is granted no greater rights by virtue of the right to assign, pledge or mortgage its interest in this Guarantee than Grantee has been granted under the lease, or New Tenant has been granted under the New Tenant's Documents, to assign, pledge or mortgage Tenant's Interest in the Premises. 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. -7- W6-MI962620.064 15. This Guarantee shall constitute the entire agreement of Guarantor with Grantee 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 Grantee to accept this Guarantee, Guarantor represents and warrants to Grantee that as of the date hereof: (i) Guarantor is a municipal corporation duly validly existing, and in good standing under the laws of the State of Florida; (ii) Guarantor has the requisite 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 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); (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) The person executing this Guarantee on behalf of Guarantor has all requisite authority to do so, as a duly authorized signatory of Guarantor; and (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 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 - 8 - W6-MI962620.064 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: City of Miami Beach City Manager 1700 Convention Center Drive Miami Beach, Florida 33139 with a copy to: City of Miami Beach City Attorney 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. if to Grantee prior to the Hotel Opening Date: M B Redevelopment, Inc. 407 Lincoln Road Suite 6-K Miami Beach, Florida 33139 Attention: Eric Nesse if to Grantee on or after the Hotel Opening Date: MB Redevelopment, Inc. c/o loews Miami Beach Hotel 1601 Collins Avenue Miami Beach, Florida 33139 Attention: General Manager - 9 - W6-MI962620.064 with a copy to: Loews Hotels Holding Corporation 667 Madison Avenue New York, New York 10021 Attention: Corporate Secretary and to: Hughes Hubbard & Reed 201 S. Biscayne Boulevard, Suite 2500 Miami, Florida 33131 Attention: William A. Weber, Esq. Any such 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. 18. The acceptance by Grantee of this Guarantee shall constitute its acceptance of the terms and provisions hereof. 19. Notwithstanding anything to the contrary contained in this Guarantee, if, and only if, the Requirements so require, the obligations of Guarantor under this Guarantee shall be required to be satisfied solely from Non-Ad Valorem Funds (as hereinafter defined) budgeted and appropriated by the City on an annual basis as described in this Section 19. In which event, Guarantor hereby covenants and agrees to appropriate in its annual budget, or by amendment thereto, if necessary, from Non-Ad Valorem Funds lawfully available in each fiscal year, amounts sufficient to satisfy all of its obligations under this Guarantee and under that certain Completion Guarantee dated the date hereof given by Guarantor to MB Redevelopment, Inc. dated the date hereof with respect to the obligations of the Owner under Section 21 of the lease (the "Completion Guarantee"). Such covenant and agreement on the part of the Guarantor to budget and appropriate such amounts of Non-Ad Valorem Funds shall be cumulative to the extent not paid, and shall continue until such Non-Ad Valorem Funds or other legally available funds in amounts sufficient to satisfy all of Guarantor's obligations under this Guarantee and under the Completion Guarantee shall have been budgeted, appropriated and actually paid. Subject to the provisions of this Section 19, such covenant and agreement on the part of the Guarantor to budget and appropriate such amount of Non-Ad Valorem Funds as security for the performance of all of its obligations under this Guarantee shall in no way be construed as limiting the liability of Guarantor under this Guarantee. Notwithstanding the foregoing covenant and agreement of the Guarantor, the Guarantor does not covenant to maintain any services or programs now provided or maintained by the Guarantor, which generate Non-Ad Valorem Funds. - 10- W6-MI962620.064 Such covenant and agreement to budget and appropriate does not create any lien upon or pledge of such Non-Ad Valorem Funds, nor does it preclude the Guarantor from pledging in the future its Non-Ad Valorem Funds, nor does it require the Guarantor to levy and collect any particular Non-Ad Valorem Funds, nor does it give MB Redevelopment, Inc. a prior claim on the Non-Ad Valorem Funds as opposed to claims of general creditors of the Guarantor. Such covenant and agreement to appropriate Non-Ad Valorem Funds is subject in all respects to the payment of obligations secured by a pledge of all or portions of the Non-Ad Valorem Funds heretofore or hereinafter entered into (including the payment of debt service on bonds and other debt instruments). However, the covenant and agreement to budget and appropriate in its general annual budget or amendment thereto for the purposes and in the manner stated herein shall have the effect of making available in the manner described herein Non-Ad Valorem Funds and placing on the Guarantor a positive duty to appropriate and budget, by amendment, if necessary, amounts sufficient to meet its obligations hereunder and under the Completion Guarantee; subject, however, in all respects to the restrictions of Section 166.241 (3), Florida Statutes, which provides, in part, that the governing body of each municipality make appropriations for each fiscal year which, in anyone year, shall not exceed the amount to be received from taxation or other revenue sources; and subject further, to the payment of services and programs which are for essential public purposes affecting the health, welfare and safety of the inhabitants of the City or which are legally mandated by applicable law. To the extent Requirements do not require that the obligations of Guarantor hereunder be satisfied solely from Non Ad-Valorem Funds as described in this Section 19, Grantee shall have all the rights and remedies available at law or in equity under the laws of the State of Florida. The term "Non Ad-Valorem Funds" shall mean all revenues of the Guarantor derived from any source other than ad valorem taxation on real or personal property, which are legally available to make the payments required herein, but only after provision has been made by the Guarantor for the payment of all essential or legally mandated services. 20. This Guarantee shall not terminate and shall continue to be in full force and effect until the termination of the Easement Agreement in accordance with the provisions thereof (subject to the provisions of Section 9 and Section 10 hereof). 21. 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, members, partners, holders of other ownership interests, directors, elected or appointed officials (including, without limitation, the Mayor and commissioners of the Guarantor) or employees of the Guarantor, or of any successor corporation or other successor entity, 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 - 11 - W6-MI962620.064 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: City of Miami Beach City Manager 1700 Convention Center Drive Miami Beach, Florida 33139 with a copy to: City of Mi.ami Beach City Attorney 1700 Convention Center Drive Miami Beach, Florida 33139 and with a copy to: Squire, Sanders & Dempsey Two Renaissance Square Phoenix, Arizona 85004 Attention: Richard F. Ross, Esq. if to Grantee prior to the Hotel Opening Date: MB Redevelopment, Inc. 407 Lincoln Road Suite 6-K Miami Beach, Florida 33139 Attention: Eric Nesse if to Grantee on or after the Hotel Opening Date: MB Redevelopment, Inc. c/o loews Miami Beach Hotel 1601 Collins Avenue Miami Beach, Florida 33139 Attention: General Manager - 9 - W6-MI962620.064 with a copy to: loews Hotels Holding Corporation 667 Madison Avenue New York, New York 10021 Attention: Corporate Secretary and to: Hughes Hubbard & Reed 201 S. Biscayne Boulevard, Suite 2500 Miami, Florida 33131 Attention:. William A. Weber, Esq. Any such 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. 18. The acceptance by Grantee of this Guarantee shall constitute its acceptance of the terms and provisions hereof. 19. Notwithstanding anything to the contrary contained in this Guarantee, if, and only if, the Requirements so require, the obligations of Guarantor under this Guarantee shall be required to be satisfied solely from Non-Ad Valorem Funds (as hereinafter defined) budgeted and appropriated by the City on an annual basis as described in this Section 19. In which event, Guarantor hereby covenants and agrees to appropriate in its annual budget, or by amendment thereto, if necessary, from Non-Ad Valorem Funds lawfully available in each fiscal year, amounts sufficient to satisfy all of its obligations under this Guarantee and under that certain Completion Guarantee dated the date hereof given by Guarantor to MB Redevelopment, Inc. dated the date hereof with respect to the obligations of the Owner under Section 21 of the lease (the "Completion Guarantee"). Such covenant and agreement on the part of the Guarantor to budget and appropriate such amounts of Non-Ad Valorem Funds shall be cumulative to the extent not paid, and shall continue until such Non-Ad Valorem Funds or other legally available funds in amounts sufficient to satisfy all of Guarantor's obligations under this Guarantee and under the Completion Guarantee shall have been budgeted, appropriated and actually paid. Subject to the provisions of this Section 19, such covenant and agreement on the part of the Guarantor to budget and appropriate such amount of Non-Ad Valorem Funds as security for the performance of all of its obligations under this Guarantee shall in no way be construed as limiting the liability of Guarantor under this Guarantee. Notwithstanding the foregoing covenant and agreement of the Guarantor, the Guarantor does not covenant to maintain any services or programs now provided or maintained by the Guarantor, which generate Non-Ad Valorem Funds. - 10- W6-MI962620.064 Such covenant and agreement to budget and appropriate does not create any lien upon or pledge of such Non-Ad Valorem Funds, nor does it preclude the Guarantor from pledging in the future its Non-Ad Valorem Funds, nor does it require the Guarantor to levy and collect any particular Non-Ad Valorem Funds, nor does it give MB Redevelopment, Inc. a prior claim on the Non-Ad Valorem Funds as opposed to claims of general creditors of the Guarantor. Such covenant and agreement to appropriate Non-Ad Valorem Funds is subject in all respects to the payment of obligations secured by a pledge of all or portions of the Non-Ad Valorem Funds heretofore or hereinafter entered into (including the payment of debt service on bonds and other debt instruments). However, the covenant and agreement to budget and appropriate in its general annual budget or amendment thereto for the purposes and in the manner stated herein shall have the effect of making available in the manner described herein Non-Ad Valorem Funds and placing on the 'Guarantor a positive duty to appropriate and budget, by amendment, if necessary, amounts sufficient to meet its obligations hereunder and under the Completion Guarantee; subject, however, in all respects to the restrictions of Section 166.241 (3), Florida Statutes, which provides, in part, that the governing body of each municipality make appropriations for each fiscal year which, in anyone year, shall not exceed the amount to be received from taxation or other revenue sources; and subject further, to the payment of services and programs which are for essential public purposes affecting the health, welfare and safety of the inhabitants of the City or which are legally mandated by applicable law. To the extent Requirements do not require that the obligations of Guarantor hereunder be satisfied solely from Non Ad-Valorem Funds as described in this Section 19, Grantee shall have all the rights and remedies available at law or in equity under the laws of the State of Florida. The term "Non Ad-Valorem Funds" shall mean all revenues of the Guarantor derived from any source other than ad valorem taxation on real or personal property, which are legally available to make the payments required herein, but only after provision has been made by the Guarantor for the payment of all essential or legally mandated services. 20. This Guarantee shall not terminate and shall continue to be in full force and effect until the termination of the Easement Agreement in accordance with the provisions thereof (subject to the provisions of Section 9 and Section 10 hereof). 21. 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, members, partners, holders of other ownership interests, directors, elected or appointed officials (including, without limitation, the Mayor and commissioners of the Guarantor) or employees of the Guarantor, or of any successor corporation or other successor entity, 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 - 11 - W6-MI962620.064 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, member, partner, holder of oth"er ownership interest, 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. ATTEST: By: Ro6r fl4ck Robert Parcher Name:~et '?~~~R. City Clerk rORM APPROVED LEGAL DEPT. By 41; (lfff~ Date 'P/~/%'" u . . - 12 - W6-MI962620.064