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Condominium Unit Lease #2 CONDOMINIUM UNIT LEASE between MIAMI BEACH REDEVELOPMENT AGENCY, Owner and MB REDEVELOPMENT, INC., Tenant Dated as of September 20, 1996 PREPARED BY: , Eric D. Rapkin, Esq. Hughes Hubbard & Reed LLP 201 South Biscayne Blvd. Suite 2500 Miami, Florida 33131 RECORD AND RETURN TO: Kolleen O.P. Cobb, Esq. Hughes Hubbard & Reed LLP 201 South Biscayne Blvd. Suite 2500 Miami, Florida 33131 MI9626 I 0,074/09/19/96 CONDOMINIUM UNIT LEASE THIS CONDOMINIUM UNIT LEASE (the "Lease"), dated as of this 20th day of September, 1996 (the "Commencement Date"), between MIAMI BEACH REDEVELOPMENT AGENCY, a public body corporate and politic, as Owner, and MB REDEVELOPMENT, INC., a Florida corporation, as Tenant. RECITALS: A. In February 1993, the City Center/Historic Convention Village Redevelopment and Revitalization Area was officially established by the adoption of a Redevelopment Plan (the "Redevelopment Plan", as further defmed below), resulting from the combined efforts of the City of Miami Beach, a municipal corporation of the State of Florida (the "City"), Owner, Metropolitan Dade County and the State of Florida. The purposes of the Redevelopment Plan are, among other things, to eliminate blight, establish redevelopment, foster the development of convention quality hotels, ancillary improvements and facilities, and necessary linkages to the Miami Beach Convention Center. B. Pursuant to the Redevelopment Plan, Owner acquired land ("Land", as further defmed below), known as Site I-A, which it has agreed to make available for a convention headquarters hotel (the "Hotel", as further defmed below). C. In furtherance of the Redevelopment Plan, the City published a Request for Proposals (the "RFP") dated November 29, 1993, seeking, among other things, proposals for the development and operation of a convention headquarters hotel. D. By virtue of a resolution adopted on July 21, 1994, after a public review process, Owner selected Tenant's predecessor from among the groups which submitted proposals pursuant to the RFP and directed representatives of the Owner to negotiate the terms under which Tenant's predecessor would develop, construct, own and operate the Hotel in accordance with requirements of the RFP. E. Owner and Tenant's predecessor entered into a Letter of Intent (as the same may have been amended from time to time, the "Letter of Intent"), dated May 3, 1995, and approved by Loews Hotels Holding Corporation, a Delaware corporation ("LIllIC"), and the City, which, among other things, provides for the development, construction, furnishing and equipping of the Hotel. F. Owner, the City (to the extent provided therein) and Tenant (acting as "Developer") have entered into that certain Hotel Development Agreement (the "Hotel Development Agreement") dated as of the date hereof, pursuant to which Tenant (acting as "Developer") has agreed to construct the Hotel and related Improvements (as defined below) in accordance with the terms thereof. MI962610,074/09/19/96 G. By that certain bill of sale from Owner to Tenant dated as of the date hereof, Owner has conveyed to Tenant Owner's right, title and interest in and to the Improvements existing as of the date hereof. H. Owner, the City (to the extent provided therein) and Tenant have entered into that certain Agreement of Lease, of even date herewith for the Land and the leasing, ownership, management and operation of the Hotel (the "Ground Lease"), which has been recorded among the Public Records of Dade County, Florida under Clerk's File No. q (c ~y l..~ &~'1 . I. Owner and Tenant, as Co-Declarants, have entered into that certain Declaration of Condominium for Loews Miami Beach Hotel, a Condominium, of even date herewith (the "Declaration"), which Declaration has ~en recorded among the Public Records of Dade County, Florida under Clerk's File No. q ~ t L{ 1. ~ . J. Pursuant to the Declaration, Tenant is the owner of the "Hotel Unit", and Owner is the owner of the "Public Unit" (as such terms are defined in the Declaration). K. Owner and Tenant desire to enter into a definitive agreement for the lease of the Public Unit. TERMS OF AGREEMENT NOW, THEREFORE, it is hereby mutually covenanted and agreed by and between the parties hereto that this Lease is made upon the terms, covenants and conditions hereinafter set forth. ARTICLE 1. DEFINITIONS For all purposes of this Lease, the terms defmed in this Lease shall have the meanings set forth in the Declaration and/or in the Ground Lease, except if otherwise noted in this Lease. ARTICLE 2. DEMISE OF PUBLIC UNIT AND TERM OF LEASE Section 2.1 Demise of Public Unit for Term. Owner does hereby demise and lease to Tenant, and Tenant does hereby lease and take from Owner, the Public Unit, together with all the appurtenances, rights, privileges and hereditaments thereto, and all fixtures, furniture, equipment and all other personal property owned by the Owner now or hereafter located in the Public Unit, subject to (a) the terms and conditions of this Lease, (b) the Title Matters (to the extent such Title Matters may exist at any time during the Term), (c) the Declaration and (d) the Ground Lease, to have and to hold unto Tenant, its successors and assigns for a term MI9626 1 0,074/09/1 9/96 2 commencing on the Commencement Date and expiring on the Fixed Expiration Date, unless sooner tenninated pursuant to the terms hereof. Section 2.2 No Encumbrances. Owner will not permit or suffer any encumbrance, mortgage, pledge or hypothecation of its interest in this Lease or the Public Unit except with respect to those matters (such as utility easements and nonmonetary reciprocal easement agreements) reasonably approved by Tenant and which do not adversely affect the operation or development of the Hotel. Any such mortgage, pledge, encumbrance or hypothecation in violation of this Section 2.2 is void. Notwithstanding the foregoing, Owner shall have the absolute right to pledge its interest in the Base Rent, Impositions, and any other sums, costs, expenses or deposits which Tenant is obligated, pursuant to any of the provisions of this Lease, to pay and/or deposit (collectively, "Rental"), payable hereunder so long as such pledge does not include a pledge of Owner's interest in the Public Unit (other than the Rental payable hereunder), and the pledgee shall have no rights under this Lease other than the right to receive payments of Rental. Any pledge of Rental permitted hereunder shall not create any rights in the pledgee thereunder to enforce any of the provisions of this Lease. Owner shall deliver to Tenant and any Recognized Mortgagee, within fifteen (15) days after the effective date thereof, a true and correct copy of any pledge instrument permitted hereunder. Section 2.3 Sale of Entire Interest. Owner shall not sell, transfer, conveyor assign its interest in this Lease or the Public Unit, except for a sale, transfer, conveyance or assignment of its entire interest in both this Lease and the Public Unit, subject to Tenant's rights under Sections 36.1 and 36.2 of the Ground Lease. Section 2.4 Rights under Declaration. It is the intent of the parties that, except in connection with amendments to the Declaration, Tenant shall have the benefit of any and all rights and privileges under the Declaration benefitting the Public Unit. Owner shall notify Tenant in advance of any and all meetings called by Owner under the Declaration. Owner shall exercise any voting right it may have under the Declaration only at the direction of Tenant, and Owner shall execute any instruments reasonably required by Tenant to acknowledge the foregoing, including, without limitation, any proxies in favor of Tenant to the extent permitted by Requirements; provided, however, that Owner shall have no liability whatsoever with respect to Tenant's exercise of any such voting right or any such instrument, or any action taken by Tenant in connection therewith, and Tenant shall indemnify and hold Owner harmless from and against any loss, cost, liability, claim, damage expense (including, without limitation, reasonable attorneys' fees and disbursements), penalty or fme incurred in connection therewith. MI9626 10,074/09/19/96 3 ARTICLE 3. RENTAL Section 3.1 Method and Place of Payment. Except as otherwise specifically provided herein, all Rental shall be paid without notice or demand. All Rental payable to Owner (except Impositions, if the Requirements governing such payment are to the contrary) shall be paid by good checks (payable upon presentment) drawn on a U.S. or state chartered bank, in currency of the United States of America. Rental that is payable to Owner (other than Impositions) shall be payable at the address of Owner set forth herein or at such other place as Owner shall direct by notice to Tenant. Impositions shall be payable in the form and at the location provided by Requirements governing the payment of such. Section 3.2 Base Rent. (a) Base Rent. Tenant shall pay Owner annual base rent for each Lease Year ("Base Rent") during the Term in the amount of $1.00 commencing on the Hotel Opening Date. (b) Payment of Base Rent. Base Rent shall be paid in annual installments and shall be paid in advance, commencing on the date provided in Section 3.2(a) and on the first day of each and every calendar year thereafter during the Term. All Base Rent which is due for any period of less than a full month or a full calendar year shall be appropriately apportioned. Section 3.3 Impositions. From and after the Commencement Date, Tenant shall pay, in the manner provided in Section 3.4(c) of the Ground Lease, all Impositions that at any time thereafter are assessed, levied, confirmed, imposed upon, or charged to Owner with respect to (i) the Public Unit, or (ii) any vault, passageway or space in, over or under any sidewalk or street in front of or adjoining the Public Unit, or (iii) any other appurtenances of the Public Unit, or (iv) any personal property, FF&E, Building Equipment or other facility used in the operation thereof, or (v) any document to which Tenant is a party creating or transferring an interest or estate in the Public Unit of, by or to Tenant, or (vi) the use and occupancy of the Public Unit, or (vii) this transaction. Section 3.4 Net Lease. It is the intention of Owner and Tenant that (a) Rental be absolutely net to Owner without any abatement, diminution, reduction, deduction, counterclaim, setoff or offset whatsoever, except to the extent expressly set forth in this Lease or in the Ground Lease, and (b) Tenant pay all costs, expenses and charges of every kind or nature (except as expressly provided for herein to the contrary) relating or allocable to the Public Unit that may arise or become due or payable during or after (but attributable to a period falling within) the Term. MI9626I 0.074/09/19/96 4 ARTICLE 4. USE Section 4.1 Use. Tenant shall use and operate the Public Unit throughout the Term as required by the Declaration and the Ground Lease. ARTICLE 5. INSURANCE Section 5.1 Insurance Requirements. At all times during the Term, Tenant, at its sole cost and expense (as an Operating Expense), shall carry or cause to be carried all insurance coverages required to be carried by Tenant under the Ground Lease and Hotel Owner under the Declaration. All insurance requirements and the treatment of the proceeds thereof shall be governed by the applicable provisions of the Ground Lease and Declaration. ARTICLE 6. DAMAGE, DESTRUCTION AND RESTORATION Section 6.1 Damage, Destruction and Restoration. The damage to or destruction of the Public Unit by ftre or other casualty and Casualty Restorations shall be governed by the applicable provisions of the Ground Lease and the Declaration. Section 6.2 Effect of Casualty on This Lease. This Lease shall not terminate, be forfeited or be affected in any manner, and there shall be no reduction or abatement of Rental (except to the extent Owner receives the net proceeds of the insurance described in Section 7.9 of the Ground Lease), by reason of damage to, or total or partial destruction of, or untenantability of, the Public Unit or any part thereof resulting from such damage or destruction. Tenant's Rental obligations hereunder shall continue as though the Public Unit had not been damaged or destroyed and shall continue without abatement, suspension, diminution or reduction whatsoever. Subject to Unavoidable Delays and taking into account Tenant's Casualty Restoration obligations (including, without limitation, the effect of the casualty and the Casualty Restoration on the Tenant's ability to comply with the Quality Standard), Tenant's non-Rental obligations hereunder shall continue as though the Public Unit had not been damaged or destroyed and shall continue without abatement, suspension, diminution or reduction whatsoever. MI9626 1 0,074/09/1 9/96 5 ARTICLE 7. CONDEMNATION Section 7.1 Taking;. All takings of the Public Unit, all Condemnation Restorations of the Public Unit following any taking and the disbursement of awards in connection therewith shall be governed by the applicable provisions of the Ground Lease and Declaration. Section 7.2 Effect of Taking; on This Lease. Except as provided in Section 9.1 of the Ground Lease, this Lease shall not terminate, be forfeited or be affected in any manner, and there shall be no reduction or abatement of Rental, by reason of any taking of the Public Unit or any part thereof. Except as provided in Section 9.2(a) of the Ground Lease, Tenant's Rental obligations hereunder shall continue as though the Public Unit had not been taken and shall continue without abatement, suspension, diminution or reduction whatsoever. Subject to Unavoidable Delays and taking into account Tenant's Condemnation Restoration obligations (including, without limitation, the effect of the taking and the Condemnation Restoration on the Tenant's ability to comply with the Quality Standard), Tenant's non-Rental obligations hereunder shall continue as though the Public Unit had not been taken and shall continue without abatement, suspension, diminution or reduction whatsoever. ARTICLE 8. ASSIGNMENT, TRANSFER AND SUBLETIING Section 8.1 Tenant's Rig;ht to Assig;n, Transfer or Enter into a Sublease. All Capital Transactions and Subleases by Tenant shall be governed by the applicable provisions of the Ground Lease. ARTICLE 9. MORTGAGES Section 9.1 Rig;ht to Mortg;ag;e. Except as otherwise expressly provided for in the Ground Lease, Tenant shall not mortgage, pledge, hypothecate or otherwise encumber Tenant's interest in this Lease. Without limiting the preceding sentence, all Mortgages by Tenant shall be governed by the applicable provisions of the Ground Lease. MI96261 0.074/09/19/96 6 ARTICLE 10. NO SUBORDINATION Section 10 .1 No Subordination. Owner's interest in the Public Unit and in this Lease, as the same may be modified, amended or renewed in accordance with the provisions of this Lease, shall not be subject or subordinate to (a) any Mortgage now or hereafter existing, (b) any other liens or encumbrances hereafter affecting Tenant's interest in this Lease and the leasehold estate created hereby or (c) any Sublease or any mortgages, liens or encumbrances now or hereafter placed on any Subtenant's interest in the Public Unit. This Lease and the leasehold estate of Tenant created hereby and all rights of Tenant hereunder are and shall be subject to the Title Matters. ARTICLE 11. HOTEL CONSTRUCTION AND FURNISHING Section 11.1 Hotel Development A~reement. Tenant shall construct the Public Unit in accordance with the provisions of the Hotel Development Agreement and Article 13 of the Ground Lease. If, with respect to a matter relating to the Construction Work for the initial construction of the Hotel, a conflict arises between the terms of the Hotel Development Agreement and the terms of this Lease, the terms of the Hotel Development Agreement shall govern until the Hotel Opening Date, at which time the terms of this Lease shall govern. ARTICLE 12. MAINTENANCE AND REPAIR; ALTERATIONS Section 12.1 Maintenance of Public Unit. Tenant shall maintain and repair the Public Unit in accordance with the applicable provisions of the Ground Lease. Tenant shall not make any Alterations in or to the Public Unit except in accordance with the provisions of the Ground Lease concerning Alterations. ARTICLE 13. REQUIREMENTS Section 13.1 Requirements. (a) In connection with any Construction Work, and with the maintenance, management, use and operation of the Public Unit and Tenant's performance of its obligations hereunder, Tenant shall MI962610,074/09/19/96 7 comply promptly with all Requirements, without regard to the nature of the work required to be done, whether extraordinary or ordinary, and whether requiring the removal of any encroachment, or affecting the maintenance, management, use or occupancy of the Public Unit, or involving or requiring any structural changes or additions in or to the Public Unit and regardless of whether such changes or additions are required by reason of any particular use to which the Public Unit, or any part thereof, may be put. No consent to, approval of or acquiescence in any plans or actions of Tenant by Owner, in its proprietary capacity as landlord under this Lease, or Owner's designee shall be relied upon or construed as being a determination that such are in compliance with the Requirements, or, in the case of construction plans, are structurally sufficient, prudent or in compliance with the Requirements. (b) In connection with the performance of Owner's obligations hereunder, Owner shall comply promptly with all Requirements. ARTICLE 14. HOTEL MANAGER AND MANAGEMENT AGREEMENT Section 14.1 Management Agreement. Tenant shall cause the Public Unit to be managed as part of the Hotel pursuant to Article 16 of the Ground Lease. ARTICLE 15. DISCHARGE OF LIENS Section 15.1 Creation of Liens. (a) Tenant shall not create, cause to be created, or suffer or permit to exist (a) any lien, encumbrance or charge upon this Lease, the leasehold estate created hereby, the income therefrom or the Public Unit or any part thereof or appurtenance thereto, which is not removed within the time period required pursuant to Section 17.2 of the Ground Lease, (b) any lien, encumbrance or charge upon any assets of, or funds appropriated to, Owner, or (c) any other matter or thing whereby the estate, rights or interest of Owner in and to the Public Unit or any part thereof or appurtenance thereto might be materially impaired. Notwithstanding the above, Tenant shall have the right to execute Mortgages, Subleases and other instruments (including, without limitation, equipment leases) as provided by, and in accordance with, the provisions of this Lease and the Ground Lease, including, without limitation, any liens on FF&E. (b) Owner shall not create, cause to be created, or suffer or permit to exist (a) any lien, encumbrance or charge upon this Lease, the leasehold estate created hereby, the income therefrom (except as otherwise pennitted in Article 2) or the Public Unit or any part thereof or appurtenance thereto, which is not removed within the time period required pursuant to Section 17.2 of the Ground Lease, (b) any lien, encumbrance or charge upon any assets of, or funds appropriated to, Tenant, or (c) MI96261 0,074/09/19/96 8 any other matter or thing whereby the estate, rights or interest of Tenant in and to the Public Unit or any part thereof or appurtenance thereto might be materially impaired. Section 15.2 DischarJ;!;e of Liens. (a) If any mechanic's, laborer's, vendor's, materialman's or similar statutory lien (including tax liens, provided the underlying tax is an obligation of Tenant by law or by a provision of this Lease) is filed against the Public Unit or any part thereof, or if any public improvement lien created, or caused or suffered to be created by Tenant shall be filed against any assets of, or funds appropriated to, Tenant or Owner, Tenant shall, within thirty (30) days after Tenant receives notice of the filing of such mechanic's, laborer's, vendor's, materialman's or similar statutory lien or public improvement lien, cause it to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise. However, Tenant shall not be required to discharge any such lien if Tenant shall have (i) furnished Owner with, at Tenant's option, a cash deposit, bond, letter of credit from an Institutional Lender (in form reasonably satisfactory to Owner) or other security (such as a personal guaranty or title company indemnity) reasonably satisfactory to Owner, in an amount sufficient to pay the lien with interest and penalties and (ii) brought an appropriate proceeding to discharge such lien and is prosecuting such proceeding with diligence and continuity; except that if, despite Tenant's efforts to seek discharge of the lien, Owner reasonably believes that a court judgment or order foreclosing such lien is about to be entered or granted and so notifies Tenant, Tenant shall, within ten (10) days after notice to such effect from Owner (but not later than three (3) business days prior to the entry or granting of such judgment or order of foreclosure), cause such lien to be discharged of record or Owner may thereafter discharge the lien in accordance with Section 19.2 and look to the security furnished by Tenant for reimbursement of its cost in so doing. (b) Notwithstanding anything to the contrary contained in Section 15.2(a), if any mechanic's, laborer's, vendor's, materialman's or similar statutory lien (including tax liens, provided the underlying tax is an obligation of Owner by law or by a provision of this Lease) is filed against the Public Unit or any part thereof or Tenant's interest therein as a result of any action of Owner, its officers, employees, representatives or agents, Owner shall, within thirty (30) days after Owner receives notice of the filing of such mechanic's, laborer's, vendor's, materialman's or similar statutory lien, cause it to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise. However, Owner shall not be required to discharge any such lien if Owner shall have (i) furnished Tenant with, at Owner's option, a cash deposit, bond, letter of credit from an Institutional Lender (in form reasonably satisfactory to Tenant) or other security (such as a personal guaranty or title company indemnity) reasonably satisfactory to Tenant, in an amount sufficient to pay the lien with interest and penalties and (ii) brought an appropriate proceeding to discharge such lien and is prosecuting such proceeding with diligence and continuity; except that if, despite Owner's efforts to seek discharge of the lien, Tenant reasonably believes that a court judgment or order foreclosing such lien is about to be entered or granted and so notifies Owner, Owner shall, within ten (10) days of notice to such effect from Tenant (but not later than three (3) business days prior to the entry or granting of such judgment or order of foreclosure), cause such lien to be discharged of record or Tenant may thereafter discharge the lien in accordance with Section 19.2 and look to the security furnished by Owner for reimbursement of its cost in so doing. MI962610.074/09/19/96 9 Section 15.3. No Authority to Contract in Name of Owner. Nothing contained in this Article shall be deemed or construed to constitute the consent or request of Owner, express or implied, by implication or otherwise, to any contractor, subcontractor, laborer or materialman for the performance of any labor or the furnishing of any materials for any specific improvement of, alteration to, or repair of, the Public Unit or any part thereof, nor as giving Tenant any right, power or authority to contract for, or permit the rendering of, any services or the furnishing of materials that would give rise to the filing of any lien, mortgage or other. encumbrance against Owner's interest in the Public Unit or any part thereof or against assets of Owner, or Owner's interest in any Rental. Notice is hereby given, and Tenant shall cause all Construction Agreements to provide, that to the extent enforceable under Florida law, Owner shall not be liable for any work performed or to be performed at the Public Unit or any part thereof for Tenant or any Subtenant or for any materials furnished or to be furnished to the Public Unit or any part thereof for any of the foregoing, and no mechanic's, laborer's, vendor's, materialman's or other similar statutory lien for such work or materials shall attach to or affect Owner's interest in the Public Unit or any part thereof or any assets of Owner, or Owner's interest in any Rental. The foregoing shall not require Tenant to request advance waivers of lien from contractors or subcontractors. ARTICLE 16. REPRESENTATIONS Section 16.1. No Brokers. Each of Owner and Tenant represents to the other that it has not dealt with any broker, fmder or like entity in connection with this Lease or the transactions contemplated hereby, and each party shall indemnify the other against any claim for brokerage commissions, fees or other compensation by any Person alleging to have acted for or dealt with the indemnifying party in connection with this Lease or the transactions contemplated hereby. Section 16.2. No Other Representation. Tenant accepts the Public Unit in its existing condition and state of repair and Tenant confirms that: except for the representation contained in Section 16.1 (and any other representation expressly set forth in this Lease or the Ground Lease), (i) no representations, statements, or warranties, express or implied, have been made by, or on behalf of, Owner with respect to the Public Unit or the transactions contemplated by this Lease, the status of title thereto (except as set forth in Exhibit 2.1 of the Ground Lease), the physical condition thereof (including but not limited to subsurface conditions), the leases or occupancies thereof or with respect thereto, if any, the zoning, wetlands or other laws, regulations, rules and orders applicable thereto or the use that may be made of the Public Unit, or the presence or absence of "hazardous substances" (as defmed in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 USCA ~9601 et seq.) on or under the Public Unit, (ii) Tenant has relied on no such representations, statements or warranties, and MI9626 lo.G74/09/1 9/96 10 (Hi) Owner shall not be liable to Tenant, in any event whatsoever, to correct any latent or patent defects in the Public Unit. ARTICLE 17. NO LIABILITY FOR INJURY OR DAMAGE ETC. Section 17.1 Liability of Owner or Tenant. The liability and exculpation of Owner and Tenant (and indemnification of Owner and Tenant) under this Lease shall be subject to the provisions of Article 19 and Article 20 of the Ground Lease as if the references in such provisions to the "Lease" were references to this Lease. ARTICLE 18. OWNER'S SECURITY INTEREST IN BUILDING EQUIPMENT AND FF&E Section 18.1. Grant of Security Interest. Solely for the purpose of securing Tenant's obligations to deliver to Owner the Improvements upon Expiration of the Term, Tenant hereby grants to Owner a security interest in all of the Building Equipment and FF&E now or hereafter located on the Public Unit and owned by Tenant, and in all products and proceeds thereof; provided, however, that Owner's security interest shall be automatically fully subordinate and subject to any purchase money financing permitted hereunder and any Recognized Mortgagee's security interest in the Building Equipment and FF&E. Upon the Expiration of the Term, Owner shall be entitled to all of the rights, remedies, powers and privileges available to a secured party under (and subject to the provisions ot) the Uniform Commercial Code enacted by the State of Florida. Tenant shall execute and deliver all such instruments and take all such action as Owner, from time to time, may reasonably request in order to obtain the full benefits of the security interest described in this Section and of the rights and powers herein created and to maintain and perfect the security interest granted above. To the extent permitted by Requirements, Tenant irrevocably authorizes Owner to file financing statements and continuation statements with respect to the foregoing collateral without the signature of Tenant. Owner shall execute and deliver all such instruments as any Recognized Mortgagee or permitted purchase money lender shall reasonably require in order to confirm Owner's subordination of its security interest as aforesaid. Subject to Section 14.2(a) of the Ground Lease, Tenant may, during the Term, remove, replace and otherwise deal with the Building Equipment and FF&E in the ordinary course of the operation of the Hotel. Owner hereby waives any statutory lien for rent provided to Owner pursuant to applicable Requirements. MI96261 0.074/09/19/96 11 ARTICLE 19. RIGHT TO PERFORM THE OTHER PARTY'S COVENANTS Section 19.1. Right to Perform Other Party's Obligations. (a) If a Default shall occur and be continuing beyond any applicable grace period, Owner may, but shall be under no obligation to, perform the obligation of Tenant the breach of which gave rise to such Default, without waiving or releasing Tenant from any of its obligations contained herein, provided that Owner shall exercise such right only in the event of a bona fide emergency or after five (5) business days notice, and Tenant hereby grants Owner access to the Public Unit in order to perform any such obligation. (b) If a default by Owner under this Lease shall occur and be continuing beyond any applicable grace period, Tenant may, but shall be under no obligation to, perform the obligations of Owner (other than those described in Article 21 of the Ground Lease and those which are governmental as opposed to proprietary obligations) the breach of which gave rise to such default or event of default, without waiving or releasing Owner from any of its obligations contained herein, provided that Tenant shall exercise such right only in the event of a bona fide emergency or after five (5) business days notice to Owner or the City, as applicable. Section 19.2. Discharge of Liens. (a) If Tenant fails to cause any mechanic's, laborer's, vendor's, materialman's or similar statutory lien (including tax liens, providing the underlying tax is an obligation of Tenant by law or by a provision of this Lease) to be discharged of record in accordance with the provisions of Article 15, Owner may, but shall not be obligated to, discharge such lien of record either by paying the amount claimed to be due or by procuring the discharge of such lien by deposit or by bonding proceedings. If Owner's title is threatened or a material interest of Owner is impaired, Owner may also, if Tenant has not done so (or bonded such lien), compel the prosecution of an action for the foreclosure of such lien by the lienor and the payment of the amount of the judgment in favor of the lienor with interest, costs and allowances. (b) If Owner fails to cause any mechanic's, laborer's, vendor's, materialman's or similar statutory lien (including tax liens, providing the underlying tax is an obligation of Owner by law or by a provision of this Lease) to be discharged of record in accordance with the provisions of Article 15, Tenant may, but shall not be obligated to, discharge such lien of record either by paying the amount claimed to be due or by procuring the discharge of such lien by deposit or by bonding proceedings. If Tenant's leasehold interest in the Public Unit (or any portion thereof) is threatened or a material interest of Tenant is impaired, Tenant may also, if Owner has not done so (or bonded such lien), compel the prosecution of an action for the foreclosure of such lien by the lienor and the payment of the amount of the judgment in favor of the lienor with interest, costs and allowances. MI9626 1 0.074/09/1 9/96 12 Section 19.3. Reimbursement for Amounts Paid Pursuant to this Article. (a) Any amount paid by Owner in performing Tenant's obligations as provided in this Article, including all costs and expenses incurred by Owner in connection therewith, shall constitute Rental hereunder and shall be reimbursed to Owner within thirty (30) days of Owner's demand, together with a late charge on amounts actually paid by Owner, calculated at the Late Charge Rate from the date of notice of any such payment by Owner to the date on which payment of such amounts is received by Owner. (b) Any amount paid by Tenant in performing Owner's obligations as provided in this Article, including all costs and expenses incurred by Tenant in connection therewith, shall be reimbursed to Tenant within thirty (30) days of Tenant's demand, together with a late charge on amounts actually paid by Tenant, calculated at the Late Charge Rate from the date of notice of any such payment by Tenant to the date on which payment of such amounts is received by Tenant. Section 19.4. Waiver, Release and Assumption of Obli~ations. (a) Owner's payment or performance pursuant to the provisions of this Article shall not be, nor be deemed to constitute, Owner's assumption of Tenant's obligations to payor perform any of Tenant's past, present or future obligations hereunder. (b) Tenant's payment or performance pursuant to the provisions of this Article shall not be, nor be deemed to constitute, Tenant's assumption of Owner's obligations to payor perform any of Owner's past, present or future obligations hereunder. ARTICLE 20. EVENTS OF DEFAULT, CONDITIONAL LIMITATIONS, REMEDIES, ETC. Section 20.1 Defaults. The parties agree that there shall be no separate Defaults and/or Events of Default by Tenant, or defaults by Owner or events which with the passing of time or giving of notice would constitute a default by Owner, under this Lease. Any Default and/or Event of Default by Tenant, or default or event of default by Owner, under the Ground Lease shall be deemed to be a Default or Event of Default (as if the defInitions set forth in the Ground Lease for "Default" and "Event of Default" referred to both this Lease and the Ground Lease) by Tenant, or default or event of default by Owner, under this Lease, and shall be governed by the applicable provisions (as if such provisions referred to both this Lease and the Ground Lease) of the Ground Lease. Owner's remedies in connection with any such Default or Event of Default, and Tenant's remedies in connection with any such default or event of default, shall likewise be governed by the applicable provisions of the Ground Lease (as if such provisions referred to both this Lease and the Ground Lease). Any termination of the Ground Lease shall be deemed to be a termination of this Lease. MI96261 0.074/09/19/96 13 ARTICLE 21. NOTICES, CONSENTS AND APPROVALS Section 21.1 Service of Notices and Other Communications. All Notices and consents under this Lease shall be provided in accordance with the applicable provisions of the Ground Lease as if the references in such provisions to the "Lease" were references to this Lease. Any and all Notices sent by either party under the Ground Lease shall automatically be deemed to have also been given under this Lease, regardless of whether this Lease is expressly described in such Notice. Any and all granting or denials of consent under the Ground Lease shall automatically be deemed to have also been granted or denied under this Lease, regardless of whether this Lease is expressly described in such granting or denial of consent. ARTICLE 22. CERTIFICATES BY OWNER AND TENANT Section 22.1 Certificates. Any and all estoppel certificates of Tenant and/or Owner given pursuant to the Ground Lease shall automatically be deemed to have also been given under and with respect to this Lease, regardless of whether this Lease is expressly described in the estoppel certificate. ARTICLE 23. SURRENDER AT END OF TERM Section 23.1 Surrender of Public Unit. Upon the Expiration of the Term (or upon a re-entry by Owner upon the Public Unit pursuant to Article 25 of the Ground Lease), Tenant, without any payment or allowance whatsoever by Owner, shall surrender the Public Unit to Owner in good order, condition and repair, reasonable wear and tear excepted and (subject to the provisions of Article 8 of the Ground Lease) damage from casualty excepted, free and clear of all Subleases, liens and encumbrance other than as set forth below and the Title Matters. Tenant hereby waives any notice now or hereafter required by law with respect to vacating the Public Unit on the Expiration of the Term. MI96261 0.074/09/19/96 14 ARTICLE 24. QUIET ENJOYMENT Section 24.1 Quiet Enioyment. Owner covenants that, as long as this Lease is in full force and effect without an Event of Default existing under the Ground Lease and this Lease, Tenant shall and may (subject to the exceptions, reservations, terms and conditions of this Lease) peaceably and quietly have, hold and enjoy the Public Unit for the Tenn without molestation or disturbance by or from Owner (solely in its proprietary capacity) or any Person claiming by, under or through Owner (solely in its proprietary capacity). ARTICLE 25. ARBITRATION Section 25.1 Arbitration. Any and all Disputes under this Lease shall be subject to arbitration in accordance with the provisions of Article 31 of the Ground Lease, as if the defInition set forth in the Ground Lease for "Dispute" and such Article 32 referred to both this Lease and the Ground Lease. ARTICLE 26. NONDISCRIMINATION Section 26.1 Nondiscrimination. Tenant shall be an equal opportunity employer, and shall not engage in any unlawful discrimination against any Person because of race, creed, national origin, sex, age, disability, marital status or sexual orientation. ARTICLE 27. MISCELLANEOUS Section 27.1 Governin~ Law. This Lease shall be governed by, and construed in accordance with, the laws of the State of Florida, without regard to principles of conflict of laws. MI96261 0.074/09/19/96 15 Section 27.2 References. (a) Captions. The captions of this Lease are for the purpose of convenience of reference only, and in no way defme, limit or describe the scope or intent of this Lease or in any way affect this Lease. (b) Reference to Owner and Tenant. The use herein of the neuter pronoun in any reference to Owner or Tenant shall be deemed to include any individual Owner or Tenant, and the use herein of the words "successors and assigns" or "successors or assigns" of Owner or Tenant shall be deemed to include the heirs, legal representatives and assigns of any individual Owner or Tenant. (c) Agency's and City I S Governmental Capacity. Nothing in this Lease or in the parties I acts or omissions in connection herewith shall be deemed in any manner to waive, impair, limit or otherwise affect the authority of the Agency or City in the discharge of its police or governmental power. (d) Reference to "herein", "hereunder", etc. All references in this Lease to the terms "herein", "hereunder" and words of similar import shall refer to this Lease, as distinguished from the paragraph, Section or Article within which such term is located. Section 27.3 Entire Agreement, etc. (a) Entire Agreement. This Lease contains all of the promises, agreements, conditions, inducements and understandings between Owner and Tenant concerning the Public Unit and there are no promises, agreements, conditions, understandings, inducements, warranties or representations, oral or written, express or implied, between them other than as expressly set forth herein or as may be expressly contained in any enforceable written agreements or instruments executed simultaneously herewith by the parties hereto, except for that certain Hold Harmless and Indemnification Agreement dated December 18, 1995 and December 20, 1995, between the Agency and SMHC, as the same may have heretofore have been or may hereafter be amended. This Lease may be executed in counterparts, each of which shall be deemed an original but all of which together shall represent one instrument. (b) Waiver, Modification, etc. No covenant, agreement, term or condition of this Lease shall be changed, modified, altered, waived or terminated except by a written instrument of change, modification, alteration, waiver or termination executed by Owner and Tenant. No waiver of any Default or default shall affect or alter this Lease, but each and every covenant, agreement, term and condition of this Lease shall continue in full force and effect with respect to any other then existing or subsequent Default or default thereof. (c) Effect of Other Transactions. No Sublease, Mortgage or Capital Transaction, whether executed simultaneously with this Lease or otherwise, and whether or not consented to by Owner, shall be deemed to modify this Lease in any respect, and in the event of an inconsistency or conflict between this Lease and any such instrument, this Lease shall control. MI9626 10,074/09/1 9/96 16 Section 27.4 Invalidity of Certain Provisions If any provision of this Lease or the application thereof to any Person or circumstances is, to any extent, fInally determined by a court of competent jurisdiction to be invalid and unenforceable, the remainder of this Lease, and the application of such provision to Persons or circumstances other than those as to which it is held invalid and unenforceable, shall not be affected thereby and each term and provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. Section 27.5 Merj!;er. Unless Owner, Tenant and all Mortgagees execute and record an agreement to the contrary, there shall be no merger of this Lease or the leasehold estate created hereby with the fee estate in the Public Unit or any part thereof by reason of the same Person acquiring or holding, directly or indirectly, this Lease and the leasehold estate created hereby or any interest in this Lease or in such leasehold estate as well as the fee estate in the Public Unit. Section 27.6 Remedies Cumulative. Each right and remedy of either party provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease, or now or hereafter existing at law or in equity or by statute or otherwise, except as otherwise expressly limited by the terms of this Lease or the Ground Lease, and the exercise or beginning of the exercise by a party of anyone or more of the rights or remedies provided for in this Lease, or now or hereafter existing at law or in equity or by statute or otherwise, except as otherwise expressly limited by the terms of this Lease or the Ground Lease, shall not preclude the simultaneous or later exercise by such party of any or all other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise except as otherwise expressly limited by the terms of this Lease or the Ground Lease. Section 27.7 Performance at Each Party's Sole Cost and Expense. Unless otherwise expressly provided in this Lease, when either party exercises any of its rights, or renders or performs any of its obligations hereunder, such party shall do so at its sole cost and expense. Section 27.8 Successors and Assij!;ns. The agreements, terms, covenants and conditions herein shall be binding upon, and insure to the benefIt of, Owner and Tenant and, except as otherwise provided herein, their respective successors and assigns and shall be construed as covenants running with the land. If, while the Agency is the Owner hereunder, the Agency shall cease to exist, the City, by its signature hereto, hereby agrees to be bound by the terms, covenants and conditions of Owner hereunder and Tenant agrees to recognize the City as Owner hereunder. MI96261 0,074/09/19/96 17 Section 27.9 Recordin~ of Lease. Tenant shall cause this Lease and any amendments hereto to be recorded in the Public Records of Dade County, Florida promptly after the execution and delivery of this Lease or any such amendments and shall pay and discharge all costs, fees and taxes in connection therewith. Section 27.11 Corporate Obli~ations. It is expressly understood that this Lease and obligations issued hereunder are solely corporate obligations, and, except as otherwise provided in Article 19 of the Ground Lease, that no personal liability will 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 Chainnan and Members of the Owner and the Mayor and Commissioners of the City and the members of any other governing body of Owner) or employees, as such, of the Owner or Tenant, 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 Lease or implied therefrom; and, except as otherwise provided in Article 19 of the Ground Lease, that 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, member, partner, holder of other ownership interests, director, elected or appointed official (including, without limitation, the Chainnan and any Member of the Owner and the Mayor and Commissioners of the City and the members of any other governing body of Owner) or employee, as such, or under or by reason of the obligations, covenants or agreements contained in this Lease or implied therefrom are expressly waived and released as a condition of, and as a consideration for, the execution of this Lease. Section 27.12 Nonliability of Officials and Employees. Except as otherwise provided in Article 19 of the Ground Lease, no member, official or employee of the Owner or the City shall be personally liable to Tenant, or any successor in interest, in the event of any default or breach by the Owner or for any amount or obligation which may become due to the Tenant or successor under the terms of this Lease; and, except as otherwise provided in Article 19 of the Ground Lease, that 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 Person, or under or by reason of the obligations, covenants or agreements contained in this Lease or implied therefrom are expressly waived and released as a condition of, and as a consideration for, the execution of this Lease. Section 27.13 Effect on Ground Lease. Nothing herein contained, nor any action taken hereunder, including but not limited to a conveyance or ownership of a Unit, shall operate to modify or amend any of the terms and provisions of the Ground Lease or this Lease, as amended, or the rights or obligations of the parties of the Ground Lease or this Lease, as amended, who are also parties to this Lease. To the extent the Ground Lease and this Lease are inconsistent, the Ground Lease shall control. In connection therewith, Tenant shall continue to have all the rights and obligations as tenant under the Ground Lease. MI962610,074/09/19/96 18 Section 27 .14 No Partnership. The parties hereby acknowledge that it is not their intention under this Lease to create between themselves a partnership, joint venture, tenancy-in-common, joint tenancy, co-ownership or agency relationship for the purpose of developing the Hotel, or for any other purpose whatsoever. Accordingly, notwithstanding any expressions or provisions contained herein, except for (i) the limited purpose of being co-declarants under the Declaration and (ii) the common ownership of the common elements, if any, under the Declaration, nothing in this Lease or the other documents executed by the parties with respect to the Hotel, whether based on the calculation of Rental or otherwise, shall be construed or deemed to create, or to express an intent to create, a partnership, joint venture, tenancy-in-common, joint tenancy, co-ownership or agency relationship of any kind or nature whatsoever between the parties hereto. The provisions of this Section shall survive Expiration of the Term. Section 27.15 Time Periods. Any time periods in this Lease of less than thirty (30) days shall be deemed to be computed based on business days (regardless of whether any such time period is already designated as being computed based on business days). In addition, any time period which shall end on a day other than a Business Day shall be deemed to extend to the next Business Day. Section 27.16. Radon Notice. NOTICE REQUIRED BY CHAPTER 88-285, LAWS OF FLORIDA Chapter 88-285, Laws of Florida, requires the following notice to be provided with respect to the contract for sale and purchase of any building, or a rental agreement for any building: "RADON GAS: Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your county public health unit. " Section 27.17 No Third Party Beneficiaries. Nothing in this Lease shall confer upon any Person, other than the parties hereto and their respective successors and permitted assigns, any rights or remedies under or by reason of this Lease; provided, however, that a Recognized Mortgagee or its Designee shall be a third party beneficiary hereunder to the extent such Recognized Mortgagee or such Designee is granted rights hereunder or under the Ground Lease. MI9626 1 0,074/09/19/96 19 EXECUTION IN WITNESS WHEREOF, Owner and Tenant, intending to be legally bound, have executed this Lease as of the day and year fIrst above written. MIAMI BEACH REDEVELOPMENT AGENCY ATTEST: By: ~~lt4r PClAc1.M Robert Parcher Secretary STATE OF FLORIDA ) )ss: ) ~ The foregoing instrument was acknowledged before me this;2<0 day oG~ COUNTY OF DADE 1996, by Seymour Gelber, as Chairman, and Robert Parcher, as Secretary, of the MIAMI BEACH REDEVELOPMENT AGENCY, a public body corporate and politic, on behalf of such public body. They are personally known to me or produced valid Florida driver's licenses as identifIcation. ~-'25 ,/' C My commission expires: FORM APPROVED REDEVELOPMENT AGENCY GENERALC~ By 111~ ' Date r~/j6 MI9626I 0,074/09/19/96 20 MB REDEVELOPMENT, INC. ATTEST: By: ~ ~, STATE OF FLORIDA ) )ss: COUNTY OF DADE ) ~ T e foregoin~ instrumeot was acktj~wl ed before me Ibis -:;l.Q dan ~~ 1996, bylT'G\ ~. ~)/ L , as~,z. V, ~,\aJ~and(O CMLi (D. LQ_ ' as ~ .Secretary, of MB REDEVELOPMENT, INC., a Florida corporation, on behalf of such corporation. They are personally known to me or produced valid Florida driver's licenses as identification. ~~ dC(Q; ~ ( Notary Public, S~t~ of f\orida Print Name: _t:- I , 2~ C ~ My commission expires: 21 MI96261 0,074/09/1 9/96 - SOLELY FOR THE PURPOSES OF SECTION 27.8 OF THE FOREGOING LEASE: CITY OF MIAMI BEACH, FLORIDA ATTEST: By: ~o~( f~~ Robert Parcher City Clerk STATE OF FLORIDA ) )ss: COUNTY OF DADE ) '\r ~ rP The foregoing instrument was acknowledged before me this?u day Of~~ 1996, by Seymour Gelber, as Mayor, and Robert Parcher, as City Clerk, of the CITY OF MIAMI BEACH, a municipal corporation of the State of Florida, on behalf of such municipal corporation. They are personally known to me or produced valid Florida driver's licenses as identification. .'. My commission expires: bod(1.,; FORM APPRC\'~-l lEG~. By 4 ~ Date Udt96' , ,~- MI9626 1 0,074/09/1 9/96 22