LTC 240-2003
CITY OF MIAMI BEACH
Office of the City Manager
Letter to Commission No.c27"'o .i7co3
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From:
Mayor David Dermer and
Members of the City Commission
Jorge M. Gonzalez \",..r-~
City Manager U 0
ROYAL PALM
Date: October 9, 2003
To:
Subject:
Attached please find the latest correspondence between Don Peebles and the City
regarding our ongoing negotiations. A report will be provided on October 15, 2003 to the
City Commission.
I am also attaching an updated Net Present Value calculation reflecting the new negotiated
terms in comparison to the Existing Lease Terms and the April 30, 2003 LOI Terms.
JMG\~\rar
F:\cmgr\$ALL\lTC-03\RDP Royal Palm LOI and NPV.CMC.rar.doc
attachments
c: Christina M. Cuervo, Assistant City Manager
Patricia Walker, Chief Financial Officer
Raul Aguila, First Assistant City Attorney
P ADC Hospitality Corporation I
550 Biltmorc \Va\'. Suite 550
Coral Gahles. Flnrida 33134
Tcl: (.i05 )442-4342 Fax: (305) 442-4345
Via Courier
October 2, 2003
Mr. Jorge M. Gonzalez
Executive Director
Miami Beach Redevelopment Agency
Executive Director
1700 Convention Center Drive
Miami Beach, Florida 33130
Re: Royal Palm Crowne Plaza Resort
Letter of Intent
Dear Mr. Gonzalez:
I am in receipt of and have reviewed your letter of September 30, 2003 and understand and
appreciate the spirit in which it was sent. We have all been involved in this process for a long
time. some far longer than others, and we are all frustrated with the time it has taken to conclude
an acceptable agreement. It seems that every time we get close. a new issue always seems to
throw us off course.
I have twice, now, signed a letter of intent, after much negotiation, which I thought and assumed
would be acceptable to the City. In each instance. I have been told that what I signed was not
acceptable because of new conditions that had not previously been agreed to by me.
With respect, some of the statements contained in your September 30 letter are not accurate, and
I feel that I need to call those inaccuracies to your attention.
You first make a statement that I deleted the "requirement" to provide the letter of consent from
Union Planters Bank. I must, again, remind you that while many other issues and concepts were
discussed during our many negotiation sessions, what was finally agreed to, as acknowledged by
all concerned, was what was set forth in the September 10 Term Sheet that was submitted to the
Commission on September 10, a copy of which is enclosed, and, to the extent not inconsistent,
the April 30 draft of the Letter of Intent that I signed (see Item 9 of the Term Sheet). Nowhere in
either of those document is there a "requirement" of a consent letter from Union Planters Bank.
After looking at the Exhibit B included with your September 30 letter. I realize that the problem is
that we are each referring to different Exhibit Bs. What I and my counsel have been relying on is
the form of Exhibit B that was agreed to and attached to the April 30 Letter of Intent that I siqned
and had available for execution on behalf of the City at the April 30 Commission meeting. You
and Joel appear to be relying on a different version. but it is not the exhibit that we agreed to. I
suspect that if you review the submittal to the Commission for the April 30 meeting, you will find
an Exhibit B consistent with the Exhibit B that I have been relying on. The Bank consent issue
first arose at the Commission meeting and, therefore, was not included in what I agreed to prior to
that meeting.
The second numbered paragraph of your letter states that I was "retreating" from my "promise" to
obtain a letter from Union Planters Bank and you referred to my email of September 16, which
you enclosed with your letter. I have read and reread that email and nowhere do I see anything
that remotely resembles a "promise". What I stated in that email is that we were "in the process
of getting the loan extended". .. and that I would "follow-up with (the Bank) as to our request for
a letter confirming their offer to extend the loan. . . ."
Mr. Jorge M. Gonzalez
October 2, 2003
Page 2
I have already addressed the third numbered paragraph of your letter relating to the confusion
between the form of Exhibit B.
I apologize that I did not include a blackline revision of the LOI. As my counsel has previously
advised Joel Minsker. this was an oversight on the part of my staff and I fully intended to provide
the blackline to you. It is my understanding that a blackline has now been provided to Joel.
As to your request relative to the Town Park documents, we can make them available for review
by your counsel at Hunton & Williams' offices.
After all these weeks, months and years. we have finally reached an agreement on the business
terms of a settlement, and it would be most unfortunate for all concerned to lose this opportunity
to bring this matter to conclusion. In the spirit of compromise, therefore, I am prepared to include
in a revised Letter of Intent my agreement to obtain a letter from Union Planters Bank within thirty
days after the execution of the LOI by all parties. The letter will state that the Bank agrees in
principle with the terms of the LOI subject to its receipt. review and approval of the definitive
documents. We cannot, however, commit to obtain a specific form of letter, but we believe that
we can obtain a letter that will be reasonably satisfactory to the City.
'1
1) I,t. .
A condition of our agreement to provide the letter from Union Planters must be that the City agree
that drafting will commence immediately after the execution and approval of the LOI by all parties
since we do not wish to delay for another thirty days our concluding this matter. If you are
unwilling to have your counsel do the drafting, than I will, at my expense, have my counsel
prepare the drafts. If your counsel is to do the drafting, I would also want a commitment that first
drafts of all documents be published for review within two weeks after execution of the LOI. If my
counsel is to do the drafting, I will make the same commitment.
In addition to our agreement to provide the letter from the Bank, in an effort to finally bring this to
conclusion, I will also agree to proVide the affidavit you have requested regarding our prior loan
modifications despite that ,tact that we do not believe that such affidavit is required under these
circumstances by the terms of the Lease. I have revised Exhibit B to reflect that agreement.
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I trust that you will see that there has been. to some extent, an innocent miscommunication or
misunderstanding as to what had been agreed to in the Term Sheet and the April 30 LOI. I
suggest we put those misunderstandings aside and move forward with this negotiation, in good
faith, such that it can be approved by the Commission on October 15.
In view of the fact that I have conceded to your requests as described above and have not
changed my position on anything that I agreed to in the April 30 LOI and the Term Sheet, there
should be no reason why this matter cannot be brought before the Commission on the 15'h for
final approval. Although Stuart Hoffman will be out of town next week, I am sure that you and I
can find a time to meet to bring this to conclusion if you think a meeting between us will be helpful
or necessary.
Mr. Jorge M. Gonzalez
October 2, 2003
Page 3
In the meantime, I have revised the LOI consistent with this letter and have enclosed four (4)
originals, which have been executed for your review together with a blacklined version.
Sincerely,
RDP ROYAL PALM HOTEL LIMITED PARTNERSHIP
By: PADe Hospitality Corporation I, General Partner
~t Pov-~~
R. Donahue Peebles ~
President
Enclosures
cc: Chairman and Members of the Redevelopment Agency
Murray H. Dubbin, City Attorney
Joel N. Minsker, Bloom & Minsker, P.A.
City of Miami Beach City Manager
Miami Beach Redevelopment Agency General Counsel
Stuart K. Hoffman, Esq.
This communication is a privileged setllement conullunicalion and stricti)' inadmissihle for
any purpose llUrsuant to Section 90.408, Fla. Stat. and Rule 408, Fed. R. Evid.
LETTER OF INTENT
TO AMEND ROYAL PALM
C/{OWNE PLAZA RESORT AGlmEMENTS
Subjcct:
Parties:
Royal Palm Crowne Plaza Hotcl
RDP Royal Palm Hotel Limited Partnership ("RDP")
City of Miami Beach (the "City")
Miami Beach Redevelopment Agency (the "Agency")
Date:
,2003
RECITATIONS:
A. On May 28. 1998, the parties entered into an Agreement of Lease regarding the
land more fully described on Exhibit "A" ("Land") attached hereto and made a part hereof as if
fully set forth herein, as recorded on July I, 1998 in Official Records Book 18170, at Page 0893,
in the Public Records of Miami-Dade County, Florida ("Lease").
B. Subsequent to the recording of the Lease, RDP began the construction of the
Royal Palm/Shorecrcst Crowne Plaza Hotel ('"Hotel").
C. During the construction of the Hotel, RDP encountered structural problems with
the original Royal Palm Hotel and soil contamination problems regarding the Land which alleg-
edly resulted in ccrtain construction delays. A dispute arose amongst the parties regarding the
aforesaid problems and delays resulting in RDP's refusal to pay certain Rental due under the
Lease and the Agency's refusal to pay claims related to said contamination and alleged construc-
tion delays.
D. The parties respcctively deny and dispute al/ such claims and allegations against
them. whether asserted or unasserted.
E. The parties, wishing to avoid litigation and amicably resolve all matters existing
between them, entered into negoti ations regarding the aforesaid disputes. This lettcr sets forth
the understanding reached as a result of such negotiations. Capitalized terms which are not
defined in this Letter of Intent to Amend Royal Palm Crowne Plaza Resort Agreements ("La!")
sh.111 have the meanings ascribed to them in the existing, applic.lble documents. "Agency"
means, as appropriate, the Agency or the City or both, as the case may be.
F. Agencv and Owner in their desire to maintain and fulfill their commitmcnt to pro-
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vide the African American coml1lunity with opportunities in the hospitality industry, are willing
to amend the Royal Palm Crowne Plaza agrecments subject to the Hotel's continuing compliance
with the Convention Center Agreement which provides. among other things, that the Hotel
owner and its slIccessors and assigns make available Hotel facilities and services for support of
the Convention Center events and to undertake joint marketi ng efforts.
1. BACK RENT AND REAL ESTATE TAXES:
1.1 Back Rent Prior To The Hotel Opening Date. RDP and the Agency
agree that unavoidable delays allributed to the environmental and reconstruction
delays occulTed prior to the Holel Opening Date. RDP has previously paid
$128,37:1.38 in Back Rent prior to the Hotel Opening Date; i.e., from October
31, 2000 to May 14, 2002, and the Agency shall retain said amount in full
settlement of all amounts due for Back Rent for the period prior to May 15,
2002. Additionally, RDP shall pay within five (5) clays from the last execution
of thIS LOI any ancl all applicable sales tax clue and owing on said amount plus
any interest and penalty assessed by the State of Florida against the City and/or
the Agency for failure to pay applicable sales tax on said amount prior to the
Hotel Opening Date.
1.2 Clark Credit. Subject to the conditions set forth in this Section 1.2,
RDP shall pay to the Agency an amount up to $140,000.00 (the "Clark Credit"')
plus applicable sales tax when, and if, it settles its present litigation with The
Clark Construction Group styled RDP Royal Palm Hotel, LP, Et AI. YS. The
Clark Construction Group, Inc. vs. Arquitectonica International Corp., Et AI.,
U.S. District Court, Southem District of Florida, Case No. 01-3130-CIV-
Middlebrooks ("Clark Litigation"') or if it obtains a final non-appealable
judgment in the Clark Litigation. RDP shall pay this amount to the Agency
within ten (10) days of its receipt of funds from, and to the extent, either the
settlement or the judgment provides excess funds after RDP pays its attorneys'
fees and costs for the Clark Litigation. Article 4 of the Lease entitled "Late
Charges"' shall not apply to the payment of the Clark Credit. The application of
the Clark Credit shall be treated as additional Bttni\IRent which shall be due only
if the conditions set forth in this Section are met and then only to that extent. t2qcJ..
Any amounts paid to the Agency under this Section 1.2 shall not apply to the
eight percent (8%) return calculation as a component of the Purchase Price as
defined in Section 36.I(d)(iii) of the Lease (the "Retum"). This provision shall
survive the payment of the Purchase Price.
1.3 Back Rent After The Hotel Opening Date. Base Rent and
Additional Rent elue, plus applicable sales tax, from the period of May 15, 2002
to May 15,2003 {'"Post Opening Back Rent") shall be deferred and payable over
the ten (10) year period commencing in Lease Year 5 and ending in Lease Year
14.
1.4 Real Estate Taxes. The parties acknowledge that the 2002 real
estate taxes on the Improvements are unpaid and that said taxes are being
appealed. On or before the date the Closing Documents are executed, RDP shall
provide to the Agency proof that it has complied with the requi rements of
Section 32.2(b) of the Lease as \0 said taxes. Further, to the extent that sales
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taxes are due on real estate t,lxes which were the responsibility of RDP prior to
the date of the execution of this LOl, RDP shall pay such taxes, penalties anel
penalty interest prior to the cxccution Oflhc Closing Documents.
2. FUTUIU: RENTAL:
Additional Rcnt and Incentivc Rent. plus applicablc sales lax. clue in Lease
Years 2 through 5 shall he dcferred and payable over the ten (10) year penoel
commencing in Lease Ycar 6 and ending in Lease Year 15. Other than as stated
in the preceding sentence. RDP shall continue to pay Base Rent, Additional Rent,
and Incentive Rent (plus all applicable sales taxes on such non-deferred payments
of same) as well as all other Rental from the date of execution of thiS LOr
pursuant to the terms and conclilions of the Lease.
3. PURCHASE PRICE:
3.1 Declaration of Covenants and Restrictions. The Declaration of
Covenants and Restrictions shall be amended to provide that upon payment of
the Purchase Price in full. the following changes shall be effective, but that said
Declaration shall not otherwise be amended, modi fied or changed:
(I) with respect to the Shorecrest Land only, Section 2.2 shall
no longer apply.
(2) with respect to both the RP Land and the Shorecrest Land,
Section 2.3 shall no longer apply and if, as a result thereof, then applicable
zoni ng ordinances, such as the current section 118-5 of the Miami Beach
Code, require a covenant in lieu of unity of title, RDP shall cause such a
covenant to be recorded as to said parcels.
3.2 Convention Center A!!reement. The Convention Center Agree-
ment shall be amended to provide that, upon payment of the Purchase Price in
full, the "350 rooms per day" requirement stated in the Room Block definition
shall be reduced to two hundred fifty seven (257) rooms per day. In all other
respects, the definition of Room Block and the remainder of the Convention
Center Agreement shall remain unchanged except as provided in paragraph
18.17 of this LOt.
3.3 Time for Pavment in Full. The outside date for full payment of the
Purchase Price shall be the Fixed Expiration Date rather than Lease Year 25 as
presently provided for in the Lease. All Lease terms (such as those relating 10
Rental inflation increases, by way of example) that are presently ad.lustecl in
increments through Lease Year 25. shall be extended in the same increments to
the Fixed Expiration Date.
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4. REFINANCING:
The Refinancing Times stated in Section J I. 13(a) of the Lease sh~11I be
changed to on or prior to the beginning of the fifth (51") year after the Hotel
Opening Date ("First Refin,lllcing"'); on or prior to ten (10) years after the closing
of the First Refinancing ("Second Refinancing") and then every tenth (lOth)
anniversary of the Second Refin,lllcing thereafter; provided however, that the
maturity date of any refinancing that extends beyond the next required refinancing
will not have to be repaid prior to its maturity provided said maturity date is no
later than twenty (20) years from the last rcfin,lllcing; provided further however,
that when Tenant refinances the Balance of its Debt, the Net Refinancing
Proceeds, as defined in Section 1 I. J 3(b) of the Lease, shall be applied to the
extent available in the following order:
A. To Owner to pay the deferred Rental described in paragnlphs 1.3
and 2 of this LOI;
B. Fifty percent (50%) to Owner to pay the Retulll applicable as part
of the Purchasc Price accrued and unpaid to date; and fifty percent (50%)
to Tenant to repay Town Park Hotel Corporation, as Hotel Manager
("Town Park"), for Costf OVelTlllls* paid by Town Park (estimated at $5
million). ~
C. To Owner to pay the balance of the Return applicable as part of the
Purchase Price accrued and unpaid to date;
D. Fifty percent (50%) to Owner to pay the Purchase Price (which
includes the Retum) for Owner's Interest in the Premises; and fifty percent
50% first to any amounts then still due Town Park as described in Section
4B, above, and then to Tenant for Tenant Cost OvelTuns* paid by Tenant
(estimated at $2 million);
E. To Owner to pay the balance of the Purchase Price (which includes
the Retum) for Owner's Interest in the Premises; and
F. To Tenant if any funds remain after paying in full the amounts in
paragraphs 4A-4E above.
* Any Cost Overruns wIll be calculated net of (l) any Clark settlement
proceeds paid to Tenant, directly or indirectly but (a) net of attorneys and
other professional fees and court costs not reflected in Tenant's Cost
OVelTl1ll calculation and not advanced by Town Park and (b) the Clark
Credit to the extent paid to Owner, and (2) any prior overrun or equity
repayments from the two (2) prior future advances paid to Tenant. Cost
OVelTllllS will be subject to a full accounting and review by Owner, with
the exact amounts in paragraphs 4B and 40 to be agreed upon by the
parties.
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S. TENANT'S IU~PA Y!\lENT OF TI-IE RETliRN:
Beginning in Lease Year 25, and every ten (10) years thereafter. Tenant
shall pay Owner any accrued alld unpaid portion of the Return as follows:
A. Any and all unpaid portions of the Return accrued in Lease Years
1-25 will be amortized and paid over ten (10) years in Lease Years 26-35.
B. Any and all unpaid portions of the Return accrued in subsequent
ten (10) Lease Year increments (i.e., Lease Years 26-35, 36-45, 46-55, 56-
65,66-75,76-85,86-95, and 95-Fixed Expiration Date) will be amortized
and paid over ten (10) years in the respective succeeding tell(JO) year
Lease Term periods (i.e., Lease Years 36-45, 46-55, 56-65, 66-75,76-85,
86-95, and 95-Fixed Expiration Date, respectively) and will be refelTed to
as the "Amortized Retum".
C. Commencing 011 Lease Year 35 and for each Lease Year thereafter,
to the extent that the Base Rent, Additional Rent and the "Amortized
Retum", in aggregate, payable in each Lease Year is less than $800,000,
as adjusted for inflation (the "Rental Cap"), then in such Lease Year,
Tenant shall pay the difference between the "Rental Cap" less the
aggregate of Base Rent, Additional Rent and the "Amortized Retum" for
said Lease Year, as mandatory incentive rent (the "Mandatory Incentive
Rent"). If in any such Lease Year, on or after Lease Year 35, Incentive
Rent is payable, such Incentive Rent shall be due and payable even if such
payment results in a payment that Lease Year in excess of the Rental Cap.
"Rental Cap" is defined as the $800,000 amount which shall be increased
at the beginning of the tenth (10'11) Lease Year, and ever five (5) years
thereafter, in the proportion as the percentage increase in the GDP Implicit
Price Deflator Index from the Hotel Opening Date.
6. SALE OF THE HOTEL:
In addition to the other provisions in the Lease regarding the Sale of the
Hotel. upon the Sale of the Hotel the following shall occur:
A. All deferred and/or accrued and unpaid Rental and the Return shall
be paid in full; and
B. All rental, including any defelTals thereof, as provided in the
Ground Lease Amendment pursuant Lo this LOI, shall revert to the original
Rental, without any deferrals thereof, as provided in the original Lease
before the execution of the Ground Lease Amendment.
7. TOWN PARK HOTEL CORPORATION AS HOTEL MANAGER:
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7. J Recitals B-E and paragraph 1 of the amendments proposed by
Tenant in the Amendment Re Town Park to Agreement of Lease alt.lched hereto
and incorporated by referencc hercin as Exhibit "0'" shall be included in the
Ground Lease Amendment; provided however, that same shall terminate upon the
Sale of the HOlel or the earlier to occur of (i) termination of the /-Iotel
Management Agreement betwecn ROP and Town Park or (ii) fifteen (15) ycars
from Hotel Opening Date.
7.2 Section 16.7(e).ofthe Lease will he deleted in its entirety.
7.3 Any payments or costs in connection with the "Note" and/or
"Loan", as defined in the Amendment Re Town Park to Agrecment of Lease. will
not be considered "Operating Expenses" as that term is defined in the Lease.
7.4 Tenant waIT<.II1ts and represents to Owner and the City that Recitals
B-E of the amendments proposed by Tenant are true and COITect and are a
material inducement for Owner and the City to include these amendments in the
Ground Lease Amendment.
8. FF&E RESERVE:
8.1 Hotel FF&E Reserve. The percentages stated in Section 16.5(a) of
the Lease with respect to the Hotel shall be changed as follows:
Lease Year
J
2
3
4
5 and thereafter
Percentages of Hotel Revenues
0%
1%
2%
3%
4%
9. SHORECREST RESTAURANT:
9.1 Changes to Article 33 of the Lease. Article 33 of the Lease shall
be amended to delete therefrom subsections (a) through (I) and to permit in the
area originally contemplated for the Restaurant (the "Space") the construction of a
spa, additional meeting space or other improvements for any reasonable hotel
purpose that will benefit the operation of the Hotel; provided, however, that such
uses are permissible under all applicable local laws and zoning ordinances. The
sizes and dimensions of al/ such facilities within the Space shall be as reasonably
determined by ROP and the Operators (defined below) of the respective facilities.
Subsection (g) shall be amended to relate to <lny Operator. The amended Lease
shall provide that such facilities shall not be subject to any further approval by the
Agency except as provided in paragraphs 9.3 and 9.5, below, but the Lise and
operation of said facilities shall be consistent with that of a ftrst class hotel.
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9.2 Fees and Costs. RDP shall be solely responsible for, and shall pay,
at its sole cost and expense, any parking impact fees and any other costs,
including but not limited to concurrency rces, permit fees and the like resultll1g
from the new lacilities.
9.3 The Space as a Condominium Unit. If the Space is located on the
Shorecres! Land, and if RDP elects to create a condominium unit for the Space as
permitted under the terms or the Lease. RDP shall cause the Declaration of
Condominium to contain provisions that (i) the sale or lease or the Space unit
shall be subject to the Agency's approval and (ii) the Space unit shall be operated
in accordance with the quality slandanJs referred to in par,lgraph 9 of this LOI.
9.4 Non-Disturbance Agreement. Upon request of RDP, the Agency
shall execute a non-disturbance agreement in favor of a third party Space operator
(an "Operator'") containing terms generally found in such agreements in form and
content reasonably acceptable to the Operator and the Agency, but the term of
which shall be no longer than the earlier to occur of (i) the expiration of the third
party Space agreement or (ii) twenty (20) years.
9.5 Operator Agreement. In the event the Space is managed or
operated by an Operator pursuant to an agreement between RDP and Operator,
said agreement shall be deemed to be Sublease under the Lease requiring Agency
approval under Section 1O.2(a)(v) of the Lease, the agreement shall contain
quality standards pertaining to the operation and physical condition of the Space
which shall be enforced by RDP, which standards and the selection of the
Operator shall be subject to approval by the Agency.
10. EXISTING DISPUTED ITEMS:
10.1 List Of Disputed Items. Exhibit "E" entitled "List of Disputed
Items" is attached hereto and incorporated by reference herein as a list of the cur-
rent disputed items under the Lease and other related documents as of the date of
last execution of this LOI ("RDP Items").
10.2 Curing of RDP Items. RDP shall cure all of the RDP Items on or
before thirty (30) days from the date of execution of this LOI except for those
items listed in Exhibit "C" attached hereto and specifically incorporated herein.
11. RELEASES OF ALL CLAIMS BY Imp. THE AGENCY AND THE
CITY:
1 1.1 RDP Claims. RDP shall waive and release any and all alleged
delay claims, environmental damage claims and any other claims of any kind
whatsoever against the City and/or the Agency arising or accruing prior to the
date of execution or the Closing Documents upon the execution of the Closing
Documents.
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1l.2 Agency and Citv Claims. The Agcncy and the City shall waive
and release their Owner's excess contribution claim and any othcr claims of .IIlY
kind whatsoever against RDP upon the cxccution of thc Closing Documents.
11.3 Acknowledgcment. Provided that all of the terms and conditions
of this LOI have been satisfied by all parties, the amendment to the Lease shall
contain a written ac knowledgment that all alleged claims and other alleged
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defaults have been cured, settled and or waived, that all controversies between the
parties have been settled and that the Lease is in good standing and in full force
and effect.
12. GARAGE EASEME:'IIT AGREEMENT:
12.1 The Garage Easement Agreement shall be amended as appropriate
to provide for and incorporate the following concepts:
A. The parties shall have no further obligation for the payment of Use
Fees and Facility Usage Payments and no such payments are due either
party as of the date of the execution of this LOI.
B. The words "anel approved by Grantee" III Section 5(a) shall be
e1e I eteel.
C. RDP shall have no affirmative obligation to use the Garage for its
Hotel guests and employees.
D. Section 9(a) shall be deleted and the Garage Easement Agreement
shall be removed from any cross default provisions contained in any of the
Hotel related documents.
E. The term "self park rate" shall mean (i) the rates charged to the
general public at the Garage facility and identified as the maximum daily
rate or (ii) the valet rate charged by the Royal Palm Hotel at RDP's
election.
12.2 The remainder of the Garage Easement Agreement shall remain in
full force and effect.
12.3 In the event that RDP creates a hotel condominium on the
Shorecrest Land, then, in that event, the parties to this LOI agree that there are no
rights or agreements under the Garage Easement Agreemcnt which will be
transfelTed to the Shorecrest Hotel Condominium unit owners.
13. CONCESSION AGREEMENT llNDER THE LEASE:
13.1 Fee Payment. RDP shall pay the Concession Fees due and owing,
if any, under the Concession Agreement described in Exhibit 14.5 of the Lease on
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or before five (5) days after the last execution of this LO!. The panies arc not
now aware of any such outstanding fees.
13.2 License Fces. RDP shall payor cause to be paid the com;sponding
occupational license fee in connection with the beachfront concession operatIon
for the Hotel.
13.3 Shorecrest Condominium. In the event that RDP creates a hotel
condominium on the Shorecrest Land, then, in that event, RDP shall pay (or cause
the Shorecrest hotel condominium association to pay) the cOITesponcling
applicable beach concession fees consistent with those fees charged other upland
private owners of hotel and condominium properties.
14. CLARK CONSTIWCTlON LITIGATION LIENS:
The existing Clark Litigation liens and future liens, including liens filed or
which may be filed by subcontractors, relating solely to the Clark Litigation, if
any, against the leasehold interest of RDP in the Lease shall not be considered an
Event of Default under any of the Hotel Documents so long as RDP di ligently and
in good faith continues to prosecute its claims to resolve all issues under the Clark
Litigation; provided however, that nothing contained herein shall relieve RDP of
its responsibility to remove these liens and to resolve those matters contained in
Exhibit "e", either by resolution of the Clark Litigation or otherwise.
15. ATTORNEYS FEES:
Each party shall bear its own legal fees relating to this LOI and the
Closing Documents except that RDP shall reimburse the Agency at the time of the
execution date of the Closing Documents its legal fees up to the first $60,000
charged by Bloom & Minsker, P.L., based upon an hourly rate of $250.00.
Agency shall provide to RDP detai led statements for professional services
showing time and activity on a daily basis supporting said reimbursement.
16. ADDITIONAL TERMS. CONDITIONS AND ISSUES NOT COV-
ERED IN THIS LOI:
Because of the complex nature of the documents involved and the changes
being considered as a result of this LOr, RDP, the Agency and the City shall have
the right to raise additional terms and conditions and issues not covered in this
LOI and which are not inconsistent with the terms of this LOr as the actual draft-
ing of the documents occurs and continues.
17. SPECIAL INDEl\INIFICATION BY RDP:
RDP shall indemnify and hold harmless and shall provide defense for the
Agency and the City by counsel reasonably acceptable to the Agency and the City
regarding any and all matters arising out of, or relating directly or indirectly to,
any challenges by any third parties to this LOr and the Closing Documents except
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for those challenges ansing out of the Clark Credit, the payment and parti,d
waiver of Back Rent and the setllement of alleged delay claims attributed 10 the
environmental damage and recollstruction delays rcfelTed to in paragraph 1.1 of
this LOI.
18. COMPLETION GUARANTEE:
18.1 The Agency ancl the City acknowledge that the Guarantor under
the Completion Guarantee given to the Agency and the City shall be terminated
upon delivery to the Agency and the City of the certificate by the Architect
described in Section 2(i) of said Guarantee and Final CO's are issued as
contemplated by Section 2(i i) of s<.lid Guarantee. In all other respects. Guarantor
has complied with its obligations uncleI' the Guarantee. The Completion Deadline
is tolled until said certificate is delivered and the Final CO's are issued.
19. DECLARATION OF COVENANTS AND RESTRICTIONS:
19.1 The parties acknowledge that the payment in full by RDP of the
Purchase Price to the Agency shall not terminate the Declaration.
20. CLERICAL CHANGES TO THE LEASE AND RELA TED EXIST.
ING DOCUMENTS:
Non-substantive clerical changes such as CUITent mailing addresses in the
notice provisions and grammatical en'ors in the Hotel Documents shall be cor-
rected in the Closing Documents.
21. GENERAL:
21.1 Definitive Agreements. Upon execution of this LO! by RDP, the
approval of the terms hereof by the appropriate Agency and City governing
bodies and the execution of this LOl by the appropriate Agency and City officials,
the Closing Documents shall be drafted. The Agency shall submit first drafts of
all such documents to Tenant within fi fteen (15) days after such approval. The
Closing Documents will contain, among other things, representations, w,IITanties,
conditions, covenants and indemnities and the like typical in similar transactions,
subject to the terms hereof. Furthermore, the parties to this LOr recognize that
due to the complexity of the structure of these transactions, not all of the major
legal issues have been covered by this La!. The consummation of the
transactions contemplated hereby is conditioned upon the negotiation and
execution of the Closing Documents with terms, provisions and conditions
mutually acceptable to RDP, the Agency and the City as well as the obtaining of
all necessary lender approvals and the satisfaction of the parties with all other
agreements and matters necessary or desirable with respect to the transactions
contemplated hereby. The panics shall comply with all applicable lall's, statutes,
regulations and requirements and performance by the Agency, the City and RDP
under this LOI and the Closing Documents shall be subject thereto. The following
is a list of the documents which Illay need to be amended or created (sai d list is
- 10-
not meant to be inclusive of ~t11 required agreement) and additional agreements
shall be executeu by the parties to this LOI as rcquireu:
LIST OF AGREEMENTS
A. GROUND LEASE AMENDMENT
B. CONVENTION CENTER AGREEMENT A!\lENDMENT
C. DECLARATION OF COVENANTS AND RESTRICTIONS
AMENDMENT
D. GARAGE EASEMENT AMENDMENT
E. AGENCY'S RELEASE OF CLAIMS
F. CITY'S RELEASE OF CLAIMS
G. RDP'S RELEASE OF CLAIMS
H. SPECIAL INDEMNIFICATION BY RDP
I. TERMINA TION OF COMPLETION GUARANTY
1. UCC FINANCING STATEMENTS - to renew lease UCC-j's as
amended by Ground Lease Amendment.
21.2 Assi gnment by Agencv. In the event the Agency ccases to exist,
the Closing Documents will provide that the rights granted to the Agency will
inure to the benefit of the City and the City will be bound to perform the ohliga-
tions therein.
21.3 Termination. This LOI may be terminated by either party if the
Closing Documents have not been executed by six (6) months from the execution
date of this LOI.
21.4 Non-binding. Except for the last sentence in paragraph I. I
hereinabove and paragraph 21.11 hereinbelow which the parties to this LOI intend
to be binding, (i) no party shall have any legally binding obligation to any other
party under this LOI until such time as the Closing Documents are executed by all
parties thereto; and (ji) no party will have any liability whatsoever under this LOI
to any other party for failure to perform in accordance with this LOI, if any party
decides to terminate this LOI or for any other reason related to this LOI.
21.5 Amendments. This LOI may be amended only by a wri tten agree-
ment executed by both of RDP and the Agency.
21.6 Governing Law and Venue. This LOI, the Closing Documents and
their interpretation, v~didity and performance, shall be governed by the laws of the
State of Florida, both substantive and remedial, without regard to principles of
conflict of laws. The venue for any litigation arising out of this LOI or the Clos-
ing Documents shall be the Eleventh Judicial Circuit, Miami-Dade County,
- J 1 -
Florida, if in state court, and the U.S. District Court, Southern District of Florida.
if in federal court.
21.7 "AI)01"O\'al" or "Consent." The use of the terms "approval"' or
"consent" in this LOI shall always be deemed to mean Areasonab/e approval@ or
Areasonable consent@ except where specifically provided otherwise.
21.8 Counterparts. This LOI may be executed in counterparts ~lIld all
such counterparts, when t.lken together, shall conSlitute this LOr.
21. 9 Recognized Mortgagee Consent LeIter. Wilhin thirty (30) days
after the last execution of this LOI and approval of II by the Agency ancl the City
as described in Section 21. I, Tenant shall provide to the Agency a letler from
Union Planters Bank wherein said Bank will acknowledge that it has nu material
objection to any of the terms of this LOI, but which may Contain reasonable
reservations and qualifications to the effect that the letter is in no way binding on
said Bank and that the Bank has the right to approve or disapprove for any reason
the proposed agreements and instruments descri bed in Section 21.1. above.
21.10 Successors and Assigns. All references to any of the parties to this
LOI shall include their permitted successors and permitted assigns.
21.11 Attorneys' Fees. In the event litigation arises solely under the last
sentence in paragraph 1.1 hereinabove, then, in that event, the prevailing party
shall be entitled to recover its attorneys' fees and court costs, including those
involving appeals and/or post-judgment proceedings, if any.
21.J 2 LOI In Effect. This LOI shall remain in effect as provi ded herein-
above provided that RDP shall maintain the Lease and related existing documents
in good standing and free of any defaults (the parties agreeing that the issues cov-
ered elsewhere in this LOI shall not be deemed defaults for purposes of this para-
graph 21.12) during the pendency of this LOI; the failure of which shall automati-
cally result in this LOI being terminated and of no further force and effect other
than the specific binding par<lgraphs as provided in paragraph 21.4 of this LOr.
21.13 Privi leged Settlement Communic<ltion. This LOI is a pri vileged
settlement communication except for the specific binding paragraphs as provided
in paragraph 21.4 of this LO!. The remainder of this LOI is strictly inadmissible
for any purpose pursuant to Section 90.408, Florida Statutes and Rule 408,
Fedenll Rules of Evidence.
21.14 Statements Against Interest. Any statements made by any party to
this LOI contained in this LOI have been made solely for the purpose of resolving
al] matters existing between the parties to this LO!. All parties to this LOI recog-
nize and agree that any such statements may not be COITect as applied to any other
person or entities not a party to this LOI and more specifically, all parties to this
- 12 -
LOI recognize and agree that any sLlch statements may not be correct as applied to
the Clark Litigation.
21.15 Recording Fees and the Like. RDP shall pay all recording fees and
the like for all of the Closing Documents or any other documents contemplated by
this La!.
21.16 Waiver of Jury Trial. All of the Closing Documents shall, where
applicable, contain a waiver of jury trial provision.
21.17 Cross Default. The Convention Center Agreement shall he
amended to provide that a default in the Declaration shall be a default in the
Convention Center Agreement.
[CONTINUED ON NEXT PAGE]
- 13 -
AGREED AND ACKNOWLEDGED:
nDP ROYAL PALl\I HOTEL LIMITED
PARTNERSHIP, a Florida limited partnership
By: PADC HOSPITALITY CORPORATION I, Datecl:O/ b.\-/'" 2.1 ,2003
a Florida orporation, as General Partner
By:
Name: Richard A. Mat of
Title: Vice President
MIAMI REACH REDEVELOPMENT
AGENCY
By:
Name: David Dermer
Title: Chairman
Dated:
,2003
Attest:
Name: Robert Parcher
Title: Secretary
APPROVED:
CITY OF MIAMI BEACH
By:
Dated:
,2003
Name: David Dermer
Title: Mayor
Attest:
Name: Robert Parcher
Title: City Clerk
f:/Mill~kcr/C,M B./Crm\'IlL' Pl;lza/AgrccIllL'IlI~/Mlnshl' New LOI l)-25-03 dol,;
- 14 -
EXHIBIT ,\
DESCHIPTION OF THE LAND
RP LAND
The South 12.65 feet (measured ,dong the lot line) of LOlS 7 and
14, all of Lots 6 and 15 and the North 10.0 feet (measured along
the lot line) of Lots 5 and 16, all in Block 56. or FISHER'S FIRST
SUBDIVISION OF ALTON BEACI-I, according to the plat
thereof, as recoi-ded in Plat Book 2, at Page 77, of the Public
Records of Dade County, Florida, together with that certain parcel
of land lying East and adjacent to the above described parceL said
parcel bounded on the South by the South line of the above
described parcel extended Easterly: bounded on the North by the
North line of the above described parcel extended Easterly:
bounded on the East by the Erosion Control Li ne of the Atlantic
Ocean and bounded on the West by the East line of the above
mentioned Block 56.
SHORECREST LAND
The South 40.00 feet (measured along the lot line) of Lots 5 and 16
and the North one-half of Lots 4 and 17, all in Block 56, of
FISHER'S FIRST SUBDIVISION OF ALTON BEACH. accord-
ing to the plat thereof, as recorded in Plat Book 2, at Page 77, of
the Public Records of Dade County, Florida. together with that
certain parcel of land lying East and adjacent to the above
described parceL said parcel bounded on the South by the South
line of the above described parcel extended Easterly: bounded on
the North by the North line of the above described parcel extended
Easterly; bounded on the East by the Erosion Control Line of the
Atlantic Ocean and bounded on the West by the East line of the
above mentioned Block 56.
All lands described above located, lying and being in Section 34. Township 53 South. Range 42
East, in the City of Miami Beach, Dade County. Florida.
" EXHIBIT B"
The following is a list of outstanding disputes regarding the Hotel Development
Agreement:
ARTICLE 2. CONSTRUCTION
2.3. Completion of Construction of the Project
(b) Upon Substantial Completion of Construction of the Project Developer shall
furnish the Owner with the following:
(vi) evidence that all FF&E necessary to use and operate the Hotel in
accordance with Ground Lease, Management Agreement, Plans and
Specs, and the Development Budget has been installed in the Hotel
Developer has provided a letter, dated March 12, 2003 in satisfaction
of this requirement.
ARTICLE 4 OWNER PARTICIPATION
4.2. Owner's Riqht to Notice. Access and Review
(a) (v) the delivery by Developer to the Owner of two (2) copies of:
(1) all agreements with contractors (that will be provided upon
settlement with Clark Construction), subcontractors, suppliers,
vendors and other Persons supplying materials or services in
connection with the Construction of the Project in excess of
Two Hundred Fifty Thousand Dollars ($250,000), which shall
be aggregated with respect to each Person supplying materials
or services;
(5) all drawdowns of equity and loan proceeds under the Loan
Docs.
(7) Updated Development Budget
(8) all interior design control books
ARTICLE 5. MISCELLANEOUS CONSTRUCTION PROVISIONS
5.2 Names of Contractors. Materialmen, etc. - Developer shall furnish to Owner, with a
list of each contractor, subcontractor, vendor and supplier who is performing any
labor or supplying material in excess of $500,000 (except for FF&E)...
The items listed in Article 4 and Article 5 above, will be satisfied by the Developer's
delivery of an itemized "Project Cost Summarization" and DebVEquity Capital
Investment Summary ("Project Capitalization Recap") regarding the Project.
The following is a list of outstanding disputes regarding the Agreement of Lease:
ARTICLE 11.MORTGAGES
11.13. RefinancinQ of Debt
(b) RefinancinQ Not Related to a Default - If Tenant refinances its Debt in the
ordinary course of business, and not related to any Event of Default, the Net
Refinancing Proceeds shall be applied in the following order:
(i) to Owner to pay the Purchase Price for Owner's Interest in the
Premises:
(ii) to Tenant if any funds remain after paying Owner the full Purchase
Price for Owner's Interest in the Premises
(1) Owner's subordination of its right to Rental shall be at the
Subordinated Amount as of the date of such refinancing by
Tenant.
(2) "Net Refinancing Proceeds" means the amount of the
refinancing of the Debt less (x) the Balance immediately before
such refinancing of the Debt, (y) the interest owing on such
Balance, and (z) reasonable refinancing transaction expenses,
brokerage commissions and prepayment fees and yield
maintenance charges relating to the Debt to be refinanced.
RDP has been requested to submit financial information regarding any possible
refinancing to the Agency. As such, RDP will provide the City/Agency with an
Affidavit relating to the Union Planters Bank Joan modifications that have been
closed to date summarizing the use and application of the additional advance
proceeds and stating the fact that none of the loan proceeds were used (i) for
distributions to any of the Borrower's partners or members, (ii) to repay any of the
Borrower's partners or members for prior advances, loans or equity or capital
contributions, or (iii) to repay any other person or entity which loaned money to the
Borrower.
13.3 One (1) Hotel Manaqer The Developer will affirm that at all times during the Term
and without interruption, both the Shorecrest Improvements and the RP
Improvements shall be operated and managed by one and the same Hotel
Manager.
Developer has re-sent previous letter (dated January 15, 2003) affirming this
condition is being complied with provision on the Lease Agreement, and as such,
this condition is satisfied
ARTICLE 10. Notice to Owner 10.1.(k)
Tenant will provide notice to owner of any Capital Transaction not requiring Owner's
consent not later than two (2) business days after the occurrence of such Capital
Transaction.. .
Developer has provided said notice in connection with the transaction described in
the Certificate of Tenant and further provided a letter dated March 12, 2003 in
satisfaction of this requirement.
F.\CMgr\$All\CHRISTIN\RDA\lOya1palm Ext'lbil B 4.22.03.doc
2
"EXHIBIT C"
(CLARK EXHIBIT)
The following is a list of outstanding Clark issues disputes regarding the Hotel
Development Agreement:
ARTICLE 2. CONSTRUCTION
2.3. Completion of Construction of the Project
(b) Upon Substantial Completion of Construction of the Project Developer shall
furnish the Owner with the following:
(i) certificate of the Architect re: Substantial Completion
(iii) lien waivers in form and substance reasonably satisfactory to Owner,
other than Clark Construction lien waivers that will be provided upon
settlement with Clark Construction
(v) Contractor's Final Affidavit, to be provided upon settlement with Clark
Construction
ARTICLE 4 OWNER PARTICIPATION
4.2. Owner's Riqht to Notice. Access and Review
(b) The final critical path method ("CPM Schedule")
The Developer will provide the last CPM Schedule provided by Clark in the
Developer's possession. To the extent the Final CPM Schedule is provided as a
result of the settlement of litigation with Clark, the Developer will provide same.
ARTICLE 14.DISCHARGE OF LIENS
14.2 Discharqe of Liens
(a) If any mechanic's, laborer's, vendor's, materialman's, or similar statutory lien
(including tax liens) is filed against the Project Site...Developer shall cause it
to be discharged. However, Developer shall not be required to discharge
any such lien if Developer has furnished Owner with, at Developer's option, a
cash deposit, bond, letter of credit from an Institutional Lender or other
security.
As to liens filed by Clark Construction, the Developer agrees that upon
settlement of litigation with Clark Construction, all liens will be discharged.
F:\cmgt\$All\CHAISTIN\ADA\royalpa1m Clar~ Exhibil B 4-22-03 doc
EXHIBIT "D"
AMENDMENT RE TOWN PARK TO AGREEJ\1ENT OF LEASE
AMEI'\DMENT TO AGREE:'vIENT OF LEASE (the "Amendment"') is made and entered into as
of the day of ,20m by and between RDP ROYAL PALM HOTEL L1l'vIITED
PARTNERSHIP. a Florida limited partnership ("Owner"') and MIAMI BEACH
REDEVELOPMENT AGENCY, a public hody corporate and politic ("Tenant").
WITNESSETH
A. Owner and Tenant entered into an Agreement of Lease, dated October 21, 1997, (the
"Lease"), relating to real property more particularly described therein (the "Property"').
B. Town Park Hotel Corporation. a Tennessee corporation ('Town Park"), is the Hotel Manager
(defined in the Lease) of the Hotel (defined in the Lease).
C. Town Park and PADC Royal Palm Holdings, LLC ("BOtTOWer") are parties to that certain
Loan Agreement dated April 30,2001 (the "Loan Agreement"), whereby Town Park agreed
to convey to BOlTower a forty-seven and 66/100 percent (47.66%) Class A limited
partnership interest in Tenant in consideration for Bon'ower's execution and deli very of that
certain Purchase Money Promissory Note in favor of Town Park (the "Note"), which Note
evidences the loan by Town Park to Bon'ower (the "Loan").
D. Town Park currently holds a one percent (I %) limited partnership interest in Tenant.
E. Pursuant to Section 4.0 I (f) of the Loan Agreement, Town Park desires to confirm that the
Loan will be treated as an equity interest in Tenant for purposes of the Lease so long as the
Loan is outstanding,
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration. the receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Recitals. The foregoing recitals are true and COlTect.
2. Equi tv Interest. Owner and Tenant hereby agree that to the extent that the Lease
distinguishes between Town Park (in its capacity as Hotel Manager) holding or not
holding any equity interest in Tenant, the Loan evidenced and secured by the Note
shall be treated for purposes of the Lease as Town Park holding an equity interest in
Tenant.
3. No Further Modification. Except as amended by this Amendment, the Lease and
all of its terms and provisions shall remain in full force and effect. In the event of
any conflict between the provisions of this Amendment and any provision of the
Lease, the provisions of this Amendment shall control. All capitalized terms herein
shall have the same meanings as they have in the Lease, unless otherwise defined
herein.
[Signature page follows.]
IN WITNESS WHEREOF, this Amendment has becn duly executed by the parties
hereto.
WITNESSES:
"O\VNER":
MIAMI
AGENCY
BEACH
REDEVELOPMENT
By:
Print Name
Print Name:
Title:
Print Name
"TENANT":
RDP ROYAL PALM HOTEL LIMITED
PARTNERSHIP, a Florida limited partnership
By: PADC Hospitality Corporation I, a
Florida corporation, as general partner
WITNESSES:
By:
Print Name
Print Name:
Title:
Print Name
(,17(,0000002 MIAMI 175177\,)
MI A M I B E A C H REDEVELOPMENT AGENCY
1700 Convention Center Drive, Miami Beach, FI. 33139
http:\\www.miamibeachfl.gov
Telephone (305) 673-7010
Facsimile (305) 673-7782
VIA E-MAIL AND COURIER
October 9,2003
R. Donahue Peebles
President
RDP Royal Palm Hotel Limited Partnership
PADC Hospitality Corporation I
550 Biltmore Way, Suite 550
Coral Gables, FL 33134
Re: Royal Palm Letter of Intent ("LOI") - your October 2, 2003 correspondence
Dear Mr. Peebles:
Thank you for your October 2, 2003 correspondence and your willingness to bring this
matter to conclusion.
To that end, I have enclosed a clean and a black lined copy of our previous "September
26, 2003 LOI", which I have revised to incorporate certain (but not all) changes you have
requested ("October 9, 2003 LOI").
In particular, please note that I have not changed our original paragraph 21.9 in the
"September 26, 2003 LOI" regarding the Bank Consent Letter, except for the deletion of
the sentence regarding no drafting or other legal work. Additionally, I have agreed to
accept your offer to draft all of the Closing Documents within fifteen (15) days after Agency
approval of the LOI and have incorporated that language in paragraph 21.1, consistent with
your request.
As to Exhibit "B", you have made changes to indicate satisfaction of certain elements by
way of letters dated January 15, 2003 and March 12, 2003, which the Agency still deemed
outstanding on April 30, 2003. Therefore, I have noted in Exhibit "B" attached to the
October 9,2003 LOI, the Agency's need to clarify these discrepancies within the thirty (30)
day timeframe allotted in paragraph 10.2 of the LOI and have revised "Article 11
Mortgages" to reflect consistent language.
Given the Default Notice we received, its significance and our inability to discuss this
matter with your Lender, I cannot in good conscience recommend the enclosed "October 9,
2003 LOI" for approval by the Agency, without first receiving a letter curing the Union
Planters Default Notice on your $55 million loan. Additionally, Joel Minsker is available the
evening of Tuesday, October 14, 2003, to review the Union Planters and Town Park
documents at your counsel Hunton Williams' offices, as you suggested. Please indicate if
this is acceptable.
R. Donahue Peebles
October 9, 2003
Page 2 of 2
Considering all the exchange of correspondence and the numerous meetings held between
the parties and in light of the fact that you have been directly involved in every negotiation
which are of such great importance to both parties, it is imperative that you, with your
signature, acknowledge the terms set forth herein by accepting and executing the "October
9, 2003 LOI".
In an effort to bring this protracted negotiation to a successful conclusion, I have narrowly
focused on the issues of importance to the Agency and the City. Please indicate your
acceptance of the "October 9,2003 LOI", by signing and returning the attached "October 9,
2003 LOI", unchanqed, and providing the Union Planters notice curing the aforesaid default
no later than Friday, October 10, 2003 at noon, for inclusion in the City
Commission/Agency Agenda package to be considered on October 15, 2003.
Sincerely,
\,-- ~/
o ~ "'6 - . - >) - (')
Jorge M. Gonzalez
City Manager
Enclosures
c: Honorable Chairman and Members of the Redevelopment Agency
Murray H. Dubbin, City Attorney and Redevelopment Agency General Counsel
Joel N. Minsker, Bloom & Minsker, P.L.
Stuart K. Hoffman, Esq.
JMG\CMC\rar
F:\cmgr\SALL\CHRISTIN\JMG\RoyaIPalm Peebles 20030c19.doc
r
This communication ilia privilegedsettlem~ntcomlllunication andstrictIyinadmissible for
an ur ose ursuant to Section 90.408, Fla. Stat. and Rule 408, Fed. R. Evid.
LETTER OF INTENT
TO AMEND ROYAL PALM
CROWNE PLAZA RESORT AGREEMENTS
Subject:
Parties:
Royal Palm Crowne Plaza Hotel
RDP Royal Palm Hotel Limited Partnership ("RDP")
City of Miami Beach (the "City")
Miami Beach Redevelopment Agency (the "Agency")
Date:
, 2003
RECITATIONS:
A. On May 28, 1998, the parties entered into an Agreement of Lease regarding the
land more fully described on Exhibit "A" ("Land") attached hereto and made a part hereof as if
fully set forth herein, as recorded on July 1, 1998 in Official Records Book 18170, at Page 0893,
in the Public Records of Miami-Dade County, Florida ("Lease").
B. Subsequent to the recording of the Lease, RDP began the construction of the
Royal PalmlShorecrest Crowne Plaza Hotel ("Hotel").
C. During the construction of the Hotel, RDP encountered structural problems with
the original Royal Palm Hotel and soil contamination problems regarding the Land which alleg-
edly resulted in certain construction delays. A dispute arose amongst the parties regarding the
aforesaid problems and delays resulting in RDP's refusal to pay certain Rental due under the
Lease and the Agency's refusal to pay claims related to said contamination and alleged construc-
tion delays.
D. The parties respectively deny and dispute all such claims and allegations against
them, whether asserted or unasserted.
E. The parties, wishing to avoid litigation and amicably resolve all matters existing
between them, entered into negotiations regarding the aforesaid disputes. This letter sets forth
the understanding reached as a result of such negotiations. Capitalized terms which are not
defined in this Letter of Intent to Amend Royal Palm Crowne Plaza Resort Agreements ("La I")
shall have the meanings ascribed to them in the existing, applicable documents. "Agency"
means, as appropriate, the Agency or the City or both, as the case may be.
F. Agency and Owner in their desire to maintain and fulfill their commitment to pro-
vide the African American community with opportunities in the hospitality industry, are willing
to amend the Royal Palm Crowne Plaza agreements subject to the Hotel's continuing compliance
with the Convention Center Agreement which provides, among other things, that the Hotel
l
owner and its successors and assigns make available Hotel facilities and services for support of
the Convention Center events and to undertake joint marketing efforts.
1. BACK RENT AND REAL ESTATE TAXES:
1.1 Back Rent Prior To The Hotel Opening Date. RDP and the Agency
agree that unavoidable delays attributed to the environmental and reconstruction
delays occurred prior to the Hotel Opening Date. RDP has previously paid
$128,373.38 in Back Rent prior to the Hotel Opening Date; i.e., from October
31, 2000 to May 14, 2002, and the Agency shall retain said amount in full
settlement of all amounts due for Back Rent for the period prior to May IS,
2002. Additionally, RDP shall pay within five (5) days from the last execution
of this LOl any and all applicable sales tax due and owing on said amount plus
any interest and penalty assessed by the State of Florida against the City and/or
the Agency for failure to pay applicable sales tax on said amount prior to the
Hotel Opening Date.
1.2 Clark Credit. Subject to the conditions set forth in this Section 1.2,
RDP shall pay to the Agency an amount up to $140,000.00 (the "Clark Credit")
plus applicable sales tax when, and if, it settles its present litigation with The
Clark Construction Group styled RDP Royal Palm Hotel, LP, Et AI. vs. The
Clark Construction Group, Inc. vs. Arquitectonica International Corp., Et AI.,
U.S. District Court, Southern District of Florida, Case No. 01-3130-CIV-
Middlebrooks ("Clark Litigation") or if it obtains a final non-appealable
judgment in the Clark Litigation. RDP shall pay this amount to the Agency
within ten (10) days of its receipt of funds from, and to the extent, either the
settlement or the judgment provides excess funds after RDP pays its attorneys'
fees and costs for the Clark Litigation. Article 4 of the Lease entitled "Late
Charges" shall not apply to the payment of the Clark Credit. The application of
the Clark Credit shall be treated as additional Back Rent which shall be due only
if the conditions set forth in this Section are met and then only to that extent.
Any amounts paid to the Agency under this Section 1.2 shall not apply to the
eight percent (8%) return calculation as a component of the Purchase Price as
defined in Section 36.I(d)(iii) of the Lease (the "Return"). This provision shall
survive the payment of the Purchase Price.
1.3 Back Rent After The Hotel Opening Date. Base Rent and
Additional Rent due, plus applicable sales tax, from the period of May 15,2002
to May 15,2003 ("Post Opening Back Rent") shall be deferred and payable over
the ten (10) year period commencing in Lease Year 5 and ending in Lease Year
14.
1.4 Real Estate Taxes. The parties acknowledge that the 2002 real
estate taxes on the Improvements are unpaid and that said taxes are being
appealed. On or before the date the Closing Documents are executed, RDP shall
provide to the Agency proof that it has complied with the requirements of
Section 32.2(b) of the Lease as to said taxes. Further, to the extent that sales
- 2 -
taxes are due on real estate taxes which were the responsibility of RDP prior to
the date of the execution of this LOI, RDP shall pay such taxes, penalties and
penalty interest prior to the execution of the Closing Documents.
2. FUTURE RENTAL:
Additional Rent and Incentive Rent, plus applicable sales tax, due in Lease
Years 2 through 5 shall be deferred and payable over the ten (10) year period
commencing in Lease Year 6 and ending in Lease Year 15. Other than as stated
in the preceding sentence, RDP shall continue to pay Base Rent, Additional Rent,
and Incentive Rent (plus all applicable sales taxes on such non-deferred payments
of same) as well as all other Rental from the date of execution of this LOI
pursuant to the terms and conditions of the Lease.
3. PURCHASE PRICE:
3.1 Declaration of Covenants and Restrictions. The Declaration of
Covenants and Restrictions shall be amended to provide that upon payment of
the Purchase Price in full, the following changes shall be effective, but that said
Declaration shall not otherwise be amended, modified or changed:
(1) with respect to the Shorecrest Land only, Section 2.2 shall
no longer apply.
(2) with respect to both the RP Land and the Shorecrest Land,
Section 2.3 shall no longer apply and if, as a result thereof, then applicable
zoning ordinances, such as the current section 118-5 of the Miami Beach
Code, require a covenant in lieu of unity of title, RDP shall cause such a
covenant to be recorded as to said parcels.
3.2 Convention Center Agreement. The Convention Center Agree-
ment shall be amended to provide that, upon payment of the Purchase Price in
full, the "350 rooms per day" requirement stated in the Room Block definition
shall be reduced to two hundred fifty seven (257) rooms per day. In all other
respects, the definition of Room Block and the remainder of the Convention
Center Agreement shall remain unchanged except as provided in paragraph
18.17 of this LO!.
3.3 Time for Pavment in Full. The outside date for full payment of the
Purchase Price shall be the Fixed Expiration Date rather than Lease Year 25 as
presently provided for in the Lease. All Lease terms (such as those relating to
Rental inflation increases, by way of example) that are presently adjusted in
increments through Lease Year 25, shall be extended in the same increments to
the Fixed Expiration Date.
- 3 -
4. REFINANCING:
The Refinancing Times stated in Section 11.l3(a) of the Lease shall be
changed to on or prior to the beginning of the fifth (Sth) year after the Hotel
Opening Date ("First Refinancing"); on or prior to ten (10) years after the closing
of the First Refinancing ("Second Refinancing") and then every tenth (10th)
anniversary of the Second Refinancing thereafter; provided however, that the
maturity date of any refinancing that extends beyond the next required refinancing
will not have to be repaid prior to its maturity provided said maturity date is no
later than twenty (20) years from the last refinancing; provided further however,
that when Tenant refinances the Balance of its Debt, the Net Refinancing
Proceeds, as defined in Section 11.13(b) of the Lease, shall be applied to the
extent available in the following order:
A. To Owner to pay the deferred Rental described in paragraphs 1.3
and 2 of this LOl;
B. Fifty percent (SO%) to Owner to pay the Return applicable as part
of the Purchase Price accrued and unpaid to date; and fifty percent (SO%)
to Tenant to repay Town Park Hotel Corporation, as Hotel Manager
("Town Park"), for Cost Overruns. paid by Town Park (estimated at $S
million).
C. To Owner to pay the balance of the Return applicable as part of the
Purchase Price accrued and unpaid to date;
D. Fifty percent (SO%) to Owner to pay the Purchase Price (which
includes the Return) for Owner's Interest in the Premises; and fifty percent
SO% first to any amounts then still due Town Park as described in Section
4B, above, and then to Tenant for Tenant Cost Overruns. paid by Tenant
(estimated at $2 million);
E. To Owner to pay the balance of the Purchase Price (which includes
the Return) for Owner's Interest in the Premises; and
F. ToT enant if any funds remain after paying in full the amounts in
paragraphs 4A-4E above.
. Any Cost Overruns will be calculated net of (I) any Clark settlement
proceeds paid to Tenant, directly or indirectly but (a) net of attorneys and
other professional fees and court costs not reflected in Tenant's Cost
Overrun calculation and not advanced by Town Park and (b) the Clark
Credit to the extent paid to Owner, and (2) any prior overrun or equity
repayments from the two (2) prior future advances paid to Tenant. Cost
Overruns will be subject to a full accounting and review by Owner, with
the exact amounts in paragraphs 4B and 4D to be agreed upon by the
parties.
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5. TENANT'S REPAYMENT OF THE RETURN:
Beginning in Lease Year 25, and every ten (10) years thereafter, Tenant
shall pay Owner any accrued and unpaid portion of the Return as follows:
A. Any and all unpaid portions of the Return accrued in Lease Years
1-25 will be amortized and paid over ten (10) years in Lease Years 26-35.
B. Any and all unpaid portions of the Return accrued in subsequent
ten (10) Lease Year increments (i.e., Lease Years 26-35, 36-45,46-55,56-
65, 66-75, 76-85, 86-95, and 95-Fixed Expiration Date) will be amortized
and paid over ten (10) years in the respective succeeding ten(10) year
Lease Term periods (i.e., Lease Years 36-45, 46-55,56-65,66-75, 76-85,
86-95, and 95-Fixed Expiration Date, respectively) and will be referred to
as the "Amortized Return".
C. Commencing on Lease Year 35 and for each Lease Year thereafter,
to the extent that the Base Rent, Additional Rent and the "Amortized
Return", in aggregate, payable in each Lease Year is less than $800,000,
as adjusted for inflation (the "Rental Cap"), then in such Lease Year,
Tenant shall pay the difference between the "Rental Cap" less the
aggregate of Base Rent, Additional Rent and the "Amortized Return" for
said Lease Year, as mandatory incentive rent (the "Mandatory Incentive
Rent"). If in any such Lease Year, on or after Lease Year 35, Incentive
Rent is payable, such Incentive Rent shall be due and payable even if such
payment results in a payment that Lease Year in excess of the Rental Cap.
"Rental Cap" is defined as the $800,000 amount which shall be increased
at the beginning of the tenth (10th) Lease Year, and ever five (5) years
thereafter, in the proportion as the percentage increase in the GDP Implicit
Price Deflator Index from the Hotel Opening Date.
6. SALE OF THE HOTEL:
In addition to the other provisions in the Lease regarding the Sale of the
Hotel, upon the Sale of the Hotel the following shall occur:
A. All deferred and/or accrued and unpaid Rental and the Return shall
be paid in full; and
B. All rental, including any deferrals thereof, as provided in the
Ground Lease Amendment pursuant to this LOI, shall revert to the original
Rental, without any deferrals thereof, as provided in the original Lease
before the execution of the Ground Lease Amendment.
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7. TOWN PARK HOTEL CORPORATION AS HOTEL MANAGER:
7.1 Recitals B-E and paragraph 2 of the amendments proposed by
Tenant in the Amendment Re Town Park to Agreement of Lease attached hereto
and incorporated by reference herein as Exhibit "D" shall be included in the
Ground Lease Amendment; provided however, that same shall terminate upon the
Sale of the Hotel or the earlier to occur of (i) termination of the Hotel
Management Agreement between RDP and Town Park or (ii) fifteen (15) years
from Hotel Opening Date.
7.2 Section 16.7(e) of the Lease will be deleted in its entirety.
7.3 Any payments or costs in connection with the "Note" and/or
"Loan", as defined in the Amendment Re Town Park to Agreement of Lease, will
not be considered "Operating Expenses" as that term is defined in the Lease.
7.4 Tenant warrants and represents to Owner and the City that Recitals
B-E of the amendments proposed by Tenant are true and correct and are a
material inducement for Owner and the City to include these amendments in the
Ground Lease Amendment.
8. FF&E RESERVE:
8.1 Hotel FF&E Reserve. The percentages stated in Section 16.5(a) of
the Lease with respect to the Hotel shall be changed as follows:
Lease Year
1
2
3
4
5 and thereafter
Percentages of Hotel Revenues
0%
1%
2%
3%
4%
9. SHORECREST RESTAURANT:
9.1 Changes to Article 33 of the Lease. Article 33 of the Lease shall
be amended to delete therefrom subsections (a) through (f) and to permit in the
area originally contemplated for the Restaurant (the "Space") the construction of a
spa, additional meeting space or other improvements for any reasonable hotel
purpose that will benefit the operation of the Hotel; provided, however, that such
uses are permissible under all applicable local laws and zoning ordinances. The
sizes and dimensions of all such facilities within the Space shall be as reasonably
determined by RDP and the Operators (defined below) of the respective facilities.
Subsection (g) shall be amended to relate to any Operator. The amended Lease
shall provide that such facilities shall not be subject to any further approval by the
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Agency except as provided in paragraphs 6.3 and 6.5, below, but the use and
operation of said facilities shall be consistent with that of a first class hotel.
9.2 Fees and Costs. RDP shall be solely responsible for, and shall pay,
at its sole cost and expense, any parking impact fees and any other costs,
including but not limited to concurrency fees, permit fees and the like resulting
from the new facilities.
9.3 The Space as a Condominium Unit. If the Space is located on the
Shorecrest Land, and if RDP elects to create a condominium unit for the Space as
permitted under the terms of the Lease, RDP shall cause the Declaration of
Condominium to contain provisions that (i) the sale or lease of the Space unit
shall be subject to the Agency's approval and (ii) the Space unit shall be operated
in accordance with the quality standards referred to in paragraph 6 of this LO!.
9.4 Non-Disturbance Agreement. Upon request of RDP, the Agency
shall execute a non-disturbance agreement in favor of a third party Space operator
(an "Operator") containing terms generally found in such agreements in form and
content reasonably acceptable to the Operator and the Agency, but the term of
which shall be no longer than the earlier to occur of (i) the expiration of the third
party Space agreement or (ii) twenty (20) years.
9.5 Operator Agreement. In the event the Space is managed or
operated by an Operator pursuant to an agreement between RDP and Operator,
said agreement shall be deemed to be Sublease under the Lease requiring Agency
approval under Section 1O.2(a)(v) of the Lease, the agreement shall contain
quality standards pertaining to the operation and physical condition of the Space
which shall be enforced by RDP, which standards and the selection of the
Operator shall be subject to approval by the Agency.
10. EXISTING DISPUTED ITEMS:
10.1 List Of Disputed Items. Exhibit "B" entitled "List of Disputed
Items" is attached hereto and incorporated by reference herein as a list of the cur-
rent disputed items under the Lease and other related documents as of the date of
last execution of this LOI ("RDP Items").
10.2 Curing of RDP Items. RDP shall cure all of the RDP Items on or
before thirty (30) days from the date of execution of this LOI except for those
items listed in Exhibit "c" attached hereto and specifically incorporated herein.
11. RELEASES OF ALL CLAIMS BY RDP, THE AGENCY AND THE
CITY:
11.1 RDP Claims. RDP shall waive and release any and all alleged
delay claims, environmental damage claims and any other claims of any kind
whatsoever against the City and/or the Agency arising or accruing prior to the
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date of execution of the Closing Documents upon the execution of the Closing
Documents.
11.2 Agency and City Claims. The Agency and the City shall waive
and release their Owner's excess contribution claim and any other claims of any
kind whatsoever against RDP upon the execution of the Closing Documents.
11.3 Acknowledgement. Provided that all of the terms and conditions
of this LOI have been satisfied by all parties, the amendment to the Lease shall
contain a written acknowledgment that all alleged claims and other alleged
defaults have been cured, settled and or waived, that all controversies between the
parties have been settled and that the Lease is in good standing and in full force
and effect.
12. GARAGE EASEMENT AGREEMENT:
12.1 The Garage Easement Agreement shall be amended as appropriate
to provide for and incorporate the following concepts:
A. The parties shall have no further obligation for the payment of Use
Fees and Facility Usage Payments and no such payments are due either
party as of the date of the execution of this LO!.
B. The words "and approved by Grantee" in Section 5(a) shall be
deleted.
C. RDP shall have no affirmative obligation to use the Garage for its
Hotel guests and employees.
D. Section 9(a) shall be deleted and the Garage Easement Agreement
shall be removed from any cross default provisions contained in any of the
Hotel related documents.
E. The term "self park rate" shall mean (i) the rates charged to the
general public at the Garage facility and identified as the maximum daily
rate or (ii) the valet rate charged by the Royal Palm Hotel at RDP's
election.
12.2 The remainder of the Garage Easement Agreement shall remain in
full force and effect.
12.3 In the event that RDP creates a hotel condominium on the
Shorecrest Land, then, in that event, the parties to this LOI agree that there are no
rights or agreements under the Garage Easement Agreement which will be
transferred to the Shorecrest Hotel Condominium unit owners.
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13. CONCESSION AGREEMENT UNDER THE LEASE:
13.1 Fee Payment. RDP shall pay the Concession Fees due and owing,
if any, under the Concession Agreement described in Exhibit 14.5 of the Lease on
or before five (5) days after the last execution of this LO!. The parties are not
now aware of any such outstanding fees.
13.2 License Fees. RDP shall payor cause to be paid the corresponding
occupational license fee in connection with the beachfront concession operation
for the Hotel.
13.3 Shorecrest Condominium. In the event that RDP creates a hotel
condominium on the Shorecrest Land, then, in that event, RDP shaH pay (or cause
the Shorecrest hotel condominium association to pay) the corresponding
applicable beach concession fees consistent with those fees charged other upland
private owners of hotel and condominium properties.
14. CLARK CONSTRUCTION LITIGATION LIENS:
The existing Clark Litigation liens and future liens, including liens filed or
which may be filed by subcontractors, relating solely to the Clark Litigation, if
any, against the leasehold interest of RDP in the Lease shall not be considered an
Event of Default under any of the Hotel Documents so long as RDP diligently and
in good faith continues to prosecute its claims to resolve all issues under the Clark
Litigation; provided however, that nothing contained herein shall relieve RDP of
its responsibility to remove these liens and to resolve those matters contained in
Exhibit "C", either by resolution of the Clark Litigation or otherwise.
15. ATTORNEYS FEES:
Each party shall bear its own legal fees relating to this LOI and the
Closing Documents except that RDP shall reimburse the Agency at the time of the
execution date of the Closing Documents its legal fees up to the first $60,000
charged by Bloom & Minsker, P.L., based upon an hourly rate of $250.00.
Agency shall provide to RDP detailed statements for professional services
showing time and activity on a daily basis supporting said reimbursement.
16. ADDITIONAL TERMS. CONDITIONS AND ISSUES NOT COV-
ERED IN THIS LOI:
Because of the complex nature of the documents involved and the changes
being considered as a result of this LOI, RDP, the Agency and the City shall have
the right to raise additional terms and conditions and issues not covered in this
LOI and which are not inconsistent with the terms of this LOI as the actual draft-
ing of the documents occurs and continues.
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17. SPECIAL INDEMNIFICATION BY RDP:
RDP shall indemnify and hold harmless and shall provide defense for the
Agency and the City by counsel reasonably acceptable to the Agency and the City
regarding any and all matters arising out of, or relating directly or indirectly to,
any challenges by any third parties to this LOl and the Closing Documents except
for those challenges arising out of the Clark Credit, the payment and partial
waiver of Back Rent and the settlement of alleged delay claims attributed to the
environmental damage and reconstruction delays referred to in paragraph 1.1 of
this LOl .
18. COMPLETION GUARANTEE:
18.1 The Agency and the City acknowledge that the Guarantor under
the Completion Guarantee given to the Agency and the City shall be terminated
upon delivery to the Agency and the City of the certificate by the Architect
described in Section 2(i) of said Guarantee and Final CO's are issued as
contemplated by Section 2(ii) of said Guarantee. In all other respects, Guarantor
has complied with its obligations under the Guarantee. The Completion Deadline
is tolled until said certificate is delivered and the Final CO's are issued.
19. DECLARATION OF COVENANTS AND RESTRICTIONS:
19.1 The parties acknowledge that the payment in full by RDP of the
Purchase Price to the Agency shall not terminate the Declaration.
20. CLERICAL CHANGES TO THE LEASE AND RELATED EXIST-
ING DOCUMENTS:
Non-substantive clerical changes such as current mailing addresses in the
notice provisions and grammatical errors in the Hotel Documents shall be cor-
rected in the Closing Documents.
21. GENERAL:
21.1 Definitive Agreements. Upon execution of this LOl by RDP, the
approval of the terms hereof by the appropriate Agency and City governing
bodies and the execution of this LOl by the appropriate Agency and City officials,
the Closing Documents shall be drafted. Tenant shall submit first drafts of all of
the Closing Documents to the Agency within fifteen (IS) days after such
approval. The Closing Documents will contain, among other things, representa-
tions, warranties, conditions, covenants and indemnities and the like typical in
similar transactions, subject to the terms hereof. Furthermore, the parties to this
LOl recognize that due to the complexity of the structure of these transactions, not
all of the major legal issues have been covered by this LO!. The consummation
of the transactions contemplated hereby is conditioned upon the negotiation and
execution of the Closing Documents with terms, provisions and conditions
mutually acceptable to RDP, the Agency and the City as well as the obtaining of
- 10 -
17. SPECIAL INDEMNIFICATION BY RDP:
RDP shall indemnify and hold harmless and shall provide defense for the
Agency and the City by counsel reasonably acceptable to the Agency and the City
regarding any and all matters arising out of, or relating directly or indirectly to,
any challenges by any third parties to this LO! and the Closing Documents except
for those challenges arising out of the Clark Credit, the payment and partial
waiver of Back Rent and the settlement of alleged delay claims attributed to the
environmental damage and reconstruction delays referred to in paragraph 1.1 of
this LO! .
18. COMPLETION GUARANTEE:
18.1 The Agency and the City acknowledge that the Guarantor under
the Completion Guarantee given to the Agency and the City shall be terminated
upon delivery to the Agency and the City of the certificate by the Architect
described in Section 2(i) of said Guarantee and Final CO's are issued as
contemplated by Section 2(ii) of said Guarantee. In all other respects, Guarantor
has complied with its obligations under the Guarantee. The Completion Deadline
is tolled until said certificate is delivered and the Final CO's are issued.
19. DECLARATION OF COVENANTS AND RESTRICTIONS:
19.1 The parties acknowledge that the payment in full by RDP of the
Purchase Price to the Agency shall not terminate the Declaration.
20. CLERICAL CHANGES TO THE LEASE AND RELATED EXIST-
ING DOCUMENTS:
Non-substantive clerical changes such as current mailing addresses in the
notice provisions and grammatical errors in the Hotel Documents shall be cor-
rected in the Closing Documents.
21. GENERAL:
21.1 Definitive Agreements. Upon execution of this LO! by RDP, the
approval of the terms hereof by the appropriate Agency and City governing
bodies and the execution of this LO! by the appropriate Agency and City officials,
the Closing Documents shall be drafted. Tenant shall submit first drafts of all of
the Closing Documents to the Agency within fifteen (15) days after such
approval. The Closing Documents will contain, among other things, representa-
tions, warranties, conditions, covenants and indemnities and the like typical in
similar transactions, subject to the terms hereof. Furthermore, the parties to this
LOI recognize that due to the complexity of the structure of these transactions, not
all of the major legal issues have been covered by this LOI. The consummation
of the transactions contemplated hereby is conditioned upon the negotiation and
execution of the Closing Documents with terms, provisions and conditions
mutually acceptable to RDP, the Agrncy and the City as well as the obtaining of
- 10-
J~
all necessary lender approvals and the satisfaction of the parties with all other
agreements and matters necessary or desirable with respect to the transactions
contemplated hereby. The parties shall comply with all applicable laws, statutes,
regulations and requirements and performance by the Agency, the City and RDP
under this LOI and the Closing Documents shall be subject thereto. The following
is a list of the documents which may need to be amended or created (said list is
not meant to be inclusive of all required agreement) and additional agreements
shall be executed by the parties to this LOI as required:
LIST OF AGREEMENTS
A. GROUND LEASE AMENDMENT
B. CONVENTION CENTER AGREEMENT AMENDMENT
C. DECLARATION OF COVENANTS AND RESTRICTIONS
AMENDMENT
D. GARAGE EASEMENT AMENDMENT
E. AGENCY'S RELEASE OF CLAIMS
F. CITY'S RELEASE OF CLAIMS
G. RDP'S RELEASE OF CLAIMS
H. SPECIAL INDEMNIFlCA TION BY RDP
1. TERMINATION OF COMPLETION GUARANTY
J. UCC FINANCING STATEMENTS - to renew lease UCC-l's as
amended by Ground Lease Amendment
21.2 Assignment bv Agencv. In the event the Agency ceases to exist,
the Closing Documents will provide that the rights granted to the Agency will
inure to the benefit of the City and the City will be bound to perform the obliga-
tions therein.
21.3 Termination. This LOl may be terminated by either party if the
Closing Documents have not been executed by six (6) months from the execution
date of this LOL
21.4 Non-binding. Except for the last sentence in paragraph 1.1
hereinabove and paragraph 21.11 hereinbelow which the parties to this LOl intend
to be binding, (i) no party shall have any legally binding obligation to any other
party under this LOl until such time as the Closing Documents are executed by all
parties thereto; and (ii) no party will have any liability whatsoever under this LOl
to any other party for failure to perform in accordance with this LOI, if any party
decides to terminate this LOI or for any other reason related to this LOl.
21.5 Amendments. This LOI may be amended only by a written agree-
ment executed by both ofRDP and the Agency.
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21.6 Governing Law and Venue. This LOI, the Closing Documents and
their interpretation, validity and performance, shall be governed by the laws of the
State of Florida, both substantive and remedial, without regard to principles of
conflict of laws. The venue for any litigation arising out of this Lalor the Clos-
ing Documents shall be the Eleventh Judicial Circuit, Miami-Dade County,
Florida, if in state court, and the U.S. District Court, Southern District of Florida,
if in federal court.
21.7 "Aooroval" or "Consent." The use of the terms "approval" or
"consent" in this LOI shall always be deemed to mean "reasonable approval" or
"reasonable consent" except where specifically provided otherwise.
21.8 Counteroarts. This LOI may be executed in counterparts and all
such counterparts, when taken together, shall constitute this LOI.
21.9 Recognized Mortgagee Consent Letter. Tenant shall cause Union
Planters Bank, the Recognized Mortgagee, to execute and deliver its letter
consenting to this LOI as shown in Exhibit "E" attached hereto and incorporated
by reference herein (the "Consent Letter") to the Agency and the City no later
than thirty (30) days from the date of execution of this LOI ("Consent Letter
Delivery Date"). The parties hereto agree that, except for the last sentence in
paragraph 1.1 and paragraph 21.11 of this LOI, the remainder of this LOI shall
not be in effect until the Consent Letter Delivery Date. In the event the Consent
Letter is not delivered by the Consent Letter Delivery Date, then, in that event,
except for the last sentence in paragraph 1.1 and paragraph 21.11 of this LOI, the
remainder of this LOI shall be null and void and of no further force or effect.
21.10 Successors and Assigns. All references to any of the parties to this
LOI shall include their permitted successors and permitted assigns.
21.11 Attornevs' Fees. In the event litigation arises solely under the last
sentence in paragraph 1.1 hereinabove, then, in that event, the prevailing party
shall be entitled to recover its attorneys' fees and court costs, including those
involving appeals and/or post-judgment proceedings, if any.
21.12 LOI In Effect. This LOI shall remain in effect as provided herein-
above provided that RDP shall maintain the Lease and related existing documents
in good standing and free of any defaults (the parties agreeing that the issues cov-
ered elsewhere in this LOI shall not be deemed defaults for purposes of this para-
graph 21.12) during the pendency of this LOI; the failure of which shall automati-
cally result in this LOI being terminated and of no further force and effect other
than the specific binding paragraphs as provided in paragraph 21.4 of this LOI.
21.13 Privileged Settlement Communication. This LOI is a privileged
settlement communication except for the specific binding paragraphs as provided
in paragraph 21.4 of this LOI. The remainder of this LOI is strictly inadmissible
- 12 -
for any purpose pursuant to Section 90.408, Florida Statutes and Rule 408,
Federal Rules of Evidence.
21.14 Statements Against Interest. Any statements made by any party to
this LOI contained in this LOI have been made solely for the purpose of resolving
all matters existing between the parties to this LO!. All parties to this LOI recog-
nize and agree that any such statements may not be correct as applied to any other
person or entities not a party to this LOl and more specifically, all parties to this
LO! recognize and agree that any such statements may not be correct as applied to
the Clark Litigation.
21.15 Recording Fees and the Like. RDP shall pay all recording fees and
the like for all of the Closing Documents or any other documents contemplated by
this LO!.
21.16 Waiver of JUry Trial. All of the Closing Documents shall, where
applicable, contain a waiver of jury trial provision.
21.17 Cross Default. The Convention Center Agreement shall be
amended to provide that a default in the Declaration shall be a default in the
Convention Center Agreement.
[CONTINUED ON NEXT PAGE]
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AGREED AND ACKNOWLEDGED:
RDP ROYAL PALM HOTEL LIMITED
PARTNERSHIP, a Florida limited partnership
By: PADC HOSPITALITY CORPORATION I, Dated:
a Florida corporation, as General Partner
By:
Name: R. Donahue Peebles
Title: President
MIAMI BEACH REDEVELOPMENT
AGENCY
By:
Name: David Dermer
Title: Chairman
Attest:
Name: Robert Parcher
Title: Secretary
APPROVED:
CITY OF MIAMI BEACH
By:
Name: David Dermer
Title: Mayor
Attest:
Name: Robert Parcher
Title: City Clerk
F:IMinskerlC.M.B.lCrowne PlazalAgrcementslMinsker New LOI IO-9-03.doe
- 14-
Dated:
Dated:
,2003
,2003
,2003
EXHIBIT A
DESCRIPTION OF THE LAND
RPLAND
The South 12.65 feet (measured along the lot line) of Lots 7 and
14, all of Lots 6 and 15 and the North 10.0 feet (measured along
the lot line) of Lots 5 and 16, all in Block 56, of FISHER'S FIRST
SUBDIVISION OF ALTON BEACH, according to the plat
thereof, as recorded in Plat Book 2, at Page 77, of the Public
Records of Dade County, Florida, together with that certain parcel
of land lying East and adjacent to the above described parcel; said
parcel bounded on the South by the South line of the above
described parcel extended Easterly; bounded on the North by the
North line of the above described parcel extended Easterly;
bounded on the East by the Erosion Control Line of the Atlantic
Ocean and bounded on the West by the East line of the above
mentioned Block 56.
SHORECREST LAND
The South 40.00 feet (measured along the lot line) of Lots 5 and 16
and the North one-half of Lots 4 and 17, all in Block 56, of
FISHER'S FIRST SUBDIVISION OF ALTON BEACH, accord-
ing to the plat thereof, as recorded in Plat Book 2, at Page 77, of
the Public Records of Dade County, Florida, together with that
certain parcel of land lying East and adjacent to the above
described parcel; said parcel bounded on the South by the South
line of the above described parcel extended Easterly; bounded on
the North by the North line of the above described parcel extended
Easterly; bounded on the East by the Erosion Control Line of the
Atlantic Ocean and bounded on the West by the East line of the
above mentioned Block 56.
All lands described above located, lying and being in Section 34, Township 53 South, Range 42
East, in the City of Miami Beach, Dade County, Florida.
"EXHIBIT B"
List of Disputed Items
10/9/2003
The following is a list of outstanding disputes regarding the Hotel Development
Agreement:
ARTICLE 2. CONSTRUCTION
2.3. Completion of Construction of the Proiect
(b) Upon Substantial Completion of Construction of the Project Developer
shall furnish the Owner with the following:
(vi) evidence that all FF&E necessary to use and operate the Hotel in
accordance with Ground Lease, Management Agreement, Plans
and Specs, and the Development Budget has been installed in the
Hotel
Tenant will provide evidence to satisfy Owner. Tenant states that it has provided
a letter, dated March 12, 2003 in satisfaction of this requirement. Tenant to verify
compliance within 30 days of LOI approval as provided in Section 10.2 of the
October 9, 2003 LOI.
ARTICLE 4 OWNER PARTICIPATION
4.2. Owner's Riqht to Notice, Access and Review
(a) (v) the delivery by Developer to the Owner of two (2) copies of:
(1) all agreements with contractors (that will be provided upon
settlement with Clark Construction), subcontractors,
suppliers, vendors and other Persons supplying materials or
services in connection with the Construction of the Project in
excess of Two Hundred Fifty Thousand Dollars ($250,000),
which shall be aggregated with respect to each Person
supplying materials or services;
(5) all drawdowns of equity and loan proceeds under the Loan
Docs.
(7) Updated Development Budget
(8) all interior design control books
ARTICLE 5. MISCELLANEOUS CONSTRUCTION PROVISIONS
5.2 Names of Contractors. Materialmen. etc. - Developer shall furnish to Owner, with
a list of each contractor, subcontractor, vendor and supplier who is performing
any labor or supplying material in excess of $500,000 (except for FF&E)...
The items listed in Article 4 and Article 5 above, will be satisfied by the Tenant's
delivery of an itemized "Project Cost Summarization" and Debt/Equity Capital
Investment Summary ("Project Capitalization Recap") regarding the Project.
The following is a list of outstanding disputes regarding the Agreement of Lease:
ARTICLE 11. MORTGAGES
11.13. Refinancinq of Debt
(b) Refinancinq Not Related to a Default - If Tenant refinances its Debt in the
ordinary course of business, and not related to any Event of Default, the
Net Refinancing Proceeds shall be applied in the following order:
(i) to Owner to pay the Purchase Price for Owner's Interest in the
Premises;
(ii) to Tenant if any funds remain after paying Owner the full Purchase
Price for Owner's Interest in the Premises
(1) Owner's subordination of its right to Rental shall be at the
Subordinated Amount as of the date of such refinancing by
Tenant.
(2) "Net Refinancing Proceeds" means the amount of the
refinancing of the Debt less (x) the Balance immediately
before such refinancing of the Debt, (y) the interest owing on
such Balance, and (z) reasonable refinancing transaction
expenses, brokerage commissions and prepayment fees
and yield maintenance charges relating to the Debt to be
refinanced.
Tenant has been requested to submit financial information regarding any
possible refinancing to the Agency. As such, Tenant will provide Owner with an
Affidavit relating to the Union Planters Bank loan modifications that have been
closed to date summarizing the use and application of the additional loan
proceeds and stating the fact that none of the loan proceeds were used (i) for
distributions to any of the Borrower's partners or members, (ii) to repay any of
the Borrower's partners or members, (iii) to repay any other person or entity
which loaned money to the Borrower.
13.3 One (1) Hotel Manaqer The Developer will affirm that at all times during the Term
and without interruption, both the Shorecrest Improvements and the RP
Improvements shall be operated and managed by one and the same Hotel
Manager.
Tenant states it has re-sent letter (dated January 15, 2003) affirming this condition
is being complied with in accordance with the provision of the Lease Agreement,
and as such, deems this condition is satisfied. Tenant to verify compliance
within 30 days of LOI approval as provided in Section 10.2 of the October 9,2003
LOI.
ARTICLE 10. Notice to Owner 10.1.Ckl
Tenant will provide notice to owner of any Capital Transaction not requiring Owner's
consent not later than two (2) business days after the occurrence of such Capital
Transaction.. .
Tenant states it has provided said notice in connection with the transaction
described in the Certificate of Tenant and further provided a letter dated March
12, 2003 in satisfaction of this requirement. Tenant to verify compliance within 30
days of LOI approval as provided in Section 10.2 of the October 9, 2003 LOI.
F:\cmgr\$ALL\CHRISTIN\RDA\royalpalm Exhibit B 1o-9-03.doc
"EXHIBIT C"
(CLARK EXHIBIT)
The following is a list of outstanding Clark issues disputes regarding the Hotel
Development Agreement:
ARTICLE 2. CONSTRUCTION
2.3. Completion of Construction of the Project
(b) Upon Substantial Completion of Construction of the Project Developer
shall furnish the Owner with the following:
(i) certificate of the Architect re: Substantial Completion
(iii) lien waivers in form and substance reasonably satisfactory to
Owner, other than Clark Construction lien waivers that will be
provided upon settlement with Clark Construction
(v) Contractor's Final Affidavit, to be provided upon settlement with
Clark Construction
ARTICLE 4 OWNER PARTICIPATION
4.2. Owner's Riqht to Notice. Access and Review
(b) The final critical path method ("CPM Schedule")
The Developer will provide the last CPM Schedule provided by Clark in the
Developer's possession. To the extent the Final CPM Schedule is provided as a
result of the settlement of litigation with Clark, the Developer will provide same.
ARTICLE 14. DISCHARGE OF LIENS
14.2 Discharae of Liens
(a) If any mechanic's, laborer's, vendor's, materialman's, or similar statutory
lien (including tax liens) is filed against the Project Site...Developer shall
cause it to be discharged. However, Developer shall not be required to
discharge any such lien if Developer has furnished Owner with, at
Developer's option, a cash deposit, bond, letter of credit from an
Institutional Lender or other security.
As to liens filed by Clark Construction, the Developer agrees that upon
settlement of litigation with Clark Construction, all liens will be discharged.
F:\cmgr\$ALl\CHRISTIN\RDA\royalpalm Clark Exhibit C 10-9-03.doc
EXHIBIT "D"
AMENDMENT RE TOWN PARK TO AGREEMENT OF LEASE
AMENDMENT TO AGREEMENT OF LEASE (the "Amendment") is made and entered into as
of the day of ,2003 by and between RDP ROYAL PALM HOTEL LIMITED
PARTNERSHIP, a Florida limited partnership ("Owner") and MIAMI BEACH
REDEVELOPMENT AGENCY, a public body corporate and politic ("Tenant").
WITNESSETH
A. Owner and Tenant entered into an Agreement of Lease, dated October 21, 1997, (the
"Lease"), relating to real property more particularly described therein (the "Property").
B. Town Park Hotel Corporation, a Tennessee corporation ("Town Park"), is the Hotel Manager
(defined in the Lease) ofthe Hotel (defined in the Lease).
C. Town Park and PADC Royal Palm Holdings, LLC ("Borrower") are parties to that certain
Loan Agreement dated April 30, 2001 (the "Loan Agreement"), whereby Town Park agreed
to convey to Borrower a forty-seven and 66/100 percent (47.66%) Class A limited
partnership interest in Tenant in consideration for Borrower's execution and delivery of that
certain Purchase Money Promissory Note in favor of Town Park (the "Note"), which Note
evidences the loan by Town Park to Borrower (the "Loan").
D. Town Park currently holds a one percent (I %) limited partnership interest in Tenant.
E. Pursuant to Section 4.01(t) of the Loan Agreement, Town Park desires to confirm that the
Loan will be treated as an equity interest in Tenant for purposes of the Lease so long as the
Loan is outstanding.
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Recitals. The foregoing recitals are true and correct.
2. Equity Interest. Owner and Tenant hereby agree that to the extent that the Lease
distinguishes between Town Park (in its capacity as Hotel Manager) holding or not
holding any equity interest in Tenant, the Loan evidenced and secured by the Note
shall be treated for purposes of the Lease as Town Park holding an equity interest in
Tenant.
3. No Further Modification. Except as amended by this Amendment, the Lease and
all of its terms and provisions shall remain in full force and effect. In the event of
any conflict between the provisions of this Amendment and any provision of the
Lease, the provisions of this Amendment shall control. All capitalized terms herein
shall have the same meanings as they have in the Lease, unless otherwise defined
herein.
[Signature page follows.]
IN WITNESS WHEREOF, this Amendment has been duly executed by the parties
hereto.
WITNESSES:
"OWNER":
MIAMI
AGENCY
BEACH
REDEVELOPMENT
By:
Print Name
Print Name:
Title:
Print Name
"TENANT":
RDP ROYAL PALM HOTEL LIMITED
PARTNERSHIP, a Florida limited partnership
By: P ADC Hospitality Corporation I, a
Florida corporation, as general partner
WITNESSES:
By:
Print Name
Print Name:
Title:
Print Name
EXHIBIT "E"
RECOGNIZED MORTGAGE CONSENT LETTER
UNION PLANTERS BANK
2800 Ponce de Leon Blvd.
Coral Gables, Florida 33134
,2003
Miami Beach Redevelopment Agency
Jorge Gonzalez, Executive Director
1700 Convention Center Drive, Fourth Floor
Miami Beach, Florida 33139
-and-
City of Miami Beach
Jorge Gonzalez, City Manager
1700 Convention Center Drive, Fourth Floor
Miami Beach, Florida 33139
Re: Letter of Intent to Amend Royal Palm Crowne Plaza Resort Agreements dated
, 2003 ("LOI")
Dear Mr. Gonzalez:
Weare in receipt of a copy of the fully executed LOI.
We are the Recognized Mortgagee under the Lease which is the subject of the LOI as
these terms are defined in the LOI and the Lease.
Section 11.10 of the Lease states in part as follows:
Owner agrees not to accept a voluntary surrender, termination or
modification of this Lease at any time while such Recognized Mortgage(s)
shall remain a lien on Tenant's leasehold estate. It is further understood
and agreed that any such Recognized Mortgagee(s) shall not be bound by
any surrender, termination or modification of this Lease unless such
surrender, termination or modification is made with the prior written
consent of such Recognized Mortgagee, and this Lease shall not terminate
by merger or otherwise as long as the lien of the Recognized Mortgage( s)
remains undischarged. ...
Miami Beach Redevelopment Agency
Jorge Gonzalez, Executive Director
-and-
City of Miami Beach
Jorge Gonzalez, City Manager
,2003
Page 2
Accordingly, we hereby consent to the LOI subject to the negotiation and execution of
the Closing Documents (as defined in the LOI) with terms, provisions and conditions mutually
acceptable to RDP, the Agency and the City as well as the obtaining of our approval.
Very truly yours,
Roy D. Tanis
Senior Vice President
This communication is a privileged settlement communication and strictly inadmissible for
an ur ose unuant to Section 90.408, Fla. Stat. and Rule408, Fed. R. Evld.
LETTER OF INTENT
TO AMEND ROYAL PALM
CROWNE PLAZA RESORT AGREEMENTS
Subject:
Parties:
Royal Palm Crowne Plaza Hotel
RDP Royal Palm Hotel Limited Partnership ("RDP")
City of Miami Beach (the "City")
Miami Beach Redevelopment Agency (the "Agency")
Date:
, 2003
RECITATIONS:
A. On May 28, 1998, the parties entered into an Agreement of Lease regarding the
land more fully described on Exhibit "A" ("Land") attached hereto and made a part hereof as if
fully set forth herein, as recorded on July I, 1998 in Official Records Book 18170, at Page 0893,
in the Public Records of Miami-Dade County, Florida ("Lease").
8. Subsequent to the recording of the Lease, RDP began the construction of the
Royal Palm/Shorecrest Crowne Plaza Hotel ("Hotel").
C. During the construction of the Hotel, RDP encountered structural problems with
the original Royal Palm Hotel and soil contamination problems regarding the Land which alleg-
edly resulted in certain construction delays. A dispute arose amongst the parties regarding the
aforesaid problems and delays resulting in RDP's refusal to pay certain Rental due under the
Lease and the Agency's refusal to pay claims related to said contamination and alleged construc-
tion delays.
D. The parties respectively deny and dispute all such claims and allegations against
them, whether asserted or un asserted.
E. The parties, wishing to avoid litigation and amicably resolve all matters existing
between them, entered into negotiations regarding the aforesaid disputes. This letter sets forth
the understanding reached as a result of such negotiations. Capitalized terms which are not
defined in this Letter of Intent to Amend Royal Palm Crowne Plaza Resort Agreements ("LOI")
shall have the meanings ascribed to them in the existing, applicable documents. "Agency"
means, as appropriate, the Agency or the City or both, as the case may be.
F. Agency and Owner in their desire to maintain and fulfill their commitment to pro-
vide the African American community with opportunities in the hospitality industry, are wil1ing
to amend the Royal Palm Crowne Plaza agreements subject to the Hotel's continuing compliance
with the Convention Center Agreement which provides, among other things, that the Hotel
owner and its successors and assigns make available Hotel facilities and services for support of
the Convention Center events and to undertake joint marketing efforts.
1. BACK RENT AND REAL ESTATE TAXES:
1.1 Back Rent Prior To The Hotel Ooeninl! Date. RDP and the Agency
agree that unavoidable delays attributed to the environmental and reconstruction
delays occurred prior to the Hotel Opening Date. RDP has previously paid
$128,373.38 in Back Rent prior to the Hotel Opening Date; i.e., from October
31, 2000 to May 14, 2002, and the Agency shall retain said amount in full
settlement of all amounts due for Back Rent for the period prior to May IS,
2002. Additionally, RDP shall pay within five (5) days from the last execution
of this LOI any and all applicable sales tax due and owing on said amount plus
any interest and penalty assessed by the State of Florida against the City and/or
the Agency for failure to pay applicable sales tax on said amount prior to the
Hotel Opening Date.
1.2 Clark Credit. Subject to the conditions set forth in this Section 1.2,
RDP shall pay to the Agency an amount up to $140,000.00 (the "Clark Credit")
plus applicable sales tax when, and if, it settles its present litigation with The
Clark Construction Group styled RDP Royal Palm Hotel, LP, Et AI. vs. The
Clark Construction Group, Inc. vs. Arquitectonica International Corp., Et AI.,
U.S. District Court, Southern District of Florida, Case No. 01-3130-CIV-
Middlebrooks ("Clark Litigation") or if it obtains a final non-appealable
judgment in the Clark Litigation. RDP shall pay this amount to the Agency
within ten (10) days of its receipt of funds from, and to the extent, either the
settlement or the judgment provides excess funds after RDP pays its attorneys'
fees and costs for the Clark Litigation. Article 4 of the Lease entitled "Late
Charges" shall not apply to the payment of the Clark Credit. The application of
the Clark Credit shall be treated as additional pack R~el1t \Vl1ich _shall be dill:. ()~Iy _ .
if the conditions set forth in this Section are met and then only to that extent.
Any amounts paid to the Agency under this Section 1.2 shall not apply to the
eight percent (8%) return calculation as a component of the Purchase Price as
defined in Section 36.I(d)(iii) of the Lease (the "Return"). This provision shall
survive the payment of the Purchase Price.
1.3 Back Rent After The Hotel Ooening Date. Base Rent and
Additional Rent due, plus applicable sales tax, from the period of May 15, 2002
to May 15, 2003 ("Post Opening Back Rent") shall be deferred and payable over
the ten (10) year period commencing in Lease Year 5 and ending in Lease Year
14.
1.4 Real Estate Taxes. The parties acknowledge that the 2002 real
estate taxes on the Improvements are unpaid and that said taxes are being
appealed. On or before the date the Closing Documents are executed, RDP shall
provide to the Agency proof that it has complied with the requirements of
Section 32.2(b) of the Lease as to said taxes. Further, to the extent that sales
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taxes are due on real estate taxes which were the responsibility of RDP prior to
the date of the execution of this Lor, RDP shall pay such taxes, penalties and
penalty interest prior to the execution of the Closing Documents.
2. FUTURE RENTAL:
Additional Rent and Incentive Rent, plus applicable sales tax, due in Lease
Years 2 through 5 shall be deferred and payable over the ten (10) year period
commencing in Lease Year 6 and ending in Lease Year IS. Other than as stated
in the preceding sentence, RDP shall continue to pay Base Rent, Additional Rent,
and Incentive Rent (plus all applicable sales taxes on such non-deferred pavments
Qf..same) as well as all other Rental from the date of execution of this LOI
pursuant to the terms and conditions of the Lease.
3. PURCHASE PRICE:
3.1 Declaration of Covenants and Restrictions. The Declaration of
Covenants and Restrictions shall be amended to provide that upon payment of
the Purchase Price in full, the following changes shall be effective, but that said
Declaration shall not otherwise be amended, modified or changed:
(I) with respect to the Shorecrest Land only, Section 2.2 shall
no longer apply.
(2) with respect to both the RP Land and the Shorecrest Land,
Section 2.3 shall no longer apply and if, as a result thereof, then applicable
zoning ordinances, such as the current section 118-5 of the Miami Beach
Code, require a covenant in lieu of unity of title, RDP sh.all cause such a
covenant to be recorded as to said parcels.
3.2 Convention Center Agreement. The Convention Center Agree-
ment shall be amended to provide that, upon payment of the Purchase Price in
full, the "350 rooms per day" requirement stated in the Room Block definition
shall be reduced to two hundred fifty seven (257) rooms per day. In all other
respects, the definition of Room Block and the remainder of the Convention
Center Agreement shall remain unchanged except as provided in paragraph
18.17 of this La!.
3.3 Time for Payment in Full. The outside date for full payment of the
Purchase Price shall be the Fixed Expiration Date rather than Lease Year 25 as
presently provided for in the Lease. All Lease terms (such as those relating to
Rental inflation increases, by way of example) that are presently adjusted in
increments through Lease Year 25, shall be extended in the same increments to
the Fixed Expiration Date.
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4. REFINANCING:
The Refinancing Times stated in Section I 1.13(a) of the Lease shall be
changed to on or prior to the beginning of the fifth (5th) year after the Hotel
Opening Date ("First Refinancing"); on or prior to ten (10) years after the closing
of the First Refinancing ("Second Refinancing") and then every tenth (10th)
anniversary of the Second Refinancing thereafter; provided however, that the
maturity date of any refinancing that extends beyond the next required refinancing
will not have to be repaid prior to its maturity provided said maturity date is no
later than twenty (20) years from the last refinancing; provided further however,
that when Tenant refinances the Balance of its Debt, the Net Refinancing
Proceeds, as defined in Section l1.13(b) of the Lease, shall be applied to the
extent available in the following order:
A. To Owner to pay the deferred Rental described in paragraphs 1.3
and 2 of this Lor;
B. Fifty percent (50%) to Owner to pay the Return applicable as part
of the Purchase Price accrued and unpaid to date; and fifty percent (50%)
to Tenant to repay Town Park Hotel Corporation, as Hotel Manager
("Town Park"), for CostOverruns. paid by Town Park (estimated at $5
million).
C. To Owner to pay the balance of the Return applicable as part of the
Purchase Price accrued and unpaid to date;
D. Fifty percent (50%) to Owner to pay the Purchase Price (which
includes the Return) for Owner's Interest in the Premises; and fifty percent
50% first to any amounts then still due Town Park as described in Section
4B. above. and then to Tenant for Tenant Cost Overruns. paid by Tenant
(estimated at $2 million);
E. To Owner to pay the balance of the Purchase Price (which includes
the Return) for Owner's Interest in the Premises; and
F. To Tenant if any funds remain after paying in full the amounts in
paragraphs 4A-4E above.
.Any Cost Overruns will be calculated net of (I) any Clark settlement
proceeds paid to Tenant, directly or indirectly but (a) net of attorneys and
other professional fees and court costs not reflected in Tenant's Cost
Overrun calculation and not advanced by Town Park and (b) the Clark
Credit to the extent paid to Owner, and (2) any prior overrun or equity
repayments from the two (2) prior future advances paid to Tenant. Cost
Overruns will be subject to a full accounting and review by Owner, with
the exact amounts in paragraphs 4B and 4D to be agreed upon by the
parties.
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f~:::;~__m_"'_'-----l
5. TENANT'S REPAYMENT OF THE RETURN:
Beginning in Lease Year 25, and every ten (l0) years thereafter, Tenant
shall pay Owner any accrued and unpaid portion of the Return as follows:
A. Any and all unpaid portions of the Return accrued in Lease Years
1-25 will be amortized and paid over ten (l0) years in Lease Years 26-35.
8. Any and all unpaid portions of the Return accrued in subsequent
ten (10) Lease Year increments (i.e., Lease Years 26-35, 36-45, 46-55, 56-
65, 66-75, 76-85, 86-95, and 95-Fixed Expiration Date) will be amortized
and paid over ten (10) years in the respective succeeding ten(lO) year
Lease Term periods (i.e., Lease Years 36-45, 46-55, 56-65, 66-75, 76-85,
86-95, and 95-Fixed Expiration Date, respectively) and will be referred to
as the "Amortized Return".
C. Commencing on Lease Year 35 and for each Lease Year thereafter,
to the extent that the Base Rent, Additional Rent and the "Amortized
Return", in aggregate, payable in each Lease Year is less than $800,000,
as adjusted for inflation (the "Rental Cap"), then in such Lease Year,
Tenant shall pay the difference between the "Rental Cap" less the
aggregate of Base Rent, Additional Rent and the" Amortized Return" for
said Lease Year, as mandatory incentive rent (the "Mandatory Incentive
Rent"). If in any such Lease Year, on or after Lease Year 35, Incentive
Rent is payable, such Incentive Rent shall be due and payable even if such
payment results in a payment that Lease Year in excess of the Rental Cap.
"Rental Cap" is defined as the $800,000 amount which shall be increased
at the beginning of the tenth (lOth) Lease Year, and ever five (5) years
thereafter, in the proportion as the percentage increase in the GDP Implicit
Price Deflator Index from the Hotel Opening Date.
6. SALE OF THE HOTEL:
In addition to the other provisions in the Lease regarding the Sale of the
Hotel, upon the Sale ofthe Hotel the following shall occur:
A. All deferred and/or accrued and unpaid Rental and the Return shall
be paid in full; and
B. All rental, including any deferrals thereof, as provided in the
Ground Lease Amendment pursuant to this LOI, shall revert to the original
Rental, without any deferrals thereof, as provided in the original Lease
before the execution of the Ground Lease Amendment.
..:..5".:.
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7. TOWN PARK HOTEL CORPORATION AS HOTEL MANAGER:
7.1 Recitals B-E and paragraph 2 of the amendments proposed by
Tenant in the Amendment Re Town Park to Agreement of Lease attached hereto
and incorporated by reference herein as Exhibit "D" shall be included in the
Ground Lease Amendment; provided however, that same shall tenninate upon the
Sale of the Hotel or the earlier to occur of (i) tennination of the Hotel
Management Agreement between RDP and Town Park or (ii) fifteen (15) years
from Hotel Opening Date.
7.2 Section 16.7(e) of the Lease will be deleted in its entirety.
7.3 Any payments or costs in connection with the "Note" and/or
"Loan", as defined in the Amendment Re Town Park to Agreement of Lease, will
not be considered "Operating Expenses" as that tenn is defined in the Lease.
7.4 Tenant warrants and represents to Owner and the City that Recitals
B-E of the amendments proposed by Tenant are true and correct and are a
material inducement for Owner and the City to include these amendments in the
Ground Lease Amendment.
8. FF&E RESERVE:
8.1 Hotel FF&E Reserve. The percentages stated in Section l6.5(a) of
the Lease with respect to the Hotel shall be changed as follows:
Lease Year
I
2
3
4
5 and thereafter
Percentages of Hotel Revenues
0%
1%
2%
3%
4%
9. SHORECREST RESTAURANT:
9.1 Changes to Article 33 of the Lease. Article 33 of the Lease shall
be amended to delete therefrom subsections (a) through (f) and to pennit in the
area originally contemplated for the Restaurant (the "Space") the construction of a
spa, additional meeting space or other improvements for any reasonable hotel
purpose that wi II benefit the operation of the Hotel; provided, however, that such
uses are pennissible under all applicable local laws and zoning ordinances. The
sizes and dimensions of all such facilities within the Space shall be as reasonably
detennined by RDP and the Operators (defined below) of the respective facilities.
Subsection (g) shall be amended to relate to any Operator. The amended Lease
shall provide that such facilities shall not be subject to any further approval by the
~~
f=.:::-:.-
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Agency except as provided in paragraphs 6.3 and 6.5, below, but the use and
operation of said facilities shall be consistent with that of a first class hotel.
9.2 Fees and Costs. RDP shall be solely responsible for, and shall pay,
at its sole cost and expense, any parking impact fees and any other costs,
including but not limited to concurrency fees, permit fees and the like resulting
from the new facilities.
9.3 The Space as a Condominium Unit. If the Space is located on the
Shorecrest Land, and if RDP elects to create a condominium unit for the Space as
permitted under the terms of the Lease, RDP shall cause the Declaration of
Condominium to contain provisions that (i) the sale or lease of the Space unit
shall be subject to the Agency's approval and (ii) the Space unit shall be operated
in accordance with the quality standards referred to in paragraph 6 of this LO!.
9.4 Non-Disturbance Agreement. Upon request of RDP, the Agency
shall execute a non-disturbance agreement in favor of a third party Space operator
(an "Operator") containing terms generally found in such agreements in form and
content reasonably acceptable to the Operator and the Agency, but the term of
which shall be no longer than the earlier to occur of (i) the expiration of the third
party Space agreement or (ii) twenty (20) years.
9.5 Operator Agreement. In the event the Space is managed or
operated by an Operator pursuant to an agreement between RDP and Operator,
said agreement shall be deemed to be Sublease under the Lease requiring Agency
approval under Section 10.2(a)(v) of the Lease, the agreement shall contain
quality standards pertaining to the operation and physical condition of the Space
which shall be enforced by RDP, which standards and the selection of the
Operator shall be subject to approval by the Agency.
10. EXISTING DISPUTED ITEMS:
10.1 List Of Disputed Items. Exhibit "B" entitled "List of Disputed
Items" is attached hereto and incorporated by reference herein as a list of the cur-
rent disputed items under the Lease and other related documents as of the date of
last execution ofthis LOI ("RDP Items").
10.2 Curing of RDP Items. RDP shall cure all of the RDP Items on or
before thirty (30) days from the date of execution of this LOI except for those
items listed in Exhibit "C" attached hereto and specifically incorporated herein.
11. RELEASES OF ALL CLAIMS BY RDP. THE AGENCY AND THE
QIX.;,
11.1 RDP Claims. RDP shall waive and release any and all alleged
delay claims, environmental damage claims and any other claims of any kind
whatsoever against the City and/or the Agency arising or accruing prior to the
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date of execution of the Closing Documents upon the execution of the Closing
Documents.
11.2 Agency and City Claims. The Agency and the City shall waive
and release their Owner's excess contribution claim and any other claims of any
kind whatsoever against RDP upon the execution of the Closing Documents.
11.3 Acknow]edgement. Provided that all of the terms and conditions
of this LOJ have been satisfied by all parties, the amendment to the Lease shall
contain a written acknowledgment that all alleged claims and other alleged
defaults have been cured, settled and or waived, that all controversies between the
parties have been settled and that the Lease is in good standing and in full force
and effect.
12. GARAGE EASEMENT AGREEMENT:
12.] The Garage Easement Agreement shall be amended as appropriate
to provide for and incorporate the following concepts:
A. The parties shall have no further obligation for the payment of Use
Fees and Faci]ity Usage Payments and no such payments are due either
party as of the date of the execution of this LO!.
B. The words "and approved by Grantee" in Section 5(a) shall be
deleted.
C. RDP shall have no affirmative obligation to use the Garage for its
Hotel guests and employees.
D. Section 9(a) shall be deleted and the Garage Easement Agreement
shall be removed from any cross default provisions contained in any of the
Hotel related documents.
E. The term "self park rate" shall mean (i) the rates charged to the
general public at the Garage facility and identified as the maximum daily
rate or (ii) the valet rate charged by the Royal Palm Hotel at RDP's
election.
12.2 The remainder of the Garage Easement Agreement shall remain in
full force and effect.
12.3 In the event that RDP creates a hotel condominium on the
Shorecrest Land, then, in that event, the parties to this LOJ agree that there are no
rights or agreements under the Garage Easement Agreement which will be
transferred to the Shorecrest Hotel Condominium unit owners.
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13. CONCESSION AGREEMENT UNDER THE LEASE:
13.1 Fee Payment. RDP shall pay the Concession Fees due and owing,
if any, under the Concession Agreement described in Exhibit 14.5 of the Lease on
or before five (5) days after the last execution of this La!. The parties are not
now aware of any such outstanding fees.
13.2 License Fees. RDP shall payor cause to be paid the corresponding
occupational license fee in connection with the beachfront concession operation
for the Hotel.
13.3 Shorecrest Condominium. In the event that RDP creates a hotel
condominium on the Shorecrest Land, then, in that event, RDP shall pay (or cause
the Shorecrest hotel condominium association to pay) the corresponding
applicable beach concession fees consistent with those fees charged other upland
private owners of hotel and condominium properties.
14. CLARK CONSTRUCTION LITIGATION LIENS:
The existing Clark Litigation liens and future liens, including liens filed or
which may be filed by subcontractors, relating solely to the Clark Litigation, if
any, against the leasehold interest of RDP in the Lease shall not be considered an
Event of Default under any of the Hotel Documents so long as RDP diligently and
in good faith continues to prosecute its claims to resolve all issues under the Clark
Litigation; provided however, that nothing contained herein shall relieve RDP of
its responsibility to remove these liens and to resolve those matters contained in
Exhibit "C", either by resolution of the Clark Litigation or otherwise.
15. ATTORNEYS FEES:
Each party shall bear its own legal fees relating to this LOI and the
Closing Documents except that RDP shall reimburse the Agency at the time of the
execution date of the Closing Documents its legal fees up to the first $60,000
charged by Bloom & Minsker, P.L., based upon an hourly rate of $250.00.
Agency shall provide to RDP detailed statements for professional services
showing time and activity on a daily basis supporting said reimbursement.
16. ADDITIONAL TERMS. CONDITIONS AND ISSUES NOT COV-
ERED IN THIS LOI:
Because of the complex nature of the documents involved and the changes
being considered as a result of this LOI, RDP, the Agency and the City shan have
the right to raise additional terms and conditions and issues not covered in this
LOI and which are not inconsistent with the terms of this LOr as the actual draft-
ing of the documents occurs and continues.
~9.:.
".~:=::~___m_______j
17. SPECIAL INDEMNIFICATION BY RDP:
RDP shall indemnify and hold harmless and shall provide defense for the
Agency and the City by counsel reasonably acceptable to the Agency and the City
regarding any and all matters arising out of, or relating directly or indirectly to,
any challenges by any third parties to this LOI and the Closing Documents except
for those challenges arising out of the Clark Credit, the payment and partial
waiver of Back Rent and the settlement of alleged delay claims attributed to the
environmental damage and reconstruction delays referred to in paragraph 1.1 of
this LOI .
18. COMPLETION GUARANTEE:
18.1 The Agency and the City acknowledge that the Guarantor under
the Completion Guarantee given to the Agency and the City shall be terminated
upon delivery to the Agency and the City of the certificate by the Architect
described in Section 2(i) of said Guarantee and Final CO's are issued as
contemplated by Section 2(ii) of said Guarantee. In all other respects, Guarantor
has complied with its obligations under the Guarantee. The Completion Deadline
is tolled until said certificate is delivered and the Final CO's are issued.
19. DECLARATION OF COVENANTS AND RESTRICTIONS:
19.1 The parties acknowledge that the payment in full by RDP of the
Purchase Price to the Agency shall not terminate the Declaration.
20. CLERICAL CHANGES TO THE LEASE AND RELATED EXIST-
ING DOCUMENTS:
Non-substantive clerical changes such as current mailing addresses in the
notice provisions and grammatical errors in the Hotel Documents shall be cor-
rected in the Closing Documents.
21. GENERAL:
21.1 Definitive Agreements. Upon execution of this LOI by RDP, the
approval of the terms hereof by the appropriate Agency and City governing
bodies and the execution of this LOI by the appropriate Agency and City officials,
the Closing Documents shall be drafted. Tenant shall submit first drafts of all of
the Closing Documents to the Agcncv within fifteen (15) davs after such
approval. The Closing Documents will contain, among other things, representa-
tions, warranties, conditions, covenants and indemnities and the like typical in
similar transactions, subject to the terms hereof. Furthermore, the parties to this
LOI recognize that due to the complexity ofthe structure of these transactions, not
all of the major legal issues have been covered by this LOI. The consummation
of the transactions contemplated hereby is conditioned upon the negotiation and
:~~~;I:n a~:e;:~~I;:~s~~p ~t~~u:::~~y :~~ t~:~~;y P:so~::~:: t~~do~~~~~~o:~ . ..f~:=:-:~: - -::-----------~
- 10-
- ......
all necessary lender approvals and the satisfaction of the parties with all other
agreements and matters necessary or desirable with respect to the transactions
contemplated hereby. The parties shall comply with all applicable laws, statutes,
regulations and requirements and performance by the Agency, the City and RDP
under this LOI and the Closing Documents shall be subject thereto. The following
is a list of the documents which may need to be amended or created (said list is
not meant to be inclusive of all required agreement) and additional agreements
shall be executed by the parties to this LOI as required:
LIST OF AGREEMENTS
A. GROUND LEASE AMENDMENT
B. CONVENTION CENTER AGREEMENT AMENDMENT
C. DECLARATION OF COVENANTS AND RESTRICTIONS
AMENDMENT
D. GARAGE EASEMENT AMENDMENT
E. AGENCY'S RELEASE OF CLAIMS
F. CITY'S RELEASE OF CLAIMS
G. RDP'S RELEASE OF CLAIMS
H. SPECIAL INDEMNIFICATION BY RDP
I. TERMINATION OF COMPLETION GUARANTY
1. UCC FINANCING STATEMENTS - to renew lease UCC- I 's as
amended by Ground Lease Amendment
.z 1.2 Assignment bv Agencv. In the event the Agency ceases to exist,
the Closing Documents will provide that the rights granted to the Agency will
inure to the benefit of the City and the City will be bound to perform the obliga-
tions therein.
21.3 Termination. This LOI may be terminated by either party if the
Closing Documents have not been executed by six (6) months from the execution
date of this LOI.
21.4 Non-binding. Except for the last sentence in paragraph 1.1
hereinabove and paragraph 21.11 hereinbelow which the parties to this LOI intend
to be binding, (i) no party shall have any legally binding obligation to any other
party under this LOI until such time as the Closing Documents are executed by all
parties thereto; and (ii) no party will have any liability whatsoever under this LOI
to any other party for failure to perform in accordance with this LOI, if any party
decides to terminate this LOI or for any other reason related to this LOI.
21.5 Amendments. This LOI may be amended only by a written agree-
ment executed by both ofRDP and the Agency.
,:..ll~
l~;;E~_T~~~~~~ .__ .--.J
".f::::::---
---------l
21.6 Governing Law and Venue. This LOI, the Closing Documents and
their interpretation, validity and perfonnance, shall be governed by the laws of the
State of Florida, both substantive and remedial, without regard to principles of
conflict of laws. The venue for any litigation arising out of this LOI or the Clos-
ing Documents shall be the Eleventh Judicia] Circuit, Miami-Dade County,
Florida, ifin state court, and the U.S. District Court, Southern District ofF]orida,
if in federal court.
2\. 7 "Appro va]" or "Consent." The use of the tenns "approval" or
"consent" in this LOI shall always be deemed to mean Areasonab]e approva\@ or
Areasonab]e consent@ except where specifically provided otherwise.
21.8 Counterparts. This LOI may be executed in counterparts and all
such counterparts, when taken together, shall constitute this LOr.
2\.9 Recognized Mortgagee Consent Letter. Tenant shall cause Union
Planters Bank, the Recognized Mortgagee, to execute and deliver its letter
consenting to this LOI as shown in Exhibit "E" attached hereto and incorporated
by reference herein (the "Consent Letter") to the Agency and the City no later
than thirty (30) days from the date of execution of this LOI ("Consent Letter
Delivery Date"). The parties hereto agree that, except for the last sentence in
paragraph 1.1 and paragraph 21.11 of this LOI, the remainder of this LOI shall
not be in effect until the Consent Letter Delivery Date. )n the event the Consent
Letter is not delivered by the Consent Letter Delivery Date, then, in that event,
except for the last sentence in paragraph 1.1 and paragraph 21.11 of this LOI, the
remainder of this LOI shall be null and void and of no further force or effect.
21.1 0 Successors and Assigns. All references to any of the parties to this
LOI shall include their pennitted successors and pennitted assigns.
21.11 Attomevs' Fees. In the event litigation arises solely under the last
sentence in paragraph 1.1 hereinabove, then, in that event, the prevailing party
shall be entitled to recover its attorneys' fees and court costs, including those
involving appeals and/or post-judgment proceedings, if any.
2\. ] 2 LOI In Effect. This LOI shall remain in effect as provided herein-
above provided that RDP shall maintain the Lease and related existing documents
in good standing and free of any defaults (the parties agreeing that the issues cov-
ered elsewhere in this LOI shall not be deemed defaults for purposes of this para-
graph 21.12) during the pendency of this LOI; the failure of which shall automati-
cally result in this LOI being tenninated and of no further force and effect other
than the specific binding paragraphs as provided in paragraph 2 \.4 of this LOr.
21.13 Privileged Settlement Communication. This LOI is a privileged
settlement communication except for the specific binding paragraphs as provided
in paragraph 21.4 of this LOr. The remainder of this LOI is strictly inadmissible
,:J2,.;:
Deleted: The parties also agree that no
drafting or other legal work shall
commence regarding the Closing
Documents until the Consent Letter
Delivery Dale.
J~:=:-:_----------'--1
for any purpose pursuant to Section 90.408, Florida Statutes and Rule 408,
Federal Rules of Evidence.
21.14 Statements Against Interest. Any statements made by any party to
this LOI contained in this LOI have been made solely for the purpose of resolving
all matters existing between the parties to this LOI. All parties to this LOI recog-
nize and agree that any such statements may not be correct as applied to any other
person or entities not a party to this LOI and more specifically, all parties to this
LOI recognize and agree that any such statements may not be correct as applied to
the Clark Litigation.
21.15 Recording Fees and the Like. RDP shall pay all recording fees and
the like for all of the Closing Documents or any other documents contemplated by
this LOI.
21.16 Waiver of Jurv Trial. All of the Closing Documents shall, where
applicable, contain a waiver of jury trial provision.
21.17 Cross Default. The Convention Center Agreement shall be
amended to provide that a default in the Declaration shall be a default in the
Convention Center Agreement.
[CONTINUED ON NEXT PAGEl
,:..13~
. fD-;I~t;i~-----.--l
,'...Deleted: - _
AGREED AND ACKNOWLEDGED:
RDP ROYAL PALM HOTEL LIMITED
PARTNERSHIP, a Florida limited partnership
By: PADC HOSPITALITY CORPORATION I, Dated:
a Florida corporation, as General Partner
By:
Name: R. Donahue Peebles
Title: President
MIAMI BEACH REDEVELOPMENT
AGENCY
By:
Name: David Dermer
Title: Chairman
Attest:
Name: Robert Parcher
Title: Secretary
APPROVED:
CITY OF MIAMI BEACH
By:
Name: David Dermer
Title: Mayor
Attest:
Name: Robert Parcher
Title: City Clerk
F:/MinskerJC.M.B./Crowne PlazalAgreements/Minsker New LOI lO-9il3~doc
- 14-
.."... .-
Dated:
Dated:
,2003
,2003
,2003
, ' 1 DeIeI8d: 26-
. . DeIelIld: - ~
Ii:, DeIelIld: _
"
"
EXHIBIT A
DESCRIPTION OF THE LAND
RP LAND
The South 12.65 feet (measured along the lot line) of Lots 7 and
14, all of Lots 6 and 15 and the North 10.0 feet (measured along
the lot line) of Lots 5 and 16, all in Block 56, of FISHER'S FIRST
SUBDIVISION OF ALTON BEACH, according to the plat
thereof, as recorded in Plat Book 2, at Page 77, of the Public
Records of Dade County, Florida, together with that certain parcel
of land lying East and adjacent to the above described parcel; said
parcel bounded on the South by the South line of the above
described parcel extended Easterly; bounded on the North by the
North line of the above described parcel extended Easterly;
bounded on the East by the Erosion Control Line of the Atlantic
Ocean and bounded on the West by the East line of the above
mentioned Block 56.
SHORECREST LAND
The South 40.00 feet (measured along the lot line) of Lots 5 and 16
and the North one-half of Lots 4 and 17, all in Block 56, of
FISHER'S FIRST SUBDIVISION OF ALTON BEACH, accord-
ing to the plat thereof, as recorded in Plat Book 2, at Page 77, of
the Public Records of Dade County, Florida, together with that
certain parcel of land lying East and adjacent to the above
described parcel; said parcel bounded on the South by the South
line of the above described parcel extended Easterly; bounded on
the North by the North line of the above described parcel extended
Easterly; bounded on the East by the Erosion Control Line of the
Atlantic Ocean and bounded on the West by the East line of the
above mentioned Block 56.
All lands described above located, lying and being in Section 34, Township 53 South, Range 42
East, in the City of Miami Beach, Dade County, Florida.
"EXHIBIT sn
.List of Disputed Items
10/9/2003
The followinq is a list of outstanding disputes reaardina the Hotel Development
AQreement:
ARTICLE 2. CONSTRUCTION
2.3. Completion of Construction of the Proiect
(b) Upon Substantial Completion of Construction of the Proiect Developer
shall furnish the Owner with the followina:
(vi) evidence that all FF&E necessary to use and operate the Hotel in
accordance with Ground Lease, Manaaement AQreement. Plans
and Specs, and the Development Budaet has been installed in the
Hotel
Tenant will provide evidence to satisfy Owner. Tenant states that it has provided
a letter, dated March 12. 2003 in satisfaction of this requirement. Tenant to verify
compliance within 30 days of LOI approval as provided in Section 10.2 of the
October 9, 2003 LOI.
ARTICLE 4 OWNER PARTICIPATION
4.2. Owner's Riaht to Notice. Access and Review
(a) (v) the delivery by Developer to the Owner of two (2) copies of:
(1) all aareements with contractors (that will be provided upon
settlement with Clark Construction). subcontractors,
suppliers, vendors and other Persons supplvinQ materials or
services in connection with the Construction of the Proiect in
excess of Two Hundred Fifty Thousand Dollars ($250.000).
which shall be aQareQated with respect to each Person
supplvinQ materials or services:
(5) all drawdowns of eauitv and loan proceeds under the Loan
Docs.
(7) Updated Development Budaet
(8) all interior desian control books
ARTICLE 5. MISCELLANEOUS CONSTRUCTION PROVISIONS
5.2 Names of Contractors. Materialmen. etc. - Developer shall furnish to Owner. with
a list of each contractor, subcontractor, vendor and supplier who is performinQ
any labor or supplyinQ material in excess of $500.000 (except for FF&EL
Deleted: ::
Deleted: ,
DISPUTED ITEMS'
,
TO BE UPDATED BY CHRISTINA
CUERVO'
.-_______page 8reak-----
EXHlB IT ''C"
Deleted: LIST OF CLARK
CONSTRUCTION ITEMS'
Deleted: TO BE UPDATED BY
CHRISTINA CUERVO'
.. ....section Break {Next page)........
The items listed in Article 4 and Article 5 above, will be satisfied by the Tenant's
delivery of an itemized "Proiect Cost Summarization" and Debt/Equity Capital
Investment Summarv ("Proiect Capitalization Recap") reQardiml the Proiect.
The followinq is a list of outstandinq disputes reqardinq the AQreement of Lease:
ARTICLE 11. MORTGAGES
11.13. Refinancinq of Debt
(b) Refinancinq Not Related to a Default - If Tenant refinances its Debt in the
ordinary course of business. and not related to any Event of Default. the
Net Refinancinq Proceeds shall be applied in the followinq order:
Ii) to Owner to pay the Purchase Price for Owner's Interest in the
Premises:
Iii} to Tenant if any funds remain after payinq Owner the full Purchase
Price for Owner's Interest in the Premises
(1) Owner's subordination of its riqht to Rental shall be at the
Subordinated Amount as of the date of such refinancinq by
Tenant.
(2) "Net Refinancinq Proceeds" means the amount of the
refinancinq of the Debt less Ix) the Balance immediately
before such refinancinq of the Debt. Iy) the interest owinq on
such Balance. and (z) reasonable refinancinq transaction
expenses. brokeraqe commissions and prepayment fees
and yield maintenance charqes relatinq to the Debt to be
refinanced.
Tenant has been requested to submit financial information regardin!:! any
possible refinancin!:! to the Agency. As such, Tenant will provide Owner with an
Affidavit relatin!:! to the Union Planters Bank loan modifications that have been
closed to date summarizing the use and application of the additional loan
proceeds and stating the fact that none of the loan proceeds were used Ii) for
distributions to any of the Borrower's partners or members. Iii} to repay any of
the Borrower's partners or members, liii} to repay any other person or entity
which loaned money to the Borrower.
13.3 One (1) Hotel Manaaer The Developer will affirm that at all times durina the Term
and without interruption. both the Shorecrest Improvements and the RP
Improvements shall be operated and manaqed by one and the same Hotel
Manaaer.
Tenant states it has re-sent letter (dated January 15. 2003) affirminq this condition
is being complied with in accordance with the provision of the Lease Agreement,
and as such, deems this condition is satisfied. Tenant to verify compliance
within 30 days of LOI approval as provided in Section 10.2 of the October 9. 2003
!:.Qh
ARTICLE 10. Notice to Owner 10.1.(kl
Tenant will provide notice to owner of any Capital Transaction not reouirino Owner's
consent not later than two (2) business days after the occurrence of such Capital
Transaction...
Tenant states it has provided said notice in connection with the transaction
described in the Certificate of Tenant and further provided a letter dated March
12. 2003 in satisfaction of this reQuirement. Tenant to verify compliance within 30
days of LOI approval as provided in Section 10.2 of the October 9,2003 LOI.
F:ll:;n\(Jr\tA.LL\CHRISTIN\P.DA\rOVO'Itnalm ExhitJil B 10-9-03.t.loc
"EXHIBIT C"
(CLARK EXHIBIT)
The followina is a list of outstandina Clark issues disputes reaardina the Hotel
Development Aareement:
ARTICLE 2. CONSTRUCTION
2.3. Completion of Construction of the Proiect
(b) Upon Substantial Completion of Construction of the Proiect Developer
shall furnish the Owner with the followina:
(i) certificate of the Architect re: Substantial Completion
(iii) lien waivers in form and substance reasonably satisfactory to
Owner. other than Clark Construction lien waivers that will be
provided upon settlement with Clark Construction
(v) Contractor's Final Affidavit. to be provided upon settlement with
Clark Construction
ARTICLE 4 OWNER PARTICIPATION
4.2. Owner's Riaht to Notice, Access and Review
(b) The final critical path method ("CPM Schedule")
The Developer will provide the last CPM Schedule provided bv Clark in the
Developer's possession. To the extent the Final CPM Schedule is provided as a
result of the settlement of IitiQation with Clark. the Developer will provide same.
ARTICLE 14. DISCHARGE OF LIENS
14.2 Discharae of Liens
(a) If any mechanic's. laborer's, vendor's, materialman's. or similar statutory
lien (includina tax liens) is filed aaainst the Proiect Site...Developer shall
cause it to be discharaed. However. Developer shall not be reauired to
discharge any such lien if Developer has furnished Owner with, at
Developer's option, a cash deposit. bond. letter of credit from an
Institutional lender or other security.
As to liens filed bv Clark Construction. the Developer aQrees that upon
settlement of litigation with Clark Construction, all liens will be discharged.
F"\cmar\SAL L ICHRISTIN\RDA\rO'lntDlllm Clark EKhlbil C 1 Q.g..QJ.dDC
EXHIBIT "D"
AMENDMENT RE TOWN PARK TO AGREEMENT OF LEASE
AMENDMENT TO AGREEMENT OF LEASE (the "Amendment") is made and entered into as
of the _ day of , 2003 by and between RDP ROYAL PALM HOTEL LIMITED
PARTNERSHIP, a Florida limited partnership ("Owner") and MIAMI BEACH
REDEVELOPMENT AGENCY, a public body corporate and politic ("Tenant").
WITNESSETH
A. Owner and Tenant entered into an Agreement of Lease, dated October 21, 1997, (the
"Lease"), relating to real property more particularly described therein (the "Property").
B. Town Park Hotel Corporation, a Tennessee corporation ("Town Park"), is the Hotel Manager
(defined in the Lease) of the Hotel (defined in the Lease).
C. Town Park and P ADC Royal Palm Holdings, LLC ("Borrower") are parties to that certain
Loan Agreement dated April 30, 2001 (the "Loan Agreement"), whereby Town Park agreed
to convey to Borrower a forty-seven and 66/100 percent (47.66%) Class A limited
partnership interest in Tenant in consideration for Borrower's execution and delivery of that
certain Purchase Money Promissory Note in favor of Town Park (the "Note"), which Note
evidences the loan by Town Park to Borrower (the "Loan").
D. Town Park currently holds a one percent (I %) limited partnership interest in Tenant.
E. Pursuant to Section 4.0 I (f) of the Loan Agreement, Town Park desires to confirm that the
Loan will be treated as an equity interest in Tenant for purposes of the Lease so long as the
Loan is outstanding.
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
I. Recitals. The foregoing recitals are true and correct.
2. EQuitv Interest. Owner and Tenant hereby agree that to the extent that the Lease
distinguishes between Town Park (in its capacity as Hotel Manager) holding or not
holding any equity interest in Tenant, the Loan evidenced and secured by the Note
shall be treated for purposes of the Lease as Town Park holding an equity interest in
Tenant.
3. No Further Modification. Except as amended by this Amendment, the Lease and
all of its terms and provisions shall remain in full force and effect. In the event of
any conflict between the provisions of this Amendment and any provision of the
Lease, the provisions of this Amendment shall control. All capitalized terms herein
shall have the same meanings as they have in the Lease, unless otherwise defined
herein.
[Signature page follows.]
IN WITNESS WHEREOF, this Amendment has been duly executed by the parties
hereto.
WITNESSES:
Print Name
Print Name
WITNESSES:
Print Name
Print Name
"OWNER":
MIAMI
AGENCY
BEACH
REDEVELOPMENT
By:
Print Name:
Title:
"TENANT":
RDP ROYAL PALM HOTEL LIMITED
PARTNERSHIP, a Florida limited partnership
By: PADC Hospitality Corporation I, a
Florida corporation, as general partner
By:
Print Name:
Title:
EXHIBIT "E"
RECOGNIZED MORTGAGE CONSENT LETTER
UNION PLANTERS BANK
2800 Ponce de Leon Blvd.
Coral Gables, Florida 33134
, 2003
Miami Beach Redevelopment Agency
Jorge Gonzalez, Executive Director
1700 Convention Center Drive, Fourth Floor
Miami Beach, Florida 33139
-and-
City of Miami Beach
Jorge Gonzalez, City Manager
1700 Convention Center Drive, Fourth Floor
Miami Beach, Florida 33\39
Re: Letter of Intent to Amend Royal Palm Crowne Plaza Resort Agreements dated
, 2003 ("LOI")
Dear Mr. Gonzalez:
We are in receipt of a copy of the fully executed LOI.
We are the Recognized Mortgagee under the Lease which is the subject of the LOI as
these terms are defined in the LOI and the Lease.
Section 11.10 of the Lease states in part as follows:
Owner agrees not to accept a voluntary surrender, termination or
modification of this Lease at any time while such Recognized Mortgage(s)
shall remain a lien on Tenant's leasehold estate. It is further understood
and agreed that any such Recognized Mortgagee(s) shall not be bound by
any surrender, termination or modification of this Lease unless such
surrender, termination or modification is made with the prior written
consent of such Recognized Mortgagee, and this Lease shall not terminate
by merger or otherwise as long as the lien of the Recognized Mortgage(s)
remains undischarged. ...
Miami Beach Redevelopment Agency
Jorge Gonzalez, Executive Director
-and-
City of Miami Beach
Jorge Gonzalez, City Manager
,2003
Page 2
Accordingly, we hereby consent to the LO! subject to the negotiation and execution of
the Closing Documents (as defined in the LOl) with terms, provisions and conditions mutually
acceptable to RDP, the Agency and the City as well as the obtaining of our approval.
Very truly yours,
Roy D. Tanis
Senior Vice President
ROYAL PAlM 101t103
Pre-Opening Rent Paid
Seck Rent-Prior 10 Hotel Opening 0,
(May 15, 2(02):
Rent Due from Holel Opening Date
(May 15, 2(02):
Sum of Payments thru Veil 25 plus
return&PP,irllny
NOTE: RENTAL SUBJECT TO BOP
AS
Royal Palm S.ttlwn.nt 1/28103.
Owflltf Contribution
Return
NPV eomp81rlson
Annual Rent
Amortization P<<tod of 1st VA'
Unpaid R.nt & 4 y..,.. AddltloMl
R.nt
Annuli Return Ill" of $10,000,000
....AnnUllIR.nll
.,~ 'Exl.llng~_ LO' .~. Proposel ~~ '-'
Annual Rent ....., ....... 'oto' ....., Return Total
- Assume Auo 01 - ~ ~ ~ !HI ~ ~ 2e.seD.()3
$ 128,333.38 $ 128,333,38 $ 128.333.38 $ 129,333.38 $ 128,333.38 $ 128,333.39
I
$ 749,583.29 $ $ $ $ $
I . 490,000.00 $ 490,000,(1) $ $ 1 $ $
2 $ 490,000.00 $ 490,000.00 $ 220,000.00 $ 220,000.00 2 $ 220,000.00 . 220,000.00
J . 490,000.00 $ 490,000,00 . 220,000.00 . 220,000.00 J $ 220,000.00 . 220,000.00
4 $ 490,000.00 $ 490,000.00 . 220,000.00 . 220,000.00 4 $ 220,000.00 $ 220,000.00
5 . 490,000.00 . 490,000.00 . 269,000.00 $ 269,000.00 5 $ 269,000.00 . 269,000.00
. . 490,000.00 $ 490,000.00 $ 647,000.00 $ 647,000.00 , $ 647,000.00 $ 647,000.00
7 , 490,000.00 $ 490,000.00 $ 647,000.00 $ 647,000.00 7 $ 647,000.00 . 647,000.00
, . 490,000.00 $ 490,000.00 $ 847,000.00 $ 847,000.00 , $ 647,000.00 $ 847,000.00
9 . 490,000.00 $ 490,000.00 $ 647,000.00 $ 847,000.00 9 $ 647,000.00 $ 847,000.00
10 . 490,000.00 $ 490,000,00 $ 847,000.00 $ 647,000.00 10 $ 647,000.00 $ 647.000.00
11 $ 490,000.00 $ 490,000,00 $ 647,000.00 $ 847,000.00 11 $ 647,000.00 $ 847,000.00
12 . 490,000.00 $ 490,000,(1) . 647,000.00 $ 647,000.00 12 $ 647,000,00 $ 847.000.00
13 . 490,000.00 $ 490,000.00 $ 647,000.00 $ 847,000.00 13 $ 647,000.00 $ 847,000.00
14 . 490,000.00 $ 490,000.00 . 847,000.00 $ 647,000.00 14 $ 647,000.00 $ 847,000.00
" . 490,000,00 $ 490,000.00 $ 598,000.00 $ 598,000.00 " $ 596,000.00 . 598.000.00
16 $ 490,000,00 $ 490,000.00 $ 490,000.00 $ 490,000.00 16 $ 490,000.00 $ 490.000.00
17 $ 490,000.00 . 490.000.00 $ 490,000.00 $ 490,000.00 17 $ 490,000.00 $ 490,000.00
16 $ 490,000.00 . 490,000.00 $ 490,000.00 $ 490,000.00 16 $ 490,000.00 $ 490,000.00
to $ 490,000,00 $ 490,000.00 $ 490,000.00 $ 490,000.00 to $ 490,000.00 $ 490,000.00
20 . 490,000,00 . 490,000.00 $ 490,000.00 $ 490,000.00 20 $ 490,000.00 $ 490,000.00
21 $ 490,000,00 $ 490.000.00 $ 490,000.00 $ 490,000.00 21 $ 490,000.00 $ 490,000.00
22 . 490,000,00 . 490,000.00 $ 490,000.00 $ 490,000.00 22 $ 490,000.00 . 490,000.00
23 $ 490,000,00 $ 490,000.00 $ 490,000.00 $ 490,000.00 23 $ 490,000.00 . 490,000.00
24 $ 490,000,00 . 490,000.00 $ 490,000.00 $ 490,000.00 24 $ 490,000.00 $ 490,000.00
26 $ 490,000,00 $ 490,000.00 $ 490.000,00 $ 490,000.00 25 $ 490,000.00 $ 490,000.00
26 $ 18,672,083,33 $ 17,621,666.62 , 1$ 7,621,688.62 $ 7,621,666.62 26 $ 490,000.00 $ 782,186.68 $ 1,252,186.66
NPV $9,683,883,06 $9,143,197.71 $8,n2,639.9O 27 $ 490,000.00 $ 782,186.68 $ 1.252,186.66
I I'It'LICII I RlCt:. Dt:.l-LA I UK INDEX ~ PRoVlllEDlN 1 H : LEASE. 26 $ 490,000,00 $ 782.186,66 $ 1,252,168.86
29 $ 490,000.00 $ 762,168.66 . 1,252,166.66
:to $ 490,000.00 $ 762,166.66 $ 1,252,166.66
31 $ 490,000.00 $ 762,166.66 . 1,252,168.66
32 $ 490,000.00 $ 762,168.68 $ 1,252,166.66
JJ $ 490,000.00 $ 762,166.66 . 1.252.166.66
J4 $ 490,000.00 $ 762,166.86 . 1,252,166.66
J5 $ 490,000.00 $ 762,168.66 $ 1,252,166,66
36 $ 490,000.00 $ 310,000.00 . 800,000,00
37 $ 490,000.00 $ 310,000.00 . 800.000,00
J6 $ 490.000.00 $ 310,000.00 . 800,000,00
39 $ 490,000.00 $ 310,000.00 $ 800,000,00
40 $ 490,000.00 $ 310,000.00 $ 800,000,00
41 $ 490,000.00 $ 310,000.00 $ 800,000,00
42 $ 490,000.00 . 310,000,00 . 800,000,00
4J $ 490,000.00 $ 310,000,00 $ 800,000,00
44 $ 490,000.00 . 310,000,00 $ 800,000.00
45 $ 490,000.00 $ 310,000,00 $ 800,000,00
46 $ 490,000.00 $ 310,000,00 $ 800.000.00
47 $ 490,000.00 $ 310,000,00 $ 800,000,00
48 $ 490,000.00 $ 310,000,00 $ 800,000.00
$ 10,000,000.00 49 . 490,000.00 $ 310,000.00 $ 800,000.00
." 60 $ 490,000.00 $ 310.000.00 $ 600,000.00
." 51 $ 490,000.00 $ 310,000.00 $ 800,000.00
52 $ 490,000.00 $ 310,000.00 $ 800,000.00
$ -480,000.00 53 $ 490,000.00 . 310,000.00 $ 600,000.00
10 64 $ 490.000,00 . 310,000.00 . 800,000.00
55 $ 490,000,00 . 310,000.00 $ 800,000.00
$ 310000.00 56 $ 490,000,00 $ 310,000.00 $ 600,000.00
57 . 490,000,00 . 310,000.00 $ 600,000.00
,. $ 490,000,00 $ 310,000.00 $ 600,000.00
69 . 490.000,00 $ 310,000.00 $ 800,000.00
60 . 490,000.00 $ 310,000.00 $ 600,000.00
61 $ 490,000.00 $ 310,000.00 $ 800,000.00
" $ 490,000.00 $ 310,000.00 $ 800,000.00
" $ 490,000.00 $ 310,000.00 $ 800,000.00
.. $ 490,000.00 $ 310,000.00 $ 800.000.00
" $ 490,000.00 $ 310,000.00 $ 800,000.00
,. $ 490,000.00 $ 310,000.00 $ 800,000.00
57 $ 490,000.00 . 310,000.00 $ 800,000.00
" $ 490,000.00 . 310,000.00 $ 600.000.00
69 $ 490,000.00 $ 310,000.00 $ 800,000.00
70 $ 490,000.00 $ 310,000.00 $ 800,000.00
71 $ 490,000.00 $ 310,000.00 $ 800,000.00
n $ 490,000.00 $ 310,000.00 $ 800,000.00
" $ 490,000.00 $ 310,000.00 $ 800,000.00
74 $ 490,000.00 $ 310,000.00 $ 800,000.00
76 $ 490,000.00 $ 310,000.00 $ 800,000.00
76 $ 490,000.00 $ 310,000.00 $ 800,000.00
" $ 490,000.00 $ 310,000.00 $ 800,000,00
76 $ 490,000.00 $ 310,000.00 . 800,000,00
79 $ 490.000.00 $ 310,000.00 $ 800,000,00
60 $ 490.000.00 $ 310,000,00 . 800,000.00
61 $ 490,000.00 $ 310,000,00 $ 800,000.00
" $ 490,000.00 $ 310,000,00 $ 800.000.00
" $ 490,000.00 $ 310,000,00 $ 800,000.00
.. . 490,000.00 $ 310,000,00 , 800,000.00
55 $ 490,000.00 $ 310,000.00 $ 800,000.00
sa $ 490,000,00 $ 310,000.00 $ 600.000.00
57 $ 490,000,00 . 310,000.00 $ 800,000.00
" . 490,000,00 $ 310,000.00 $ 800,000.00
" $ 490,000,00 . 310,000.00 $ 800,000.00
90 $ 490,000.00 $ 310,000.00 $ 800,000,00
91 $ 490,000,00 $ 310,000.00 $ 800,000.00
92 $ 490,000.00 $ 310,000.00 $ 800.000.00
OJ $ 490,000.00 $ 310,000.00 $ 800,000.00
94 $ 490,000.00 $ 310,000.00 $ 800,000.00
95 $ 490,000.00 $ 310,000.00 $ 800.000.00
" $ 490,000.00 . 310,000.00 . 800,000.00
97 $ 490,000.00 $ 310,000.00 $ 600,000.00
" $ 490,000.00 $ 310,000,00 $ 800,000.00
99 $ 490,000.00 $ 310,000.00 $ 800,000.00
100 $ 10,000,000.00 $ 2,870,000.00 I S ;~:~~~:~,:
NPV
F:\cmgr\$ALL\CHR1STIN\ROA\RevIHdLease Paymentl ~ebles 99 ye.. doc,JlII