Development & Ground Lease Agreement between CMB & MB Mixed Use Investment, LLC Development & Ground Lease Agreement
between
MB Mixed Use Investment, LLC
and
CITY OF MIAMI BEACH, a
Florida municipal corporation
City Corn
TABLE OF CONTENTS
ARTICLE I 2
VOTER REFERENDUM,EFFECTIVE DATE AND DEFINITIONS 2
Section 1.1. Voter Referendum Requirement 2
Section 1.2. Effective Date 2
Section 1.3. Defined Terms 2
Section 1.4. Exhibits 19
Section 1.5. Interpretation 19
ARTICLE II 19
THE HOTEL PROJECT IMPROVEMENTS ... 19
Section 2.1. Development and Conformity of Plans 19
Section 2.2. Approved Plans 20
Section 2.3. Lessee's Hotel Project Obligations 20
Section 2.4. Payment of Hotel Project Costs 20
Section 2.5. Financing Matters. 21
Section 2.6. No Claim for Value of Lessee Improvements 22
Section 2.7. Schedule of Performance 22
Section 2.8. Construction Obligations 22
Section 2.9. Progress of Construction/City's Representative 24
Section 2.10. Delivery of Plans 25
Section 2.11. Connection of Buildings to Utilities 25
Section 2.12. Permits and Approvals 25
Section 2.13. City and Lessee to Join in Certain Actions 25
Section 2.14. Compliance with Laws 26
Section 2.15. Alterations and Renovations 26
Section 2.16. Art in Public Places 26
ARTICLE III 26
LAND USES AND DEVELOPMENT OBLIGATIONS .....26
Section 3.1. Covenant Regarding Land Uses 26
Section 3.2. Applications for Development Approvals and Development Permits..,.... 26
Section 3.3. Concurrency 26
Section 3.4. Compliance with Local Regulations Regarding Development Permits 27
Section 3.5. Consistency with the City's Comprehensive Plan 28
Section 3.6. Presently Permitted Development 28
Section 3.7. Public Facilities to Serve the Leased Property 28
Section 3.8. Public Reservations,Dedications 28
Section 3.9. Required Development Permits 28
Section 3.10. Responsible Wages and Local Employment 28
Section 3.11. Laws Governing this Lease 28
Section 3.12. Duration of Development Rights 28
Section 3.13. Lessee's Right of Termination 29
ARTICLE IV 29
GENERAL TERMS OF LEASE 29
Section 4.1. Lease of Leased Property to 29
Section 4.2. Restrictive Covenants 33
Section 4.3. Representations 34
Section 4.4. Rent and Other Payments 35
Section 4.5. Covenants for Payment of Public Charges by Lessee. 39
ARTICLEV — .« ............40
ASSIGNMENT — ................40
Section 5.1. Purpose of Restrictions on Transfer 40
Section 5.2. Transfers ». 41
Section 5.3. Permitted Transfers ... 41
Section 5.4. Transfer Requiring City's Approval 43
Section 5.5. Effectiveness of Transfers 43
Section 5.6. Subletting 43
ARTICLE VI 44
MORTGAGE FINANCING;RIGHTS OF MORTGAGEE AND LESSEE 44
Section 6.1. Conditions of Financing and Leasehold Mortgage 44
Section 6.2. No Waiver of Lessee's Obligations or City's Rights 50
ARTICLE VII ». 51
REMEDIES;EVENTS OF DEFAULT .. ....................51
Section 7.1. Default by Lessee 51
Section 7.2. Remedies for Lessee's Default. 54
Section 7.3. Default by the City 56
Section 7.4. Force Majeure and Economic Force Majeure 56
Section 7.5. Remedies Cumulative;Waiver 57
Section 7.6. Right to Cure 57
Section 7.7. Room Block Agreement 57
Section 7.8. Dispute Resolution 58
Section 7.9. Expedited Arbitration of Development Disputes 58
Section 7.10. Disputes Regarding Disapproval of a Proposed Brand or Proposed
Transferee 60
Section 7.11. Plans and Data 61
ARTICLE VIII ». 62
PROTECTION AGAINST MECHANICS'LIENS 62
AND OTHER CLAIMS;INDEMNIFICATION WM... 62
Section 8.1. Lessee's Duty to Keep Project Free of Liens 62
Section 8.2. Contesting Liens 63
Section 8.3. Indemnification 63
Section 8.4. Environmental Matters 64
Section 8.5. Limitation of City's Liability 66
ARTICLEIX ... ..........67
INSURANCE AND RECONSTRUCTION 67
Section 9.1. General Insurance Provisions 67
Section 9.2. Evidence of Insurance 67
Section 9.3. Required Coverages 68
Section 9.4. Premiums and renewals 69
Section 9.5. Adequacy Of Insurance Coverage 69
Section 9.6. City May Procure Insurance if Lessee Fails To Do So 69
Section 9.7. Effect of Loss or Damage 70
Section 9.8. Proof of Loss . 70
Section 9.9. Insurance Proceeds 70
Section 9.10. Reconstruction ..71
Section 9.11. Waiver of Subrogation 71
Section 9.12. Inadequacy of Insurance Proceeds 72
Section 9,13. No City Obligation to Provide Property Insurance 72
Section 9.14. Compliance 72
Section 9.15. Right to Examine 72
Section 9.16. Personal Property 72
ARTICLE X 72
CONDEMNATION 72
Section 10.1. Complete Condemnation 72
Section 10,2. Partial Condemnation 73
Section 10.3. Restoration After Condemnation 73
Section 10.4. Temporary Taking 74
Section 10.5. Determinations 74
Section 10.6. Payment of Fees and Costs 74
ARTICLE XI 74
QUIET ENJOYMENT AND OWNERSHIP OF IMPROVEMENTS..... 74
Section 11.1. Quiet Enjoyment 74
Section 11.2. Waste 74
Section 11.3. Maintenance and Operation of Improvements 74
Section 11.4. Ownership of Improvements During Lease 75
Section 11.5. Surrender of Leased Property 75
ARTICLE XII 75
MAINTENANCE AND REPAIRS 75
Section 12.1. Standards Generally 75
Section 12.2. Utilities 76
Section 12.3. Cleaning 76
Section 12.4. Removal of Trash 76
Section 12.5. Maintenance and Repairs 76
Section 12.6. Excavation of Land 76
Section 12.7. Water and Sewerage System 77
Section 12.8. Industrial Waste Facilities 77
Section 12,9. Inspections 77
Section 12.10. Failure of Lessee to Maintain 77
ARTICLE XIII ... 78
MANAGEMENT OF HOTEL .... 78
Section 13.1. Hotel Standards 78
Section 13.2. Covenant to Continuously Operate Hotel 78
Section 13.3. Hotel Name 79
ARTICLE XIV 79
MISCELLANEOUS PROVISIONS 79
Section 14.1. No Partnership or Joint Venture 79
Section 14.2. Recording, Documentary Stamps 79
Section 14.3. Florida and Local Laws Prevail 80
Section 14.4. No Conflicts of Interest 80
Section 14.5. Notice 80
Section 14.6. Estoppel Certificates 81
Section 14.7. Provisions not Merged with Deed 82
Section 14,8. Titles of Articles and Sections 82
Section 14.9. Counterparts 82
List of Exhibits
EXHIBIT"A"ACCEPTABLE OWNER DEFINITION 86
EXHIBIT"B" HOTEL STANDARDS 91
EXHIBIT"C" BUDGETED IMPROVEMENT COSTS 93
EXHIBIT"D" LEGAL DESCRIPTION OF HOTEL SITE 94
EXHIBIT"E"APPROVED PLANS 96
EXHIBIT"F" RESERVED 112
EXHIBIT"G" FORM OF EASEMENTS 113
EXHIBIT"H" PRESENTLY PERMITTED DEVELOPMENT 129
EXHIBIT"I" PUBLIC FACILITIES 130
EXHIBIT"J" PUBLIC RESERVATIONS AND DEDICATIONS 131
EXHIBIT"K" REQUIRED DEVELOPMENT PERMITS AND VARIANCES 132
EXHIBIT"L" ROOM BLOCK AGREEMENT 133
EXHIBIT"M"OWNERSHIP INTERESTS IN LESSEE 159
EXHIBIT"N" RESERVED 162
EXHIBIT"0"TRANSACTION RENT 163
EXHIBIT"P"RESERVED 164
EXHIBIT"Q" RESERVED 165
EXHIBIT"R"SCHEDULE OF MINIMUM FIXED RENT 166
EXHIBIT"S"MANDATORY HOTEL PROJECT DESIGN ELEMENTS 167
EXHIBIT"T"LESSEE'S ARTICLES OF ORGANIZATION 168
EXHIBIT"U"FILLMORE THEATER PARKING 177
Section 14.10. Successors and Assigns; No Third Party Beneficiaries 82
Section 14.11. Entire Agreement 83
Section 14.12. Amendments 83
Section 14.13. Non-Subordination of City's Interest 83
Section 14.14. City Manager's Delegated Authority. 84
Section 14.15. Holidays 84
Section 14.16. No Brokers 84
Section 14.17. No Liability for Approvals and Inspections 84
Section 14.18. Radon 84
Section 14.19. Lessee Entity 84
Section 14.20. Inflation Adjustments 84
Section 14.21. Standard of Conduct 85
Section 14.22. Waiver of Consequential Damages 85
Section 14.23. Reservation of Rights 85
DEVELOPMENT AND GROUND LEASE AGREEMENT
THIS DEVELOPMENT AND GROUND LEASE AGREEMENT ("Lease") is executed on the 31st day of
July. 2018, by and between the CITY OF MIAMI BEACH, FLORIDA, a municipal corporation (the"City")
and MB MIXED USE INVESTMENT, LLC,a Florida limited liability company(the"Lessee").
RECITALS:
A. The City has a material interest in maximizing the performance of the Miami Beach
Convention Center (as hereinafter defined in Section 1.3) and encouraging convention and tourism
business in the City. To further those goals, the City desires to facilitate development of an adjacent full
service convention center headquarter hotel on real property owned by the City and described more
fully in Exhibit "D" hereto, to be connected to the Convention Center by an enclosed overhead
pedestrian Skybridge(as hereinafter defined in Section 1.3).
B. The City is a Florida municipal corporation with powers and authority conferred under
the Florida Constitution, the Municipal Home Rule Powers Act set forth in Chapter 166 of the Florida
Statutes, and the Miami Beach City Charter and Code of Ordinances (the "City Code"). The City has all
governmental, corporate and proprietary powers to enable it to conduct municipal government,
perform municipal and governmental functions, and render municipal services, including the authority
to adopt, implement and enforce (together with any other required Governmental Approvals)
comprehensive plans, zoning ordinances, redevelopment plans, and other police power and legislative
measures necessary to assure the health,safety and general welfare of the City and its inhabitants.
C. This Lease, among other things, is intended to and shall constitute a development
agreement between the parties pursuant to Sections 163.3220-163.3243, Florida Statutes, the "Florida
Local Government Development Agreement Act" and Section 118-4 of the City's Code.
D. On or about May 17, 2018, the City issued Request for Proposal No. 2018-238-KB, for
the Development of a Convention Hotel Adjacent to the Miami Beach Convention Center ("RFP"). After
a competitive RFP process, and the City having fully considered this Lease at two duly noticed public
hearings in compliance with Section 163.3225 of the Act; having determined that the Hotel Project (as
hereinafter defined in Section 1.3) and this Lease are in compliance with the City's Comprehensive Plan
and Land Development Regulations (as each are hereinafter defined in Section 1.3) as of July 25, 2018;
and having further determined that it is in the City's best interest to address the issues covered by this
Lease in a comprehensive manner, in compliance with all applicable laws, ordinances, plans, rules and
regulations of the City,the City has agreed to enter into this Lease with the Lessee, subject to the terms
and conditions herein.
E. On July 25, 2018, the Mayor and City Commission, by Resolution No. 2018-3 0 425 ,
approved the execution of this Lease.
NOW THEREFORE, for and in consideration of the foregoing, and of the mutual covenants and
agreements contained herein, the parties agree as follows:
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ARTICLE I
VOTER REFERENDUM,EFFECTIVE DATE AND DEFINITIONS
Section 1.1. Voter Referendum Requirement. The parties acknowledge and agree that, pursuant to
Section 1.03(b)(3) of the City Code, this Lease and the obligations herein are subject to and contingent
upon the approval of this Lease by vote of at least sixty percent (60%)of the voters voting thereon in a
City-wide referendum on November 6, 2018 (the "2018 Referendum") or such later date in 2019 as
further described in this Section (each, a "2019 Referendum" and together with the 2018 Referendum,
each, a "Referendum"). In the event that the 2018 Referendum is not successful, or if the ballot
question is removed or election results are invalidated by a court of competent jurisdiction, then the
Lessee may, within 90 days after the date on which it is determined that the 2018 Referendum was not
successful, request that the City Commission consider adopting a resolution calling for a special election
for approval of the Lease in a 2019 Referendum. If (a) the City Commission declines to adopt a
resolution calling for approval of the Lease in a 2019 Referendum or (b) within such ninety (90) day
period, Lessee either fails to so notify the City or notifies the City that it wishes to terminate this Lease,
then in any such event, this Lease shall be deemed null and void and the parties shall have no
obligations or liabilities of any kind or nature whatsoever hereunder. In the event that, following
Lessee's request, the City Commission adopts a resolution calling for a 2019 Referendum and the 2019
Referendum is not successful,or if the ballot question is removed or election results are invalidated by a
court of competent jurisdiction, in each case following the last date on which a 2019 Referendum
occurred,this Lease shall be deemed null and void and the parties shall have no obligations or liabilities
of any kind or nature whatsoever hereunder.
Section 1.2. Effective Date. If a Referendum is successful and all requirements of the City Code and
applicable law are satisfied, this Lease shall be effective upon the City Commission's adoption of a
resolution accepting the certification of the official results of the applicable election with respect to the
applicable Referendum("Effective Date").
Section 1.3. Defined Terms. As used herein the term:
"Acceptable Owner" has the meaning ascribed to it in Exhibit"A".
"Additional Base Rent" has the meaning ascribed to it in Section 4.4(a)(iii).
"Additional Rent" means any and all payments required of Lessee to the City by the terms of this Lease
other than Base Rent.
"Affiliate"means, regarding any Person,any other Person directly or indirectly Controlling, Controlled by
or under common Control with such Person. When used in reference to Lessee,for so long as Lessee(or
any of its Affiliates) holds an interest,directly or indirectly, in Lessee, "Affiliate"shall include any Person
Controlling,Controlled by, or under common Control with Lessee.
"Approval, Approve or Approved" means the written approval or consent of a Party, which unless
otherwise specified herein by reference to "sole discretion" or words of similar effect, shall be
commercially reasonable and made in good faith and with due diligence.
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"Approved Brand" means (a) each of the following national hotel brands, provided that with respect to
any such operator engaged by Lessee after the fifth anniversary of the Opening Date, such operator's
reputation for quality and quality of operation as of the date of engagement is generally known and
recognized by the hotel industry as not having substantially declined, as of the date of engagement, in
comparison to their reputation for quality and quality of operation as of the Effective Date: Marriott
(i.e., the Marriott, Marriott Marquis, Renaissance, Gaylord, Westin, Sheraton or AN Marriott brands),
Omni, Hyatt Regency, La Meridien, Hilton and Intercontinental, (b) from and after the twentieth (20")
anniversary of the Opening Date, any other "Upper Upscale" brand as then rated by Smith Travel
Research and generally recognized in the hospitality industry as an experienced convention center hotel
brand, or (c) any other hotel brand Approved by City pursuant to this Lease. For avoidance of doubt,
from and after the twentieth (20`h) anniversary of the Opening Date, Lessee may elect to operate or
cause the Hotel to be operated as a "non-branded"hotel, provided,that the Hotel must comply with the
Hotel Standards set forth on Exhibit"B",
"Approved Operator" means (a) any Approved Brand or (b)any management company approved by an
Approved Brand to either (i) serve as the Hotel Operator pursuant to a franchise agreement with the
Approved Brand or(ii)operate another Approved Brand hotel.
"Approved Plans" means the renderings and diagrams attached hereto as Exhibit "E" depicting the
Mandatory Hotel Project Design Elements (other than the Skybridge), which renderings and diagrams
the City has Approved as of the Effective Date,as may be modified from time to time in accordance with
the terms of this Lease.
"Approved Skvbridge and Off-Site improvements Plans" means the renderings and diagrams depicting
the Skybridge and Off-Site Improvements to be Approved by the City Manager prior to the Possession
Date, which, following Approval by the City Manager, may be modified from time to time in the same
manner as the Approved Plans in accordance with the terms of this Lease. The Skybridge will have
finishes consistent with the finishes in the connecting point in the Convention Center, or as needed to
comply with the Hotel Operator's generally applicable national brand standards. The repairs to the
Fillmore Theater as part of the Off-Site Improvements will be done consistently with the quality of the
Fillmore Theater prior to the work being done by Lessee in connection with the Hotel Project.
"Arbitrator"shall have the meaning ascribed to it in Section 7.10(a).
"Assignment of Contracts and Agreements" means an assignment from Lessee, as assignor, to the City,
as assignee, assigning in favor of the City, on a non-recourse basis without any warranties or
representations from Lessee, all of Lessee's right, title and interest in and to all contracts and
agreements (other than the Hotel Project General Construction Contract and the Assignment of Plans
and Approvals)executed in connection with the design, construction and equipping of the Hotel Project
prior to the Completion of Construction, including such contracts and agreements with design
professionals, which assignment shall be in form and substance reasonably satisfactory to the City
(together with any necessary consents required in connection with such assignment), which assignment
shall be an absolute assignment from Lessee to the City, provided that for so long as no Event of Default
has occurred and is continuing hereunder, the City shall give Lessee a license of all such contracts and
agreements, with the right to enforce all of the terms thereof, for the duration of the Term; provided,
further that for so long as a First Leasehold Mortgage encumbers the Hotel Project, the City agrees to
permit Lessee to make an assignment of such contracts and agreements to such First Leasehold
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Mortgagee (which First Leasehold Mortgagee shall have priority with respect thereto pursuant to the
non-disturbance, recognition and attornment agreement entered into pursuant to Section 6.1(b)
hereof).
"Assignment of Hotel Project General Construction Contract" means an assignment from Lessee, as
assignor, to the City, as assignee, assigning in favor of the City all of Lessee's right, title and interest in
and to the Hotel Project General Construction Contract, which assignment shall include a duly executed
consent by the Hotel Project General Contractor and shall otherwise be in form and substance
reasonably satisfactory to the City (together with any necessary consents required in connection with
such assignment), which assignment shall be an absolute assignment from Lessee to the City, provided
that for so long as no Event of Default has occurred and is continuing hereunder, the City shall give
Lessee a license of the Hotel Project General Construction Contract, with the right to enforce all of the
terms thereof, for the duration of the Term; provided, further that for so long as a First Leasehold
Mortgage encumbers the Hotel Project, the City agrees to permit Lessee to make an assignment of the
Hotel Project General Construction Contract to such First Leasehold Mortgagee (which First Leasehold
Mortgagee shall have priority with respect thereto pursuant to the non-disturbance, recognition and
attornment agreement entered into pursuant to Section 6.1(b) hereof).
"Assignment of Plans and Approvals" means an assignment from Lessee, as assignor, to the City, as
assignee,assigning in favor of the City all of Lessee's right, title and interest in and to all Approved Plans,
designs, Governmental Approvals and other work product produced by Lessee and any other Person for
use in the development, construction and operation of the Work, which assignment shall include a duly
executed consent by each Person other than the Lessee having an interest in such Approved Plans,
designs,Governmental Approvals and other work product and shall otherwise be in form and substance
reasonably satisfactory to the City (together with any necessary consents required in connection with
such assignment), which assignment shall be an absolute assignment from Lessee to the City, provided
that for so long as no Event of Default has occurred and is continuing hereunder, the City shall give
Lessee a license of all such Approved Plans, designs, Governmental Approvals and other work product
assigned to the City for the duration of the Term; provided, further that for so long as a First Leasehold
Mortgage encumbers the Hotel Project,the City agrees to permit Lessee to make an assignment of such
Approved Plans, designs, Governmental Approvals and other work product to such First Leasehold
Mortgagee (which First Leasehold Mortgagee shall have priority with respect thereto pursuant to the
non-disturbance, recognition and attornment agreement entered into pursuant to Section 6.1(b)
hereof).
"Audited Gross Operating Revenues Schedule" means a schedule prepared in accordance with the
Uniform System and reconciled in accordance with GAAP, and showing all Gross Operating Revenues
and Gross Operating F&B Revenues for a Lease Year. Such Audited Gross Operating Revenues shall be
based on Lessee's audited financial statements for such Lease Year.
"Bankruptcy Code" means Title 11 of the United States Code entitled "Bankruptcy," as amended.
"Base Rent" shall have the meaning ascribed to it in Section 4.4(a).
"Brand Approvals" means the written confirmation from the Initial Hotel Operator approving the design
of the Hotel Project, and, prior to Opening,approving the FF&E to be installed in the Hotel Project.
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"Budgeted Improvement Costs" means the estimated Improvement Costs as of the date hereof, as set
forth in Exhibit"C".
"Business Day" means a day other than a Saturday,a Sunday or a day on which the offices of the City,or
national banks in Miami-Dade County, Florida are closed for business.
"Certificate of Occupancy" means a certificate of occupancy or certificate of completion, as applicable,
for the buildings and structures on the Leased Property,and shall include any such certificate designated
as"Temporary"in nature,provided it allows for occupancy of the Hotel by paying guests.
"City" shall mean the City of Miami Beach, a Florida municipal corporation, having its principal offices at
1700 Convention Center Drive, Miami Beach, Florida 33139. In all respects hereunder,City's obligations
and performance is pursuant to City's position as the owner of the Hotel Site acting in its proprietary
capacity. In the event City exercises its regulatory authority as a governmental body, the exercise of
such regulatory authority and the enforcement of any rules, regulations, laws and ordinances (including
through the exercise of the City's building,fire,code enforcement, police department or otherwise)shall
be deemed to have occurred pursuant to City's regulatory authority as a governmental body and shall
not be attributable in any manner to City as a party to this Lease or in any way be deemed in conflict
with,or a default under,the City's obligations hereunder.
"City Code"has the meaning ascribed to it in the recitals hereto.
"City Commission"shall mean the governing and legislative body of the City.
"City Delays" shall mean the number of days in which the City performs any obligation under Section
2.13 hereof in excess of the number of days set forth for such performance therein.
"City Manager" shall mean the Chief Administrative Officer of the City. The City Manager shall be
construed to include any duly authorized representatives designated in writing with respect to any
specific matter(s) concerning this Lease (exclusive of those authorizations reserved to the City
Commission or regulatory or administrative bodies having jurisdiction over any matter(s) related to this
Lease).
"City's Representative" has the meaning ascribed to it in Section 2.9(b).
"Commence Construction" or "Commencement of Construction" means, with respect to the Hotel
Project, the commencement of bona-fide pouring of the concrete foundation for the Hotel Project,
provided that the pour is completed in the ordinary course.
"Complete Construction" or "Completion of Construction" means the date Lessee has completed the
Hotel Project substantially in accordance with the requirements of the Approved Plans and all conditions
of permits and regulatory agencies to obtain a Certificate of Occupancy have been satisfied, all
applicable Governmental Authorities have issued a Certificate of Occupancy, the Hotel has been
accepted by the Hotel Operator, and the Hotel Project is ready for occupancy, utilization and continuous
commercial operation for the uses and purposes intended by this Lease, without material interference
from incomplete or improperly completed Work, and substantially all of the FF&E required for the
Opening Date has been purchased, delivered to and installed in the Hotel Project to the extent required
by the Hotel Operator.
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"Comprehensive Plan" means the comprehensive plan which the City Commission has adopted and
implemented for the redevelopment and continuing development of the City pursuant to Chapter 163
Part II,of the Florida Statutes.
"Concurrence Requirements"shall have the meaning ascribed to it in Section 3.3.
"Construction Lender" means the Institutional Lender selected by Lessee to provide the Construction
Loan.
"Construction Loan" means the loan or loans to be provided by the Construction Lender(s)to the Lessee
for development and construction of the Hotel Project in an aggregate amount not more than 85% of
the Budgeted Improvement Costs.
"Construction Loan Commitment" means a financing commitment, term sheet or similar agreement by
the Construction Lender that has been executed and delivered by and between Lessee and the
Construction Lender(s) that confirms availability (subject to satisfaction of the terms and conditions
contained therein)of the Construction Loan to fund the construction of the Hotel Project in accordance
with the requirements of this Lease.
"Control," "Controlling" or "Controlled" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, by Governmental Requirements or otherwise, or the power
to elect in excess of fifty percent (50%) of the directors, managers, general partners or other Persons
exercising similar authority with respect to such Person (it being acknowledged that a Person shall not
be deemed to lack Control of another Person even though certain decisions may be subject to "major
decision" consent or approval rights of limited partners, shareholders or members, as applicable). For
avoidance of doubt, if a Person(for purposes of this definition, "Person A")cannot elect in excess of fifty
percent (50%)of the directors, managers,general partners or other Persons exercising similar authority
with respect to a Person (for purposes of this definition, "Person B")without the consent or approval of
another Person or Persons,then Person A shall not be deemed to Control Person B.
"Convention Center" means the Miami Beach Convention Center located at 1901 Convention Center
Drive, Miami Beach,Florida,33139.
"Convention District Fee" has the meaning ascribed to it in Section 4.5(a)(iii).
"Corrective Action Work"has the meaning ascribed to it in Section 8.4(a)(vii).
"CPA" means a national firm of certified public accountants Approved by the City Manager, used by
Lessee for the purpose of certifying the annual reports, its financial condition or for any other purpose
specified herein.
"Credit Enhancement" means a credit enhancement with respect to, or guaranty of, the financing for
the Hotel provided by a Hotel Operator,or an Affiliate thereof.
"Debt Service Coverage Ratio" means the ratio of: (i)Gross Operating Profit for the previous twelve(12)
months; to (ii) the amount of Debt Service Payments actually required to be paid in such twelve (12)
months. For example, if Gross Operating Revenues and Gross Operating F&B Revenues for a particular
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twelve (12) months equal $3,700,000, Project Expenses equal $1,000,000 and Debt Service Payments
actually required to be paid equal $1,800,000, the Debt Service Coverage Ratio for that twelve (12)
months would be 1.50.
"Debt Service Payments" means all principal, interest and other regularly scheduled sums and amounts
paid or payable by Lessee for or during the applicable or pertinent period, in connection with any debt
secured by a Leasehold Mortgage.
"Default Rate" means an interest rate equal to five percent (5%) per annum above the highest annual
prime rate (or base rate) published from time-to-time in The Wall Street Journal under the heading
"Money Rates" or any successor heading as being the rate in effect for corporate loans at large U.S.
money center commercial banks(whether or not such rate has actually been charged by any such bank)
or if such rate is no longer published, then the highest annual rate charged from time-to-time at a large
U.S. money center commercial bank, selected by the City, on short term, unsecured loans to its most
creditworthy large corporate borrowers.
"Development Arbitrator"shall have the meaning ascribed to it in Section 7.9(b).
"Development Dispute" means any dispute between Lessee and City (acting in its proprietary capacity)
arising prior to the Opening Date with respect to (i) whether a modification to the Hotel Project is a
substantial deviation from the Approved Plans or a Prohibited Hotel Project Change requiring City's
Approval pursuant to Section 2.2; (ii) any contention that City has unreasonably failed to Approve
modifications to the Approved Plans in accordance with this Lease; (iii) any contention that City has
unreasonably failed to Approve the proposed Approved Skybridge and Off-Site Improvements Plans or
modifications thereto in accordance with this Lease; (iv) any contention that City has unreasonably
failed to Approve a Hotel Project General Contractor in accordance with Section 2.8(b); (v) any
disagreement as to permitted delays in Outside Dates;or(vi)any disagreement as to permitted delays in
the Schedule of Performance pursuant to Section 2.7.
"Development Order" means any order granting, denying, or granting with conditions an application for
a Development Permit.
"Development Permit"shall have the meaning set forth in Section 163.3221(5),Florida Statutes(2014).
"Economic Force Maieure" means economic or political conditions or events that materially impair
access to debt or equity markets by developers for development of projects in the United States similar
to the Hotel Project or allow a committed debt or equity participant to terminate its debt or equity
commitment,such as a temporary or long term liquidity crisis or major recession.
"Effective Date" has the meaning ascribed to in Section 1.2.
"Environmental Condition" has the meaning ascribed to it in Section 8.4.
"Environmental Claim" has the meaning ascribed to it in Section 8.4.
"Environmental Laws" has the meaning ascribed to it in Section 8.4.
"Environmental Permit" has the meaning ascribed to it in Section 8.4.
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"Environmental Requirements"has the meaning ascribed to it in Section 8.4.
"Equity Commitment" means the commitment of Lessee to contribute an amount in cash to pay
Improvement Costs as may be necessary, at the time of determination, when combined with the Initial
Hotel Operator Financial Commitment, if any, and the proceeds available under the Construction Loan
and Mezzanine Loan, if any, to maintain the Hotel Project In Balance, a portion of which Equity
Commitment shall be funded by the Initial Lessee Estimated Equity Contribution but in no event less
than the Initial Lessee Minimum Equity Contribution.
"Event of Default" has the meaning ascribed to it in Article VII.
"FF&E" means the furniture, fixtures and equipment for the Hotel Project to be procured and
maintained by the Lessee.
"Fillmore Theater" means the performing arts center located at 1700 Washington Avenue, Miami Beach,
Florida, adjacent to and east of the Hotel Project and also known as the "Fillmore Miami Beach at the
Jackie Gleason Theater".
"First Leasehold Mortgage" means a Leasehold Mortgage which is a first lien on Lessee's interest in this
Lease and the leasehold interest created hereby and the Hotel Project.
"First Leasehold Mortgagee" means the Institutional Lender that is a holder of a First Leasehold
Mortgage, which shall be evidenced by, and the City shall be able to rely absolutely on, a title report
current as of the time of any determination and prepared by a generally recognized title insurance
company doing business in Miami-Dade County, Florida, or upon a certificate of Lessee, signed and
verified by a Responsible Officer of Lessee.
"First Rent Year"has the meaning ascribed to it in Section 4.4(a).
"Force Majeure Event" means the following: acts of God; strikes, lockouts or other industrial
disturbances; acts of public enemies, whether actual or threatened; orders of any civil or military
authority; insurrections; riots; acts of terrorism; epidemics; landslides, earthquakes, lightning, fires,
hurricanes, storms, floods, washouts and other natural disasters; inability to procure or a general
shortage of labor, equipment, facilities, materials or supplies in the open market, or failure or
unavailability of transportation generally;or other similar extraordinary causes beyond the commercially
reasonable control of the Party claiming such inability. In no event shall "Force Majeure Event" include
economic hardship or financial inability to perform specific to the Party nor shall it include Economic
Force Majeure.
"Foreign Instrumentality" means a foreign (non-U.S.) government or agency thereof or a Person
Controlled thereby.
'Franchise Agreement" means the hotel franchise agreement, as it may be extended, supplemented,
amended or replaced from time to time, between Lessee and the applicable Approved Brand, which
provides Lessee with the right to use the name or flag of the Hotel (if Lessee does not otherwise have
such rights).
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"GAAP" means generally accepted accounting principles, as in effect from time to time, as promulgated
by the Financial Accounting Standards Board, consistently applied or a system generally recognized in
the United States as having replaced GAAP.
"Gaming Establishment" means any establishment offering or otherwise engaged in gambling or
wagering of any nature or kind.
"Governmental Approvals" means all permits, approvals, certificates of occupancy, notifications,
certifications, registrations, authorizations and other rights and privileges that are required by any
Governmental Authority. Notwithstanding anything to the contrary in this Lease, the Lessee retains its
rights in accordance with applicable Governmental Requirements to challenge or appeal any denial of
Governmental Approvals.
"Governmental Authority" means any federal, state, county, municipal or other governmental
department, entity, authority, commission, board, bureau, court, agency, or any instrumentality of any
of them, with jurisdiction over the Leased Property, the Lessee Improvements, the Work or the Off-Site
Improvements.
"Governmental Requirements" means any law, enactment, statute, code, order, ordinance, rule,
regulation, judgment, decree, writ, injunction, franchise, permit, certificate, license, or other similar
requirement of any Governmental Authority, now existing or hereafter enacted, adopted, promulgated,
entered, or issued, affecting the Leased Property or the construction and operation of the Lessee
Improvements. Notwithstanding anything to the contrary in this Lease, the Lessee retains its right to
challenge Governmental Requirements in accordance with all other applicable Governmental
Requirements, including based on a constitutional objection that a Governmental Requirement violates
Lessee's constitutional rights regarding contracts
"Gross Operating Profit" means the amount calculated by subtracting Project Expenses from the sum of
Gross Operating Revenues and Gross Operating F&B Revenues.
"Gross Operating F&B Revenues" means all revenues and income of any nature derived directly or
indirectly from Hotel food and beverage operations as determined in accordance with the Uniform
System, including revenues and income generated from banquets and catering, lobby bar, the
restaurant club, three-meal a day restaurants and/or food and beverage facilities located on the pool
deck and surrounding areas within the Hotel (whether any food and beverage establishment is operated
by Lessee or a Subtenant, provided that Gross Operating F&B Revenues shall not include any revenues
derived from third-party leased restaurants operated within the ground floor retail areas).
Notwithstanding the foregoing,the following shall not constitute Gross Operating F&B Revenues: (i) any
gratuities or service charges added to a customer's bill and distributed as compensation to the Hotel's
employees; (ii) any credits or refunds made to customers, guests or patrons; and (iii) any sales taxes,
excise taxes, or other similar taxes or charges collected by the Hotel and remitted to tax authorities.
"Gross Operating Revenues" means all revenues and income of any nature derived directly or indirectly
from the Hotel or from the use or operation of the Leased Property, including gross rooms sales
(excluding the value of any redeemed guest loyalty program credits or points), resort fees, online travel
bookings net of any commissions paid to an online travel agency or other similar entity, telephone,
facsimile and/or internet services, in-room video and parking and valet service receipts (whether the
parking or valet services are operated by Lessee or a Subtenant, excluding any revenues derived from
9
third-party leased restaurants operated within the ground floor retail areas), vending machines, gross
receipts, rents (excluding amounts collected by Lessee for payment of operating expenses, taxes or
insurance)or license fees from the operation by Lessee or any Affiliate of Lessee of newsstand, gift shop,
or business center, or from any other sub-lessees, concessionaires, third-parties conducting operations
on the Leased Property or other sources (except as provided in Section 5.6(c) hereof), the fair rental
value of space within the Hotel Project occupied by Lessee or any entity affiliated with or employed by
Lessee for purposes other than managing the Hotel Project (to the extent the occupants of such space
are paying less than the fair market value of such space) and the proceeds of business interruption,
other loss of income, use, occupancy or similar insurance, as determined in accordance with GAAP (to
the extent not inconsistent with the Uniform Systems of Accounts), and the Uniform System of
Accounts, and without any reduction or allowance for uncollectable charges or bad debts.
Notwithstanding the foregoing, the following shall not constitute Gross Operating Revenues: (i) any
gratuities or service charges added to a customer's bill and distributed as compensation to the Hotel's
employees; (ii) any credits or refunds made to customers, guests or patrons; (iii) any sums and credits
received for lost or damaged merchandise; (iv) any sales taxes, excise taxes, or other similar taxes or
charges collected by the Hotel and remitted to tax authorities; (v) any proceeds from the sale or other
disposition of FF&E or capital equipment; (vi) any interest earned with respect to the deposit or
investment of proceeds from operation of the Hotel; (vii) any fire and extended coverage insurance
proceeds (except that proceeds of business interruption or other loss of income insurance shall be
included in Gross Operating Revenues); (viii) any condemnation awards; (ix) Gross Operating F&B
Revenues; (x) any proceeds of sale or financing or refinancing of the Hotel; and (xi) any revenues
received as part of a frequent guest reward or guest loyalty program.
"Hazardous Substance" has the meaning ascribed to it in Section 8.4.
"Hearing" has the meaning set forth in Section 7.9(c).
"Hearing Date" has the meaning set forth in Section 7.9(c).
"Hotel" means the hotel complex to be developed and constructed on the Hotel Site substantially in
accordance with the Approved Plans, which will contain approximately 800 rooms, separately keyed
sleeping rooms capable of individual rental on a day-to-day overnight basis to hotel patrons and guests.
For the purpose of determining the maximum number of separately keyed sleeping rooms contained
within the Hotel at any time during the Term, each such room which is capable of being separately
keyed will be deemed to be separately keyed, without regard to the actual use thereof.
"Hotel Operator" means and includes any Approved Operator engaged by Lessee to be responsible for
overseeing the day- to-day management of the Hotel Project (or, if at any time there is no such
operator, Lessee as operator of the Hotel Project).
"Hotel Project" means Lessee's leasehold created by this Lease and the development, design,
construction and purchase of the Lessee Improvements and their subsequent use;the completion of the
Work substantially in accordance with the Approved Plans, including (1) the Hotel and all associated
infrastructure (including on-site parking and all supporting Hotel facilities and amenities), (2) the
Skybridge and all associated infrastructure, (3) the installation of FF&E and other improvements and
appurtenances of every kind and description (including all landscaping, planting and other
improvements of any type) now located or hereafter erected, constructed or placed upon the Leased
10
Property; and (4) any and all alterations, renewals and replacements thereof, additions thereto and
substitutions therefor.
"Hotel Project General Construction Contract" means the construction contract between Lessee and the
Hotel Project General Contractor for the construction of the Hotel Project in accordance with the
Approved Plans, within the contract time specified for completion of the Work, for a guaranteed
maximum price that will not exceed the sum allocated for construction of the Work in the Budgeted
Improvement Costs, and that includes provisions requiring a Performance Bond and Payment Bond and
all other terms or conditions required under this Lease.
"Hotel Project General Contractor" means the duly licensed general contractor(s)engaged by Lessee for
the construction of the Hotel Project and completion of the Work.
"Hotel Site" means the parcel of real property described in Exhibit"D"
"Hotel Standards" means the standards set forth in Exhibit"B".
"Improvement Costs" means the actual,verifiable costs and expenses paid to third parties, not Affiliates
of Lessee (unless such costs paid to Affiliates of Lessee are at fair market value and with notice to the
City), in the design, permitting,development,construction and equipping of the Hotel Project;
"In Balance" means, at any time in question, that the sum of (a) the then unfunded amount of the
Construction Loan available to Lessee for payment of costs of labor and materials to achieve Completion
of Construction of the Hotel Project, plus (b) the then unfunded amount of the Mezzanine Loan, if any,
available to Lessee for the payment of costs of labor and materials to achieve Completion of
Construction of the Hotel Project, plus (c) the then remaining balance to be funded under the Equity
Commitment, plus (d) the then remaining balance to be funded under the Initial Hotel Operator
Financial Commitment, if any, plus (e) any additional cash amounts deposited with the City or any
Leasehold Mortgagee or any Mezzanine Lender by Lessee in order to fund the difference, if any,
between the sum of(a), (b), (c) and (d)above and the then remaining Improvement Costs is adequate to
pay all of the then remaining Improvements Costs that are reasonably likely to be incurred through
Complete Construction of the Hotel Project.
"Initial Hotel Operator" means the initial Hotel Operator engaged by Lessee.
"Initial Hotel Operator Financial Commitment" means the commitment, if any, of the Initial Hotel
Operator to fund, in the aggregate, cash, to be used to pay Budgeted Improvement Costs, in such
amount as may be necessary when combined with the Equity Commitment and the proceeds available
under the Construction Loan and Mezzanine Loan, if any, to maintain the Hotel Project In Balance.
"Initial Lessee" means MB Mixed Use Investment, LLC, a Florida limited liability company.
"Initial Lessee Estimated Equity Contribution" means an amount up to$20,000,000 but not less than the
Initial Lessee Minimum Equity Contribution to be funded in cash by Initial Lessee or one or more of its
Affiliates to pay Improvement Costs.
"Initial Lessee Minimum Equity Contribution" means $10,000,000.00 to be funded in cash by Initial
Lessee or one or more of its Affiliates to pay Improvement Costs.
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"Initial Owner" has the meaning ascribed to it in Section 5.2.
"Institutional Lender" means, any of the following entities that as of the date of closing of the financing
(i) is not a Prohibited Person, (ii)with respect to those entities in clause(g), (h), (i) and (j) below is not a
Foreign Instrumentality (other than any of the member countries of the European Union or the Gulf
Cooperation Council, each as existing as of the Effective Date, United Kingdom, Canada, Mexico,
countries located in South America (excluding Venezuela), Japan, South Korea, Singapore and Australia,
and Persons Controlled by any of the foregoing countries) and (iii) (A)with respect to those entities in
clauses (a) through (e) and (i) below providing loans to be secured by Leasehold Mortgages, has a net
worth in excess of One Hundred Million Dollars ($100,000,000) (as adjusted by inflation over the Term
pursuant to Section 14.20 hereof), (B) with respect to those entities in clauses (a) through (e) and (i)
below providing Mezzanine Loans, has a net worth in excess of Fifty Million Dollars ($50,000,000) (as
adjusted by inflation over the Term pursuant to Section 14.20 hereof) and (C) with respect to those
entities in clauses (h) and (j) below has total assets (in name or under management) in excess of
$500,000,000(as adjusted by inflation over the Term pursuant to Section 14.20 hereof)for(h)and(j):
(a) any federal or state chartered commercial bank or national bank or any of its
subsidiaries;
(b) any federal or state chartered savings and loan association, savings bank or trust
company;
(c) any pension, retirement or welfare trust or fund, whose loans on real estate are
regulated by state or federal laws;
(d) any public limited partnerships,public real estate investment trust or other public entity
investing in commercial mortgage loans whose loans on real estate are regulated by state or federal
laws;
(e) any licensed life insurance company in the business of making commercial mortgage
loans or a subsidiary or affiliate of any such institution, in each case, whose loans on real estate are
regulated by state or federal laws;
(f) any agent, designee, or nominee of an Institutional Lender that is an Affiliate (solely as
described in clause (a)of the definition thereof)of any Institutional Lender or any other Person that is a
subsidiary or an Affiliate (solely as described in clause (a) of the definition thereof) of an Institutional
Lender;
(g) a governmental agency;
(h) an investment bank;
(i) a securitization trust that is rated by S&P, Fitch or Moody's (or any like-extant national
rating agency);
(j) a hedge fund,opportunity fund, private debt fund,or like entity;and
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(k) any other source of funding, public or private, which is otherwise Approved by the City
Manager.
In the event of a syndicated loan, if fifty-one percent (51%) or more of the syndicate of lenders are
Institutional Lenders, then the syndicated loan shall be deemed to be made by an Institutional Lender.
City Manager's failure to notify Lessee of any disapproval of any proposed lender under(k)above within
twenty (20) days from its receipt of a notice by Lessee shall be deemed to constitute the City Manager's
conclusive Approval of any such proposed lender.
"Insurance Trustee"has the meaning ascribed to it in Section 9.9(a)
"Land Development Regulations" shall have the meaning set forth in Section 163.3221(8), Florida
Statutes and shall also include the definition of "land development regulations" in Section 114-1 of the
City Code.
"Lease" means this Development and Ground Lease Agreement, and all exhibits annexed hereto and
made a part hereof,as the same may be modified or amended from time to time.
"Leased Projr'rty" means the Hotel Site.
"Leasehold Mortgage" means a mortgage, including an assignment of the rents, issues and profits from
the Hotel Project or other security instrument in favor of a Leasehold Mortgagee, which constitutes a
lien on Lessee's leasehold interest created by this Lease during the Term.
"Leasehold Mortgagee" means an Institutional Lender that is the owner and holder of a Leasehold
Mortgage.
"Lease Year" means a year, other than the first and last year of the Term, consisting of twelve (12)
consecutive calendar months. The first Lease Year during the term of this Lease shall commence on the
Rent Commencement Date and end on December 31' of the year in which the Rent Commencement
Date occurs. The second and following Lease Years shall commence on the 1S1 day of January each
calendar year and end on December 31'`of such year.
"LEED Status" means a certification by the U.S. Green Building Counsel's ("USGBC") Leadership in Energy
and Environmental Design ("LEED") that the Hotel Project has satisfied all of the requirements
associated with the then current USGBC Gold LEED certification.
"Lessee" means MB Mixed Use Investment, LLC, a Florida limited liability company, and the successors,
assigns or transferees thereof expressly Approved or permitted by the terms and provisions of this
Lease. A certified copy of Lessee's articles of organization is on file with the City as set forth on Exhibit
"Lessee Improvements" means any and all permanent buildings, structures and machinery, equipment
and fixtures, which are existing and may from time to time and at any time during the Term be erected
or located on the Leased Property, including the Hotel and associated infrastructure and the Skybridge
and associated infrastructure.
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"Liquid Assets" means (a) cash on hand or on deposit in any federal or state chartered commercial bank
or national bank or any of its subsidiaries, (b) readily marketable securities, (c) readily marketable
commercial paper rated A-1 by Standard & Poor's Corporation (or a similar rating by any similar
organization that rates commercial paper), (d) certificates of deposit issued by commercial banks
operating in the United States with maturities of one year or less, (e) money market mutual funds, and
(f)the uncommitted amount of any available line(s)of credit.
"Management Agreement" means the hotel operating or management agreement, as it may be
extended, supplemented, amended or replaced from time to time, between Lessee and the Hotel
Operator and which specifies the terms and conditions applicable to the day-to-day management of the
Hotel, including the obligation of the Hotel Operator to comply with the Room Block Agreement.
"Mandatory Hotel Protect Design Elements" means the design features, components or other elements
of the Hotel Project to be developed by the Lessee as further described on Exhibit"S".
"MBCC: Protect" means the Miami Beach Convention Center Renovation and Expansion Project,
consisting of the renovation of the Convention Center, expansion of ballroom and auxiliary spaces,
parking levels above portions of the Convention Center, exterior landscaping and a 6 acre public park,
the renovation of Convention Center Drive, including relocation of utilities, and other improvements to
the Convention Center and surrounding areas.
"MBCC Standard of Operation" means the average standard of physical and operational quality for the
MBCC Project facilities and associated infrastructure consistent with the principal convention centers
operated in Orlando, Atlanta, New Orleans, Dallas, Houston, Boston, Chicago, San Francisco, San Diego
and Los Angeles, as of the Effective Date.
"Mezzanine Borrower" means the borrower under any Mezzanine Loan.
"Mezzanine Lender" means (a) the Institutional Lender selected by Lessee to provide the Mezzanine
Loan or (b) a Hotel Operator, or an Affiliate thereof, to the extent it is providing a Mezzanine Loan or
Credit Enhancement and is receiving a pledge of the equity interests in Lessee.
"Mezzanine Loan" means a loan to be made by the Mezzanine Lender to the Mezzanine Borrower to
provide financing for the Hotel Project, subordinate to the First Leasehold Mortgagee, which may be
secured by a lien on the ownership interests in Lessee.
"Mezzanine Loan Commitment" means a mezzanine financing commitment, term sheet or similar
agreement by the Mezzanine Lender that has been executed and delivered by and between Lessee
and/or Mezzanine Borrower and the Mezzanine Lender that confirms the availability (subject to
satisfaction of the terms and conditions contained therein)of the Mezzanine Loan.
"Minimum Fixed Rein" has the meaning ascribed to it in Section 4.4(a)(i).
"MOT Plan" has the meaning ascribed to it in Section 4.1(b)(xv).
"Off-Site Improvements" means any and all improvements not located on the Leased Property shown on
the Approved Plans and in accordance with the Governmental Approvals, including demolition of any
portion of the Fillmore Theater located on the Leased Property, enclosure of any remaining portion of
14
the Fillmore Theater located outside the Leased Property, and paving and striping of up to twenty-five
surface parking spaces for Fillmore Theater personnel as depicted in Exhibit "U".
"Opening Date" means the date on which the Hotel first opens for business to the general public.
"Outside Date" means either of the Outside Opening Date or Outside Possession Date.
"Outside Opening Date" means that date that is sixty(60)months after the Possession Date, the date by
which the Opening Date must have occurred, as such date shall be reasonably extended by (i) a Force
Majeure Event or Economic Force Majeure in accordance with this Lease; (ii) City Delays; and/or (iii)
Unanticipated Circumstances, if applicable.
"Outside Possession Date" means that date that is thirty-six (36) months after the Effective Date, by
which date the Possession Conditions must be satisfied, as such date shall be reasonably extended for(i)
a Force Majeure Event or Economic Force Majeure in accordance with this Lease; (ii) City Delays; and/or
(iii) Unanticipated Circumstances, if applicable.
"Parties" means City and Lessee, and "Party" is a reference to either City or Lessee, as the context may
indicate or require.
"Performance Bond and Payment Bond"means a performance bond and a payment bond with regard to
the Hotel Project General Construction Contract in the full amount of the guaranteed maximum price
thereof,with a good and sufficient surety, in compliance with all applicable Governmental Requirements
and in form and content Approved by the City Manager, or such other security as is reasonably
acceptable to the City Manager, after consultation with the City Attorney.
"Permitted Transfers" has the meaning ascribed to it in Section 5.3
"Person" means any corporation, unincorporated association or business, limited liability company;
business trust, real estate investment trust, common law trust, or other trust, general partnership,
limited partnership, limited liability limited partnership, limited liability partnership, joint venture, or
two or more persons having a joint or common economic interest, nominee, or other entity, or any
individual(or estate of such individual); and shall include any Governmental Authority.
'Prohibited Person" shall mean any of the following Persons: (A) any Person (whose operations are
directed or controlled by an individual) who has been convicted of or has pleaded guilty in a criminal
proceeding for a felony or who is an on-going target of a grand jury investigation convened pursuant to
United States laws concerning organized crime; or (B) any Person organized in or controlled from a
country, the effects of the activities with respect to which are regulated or controlled pursuant to the
following United States laws and the regulations or executive orders promulgated thereunder to the
extent the same are then effective: (x) the Trading with the Enemy Act of 1917, 50 U.S.C. App. §1, et
seq., as amended (which countries are, as of the date hereof, North Korea, Cuba and Venezuela); (y)the
International Emergency Economic Powers Act of 1976, 50 U.S.C. §1701, et seq., as amended; and (z)
the Anti-Terrorism and Arms Export Amendments Act of 1989, codified at Section 6(j) of the Export
Administration Act of 1979, 50 U.S.C. App. § 2405(j), as amended (which countries are, as of the date
hereof, Iran, Sudan and Syria); or (C) any Person who has engaged in any dealings or transactions (i) in
contravention of the applicable money laundering laws or regulations or conventions or (ii) in
contravention of Executive Order No. 13224 dated September 24, 2001 issued by the President of the
13
United States (Executive Order Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit, or Support Terrorism), as may be amended or supplemented from time-
to-time or any published terrorist or watch list that may exist from time to time; or(D) any Person who
appears on or conducts any business or engages in any transaction with any person appearing on the list
maintained by the U.S. Treasury Department's Office of Foreign Assets Control list located at 31 C.F.R.,
Chapter V, Appendix A or is a person described in Section 1 of the Anti-Terrorism Order; or (E) any
Affiliate of any of the Persons described in paragraphs (A) through (D)above
"Possession Conditions" has the meaning ascribed to it in Section 4.1(h).
"Possession Date" has the meaning ascribed to it in Section 4.1(b).
"Prohibited Hotel Project Changes" means
(a) after the Effective Date and prior to the Possession Date, any changes to the Approved
Plans that result in any of the following except to the extent previously Approved in a writing executed
by the City Manager and expressly providing that the City Manager is thereby Approving a Prohibited
Hotel Project Change (which Approval may be granted or withheld by City Manager in his sole and
absolute discretion),or which are required because of Governmental Requirements: (i)a failure of the
Hotel Project to contain any of the Mandatory Hotel Project Design Elements,or a material change to
the design thereof; (ii)failure to obtain any Brand Approval; (iii) a material change in the massing of the
development, including the orientation and general configuration of the tower structure or the size and
configuration of the tower structure and podium design reflected in the Approved Plans, or(iv)any
change that materially affects the facade of the Hotel Project Approved by the City, or otherwise
materially affects the exterior appearance of the Hotel Project or materially impairs the ability of the
Hotel Project to function as a convention center hotel, or
(b) after the Possession Date and prior to the Opening Date, any changes to the Approved
Plans or any actual construction that results in any of the following, except to the extent previously
Approved in a writing executed by the City Manager and expressly providing that the City Manager is
thereby Approving a Prohibited Hotel Project Change (which Approval may be granted or withheld by
City Manager in his sole and absolute discretion), or which are required because of Governmental
Requirements: (i) a failure of the Hotel Project to contain any of the Mandatory Hotel Project Design
Elements, or a material change to the design thereof; (ii) failure to obtain any Brand Approval; (iii) a
material change in the design or actual scope, appearance or quality of any of the Mandatory Hotel
Project Design Elements; (iv) a material change in the massing of the development, including the
orientation and general configuration of the tower structure or the size and configuration of the tower
structure and podium design reflected in the Approved Plans, or (v) any change that materially affects
the facade of the Hotel Project Approved by the City, or otherwise materially affects the exterior
appearance of the Hotel Project or materially impairs the ability of the Hotel Project to function as a
convention center hotel.
"Project Expenses" means:
(a) operating expenses of the Hotel Project incurred to Persons other than Affiliates of the
Lessee (unless such expenses paid to Affiliates of Lessee are at a fair market rate and with notice to the
City);
16
(b) wages and benefits paid and payable to te Hotel Operator's full time or part-time on-
site or off-site management employees and full or part-time non-management employees;and
(c) management fees,at prevailing market rates.
"Proposed Transferee"has the meaning ascribed to it in Section 7.10(b).
"Public Charges" has the meaning ascribed to it in Section4.5(a).
"Reconstruction Work"has the meaning ascribed to it in Section 9.9(b).
"Rent" means all payments required pursuant to Section 4.4 and any other payments characterized as
rent hereunder, including Base Rent,Additional Rent andTransaction Rent.
"Rent Commencement Date"has the meaning ascribed to it in Section 4.4(a).
"Rent Year"has the meaning ascribed to it in Section 4.4(a).
"Responsible Officer" means any executive officer or manager of Lessee responsible for the
administration of the obligations of Lessee in respect of tiis lease.
"Room Block Agreement" means the room block agreement, in the form of Exhibit"L"attached hereto,
to be executed by and between the City and the lessee,and pursuant to which Lessee agrees to provide
the services therein described to City In exchange for the agreements of City hereunder.
"Schedule of Performance"has the meaning ascribed to i in Section 4.1(b)(viii).
"Second Rent Year"has the meaning ascribed to it in Section 4.4(a).
"Section,""Subsection,""Paragraph,""Subparagraph," "Cause,"or"Subelause"followed by a number or
letter means the section, subsection, paragraph, subparagraph, clause or subclause of this Lease so
designated.
"Single Purpose Entity" means:
(a) an entity or organization that does nst and cannot by virtue of Its organizational
documents:
(i) engage in any business other tian owning, developing, leasing and operating
the Hotel Project;or
(ii) acquire or own material assets other than the Hotel Project and incidental
personal property;and that
(b) does not hold itself out to the public as anything but a legal entity or organization
separate from any other Person;and
(c) conducts business solely in its name or under a duly registered fictitious name.
17
"Skvbridge" means the overhead, enclosed, climate-controlled pedestrian walkway to be constructed,
operated and maintained by Lessee in accordance herewith connecting the Hotel Project to the
Convention Center and included in the Hotel Site described on Exhibit"D".
"Sublease" means any lease, sublease, license or other agreement by which Lessee demises, leases, or
licenses the use and occupancy by another Person of one or more specific retail, parking/valet, spa or
restaurant spaces,or other defined portion of the Hotel Project.
"Subtenant"means any Person using and occupying or intending to use and occupy one or more specific
spaces or other defined portion of the Hotel Project pursuant to a Sublease.
"Target Dates" means the following dates that have been targeted by Lessee to achieve the following
activities or events:
(a) The "Target Possession Date": the date targeted for satisfaction of the Possession
Conditions, which is eighteen (18) months after the Effective Date, as such date shall be reasonably
extended for (i) a Force Majeure Event or Economic Force Majeure in accordance with this Lease; (ii)
City Delays;and/or(iii)Unanticipated Circumstances,if applicable.
(b) The "Target Completion Date": the date targeted for completion of construction of the
Hotel Project, which date is forty-eight (48) months after the Possession Date, as such date shall be
reasonably extended for (i) a Force Majeure Event or Economic Force Majeure in accordance with this
Lease;(ii)City Delays;and/or(iii)Unanticipated Circumstances,if applicable.
"Term" has the meaning ascribed to it in Section 4.1(a).
"Third Rent year" has the meaning ascribed to it in Section 4.4(a).
"Transaction Rent"shall have the meaning ascribed to it in Section 4.4(b).
"Transfer" means any sale, assignment or conveyance (including any sublease of the entire Leased
Property) or any other transaction or series of transactions in the nature of a sale, assignment or
conveyance(including any sublease of the entire Leased Property)of:
(a) the Hotel Project or any part thereof;
(b) any legal or beneficial interest in the Hotel Project,or any part thereof;
(c) any direct or indirect legal or beneficial interest in Lessee (including the syndication of
tax benefits);or
any series of such Transfers that have the cumulative effect of a sale, transfer or conveyance (including
any sublease of the entire Leased Property)of any of the foregoing(a), (b),or(c).
"Unanticipated Circumstances" means (a) concealed or subsurface conditions not reasonably
anticipated by Lessee, including any Environmental Condition and any geothermal system located within
or proximate to the Hotel Site, the areas in which the Off-Site Improvements are to be constructed or
the areas in which the Skybridge is to be constructed, or under or within any existing improvements
located on or within any portion of any of the foregoing, (b) off-site improvements required by any
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Governmental Authority other than those depicted on the renderings and diagrams attached hereto as
Exhibit "E", (c) any relocation of underground utilities located on the Hotel Site and (d) any appeals of
Governmental Approvals to a court of competent jurisdiction.
"Uniform System" means the Uniform System of Accounts for the Lodging Industry, 11th Revised
Edition, 2014,as published by the Educational Institute of the American Hotel and Motel Association, as
revised from time-to-time.
"Work" means the design, permitting, development and construction of the Lessee Improvements in
accordance with the Approved Plans, including all design, architectural, engineering and other
professional services, demolition and construction services, supervision, administration and
coordination services and the provision of all drawings, specifications, labor, materials, equipment,
supplies, tools, machinery, utilities, fabrication, transportation, storage, insurance, bonds, permits and
conditions thereof, zoning approvals, changes required to comply with building codes and
Governmental Approvals, licenses, tests, inspections, surveys, studies, and other items, work and
services that are necessary or appropriate for the demolition of existing structures and other
preparatory or remediation work on the Hotel Site; utility relocations, installations, hook-ups or other
infrastructure as may be required to make the Leased Property suitable for the use of the Hotel Project;
total design, construction, installation, furnishing, equipping, and functioning of the Lessee
Improvements, together with all additional, collateral and incidental items, work and services required
for completion of the Lessee Improvements(including all such items,work and services as are necessary
to provide fully functional and functioning Lessee Improvements).The Work also includes completion of
all Off-Site Improvements.
Section 1.4. Exhibits. If any exhibit to this Lease conflicts with the body of this Lease, the body of
this Lease shall govern.
Section 1.5. Interpretation. All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural, as appropriate. The words "herein," "hereof,"
"hereunder," "hereinafter," and words of similar import refer to this Lease as a whole and not to any
particular Article, Section or Subsection hereof. The terms "include" and "including" and words of
similar import shall each be construed as if followed by the phrase "without limitation". This Lease will
be interpreted without interpreting any provision in favor of or against either party by reason of the
drafting of such provision.
ARTICLE II
THE HOTEL PROJECT IMPROVEMENTS
Section 2.1. Development and Conformity of Plans.
(a) Lessee shall be responsible for preparing all plans and specifications for constructing the
Hotel Project.Such plans and specifications shall conform in all material respects to the Approved Plans;
(b) Notwithstanding any other provision or term of this Lease or any Exhibit hereto, the
Approved Plans and all work by Lessee regarding the Hotel Project shall conform to the City Code, the
Florida Building Code and all other Governmental Requirements and, to the extent consistent with the
above,the provisions of this Lease.
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Section 2.2. Approved Plans. The City shall have the right to Approve, in its sole discretion, (x) any
substantial deviation of the Hotel Project from the Approved Plans and (y) any Prohibited Hotel Project
Changes. Notwithstanding any Approval provided pursuant to this Section 2.2, Lessee shall be solely
responsible for obtaining all required final, non-appealable Governmental Approvals as more fully set
forth in Article IV of this Lease, Any Approval of the Approved Plans or any component thereof by the
City shall be for its own benefit in its proprietary capacity as the owner of the Leased Property and shall
not be deemed to mean, and the City, in such proprietary capacity, makes no representation, that such
Approved Plans comply with all applicable Governmental Approvals and Governmental Requirements.
(a) Lessee shall submit to the City Manager, prior to Commencement of Construction, any
proposed modifications to the Approved Plans for the City Manager's determination of whether such
modifications include any substantial deviation of the Hotel Project from the Approved Plans or
Prohibited Hotel Project Changes. Modifications to the Approved Plans shall be indicated by
"ballooning," highlighting, blacklining or describing such modifications in writing in reasonable detail in
an accompanying memorandum. The City shall not be responsible for, and shall not be deemed to have
Approved,any modification to the Approved Plans that is not indicated as required by this Section.
(b) Within twenty-one (21) days of receipt of any proposed modifications to the Approved
Plans, the City Manager shall notify Lessee, in writing, that he approves such modifications, or the basis
for any disapproval of any substantial deviation of the Hotel Project from the Approved Plans or
Prohibited Hotel Project Change; provided, however, that the City shall not disapprove any material
modification necessitated by Governmental Requirements. City's failure to notify Lessee of any
disapproval within such twenty-one (21) day period shall be deemed to constitute the City's conclusive
Approval of the proposed modifications to the Approved Plans. The Approved Plans, as amended by
such Approved modifications, shall thereafter be the Approved Plans referred to herein.
(c) If the City disapproves of any modification pursuant to this Section 2.2, then Lessee
shall, at its election, either (x) submit City's disapproval to expedited arbitration pursuant to Section 7.9
of this Lease, or (y) within thirty (30) days after receiving the City's disapproval notice, submit revised
proposed modifications to the Approved Plans for City's review and Approval as provided in this Section
2.2, provided that the time period for approval or disapproval shall be fifteen (15) days.
(d) At any time during the design development phase of the Hotel Project, Lessee may (but
shall not be required to) submit to the City Manager any proposed modifications to the Approved Plans
for City's review and Approval pursuant to this Section 2.2, so as to mitigate or avoid any potential
delays to the Schedule of Performance as a result of disputes regarding the final proposed Approved
Plans.
Section 2.3. Lessee's Hotel Project Obligations. Subject to the terms hereof, Lessee is obligated to
and shall (i) design, permit, and construct, in a good and workmanlike manner, and at its sole cost and
expense,the Hotel Project in all material respects in accordance with and subject to all of the terms and
provisions of this Lease and to Complete Construction thereof by the Outside Opening Date, (ii) obtain a
certificate of the LEED Status in accordance with Section 133-6 of the City Code and provide reasonable
evidence of such certification to City within a reasonable period following the Opening Date, and (iii)
operate, maintain, repair and replace, at its sole cost and expense, the Hotel Project in accordance with
and subject to all of the terms and provisions of this Lease.
Section 2.4. Payment of Hotel Protect Costs.
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(a) As between Lessee and the City, the Lessee shall bear and be solely responsible for all
costs and expenses related to the design, permitting and construction of the Work, the Hotel Project
and its subsequent use, including the following:
(i) Lessee's land use approvals, development fees, and permit fees for the design,
construction, and subsequent use of the Hotel Project;
(ii) lessee's design and construction of the Hotel Project;
(iii) Lessee's financing, construction bonding and insurance, building permits, utility
installations and/or hook-ups or other infrastructure, as may be required to make the Leased Property
suitable for the use of the Hotel Project;
(iv) Lessee's consultants, accountants, financing charges, legal fees, furnishings,
equipment, and other personal property of the Lessee;and
(v) all other Lessee direct or indirect costs associated with the approvals, design,
construction,and financing of the Lessee Improvements, and their subsequent use.
(b) Lessee acknowledges that the City shall have no maintenance responsibility for any of
the Leased Property and Lessee Improvements, and utilities and infrastructure to be constructed by
Lessee.
(c} Lessee shall be exclusively responsible for all matters relating to underground utility
lines and facilities, including locating, relocating and/or removal, as necessary. Under no circumstances
shall City be responsible for paying the cost of, or otherwise reimbursing Lessee for, relocation, removal,
or payment of charges to utility companies for, any utility lines or facilities lying on, under, or around the
Leased Property. City shall provide reasonable cooperation and assistance to lessee in the resolution of
issues associated with existing underground utilities. Lessee shall not remove, disturb, or relocate any
existing utilities on the Leased Property without the City Manager's prior written Approval.
Section 2,5_ Financing Matters.
(a) Lessee shall pay for all improvement Costs from funds required to be provided under
the Equity Commitment, the Initial Hotel Operator Financial Commitment, if any, the Construction Loan
and the Mezzanine Loan, if any; provided that if the proceeds of the foregoing sources are not available
or are inadequate for any reason, Lessee shall be responsible to provide funds from such other sources
as Lessee may identify to pay all costs and expenses necessary to Complete Construction of the Hotel
Project and cause the Opening Date to occur in accordance herewith.
(b) Lessee shall be solely responsible for obtaining the Construction Loan and the
Mezzanine Loan, if any, for all completion guaranties required in connection with the Construction Loan
and the Mezzanine Loan, if any, and for providing all collateral and other security, and otherwise
satisfying all conditions thereof and covenants, agreements and obligations of the borrower thereunder.
In no event shall City have any responsibility, obligation or liability with respect to the Construction Loan
or the Mezzanine Loan, if any, and Lessee shall reimburse City for all of City's third party costs and
expenses (including attorneys' fees) reasonably incurred in connection with any requirements or
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requests of the Construction Lender in connection with the Construction Loan or the Mezzanine Lender
in connection with the Mezzanine Loan, if any.
Section 2.6. No Claim for Value of Lessee Improvements. Lessee shall have no claim against the City
for the value of the Lessee Improvements following any termination of this Lease, whether at the
natural expiration of the Term or otherwise, except, with respect to any claims against the City acting in
its governmental capacity. including any claims related to a condemnation by the City.
Section 2.7. Schedule of Performance. Lessee shall prosecute completion of the Work substantially
in accordance with the Approved Plans (with only such changes hereto that do not constitute Prohibited
Hotel Project Changes, except as otherwise permitted or Approved pursuant to this Lease), with all
commercially reasonable diligence and in good-faith, in good and workmanlike manner, and shall use
diligent,good-faith efforts to prosecute the Work in accordance with the Schedule of Performance,time
being of the essence. The dates to be reflected in the Schedule of Performance, including the Target
Dates, shall not be extended except for (i) a Force Majeure Event, (ii) Economic Force Majeure, (iii) a
City Delay and/or (iv) Unanticipated Circumstances. If the Parties disagree with respect to any
permitted delays in the Schedule of Performance, such disagreement shall be resolved in accordance
with Section 7.9 hereof.
(a) Lessee shall endeavor, through the use of diligent, good-faith eftorts, to cause the
prosecution of the Work in accordance with the Target Dates, the Outside Dates and other dates to be
set forth in the Schedule of Performance, but failure to meet the Target Dates or other date (other than
any Outside Date)to be set forth in the Schedule of Performance shall not be a default under this Lease.
(b) As further to be delineated in the Schedule of Performance, Lessee shall
Complete Construction and cause the Opening Date to occur by the Outside Opening Date.
Section 2.8. Construction Obligations.
(a) Bonds. By no later than Commencement of Construction, Lessee shall provide a
Performance Bond and Payment Bond, with all premiums paid and in favor of Lessee with an obligee
rider in favor of the City and the First Leasehold Mortgagee. Lessee shall also provide City with a
demolition bond or other form of financial instrument reasonably acceptable to City to assure the
availability of funds for demolition or removal of any uncompleted facility in the event Lessee, after
receipt of a written demand from City, fails to demolish and remove the uncompleted facility following
Lessee's failure to substantially complete such facility as required herein.
(b) Approval of Hotel Project General Contractor. Lessee's selection of the Hotel Project
General Contractor shall be subject to the advance Approval of the City Manager, after consultation with
the City Attorney, as to the qualifications and responsibility of the proposed Hotel Project General
Contractor to perform the contract, based on the contractor's licensure, bonding capacity, financial
capacity, history of compliance with laws, and satisfactory past performance on similar projects.
Provided that the Hotel Project General Contractor proposed by Lessee does not have a significant
history of material non-compliance with the law, City agrees to Approve any Hotel Project General
Contractor proposed by Lessee that satisfies each of the following:
(I) Has a State of Florida Building and Business License;
(ii) Has completed at least one project in the past three years under a construction
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contract that specified a guaranteed maximum price at or above$100,000,000;
(iii) Has completed at least one high-rise hotel of at least eight (8) stories and four
hundred(400)rooms in the last 5 years;and
(iv) Has total bonding capacity in excess of $1 Billion with at least $250,000,000
available for a single project.
(c) Construction Obligations. Prior to the Outside Opening Date, Lessee shall, or shall
cause its Hotel Project General Contractor to:
(I) Perform and complete the Work;
(ii) Select the means and methods of construction. Only adequate and safe
procedures, methods,structures and equipment shall be used;
(iii) Furnish, erect, maintain and remove such construction plant and such
temporary work as may be required;and be responsible for the safety, efficiency and adequacy of the
plant, appliance and methods used and any damage which may result from failure, improper
construction, maintenance or operation of such plant,appliances and methods;
(iv) Provide all architectural and engineering services, scaffolding, hoists, or any
temporary structures, light, heat, power, toilets and temporary connections, as well as all equipment,
tools and materials and whatever else may be required for the proper performance of the Work;
(v) Order and have delivered all materials required for the Work and shall be
responsible for all materials so delivered to remain in good condition;
(vi) Maintain the Hotel Project site in a clean and orderly manner at all times, and
remove all paper,cartons and other debris from the Hotel Site;
(vii) Erect, furnish and maintain a field office with a telephone at the Hotel Site
during the period of construction in which a supervisor-level employee shall be on site during the
performance of any Work in connection with the Hotel Project; and cause the Hotel Project General
Contractor to require in each subcontract having a price in excess of $5,000,000 (and to require each
subcontractor to require in each sub-subcontract having a price in excess of $5,000,000) that such
subcontractor (and sub-subcontractor) have on-site a supervisor-level employee at all times during the
performance of any Work under such subcontract(and sub-subcontract);
(viii) Protect all Work prior to its completion and acceptance;
(ix) Restore and repair any properties adjacent and leading to the Hotel Site
damaged as a result of construction of the Hotel Project, whether such properties are publicly or
privately owned;
(x) Implement, and maintain in place at all times, a comprehensive hurricane and
flood plan for the Hotel Site and the Work,and provide a copy of same to the City;
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(xi) Upon Completion of Construction, deliver to the City as built drawings and plans
and specifications of the Hotel Project;and
(xii) Upon Completion of Construction, deliver to the City, a copy of the final
certificate of occupancy or certificate of completion,as applicable,for the Hotel Project.
Notwithstanding any provision hereof to the contrary, (x) at no time during construction of the Hotel
Project may Lessee make any Prohibited Hotel Project Changes without the express, prior written
Approval of City (which Approval may be granted or withheld by City in City's sole and absolute
discretion), (y) Lessee and the City shall reasonably cooperate with each other so that the performance
and completion of the Work does not materially interfere with the loading dock operations of the
Convention Center or impair or impede access to such operations during a Convention Center event,
other than during the construction of the Skybridge, during which Lessee and the City will reasonably
cooperate with each other in good faith to minimize such interference and (z) Lessee and the City shall
reasonably cooperate with each other so that the performance and completion of the Work does not
materially interfere with the loading dock operations of the Fillmore Theater.
(d) Completion of Construction. Lessee shall carry on any construction, maintenance or
repair activity with diligence and dispatch and shall use diligent,good-faith efforts to complete the same
in accordance with the Schedule of Performance. Lessee shall not, except if an emergency exists (then
only to the extent that the City can grant such an exception),carry on any construction, maintenance or
repair activity in any easement area that unreasonably interferes with using and enjoying the property
encumbered by such easement.
(e) Skybridge and Off-Site Improvements. Lessee shall deliver the proposed Approved
Skybridge and Off-Site Improvements Plans to the City for Approval as required to maintain the
Schedule of Performance. The 25 surface parking spaces for Fillmore Theater personnel to be
constructed by Lessee as part of the Off-Site Improvements will be constructed as depicted on Exhibit
"U" hereto. Lessee shall have no obligations or liabilities with respect to the ownership or operation of
such parking spaces after completion.
Section 2.9. Progress of Construction/City's Representative.
(a) Lessee shall keep the City apprised of Lessee's progress regarding the Work, including
Lessee's progress towards meeting the Target Dates and Outside Dates set forth in the Schedule of
Performance. Lessee shall deliver written reports of same not less than monthly;and
(b) The City may, from time-to-time, designate one or more employees or agents to be the
City's representative ("City's Representative"), who may, during normal business hours, in a
commercially reasonable manner, visit, inspect and monitor the Hotel Project, the materials to be used
thereon or therein, contracts, records, plans, specifications and shop drawings relating thereto,whether
kept at Lessee's offices or at the Hotel Project construction site or elsewhere, and the books, records,
accounts and other financial and accounting records of Lessee (which shall be kept at the address
specified in Section 14.5) as often as may be reasonably requested. Further, City's Representative shall
be advised of, and entitled to attend, meetings among Lessee, Lessee's representative and the Hotel
Project General Contractor or any subset of this group. Lessee will cooperate with the City to enable
City's Representative to conduct such visits, inspections and appraisals. Lessee shall make available to
City's Representative for inspection, with commercially reasonable notice, daily log sheets covering the
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period since the immediately preceding inspection showing the date, weather, subcontractors on the
job, number of workers and status of construction. To the fullest extent permitted by law, City shall
protect from disclosure any records that are confidential and exempt from disclosure under Florida law,
provided, however,that nothing herein shall preclude the City or its employees from complying with the
disclosure requirements of the Public Records Act, and any such compliance shall not be deemed an
event of default by the City under this Lease. City shall use its good-faith, diligent efforts to provide
timely written notice to Lessee of any public records request seeking any records of the Lessee that may
be within the City's custody, possession or control, to permit Lessee the opportunity to seek to protect
such information from disclosure.
Section 2.10. Delivery of Plans.
Promptly after completing the Work and Lessee's receipt of a Certificate of Occupancy, as applicable,for
the Work, Lessee will deliver to the City a copy of the plans and specifications, including shop drawings,
for the Lessee Improvements.
Section 2.11. Connection of Buildings to Utilities.
(a) Lessee, at its sole cost and expense for the Leased Property and in compliance with all
Governmental Approvals and Governmental Requirements, shall install or cause to be installed all
necessary connections between the Lessee Improvements, and the water, sanitary and storm drain
mains and mechanical and electrical conduits whether or not owned by the City.
(b) Lessee shall pay for the cost, for the Leased Property, if any, of locating, grounding and
installing within the Leased Property, as applicable, new facilities for sewer, water, electrical, and other
utilities as needed to service the Hotel Project, and, at its sole cost and expense for the Leased Property,
will install or cause to be installed inside the property line of the Leased Property, all necessary utility
lines, with adequate capacity and the sizing of utility lines for the Hotel Project, as contemplated on the
Approved Plans.
Section 2.12. Permits and Approvals. Lessee shall secure and pay for all Governmental Approvals for
the Work, including any alterations and renovations made pursuant to Section 2.15, and shall pay any
and all fees and charges due to and collected by the City or any other Governmental Authority
connected with issuing such Governmental Approvals, if any.
Section 2.13. City and Lessee to Join in Certain Actions. Within fifteen (15) days after receiving a
written request from Lessee that is consistent with all Governmental Requirements and in accordance
with this Lease,the City, at Lessee's sole cost and expense (including City's reasonable attorneys' fees in
reviewing any agreements), shall join Lessee when required by law in any and all applications and
agreements for Governmental Approvals as may be commercially reasonably necessary for developing
and constructing the Hotel Project, which applications and agreements are necessary because City is the
fee owner of the Leased Property and/or the properties surrounding the Leased Property, and which
applications and agreements may include applications for subdivision approval, covenants in lieu of
unity of title, easement and operating agreements, and demolition permits and applications for Design
Review Board approval for buildings located on the Hotel Site. Lessee shall pay all fees and charges for
all such applications. Failure of the City to perform as requested within such fifteen (15)day period shall
be deemed a City Delay for the number of days of delay beyond such fifteen (15)day period.
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Section 2.14. Compliance with Laws. Lessee will comply with any Governmental Requirements in
constructing and operating the Hotel Project.
Section 2.15. Alterations and Renovations. After completing the Work, if Lessee wishes to make
alterations or renovations thereof:
(a) no renovation or alteration shall be made until Lessee obtains all required
Governmental Approvals,at Lessee's sole cost and expense;
(b) except for FF&E, any renovation or alteration of Lessee Improvements that involves a
substantial deviation from the Approved Plans or otherwise substantially affects the overall character or
appearance of the exterior of the Hotel Project, unless required by Governmental Requirements shall
require the City's approval in its proprietary capacity in its sole discretion;and
(c) all such alterations and renovations shall be performed by duly licensed and insured
contractors in a good and workmanlike manner, and in any event, shall be consistent with the Hotel
Standards.
Section 2.16. Art in Public Places. Lessee shall comply with the City's Art In Public Places (AIPP)
program requirements under Section 82-536 through 82-612 of the City Code, as applicable, and shall
contribute to the City's Art in Public Places fund the total of 1.5%of the "construction cost"of the Hotel
Project,as such term is defined in Section 82-537 of the City Code, no later than date of execution of the
Hotel Project General Contract by Lessee and the Hotel Project General Contractor, as required by the
City Code.
ARTICLE III
LAND USES AND DEVELOPMENT OBLIGATIONS
Section 3.1. Covenant Regarding Land Uses. Lessee agrees and covenants to devote, during the
Term of this Lease, the Hotel Project only to the uses specified in this Lease and to be bound by and
comply in all material respects with all of the provisions and conditions of this Lease. In addition, and
except as hereinafter set forth, Lessee shall not have the right to seek or obtain different uses or a
change in such uses either by requesting a zoning change or by court or administrative action without
first obtaining the City's Approval,which Approval may be granted or denied in the City's sole discretion.
Section 3.2. Applications for Development Approvals and Development Permits. Promptly
following the Effective Date of this Lease,the Lessee will initiate and diligently pursue all applications for
Development Orders and Development Permits that may be required in connection with the Hotel
Project. Lessee shall be solely responsible for obtaining all final, non-appealable Development Orders
and Development Permits for the Hotel Project. No extension of any time period herein shall be
deemed to be an extension of any time periods contained within the Development Permits or
Development Orders.
Section 3.3. Concurrency.
(a) Lessee shall be solely responsible for obtaining all land use permits, including all permits
and approvals required pursuant to Section 163.3180, Florida Statutes, and Chapter 122,City Code,with
respect to concurrency requirements for roads, sanitary sewer, solid waste, drainage, potable water,
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and parks and recreation, (the "Concurrency Requirements"). Prior to applying for its building permit for
the Hotel Project, Lessee shall apply for a preliminary concurrency determination for the Hotel Project
with the City's concurrency management division. Lessee shall diligently and in good faith comply with
the all of the requirements of Section 122-8 of the City Code to obtain a preliminary concurrency
determination impact certificate, and if the concurrency management division determines that the
required public facilities are or will be available to serve the proposed development, the concurrency
management division shall issue a preliminary concurrency determination impact of no less than 36
months from the date of issuance of the determination, which shall be specified on the face of the
preliminary concurrency determination. In the event the issuance of a preliminary concurrency
determination is based on an approved mitigation program, such certificate shall be expressly
conditioned upon compliance with such program. Provided that (i) a preliminary concurrency
determination impact certificate is issued, (ii) the Design Review Board approves a development order
for the Hotel Project and such order becomes final (after all appeal periods have expired without an
appeal being filed, or if filed, resolved favorably for Lessee), and (iii), Lessee pays applicable mitigation
fees (including impact fees, concurrency fees, and/or mobility fees that may be due) or provides for
applicable mitigation prior to building permit, then in that event, a final reservation certificate shall be
issued and the available capacity for public facilities will be reduced by the projected demand for the
Hotel Project until the reservation of the capacity expires or becomes permanent.
(b) Provided that Lessee complies with the provisions of Section 3.3 (a) above, (i) the City
agrees that Concurrency Requirements for the following public facilities and services required to service
the Hotel Project have been satisfied or will be satisfied in accordance with the terms of this Lease:
potable water transmission capacity; sanitary sewer transmission capacity; storm sewer capacity; local
recreation open space; transportation level of service; and solid waste collection capacity and (ii) all
subsequent development orders or permits that are in conformity with this Lease are hereby found to
meet concurrency standards set forth in the Comprehensive Plan, and to be consistent with the
presently permitted development as described on Exhibit"H"and applicable zoning regulations, so long
as the Leased Property is developed in substantial compliance with the Governmental Approvals
described in Exhibit"K".
(c) In addition to the foregoing, the City agrees to prioritize reservation of capacity, as of
the Effective Date, for potable water transmission capacity, sanitary sewer transmission capacity and
storm sewer capacity facilities and services required to service the Hotel Project; provided, however,
that if Miami-Dade County issues a moratorium on new construction for water and sewer services, any
such moratorium is beyond the City's control, and City cannot supersede Miami-Dade County's
jurisdiction with respect to the reservation of capacity. Upon such reservation, the City will reserve
sufficient infrastructure and capacities for potable water transmission,sanitary sewer transmission, and
storm sewer based on the Hotel Project as described in this Lease, and such capacity will remain
available to serve the Hotel Project. Lessee shall be responsible for the relocation of utilities (including
the existing drainage culvert on the Hotel Site) and for improvements to City utilities directly and
reasonably required to provide service to the Hotel.
Section 3.4. Compliance with Local Regulations Regarding Development Permits. This Lease is not
and shall not be construed as a Development Permit, approval or authorization to commence any
development,fill, or other land modification.The Lessee and the City agree that the failure of this Lease
to address a particular permit, approval, procedure, condition, fee, term or restriction in effect on the
Effective Date shall not relieve Lessee of the necessity of complying with the regulation governing said
permitting requirements, conditions, fees,terms or restrictions,subject to the terms of this Lease.
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Section 3.5. Consistency with the City's Comprehensive Plan. The City has adopted and
implemented the Comprehensive Plan. The City hereby finds and declares that the provisions of this
Lease dealing with the Hotel Site and the Hotel Project are consistent with the City's Comprehensive
Plan and Land Development Regulations(subject to all applicable requirements, permits and approvals).
Section 3.6. Presently Permitted Development. The development that is presently permitted on the
Leased Property, including population densities, and building intensities and height,which are subject to
this Lease,are more specifically set forth in Exhibit"H" hereto.
Section 3.7. Public Facilities to Serve the Leased Property. A description of the public facilities that
will service the Hotel Project of the properties subject to this Lease, including who shall provide such
facilities; the date any new facilities, if needed, will be constructed; and a schedule to assure public
facilities are available concurrent with the impacts of the development is included as Exhibit"I"hereto.
Section 3.8. Public Reservations, Dedications. A description of the reservations and/or dedications
of land for public purposes that are proposed under the terms of this Lease is included as Exhibit "1"
hereto.
Section 3.9. Required Development Permits. Attached and made a part hereof as Exhibit "K" is a
listing and description of certain local development permits approved or needed to be approved for the
development of the Hotel Project, provided that City makes no representation or warranty that the
information set forth on Exhibit"K" is correct or complete, Lessee releases City from any liability with
respect to such information and Lessee acknowledges and Lessee agrees that Lessee is solely
responsible for confirming the correctness and completeness of such information and obtaining all
applicable Governmental Approvals whether or not set forth on Exhibit"K".
Section 3.10. Responsible Wages and Local Employment. The City and Lessee support and
encourage the application of responsible wages and City of Miami Beach and Miami-Dade County
workforce hiring with respect to the Hotel Project.
Section 3.11. Laws Governing this Lease. For the entire Term of this Lease, the City hereby agrees
that the City's Land Development Regulations governing the development of the Leased Property as
they exist as of the Effective Date of this Lease shall govern the development of the Leased Property and
the Hotel Project during the Term. Notwithstanding the foregoing, the City may apply subsequently
adopted laws or policies to the Leased Property and the Hotel Project(particularly as they may relate to
quality of life issues such as, but not limited to noise, litter, and hours of operation) as permitted or
required by the Act, including, without limitation,Section 163.3233(2), Florida Statutes,as same may be
amended from time to time; provided, however, that this provision shall not be deemed to apply to
regulations governing height,floor area ratio(FAR),density, parking requirements or permitted uses.
Section 3.12. Duration of Development Rights. Notwithstanding any provision to the contrary in this
Lease, the development rights and responsibilities granted to Lessee hereunder shall run for an initial
term of ten (10)years from the Effective Date, and may be extended by mutual consent of the City and
the Lessee subject to a public hearing(s) pursuant to Section 163.3225, Florida Statutes. Consent to any
extension of the development rights granted herein is within the sole discretion of each Party. No notice
of termination shall be required by either Party upon the expiration of the development rights granted
pursuant to this Lease, provided, however, that the Parties' obligations for the failure to satisfy
Possession Conditions shall be as provided for in Section 4.1(f) and any other applicable provisions of
this Lease.
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Section 3.13. Lessee's Right of Termination. Notwithstanding anything to the contrary herein,
including Section 7.2(b) of this Lease, Lessee shall have the right to terminate this Lease prior to the
Possession Date due to (i)changes to the Approved Plans required by the City's Design Review Board or
any other Governmental Authority (including the City) that render the Hotel Project economically
unfeasible in the reasonable business judgment of Lessee; (ii) the Hotel Project cannot meet the
Concurrency Requirements, or the costs of concurrency mitigation are, in the reasonable business
judgment of Lessee, economically unfeasible; (iii) Lessee, after its diligent good-faith efforts, has been
unable to obtain a full building permit for the Hotel Project;or(iv)Unanticipated Circumstances exist. In
the event of termination pursuant to this Section 3.13, each Party shall bear its own costs and expenses
incurred in connection with this Lease and, neither Party shall have any further liability to the other
Party.
ARTICLE IV
GENERAL TERMS OF LEASE
Section 4.1. Lease of Leased Property to Lessee. Subject to the conditions set forth in this Lease,
including the occurrence of the Possession Date, the payment of all Rent and all other payments by
Lessee provided herein, and the City's and Lessee's performance of their duties and obligations required
by this Lease:
(a) Demise. The City, as of the Possession Date, demises and leases to Lessee, and Lessee
takes and hires from the City, the Leased Property for a term of approximately ninety-nine (99) years
ending on December 31"of the last Lease Year prior to the 99`h anniversary of the Possession Date (the
"Term"). Within thirty (30) days after the Possession Date, the City and Lessee, upon request of either
Party,shall execute a commencement date agreement and/or one or more written memoranda in such
form as will enable them to be recorded among the Public Records of Miami-Dade County, in each case,
setting forth the beginning and termination dates of the Term, determined according to this Lease, and
recording any such other documents as may be required under this Lease.
(b) Possession Date; Conditions Precedent to Possession. The Parties recognize that as of
the Effective Date there remain various items and matters to be satisfied, obtained and Approved in
order that the Hotel Project may proceed as intended by the Parties. The date that the City delivers
possession of the Leased Property to Lessee according to this Section 4.1(b),as designated by the City to
Lessee in writing, is referred to herein as, the "Possession Date." The City shall not be obligated to
deliver possession of the Leased Property and Lessee's rights as tenant hereunder shall not become
effective until each of the events described in this Section 4.1(b) irrevocably shall have occurred, at
which time, the City shall deliver possession of the Leased Property to Lessee, Lessee shall take
possession thereof and the lease provisions of this Lease shall become effective. Until that time, this
Lease shall be construed to be in the nature of a development agreement, and not a lease. The
conditions precedent to delivery of possession(collectively,the"Possession Conditions")are as follows:
(i) There exists no uncured Event of Default;
(ii) Lessee shall have entered into, and delivered to the City a duly executed copy
of, the Hotel Project General Construction Contract (and all then existing change orders thereto), in
form and substance and with a Hotel Project General Contractor Approved pursuant to
Subsection 2.8(b) by the City Manager reflecting the guaranteed maximum price for completion of the
Lessee improvements;
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(iii) Lessee shall have delivered to City written evidence reasonably satisfactory to
the City of the existence and availability of(A) Liquid Assets to fund the Equity Commitment, (B) Initial
Hotel Operator Financial Commitment, if any, (C)the Mezzanine Loan Commitment, if any, and (D)the
Construction Loan Commitment,all of which together demonstrate that the Hotel Project is In Balance;
(iv) Lessee shall have provided to City, and City Manager shall have Approved, any
changes to the Budgeted improvement Costs, provided that City Manager shall not withhold its
Approval so long as Lessee has obtained and delivered to the City written evidence of the existence and
availability of (A) Liquid Assets to fund the Equity Commitment, (B) the Initial Hotel Operator Financial
Commitment, (C)the Mezzanine Loan Commitment, if any, and (D)the Construction Loan Commitment
that demonstrate that the Hotel Project is In Balance;
(v) Lessee shall have reimbursed the City for the costs associated with the City's
voter referendum in connection with this Lease, not to exceed Twenty-Five Thousand Dollars($25,000).
(vi) Lessee shall have obtained, and shall have delivered to City a copy of, all
Governmental Approvals necessary for the Commencement of Construction and for the demolition of all
improvements currently located within the Hotel Site,the areas in which the Off-Site Improvements are
to be constructed and the areas in which the Skybridge is to be constructed;
(vii) Lessee and the Initial Hotel Operator shall have delivered to the City an
instrument or instruments reasonably acceptable to the City (A) certifying that Lessee and the initial
Hotel Operator have duly executed and entered into the Management Agreement, and any related
franchise,technical services and/or centralized services agreements,that the Management Agreement,
Franchise Agreement and any other such agreements are in full force and effect and there are no
defaults (or any events that could ripen into defaults), and that the Management Agreement requires
the Hotel Operator to comply with the terms of the Room Block Agreement, (B)acknowledging that for
so long as the Initial Hotel Operator is managing and operating the Hotel Project it shall observe and
comply with the Room Block Agreement and (C) in the form of an agreement among Lessee, the Initial
Hotel Operator and the City, to the effect that if this Lease is terminated as a result of any Event of
Default, the Hotel Operator shall, at the City's option, continue to perform under the Management
Agreement in accordance with the terms thereof and the Franchise Agreement so long as the Hotel
Operator is being paid compensation thereafter accruing under the Management Agreement and the
City shall perform, and the Hotel Operator shall accept the City's performance of, the duties and
obligations under the Management Agreement to be performed by the Lessee,as "owner,"thereunder,
but only to the extent accruing from and after the date of termination of this Lease; provided, however,
if the First Leasehold Mortgagee enters into a similar agreement with the Lessee and the Hotel
Operator,the City agrees that the Hotel Operator shall continue to perform and such performance shall
not be optional on the part of the City;
(viii) Lessee shall have delivered to City, and City Manager shall have Approved, a
schedule of performance for the Hotel Project setting forth the dates and times of delivery of the Hotel
project, including the Target Dates, the Outside Dates and other milestones for development and
approval of the plans and specifications listed in Section 2.2, preparation and filing of applications for
and obtaining all applicable Governmental Approvals described on Exhibit "K" for the Hotel Project
(other than the items under paragraph 12 of Exhibit"K") and the schedule for completion of the Work
(the "Schedule of Performance"). City agrees that it shall not withhold Approval thereof so long as the
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same reflects Completion of Construction by the Outside Opening Date and Lessee has provided
reasonable evidence that such schedule is reasonable;
(ix) Lessee shall have presented evidence reasonably acceptable to the City that all
insurance coverages required under this Lease are in place;
(x) Lessee shall have delivered to the City Manager reasonable evidence that the
Approved Plans have been approved by the First Leasehold Mortgagee and the Initial Hotel Operator;
(xi) Lessee shall have delivered to the City,a duly executed Assignment of Plans and
Approvals, a duly executed Assignment of Hotel Project General Construction Contract and a duly
executed Assignment of Contracts and Agreements;
(xii) Lessee shall have delivered to the City reasonable evidence that Lessee has
invested the Initial Lessee Minimum Equity Contribution prior to the Possession Date, or if the Initial
Lessee Minimum Equity Contribution has not been invested prior to the Possession Date, Lessee shall
deposit an amount equal to the balance of the unfunded amount of the Initial Lessee Minimum Equity
Contribution, less cash amounts deposited with any Leasehold Mortgagee or any Mezzanine Lender by
Lessee to satisfy Lessee's equity requirements under the Construction Loan or Mezzanine Loan, in
escrow with an escrow agent reasonably satisfactory to the City to be drawn by Lessee on a monthly
basis based upon presentation of invoices for Budgeted Improvement Costs;
(xiii) Lessee has provided to the City reasonable evidence that the closing of the
Construction Loan has occurred;
(xiv) the representations and warranties made by the Lessee in this Lease pursuant
to Sections 4.3(a) and 5.2 remain true and correct in all material respects on and as of the Possession
Date;
(xv) Lessee shall have delivered to the City a maintenance of traffic plan for the
staging of the Work during the construction period (the "MOT Plan"), which MOT Plan shall have been
Approved by the City Manager and which will include minimal disruptions to 17th Street and Convention
Center Drive, subject only to closures for short time periods upon Approval by the City Manager as
reasonably necessary to complete the Work;and
(xvi) Lessee shall have delivered to the City a parking and transportation plan for the
off-site parking and transportation of construction workers and Hotel employees to and from the Hotel,
which plan shall have been Approved by the City Manager and which, subject to Lessee's negotiations
with the Initial Hotel Operator, may include various traffic mitigation options, including (1) providing
hotel guests with an online link to the City's trolley service map, with points of interest, at reservation
confirmation, and a copy of the City's trolley brochure at check-in; (2) offering Hotel guests the ability to
purchase, as part of a room reservation, airport shuttle services or transit passes to encourage public
transit usage; (3) providing a reservation portal for guests to include their airport arrival times, with the
system identifying available shuttle services based on those arrival times; (4) partnering with on-
demand multi-passenger services, such as the FreeBee golf carts, as an amenity for hotel guests; (5)
offering off-site parking and shuttle services for Hotel employees; (6) utilizing Miami-Dade County's
corporate discount program to reduce the costs of transit passes for Hotel employees using transit to
work;and/or (7)providing a covered area for bicycle parking within the Hotel Project.
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(Cl Pre-Possession Period. From and after the Effective Date, the Parties shall each use
their respective diligent and commercially reasonable efforts to achieve the Possession Date timely.
(d) Hotel Site Inspections. Commencing on the date hereof and thereafter until this Lease
is terminated or the Possession Date occurs,the City shall permit Lessee commercially reasonably access
to the Hotel Site, areas in which the Off-Site Improvements are to be constructed and the areas in which
the Skybridge is to be constructed to conduct at Lessee's sole cost and expense, physical inspections,
tests, studies, samplings and analyses (including soil borings and invasive environmental testing) of the
Hotel Site and such other areas and to the extent necessary to carry out the provisions of this lease;
provided, however, that such access shall not materially interfere with any ongoing operations at the
Convention Center or the Fillmore Theater. Lessee, at all times and at its sole cost and expense, shall
maintain or shall cause its Hotel Project General Contractor or other contractors in privity with Lessee to
maintain, comprehensive general liability insurance as required in Article IX. Lessee shall restore any
damage to the Hotel Site and such other areas caused by any such inspections,tests or studies; provided
that in no event shall Lessee be responsible for the discovery, exposure or release of hazardous
substances or materials in, on or about the Hotel Site that are not introduced to the Hotel Site by
Lessee, its agents, representatives,contractors, invitees or employees.
(e) Indemnification. Whether or not the Possession Date occurs, Lessee shall indemnify,
defend and hold City and its respective officers, employees, agents, representatives, consultants,
counsel and contractors (of any tier) harmless from and against all claims, actions, suits; charges,
complaints, orders, liability, damages, loss, costs and expenses (including any attorneys' fees and costs
of litigation) related to, arising from or in connection with the acts or omissions of Lessee, its agents,
representatives, contractors or employees, including injury or death to persons or damage to their
property, while exercising Lessee's right to access the Hotel Site and performance of such inspections,
tests or studies pursuant hereto, except to the extent resulting from the negligence or willful
misconduct of City or its officers, employees, agents, representatives, consultants, counsel and
contractors, and except as limited in paragraph (d) above. The indemnification obligations of Lessee set
forth in this paragraph shall expressly survive the expiration or termination of this Lease and
notwithstanding any provision of this Lease to the contrary, City shall have all rights and remedies
available at law or in equity in the enforcement of such indemnification obligations of Lessee or arising
from Lessee's failure to perform such indemnification obligations.
(f) Failure to Satisfy Conditions. Notwithstanding anything contained in this Lease to the
contrary, if: (i) any of the Possession Conditions have not occurred by the Outside Possession Date; or
(ii)the Opening Date does not occur by the Outside Opening Date, then notwithstanding anything to the
contrary set forth in Section 7,1 below and not in limitation of any of the City's remedies set forth in
Article VII of this Lease, Lessee hereby waives any further right to cure, and the City shall be entitled to
immediately revoke the licenses granted to Lessee pursuant to the Assignment of Plans and Approvals,
the Assignment of Hotel Project General Construction Contract and the Assignment of Contracts and
Agreements upon written notice to the Lessee.
(g) Easements. Lessee agrees that this Lease shall be subject to and contingent upon the
execution of certain easements,including any applicable access easements. On the Possession Date,the
easements in substantially the forms attached hereto as Exhibit"G" (the"Easements")shall be executed
by all necessary parties. The Parties shall also, prior to the Possession Date, enter into any and all
easements which may be required by Lessee to(i)design, permit and construct enclosures regarding the
Fillmore Theatre in the area of demolition; and (ii) develop, construct, operate, repair, maintain and
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reconstruct the Hotel Project, including to connect utilities to the Hotel Site as shown in the Approved
Plans. The Parties shall thereafter cause the Easements to be promptly recorded among the public
records of Miami-Dade County, Florida.
Section 4.2. Restrictive Covenants.
(a) Permitted Use. Lessee shall operate the Hotel Project throughout the Term as a
convention headquarter hotel for the accommodation of hotel guests, and for related banquet, meeting
and similar purposes, with related retail shops, restaurants and such other amenities as are consistent
with the Hotel Standards.
(b) Use Restrictions. The Hotel Project shall not be used by Lessee, nor shall Lessee
knowingly permit the use thereof by any other Person for the following: (i) any unlawful or illegal
business, use or purpose; (ii) any business, use or purpose which is immoral, disreputable (including
"adult entertainment establishments" and "adult" bookstores, but excluding in-room "R Rated"
television and on-demand movies) or extra-hazardous; (iii) a nightclub where the sale of food is only
incidental to the sale of alcoholic beverages and where the establishment is licensed and primarily
operated from midnight to 5:00 a.m. as a "Dance hall" or "Entertainment Establishment" as defined by
Section 114-1 of the City of Miami Beach Code (other than and specifically excluding the Hotel's lobby
bars, rooftop bars or cocktail lounges, pool bars, restaurants, banquet functions or other similar food
and beverage operations contemplated as part of the Approved Plans or the Mandatory Hotel Project
Design Elements); or (iv) any Gaming Establishment (whether or not such use is permitted by applicable
law). Lessee shall have no right to convert the use of the Hotel Project or any portion thereof to any
time sharing, time interval or cooperative form of ownership, or to subject the same to any
condominium regime.
(c) Nuisances Disallowed. Lessee shall not make any use of the Leased Property, nor shall it
allow any of its sub-lessees or invitees to make use of the Leased Property, in a manner that creates or
reasonably will lead to a public or private nuisance under state or local law. Upon notification by City
that such a nuisance is then being allowed on the Leased Property, Lessee shall promptly take steps
necessary to abate such nuisance to the City's reasonable satisfaction City shall retain all of its contract
rights to abate a nuisance under the terms of this Lease, as well as its regulatory rights to abate such
nuisance in accordance with then-current law.
(d) No Discrimination. Lessee shall comply with, and shall cause others to comply with,
Governmental Requirements prohibiting discrimination by reason of race, color, national origin, religion,
sex, intersexuality,gender identity, sexual orientation, marital and familial status, and age or disability in
the sale, lease, use or occupancy of the Hotel Project or any portion thereof. Lessee's compliance with
the City's Human Rights Ordinance, codified in Chapter 62 of the City Code, as may be amended from
time to time, shall be a material term of this Lease. Lessee shall cause the requirements of this Section
4.2(d) to be incorporated in the Management Agreement with the Hotel Operator; provided, however,
that Lessee shall not be in default hereunder following (i) any discrimination committed by the Hotel
Operator or Hotel Operator's employees or (ii) Hotel Operator's non-compliance with the City's Human
Rights ordinance, codified in Chapter 62 of the City Code, so long as, in each case, Lessee is enforcing the
terms of the Management Agreement to require Hotel Operator's compliance with the requirements of
this Section 4.2(d), which enforcement shall include termination of the Management Agreement after
the third violation by such Hotel Operator of requirements of this Section 4.2(d) within any five (5)
consecutive year period during the Term, as such violations have been finally determined by a court of
3?.
competent jurisdiction. For avoidance of doubt, Lessee shall be deemed to comply with the preceding
sentence so long as Lessee is actively pursuing any necessary litigation associated with such termination
of the Management Agreement.
(e) Lessee's Rights To Operate a Convention Hotel Not Exclusive. Except as specified
herein, it is expressly understood and agreed that the rights granted under this Lease are non-exclusive
and City reserves the right to grant similar privileges and similar leases to other lessees on other City-
owned or leased property, and to take any and all actions (including the leasing of City property other
than the Leased Property for any lawful purpose)that City is permitted to take under federal, state, and
local law. Notwithstanding the foregoing, the City shall not for a period of ten (10) years after the
Opening Date, permit any other hotel with over 500 separately keyed sleeping rooms to open for
business to the general public on City-owned or City-leased property within the geographical area
bounded by 5`h street to the south,48'r street to the north, the Atlantic Ocean to the east and Biscayne
Bay/Intracoastal Waterway to the west.
(f) Room Block Agreement. Lessee shall operate, and cause the Hotel Operator to
operate, the Leased Property in material compliance with the terms of the Room Block Agreement
throughout the Term. In addition, Lessee shall not receive any commission, rebate or other
compensation from any hotel located in the City of Miami Beach with respect to any group room block
or room bookings made by any such Miami Beach hotel.
(g) No Ownership Interests in Gaming Establishments in Miami-Dade County. Lessee, and
any Persons with an ownership interest in Lessee, shall not, directly or indirectly, own, operate or
manage a Gaming Establishment in Miami-Dade County. Florida; provided, however, that the foregoing
restriction shall not prevent Persons having an ownership interest in Lessee, from owning or Controlling
in the aggregate five percent (5%)or less of the voting securities of any owner, operator or manager of a
Gaming Establishment in Miami-Dade County, Florida.
(h) Enforceability. The restrictive covenants contained in this Section 4.2 shall be binding
upon the Parties and shall be for the benefit and in favor of, and enforceable by, the Parties, and their
successors and assigns, as the case may be. It is further understood that such covenants shall not benefit
or be enforceable by any other Person.
Section 4.3. Representations.
(a) Lessee's Representation. Lessee represents to the City that its principals and Affiliates
are experienced in the development, construction, leasing and operation of hotel properties generally,
and that Lessee has independently determined the merits and risks of electing to proceed with the
development of the Hotel Project, and that Lessee is not and, will not be relying upon any information
that may have been or hereafter be provided to Lessee with respect to or relating to the financial results
derived from, financial merits of investing in, or other economic or other benefits that may be realized
from the development, construction, leasing and operation of the Hotel Project or sale of Lessee's
interests in this Lease.
(b) No Representation or Warranties By City. Lessee acknowledges and agrees that it will
be given the opportunity to perform all inspections and investigations concerning the Leased Property
to its satisfaction prior to the Possession Date, and the City (i) except as specifically provided in this
Lease, is not making and has not made any representations or warranties, express or implied, of any
kind whatsoever with respect to the Leased Property, including any representation or warranty of any
34
kind with respect to title, survey, physical condition, suitability or fitness for any particular purpose,the
financial performance or financial prospects of the Hotel Project, its value, or any other economic
benefit that can be realized or expected therefrom, the presence or absence of Hazardous Substances,
the tenants and occupants thereof, the zoning or other Governmental Requirements applicable thereto,
taxes, the use that may be made of the Leased Property, or any other matters with respect to this
transaction or Lease); (ii) Lessee has relied on no such representations, statements or warranties, and
(iii) City will in no event whatsoever be liable for any latent or patent defects in the Leased Property
(including any subsurface conditions).
(c) "AS IS" Condition of Leased Property. Lessee acknowledges it has relied solely on
Lessee's own inspections, tests, evaluations and investigations of and related to this Lease and the
Leased Property in its determination of whether to proceed with this Lease and the Hotel Project. As a
material part of the consideration of this Lease, Lessee agrees to accept the Leased Property on the
Possession Date in its "AS IS" and "WHERE IS" condition "WITH ALL FAULTS" and latent or patent
defects, and without representations and warranties of any kind, express or implied, or arising by
operation of law.
(d) The provisions of this Section 4.3 shall survive the termination of this Lease.
Section 4.4. Rent and Other Payments. Lessee covenants and agrees to pay the City, from and after
the date hereof and during the Term the following Rent, as applicable:
(a) Base Rent. Commencing as of the (i) Opening Date (the "Rent Commencement Date"),
and except as set forth below, monthly rent in the amount of the greater of (x) (A) two and one half
percent (2.5%) of the Gross Operating Revenues for such month plus (B) one and one quarter percent
(1.25%) of the Gross Operating F&B Revenues for such month or (y) one-twelfth (1/12`i') of the
Minimum Fixed Rent set forth in Section 4.4(a)(i) of this Lease ("Base Rent").
The Base Rent shall be due and payable on or before the twenty-fifth (25")day of each month following
the month for which the Base Rent is applicable. Prior to the closing of the Construction Loan, Lessee
shall provide City with a copy of the pro forma accepted by the Construction Lender in connection with
the closing of the Construction Loan.
(i) Minimum Fixed Rent. "Minimum Fixed Rent" shall be an annual fixed rent
payable in twelve (12)equal monthly installments, prorated as to any partial month,commencing on the
Rent Commencement Date and continuing on the first day of each month thereafter. Attached as
Exhibit "R" hereto is a schedule setting forth the Minimum Fixed Rent for the period commending on
the Rent Commencement Date and ending on December 31 of the year in which the tenth (10")
anniversary of the Rent Commencement Date occurs; provided that the amount shown for the first year
shall apply for the period commencing on the Rent Commencement Date and ending on December 31 of
the year in which the first anniversary of the Rent Commencement Date occurs, prorated for any partial
calendar years. Commencing on January 1"following the tenth anniversary of the Rent Commencement
Date, and every ten (10) Lease Years thereafter (each, a "Minimum Fixed Rent Reset Date"), the
Minimum Fixed Rent shall be adjusted to equal the greater of (x) the Minimum Fixed Rent payable for
the period immediately preceding the Minimum Fixed Rent Reset Date, or (y) sixty percent (60%) of the
average Base Rent payable for each twelve month period during the preceding ten (10) calendar year
periods; provided that for the first Minimum Fixed Rent Reset Date item (y)shall be sixty percent (60%)
35
of the average Base Rent for each twelve month period payable during the preceding five (5) calendar
year period.
(ii) Each Base Rent payment shall be accompanied with documentation sufficient
for City to verify the accuracy of the Base Rent payment, and in a format and of a detail reasonably
required by City.
(iii) Each year following the Rent Commencement Date, Lessee shall provide City
with the report required in Section 4.4(j)(ii) as to the correct Gross Operating Revenues and Gross
Operating F&B Revenues for the previous calendar year. The report shall be prepared in accordance
with the American Institute of Certified Public Accountants' requirements for special reports. All Base
Rent payments and annual reports are subject to audit under Section 4.40). In the event such report
reflects that additional Base Rent ("Additional Base Rent") is due to the City with respect to such
previous calendar year, Lessee shall deliver such payment to the City contemporaneously with the
delivery of such report. In the event such report reflects an overpayment to the City with respect to
Base Rent,the City shall return the excess to Lessee within thirty(30)days after receipt of such report.
(iv) Lessee shall be responsible for any applicable sales tax payable in connection
with the Rent.
(b) Transaction Rent. Lessee covenants and agrees to pay the City as Additional Rent,
within sixty (60) days after the closing of the first three (3) Transfers that effects either a sale of the
entire Hotel Project to a Person that is not an Affiliate of Lessee or a Transfer of a Controlling interest in
Lessee to a Person that is not an Affiliate of Lessee(other than(i)a Transfer pursuant to a foreclosure of
a Leasehold Mortgage or a delivery by Lessee of a deed in lieu thereof, (ii) the first Transfer by a
Leasehold Mortgagee following a Transfer pursuant to clause (i), or (iii) a Transfer pursuant to a
foreclosure of the pledge of ownership interests of Lessee granted pursuant to a Mezzanine Loan or
Credit Enhancement or a delivery by Lessee of an assignment in lieu thereof, or(iv)the first Transfer by
the Mezzanine Lender or the beneficiary of a Credit Enhancement following a Transfer pursuant to
clause(iii)), an amount equal to the lesser of(x)$2 million(or a prorated portion thereof if such Transfer
is of less than 100% of the ownership interests of Lessee) or (y) 0.25% of the gross sales price (less
typical commissions, closing adjustments and credits) in connection with such Transfer (each
"Transaction Rent"); provided that Transaction Rent shall be payable in connection with any such
Transfer only if the gross sales price in connection with such Transfer exceeds an amount equal to 120%
of the Improvement Costs (provided that any Improvement Costs paid to Affiliates of Lessee shall be
included up to but not exceeding fair market value for the services provided by such Affiliates), or a
prorated portion thereof if such Transfer is of less than 100%of the ownership interests of Lessee.
(I) An example of calculating Transaction Rent pursuant to Section 4.4(b) is set
forth on Exhibit"0".
(c) Mon-subordination of Rent. The Rent payable to City hereunder shall never be
subordinated, including to any sums due under the Construction Loan or any other financing by Lessee,
and City shall at all times have a first priority right to payment of the Rent from Gross Operating
Revenues and Gross Operating F&B Revenues.
(d) Payment of Rent and Other Payments. All Rent and other payments hereunder
required to be made to the City shall be paid to the City at the Office of the Director of Finance, Miami
Beach City Hall, 1700 Convention Center Drive, 3"' Floor, Miami Beach, Florida 33139 and in such
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manner or at such other place as the City shall designate from time-to-time in a notice given pursuant to
the provisions of Section 14.5.
(e) Late Payment Charge. In the event the Lessee fails to make any payments, as required
to be paid under the provisions of this Lease, within fifteen (15) days after same shall become due,
interest at the Default Rate shall accrue against the delinquent payment(s) from the original due date
until the City actually receives payment.The right of the City to require payment of such interest and the
obligation of the Lessee to pay same shall be in addition to and not in lieu of the rights of the City to
enforce other provisions herein and to pursue other remedies provided under this Lease. All payments
of money required to be paid to the City by Lessee under this Lease other than Base Rent, including
interest, late fees, penalties and contributions, shall be treated as Additional Rent.
(f) Dishonored Check or Draft. In the event that the Lessee delivers a dishonored check,
draft or wire transfer to the City in payment of any obligation arising under this Lease, the Lessee shall
incur and pay City an amount that is three (3)times the service fee incurred by City for such dishonored
check or draft. Further, in such event, the City may require that future payments required pursuant to
this Lease be made by cashier's check or other means acceptable to the City.
(g) Holdover Rental. In the event that the Lessee remains in possession of the Leased
Property beyond the Term or termination of this Lease,the Lessee shall be bound by all of the terms and
conditions of this Lease to the same extent as if this Lease were in full force and effect during the time
beyond the expiration date of this Lease. However, during any such possession of the Leased Property,
as a holdover tenant after the City has demanded the return of the Leased Property, the Lessee shall be
liable for double the Base Rent being paid at that time, or, if Section 83.06, Florida Statutes, as amended
provides a greater amount,then whatever greater amount is specified in the Florida Statutes.
(h) No Abatement of Rent. Except as may be otherwise expressly provided herein, there
will be no abatement, diminution or reduction of Rent payable by Lessee hereunder or of the other
obligations of Lessee hereunder under any circumstances._
(i) Lessee Improvements Not Deemed Rent. The Lessee Improvements will be made by
Lessee in order to put the Leased Property in a condition suitable for the operation of the Lessee's
business. The cost or value of the Lessee Improvements is intended by the parties to inure solely to the
benefit of the Lessee and no portion of such cost or value is intended to inure to the benefit of the City
or constitute rent, license fee or other consideration for the right to occupy the Leased Property or the
Lessee improvements until the surrender of the Leased Property from Lessee to the City at the
expiration or earlier termination of this Lease.
(j) Records and Reporting.
(I) For the purpose of permitting verification by the City of any amounts due to it,
including an account of Gross Operating Revenues, Gross Operating F&B Revenues, Base Rent and
Transaction Rent, Lessee shall keep and preserve for at least five (5) years in Miami-Dade County,
Florida, at the address specified in Section 14.5, or at its home office, auditable original or duplicate
books and records for the Hotel Project, which shall disclose all financial information regarding the Hotel
Project, including information required to determine Base Rent and Transaction Rent. All such records
shall be maintained in every material respect according to GAAP and, as applicable to the Hotel, the
Uniform System. The City shall, on commercially reasonable notice, have the right during normal
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business hours at the expense of the City unless otherwise provided herein to inspect such books and
records and make any examination or audit or copy thereof which the City may require at any time
within one year after (a)submittal of the annual certification to City set forth in Subsection 4.4(j)(ii) with
respect to the Gross Operating Revenues and Gross Operating F&B Revenues, and (b) a Transfer
pursuant to which Transaction Rent is due in accordance herewith, with respect to the gross sales price
of such Transfer, as applicable. Records copied by the City, if any, shall be subject to the requirements
of the Florida Public Records Act set forth in Chapter 119 of the Florida Statutes ("Public Records Act").
To the fullest extent permitted by law, City shall protect from disclosure any records that are
confidential and exempt from disclosure under Florida law, provided, however, that nothing herein shall
preclude the City or its employees from complying with the disclosure requirements of the Public
Records Act, and any such compliance shall not be deemed an event of default by the City under this
Lease. City shall use its good-faith, diligent efforts to provide timely written notice to Lessee of any
public records request seeking any records of the Lessee that may be within the City's custody,
possession or control, to permit Lessee the opportunity to seek to protect such information from
disclosure. If such audit shall disclose a liability for Rent in excess of the Rent theretofore paid by
Lessee for the period in question, Lessee shall pay such excess amounts, together with interest at the
Default Rate, as Additional Rent within thirty (30) days after receipt of written demand therefor, and if
such audit shall disclose an overpayment of the Rent theretofore paid,the City shall return the excess to
Lessee within thirty(30)days after receipt of written demand therefore.
(ii) Lessee shall provide the City with an annual Audited Gross Operating Revenues
Schedule for each Lease Year during the Term, certified by the Lessee's outside CPA, within one hundred
twenty (120) days after the close of each Lease Year (including the Lease Year in which this Lease
terminates or is terminated) specifying the Gross Operating Revenues and Gross Operating F&B
Revenues, for each of the categories or items identified in the definitions of Gross Operating Revenues
and Gross Operating F&B Revenues, as applicable, Base Rent for the applicable Lease Year and
Additional Base Rent, if any.
(iii) If Lessee shall fail to deliver the foregoing annual Audited Gross Operating
Revenues Schedule to the City within said one hundred twenty (120) day period, the City shall have the
right to either conduct an audit itself or to employ an independent certified public accountant to
examine such books and records as may be necessary to certify the amount of Rents due with respect to
such Lease Year and to obtain the information described above. Lessee shall pay to the City, within thirty
(30) days after receipt of written demand thereof, as Additional Rent, the cost of any audit performed
by or for the City pursuant to this item(iii).
(iv) If the City disagrees with the annual Audited Gross Operating Revenues
Schedule provided by Lessee, it may conduct its own audit within one year after receipt of same by City,
which Lessee shall pay for if said audit demonstrates a deficiency of more than three percent (3%), in
the amount of Base Rent due to the City. If in the course of any audit the City identifies a deficiency in
excess of five percent (5%) in the amount of Base Rent, the City shall have the right to audit Lessee's
books and records for the three (3) prior calendar years. If the City identifies any deficiencies in excess
of five percent (5%)in the amount of Base Rent due as a result of an audit of any of those three (3) prior
calendar years, the City shall have the right to audit an additional two (2) prior calendar years. Any
dispute between the two audits which cannot be resolved by the Parties shall be resolved in accordance
with Section 7.8 of this Lease. The cost of any audit by the City which Lessee is required to pay the cost
of pursuant to this Section shall be the cost charged to the City by its independent auditors, or if done by
City personnel, the direct employee salary cost to the City for the time spent by said employees in
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performing such audit, but not in excess of what would have been charged to the City for the same
service by the City's outside auditors.
(v) Quarterly, commencing on the Possession Date and continuing until the
Completion of Construction, and not less often than annually thereafter, lessee shall deliver to the City
a written report detailing the employment by Lessee of City of Miami Beach and Miami-Dade County
residents in the construction,operation and maintenance of the Hotel Project.
Section 4.5. Covenants for Payment of Public Charges by Lessee.
(a) Payment of Public Charges. Lessee, in addition to the Rent and all other payments due
to City hereunder, covenants to pay and discharge before any fine, penalty, interest or cost may be
added,all public charges(collectively"Public Charges")including:
(i) All real and personal property taxes,all ad valorem real property taxes, all taxes
on Rents payable hereunder and under Subleases, tourist, room and restaurant taxes, restaurant taxes,
and public assessments (including, without limitation, permit fees, impact fees and other public
charges);and
(ii) Special Assessments pursuant to Section 4.5(d), electric, water and sewer rents,
rates and charges levied, assessed or imposed by any Governmental Authority against the Leased
Property, including all Lessee Improvements thereon, in the same manner and to the same extent as if
the same,together with all Lessee Improvements thereon were owned In fee simple by Lessee;and
(b) Lessee's obligation to pay and discharge Public Charges levied, assessed or imposed
against or with respect to the Leased Property shall not commence until the Possession Date. All such
charges shall be prorated, to the extent applicable, if the Possession Date is not at the beginning of the
calendar year. Lessee, upon written request, shall furnish or cause to be furnished to the City, official
receipts of the appropriate taxing authority, or other proof satisfactory to the City evidencing the
payment of any Public Charges.
(c) Contesting Impositions.
(I) Lessee shall have the right to contest the amount or validity,in whole or in part,
of any Public Charges, for which Lessee is, or is claimed to be, liable, by appropriate proceedings
diligently conducted but only after payment of such Public Charges, unless such payment would operate
as a bar to such contest or materially interfere with the prosecution thereof, in which event, payment of
such Public Charges may be postponed if, and only if, Lessee has deposited with City, in its capacity as
landlord under this Lease, cash or other security reasonably required by City Manager in the amount so
contested and unpaid, together with interest and penalties in connection therewith and any other
charges that may be assessed against or become a charge on the Leased Property or any part thereof in
such proceedings, less any amounts deposited with any Leasehold Mortgagee or any Mezzanine Lender
for such purposes. Upon the termination of any such proceedings, Lessee shall pay the amount of such
Public Charges or part thereof, if any,as finally determined in such proceedings,together with any costs,
fees, including counsel fees, interest, penalties and any other liability in connection therewith,and may
use the cash or other security deposited with the City for such purpose. If Lessee does not so use any
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such cash or other security deposited with the City, then the City shall promptly return such cash or
other security to Lessee upon the termination of any such proceedings.
(ii) City shall not be required to join in any proceedings referred to in this Section
4.5(d)unless:
(1) Governmental Requirements shall require that such proceedings be
brought by or in the name of City;or
(2) the proceeding involves the assessment or attempted assessment of a
real estate or ad valorem tax on the Leased Property,
in which event the City shall join in such proceedings or permit the same to be brought in the City's
name. Notwithstanding the foregoing, City's joinder and cooperation shall be limited to actions
necessary to enable Lessee to satisfy technical requirements of any action or proceeding and in no event
shall City be required to join in such action or proceeding in any substantive capacity.
(iii) Except for any counsel it retains separately, the City shall not be subjected to
any liability to pay any fees, including counsel fees, costs and expenses regarding such proceedings.
Lessee agrees to pay such fees,including commercially reasonable counsel fees, costs and expenses or,
on demand, to make reimbursement to the City for such payment. The City will endeavor to use in
house counsel whenever possible,in accordance with the City's customary practices.
(d) Special Assessments. The City retains all its rights to impose nondiscriminatory special
assessments or other public charges;provided, however,if at any time the City,in its municipal capacity,
subjects non-governmental users to an exclusive franchise for trash removal or other public services,
Lessee will be treated the same as similarly sized and situated properties (such as the Miami Beach
Loews Hotel).
(e) No Tax Abatements or Other Public Subsidies to Lessee. This Lease shall not, in and of
itself, entitle Lessee to any City tax abatement, tax rebate, public funding or public financing with
respect to any Public Charges, nor shall this Lease prohibit Lessee from seeking or receiving any tax
abatement, tax rebate, public funding or public financing with respect to any Public Charges of any
Governmental Authorities other than the City.
Section 4.6. Additional Consideration. Lessee, in addition to the Rent and all other payments due to
City hereunder, covenants to pay to the City for joint marketing purposes to promote the Convention
Center,the Hotel and the City, an amount equal to one percent(1%)of all gross room revenues but only
to the extent paid by Hotel guests as a voluntary surcharge and collected by Lessee (the "Convention
District Fee"), with the expenditure of such funds to be determined by the City Commission through its
annual budget process. Lessee will not challenge or contest the validity of the Convention District Fee.
ARTICLE V
ASSIGNMENT
Section 5.1. Purpose of Restrictions on Transfer. This Lease is granted to Lessee solely to develop
the Hotel Project and its subsequent use according to the terms hereof, and not for speculation in
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landholding. Lessee recognizes that, in view of the importance of developing the Hotel Project to the
general welfare of the City and the general community, the Lessee's qualifications and identity are of
particular concern to the community and the City. Accordingly, Lessee acknowledges that it is because
of such qualifications and identity that the City is entering into this Lease with Lessee, and, in so doing,
the City is further willing to accept and rely on the Lessee's obligations for faithfully performing all its
undertakings and covenants.
Section 5.2. Transfers. Lessee represents and warrants that Lessee has not made, created or
suffered any Transfers as of the date of this Lease and that the Persons that have an ownership interest
in Lessee on the date of this Lease are listed, together with their percentage and character of
ownership, on Exhibit "M". No Transfer may or shall be made, suffered or created by Lessee, its
successors, assigns or transferees without complying with the terms of this Article V. Any Transfer that
violates this Lease shall be null and void and of no force and effect. Notwithstanding anything to the
contrary set forth herein, including Section 5.3 hereof, prior to the Opening Date, one or more of the
principals of MB Mixed Use Investment Holdings Member, LLC and/or TB MBCC Hotel Investment LLC, as
such principals exist on the date of execution of this Lease, or the estate(s) of any such principal(s)
(each, an "Initial Owner"), shall, individually or collectively, continue, directly or indirectly, to direct the
day-to-day management and policies of Lessee.
Section 5.3. Permitted Transfers.
(a) Other than Permitted Transfers, no Transfer will be permitted without the written
Approval of the City Manager.
(b) Each of the following Transfers, shall be permitted hereunder without the City's
Approval("Permitted Transfers"):
(I) a Transfer prior to the Opening Date of a direct or indirect interest in Lessee to
an equity investor funding all or any portion of the balance of the Equity Commitment in excess of the
Initial Lessee Minimum Equity Contribution (together with any additional amounts funded by Initial
lessee or one or more of its Affiliates), provided that such transferee satisfies the applicable
"Acceptable Owner Criteria"set forth on Exhibit"A"attached hereto;
(ii) a Transfer after the Opening Date of the entire Hotel Project or any direct or
indirect interest in lessee provided that (i) the transferee satisfies the applicable "Acceptable Owner
Criteria" set forth on Exhibit "A" attached hereto; (ii) the City is given written notice thereof together
with true and correct copies of the applicable information required under Exhibit "A" attached hereto
and in accordance with the time frames set forth on Exhibit "A" attached hereto in order for City
Manager to confirm that the transferee (or the Lessee) is an Acceptable Owner; (iii) no Event of Default
has occurred and is continuing and (iv) all of the conditions precedent to the effectiveness of such
Transfer as set forth in Section 5.5 hereof are satisfied;
(iii) Any Transfer, if in accordance with the terms and conditions of Article VI, by the
First Leasehold Mortgagee, to an agent, designee or nominee of the First Leasehold Mortgagee that is
wholly owned or Controlled by such First Leasehold Mortgagee;
(iv) Any Transfer directly resulting from the foreclosure of a First Leasehold
Mortgage or the granting of a deed in lieu of foreclosure of a First Leasehold Mortgage or any Transfer
made to the purchaser at foreclosure of a First Leasehold Mortgage or to the grantee of a deed in lieu of
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foreclosure of a First Leasehold Mortgage (if such purchaser or grantee is a nominee in interest of the
First Leasehold Mortgagee), and provided further that such Transfer, purchase or grant is in accordance
with the terms and conditions of Article VI;
(v) Any Transfer directly resulting from a conveyance to a First Leasehold
Mortgagee of Lessee's interest provided it is in accordance with the terms and conditions of Article VI;
(vi) Any Transfer directly resulting from the foreclosure by the Mezzanine Lender of
a pledge of ownership interests of Lessee or any Transfer made to the purchaser at a foreclosure of such
pledge of ownership interests of Lessee (if such purchaser is a nominee in interest of the Mezzanine
Lender), or any assignment in lieu of such foreclosure, provided that such Transfer is in accordance with
the terms and conditions of Article VI;
(vii) Any Transfer, or series of Transfers not permitted pursuant to Sections 5.3(b)(i)
and 5.3(b)(ii) above,of not more than an aggregate of twenty-five percent (25%)of the direct or indirect
ownership interests in Lessee, provided that either there is no change in Control of Lessee as a result of
such Transfer or at all times after such Transfer, an Initial Owner or any Affiliate thereof, an Acceptable
Owner or other successor Person Approved by the City Manager has the power to direct the day-to-day
management and policies of Lessee;
(viii) Any Transfer that occurs by inheritance, devise, bequest or by operation of law
upon the death of a natural person who is the owner of a direct or indirect ownership interest in Lessee,
provided that, in each case, at all times after such Transfer, the transferor, or in the case of death, the
Person who inherits transferor's interest, retains Control of the transferred interest;
(ix) Any Transfer to a trust, partnership or other entity for family estate planning
purposes, provided that, in each case, at all times after such Transfer, the transferor retains Control of
the transferred interest;
(x) Any Transfer (A) to an Affiliate of the transferor or (B) among direct or indirect
owners of Lessee, provided that, in each case, either there is no change in Control of Lessee as a result
of such Transfer or at all times after such Transfer, an Initial Owner or an Affiliate thereof or an
Acceptable Owner or other successor Person Approved by the City Manager has the power to direct the
day-to-day management and policies of Lessee;or
(xi) After an initial Transfer of direct or indirect interests in Lessee to any entity that
is listed on any national securities exchange (which shall be subject to the Permitted Transfers or other
Approval provisions herein, as applicable), any Transfer of direct or indirect interests in Lessee through
any entity that is listed on any national securities exchange;
provided, however, in the case of any Transfer hereunder, the proposed transferee shall not, directly or
indirectly, own, operate or manage any Gaming Establishment in Miami-Dade County, Florida and any
purported Transfer in violation hereof shall be null and void and of no force and effect; provided,
however, that the foregoing restriction shall not apply to a proposed transferee if all Persons owning or
Controlling such proposed transferee, own or control in the aggregate five percent (5%) or less of the
voting securities of any owner, operator or manager of a Gaming Establishment in Miami-Dade County,
Florida.
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Section 5.4. Transfer Requiring City's Approval. Regarding any Permitted Transfer pursuant to
Section 5.3(b) or any other Transfer that is not a Permitted Transfer, Lessee shall give or cause to be
given to the City written notice of a Transfer (in the case of a Permitted Transfer), or written notice
requesting Approval of any other Transfer that is not a Permitted Transfer, and submitting all
information reasonably necessary for the City Manager (or the City Commission, with respect to
Transfers to certain Foreign Instrumentalities as specified herein) to evaluate the proposed transferees
and the Transfer and to obtain the City's Approval of same, when such Approval is required under the
terms of this Lease. If a Permitted Transfer under Sections 5.3(b)(i) or (ii), said information shall
demonstrate that the transferee is an Acceptable Owner as set forth on Exhibit"A"attached hereto; if a
Permitted Transfer under Sections 5.3(b)(vii) or (x), said information shall demonstrate that either there
is no change in Control of Lessee as a result of such Transfer or an Initial Owner or an Affiliate thereof,
an Acceptable Owner or, if applicable, other successor Person Approved by the City Manager has the
power to direct the day-to-day management and policies of Lessee; if a Permitted Transfer under
Sections 5.3(b)(viii)or(ix)said information shall demonstrate that the transferor,or in the case of death,
the Person who inherits transferor's interest, retains Control of the transferred interest. If not a
Permitted Transfer, Lessee shall provide to the City the information described in Paragraph C of Exhibit
"A" and the provisions described in Paragraph D of Exhibit "A" shall apply. The City's confirmation or
Approval process shall proceed as set forth on Exhibit "A" attached hereto. Any Approval of a Transfer
to a Foreign Instrumentality (other than to any of the member countries of the European Union or the
Gulf Cooperation Council, each as existing as of the Effective Date, United Kingdom, Canada, Mexico,
countries located in South America (excluding Venezuela), Japan, South Korea, Singapore and Australia,
or Persons Controlled by any of the foregoing countries)shall be subject to the prior written approval of
the City Commission, which approval may be granted, conditioned or withheld by the City Commission
in its sole discretion. Any Approval of a Transfer shall not waive any of the City's rights to Approve or
disapprove of any subsequent Transfer. Lessee shall from time to time throughout the Term, as the City
shall reasonably request, furnish the City with a complete statement, subscribed and sworn to by a
Responsible Officer of Lessee, setting forth the full names and address of holders of the ownership
interests in Lessee who hold, directly or indirectly, at least a ten percent (10%) interest in Lessee as well
as to confirm the percentage ownership interest, if any, of such Responsible Officer.
Section 5.5. Effectiveness of Transfers. No Transfer shall be effective unless and until all of the
following conditions precedent are satisfied within thirty(30)days of such Transfer:
(a) executed copies of the documents that convey title to the transferred interest; and
(b) where the Transfer is pursuant to Section 5.3(b)(ii), and if it is of the entire Hotel
Project, the Person to which any such Transfer is made, by a commercially reasonable, written
instrument and in form recordable among the public records, shall, for itself and its successors and
assigns, and especially for the benefit of the City, expressly assume all of the obligations of Lessee under
this Lease and agree to be liable and subject to all conditions and restrictions to which Lessee is subject.
Section 5.6. Subletting.
(a) Subject to the other terms and conditions of this Lease, Lessee shall have the right to
enter into Subleases of portions of the Leased Property at any time and from time to time during the
Term of this Lease with such Subtenants, and upon such commercially reasonable terms and conditions
as Lessee shall deem fit and proper, including, without limitation a taxable REIT subsidiary lease under
Section 856 of the Internal Revenue Code and an Opco/Propco lease between Lessee and an Affiliate,
provided the Sublease is consistent with this Lease (including this Article V) and consistent with the
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Hotel Standards. At the City's request, Lessee shall allow the City to review and inspect any and all
Subleases for the Hotel Project.
(b) Lessee covenants that it will perform and observe in all material respects all the terms,
covenants, conditions and agreements required to be performed and observed by it under each
Sublease. Lessee agrees that each Sublease shall:
(i) require the Subtenant to maintain adequate books and records including
reasonably detailed information on Gross Operating Revenues and/or Gross Operating F&B Revenues
(as applicable) of the applicable subleased portion of the Leased Property and to submit the same for
inspection and audit by the City and require the Subtenant to comply with Governmental Requirements;
(ii) provide that, if this Lease terminates, the Subtenant shall, if required by the
City, pay all rents and all other charges required by such Sublease directly to the City; and
(iii) obligate the Subtenant not to violate any term, covenant or restriction
applicable to Lessee that is contained in this Lease. In addition, Lessee shall in all events require and
cause Subtenants to perform obligations imposed by the Lease and applicable to such Sublease
(specifically including the obligations set forth in this Section 5.6).
(c) Notwithstanding anything to the contrary contained herein, at all times the Base Rent
payable to the City with respect to all portions of the Leased Property, whether or not subleased to a
Subtenant, shall be based on the Gross Operating Revenues and Gross Operating F&B Revenues of the
Leased Property, including any subleased portion of the Leased Property, and shall not be based on the
Sublease rent paid by any Subtenant thereunder (and such Sublease rent shall not be included in
calculating Gross Operating Revenues or Gross Operating F&B Revenues, as applicable) except solely
with respect to a portion of the Leased Property leased to a Subtenant for purposes of operating any
areas on the ground floor of the Hotel Project; a gift shop; a car rental facility; FedEx, UPS or a similar
delivery service; beachwear and equipment rental; and antennae; in which cases, only such Sublease
rent (but not Gross Operating Revenues or Gross Operating F&B Revenues, as applicable, of such
Subleased portions of the Leased Property) shall be used for purposes of calculating Gross Operating
Revenues and Gross Operating F&B Revenues.
ARTICLE VI
MORTGAGE FINANCING;RIGHTS OF MORTGAGEE AND LESSEE
Section 6.1. Conditions of Financing and Leasehold Mortgage.
(a) Lessee shall have the right to secure one or more financings or re-financings and, in
conjunction with and to secure that financing or re-financing, may enter into a First Leasehold Mortgage
in favor of a First Leasehold Mortgagee and/or a pledge of its ownership interests in favor of a
Mezzanine Lender, provided that:
(i) any such secured financing of the Hotel Project exclusively secures debt of the
Lessee or the Mezzanine Borrower directly related to the Hotel Project;
(ii) no First Leasehold Mortgage or other encumbrance executed by the Lessee in
connection with such First Leasehold Mortgage or Mezzanine Loan or otherwise will extend to or be a
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lien or encumbrance upon City's interest in any part of the Leased Property or in any right appurtenant
to that interest;
(iii) the First Leasehold Mortgage and any other encumbrance executed by the
Lessee in connection with such First Leasehold Mortgage or otherwise shall at all times, without the
necessity for the execution of any further documents, be subject and subordinate to the interest of the
City in the Leased Property subject to this Article VI; provided that (A) the First Leasehold Mortgagee
agrees from time to time upon request and without charge to execute, acknowledge and deliver any
instruments reasonably requested by the City under this Lease to evidence the foregoing subordination
and (B) the City agrees from time to time upon reasonable request and without charge to execute,
acknowledge and deliver any instruments reasonably requested by such First Leasehold Mortgagee or
Mezzanine Lender to evidence the City's non-disturbance and recognition of the rights granted to such
First Leasehold Mortgagee or Mezzanine Lender pursuant to this Section 6.1;
(iv) the rights of the City in the Leased Property and arising out of this Lease shall
not be affected by the First Leasehold Mortgage, First Leasehold Mortgagee, Mezzanine Loan or
Mezzanine Lender, nor shall the City be deprived in any other way of its rights in the Leased Property or
under this Lease, except to the extent provided in this Article VI or in any subordination, non-
disturbance and recognition agreement between the City and such First Leasehold Mortgagee or
Mezzanine Lender that is consistent with the terms of this Lease;
(v) Lessee shall at all times remain liable hereunder for the payment of Rent and
the performance of all covenants and conditions of this Lease as provided in this Lease;
(vi) at the time of the closing of the financing or re-financing other than for the
initial Construction Loan, the initial Mezzanine Loan and any other Leasehold Mortgage loan or
Mezzanine Loan that is closed prior to the Opening Date, Lessee certifies to the City that the Hotel
Project, after taking into account all existing debt of the Lessee, is projected to have and be able to
sustain a Debt Service Coverage Ratio of not less than 1.15 (based on the reasonably projected first
stabilized year for any financing that closes prior to the end of the reasonably projected first stabilized
year, and based on Lessee's approved operating budget for the current Lease Year for subsequent
financings);
(vii) at the time of the closing of the financing or re-financing,the aggregate amount
of the principal indebtedness secured by (a) mortgages encumbering Lessee's interest in the Leased
Property and/or (b) pledges of ownership interests of Lessee, does not exceed an amount equal to
eighty percent(80%)of the sum of(1)the then value of Lessee's interest in the Leased Property and any
improvements previously constructed on the Leased Property, as reasonably determined by a third-
party appraiser selected by the City and engaged at Lessee's sole expense, which appraiser must have at
least ten (10) years of experience in appraising hotel properties of at least four hundred (400) rooms in
the Miami Beach area, (2)the value of any improvements to be constructed on the Leased Property with
the proceeds of such financing or re-financing, and (3) all costs incurred, and all reserves required, in
connection with such financing or re-financing;
(viii) the First Leasehold Mortgagee shall have a first-priority right and option to
retain, apply and disburse the proceeds of any insurance or the proceeds of any condemnation award in
accordance with the requirements of its First Leasehold Mortgage before any such proceeds are applied
towards the demolition, repair or restoration of the Leased Property in accordance with the provisions
of this Lease; and
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(ix) Following a foreclosure sale, any purchaser at such foreclosure sale acquiring
any right, title or interest in or to this Lease, shall enter into in a written instrument reasonably
satisfactory to the City, to assume and agree to perform all of the terms, covenants and conditions of
Lessee hereunder arising after the date of such Transfer(provided that City does not waive or relinquish
its right,and shall have the right,to enforce its remedies with respect to any Event of Default existing as
of the date of such Transfer), that no additional mortgage or assignment of this Lease or pledge of
ownership interests of Lessee will be made except in accordance with the provisions contained in this
Article VI, and that a duplicate original of such written instrument, duly executed and acknowledged by
such purchaser and in recordable form, is delivered to the City immediately after the consummation of
such sale,or,in any event, prior to taking possession of the Leased Property.
(b) Prior to the date(i)a First Leasehold Mortgage is recorded or(ii)the Mezzanine Lender,
if any, enters into a Mezzanine Loan agreement with Lessee, the First Leasehold Mortgagee or
Mezzanine Lender,as applicable, Lessee and the City(by and through the City Manager)shall enter into
a non-disturbance, recognition and attornment agreement containing the provisions set forth in Section
6.1(d) below and such other terms and conditions as are reasonably acceptable to the First Leasehold
Mortgagee or Mezzanine Lender, as applicable, and the City Manager, after consultation with the City's
Chief Financial Officer and City Attorney.
(c) Lessee shall deliver to the City, promptly after execution by Lessee, (i) a true and
verified recorded copy of any First Leasehold Mortgage and any amendment, modification or extension
thereof, together with the name and address of the First Leasehold Mortgagee and (ii) a true and
correct copy of any Mezzanine Loan agreement and any amendment, modification or extension thereof,
together with the name and address of the Mezzanine Lender.
(d) For so long as any First Leasehold Mortgage encumbers the Leased Property, or, as
applicable, a Mezzanine Lender holds a pledge of Lessee's ownership interest, and provided the
conditions of Section 6.1(a)through(c)above have been satisfied:
(i) in any event where the City gives Lessee notice of an Event of Default, the City
shall deliver a copy of such notice to the First Leasehold Mortgagee and Mezzanine Lender,at the name
and address designated in writing by the First Leasehold Mortgagee and Mezzanine Lender to the City
from time to time (the City shall be deemed to have fulfilled its notice obligation by providing the
required notice to the address delivered to the City in accordance with Section 6.1(c) or such other
address so designated by the First Leasehold Mortgagee or Mezzanine Lender to the City in writing and
shall not be responsible for any liability in the event such address is not current);
(ii) notwithstanding the time allowed for Lessee to cure an Event of Default, the
First Leasehold Mortgagee and the Mezzanine Lender shall have the right, but not the obligation, up to
fifteen (15) days following the City's notice thereof to cure a monetary default and thereafter keep all
Rent and other amounts due hereunder current, and up to thirty (30) days following the City's notice
thereof to cure a non-monetary Event of Default (except an Event of Default under Section 7.1(c)
hereof, for which the First Leasehold Mortgagee and Mezzanine Lender will not be given any additional
time to remedy), but if such non-monetary Event of Default cannot be cured within such thirty(30) day
period, then the First Leasehold Mortgagee and Mezzanine Lender shall (except as provided in clauses
(iii) and (iv) below) have up to ninety(90) days to cure, provided that it has started to do so within the
initial thirty (30) day period and thereafter continues to diligently pursue the cure. The City will accept
performance by the First Leasehold Mortgagee and Mezzanine Lender of any covenant, condition or
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agreement on Lessee's part to be performed hereunder with the same force and effect as though
performed by Lessee;and
(iii) notwithstanding the provisions of this Lease to the contrary, including Article VII
hereof, no Event of Default by Lessee will be deemed to exist as to the First Leasehold Mortgagee, and
the City shall not be permitted to terminate this Lease due to an Event of Default of Lessee, as long as
the First Leasehold Mortgagee, in good faith, either (A) commences to cure such Event of Default and
prosecute the same to completion in accordance with clause (ii) above, or (B) if the nature of any non-
monetary Event of Default (except an Event of Default under Section 7.1(c) hereof, for which the First
Leasehold Mortgagee will not be given any additional time to remedy) is such that possession of or title
to the Hotel Project is reasonably necessary to cure the Event of Default or if the Event of Default is of
the type that cannot commercially reasonably be cured by the First Leasehold Mortgagee (e.g., Lessee
bankruptcy) (and which will be waived as to the First Leasehold Mortgagee if the First Leasehold
Mortgagee commences to cure all other Events of Default and prosecutes same to completion in
accordance with this clause (iii) or clause (ii) above), files a complaint for foreclosure and thereafter
prosecutes the foreclosure action in good faith and with due diligence and continuity (subject to any
stays, moratoria or injunctions applicable thereto) and obtains possession or title, to the extent a cure
cannot be effected without possession or title, directly or through a receiver, and as promptly as
practicable after obtaining such possession or title, to the extent a cure cannot be effected without
possession or title, commences promptly to cure such Event of Default and to prosecute the same to
completion in good faith and with due diligence and continuity; provided, however, that the First
Leasehold Mortgagee has delivered to the City, in writing within twenty (20) days following receipt of
City's notice of default, its agreement to take the action described in clause (A) or (B) of this clause (iii),
and that during the period in which such action is being taken (and any foreclosure proceedings are
pending), all of the other obligations of Lessee under this Lease, to the extent they are susceptible of
being performed by the First Leasehold Mortgagee (e.g., the payment of Rent), are being duly
performed. However, at any time after the delivery of the aforementioned agreement, the First
Leasehold Mortgagee may notify the City, in writing, that it has relinquished possession of the Leased
Property, or that it will not institute foreclosure proceedings or, if such proceedings have been
commenced, that it has discontinued them, and in such event, the First Leasehold Mortgagee will have
no further liability under such agreement from and after the date which is 30 days after it delivers such
notice to the City (except for any obligations accruing prior to 30 days after the date it delivers such
notice), and, thereupon,subject to the rights of the Mezzanine Lender set forth in clause (iv) below, the
City will have the unrestricted right to terminate this Lease and to take any other action it deems
appropriate by reason of any Event of Default, and upon any such termination, the provisions of Section
6.1(h) hereof will apply.
(iv) notwithstanding the provisions of this Lease to the contrary, including Article VII
hereof, no Event of Default by Lessee will be deemed to exist as to the Mezzanine Lender, and the City
shall not be permitted to terminate this Lease due to an Event of Default of Lessee, as long as the
Mezzanine Lender and/or First Leasehold Mortgagee, in good faith, either (A) commences to cure such
Event of Default and prosecute the same to completion in accordance with clause(ii)or(iii)above,or(B)
if the nature of any non-monetary Event of Default (except an Event of Default under Section 7.1(c)
hereof, for which the Mezzanine Lender will not be given any additional time to remedy) is such that
title to the ownership interests of the Lessee is reasonably necessary to cure the Event of Default or if
the Event of Default is of the type that cannot commercially reasonably be cured by the Mezzanine
Lender(e.g., Lessee bankruptcy) (arid which will be waived as to the Mezzanine Lender if the Mezzanine
Lender and/or First Leasehold Mortgagee commences to cure all other Events of Default and prosecutes
same to completion in accordance with clause (ii) or (iii) above), has taken all commercially reasonable
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steps necessary to foreclose the pledge of the Lessee's ownership interests, and prosecutes such action
in good faith and with due diligence and continuity (subject to any customary and reasonable
restrictions imposed under any intercreditor agreement or similar agreement between any First
Leasehold Mortgagee and Mezzanine Lender and/or any stays, moratoria or injunctions applicable
thereto) and obtains title to the ownership interests of the Lessee, and as promptly as practicable after
obtaining such title, commences promptly to cure such Event of Default and to prosecute the same to
completion in good faith and with due diligence and continuity; provided, however, that the Mezzanine
Lender has delivered to the City, in writing within twenty (20) days following receipt of City's notice of
default, its agreement to take the action described in clause (A) or(8)of this clause (iv), and that during
the period in which such action is being taken, all of the other obligations of Lessee under this Lease,to
the extent they are susceptible of being performed by the Mezzanine Lender (e.g., the payment of
Rent), are being duly performed. However, at any time after the delivery of the aforementioned
agreement, the Mezzanine Lender may notify the City, in writing, that it has relinquished title to the
ownership interests of the Lessee or that it will not seek to foreclose the pledge of Lessee's ownership
interests or, if such foreclosure has commenced, that it has been discontinued, and in such event, the
Mezzanine Lender will have no further liability under such agreement from and after the date which is
30 days after it delivers such notice to the City(except for any obligations accruing prior to 30 days after
the date it delivers such notice), and, thereupon, subject to the rights of the First Leasehold Mortgagee
set forth in clause(iii) above, the City will have the unrestricted right to terminate this Lease and to take
any other action it deems appropriate by reason of any Event of Default, and upon any such
termination,the provisions of Section 6.1(h) hereof will apply.
(e) From and after the date upon which the City receives the notice described in Section
6.1(c) hereof, the City will not (i) consent to a cancellation or surrender of this Lease (except upon the
expiration of the Term), or any amendment or modification hereof or(ii)terminate this Lease other than
as provided in this Article VI (except upon the expiration of the Term)without the prior written consent
of the First Leasehold Mortgagee and Mezzanine Lender, which consent shall not be unreasonably
delayed, conditioned or withheld.
(f) Notwithstanding anything in this Lease to the contrary, foreclosure of a First Leasehold
Mortgage or any sale thereunder, whether by judicial proceedings or by any power of sale contained in
the First Leasehold Mortgage or applicable law, or any conveyance of the Hotel Project from Lessee to
the First Leasehold Mortgagee or its designee or nominee in lieu of the foreclosure or other appropriate
proceedings in the nature thereof, or any foreclosure of a Mezzanine Loan, or conveyance of the
Lessee's ownership interest in lieu thereof,shall not:
(i) require the City's consent; or
(ii) provided the First Leasehold Mortgagee or the Mezzanine Lender has complied
with the provisions of this Article VI, constitute a breach of any provision of or a default under this
Lease.
(g) If the First Leasehold Mortgagee or any other foreclosure sale purchaser subsequently
assigns or transfers its interest under this Lease after acquiring the same by foreclosure or by an
acceptance of a deed in lieu of foreclosure or subsequently assigns or transfers its interest under any
such new lease entered into pursuant to Section 6.1(h) below, and in connection with any such
assignment or transfer, the First Leasehold Mortgagee or any other foreclosure sale purchaser takes
back a First Leasehold Mortgage to secure a portion of the purchase price, the holder of such First
Leasehold Mortgage shall be a First Leasehold Mortgagee entitled to receive the benefit of this Article VI
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and all other provisions of this Lease intended for the benefit of a First Leasehold Mortgagee. Similarly,
if a Mezzanine Lender or a purchaser under a UCC sale obtains title to the ownership interests in Lessee
and subsequently assigns or transfers its interests in such ownership interests, or subsequently assigns
or transfers its interest under any new lease entered into pursuant to Section 6.1(h) below, and in
connection with any such assignment or transfer, the Mezzanine Lender or any other UCC sale
purchaser takes back a pledge of the ownership interests of the Lessee to secure a portion of the
purchase price, the holder of such pledge shall be a Mezzanine Lender entitled to receive the benefit of
this Article VI and all other provisions of this Lease intended for the benefit of a Mezzanine Lender.
(h) Should the Lessee or any First Leasehold Mortgagee or Mezzanine Lender not cure the
alleged Event of Default as provided in this Section 6.1, the City has the right to terminate this Lease by
reason of any uncured Event of Default as provided in this Lease. If this Lease is terminated by the City
in accordance with the foregoing or is terminated as a result of the bankruptcy of the Lessee, the City
shall give written notification of such termination to the First Leasehold Mortgagee and Mezzanine
Lender, and the City shall, upon written request of the First Leasehold Mortgagee to the City received
within thirty (30) days after such notice of termination, enter into a new lease of the Leased Property
with such First Leasehold Mortgagee or Lessee (as owned by Mezzanine Lender), as lessee, for the
remainder of the Term with the same covenants, conditions and agreements (except for any
requirements which have been fully satisfied by Lessee or City prior to termination or which pertain to
the ownership of Lessee)as are contained herein.
(i) The City's delivery of the Leased Property to the First Leasehold Mortgagee or Lessee(as
owned by Mezzanine Lender), as applicable, as lessee, pursuant to a new lease shall be:
(I) made without representation or warranty of any kind or nature whatsoever
either express or implied;
(ii) First Leasehold Mortgagee or Lessee (as owned by Mezzanine Lender), as
lessee,shall take such Leased Property"as-is" in its then current condition; and
(iii) upon execution and delivery of such new lease, First Leasehold Mortgagee or
Lessee (as owned by Mezzanine Lender), as lessee, at its sole cost and expense shall be responsible for
taking such action as shall be necessary to cancel and discharge this Lease and to remove Lessee named
herein and any other occupant (other than as allowed by the First Leasehold Mortgagee or Lessee (as
owned by Mezzanine Lender),as applicable, as lessee,or the City)from the Hotel Project.
(j) The City's obligation to enter into such new lease of the Leased Property with the First
Leasehold Mortgagee or Lessee (as owned by the Mezzanine Lender) shall be conditioned upon, on the
date the new lease is executed:
(I) the City receiving payment of all Rent due hereunder through the date of such
new lease;
(ii) all monetary defaults hereunder having been cured;
(iii) all non-monetary defaults susceptible to cure having been remedied and cured
(or First Leasehold Mortgagee or Lessee (as owned by Mezzanine Lender), as applicable, as lessee,
having commenced such cure and continuing to diligently complete the cure in accordance with clauses
(iii)or(iv)of paragraph (d)above, as applicable); and
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(iv) the City receiving payment of all expenses, including reasonable attorneys' fees
and disbursements and court costs, incurred by the City in connection with such Event of Default, the
termination of this Lease and the preparation of the new lease, together with interest thereon at the
lesser of the Default Rate or the highest rate permitted by law, from the due date or the date expended
by the City, as the case may be, to the date of actual payment from First Leasehold Mortgagee or
Mezzanine Lender, as applicable.
(k) With respect to the payment of Rent by the First Leasehold Mortgagee or Mezzanine
Lender pursuant to this Article VI, if the Rent currently due cannot be determined by the First Leasehold
Mortgagee or Mezzanine Lender, as applicable, without possession of or title to the Hotel Project or
ownership of the Lessee's equity interests, as applicable, then the First Leasehold Mortgagee or
Mezzanine Lender may pay the amount of Base Rent which was paid for the immediately previous
period, with the adjustment, upward or downward, to be made ninety (90) days after the First
Leasehold Mortgagee obtains possession of or title to the Hotel Project or the Mezzanine Lender
acquires title to the ownership interests of the Lessee,as applicable.
Section 6.2. No Waiver of Lessee's Obligations or City's Rights. Nothing contained herein or in any
Leasehold Mortgage shall be deemed or construed to relieve Lessee from the full and faithful
observance and performance of its covenants, conditions and agreements contained herein, or from any
liability for the non-observance or non-performance thereof, or to require, allow or provide for the
subordination to the lien of such Leasehold Mortgage or to any Leasehold Mortgagee of any estate,
right, title or interest of the City in or to the Leased Property, buildings and structures or this Lease
(including the right to Rent, Public Charges, and other monetary obligations of Lessee to the City under
this Lease), nor shall the City be required to join in such mortgage financing or be liable for same in any
way. City's interest in the Leased Property and this Lease, as the same may be modified, amended or
renewed, will not at any time be subject or subordinate to (a) any mortgage now or hereafter placed
upon Lessee's interest in this Lease, or (b) any other liens or encumbrances hereafter affecting Lessee's
interest in this Lease. City represents and warrants to Lessee that no mortgages currently exist against
its fee interest in the Leased Property,and acknowledges that this Lease shall not be subordinate to any
future mortgage against the fee interest in the Leased Property. Notwithstanding anything to the
contrary contained in this Lease, if all or any portion of the interest of City in the Leased Property or this
Lease shall be acquired by reason of foreclosure of any mortgage, security agreement, lien or other
encumbrance or other proceedings brought to enforce the rights of the holder(s) thereof, by deed in
lieu of foreclosure or by any other method, and as a result any Person succeeds to such interests of City,
this Lease and the rights of Lessee hereunder shall continue in full force and effect and shall not be
terminated or disturbed except as otherwise expressly permitted by the terms of this Lease.
Section 6.3. Waiver of Landlord's Lien. City hereby waives any statutory liens and any rights of
distress with respect to the improvements, fixtures and all Lessee's personal property constructed on,
located at or used in connection with the Leased Property, or the Lessee's interest in the Leased
Property. This Lease does not grant a contractual lien or any other security interest to City or in favor of
City with respect to the improvements, fixtures or any of Lessee's personal property constructed on,
located at or used in connection with the Leased Property, or the Lessee's interest in the Lease Property.
The City further agrees to execute and deliver such instruments reasonably requested by any Leasehold
Mortgagee or Mezzanine Lender from time to time to evidence the aforesaid waiver of City.
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ARTICLE VII
REMEDIES;EVENTS OF DEFAULT
SectIon 7.1. Default by Lessee. Each of the following occurrences shall constitute an "Event of
Default"of Lessee that shall entitle City to terminate this Lease and seek any other remedies as set forth
in Section 7.2:
(a) if Lessee fails to pay any installment of Rent, including Base Rent, or any part
thereof, when the same becomes due and payable for a period of three (3) Business Days after notice
thereof from the City;
(b) if Lessee fails to make any payment of Additional Rent, Public Charges or any
other payment required to be paid by lessee hereunder for a period of 10 Business Days after notice
thereof from City to Lessee;
(c) if lessee fails to satisfy all of the Possession Conditions by the Outside
Possession Date;
(d) [intentionally deleted];
(e) if Lessee fails,after Commencement of Construction,to cause the Opening Date
to occur by the Outside Opening Date;
(1) if Lessee conducts on the Leased Property any business,the performance of any
service,or the sale or marketing of any product or service by Lessee which is prohibited by the terms of
this Lease for a period of thirty(30)days after receipt of notice thereof from the City;
(g) if Lessee(i) actively participates in the use of any portion of the Hotel Project as
a Gaming Establishment (through venue rental, promotion or other similar activities) for a period of
three(3)Business Days after written notice thereof from the City; provided, however,that the City shall
not be obligated to provide written notice of such failure more than two (2) times in any consecutive
twelve (12) month period, and the failure of lessee to comply with the restrictions in Section 4.2(b)
prohibiting use of the Leased Property as a Gaming Establishment after the second written notice in any
consecutive twelve (12) month period shall constitute an Event of Default by Lessee hereunder without
the requirement of any notice or opportunity to cure; or (ii) knows of the use by any Person of any
portion of the Hotel Project as a Gaming Establishment and fails for a period of three (3) Business Days
after written notice thereof from the City either to (A) cause the violation to cease or (B) commence
action to terminate the Sublease and thereafter diligently prosecute eviction of the Subtenant as
immediately as possible;
(h) If Lessee or any Person with an ownership interest in Lessee violates Section
4.2(g) (other than as provided in subsection (g) above) or the Acceptable Owner Criteria specified in
subparagraph A.4 of Exhibit"A" of this Lease (other than any such violation by any Persons that have
ownership interests in Lessee through any entity that is listed on any national securities exchange), or is
a Prohibited Person (other than Persons that have ownership interests in Lessee through any entity that
is listed on any national securities exchange);provided,however, in the case of any such violation by any
Person with an ownership interest in Lessee, Lessee shall have twelve months to cure such violation
after Lessee first becomes aware of such violation, including without limitation, in the case of Section
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4.2(g) by divestiture of the ownership interest in the Gaming Establishment (whether by notice from the
City or otherwise);
(i) if Lessee fails to maintain or provide evidence of all insurance in compliance in
all material respects with Article IX hereof (any lapse in required coverage shall be deemed a failure to
comply with Article IX hereof) and such failure continues for a period of ten (10) Business Days from the
date of written notice thereof from City;
(j) if Lessee fails to operate the Hotel in compliance in all material respects with
the Hotel Standards, and such failure continues for a period of ninety(90) days from the date of written
notice thereof from City or if the default is not capable of being cured within such ninety (90) day
period, Lessee fails within such period to commence a cure and thereafter diligently and in good faith
prosecute the same to completion within a reasonable time, subject to the rights of any First Leasehold
Mortgagees, Mezzanine Lenders and sub-lessees hereunder;
(k) if there is a default by Lessee under the Management Agreement and/or
Franchise Agreement and as a result of such default the Management Agreement and/or Franchise
Agreement is terminated and a replacement Management Agreement and/or Franchise Agreement is
not entered into within ninety (90) days thereafter, provided that if Lessee shall have commenced and
thereafter shall have continued diligently to replace the Management Agreement and/or Franchise
Agreement within such ninety(90) day period and the Hotel Project continues to operate in the ordinary
course of business, then Lessee shall have an additional commercially reasonable period of time not to
exceed one hundred eighty (180) days within which to enter into a replacement Management
Agreement and/or Franchise Agreement,
(I) if prior to the Opening Date, any lawsuit is filed against the Lessee, which is not
dismissed within sixty (60) days and the amount in controversy of which is not covered by insurance or
bond and which, if adversely determined, would substantially impair the ability of Lessee to perform its
obligation to cause the Opening Date to occur by the Outside Opening Date, unless Lessee is contesting
such lawsuit in good faith and through appropriate action.
(m) if Lessee fails to observe or perform one or more of the other terms, conditions,
covenants or agreements of this Lease not otherwise addressed in this Section 7.1 and such failure
continues for a period of 45 days after written notice thereof by City to Lessee specifying such failure,
unless such failure requires work to be performed, acts to be done, or conditions to be removed which
cannot by their nature reasonably be performed, done or removed, as the case may be, within such 45
day period, in which case no Default will be deemed to exist as long as (i) Lessee commences curing the
same within such 45 day period and diligently and continuously prosecutes the same to completion and
(ii) after the Opening Date the Hotel Project continues to operate in the ordinary course of business, to
the extent commercially reasonable taking into account the nature of the alleged failure to perform
according to the covenant,condition or agreement in question;
(n) if Lessee admits, in writing, that it is generally unable to pay its debts as such
debts become due;
(o) if Lessee makes an assignment for the benefit of creditors;
(p) if Lessee files a voluntary petition under the Bankruptcy Code or if such petition
is filed against Lessee and an order for relief is entered, or if Lessee files any petition or answer seeking,
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consenting to or acquiescing in any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under the Bankruptcy Code or any other present or future
applicable federal, state or other statute or law, or seeks or consent to or acquiesces in or suffers the
appointment of any trustee, receiver, custodian, assignee, sequestrator, liquidator or other similar
official of Lessee, or of all or any substantial part of its properties or of the Leased Property or any
interest of Lessee therein;
(q) if within 90 days after the commencement of any proceeding against Lessee
seeking to have an order for relief entered against it as debtor or to adjudicate it a bankrupt or
insolvent, or seeking any reorganization, arrangement, composition, readjustment or adjustment,
winding-up, liquidation, dissolution or similar relief under the Bankruptcy Code or any other present or
future applicable federal, state or other statute or law of any jurisdiction, domestic or foreign, such
proceeding has not been dismissed, or if, within 90 days after the appointment, without the consent or
acquiescence of Lessee, of any trustee, receiver, custodian, assignee, sequestrator or liquidator of
Lessee, or of all or any substantial part of its properties or of the Leased Property or any interest of
Lessee therein, such appointment has not been vacated or stayed on appeal or otherwise, or if, within
30 days after the expiration of any such stay,such appointment has not been vacated;
(r) if any case, proceeding or other action is commenced or instituted against
Lessee seeking the issuance of a warrant of attachment, execution or similar process against all or any
substantial part of its property, which case, proceeding or other action results in the entry of an order
for any such relief which has not been vacated, discharged, stayed or bonded pending Lessee's appeal
therefrom within 30 days from the entry thereof;
(s) if Lessee fails, or fails to cause the Hotel Operator, to continuously operate the
Leased Property in accordance with Section 13.2 hereof; provided, however, that if such failure is a
result of the actions or inactions of the Hotel Operator, and in order to cure such failure, Lessee must
enforce its rights against the Hotel Operator and/or terminate Hotel Operator, Lessee shall have a
period of twelve (12) months after the initial occurrence of such failure within which to cause the Hotel
Operator to continuously operate in accordance with Section 13.2 hereof and/or terminate the Hotel
Operator provided that Lessee promptly commences such enforcement rights and/or termination and
thereafter pursues such enforcement rights and/or termination in good faith and with due diligence and
during such enforcement and/or termination process, Lessee uses commercially reasonable efforts to
continuously operate the Leased Property in accordance with Section 13.2 hereof;
(t) if Lessee, prior to the Opening Date, vacates or abandons the Leased Property
or any portion thereof, or voluntarily abandons construction of any portion of the Hotel Project (other
than in connection with a Force Majeure Event), which abandonment is not cured within a reasonable
time, not less than thirty(30)days,following written notice from City;
(u) if this Lease or the leasehold estate of Lessee hereunder is assigned, subleased,
transferred, mortgaged, pledged or encumbered in any manner without compliance with the provisions
of this Lease, or if Lessee attempts to consummate any Transfer (by entering into an agreement to sell
or assign its interest in this Lease or the Hotel Project or to sublet any portion of the Leased Property
which is not conditioned on satisfying the Transfer provisions of this Lease, or by agreeing to a Transfer
without complying with the provisions governing same in this Lease), except as expressly permitted
herein; and fails to correct such Transfer or such other default under this clause (u) within thirty (30)
days after receiving notice from City;
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(v) if a levy under execution or attachment is made against Lessee or its property
and such execution or attachment has not been vacated or removed by court order, bonding or
otherwise within a period of 30 days after such execution of attachment;and
(w) if Lessee or Hotel Operator fails to comply with the Room Block Agreement in a
manner that constitutes an Event of Default under such agreement.
Notwithstanding any provision to the contrary herein, the Parties' acts or omissions in connection with
Section 3.10 shall not be deemed an Event of Default.
Section 7.2. Remedies for Lessee's Default.
(a) If an Event of Default occurs hereunder, the City may elect any one or more of the
following remedies,without limitation:
(i) terminate this Lease and commence an action for eviction immediately upon
the occurrence of any Event of Default;
(ii) immediately revoke the licenses granted to Lessee pursuant to the Assignment
of Plans and Approvals and the Assignment of Hotel Project General Construction Contract;and
(iii) with respect to any Event of Default under Section 7.1(f), the City shall be
entitled, for each month so long as such Event of Default has not been cured, to Base Rent equal to
three times the Base Rent being paid at the time of such Event of Default for each month until the
earlier of (x) such Event of Default has been cured or (y) City has terminated this Lease pursuant to
clause(i)above.
The City's election of a remedy hereunder with respect to any one or more Events of Default shall not
limit or otherwise affect the City's right to elect any of the remedies available to it hereunder or as
provided by law with respect to that or any other Event of Default.
(b) If this Lease is terminated as provided in Section 7.2(a)(i) hereof as a result of an Event
of Default under Section 7.1(c), Lessee will pay or cause to be paid to the City the lesser of: (i) the
unfunded portion, if any, of the Initial Lessee Minimum Equity Contribution; or (ii) the actual,
documented costs and expenses paid by City to third parties in connection with this Lease, not to exceed
$500,000.00 in the aggregate. if this Lease is terminated as provided in Section 7.2(a)(i) hereof as a
result of an Event of Default other than an Event of Default under Section 7.1(c),Lessee will pay or cause
to be paid to the City the unfunded portion, if any, of the Initial Lessee Minimum Equity Contribution
and will indemnify City against and compensate City from and for any and all reasonable third party
costs incurred by City in enforcing its rights and remedies hereunder. If Lessee has already invested the
amount of the Initial Lessee Minimum Equity Contribution at the time of termination and has provided
reasonable evidence of same to the City,no additional amounts will be due from Lessee;
(c) If an Event of Default occurs, Lessee will nevertheless be obligated to continue to pay all
Rent for so long as Lessee has possession of the Leased Property.
(d) Upon the termination of this Lease, Lessee shall quit and peaceably surrender the Hotel
Project (which includes the Leased Property and the Lessee Improvements), and all property in its
possession to the City in accordance with Sections 7.9 and 11.5.
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(e) Upon the termination of this Lease, as provided in this Section 7.2,all rights and interest
of Lessee in and to the Hotel Project (which includes the Leased Property and the Lessee
Improvements), and every part thereof shall cease and terminate, and the City may, in addition to any
other rights and remedies it may have,retain all sums paid to it by Lessee under this Lease.
(f) If this Lease is terminated prior to the Outside Opening Date, to the extent not
previously assigned to the City,City shall have the right to cause Lessee to assign to the City(or another
Person as "Assignee") all of its rights under (i) the Hotel Project General Construction Contract, the
Management Agreement,the Franchise Agreement, if any,the agreements executed by Lessee with the
architect for the Hotel Project and any other design professions and any other agreement executed by
Lessee in connection with the development, construction and/or fixturing of the Hotel Project that
requires payments by Lessee exceeding $500,000.00 in the aggregate and (ii) to the extent Lessee is
able, all other contracts and agreements executed in connection with the Hotel Project, in each case on
a non-recourse basis, without any warranties or representations from Lessee, and, subject to the rights
of Leasehold Mortgagees and Mezzanine Lenders, to entitle City or Assignee to all of the rights and
benefits of Lessee thereunder, and to provide that City or Assignee, upon the assignment of such
contracts(s) and agreement(s) pursuant to this section, shall only be responsible for amounts due
thereunder for work performed or services rendered with City's or Assignee's consent after such
assignment; provided that the other party to any such contracts will continue to have the rights and
remedies provided therein for any defaults occurring prior to the assignment to the City or its Assignee.
(g) In the event the City elects to terminate this Lease after an Event of Default and such
termination is stayed by order of any court having jurisdiction of any matter relating to this Lease,or by
any federal or state statute,then following the expiration of any such stay,the City shall have the right,
at its election, to terminate this Lease with five (5) days' written notice to Lessee, Lessee as debtor in
possession or if a trustee has been appointed,to such trustee.
(h) As an additional inducement to and material consideration for City agreeing to this
Lease, Lessee agrees that in the event a Bankruptcy or Judicial Action (as defined herein) is commenced
which subjects the City to any stay in the exercise of the City's rights and remedies under this Lease,
including the automatic stay imposed by section 362 of the United States Bankruptcy Code (individually
and collectively, "Stay"), then, provided the Stay is lifted and released as to all Leasehold Mortgagees
and Mezzanine Lenders (to the extent the Leasehold Mortgage loan documents and Mezzanine Loan
documents, as applicable, include Stay relief provisions), Lessee irrevocably consents and agrees to the
Stay being lifted and released against City, and City shall thereafter be entitled to exercise all of its rights
and remedies against the Lessee under this Lease. The Lessee acknowledges that it is knowingly,
voluntarily, and intentionally waiving its rights to any Stay and agrees that the benefits provided to the
Lessee under the terms of this Lease are valuable consideration for such waiver. As used in this Section,
the term "Bankruptcy or Judicial Action"shall mean any voluntary or involuntary case filed by or against
Lessee under the Bankruptcy Code, or any voluntary or involuntary petition in composition,
readjustment, liquidation, or dissolution, or any state and federal bankruptcy law action filed by or
against Lessee, any action where Lessee is adjudicated as bankrupt or insolvent, any action for
dissolution of Lessee or any action in furtherance of any of the foregoing, or any other action, case, or
proceeding that has the effect of staying(or in which a Stay is being obtained against)the enforcement
by the City of its rights and remedies under this Lease.
(i) Notwithstanding the foregoing, in the event that Lessee seeks to assume and assign this
Lease pursuant to section 365 of the Bankruptcy Code it will be required to provide to the City adequate
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assurance of future performance which shall consist of evidence that such assignee satisfies the
"Acceptable Owner Criteria"set forth in Exhibit"A".
Section 7.3. Default by the City. An event of default by the City shall be deemed to have occurred
under this Lease if the City fails to perform any obligation or fulfill any covenant or agreement of the City
set forth in this Lease and such failure shall continue for thirty (30) days following the City's receipt of
written notice of the non-performance; provided, however,the City shall not be in default of this Lease:
(a) if the City provides Lessee with a written response within said thirty (30) day period
indicating the status of the City's resolution of the breach and providing for a mutually agreeable
schedule to correct same;or
(b) with respect to any breach that is capable of being cured but that cannot reasonably be
cured within said thirty (30) day period, if the City commences to cure such breach within such thirty
(30) day period (or as soon thereafter as is reasonably possible) and diligently continues to cure the
breach until completion, but no longer than a total of one hundred twenty(120)days.
Section 7.4. Force Majeure and Economic Force Majeure.
(a) Neither the City nor Lessee, as the case may be, shall be considered in breach of or in
default of any of its non-monetary obligations, including suspension of construction activities,
hereunder by reason of unavoidable delay due to any Force Majeure Event; provided that the Party
claiming such Force Majeure Event delivers written notice to the other Party of such Force Majeure
Event within twenty-one (21) days after first becoming aware of the occurrence thereof, which notice
shall describe in reasonable detail the events giving rise to the Force Majeure Event;and such Party shall
diligently attempt to remove, resolve or otherwise seek to mitigate such delay and keep the other Party
advised with respect thereto. Time is of the essence with respect to this provision, and any failure by a
Party to timely deliver such notice of a Force Majeure Event shall be deemed a waiver of such Party's
right to delay performance as a result of such Force Majeure Event. With respect to any Force Majeure
Event that is an "Act of God" (e.g., a hurricane) that is of such an extent that reasonable methods of
communication or access are not available, then notwithstanding Section 14.5 of this Lease to the
contrary, notice by Lessee shall be deemed sufficiently given to City if transmitted via electronic
transmission to the City Manager and City Attorney; provided that as soon as reasonably practicable
following the occurrence of such "Act of God" a copy of such notice is delivered pursuant to the terms of
Section 14.5 hereof.
(b) Economic Force Majeure. If, prior to Possession, Lessee is delayed, hindered or
prevented from being able to obtain a Construction Loan Commitment or satisfy the Possession
Conditions due to Economic Force Majeure, then the Outside Possession Date and the Outside Opening
Date shall each be extended for the period of such delay (but not to exceed eighteen (18) months);
provided, that, with respect to any such delay by Economic Force Majeure, the Lessee shall give written
notice of such occurrence to City within twenty-one (21) days after Lessee has knowledge of such
occurrence, which notice shall describe in reasonable detail the events giving rise to the Economic Force
Majeure and Lessee shall diligently attempt to remove, resolve, or otherwise seek to mitigate such
delay, and keep City advised with respect thereto. Time is of the essence with respect to this provision,
and any failure by Lessee to timely deliver such notice of Economic Force Majeure shall be deemed a
waiver of Lessee's right to extend the Outside Possession Date and the Outside Opening Date, as
applicable, as a result of such Economic Force Majeure.
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Section 7.5. Remedies Cumulative; Waiver. The rights and remedies of the parties to this Lease,
whether provided by law or by this Lease, shall be cumulative and concurrent,and the exercise by either
Party of any one or more of such remedies shall not preclude the exercise by it, at the same or different
times,of any other such remedies for the same default or breach,or of any of its remedies for any other
default or breach by the other Party. No waiver of any default or Event of Default hereunder shall
extend to or affect any subsequent or other default or Event of Default then existing, or impair any
rights, powers or remedies consequent thereon, and no delay or omission of any Party to exercise any
right, power or remedy shall be construed to waive any such default or Event of Default or to constitute
acquiescence thereof.
Section 7.6. Right to Cure. If Lessee shall default in the performance of any term, covenant or
condition to be performed on its part hereunder, the City may, in its sole discretion, after notice to
Lessee and beyond applicable grace and cure periods(or without such notice and cure in the event of an
emergency), perform the same for the account and at the expense of Lessee; provided, however: (i)City
shall not exercise its rights under this Section 7.6 if the City has not provided the notices required under
Section 6.1(d)(i); and (ii) City shall not exercise its rights under this Section 7.6 if any Leasehold
Mortgagee or Mezzanine Lender is complying with the provisions of Sections 6.1(d)(ii), (iii) or (iv), as
applicable, with respect to such default. If, at any time and by reason of such default that remains
uncured beyond applicable grace and cure periods, except for defaults relating to failure to satisfy all of
the Possession Conditions by the Outside Possession Date, or defaults that occur prior to the date the
Possession Conditions are satisfied and possession is given to Lessee(unless in each case City waives any
right to terminate this Lease),the City is compelled to pay,or elects to pay,any sum of money or do any
act which will require the payment of any sum of money, or is compelled to incur any expense in the
enforcement of its rights hereunder or otherwise, such sum or sums shall be deemed Additional Rent
hereunder and,together with interest thereon at the Default Rate, shall be repaid to the City by Lessee
upon demand. Notwithstanding the foregoing, sums expended in connection with the Work or
Skybridge (or both)shall not be deemed Additional Rent, and Lessee shall not be required to repay City
for such sums, unless either(A) City waives its rights to terminate this Lease regarding all then-existing
defaults and Events of Default or (B) if City does not waive its rights to terminate, and this Lease is
terminated,then upon any reinstatement of this Lease either by mutual agreement of City and Lessee or
by final, non-appealable order of a court of competent jurisdiction.
Section 7.7. Room Block Agreement. No termination or expiration of this Lease shall affect or
impair the Room Block Agreement, which shall continue to encumber the Hotel with respect to any of
Lessee's successors in accordance with the terms of the Room Block Agreement. Upon expiration or
earlier termination of this Lease, the City shall honor bookings under the Room Block Agreement which
follow such expiration or earlier termination of this Lease.
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Section 7.8, Dispute Resolution.
(a) City and Lessee agree that any dispute, claim or controversy between them relating to
or arising under this Lease ("Dispute") will first be submitted, by written notice, to a designated
representative of both City and Lessee who will meet at City's place of business or other mutually
agreeable location, or by teleconference, and confer in an effort to resolve such dispute. Any decision of
the representatives will be final and binding on the parties. In the event the representatives are unable
to resolve any dispute within ten (10) days after submission to them, either Party may refer the dispute
to mediation. The exclusive venue for any Dispute not resolved by mediation shall be any state or
federal court of competent jurisdiction sitting in or for Miami-Dade County, Florida, except for (i)
Development Disputes, which shall be resolved in accordance with Section 7.9, or (ii) Disputes relating
to City's disapproval of a proposed brand as an Approved Brand or a Proposed Transferee as an
Acceptable Owner, which shall be resolved in accordance with Section 7.10.
(b) TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE CITY AND LESSEE HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER OF THEM OR THEIR HEIRS,
PERSONAL REPRESENTATIVES, SUCCESSORS OR ASSIGNS MAY HAVE TO A TRIAL BY JURY IN RESPECT TO
ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE OR ANY AGREEMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT TO THE PARTIES ENTERING INTO THIS LEASE.
Section 7.9. Expedited Arbitration of Development Disputes.
(a) If Lessee or City asserts that a Development Dispute has arisen, such asserting Party
shall give prompt written notice thereof to the other Party, and such Development Dispute shall be
submitted to binding arbitration by the Development Arbitrator in accordance with this Section 7.9.
(b) The Parties shall cooperate to select an independent, neutral, professional arbitrator
experienced in the resolution of construction claims and associated subject matter having at least ten
(10)years of hotel development or construction experience in the Miami-Dade County area to serve as
the arbitrator (the "Development Arbitrator"). If the Parties cannot agree on a single Development
Arbitrator, then each Party shall select an arbitrator with such hotel development or construction
experience, who shall jointly select a third arbitrator with such hotel development or construction
experience and the three arbitrators shall collectively constitute the Development Arbitrator.
(c) The Development Arbitrator shall, no later than five (5) Business Days after being
selected, hold a preliminary, informal meeting with City and Lessee in an attempt to mediate such
Development Dispute. If such Development Dispute is not resolved at such meeting, the Development
Arbitrator shall at such meeting establish a date (the "Hearing Date"), not earlier than five (5) Business
Days after such meeting nor later than twenty (20) days after such meeting for a hearing (a "Hearing")
to be held in accordance with this Lease to resolve such Development Dispute.
(d) Lessee and City each shall have the right to make one (1) written submission to the
Development Arbitrator prior to the Hearing. Such submission shall be received by the Development
Arbitrator and the other Party not later than two (2) Business Days prior to the Hearing Date. The
Parties agree that no discovery (as the term is commonly construed in litigation proceedings) will be
permitted and agree that neither Party nor the Development Arbitrator shall have discovery rights in
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connection with a Development Dispute.
(e) The Hearing shall be conducted by the Development Arbitrator. It is the intention of
the Parties that the Hearing on a Development Dispute shall be conducted in an informal and
expeditious manner. No transcript or recording shall be made. Each Party shall have the opportunity to
make a brief statement and to present documentary and other support for its position, which may
include the testimony of not more than four (4) individuals, two (2) of whom may be outside experts.
There shall be no presumption in favor of either Party's position. Any procedural matter not covered
herein shall be governed by procedures mutually agreed upon by the Parties, or if they are unable to
agree, in accordance with the Construction Industry Arbitration Rules of the American Arbitration
Association (as amended hereby).
(f) The Hearing shall be held in a location selected by the Development Arbitrator in
Miami-Dade County, Florida. Provided that the Development Arbitrator is accompanied by
representatives of both Lessee and City, the Development Arbitrator may, at its option, visit the Hotel
Site to make an independent review in connection with any Development Dispute.
(g) The Development Arbitrator, in rendering its decision with regard to any Development
Dispute, shall take into account and at a minimum consider the following factors, which shall be used
to guide its decision:
(i) City does not have any Approval rights with respect to the matter of interior
design and decor of the Hotel Project except to the extent the same is reflected in the Approved
Plans or Mandatory Hotel Project Design Elements;
(ii) the Hotel Project shall be designed and constructed to meet or exceed the Hotel
Standards;
(iii) the mutual goal of Lessee and City is that costs in excess of the Budgeted
Improvement Costs should be avoided or minimized unless proposed by Lessee and for which Lessee
has agreed to provide adequate funds;
(iv) the mutual goal of Lessee and City is that the construction of the Hotel Project
be completed and the Opening Date occur by the Outside Opening Date;
(v) the Hotel Project must comply with all Governmental Requirements; and
(vi) the magnitude of the modification to the Approved Plans.
(h) Pending resolution of the Development Dispute, Lessee may not implement the
matter which is the subject of such Development Dispute.
(i) The Development Arbitrator shall render a decision, in writing, as to any Development
Dispute not later than two (2) Business Days following the conclusion of the Hearing regarding such
Development Dispute and shall provide a brief written basis for its decision not later than five (5)
Business Days thereafter. Such decision of the Development Arbitrator shall be rendered by (a) the
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decision of the single Development Arbitrator,(b)the decision of two of the arbitrators comprising the
Development Arbitrator, if two are able to agree, (c) the decision of the third arbitrator appointed by
each of the Parties' arbitrators, if no two of the three arbitrators are able to agree within such period,
or (d) agreement between the Parties prior to and independently of the decision of the Development
Arbitrator. As to each Development Dispute, the Development Arbitrator's decision shall be limited
to resolution of the Development Dispute in question, and the Development Arbitrator shall have no
right whatsoever to impose or grant to either Party any remedy other than a decision as to: (i)
whether a modification to the Hotel Project is a substantial deviation from the Approved Plans or a
Prohibited Hotel Project Change requiring City's Approval pursuant to Section 2.2; (ii) any contention
that City has unreasonably failed to Approve modifications to the Approved Plans in accordance with
this Lease; (iii) any contention that City has unreasonably failed to Approve the proposed Approved
Skybridge and Off-Site Improvements Plans or modifications thereto in accordance with this Lease; (iv)
any contention that City has unreasonably failed to Approve a Hotel Project General Contractor in
accordance with Section 2.8(b); or (v) any disagreement as to permitted delays in the Schedule of
Performance pursuant to Section 2.7.
(j) The decision of the Development Arbitrator shall be final and binding on the Parties
for all purposes and may be entered in any court of competent jurisdiction.
(k) If any matter submitted to the Development Arbitrator hereunder is settled by
agreement between the Parties prior to, or independently of, the final determination of the
Development Arbitrator, any and all expenses of such binding determination (including fees of the
Development Arbitrator) will be shared equally by the Parties; and the expense of such binding
determination resolved by final determination of the Development Arbitrator (including fees of the
Development Arbitrator) will be borne by the Party against whom such determination has been
concluded.
Section 7.10. Disputes Regarding Disapproval of a Proposed Brand or Proposed Transferee.
(a) If (i) Lessee and City disagree as to whether a proposed Approved Brand satisfies the
definition of an Approved Brand pursuant to clause (a) of the definition thereof or (ii) Lessee believes
that the City is acting unreasonably in disapproving a proposed brand as an Approved Brand, then in
either case, the Lessee may refer the matter to mediation in accordance with Section 7.8(a) above,and
if the matter is not resolved by mediation, then Lessee, as its sole remedy, may submit such matter to
a panel of experts for a binding determination in accordance with this Section 7.10(an "Arbitrator").
(b) If the City Manager determines that a proposed transferee of the Hotel Project (or any
part thereof), any legal or beneficial interest in the Hotel Project (or any part thereof) or any direct or
indirect legal or beneficial interest in Lessee (each, a "Proposed Transferee") does not satisfy the
definition of an Acceptable Owner and the Acceptable Owner Criteria pursuant to Exhibit A attached
hereto, and Lessee disagrees,and if the matter is not resolved by the designated representatives of the
City and Lessee as provided in Section 7.8(a)above,then solely with respect to any such determination
made by the City Manager, Lessee, as its sole remedy, may submit such matter to an Arbitrator in
accordance with this Section 7.10. For the avoidance of doubt, in the event the City Manager exercises
his or her right to seek the City Commission's direction or Approval of a Proposed Transferee, the
Lessee shall not have the right to submit the City Commission's determination or disapproval of a
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Proposed Transferee to arbitration pursuant to this Section 7.10, but the City Commission shall be
subject to the same time period and standards of judgment as would apply to the City Manager as
provided in Exhibit A.
(c) If Lessee elects to proceed with an Arbitrator in accordance with this Section 7.10, the
determination of whether a proposed brand should be an Approved Brand or a Proposed Transferee is
an Acceptable Owner,will be made by(a)an expert selected jointly by the City and Lessee, or(h) if the
City and Lessee fail to agree upon a single expert, by an expert selected by the City, an expert selected
by Lessee and a third expert appointed by the experts selected by the Parties. Any Arbitrator or expert
panelist hereunder will each have at least ten (10) years of professional experience in the hospitality
industry as a legal or other consultant. The Parties agree that no discovery (as the term is commonly
construed in litigation proceedings) will be permitted and agree that neither Party nor the Arbitrator
shall have discovery rights in connection with a Dispute hereunder. The proceeding before the
Arbitrator shall be conducted in an informal and expeditious manner. No transcript or recording shall
be made. Each Party shall have the opportunity to make a brief statement and to present documentary
and other support for its position, which may include the testimony of not more than four (4)
individuals, two (2)of whom may be outside experts. There shall be no presumption in favor of either
Party's position. Any procedural matter not covered herein shall be governed by procedures mutually
agreed upon by the Parties, or if they are unable to agree, in accordance with the Construction
Industry Arbitration Rules of the American Arbitration Association (as amended hereby).
(d) The matter submitted to the Arbitrator will be conclusively determined within thirty
(30) days of the appointment of the last Arbitrator by (a) the decision of the single expert, (b) the
decision of any two of the three experts, if two are able to agree, (c) the decision of the third expert, if
no two of the three experts are able to agree within such period, or(d) agreement between the Parties
prior to and independently of the decision of the Arbitrator.
(e) With respect to (i) whether a proposed Approved Brand satisfies the definition of an
Approved Brand pursuant to clause (a) of the definition thereof, the Arbitrator will determine that such
proposed Approved Brand either satisfies such definition or fails to satisfy such definition or(ii)whether
the City has acted reasonably in disapproving a proposed Approved Brand pursuant to Section 13.3,the
Arbitrator will determine either that the City acted reasonably in disapproving the proposed Approved
Brand or that the City acted unreasonably in disapproving the proposed Approved Brand, and the
Arbitrator will have no authority to compromise or otherwise modify the issue that is the subject of the
determination or(iii)whether a Proposed Transferee satisfies the definition of an Acceptable Owner and
the Acceptable Owner Criteria pursuant to Exhibit A, the Arbitrator will determine that such Proposed
Transferee either satisfies such definition and criteria or fails to satisfy such definition and criteria. If
any matter submitted to the Arbitrator hereunder is settled by agreement between the Parties prior to,
and independently of, the final determination of the Arbitrator, any and all expenses of such binding
determination (including fees of the Arbitrator)will be shared equally by the Parties; and the expense of
such binding determination resolved by final determination of the Arbitrator (including fees of the
Arbitrator)will be borne by the Party against whom such determination has been concluded.
Section 7.11. Plans and Data. In the event of a termination of this Lease, Lessee shall deliver to City,
copies of any and all Subleases and service and maintenance agreements then affecting the Leased
Property, all maintenance records, all warranties or guaranties then in effect which Lessee received in
connection with any work or services performed or FF&E installed on the Leased Property, the plans and
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specifications, surveys, studies, reports, cost estimate, designs, Governmental Approvals, keys,
combinations to locks, access codes, records, correspondence and any and all other records, files,
documents and other items and materials of every and and nature whatsoever relating to the
development, operation, maintenance or ownership of the Hotel Project, all of which shall be delivered
by Lessee to the City within thirty(30)days after such termination;provided, however that for so long as
a First Leasehold Mortgage encumbers the Hotel Project,the City agrees to permit Lessee to deliver any
or all of the foregoing to such First Leasehold Mortgagee(which First Leasehold Mortgagee shall have
priority with respect thereto pursuant to the non-disturlance, recognition and attornment agreement
entered into pursuant to Section 6.1(b) hereof). Such materials will be provided to City without any
representation or warranty of any kind, express or implied (including regarding the truth, accuracy or
completeness thereof and fitness for a particular purpose). The obligations of Lessee under this Section
7.11 survive the termination of this Lease.
ARTICLE Vs
PROTECTION AGAINST MECHANICS'LIENS
AND OTHER CLAIMS;INDEMNIFICATION
Section 8.1. Lessee's Duty to Keep Project Free of Liens.
(a) Pursuant to Section 713.10, Florida Statutes, any and all liens or lien rights shall extend
to, and only to, the right, title and interest of Lessee is the Hotel Project and shall not encumber or
affect the City's fee simple title to the Leased Property.
(b) The right,title and interest of the City in the Leased Property shall not be subject to liens
or claims of liens for improvements made by Lessee. Nosing contained in this Lease shall be deemed or
construed to constitute the consent or request of the City,express or by implication or otherwise,to any
contractor,subcontractor, laborer or materialman for the performance of any labor or the furnishing of
any materials for any specific improvement of, alteration to, or repair of the Hotel Project, or any part
thereof, nor as giving Lessee, any Leasehold Mortgage, Subtenant, lessee, or sub-lessee any right,
power or authority to contract for,or permit the render of,any services or the furnishing of materials
that would give rise to the filing of any lien, mortgage or other encumbrance against City's interest in
the leased Property, or any part thereof, or against asses of the City, or City's interest in any Rent and
other monetary obligations of Lessee as defined in this Lease.
(c) Notice is hereby given, and Lessee shall cause all construction agreements entered into
between Lessee and the Hotel Project General Contractor or other contractor in privity with Lessee or
subcontractor in privity with the Hotel Project General Cantractor or any other subcontractor to provide
that:
(i) City shall not be liable for any work performed or to be performed at the Hotel
Project or any part thereof for or on behalf of the Lessee,any Leasehold Mortgagee, Subtenant, lessee,
or sub-lessee or for any materials furnished or to be furnished to the Hotel Project, or any part thereof,
for any of the foregoing;and
Ili) no mechanic's, laborer's,vendor's, materialman's or other similar statutory lien
for such work or materials shall be attached to or affeo City's interest in the Leased Property, or any
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part thereof, or any assets of the City, or the City's interest in any Rent or other monetary obligations of
Lessee arising under this Lease,
(d) Lessee acknowledges and agrees that the City shall be entitled to record in the public
records of Miami-Dade County, Florida a notice of no lien in accordance with Chapter 713.10, Florida
Statutes, and that if requested by the City, Lessee will execute and deliver a countersignature to such
notice within ten (10)days of the City's request.
Section 8.2. Contesting Liens. If Lessee desires to contest any such lien as described in Section 8.1, it
shall notify the City of its intention to do so within thirty (30) days after Lessee has notice of the filing of
such lien In such case, Lessee, at Lessee's sole cost and expense, shall furnish a cash deposit or surety
bond in an amount sufficient to pay such lien and any cost (including interest and penalties), liability or
damage arising out of such contest. The lien, if Lessee timely provides the bond described above, shall
not be an Event of Default hereunder until thirty (30) days after the final determination of the validity
thereof provided that, within that time, Lessee shall satisfy and discharge such lien to the extent held
valid; provided, however, that the satisfaction and discharge of any such lien shall not, in any case, be
delayed until execution is had on any judgment rendered thereon, or else such delay shall be considered
to be a monetary Event of Default hereunder. In the event of any such contest, Lessee shall protect and
indemnify the City against all loss,expense and damage resulting therefrom as provided in Section 8.3.
Section 8.3. Indemnification.
(a) Lessee acknowledges and agrees that this Lease is not an agreement between City and
any architect, engineer, general contractor, subcontractor, sub-subcontractor, or materialman or any
combination thereof for the construction, alteration, repair, or demolition of a building, structure,
appurtenance, or appliance on the Leased Property, and therefore that the limitations on indemnity
provisions in Section 725.06, Florida Statutes, as such statute may be amended from time to time, do
not apply to this Lease. Accordingly, to the fullest extent permitted by law, the Lessee shall defend,
indemnify and hold harmless the City and its officers, employees, agents and instrumentalities from any
and all liability, losses or damages, including reasonable attorneys' fees and costs of defense, which the
City or its officers, employees, agents or instrumentalities may incur as a result of claims, demands,
suits,causes of actions or proceedings of any kind or nature first arising following the Effective Date,and
arising out of, relating to or resulting from any of the following occurrences or events, whether by the
Lessee or its employees, agents, partners, principals, sub-lessees, or contractors: (i) [intentionally
deleted]; (ii) the use and operation of the Hotel Project or any part thereof which is not in compliance
with the terms of this Lease, (iii) the negligent acts or omissions of Lessee or its employees, agents,
partners, principals, sub-lessees, or contractors; (iv) any challenge to the validity of any Transfer by a
third party through legal proceedings or otherwise based on the action or inaction of Lessee or its
employees, agents, partners, principals, sub-lessees or contractors, except to the extent any liability,
losses or damages are caused by the gross negligence or willful misconduct of the City or its officers,
employees,agents, or contractors.
(b) Lessee shall investigate and defend all claims, suits, or actions of any kind or nature in
the name of the City which are covered by this indemnity obligation, where applicable, including
appellate proceedings, and shall pay reasonable costs, judgments, and reasonable attorney's fees which
may issue thereon,
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(c) Lessee expressly understands and agrees that any insurance protection required by
this Lease or otherwise provided by Lessee shall in no way limit the responsibility to indemnify, keep and
save harmless and defend the City or its officers, employees, agents and instrumentalities as herein
provided. The City shall give to the Lessee reasonable notice of any such claims or actions. The
provisions of this section shall survive the expiration or early termination of this Lease.
(d) Lessee covenants and agrees that any contracts entered into by Lessee and the Hotel
Project General Contractor or other contractors in privity with Lessee for the Work shall include the
indemnities required by this Section 8.3 from the Hotel Project General Contractor or other contractors
in privity with Lessee in favor of Lessee and the City.
Section 8.4. Environmental Matters.
(a) Defined Terms.
(i) "Environmental Condition" means any set of physical circumstances in, on,
under, or affecting the Hotel Project that may constitute a threat to or endangerment of health, or the
environment,including:
(1) The presence of any Hazardous Substance in violation of Environmental
Laws which were introduced to the Hotel Site;
(2) The violation, or alleged violation, of any Environmental Laws on the
Leased Property;
(3) Any underground storage tanks, as defined in Subtitle I of the
Hazardous and Solid Waste Amendments of 1984,42 U.S.C. 6991 et.seq.,or the regulations thereunder,
for the storage of hazardous wastes,oil,petroleum products,or their byproducts;
(4) The presence of any PCB, asbestos or any other substances specifically
regulated under the Toxic Substances Control Act, 15 U.S.C. 2601 or regulations issued thereunder, in
violation of Environmental Laws;and any open dump or system of refuse disposal for public use without
a permit, as prohibited by 42 U.S.C. 6945 and/or Florida law equivalent, or the regulations issued
thereunder.
(ii) "Environmental Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act,42 U.S.C.9601 et.seq.,the Resource Conservation and Recovery Act,42
U.S.C. 6901 et. seq.; the Toxic Substances Control Act, 15 U.S.C. 2601 et. seq.;the Clean Water Act, 33
U.S.C. 1251 et seq.; the Clean Air Act, 42 U.S.C. 7401 et. seq.; the Oil Pollution Act, 33 U.S.C. 2701 et.
seq., the Hazardous Materials Transportation Act, 49 U.S.C. 1801 et. seq.; the Refuse Act of 1989, 33
U.S.C. 407; as such laws have been amended or supplemented from time-to-time, and the regulations
promulgated thereunder;and any equivalent state or local laws.
(iii) "Hazardous Substance" means any substances or materials presently or
hereinafter identified to be toxic or hazardous according to any of the Environmental Laws, including
any asbestos, PCB, radioactive substances, petroleum based products, and includes hazardous wastes,
hazardous substances, extremely hazardous substances, hazardous materials, toxic substances, toxic
chemicals,oil,petroleum products and their by-products,and pollutants or contaminants as those terms
are defined in the Environmental Laws.
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(iv) "Environmental Permit" means any Governmental Approval required under any
Environmental Law in connection with the ownership, use or operation of the Hotel Project for the
storage, treatment, generation, transportation, processing, handling, production or disposal of
Hazardous Substances, or the sale, transfer or conveyance of the Hotel Project, and all supporting
documentation thereof.
(v) "Environmental Claim" means any notice of violation, claim, demand,
abatement or order or direction (conditional or otherwise) by any Governmental Authority or any
person for personal injury (including sickness, disease, or death), property damage, damage to the
environment, nuisance, pollution, contamination or other adverse effects on the environment, or for
fines, penalties,or restrictions, resulting from or based upon:
(1) The existence or release, or continuation of any existence of a release
of, or exposure to, any Hazardous Substance in, into or onto the environment (including the air, ground,
water or any surface) at, in or from the Leased Property in violation of Environmental Laws;
(2) The transportation, storage, treatment or disposal of any Hazardous
Substance in connection with the activities on the Leased Property in violation of Environmental Laws;
or
(3) The violation, or alleged violation, of any Environmental Laws on the
Leased Property;
but excluding any of the foregoing to the extent arising from the negligent or intentional actions of the
City and its agents after the execution of this Lease.
(vi) "Corrective Action Work" means any and all activities of removal, response,
investigation,testing,analysis, remediation taken to:
(1) prevent, abate or correct an existing or threatened Environmental
Condition at, about, or affecting the Leased Property but excluding those to the extent arising
from the negligent or intentional actions of the City or its agents after the date of execution of
this Lease;or
(2) comply with all applicable Environmental Laws, excluding those to the
extent arising from the negligent or intentional actions of the City or its agents after the date of
execution of this Lease.
(b) Environmental Indemnification.
(I) Provided that that Possession Conditions are satisfied and the City delivers
possession of the Leased Property to Lessee, Lessee covenants and agrees, at its sole cost and expense,
to defend (with counsel selected by Lessee, after consulting with the City), indemnify and hold harmless
the City, its successors, and assigns from and against, and shall reimburse the City, its successors and
assigns, for any and all Environmental Claims, whether meritorious or not, brought against the City by
any Governmental Authority;
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(ii) the foregoing indemnity includes indemnification against all costs of removal,
response, investigation, or remediation of any kind, and disposal of such Hazardous Substances as
necessary to comply with Environmental Laws, all costs associated with any Corrective Action Work, all
costs associated with claims for damages to persons, property, or natural resources, and the City's
commercially reasonable attorneys' fees and consultants' fees, court costs and expenses incurred in
connection therewith;
(iii) this indemnification is in addition to all other rights of the City under this Lease;
and
(iv) payments by Lessee under this Section shall not reduce Lessee's obligations and
liabilities under any other provision of this Lease.
Notwithstanding anything to the contrary contained in this Lease, neither the Lessee nor Hotel
Project General Contractor, or other contractor in privity with Lessee, has a duty to indemnify the City in
connection with any Environmental Claims to the extent caused by the negligent or intentional conduct
of the City or its agents,employees or contractors.
Section 8.5. Limitation of City's Liability.
(a) Any tort liability to which the City is exposed under this Lease shall be limited to the
extent permitted by applicable law and subject to the provisions and monetary limitations of Section
768.28, Florida Statutes, as may be amended, which statutory limitations shall be applied as if the
parties had not entered into this Lease, and City expressly does not waive any of its rights and
immunities thereunder.
(b) City will not in any event whatsoever be liable for any injury or damage to Lessee(unless
caused by the gross negligence of City, its agents, contractors or employees) or to any other Person
happening on, in or about the Leased Property and its appurtenances, nor for any injury or damage to
the Leased Property or to any property belonging to Lessee (unless caused by the gross negligence of
City, its agents, contractors or employees) or to any other Person which may be caused by any fire or
breakage, or by the use, misuse or abuse of any of the Lessee Improvements (including any of the
common areas within the buildings, equipment, elevators, hatches, openings, installations, stairways,
hallways or other common facilities or the improvements to the land described in this Lease), or which
may arise from any other cause whatsoever (unless caused by the gross negligence of City, its agents,
contractors or employees).
(c) City will not be liable to Lessee or to any other Person for any failure of telephone,
computer system, cable TV, water supply, sewage disposal, gas or electric current, nor for any injury or
damage to any property of Lessee or to any Person or to the Leased Property caused by or resulting
from gasoline, oil, steam, gas, electricity, or hurricane, tornado, flood, wind or similar storms or
disturbances, or water, rain or snow which may leak or flow from the street, sewer, gas mains or
subsurface area or from any part of the Leased Property, or leakage of gasoline or oil from pipes,
appliances, sewer or plumbing works therein, or from any other place, nor for interference with light or
other incorporeal hereditaments by any Person (unless caused by the gross negligence of City, its
agents,contractors or employees).
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ARTICLE IX
INSURANCE AND RECONSTRUCTION
Section 9.1. General Insurance Provisions. Prior to any activity on the Leased Property, and at all
times during the Term, Lessee at its sole cost and expense shall procure the insurance specified below.
In addition, Lessee shall ensure its Hotel Project General Contractor and tenants maintain the insurance
coverages set forth below. All policies must be executable in the State of Florida. All insurers must
maintain an AM Best rating of A- or better. The terms and conditions of all policies may not be less
restrictive than those contained in the most recent edition of the policy forms issued by the Insurance
Services Office (ISO) or the National Council on Compensation Insurance (NCCI). If ISO or NCCI issues
new policy forms during the policy term of the required insurance, complying with the new policy forms
will be deferred until the expiration date of the subject policy. Said insurance policies shall be primary
over any and all insurance available to the City whether purchased or not and shall be non-contributory.
The Lessee, its Hotel Project General Contractor or tenants shall be solely responsible for all deductibles
contained in their respective policies. All policies procured pursuant to this Article IX shall be subject to
maximum deductibles reasonably acceptable to the City. The City of Miami Beach will be included as an
"additional insured" on the commercial general liability, automobile liability (to the extent available),
and pollution liability policies and as loss payee on the property insurance and builder's risk policy.
Section 9.2. Evidence of Insurance. Prior to Lessee taking possession of the Leased Property, and
annually thereafter, Lessee shall deliver satisfactory evidence of the required insurance to the City.
Satisfactory evidence shall be: (a) a certificate of insurance for all required coverage; and (b) a copy of
the actual insurance policy for builder's risk coverage.The City, at is sole option, may request a certified
copy of any or all insurance policies required by this Lease, or the applicable portions thereof if
insurance is provided through a master insurance program. All insurance policies must specify they are
not subject to cancellation or non-renewal without a minimum of 30 days notification by the insurer to
the City, the City's Risk Management Division and the First Leasehold Mortgagee, with a minimum of 10
days notification by the insurer to the City, the City's Risk Management Division and the First Leasehold
Mortgagee prior to cancellation or non-renewal for non-payment of premium. The Lessee will deliver to
the City, at least 30 days prior to the date of expiration of any insurance policy, a renewal policy
replacing any policies expiring during the Term of this Lease, or a certificate thereof, together with
evidence that the full premiums have been paid unless the premiums are being financed; provided that
such financing shall be permitted only if such policy provides that the insurer will deliver to the City
reasonable advance written notice prior to the cancellation of any coverage thereunder and a
reasonable period of time within which the City has the right, but not the obligation, to pay any unpaid
premiums to avoid any lapse in coverage. Premiums may be paid in annual installments. All certificates
of insurance shall (i) be in a form acceptable to the City, (ii) name the types of policies provided, (iii)
refer specifically to this Lease; (iv) evidence the waiver of subrogation in favor of the City as required by
Section 9.11 below; and (v)evidence that coverage shall be primary and noncontributory, and that each
policy includes a Cross Liability or Severability of Interests provision, with no requirement of premium
payment by the City. Lessee shall deliver, together with each certificate of insurance, a letter from the
agent or broker placing such insurance, certifying to the City that the coverage provided meets the
coverage required under this Lease. The official title of the certificate holder is "City of Miami Beach,
Florida." Additional insured certificates for the City shall read "City of Miami Beach, Florida", and shall
be addressed to 1700 Convention Center Drive, Miami Beach, FL, 33139, Attn: Risk Management, 3rd
Floor.
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Section 9.3. Required Coverages. In addition to such insurance as may be required by law, the
Lessee shall procure and maintain, or cause others to procure and maintain, without lapse or material
change, for so long as it occupies the Leased Property, the following insurance, which may be provided
through master blanket insurance policies and/or the insurance program of any applicable Approved
Brand:
(a) Commercial General Liability Insurance on a comprehensive basis, including contractual
liability, to cover the Leased Property and Lessee's operations and indemnity obligations, in an amount
not less than $5,000,000 combined single limit per occurrence for bodily injury and property damage.
Such insurance may be provided through a combination of primary and excess/umbrella liability policies.
(b) Automobile Liability Insurance covering all owned, non-owned and hired vehicles used
by the Lessee in connection with its operations under this Lease in an amount not less than $1,000,000
combined single limit per occurrence for bodily injury and property damage. Coverage must be afforded
on a form no more restrictive than the latest edition of the Business Automobile Liability policy, without
restrictive endorsements,as filed by the Insurance Services Office(ISO)
(c) Pollution Liability Insurance in an amount not less than $10,000,000 per claim, covering
third party claims, remediation expenses, and legal defense expenses arising from on-site and off-site
loss, or expense or claim related to the release of Hazardous Materials at the Leased Property. Such
policy shall include an annual policy aggregate in the amount of$10,000,000.
(d) Builders Risk Insurance during the course of construction, issued in the name of the
Lessee, the Hotel Project General Contractor and the City as their interests may appear, in amount(s)
not less than 100% of the insurable value of the Hotel Project completed structure(s), covering perils on
an "All Risk" basis, including flood, earthquake, and windstorm. Policy(s) must clearly indicate that
underground structures (if applicable) and materials being installed are covered. Any deductibles are the
sole responsibility of the Lessee.
(e) Commercial Property Insurance after Completion of Construction in an amount of 100%
of the insurable value of all Lessee Improvements under an "all risk" form, including damage by water,
flood, subsistence, tornado, hurricane and earthquake in an amount not less than the replacement cost
value of the Hotel.
(f) Business Interruption Insurance after the Opening Date coverage utilizing a gross
earnings value form with limits equal to twelve (12) months of Lessee's projected Gross Operating
Revenues and Gross Operating F&B Revenues less non-continuing expenses associated with the Leased
Property. The City and Lessee shall jointly review Lessee's projected Gross Operating Revenues and
Gross Operating F&B Revenues periodically and the limits of this policy shall be adjusted based on this
review.
(g) Workers' Compensation and Employers Liability Insurance with limits sufficient to
respond to Florida Statute §440. In addition, the Lessee shall obtain Employers' Liability Insurance with
limits of not less than: (i) $500,000 Bodily Injury by Accident, (ii) $500,000 Bodily Injury by Disease and
(iii) $500,000 Bodily Injury by Disease, each employee.
(h) Professional Liability. Lessee shall cause any architects or engineers to maintain
architects and engineers errors and omissions liability insurance specific to the activities or scope of
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work such consultants will perform. If coverage is provided on a "claims made" basis, the policy shall
provide for the reporting of claims for a period of five (5) years following the completion of all
construction activities. The minimum limits acceptable shall be $1,000,000 per occurrence and
$3,000,000 in the annual aggregate.
(i) Terrorism Insurance. So long as the Terrorism Risk Insurance Program Reauthorization
Act of 2015 ("TRIPRA") or a similar or subsequent statute is in effect, terrorism insurance for "certified"
and "non-certified" acts (as such terms are used in TRIPRA or a similar or subsequent statute) in an
amount equal to the full replacement cost of the Leased Property plus 12 months of business
interruption coverage. If TRIPRA or a similar or subsequent statute is not in effect, then the "all risk"
property insurance required pursuant to Section 9.3(e) of this Lease shall not exclude coverage for acts
of terror or similar acts of sabotage unless terrorism insurance is not commercially available, in which
case, Lessee shall obtain stand-alone coverage in commercially reasonable amounts(for purposes of this
clause (i), commercially reasonable amounts shall mean amounts that would be (A) obtained by
property owners or lessees of properties located in markets similar to that of the Hotel Project and
similar in size and type to the Hotel Project and (B) required by prudent Institutional Lenders or
landlords in such similar markets with similar properties).
Section 9.4. Premiums and renewals. Lessee shall pay as the same become due all premiums for the
insurance required by this Article IX, shall renew or replace each such policy and deliver to the City
evidence of the payment of the full premium thereof prior to the expiration date of such policy, and
shall promptly deliver to the City all original Certificates of Insurance and copies of all such renewal or
replacement policies.
Section 9.5. Adequacy Of Insurance Coverage.
(a) The adequacy of the insurance coverage required by this Article IX may be reviewed
periodically by the City in its sole discretion. Except with respect to "CCIP" and "OCIP" policies, the City
reserves the right, but not the obligation, to review and reasonably revise the insurance requirements
every three (3) years, (including but not limited to deductibles, limits, coverages and endorsements)
provided such revisions are commercially reasonable, customary and commonly available regarding
properties similar in type, size, use and location to the Leased Property and Lessee Improvements and
further provided that such coverage is available at commercially reasonable rates (including fiduciary
liability and directors and officers liability insurance);
(b) Lessee agrees that City may, if it so elects, at City's expense, have the Lessee
Improvements appraised for purposes of obtaining the proper amount of insurance hereunder. Any
review by the City shall not constitute an approval or acceptance of the amount of insurance coverage
Section 9.6. City May Procure Insurance if Lessee Fails To Do So. If Lessee refuses, neglects or fails
to secure and maintain in full force and effect any or all of the insurance required pursuant to this Lease
within thirty (30) days after written notice from the City to Lessee and First Leasehold Mortgagee, the
City, at its option, may procure or renew such insurance. In that event, all commercially reasonable
amounts of money paid therefor by the City shall be treated as Additional Rent payable by Lessee to the
City together with interest thereon at the Default Rate from the date the same were paid by the City to
the date of payment thereof by Lessee. Such amounts, together with all interest accrued thereon, shall
be paid by Lessee to the City within ten (10)days of written notice thereof.
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Section 9.7. Effect of Loss or Damage. Any loss or damage by fire or other casualty of or to any of
the Lessee Improvements on the Leased Property at any time shall not operate to terminate this Lease
or to relieve or discharge Lessee from the payment of Rent, or from the payment of any money to be
treated as Additional Rent in respect thereto, pursuant to this Lease, as the same may become due and
payable, as provided in this Lease, or from the performance and fulfillment of any of Lessee's obligations
pursuant to this Lease. No acceptance or approval of any insurance agreement or agreements by the
City shall relieve or release or be construed to relieve or release Lessee from any liability, duty or
obligation assumed by, or imposed upon it by the provisions of this Lease.
Section 9.8. Proof of Loss. Whenever any Lessee Improvements, or any part thereof, constructed on
the Leased Property (including any personal property furnished or installed in the premises) shall have
been damaged or destroyed, Lessee shall promptly make proof of loss in accordance with the terms of
the insurance policies and shall proceed promptly to collect or cause to be collected all valid claims
which may have arisen against insurers or others based upon any such damage or destruction.
Section 9.9. Insurance Proceeds.
(a) Authorized Payment. All sums payable for loss and damage arising out of the casualties
covered by the property insurance policies shall be payable:
(i) directly to Lessee, if the total recovery is equal to or less than $10,000,000 (as
adjusted for inflation over the Term pursuant to Section 14.20 hereof), except that if an Event of Default
has occurred and is continuing hereunder, such proceeds, shall be paid over to the Insurance Trustee
and disbursed in accordance with Section 9.9(a)(ii). After the completion of all Reconstruction Work in
accordance herewith, any remaining proceeds shall be paid over to Lessee subject to its obligations to
the First Leasehold Mortgagee. If proceeds are paid directly to Lessee and Lessee defaults in its
obligations to reconstruct the Lessee Improvements as required hereunder, which default remains
uncured after the expiration of any applicable grace and cure periods, and as a result City exercises its
right to terminate this Lease under Section 7.2(a)(i), Lessee shall pay to City all such proceeds that have
been paid directly to Lessee;and
(ii) (A)to a commercial bank or trust company designated by Lessee and Approved
by the City Manager, (B) any Leasehold Mortgagee, if required by such Leasehold Mortgagee pursuant
to the terms of such Leasehold Mortgage, or (C) any Mezzanine Lender if required by such Mezzanine
Lender pursuant to the terms of the Mezzanine Loan documents (but subject to any requirements of any
Leasehold Mortgagee) (the "Insurance Trustee"), if the total recovery is in excess of S10,000,000 (as
adjusted for inflation over the Term pursuant to Section 14.20 hereof)or is less than $10,000,000 but an
Event of Default has occurred and is continuing hereunder,to be held by the Insurance Trustee pending
establishment of reconstruction, repair or replacement costs and shall be disbursed to Lessee pursuant
to the provisions of subparagraph (b)of this Section 9.9.
(b) Disposition of Insurance Proceeds for Reconstruction.
(I) Subject to the requirements of any First Leasehold Mortgage, all insurance
proceeds shall be applied for the reconstruction, repair or replacement of Lessee Improvements and the
FF&E and other personal property of Lessee located on the Leased Property, so that Lessee
Improvements, FF&E and such other personal property shall be restored to a condition comparable to
the condition prior to the loss or damage (except to the extent restricted or prohibited by then
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applicable Governmental Requirements) but in all cases consistent with the Hotel Standards (hereinafter
referred to as "Reconstruction Work");
(ii) From the insurance proceeds received by the Insurance Trustee, there shall be
disbursed to Lessee such amounts as are required for the Reconstruction Work. Lessee shall submit
invoices or proof of payment to the Insurance Trustee for payment or reimbursement according to an
agreed schedule of values approved in advance by the City Manager and Lessee;and
(iii) After the completion of the Reconstruction Work, any unused insurance
proceeds shall be paid to Lessee subject to the rights of any First Leasehold Mortgagee pursuant to the
First Leasehold Mortgage.
Section 9.10. Reconstruction.
(a) In the event of any loss or damage by fire or other casualty of or to any of the Lessee
Improvements, FF&E and other personal property of Lessee located on the Leased Property having a
value in excess of$2,500,000, Lessee shall give the City notice thereof within five (5) Business Days, and
Lessee, at its sole cost and expense, whether or not such loss or damage has been insured and whether
or not such loss or damage is to property having a value in excess of$2,500,000, covenants and agrees
to commence the Reconstruction Work as soon as practicable, but in any event within three (3) months
after the insurance proceeds in respect of the destroyed or damaged improvements or personal
property have been received by or made available to Lessee, and to fully complete such Reconstruction
Work as expeditiously as reasonably possible consistent with the nature and extent of the damage.
Lessee shall comply in all respects with the provisions of Section 2.15 with respect to any Reconstruction
Work To the extent any First Leasehold Mortgagee exercises any right or option to retain and apply any
portion of the proceeds of any insurance (or condemnation awards) toward payment of the sum
secured by the First Leasehold Mortgage, Lessee shall diligently and expeditiously undertake to secure
and close on Leasehold Mortgage loans and/or Mezzanine Loans to finance the Reconstruction Work,
and thereafter, to commence and fully complete such Reconstruction Work as expeditiously as
reasonably possible consistent with the nature and extent of the damage.
(b) (Intentionally deleted.]
(c) Notwithstanding the foregoing, if, during the last ten (10) years of the Term, the Lessee
Improvements are totally destroyed or so damaged as to render them unusable, then (i) Lessee or the
City may terminate this Lease by delivery of written notice of such termination to the other Party not
later than sixty (60) days after the occurrence of such casualty, whereupon this Lease will terminate as
of the date of such casualty. Upon such termination,the insurance proceeds shall be payable as follows:
(i) first, to demolish the Lessee Improvements and clear the site of all Lessee Improvements and debris
to the City's reasonable satisfaction, (ii) second to reimburse Lessee for the fair market value of the
Lessee Improvements as of the date prior to such loss or destruction and (iii)third,the balance, if any, to
the City. If neither the Lessee nor the City timely elect to terminate this Lease in accordance with this
Section 9.10(c), Lessee shall restore the Lessee Improvements in accordance with Section 9.10(a) hereof.
Section 9.11. Waiver of Subrogation. Where permitted by law, each Party hereby waives all rights of
recovery by subrogation or otherwise (including, without limitation, claims related to deductible or self-
insured retention clauses, inadequacy of limits of any insurance policy, insolvency of any insurer,
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limitations or exclusions of coverage), against the other Party, and its respective officers, agents, or
employees.
Section 9.12. Inadequacy of Insurance Proceeds. Lessee's liability hereunder to timely commence and
complete restoration of the damaged or destroyed Lessee Improvements shall be absolute, irrespective
of whether the insurance proceeds received, if any, are adequate to pay for said restoration.
Section 9.13. No City Obligation to Provide Property Insurance. Lessee acknowledges and agrees that
City shall have no obligation to provide any property insurance on any Lessee Improvements or property
of Lessee located on the Leased Property. If City does provide any property insurance coverage, Lessee
acknowledges that such insurance shall be for the sole benefit of the City and Lessee shall have no right
or claim to any such proceeds.
Section 9.14. Compliance. Lessee's compliance with the requirements of this Article IX shall not
relieve the Lessee of its liability, or be construed to relieve or limit, Lessee of any responsibility, liability,
or obligation imposed under any other portion of this Lease, or by law, including, without limitation,any
indemnification obligations which Lessee owes to City.
Section 9.15. Right to Examine. The City reserves the right, upon reasonable notice, to examine the
original or true copies of policies of insurance (including binders, amendments, exclusions, riders and
applications), or applicable portions of any master insurance policy, to determine the true extent of
coverage. The Lessee agrees to permit such inspection and make available such policies or portions
thereof at the offices of the City.
Section 9.16. Personal Property. Any personal property of the Lessee or of others placed in the
Leased Property shall be at the sole risk of the Lessee or the owners thereof, and the City shall not be
liable for any loss or damage thereto for any cause except as a result of the gross negligence or willful
misconduct of the City or its employees,agents or contractors.
ARTICLE X
CONDEMNATION
Section 10.1. Complete Condemnation.
(a) If the entire Hotel Project shall be taken or condemned for any public or quasi-public
use or purpose, by right of eminent domain or by purchase in lieu thereof(in each case, a "Taking"), or if
such Taking shall be for a portion of the Hotel Project such that the portion remaining is riot sufficient
and suitable, on a commercially reasonable basis, for the operation of the Hotel, then this Lease shall
cease and terminate as of the date on which the condemning authority takes possession;and
(b) If this Lease is so terminated, the entire award for the Hotel Project or the portion
thereof so taken shall be apportioned among the City and the Lessee as of the day immediately prior to
the vesting of title in the condemning authority, as follows:
(i) First, Lessee shall be entitled to the then fair market value of its interest under
this Lease and in the Lessee Improvements, less the discounted value of such Lessee Improvements as
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allocated to the City, together with any and all business damages suffered by Lessee (subject, however,
to the rights of the First Leasehold Mortgagee thereto);
(ii) Second, but only if the City is not the authority condemning the Hotel Project,
the City shall receive the then fair market value of the Leased Property so taken or condemned
considered as vacant, unimproved, and unencumbered, together with the value of the City's remainder
interest in the lessee Improvements which have been taken; and
(iii) the City and Lessee shall each receive one-half(1/2)of any remaining balance of
the award, except that the Lessee shall receive the entire remaining balance of the award if the City is
the authority condemning the Hotel Project.
Section 10.2. Partial Condemnation.
(a) If there is a Taking of a portion of the Hotel Project, and the remaining portion can, on a
commercially reasonable basis be adapted and used to operate the Hotel in the same manner it was
previously operated, then this Lease shall continue in full force and effect; and
(b) In such event,the award shall be apportioned as follows.
(i) First, to the Lessee to the extent required, pursuant to the terms of this Lease,
for the restoration of the Hotel Project;
(ii) Second, but only if the City is not the authority condemning the Hotel Project, to
the City the portion of the award allocated to the fair market value of the Leased Property which is so
taken,considered as vacant and unimproved;
(iii) Third, to the Lessee the amount by which the value of Lessee's interest in the
Lessee Improvements and the leased Property were diminished by the taking or condemnation;and
(iv) the City and Lessee shall each receive one-half (1/2) of any remaining balance of
the award, except that the Lessee shall receive the entire remaining balance of the award if the City is
the authority condemning the Hotel Project.
Section 10.3. Restoration After Condemnation. If this Lease does not terminate due to a Taking, then
(a) Lessee shall, with commercially reasonable diligence and good-faith, restore the
remaining portion of the Hotel Project in accordance with the provisions of Sections 9.10(a) hereof;
(b) the entire proceeds of the award shall be deposited and treated in the same manner as
insurance proceeds are to be treated under Article IX until the restoration has been completed and
Lessee and the City have received their respective shares thereof pursuant to this Article X; and
(c) if the award is insufficient to pay for the restoration, Lessee shall be responsible for the
remaining cost and expense.
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Section 10.4. Temporary Taking. If there is a Taking of the temporary use (but not title) of the Hotel
Project,or any part thereof,this Lease shall, but only to the extent it is commercially reasonable, remain
in full force and effect and there shall be no abatement of any amount or sum payable by or other
obligation of Lessee hereunder. Lessee shall receive the entire award for any such temporary Taking to
the extent it applies to the period prior to the end of the Term and the City shall receive the balance of
the award.
Section 10.5. Determinations. If the City and the Lessee cannot agree in respect of any matters to be
determined under this Article, a determination shall be requested of the court having jurisdiction over
the Taking. For purposes of this Article, any personal property taken or condemned shall be deemed to
be a part of the Lessee Improvements, and the provisions hereof shall be applicable thereto.
Section 10.6. Payment of Fees and Costs. All fees and costs incurred in connection with any
condemnation proceeding described in Article X shall be paid in accordance with the law governing
same, as determined by the court, if appropriate.
ARTICLE XI
QUIET ENJOYMENT AND OWNERSHIP OF IMPROVEMENTS
Section 11.1. Quiet Enjoyment.
(a) The City represents and warrants that Lessee, upon paying the Rent, Additional Rent
and other monetary obligations pursuant to this Lease and observing and keeping the covenants and
agreements of this Lease on its part to be kept and performed, shall lawfully and quietly hold, occupy
and enjoy the Leased Property during the Term without hindrance or molestation by the City, acting in
its proprietary capacity, or by any Person claiming under the City, acting in its proprietary capacity. The
City shall, at its own cost and expense, through the City Attorney's office or other counsel selected by
the City in its sole discretion, defend any suits or actions which may be brought challenging Lessee's
right to lawfully and quietly hold, occupy and enjoy the Leased Property in accordance with the
preceding sentence. Lessee shall have the right to retain its own counsel in connection with such
proceedings, at Lessee's sole cost and expense.
(b) However, if the City is acting in its governmental capacity, any liability under this Section
shall only be to the extent permitted by applicable law and subject to the provisions and monetary
limitations of Section 768.28, Florida Statutes, as may be amended, which statutory limitations shall be
applied as if the parties had not entered into this Lease.
Section 11.2. Waste. Lessee shall not knowingly permit, commit or suffer waste or material
impairment of the Hotel Project, or any part thereof; provided, however, demolition of existing
improvements on the Leased Property existing on the date hereof or redevelopment or reconstruction
of the Hotel Project as permitted under this Lease shall not constitute waste.
Section 11.3. Maintenance and Operation of Improvements. Without limiting the provisions of
Article XIi, Lessee shall at all times keep the Hotel Project in good and safe condition and repair in
accordance with the Hotel Standards, commercially reasonable wear and tear and (subject to Lessee's
restoration obligations hereunder) damage by casualty excepted. Regarding the occupancy,
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maintenance and operation of the Hotel Project, the Lessee shall comply with all applicable
Governmental Requirements.
Section 11.4. Ownership of Improvements During Lease.
(a) Prior to the expiration or termination of this Lease, title to the Lessee Improvements
shall not vest in the City by reason of its ownership of fee simple title to the Leased Property, but title to
the Lessee Improvements shall remain in Lessee.
(b) If this Lease shall terminate, based on a mutual agreement between the parties or an
final order from a court with jurisdiction from which the time for appeal has expired, prior to the
expiration of the Term and if, at that time, the First Leasehold Mortgagee or Mezzanine Lender shall
exercise its option to obtain a new lease for the remainder of the Term pursuant to Article VI, then title
to the Lessee Improvements shall automatically pass to, vest in and belong to such First Leasehold
Mortgagee or any designee or nominee of such First Leasehold Mortgagee (or Lessee, as owned by
Mezzanine Lender or its designee or nominee) permitted hereunder, until the expiration or sooner
termination of the term of such new lease.
(c) The City and Lessee covenant that, to confirm the automatic vesting of title as provided
in this paragraph, each will execute and deliver such further assurances and instruments of assignment
and conveyance as may be commercially reasonably required by the other for that purpose.
Section 11.5. Surrender of Leased Property.
(a) Upon the expiration of the Term or earlier termination of this Lease (subject only to the
rights of any First Leasehold Mortgagee), title to Lessee Improvements, free and clear of all debts,
mortgages, encumbrances, and liens (which for this purpose shall include all personal property or
equipment furnished or installed on the Hotel Project and owned or leased by Lessee), shall
automatically pass to, vest in and belong to the City or its successor in ownership and it shall be lawful
for the City or its successor in ownership to re-enter and repossess the Leased Property and Lessee
Improvements thereon without process of law; and
(b) The City and Lessee covenant that, to confirm the automatic vesting of title as provided
in this Section, each will execute and deliver such further assurances and instruments of assignment and
conveyance as may be reasonably required by the other for that purpose.
ARTICLE XII
MAINTENANCE AND REPAIRS
Section 12.1. Standards Generally. The City and Lessee agree that the manner in which the Hotel
Project is developed,operated and maintained is important to the City by reason of its interest in having
a convention hotel facility for use by its residents and visitors to the City. Therefore, Lessee hereby
agrees to develop, operate and maintain the Hotel Project and the Lessee Improvements thereon
(including all FF&E) consistent with the Hotel Standards and in good order and repair, and will replace
the same when necessary with items of similar utility and value in order to maintain such condition
throughout the Term.
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Section 12.2. Utilities. City will not be required to furnish any services, utilities or facilities
whatsoever to the Leased Property pursuant to this Lease. Any services provided to the Leased Property
shall be pursuant to the terms of a separate agreement.
Section 12.3. Cleaning. Lessee shall, at its sole cost and expense, perform or cause to be performed,
services which will at all times keep the Leased Property and the Lessee Improvements thereon,
whether partially or fully constructed, in a clean, neat,orderly, sanitary and presentable condition.
Section 12.4. Removal of Trash. Lessee shall, at its sole cost and expense, store, dispose of, and
remove or cause to be removed from the Leased Property all trash and refuse which might accumulate
and arise from its use of the Leased Property.
Section 12.5. Maintenance and Repairs.
(a) Lessee shall be exclusively responsible for maintenance and repair of the Leased Property and
the Lessee Improvements, (except for the Off-Site Improvements or to the extent infrastructure
maintenance has been transferred by Lessee to a utility company by means of a written contract),to the
extent and at the times that are consistent with standard industry practice for each applicable Lessee
Improvement. Maintenance and repairs by Lessee, including landscape maintenance, shall be in quality
and class equal to or better than the original Work to preserve the Leased Property and Hotel Project in
good condition and working order.
(b) In no event shall City be responsible or liable for any maintenance or repair of any Lessee
Improvement, fixture, equipment, structure, facility, alteration, or addition thereto on the Leased
Property.
(c) Lessee shall be responsible for complying at its cost with any Governmental Requirements,
including construction re-certification of any Lessee Improvement on the Leased Property (other than
the Off-Site Improvements), including the "40-year recertification" requirement under the current
building code.
(d) Maintenance and repair of the Hotel Project must be at a level that is in compliance with the
Hotel Standards and that will cause the Hotel Project to be in a usable condition at the expiration or
termination of this Lease, and with Lessee having expended sufficient funds that will cause each Lessee
Improvement to be useful and functional and code compliant. During the Term of this Lease, Lessee
shall (1) adequately and reasonably fund maintenance reserve accounts for each Lessee Improvement
on the Leased Property in amounts that are consistent with standard industry practice applicable to
each particular Lessee Improvement, (2) periodically expend funds from such accounts for maintenance
purposes in an amount and at a time or times that are customary and ordinary for a sound maintenance
program for the Leased Property and consistent with commercial development practices prevailing in
South Florida and (3) comply at all times with the terms set forth in the Management Agreement and
Franchise Agreement from time to time regarding accrual, maintenance and expenditure of reserves,
including FF&E reserves.
Section 12.6. Excavation of Land. Except in connection with the construction of the Hotel Project, or
redevelopment or reconstruction of the Hotel Project as permitted under this Lease, no excavation of
any of the land shall be made, no soil or earth shall be removed from the Leased Property, and no well
of any nature shall be dug, constructed or drilled on the Leased Property, except as may be required for
environmental monitoring purposes, without the prior written Approval by City Manager.
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Section 12.7. Water and Sewerage System.The Lessee shall operate and maintain, at its sole cost and
expense, all the components of the water, sanitary sewerage and storm drainage facilities constructed
by Lessee as part of the Hotel Project within the boundaries of the Leased Property. Once constructed,
Lessee shall not make any alterations or modifications to these facilities without the advance written
Approval of the City Manager, which approval shall not be unreasonably withheld. Such consent shall be
granted if any such alterations or modifications are required to comply with Governmental
Requirements.
Section 12.8. Industrial Waste Facilities. The Lessee shall be fully responsible for all industrial wastes
on the Leased Property caused or produced by Lessee, its Subtenants or third-parties operating on the
Leased Property and the proper disposal thereof, in accordance with applicable Governmental
Requirements.
Section 12.9. Inspections. City and/or its designated representatives shall have the right, during
normal working hours, after prior reasonable notice to inspect the Leased Property and the Lessee
Improvements to identify those items of maintenance, repair, replacement, modification and
refurbishment reasonably required of Lessee to keep the Leased Property and the Lessee Improvements
in good order and condition. If Lessee has failed to fulfill its maintenance and repair obligations under
this Lease, City shall provide written notice and the Lessee shall perform all corrective work identified in
such notice within thirty (30) days of receipt of the notice from City; provided, however that if such
corrective work cannot be reasonably accomplished within a thirty(30)day period,then the Lessee shall
commence the corrective work within that thirty (30) day period and diligently prosecute same to
completion. Trash and debris maintenance shall be corrected within two (2) Business Days following
receipt of written notice from City. Failure of City to inspect as aforementioned shall not impose any
liability on the City. Nothing in this contractual provision relating to City's inspections shall preclude City
from making inspections of the Leased Property in accordance with City's regulatory authority.
Section 12.10. Failure of Lessee to Maintain. If Lessee has failed to properly clean, remove trash and
debris, maintain,repair, replace and refurbish the Leased Property as required by this Article XII,the City
shall provide to the Lessee a written list of deficiencies, reflecting the amount of time to be reasonably
allowed for the Lessee to correct same. If the Lessee fails to correct or commence to correct such
deficiencies within the time allowed and has not registered an objection as to its obligation to do so,the
City, at its option, may elect to correct any or all of such deficiencies, in which case, the City shall give
Lessee fifteen (15) days further written notice of its intention to do so, and if the Lessee has not
corrected or commenced to correct the same within such additional fifteen (15) day period, the City
may enter upon the Leased Property and perform all work, which, in the reasonable judgment of the
City, is necessary and the City shall add the cost of such work, plus twenty-five percent (25%) for
administrative costs,to the Rent due hereunder on the first day of the month following the date of such
work, and such cost shall be and constitute a part of the Rent. If Lessee has not corrected or
commenced to correct such deficiencies within such additional fifteen (15) day period, the Lessee shall
not undertake performance of such repairs or cleanup without specific prior written authorization from
the City
ARTICLE XIII
MANAGEMENT OF HOTEL
Section 13.1. Hotel Standards.
(a) Lessee covenants and agrees that it will utilize the Hotel Standards, as delineated in
Exhibit "B", to maintain and operate the Hotel, and operate or cause for the Hotel to be operated in
compliance with this Lease, Management Agreement, Franchise Agreement (as applicable) and
Governmental Requirements;
(b) Any commercial operations on the Hotel Project, whether conducted by Lessee, an
Affiliate of Lessee or any concessionaire, involving any unreasonably noisy, dangerous or obnoxious
activities or the leasing or rental of unreasonably noisy, dangerous or obnoxious equipment, shall
require the prior written approval of the City and City may withhold such approval or require the
termination of any such commercial operations then in existence on the Hotel Project in its
commercially reasonable judgment; and
(c) Lessee shall use commercially reasonable efforts to ensure that any concession,
commercial activity, or other Hotel activity shall be generally consistent with the Hotel Standards.
(d) Notwithstanding anything to the contrary contained herein, in the event that the
Convention Center is not operated and maintained in accordance with the MBCC Standard of Operation
for a period of more than one hundred eighty(180) days after written notice thereof from Lessee to City
and City does not commence improvements to restore the Convention Center to the MBCC Standard of
Operation within one hundred eighty (180)days after written notice thereof from Lessee and thereafter
use commercially reasonable, diligent efforts to complete such cure as soon as reasonably practicable,
then as Lessee's sole remedy, Lessee's obligations under the Room Block Agreement shall be suspended
until such time as the MBCC Standard of Operation is restored, at which time, Lessee shall be required
to comply with its obligations under the Room Block Agreement.
Section 13.2. Covenant to Continuously Operate Hotel.
(a) Subject to the need to make repairs and perform maintenance and any Force Majeure
Event in accordance herewith, after the Opening Date, Lessee shall diligently and continuously operate
(or cause to be operated)the Hotel for 365 days each year consistent with the Hotel Standards;
(b) Subject to the need to make repairs and perform maintenance and subject to any Force
Majeure Events in accordance herewith, after the Opening Date, for each day the Hotel is not operated
continuously,the City, in addition to any other remedies available to it under this Lease,shall be entitled
to receive a rental which shall be no less per day than the average of the Base Rent payable during the
preceding three(3)full Lease Years; and
c Notwithstanding the foregoing, Lessee shall have the right from time-to-time to close
the Hotel or parts thereof for such commercially reasonable periods of time to make repairs, alterations,
remodeling and improvements, including, without limitation; any repairs, alterations, remodeling and
improvements in connection with a Hotel brand change or refresh, or for any reconstruction after
casualty or condemnation or any Force Majeure Event; provided that the Lessee is using commercially
reasonable diligent efforts to repair and restore the Hotel or, as applicable, to mitigate the impact of
such Force Majeure Events on its operations.
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Section 13.3. Hotel Name. Lessee may enter into a new Management Agreement or Franchise
Agreement, or change the name or brand of the Hotel so long as such name or brand is an Approved
Brand. In the event Lessee desires to operate the Hotel as a non-branded hotel (which shall be
permitted only after the twentieth (20th) anniversary of the Opening Date), the Hotel shall be owned,
operated and maintained in a manner consistent with the Hotel Standards and the name of the Hotel in
such case shall be determined by Lessee in its sole but reasonable discretion. In determining whether or
not to give any Approval of a brand that is not an Approved Brand, the City may consider, by way of
example and not of limitation, the public image of the proposed name or flag, its compliance with
Exhibit "B" or other quality classification and whether such image is commensurate with the public
image the City desires to project. Provided that no Event of Default is then continuing, Lessee's request
for approval shall be deemed approved if (i) the first correspondence from Lessee to City requesting
such approval or consent is in an envelope marked "PRIORITY" and contains a bold-faced, conspicuous
(in a font size that is not less than fourteen (14)) legend at the top of the first page thereof stating that
"FIRST NOTICE: THIS IS A REQUEST FOR CONSENT UNDER SECTION 13.3 OF THE DEVELOPMENT AND
GROUND LEASE AGREEMENT, DATED AS OF , 201_, AND FAILURE TO RESPOND TO
THIS REQUEST WITHIN TWENTY (20) DAYS MAY RESULT IN THE REQUEST BEING DEEMED GRANTED",
and is accompanied by the information and documents required above, and any other information
reasonably requested by City in writing prior to the expiration of such twenty(20) day period in order to
adequately review the same has been delivered; and (ii) if City fails to respond or to deny such request
for approval in writing within the first fifteen (15) days of such twenty (20) day period, a second notice
requesting approval is delivered to City from Lessee in an envelope marked "PRIORITY" containing a
bold-faced, conspicuous (in a font size that is not less than fourteen (14)) legend at the top of the first
page thereof stating that "SECOND AND FINAL NOTICE: THIS IS A REQUEST FOR CONSENT UNDER
SECTION 13.3 OF THE DEVELOPMENT AND GROUND LEASE AGREEMENT, DATED AS OF
, 201_. IF YOU FAIL TO PROVIDE A SUBSTANTIVE RESPONSE (E.G., APPROVAL,
DENIAL OR REQUEST FOR CLARIFICATION OR MORE INFORMATION) TO THIS REQUEST FOR APPROVAL
IN WRITING WITHIN FIVE (5) DAYS, YOUR APPROVAL SHALL BE DEEMED GIVEN" and City fails to provide
a substantive response to such request for approval within such final five (5)day period.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 14.1. No Partnership or Joint Venture. It is mutually understood and agreed that nothing
contained in this Lease is intended or shall be construed in any manner or under any circumstances
whatsoever as creating or establishing the relationship of co-partners, or creating or establishing the
relationship of a joint venture between the City and Lessee, or as constituting Lessee as the agent or
representative of the City for any purpose or in any manner whatsoever.
Section 14.2. Recording, Documentary Stamps. A memorandum of this Lease, in form mutually
satisfactory to the parties, may be recorded by either Party among the Public Records of Miami-Dade
County, Florida and the cost of any such recordation, the cost of any documentary stamps which legally
must be attached to any or all of said documents shall be paid in full by Lessee. The Parties shall
cooperate in structuring the transactions contemplated hereby in such a manner as to reduce such
costs, provided such structure shall not have any adverse consequence for the City.
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Section 14.3. Florida and Local Laws Prevail. This Lease shall be governed by the laws of the State of
Florida. This Lease is subject to and shall comply with the City Code as the same is in existence as of the
execution of this Lease and the ordinances of the City of Miami Beach. Any conflicts between this Lease
and the City Code shall be resolved in favor of the latter. If any term,covenant, or condition of this Lease
or the application thereof to any Person or circumstances shall to any extent, be illegal, invalid, or
unenforceable because of present or future laws or any rule or regulation of any governmental body or
entity or becomes unenforceable because of judicial construction, the remaining terms, covenants and
conditions of this Lease, or application of such term, covenant or condition to Persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each
term, covenant, or condition of this Lease shall be valid and be enforced to the fullest extent permitted
by law. Any dispute arising out of or relating to this Lease that specifically provides for arbitration (and
only such provisions)shall be subject to arbitration as expressly provided herein. In any such arbitration
or in any legal action brought by either Party because of a breach of this Lease or to enforce any
provision of this Lease, the prevailing Party shall be entitled to reasonable attorneys' fees and
paralegals' fees and costs, including those incurred in subsequent actions to enforce or vacate an
arbitration award and those incurred on appeal.
Section 14.4. No Conflicts of Interest/City Representatives not Individually Liable. No member,
official, representative,or employee of the City shall have any personal interest, direct or indirect, in this
Lease, nor shall any such member, official, representative or employee participate in any decision
relating to this Lease which affects his or her personal interest or the interest of any corporation,
partnership or association in which he or she is, directly or indirectly, interested. No member, official,
elected representative or employee of the City shall be personally liable to Lessee or any successor in
interest in the event of any default or breach by the City or for any amount which may become due to
Lessee or successor or on any obligations under the terms of this Lease.
Section 14.5. Notice. A notice or communication, under this Lease by the City, on the one hand, to
Lessee, or, on the other, by Lessee to the City shall be sufficiently given or delivered if in writing and
dispatched by hand delivery, or by nationally recognized overnight courier providing receipts, or by
registered or certified mail, postage prepaid, return receipt requested to:
(a) Lessee. In the case of a notice or communication to Lessee if addressed as follows
To:
MB MIXED USE INVESTMENT, LLC
2665 South Bayshore Drive
Suite 1020
Coconut Grove, Florida 33133
Attention: David P. Martin and Ellen Buckley
with a copy to:
Greenberg Traurig, P.A.
333 5.E. 2" Avenue
Miami, Florida 33131
Attention: Laura Gangemi Vignola, Esq
and to
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TB MBCC Hotel Investment LLC
19950 West Country Club Drive, 10th Floor
Aventura, FL 33180
Attention:Jackie Soffer
with a copy to:
TB MBCC Hotel Investment LLC
19950 West Country Club Drive, 10th Floor
Aventura, FL 33180
Attention: Legal Department/Mario Romine
(h) City. In the case of a notice or communication to the City, if addressed as follows:
To:
City Manager
City of Miami Beach, Florida
1700 Convention Center Drive,4th Floor
Miami Beach, Florida 33139
With Copies To:
City Attorney
City of Miami Beach, Florida
1700 Convention Center Drive,4`"Floor
Miami Beach, Florida 33139
or if such notice is addressed in such other way in respect to any of the foregoing Parties as that Party
may, from time-to-time, designate in writing, dispatched as provided in this Section 14.5.
Section 14.6. Estoppel Certificates. The City and lessee shall, within thirty (30) days after written
request by the other,execute, acknowledge and deliver to the Party which has requested the same or to
any actual or prospective First Leasehold Mortgagee, Mezzanine Lender, or purchaser of the Hotel or
any equity interest in Lessee, a certificate stating that:
(a) this Lease is in full force and effect and has not been modified, supplemented or
amended in any way, or, if there have been modifications, this Lease is in full force and effect as
modified, identifying such modification agreement, and if this Lease is not in force and effect, the
certificate shall so state;
(b) this Lease as modified represents the entire agreement between the Parties as to this
subject matter,or, if it does not,the certificate shall so state;
(c) the dates on which the Term of this Lease commenced and will terminate;
(d) to the knowledge of the certifying Party all conditions under this Lease to be performed
up to that date by the City or Lessee, as the case may be, have been performed or satisfied and, as of
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the date of such certificate, there are no existing defaults, defenses or offsets which the City or Lessee,
as the case may be, has against the enforcement of this Lease by the other Party, or, if such conditions
have not been satisfied or if there are any defaults, defenses or offsets,the certificate shall so state;and
(e) the Rent due and payable for the year in which such certificate is delivered has been
paid in full, or, if it has not been paid,the certificate shall so state;and
(f) in connection with any request by a prospective First Leasehold Mortgagee or
Mezzanine Lender, that such proposed First Leasehold Mortgagee or Mezzanine Lender (as applicable)
and such proposed financing satisfy the requirements of Section 6 1, including the requirements of
Section 6.1(g).
The Party to whom any such certificate shall be issued may rely on the matters therein set forth;
however, in delivering such certificate neither Lessee nor the City (nor any individual signing such
certificate on such Party's behalf) shall be liable for the accuracy of the statements made therein, but
rather shall be estopped from denying the veracity or accuracy of the same. Any certificate required to
be made by the City or Lessee pursuant to this paragraph shall be deemed to have been made by the
City or Lessee (as the case may be) and not by the person signing same.
Section 14.7. Provisions not Merged with Deed. Unless otherwise expressed in the instrument of
conveyance or transfer, none of the provisions of this Lease are intended to or shall be merged by
reason of any deed:
(a) transferring the Hotel Project or any part thereof from Lessee (or its successors or
assigns)to the City(or its successors or assigns); or
(b) transferring title to the Leased Property or any part thereof from the City to Lessee, its
successors or assigns. Any such deed shall not be deemed to affect or impair the provisions and
covenants of this Lease.
Notwithstanding anything to the contrary contained herein, so long as there is a First Leasehold
Mortgagee, the City and Lessee agree that the City shall not transfer any fee interest in the Leased
Property to Lessee without such First Leasehold Mortgagee's prior written consent.
Section 14.8. Titles of Articles and Sections. Any titles of the several parts, Articles and Sections of
this Lease are inserted for convenience of reference only and shall be disregarded in construing or
interpreting any of its provisions.
Section 14.9. Counterparts. This Lease may be executed in counterparts, each of which shall be
deemed an original. Any such counterparts shall constitute one and the same instrument. This Lease
shall become effective only upon execution and delivery of this Lease by the Parties hereto.
Section 14.10. Successors and Assigns; No Third Party Beneficiaries. Except to the extent limited
elsewhere in this Lease, all of the covenants conditions and obligations contained in this Lease shall be
binding upon and inure to the benefit of the respective successors and assigns of the City and Lessee.
Lessee and the City acknowledge and agree that except for a First Leasehold Mortgagee or a Mezzanine
Lender, if any, each of which shall have the rights set forth in Article VI hereof, no third party shall have
any rights or claims arising hereunder, nor is it intended that any third party shall be a third party
beneficiary of any provisions hereof. Notwithstanding anything to the contrary contained in this Lease,
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in the event of any assignment of this Lease by the City, including if all or any portion of the interest of
the City in the Leased Property or this Lease shall be acquired by reason of foreclosure of any mortgage,
security agreement, lien or other encumbrance or other proceedings brought to enforce the rights of
the holder(s)thereof, by deed in lieu of foreclosure or by any other method, all references hereunder to
the City Manager with respect to Approvals, consents, decisions, waivers, determinations,
confirmations, submittals, notifications, communications and other matters shall be deemed to refer to
the Person who is then the lessor under this lease.
Section 14.11. Entire Agreement. This Lease and its Exhibits constitute the sole and only
agreement of the Parties hereto with respect to the subject matter hereof and correctly set forth the
rights, duties, and obligations of each to the other as of its date. Any prior agreements, promises,
negotiations, or representations not expressly set forth in this Lease are of no force or effect and are
merged into this Lease.
Section 14.12. Amendments. No amendments to this Lease shall be binding on either Party unless
in writing and signed by both Parties. Solely to the limited extent as may be necessary to reasonably
facilitate the initial Construction Loan to finance the Hotel Project and the first refinancing thereof
and/or the initial Mezzanine Loan and the first refinancing thereof, the City Manager shall have the
delegated authority (but not the obligation), after consultation with the City's Chief Financial Officer and
City Attorney, to negotiate and execute modifications to Article 9, Article 10, Sections 6.1(a)(vi)through
6.1(a)(ix), and Sections 6.1(b) through 6.1(k) of this Lease;and to negotiate and execute the easements
contemplated pursuant to Section 4.1(g) of this Lease. All other amendments must be approved by
majority vote of the City Commission, subject to the requirements of the City Charter and applicable
law, except that the provisions of Sections 4.2(b), 4.2(g), 4.5(a) through (e), and Section A.1 of Exhibit
"A"hereto may not be modified except by approval of such modifications by at least sixty percent (60%)
of the voters voting thereon in a City-wide referendum, in the same manner as required for approval of
the initial Lease pursuant to Section 1.03(b)(3) of the City Charter, and the Base Rent and Minimum
Fixed Rent set forth in Section 4.4(a) may not be modified except by approval of such modification by at
least sixty percent (60%)of the voters voting thereon in a City-wide referendum, in the same manner as
required for approval of the initial Lease pursuant to Section 1.03(b)(3)of the City Charter.The City shall
not be obligated to expend any money or undertake any obligation connected with any such
amendment proposed by Lessee, or otherwise connected with any action requested by or for the
benefit of Lessee under this Lease, and shall be reimbursed by Lessee for all out of pocket expenses
(including third party consultants and attorneys) incurred by the City. Prior to the City taking action
regarding any such request, Lessee shall deposit with the City the estimated amount of such costs, as
reasonably determined by the City.
Section 14.13. Non-Subordination of City's Interest. The City's fee interest in and ownership of
the Leased Property and the City's rights and interest in this Lease (including the rights to Rent, Public
Charges and other monetary obligations of Lessee to the City under this Lease) shall not be subject or
subordinate to or encumbered by any financing for the Hotel Project or lien or encumbrances affecting
Lessee's interest in this Lease or Lessee Improvements or by any acts or omissions of Lessee or any
Subtenant hereunder. In this regard, the Rent, Additional Rent, Public Charges and other monetary
obligations of Lessee to the City under this Lease then payable at any point in time during the Term shall
be paid by Lessee to the City and shall be superior in right to all claims or rights hereunder or described
above in this Section, including all Hotel Project operating expenses, the payment of debt service, and
any distributions of profits to Lessee or any of its Affiliates or owners. City acknowledges that this Lease
shall not be subordinate to any future mortgage against the fee interest in the Leased Property.
Notwithstanding anything to the contrary contained in this Lease, if all or any portion of the interest of
83
the City in the Leased Property or this Lease shall be acquired by reason of foreclosure of any mortgage,
security agreement, lien or other encumbrance or other proceedings brought to enforce the rights of
the holder(s) thereof, by deed in lieu of foreclosure or by any other method, and as a result any Person
succeeds to such interests of City, this Lease and the rights of Lessee hereunder shall continue in full
force and effect and shall not be terminated or disturbed except as otherwise expressly permitted by
the terms of this Lease.
Section 14.14. City Manager's Delegated Authority. Notwithstanding any provision to the
contrary in this Lease, nothing herein shall preclude the City Manager from seeking direction from or
electing to have the City Commission determine any matter arising out of or related to this Lease,
including, without limitation, any Approval contemplated under this Lease (within the timeframe
specified therefor as if the Approval was being determined by the City Manager), any proposed
amendment or modification to this Lease or any separate agreement relating to the Hotel Project or
otherwise referenced in this Lease.
Section 14.15. Holidays. It is hereby agreed that whenever a notice or performance under the
terms of this Lease is to be made or given on a Saturday or Sunday or on a legal holiday recognized by
the City, it shall be postponed to the next following Business Day, not a Saturday, Sunday or legal
holiday.
Section 14.16. No Brokers. Lessee shall be responsible for, and shall hold the City harmless with
respect to, the payment of any commission claimed by or owed to any real estate broker or other
Person retained by Lessee and which is entitled to a commission as a result of the execution and delivery
of this Lease. The City similarly shall be responsible for, and shall hold Lessee harmless with respect to,
the payment of any commission claimed by or owed to any real estate broker or other Person retained
by the City and which is entitled to a commission as a result of the execution and delivery of this Lease.
Section 14.17. No liability for Approvals and Inspections. Except as may be otherwise expressly
provided herein, no approval to be made by the City in its capacity as landlord under this Lease or any
inspection of the Work or the Hotel Project by the City under this Lease, shall render the City liable for
its failure to discover any defects or nonconformance with any Governmental Requirement.
Section 14.18. Radon. Radon is a naturally occurring radioactive gas that, when it has accumulated
in a building in sufficient quantities, may present health risks to persons who are exposed to it over
time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida.
Additional information regarding radon and radon testing may be obtained from the county public
health unit for Miami-Dade County.
Section 14.19. Lessee Entity. On the date of execution hereof, Lessee is a limited liability company.
In the event that at any time during the Term of this Lease and any extensions and renewals thereof,
Lessee is a corporation or an entity other than a limited liability company,then any references herein to
member, membership interest, manager and the like which are applicable to a limited liability company
shall mean and be changed to the equivalent designation of such term which is appropriate to the
nature of the new Lessee entity.
Section 14.20. Inflation Adjustments. All adjustments for inflation required under this Lease shall
be calculated utilizing the United States Bureau of Labor Statistics, Consumer Price Index for All Urban
Consumers; U.S. City average (1982-84=100). If the United States Department of Labor should no longer
84
compile and publish this index, the most similar index compiled and published by said Department or
any other branch or department of the federal government shall be used for the purpose of computing
the inflation adjustments provided for in this Lease. If no such index is compiled or published by any
branch or department of the federal government, the statistics reflecting cost of living increases as
compiled by any institution or organization or individual designated by the City and generally recognized
as an authority by financial or insurance institutions shall be used as a basis for such adjustments.
Section 14.21. Standard of Conduct. The implied covenant of good faith and fair dealing under
Florida law is expressly adopted.
Section 14.22. Waiver of Consequential Damages. Notwithstanding anything contained in this
Lease to the contrary, in no event shall either Party be liable to the other for any consequential,
exemplary or punitive damages.
Section 14.23. Reservation of Rights. This Lease shall not affect any rights that may have accrued
to any Party to this Lease under applicable laws and each Party hereto reserves any and all of such
rights.
(signature pages to follow)
85
IN WITNESS WHEREOF, Lessee has caused this Lease to be signed in its name, and the City of
Miami Beach has caused this Lease to be signed in its name by the Mayor, and duly attested to by the
City Clerk, and approved as to form and sufficiency by the City Attorney, on the day and year first above
written.
WITNESSED BY: CITY OF MIAMI BEACH, FLORIDA
j(4141A.t. '5111r A A)4143,.....
rint Name:
Mr;t dawrbeft,n __41: By: ----
Print Name: Dan Gelber, Mayor
ATTEST \\N\ 8 Approved for form and legal sufficiency
By: AA/ 0 i (s-------'
. B
C. y Clerk * ?INCORP QRAt�D City Attorney
STATE OF FLORIDA S t <7 2, .->
COUNTY OF MIAMI-DADE )
The foregoing instrument was acknowledged before me this day of to , 2018, by Dan
Gelber, as Mayor of the City of Miami Beach,who is personally known to me or who pioduced
as identification.
N tary Pub c1� )144)
YAM)LExMORMES Commis ' n Number: nrll3S6'
s r .' Notary Public-State of Florida
CommisSwns*GG0713S5 Commission Expires: I larf(, /(v/ 202--/
,' Z .F"A•.' *Comm Evpites Mat 16,2021
P''' flpNkd*MA„NelonM hoar/Am
Signature page to Development and Ground Lease Agreement
LESSEE
MB MIXED USE INVESTMENT, LLC, a Florida limited liability
company
By: MB Mixed Use Investment Ho ings Member, LLC, a
Florida IlnUctliajAl co a y,as manager
fAtz(r114746er
P int ame:fl1Gtrt C. BIACiLleti By:
fray Ma in, an er
Print Name: l�l l TOW:1v •.
By: TB MBCC Hotel Investment, LLC, a Florida limited
liability company, as manager
By:
Print Name: Name:
Title:
Print Name:
STATE OF FLORIDA
COUNTY OF MIAMI-DADE
The foregoing instrument was acknowledged before me this ?1 day of ()k3.G , 2018 by David
Martin, as a manager of MB Mixed Use Investment Holdings Member, LLC, a Florida limited liability
company, which is a manager of MB Mixed Use Investment, LLC, a Florida limited liability company , on
behalf of such company. Such person is personally known to me or produced as
identification.
G�MAVSS%p i; Notpfc blicJ
•t �td30,<<'y4nQ ,ommission Number: �r Qi/ gdAX
F18: commission Expires: � 2e, 00.�ia
STATE OF FLORIDA
• > w Y� H:*
COUNTY OF f'� % r;ii it°��`o```
The foregoing instrument was acknowledged before me this day of , 2018 by
, as of TB MBCC Hotel Investment, LLC, a Florida
limited liability company, which is a manager of MB Mixed Use Investment, LLC, a Florida limited liability
company, on behalf of such company. Such person is personally known to me or produced
as identification.
Notary Public
Commission Number:__
Commission Expires:
Signature pope to Development and Ground Lease Agreement
LESSEE
MB MIXED USE INVESTMENT, LLC, a Florida limited liability
company
By: MB Mixed Use Investment Holdings Member, LLC, a
Florida limited liability company,as manager
Print Name: _ By: _ __
David Martin,Manager
Print Name:
By: TB MBCC Hotel Investment, LLC, a Florida limited
liability comp ,as Hager
By:
Print Name: S I Ass _ Name:
Title:
( ' nt 4--onitf -Doti_ sr-b
STATE OF FLORIDA
COUNTY OF MIAMI-DADE
The foregoing instrument was acknowledged before me this_ day of , 2018 by David
Martin, as a manager of MB Mixed Use Investment Holdings Member, LLC, a Florida limited liability
company, which is a manager of MB Mixed Use Investment, LLC, a Florida limited liability company, on
behalf of such company. Such person is personally known to me or produced as
identification.
Notary Public
Commission Number:
(t) O ack., Commission Expires:
STATE OF FEORtS*
COUNTY OF
tl
The foregoing instrument was acknowledged before me this 3 day of autly
, 2018
by Y_� ,__�_i �' as Mi.44.414,! of TB MBCC Hotel Investment, LLC, a Florida
limited li bility company, which is a manage f MB Mixed Use Investment, LLC, a Florida limited liability
company,on behalf of such company, Such person is personal) know to me or produce FL DI—
as identification.
KYLE STEWART i .Nary Public
NOTARY PUBLIC 1, Commission Number: 1.0174 (01C/
STATE OF COLORADO Commission Expires. Id 1v 7/14L it
NOTARY ID#20174046196
F,Commission 7 2021
"v^ h, page to Development and Ground Lease Agreement
EXHIBIT"A"
ACCEPTABLE OWNER DEFINITION
A. "Acceptable Owner" means any individual, corporation or other entity which has, at a
minimum,the following qualifications:
1. The proposed transferee must comply with Section 4.2(g)of the Lease.
2. The proposed transferee is not a Foreign Instrumentality other than a member
country of the European Union or the Gulf Cooperation Council, each as existing on the Effective Date,
United Kingdom, Canada, Mexico, countries located in South America (other than Venezuela), Japan,
South Korea,Singapore and Australia,or a Person Controlled by any of the foregoing countries.
3. The proposed transferee must not be owned, or Controlled by entities or
individuals who have been convicted, or are presently under indictment, for felonies under the laws of
any foreign or United States of America jurisdiction. But the foregoing shall not apply to individuals or
entities owning less than a twenty percent(20%)equity interest in the proposed transferee, other than
officers,directors,managers or others who have the power to direct and control the business and affairs
of the proposed transferee.
4. The proposed transferee must not in its charter or organizational documents
(defined as the articles of incorporation and bylaws for any corporation,the partnership agreement and
partnership certificate for any partnership, the articles of organization and limited liability company
operating agreement for any limited liability company, the trust agreement for any trust and the
constitution of the relevant government for any governmental entity, but expressly excluding any
statements, positions, actions or allegations not contained in such charter organizational documents)
expressly advocate or have as its stated purpose (a)the violent overthrow of or armed resistance against,
the U.S. government; or (b) genocide or violence against any persons; or (c) discrimination, hatred or
animosity toward persons based solely on their race,creed,color,sex or national origin,
5. A proposed transferee of the entire Hotel Project or of a direct or indirect
Controlling ownership interest in Lessee (each, a "Proposed Major Transferee"), or an Affiliate of such
Proposed Major Transferee Controlling such Proposed Major Transferee or Person with an ownership
interest in such Proposed Major Transferee Controlling such Proposed Major Transferee, must(a)either
(,)not terminate any then existing Management Agreement or Franchise Agreement or(ii) retain or hire
an Approved Brand and/or Approved Operator, as applicable, and (b) if any then existing Leasehold
Mortgage loan and/or Mezzanine Loan is being re-financed, or any new Leasehold Mortgage and/or
Mezzanine Loan is being entered into,then such Proposed Major Transferee must comply with the Debt
Service Coverage Ratio required under Section 6.1(a)(vi)of the Lease and the loan-to value requirement
set forth in Section 6(a)(vii)of the Lease.
6. A Proposed Major Transferee shall have had no violations of any applicable law
against such Proposed Major Transferee, or any hotel or other property owned or managed by such
Proposed Major Transferee, within Florida, which have resulted in: (i) a prohibition from continuing to
operate such hotel or other property for any period of time or (ii) a forfeiture of the Proposed Major
Transferee's entire interest in such hotel or other property.
A DS LLP.0oc630t 1
bRA 1gg55,)977v27
086
7. A Proposed Major Transferee must not lnor any of the individuals or entities wno
own at least a twenty percent (20%) equity interest in such Proposed Major Transferee or are officers,
directors, managers or otherwise have the power to direct and control the business and affairs of such
Proposed Major Transferee)have filed or been discharged from bankruptcy,or have been the subject of
an involuntary bankruptcy, reorganization or insolvency proceedings within the past five (5) years
(bankruptcy filings by Affiliates shall not disqualify a Proposed Major Transferee,unless such Affiliates are
any of the individuals or entities described in the parenthetical immediately above).
B. "Acceptable Owner Criteria": The foregoing categories of requirements set forth in
paragraph A above are collectively defined as the"Acceptable Owner Criteria."
C. Evaluation of the Acceptable Owner Criteria:
Solely for the purpose of evaluating whether the proposed transferee has met the Acceptable Owner
Criteria set forth in subparagraphs A.1—A.4,A fi and A.7 of this Exhibit A,the proposed transferee shall
provide the following information to the Lessee and certify that the information provided by the proposed
transferee is true and correct and that the proposed transferee meets or exceeds the Acceptable Owner
Criteria:
1. solely with respect to a Proposed Major Transferee,information sufficient for the
City or any outside vendor engaged by the City to perform a due diligence investigation pursuant to
paragraph D below,including copies of any applicable operating licenses;
2. solely with respect to a Proposed Major Transferee, identification and summary
description of its principals and its major real estate or other investments;
3. solely with respect to a Proposed Major Transferee,a list of all bankruptcies filed
by such Proposed Major Transferee or to which such Proposed Major Transferee was a party-bankrupt,if
any;and
4. such other evidence as is commercially reasonably necessary as determined by
Lessee to establish that the new entity proposed to be the Acceptable Owner meets the Acceptable Owner
Criteria.
D. With respect to any proposed Transfer to a Proposed Major Transferee, City may, at its
sole discretion,engage an outside vendor to perform a due diligence investigation at the Lessee's or such
Proposed Major Transferee's sole expense, which may include a search of civil, criminal, or bankruptcy
proceedings in federal and state jurisdictions; regulatory filings; tax filings: lien,judgment and Uniform
Commercial Code searches; business registrations, and the like; provided, however, that City's right to
conduct its own due diligence shall not expand or deemed to expand the Acceptable Owner Criteria or
impose additional criteria with respect to whether a proposed transferee constitutes an Acceptable
Owner. City shall be entitled to engage an independent accounting firm,the reasonable costs of which
shall be borne by Lessee or such Proposed Major Transferee, to review the information upon which the
Proposed Major Transferee's certifications were based, for the purpose of determining whether the
certifications and/or information provided to the City is accurate and complete. Lessee shall, or shall
cause such Proposed Major Transferee to, reimburse City, upon demand, for any reasonable costs
incurred by City in connection with such Transfer or proposed Transfer to a Proposed Major Transferee,
including the reasonable out-of-pocket costs of making inquiries and investigations into the conformance
AOSLIP 00063061 14
MIA f8e555677v27
087
with the Acceptable Owner Criteria of such Proposed Major Transferee and the reasonable legal costs
incurred,if any,in connection therewith.
L. Confirmation/Approval Process for Proposed Transferees.
Regarding the City's confirmation that a proposed transferee is an Acceptable Owner, or the City's
approval of a Transfer that is not a Permitted Transfer,the parties hereby agree that:
1. The City Manager shall rely solely on the proposed transferee's certification that
the proposed transferee meets the Acceptable Owner Criteria (if a Permitted Transfer), along with the
information provided by the proposed transferee and with respect to any Proposed Major Transferee,the
results of any due diligence investigation performed by the City.
2. The City Manager shall not unreasonably withhold the City's confirmation if the
proposed transferee complies with the Acceptable Owner Criteria.
3. The City Manager shall not unreasonably withhold the City's Approval of a
Transfer that is not a Permitted Transfer, except that with respect to a Transfer to a Foreign
Instrumentality (other than a member country of the European Union or the Gulf Cooperation Council,
each as existing on the Effective Date, United Kingdom, Canada, Mexico, countries located in South
America(excluding Venezuela),Japan,South Korea,Singapore and Australia or Persons Controlled by any
of the foregoing countries), such Transfer shall be subject to the prior written approval of the City
Commission,which may be granted,conditioned or withheld by the City Commission in its sole discretion;
and
4. if a proposed Transfer requires the City's confirmation or Approval, Lessee shall
deliver written notice to the City,which shall'include(i)the name and address of the proposed transferee;
(ii) the name and address of the proposed transferor; (iii) information describing the nature of the
transaction;(iv)the percentage interest being conveyed; and(iv)the materials described in paragraph C
above
5. The City Manager shall have up to forty-five(45)days after the delivery of such
written notice and the information required under paragraph C above, to determine whether, on a
commercially reasonable basis,the proposed transferee meets the Acceptable Owner Criteria set forth in
subparagraphs A.1—A.4,A.6 and A.7 of this Exhibit A if a Permitted Transfer. The City Manager shall have
up to sixty (60) days after the delivery of such written notice and the information required under
paragraph C above whether to Approve in accordance herewith a Transfer that is not a Permitted Transfer.
6. Provided that no Event of Default is then continuing, Lessee's request for
confirmation that the proposed transferee meets the Acceptable Owner Criteria set forth in
subparagraphs A.1 — A.4, A.6 and A.7 of this Exhibit A shall be deemed confirmed if the first
correspondence from lessee to the City requesting such confirmation is in an envelope marked
"PRIORITY"and contains a bold-faced,conspicuous(in a font size that is not less than fourteen(14))legend
at the top of the first page thereof stating that"THIS IS A REQUEST FOR CONFIRMATION OF A PERMITTED
TRANSFER UNDER SECTION 5.4 OF THE DEVELOPMENT AND GROUND LEASE AGREEMENT, DATED AS Or-
2018,AND FAILURE TO RESPOND TO THIS REQUEST WITHIN FORTY FIVE (45) DAYS
WILL RESULT IN THE REQUEST BEING DEEMED CONFIRMED,"and is accompanied by the information and
documents required above and City fails to respond or to deny such request for confirmation in writing
AosLu,opp6346:14
MIA 186559977,'27
088
within such fo'ty-five (45) day period Provided that no Event of Default is then continuing, Lessee's
request for Approval of a Transfer that is not a Permitted Transfer shall he deemed Approved if the first
correspondence from Lessee to the City requesting such Approval is in an envelope marked "PRIORITY"
and contains a bold-faced,conspicuous(in a font size that is not less than fourteen(14))legend at the top
of the first page thereof stating that"THIS IS A REQUEST FOR APPROVAL OF A TRANSFER UNDER SECTION
5.4 OF THE DEVELOPMENT AND GROUND LEASE AGREEMENT, DATED AS OF , 2018,
AND FAILURE TO RESPOND TO THIS REQUEST WITHIN SIXTY (60) DAYS WILL RESULT IN THE REQUEST
BEING DEEMED APPROVED" and is accompanied by the information and documents required above and
City fails to respond or to deny such request for Approval in writing within such sixty(60)day period. Any
Transfer shall be subject to the deemed Approval provisions set forth above in this subparagraph E.6,
provided,however,that the City Commission shall have sixty(60)days after receipt of written notice from
Lessee of any proposed Transfer to a Foreign Instrumentality (other than a member country of the
European Union or the Gulf Cooperation Council,each as existing on the Effective Date,United Kingdom,
Canada,Mexico,countries located in South America(excluding Venezuela),Japan,South Korea,Singapore
and Australia or Persons Controlled by any of the foregoing countries),to approve or disapprove of such
proposed Transfer,and if the City has not notified Lessee,in writing,of the City Commission's approval of
such Transfer within such sixty(60)day period,then such Transfer shall be deemed approved.
7. If the City notifies Lessee,in writing, within the first thirty(30)days of such forty-
fve (45) or sixty (60) day period, as applicable, that the information submitted is. on a commercially
reasonable basis,incomplete or insufficient (and specifies in what ways it is incomplete or insufficient),
then Lessee shall supplement such information,on a commercially reasonable basis,and the City Manager
(or City Commission, with respect to Transfers to Foreign Instrumentalities requiring City Commission
approval) shall have twenty (20) days after such supplemental information is provided to make its
determination whether the proposed transferee meets the Acceptable Owner Criteria set forth in
subparagraphs A.1—A.4, A.6 and A.7 of this Exhibit A or to Approve a Transfer that is not a Permitted
Transfer.
8. If the City Manager does not confirm that the proposed transferee does not meet
the Acceptable Owner Criteria set forth in subparagraphs A.1 — A.4, A.6 and A.7 of this Exhibit A or
disapproves a Transfer that is not a Permitted Transfer,the City Manager shall provide to Lessee specific
written,commercially reasonable reasons for such action.The failure to object to the proposed transferee
or Transfer within the applicable time period set forth above shall be deemed to be the confirmation by
the City of the proposed transferee as an Acceptable Owner(subject to compliance with the Acceptable
Owner Criteria set forth in subparagraphs A 5 of this Exhibit A, if applicable, which shall be confirmed
upon closing of the applicable Transfer) or Approval of the proposed Transfer,except with respect to a
proposed'ransfer to a Foreign Instrumentality(other than a member country of the European Union or
the Gulf Cooperation Council, each as existing on the Effective Date, United Kingdom, Canada, Mexico,
countries located in South America(excluding Venezuela),Japan,South Korea,Singapore and Australia or
Persons Controlled by any of the foregoing countries),which the City Commission must expressly approve
in writing,as provided above,in order for such Transfer to be effective.
9. No confirmation by the City of a proposed transferee as an Acceptable Owner or
its meeting of the Acceptable Owner Criteria shall have the effect of waiving or estopping the City from
later claiming that said Acceptable Owner is no longer operating or maintaining the Hotel Project
according to the terms of this Lease.
F Interpretation
ADSLLP•00063061 14
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089
1. All acts and omissions as well as rights and duties shall be done in a commercially
reasonable manner,unless the standard of"sole discretion"is used.
2. The implied covenant of good faith and fair dealing under Florida law is expressly
adopted.
ADSUP 00063061 14
MIA 188559977v27
090
EXHIBIT"B"
HOTEL STANDARDS DEFINITION
The Lessee shall operate the Hotel, or cause for the Hotel to be operated, so that (with the
requirements in paragraphs A,B and C being the"Hotel Standards"):
A. if the Hotel is operated as a branded hotel other than an Approved Brand as defined in
clause(i)or clause(iii)of the definition thereof,which shall only be permitted from and after the twentieth
(20')anniversary of the Opening Date,it must meet the level of service and quality comparable to other
hotels in the "Upper Upscale" chain scale segment as then determined by Smith Travel Research and
generally recognized in the hospitality industry as an experienced convention center hotel brand;
B. If the Hotel is operated as a non-branded hotel,which shall be permitted only after the
twentieth (20"') anniversary of the Opening Date, it meets a sufficient number of the standards then
required to be able to obtain a 3.5 diamond rating from the American Automobile Association("AAA");
if at any time during the Term of this Lease any such rating system described in paragraphs A or B above
is discontinued or the standards for such rating system are materially changed,the Parties shall mutually
and reasonably agree to substitute an alternate rating system that is most nearly equivalent to the
discontinued or changed rating system.
C. Notwithstanding the foregoing,in the case of either paragraph A or B above,Lessee shall
be deemed to have satisfied the Hotel Standards as long as it is operating the Hotel Project(or causing
the Hotel Project to be operated) in a manner substantially similar to the operation of the following
convention center hotels as of the Effective Date: Hilton Americas-Houston, Hilton Orlando, Marriott
Marquis Washington DC,San Francisco Marriott Marquis,Hyatt Regency Orlando,Hyatt Regency Denver
at the Colorado Convention Center,The Westin Charlotte,and the Sheraton Chicago Hotel and Towers
and the Loews Miami Beach or any convention center hotel of a similar size and purpose as the Hotel
operated by an Approved Brand.
For paragraph B above, the Lessee does not have to actually obtain the AAA 3.5-diamond or
equivalent rating,but it must be able to meet the standards for obtaining it.If the Lessee elects,in its sole
discretion, not to obtain that rating, the City shall have the right once every thirty-six (36) months to
require the Lessee to retain a hotel consultant proficient in the AAA Diamond ratings and with at least ten
(10)years'experience in the hotel industry to produce a report within sixty(60)days of the City's request
that states the Hotel does or does not meet the Hotel Standards set forth in Paragraph B above.
The City has the right to accept or reject the report.If it rejects the report,the City shall retain its
own hotel consultant proficient in the MA Diamond ratings who shall also have at least ten(10)years'
experience in the hotel industry. That consultant shall produce a report at any time explaining in
commercially reasonable detail why the report by the Lessee's hotel consultant is or is not correct.
After the City's hotel consultant's report is delivered to the Lessee,the City and Lessee shall not
take any formal action for thirty(30)days. They may elect to discuss or mediate the matter during that
period of thirty(30)days.
ADSU.P-00063061 14
MIA 186559977v27
091
At the end of that period of time, if the City does not agree that the Hotel is being operated in
accordance with the Hotel Standards, then the matter may be resolved in accordance with Section 7.8,
using a mediator with substantial experience in the hotel industry.
In the event of a determination that the Hotel Standards are not being met,Lessee shall have six
(6) months within which to take the necessary action to cause the Hotel to be operated in accordance
with the Hotel Standards.
ADSLLP-D0063061 14
MIA 186559977v27
092
EXHIBIT"C"
BUDGETED IMPROVEMENT COSTS
Hotel Project Costs
Preliminary Development Budget
Description Total Per Room %Total
Hard Costs (Including Contingency) $235,900,006 $297,103 65.1%
Furniture, Fixtures & Equipment $27,790,000 $35,000 7.7%
Architect & Engineering $14,346,305 $18,068 4.0%
Pre-opening/Working Capital $7,000,000 $8,816 1.9%
Development Fees $14,485,829 $18,244 4.0%
Art in Public Places $3,205,078 $4,037 0.9%
Other Soft Costs $42,561,312 $53,604 11.8%
Contingency (HC &SC) $2,559,881 $3,224 0.7%
Interest Reserve $12,259,348 $15,440 3.4%
Closing Costs $2,000,000 $2,519 0.6%
Total Development Budget $362,107,759 $456,055 100.0%
ADSLLP-00063061 14
MIA 186559977v27
093
EXHIBIT"D"
LEGAL DESCRIPTION OF HOTEL SITE
[see attached]
ADSLIP 00063061 14
MIA 1PM559977v27
094
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EXHIBIT"E"
APPROVED PLANS
(see attached pages)
ADSLLP 00063061 14
MIA 186559977v27
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RESERVED
ADSUP-00063061 14
MIA 188559977v27
112
EXHIBIT"G"
FORM OF EASEMENTS
GRANT OF EASEMENT AND AGREEMENT
THIS GRANT OF EASEMENT AND AGREEMENT(this"Easement')is made this day of
20 by the CITY OF MIAMI BEACH,a Florida municipal corporation(the"City"),having its principal place
of business at 1700 Convention Center Drive, Miami Beach, Florida 33139 in favor of MB MIXED USE
INVESTMENT. LLC, a Florida limited liability company("Lessee"), having its principal place of business at
WHEREAS,the City owns that certain property situated, lying and being in Miami-Dade County,
Florida,as more particularly described in Exhibit"A"attached hereto(the"Property");
WHEREAS, the City and the Lessee entered into that certain Development and Ground Lease
Agreement dated as of , 20_ , a memorandum of which is recorded in Official Records
Book ,at Page _ of the Public Records of Miami-Dade County (the "Development and
Ground Lease Agreement"). which constitutes a development agreement pursuant to the Florida Local
Government Development Act, Section 163.3220, et. seq., Florida Statutes (the "Act") and which
contemplates the development and ground lease of the portion of the Property depicted in Exhibit "B"
(the "Leased Property") for an 800-room full-service convention hotel and related facilities, to be
connected to the Miami Beach Convention Center located at 1901 Convention Center Drive,Miami Beach,
Florida ("Convention Center") by an enclosed overhead pedestrian skybridge (the "Hotel Project").
Capitalized terms not defined herein shall have the meanings assigned such terms in the Development
and Ground Lease Agreement;
WHEREAS, pursuant to the Development and Ground Lease Agreement, the City has agreed to
grant to the Lessee a non-exclusive, irrevocable access easement for the purpose of ingress and egress
through, over, on, upon and across the right-of-way which is more particularly described in Exhibit"C'
attached hereto("Easement Parcel 1")for the purpose of permitting Lessee to access the Leased Property
including,without limitation,its parking,loading docks and/or service areas,and reserving unto City and
its contractors, agents, employees, invitees and licensees (collectively, the "City Parties") the right to
ingress and egress through, over,on, upon and across the Easement Parcel 1 for all purposes, including
but not limited to providing pedestrian and vehicular access to the Convention Center and The Fillmore
Theater located at 1700 Washington Avenue, Miami Beach, Florida ("Fillmore Theater"), and their
respective loading docks and service areas;
WHEREAS, pursuant to the Development and Ground Lease Agreement, the City has agreed to
grant to the Lessee a non-exclusive, irrevocable access easement over the area more fully described in
Exhibit"D_hereto("Easement Parcel 2"),far the purpose of permitting Lessee to construct the Skybridge
and the Off-Site Improvements, as those terms are more particularly described in the Development and
Ground Lease Agreement,and to maintain the Skybridge in accordance with the Development and Ground
Lease Agreement;and
WHEREAS, pursuant to the Development and Ground lease Agreement, the City has agreed to
grant to the Lessee a non-exclusive, irrevocable,temporary easement over the area more fully described
ADSLLP-00063C61:4
MIA 188559977v27
113
in Exhibit"E"hereto("Easement Parcel 3"),for construction staging purposes during Lessee's construction
of the Lessee Improvements,as such,term is more particularly described in the Development and Ground
Lease Agreement, in accordance with the Development and Ground Lease Agreement;and
WHEREAS, pursuant to the Development and Ground Lease Agreement. the City has agreed to
grant to the Lessee a non-exclusive, irrevocable, temporary easement in, over, through and across the
airspace above the City's properties located adjacent to the Leased Property,including,without limitation,
the Fillmore Theatre,the Convention Center and City Hall(such airspace over such adjacent properties is
referred to herein as "Easement Parcel 4")for crane swing purposes during Lessee's construction of the
Lessee Improvements in accordance with the Development and Ground Lease Agreement;and
WHEREAS, collectively, Easement Parcel 1, Easement Parcel 2, Easement Parcel 3 and Easement
Parcel 4 shall be referred to herein as the"Easement Parcels";
WHEREAS, granting the foregoing easements is a condition of the effectiveness of the
Development and Ground Lease Agreement and the issuance of development permits and approvals in
order to develop the Hotel Project;
NOW THEREFORE, in consideration of Ten and No/100 Dollars (510.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged,the City and Lessee
agree as follows:
1 The City hereby grants to the Lessee and Lessee's employees, agents, contractors,
subcontractors,vendors, guests, licensees, suppliers, laborers,visitors, invitees, Leasehold Mortgagees
and Mezzanine Lenders(collectively,"Lessee Permittees")a non-exclusive,irrevocable access easement
through,over,on,upon and across Easement Parcel 1 for the purpose of ingress and egress to and from
the Leased Property and its parking, loading docks and/or service areas, for so long as Lessee uses the
Leased Property in accordance with the terms of the Development and Ground Lease Agreement. The
City hereby expressly reserves for itself, the other City Parties and their respective successors and/or
assigns, the unrestricted right to use Easement Parcel 1 for purposes of providing pedestrian and
vehicular access to the Convention Center and the Fillmore Theater, and their respective loading docks
and service areas and for any and al other purposes that do not unreasonably interfere with the Lessee's
and Lessee Permittees' use of Easement Parcel 1 for the rights granted herein,including but not limited
to granting other easements or licenses at the same location. The City shall be responsible for the
maintenance and operation of Easement Parcel 1 at the City's sole cost and expense.
2 The City hereby grants Lessee and Lessee's employees,contractors, subcontractors, laborers,
suppliers,Leasehold Mortgagees and Mezzanine Lenders(collectively,"Lessee Construction Permittees,"
and collectively with the Lessee Permittees,the"Lessee Parties')a non-exclusive,irrevocable easement
over,on, under, upon,and across Easement Parcel 2 to perform all acts necessary to ensure fulfillment
of all requirements of (insert permit or order no with respect to the construction of the Skybridge
and/or Off Site Improvements referenced in the Development and Ground Lease Agreement and as
reasonably necessary to maintain the Skybridge in accordance with Lessee's obligations under the
Development and Ground Lease Agreement,including but not limited to pedestrian and vehicular ingress
and egress to and from the Leased Property and Hotel Site through,over,and across Easement Parcel 2.
The City hereby expressly reserves for itself,the other City Parties and their respective successors and/or
assigns, the unrestricted right to use the Easement Parcel 2 for any and all other purposes that do not
unreasonably interfere with the Lessee's and Lessee Construction Permittees' use of Easement Parcel 2
ADSLLF 00063061 14
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for the rights granted herein, including but not limited to granting other easements or licenses at the
same location.
3 The City hereby grants Lessee and Lessee Construction Permittees a non-exclusive,temporary
irrevocable easement over,on, under, upon,and across Easement Parcel 3 for purposes of construction
staging with respect to the construction of the Lessee Improvements referenced in the Development and
Ground Lease Agreement (the "Temporary Construction Easement"), including but not limited to (i)
erecting scaffolding, swing stages and other temporary structures in Easement Parcel 3,(ii)temporarily
staging construction equipment and materials in Easement Parcel 3, (iii) erecting a fence within
Easement Parcel 3, (iv)the installation and removal of temporary sheet piles within Easement Parcel 3,
(iv)site logistics, including but not limited to Lessee's and the Lessee Construction Permittees' ingress
and egress to and from the Leased Property and Hotel Site through,over,and across Easement Parcel 3,
and (v) performing other activities reasonably related to the construction of the Hotel Project and all
improvements relating thereto in accordance with the Development and Ground Lease Agreement. The
Temporary Construction Easement will expire upon the Opening Date. Although said termination is
intended to be automatic and require no further action on the part of any party hereto,upon the request
of either party, the City and Lessee will, no later than thirty (30) days after such request, execute a
termination and release or partial release, as applicable, of the Temporary Construction Easement, in
form and substance reasonably acceptable to the City and Lessee.
4 The City hereby grants Lessee and Lessee Construction Permittees a non-exclusive,temporary
irrevocable easement in, over, through and across Easement Parcel 4 for the limited purpose of
maintaining and swinging the arcs, booms,jib,counter-jib,counter-weights and other portions of one or
more swinging tower cranes(collectively,the"Cranes"),from time to time,in,over,through and across
Easement Parcel 4 and to encroach into Easement Parcel 4 for such purposes(the"Crane Easement");
provided however, Lessee must obtain,at its sole cost and expense, all required governmental permits
and approvals with respect to such use, and the Crane Easement does not permit, and shall not be
deemed to permit, Lessee or the Lessee Construction Permittees to place the Cranes on the ground
located under Easement Parcel 4. The Crane Easement will expire upon the Opening Date. Although
said termination is intended to be automatic and require no further action on the part of any party
hereto,upon the request of either party,the City and Lessee will,no later than thirty(30)days after such
request,execute a termination and release or partial release, as applicable,of the Crane Easement, in
form and substance reasonably acceptable to the City and Lessee.
5 The Easement Parcels are subject to all liens, encumbrances, covenants, conditions,
restrictions, reservations, contracts,leases and licenses,easements,and rights of way pertaining to the
Property,whether or not of record,as identified on Exhibit "F" hereto(the"Encumbrances"). The use
of the word "grant" shall not imply any warranty on the part of the City with respect to the Easement
Parcels.
6 The Lessee shall maintain insurance on the Easement Parcels at all times as required by the
Development and Ground Lease Agreement(for avoidance of doubt,the only insurance required with
respect to Easement Parcel 4 shall be public liability insurance with respect to Lessee's and Lessee
Construction Permittees' use and operation of the Cranes, and may be maintained by Lessee's general
contractor or other applicable Lessee Construction Pennittee). Such insurance policy snail name the City
as an additional insured and loss payee(with respect to property coverage)thereunder;shall be written
by insurance companies licensed to do business in Florida and with an AM Best rating of A- or better;
and must specify it is not subject to cancellation or non-renewal without a minimum of 30 days
ADSLLP-00063061 14
VIA 1 865599 7 7v27
115
notiiication by the insurer to the City with a copy to the attention of Risk Manager, 1700 Convention
Center Drive, Miami Beach, Florida 33139 ("Risk Manager"), with a minimum of 10 days notification by
the insurer to the City and the City's Risk Manager prior to cancellation or non-renewal for non-payment
of premium. The Lessee shall provide the City with a certificate of insurance evidencing said coverages.
7 City covenants,warrants and represents that it is the fee simple owner of the leased Property
and Easement Parcels, and has the right, title, and capacity to grant the easements granted herein,
subject only to the Encumbrances.
B Lessee shall not materially interfere with the use by and operation and activities of City Parties
on the Easement Parcels,as applicable,and Lessee shall use such routes and follow such procedures on
the Easement Parcels as result in the least damage and inconvenience to City and its invitees, agents,
employees,guests, lessees and/or licensees.
9 Lessee shall be responsible for any damage to the Property or any property of third parties
resulting from the exercise or use of the Easement Parcels by the Lessee or the Lessee Parties.including
but not limited to soil erosion,subsidence or damage resulting therefrom. Lessee shall promptly repair
and restore to its original condition any of the Property that may be altered, damaged or destroyed in
connection with the exercise or use of the Easement Parcels by the Lessee Parties. This Easement is
made on the express condition that City is to be free from all liability by reason of injury or death to
persons or injury to property from whatever cause arising out of any of the Lessee Parties'exercise or
use of the Easement Parcels, including any liability for injury or death to the person or property of any
of the Lessee Parties or to any property under the control or custody of any of the Lessee Parties. Lessee
hereby covenants and agrees to defend and indemnify the City Parties and save them harmless from any
and a'l liability,loss,costs,or obligations on account of,or arising out of,any such injury or losses caused
or claimed to be caused by the exercise or use of the Easement Parcels by the Lessee Parties, however
occurring,except to the extent caused solely by the willful or grossly negligent acts or omissions of City
or the City Parties.
10 This Easement shall inure to the benefit of and be binding upon the heirs, legal
representatives,successors and assigns of the City and Lessee,as applicable.
11 Lessee alone shall pay any and all taxes,charges or use fee(s)levied by any governmental
agency against Lessee's interest in the Easement Parcels. Lessee shall not cause liens of any kind to be
placed against the Easement Parcels or any of the Property except in connection with a Leasehold
Mortgage.
12 Any notices required or permitted to be given under this Easement shall be in writing
and shall be deemed to have been given if delivered by hand,sent by recognized overnight courier(such
as Federal Express) or mailed by certified or registered mail, return receipt requested in a postage
prepaid envelope,and addressed as follows:
If to the City at: City of Miami Beach,City Hall
1700 Convention Center Drive
Miami Beach,Florida 3313
Attn: City Manager,City Attorney
With a copy to:
AOSLLP 00063051 14
MIA 1e6559977v27
116
If to Lessee at:
c/o
Attn:
With a copy to:
Notices personally delivered or sent by overnight courier shall be deemed given on the date of
delivery and notices mailed in accordance with the foregoing shall be deemed given five (5)days after
deposit in the U.S.mails. The terms of this Section shall survive the termination of this Easement.
13 Construction.
a This Easement shall be construed and governed in accordance with the laws of the State
of Florida All of the parties to this Easement have participated fully in the negotiation and preparation
hereof;and,accordingly,this Easement shall not be more strictly construed against any one of the parties
hereto.
b. In construing this Easement, the use of any gender shall include every other and all
genders,and captions and section and paragraph headings shall be disregarded.
c All of the exhibits attached to this Easement are incorporated in,and made a part of,this
Easement.
d. The recitals to this Easement set forth above are true and correct and are incorporated
herein by this reference.
e. The dominant estate is intended to be appurtenant to the Development and Ground Lease
Agreement and is co-terminus with the Lessee's rights thereunder,
14 Severability. In the event any term or provision of this Easement be determined by
appropriate judicial authority to be illegal or otherwise invalid,such provision shall be given its nearest
legal meaning or construed as deleted as such authority determines,and the remainder of this Easement
shall be construed to be in full force and effect.
15 Time of Essence.Time shall be of the essence for each and every provision hereof.
16 Entire Agreement. This Easement, together with the documents referenced herein,
constitute the entire agreement and understanding among the parties with respect to the subject matter
ADSLLP 00063061 14
MIA 186559977v27
117
hereof,and there are no other agreements,representations or warranties other than as set forth herein.
This Easement may not be changed,altered or modified except by an instrument in writing signed by the
party against whom enforcement of such change would be sought.
(Signature pages to follow)
AOSLLP 00063061 14
MIA 186559977v27
118
IN WITNESS WHEREOF, the undersigned have caused this Easement to be executed by
execution of this instrument as of this day of ,201_.
Witnesses: CITY OF MIAMI BEACH,FLORIDA,
a municipal corporation
Sign Name: By:
Mayor
Print Name:
Sign Name:
Print Name:
ATTEST:
City Clerk
STATE OF FLORIDA
SS:
COUNTY OF DADE
The foregoing instrument was acknowledged before me this_day of
20_ by , as of . He is
personally known to me or has produced as identification and who did
(did not)take an oath.
NOTARY PUBLIC
Typed or Printed Name of Notary
My Commission Expires:
Serial No.,if any:
ADSLLP-0006306114
MIA 18655997747
119
ACKNOWLEDGED AND ACCEPTED this day of ,20_by •
Witnesses: MB MIXED USE INVESTMENT,LLC
Sign Name:
Print Name: By:
Print name:
Sign Name
Print Name:
STATE OF FLORIDA
)SS:
COUNTY OF DADE
The foregoing instrument was acknowledged before me this _day of
20_ by , as of . He Is
personally known to me or has produced as identification and who did
(did not)take an oath.
NOTARY PUBLIC
Typed or Printed Name of Notary
My Commission Expires:
Serial No.,if any:
ADSUP 0006306114
MIA 186559977v27
120
Exhibit"A"
[MBCC Parcel-Folio No.02-3227-000-0090)
ADSLLP 00063061 14
MIA 186659977v27
121
Exhibit"B"
Hotel Site Legal Description
[see attached]
AOSUP-00063061 14
MIA 188559977v27
122
Appendix 2
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Exhibit"C"
Easement Parcel 1(Right-of-way)
(exact description to be finalized as part of the development process pursuant to the Lease)
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Exhibit"D"
Easement Parcel 2 for
Construction of Skybridge and Off-site Improvements and Maintenance of Skybridge
(exact description to be finalized as part of the development process pursuant to the Lease]
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Exhibit"E"
Easement Parcel 3(Temporary Construction Easement)
[See attached depiction of construction staging area.
Exact description to be finalized as part of the development process pursuant to the Lease]
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Exhibit"F"
Encumbrances
[see attached;
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EXHIBIT"H
PRESENTLY PERMITTED DEVELOPMENT
(a) Permitted Development and Uses. The Leased Property is in the CCC Civic and
Convention Center District,a zoning district created to accommodate the facilities necessary to support
the Convention Center. The main permitted uses in the CCC Civic and Convention Center District are
parking lots,garages,performing arts and cultural facilities;hotel;merchandise mart;commercial or office
development; landscape open space; parks. Property located in the CCC Civic and Convention Center
District may be used for the purposes permitted and regulated in these land use designations and zoning
districts, as further limited by the City's Land Development Regulations, provided, however, that the
Leased Property may only be used in accordance with the terms and conditions of this!.ease.
(b) Density,Building Heights.Setbacks and intensities.The maximum density,heights,
setbacks and intensities for any development on the leased Property shall be regulated by the City's Land
Development Regulations,Comprehensive Plan and any Governmental Requirements.The development
regulations in the CCC Civic and Convention Center District are as follows:(1)maximum floor area ratio of
2.75. There are no lot area,lot width,population densities or unit size requirements for the CCC Civic and
Convention Center District. Building height and story requirements are as follows: (1)Maximum building
height for hotels: 300 feet;for all other uses: 100 feet.(2)Maximum number of stories for hotels:30;for
all other uses:11 stories.The development regulations(setbacks,floor area ratio,signs,parking,etc.)shall
be the average of the requirements contained in the surrounding zoning districts as determined by the
City's Planning and Zoning Director, Notwithstanding the foregoing,the permitted height for the Hotel
Project shall not exceed 185 feet,measured from Base Flood Elevation plus maximum Freeboard(BFE+5
feet),and further,as provided in the City's Land Development Regulations,including,without limitation,
Section 142-1161 of the City Code.
THIS EXHIBIT DESCRIBES THE PRESENTLY PERMITTED DEVELOPMENT FOR PURPOSES OF THE ACT ONLY,
THE PROJECT SHALL CONFORM TO THE DESCRIPTION, TERMS AND CONDITIONS SET FORTH IN THIS
LEASE.
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EXHIBIT"I"
PUBLIC FACILITIES
The proposed development will be serviced by those roadway transportation facilities currently
in existence as provided by state, county, and local roadways. The proposed development will also be
serviced by public transportation facilities currently in existence,as provided by Miami-Dade County,the
City of Miami Beach,and such other governmental entities as may presently operate public transportation
services within the City of Miami Beach. Sanitary sewer,solid waste,drainage,and potable water services
for the proposed development shall be those services currently in existence and owned or operated by
Miami-Dade County, the Miami-Dade County Water and Sewer Department, the City of Miami Beach,
and State of Florida. The proposed development shall be serviced by those existing educational facilities
owned or operated by the Miami Dade Public Schools District, if applicable. The proposed development
shall be serviced by those existing parks and recreational facilities owned or operated by the United States
Government within Miami Dade County, by the State of Florida, by Miami-Dade County,and by the City
of Miami Beach. The proposed development shall be serviced by those existing health systems and
facilities operated by the United States Government within Miami-Dade County,by the State of Florida.
by Miami-Dade County,and by the City of Miami Beach.
The proposed development will also be serviced by any and all public facilities,as such are defined
in Section 163.3221(12) of the Act,that are described in the Comprehensive Plan, specifically including
those facilities described in the Infrastructure Element and the Capita!Improvements Element therein,a
copy of which is available for public inspection in the offices of the City Clerk of the City of Miami Beach.
Notwithstanding the foregoing,the Hotel Project may be required to provide for some of its own services,
including solid waste removal and stormwater drainage.
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EXHIBIT"1"
PUBLIC RESERVATIONS AND DEDICATIONS
None,except for any easements or reservations contemplated under Section 4.1(g).
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EXHIBIT"K"
REQUIRED DEVELOPMENT PERMITS AND VARIANCES
The following constitutes a generalized list of local permits anticipated as necessary to be
approved by the terms of this Lease.
1. Design Review Board,Planning Board,and/or Board of Adjustment approvals,pursuant
to Chapter 118 of the City of Miami Beach Code
2. Utility Permits
3. Demolition Permits
4. Building Permits
5. Environmental Permits
6. Hazardous Materials Removal Permit,if removal of hazardous materials is found
necessary.
7. Public Works Permit,Paving and Drainage
8. Public Works Permit,Water and Sewer
9. Public Works Revocable Permits
10 Certificates of Use and/or Occupancy
11 Any variances or waivers that may be required pursuant to Chapters 114 through 142 of
the City of Miami Beach Code
12 All other local governmental approvals as may be applicable to the subject property
from time to time pursuant to the terms of this Development and Ground Lease
Agreement, including but not limited to restrictive covenants in lieu of unity of title
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EXHIBIT"L"
ROOM BLOCK AGREEMENT
between
CITY OF MIAMI BEACH,FLORIDA
and
MB MIXED USE INVESTMENT,LLC
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TABLE OF CONTENTS
ARTICLE I DEFINED TERMS 1
1.01 "18-Month Room Block Request ....1
1.02 "Acceleration Notice"is defined in Section 3.01(e) ... ... .1
1.03 "Active Negotiations 1
1.05 "Agreement 2
1.06 "Amended Offer ................2
1.07 "Available Guest Rooms 2
1.08 "Block Notice 2
1.09 "Block Release Request Notice ......2
1.10 "Business Day ......... ......_,., ..2
1.11 "City 2
1.12 "City Manager 2
1.13 "City-Wide Event ... 2
1.14 [Intentionally deleted) 3
1.15 "Convention Center 3
1.16 "Cure Period ... .......3
1.17 "Development and Ground Lease Agreement 3
1.18 "Effective Date 3
1.19 "Event Block Minimum Rate 3
1.20 "Event of Default ,.,,.».....................................3
1.21 "Event Night 3
1.22 "Event Room Block ...... 3
1.23 "Force Majeure 3
1.24 "GMCVB 4
1.25 "Hotel 4
1.26 "Hotel Site ..4
1.27 "Initial Offer „.............................. ..4
1.28 "Known Release Dates"is defined in Section 3.02(d) r4
1.29 "Lessee's Initial Projected Event Block Rate Schedule"is defined in
Section 4.01(b). 4
1.30 "Lessee's Subsequent Projected Event Block Rate Schedule"is defined in
Section 4.01(c) 4
1.31 "Managed Hotels 4
1.32 "Management Agreement 4
1.33 "Maximum Event Night Ceiling 4
1.34 "Maximum Event Room Block 4
1.35 "Midweek 4
1.36 "Notice 4
1.37 "Offer Expiration Date 4
1.38 "Opening 4
1.39 "Operator 4
1.40 "Lessee ... .., 5
1.41 "Potential Convention Center Customer 5
1.42 "Public Records Act 5
1.43 "Rate Quote 5
1.44 Intentionally Omitted ,....5
1.45 "Room Block Contract 5
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1.46 "Room Block Request Notice 5
1.47 "Sales Representative 5
1.48 "Special Event Block Minimum Rate 5
1.49 "Standard of Operation 5
1.50 "Standard of Operation Failure Notice 5
1.51 "Suspension Period"is defined In Section 2.02(b)._.„. ....... .. 5
1.52 "Term 5
1.53 "Weekend „...» ......................5
ARTICLE II TERM OF THIS AGREEMENT , 5
2.01 Commencement of the Term 5
2.02 Expiration of Term;Suspension Period 5
ARTICLE III ROOM BLOCK COMMITMENT;RELEASE OF BLOCK 6
3.01 Room Block 6
3.02 Release of Block 11
ARTICLE IV ROOM BLOCK PRICING 12
4.01 Event Block Minimum Rates;Special Event Block Minimum Rates 12
4.02 Intentionally Omitted 14
4.03 Confidentiality 14
ARTICLE V STANDARDS OF HOTEL OPERATION 15
5.01 Standards 15
ARTICLE VI 15
STANDARDS OF CENTER OPERATION AND OTHER CITY COVENANTS 15
ARTICLE VII NO LIABILITY FOR PROPOSED CONVENTION CENTER CUSTOMER;LESSEE
RESPONSIBILITY TO CAUSE OPERATOR TO PERFORM;INDEMNITY 15
7.01 No Liability to City 15
ARTICLE VIII EVENTS OF DEFAULT 16
8.01 Default 16
8.03 Lessee's Reservation of Rights 17
ARTICLE IX ADDITIONAL PROVISIONS 17
9.02 Miscellaneous 17
9.03 Estoppel Certificate 17
9.04 Notices 18
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ROOM BLOCK AGREEMENT
THIS ROOM BLOCK AGREEMENT ("Agreement") made and entered into as of the day of
201_ (the "Effective Date") by and between City of Miami Beach, Florida ("City"), a
Florida municipal corporation, and MB Mixed Use Investment, LLC("Lessee"), a Florida limited liability
company,recites and provides as follows.
RECITALS
The City has a material interest in maximizing the quality and performance of convention business
attracted to the Convention Center,as hereinafter defined in Section 1.15,and encouraging convention
and tourism business in the City.
In furtherance of those goals,and to facilitate the development of a full service convention center
hotel connected to the Convention Center,the City has entered into the Development and Ground Lease
Agreement (as hereinafter defined in Section 1.17) with Lessee, under which the parties have agreed,
among other things,to enter into a room block agreement pursuant to which specific percentages of the
Hotel's guest rooms will be reserved for specific periods of time for attendees,participants and planners
of conventions and trade shows at the Convention Center. City and Lessee agree that the room block
agreement described in the Lease (and, accordingly, this Agreement) constitutes a contract for the
provision of services by Lessee to and for the benefit of City,which services are being provided in exchange
for the covenants and agreements of City set forth in the Lease
City and Lessee intend that this Agreement satisfy such room block agreement requirement m
the Lease.
Lessee has or will execute and enter into a Management Agreement(as hereinafter defined)with
the Initial Hotel Operator(as defined in the Lease) pursuant to which, among other things, Lessee shall
require, and the Initial Hotel Operator must agree,to perform the obligations assigned to Lessee and/or
Operator (as hereinafter defined) herein during the term of such Management Agreement and to
otherwise operate the Hotel in a manner which complies with this Agreement.
In consideration of the mutual covenants and agreements herein contained and other good and
valuable consideration,the receipt and legal sufficiency of which are hereby acknowledged and confessed
by the parties hereto,City and Lessee hereby covenant and agree with each other as follows:
ARTICLE I
DEFINED TERMS
In this Agreement,these terms shall have the following meanings:
1.01 "18-Month Room Block Request"is defined in Section 3.01(c).
1.02 "Acceleration Notice"is defined in Section 3.01(e).
1.03 "Active Negotiations" means (x) for purposes of Section 3,01(b) and (c), that Lessee or
Operator, on the one hand, and a bona fide potential Hotel guest,on the other hand, have exchanged
written correspondence between them that reflects an indication of mutual interest for consummating a
transaction whereby such Hotel contracts to block or books guest rooms at the Hotel,and neither Lessee
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or Operator,on the one nand,nor such bona fide potential Hotel guest on the other hand, has indicated
that it no longer has any interest in pursuing such negotiations and (y) for purposes of Section 3.02(a),
that the GMCVB or the City or its representatives, on the one hand, and a Potential Convention Center
Customer, on the other hand, have exchanged written corresponderce between them that reflects an
indication of mutual interest for consummating a City-Wide Event and neither the GMCVB or the City,on
the one hand, nor such Potential Convention Center Customer,on the other hand, has indicated that it
no longer has any interest in pursuing such negotiations
1.04 "Adjusted Maximum Event Room Block" is defined in Section 3.01(b)(i).
1.05 "Agreement"is defined in this Agreement's preamble.
1.06 "Amended Offer"is defined in Section 3.01(d).
1.07 "Available Guest Rooms"means,as of any date in question,all of the Hotel's guest rooms
(including suites),excluding any guest rooms that are reasonably projected to be unavailable on the dates
in question due to scheduled renovations(including,without limitation,renovations as a result of a hotel
brand change or brand refresh), repairs(including, without limitation, repairs due to events of casualty
that have occurred), or maintenance, and excluding any of the Hotel's guest rooms that have been
condemned in a taking and as to which physical possession is projected to have been taken by the
condemnor prior to the date in question.
1.08 "Block Notice"is defined in Section 3.01(d).
1.09 "Block Release Retries(Notice"is defined in Section 3.02(b)
1.10 "Business Day"means a day other than a Saturday,a Sunday or a day on which national
banks in Miami-Dade County, Florida are closed for business. If any action is required to be performed,
or if any notice, consent or other communication is given, on a day that is not a Business Day, such
performance shall be deemed to be required, and such notice,consent or other communication shall be
deemed to be given, on the first Business Day following such non-Business Day. Unless otherwise
specified herein,all references herein to a "day"or"days"shall refer to calendar days and not Business
Days.
1.11 "City" means the City of Miami Beach, Florida, a municipal corporation of the State of
Florida.
1.12 "City Manager"means the Chief Administrative Officer of the City. The City Manager shall
be construed to include any duly authorized representatives designated in writing with respect to any
specific matter(s)concerning the Room Block Agreement(exclusive of those authorizations reserved to
the City Commission or regulatory or administrative bodies having jurisdiction over any matter(s)related
to the lease).
1.13 "City-Wide Event" means a convention, trade show or other event requiring a three (3)
night stay, during which a Potential Convention Center Customer(i)needs to use a minimum of 115,000
gross square feet of exhibit or meeting space in the Convention Center for not less than three (3)days
(including the day preceding the commencement of and the day following the conclusion of such event)
and(ii)in connection with such event, requests 1,500 or more guest rooms on the peak night and 4,000
or more guest rooms in the aggregate be made available in hotels in the City (including the Hotel)and
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surrounding metropolitan areas. A City-Wide Event shall also include the annual Orange Bowl football
game hosted by the Orange Bowl Committee and any Super Bowl football game that may take place in
Miami-Dade County or Broward County(without regard to whether either event utilizes the Convention
Center in any way).
1.14 jlntentionally deleted)
1.15 "Convention Center" means the Miami Beach Convention Center located at 1900
Convention Center Drive,Miami Beach,Florida.
1.16 "Cure Period"is defined in Section 2.02(b).
1.17 "Development and Ground Lease Agreement" or "Lease" means that certain
Development and Ground Lease Agreement between Lessee and City dated ,201_,as may be
amended from time to time in accordance with its terms.
1.18 "Effective Date"is defined in this Agreement's preamble.
1.19 "Event Block Minimum Rate"is defined in Section 4.01(e).
1.20 "Event of Default"is defined in Section 8.01.
1.21 "Event Night"means any night during a City-Wide Event(including the day preceding the
commencement of and the day following the conclusion of such event,as contemplated in the definition
thereof)for which(i)City has exercised its rights under Section 3.01(a) by giving a Room Block Request
Notice to the Operator and(ii)in response to such Room Block Request Notice,250 or more rooms have
been booked, blocked or reserved by the Operator either(x) pursuant to a contract with the Potential
Convention Center Customer or(y)pursuant to initial Offers or Amended Offers that have been accepted
or are still outstanding (and, if such contracts are terminated or any of such offers are subsequently
terminated or rejected, then any of the blocked rooms that were subject thereto shall no longer be
considered blocked for purposes of this definition). If rooms are blocked under this Agreement for
multiple City-Wide Events on the same night,that night will be considered to be a single Event Night for
purposes of the Maximum Event Night Ceiling but in no event shall any night during a City-Wide Event be
considered an Event Night for purposes of the Maximum Event Night Ceiling if City has not given a Room
Block Request Notice for that night to the Operator.
1.22 "Event Room Block"means a block of guest rooms(including suites)at the Hotel offered
to or reserved for the attendees of a City-Wide Event in response to a Room Block Request Notice.
1.23 "Force Maieure" means and includes causes without fault and beyond the control of a
party, whether or not foreseeable, including, without limitation, fire, explosion, accident, flood,
windstorm, earthquake, or other disaster or calamity, disruption of utility service; restrictive new
governmental laws or regulations;acts of war(whether declared or undeclared),invasion, blockade,or
sabotage;terrorism or threat thereof;riot,civil disturbance,insurrection or acts of public enemies;and
strike,lockout or other labor action and inability to procure materials; provided that neither a material
disruption of or material adverse change in financial,banking or capital market conditions or a material
adverse change in the business, financial condition, operations, assets, liabilities or prospects of either
party shall excuse any failure or delay in performance under this Agreement.
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1.24 "GMCVB"means the Greater Miami Convention&Visitors Bureau.
1.25 "Hotel"means the hotel to be constructed by Lessee on the Hotel Site pursuant to the
Lease,together with all supporting hotel facilities and amenities.
1.26 "Hotel Site"means the parcel of real property described on Exhibit A attached hereto and
made part hereof.
1.27 "initial Offer"is defined in Section 3.01(b),
1.28 "Known Release Rates"is defined in Section 3.02(d),
1.29 "Lessee's Initial Projected Event Block Rate Schedule"Is defined in Section 4.01(b).
1.30 "Lessee's Subsequent Protected Event Block Rate Schedule"is defined in Section 4.01(c).
1.31 "Managed Hotels"means full-service,convention center hotels within the United States
of America operated as first-class hotels containing no less than 400 rentable guest rooms operated under
a brand name and managed by the Operator or any entity controlled by,under common control with or
that controls Operator.
1.32 "Management Agreement" means the hotel operating or management agreement
between Lessee and the Operator that exists from time to time,as it may be amended or replaced from
time to time.
1.33 "Maximum Event Night Ceiling" means the maximum number of Event Nights in any
calendar month during which Lessee or Operator shall be obligated to provide Event Room Blocks
pursuant to this Agreement. The Maximum Event Night Ceiling is fourteen(14)Event Nights per calendar
month.
1.34 "Maximum Event Room Block"means eighty percent(80%)of all of the Hotel's Available
Guest Rooms.
1.35 "Midweek"means Sunday through Thursday,inclusive,
1.36 "Notice" or "notice" means each and every communication, request, reply, or advice
required or permitted to be given,made or accepted by any party to this Agreement to any other party
to this Agreement,each of which shall be given in writing,and deemed received by the intended recipient,
in accordance with Section 9.04.
1.37 "Offer Expiration Date"is defined in Section 3.01(e).
1.38 "Opening"means the opening of the Hotel to the public for business.
1.39 "Operator" means the entity responsible for overseeing the day to day management of
the Hotel. The initial Operator (sometimes herein called the "Initial Hotel Operator") of the Hotel is
,a _corporation.
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1.40 "Lessee" means the entity defined as "Lessee" in this Agreement's preamble and each
subsequent Lessee of all or any part of the Hotel Site. An entity shall be deemed to be the "Lessee"
hereunder only during the term of its leasehold of the Hotel Site.
1.41 "Potential Convention Center Customer"means a person,entity,group or association(or
any combination thereof)that is planning a City-Wide Event.
1.42 "Public Records Act"is defined in Section 4.04.
1.43 "Rate Quote"is defined in Section 3.01(b).
1.44 Intentionally Omitted.
1.45 "Room Block Contract"is defined in Section 3.01(f).
1.46 "Room Block Request Notice"is defined in Section 3.01(a).
1.47 "Sales Representative"is defined in Section 3.01(a).
1,48 "Special Event Block Minimum Rate"is defined in Section 4.01(e).
1.49 "Standard of Operation"is defined in Section 6.01.
1.50 "Standard of Operation Failure Notice"is defined in Section 2.02(a)(11)
1.51 "Suspension Period"is defined in Section 2.02(b)
1.52 "Term" is defined in Section 2.01.
1.53 "Weekend"means Friday and Saturday.
ARTICLE II
TERM OF THIS AGREEMENT
2.01 Commencement of the Term.The term of this Agreement(the"Term")shall commence
on the Effective Date.
2.02 Expiration of Term;Suspension Period.
(a) The Term shall continue until the earlier to occur of:
(i) the date upon which the Convention Center is no longer designated by
the City as the City's principal convention center;and
(ii) the termination of this Agreement pursuant to Section 8.01 of this
Agreement.
(b) The Term shall be suspended for so long as the Convention Center is no longer
operated and maintained substantially consistent with the Standard of Operation (the "Suspension
Period");provided,that,no suspension of the Term pursuant to this Section 2.02(b)shall be deemed to
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nave occurred unless and until(1)Lessee has provided to City written notice(the"Standard of Operation
Failure Notice")of any alleged failure by City to operate and maintain the Convention Center in a manner
substantially consistent with the Standard of Operation, which notice Ito be effective as such)must state
with reasonable specificity the reasons why Lessee believes that the Convention Center is no longer being
operated or maintained substantially consistent with the Standard of Operation (e.g., if Lessee believes
the Convention Center is not being maintained in substantial accordance with the Standard of Operation,
Lessee's notice shall describe the deficiencies in maintenance with reasonable specificity),and(2)City has
failed to remedy such failure within one hundred eighty(180) days following receipt of such Standard of
Operation Failure Notice (such 180-day cure period to be extended for delays resulting from Force
Majeure and,if the nature of the failure is such that the same cannot reasonably be expected to be cured
within said 180-day period, such 180-day period shall be extended such period of time as is reasonably
necessary to effect such cure so long as City commences the cure promptly and uses commercially
reasonable, diligent efforts to complete such cure as soon as reasonably practicable; the 180-day cure
period,as the same may be extended as provided for in this clause,is herein called the "Cure Period").
Notwithstanding the foregoing, City shall have the right to contest Lessee's determination that the
Convention Center is not being operated or maintained substantially in accordance with the Standard of
Operation by giving Lessee notice of such contest within thirty(30)days following receipt of the Standard
of Operation Failure Notice. If City elects to contest Lessee's determination,then the commencement of
the Cure Period shall be delayed until the date of determination by a court of competent jurisd'ction that
the Convention Center was not being operated and maintained substantially consistent with the Standard
of Operation. At such time as the Convention Center is operated and maintained substantially consistent
with the Standard of Operations, the Suspension Period shall terminate and the parties shall operate in
accordance with the terms hereof
ARTICLE III
ROOM BLOCK COMMITMENT;RELEASE OF BLOCK
3.01 Room Block. During the Term,City may from time to time require the Operator to offer
an Event Room Block to Potential Convention Center Customers in connection with a City-Wide Event in
accordance with, and subject to the limitations set forth in, this Agreement. Notwithstanding anything
herein to the contrary,City shall not have the right to require the Operator to offer an Event Room Block
to Potential Convention Center Customers if(a)the number of Event Nights requested in the Room Block
Request Notice for such Event Room Block would cause the Maximum Event Night Ceiling to be exceeded,
or(b)the total number of rooms requested to be blocked in such Room Block Request Notice on any Event
Night exceeds the number of rooms Operator is required to offer to block pursuant to Section 3A1Lb)jiJ.
Subject to the limitations set forth in the preceding sentence and elsewhere in this Article III,the right to
require that the Operator so offer the Event Room Block will be exercised in accordance with the following
procedures:
(a) A management, sales or booking representative of City or,if authorized by City,
the GMCVB (the "Sales Representative"), will notify the Operator that a Potential Convention Center
Customer is seeking offers from local hotels to accommodate,among other needs,the guest room needs
of the Potential Convention Center Customer for a City-Wide Event(the"Room Block Request Notice").
The Room Block Request Notice will(i)identify the Potential Convention Center Hotel Customer,(ii)if the
same is generally available to City,set forth a documented history of the group's room block events for
the most recent three year period including a comparison of the number of rooms blocked and the actual
number of rooms actually used,(iii)specify each specific date for wh.ch the Potential Convention Center
Customer will require blocks of guest rooms(including those dates commonly known as "move in" and
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"move out" dates), and (iv) specify the number of guest rooms in the Hotel the Potential Convention
Center Customer is seeking to block on each of the specific dates. Notwithstanding the provisions of
Section 9 04 or the definition of "Notice" set forth above, the Room Block Request Notice will be
communicated to the Operator in the same manner as such notifications are customarily communicated
by the Sales Representative to other hotels in the City. However, a copy of all Notices required or
permitted to be provided by the Sales Representative or City under this Article III shall be delivered to
Lessee, and such notices to Operator shall not be effective unless and until a copy of such notices are
delivered to Lessee.
(b) Unless such deadline is extended in writing by the Sales Representative,within
five(5)Business Days after Operator's receipt of a Room Block Request Notice for a City-Wide Event that
is no sooner than thirty(30) months from the date of such notice (or, if applicable by the operation of
Section 3.01(c)below,eighteen(18)months from receipt of such notice),the Operator will deliver to the
Potential Convention Center Hotel Customer(with a copy to the Sales Representative and City)an initial
written offer in response to the Room Block Request Notice (the"Initial Offer"). In the Initial Offer the
Operator will:
(i) offer to the Potential Convention Center Customer to block, on each
specific date that the Potential Convention Center Customer requires a block of guest rooms as specified
in the Room Block Request Notice,the lesser of(A) the actual number of the guest rooms in the Room
Block Request Notice for each specific date,or(B)the Maximum Event Room Block after deducting from
the Maximum Event Room Block the following (which amount shall be referred to as the "Adjusted
Maximum Event Room Block"):
1. any previously offered room blocks under this Agreement for
other City-Wide Events covering such dates, which offers have either been accepted or are still
outstanding;
2. any guest rooms released by City pursuant to Section 3.01(j)or
Sgction 3.02 and that have actually been booked by Operator or are the subject of Active Negotiations. If
such guest rooms are the subject of Active Negotiations,then at the request of City Lessee and Operator
shall(x)attempt to cause such proposed Hotel guest with whom such Active Negotiations are being held
to select other dates for the use thereof that would permit Operator to accommodate the room block set
forth in the Room Block Request Notice or (y) require that Operator accelerate negotiations with such
potential Hotel guest by requiring such potential Hotel guest to execute a contract to block or book such
rooms that are the subject of such Active Negotiations within the fifteen (15) Business Days following
City's request to Operator under this clause (yl, failing which, for purposes hereof, such rooms shall no
longer be considered under Active Negotiations;and
3, in the case where the Maximum Event Night Ceiling for such
month to which such block relates had previously been reached but,due to subsequent cancelations of
bookings there remain, as of the date of request for the initial Offer, available Event Nights for such
month,then less the number of rooms booked, blocked or reserved by Operator(i.e, rooms that were
booked or reserved, or were offered by Operator to be booked, blocked or reserved under offers that
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have either been accepted or are st 11 outstanding)following the date such Maximum Event Ceiling Night
had been reached and prior to such cancelations',and
(ii) quote a specific room rate for a standard single and double room and
suites(the"Rate Quote"). In making the Rate Quote,the Operator will take into account seasonality(i.e.,
using group event guest room rates received in a calendar month as the basis for quotes for the same
month in subsequent calendar years), Midweek versus Weekend rates, and special events that occur
regularly during the applicable period); provided, that, the Rate Quote shall not take into account non-
recurring special events that occur in a particular month which inflate group event room rates(such as
Super Bowls, NCAA Men's or Women's basketball tournaments, Major League Baseball playoffs and
similar sporting or entertainment events), In addition, rates for groups whose stay consists of both
Midweek and Weekend days shall be determined in accordance with Operator's booking policies
described in Section 3.01(f). The amount of the Rate Quote in the Initial Offer will be at the sole,but good
faith,discretion of the Operator
(c) Notwithstanding anything to the contrary set forth in Section 3 01(b) or any
other provision of this Agreement to the contrary:
(i) the Operator shall offer the Adjusted Maximum Event Room Block to a
Potential Convention Center Customer for a City-Wide Event that will commence between eighteen(18)
and thirty(30)months from the date of such notice (a"18-Month Room Block Request"), and Operator
shall be obligated to issue an Initial Offer (and otherwise perform its obligations hereunder) for such a
City-Wide Event only if the number of rooms requested in such 18-Month Room Block Request are
available as of the date of receipt of such Room Block Request Notice(i e.,rooms that(x) have not been
booked,blocked,or reserved,(y)are not the subject of Active Negotiations regarding same,and(z)have
not been previously offered by Operator to be booked,blocked or reserved under offers that have either
been accepted or are still outstanding)on the Event Nights for which rooms are requested in such Room
Block Request Notice;provided,however,that
(ii) the Operator shall designate one consecutive four (4) day period each
calendar month to be able to offer the Adjusted Maximum Event Room Block to a Potential Convention
Center Customer for City-Wide Events commencing not less than eighteen(18)months and not more than
thirty(30) months from the first day of such calendar month. Operator shall determine the consecutive
four (4) day periods for each respective month during the applicable period and shall notify City of the
schedule on a monthly basis.
'The following is an example of the intended operation of this clause(3). Assume that on January 1,2020,
the Maximum Event Night Ceiling was achieved for the month of January 2024. Then assume that, in
accordance with its right to do so pursuant to Section 3.01UIj, during the month of January 2020 the
Operator books 200 room nights for the month of January 2024. Then assume that a block for 400 rooms
booked for January 2024 and that comprised part of the Maximum Event Night Ceiling was canceled on
February 1, 2020. Then assume that a Room Block Request is delivered on March 1, 2020 for a block in
January 2024. The 200 rooms booked by Operator in January 2020 would be deducted from the
calculation of the Maximum Event Room Block under clause(3).
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(d) The Rate Quote included by Operator in the Initial Offer shall be determined in
Operator's sole,but good faith,discretion,and in determining such rate,Operator shall be entitled to take
into account, among other considerations, the level of food and beverage services that the Operator
anticipates the Potential Convention Center Customer will purchase in the Hotel. After reviewing the
Initial Offer,the Sales Representative may consult with the Operator regarding the Rate Quote contained
in the Initial Offer If prior to acceptance of the Initial Offer(or any amendment thereto voluntarily offered
by the Operator to the Potential Convention Center Customer),City reasonably and in good faith believes
that it might be in City's or the City's best interest to compel the Lessee to offer the Potential Convention
Center Customer an alternative rate structure,City may,after consultation with the Operator and within
thirty (30) days following receipt of the Initial Offer, elect to require (which election shall be
communicated by Notice from City to the Operator) the Operator to offer to the Potential Convention
Center Customer a rate lower than the rate in the Initial Offer,but in no event lower than the Event Block
Minimum Rate or,for up to six(6)City-Wide Events annually as determined at the City's sole discretion,
the Special Event Block Minimum Rate, as applicable (such written election being the "Block Notice").
Upon receipt of the Block Notice,Operator shall,within two(2)Business Days thereafter,amend the Initial
Offer by substituting the rate specified by City, which shall be no lower than the Event Block Minimum
Rate,as the Rate Quote(the "Amended Offer").
(e) Subject to the remaining provisions of this Section 3.01(e),the Initial Offer or the
Amended Offer (if applicable) shall remain open for acceptance by the Potential Convention Customer
until the sixtieth(60th)day following the date of the Initial Offer or Amended Offer,as the case may be;
provided, that in the case of an Initial Offer or Amended Offer given in response to a 18-Month Room
Block Request,then Operator may at any time provide the Potential Convention Center Customer with
written notice (the "Acceleration Notice") that such Initial Offer or Amended Offer will expire on the
fifteenth (15th) Business Day following the date of such Acceleration Notice unless the Potential
Convention Center Customer executes and returns the Room Block Contract to the Operator. If such
customer fails to execute and return the Room Block Contract within such fifteen (15)-Business Day
period, the offer shall expire, and the Operator shall have no further obligation to City or the Potential
Convention Center Customer in regard to such City-Wide Event under the Initial Offer or the Amended
Offer,as the case may be. The date of expiration of the Initial Offer or Amended Offer,as the case may
be,determined pursuant to this Section 3_01O is herein referred to as the"Offer Expiration Date".
(f) If either the Initial Offer or the Amended Offer is accepted by the Potential
Convention Center Customer prior to the Offer Expiration Date, Operator shall endeavor to negotiate a
binding contract with the Potential Convention Center Customer applying Operator's customary booking
policies to the Event Room Block (the "Room Block Contract"), including policies relating to contracts,
advance deposits and cancellation,provided that these policies shall adhere in all material respects to the
general customs employed by the Operator at its Managed Hotels, if any. Lessee will use its good faith
efforts to cause Operator to consider changes to Operator's customary booking policies to the extent
necessary to accommodate any prevalent and material local booking customs or practices. If a Potential
Convention Center Customer has not for any reason(other than Operator's breach of its obligations set
forth in the preceding sentence)signed a contract with the Operator with respect to such Initial Offer or
Amended Offer, as the case may be,on or before the Offer Expiration Date, then such offer will expire,
whereupon the Lessee shall have no further obligation to City or the Potential Convention Center
Customer in regard to such City-Wide Event under the Initial Offer or the Amended Offer,as the case may
be. However, if such offer expires at a time when there are more than thirty (30) months (or, by the
operation of Section 3.01(c), eighteen (18) months) prior to the first Event Night of the Potential
Convention Center Customer's City-Wide Event,nothing in this Agreement shall prohibit City from issuing
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a new Room Block Request Notice for such City-Wide Event in accordance with, and subject to the
provisions of,this Section 301, provided that Lessee shall have no obligation to include the same terms
as were included in the Initial Offer or the Amended Offer,as the case may be,that had previously expired
for such City-Wide Event in the Initial Offer Lessee delivers to City in connection with such new Room
Block Request Notice.
(g) If a Potential Convention Center Customer signs a Room Block Contract with the
Operator but later provides written notice to the Operator that it is terminating such contract, the
Operator,after Notice to City from the Lessee or Operator,will have no further obligation to City in regard
to the Event Nights covered by the Room Block Request Notice(which shall be deemed released from the
obligations hereunder), but only if such written termination notice is given by the Potential Convention
Center Customer on a date less than thirty (30) months before the first Event Night. If such notice of
termination is given on a date more than thirty (30) months before the first Event Night, then, unless
rooms are blocked under this Agreement for such Event Nights for another City-Wide Event, the Event
Nights covered by the Room Block Request Notice for such City-Wide Event will not be included in
calculating the Maximum Event Night Ceiling,and City may again deliver a Room Block Request Notice in
accordance with,and subject to the limitations set forth in,this Section 3.01;provided,however,Operator
will have no obligation to cancel any bookings to accommodate such subsequent request(for example,as
provided in Section 3.01(I),once the Maximum Event Night Ceiling has been reached the Operator is free
to book rooms hereunder for such month and Operator shall not be obligated to cancel any rooms
reservations for such month to accommodate a replacement block). City recognizes that the Lessee or
Operator may be entitled to collect cancellation fees from such Potential Convention Center Customer
and City hereby consents thereto and agrees that City shall have no right or claim to all or any portion of
such fees except as provided in the Lease. Similarly, the Lessee recognizes that City may be entitled to
collect cancellation fees from such Potential Convention Center Customer pursuant to the contract
between City and the Potential Convention Center Customer, if any, and the Lessee hereby consents
thereto and agrees that Lessee shall have no right or claim to all or any portion of such fees.
(h) If a Potential Convention Center Customer signs a Room Block Contract with the
Operator, then Operator will reserve rooms included in an Event Room Block for such customer for
purchase by the persons attending the applicable event until the date required under the Room Block
Contract executed with such Potential Convention Center Customer, after which time any unbooked
rooms shall be released from such Event Room Block and may be rented for the dates covered by such
Event Room Block at any rate to any person Operator selects without restrictions imposed by this
Agreement.
(i) Operator shall have the unrestricted right to commit up to twenty(20%)of the
Available Guest Rooms on any given date(and any other rooms that are not subject to being blocked by
City pursuant to this Agreement)to the Motel's commercial or group guests. In addition, Operator shal
have the unrestricted right to commit any and all rooms not subject to a room block commitment pursuant
to this Agreement for any date that is less than thirty(30) months in advance; provided, however, if an
18-Month Room Block Request is delivered to Operator,Operator shall issue an Initial Offer with respect
to such request only to the extent required pursuant to Sections 3.011c)(i)and 3.01(c)(')•
(j) If Operator has a potential booking that would not be permitted under the terms
of this Agreement,Operator may by notice to City(with a copy to Lessee)request that it be entitled to
make such booking. City shall have five (5)Business Days in which to respond to such request by notice
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to the Operator;provided,that a faiiure to respond shall be deemed a rejection of such request(but such
deemed rejection shall not prevent Operator from making multiple requests for such release).
(k) For the avoidance of doubt,the Operator shall have the right to freely book all
rooms within the Hotel for any day on which the Convention Center cannot accommodate a City-Wide
Event because less than one hundred fifteen thousand(115,000)square feet of meeting or exhibit space
is available on such day for use by a Potential Convention Center Customer (such determination to be
made as of the time Operator makes or extends an offer to make such booking)or (ii) that is an Event
Night during a calendar month in which the Maximum Event Night Ceiling has been reached.
(I) Once the Maximum Event Night Ceiling is reached for a month, the Operator
shall have the right to freely book the available rooms at the Hotel for that month,regardless of when the
booking is made(e.g., it may be more than thirty(30)months in advance).
(m) Notwithstanding the foregoing, it a Potential Convention Center Customer has
(i) a documented history of causing material property damage or unusually heavy wear and tear in
connection with group events or(ii) poor credit or a questionable payment history, then Operator shall
have the right,at its option,to decline to accommodate such Potential Convention Center Customer upon
notice to the City given within five(5)days following the date of the Room Block Request Notice;provided,
that such notice to the City under this paragraph shall set forth with particularity the basis for the
Operator's conclusions. In the event the City disagrees with the Operator's conclusions,the parties agree
to meet and confer and attempt in good faith to reach agreement as to whether to accept or decline the
Potential Convention Center Customer
3.02 Release of Block
(a) Notwithstanding anything to the contrary set forth in this Agreement,but subject
to Section 3.02j below, Operator shall have the right to commit a block of more than twenty percent
(20%) of the Available Guest Rooms to non-Potential Convention Center Customer business for a date
more than thirty (30) months in the future, and the rooms in excess of twenty percent (20%) shall be
released from the terms of this Agreement for such dates,unless any of the following are true:
(i) A Room Block Request Notice satisfying the requirements set forth herein
has been delivered that covers any of the dates reflected in the Block Release Request Notice, unless any
Initial Offer or Amended Offer delivered by Operator in response thereto has expired without the
execution by the Potential Convention Center Customer of a Room Block Contract with Operator or, if
such a contract was executed,the same has been terminated by the customer;
(ii) The GMCVB or the City is in Active Negotiations with a Potential
Convention Center Customer for a City-Wide Event that includes any of the dates covered by the Block
Release Request Notice;or
(iii) The dates covered by the Block Release Request Notice have historically
been booked in hotels in the City for a City-Wide Event and City reasonably concludes that the release of
the block in the Hotel will jeopardize the booking of such City-Wide Event.
(b) If Operator desires to commit a block of more than twenty percent (20%) of
Available Guest Rooms pursuant to Section 3.02(a)above, Operator shall send a Notice to City(a"Block
Release Request Notice")specifying(i)the dates as to which such request applies,(ii)the number of event
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night rooms to which such request applies,and(iii)either that(x)to Operators knowledge,none of the
items in clauses(t)through(iii)of Section 3.02(a)are true or(y)even though one or more of the items in
clauses(i)through(iii)are true,such Block Release Request Notice describes a group that is proposing to
contract for regularly recurring events(including on a rotating basis with other municipalities)at the Hotel
and/or the Convention Center,and City should consider such request for the release in light of the possible
repeat nature of the proposed business. Within five (5) Business Days after receipt of a Block Release
Request,City shall deliver written notice to Operator either(i)confirming the release of the requested
rooms for the specific dates set forth in such Block Receipt Request or(ii)disapproving such release with
an explanation as to which item in clause(i)through(iii)of Section 3.02(a)permits City to disapprove. If
City fads to either(x)confirm the release of rooms in a Block Release Request Notice or(y)disapprove the
release of rooms in a Block Release Request, in each case of(x)and (y), in writing within such five (5)
Business Day period,then such release shall be confirmed.
(c) Operator shall,upon request by City following any release made pursuant to this
Section 3.02, use its good faith efforts to accommodate any Event Room Block subsequently requested
covering any of the dates for which a release has been provided by City under this Section 3A2.
(d) City will provide Operator a list of known release dates on a periodic basis(not
less than semi-annual)identifying all future dates the Convention Center cannot be utilized for City-Wide
Events due to maintenance, move in/out periods,or any other reason("Known Release Dates"). If the
City subsequently eliminates such dates from a subsequent list of Known Release Dates,such date(s)shall
be subject to all applicable provisions of this Agreement, unless rooms have been booked, blocked or
reserved by the Operator pursuant to a contract with a hotel customer or group(and, if such contracts
are terminated,then any of the blocked rooms that were subject thereto shall no longer be considered
blocked for purposes herein).
ARTICLE IV
ROOM BLOCK PRICING
4.01 Event Block Minimum Rates;Special Event Block Minimum Rates.
(a) The Event Block Minimum Rates and Special Event Block Minimum Rates shall be
as follows:
(E) The Event Block Minimum Rate shall be an amount equal to 105%of the
average group rate for the applicable period reflected in the Lessee's initial Projected Event Block Rate
Schedule or Lessee's Subsequent Projected Event Block Rate Schedule (each as defined below), as
applicable,as further described in Section 4.01(e.
(ii) The Special Event Block Minimum Rate shall be an amount equal to 100%
of the average group rate for the applicable period reflected in the Lessee's Initial Projected Event Block
Rate Schedule or Lessee's Subsequent Projected Event Block Rate Schedule(each as defined below),as
applicable,as further described in Section 4.01(e).
(b) Concurrent with the Commencement of Construction,Lessee shall have provided
to City and the City shall have approved a schedule of the projected Event Block Minimum Rates and
Special Event Block Minimum Rates for the first five(5)calendar years after the Opening(the"Lessee's
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Initial Projected Event Block Rate Schedule"). The Lessee's Initial Projected Event Block Rate Schedule
shall include a schedule for both Event Block Minimum Rates and Special Event Block Minimum Rates,and
will include varying rates for room type and for periods within each applicable calendar year to account
for seasonality and day of the week(e.g., Midweek,Weekend). The rates for each such year included in
Lessee's Initial Projected Event Block Rate Schedule shall represent Lessee's good faith forecast of the
rates that will be included in the pro forma budget for the operation of the Hotel for such year and are
the projections and forecasts being used by Lessee in making its decisions,and planning for,bookings in
the operation of the Hotel and the conduct of Lessee's business generally.
(c) By no later than January 1 of each year commencing after the date hereof,Lessee
shall provide City a schedule of the projected Event Block Minimum Rates and Special Event Block
Minimum Rates for the ensuing five(5)calendar year period(each such schedule,an"Lessee's Subsequent
Projected Event Block Rate Schedule"). The rates (x) for the first twelve (12) months covered by the
Lessee's Subsequent Projected Event Block Rate Schedule shall be those set forth in the pro forma
operating budget for the Hotel for such 12-month period that has been approved by Lessee and Operator,
and (y)for each other year covered thereby shall represent Lessee's and Operator's then-current good
faith forecast of the rates that Lessee and Operator project well be included in the actual pro forma budget
adopted for the operation of the Hotel for such years and are the forecasts and projections being used by
Lessee in making its decisions,and planning for, bookings in the operation of the Hotel and the conduct
of Lessee's business generally. For each year, subsequent to January 1, Lessee may deliver one (1)
updated Lessee's Subsequent Projected Event Block Rate Schedule, which will replace the Lessee's
Subsequent Projected Event Block Rate Schedule previously delivered for such year.
(d) Each of the Lessee's Initial Projected Event Block Rate Schedule and each Lessee's
Subsequent Projected Rate Schedule shall, when delivered to City, be accompanied by (i) reasonable
evidence that the same has been approved by both Lessee and Operator, and (ii) a certification from
Lessee to City indicating that the Event Block Minimum Rate and Special Event Block Minimum Rate for
each year set forth therein represents(x)for the first twelve(12)months covered thereby those set forth
in the Lessee's pro forma operating budget for such 12-month period that has been approved by Lessee
and Operator,and(y)for each other year covered thereby,Lessee's and Operator's good faith forecast of
the rates that Lessee and Operator project will be included in the actual pro forma budget adopted for
the operation of the Hotel for such year and are the forecasts and projections actually being used by
Lessee in making its decisions,and planning for, bookings in the operation of the Hotel and the conduct
of Lessee's business generally.
(e) The rates reflected in the Lessee's Initial Projected Event Block Rate Schedule and
each of the Lessee's Subsequent Projected Event Block Rate Schedules,as increased up to one hundred
and five percent (105%) of such rates,shall be the"Event Block Minimum Rate" for each of the five(5)
years covered by, as applicable, the Lessee's Initial Projected Event Block Rate Schedule or the then
current Lessee's Subsequent Projected Event Block Rate Schedule. The rates reflected in the Lessee's
Initial Projected Event Block Rate Schedule and each of the Lessee's Subsequent Projected Event Block
Rate Schedules,a'one hundred percent(100%)of such rates,shall be the"Special Event Block Minimum
Rate" for each of the five (5) years covered by, as applicable, the Lessee's Initial Projected Event Block
Rate Schedule or the then current Lessee's Subsequent Projected Event Block Rate Schedule.
(i) The parties recognize that the Event Block Minimum Rate and Special
Event Block Minimum Rate may change each year(but only once per year and then only with the issuance
of the Lessee's Subsequent Projected Event Block Rate Schedule), it being understood that each Lessee's
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Subsequent Projected Event Block Rate Schedule (and the rates reflected therein) shall supersede all
previously issued Lessee's Subsequent Projected Event Block Rate Schedules even though the same relate
to the same years(the following is an example of the "rolling" nature of the determination of the Event
Block Minimum Rate: assume that the Lessee issues, on December 1, 2020, an Lessee's Subsequent
Projected Event Block Rate Schedule. That schedule will cover the period commencing January 1, 2021
and ending December 31. 2025 (the"2021 Schedule") Then assume that on December 1. 2021, Lessee
issues a Lessee's Subsequent Projected Event Block Rate Schedule. That schedule will cover the period
commencing January 1, 2022 and ending on December 31, 2026 [the "2022 Schedule'']. The 2022
Schedule will,as to any Block Notice issued on or after January 1,2022,supersede the 2021 Schedule and
all prior schedules covering the years 2022,2023, 2024 and 2025 and shall govern the determination of
the Event Block Rate with respect to such Block Notice).
(ii) If a Block Notice is issued for a City-wide Event where the first Event Night
will occur on a date in a calendar year that is not covered by the then current Lessee's Subsequent
Projected Event Block Rate Schedule (i.e., the date of such first Event Night is beyond the five(5) year
period covered by the then current Lessee's Subsequent Projected Event Block Rate Schedule),the Event
Block Rate reflected in the then current Lessee's Subsequent Projected Event Block Rate Schedule shall
be used but shall be adjusted by an usual and customary industry inflation factor as reasonably agreed
upon by Lessee,Operator and City.
4.02 Intentionally Omitted
4.03 Confidentiality. Subject to its obligations under the Florida Public Records Act(the"Public
Records Act") in force in the State of Florida from time to time,City will not disclose any Initial Offer or
Amended Offer, any information provided by Operator under Section 3.01(m) or any information
obtained pursuant to Section 4.01 to any person or entity other than (i) its employees, accountants,
counsel and other consultants who have a need to know such information,(ii)the Lessee and its officers,
directors,employees,accountants,counsel and other consultants,(iii)the Lessee's existing and proposed
lenders,(iv)Operator and its officers,directors,employees,accountants,counsel and other consultants,
(v) prospective purchasers of the Hotel or (vi) in connection with any legal proceeding (or alternative
dispute resolution procedure) between City and Lessee and/or Operator, provided that City shall use
reasonable efforts to obtain confidential treatment of same. Neither Lessee nor Operator will disclose
any information provided by City to Lessee or Operator hereunder to any person or entity other than(1)
their respective affiliates, and the employees, accountants, counsel and other consultants of Lessee.
Operator and their respective affiliates who have a need to know such information and their respective
partners, members,shareholders,and other holders of direct or indirect beneficial interests in Lessee or
Operator, (2) the Lessee's existing and proposed lenders and investors and any proposed replacement
Operator, (3) prospective purchasers of the Hotel or (4) in connection with any legal proceeding (or
alternative dispute resolution procedure)between City and Lessee and/or Operator,provided that Lessee
and Operator shall use reasonable efforts to obtain confidential treatment of same.
(a) Subject to City's obligations under the Public Records Act, City shall use its good
faith efforts to provide timely written notice to Lessee and Operator of any request received by City
pursuant to the Public Records Act requesting information held by City to which Lessee or Operator may
assert "confidential business information" or "trade secret" status under the Public Records Act, all for
the purpose of providing Lessee and Operator an opportunity to seek to protect such information from
disclosure by timely filing an appropriate action in a court of competent jurisdiction seeking non-
disclosure of the requested information.
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ARTICLE V
STANDARDS OF HOTEL OPERATION
5.01 Standards. At all times during the term of this Agreement,the lessee shall,to the extent
the Hotel is being operated (or, pursuant to the Lease, required to be operated),cause the Operator to
operate and manage the Hotel in accordance with the Management Agreement and (to the extent the
Hotel is required to be operated pursuant to the Lease)the applicable provisions of the Lease. At all times
when there is no Management Agreement, Lessee shall, to the extent the Hotel is being operated,
operate, or cause an Operator to operate, the Hotel in a manner generally consistent with the general
physical and service standards applicable to other upscale convention center hotels and(to the extent the
Hotel is required to be operated pursuant to the Lease) in accordance with the applicable provisions of
the Lease.
ARTICLE VI
STANDARDS OF CENTER OPERATION AND OTHER CITY COVENANTS
6.01 Standards. During the Term,City shall operate and maintain the Convention Center to at
least the average standard of quality consistent with the principal convention centers operated in
Orlando, Atlanta, New Orleans, Dallas, Houston, Boston, Chicago, San Francisco, San Diego and Los
Angeles,as of the Effective Date(the"Standard of Operation").
6.02 Restrictive Covenant. At all times during the term of this Agreement,the City shall comply
with the restrictive covenant set forth in Section 4.2(e)of the Lease.
ARTICLE VII
NO LIABILITY FOR PROPOSED CONVENTION CENTER CUSTOMER;
LESSEE RESPONSIBILITY TO CAUSE OPERATOR TO PERFORMINDEMNITY
7.01 No Liability to City. In no event shall City be in any way responsible or liable for the
performance by any Potential Convention Center Customer of its obligations under its contract with the
Lessee or Operator or for any charges, liabilities or other sums owed by, or liabilities of, such Potential
Convention Center Customer(or for those for whom it blocks rooms)to either Lessee or Operator.
7.02 Lessee and Operator Responsibility; Authority to Grant Consents and Make Decisions.
Lessee shall cause Operator to perform al!of the covenants and agreements of the Operator under this
Agreement, and to cause the Operator to observe all of the covenants and agreements of Operator
hereunder,and by entering into a Management Agreement Operator shall,notwithstanding any contrary
provision of its Management Agreement, be directly responsible to City for the performance of the
Operator's obligations hereunder. Furthermore, all actions, consents, decisions, elections, offers, and
determinations made hereunder oy the Operator with respect to covenants and obligations of the
Operator under this Agreement shall be binding upon both Lessee and Operator for purposes of this
Agreement. As of the Effective Date,Lessee has delegated the performance of the obligations and rights
assigned to the Operator hereunder to the Initial Hotel Operator under a Management Agreement(for so
long as the same remains in effect) and, upon its termination, shall delegate any or all of such
responsibilities hereunder to any subsequent Operator pursuant to a subsequent Management
Agreement,but no such delegation shall release or relieve Lessee from its obligation to perform,or cause
to be performed,all of its covenants and agreements set forth herein.
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All consents, decisions,waivers,and determinations to be made or given hereunder by City may
be made and given by the City Manager(or any person designated from time to time by the City Manager
by Notice to Lessee and Operator)and no inference to the contrary shall be made because the defined
term`City"is used in some places in this Agreement and the phrase"City Manager"is used in others.
7.03. indemnification. The Lessee shall indemnify,defend and hold harmless the City and its
officers,employees,agents and instrumentalities from any and all liability, losses or damages,including
attorney's fees and costs of defense,which the City or its officers,employees,agents or instrumentalities
may incur as a result of any third party claims,demands, suits, causes of actions or proceedings of any
kind or nature arising out of,relating to or resulting from the performance of the Room Block Agreement
by the Lessee, Operator, or their respective employees, agents, partners, principals or subcontractors.
The Lessee shall pay all claims and losses in connection therewith, and shall investigate and defend all
claims,suits or actions of any kind or nature in the name of the City,where applicable,including appellate
proceedings,and shall pay all costs,judgments,and attorney's fees which may be incurred thereon,The
above indemnification provisions shall survive the expiration or termination of this Agreement.
ARTICLE VIII
EVENTS OF DEFAULT
8.01 Default. A default under the terms of this Agreement shall occur if any party hereto shall
default in the performance of any of the terms,conditions or covenants contained In this Agreement to
be performed or observed by it,and such party does not remedy such default within thirty(30)days after
Notice or,if the default is of such character as to require more than thirty(30)days to remedy,then if
such party fails to commence to cure and correct the default within said thirty (30) day period and
thereafter prosecute such corrective action diligently and without interruption and complete the cure
thereof within ninety (90) days following the original Notice of such default (an "Event of Default").
Notwithstanding the foregoing,the failure of Lessee or Operator to comply with the provisions of Article
III hereof within the time frames set forth therein shall, if not cured within three (3) Business Days
following written notice from City to Lessee and Operator, constitute an Event of Default by Lessee
hereunder without the need of any additional Notice and without any further opportunity to cure such
Event of Default.All Notices of default shall be provided to Lessee and to Operator and shall also be given
to Lessee's mortgagee (provided such mortgagee has provided Notice to City of its name and address
where Notices to it hereunder are to be sent).
8.02 Remedies. If an Event of Default shall have occurred because of a breach of any provision
hereof by City,on the one hand,or Lessee on the other hand then the nondefaulting party shall have the
right,at any time after the occurrence of said Event of Default to(i)initiate and thereafter prosecute an
action in equity for the specific performance of any covenants or obligations to be performed by the
defaulting party hereunder (City shall also have the right to seek and obtain an order of specific
performance against the Operator so as to compel Operator, in its capacity as such under the
Management Agreement,to comply herewith)or(ii)exercise such other rights as shall be available at law
or in equity. In no event, however, shall this Agreement be terminated due to an Event of Default
(provided that the foregoing shall not limit the provisions of Section 2.02).
Each party acknowledges and agrees that its covenants,obligations and agreements set forth in
this Agreement are a material and fundamental inducement to the City in executing and delivering the
Lease and any other agreements referenced therein,such that actual damages may not be an adequate
AOS1IP-0063061 14
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remedy at law for the breacn hereof by City, the Lessee or the Operator. Accordingly, any party shall be
entitled to seek relief mandating act:on by City,the Lessee and/or Operator hereunder in accordance with
this Agreement. In addition, each party recognizes and agrees that monetary damages could not be
calculated to compensate the other party for any breach by the defaulting party of the covenants and
agreements contained in this Agreement. Each party may restrain and enjoin any breach or threatened
breach of any covenant, duty or obligation of the other party contained in this Agreement without the
necessity of(i) posting a bond or other security, (ii)any showing of irreparable harm, balance of harms,
consideration of public interest or the inadequacy of monetary damages as a remedy, or (iii) that the
administration of an order for injunctive relief would be impracticable. in the event of any breach or
threatened breach of any covenant,duty or obligation contained in this Agreement,the party breaching
(or threatening breach) stipulates and agrees that the balance of hardships which weigh in favor of
injunctive relief and that non-breaching party may seek and obtain injunctive or other form of ancillary
relief from a court of competent jurisdiction in order to maintain the status quo and enforce the terms of
this Agreement on an interim basis pending the outcome of the dispute or controversy hereunder.
Lessee agrees to include in each Management Agreement a provision similar to the foregoing
whereby the Operator makes such agreements to Lessee with respect hereto and specifically agrees that
City shall have the right to specifically enforce against the Operator the provisions of this Agreement.
8803 Lessee's Reservation ofFlights. Notwithstanding anything to the contrary contained in this
Agreement, this Agreement shall in no way limit Lessee's or Operator's rights and remedies against a
Potential Convention Center Customer resulting from such Potential Convention Center Customer's
default under any contract,including any Room Block Contract,with Lessee or Operator.
ARTICLE IX
ADDITIONAL PROVISIONS
9.01 Exculpation. The liability of Lessee(and of any successor"Lessee")under this Agreement
shall be limited to its interest in the hotel. City agrees that none of the Lessee's or Operator's direct or
indirect partners, members, managers, joint venturers, shareholders, directors, officers, agents and
employees shall have any personal liability with respect to,or arising out of,this Agreement. In no event
shall any officer,director,agent,or consultant of City. nor any employee or public official of the City,ever
have any personal liability with respect to or arising out of this Agreement.
Nothing within this Section 9.01 shall limit the right of any party to seek specific performance of
the terms and provisions of this Agreement as provided in Article VIII.
9.02 Miscellaneous. if any term of this Agreement or any application thereof shall be invalid
or unenforceable,the remainder of this Agreement and any other application of such term shall not be
affected thereby. This Agreement may be changed, waived, mod'fied Of supplemented only by an
instrument in writing signed by Lessee and City. The headings in this Agreement are for purposes of
reference only and than not limit or define the meaning hereof. This Agreement may be executed in any
number of counterparts,each of which shall be an original,but all of which shall together constitute one
and the same instrument.
9.03 i-stoppel Certificate. Within ten (10) Business Days after request therefor by any party
hereto or by Operator or by the holder of any loan made to Lessee or Operator,the other party(ies)and
Operator shall execute and deliver to the requesting party a statement in writing and reasonably
satisfactory to the requesting party and directed to the requesting party land,if requested.to the holder
ADSLLP•03063061 14
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of any loan made to Lessee or Operator)certifying to such factuai matters as may be reasonably requested
by such requesting party, including without limitation (if such be the case) that (a) this Agreement is
unmodified and in full force and effect,(b)to the certifying party's knowledge the requesting party is not
in default hereunder or,if in default,the nature thereof in reasonable detail,and(c)there are no defenses
or offsets to the Agreement claimed by the other party.
9.04 Notices. Each Notice to be provided or given hereunder must be in writing (in some
instances in this Agreement the words"written Notice"or"notice in writing"may be used and in others
simply the word"Notice"or"notice" may be used;no inference is to be drawn therefrom as all Notices
must be in writing)and must be delivered or provided in one of the following methods:(a)certified mail,
return receipt requested,postage pre-paid and addressed to the party to whom such Notice is intended
to be delivered; or(b) personal delivery to the addressee by courier or other means of hand delivery.
Notice delivered by certified mail pursuant hereto shall be effectively given and received on the third(3`Q)
business day following deposit of the same in the United States Mail, postage pre-paid, addressed
properly to the party to whom such notice intended. Notice by personal delivery shall be effectively given
and received upon acceptance thereof by the addressee as confirmed in writing by a receipt executed by
and retained by the party delivering such Notice.
to City: City of Miami Beach
1700 Convention Center Drive
Miami Beach, Florida 33139
Attention:
with a copy to: City Attorney's Office
City of Miami Beach
1700 Convention Center Drive,4Th Floor
Miami Beach,Florida 33139
to the Lessee-
with a copy to:
to the Operator:
Any mortgagee,trustee or beneficiary under any mortgage or deed of trust on the Hotel may by
Notice to the parties set forth hereinabove designate an address to which Notices to it hereunder shall be
sent. Any such party may from time to time by Notice as herein provided,designate a different address
to which Notices to it shall be sent.
ADSUP 00063061 14
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9.0.5 Transfer of Lessee's or Operator's Interest,
(a) In the event of the sale,assignment or transfer by Lessee of its leasehold interest
in the Hotel Site(other than a collateral assignment to secure a debt of Lessee)to a successor in interest
(who shall, upon acceptance of title to or an interest in the Hotel Site or any part thereof,be deemed to
have assumed the obligations of Lessee hereunder arising from and after the date of such acceptance),
the transferring Lessee shall be released or discharged from all of its covenants and obligations hereunder,
except such obligations as shall have accrued prior to any such sale, assignment or transfer; and City
agrees to look solely to such successor in interest of Lessee for performance of such subsequently
occurring obligations. Notwithstanding the provisions of the preceding sentence, any successor Lessee
hereunder shall in all respects be obligated to honor any contract or agreement previously executed with
a Potential Convention Center Customer in accordance with its terms and shall be bound by any
outstanding Initial Offers or Amended Offers, each Room Block Request Notice and the Event Rate then
in effect subject to and in accordance with the provisions of Article III.
(h) In the event that the Management Agreement with any Operator shall expire or
terminate for any reason then the Operator under such Management Agreement shall be relieved from
any obligations arising hereunder from and after the date upon which, as a consequence thereof, such
Operator is no longer operating the Hotel. Lessee shall be obligated to secure the written consent and
agreement of any replacement third-party Operator to comply with all of the terms, provisions and
conditions set forth herein;provided,that,a failure by the Lessee to do so shall in no way release or relieve
Lessee or any such third-party replacement Operator from performing the obligations of the Lessee and
Operator hereunder.
9.06 Superiority of Agreement;Covenant Running with the Hotel Site. The provisions of this
Agreement shall constitute a restrictive covenant running with the Hotel Site binding upon each Lessee
thereof,and any and all operators or managers of the improvements thereon,and each and every other
person or entity claiming or holding any interest in the Hotel Site, shall inure to the benefit of the City,
and shall apply to any hotel now or hereafter located on the Hotel Site,or any portion thereof.
9.07 Gender;Singular and Plural. As used herein,the neuter gender includes the feminine and
masculine, the masculine includes the feminine and neuter,and the feminine includes the masculine and
neuter,and each includes a corporation,partnership or other legal entity when the context so requires.
The singular number includes the plural,and vice versa,whenever the context so requires.
9.08 Nature and Extent of Agreement. This Agreement contains the complete agreement of
the parties regarding the terms and conditions of the Agreement. There are no oral or written conditions,
terms, understandings or other agreements pertaining to the room block arrangements which have not
been incorporated herein.
9.09 Governing Law.This Agreement shall be governed as to performance,interpretation and
jurisdiction by the laws of the State of Florida, without regard to conflicts of law rules. This Agreement
shall be enforceable in Miami-Dade County, Florida, and if legal action is necessary by either party with
respect to the enforcement of any or all of the terms or conditions herein, exclusive venue for the
enforcement of same shall be in Miami-Dade County,Florida.
9.10 Binding Effect. Subject to express provisions hereof to the contrary,this Agreement shall
be binding upon and shall inure to:he benefit of the parties hereto and their respective heirs,successors
and assigns during the Term hereof Furthermore, and notwithstanding any provision hereof to the
a051.1P-00063061 i4
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contrary,City may at any time,without the need of prior notice to or consent from the Lessee,assign this
Agreement to any other entity designated by the City(provided that no such assignment shall be effective
against Lessee until Notice thereof is provided to Lessee, and provided further that such assignee
expressly assumes all of the obligations of City hereunder and agrees to be bound by the terms and
provisions of this Agreement. In addition,the Operator shall be an express third party beneficiary of the
obligations,duties and covenants of City hereunder. In the event of any assignment of this Agreement by
the City, all references hereunder to the City Manager with respect to Approvals, consents, decisions,
waivers, determinations, confirmations, submittals, notifications, communications and other matters
shall be deemed to refer to the Person who is then the lessor under the Lease.
(signature pages to follow)
nosuc 00063061 14
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155
Each of the parties hereto have caused this Agreement to be duly executed by their lawfully authorized
representatives effective as of the Effective Date,
Lessee:
MB MIXED USE INVESTMENT,LLC,a Florida limited
liability company
By:
Name:
Title.
CITY OF MIAMI BEACH,FLORIDA
By:
Dan Gelber
Mayor
Approved for form and legal sufficiency
By:
City Attorney
ATTEST
By:
City Clerk
ADSLLP-00063061 1d
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156
EXHIBIT A
HOTEL SITE
[see attached]
a)SLLP-00063061 10
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157
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EXHIBIT"M"
OWNERSHIP INTERESTS IN LESSEE
(attached]
ADStLP-00063061 14
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159
MB MIXED USE INVESTMENT,LLC
PEDRO A MARTIN DAVID P MARTIN
50%.'ss
MB MIXED USE INVESTMENT
HOLDINGS MEMBER OWNER,
LLC
I00%
MB MIXED USE INVESTMENT
HOLDINGS MEMBER PARENT,
LLC
MB MIXED USE INVESTMENT TB MBCC HOTEL
HOLDINGS MEMBER,LLC INVESTMENT,LLC
50%
MB MIXED USE INVESTMENT
HOLDINGS.LLC
111i 11I\F'.111'SE IN%ESf4.11FN1,L1(
160
PRINCIPALS OF TURNBERRY MEMBER OF MB MIXED USE INVESTMENT HOLDINGS, LLC
`Members are(i)Jacquelyn Soffer and/or trusts, partnerships or
other entities for estate planning purposes of Jacquelyn Soffer
Jacquelyn (collectively, "Jackie Softer"), (ii) one or more of the following
Members* relatives of Jacquelyn Soffer:(x) Rock Soffer,
Soffer (y)Max Rappaport,
and(z)Brooke Soffer, and/or(iii)senior employees of Turnberry
Associates; provided that(1)Jackie Soffer shall own at least five
percent (5%) of TB MCC Hotel Investment LLC and (2) no
individual will directly or indirectly own more than thirty percent
0%Manager 100%Equity7.
(30%)of TB MBCC Hotel Investment LLC.
1 S
m I
TB MBCC HOTEL INVESTMENT LLC I MB MIXED USE INVESTMENT
I
HOLDINGS MEMBER, LLC
(FL-6/6/18)
50%Member 50%Member
MB MIXED USE INVESTMENT HOLDINGS, LLC
(FL-5/30/18)
EXHIBIT"N"
[RESERVED]
ADSLIP 00063061 14
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EXHIBIT"0"
TRANSACTION RENT
EXAMPLE OF TRANSACTION RENT CALCULATION
The example of Transaction Rent in this Exhibit"0"is for illustrative purposes only,and assumes Improvement
Costs(with Improvement Costs paid to Affiliates of Lessee included up to but not exceeding fair market
value for the services provided by such Affiliates)of$450,000,000.00 for a hurdle of$540,000,000.00.
1. Assuming that,for the first Transfer for which Transaction Rent would be payable,(i)Owner#1 sells a 51%
Controlling interest in the Lessee to Owner#2 for a gross sales price(less typical closing adjustments and credits)of
$250,000,000,then no Transaction Rent would be payable in connection with this first Transfer,as the gross sales
price did not exceed$270,000,000 00(50%of the$540,000,000 00 hurdle).
2. Assuming that,for the second Transfer for which Transaction Rent would be payable,(i)Owner#2 sells a
51%Controlling interest in the Lessee to Owner#3 for a gross sales price(less typical closing adjustments and credits)
of 5300,000,000 00,then the Transaction Rent payable in connection with such Transfer would be calculated as
follows:
Gross sales price(less adjustments) $300,000,000 00
Transaction Rent, $750,000 00(i e_25% 5300,000,000)
3 Assuming that,for the third Transfer for which Transaction Rent would be payable,a 75%interest in the
Lessee is sold for an aggregate of 5450,000,000 DO,with Owner#3 selling a 40% interest in the Lessee to Owner#4
for a gross sales price(less typical closing adjustments and credits)of$240,000,000,and Owner#1 selling a 35%
interest to Owner#4 for a gross sales price(less typical closing adjustments and credits)of$210,000,000, then the
Transaction Rent payable to City would be calculated as follows
Owner TrajgT
Gross sales price(less adjustments) 5240,000,000 00
Transaction Rent: $600,000 00(i e, 25%of$240,000,000)
Owner#1 Transfer
Gross sales pnce(less adjustments) 5210,000,000.00
Transaction Rent $525,000(i e, 25%of S21C,000,000)
AOSILP 00063061 14
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EXHIBIT"P"
[RESERVED)
ADSUP-00063061 14
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EXHIBIT"Q"
[RESERVED)
AOSLLP 00063061 14
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EXHIBIT"R" 2
SCHEDULE OF MINIMUM FIXED RENT
[UPDATE BASED ON FINAL NEGOTIATED AMOUNTS]
Year Lease Amount
1 $400,000
2 $800.000
3 $1,200,000
4 i $1,600,000
s $2.000.000
6 $2,040,000
7 $2,080,800
8 S2,122.416
9 $2,164,864
10 $2,208,162
'As provided in Section 4.4(a),this amount shall apply from the Rent Commencement Date to December
31 of the year in which the first anniversary of the Rent Commencement Date occurs,prorated for any
partial months and partial calendar years.
ADSLLP-00063061.14
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EXHIBIT"5"
MANDATORY HOTEL PROJECT DESIGN ELEMENTS
A full-service convention hotel, including:
1 approximately(but not to exceed)800 rooms(with a breakdown between kings, double/double
or double/queen rooms and suites necessary to obtain the Brand Approval by the Initial Hotel
Operator);
2. if required by the Initial Hotel Operator,a club lounge;
3. a minimum of approximately 59,000 net square feet (+/- 5%) of hotel conference space for
meetings or other events,including a minimum of 20,000 net square feet(+/-5%)grand ballroom,
16,000 net square feet(+/-5%)junior ballroom,and 23,000 net square feet(+/-5%)of breakout
meeting space;
4. appropriate space for kitchen facilities,used for room service and serving conference and meeting
rooms;
5. food and beverage locations of a total square footage size tnat is not greater than the square
footage size of food and beverage locations that are consistent with the size and number of rooms
in comparable 4 Diamond hotels in comparable locations, not less than 600 seats, in the
aggregate, contained within a three-meal restaurant, specialty restaurant, pool bar and grill,
lounge and lobby bar (such restaurants and bars are to be developed primarily along the
perimeter of the ground floor of the Hotel Project) and as necessary to obtain Brand Approval
from the Initial Hotel Operator;
6. a non-specialty retail facility which may consist of a sundry and/or coffee shop(s)selling products
such as news, coffee, overnight supplies, and travel necessities as necessary to obtain Brand
Approval from the Initial Hotel Operator;
7. a pool,fitness center and spa;
8. the exterior elements depicted in Exhibit E, subject to a height restriction of a maximum one
hundred and eighty five (185) feet, in accordance with the provisions of the City's Land
Development Regulations;
9 a minimum of.40 parking spaces per room on-site,in accordance with the provisions of the City's
Land Development Regulations;and
10. the Skybridge.
For the avoidance of doubt, the Lessee may elect to include in the Hotel Project ballroom and meeting
space of a size that is greater than the 5%variances provided for above without City's Approval (and
Lessee shall not be deemed to have made a Prohibited Hotel Project Change or to have failed to include
the Mandatory Hotel Project Design Elements as a result of the inclusion of such excess ballroom and
meeting space).
ADSLLP 00063061 14
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EXHIBIT"T"
LESSEE'S ARTICLES OF ORGANIZATION
A DSLLP-00063061 14
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Electronic Filing Cover Shcct
Note: Please print this page and use it as a cover sheet. Type the fax audit number(shown
below)on the top and bottom of all pages of the document
(((11130001647793)))
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70
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Fax Number : (B50)617-6381
from
Account Name C T CORPCRATLOK 2151EN.
Account Number • PCA000000023
Pnone • (614)230-3338
Fax Number : (954)203-08l5
••enter the email address for this bus:ntss entity to be used for future
annual report railings. Enter only one email adores* please •• •
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"Law"
p ' C,�� FLORIDA LIMITED LIABILITY CO.
ti..1 `.
X 't�`rr MB MIXED USE INVESTMENT.LLC
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169
To Page 3 or 5 2013-05.30 13 29 40 CST 196420a0d16 FIOro Ranee McGrew
ARTICLES OF ORGANIZATION
MB MIXED tlsr.INVESTMENT,LLC,
a Fiorids limited liability company
ARTICLE I
NAMe
The business and affairs of the Limited Liability Company shall be conducted under the name of.
MB MIXED USE INVESTMENT,LLC
ARTICLE II
PRINCIPAL OFT1G1:AND MAILING ADDRESS
The street address of the principal play of business of UK Limited Liability Company within the
State of Florida shall be:
2663 South Bayskore hive
Suite 1020
Coconut drove,Florda 33133
and,the mailing address of the Limited Liability Company shall be.
P.O.Box 330609
Miami,Florida 33233
ARTICLE III
INITJAL REGISTERED AGENT/OFFICE
The registered office of the Limited Liability Company and its initial registered agent shall be: c
r�
NRAI Serviced,Inc. y
1200 South Pine Island Road :
Plantation,Florida 33324 H: , =t y+
_ r--'�^[
r-m w1 I ry
ARTICLE i V • _ v
MANAGEMENT r v. =
The Company is a manager-managed limited liability company fur purposes of the Roridrt,-m
Revised Limited Liability Company Act and its managcr(s) shall be appointed and serve in?"
accordance with the terms end conditions sot forth in the Company's operating immanent,as the
same may be amended from time to time.
sac sti«mresrevl
170
I
To Page 4 of 5 2015 05-30 13 2e a0 CST 19542080845 From Ranee McGrew
Ir
These Articles of Organization have been executer}es of the 30th day of May,2018
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"AUTHORIZED REPRESENTATIVE"
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171
To Poge 5 0! 2018-05.30 13 28 40 CST 195r3oeoe45 Fnom Ranee McGraw
CERTIFIC:ATT.OF DESIGNATION OF
REGtSTERF:l3)GF.NT/REQI$TER EDOFFICE ((�
Pursuant to the provisions of Section 605.02013 of the Florida Statutes, the undersigned
Limited LiebiLty Company submits the following statement to designate a tcgistc vd office and
registered agent in the State of Florida.
. the name of the Limited Liability Company is:
MB MIXED USE INVEST ENT,LLC
2. the name and the Florida street address of the registered agent are
NRAI Se.vicee,Inc.
1200 South Pine Island Road
Plantation,Florida 33324
Having been named to accept set-vice of process for the above stated Limited Liability
Company at the place designated in this certificate,I hereby accept the appointment as net stewed
agent and agree to act in this capacity. I further agree to comply with the previsions of all •
stetutca relative to the proper and complete performautcc of my duties,and I am familiar with end
accept the obligations of my position as registered agent.
NR Services,Inc.
Date: May 30,2018 By
Assistant Secretary
svt M R#4S6326+t
1 .
Tu P 2 d S d r 10 T 208 0❑, t7a
& /2018 G. l e ornweban
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1)tvtsion of Curpta anon,:
Electronic Filing Cover Sheet
Note: Menu-print this page and use It u<a cus`er%beet.T)pe the Ins audit number
(shown below)on the top and bottom of all puglcs ufthe document
(((1.118000173324 3)))
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1-180001753243ABC•
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To
Dlvtston of Corporations T,
FAY Number • (8S0)61I-o3B3 •�: r
From
Account Ner,e • C T CORPORATION SYSTEM
Account Number • FCAaeeee0023
Phone (614)28e-3339 t?
Fax Number . (954)208-0145
"Enter the email address for this business entity to be used for future
annual report mailtnes. Enter only one email address please.*.
tones]. Address
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LLC AA1_\D/k S l'A'1 E/CO1UtECT OR Al/MG RESIGN
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To Pace 3 or 5 2C1 B C t 1 1..'1 10 CS' 14542O80845 Prn,, Ranae McGraw
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Al TICLES OF AMENDMENT 18 ,j
TO 1 I? .
-/ 46
AIUTICI,IS OF ORGANIZATION '•f '
OF =l,'
.•t,
M8 MIXED USE INVESTMENT,LLC
(!,tt elthe are t. Qrtf. yy,,�Li�L ��►4+}e uulr?n ss sir ycesdy)
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The Article-4 Orgoitimm n fag this Lumina!Luththty Company uc•rt:filed on May 30,201$ trend aiigood
fletradandocument number L16000133765
Nis anaendmen is submitted to emend the followtng
A. It amending name,eater the new panne or the Waited Nuhthty cumnanv here;
Me new name mat be eisaaquuhable sad D AUtn the words'lututri t.abdav Calvary'the aestsnatton'LLC`or the abbreviat.oe-L L l:'
Enter new prhtcipal others address,If applicable:
(Prtrtelnol to/fit'r Miclrr_ce MUST RF A STREFTAA1)RFSvj
Enter ne..moil g,tddreea,if applies lilt:
'i'fallure mitlrees Mn 11WF.,t POST Ot•TiCv3OX)
it. II atncataug the registered agent und/ur regialcrcd office address oa our records, cuter the name ut the now
r.Lisccred atoll puilur She nee reristered office a04/104 here:
sonde of No*Revrateted Anvil.—
`'tat Ilcet tglyd Ufirc r�dtir .
fitter t!onda goer,adims
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Neu krelalercd,%teat'+Signature,If ehanelot Re$btertd Attu,
l hereby(recepr the appotrtaac•nt or registered agora and agree to act in MA capacuy 1 further agree to comply with the
praa'tsrnn.s ofa/I statutes rotative to the proper and camplo(c perftslmanca•glory dents,and l ant familinr with and
ttcrtW the obltgatwar oftnv position tic regtrtcrud agent as llrautlttd for in Chapter 605 F S Or,1/ALI dtxwntnt is
being flied to merely reflect a change to the registered office address,I hereby confirm that the lnuted babthty
ceflnpan)has been aalrflyd in writhe of this cluu.ge.
if Cssuttaq Ittentercil Agent,Clraenve at Now Reelct.eei Agra{
Page I of 3
174
To Page 4 on 5 2010.O6.11 15 21 10 CST 19542O80845 From Ranaa McGraw
If antcndlig.lulhorieed I'crstw(s)ruthurlied to mumnt;c,enter the tidy,conc.mitt rrddrr»of t•aeh persnrl added
or rentovetl ttotn our ttrords•
11G1t= Manager
AMRR- Atlrlturrrad Member
I'lllc Minty &NUM 1/Pc of t\cllna
MGR David P Mortal 2665 South 6aysher°Drive
O Add
Sutte 1020
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Coconut Drove,Florida 33133
C3 Change
MGR Jackie Soifer 19950 W Country Club Dr
a Add
Avinlura,Flonda 331 t1D
to Remove
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Page 2uf3
175
To Pave 5 of 5 2018-C8 t 1 15 21 10 CST 195420801545 Ftorn Panne McGraw
I). If amending any other inintmatina.inter chamois)here: ("Mach addatonal them,rfneceerary)
co
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F_ rlfuclive date.if other Than the dote of(deny (aptioual)
Of en elTerave date n need,nu Calm mua he ereutle rind mere lie port rn ere ur Molt w more ihen 90 darn.after Meet)Pereira to 605 u201 t Ixh)
Nan I fthe date'alerted in this block does not meet the.pphecbls statutory tiling requrremcnls,this date M ill not be listed es the
document',eilcttru den.ou the thp,ntrntot o(Stare's records
it the record specifies a delaveo effective date,but not an effective time,at 11.01 a m on the earlier o1
(b) The 90th cav after the record Is filed.
June 11 2018
41ww —
Jecic M Maeg,Authori5 Representative
r)oed or mimed osam of signet
Page 3 of 3
Filing Fee: N25.00
176
EXHIBIT"U"
FILLMORE THEATER PARKING
(See attached page)
ADSLP 00063061 14
MIA 188559977v27
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