loi royal palm agreement (1)

8/15/2019 LOI Royal Palm Agreement (1)

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This communication is a privileged settlement communication and strictly inadmissible for

any purpose pursuant to Section 90. 408, Fla. Stat. and Rule408,

Fed Evd

L E T T E ROF NTENT TOAMEND ROYAL PALM CRO WNE

PLAZARESORT

A G R E E M E N T SSubject:Parties: Royal Palm

CrownePlaza Hotel RDP Roya Pam Hotel

L i m i t e dPartnership (RDP ) Cty of M i a m i

Beach ( t he " Ct y ) iami B e a c h R e d e v e l o p m e n t

Agency ( t hegency ) D a t e : ;

t U, / )

U~ 2 t5 2 0 0 3 R E C I TAT I O N S :A n Ma y 28 9 9 8 ,the parties e n t e r e dinto an A g r e e m e n to e a s e regarding th e land mor e fuly descr ibedon xhibitA (" and") t t a c h e dhere to

and m a d ea art h e r e o fas f fully s e t forth heren, as recordedonJ u l y1 998 in ff icialRecords Book 18170, a age

0 8 9 3 , in he P u b l i cRecords of M i a m i -Dade County, Florida (L e a s e ) .B u b s e q u e n tto

the e c o r d i n go he ease, RDP began

thec o n s t r u c t i o n

of the o y a lP a l m /S h o r e c r e s tCrowne Pa za Hoe ("Hote").

C

D u r i n gthe ons t ruc t iono he Hotel,RD P encountered structuralproblems with the original RoyalPalm Hot e a n dsol contamination p r o b l e m sregardingthe and which alleg- edly resulted incert an c o n s t r u c t i o nd e l a y s .A ispute a r o s ea m o n g s tth e parties regard ingthe aforesaid problems and delays r e s u l t i n gin D P' s refusal to pay e r t a inR e n t a ldue nder the Lease and he A g e n c y '

se f u s a lto

p a y claims r e l a t edto sad on tamina t ionand alleged cons t ruc -tion delays. D The m1iesr e spec t i ve lydeny and i s p u t eal suc h

cla ims and al legat ionsagainst t h e m ,whether asserted o un sserted. E The parties,wshing to vod i t i ga t ionand mcably r e s o l v eal matters e x is tin g b e tw e e nthem, e n t e r e dinto negotiations regarding the aforesaiddisputes. Th i s letter ses foth he n d e r s t a n d i n gr e a c h e d asa e s u l to suc h egotiat ions.C a p i t a l i z e dt e r m swhch, are not defined in hs Letter oIntent to m e n dRoyal Pam r o w n ePlaza R e s o r tAgreements (LO" ) sha l have themeanings a s c r i b e dto h e m in he exis t ing ,a p p l i c a b l edocumen t s . "A g e n c ym e a n s ,as a p p r o p r i a t e ,the g e n c y

or the ity o o t h ,as he a se may be F gency and w n e rintheir des i reto aintain and ulfill t her ommi tmen tto po ide he AfricanAmer i cancommunitywith o p p o r t u n i t i e sin he osp i t a l i t yindustry, are illingto amend th eRoya PamC ro w ne P la z aagreements subject to he Hotel' s on t inu ingc o m p l i a n c ewith the C o n v e n t i o n


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owner and its successors and assigns make available Hotel facilities and services for support ofthe Convention Center events and to undertake joint marketing eff0l1s.1. B A

CK R E N TAND REAL EST A E T A X E S : 1

1 ack Rent P r i o rTo The Hot e O p e n i n gDate. RD P an d theAgencyagree tha u n a v o i d a b l edeays t tributedto the nv i ronmen ta land

r e c o n s t r u c t i o ndeays o c c u n e dpriorto the Hotel O p e n i n g Date. RD P has r e v i o u s l yp a i d128, 373. 38 in B a c kRent prior to heH o t e l O p e n i n gDat e;

i. e, from O c t o b e r31 000 to ay 14 0 0 2 ,andthe g e n c ys h a l l rean aid a m o u n tin ul se t t l emen tof al m o u n t sd u e for

Back Rent for the peliod prior to ay 15, 2002.Additionally,R D Pshall pay within five ( 5) days rom the last e x e c u t i o no his LOI any andal applicable sales tax due a n d o w i n gon a id amount pus ny i n t e r e s tand p e n a l t ya s s e s s e dby he State of Flor idaagainst the City and/ o the A g e n c yfor failureto pay ppl icable

sales tax on a id a m o u n tpo o the o t e lO p e n i n gDat e

1 2 Clark Credi t .S u b j e c tto he conditions se t forth in ths Section

1 2 DP shall pay to h e Agencyan m o u n tup to$ 40, 000.00( t he Clark C redit )plus a p p l i c a b l esales tax w h e n , a n di f, t e t t l e sits r esen l i t i ga t ionwith Th e Cak onstruction G r o u p styledRD PR o y a lPalmHote, LP E A. s. The Clark Const ruc t ion Group,

I nc s A r q u i t e c t o n i c aInternat ionalC o r p . ,Et A., . S istrict Court,Southern Districtof Florida, Case No. 01- 3130- CIV- Middlebrook s (C l a r kLi t iga t ion" )oif t o b t a i n sa i na l non- ppealablej u d g m e n tin he C l a r kLi t iga t ion .RDP shall payths m o u n tto the gency wthn ten ( 10 ays o ts receipto funds from, an d to the extent, either th e se t t l emen to the u d g m e n tprovides excess funds after R D Ppays its t torneys'fees and coss for the la rkLi t iga t ion .Article 4 he Lease ent i t ledLae h a r g e sshall no apply to the p a y m e n tof the Cak r e d i t .The applicationo the lark Credit shall be t r ea tedas a d d i t i o n a lBac k

Rent whch shall be clue only if he conditions se forth in his S e c t i o n

are me and t hen nl y to tha x t e n t .A n y amounts paid tothe gencyuncler th i sS e c t i o n1. 2 hall not appy to th ightpercent ( 8% return calculationas a o m p o n e n t

o he P u r c h a s ePrice as defined in ection 36. 1d i i ) the Lease ( the" e t u r n ) .This p r o v i s i o nshall su rv ivethep a y m e n to the Purchase Price. 1 3 a c kRen AfterThe HotelO p e n i n gDate. Base Rent and ddit ionalRent due, plus app l i c ab l es a l e st ax, rom

the period o ay 15 2002 o ay 152003 (" Pos O p e n i n gB a c k Ren ) hall be e f e r r e dand p a y a b l eover the ten (10 ear pe r iodc o m m e n c i n gin Lease Year 5 nd nding in ease Year14 . 4 Rea Estate Taxes. T h epar t iesa c k n o w l e d g ethat the 2002 e a lestate taxeson the I m p r o v e m e n t sare u n p a i dand that sad a x e sare beng a p p e a l e d .On


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taxes are due on real estate taxes which were the responsibility of RDP prior tothe date of the execution of this LOI, RDP shall pay such taxes, penalties andpenalty interest prior to the execution of the Closing Documents.

2 UTURE

RENTAL: E ff e c t i v eupon xecut iono this LO, ddit ionalR e n t and n c e n t i v e

Rent, pus ppl icablesales tax, u e in ease Years 2 h r o u g h 5 hallbe eferred an d p a y a b l e over the t en( 0 ) year period c o m m e n c i n gin e a s eYear 6 nd ending in Lease Ye a r15. Oher t han as tatedin he p r e c e d i n gs e n t e n c e ,RDP sha l c o n t i n u e to pay ase Rent, Addi t ional

Rent, nd Incentive Rent (plus al applicable saes a x e son u c h non- d e f e l Te dp a yme n t sosame) as e ll as all ohe e n t a lfrom the dae f e x e c u t i o no his LO

pursuan tto the e r m san d conditions o the Lease. In he event tha he C l o s i n gDocuments ae o t e x e c u t e dand th e t r a n s a c t i o ncontemplated by ths Ois not consummated,any amounts defelTed a n d u n p a i dto he g e n c yp u r s u a n tto this Sectionshal be paid to he Agency ithinthirty ( 30

days fter

the erminationo aid negotiations. 3 URCHASE P R I C E :

3 eclaration o ovenantsand estrictions.The e c l a r a t i o no ovenants a n dRestr ic t ionssha l be m e n d e dto r o v i d etha upon p a y m e n tof the u r c h a s ePrice inf ul , he o l l o w i n gchanges s h a l lbe ffective, ut that

said D e c l a r a t i o ns h a l l not otherwse be a m e n d e d ,modified oc h a n g e d :1 th

r e s p e c tto he Shorec r e s tLand only,Section 2 2 sha l nolonger apply. 2 wth r e s p e c tto o th the R PLand and the Shorecres tLand, Section 2 hall no onger a p p l yand i f, sa result thereof ,t hen pplicablez o n i n gordinances,such as the C U t T e n tsection 118 5 fthe i a m iB e a c hCode equirea o v e n a n tin

l i eu o unty o t tl e DP shallcause such a ovenant to be e c o r d e das to a id pa rce l s . 3 onventionC e n t e r A g r e e m e n t . The C o n v e n t i o nC e n t e rAgree- ment s h a l lbe amended to rovi dethat, p o npayment of the Purchase Price in ul , the " 35 0 r o o m spe r day"

r e q u i r e m e n ts ta ted in he Room Block definit ionshall be e d u c e dto tw

hundred ffty even ( 257 rooms pe day. In ll otherrespects ,the def ini t ion

o oo mBock n d the e m a i n d e ro he onven t ionC e n t e rAgreements h a l lr e m a i nunchanged except as rovidedin p a r a g r a p h21 7 o his LO. 3Tme fo a y m e n tin Full. The o u t s i d edat e fo ful p a y m e n to the urchasePrice sha l be th e Fixed ExpirationDat e rather than Lease Year 25as presently provided fo in he Lease ll L e a s e terms ( such st h o s erelating to enta l


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4E F I N A N C I N G :The e f inanc ingTimes s t a t edin ection11. 13( a he

Lease s h a l l be c h a n g e dto n or prior to the b e g i n n i n gof the fifth ( Sth) yearafter the Hotel Opening Date (First R e f i n a n c i n g " ) ;on or prior to en ( 10yea r safter the closing o the irst R e f i n a n c i n g ( "Second R e f i n a n c i n g )a n dt hen v e r yt e n t h (10th anniversary o the econd R e f i n a n c i n gthe rea f te r ;provided h o w e v e r ,t h a tthe maturity date o any ef inancingthat extends beyondthe next r e q u i r e drefinancingwill not have to be repaid prior to its atur i typrovidedsaidm a t u r i t ydate is o ater than twen ty (20 ears from thelast ref inancing;provided further h o w e v e r ,tha w h e nTe n a n tr e f i n a n c e sthe B a l a n c eoits e b t , the e t R e f i n a n c i n g Proceedsas d e f i n e din e c t i o n 11. 13( ) ofthe ease h a l lbe applied to

th e e x t e n tavailable in the f o l l o w i n gor der: A To w n e rtopay th e d e f e l Te dRental

described in a r a g r a p h s1. 3 and 2 o his LO; B ifty p e r c e n t (SO%)to Own er to ay he Return applicableas art o the urchaseP r i c eaccrued a n d unpaid to ate; and f fty e r c e n t (SO% to

Tenant to e p a y Town Pak Hotel Corporation,as otel Manager To w n Park ) ,fo

C o s t O v e l Tu n s *pai d by Town Park (estimated at $ S million). C o O w n e rto paythe alance o he Return applicableas

p a r t o the urchaseP r i c eaccrued a n d u n p a i dto dae D ftypercent ( SO%) to w n e rto ay the urchaseP r i c e (whch n c l u d e s

the Return)for O w n e r 's In te res tin he remises ;and fifty p e r c e n tSO% frs o anyamountst hen still due T o w nPark as described in ection 4B, b o v e ,and

t hen o Tenant

fo r Te n a n tCos velTuns*paid by Tenant es t imatedat $ 2 illion ; E ToO w n e rto ay the alanceo h e P u r c h a s ePi ce( hich

includes the Return) o r O w n e r 's nterest in the remises;and F To e n a n ti n y fundsremain

after paying in ull th e amounts in aragraphs4A- 4E aboveAny o st OvelTunswll a lcu la tedne of ( ) any C l a r kse t t lement p r o c e e d spaid to e n a n t ,direc t lyo ndirectly but ( a e t o ttorneysandother professional fees and cour t c o s t sno r e f l e c t e din enant 's ostOverrun calculationand no a d v a n c e dby Town Park and ( b he l a r k Creditto he x t e n tpaid to wner, an d ( 2 ny prio o v e r r u no q u i t y repaymentsfrom th e t w o (2 prio uture advances p a i dto e n a n t .Cost OvelTLtns wll e subject to a ull account inga n d review by wner,withthe


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7 OWN PA RK HOTEL O R P O R AT I O NAS OTEL

MANAGER:7. 1 R e c i t a l sB and paragraph 2 fthe mendmentsp r o p o s e dby e n a n tin he m e n d m e n tRe o w nPark to g r e e m e n to Lease t tachedhereo and incorpora tedby eferenceherein as Exhibit " D" shallbe ncluded in the round L e a s eA m e n d m e n t ;p r o v i d e dhowever, that s a m eshall terminateupon the Sale of the o t e l o he earlierto c c u rof ( i)ermination o he otel M a n a g e m e n tA g re e m e n t b e tw e enRDP a n d Town Parko ( ii fifteen ( 15)

year s f rom H o t e lO p e n i n gDate. 7 2 ection 16 . 7( e

o the ease wll be deeed in ts entirety. 7Any p a y m e n t so o s t sin connection with the" ote" , d/ o o a n ,as e f i n e d

in he Amendment Re own P a r k to g r e e m e n tof Lease, il l not be

considered Operating E x p e n s e sas h a t term is e f i nedin he Lease7. 4 Te n a n tw a r r a n t sand represents to Owner and the City tha R e c i t a l sBo he m e n d m e n t sproposed by Te n a n tare t r u e and orrect and re amaterial i n d u c e m e n tfo

O w n e ra n dthe

Cty to includet hese m e n d m e n t sin he roundLease Amendment.8.FF& E E S E RV E :8 H o t e lFF& E ese rve .The e r c e n t a g e sstated

in ection

16. 5

a f the Lease

wth es pec

to he Hot e s h a l lbe changed as o l l o w s :L e a s eYear 12 3 5 nd hereafter Percentageso ote lR e v e n u e s0% 1% %3%4 9 HORECRESTR E S TA U R A N T:9 1 h a n g e sto rticle33 f th eL e a s e . Arti cle 33 o he Lease shal e a m e n d e dto elete

therefrom s u b s e c t i o n s (a hrough ( f) and o p e r m i tin the aea r ig ina l lyc o n t e m p l a t e dfo he Restaurant ( the" p a c e )the o n s t r u c t i o no a spa, dditional m e e t i n gspace o ohe mprovementsfor any reasonable hotel p u r p o s ethat wll b e n e f i tthe operationo th e Hotel; r ov ided ,h o w e v e r ,tha suc h uses are permiss ibleunder alapplicable locallaws a n d zoni ng rdinances.The i zesand dimensions o al uchf ac i l i t i e swthin the Space sha l be as easonablyd e t e r m i n e dby RD P and the perators (def ined


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A g e n c y except as provided in paragraphs 9 3 nd 9 5 e l o w,but he use and p e r a t i o nof sad aci l i t iesshall be consistentwith that o

a irst class hotel. 9 Fees and os t s . RD P shall bes o l e l yresponsiblefor, and shall pay, a its ole cost and e x p e n s e ,any parkingimpact fees and any t h e rcos s n c l u d i n gbut not l im i te dto o n c u l Te n c yfeespermit fees and the

like resulting f r o m th e new a c i l i t i e s .9. 3 The Spaceas ondominiuUnt . If he S p a c eis ocated on the horecrestLand nd if DP elects to

create a ondominiumunt for the Space as ermit tedunder the t e ms fth ease ,RDP sha l cause the Declara t iono ondominiumto on ta inprov i s ionsthat ( i)the a le o e a s eof the paceunt hall b e s u b je c tto he A g e n c y 's approvala n d (i

he p a c euni t sha l be pe ra t edin accordance withthe quality

s t a n d a r d sreeTed to n aragraph 9. 5 f thsLOr. 9 Non- Disturbance Agreement. p o nrequest of R D P,the A g e n c yshall execute

a non disturbance a g r e e m e n tin avor of a th rd a r t ySpace o p e r a t o ran Operator") ontaining t e r m sg e n e r a l l yfound in uch a g r e e m e n t sin form and c o n t e n tr e a s o n a b l ya c c e p t a b l eto the O p e r a t o rand the Agency, bu t the e rm of w h i c hsha l be no l onge rthan the earl ier to occuro (

i)the xpiration of the thrd party Space agreemento ( i)

twenty ( 0 ) y e a r s . 9 5 p e r a t o rA g r e e m e n t .In he vent the Spaceis managed o pera tedby n Opera to rpursuant to n a g r e e m e n tbetween RDPand perator, sad greements h a l l b e d e e m e dto be u b l e a s eunder the Lease

r e q u i r i n gAgency approval u n d e rS e c t i o n1O 2 a( v f the Lease,

the g r e e m e n ts h a l l contain qual i tys t a n d a r d s p e r t a i n i n gto he o p e r a t i o nand hys ica lc o n d i t i o no he p a c ewhich s h a l lbe nforcedby RDP,

whch tandards and

the se lec t iono he Operator s h a l l be u b j e c tto approvalby h e Agency. 10 X I S T I N GDISPUTED I T E M S :10 1 ist Of D i s p u t e dI tems.E x h i b i tBentitled Ls o isputed I t e m sis t t a c h e dhereto and ncorporated by referenceh e r e i nas alist o he cur- rent disputed items

under th e Lease and other related d o c u m e n t sas of the date o ast e x e c u t i o n

o this Lor C R D P I t e m s ) .10. 2 Curi ng of R D P Ite m s.RDP shall cureal o h e RDP t e m son o e f o r ethrty ( 30 ays

f r om he date o x e c u t i o no hs Lo xcept fothose

items lised in xhibit C t t a c h e dhereto and s p e c i f i c a l l yincorporatedherein.11. E L E A S E SO ALL L A I M S BY RDP, THE AGENCYA N DTHE CITY:11 1 DP Cla ims .RDP shall w a i v eand elease any and al a l l egedd e l a y


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date of execution of the Clos ing Documents upon the execution of the Clos ingDocuments.

1l. 2 g e n c yand Cty C l a i m s .The g e n c yand the City shallw a i v eand elease ther wner' s xces s ontr ibut ionclaim and any other c l a i m soany knd w h a t s o e v e ragainst RDP u p o nthe xecut ionof the Cosng

Document s 11 3 cknowledgement.Providedthat al o thet e r m sand c o n d i t i o n so his LO h a v eb e e nsatisfied by al a r t i e s ,the a m e n d m e n ttothe e a s eshal co nan a r i t t ena c k n o w l e d g m e n tthat al alleged claimsand ther alleged defaults hav e ee n c u r e d ,settled and or waved, ha all

c o n t r o v e r s i e sb e t w e e nthe parties have b ee n s e t t l e dand h a tth e Lease is n o o ds tandingandin ful

foce and ef ec .

12. G A R A G EEASEMENT AGREEMENT:12 1 The a r a g eEasementAgreementshall be a m e n d e das ppropr ia teto rovide

for and i n c o r p o r a t ethe o l l o w i n gc o n c e p t s :A The a r t i e sshall have o f u r t h e robl igat ionfor the a y m e n to se F e e s and Facility Usage P a y m e n t sandno suchp a y m e n t sare du e either p m 1 yas o he date o

th e e x e c u t i o no his LO. . The o r d s and p p r o v e dby r an teeIn

Section Sea) shall be e l e t e d . C RDP h a l lhave no aff i rmat iveob l iga t iontouse the a r a g efo

its Hot e gues tsand employees .D e c t i o n9 a hal bedeleted a n d the arage E a s e m e n tAgreementsha l be emoved f romany c r o s sd e f a u l tprov i s ionscontained in

a n y o the Hotel re la tedd o c u m e n t s .E he t e rmself park rat e" h a l l m e a n (ihe a t e sc h a rg e dto he e n e r a lpubic at the Gar age f ac i l i ty

and iden t i f ieda s the m a x i m u mdaily rate or ( i i ) the valet rate c h a rg e dby h eRoya

Palm Hoe at RDP' s ect ion. 12 2 he emainder

o the a r a g eEasement

Agreementshall remain in ful force a n d effect. 1 n

the vent that R D Pc r e a t e sa o t e lc o n d o m i n i u mon the S h o r e c r e s tLand, hen, in hat event,the ar t ies to hs LOI agree tha there ae no r igh tso greementsu n d e rthe arage Easemen t A g r e e m e n twhch


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1 ONCESSION A G R E E M E N TUNDERTHE

L E A S E :13 1 ee P a y m e n t .RD P shal pay the C o n c e s s i o nFeesd u eand owing, if any under the oncessionAgreement descr ibedin Exhibit 14.5 o h eL e a s e on o e f o r ef ve( ) ay s after the las e x e c u t i o noths LO. h e pa r t i e sare no ow

aware o any such o u t s t a n d i n gf ees 3. 2 L i c e n s eF e e s . R D Psha lpayo cause to be pad he 01Tespondingoccupational l icense fin onnec t ionwth

the each ront concessiono p e r a t i o nfo he Hotel. 13 S h o r e c r e s t

Condominium. In he even that RDP crea tesa ote c o n d o m i n i u mon the Shorec res tLand

then, in hat even, RDP h a l l pay ( or causethe h o r e c r e s thoe o n d o m i n i u massociation to pay) he c O I Te s p o n d i n ga pp l i c a b l ebeachconcess ionf ees onsis tentwth those f ees charged o t h e r

upland p vae wne s o

hotel and o n d o m i n i u mprope11ies.14 . L A R KC O N S T R U C T I O NL I T I G AT I O NLIENS: The e x i s t i n gC l a r kLitigation liens a n d future l i ens ,includng liens filed or w h i c hmy be iledby s u b c o n t r a c t o r s ,re la t ingsoey to he Clark Litigation,if any, gainst the l easeholdint eres ofRDP in the ease shall no t be c o n s i d e r e dan v e n t o efaul tunder any oth e Hote lD o c u m e n t sso o n g as D Pdiligentlya n d in o o dfath o n t i n u e sto r o s e c u t eits laims to e s o l v eal ssues under the Clark L i t i g a t i o n ;providedh o w e v e r ,tha o th ingcontained herein shall r e l i e v eR D Po ts esponsibilityto e m o v et hese l i e n s and to resove h o s e m a tte rsc o n t a i n e din x h i b i t C

et he by

r e so lu t i ono he Clark Litigationo o t h e r w i s e .15. AT T O R N E Y SF E E S :Each party shall bear

its ow legal fees relating to ths or and he C l o sin g D o c u m en tse x c e p tthatRDP hall re imbursethe Agency a he time o th e execut iondate o

the losingD o c u m e n t s its e g a lf e e s up to he firs $ 0, 00 0charged by Bloom & insker,P L, a s e d upon n hourl y rae

o $ 50. 00. A g e n c yshall provideto DP detai led sat ements

fo rofessional se vce s howing t i me and activityon aily basis

supporting s a idre imbursement .16 D D I T I O N A LT E R M S ,C O N D I T I O N SAND SSUES N OT C O V -EREDIN THS OI: Becauseo he c o m p l e xnature o he d o c u m e n t si n v o l v e dan d the c h a n g e sbeingcons ide redas a result o hs or, RDP he Agency and the it y shallhave the ri gh to aise addtiona t e rms an d conditions a n d i s s u e snot c o v e r e din ths LOI

an d w h i c hare no nconsistent with the


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17 PECAL NDEMNIFICATIONBY

RDP: RDP sha l i n d e m n i fyand hod a r m l e s sand shall provide d e f e n s eforthe g e n c yan d the C it yby counsel reasonably acceptableto the g e n c yan d theCty egard ingany a n d al matters ar i s ingout of, o elating direct lyo ndirect lyto any hallengesby any third p a r t i e sto his Lor and the Cosng D o c u m e n t se x c e p tfo those h a l l e n g e sa r i s ing out of the Clark Credi t ,the a y m e n tandpartial w a i v e ro ack Ren t and the e t t lemento l l e g e ddelay cl ai ms t tributedtoth e n v i r o n m e n t a ld a m a g eand r e c o n s t r u c t i o ndelays referredto in aragraph1 1

o hs

Lor . 18 O M P L E T I O NG U A R A N T E E :18. 1 he A g e n c yand heCity acknowledgetha the uarantoru n d e rthe o m p l e t i o nG u a r a n t e eg i v e nto he Agenc y

and the it y shall be e r m i n a t e du p o n de l ive ryto the Agenc y a n dthe Cty

o h e certificate by th e A r c h i t e c tdescribed in ection 2 ) o sad Guaran tee

and ina lCO s are issued as ontemplatedby Section 2 iif sad u a r a n t e e .In a] ther r e s p e c t s ,Guarantor has complied wthits obligationsu n d e rthe u a r a n t e e .The ompletionDeadline is ol] ed until sa idce r t i f i c a t eisdelivered and he F na O s

re issued. 19 E C L A R AT I O NOF OVENANTSA N D RESTRICTIONS:19 1 Th epart ies cknowledgethat th e p a y m e n tin ull by RDP f the Purchase

P ce o the Agency shal] no erminatethe Dc

aration. 20 LERICAL C H A N G E STO H E LEASE AND RELATED E X I S T-IN GD O C U M E N T S :Non u b s t a n t i v ecl eri ca] hanges s u c has cu r ren t mai l ing a d d r e s s e sin thenotice provisionsand g r a m m a t i c a leTos

in

the oe D o c u m e n t ssha l be cor- rected in the C l o s i n g

D o c u m e n t s .21. G E N E R A L :21 1 DefinitiveAgreemen t s .Upo n execution o this Loby DP, the approval of the te rms h e r e o fby the p p r o p r i a t eA g e n c yand Ctyg o v e r n i n gbodies and he xecut iono hs OI by he p p r o p r i a t eA g e n c ya n d Ci ty

off ic ia l s ,the Cosng Documentsshall be r a f t e d .Te n a n t sha l s u b m i tfirst draftso l o the l o s i n gDocuments to he Agency wthn fifteen ( 15 ays fter su c h p p r o v a l .The C l o s i n gD o c u m e n t swil]contain, am ong other t h i n g s ,r ep re sen t a -ti ons waITanties, conditions,ovenantsand ndemni t i e sand he liketypical in i m i l a rt r ansac t ions ,s u b j e c tto the e r m sh e r e o f .F1Il1hermore, the parties to hisLO I recognizethat due to he o m p l e x i t yo the structureo these t r a n s a c t i o n s ,noall of the mao egal issueshave been c o v e r e dby hisLO. h e consummat iono the r a n s a c t i o n sc on t e mp la t e dhereby is onditionedupon the egotiationand e x e c u t i o no he C l o s i n gD o c u m e n t swith terms, prov i s ionsan d condit ionsmutual ly

acceptab le


11/23

all necessary lender approvals and the satisfaction of the parties wth all otheragreements and matters necessary or desirable wth respect to the transactions

con templa tedhereby. The parties shall comply wth all applicable laws, statutes,regula t ionsand requirements and per fo rmanceby the Agency, the City and RDPunder this LOI and the Closing Documents shall be subject thereto. The followingis a list of the documents which may need to be amended or created ( said list is

not meant to be inclusive af all required agreement) and additional agreementsshall be executed by the part ies to this LOI as required:

LIST OF AGREEMENTS

A GROUND LEASE AMENDMENT

B. CONVENTION CENTER AGREEMENT AMENDMENT

C DECLARATION OF COVENANTS AND RESTRICTIONS

AMENDMENT

D. GARAGE EASEMENT AMENDMENT

E. AGENCY' S RELEASE OF CLAIMS

F CITY' S RELEASE OF CLAIMS

G. RDP' S RELEASE OF CLAIMS

H SPECIAL INDEMNIFICATION BY RDP1ERMINATIONO OMPLETION

GU R NTYJ CC INANCNG STATEMENTS -to enew lease UCC-l' s

as am en de dby r o u n d Lease

Amendment 21. 2 ssignmentbv Agencv. In the vent th e Agencyc e a s e sto xs, he Closing D o c u m e n t swill p r o v i d ethat th e r i g h t sgranted tothe g e n c ywill inure o the b e n e f i to the City and th e Cty will be o u n dtoperform the

obi ga tions t h e r e i n .21. 3 Termination. T h i sLO may b e t e rmina t ed

by the party if he Closing Documentsh a v e no been e x e c u t e dbysx( 6) o n t h sf r o m

the execution date of this L01. 21 Non inding.xceptfor thelast sentence in paragraph

and the as

s e n t e n c ein aragraph2 e r e i n a b o v eand aragraph21. 11 r in loww h i c h the arties ta this LOintend to e binding, (i) o arty shall have any legally binding obl iga t ionto anyahe party under th i s LO I until suc h time as the Closing D o c u m e n t sare e x e c u t e dby al arties t he re to ;and ( ii) no party wll h a v e any iabil i tyw h a t s o e v e ru n d e rths OI ta ny a t h e rparty for failure to pelform in c c o r d a n c ewith this LOI,if ny art y ec idesto t e r m i n a t e

ths OI o for any ohe r e a s o nre la tedto ths LO.21 5 Amendments.This L O Imay be m e n d e dony


12/23

21 6 o v e r n i n gLaw and Venue. This LO, the l o s i n gD o c u m e n t sand her nterpreta t ion,vaidty and performance,sha l be g o v e r n e dby he lawso he Sate o Fori da, oth substantive and r e m e d i a l ,w i t h o u tregard toprinciples of conflict o l aws he v e n u efo any i t igationa r i s i n gout o his L O I o

th e Cos ng Documentsshall be he leventh Judicial Circuit, Miami-Dade ounty,Flor ida ,if n tate c o u r t , a n dth e U S istrict Court, outhernDistrict

of Flor ida ,if n

federal c o u r t . 21 7 p p r o v a lor " o n s e n t . "The use of

the e r m s "a p p r o v a lo o n s e n tin his LO h a l l always be deemed tome an reasonable a p p r o v a l @o Areasonableconsent@ exc ep

whe e peci f ica l lyp r o v i d e do t h e r w i s e .2[. 8 ounterparts.Ths OI m a ybe executed in o u n t e r p a r t sand al such oun te rpa r t s ,when

t ake n ogether, sha l ons t i tu teths LO. 21 9

Recognized M o r t g a g e eExtension and C o n s e n tLetter. enant s h a l lcaus e U n i o nPlanters B a n k ,the Recognized Mortgagee ,to x e c u t e an d deliver its leter consentingto hs Or

as h o w nin xhibit " E ttached hereto and incorpora tedby e f e r e n c eh e r e i n (the " o n s e n tLetter )to he Agency an d the it ya n dshall p rov idep r o o ffromthe ecogn izedM 0 I 1 g a g e etha he RecognizedMortgagehas been e x t e n d e dand is ngood s t a n d in g (the" E x t e n s i o nLetter") no later thanthrty ( 0) days from the dat eo e x e c u t i o no this LO (" UP Let ters Deli very D a t e ) .The pa r t i e shereo a g r e e

tha, xceptfo r the last sentence in paragraph l.l

he last s e n t e n c e

of paragraph 2 and p a r a g r a p h21. 11 of th i s LO, the e m a i n d e ro ths LO halln o t be in f f ec tuni l the UP Le t t e r sDelivery Dat e In he event th e C o n s e n tL e t t e rand the xtensionLet te r a re not delivered by he UP L e t t e r sDei very Date ,

t hen nt ha t e v e n t ,e x c e p tfo he las s e n t e n c ein aragraphl. l,the las entenceo a r a g r a p h2 n d p a r a g r a p h21. 11 o h is LOI, the e m a i n d e rof ths

LO hall be ull an d vod n d o no f u r t h e rf o r c eor effec t .21.

10 u c c e s s o r sand Assi gns A e f e r e n c e sto ny

o he pm1ie sto ths LO shall include ther p e r m i t t e ds u c c e s s o r sand ermit tedassigns. 2 1 .1 1 Attorneys' Fees. In the event l i t iga t ionarises solelyunder th e las en t encein aragraph

e re inabove ,then, in tha event,

the r e v a i l i n gparty shall be entitled to ecoverits

a t t o r n e y s 'f e e sand ourt costs, nc lud ingthose involvingappeals and/ o os-judgmentp r o c e e d i n g s ,if ny. 21. 12 OI In ffect.Ths LO shalr ema inin ffect as r o v i d e dh e r e i n -a b o v eprovided that RDP shal m a i n t a i nthe Lease andrelated exsi ng ocumentsin ood s t and ingand f r e eo ny e f a u l t s (the a r t i e sa g r e e i n gthat

the issues cov- ered l sewherein his LOI shal n o t be e e m e ddefaultsfor p u r p o s e sof this paragraph 21 2) u r i n gthe pendency o his LO; thefailure of which shall automati- cally result in ths L O Ibeing t e r m i n a t e d


13/23

21 13 ivi leged Se t t l emen tCommunica t ion .T h i sL O Iisa ri vi leged s e t t l e m e n tcommunica t ione x c e p tfo the pecific b i n d i n gparagraphsas provided in p a r a g r a p h21. 4o h is LO . The remaindero thsLOI is trictly inadmissible for any purpose pursuant to ection

90 08, lor idaStatutes

and ue 408 F e d e r a lRes o Evidence.21. 14 tatementsA g a i n s tI n t e r e s t .Any ta tementsmade by any party to ths OI c o n t a i n e din his LOh a v ebeen made soey for the urposeo r e s o l v i n gal matters ex i s t ingb e t w e e nthe partiesto his LO. l pa r t i e sto ths LOI recog-n izeand gree that any such s t a t emen t s

my not be o r r e c ta s applied to any other p e r s o no entities n o t a a r t ytothis LO nd more s p e c i f i c a l l y,al parties to this LOI recognizeand gree that any u chs t a t emen t smy no

be on ect as applied to he Clark Lit igat ion.21 5 e c o r d i n gFees and the L i k e .R D Pshall pay al e c o r d i n gfees and the l i ke o ral o

the losingD o c u m e n t so ny o t h e rd o c u m e n t sc o n t e m p l a t e dby his LO.

21 16 aivero u ryTrial.Al o

the Closing D o c u m e n t sshal , here applicable, c o n t a i n awaver of jury trial provision.21 7 C r o s s Deaut. The Convent ionCenterAgreement sha l lbeamended to provide

tha a efault in


14/23

AGREED AND ACKNOWLEDGED:

RDP ROYAL PALM HOTEL LIMITED

PARTNERSHIP, a Forida limited partnership

By: PADC HOSPITALITY CORPORATION1, a lor ida co r on, as eneral

P a r t n e r

B

EDEVELOPMENTB avi d

D e r m e ri tl e

Chairman A tte s t : - : -U vuifp ( CLu ame: Robert

Parcher

Ttl e

C I T YB y : e D vd

Dermer Title:

Mayor A tte s t: ~ ( )ftJA-~ ame: Robert

P a r c h e rTitle:Cty

Cek P P R O V E DASTO FORM &

L A N G U A G EFOR

EXECUTIONfU r ~&N~ f1- ~>zd) F:/

MiI Sk~ i ~ leell~:'~ i l lSkelN e w La

IO9-

03 d o c 14 - D a t e d : \

1 5I 2003


15/23


16/23

EXHBIT B"

List of Disputed Items

1 0 / 2 0 0 3Th e fol lowingis is of outs tand ingdspuesregarding

th ote Dev eopmen tAgreement:ARTICLE4 W N E RPA RT I C I PAT I O N4 wner'

s R i q h t to Notice, c c e s sand ev iewa ( v h e de l ive ry by eveloperto the wner o wo ( 2 op ieso: 1al g r e e m e n t swth contractors ( tha

wll be r o v i d e dupon settlement wth Cak onstruction),s u b c o n t r a c t o r s ,suppliers,vendors and other Persons upplyingm a t e r i a l so ervicesin onnectionwth the Const ruc t ion o heProject in x c e s so wo Hundred Fif ty T h o u s a n dDollars ($

250 000 , hichsha lbe aggregated w i t hrespect to ach Person supplying m a t e r ia l soservices;

5 al r a w d o w n sof equity and loan proceeds

under th oan ocs7 pdatedDevelopment Budge 8 al nterior design con t ro lbooks A R T I C L E

5. ISCELLANEOUSCONSTRUCTIONP R O V I S I O N S

5 2ames o C o n t r a c t o r s ,M a t e r ia l m e n .e tc . -Developer

shall furnish to Owner, wth a lis f each cont rac tor,subcontractor,vendor

and supplier who is performing any l abor o upp ly ingm a t e r i a lin e x c e s so $ 500 0 0 (

except for FF& E. . . he tems l i sed n rticle 4 ndAti ce 5 bove, wll be satisfied by the

Te n a n t 's eliveryof an i temizedPoject Cos S u m m a r i z a t i o nand Deb / q u i t yCapital

Investment Summar y ("

Poject apitalizationRecap )regarding the ro j ec t .The ollowingis a is to utstanding dispu tesr e g a r d i n gth e A g r e e m e n t

o ea se RTICLE11 O R T G A G E S11. 13 efinancinqo Debt b) efinancinq NotR e l a t e dto a efault -If Tenant refinancesits Debt in


17/23

i) to Owner to pay the Purchase Price for Owner' s Interest in the

Premises;

ii to Tenant if any funds remain after paying Owner the full PurchasePrice for Owner' s Interest in the Premises

1 wner 's

ubordinationof its i g h tto ental s h a l l be atthe ubordinated A m o u n tas of the a teo such efinancinby

Te n a n t .2 ef inancing P r o c e e d s "means th e a m o u n t

o h e re f inanc ingo he D e b t less ( x theBalance i m m e d i a t e l ybeore u c hr e f i n a n c i n go th e Debt, ( y the n t e r e s towing on uch Balance,and ( z easonable

refinancing transaction expenses roke ragecommssions andp r e p a y m e n tfees and yied m a i n t e n a n c echa rgesr e l a t i n gto he D e b tto

be e f inanced .Te n a n t has e e n reques ted to ubmt financial i n fo r m a t io nregarding any ossibler e f i n a n c i n gto he Agency. A uch, Tenant wll rovide O w n e rwth an ff idavi trelat ingto he nion P l a n t e r sBa nk oan modi f i ca t ionsthathave b e e nclosed to ate s u m m a r i z i n gthe use n d a p p l i c a t i o n o he

additional loan proceeds and stating the fac t h a t none o the oan p r o c e e d s w used (i

or d i s t r i bu t ionsto any o h e Borrower' s artners o r mem ber s , (i i ) o e p a y

any o h e Borrower' s artners or mem ber s , (iii) o epay any t h e r persono nti ty which l o a n e dm o n e yto

th eB o r r o w e r.F\ mr\$ L\ CHAISTIN RDA \ oyalpalm E x h i b i l


18/23

EXHIBIT C"

CLARK EXHBIT)

The following is a list of outstanding Clark issues disputes regarding the Hotel

Development Agreement:

ARTICLE 2O N S T R U C T I O N2. 3 ompletiono C o n s t r u c t i o no f the Poi ect b p o nSubstantial Completionof C o n s t r u c t i o nothe Project D e v e l o p e rshal f u r n i s hthe Ownerwith the ol lowing:i ertificate of the Architectre: Subs t an t i a lComplet ion iii) lien w a i v e r s in fom and ubstance

reasonably sat isfactoryto wner, ohe han Car k C o n s t r u c t i o nlien w a i v e r s

tha wll be rov idedupon settlementwi th Cak onstructionv ont rac tor ' s ina l Affidavit, to be r o v i d e d

upon settlement

wth Car k Cons ructionA RT I C L E4 O W N E RPARTICIPATION4 2 w n e r ' s

Riqh t to otice,Access and Review b he

final criti ca path method (" PM S c h e d u l e )The Developer wll rovidethe a s t C PM

Schedule providedby l a rk in the e v e l o p e r 's o s s e s s i o n .To h e extent the F i n a lCPM Scheduleis provi ded as a esult o he settlement o litigation wth

Cak th eve lope rwllprovide s a m e .A R T I C L E

14. DIS H RGEOF LENS 4 . 2 ischarqeo i ensa f any mechanic ' sl a b o r e r 's e n d o r 's aterialmans o imi l a rstatutory lien (ncluding taxl i ens s filed a g a i n s tthe oect Ste.. . e v e l o p e rshall c a u s eit obe i s c h a r g e d .H o w e v e r ,D e v e l o p e rshal lno be required to i s c h a rg ea n ysuch ie n if eveloperhas furnished O w n e r wth at D e v e l o p e r 's p t i o n ,a

ash epos i t ,bond, let er

of credi tfrom an InstitutionalLender o ther security. A o liensf l ed y Car k ons t ruc t i on ,the Deveoper a g r e e sthat u p o n se t t l emento

litigationwth Clark Construction, al l i ens wll be i scharged. F\


19/23

EXHIBIT " D"

AMENDMENT RE TOWN PARK TO AGREEMENT OF LEASE

AMENDMENT TO AGREEMENT OF LEASE ( the " Amendment") is made and entered into as

of the da y of , 2 0 0 3by and e t w e e nRDP OYAL PALM HOTELLI MTED ARTNERSHIPa orida l imted partnership ( O w n e r ) and MAM

BE ACH E D E V E L O P M E N TAGENCY,a ublicbody o r p o r a t eand politic ("

Tenan" ) .

WITNESSETHA w n e r and Tenant e n t e r e dinto an greemento ease, dat ed O c t o b e r

21 1997, ( he L e a s e ) ,relating to rea prope11y moe articularly d e s c r i b e dtherein (

t h e Property ).B own Pak otelCorporation,a e n n e s s e ec o r p o r a t i o n (To w nPark ),is theHot e M a n a g e rd e f i n e din he L e a s e )o th o te l (def inedin

the Lease). C ow n Park and PADC Royal Palm Holdings ,LLC(" Bon" ower") re p a r t i e stothat cert an Loan A g r e e m e n t d a t e d April 30 001 ( he" oan A g r e e m e n tw h e r e b yTown P a r k agreed to o n v e yto Bon" o w e r a orty- s e v e nand

6 00 ercent (47 6%)Cass A imitedpartnership interestin e n a n tin onsiderationforBon owe ' s xecution and eliveryo h a t certain P u r c h a s e M o n e yP r o m i s s o r yNote inf avo of To w n P a r k (the" ote"), h i c hNote evidences the loan

by Town Park to on- w e r (the" Loan"). . Town Pak UTently h o l d s a

o n e percent ( l imited partnershipin te res tin Tenant. E ursuant to ection 4. 01( f) fthe o an Agreement ,Town P a r k d e s i r e sto onfirm t h a tthe o a n wll e t r e a t edas n e q u i t yin teres tinTenant fo r purposes

o th e a s es o n g as the o an is u t s t a n d i n g .NOW, T H E R E F O R E ,inconsideration of the r e m i s e sand or other g o o dand vauabe onsideration,the eceipt an dsufficiency

o hich is ereby a c k n o w l e d g e d ,the a r t i e sagree as

follows: 1 ecitals. The fo r ego ingrecitals are rue a n d c o n -ecL 2 q u i t yInterest.

Owner and enant hereby a g r e et h a tto he extent tha the e a s e d i s t i ngu i shesbetween Town Park ( in ts capacity as Hotel Manager) oldingo n o th o l d i n ganyequity i n t e r e s tin e n a n t ,the o a ne v i d e n c e dand e c u r e dby he Note shall be reated fo rpurposes

of the ease as ow n Pak holdingan equt y n t e r e s tin e n a n t .3. o F u r t h e rM o d i f ic a t i o n .E x c e p tas m e n d e dby h is A m e n d m e n t ,the e a s e 'and all of its e r m s

and provis ions sha l e m a i nin u ll force and ffect. In the v e n tof


20/23


21/23

IN WITNESS WHEREOF, this Amendment has been duly executed by the partieshereto.

WITNESSES:

4 L ;t'a m f J a J A 'RJJ Print

N a m e '

P 6//, ' ; I'\ 3.oU ~ rY

0

Pin

Name'

OWNER": MAM

A G E N C Y B E A C HREDEVELOPMENTBy : P W/ j ) ])Gl2m& L

Print N a m e :Tit le :f1 AI1 t J

L

T E N A N T :RDP OYAL PALM HOTE L

LI MTED ARTNERSHIP a orida l imted

partnershipB PADC ospitality CorporationI,a Fori da orporat ion,as eneral

p a r t n e r

B y 'l 21 ff -~~~Title: ? rt P Q .~ ft.-b~

APPROVED AS TOFORM & LANGUAGe

FOR EXECUTION

lil M n J JII~ 1 1 -


22/23

EXHIBIT " E"

RECOGNIZED MORTGAGE CONSENT LETTER

UNION PLANTERS BANK

2800 P o n c ede eon

Blvd. Coral Gables,

Florida 33134 2003 iamiBeach Redevelopment Agenc y Jorge

Gonzalez, xecutiveDi rec to r1700 C o n v e n t i o nCenter

Di ve ourth

Floor

M i a m iB e a c h ,Florida 33139

and- Cty o MiamiBeach orge Gonzalez, City Manager1700

C o n v e n t i o nCenter Dive

F O u t 1 h Foor M i a m iBeach, lo r ida33139 Re etter o ntent to Amend RoyalPalm

CrownePlaza Resort

A g r e e m e n t sdated 2 0 0 3 ( "LO" ) e a rM r.G o n z a l e z :We are in ecep o

a opy of the uly xecuted LO . We ae h e Recogn izedM o r t g a g e eu n d e rthe Lease whichis he ubject o h e LOI as hese t e r m sae

defined in the LO and h e L e a s e .Sect ion11

10 o he L e a s estates in pat as olows O w n e ragr ees ot to ccept a v o l u n t a r ys u r r e n d e r ,t e r m i n a t i o no modification o h isLease a n y time while suc h ecognizedMortgage( s h a l lremaina ienon Tenant 's l easeholdestate. I s urtheru n d e r s t o o dand a g r e e dthat an ysuch Recognized Mortgagee( s sha l ot be bound by ny

surrender, termination or modification of ths Lease u n l e s ssuch surrender,termnation or modif ica t ionis ade with the prior written c o n s e n to

s u c hRecognizedM o r t g a g e e ,and his L e a s eshall not t e rmina teby m e r g e ro therwise a sl ong as


23/23

Mami Beach R e de v elo p m e n t A g e n c yJorge Gonzalez, Executive Director

and-

City of Mami Beach

Jorge Gonzalez, City Manager

2 0 0 3

Pag e 2 A c c o r d i n g l y,w e r e b yc o n s e n tto the or s u b j e c tto he negotiation a n de x e c u t i o no the l o s i n gDocuments (as def ined in he LO) wth erms, provisions andconditions mu tua l l ya c c e p t a b l eto RDP, he A g e n c yand the City as wel l as he o b t a i n i n go

our a p p r o v a l .Very

trulyy o u r s ,RoyD anis Seni or