HomeMy WebLinkAbout058-PRA of Sanford,- - C7 s , F(
AGREEMENT OF LEASE
between
CITY OF SANFORD, FLORIDA
Owner
and
PRA OF SANFORD, L.L.C.
Tenant
May 3, 1999
Record and Return to:
Donna L. McIntosh, Esquire
Stenstrom, McIntosh, Colbert,
Whigham & Simmons, P.A.
200 West First Street, Suite 22
Post Office Box 4848
Sanford, FL 32772 -4848
TABLE OF CONTENTS
RECITALS ........................... ............................... 1
TERMS OF AGREEMENT ............... ............................... 1
ARTICLE 1.
DEFINITIONS
ARTICLE 2.
DEMISE OF LAND AND TERM OF LEASE
Section 2.1 Demise Of Land For Term .. ............................... 9
Section 2.2 Due Diligence Period ..... ............................... 10
Section 2.3 Termination Or Abatement Of Lease After Due Diligence Period .. 12
Section 2.4 Contingency Period ...... ............................... 12
Section 2.5 Termination Of Lease .... ............................... 14
ARTICLE 3.
RENTAL
Section 3.1
Method And Place Of Payment ............................
14
Section 3.2
Base Rent ............. ...............................
14
Section 3.3
Percentage Rent ........ ...............................
15
Section 3.4
Impositions ............ ...............................
16
Section 3.5
Net Lease ............. ...............................
18
Section 3.6
Survival Of Payment Obligations ...........................
18
Section 3.7
Late Charges ........... ...............................
18
ARTICLE 4.
TENANT'S CONTRIBUTION
Section 4.1
Tenant's Contribution .... ...............................
19
ARTICLE 5.
USE
Section 5.1
Use .................. ...............................
19
Section 5.2
Prohibited Uses ......... ...............................
19
Section 5.3
Hotel ................. ...............................
20
ARTICLE 6.
INSURANCE; BONDING
Section 6.1
Insurance Requirements .. ...............................
21
Section 6.2
Treatment Of Proceeds ... ...............................
21
Section 6.3
General Provisions Applicable To All Parties .................
21
Section 6.4
Additional Coverage ..... ...............................
23
Section 6.5
No Representation As To Adequacy Of Coverage .............
24
Section 6.6
Blanket Or Umbrella Policies ..............................
24
Section 6.7
Liability Insurance Requirements ..........................
25
Section 6.8
Property Insurance Requirements ..........................
26
Section 6.9
Other Insurance Requirements ............................
27
Section 6.10
Construction Insurance And Bonding Requirements ............
29
Section 6.11
Annual Aggregates ...... ...............................
31
Section 6.12
Determination Of Replacement Value .......................
31
Section 6.13
Subleases ............. ...............................
32
ARTICLE 7.
DAMAGE, DESTRUCTION AND RESTORATION
Section 7.1 Notice To Owner ........ ............................... 32
Section 7.2 Casualty Restoration ..... ............................... 32
Section 7.3 Restoration Funds ...... ............................... 32
Section 7.4 Effect Of Casualty On This Lease .......................... 34
ARTICLE 8.
CONDEMNATION
Section 8.1
Substantial Taking ....... ...............................
35
Section 8.2
Less Than A Substantial Taking ...........................
37
Section 8.3
Restoration Funds ....... ...............................
38
Section 8.4
Effect Of Taking On This Lease ...........................
40
ARTICLE 9.
SALE OF HOTEL; SUBLETTING
Section 9.1 Tenant's Right To Sale Of Hotel ........................... 40
Section 9.2 Sublease Requirements .. ............................... 47
ARTICLE 10.
MORTGAGES
Section 10.1
Owner's Consent ........ ...............................
48
Section 10.2
Definitions ............. ...............................
49
Section 10.3
Approvals .............. ...............................
49
Section 10.4
Effect Of Mortgage ...... ...............................
50
Section 10.5
Notice And Right To Cure Tenant's Defaults ..................
50
Section 10.6
Notice Of Termination .... ...............................
52
Section 10.7
Application Of Proceeds From Insurance Or
Condemnation Awards ... ...............................
52
Section 10.8
Appearance At Condemnation Proceedings ..................
52
Section 10.9 Rights Limited To Recognized Mortgagees ................... 52
Section 10.10 No Surrender Or Termination ............................. 53
ARTICLE 11.
SUBORDINATION
Section 11.1 No Subordination ..... ............................... . .. 53
ARTICLE 12.
HOTEL CONSTRUCTION AND FURNISHING
Section 12.1 Tenant's Obligation To Construct Hotel ..................... 53
Section 12.2 Conditions Precedent to Tenant's Commencement Of
Construction Of The Hotel . ............................... 53
Section 12.3 Commencement of Construction Of The Hotel ................ 54
Section 12.4 Completion Of Construction Of The Hotel .................... 54
Section 12.5 Approval And Modification Of Preliminary Plans And
Specifications .......... ............................... 55
Section 12.6 Approval Of Plans And Specifications ....................... 56
Section 12.7 Compliance With Requirements; Construction Standards ....... 56
Section 12.8 Owner's Right To Use Field Personnel ...................... 57
Section 12.9 Title To The Hotel ....... ............................... 58
Section 12.10 Construction Agreements . ............................... 58
Section 12.11 Maintenance Of Construction Site .......................... 61
Section 12.12 Waste Disposal ......... ............................... 62
ARTICLE 13.
MAINTENANCE AND REPAIR; UTILITIES
Section 13.1 Maintenance Of Premises . ............................... 62
iv
Section 13.2 Removal Of Building Equipment ........................... 62
Section 13.3 Utilities ................ ............................... 63
Section 13.4 Waste Disposal ......... ............................... 63
Section 13.5 FF &E Reserve .......... ............................... 63
ARTICLE 14.
REQUIREMENTS
Section 14.1 Requirements .......... ............................... 64
ARTICLE 15.
FRANCHISOR; CHAIN AFFILIATION
Section 15.1
Franchisor; Chain Affiliation ..............................
65
Section 15.2
Approval Of Franchisor ... ...............................
66
Section 15.3
Owner's Rights And Remedies ............................
68
Section 15.4
Initial Franchisor Engagement .............................
70
ARTICLE 16.
LIENS
Section 16.1
Creation Of Liens ....... ...............................
70
Section 16.2
Discharge Of Liens ...... ...............................
70
Section 16.3
No Authority To Contract In Name Of Owner .................
70
ARTICLE 17.
REPRESENTATIONS
Section 17.1
No Brokers ............. ...............................
71
Section 17.2
No Other Representation .. ...............................
71
ARTICLE 18.
LIABILITY / INDEMNIFICATION
u
Section 18.1 Liability / Indemnification .. ............................... 72
Section 18.2 Contractual Liability ...... ............................... 73
Section 18.3 Defense Of Claim ....... ............................... 73
Section 18.4 Notification And Payment . ............................... 74
Section 18.5 Governs Lease ......... ............................... 74
Section 18.6 §768.28 - Waiver Of Limitation On Liability ................... 74
Section 18.7 Survival ............... ............................... 74
ARTICLE 19.
OWNER'S SECURITY INTEREST IN BUILDING EQUIPMENT AND FF&E
Section 19.1 Grant of Security Interest .. ............................... 74
ARTICLE 20.
EVENTS OF DEFAULT, CONDITIONAL LIMITATIONS, REMEDIES, ETC.
Section 20.1 Definition .............. ............................... 75
Section 20.2 Enforcement Of Performance, Damages And Termination ....... 77
Section 20.3 Expiration And Termination Of Lease ....................... 77
Section 20.4 Receipt of Moneys After Notice of Termination ................ 78
Section 20.5 Strict Performance ....... ............................... 78
Section 20.6 Right To Enjoin Defaults .. ............................... 79
Section 20.7 Remedies Under Bankruptcy And Insolvency Codes ........... 79
Section 20.8 Funds Held By Tenant .... ............................... 79
Section 20.09 Inspection ............. ............................... 80
ARTICLE 21.
NOTICES, CONSENTS AND APPROVALS
vi
Section 21.1 Service Of Notices And Other Communications ............... 80
ARTICLE 22.
FINANCIAL REPORTS AND RECORDS
Section 22.1 Books And Records; Audit Rights .......................... 81
ARTICLE 23.
SURRENDER AT END OF TERM
Section 23.1
Surrender Of Premises ... ...............................
84
Section 23.2
Delivery Of Subleases, etc ...............................
84
Section 23.3
Title To Improvements .... ...............................
84
Section 23.4
Title to FF &E Reserve Account ............................
85
Section 23.5
Cash And Accounts Receivable ...........................
85
Section 23.6
Personal Property ....... ...............................
85
Section 23.7
Survival Clause ......... ...............................
86
ARTICLE 24.
QUIET ENJOYMENT
Section 24.1 Quiet Enjoyment ........ ............................... 86
ARTICLE 25.
HAZARDOUS MATERIALS
Section 25.1 Use Of Hazardous Materials .............................. 86
Section 25.2
Indemnification ......... ...............................
86
Section 25.3
Compliance ............ ...............................
86
Section 25.4
Notices ................ ...............................
87
Section 25.5
Owner's Remedies ...... ...............................
87
Section 25.6
Defaults ............... ...............................
87
vii
/� 1 n
Section 25.7 Environmental Audits ..... ............................... 88
Section 25.8 Survival ............... ............................... 88
ARTICLE 26.
MISCELLANEOUS
Section 26.1
Governing Law; Waiver Of Jury Trial; Venue Situs .............
88
Section 26.2
References ............ ...............................
88
Section 26.3
Entire Agreement, etc .... ...............................
89
Section 26.4
Invalidity Of Certain Provisions ............................
90
Section 26.5
Merger ................ ...............................
90
Section 26.6
Remedies Cumulative .... ...............................
90
Section 26.7
Performance At Each Party's Sole Cost And Expense ..........
90
Section 26.8
Successors And Assigns .. ...............................
91
Section 26.9
Recording The Lease .... ...............................
91
Section 26.10
Notice Of Defaults ....... ...............................
91
Section 26.11
Nonliability Of Officials And Employees .....................
91
Section 26.12
Conflict Of Interest ....... ...............................
91
Section 26.13
No Partnership .......... ...............................
91
Section 26.14
Public Entity Crimes ..... ...............................
92
Section 26.15
No Third Party Beneficiaries ..............................
92
Section 26.16
Joint Preparation ........ ...............................
92
Section 26.17
Tenant's Waiver Of Claims ...............................
92
Section 26.18
Tenant's Right To Contest . ...............................
92
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i^b
Section 26.19 Attorney's Fees; Costs .... ............................... 93
Section 26.20 Recording Of Memorandum .............................. 93
Section 26.21 Execution Authority ...... ............................... 93
EXECUTION ......................... ............................... 93
AGREEMENT OF LEA��
THIS AGREEMENT OF LEASE, dated as of this day o _ 1999
(the "Commencement Date ") is made between the CITY OF SANFORD, a Florida
municipal corporation, whose address is 300 North Park Avenue, Sanford, Florida, 32771
(the "Owner") and PRA OF SANFORD, L.L.C., whose address is 111 South Independence
Mail East, East Bourse Building, Suite 100, Philadelphia, PA 19106 (the "Tenant ").
RECITALS:
(A) Owner owns a certain parcel of land (the "Land ", as more specifically defined
herein) adjacent to Lake Monroe, which Owner has agreed to lease for the development
of a first class, full service hotel (the "Hotel ", as more specifically defined herein).
(B) The active and continuous use and operation of the Land as a hotel with
conference rooms, parking garage and retail shops will enhance the value of the area, the
City of Sanford and Seminole County, provide a needed public service, provide additional
employment and other financial benefits to the City of Sanford's economy and provide a
positive benefit to the City's waterfront and downtown area. The City Commission of the
City of Sanford has, therefore, found that this Hotel and Center is in furtherance of a valid
public purpose.
(C) Owner and Tenant desire to enter into an agreement for the lease of the
Land and the development, construction, furnishing, equipment, ownership , operation and
maintenance of the Hotel.
TERMS OF AGREEMENT
NOW, THEREFORE, it is hereby mutually covenanted and agreed by and between
the parties hereto that this Lease is made upon the terms, covenants and conditions
hereinafter set forth.
ARTICLE 1.
DEFINITIONS
For all purposes of this Lease, the terms as used in this Lease shall have the
following meanings:
"Affiliate" or "Affiliates" means, with respect to any Person, any other Person that,
directly or indirectly, through on or more intermediaries, controls or is controlled by, or is
under common control with, such Person. For purposes hereof, the term "control"
(including the terms "controlled by" and "under common control with ") shall mean the
possession of a controlling interest. Unless the context otherwise requires, any reference
to "Affiliate" in this Lease shall be deemed to refer to an Affiliate of Tenant.
,-
"Base Rent" has the meaning provided in Section 3.2(a).
'Building Equipment' means all installations incorporated in, located within, at or
attached to and used or usable in the operation of, or in connection with, the Premises and
shall include, but shall not be limited to, machinery, apparatus, devices, motors, engines,
dynamos, compressors, pumps, boilers and burners, heating, lighting, plumbing,
ventilating, air cooling and air conditioning equipment; chutes, ducts, pipes, tanks, fittings,
conduits and wiring; incinerating equipment, elevators, escalators and hoists; washroom,
toilet and lavatory plumbing equipment, excluding, however, any personal property which
is owned by Subtenants, licensees, concessionaires or contractors (except to the extent
any of the foregoing are Affiliates of Tenant), FF &E and Operating Equipment.
"Business Day" or "business day" means a day other than Saturday, Sunday or
a day on which banking institutions in the State of Florida are authorized or obligated by
law or executive order to be closed.
"Casualty Restoration" has the meaning provided in Section 7.2(a).
"City" means the City of Sanford, Florida.
"Commencement Date" has the meaning provided in the preamble of this Lease.
"Completion Deadline" has the meaning provided in Section 12.4(a).
"Construction" or "Construction of the Hotel' means the construction on the Land
of the Hotel.
"Construction Agreements" means all agreements executed in connection with
any Construction Work affecting the Premises and the Improvements, including, without
limitation, a restoration, alteration or other Construction Work performed in connection with
the use, maintenance or operation of the Premises.
"Construction Work" means any construction work performed under any provision
of this Lease affecting the Premises and the Improvements, including, without limitation,
the initial Construction of`the Hotel, a restoration, alteration or other construction work
performed in connection with the use, maintenance or operation of the Premises.
"Contingency Period" has the meaning provided in Section 2.3.
"Controlling Interest" means the ownership of greater than fifty percent (50 %) of
the voting equity interests in a Person or the ownership of greater than fifty percent (50 %)
of the votes necessary to elect a majority of the board of directors or other governing body
Agreement of Lease
Page 2 of 94
la
of such Person.
"Date of Taking" has the meaning provided in Section 8.1(c)(i).
"Default" means any condition or event, or failure of any condition or event to occur,
which constitutes, or would after the giving of notice and lapse of time (in accordance with
the terms of this Lease) constitute, an Event of Default.
"Default Notice" has the meaning provided in Section 20.1(b).
"Disqualified Person" has the meaning provided in Section 9.1(b)(iv)(a) -(c).
"Due Diligence Period" has the meaning provided in Section 2.2.
"Environmental Damages" shall mean all claims, judgments, damages (including
punitive damages), losses, penalties, fines, liabilities (including strict liability),
encumbrances, liens, costs and expenses of investigation and defense of any claim,
whether or not such is ultimately defeated, and of any settlement or judgment, of whatever
kind or nature, contingent or otherwise, matured or unmatured, foreseeable or
unforeseeable, any of which are incurred at any time as a result of the remediation or
mitigation of an environmental condition, including, without limitation, fees incurred for the
services of attorneys, consultants, contractors, experts, laboratories and all other costs
incurred in connection with investigation and remediation, including the preparation of any
feasibility studies or reports and the performance of any remedial, abatement,
containment, closure, restoration or monitoring work.
"EPA" means the Environmental Protection Agency of the United States.
"Event of Default" has the meaning provided in Section 20.1.
"Expiration of the Term" means the expiration of this Lease and the Term on the
Fixed Expiration Date or on such other date as this Lease may be terminated as provided
herein.
"FF &E" means all furniture, wall, floor and ceiling coverings, fixtures and equipment
(other than Building Equipment and Operating Equipment) located at or used in connection
with the Hotel, including (without limitation): (a) all furniture, furnishings, built -in serving
or service furniture, carpeting, draperies, decorative millwork, decorative lighting, doors,
cabinets, hardware, partitions (but not permanent walls), television receivers and other
electronic equipment, interior plantings, interior water features, artifacts and artwork, and
interior and exterior graphics; (b) office furniture; (c) communications equipment; (d) all
fixtures and specialized hotel equipment used in the operation of kitchens, laundries, dry
Agreement of Lease
Page 3 of 94
r-*,
cleaning facilities, bars and restaurants; (e) telephone and call accounting systems; (f)
rooms management system, point -of -sale accounting equipment, front and back office
accounting, computer, duplicating systems and office equipment; (g) cleaning and
engineering equipment and tools; (h) vehicles; (i) recreational equipment; and 0) all other
similar items which are used in the operation of the Hotel, excluding, however, any
personal property which is owned by Subtenants, licensees, concessionaires or
contractors, except to the extent any of the foregoing are Affiliates of Tenant.
"Final Certificate of Occupancy "means a certificate(s) of occupancy issued by the
City's Building Department for all or a portion of the Improvements, other than a Temporary
Certificate of Occupancy.
"Fixed Expiration Date" means the date which is the last day of the month in which
the fiftieth (50th) anniversary of the Commencement Date shall occur, as such date may
be extended pursuant to the terms hereof, unless sooner terminated pursuant to the terms
of this Lease.
"Franchise Agreement" means a written agreement between Tenant and
Franchisor pursuant to which Franchisor has agreed to extend to the Hotel its "flag"
affiliation and reservation and marketing systems, and provide management and operation
of the hotel, training facility, conference rooms, parking garage and multi - purpose center.
"Franchisor" has the meaning provided in Section 15.1(a).
"Franchisor Engagement" has the meaning provided in Section 15.2.
"Governmental Authority or Authorities" means the United State of America, the
State of Florida, the City of Sanford, Seminole County, and any agency, department,
commission, board, bureau, instrumentality or political subdivision (including any county
or district) of any of the foregoing, now existing or hereafter created, having jurisdiction
over Tenant or over or under the Premises or any portion thereof or any street, road,
avenue or sidewalk comprising a part of, or in front of, the Premises, or any vault in or
under the Premises, or airspace over the Premises.
"Guidelines" means the American Automobile Associations' Lodging Listing
Requirements and Diamond Rating Guidelines, or such other rating system selected or
designated hereunder.
"Hazardous Materials" shall mean (i) petroleum and its constituents; (ii) radon gas,
asbestos in any form which is or could become friable, urea formaldehyde foam insulation,
transformers or other equipment which contain dielectric fluid containing levels of
polychlorinated biphenyls in excess of federal, state or local safety guidelines, whichever
Agreement of Lease
Page 4 of 94
are more stringent; (iii) any substance, gas, material or chemical which is or may hereafter
be defined as or included in the definition of "hazardous substances ", "hazardous
materials ", "hazardous wastes ", "pollutants or contaminants ", "solid wastes" or words
of similar import under any Requirement including the Comprehensive Environmental
Response, Compensation and Liability Act, as amended, 42 U. S. C. §9061 et sea. the
Hazardous Materials Transportation Act, as amended, 49 U. S. C. §1801, et sea. the
Resource Conservation and Recovery Act, as amended, 42 U. S. C. §6901, et sea. the
Federal Water Pollution Control Act, as amended, 33 U. S. C. §1251, et sea. and Florida
Statutes, Chapters 396 and 403; and (iv) any other chemical, material, gas or substance,
the exposure to or release of which is regulated by any governmental or quasi -
governmental entity having jurisdiction over the Premises or the operations thereon.
"Hotel" has the meaning provided in Section 5.3(a).
"Hotel Revenue" means, without duplication, total gross revenue of any kind
(whether in cash or in kind) from the operation of the Hotel from and after the first day
following the issuance of a Certificate of Occupancy and shall include, without limitation,
all total gross revenue of every kind (whether in cash or in kind) and all gross proceeds
of sales of any kind (whether in cash or on credit or otherwise) resulting from the operation
of the Hotel and all of the facilities therein and goods and services provided thereby,
including, without limitation, all total gross revenue and proceeds from the rental of rooms,
food and beverage sales, telephone and telecommunication revenues, parking revenues
received by Tenant or any Affiliate of Tenant from or with respect to parking facilities
located on the Premises (including, without limitation, the Garage or any other parking
facility or from valet or other parking services provided to Hotel guests and other patrons
of the Hotel), leasing, brokerage and management fees and commissions, or other
compensation, derived by Tenant or any Affiliate of Tenant under any Sublease, leasing
agreement, management agreement, master lease or similar agreement regarding the
leasing of management of the Premises, all total gross revenues derived by Tenant or any
Affiliate of Tenant from the operation of any concession agreements, any gross vending
income and commissions, all rentals and other amounts received by Tenant from or with
respect to Subtenants, tenants, lessees, licensees, concessionaires subtenants,
subleases, permitees and other Persons occupying space at the Hotel and / or rendering
services to Hotel guests or other patrons of the Hotel, and the gross proceeds (after
deducting all necessary expenses incurred in the adjustment or collection thereof) of
business interruption insurance actually received by Tenant which replace lost revenues
with respect to the operation of the Hotel or any other portion of the Premises. The
following shall, however, be excluded from Hotel Revenue:
(1) Federal, state and municipal excise, sales, resort, use and other taxes
collected from patrons or guests as a part of or based upon the sales price
of any goods or services including, with limitation, gross receipts, room, bed,
Agreement of Lease
Page 5 of 94
admission, cabaret or similar taxes;
(2) Any gratuities collected;
(3) Allowances, rebates and refunds;
(4) The proceeds of any financing or refinancing;
(5) Interest on funds in the FF &E Reserve Account;
(6) Any other interest income;
(7) Proceeds from the sale of any Building Equipment or FF &E;
(8) Proceeds from the sale of the Hotel; and
(9) All revenues, if any, from the Multi- Purpose Center, including, but not limited
to, management and operation fees.
"Improvement(s)" means any building(s) (including footings and foundations),
Building Equipment, FF &E and other improvements and appurtenances of every kind and
description for the Hotel erected, constructed or placed after the Commencement Date
upon the Land (whether temporary or permanent), and any and all replacements thereof.
"Institutional Lender" means a Person which, at the time it becomes an
Institutional Lender, is a state or federally chartered savings bank, savings and loan
association, credit union, commercial bank or trust company or a foreign banking institution
(in each case whether acting individually or in a fiduciary or representative capacity); an
insurance company organized and existing under the laws of the United States of America
or any state thereof or a foreign insurance company (in each case whether acting
individually or in a fiduciary or representative capacity); an institutional investor such as
a publicly held real estate investment trust, an entity that qualifies as a "REMIC" under the
Code or other public or private investment entity (in each case whether acting as principal
or agent); a brokerage or investment banking organization (in each case whether acting
individually or in a fiduciary or representative capacity as principal or agent); an
employees' welfare, benefit, pension or retirement fund; an institutional leasing company;
an institutional financing company (e.g., General Electric Capital Corporation or General
Motors Acceptance Corporation); any governmental agency or entity insured by a
governmental agency or any combination of Institutional Lenders; provided that each of
the above entities shall qualify as an Institutional Lender only if (at the time it becomes an
Institutional Lender) it shall have assets of not less than ($100,000,000 adjusted for
inflation and not be an Affiliate or Tenant. The term "Institutional Lender" also includes
an Affiliate of an Institutional Lender as described in this paragraph.
Agreement of Lease
Page 6 of 94
r,
"Land" means the real property described on Exhibit "A" attached hereto.
"Lease" means, collectively, this Agreement of Lease and all exhibits hereto, as any
of the same may hereafter be supplemented, amended, restated, severed, consolidated,
extended, revised and otherwise modified, from time to time, either in accordance with the
terms of this Lease or by mutual agreement of the parties.
"Lease Year" means each succeeding twelve (12) month period during the Term;
and the final shorter period, if any, ending on the last day of the Term.
"Net Insurance Proceeds" has the meaning provided in Section 7.2(a).
"Multi- Purpose Center" has the meaning provided in Section 2.2(a)(ii)(3).
"Operating Equipment" means all chinaware, glassware, linens, silverware,
uniforms and menus.
"Owner" means the City, acting in its proprietary capacity.
"Owner's Indemnified Parties" means, collectively, the City of Sanford, including,
without limitation, any agencies and departments thereof, and their respective elected and
appointed officials, public officers, charter officers, employees, successors, assigns,
agents, contractors, subcontractors, experts, licensees, lessees, consultants, partners,
principals, invitees and Affiliates. An "Owner Indemnified Party" shall mean any of the
foregoing.
"Owner's Interest in the Premises" means (i) Owner's fee simple interest in the
Land and (ii) Owner's interest in this Lease and the leasehold estate created hereby.
"Percentage Rent" has the meaning provided in Section 3.3.
"Permitted Franchisor" has the meaning provided in Section 15.1(a).
"Person" means an individual, corporation, partnership, joint venture, limited liability
company, limited liability partnership, estate, trust, unincorporated association or other
entity; any Federal, state, county or municipal government or any bureau, department,
political subdivision or agency thereof; and any fiduciary acting in such capacity on behalf
of any of the foregoing.
"Plans and Specifications" means the final plans and specifications for the Hotel,
the finish schedule, the hotel program and the differentiation schedule.
Agreement of Lease
Page 7 of 94
"Preliminary Plans and Specifications" means the preliminary plans and
specifications for the Hotel, the preliminary finish schedule, the preliminary hotel program
and the preliminary differentiation schedule.
"Premises" means, collectively, the Land and the Improvements.
"Private Improvements" has the meaning provided in Section 2.2(a)(i).
"Project" has the meaning provided in Section 2.2(a)(i) and (ii).
"Public Improvements" has the meaning provided in Section 2.2(a)(ii).
"Recognized Mortgage" has the meaning provided in Section 10.2(6).
"Recognized Mortgagee" means the holder of a Recognized Mortgage.
"Renewal Term" has the meaning provided in Section 2.1.
"Rental" means Base Rent, Percentage Rent, Impositions, all amounts designated
as "Rental" hereunder, and any other sums, costs, expenses or deposits which Tenant is
obligated, pursuant to any of the provisions of this Lease, to pay and / or deposit.
"Requirements" has the meaning provided in Section 14.1(c).
"Substantial Completion" or "Substantially Complete" or "Substantially
Completed" means, with respect to the Hotel that (1) it shall have been substantially
completed in accordance with the Plans and Specifications, (2) the certificate of the
Architect described in Section 12.4(b)(i) hereof shall have been obtained, and (3) all of the
Improvements therein shall have been issued temporary certificates of occupancy.
"Substantial Controlling Interest" means the ownership of greater than fifty
percent (50 %) of the equity interests in a Person and the ownership of greater than fifty
percent (50 %) of the votes necessary to elect a majority of the board of directors or other
governing body of such Person.
"Substantially All of the Premises" has the meaning provided in Section 8.1(c)(ii).
"Temporary Certificate of Occupancy" means a temporary certificate of
occupancy, as the same may be amended from time to time, issued by the City's Building
Department for all or a portion of the Improvements.
'Tenant" means PRA of Sanford, L.L.C. and any assignee or transferee of the
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entire Tenant's Interest in the Premises that is permitted under this Lease, from and after
the date of the permitted assignment or transfer pursuant to which the entire Tenant's
Interest in the Premises was assigned or transferred to such assignee or transferee.
"Tenant Indemnified Parties" means, collectively, Tenant and its directors, officers,
shareholders, employees, successors, assigns, subtenants, agents, contractors,
subcontractors, experts, licensees, lessees, mortgagees, joint venturers, members, holders
of other ownership interests, partners of a partnership constituting a partner of Tenant,
trustees, partners, principals, invitees and Affiliates. A "Tenant Indemnified Party" shall
mean any of the foregoing.
"Tenant's Interest in the Premises" means (i) Tenant's interest in this Lease and
(ii) Tenant's interest in the Improvements.
"Term" means the term of years commencing on the Commencement Date and,
subject to earlier termination as provided hereunder, expiring at 12:00 midnight on the
Fixed Expiration Date.
"Unavoidable Delays" means delays due to (1) strikes, slowdowns, lockouts or
inability to obtain labor or materials, (2) acts of God, war, enemy action, civil commotion,
fire, casualty or catastrophic weather conditions, (3) a court order which causes a delay,
(4) the application of any Requirement, or (5) another cause beyond such party's control
or which, if susceptible to control by such party, shall be beyond the reasonable control
of such party. Such party shall use reasonable good faith efforts to notify the other party
not later than twenty (20) calendar days after such party knows of the occurrence of an
Unavoidable Delay. In no event shall (a) any party's financial condition or inability to fund
or obtain funding or financing constitute an "Unavoidable Delay" with respect to such party
and (b) an delay arising from a party's default constitute an "Unavoidable Delay" with
respect to such party's obligations hereunder. The times for performance set forth in this
Lease (other than for monetary obligations of a party) shall be extended to the extent
performance is delayed by Unavoidable Delay, except as otherwise expressly set forth in
this Lease.
ARTICLE 2.
DEMISE OF LAND AND TERM OF LEASE
SECTION 2.1 Demise of Land for Term Owner does hereby demise and
lease to Tenant, and Tenant does hereby lease and take from Owner, the Land, together
with all the appurtenances, rights, privileges and hereditaments thereto, subject to (a) the
terms and conditions of this Lease and (b) the contingencies of this Lease, to have and to
hold unto Tenant for a term commencing on the Commencement Date and terminating at
midnight on the fiftieth (50th) anniversary of the Commencement Date (the "Fixed
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Expiration Date "), as such date may be extended pursuant to the terms of this Lease,
unless sooner terminated pursuant to the terms of this Lease. The Term shall
automatically renew (on the same terms and conditions contained herein), for each of two
(2) successive periods of ten (10) years ( "Renewal Term "), provided that Tenant has not
notified Owner of its election to terminate this Lease. If Tenant elects to terminate at the
end of the Term or the Renewal Term, it shall give Owner notice to that effect at least
twelve (12) months prior to the expiration of the then current term.
SECTION 2.2 Due Diligence Period During the period (the "Due Diligence
Period ") commencing on the Commencement Date and ending on the one hundred sixty
fifth (165th) calendar day thereafter, the following shall occur:
(a) Within one hundred twenty (120) days after the Commencement Date,
Tenant shall provide to Owner a feasibility study and financial analysis ( "the Feasibility
Study / Financial Analysis ") , at Tenant's sole cost and expense, on the following Project
(the "Project "):
(i) Private Improvements:
(1) 300 room first class, full service hotel; and
(2) 15,000 to 20,000 square feet of conference rooms. This space
should be in the upper range of finish; and
(3) commercial / retail space;
(4) amusement pier restaurant and concessions; and
(5) parking garage and surface parking with no less than 600
parking spaces.
(ii) Public Improvements
(1) boardwalk;
(2) marina;
(3) 35,000 to 50,000 square foot multi - purpose center (the "Multi -
Purpose Center ") to be located on the Land. This space
should be in the mid -range of finish for banquets and still be
able to accommodate exhibits;
Agreement of Lease
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(4) 200 seat amphitheater (training center). This space should be
in the upper range of finish;
(5) fishing pier;
(6) streetscape linkages and street improvements;
(7) Fort Mellon Park improvements;
(8) seawall rehabilitation;
(9) relocation of Pump Branch; and
(10) amusement pier.
(b) The Feasibility Study / Financial Analysis shall be provided by the Tenant
to Owner to determine:
(i) the scope of the Project;
(ii) the marketability of the Project;
(iii) the Project costs and revenues;
(iv) the mix of public and private investment required for the Project; and
(v) the recommended cost and operational responsibilities for the Multi -
Purpose Center.
(c) Within sixty (60) calendar days of the Commencement Date, Owner shall be
responsible for providing a parking study, and environmental audit (Level 1) on the Land
to Tenant, at Owner's sole cost and expense, for use by Tenant in the Feasibility Study /
Financial Analysis.
(d) Within forty -five (45) calendar days of Owner's receipt of Tenant's Feasibility
Study / Financial Analysis, Owner shall be responsible for:
(i) transmitting the Feasibility Study / Financial Analysis to Seminole
County;
(ii) reviewing the Feasibility Study / Financial Analysis;
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(iii) coordinating the City's and Seminole County's review of the
Feasibility Study / Financial Analysis;
(iv) providing Tenant with any City of Sanford / Seminole County requests
for additional information; and
(v) providing Tenant with the City of Sanford / Seminole County written
response to Tenant's Feasibility Study / Financial Analysis.
SECTION 2.3 Termination Or Abatement Of Lease After Due Diligence
Period.
(a) Notwithstanding anything in this Lease to the contrary, within ten (10)
Business Days after the end of the Due Diligence Period, Tenant may terminate this Lease
by written notice to Owner, if Tenant determines the Project is not feasible, at the sole and
exclusive discretion of Tenant, and Tenant's obligations herein and this Lease, without
payment of any kind to Owner, shall terminate.
(b) Notwithstanding anything in this Lease to the contrary, within ten (10)
Business Days after the end of the Due Diligence Period, Owner may terminate this Lease
by written notice to Tenant, if Owner determines the Project is not feasible, at the sole and
exclusive discretion of Owner, and Owner's obligations herein and this Lease, without
payment of any kind to Tenant, shall terminate.
(c) Within ten (10) Business Days after the end of the Due Diligence Period, if
this Lease has not been terminated pursuant to Section 2.3(a) or (b), above, Tenant may
abate the beginning of the Contingency Period for a period of six (6) months to allow for
final resolution of the currently pending challenge to Ordinance No. 3431. During such
abatement period, Owner shall work with due diligence on obtaining the approvals
required for the amusement and fishing piers. If said abatement occurs, all subsequent
time requirements herein shall be extended by six (6) months.
(d) The Owner and Tenant shall continue to negotiate in good faith in an effort
to resolve issues, if any, which contributed to a determination by either party that the
Project was not feasible in an effort to restructure, as needed, this Lease.
SECTION 2.4 Contingency Period During the Period ( "the "Contingency
Period ") commencing on the last calendar day of the Due Diligence Period and ending on
the three hundred sixty fifth (365th) calendar day thereafter as a condition precedent to the
continuation of this Lease, the following events shall occur:
Agreement of Lease
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?^-,
(a) Tenant to obtain financing for the private portion of the Project immediately
following determination by County of County's participation in the public funding of the
Multi- Purpose Center;
(b) Owner to obtain financing for the public portion of the Project immediately
following determination by County of County's participation in the public funding of the
Multi- Purpose Center;
(c) The future land use designation and zoning required for the Project shall be
final, with all appeal periods expired or appeals resolved;
(d) Seminole County agreement executed to participate in funding of the public
portion of the Project;
(e) City of Sanford / Seminole County CRA agreement executed to participate
in funding of the public portion of the Project;
(f) Seminole County Tourist Development Committee agreement executed to
participate in funding of the public portion of the Project;
(g) Execution of Interlocal Agreement(s) with the County and the City of
Sanford / Seminole County CRA for the financing, design, construction, operation and
maintenance of the Public Improvements portion of the Project;
(h) Execution by Tenant and Owner of management/ operation agreement(s)
providing the terms and conditions for the management and operation by Tenant of the
Multi- Purpose Center;
(i) Approval by Owner of Preliminary Plans and Specifications submitted by
Tenant pursuant to Section 12.5, herein;
Q) Execution by Owner and Tenant of quality standards agreement providing
the physical and operational standards for the Hotel;
(k) Owner to obtain permitting and construction approvals for fishing pier and
amusement pier from appropriate Governmental Authorities;
(1) Owner and Tenant to execute an addendum to this Lease incorporating the
amusement pier as permitted into the definition of "Hotel" and into the terms of this Lease;
(m) Owner to approve the Private Improvements proposed by Tenant;
Agreement of Lease
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(n) Tenant to approve the Public Improvements proposed by Owner;
(o) That portion of Seminole Boulevard abutting the Land to be closed and
vacated. Nothing in this Lease shall be deemed to require the City of Sanford to close and
vacate any portion of Seminole Boulevard; and
(p) Release of grants of easement, right of way use agreements, dedications,
deed restrictions, sovereign rights or riparian rights, if any, encumbering the Land by the
appropriate Persons or Governmental Authority.
SECTION 2.5 Termination of Lease
(a) Notwithstanding anything in this Lease to the contrary, during the
Contingency Period, Tenant may terminate this Lease for the non - occurrence of one or
more of the events listed in Section 2.4 above, at the sole and exclusive discretion of
Tenant, and Tenant's obligations herein and this Lease, without payment of any kind to
Owner, shall terminate with ten (10) days prior written notice to Owner.
(b) Notwithstanding anything in this Lease to the contrary, during the
Contingency Period, Owner may terminate this Lease for the non - occurrence of one or
more of the events listed in Section 2.4 above, at the sole and exclusive discretion of
Owner, and Owner's obligations herein and this Lease, without payment of any kind to
Tenant, shall terminate with ten (10) days prior written notice to Tenant.
(c) In the event of termination of this Lease pursuant to this Section, by Tenant
or Owner, all studies, surveys or data generated by Tenant or at Tenant's request
regarding this Lease shall be turned over to Owner forthwith, and may be utilized by
Owner for any purpose.
ARTICLE 3.
RENTAL
SECTION 3.1 Method and Place of Payment Except as otherwise
specifically provided herein, all Rental shall be paid without notice or demand. All Rental
payable to Owner shall be paid by wire transfer of immediately available federal funds to
an account designated in writing by Owner or by good checks (payable upon presentment)
drawn on a United States or state chartered bank, in currency of the United States of
America. All such checks shall be made payable to: The City of Sanford, Florida and shall
be paid at the following address: The City of Sanford, Attn: Finance Director, 300 North
Park Avenue, Post Office Box 1788, Sanford, Florida, 32771.
SECTION 3.2 Base Rent
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(a) Base Rent Beginning thirteen (13) months from issuance of the first
certificate of occupancy (temporary or final) for the Hotel and continuing until the date the
bonds issued by the City to finance the Public Improvements have matured, Tenant shall
pay Owner annual Base Rent for each Lease. Year ( "Base Rent ") in the amount of
$750,000.00, plus the applicable Florida sales tax. Upon maturation of said bonds,
Tenant's requirement to pay Base Rent shall terminate. The Base Rent may be adjusted
by mutual written agreement of Owner and Tenant after determination of Seminole
County's participation in the funding of the Multi- Purpose Center.
(b) Payment of Base Rent Base Rent shall be paid in monthly installments of
$62,500.00, plus the applicable Florida sales tax and shall be paid in advance,
commencing on the first (1 st) calendar day of the first (1 st) calendar month following the
thirteenth (13th) month from issuance of the first certificate of occupancy (temporary or
final) for the Hotel and on the first (1 st) day of each and every calendar month thereafter
until the date the bonds issued by the City to finance the Public Improvements have
matured. All Base Rent which is due for any period of less than a full month or a full
calendar year shall be appropriately apportioned.
SECTION 3.3 Percentage Rent
(a) Percentage Rent Beginning thirteen (13) months from issuance of the first
certificate of occupancy (temporary or final) for the Hotel and for the balance of the Term
and Renewal Term(s), Tenant shall pay Owner, in addition to Base Rent, the following
percentage rent ( "Percentage Rent ") , plus applicable Florida sales tax:
Commencing on the thirteenth (13th) month following issuance of the first
certificate of occupancy (temporary or final) and continuing for each and
every calendar month thereafter, through and including the thirty -sixth (36th)
month:
One percent (1 %) of Hotel Revenue minus Base Rent paid to
Owner for said calendar month.
Commencing on the thirty- seventh (37th) month following issuance of the
first certificate of occupancy (temporary or final) and continuing for each and
every calendar month thereafter for the balance of the Term and Renewal
Term(s):
Three percent (3 %) of Hotel Revenue minus Base Rent paid
to Owner for said calendar month.
(b) Payment of Percentage Rent Percentage Rent shall be paid in monthly
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installments in amounts calculated in accordance with Section 3.3(a) above and shall be
paid, commencing on the twentieth (20th) calendar day of the thirteenth (13th) calendar
month following issuance of the first certificate of occupancy (temporary or final) for the
Hotel and on the twentieth (20th) day of each and every calendar month thereafter during
the Term and Renewal Term(s). All Percentage Rent which is due for any period of less
than a full month or a full calendar year shall be appropriately apportioned. Each payment
of Percentage Rent shall be accompanied by a written statement, certified as true,
complete and correct by Tenant, setting forth, in form and substance, and in detail,
reasonably sufficient to Owner, the aggregate amount and components of the total Hotel
Revenue for the applicable calendar month and the calculation of the amount of such
payment of Percentage Rent. Tenant shall not be entitled to any credits from month to
month for percentage rent.
Notwithstanding the foregoing, each actual payment of Percentage Rent shall be
based on the Hotel Revenue for the immediately preceding calendar month, and the
Percentage Rent due in respect of the last full or partial calendar month of the Term or
Renewal Term(s) shall be paid on the twentieth calendar day of the first calendar month
following the Expiration of the Term. The obligation to pay Percentage Rent shall survive
the Expiration of the Term or Renewal Term(s) as to any Percentage Rent which accrued
prior to the Expiration of the Term or Renewal Term(s).
SECTION 3.4 Impositions
(a) Obligation to Pay Impositions From and after the Commencement Date,
Tenant shall pay, in the manner provided in Section 3.4(c) below, all Impositions that at
any time thereafter are assessed, levied, confirmed, imposed upon or charged to Owner
or Tenant with respect to (i) the Premises, or (ii) any vault, passageway or space in, over
or under any sidewalk or street in front of or adjoining the Premises, or (iii) any other
appurtenances of the Premises, or (iv) any personal property, FF &E, Building Equipment
or other facility used in the operation thereof, or (v) any document to which Tenant is a
party creating or transferring an interest or estate in the Premises of, by or to Tenant, or
(vi) the use and occupancy of the Premises, or (vii) the activities and /or the transaction
contemplated by this Lease.
(b) Definition
"Imposition" or "Impositions" means the following imposed by a Governmental
Authority or any other lien, easement, encumbrance, covenant or restriction affecting the
Premises:
(i) real property taxes and general and special assessments (including,
without limitation, any special assessments for business
Agreement of Lease
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improvements or imposed by any special assessment district) or any
payments in lieu of any taxes or assessments;
(ii) personal property taxes;
(iii) sales and / or use taxes ;
(iv) water, water meter and sewer rents, rates and charges;
(v) excises;
(vi) levies;
(vii) license and permit fees;
(viii) any other governmental levies of general application, fees, rents,
assessments or taxes and charges, general and special, ordinary and
extraordinary, foreseen and unforeseen, now or hereafter enacted of
any kind whatsoever;
(ix) service charges of general application with respect to police and fire
protection, street and highway maintenance, lighting, sanitation and
water supply;
(x) fees, assessments or charges payable to Owner by Tenant under the
Lease or any other lien, encumbrance, covenant or restriction
affecting the Premises;
(xi) any fines, penalties and other similar governmental or other charges
applicable to the foregoing, together with any interest or costs with
respect to the foregoing.
(c) Payment of Impositions From and after the Commencement Date, Tenant
shall pay each Imposition or installment thereof not later than the date the same may be
paid without interest or penalty (which is the date of delinquency). However, if by law any
Imposition may, at the taxpayer's option, be paid in installments (whether or not interest
shall accrue on the unpaid balance of such Imposition), Tenant may exercise the option
to pay the Imposition in such installments and shall be responsible for the payment of such
installments with interest, if any.
(d) Evidence of Payment Tenant shall furnish to Owner, documents
reasonably satisfactory to Owner, evidencing the payment of each Imposition or
Agreement of Lease
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installment thereof within thirty (30) calendar days of payment of each.
(e) Evidence of Non - Payment Any certificate, advice or bill of the appropriate
official designated by law to make or issue the same or to receive payment of any
Imposition asserting non - payment of such Imposition shall be prima facie evidence that
such Imposition is due and unpaid at the time of the making or issuance of such certificate,
advice or bill, at the time or date stated herein. Tenant shall, immediately upon receipt of
any such certificate, advice or bill, deliver a copy of the same to Owner.
(f) Apportionment of Imposition Any Imposition relating to a fiscal period of the
taxing authority, a part of which occurs after the Commencement Date and a part of which
occurs before the Commencement Date or after the Expiration of the Term, shall be
apportioned pro rata between Owner and Tenant.
(g) Survival Notwithstanding Section 3.6 below, the provisions of this Section
3.4 shall survive the Expiration of the Term or Renewal Term(s), until any Imposition that
may be due and owning under this Lease has been paid in full.
SECTION 3.5 Net Lease It is the intention of Owner and Tenant that (a)
Rental be absolutely net to Owner without any abatement, diminution, reduction,
deduction, counterclaim, setoff or offset whatsoever, and (b) Tenant pay all costs,
expenses and charges of every kind or nature (except as expressly provided for herein to
the contrary) relating or allocable to the Premises that may arise or become due or
payable during or after, but attributable to a period falling within, the Term and Renewal
Term(s).
SECTION 3.6 Survival of Payment Obligations Each provision of this Lease
that obligates Tenant to pay Rental or any other amount shall survive the Expiration of the
Term or Renewal Term, whether or not such survival is specifically set forth in such
provision, until all Rental payable under such provision has been paid in full.
SECTION 3.7 Late Charges If Tenant fails to pay Rental or other amounts
which Tenant is obligated to pay under the terms of this Lease within fifteen (15) calendar
days of their due date, Tenant shall pay Owner, in addition to the amount otherwise due,
a one time late charge equal to ten percent (10 %) (the "Late Charge Rate ") of such
overdue amount. Interest shall accrue on all delinquent Rental and other amounts at the
maximum interest rate allowed by law. Tenant and Owner agree that the late charge set
forth herein represents a reasonable estimate of such costs and expenses and is fair
compensation to Owner for the loss suffered from such nonpayment by Tenant. No
acceptance by Owner of Rental, fees, charges or other payments in whole or in part for
any period or periods after a default by Tenant of any of the terms, covenants and
conditions hereof shall be deemed a waiver of any right on the part of Owner to terminate
Agreement of Lease
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this Lease or exercise any other remedies available to Owner. Any and all amounts due
and payable under this Article shall be considered additional Rental payable to Owner.
ARTICLE 4.
TENANT'S CONTRIBUTION
SECTION 4.1 Tenant's Contribution On or before the date the first building
permit is issued by the City for the Improvements, Tenant shall pay to the City of Sanford
the sum of Three Million Dollars ($3,000,000.00) as Tenant's contribution toward the public
portion of the Project, which contribution shall be placed in an interest bearing account and
shall be designated for payment of fees and costs associated with the design, permitting
or construction of the Public Improvements.
ARTICLE 5.
USE
SECTION 5.1 Use.
(a) Continuous Legal Use Tenant shall use and operate the Premises
throughout the Term and Renewal Term only as required by this Lease. In any event, the
Premises shall be used only in accordance with Final Certificate of Occupancy therefore
or Temporary Certificate of Occupancy, to the extent that a Final Certificate of Occupancy
has not been issued therefore.
(b) Scope of Use In accordance with Tenant's obligations to meet and comply
with the provisions of this Lease, Tenant shall, from and after the Hotel Opening Date,
actively and continuously use and operate the Premises as a first class, full service hotel
with appropriate ancillary uses and amenities, and for no other purpose without
interruption.
(c) Public Benefit Tenant acknowledges that the active and continuous use
and operation of the Premises as a first class, full service hotel with a training facility,
conference rooms, parking garage and retail shops as provided herein enhances the value
of the area, the City of Sanford and Seminole County, provides needed public services,
provides additional employment and other financial benefits to the City's economy and
provides a positive benefit to the City's waterfront and downtown area. The City
Commission of the City of Sanford has, therefore, found that this Hotel is in furtherance
of a valid public purpose.
SECTION 5.2 Prohibited Uses
(a) Tenant shall not use or occupy the Premises or any part of the Premises, and
Agreement of Lease
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neither permit nor suffer the Premises to be used or occupied, for any of the following
"Prohibited Uses "):
(i) any use not specifically authorized herein;
(ii) for any unlawful or illegal business, use or purpose; or
(iii) in such manner as may make void or voidable any insurance then in
force with respect to the Premises.
(b) Immediately upon its discovery of any Prohibited Use, Tenant shall take all
reasonably necessary steps, legal and equitable to compel discontinuance of such
business or use, including, if necessary, the removal from the Premises of any subtenants,
licensees, invitees or concessionaires.
SECTION 5.3 Hotel.
(a) First Class / Full Service Hotel Tenant shall cause the operation,
maintenance and management of the Hotel as a first class, full service hotel by a Permitted
Franchisor, which Hotel shall contain the following first class facilities and services (the
"Hotel'): (i) 300 guest rooms, (ii) a restaurant and bar, (iii) public areas and recreation
amenities expected of a first class hotel that appeal to both the center visitor and the resort
/ destination traveler, (iv) meeting and banquet facilities (including, without limitation,
kitchens and banquet and function rooms) to cater to in -house group meetings, with total
meeting space of 15,000 to 20,000 square feet, (v) prompt, professional valet, laundry and
bell services, (vi) food and beverage services to support the facilities at the Hotel and
Multi- Purpose Center, (vii) a connection from the Hotel to the Multi- Purpose Center, (viii)
a parking garage and surface parking with no less than six hundred (600) parking spaces,
and (ix) affiliation with and management by a Permitted Franchisor. Without limiting the
foregoing, the Hotel shall at all times contain food, beverage and catering facilities
(including, without limitation, kitchens and banquet and function rooms) sufficient to
service (i) the banquet and function facilities at the Hotel in the manner required of a first
class, full service hotel , (ii) the guest rooms and (iii) the Multi- Purpose Center. Tenant
shall maintain the appearance (without regard to matters of taste as the same relate to
decor, styling and aesthetics) and quality of the Hotel, and Tenant shall cause the same
to be managed and operated, at a level of quality satisfying the parties separate quality
standards agreement. Subject to the Feasibility Study, the definition of first class / full
service hotel may be refined by mutual written agreement of Owner and Tenant. Any
agreed upon modifications shall be incorporated and made part of the parties separate
quality standards agreement.
ARTICLE 6.
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INSURANCE; BONDING
SECTION 6.1 Insurance Requirements
'"
(a) Liability Requirements At all times during the Term, Tenant, at its sole cost
and expense, as an Operational Expense, shall carry or cause to be carried insurance
against liability with respect to the Premises and the operations related thereto, whether
conducted on or off the premises in an amount of not less than Ten Million Dollars
($10,000,000.00) per occurrence, combined single limit, and designating Tenant as a
named insured and Owner as an additional named insured. Such insurance shall meet
all of the standards, limits, minimums and requirements described in Section 6.7 below.
(b) Property Insurance At all times during the Term, Tenant, at its sole cost
and expense, as an Operating Expense, shall carry or cause to be carried "All Risk" (or
its equivalent) property damage insurance protecting Tenant and Owner as their interests
may appear against loss to the Premises, Land and Improvements and meeting all of the
standards, limits, minimums and requirements described in Section 6.8 below.
(c) Other Insurance At all times during the Term, Tenant shall procure and
carry insurance meeting all of the standards, limits, minimum and requirements described
in Section 6.9 below.
(d) Construction Insurance and Bonds Prior to the commencement of any
Construction Work, Tenant shall procure or cause to be procured, and after such dates
shall carry or cause to be carried, until final completion of such work, in addition to and not
in lieu of the insurance required by the foregoing subsections (a), (b) and (c), the
insurance and bonds described in Section 6.10 below.
SECTION 6.2 Treatment of Proceeds
(a) Proceeds of Casualty Insurance in General Insurance proceeds payable
with respect to a property loss shall be payable and such proceeds shall be applied to the
payment in full of the cost of such Casualty Restoration in accordance with the provisions
of Article 7 below.
(b) Cooperation in Collection of Proceeds Tenant and Owner shall cooperate
in connection with the collection of any insurance proceeds that may be due in the event
of a loss, and Tenant and Owner shall, as soon as practicable, execute and deliver such
proofs of loss and other instruments as may be required of Tenant and Owner,
respectively, for the purpose of obtaining the recovery of any such insurance proceeds.
SECTION 6.3 General Provisions Applicable To All Parties
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(a) Insurance Companies All of the insurance policies required by this Article
shall be procured from companies in good standing with the Florida Insurance
Commissioner's office and licensed or authorized by the Insurance Commissioner of the
State of Florida to do business in the State of Florida and having agents upon whom
service of process may be made in the State of Florida that have a rating in the latest
edition of "Best's Key Rating Guide" of "A- :VII" or better or another comparable rating
reasonably acceptable to Owner.
(b) Required Forms All references to forms and coverages in this Article shall
be those used by the Insurance Services Organization (ISO) or equivalent forms
reasonably satisfactory to Owner in all material respects.
(c) Required Certificates Certificates of insurance evidencing the issuance of
all insurance required by this Article, describing the coverage and providing for ten (10)
calendar days prior notice to Owner by the insurance company of cancellation or non -
renewal, shall have been delivered to Owner by the Commencement Date, and in the case
of any policies replacing or renewing any policies expiring during the Term, not later than
ten (10) calendar days before the expiration dates of any expiring policies. The certificates
of insurance shall be issued by or on behalf of the insurance company and shall bear the
original signature of an officer or duly authorized agent having the authority to issue the
certificate. The insurance company issuing the insurance shall also deliver to Owner,
together with the certificates, proof reasonably satisfactory to Owner that the premiums for
each policy have been paid. During the performance of any Construction Work, Tenant
shall deliver to Owner an entire duplicate original or a copy (certified by Tenant to be true,
complete and correct) of each policy. At all other times, Tenant shall deliver to Owner and
entire duplicate original or a copy (certified by Tenant to be true, complete and correct) of
each policy within a reasonable period of time after Owner's request therefore. Tenant
shall notify Owner of any material changes in the coverage provided under any policy
promptly after requesting an insurance company to make such change or receiving any
notice from an insurance company advising Tenant of any such change; provided,
however, that no such change may reduce or otherwise modify the insurance coverage
required under this Lease.
(d) Compliance With Policy Requirements Tenant shall not violate or permit
to be violated any of the conditions, provisions or requirements of any insurance policy
required by this Article, and Tenant shall perform, satisfy and comply with, or cause to be
performed, satisfied and complied with, all conditions, provisions and requirements of all
insurance policies.
(e) Required Insurance Policy Clauses Each policy of insurance required to
be carried pursuant to the provisions of this Article and each certificate issued by or on
behalf of the insurer shall contain (i) a provision stating substantially that no act or
Agreement of Lease
Page 22 of 94
omission of Tenant (or any other Person) or any use or occupation of the premises for
purposes more hazardous than are permitted by the policy shall not invalidate the policy
as to Owner or affect or limit the obligation of the insurance company to pay to Owner the
amount of any loss sustained and that no act or omission of Owner shall invalidate the
policy as to Tenant or affect or limit the obligation of the insurance company to pay to
Tenant the amount of any loss; (ii) a written waiver of the right of subrogation against all
of the named insured and additional insured, including Owner in its capacity as owner of
the Land, with respect to losses payable under such policy; (iii) a clause designating
Owner as loss payee or additional insured, as their interests may appear for losses in
excess of One Million Dollars ($1,000,000.00), adjusted for inflation; and (iv) an agreement
by the insurer that such policy shall not be canceled, materially modified, or denied
renewal without at least ten (10) calendar days prior written notice to Owner, specifically
covering, without limitation, cancellation or non - renewal for non - payment of premium.
(f) Separate Insurance Except as provided in Section 6.6 below, Tenant shall
not carry separate liability or property insurance concurrent in form or contributing in the
event of loss with that required by this Lease to be furnished by Tenant, unless Owner is
included therein as an additional insured with respect to liability or loss payee with respect
to property, as their interests may appear, with loss payable as in this Lease provided.
Tenant shall immediately notify Owner of the carrying of any such separate insurance and
shall cause the same to be delivered as in this Lease hereinbefore required.
(g) Duration of Policies Tenant shall procure policies for all insurance required
by any provision of this Lease for periods of not less than one (1) year and shall procure
renewals thereof from time to time at least thirty (30) calendar days before the expiration
thereof, except that Builders' Risk Insurance shall only be renewed for the term of any
construction period.
(h) Defective Certificates and Policies Following receipt of any policy or
certificate or insurance from Tenant, Owner may notify Tenant in writing that, in the opinion
of Owner, the insurance represented thereby does not conform to the requirements of this
Article 6, and Tenant shall have (i) fifteen (15) calendar days in which to cure any such
defect in respect of amount and (ii) thirty (30) calendar days to cure any other defect in
respect of such insurance.
(i) Other Obligations Of Tenant Compliance by Tenant with the requirements
of this Article 6 shall not relieve Tenant of any liability in excess of the insurance coverage
provided under any insurance policy or of Tenant's liability and obligations under any other
provision of this Lease, nor shall it preclude Owner from taking such other actions as may
be available to Owner under any other provision of this Lease or at law or in equity.
SECTION 6.4 Additional Coverage
Agreement of Lease
Page 23 of 94
(a) Other Insurance Tenant shall maintain such other insurance, in such
amounts as from time to time reasonably may be required by Owner, against such other
insurable hazards as at the time are commonly insured against in the case of hotels in
Florida of a size, nature and character similar to the size, nature and character of the
Hotel.
(b) Adjustment Of Limits All of the limits of insurance required pursuant to this
Article 6 shall be subject to review by Owner and, in connection therewith, Tenant shall
carry or cause to be carried such additional amounts as Owner may reasonably require
from time to time, but Owner may not impose such new limits any more frequently than
once in every five (5) year period from the date of the Certificate of Occupancy of the
Hotel. Any request by Owner that Tenant carry or cause to be carried additional amounts
of insurance shall not be deemed reasonable unless such additional amounts are
commonly carried in the case of hotels in Florida of a size, nature and character similar
to the size, nature and character of the Hotel; provided, however, that the provisions of this
subsection (b) shall not relieve Tenant of its obligation to carry or to cause to be carried
All Risk insurance in an amount not less than the Replacement Value as provided in
Section 6.12(a) below. Except as otherwise provided herein, Owner shall also have the
right, throughout the Term, to approve the amount of any loss deductible contained in any
insurance policy required pursuant to the provisions hereof. Tenant shall be responsible
for all deductibles.
SECTION 6.5 No Representation As To Adequacy Of Coverage The
requirements set forth herein with respect to the nature and amount of insurance coverage
to be maintained or caused to be maintained by Tenant hereunder shall not constitute a
representation or warranty by Owner or Tenant that such insurance is in any respect
adequate.
SECTION 6.6 Blanket Or Umbrella Policies The insurance required to be
carried by Tenant pursuant to the provisions of this Lease may, at Tenant's election, be
effected by blanket, wrap -up and / or umbrella policies issued to Tenant covering the
Premises and other properties owned or leased by Tenant, provided such policies
otherwise comply with the provisions of this Lease and allocate to the Premises the
specified coverage, including, without limitation, the specified coverage for all insureds
required to be named as insureds or additional insureds hereunder, without possibility of
reduction or coinsurance by reason of, or because of damage to, any other properties
names therein. If the insurance required by this Lease shall be effected by any such
blanket or umbrella policies, Tenant shall furnish to Owner, upon Owner's request,
certificates of insurance and copies (certified by Tenant to be true, complete and correct)
of such policies as provided in Section 6.3(c) above, together with schedules annexed
thereto setting forth the amount of insurance applicable to the Premises.
Agreement of Lease
Page 24 of 94
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ka
SECTION 6.7 Liability Insurance Requirements The insurance required by
Section 6.1(a) above shall consist of commercial general liability insurance protecting
against liability for bodily injury, death, property damage and personal injury. Such
insurance shall (within the limits of the insurance required by Section 6.1(a) above):
(a) include a broad form property damage liability endorsement with fire legal
liability limit of not less than $150,000, subject to adjustment for inflation;
(b) contain blanket contractual liability insurance coverage written contractual
liability;
(c) contain contractual liability insurance specifically covering Tenant's
indemnification obligation in this Lease, to the extent such indemnification
obligation is for an insurable risk;
(d) contain independent contractors coverage;
(e) contain a notice of occurrence clause;
(f) contain a knowledge of occurrence clause;
(g) contain an errors and omissions clause;
(h) contain coverage for suits arising from the use of reasonable force to protect
persons and property;
(i) contain an endorsement providing that excavation and foundation work are
covered and the "XCU" exclusions have been deleted;
0) contain a waiver of completion and occupancy condition;
(k) contain no employee and contractual exclusions in respect of the personal
injury coverage;
(1) contain no exclusions unless approved by Owner, other than the industry
standard exclusions for hotels of similar size, nature and character location;
(m) contain Products Liability / Completed Operations coverage; and
(n) provide for a deductible determined by Tenant, but not more than $150,000
per loss.
Agreement of Lease
Page 25 of 94
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The liability insurance required by Section 6.1(a) above shall be afforded in a form
no more restrictive than the latest edition of the Commercial General Policy, without
restrictive endorsements, as filed by the Insurance Services Office of the State of Florida.
The insurance required by Section 6.1(a) above shall also include automobile
liability insurance coverage any owned, leased, non -owned or hired automobile or other
motor vehicle used in connection with the Premises in an amount not less than One Million
Dollars ($1,000,000.00) per occurrence, subject to adjustment for inflation, with a
deductible determined by Tenant of not more than One Hundred Fifty Thousand Dollars
($150,000). Such automobile insurance shall be afforded in 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 of the State of Florida.
SECTION 6.8 Property Insurance Requirements The insurance required by
Section 6.1(b) above shall consist at least of property damage insurance under an "All
Risk" policy or its equivalent covering the Premises and all Land and Improvements with
replacement cost valuation and a stipulated value endorsement (to be provided not later
than promptly following the Substantial Completion of the Hotel) in an amount not less than
the full Replacement Value (determined in accordance with Section 6.12 below) and
including the following coverages or clauses:
(a) coverage for physical loss or damage to the Improvements;
(b) a replacement cost valuation without depreciation or obsolescence clause;
(c) debris removal coverage;
(d) provision for a deductible determined by Tenant, but not more than One
Hundred Fifty Thousand Dollard ($150,000) per loss ;
(e) contingent liability from operation of building laws;
(f) demolition cost for undamaged portion coverage;
(g) increased cost of construction coverage;
(h) an agreed or stipulated amount endorsement (to be provided not later than
promptly following the Substantial Completion of the Hotel) in an amount not
less than the full Replacement Value negating any coinsurance clauses;
(i) flood coverage (to the extent available at commercially reasonable rates,
limits and deductibles);
Agreement of Lease
Page 26 of 94
(j) windstorm coverage (to the extent available at commercially reasonable
rates, limits and deductibles);
(k) coverage for explosion caused by steam pressure -fired vessels (which
coverage may be provided under a separate policy reasonably approved by
Owner);
(1) business interruption coverage in accordance with Section 6.9 below;
(m) a clause designating Owner as additional insured, as their interests may
appear; and
(n) contain no exclusions unless approved in writing by Owner. Owner shall
approve industry standard exclusions for hotels of similar size, location,
nature and character of the Hotel.
Tenant shall be named insured, and Owner shall be an additional insured, as their
interests may appear. The Owner shall be designated loss payee on such All Risk policy
for the benefit of Owner and Tenant. If not included within the All Risk coverage above,
Tenant shall also carry or cause to be carried coverage against damage due to (i) water
and sprinkler leakage and collapse (which shall at least insure against damage caused by
water or any other substance discharged from any part of the fire protection equipment for
the Premises or from adjoining component parts or supports of such tanks); which shall be
written with limits of coverage of not less than the full Replacement Value per occurrence,
with a deductible of not more than One Hundred Fifty Thousand Dollars ($150,000) and
(ii) flood, which shall be written with limits of coverage not less than Ten Million Dollars
($10,000,000) with a deductible of not more than Five Hundred Thousand Dollars
($500,000), to the extent available at commercially reasonable rates and deductibles.
Without limiting any of the foregoing provisions of this Section 6.8, the All Risk policy shall
at least insure against such hazards and risks as may now or in the future be included
under the {"Standard Form of Fire, Extended Coverage, and Vandalism and Malicious
Mischief' insurance policy, without restrictive endorsements, filed by the Insurance
Services Office of the State of Florida.
If Tenant elects to insure Tenant's personal property used in connection with the
Premises, the replacement value of such personal property shall be added to the amount
of insurance required by this Section.
SECTION 6.9 Other Insurance Requirements The insurance required by
Section 6.1(c) above shall consist at least of the following:
(a) Business Interruption Insurance to include Rent Insurance on an "All Risk"
Agreement of Lease
Page 27 of 94
io
basis in an amount equal to (i) prior to the Certificate of Occupancy of the Hotel, not less
than the annual Base Rent and (ii) following the Certificate of Occupancy of the Hotel, not
less than the aggregate amount of annual Base Rent and annual Percentage Rent, if any
(based upon the then current budget prepared by Tenant). The insurance specified in this
subsection shall:
(i) provide coverage against all insurable risks of physical loss or
damage to the Improvements;
(ii) provide extra expense coverage, with a limit of at least One Million
Dollars ($1,000,000) to cover overtime and other extra costs incurred
to expedite repairing or rebuilding the damaged portion of the
Premises;
(iii) provide for coverage through the attainment of pre- existing business
levels;
(iv) contain flood and windstorm coverage to the extent available at
commercially reasonable rates, limits and deductibles;
(v) contain explosion caused by steam pressure fired vessels coverage
(which coverage may be provided under a separate policy reasonably
approved by Owner);
(vi) provide for a deductible determined by Tenant, but for other than
flood or windstorm not more than One Hundred Fifty Thousand
Dollars ($150,000) per loss;
(vii) designate Owner and Tenant as loss payee but shall be payable only
to Tenant with respect to Business Interruption proceeds not
exceeding Five Hundred Thousand Dollars ($500,000) per
occurrence; and
(viii) contain no exclusions, unless approved by Owner, other than industry
standard exclusions for hotels of similar size and location.
(b) Statutory Workers' Compensation and Disability Benefits Insurance and any
other insurance required by law covering all persons employed by Tenant, contractors,
subcontractors or any entity performing work on or for the Premises, Land or the
Improvements (unless and to the extent provided by such other parties), including
Employers Liability coverage, all in amounts not less than the statutory minimum, except
that Employers Liability coverage shall be in an amount not less then One Million Dollars
Agreement of Lease
Page 28 of 94
($1,000,000).
(c) Boiler and Machinery Insurance, covering the entire heating, ventilating and
air - conditioning systems, in all its applicable forms, including Broad Form, boiler explosion,
extra expense and loss of use in an amount not less than the replacement cost of such
heating, ventilating and air conditioning systems, located on any portion of the Premises
and other machinery located on any portion of the Premises, which shall designate Tenant
as named insured and loss payee and designate Owner as an additional insured, as their
interests may appear. Without limiting the foregoing, such insurance shall at least insure
against such perils and hazards as may now or in the future be included under any Boiler
and Machinery policy filed with and approved by the Insurance Commissioner of the State
of Florida.
(d) Dram Shop Insurance with policy limits covering the full amount of potential
liability from time to time provided or imposed upon the sellers of alcoholic beverages
under the laws of the State of Florida, and fully protecting both Tenant and Owner in
connection with any such sales of alcoholic beverages on the Premises; provided,
however, that said policy limits shall not at any time be less than the comprehensive
general liability insurance limit required by this Lease. If Tenant shall fail to procure or
maintain such Dram Shop insurance, then all sales of alcoholic beverages on the Premises
shall forthwith be suspended until such coverage is in force.
(e) Environmental Impairment Liability Insurance with policy limit coverage in an
amount of at least Two Million Dollars ($2,000,000.00) per loss with an insurance company
reasonably acceptable to Owner with Owner named as an additional insured. Such
insurance shall at least insure against (i) claims arising out of or resulting from any action
of or by Tenant (or its employees) regarding use of the Premises, and (ii) claims made
against Tenant and Owner for Hazardous Materials on, at, under or emanating from the
Premises, and (iii) claims made for remediation required by environmental regulations as
a result of pollution conditions.
SECTION 6.10 Construction Insurance and Bonding Requirements The
insurance required by Section 6.1(d) above shall consist at least of the following:
(a) Builder's Risk Insurance (standard "All Risk" or equivalent coverage) in an
amount not less than the cost of reconstruction, written on a completed value basis or a
reporting basis, for property damage protecting Tenant, Owner and the general contractor,
with a deductible determined by Tenant of not more than One Hundred Fifty Thousand
Dollars ($150,000), subject to adjustment for inflation (except as to flood and windstorm)
to include Rental payment coverage from the date of projected completion and extending
for at least twelve (12) months following such date of projected completion.
Agreement of Lease
Page 29 of 94
(b) Automobile liability insurance covering any owned, leased, non -owned or
hired automobile or other motor vehicle used in connection with work being performed on
or for the Premises in an amount not less than One Million Dollars ($1,000,000) per
occurrence, with a deductible determined by Tenant of not more than One Hundred Fifty
Thousand Dollars ($150,000). Such insurance shall be afforded in a form no more
restrictive than the latest edition of the Business Automobile Liability Policy, without
restrictive endorsements, filed by the Insurance Services Office of the State of Florida.
(c) The Architect and design engineers, with respect to the Construction of the
Hotel, shall provide, pay for and maintain professional liability insurance for protection from
claims arising out of performance of professional services caused by negligent error,
omission or act for which the insured is legally liable. Such liability insurance will provide
coverage of at least One Million Dollars ($1,000,000) in respect of all of the applicable
Construction Work on the Premises.
(d) Risk of loss from any unforeseen obstructions, encumbrances, difficulties or
conditions encountered in the prosecution of work, or the action of the elements, or from
any act or omission not authorized by this Lease on the part of the contractor or its
subcontractors, agents or employees.
(e) If any work is to be undertaken on or about navigable waters, coverage must
be included for the federal Longshore and Harbor Workers Act and the Jones Act.
(f) The insurance required pursuant to Section 6.7 above.
Tenant shall not permit Tenant's contractors to commence any Construction Work
until the required insurance has been obtained and certified copies of policies or
certificates have been delivered to Owner. In the event that any expired policy or
certificate is not replaced with a new or renewed policy or certificate satisfying the
requirements of this Lease, Owner shall have the right to suspend all Construction Work
until such time as the new or renewed policy or certificate is received by Owner.
In addition to the insurance described above, before commencing any Construction
Work, including but not limited to the Construction of the Hotel, Tenant shall require each
contractor and construction manager performing services in connection with such
Construction Work to maintain, at all times, a valid Construction Performance Bond and
a valid Labor and Material Payment Bond, both of which shall be issued in an amount not
less than the full amount of the construction, labor and / or material being performed and
purchased. Each bond must guarantee to Owner the completion and performance of the
work being performed by the contractor as well as full payment of all suppliers, material
vendors, laborers or sub - contractors contracted by Tenant or otherwise providing services
to the Premises. Each bond provided hereunder shall be executed by a surety company
Agreement of Lease
Page 30 of 94
of recognized standing authorized to do business in the State of Florida and having a
resident agent in Central Florida and having been in business with a record of successful
continuous operation for at least five (5) years. Each bond shall be in the form and content
approved by the Owner. Furthermore, such surety company must have at least the
following minimum ratings in the latest revision of Best's Insurance Report:
Amount of
Best's
Best's Financial
Bond in Dollars
Policyholder's Ratings
Size Category
$ 0 to 500,000
A
Class VIII
500,001 to 750,000
A
Class IX
750,001 to 1,000,000
A
Class X
1,000,001 to 1,250,000
A
Class XI
1,250,001 to 1,500,000
A
Class XI
1,500,001 to 2,000,000
A
Class XI
2,000,001 or more
A
Class XII
SECTION 6.11 Annual Aggregates
If there is imposed under any liability insurance policy required hereunder, an
annual aggregate which is applicable to claims other than products liability and completed
operations, such an annual aggregate shall not be less than two (2) times the per
occurrence limit required for such insurance.
SECTION 6.12 Determination Of Replacement Value
Definition The current replacement value of the Improvements (the "Replacement
Value ") shall be the full cost of replacing the Improvements including, without limitation,
all hard costs of construction as well as the costs of post - casualty debris removal, and
other costs, including without limitation, architects', engineers', surveyors', assessors' and
other professional fees and development fees. Upon Substantial Completion of the Hotel,
Replacement Value of the Improvements shall be deemed to be an amount equal to the
actual costs incurred or expended in connection with the construction of the Premises as
certified by the architect upon completion of the Premises, other than foundations and
financing and other soft costs not applicable to replacement, adjusted for each year after
completion of the Premises in accordance with the percentage change in the Building
Index. If the insurance required by Section 6.8 above is not sufficient to cover the
Replacement Value, then within fifteen (15) calendar days after such adjustment, said
insurance shall be increased or supplemented to fully cover such Replacement Value. In
no event shall such Replacement Value be reduced by depreciation or obsolescence of
the Improvements.
Agreement of Lease
Page 31 of 94
10*, 700w,
SECTION 6.13 Subleases All Subleases shall require the Subtenant to carry
liability insurance naming Tenant and Owner as additional insureds with limits reasonably
prudent under the circumstances.
ARTICLE 7.
DAMAGE, DESTRUCTION AND RESTORATION
SECTION 7.1 Notice to Owner If the Hotel is damaged or destroyed in whole
or in any material part by fire or other casualty, Tenant shall notify Owner of same as soon
as reasonably possible after Tenant's discovery of same.
SECTION 7.2 Casualty Restoration
(a) Obligation to Restore If all or any portion of the Hotel is damaged or
destroyed by fire or other casualty, ordinary or extraordinary, foreseen or unforeseen,
whether prior to of after completion of the initial Construction of the Hotel, Tenant shall,
in accordance with the provisions of this Article 7 and Article 12 below (the provisions of
Article 12 shall be deemed to apply to all Construction Work necessary to complete the
Casualty Restoration, to the extent the same are not inconsistent with the terms hereof),
restore the Premises to the condition thereof as it existed immediately before such
casualty (a "Casualty Restoration "), regardless of whether the Net Insurance Proceeds
shall be sufficient therefor. "Net Insurance Proceeds" shall mean the actual amount of
insurance proceeds paid following a fire or other insured casualty.
(b) Commencement Of Construction Work Subject to Unavoidable Delays,
Tenant shall commence the Construction Work in connection with a Casualty Restoration
within ninety (90) calendar days after receipt of the Net Insurance Proceeds arising from
the damage or destruction which caused the need for such Casualty Restoration, and
Tenant shall diligently pursue the completion of such Casualty Restoration.
(c) Paydown Of Mortgages Prohibited No Mortgagee (Recognized or
otherwise) shall have the right to apply any insurance proceeds paid in connection with
any casualty toward payment of the sum secured by its Mortgage to the extent that this
Lease requires that Tenant effect a Casualty Restoration with such proceeds.
SECTION 7.3 Restoration Funds
(a) Except as may otherwise be required by any Recognized Mortgage, all Net
Insurance Proceeds shall, if in an amount equal to One Million Dollars ($1,000,000),
adjusted for inflation, or less per occurrence, be paid to Tenant and applied as provided
herein. If greater than One Million Dollars ($1,000,000), adjusted for inflation, then all Net
Insurance Proceeds shall be deposited in escrow with the Recognized Mortgagee, or, if
Agreement of Lease
Page 32 of 94
none, with another institutional lender pursuant to a mutually acceptable trust agreement.
Provided Tenant is conducting the Casualty Restoration in accordance with this Lease, the
Net Insurance Proceeds shall be paid out from time to time as the Casualty Restoration
progresses, upon the written request of Tenant, which request shall be accompanied by
the following:
(i) A certificate signed by Tenant and the architect or engineer in charge
of the Casualty Restoration (copy provided to Owner) dated not more
than fifteen (15) calendar days prior to such request, setting forth:
(1) that the sum then requested either has been paid by Tenant or
is justly due to contractors, subcontractors, materialmen,
engineers, architects or other persons who have rendered
services or furnished materials for the work specified, and
stating that no part of such expenditures has been or is being
made the basis of any previous or then pending request for the
withdrawal of the Net Insurance Proceeds;
(2) a brief description of the services and materials;
(3) that, except for the amount described in Section 7.3(a)(i)(1)
above, there is no outstanding indebtedness actually known to
the persons signing such certificate, after due inquiry, which is
then due for labor, materials or services in connection with the
Casualty Restoration;
(4) that the cost, as estimated by the persons signing such
certificate, of the work required to complete the Casualty
Restoration does not exceed the amount of the remaining Net
Insurance Proceeds, plus any amount deposited by Tenant to
defray the expenses of the Casualty Restoration; and
(5) that the work described has been completed in accordance
with the plans and specifications applicable thereto, in a good
and workerlike manner and in accordance with all
Requirements.
(ii) Lien Waivers, title insurance company reports or such other
evidence, reasonably satisfactory to Owner, to the effect that there
has not been filed with respect to the Premises, any vendor's,
mechanic's, laborer's, materialman's or other lien which has not been
discharged or record, except such as will be discharged by payment
Agreement of Lease
Page 33 of 94
of the amount then requested; and
(iii) Such other documentation regarding the Casualty Restoration as
Owner shall reasonably require.
(b) Tenant shall, prior to the commencement of the Casualty Restoration, furnish
to Owner an estimate of the total cost of the Casualty Restoration certified by the architect
or engineer in charge of the Casualty Restoration. If such cost estimate or any
subsequent estimate provided pursuant to Section 7.3(a)(i)(4) above shall show that the
cost of completing the Casualty Restoration is in excess of the amount of the Net
Insurance Proceeds then available, Tenant shall promptly deposit with the holder of the
Net Insurance Proceeds an amount equal to such excess. The amount so deposited shall
be included in the Net Insurance Proceeds for all purposes of this Article.
(c) Upon compliance by Tenant with the foregoing provisions of this Article, the
holder of the Net Insurance Proceeds shall pay, to Tenant or the persons named in the
certificate referred to in Section 7.3(a) above, from the Net Insurance Proceeds, an amount
equal to ninety percent (90 %) of the cost of the Casualty Restoration which is evidenced
by the request. At the completion of each contract or subcontract with the Casualty
Restoration, the balance of the Net Insurance Proceeds relating to that portion of the work,
to the extent of and as required to complete the payment of Casualty Restoration costs
relating to that portion of the work, shall be paid to Tenant and Tenant shall, promptly
following the release of the retainage, provide to Owner reasonably evidence that the
Casualty Restoration relating to that portion of the work has been paid for in full.
(d) If the amount of any Net Insurance Proceeds shall exceed the entire cost of
the Casualty Restoration, such excess, upon completion of the Casualty Restoration, shall
be disbursed first to Owner, in respect of all unpaid Rental due and owing to Owner, and
second to Tenant.
SECTION 7.4 Effect Of Casualty On This Lease This Lease shall not
terminate, be forfeited or be affected in any manner, and there shall be no reduction or
abatement of Rental by reason of damage to, or total or partial destruction of, or
untenantability of, the Premises or any part thereof resulting from such damage or
destruction. Tenant's Rental obligations hereunder shall continue as though the Premises
had not been damaged or destroyed and shall continue without abatement, suspension,
diminution or reduction whatsoever. Subject to Unavoidable Delays and taking into
account Tenant's Casualty Restoration obligations (including, without limitation, the effect
of the casualty and the Casualty Restoration on the Tenant's ability to comply with the
parties separate quality standards agreement), Tenant's non - Rental obligations hereunder
shall continue as though the Premises had not been damaged or destroyed and shall
continue without abatement, suspension, diminution or reduction whatsoever.
Agreement of Lease
Page 34 of 94
ARTICLE 8.
CONDEMNATION
SECTION 8.1 Substantial Taking
(a) Termination Of Lease For Substantial Taking If all or Substantially All of
the Premises are taken (excluding a taking of the fee interest in the Premises if, after such
taking, Tenant's rights under this Lease are not affected and no rights of any Recognized
Mortgagee are affected) for any public purpose by any lawful power or authority by the
exercise of the right of condemnation or eminent domain or by agreement among Owner,
Tenant, Recognized Mortgagee and those authorized to exercise such right, this Lease
shall terminate on the Date of Taking and the Rental payable by Tenant hereunder shall
be apportioned and paid to the Date of Taking.
(b) Disbursement Of Award If all or Substantially All of the Premises are taken
or condemned as provided in Section 8.1(a) above, the Net Condemnation Award paid or
payable to Owner, Tenant or any Recognized Mortgagee in connection with such taking
or condemnation shall be apportioned as follows:
(i) There shall be determined the fair market value of each of Owner's
Interest in the Premises and Tenant's Interest in the Premises, such
determination to be made by appraisal. Each such appraisal shall be
based upon an arm's length sale to a third party buyer, taking into
account the then current state of title as well as, in the case of
Owner's Interest in the Premises, the continued existence of this
Lease.
(ii) Owner shall receive the portion of the Net Condemnation Award
equal to the product of (a) the Net Condemnation Award multiplied by
(b) a fraction, (1) the numerator of which is such appraised value of
Owner's Interest in the Premises and (2) the denominator of which is
the aggregate of such appraised value of Owner's Interest in the
Premises and such appraised value of Tenant's Interest in the
Premises.
(iii) Tenant or, if required by any Recognized Mortgagee, any Recognized
Mortgagee, shall receive the portion of the Net Condemnation award
equal to the product of (a) the Net Condemnation Award multiplied by
(b) a fraction, (1) the numerator of which is such appraised value of
Tenant's Interest in the Premises and (2) the denominator of which is
the aggregate of such appraised value of Owner's Interest in the
Premises and such appraised value of Tenant's Interest in the
Agreement of Lease
Page 35 of 94
Premises.
(iv) Notwithstanding paragraphs (i) through (iii) above, if Owner, Tenant
and any Recognized Mortgagee negotiate an award with the taking
or condemning authority which provides for an allocation of such
award between Owner's Interest in the Premises and Tenant's
Interest in the Premises, such allocation shall be binding upon
Owner, Tenant and such Recognized Mortgagee.
(c) Definitions
(i) "Date of Taking" means the earlier of (1) the date on which actual
possession of all or Substantially All of the Premises, or any part
thereof, as the case may be, is acquired by any lawful power or
authority pursuant to the provisions of applicable law or (2) the date
on which title to all or Substantially All of the Premises, or any part
thereof, as the case may be, has vested in any lawful power or
authority pursuant to the provisions of applicable law.
(ii) "Substantially All of the Premises" means such portion of the
Premises as, when so taken, would lease, in Owner's good faith
determination, a balance of the Premises that, due either to the area
so taken or the location of the part so taken in relation to the part not
so taken, would not, under economic conditions, physical constraints,
zoning laws, building regulations and other Requirements then
existing, readily accommodate a new or reconstructed building or
buildings and other improvements of a type fully comparable to the
Improvements existing at the Date of Taking and which would not
readily accommodate a first class, full service hotel as required under
this Lease. Owner shall notify Tenant, on or about the Date of
Taking, in writing of its determination as to whether or not
"Substantially All of the Premises" has been taken. If Owner and
Tenant do not mutually agree that "Substantially All of the
Premises" has been taken, then this Lease shall not terminate and
expire but shall continue in force and effect, subject to the other
provisions of this Article 8. If Owner determines and Tenant mutually
agree "Substantially All of the Premises" has been taken, then this
Lease shall terminate and expire on the Date of Taking pursuant to
Section 8.1(a) above.
(iii) "Net Condemnation Award" shall mean the actual amount of the
award paid in connection with or arising from the acquisition or other
Agreement of Lease
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W
taking of all or Substantially All of the Premises or any portion of the
Premises by any authority, less all reasonable out -of- pocket
expenses incurred by Owner, Tenant or Recognized Mortgagee in
connection with obtaining such award, including, without limitation, all
reasonable attorneys' fees and disbursements incurred in connection
therewith.
SECTION 8.2 Less Than A Substantial Taking
(a) Taking Of Less Than Substantially All Of The Premises If less than
Substantially All of the Premises are taken for any public or quasi - public purpose by any
lawful power or authority by the exercise of the right of condemnation or eminent domain
or by agreement among Owner, Tenant, any Recognized Mortgagee and the entity
authorized to exercise such right, whether prior to or after the completion of the
Construction of the Hotel, this Lease shall continue for the remainder of the Term (subject
to paragraph (b) below) without diminution of any of Tenant's obligations hereunder, but
with a fair and equitable abatement of Base Rent.
(b) Obligation To Restore The Premises If less than Substantially All of the
Premises are taken as provided in Section 8.2(a) above, whether prior to or after the
completion of the Construction of the Hotel, Tenant shall, in accordance with the
provisions of this Article 8 and Article 12 below (the provisions of which Article 12 shall be
deemed to apply to all Construction Work necessary to complete the Condemnation
Restoration, to the extent the same are not inconsistent with the terms hereof), restore the
remaining portion of the Premises, to the extent feasible, to the condition thereof as it
existed immediately before such taking (a "Condemnation Restoration "), regardless of
whether the Net Condemnation Award shall be sufficient therefor.
(c) Disbursement If less than Substantially All of the Premises are taken as
provided in Section 8.2(a) above, the Net Condemnation Award payable to Owner, Tenant
and any lender or mortgagee claiming through either of them shall be apportioned as
follows: (1) first to the cost of the Condemnation Restoration; and (2) second to Owner and
(subject to the rights of any Recognized Mortgagee) Tenant, which, as to Owner, shall be
in the same proportion as the loss attributable to the Land bears to the sum of the loss
attributable to the Land and Tenant's leasehold estate in the Land and, as to Tenant, shall
be in the same proportion as the loss attributable to Tenant's leasehold estate bears to the
sum of the loss attributable to the Land and Tenant's leasehold estate in the Land.
(d) Commencement Of Construction Work Subject to Unavoidable Delays,
Tenant shall commence the Construction Work in connection with a Condemnation
Restoration within ninety (90) calendar days after receipt of all building permits, which
shall be applied for no more than ninety (90) days following receipt of the Net
Agreement of Lease
Page 37 of 94
'-,
Condemnation Restoration and shall diligently pursue the completion of such
Condemnation Restoration.
(e) Paydown Of Mortgages Prohibited No Mortgagee (Recognized or
otherwise) shall have the right to apply any award proceeds paid in connection with any
taking toward payment of the sum secured by its Mortgage to the extent that this Lease
requires that Tenant effect a Condemnation Restoration with such proceeds.
SECTION 8.3 Restoration Funds
(a) If in connection with a taking the Net Condemnation Funds are in excess of
One Million Dollars ($1,000,000), then the Net Condemnation Award shall be deposited
in escrow with the Recognized Mortgagee, or, if none, with an institutional lender pursuant
to a mutually acceptable trust agreement. Except as may otherwise be required by a
Recognized Mortgagee, if such Net Condemnation Funds are less than or equal to One
Million Dollars ($1,000,000), the same shall be paid directly to Tenant to be applied as
provided herein. Provided Tenant is conducting the Condemnation Restoration in
accordance with this Lease, the Net Condemnation Award shall be paid out from time to
time as the Condemnation Restoration progresses, upon the written request of Tenant,
which request shall be accompanied by the following:
(i) A certificate signed by Tenant and the architect or engineer in charge
of the Condemnation Restoration, reasonably satisfactory to Owner,
dated not more than fifteen (15) calendar days prior to such request,
setting forth:
(1) that the sum then requested either has been paid by Tenant or
is justly due to contractors, subcontractors, materialmen,
engineers, architects or other persons who have rendered
services or furnished materials for the work specified, and
stating that no part of such expenditures has been or is being
made the basis of any previous or then pending request for the
withdrawal of the Net Condemnation Award;
(2) a brief description of the services and materials;
(3) that, except for the amount described in Section 8.3(a)(i)(1)
above, there is no outstanding indebtedness actually known to
the persons signing such certificate, after due inquiry, which is
then due for labor, materials, or services in connection with the
Condemnation Restoration;
Agreement of Lease
Page 38 of 94
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(4) that the cost, as estimated by the persons signing such
certificate, of the work required to complete the Condemnation
Restoration does not exceed the amount of the remaining Net
Condemnation Award, plus any amount deposited by Tenant
to defray the expenses of the Condemnation Restoration; and
(5) that the work described has been completed in accordance
with the plans and specifications applicable thereto, in a good
and workerlike manner and in accordance with all
Requirements.
(ii) Lien waivers, title company reports or such other evidence,
reasonably satisfactory to Owner, to the effect that there has not bee
filed with respect to the Premises, any vendor's, mechanic's,
laborer's, materialman's or other lien which has not been discharged
of record, except such as will be discharged by payment of the
amount then requested; and
(iii) Such other documentation regarding the Condemnation Restoration
as Owner or the Recognized Mortgagee shall reasonably require.
(b) Tenant shall, prior to the commencement of the Condemnation Restoration,
furnish to Owner an estimate of the total cost of the Condemnation Restoration certified
by the architect or engineer in charge of the Condemnation Restoration. If such cost
estimate or any subsequent estimate provided pursuant to Section 8.3(a)(i)(4) above shall
show that the cost of completing the Condemnation Restoration is in excess of the amount
of the Net Condemnation Award then available, Tenant shall promptly deposit with the
holder of the Net Condemnation Award an amount equal to such excess. The amount so
deposited shall be included in the Net Condemnation Award for all purposes of this Article.
(c) Upon compliance by Tenant with the foregoing provisions of this Article, the
holder of the Net Condemnation Award shall pay to Tenant or the persons named in the
certificate referred to in Section 8.3(a)(i), from the Net Condemnation Award, an amount
equal to ninety percent (90 %) of the cost of the Condemnation Restoration which is
evidenced by the request. At the completion of each contract or subcontract in connection
with the Condemnation Restoration, the balance of the Net Condemnation Award relating
to that portion of the work, to the extent of and as required to complete the payment of
Condemnation Restoration costs relating to that portion of the work, shall be paid to
Tenant and Tenant shall, promptly following the release of the retainage, provide to Owner
reasonable evidence that the Condemnation Restoration relating to that portion of the work
has been paid for in full.
Agreement of Lease
Page 39 of 94
,4*,
(d) If the amount of any Net Condemnation Award shall exceed the entire cost
of the Condemnation Restoration, such excess, upon completion of the Condemnation
Restoration, shall be disbursed first to any Recognized Mortgagee, in respect of any
unpaid Debt Service, second to Owner, in respect of any unpaid Base Rent (including any
late charges thereon), third to Owner in respect of any unpaid Percentage Rent, fourth to
Owner in respect of any other amounts owned by Tenant hereunder to Owner in such
order of priority as Owner shall determine, and fifth to Tenant or any Recognized
Mortgagee, as the applicable Recognized Mortgage may require.
SECTION 8.4 Effect Of Taking On This Lease Except as provided in Section
8.1 above, this Lease shall not terminate, be forfeited or be affected in any manner, and
there shall be no reduction or abatement of Rental, by reason of any taking of the
Premises or any part thereof. Except as provided in Section 8.2(a) above, Tenant's Rental
obligations hereunder shall continue as though the Premises had not been taken and shall
continue without abatement, suspension, diminution or reduction whatsoever. Subject to
Unavoidable Delays and taking into account Tenant's Condemnation Restoration
obligations (including without limitation, the effect of the taking and the Condemnation
Restoration on the Tenant's ability to comply with the parties separate quality standards
agreement), Tenant's non - Rental obligations hereunder shall continue as though the
Premises had not been taken and shall continue without abatement, suspension,
diminution or reduction whatsoever.
ARTICLE 9.
SALE OF HOTEL; SUBLETTING
SECTION 9.1 Tenant's Right To Sale Of Hotel
(a) Owner's Consent Tenant may not effect a Sale of the Hotel without the prior
written consent of Owner, which consent may not be unreasonably withheld, in accordance
with this Article.
(b) Definitions
(i) "Assignment" means a sale, exchange, assignment, transfer, lease,
merger or other disposition (other than Subleases) by Tenant of
Tenant's Interest in the Premises, whether by operation of law or
otherwise, which is not a Transfer, The creation or granting of a
Mortgage shall not constitute an Assignment or a Transfer.
(ii) "Assignee" means a purchaser, assignee, transferee or other Person
which acquired all of Tenant's Interest in the Premises.
Agreement of Lease
Page 40 of 94
(iii) "Capital Transaction" means an Assignment or Transfer.
(iv) "Disqualified Person" means any of the following Persons:
(a) Any Person (or any Person whose operations are directed or
controlled by a Person) that has been convicted of or has
plead guilty in a criminal proceeding for a felony or that is an
on going target of a grand jury investigation convened
pursuant to applicable Requirements 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: (x)
the Trading with the Enemy Action of 1917, 50 U.S.C. App. §1,
et seq., as amended (which countries are, as of the date
hereof, North Korea and Cuba); (y) the International
Emergency Economic Powers Act of 1976, 50 U.S.C. §1701,
et seq., as amended (which countries are, as of the date
hereof, Libya, Iran and Iraq); and (z) the Anti - Terrorism and
Arms Export Amendments Action of 1989, codified at Section
60) of the Export Administration Action of 1979, 50 U.S.C. App.
§24050), as amended (which countries are, as of the date
hereof, Iran, Sudan and Syria); or
(c) Any Affiliate of any of the Persons described in paragraphs (a)
or (b) above.
(v) "Equity Interest" means, with respect to any entity (1) the legal (other
than as a nominee) or beneficial ownership of outstanding voting or
non - voting stock of such entity is a business corporation, a real estate
investment trust or a similar entity, (2) the legal (other than as a
nominee) or beneficial ownership of any partnership, membership or
other voting or non - voting ownership interest in a partnership, joint
venture, limited liability company or similar entity, (3) a legal (other
than a nominee) or beneficial voting or non - voting interest in a trust
if such entity is a trust and (4) any other voting of non - voting interest
that is the functional equivalent of any of the foregoing.
(vi) "Sale of the Hotel' means an Assignment or Transfer, by operation
of law or otherwise, with the result that (1) Tenant has conveyed
Agreement of Lease
Page 41 of 94
Tenant's Interest in the Premises to a Person in which the ultimate
owners of Tenant do not own a Substantial Controlling Interest or (2)
a Substantial Controlling Interest of Tenant ceases to be held, directly
or indirectly, by a Person whose ultimate owners are identical to
those of Tenant.
(vii) "Sublease" means any sublease (including a sub - sublease or any
further level of subletting) of the Premises for a restaurant or other
food service establishment for retail space for a gift and sundry shop,
newsstand, specialty clothing store or similar use as typically is
present in a first class, full service hotel.
(viii) "Subtenant" means any party granted rights by Tenant under a
Sublease or by any other Subtenant under a Sublease.
(ix) "Transfer" means (1) any change, by operation of law or otherwise,
in ownership of an Equity Interest in Tenant, where such change in
ownership directly or indirectly produces any change in the
Substantial Controlling Interest of Tenant, or (2) any transaction or
series of transactions, by operation of law or otherwise, including,
without limitation, the issuance of additional Equity Interests or the
direct or indirect revision of the beneficial ownership or control
structure of the management or operation of Tenant or any direct or
indirect constituent entity of Tenant, which, in either case, produces
any change, by operation of law or otherwise, in the Substantial
Controlling Interest in Tenant.
(x) "Transferee" means a Person to which a Transfer is made.
(c) Approvals Tenant shall, prior to a Sale of the Hotel, submit to Owner a
written request for Owner's consent to such Sale of the Hotel, which request shall include
the following information:
(i) the name, address and a description of the nature and character of
the business operations of the proposed Assignee or Transferee,
including, without limitation, the name and address of the Franchisor
that the proposed Assignee or Transferee intends to use in respect
of the Hotel;
(a) if the proposed Assignee or Transferee (or its parent, if such
Agreement of Lease
Page 42 of 94
10�,
parent owns, directly or through its subsidiaries, all or
substantially all of such proposed Assignee or Transferee) is
a Public Company, Tenant shall provide a copy of the security
ownership information disclosed in the most recent filing for
such company (or any Person filing with respect to such
company) under the Securities Exchange Act of 1934, as
amended, or its successor, with the Securities and Exchange
Commission or its successor;
(b) if the proposed Assignee or Transferee is not a Public
Company and is a partnership, Tenant shall provide a
certificate from the managing general partner or other
authorized Person of the proposed Assignee or Transferee,
which certificate shall contain the names of (1) any general
partners holding (whether individually or together with their
respective Affiliates) more than five percent (5 %) of the
general partnership interests in such proposed Assignee or
Transferee (a "Designated Holder ") and (2) any limited
partners holding (whether individually or together with their
respective Affiliates) more than ten percent (10) of the limited
partnership interests in such proposed Assignee or Transferee
(also, a "Designated Holder"); provided, however, that if the
general partnership interests disclosed pursuant to the
foregoing provisions of this paragraph (b) aggregate to less
than fifty -one percent (51%) of the general partnership
interests in such proposed Assignee or Transferee, then there
shall be disclosed the names of the President, Chief Operating
Officer, Chief Executive Officer (or the individuals holding the
equivalent positions), and members of the Board of Directors
(or other governing body) of the proposed Assignee or
Transferee;
(c) if the proposed Assignee or Transferee is not a Public
Company and is a limited liability company ( "LLC"), trust or
other entity (other than a partnership or corporation), Tenant
shall provide a certificate from the managing member, trustee
or other authorized Person of the proposed Assignee or
Transferee, which certificate shall contain the names of (1) any
Person holding (whether individually or together with its
Affiliates) a voting interest which voting interest comprises
more than five percent (5 %) of the total voting interests in such
LLC, trust or other entity (a "Designated Holder ") and (2) any
Agreement of Lease
Page 43 of 94
Person holding (whether individually or together with its
Affiliates) a non - voting interest which non - voting interest
comprises more than ten percent (10 %) of the total non - voting
interests in such LLC, trust or other entity (also, a
"Designated Holder"); provided, however, that if the voting
interests disclosed pursuant to the foregoing provisions of this
paragraph (c) aggregate to less than fifty -one percent (51 %)
of the total voting interests in such LLC, trust or other entity,
then there shall be disclosed the names of the President, Chief
Operating Officer, Chief Executive Officer (or the individuals
holding the equivalent positions), and members of the Board
of Directors (or other governing body) of the proposed
Assignee or Transferee;
(d) if the proposed Assignee or Transferee is a corporation that is
not a Public Company, Tenant shall provide a certificate from
an authorized officer or other authorized Person of the
proposed Assignee or Transferee, which certificate shall
contain the names of (1) any holder (whether individually or
together with its Affiliates) of voting stock which voting stock
comprises more than five percent (5 %) of any class of the
outstanding voting stock of such corporation (a "Designated
Holder"),and (2) any holder (whether individually or together
with its Affiliates), of more than ten percent (10 %) of any class
of the outstanding non - voting stock of such corporation (also
a 'Designated Holder "); provided, however, that if the voting
interests disclosed pursuant to the foregoing provisions of this
paragraph (d) aggregate to less than fifty -one percent (51 %)
of each class of the outstanding voting stock of such
corporation, then there shall be disclosed the names of the
President, Chief Operating Officer, Chief Executive Officer (or
the individuals holding the equivalent positions), and members
of the Board of Directors (or other governing body) of the
proposed Assignee or Transferee;
(e) with respect to any Designated Holder disclosed pursuant to
paragraphs (b), (c) or (d) above, there shall also be disclosed
the name of the natural person or Public Company holding,
directly or indirectly through one or more intermediaries, a
Controlling Interest in such Designated Holder; provided,
however, that if no natural person or Public Company holds a
Controlling Interest in such Designated Holder, then there
Agreement of Lease
Page 44 of 94
b6 ; 4b 96ed
esee ;o ;uewaaj6y
'uogewjo;ui leuoi;ippe yons ;o Idiaoaj s,jauMo jo (anoge (04-6 uoiloaS of luensjnd
pajinbaj uoilewjo ;ui ay} ;o IIe pue) juesuoo jo;;senbaj s,}ueual ;o ldieoaj jaj ;e sued
sseuisnq (2Z);y6i9- Aju9M4 uiy;iM anoge (o) V6 uogoaS o; }uensjnd pasodojd uogoesuej}
Aue o; }uesuoo o; esn ;ej jo }uasuoo IIeys jauMo 'IBAOJdd s,jauMo (p)
'1910H ay; ;o DIES pasodojd ay; ;o uoi;enI8A9 sji y;iM uoi;oauuoo ui
;senbej AlqL- uoseei pegs jauMo se uoi;ewjo;ui leuogippe jay ;o yons (nin)
pue ` Ia}oH ay; ;o;ey} 01
jelpis jejoejeyo pue uoi}eool 'ein;eu 'azis a ;o sleloy ;o diysjauMo
jo pue uoi}eiedo ayl jo; uoi ;e;ndaj Al!lenb a pue eouaiiedxe
sseuisnq pejejej sey aaja;suejl jo aeu6issy pasodojd ay;
Jeq;ayM awwja}ap o; jeuMo elgeua o} lueioi _4ns Algeuoseei jejueo
uoi}uanuoo oilgnd Cue y;iM diysuoi}elajja;ui pue sa}ej Aouedn000
'uoi}eiedo pue aoinjas '}uewa6euew jo; uoije;ndej 'uoi;ipuoo
leoisAyd 'sn ;e }s pue eouewjo}jed leioueui; 'pejeool 'Alilenb 'ein;eu
ay} 'uoi;elpil ;nogl!m 'buipnloui `aaja ;suejl jo eaubissy pasodojd
ay; Aq pejejedo pue pauMo sleloy ay} (I,) 6uiquos9p uoi;ewjo ;ui (nn)
:asee siy} ui }ueual ;o suoi}e6ilgo ay} wjojjed
o; Al!l!ge ay; sey aaja;suejl jo eeu6issy pasodojd ay; jay}ayM
euiwjelep o; jeuMo apeue o} ;ueiogns Algeuoseei aaja;suejl
jo aeubissy pasodojd ay} ;o sseuisnq ay} buipje6ei uogewjo;ui (in)
';ueual o} elgeliene Algeuoseei }ua}xe ay; o} 'eeja;suejl
jo eau6issy pasodojd ay} ;o A}iligisuodsaj jeioueui; ay} eupielep
o} JeuMo elgeue o} }uvogns Algeuoseei aaja;suejl jo esuftsy
pasodojd ay; o; joadsej y;iM uoi}ewjo;ui leioueui; pue 6ui )iueq (n)
'uiaja4 (1) V6
uoijoeS ui pegijosep (s);uawnjlsui elgeogdde ay; ;o wjo; pasodojd a (ni)
`uosjad
paiAlenbsia a si aaja;suejl jo eaubissy pasodojd ay; jay;ayM
bui }e }s aaja;suejl jo eau6issy pasodojd ay} ;o 'elgeoildde aq lleys
janayoiyM 'uosjad pazijoy;ne jay ;o jo 'aa}snj; 'jegwaw buibeuew
`jauljed lejeu96 6ui6euew `jeogo pezuoy;ne ue ;o ejeoilgiao a (ni)
'japIoH pa;eubsaa ay} ;o (Apoq 6UIwaAO6 jay ;o jo)
sjo}oajia ;o pjeog ay} ;o sjagwew pue '(suoi;isod JuaIenmba
ay; 6uip�oy s�enpinipui ay} jo) jaoi}}o ani;noax3 ;aiyo 'jaoi;}0
bui}eiedo;aiyo ';uapisajd 9L41 jo saweu ay} pasopsip aq IIeys
provided, however, that Owner shall use reasonable efforts to deliver to Tenant Owner's
consent or refusal to consent as soon as practicable within such twenty -eight (28)
Business Days. Notwithstanding the foregoing, if any change in circumstances prior to the
closing of the proposed Sale of the Hotel renders the information provided in Section
9.1(c) above materially incomplete or materially incorrect, any consent previously given
by Owner shall be deemed null and void and Tenant shall notify Owner of the change.
Upon the receipt of such notice, Owner shall thereupon have twenty -eight (28) Business
Days to notify Tenant whether Owner's consent to such changed Sale of the Hotel is given
or denied.
Notwithstanding anything to the contrary contained herein, Owner's decision
whether to consent or refuse to consent to a proposed Sale of the Hotel pursuant to
Section 9.1(c) above shall be based only upon the following factors: (i) whether the
proposed Assignee or Transferee meets the standards of creditworthiness, financial
resources and responsibility reasonably expected by Owner of the Tenant hereunder; (ii)
whether the proposed Assignee or Transferee has the ability to perform the obligations of
the Tenant hereunder ; (iii) whether the proposed Assignee or Transferee has related
business experience and a quality reputation for operating and / or owning hotels similar
in size, nature, location and character to that of the Hotel ; (iv) if the proposed Assignee
or Transferee has proposed engaging a new Franchisor, whether such proposed
Franchisor which such proposed Assignee or Transferee intends to engage for the Hotel,
has been consented to by Owner in accordance with the applicable provisions of this
Lease; (v) whether the proposed Assignee or Transferee (or its parent if its parent owns,
directly or through it subsidiaries, all or substantially all of the Assignee or Transferee) is
a Disqualified Person; and (vi) whether and to what extent there have occurred any
material Defaults or Events of Default.
(e) Absolute Limitations On Right To Assign Tenant shall not Assign Tenant's
Interest in the Premises, except for an Assignment of the entire Tenant's Interest in the
Premises. Tenant shall not Assign any interest in this Lease or the Hotel unless such
Assignment is appurtenant to an Assignment of the entire Tenant's Interest in the
Premises.
(f) Sale Of The Hotel Instruments In the case of a Sale of the Hotel, Tenant
shall deliver to Owner, or shall cause to be delivered to Owner, within ten (10) Business
Days after the execution and delivery thereof, a true and correct copy of the instrument(s)
effectuating such transfer, including an instrument of assignment and assumption, if
applicable. In the event of the Sale of the Hotel, Tenant shall pay to Owner one percent
(1 %) of said sale price as an assignment fee.
(g) Assumption Of Liability If Tenant does not survive a Sale of the Hotel as
the tenant under this Lease and the holder of the Tenant's Interest in the Premises, then
Agreement of Lease
Page 46 of 94
the successor to Tenant shall assume and be deemed to assume this Lease and shall be
liable for the payment of Rental and the performance of an compliance with all the terms,
covenants, conditions and agreements contained in this Lease on the part of Tenant (or
any successor -in- interest to Tenant) to be performed hereunder. No Assignment or
Transfer shall be binding on Owner unless and until such Assignee or Transferee shall
enter into a written agreement containing a covenant of assumption as aforesaid. Upon
obtaining Owner's consent as required in this Article 9, delivery to Owner of the
instruments provided in Section 9.1(f) herein and payment of all Rental and Impositions
required herein, Owner shall provide to Tenant a written release from this Lease.
(h) Invalidity Of Transactions Any Sale of the Hotel entered into without
Owner's consent as required in this Article 9 or sought to be entered into without the
execution, and delivery to Owner within ten (10) Business Days thereafter, of the
instruments provided in Section 9.1(f) above shall have no validity and shall be null and
void and without effect until such time as such consent is obtained and such instrument(s)
are delivered.
SECTION 9.2 Sublease Requirements
(a) Required Sublease Clauses Tenant shall only enter into Sublease(s) for a
portion of the Premises for a restaurant(s) or other food service establishment(s) or for
retail space for a gift and sundry shop, newsstand, specialty clothing store or similar use
as typically is present in a first class, full service hotel (a "Sublease "). Each Sublease
shall provide as follows:
(i) It is subordinate and subject to this Lease.
(ii) Except for security deposits and any other amounts deposited with
Tenant or with any Recognized Mortgagee in connection with the
payment of insurance premiums, real property taxes and
assessments and other similar charges or expenses, and any rent
paid in advance upon execution of the Sublease (but not to exceed
an amount equal to two (2) months' rent), the Subtenant shall not pay
rent or other sums payable under the Sublease to Tenant for more
than six (6) months in advance (unless the Recognized Mortgagee
gives its consent to a longer period).
(iii) At Owner's option, on the termination of this Lease, the Subtenant
shall attorn to, or shall enter into a direct lease (on terms identical to
its Sublease, consistent, however, with the terms hereof) with, Owner
for the balance of the unexpired term of the Sublease.
Agreement of Lease
Page 47 of 94
(b) Subtenant Obligations During the Term, Tenant shall use commercially
reasonable efforts to cause all Subtenants to comply with their obligations under their
Subleases. A violation or breach of any of the terms, provisions or conditions of this Lease
that results from, or is caused by, an act or omission by a Subtenant shall not relieve
Tenant of Tenant's obligation to cure such violation or breach.
(c) Schedule Of Subleases At any time upon Owner's demand, Tenant shall
deliver to Owner, within ten (10) business days following such demand, (1) a schedule of
all Subleases (and licenses, franchises and concessionaires), a description of the space
that has been sublet or licensed, expiration dates, rentals and other fees, and such other
information as Owner reasonably may request, and (2) photostatic copies of all Subleases
(including licenses, franchises and concession agreements) which have not been
previously delivered (unless modified subsequent to such delivery). Upon reasonable
request of Owner, Tenant shall permit Owner and its agents and representatives to inspect
original counterparts of all Subleases (and licenses, franchises and concession
agreements) available to Tenant. Owner agrees to act reasonably with respect to the
frequency of its requests for schedules and investigation of documents as provided above.
(d) Food Establishments Without limiting any other provision of this Lease,
each Sublease for a restaurant or other food service establishment must require the
subtenant thereunder to operate its facility in a manner compatible with a first class, full
service hotel satisfying the parties separate quality standards agreement. In no event may
any portion of the Hotel be used as a "food- court" or similar function.
(e) Restaurant Non - Disturbance Agreement Upon the request of Tenant,
Owner shall execute a nondisturbance and attornment agreement with the Subtenant
under any Sublease for a restaurant, such agreement to be in form and content
satisfactory to Owner; provided, however, that (1) such Sublease shall provide for a term
of not less than one (1) year (in each case, exclusive of renewal options contained in such
Sublease), (2) the Subtenant shall have restaurant experience and a quality reputation
for the operation of a restaurant of the size, nature, location and character similar to that
of the proposed restaurant, and (3) such Sublease shall provide for the right of Tenant to
terminate such Sublease if Tenant determines that the restaurant (including, without
limitation, the quality of the food and the quality of service) is not being operated in a
manner consistent with a first class, full service hotel.
ARTICLE 10.
MORTGAGES
SECTION 10.1 Owner's Consent
(a) Tenant shall not mortgage, pledge, hypothecate or otherwise encumber
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Tenant's Interest in the Premises except by a Recognized Mortgage.
(b) Tenant may not mortgage, pledge, hypothecate or otherwise encumber
Tenant's Interest in the Premises, without the prior written consent of Owner, which
consent may not be unreasonably withheld.
SECTION 10.2 Definitions
(a) "Mortgage" means any mortgage , and all extensions, spreaders, splitters,
consolidations, restatements, replacements, modifications and amendments thereof, that
constitutes a lien on all or a portion of Tenant's Interest in the Premises.
(b) "Recognized Mortgage" means a Mortgage (i) that is held by a Person
which is an Institutional Lender, (ii) which expressly provides that it is subject and
subordinate to Owner's Interest in the Premises and to the terms of this Lease, (iii) is a
mortgage encumbering Tenant's Interest in the Premises, (iv) a photostatic copy of which
is, following the execution and delivery thereof, delivered to Owner, together with a
certification by Tenant confirming that the photostatic copy is a true copy of the Mortgage
and a certification by the Recognized Mortgagee thereunder confirming the address of
such Recognized Mortgagee for notices, and (v) that is consented to by Owner pursuant
to this Lease.
SECTION 10.3 Approvals
(a) Request For Approval In the event that Tenant wishes to obtain any debt
that will be secured by a Recognized Mortgage, Tenant shall submit to Owner a written
request for Owner's consent to such transaction, which request shall include the following
information:
(i) the name and address of the proposed Recognized Mortgagee and
information reasonably sufficient to enable Owner to determine
whether the proposed Recognized Mortgagee is an Institutional
Lender;
(ii) a certificate of an authorized officer, managing general partner,
managing member, trustee or other authorized Person, whichever
shall be applicable, of the proposed Recognized Mortgagee stating
whether the proposed Recognized Mortgagee is a Disqualified
Person.
(b) Owner's Approval Owner shall consent or refuse to consent to any
transaction proposed pursuant to Section 10.3(a) above within twenty -eight (28) Business
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Days after receipt of Tenant's request for consent and all of the information required
pursuant to Section 10.3(a) above; provided, however, that Owner shall use reasonable
efforts to deliver to Tenant Owner's consent or refusal to consent as soon as practicable
within such twenty -eight (28) Business Days. Notwithstanding the foregoing, if any change
in circumstances prior to the closing of the proposed transaction renders the information
provided in Section 10.3(a) above materially incomplete or materially incorrect, any
consent previously given by Owners shall be deemed null and void and Tenant shall notify
Owner of the change. Upon the receipt of such notice, Owner shall thereupon have
twenty -eight (28) Business Days to notify Tenant whether Owner's consent to such change
transaction is given or denied.
Notwithstanding anything to the contrary herein, Owner shall not unreasonably
refuse to consent to a proposed financing transaction and Owner's decision whether to
consent or refuse to consent to a proposed financing transaction pursuant to Section
10.3(a) above shall be based only upon the following factors (i) whether the proposed
transaction satisfies the requirements hereunder for Recognized Mortgage and
Recognized Mortgagee; (ii) whether and to what extent any material Defaults or Events of
Default have occurred; and (iii) whether the proposed Recognized Mortgagee is a
Disqualified Person.
(c) Invalidity Of Transactions Any proposed financing transaction entered into
without Owner's consent as required in this Article 10 or sought to be entered into without
the execution and delivery to Owner within ten (10) Business Days thereafter, of the
proposed Recognized Mortgage, shall have no validity and shall be null and void and
without effect until such time as such consent is obtained and such proposed Recognized
Mortgage is delivered.
SECTION 10.4 Effect Of Mortgage
(a) Owner's Intent No Mortgage shall extend to or be a lien or encumbrance
upon Owner's Interest in the Premises, the Land or any part thereof or any appurtenant
rights thereto. A Recognized Mortgage may extend to and be a lien or encumbrance only
upon the Tenant's Interest in the Premises.
(b) Mortgagee's Rights Not Greater Than Tenant's The execution and delivery
of a Recognized Mortgage shall not give or be deemed to give a Recognized Mortgagee
any greater rights against Owner than those granted to Tenant hereunder.
SECTION 10.5 Notice And Right To Cure Tenant's Defaults
(a) Notice To Recognized Mortgagee Owner shall give to the Recognized
Mortgagee a copy of each notice of Default ( "Tenant Default Notice ") at the same time
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as it gives notice of Default to Tenant, and no such Tenant Default Notice shall be deemed
effective with respect to any Recognized Mortgagee unless and until a copy thereof shall
have been so received by or refused by such Recognized Mortgagee. Only Events of
Default expressly described in the Tenant Default Notice may give rise to a termination of
the Lease by Owner pursuant to its termination rights hereunder.
(b) Right And Time To Cure The Recognized Mortgagee shall have a period
of one hundred twenty (120) calendar days after receipt of the Tenant Default Notice, in
the case of any Default, to (1) cure the Default referred to in the Tenant Default Notice or
(2) cause it to be cured. Nothing contained herein shall be construed as imposing any
obligation upon any Recognized Mortgagee to so perform or comply on behalf of Tenant.
Anything contained in this Lease to the contrary notwithstanding, Owner shall have no
right to terminate this Lease following the delivery of a Tenant Default Notice if, within one
hundred twenty (120) calendar days after receipt of such Tenant Default Notice, any
Recognized Mortgagee shall:
(i) pay or cause to be paid all Rental then due and in arrears as
specified in such Tenant Default Notice, and
(ii) cure all Defaults by Tenant in the observance or performance of any
term, covenant or condition of this Lease on Tenant's part to be
observed or performed (other than the payment of Rental), or if any
such Default is of such a nature that it cannot reasonably be
remedied within such one hundred twenty (120) calendar day period
(but is otherwise reasonably susceptible to cure), Recognized
Mortgagee shall, within one hundred twenty (120) calendar days after
the giving of such Tenant Default Notice, (1) advise Owner of such
Recognized Mortgagee's intention to institute all steps (and from time
to time, as reasonably requested by Owner, such Recognized
Mortgagee shall advise Owner of the steps being taken) necessary
to remedy such Default (which such steps shall be reasonably
designed to effectuate the cure of such Default in a professional
manner) and (2) commence and thereafter diligently prosecute to
completion all such steps necessary to remedy the same without
interruption in order to cure such Default within the shortest possible
time, it being acknowledged by Owner that, if possession or control
of the Premises is required to effect such cure, the diligent
prosecution of a foreclosure of a Recognized Mortgage, and the
continuing efforts by such Recognized Mortgagee to effect such cure
following completion of such foreclosure, shall constitute a part of the
steps necessary to remedy such Default. Nothing in this Lease shall
require a Recognized Mortgagee to cure any default of Tenant not
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SR
so
reasonably susceptible of being cured by such Person (e.g., a
bankruptcy - related default).
(c) Acceptance of Mortgagee's Performance Owner shall accept performance
by a Recognized Mortgagee of any covenant, condition or agreement on Tenant's part to
be performed hereunder with the same force and effect as though performed by Tenant.
(d) Owner's Self -Help Rights Notwithstanding the foregoing provisions of this
Section 10.5, if a Recognized Mortgagee fails for any reason to cure any Default by Tenant
described in Section 10.5(b) above within one hundred twenty (120) calendar days
following receipt of the Tenant Default Notice regarding such Default, then Owner may
upon notice, but shall be under no obligation to, perform the obligation of Tenant the
breach of which gave rise to such Default, without waiving or releasing Tenant from its
obligations with respect to such Default. Tenant hereby grants Owner access to the
Premises in order to perform any such obligation. Any amount paid by Owner in
performing Tenant's obligations as provided in this Section 10.5(d), including all costs and
expenses incurred by Owner in connection therewith, shall constitute Rental hereunder
and shall be reimbursed to Owner within thirty (30) calendar days following Owner's
demand therefor, together with a late charge on amounts actually paid by Owner,
calculated at the Late Charge Rate from the date of notice of any such payment by Owner
to the date on which payment of such amounts is received by Owner.
SECTION 10.6 Notice Of Termination If this Lease is terminated by reason
of an Event of Default, or by reason of the rejection thereof by or on behalf of the Tenant
in bankruptcy or for any reason, Owner shall give prompt notice thereof to the Recognized
Mortgagee.
SECTION 10.7 Application Of Proceeds From Insurance Or Condemnation
Awards To the extent that this Lease requires that insurance proceeds paid in connection
with any damage or destruction to the Premises, or the proceeds of an award paid in
connection with a taking referred to in Article 8 above, be applied to restore any portion
of the Premises, no Mortgagee shall have the right to apply the proceeds of insurance or
awards toward the payment of the sum secured by its Mortgage, except for the reasonable
costs of collection of such proceeds of insurance or awards.
SECTION 10.8 Appearance At Condemnation Proceedings A Recognized
Mortgagee shall have the right to appear in any condemnation proceedings and to
participate in any and all hearings, trials and appeals in connection therewith.
SECTION 10.9 Rights Limited To Recognized Mortgagees Without limiting
any other provision of this Lease, the rights granted to a Recognized Mortgagee under the
provisions of this Lease shall not apply in the case of any Mortgagee that is not a
Agreement of Lease
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Recognized Mortgagee.
SECTION 10.10 No Surrender Or Termination Owner agrees not to accept a
voluntary surrender or termination of this Lease at any time while any Recognized
Mortgage shall remain a lien on Tenant's leasehold estate. It is further understood and
agreed that no Recognized Mortgagee shall be bound by any surrender or termination of
this Lease unless such surrender or termination is made with the prior written consent of
such Recognized Mortgagee, and this Lease shall not terminate by merger or otherwise
as long as the lien of the Recognized Mortgagee remains undischarged.
ARTICLE 11.
SUBORDINATION
SECTION 11.1 No Subordination Owner's Interest in this Lease, as the same
may be modified, amended or renewed in accordance with the provisions of this Lease and
Owner's Interest in the Land, shall not be subject or subordinate to (a) any Mortgage now
or hereafter existing, (b) any other liens or encumbrances hereafter affecting Tenant's
Interest in the Premises or (c) any Sublease or any mortgages, liens or encumbrances now
or hereafter placed on any Subtenant's interest in the Premises. Tenant's Interest in the
Premises, including, without limitation, this Lease and the leasehold estate of Tenant
created hereby and all rights of Tenant hereunder, are and shall be subject to the Owner's
Interest in the Premises.
ARTICLE 12.
HOTEL CONSTRUCTION AND FURNISHING
SECTION 12.1 Tenant's Obligation To Construct Hotel The parties
acknowledge that Tenant, at Tenant's sole cost and expense, shall construct on the Land
the Hotel and Improvements described in this Lease all in accordance with the Plans and
Specifications as provided more particularly herein and any other applicable provisions of
this Lease.
SECTION 12.2 Conditions Precedent to Tenant's Commencement Of
Construction Of The Hotel
(a) Tenant shall obtain all Permits and Approvals. Tenant shall not commence
Construction of the Hotel unless and until (i) Tenant shall have obtained and delivered to
the Owner copies of all Permits and Approvals required to commence construction and (ii)
Tenant shall have delivered to the Owner original certificates of the policies of insurance
and bonds required to be carried pursuant to the provisions of Article 6 above. Tenant
shall pay all fees and charges for such Permits and Approvals and maintain such Permits
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and Approvals in full force and effect.
(b) Tenant shall not commence Construction of the Hotel, or any portion thereof,
unless and until the Owner shall have approved the Plans and Specifications.
SECTION 12.3 Commencement of Construction Of The Hotel Tenant shall,
at its sole cost and expense, commence Construction of the Hotel in sufficient time so that
commencement of major work (such as pilings of foundations) for Construction of the Hotel
in accordance with this Lease has commenced on or before ninety (90) calendar days
following the approval of the Plans and Specifications by Owner and the closing on the
Tenant's construction loan (the "Construction Commencement Date ") and thereafter
Tenant shall continue to prosecute the Construction of the Hotel with diligence and
continuity to completion. If, after Tenant has commenced construction, Tenant fails to
diligently prosecute Construction of the Hotel, and such failure continues for thirty (30)
consecutive calendar days after Tenant's receipt of notice of such failure, Owner shall, in
addition to all of its other remedies under this Lease, have the right to seek such equitable
relief (either mandatory or injunctive in nature) as may be necessary to cause diligent and
continuous prosecution of Construction of the Hotel by Tenant, it being understood that
Construction of the Hotel is a material inducement to Owner to enter into this Lease and
monetary damages shall be inadequate to compensate Owner for harm resulting from such
failure. Notwithstanding anything to the contrary contained herein, if Tenant fails to
Substantially Complete Construction of the Hotel by the Completion Deadline, then the
same shall constitute an Event of Default under this Lease and Owner shall be entitled to
all of its remedies hereunder and thereunder, including, without limitation, the termination
of this Lease. Notwithstanding anything to the contrary contained in this Agreement, the
Construction Commencement Date and the Completion Deadline may each be extended
due to Unavoidable Delays.
SECTION 12.4 Completion Of Construction Of The Hotel
(a) Substantial Completion of the Hotel shall be accomplished in a diligent
manner, and in any event by the Completion Deadline, and final completion of the
Construction of the Hotel shall be accomplished in a diligent manner, thereafter, in each
case in a good and workerlike manner, in substantial accordance with the Plans and
Specifications, in accordance with all applicable Requirements and at Tenant's sole cost
and expense. The "Completion Deadline" means December 31, 2002, subject to
extension due to Unavoidable Delays.
(b) Upon Substantial Completion of Construction of the Hotel, Tenant shall
furnish Owner with the following:
(i) a certification of the Architect (certified to Owner on a form
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Page 54 of 94
reasonably satisfactory to Owner in form and substance) that it has
examined the Plans and Specifications and that, in its professional
judgment, after diligent inquiry, Construction of the Hotel has been
Substantially Completed in accordance with the Plans and
Specifications applicable thereto and, as constructed, the Hotel
complied with all applicable Requirements.
(ii) lien waivers in form and substance reasonably satisfactory to Owner
from each contractor, subcontractor, supplier or materialman retained
by or on behalf of Tenant in connection with the Construction of the
Hotel, evidencing that such Persons have been paid in full for all work
performed or materials supplied in connection with the Construction
of the Hotel.
(iii) a complete set of "as built" plans and a survey showing the
Improvement(s) for which the Construction of the Hotel has been
completed. The foregoing requirement with respect to "as built"
plans shall be satisfied by Tenant furnishing to Owner, at Tenant's
expense, a complete set of Plans and Specifications, with all addenda
thereto and change orders in respect thereof, marked to show all
changes, deletions and selections made during the course of the
Construction of the Hotel.
SECTION 12.5 Approval And Modification Of Preliminary Plans and
Specifications
(a) Within one hundred eighty (180) calendar days following the Due Diligence
Period, Tenant shall deliver to Owner for approval the proposed Preliminary Plans and
Specifications. Within thirty (30) business days following receipt of such proposed
Preliminary Plans and Specifications, Owner shall by notice to Tenant either (i) approve
such proposed Preliminary Plans and Specifications, in which event such proposed
Preliminary Plans and Specifications shall constitute the Preliminary Plans and
Specifications, or (ii) disapprove such proposed Preliminary Plans and Specifications, such
disapproval to specify Owner's reasons for such disapproval. Within thirty (30) calendar
days after receipt of such notice of disapproval, Tenant shall revise such disapproved
proposed Preliminary Plans and Specifications to resolve Owner's objections thereto and
deliver such revised proposed Preliminary Plans and Specifications to Owner for approval.
Owner shall either approve or disapprove such revised proposed Preliminary Plans and
Specifications within thirty (30) calendar days following receipt of such revised proposed
Preliminary Plans and Specifications. Such procedure regarding revised proposed
Preliminary Plans and Specifications shall be repeated until Owner approves any revised
proposed Preliminary Plans and Specifications as the Preliminary Plans and
Agreement of Lease
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t' - , M%,
Specifications. Owner and Tenant shall work together in good faith to achieve approved
Preliminary Plans and Specifications, but if no proposed Preliminary Plans and
Specifications are approved by Owner by one hundred twenty (120) calendar days
following the delivery to Owner of the proposed Preliminary Plans and Specifications either
Owner or Tenant may, in writing, terminate this Lease, in which event the Expiration of the
Term shall occur ten (10) calendar days following such written notice of Termination of
Lease.
SECTION 12.6 Approval Of Plans And Specifications
(a) Prior to Commencement of Construction of the Hotel, Tenant shall prepare
and submit to Owner the Plans and Specifications, which Plans and Specifications, when
approved by Owner, shall be used to obtain the required building permits by Tenant. Such
submitted Plans and Specifications shall be substantially consistent with the Preliminary
Plans and Specifications (as such have been previously approved pursuant to the terms
of Section 12.5 above) and shall comply with all applicable requirements. Within thirty (30)
business days of its receipts of such Plans and Specifications, Owner shall notify Tenant
in writing, describing with specificity, its approval or disapproval of the Plans and
Specifications. The basis for such disapproval by Owner shall be any material
inconsistencies or material modifications of which the Owner disapproves between the
proposed Plans and Specifications and the Preliminary Plans and Specifications or failure
to comply with the Requirements. The basis for approval by the Owner shall be that the
Plans and Specifications, as herein provided above, are substantially consistent with the
Preliminary Plans and Specifications and complete and sufficient and suitable to construct,
furnish and equip the entire Hotel in accordance with the provisions of this Lease and the
Requirements.
SECTION 12.7 Compliance With Requirements: Construction Standards
(a) The Plans and Specifications shall comply with all applicable Requirements
and it is Tenant's responsibility to assure such compliance. Owner's approval in
accordance with this Article of any Plans and Specifications shall not be, and shall not be
construed as being, or relied upon as, a determination in respect of, or in any way render
Owner responsible or liable for, the completeness, design sufficiency or constructibility of
the Improvements described therein or that such Plans and Specifications comply with
other applicable Requirements.
(b) Construction of the Hotel shall be carried out pursuant to Plans and
Specifications prepared by licensed architects and engineers, with controlled inspections
conducted by a licensed architect or professional engineer as required by applicable
Requirements.
Agreement of Lease
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f^,
SECTION 12.8 Owner's Right To Use Field Personnel
(a) Owner reserves the right, at its sole cost and expense, to maintain one on-
site representative (from Owner's Consultant, Owner or another entity designed by Owner)
at the Premises to conduct inspections of the Premises (provided, however, that Owner
shall be entitled to maintain additional on -site representatives from time to time to the
extent reasonably necessary to perform such inspections), and Tenant agrees to provide
safe access to the Premises, including, without limitation, access to inspect the
Construction Work, including, without limitation, the preparation work and work in progress
wherever located. No such inspection by Owner's on -site representatives shall impose
upon Owner responsibility or liability for any failure by Tenant to observe any
Requirements of safety practices in connection with such Construction Work, or constitute
an acceptance of any work which does not comply with the provisions of this Lease, and
no such inspection shall constitute an assumption by Owner of any responsibility or liability
for the performance of Tenant's obligations hereunder, nor any liability arising from the
improper performance thereof. Owner shall be responsible for damages, if any, caused
by Owner's on -site representative interference with Construction Work being performed
at the Premises. Owner's on -site representatives shall not interfere with any Construction
Work being performed at the Premises and shall comply with all safety standards and
other job -site rules and regulations of Tenant. Owner's on -site representative is an
inspector only. The on -site representative shall make only such communications with
Tenant's construction manager(s), the General Contractor, its subcontractors, or any other
Person involved in the Construction of the Hotel, as are reasonably necessary to enable
such on -site representative to conduct its investigations, and in no event shall the on -site
representative give directions to such Persons.
(b) Tenant acknowledged that Owner may, at Owner's sole election and at
Owner's sole cost and expense, appoint an Owner's Consultant as the Owner's consultant
in connection with the Construction of the Hotel in accordance with the terms of this Lease.
In connection therewith, Tenant agrees to cooperate fully with the Owner's Consultant. In
furtherance thereof, Tenant agrees that the Owner's Consultant, and its authorized
representatives, shall have such rights of notice, access and review with respect to the
Premises and the Construction Agreements as is reasonably necessary to verify on
Owner's behalf that the Construction of the Hotel is being conducted in accordance with
the terms of this Lease.
To the extent the exercise of the Owner's rights hereunder requires the opportunity
for review of any documents of the opportunity for participation in any meetings, Tenant
agrees, without request therefor by Owner, to promptly provide copies of such documents
or notice of such meetings to Owner and the Owner's Consultant. The Owner's Consultant
shall not interfere with any Construction Work being performed at the Project Site and shall
comply with all safety standards and other job -site rules and regulations of Tenant.
Agreement of Lease
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Tenant shall keep Owner's Consultant informed on a periodic (but not less than
monthly) basis, unless circumstances dictate the need to do so more frequently, as to
actual progress made. Tenant shall provide the Owner's Consultant with reasonable
access to the reports, logs and other systems in which Tenant records or notes the daily
progress of the Construction Work. Tenant shall inform the Owner's consultant of any
deviation from the CPM Schedule which, in Tenant's good faith determination, is likely to
cause a material delay in the Substantial Completion of the Project (as shown on the
current CPM Schedule), within three (3) business days after such deviation becomes
apparent to Tenant.
SECTION 12.9 Title To The Hotel
(a) Subject to Article 23, the Hotel shall constitute the property of Tenant. The
Land shall at all times remain the property of Owner.
(b) Owner has not made and does not make any representations as to the
physical or structural condition, value, title, adequacy or fitness for use, or the presence
on or about the Land of any substance or material which is or may hereafter be subject to
any environmental laws, including, without limitation, Hazardous Materials, or any other
matter or thing affecting or related to the Land, and Tenant further acknowledges that no
such representations have been made, and Tenant further acknowledges that it has
inspected the Land and performed or, during the Due Diligence Period, will have the
opportunity to inspect the Land and review an environmental audit thereof (including,
without limitation, a Phase II Environmental Report) and agrees, as of the expiration of the
Contingency Period (if Tenant or Owner has not elected to termination this Lease), to take
the same "as is ", in such condition as the same may be in on the Commencement Date.
SECTION 12.10 Construction Agreements
(a) Required Clauses Each Construction Agreement which provides for the
performance of labor on the Premises shall include the following provisions (or language
substantially similar thereto which is approved in advance by Owner):
(i) an agreement by the contractor under such Construction Agreement
(the "Contractor ") to provide, prior to the commencement of its
portion of the work, and maintain during the performance thereof, the
insurance required under Article 6 above. Such Contractor shall
procure an appropriate clause in, or endorsement on, any policy of
insurance carried by it pursuant to which the insurance company
waives subrogation or consents to a waiver of right of recovery
consistent with the release, discharge, exoneration and covenants not
to sue contained herein. Original Certificates of Insurance, in
Agreement of Lease
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quadruplicate (all of which shall be original signed counterparts) and
including the City) as an additional insured (the "Certificate of
Insurance "), shall be furnished to Tenant by Contractor prior to
commencement of work, denoting all insurance required of Contractor
pursuant to the terms of the Contract. The Contractor shall secure an
original Certificate of Insurance from each of its subcontractors and
/ or suppliers with limits of liability equal to those carried by the
Contractor.
"Contractor hereby waives all rights of recovery, claims, actions or
causes of action against the City of Sanford and its elected and
appointed officials, officers, employees, successors, assigns, agents,
contractors, subcontractors, experts, licenses, consultants or invitees
for any loss or damage to property of Contractor which may occur at
any time in connection with the Project."
"To the fullest extent permitted by law, Contractor shall and does
hereby indemnify and hold harmless the City of Sanford and its
elected and appointed officials, officers, employees, successors,
assigns, agents, contractors, subcontractors, experts, licenses,
consultants or invitees from and against any and all liability, claims,
demands, damages, losses, fines, penalties, expenses and costs of
every kind and nature, including, without limitation, costs of suit and
attorneys' fees and disbursements (collectively, "Expenses "),
resulting from or in any manner arising out of, in connection with or
on account of. (1) any act, omission, fault or neglect of Contractor, or
anyone employed by it in connection with the work or any phase
thereof, or any of its agents, contractors, subcontractors, employees,
invitees or licensees in connection with the work, or anyone for whose
acts any of them may be liable, (2) claims of injury (including physical,
emotion, economic or otherwise) to or disease, sickness or death or
persons or damage to property (including, without limitation, loss of
use resulting therefrom) occurring or resulting direction or indirectly
from the work or any portion thereof or the activities of Contractor or
anyone employed by it in connection with the work, or any portion
thereof, or any of its respective agents, contractors, subcontractors,
employees, invitees or licensees in connection with the work, or
anyone for whose acts any of them may be liable, or (3) mechanics'
or materialmen's or other liens or claims (and all costs or expenses
associated therewith) asserted, filed or arising out of the work or any
phase thereof other than liens or claims arising out of Tenant's failure
to make the required payments properly due Contractor. In no event
Agreement of Lease
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shall Contractor be able to seek or be entitled to consequential
damages (including, without limitation, loss of profits or loss of
business opportunity) for claims arising under this contract. This
indemnification obligation shall not be limited in any way by: (i) any
limitation of the amount or type of damages, compensation or benefits
payable to Contractor under worker's compensation acts, disability
benefit acts or other employee benefit acts or other insurance
provided for by this contract; or (ii) the fact that the Expenses were
caused in part by a party indemnified hereunder. The Contractor
further agrees that this indemnification shall be made a part of all
contracts and purchase orders with subcontractors or material
suppliers. The indemnification agreement included in this contract is
to be assumed by all subcontractors:
(1) (a) the right of Tenant to assign to Owner the contract and
Tenant's rights thereunder, at Owner's request, without the
consent of the Contractor, and (2) that without the necessity of
such assignment and without thereby assuming any of the
obligations of Tenant under the contract occurring prior to
such assignment and / or purchase order, except for Tenant's
payment obligations, Owner shall have the right to enforce the
full and prompt performance by the Contractor of such
Contractor's obligations under the contract;
(2) "Contractor agrees to comply with all laws and requirements
applicable to Contractor and the Project."
(3) "Upon an Event of Default by Tenant resulting in a termination
of that certain Agreement of Lease between Tenant and
Owner, dated , 1999, pursuant to which
Tenant (as tenant) has agreed to lease the land on which the
Hotel is to be constructed, Contractor will, at the option of the
City of Sanford, be terminated or Contractor will honor the
contract as if this contract had been originally entered into by
the City of Sanford;
(4) "Upon an Event of Default by Tenant resulting in a termination
of that certain Agreement of Lease between Tenant and
Owner, dated , 1999, pursuant to which
Tenant (as tenant) has agreed to lease the land on which the
Hotel is to be constructed, all covenants, representations,
guarantees and warranties of Contractor hereunder shall be
Agreement of Lease
Page 60 of 94
deemed to be made for the benefit of the City of Sanford (and
the City of Sanford shall be deemed to be a third -party
beneficiary hereof) and shall be enforceable by the City of
Sanford."
(5) "Unless and until the City of Sanford expressly assumes the
obligations of Tenant under this contract (and then only to the
extent the same arise from and after such assumption) the City
of Sanford shall not be a party to this contract and will in no
way be responsible to any party for any claims of any nature
whatsoever arising or which may arise in connection with such
contract. "; and
(6) "Contractor hereby agrees that notwithstanding that Contractor
performed work at the Project Site or any part thereof, the City
of Sanford shall not be liable in any manner for payment or
otherwise to Contractor in connection with the work performed
at the Project Site, except to the extent the City of Sanford, in
writing, assumes the obligations of Tenant hereunder (and
then only to the extent such obligations arise from and after
such assumption)."
SECTION 12.11 Maintenance Of Construction Site
(a) Maintenance And Repair
(i) Tenant shall take good care of, and keep and maintain the Premises
in good and safe order and condition, and shall make all repairs
reasonably necessary to keep the Premises in good and safe order
and condition.
(ii) Tenant shall not commit, and shall use all reasonable efforts to
prevent waste, damage or injury to the Premises except with respect
to the Construction of the Hotel.
(b) Cleaning Of Construction Site Tenant shall keep clean and free from
rubbish all areas of the Project Site.
(c) Other Areas Tenant shall cause the design of the Hotel and the
Construction of the Hotel to be performed in a manner that will not directly or indirectly
materially adversely affect, damage or cause injury to Owner or any other Person. Tenant
shall promptly rectify any damage or interference caused by Tenant to any improvements,
Agreement of Lease
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equipment, structures or vegetation outside of the Premises which is owned or controlled
by Owner or any other Person.
SECTION 12.12 Waste Disposal Tenant shall dispose of waste from all areas
of the Premises in accordance with Requirements and in a prompt, sanitary and
aesthetically inoffensive manner.
ARTICLE 13.
MAINTENANCE AND REPAIR; UTILITIES
SECTION 13.1 Maintenance Of Premises
(a) Maintenance And Repair Tenant shall take good case of, and keep and
maintain, the Premises in good and safe order and condition, and shall make all repairs
therein and thereon; interior and exterior, structural and nonstructural, ordinary and
extraordinary, foreseen and unforeseen, necessary to keep the Premises in good and safe
order and condition and as a first class, full service hotel however, the necessity or
desirability therefor may arise and shall make all such repairs in the most expedient
manner possible, so that the Hotel is maintained in prime working condition satisfying the
requirements of this Lease.
(i) Tenant shall not commit, and shall use all reasonable efforts to
prevent, waste, damage or injury to the Premises.
(ii) All maintenance and repairs by Tenant shall be substantially equal in
quality and class to the original quality of the Improvements being
repaired and shall be made in compliance with the Requirements.
(b) Cleaning Of Premises Tenant shall keep clean and free from dirt, mud,
standing water, rubbish, obstructions and physical encumbrances all areas of the
Premises.
(c) Other Areas Tenant shall cause the Premises to be maintained and
operated in such a manner that will not materially, adversely, directly or indirectly affect,
damage or cause injury to Owner or any other Person. Tenant shall promptly rectify any
damage or interference caused by Tenant to any improvements, equipment, structures or
vegetation outside of the Premises, which is owned or controlled by Owner or any other
Person.
SECTION 13.2 Removal Of Building Equipment Tenant shall not remove or
dispose of any Building Equipment and / or FF &E from the Premises unless such Building
Equipment and /or FF &E (i) is promptly replaced by Building Equipment and FF &E of at
Agreement of Lease
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least equal utility and quality, or (ii) is removed for repairs, cleaning or other servicing,
provided Tenant reinstalls such Building Equipment and FF &E with reasonable diligence;
except, however, Tenant shall not be required to replace any Building Equipment or FF &E
that performed a function that has become obsolete, unnecessary or undesirable in
connection with the operation of the Premises in accordance with the terms of this Lease.
SECTION 13.3 Utilities
(a) Tenant's Obligations In Respect Of Utilities Tenant, at its sole expense,
shall be responsible for handling all aspects associated with utilities affecting the
Premises. Such responsibility includes, without limitation, (i) locating, surveying,
designing, permitting, installing and constructing any utility systems or facilities to, on or
under the Premises, (ii) removing, replacing, relocating, protecting and / or modifying any
utilities, whether such utilities are located at the Premises or on adjacent property, except
for Lynx, Southern Bell, and Pump Branch relocations (iii) maintaining and repairing all
utility lines and services to, on or under the Premises, and (iv) paying all costs, along with
the applicable Florida Sales Tax, for receipt of utility services to, on or under the Premises.
Pursuant to separate written agreements between Tenant and Owner, Owner shall provide
water and sanitary sewer service to the Premises, at the sole cost and expense of Tenant
as provided in City Code. Pursuant to separate written agreement, Tenant shall pay for
and install, or reimburse Owner for the cost of installation of any pipes, servers and
facilities necessary or required for the provision of water and sewer services to the
Premises and shall pay all applicable utility fees for such services as provided in City
Code.
SECTION 13.4 Waste Disposal Tenant shall dispose of waste from all areas
of the Premises in accordance with Requirements and in a prompt and sanitary manner.
SECTION 13.5 FF &E Reserve
(a) Tenant shall establish, in Tenant's name and for the benefit of Tenant, a
separate interest - bearing account (the "FF &E Reserve Account ") solely for the purpose
of funding the renewal, replacement and additions of FF &E and Building Equipment
required for the operation of the Hotel in accordance with the terms of this Lease from and
after the Hotel Opening Date. To fund the FF &E Reserve Account, Tenant shall deposit,
or shall cause the Hotel Manager to deposit, within thirty (30) calendar days after the end
of the month during the term of this Lease from and after the Hotel Opening Date for such
month an amount not less than the percentage of Hotel Revenues as set forth in the
following schedule:
Lease Year Percentage Of Hotel Revenues
1 0%
Agreement of Lease
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s^- f",
2 1%
3 3%
4 and thereafter 4%
(b) Tenant shall make expenditures from the FF &E Reserve Account for the
purposes permitted hereunder as is necessary to maintain the Hotel in accordance with
this Lease.
(c) Tenant hereby grants to Owner a security interest in the FF &E Reserve
Account, and all profits and proceeds thereof, in order to secure Tenant's obligations
under this Section.
ARTICLE 14.
REQUIREMENTS
SECTION 14.1 Requirements
(a) Tenant's Obligation To Complv In connection with any Construction Work,
and with the maintenance, management, use, construction and operation of the Premises
and Tenant's performance of its obligations hereunder, Tenant shall comply promptly with
all Requirements, without regard to the nature of the work required to be done, whether
extraordinary or ordinary, or affecting the maintenance, management, use or occupancy
of the Premises, or involving or requiring any structural changes or additions in or to the
Premises and regardless of whether such changes or additions are required by reason of
any particular use to which the Premises, or any part thereof, may be put. No consent to,
approval of or acquiescence in any plans or actions of Tenant by Owner, in its proprietary
capacity as landlord under this Lease, or Owner's designee shall be relied upon or
construed as being a determination that such are in compliance with the Requirements,
or, in the case of construction plans, are structurally sufficient, prudent or in compliance
with the Requirements.
(b) Permits Tenant shall obtain any and all permits, approvals and licenses
required to own, operate, occupy and manage the Premises. Tenant shall pay all fees and
charges for such permits, approvals and licenses, and maintain such permits, approvals
and licenses in full force and effect.
(c) Definition
"Requirements" means:
(i) any and all laws, rules, regulations, constitutions, order, ordinances,
charters, statutes, codes, ordinances, resolutions, executive orders
Agreement of Lease
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e"»,
and requirements of the City and all Governmental Authorities having
jurisdiction over a Person and / or the Premises or any street, road,
avenue or sidewalk comprising a part of, or lying in front of, the
Premises or any vault in or under the Premises or parking, the
Building Code of the City;
(ii) the temporary and / or permanent certificate or certificates of
occupancy issued for the Premises as then in force;
(iii) the comprehensive plan, the future land use designation, zoning and
all the land use approvals by the City;
(iv) any and all provisions and requirements of any property, casualty or
other insurance policy required to be carried by Tenant under this
Lease.
(c) Owner's Obligation To Comply In connection with the performance of
Owner's obligations hereunder, Owner shall comply promptly with all Requirements.
ARTICLE 15.
FRANCHISOR; CHAIN AFFILIATION
SECTION 15.1 Franchisor; Chain Affiliation
(a) Tenant shall cause the Hotel to be affiliated with a national or international
chain or "flag" that is a Permitted Franchisor and that is approved by Owner in accordance
with this Article 15 (a "Franchisor ") and in accordance with the terms and conditions of
this Lease pursuant to a written Franchise Agreement providing for a national or
international reservation and marketing system to which the Hotel has access and in which
the Hotel is included, the use of trademarks, service marks, logos, the "flag" and other
identifying items provided to other hotels in such reservation and marketing system of the
Franchisor and providing for the management of the Hotel, conference center, food,
beverage and catering services and operation of the garage, and containing terms and
conditions, reasonable and customary for franchise agreements for first class, full service
hotels. "Permitted Franchisor" means a Person that is a national or international chain
or "flag" that owns, franchises or operates a "four diamond" hotel in accordance with the
Guidelines (or the equivalent rating under any successor Guidelines) and which chain or
flag maintains at least sixty percent (60 %) of the hotels that it owns and / or operates as
a "three diamond" or "four diamond" hotel in accordance with the Guidelines (or the
equivalent rating under any successor Guidelines) and which operates a national or
international reservation and marketing system, which is nationally or regionally
recognized in hotel, garage and conference center management and food, beverage and
Agreement of Lease
Page 65 of 94
catering services and has an excellent reputation operating first class, full service hotels,
providing food, beverage and catering services, garage services and conference center
services similar to those required by this Lease.
(b) Tenant hereby agrees to incorporate the covenants and agreements
contained in this Article in the Franchise Agreement as covenants and agreements of the
Franchisor.
(c) The Franchisor's interest in the Franchise Agreement shall be subject and
subordinate to the Owner's Interest in the Premises and to the terms and conditions of this
Lease. As between Owner and Tenant, in the event of any conflict between the terms of
this Lease and the terms of the Franchise Agreement, the terms of this Lease shall govern.
Tenant shall remain responsible for performing all of its obligations hereunder
notwithstanding the fact that the Hotel is affiliated with the Franchisor.
SECTION 15.2 Approval Of Franchisor
(a) Approval Rights Any (i) termination of the Franchise Agreement or (ii)
engagement of the initial or a new Franchisor for the Hotel (a "Franchisor Engagement ")
shall be subject to the prior written approval of Owner.
(b) Approvals Tenant shall, prior to each Franchisor Engagement, submit to
Owner a written request for Owner's consent to such transaction, which request shall
contain or be accomplished by the following information:
(i) the name, address and a description of the nature and character of
the business operations of the proposed Franchisor sufficient to
enable Owner to determine whether such proposed Franchisor is a
Permitted Franchisor;
(ii) disclosure of the ownership of the Controlling Interest of such
proposed Franchisor;
(iii) a certificate of an authorized officer, managing general partner,
managing member, trustee or other authorized Person, whichever
shall be applicable, of Tenant or the proposed Franchisor stating
whether the proposed Franchisor is a Disqualified Person;
(iv) a proposed form of the instrument effectuating such transaction;
(v) a copy of the proposed Franchise Agreement or any modifications to
the then existing Franchise Agreement (in either case, with the
Agreement of Lease
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,*->,
economic terms thereof redacted);
(vi) if the Franchisor Engagement is being proposed because the prior
Franchisor has terminated its Franchise Agreement with Tenant, the
reasons for such termination and copies of all documents pertaining
to such termination;
(vii) a certificate of an authorized officer, managing general partner,
managing member, trustee or other authorized Person, whichever
shall be applicable, of the proposed Franchisor, setting forth a true,
complete and correct list of all properties in Florida in respect of
which Franchisor or any Affiliate currently has, or within the past three
(3) years had, a franchise, operating or management agreement; and
(viii) such other additional information as Owner shall reasonably request,
which information may include information regarding ownership,
banking and financial matters, in connection with its evaluation of
such transaction to the extent reasonably available to Tenant,
provided Owner shall make such request within ten (10) business
days after receipt of Tenant's request for consent.
(d) Owner's Approval Owner shall approve or disapprove any transaction
proposed pursuant to Section 15.2(a) above within twenty -eight (28) Business Days after
receipt of Tenant's request for consent (and all of the information required pursuant to
Section 15.2(b) above or Owner's receipt of such additional information; provided,
however, that Owner shall use reasonable efforts to deliver to Tenant Owner's consent or
refusal to consent as soon as possible within such twenty -eight (28) Business Days.
Notwithstanding the foregoing, if any change in circumstances prior to the closing of the
proposed Franchise Engagement renders the information provided in this Section
materially incomplete or materially incorrect, any consent previously given by Owner shall
be deemed null and void and Tenant shall notify Owner of the change. Upon receipt of
such notice, Owner shall thereupon have twenty -eight (28) Business Days to notify Tenant
whether Owner's consent to such changed Franchisor Engagement is given or denied.
Notwithstanding anything to the contrary contained herein, Owner's decision
whether to consent or refuse to consent to a proposed Franchisor Engagement pursuant
to Section 15.2(a) above shall be based only upon the following factors: (i) whether the
proposed new Franchisor meets the standards of creditworthiness, financial resources and
responsibility reasonably expected by Owner of the Franchisor hereunder; (ii) whether the
proposed new Franchisor is a Permitted Franchisor; (iii) related business experience and
a quality reputation for including in its chain or flag hotels similar in size, nature, location
and character to that of the Hotel; and (iv) whether and to what extent there have occurred
Agreement of Lease
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any material Defaults or Events of Default.
(e) Transfer Instruments Tenant shall deliver to Owner, or shall cause to be
delivered to Owner, within ten (10) Business Days after the execution thereof, a true and
correct copy of the instrument or transfer or engagement and a true and correct copy of
Franchise Agreement.
(f) Invalidity Of Transactions Any Franchisor Engagement that is (i) entered
into without Owner's consent as required in this Article or (ii) sought to be entered into
without the execution and delivery to Owner within ten (10) Business Days thereafter, of
the instrument of engagement, shall have no validity and shall be null and void and without
effect until such time as such consent is obtained and / or the applicable instrument is
received. If Franchisor enters into any such transaction without compliance with the terms
of this Lease, Tenant shall diligently pursue its remedies against Franchisor.
SECTION 15.3 Owner's Rights And Remedies
(a) Tenant will (i) perform or cause to be performed Tenant's obligations under
the Franchise Agreement, (ii) enforce the performance by Franchisor of all Franchisor's
obligations under the Franchise Agreement, (iii) give Owner prompt written notice and a
copy of any notice of default, event of default, termination or cancellation sent or received
by Tenant and (iv) promptly deliver to Owner executed copies of any amendment or
modification of the Franchise Agreement, or if applicable, any new Franchisor Agreement.
(b) Tenant shall cause Franchisor (and any new Franchisor, prior to the
engagement of any such Franchisor) to enter into an attornment agreement with Owner
and Tenant providing as follows: (i) Franchisor will give Owner prompt written notice and
a copy of any notice of default, event of default, termination or cancellation sent or
received by Franchisor, (ii) Franchisor will promptly deliver to Owner executed copies of
any amendment or modification of the Franchise Agreement, or if applicable, any new
Franchise Agreement, (iii) Franchisor will not assert any right it might have to terminate
the Franchise Agreement or performance of its services thereunder as the result of a
default by Tenant without giving written notice thereof to Owner, specifying the claimed
default, and notwithstanding the occurrence of any such default, Franchisor shall take no
action to rescind or terminate the Franchise Agreement and shall, at the request of Owner,
continue performance of its obligations thereunder, in accordance with the terms thereof,
provided that the default shall be cured in accordance with the terms hereof, and
Franchisor shall be paid for its services in accordance with the fee schedules set forth in
the Franchise Agreement; in furtherance of the foregoing, Franchisor shall afford Owner
an opportunity to cure defaults, under the Franchise Agreement, which rights shall be
coincident and coterminous with the right of Tenant to effect such cure, except that Owner
shall have an additional sixty (60) calendar days period, after the expiration of the period
Agreement of Lease
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in which Tenant is required to effect such cure, to effect the same (and performance by
Owner shall be accepted by Franchisor as though the same had been performed by
Tenant), and there shall be no default deemed to exist under the Franchise Agreement
unless such cure shall not have been completed within such period, (iv) in the event
Owner shall terminate Tenant's leasehold interest in the Premises or shall otherwise
succeed to the rights of Tenant and no new Lease is delivered, the Franchise Agreement
shall, at Owner's option, exercisable by written notice to Franchisor within fifteen (15)
Business Days after such termination of other succession, remain in full force and effect,
and Franchisor shall continue to perform its services thereunder for the benefit of Owner,
provided, however, that if Owner fails to timely exercise such right, Owner shall have no
right to cause Franchisor to continue performance as described herein, and if Owner timely
exercises such right, then the Franchise Agreement shall be deemed to have been
amended in the following respects (and, at the request of Owner, the parties shall enter
into a modification of the Franchise Agreement to evidence such amendments).
(1) There shall be no payment by Owner of any administration fee,
termination fee or any other fee or charge under the Franchise
Agreement in connection with termination of Tenant's leasehold
interest or Owner's succession to the rights of Tenant under the
Franchise Agreement;
(c) If the Franchise Agreement shall terminate for any reason, or be rejected or
disaffirmed pursuant to any bankruptcy law or any other law affecting creditors' rights,
Franchisor shall, if notice has not thereto been provided to Owner, immediately notify
Owner of such termination, rejection or disaffirmance, and Owner shall have the right,
exercisable by notice to Franchisor within sixty (60) calendar days after Owner obtains
possession of the Hotel, to enter into a new Franchise Agreement for the Hotel on the
same terms and conditions as are contained in the Franchise Agreement (as amended
above) for the remainder of the term of the Franchise Agreement; the execution of such
new Franchise Agreement shall be subject to the curing by Owner of any outstanding
defaults under the Franchise Agreement which are reasonably susceptible to cure by
Owner; in connection with any prospective sale of Owner's Interest in the Premises and
at the request of Owner, Franchisor will execute and deliver to the party so requesting an
estoppel certificate indicating that the Franchise Agreement is unmodified (or, if modified,
setting forth the modifications) and in full force and effect, and that to the knowledge of
Franchisor there is no default (or specifying any default of which Franchisor has
knowledge or notice), the date of expiration of the term of the Franchise Agreement, and
the date through which Franchisor has received payment under the Franchise Agreement,
it being understood that any such certificate may be relied upon by Owner; and, Owner will
give Franchisor a copy of any default notice under the Lease and afford Franchisor the
right to cure the same (provided such cure if effectuated within the time period provided
herein for Tenant to cure the same).
Agreement of Lease
Page 69 of 94
SECTION 15.4 Initial Franchisor Engagement Notwithstanding any other
provision of this Lease, Tenant shall submit a good faith request to Owner for Owner's
consent to the initial Franchisor Engagement for the Hotel not later than six (6) months
following the expiration of the Contingency Period.
ARTICLE 16.
LIENS
SECTION 16.1 Creation Of Liens
(a) Tenant shall not create, cause to be created, or suffer or permit to exist (i)
any lien, encumbrance or change upon this Lease, the leasehold estate created hereby,
the income therefrom or the Premises or any part thereof or appurtenance thereto, which
is not removed within the time period required pursuant to Section 16.2 below, (ii) any lien,
encumbrance or charge upon any assets of, or funds appropriated to, Owner, or (iii) any
other matter or thing whereby Owner's Interest in the Premises or any part thereof or
appurtenance thereto might be impaired. Notwithstanding the above, Tenant shall have
the right to execute a Recognized Mortgage, Subleases and any other instruments
(including, without limitation, equipment leases) as provided by, and in accordance with,
the provisions of this Lease, including any liens on FF &E.
(b) Owner shall not create, cause to be created, or suffer or permit to exist (i) an
lien, encumbrance or charge upon this Lease, the leasehold estate created hereby, or the
Premises or any part thereof or appurtenance thereto, which is not removed within the time
period required pursuant to Section 16.2 below, (ii) any lien, encumbrance or charge upon
any assets of, or funds appropriated to, Tenant or (iii) any other matter or thing whereby
Tenant's Interest in the Premises or any part thereof or appurtenance thereto might be
impaired.
SECTION 16.2 Discharge Of Liens
(a) If any mechanic's, laborer's, vendor's, materialman's or similar statutory lien
(including, without limitation, tax liens, provided the underlying tax is an obligation of
Tenant by law or by a provision of this Lease) is filed against the Premises or any part
thereof, or if any public improvement lien created, or caused or suffered to be created by
Tenant shall be filed against any assets of, or funds appropriated to, Tenant or Owner,
Tenant shall, within thirty (30) calendar days after Tenant receives notice of the filing of
such mechanic's, laborer's, vendor's, materialman's or similar statutory lien or public
improvement lien, cause it to be discharged of record by payment, deposit, bond, order of
a court of competent jurisdiction or otherwise.
SECTION 16.3 No Authority To Contract In Name Of Owner Nothing
Agreement of Lease
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contained in this Article shall be deemed or construed to constitute the consent or request
of Owner, express or implied, by implication or otherwise, to any contractor, subcontractor,
laborer or materialman for the performance of any labor or the furnishing of any materials
for any specific improvement of, alteration to, or repair of, the Premises or any part thereof,
nor as giving Tenant any right, power or authority to contract for, or permit the rendering
of, any services or the furnishing of materials that would give rise to the filing of any lien,
mortgage or other encumbrance against Owner's Interest in the Premises or any part
thereof or against assets of Owner, or Owner's interest in any Rental. Notice is hereby
given, and Tenant shall cause all Construction Agreements to provide that Owner shall not
be liable for any work performed or to be performed at the Premises or any part thereof for
Tenant or any Subtenant or for any materials furnished or to be furnished to the Premises
or any part thereof for any of the foregoing, and no mechanic's, laborer's, vendor's,
materialman's or similar statutory lien for such work or materials shall attach to or affect
Owner's Interest in the Premises or any assets of Owner, or Owner's interest in any Rental.
The foregoing shall not require Tenant to request advance waivers of lien from contractors
or subcontractors.
ARTICLE 17.
REPRESENTATIONS
SECTION 17.1 No Brokers Each of Owner and Tenant represent to the other
that it has not dealt with any broker, finder or like entity in connection with this Lease or
the transactions contemplated hereby, and each party shall indemnify the other against
any claim for brokerage commissions, fees or other compensation by any Person alleging
to have acted for or dealt with the indemnifying party in connection with this Lease or the
transactions contemplated hereby.
SECTION 17.2 No Other Representation As of the expiration of the
Contingency Period, Tenant accepts the Premises in existing condition and state of repair
and in "AS IS CONDITION" and "WITH ALL FAULTS" and Tenant confirms that: (i) no
representations, statements, or warranties, express or implied, have been made by, or on
behalf of, Owner with respect to the Premises or the transactions contemplated by this
Lease, the status of title of the Land, the physical condition thereof (including but not
limited to subsurface conditions), the zoning, wetlands or other laws, regulations, rules and
orders applicable thereto or the use that may be made of the Premises, or the presence
or absence of "hazardous substances" (as defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 USCA §9601 et seq.)
on or under the Premises, (ii) Tenant has relied on no such representations, statements
or warranties, and (iii) Owner shall not be liable to Tenant, in any event whatsoever, to
correct any latent or patent defects in the Premises.
ARTICLE 18.
Agreement of Lease
Page 71 of 94
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LIABILITY / INDEMNIFICATION
SECTION 18.1 Liability / Indemnification
(a) Owner Not Liable For Injury Or Damage The Owner Indemnified Parties
shall not be liable to any Tenant Indemnified Party for, and Tenant shall indemnify and
hold the Owner Indemnified Parties harmless from and against, any loss, cost, liability,
claim, damage, expense (including, without limitation, reasonable attorneys' fees and
disbursements), penalty or fine incurred in connection with or arising from any injury
(whether physical, including, without limitation, death, economic or otherwise) to Tenant
or to any other Person in, about or concerning the Premises or any damage to, or loss (by
theft or otherwise) of, any of Tenant's property or of the property of any other Person in,
about or concerning the Premises, irrespective of the cause of injury, damage or loss
(including, without limitation, the acts or negligence of any tenant or occupant of the
Premises or of any owners or occupants of adjacent or neighboring property or caused by
and Construction Work or by operations in construction of any private, public or quasi -
public work) or any latent or patent defects in the Premises, except to the extent any of the
foregoing is due to the gross negligence of willful misconduct of any Owner Indemnified
Party. The Owner Indemnified Parties shall not be liable, to the extent of Tenant's
insurance coverage (if available to cover the loss and in any case exclusive of
deductibles), for any loss or damage to any Person or property (except if due to the gross
negligence or willful misconduct of any Owner Indemnified Party) and, to that extent,
Tenant relieves the Owner Indemnified Parties from such liability. Without limiting the
generality of the foregoing, the Owner Indemnified Parties shall not be liable for (i) any
failure of water supply, sewer services, gas or electric current, (ii) any injury or damage to
person or property resulting from gasoline, oil, steam, gas, electricity or hurricane, tornado,
act of God, act of war, enemy action, flood, wind or similar storms or disturbances, water,
rain or ice, or (iii) leakage of steam, water, sewage, gas, electricity or oil from pipes,
appliances or plumbing works.
(b) Indemnification Of Owner Tenant shall indemnify and hold the Owner
Indemnified Parties harmless from all loss, cost, liability, claim, damage and expense
(including, without limitation, reasonable attorneys' fees and disbursements), penalties and
fines, incurred in connection with the claims by a Person against an Owner Indemnified
Party arising from (i) the use or occupancy or manner of use or occupancy of the Premises
by Tenant or any Person claiming through or under Tenant, (ii) any acts, omissions or
negligence of Tenant, or any Person claiming through or under Tenant, or of the
contractors, agents, servants, employees, guests, invitees or licensees of Tenant, or any
Person claiming through or under such Person, in each case to the extent in, about or
concerning the Premises either during or after the expiration or termination of the Term,
including, without limitation, any acts, omissions or negligence in connection with any
Construction Work or in the making or performing of any repairs, restoration, alterations
Agreement of Lease
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,0*
or improvements, (iii) Owner's decision to enter into a negotiation with Tenant with the goal
of consummating a lease for the Premises, (iv) the actual consummation of a lease with
Tenant for the Premises (involving, inter alia, the construction and operation of a hotel and
center) or (v) any challenge protest or contest of the procurement process in connection
with the Premises, except to the extent any of the foregoing is caused by the gross
negligence or willful misconduct of any of the Owner Indemnified Parties.
(c) Indemnification Of Tenant To the extent permitted by law, Owner shall
indemnify and hold the Tenant Indemnified Parties harmless from all loss, cost, liability,
claim, damage and expense (including, without limitation, reasonable attorneys' fees and
disbursements), penalties and fines, incurred in connection with claims by a Person
against a Tenant Indemnified Party arising from any acts, omissions or negligence of
Owner made in its proprietary capacity, in each case to the extent in, about or concerning
the Premises either during, or after the expiration of, the Term, except to the extent any
of the foregoing is caused by the gross negligence or willful misconduct of any of the
Tenant Indemnified Parties.
SECTION 18.2 Contractual Liability The obligations under this Article shall
not be affected in any way by the absence or presence of insurance coverage (or any
limitation thereon, including any statutory limitations with respect to Workers'
Compensation insurance), or by the failure or refusal of any insurance carrier to perform
an obligation on its part under insurance policies affecting the Premises; provided,
however, that if any proceeds of insurance are actually received with respect to an
obligation under this Article, the amount thereof shall be credited against, and applied to
reduce, any amounts paid and / or payable hereunder with respect to such obligation.
SECTION 18.3 Defense Of Claim
(a) If any claim, action or proceeding is made or brought against any Owner
Indemnified Party by reason of any event to which reference is made in this Article, then,
upon demand by Owner or such Owner Indemnified Party, Tenant shall either resist,
defend or satisfy such claim, action or proceedings in such Owner Indemnified Party's
name, by the attorneys for, or approved by, Tenant's insurance carrier (if such claim,
action or proceeding is covered by insurance) or such other attorneys as Owner shall
reasonably approve. The foregoing notwithstanding, such Owner Indemnified Party may,
at its own expense, engage its own attorneys to defend such Owner Indemnified Party, or
to assist such Owner Indemnified Party in such Owner Indemnified Party's defense of such
claim, action or proceeding, as the case may be.
(b) If any claim, action or proceeding is made or brought against any Tenant
Indemnified Party by reason of any event to which reference is made in this Article the,
upon demand by Tenant or such Tenant Indemnified Party, Owner, or any successor
Agreement of Lease
Page 73 of 94
owner, as applicable, shall either resist, defend or satisfy such claim, action or proceeding
in such Tenant Indemnified Party's name, by the attorneys for, or approved by, Owner's
insurance carrier (if such claim, action or proceeding is covered by insurance) or by such
other attorneys as Tenant shall reasonably approve. The foregoing notwithstanding, such
Tenant Indemnified Party may, at its own expense, engage its own attorneys to defend
such Tenant Indemnified Party, or to assist such Tenant Indemnified Party in such Tenant
Indemnified Party's defense of such claim, action or proceeding, as the case may be.
SECTION 18.4 Notification And Payment
(a) Each Owner Indemnified Party shall promptly notify Tenant of the imposition
of, incurrence by or assertion against such Owner Indemnified Party of any cost or
expense as to which Tenant has agreed to indemnify such Owner Indemnified Party
pursuant to the provisions of this Article. Tenant agrees to pay such Owner Indemnified
Party, as Rental hereunder, all amounts due under this Article within sixty (60) calendar
days after receipt of the notice from such Owner Indemnified Party.
(b) Each Tenant Indemnified Party shall promptly notify Owner of the imposition
of, incurrence by or assertion against such Tenant Indemnified Party of any cost or
expense as to which Owner has agreed to indemnify such Tenant Indemnified Party
pursuant to the provisions of this Article. Owner agrees to pay such Tenant Indemnified
Party all amounts due under this Article within sixty (60) calendar days after receipt of the
notice from such Tenant Indemnified Party.
SECTION 18.5 Governs Lease The provision of this Article shall govern
every other provision of this Lease. The absence of explicit reference to this Article in any
particular provision of this Lease shall not be construed to diminish the application of this
Article to such provision.
SECTION 18.6 §768.28 - Waiver Of Limitation On Liability Nothing contained
in this Article or elsewhere in this Lease is in any way intended to be a waiver of the
limitation placed upon Owner's liability as set forth in §768.28, Florida Statutes, or of any
other constitutional, statutory, common law or other protections afforded to public bodies
or governments.
SECTION 18.7 Survival The provisions of this Article shall survive the
Expiration of the Term.
ARTICLE 19.
OWNER'S SECURITY INTEREST IN BUILDING EQUIPMENT AND FF &E
SECTION 19.1 Grant of Security Interest Solely for the purpose of securing
Agreement of Lease
Page 74 of 94
Tenant's obligations to deliver to Owner the Improvements upon Expiration of the Term,
Tenant hereby grants to Owner a security interest in all of the Building Equipment and
FF &E now or hereafter located on the Premises and owned by Tenant, and in all products
and proceeds thereof; provided, however, that Owner's security interest shall be
automatically fully subordinate and subject to any Recognized Mortgage permitted
hereunder and any Recognized Mortgagee's security interest in the Building Equipment
and FF &E. Upon the Expiration of the Term, Owner shall be entitled to all of the rights,
remedies, powers and privileges available to a secured party under (and subject to the
provisions of) the Uniform Commercial Code enacted by the State of Florida.
ARTICLE 20.
EVENTS OF DEFAULT, CONDITIONAL LIMITATIONS, REMEDIES, ETC.
SECTION 20.1 Definition
Each of the following events shall be an "Event of Default" hereunder:
(a) if Tenant fails to make any payment or any part thereof of Rental due
hereunder and such failure continues for a period of fifteen (15) calendar days after notice
is given by Owner that the same is past due;
(b) if Tenant shall default in the observance or performance or any term,
covenant or condition of this Lease on Tenant's part to be observed or performed (other
than the covenants for the payment of Rental or as expressly set froth below) and Tenant
shall fail to remedy such Default within the time period provided herein for the cure thereof;
if no such time period is provided then, within thirty (30) calendar days after notice by
Owner of such Default (the "Default Notice "), of if such a Default is of such a nature that
it cannot reasonably be remedied within such thirty (30) calendar day period, but is
otherwise susceptible to cure, Tenant shall not (i) within thirty (30) calendar days after the
giving of such Default Notice, advise Owner of Tenant's intention to institute all steps (and
from time to time, as reasonably requested by Owner, Tenant shall advise Owner of the
steps being taken) necessary to remedy such Default (which steps shall be reasonably
designed to effectuate the cure of such Default in a professional manner), and (ii)
thereafter diligently prosecute to completion all such steps necessary to remedy the same
without interruption to cure such Event of Default within the shortest possible time;
(c) if Tenant fails to commence major work for the Construction of the Hotel by
the Construction Commencement Date as provided in Section 12.4, herein;
(d) if Substantial Completion of the Hotel has not occurred by the Completion
Deadline or the Hotel is not open to the public for business as a first class, full service
hotel in accordance with this Lease by the Hotel Opening Date;
Agreement of Lease
Page 75 of 94
r*r !�%
(e) if a quality deficiency shall occur pursuant to the Quality Standards
Agreement and Tenant shall not cure the same within thirty (30) calendar days;
(f) to the extent permitted by law, if Tenant admits, in writing, that it is generally
unable to pay its debts as such become due;
(g) to the extent permitted by law, if Tenant makes an assignment for the benefit
of creditors;
(h) to the extent permitted by law, if Tenant files a voluntary petition under Title
11 of the United State Code, or if Tenant files a petition or an answer seeking, consenting
to or acquiescing in, any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under the present or any future Federal bankruptcy
code or any other present or future applicable Federal, state or other bankruptcy or
insolvency statute or law, or seeks, consents to, acquiesces in or suffers the appointment
of any trustee, receiver, custodian, assignee, sequestrator, liquidator or other similar
official of Tenant, of all or any substantial part of its properties, or of all or any part of
Tenant's Interest in the Premises;
(i) to the extent permitted by law, if, within one hundred eighty (180) calendar
days after the appointment, without the consent or acquiescence of Tenant, of any trustee,
receiver, custodia, assignee, sequestrator, liquidator or other similar official of Tenant, of
all or any substantial part of its properties, or of all or any part of Tenant's Interest in the
Premises, such appointment has not been vacated or stayed on appeal or otherwise, of
if, within one hundred eighty (180) calendar days after the expiration of any such stay,
such appointment has not been vacated;
Q) if a levy under execution or attachment in an aggregate amount of $250,000,
adjusted for inflation, at any one time, is made against the Premises or any part thereof or
rights appertaining thereto (except for a levy made in connection with actions taken by
Owner (other than solely as holder of Owner's Interest in the Premises)), the income
therefrom, this Lease or the leasehold estate created hereby and such execution or
attachment is not vacated or removed by court order, bonding or otherwise within a period
of sixty (60) calendar days after such levy or attachment;
(k) any other event designated as an "Event of Default" under any provision of
this Lease.
In the event of a Default which with the giving of notice to Tenant and the passage
of time would constitute an Event of Default, Owner's notice of such Default to Tenant shall
state with specificity the provision of this Lease under which the Default is claimed, the
nature and character of such Default and the facts giving rise to such Default.
Agreement of Lease
Page 76 of 94
A*' r^'■,
Notwithstanding the foregoing, no Event of Default shall be deemed to have
occurred until such time as Owner shall have given Tenant notice of the occurrence of an
Event of Default (an "Event of Default Notice "). An Event of Default Notice shall state
which one remedy Owner is electing from among the remedies stated in Section 20.2(a),
(b) or (c).
SECTION 20.2 Enforcement Of Performance Damages and Termination If
an Event of Default occurs, Owner may elect to: (a) enforce performance or observance
by Tenant of the applicable provisions of this Lease; (b) recover damages for breach of
this Lease; or (c) terminate this Lease pursuant to Section 20.3(a) below. Owner's election
of a remedy hereunder with respect to an Event of Default shall not limit or otherwise affect
Owner's right to elect any of the remedies available to Owner hereunder with respect to
any other Event of Default. In the event Owner defaults under any of the provisions of this
Lease, Tenant may exercise any and all remedies available under this Lease or at law or
in equity.
SECTION 20.3 Expiration And Termination Of Lease
(a) If an Event of Default occurs, and if Owner has elected the remedy of
termination, Owner shall, within ten (10) Business Days after the date of entry by a court
of a final judgment that an Event of Default exists, give Tenant and any Recognized
Mortgagee notice stating that this Lease and the Term shall terminate on the date
specified in such notice, which date shall not be less than ten (10) calendar days after the
giving of the notice, and this Lease and the Term and all rights of Tenant under this Lease
shall expire and terminate as if the date specified in the notice were the Fixed Expiration
Date, and Tenant shall quit and surrender Tenant's Interest in the Premises and
possession thereof forthwith. If such termination is stayed by order of any court having
jurisdiction over any case described in Sections 20.1(h) or (i) above, or by federal or state
statute, then, following the expiration of any such stay, or if the trustee appointed in any
such case, Tenant or Tenant as debtor -in- possession fails to assume Tenant's obligations
under this Lease within the period prescribed therefor by law or within thirty (30) calendar
days after entry of the order for relief or as may be allowed by the court, Owner, to the
extent permitted by law or by leave of the court having jurisdiction over such case, shall
have the right, at its election, to terminate this Lease on five (5) calendar days' notice to
Tenant, Tenant as debtor -in- possession or the trustee. Upon the expiration of the five (5)
calendar day period, this Lease shall expire and terminate and Tenant, Tenant as debtor -
in- possession and / or the trustee immediately shall quit and surrender Tenant's Interest
in the Premises and possession thereof forthwith.
(b) If this Lease is terminated as provided in Section 20.3(a) above, Owner may,
without notice, re -enter and repossess Tenant's Interest in the Premises (which may
include, but not be limited to, re- entering and repossessing the Premises) and may
Agreement of Lease
Page 77 of 94
/0 . 44
dispossess Tenant by summary proceedings, writ of possession, proceedings in
bankruptcy court or otherwise, subject to applicable Requirements.
(c) If this Lease is terminated as provided in Section 20.3(a) above:
(i) Tenant shall pay to Owner all Rental payable under this Lease by
Tenant to Owner to the date upon which the Term shall have expired
and come to an end and Tenant shall surrender to Owner Tenant's
Interest in the Premises (and possession thereof) in the manner
required by this Lease, and both parties shall be relieved of all further
obligations hereunder, except to the extent this Lease expressly
provides that an obligation hereunder shall survive the Expiration of
the Term; and
(ii) In no event shall Tenant be entitled to receive any credit or payment
with respect to the value of the Land and Improvements, title to which
shall automatically vest in Owner upon such termination.
SECTION 20.4 Receipt Of Moneys After Notice Or Termination No receipt
of money by Owner from Tenant after the termination of this Lease, or after the giving of
any notice of the termination of this Lease, shall reinstate, continue or extend the Term or
affect any notice theretofore given to Tenant, or operate as a waiver of the right of Owner
to recover Tenant's Interest in the Premises (which may include, but not be limited to,
recovering possession of the Premises) by proper remedy. After the service of notice to
terminate this Lease or the commencement of any suit or summary proceedings of after
a final order or judgment for the possession of Tenant's Interest in the Premises (which
may include, but not be limited to, a judgment for possession of the Premises), Owner may
demand, receive and collect any moneys due or thereafter falling due without in any
manner affecting the notice, proceeding, order, suit or judgment, all such moneys collected
being deemed payments on account of the use and occupation of Tenant's Interest in the
Premises (including, without limitation, the use and occupation of the Premises) or, at the
election of Owner, on account of Tenant's liability hereunder.
SECTION 20.5 Strict Performance No failure by Owner or Tenant to insist
upon strict performance of any covenant, agreement, term or condition of this Lease or to
exercise any right or remedy available to such party by reason of the other party's default
or an Event of Default, and no payment or acceptance of full or partial Rental during the
continuance (or with Owner's knowledge of the occurrence) of any Event of Default, shall
constitute a waiver of any such Default or Event of Default or of such covenant,
agreement, term or condition or of any other covenant, agreement, term or condition. No
covenant, agreement, term of condition of this Lease to be performed or complied with by
either party, and no default by either party, shall be waived, altered or modified except by
Agreement of Lease
Page 78 of 94
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which the Event of Default Notice has been received and which such Event of Default shall
be continuing, Tenant shall not pay, disburse or distribute any rents, issues or profits of
the Premises, or any portion thereof, the proceeds of any insurance policies covering or
relating to the Premises or any portion thereof, or any awards payable in connection with
the condemnation of the Premises or any portion thereof, or any undistributed proceeds
from any sale or financing; provided, however, that so long as all Rental is being currently
paid to Owner, then Tenant may make payments to (i) creditors which are not Affiliates,
in payment of amounts then due and owing by Tenant to such creditors with respect to
work at the Premises, (ii) Affiliates, in payment of amounts then due and owing by Tenant
to such Affiliates for items and services provided to Tenant in connection with its
operations conducted at the Premises or any portion thereof, only to the extent such
amounts do not exceed that which is customarily and reasonably paid in arms - length
transactions to Persons who are not Affiliates for comparable items and services, and (iii)
the holder of a Recognized Mortgage, in payment of the Debt Service in respect thereof.
SECTION 20.9 Inspection Owner and its representative shall have the right,
upon twenty -four (24) hours prior notice to Tenant, to enter upon the Premises (a) to
inspect the operation, sanitation, safety, maintenance and use of the same (but Owner
shall not thereby assume any responsibility or liability for the performance of Tenant's
obligations hereunder, nor any liability arising from the improper performance thereof) and
/ or (b) to conduct inspections for the purpose of determining whether a Default or Event
of Default has occurred and / or for the purpose of observing the performance of Tenant's
obligations hereunder, provided that Owner shall be accompanied by a representative of
Tenant (in areas of the Hotel other than areas readily available to the general public), and
provided further that such entry shall not unreasonably interfere with the operation of the
Premises. Tenant agrees to make a representative of Tenant available to accompany
Owner on any such inspection.
ARTICLE 21.
NOTICES, CONSENTS AND APPROVALS
SECTION 21.1 Service Of Notices And Other Communications
(a) In Writing Whenever it is provided herein that notice, demand, request,
consent, approval or other communication shall or may be given to, or served upon, either
of the parties by the other (or any Recognized Mortgagee), or whenever either of the
parties desires to give or serve upon the other any notice, demand, request, consent,
approval or other communication with respect thereto or to the Premises, each such notice,
demand, request, consent, approval or other communication shall be in writing (whether
or not so indicated elsewhere in this Lease) and shall be effective for any purpose only if
given or served by certified or registered U. S. Mail, postage prepaid, return receipt
requested, personal delivery with a signed receipt or a recognized national courier service,
Agreement of Lease
Page 80 of 94
la
addressed as follows:
if to Tenant:
PRA of Sanford, L.L.C.
111 South Independence Mall
East Bourse Building, Suite 100
Philadelphia, PA 19106
with a copy to:
George B. Wallace, Esquire
413 West First Street
Sanford, FL 32771
William C. Longa
264 Amity Road, Suite 103
Woodbridge, CT 06525
if to Owner:
Tony VanDerworp, City Manager
City of Sanford
300 North Park Avenue
Sanford, FL 32771
with a copy to:
William L. Colbert, Esquire
200 West First Street, Suite 22
Sanford, FL 32771
(b) Effectiveness Every notice shall be effective on the date actually received,
as indicated on the receipt therefor or on the date delivery thereof is refused by the
recipient thereof.
ARTICLE 22.
FINANCIAL REPORTS AND RECORDS
SECTION 22.1 Books And Records: Audit Rights
(a) Tenant shall at all times during the Term of this Lease keep and maintain
Agreement of Lease
Page 81 of 94
,''1
(separate from any of Tenant's other books, records and accounts), and shall cause the
Franchisor to keep and maintain, accurate and complete records pertaining to the Hotel
and the Construction Work for the Construction of the Hotel, including, without limitation,
financial statements, records and books of account reflecting Hotel Revenues and the
FF &E Reserve Account and the deposits thereto and expenditures made therefrom, in
accordance with generally accepted accounting principals with such exceptions as may
be specifically provided for in this Lease. Owner and its representatives shall have, during
normal business hours and upon reasonable advance notice, access to examine and, if
Owner reasonably suspects the existence of an error or other inaccuracy or if there exists
a Default or Event of Default, photocopy the books and records, financial statements and
other documentation of Tenant and Franchisor pertaining to Hotel Revenue and the FF &E
Reserve Account and the deposits thereto and expenditures made therefrom including,
without limitation, books of account properly reflecting Hotel Revenue and the FF &E
Reserve Account and the deposits thereto and expenditures made therefrom, which books
and records shall be kept at the Hotel or elsewhere in the City of Sanford. Owner shall
have the right to cause an audit of such books and records to be made from time to time,
at Owner's expense. Such right of inspection and audit may be exercised at any time
within five (5) years after the end of the Lease Year to which such books and records
relate, and Tenant and Franchisor shall maintain all such books and records for at least
such period of time and, if any dispute between the parties has arisen and remains
unresolved at the expiration of such period of time, for such further period of time until the
resolution of such dispute.
(b) If, upon any audit by Owner as described above of the books or records of
Tenant or Franchisor, (i) an error shall be revealed which results in there being due to
Owner Percentage Rent for any Lease Year for which Annual Financial Statements are
being audited pursuant to Section 22.1(a) above, the amounts of any such underpayments
of Percentage Rent which may be disclosed by such audit, together with interest accrued
thereon at the Late Charge Rate from the date on which such underpayment was made
until the date of payment of the correct amount, shall be paid to Owner upon thirty (30)
calendar days demand or (ii) an error shall be revealed which resulted in an overpayment
by Tenant to Owner of Percentage Rent, Owner shall remit the amount of such
overpayment (less the cost of such audit) to Tenant within thirty (30) calendar days after
the completion of such audit. If such error is willful or results in there being due to Owner
Percentage Rent for any Lease Year being audited pursuant to Section 22.1(a) above in
an amount equal to or exceeding twenty percent (20 %) of the Percentage Rent theretofore
paid by Tenant in respect of such Lease Year, then the cost of such audit shall be paid by
Tenant to Owner upon thirty (30) calendar days demand.
(c) As soon as available, but in no event later than the date which is one
hundred fifty (150) calendar days after the end of each Lease Year, Tenant shall make
available at the Hotel for inspection, examination and, if Owner reasonably suspects the
Agreement of Lease
Page 82 of 94
existence of an error or other inaccuracy or if there exists a Default or Event of Default,
photocopying by Owner of its representatives, a copy of the annual statements in respect
of Hotel Revenue and the FF &E Reserve Account and the deposits thereto and
expenditures made therefrom for such Lease Year (which statements shall be audited)
accurately reflecting Hotel Revenue and the FF &E Reserve Account and the deposits
thereto and expenditures made therefrom, all prepared and certified by Tenant and such
independence certified public accountant in accordance with the generally accepted
accounting principals.
(d) As soon as available, but in no event later than thirty (30) calendar days after
the end of each month, Tenant shall make available at the Hotel for inspection,
examination and, if Owner reasonably suspects the existence of an error or other
inaccuracy or if there exists a Default or Event of Default, photocopying by Owner or its
representatives unaudited statements of Hotel Revenue and the FF &E Reserve Account
comparing actual results to both the then current budget and the previous year's actual
results, for both the current month and Lease Year to date. Owner shall not be permitted
to remove original profit and loss statements from the Premises.
(e) As soon as available, but in no event later than thirty (30) calendar days prior
to the commencement of each Lease Year, Tenant shall make available at the Hotel for
inspection, examination and, if Owner reasonably suspects the existence of an error or
other inaccuracy of if there exists a Default or Event of Default, photocopying by Owner
or its representatives an information copy of a projected summary income and expense
statement reflecting the budget of the estimated Hotel Revenue (including, separately,
gross room revenues and food and beverage revenues), and expenditures for FF &E and
capital expenditures for such coming Lease Year, prepared on a basis consistent with
generally accepted accounting principles.
(f) Tenant agrees to provide to Owner, on a monthly basis, a copy of all sales
tax documents filed with the State of Florida by Tenant for the Premises. Tenant agrees
to provide to Owner any additional documentation reasonably requested by Owner in
connection with Owner's examinations and audits under this Article.
(g) Tenant shall provide to Owner annually a special report on all Hotel
Revenue. The special report shall be prepared by an independent certified public
accounting firm in accordance with the provisions of the Codification of Statements on
Auditing Standards. The special reports shall be filed with Owner within one hundred
eighty (180) days after each Lease Year and shall include the following:
(1) Schedule of all Hotel Revenue by category by month;
(2) Schedule of Hotel Revenue by category upon which the monthly
Agreement of Lease
Page 83 of 94
/ 0"N '
payments of Percentage Rent are computed and a list of the
payments of Percentage Rent for the Lease Year covered by such
special report; and
(3) A calculation to determine whether the actual amount paid in respect
of Percentage Rent is in accordance with the Lease.
(h) The obligations of Tenant and Owner under this Article shall survive the
Expiration of the Term.
ARTICLE 23.
SURRENDER AT END OF TERM
SECTION 23.1 Surrender Of Premises Upon the Expiration of the Term or
upon a re -entry by Owner upon Tenant's Interest in the Premises, (including, without
limitation, a re -entry upon the Premises) pursuant to this Lease, Tenant, without any
payment or allowance whatsoever by Owner, shall, subject to Section 23.3 below,
surrender Tenant's Interest in the Premises, and shall yield up possession of the Premises,
to Owner in good order, condition and repair, reasonable wear and tear excepted and
(subject to the provisions of Article 8 ) damage from casualty excepted, free and clear of
all Subleases, liens and encumbrances other than as set forth below. Tenant hereby
waives any notice now or hereafter required by law with respect to vacating the Premises
on the Expiration of the Term.
SECTION 23.2 Delivery Of Subleases etc Upon the Expiration of the Term
or upon a re -entry by Owner upon Tenant's Interest in the Premises, pursuant to this
Lease, Tenant, subject to Section 23.3 below, shall deliver to Owner the following (to the
extent then in Tenant's possession or control): Tenant's original executed counterparts,
if available (and if not available, true and correct copies thereof), of all Subleases then in
effect, any service and maintenance contracts then affecting the Premises, true and
complete maintenance records for the Premises, all original licenses and permits then
pertaining to the Premises, permanent or temporary certificates of occupancy then in effect
for the Premises, and all warranties and guarantees then in effect which Tenant has
received in connection with any work or services performed or Building Equipment and
FF &E installed in the Premises (such to be delivered without representation or warranty
by Tenant), together with a duly executed assignment thereof (without recourse) to Owner
in form suitable for recording, and all financial reports required by Article 22 above and any
and all other documents of every kind and nature whatsoever relating to the operation of
the Premises and the condition of the Improvements.
SECTION 23.3 Title To Improvements Owner recognizes and agrees that
until the Expiration of the Term, ownership of and title to Tenant's Interest in the Premises
Agreement of Lease
Page 84 of 94
/^,
shall be in Tenant and that until such time, Tenant has, and shall be entitled to, all rights
and privileges of ownership of Tenant's Interest in the Premises. Ownership of and to
Tenant's Interest in the Premises shall automatically vest in Owner upon the Expiration of
the Term, without any payment of consideration therefor or allowance whatsoever by
Owner, and without the necessity for the execution and delivery by Tenant of any
instrument transferring title; provided, however, that with respect solely to FF &E, (i) if the
Expiration of the Term occurs by reason of the expiration of this Lease, then, upon such
expiration, Tenant may retain the FF &E unless Owner elects to purchase the FF &E for an
amount equal to the then depreciated or amortized value of the FF &E and (ii) if the
Expiration of the Term occurs by reason of the termination of this Lease, then, upon such
termination, ownership of the FF &E shall automatically vest in Owner, without the payment
of consideration therefor, and without the necessity of the execution and delivery by
Tenant of any instrument transferring title. Notwithstanding the foregoing, Tenant
covenants and agrees that upon the Expiration of the Term, Tenant shall, upon Owner's
request, execute and deliver to Owner any instrument or document reasonably requested
by Owner to confirm title to Tenant's Interest in the Premises (including, without limitation,
title to FF &E) in Owner.
SECTION 23.4 Title to FF &E Reserve Account Ownership of an to the FF &E
Reserve Account and all proceeds thereof shall automatically vest in Tenant (subject to
the lien therein of any Recognized Mortgagee) upon the Expiration of the Term.
SECTION 23.5 Cash And Accounts Receivable Tenant shall retain the right
to all cash and accounts receivable or in connection with the Premises existing as of the
Expiration of the Term and Owner shall pay Tenant for all unopened consumable supplies
located at the Premises upon the Expiration of the Term (based on Tenant's actual cost
therefor); provided, however, that Tenant shall turn over to Owner all deposits, accounts
receivables and other payments with respect to all bookings for periods after the Expiration
of the Term. Owner shall assume all advanced bookings for period s after the Expiration
of the Term made in the ordinary course of the operation of the Hotel. If, after the
Expiration of the Term, Owner collects any accounts receivable to which Tenant is entitled,
Owner shall promptly remit such amounts to Tenant, subject to the rights of any
Recognized Mortgagee.
SECTION 23.6 Personal Property Any personal property of Tenant or of any
Subtenant which remains on the Premises after the termination of this Lease or after the
removal of Tenant or such Subtenant from the Premises, may, at the option of Owner, be
deemed to have been abandoned by Tenant or such Subtenant, and either may be
retained by Owner as its property or be disposed of, without accountability, in such manner
as Owner may see fit, in its absolute and sole discretion, but in compliance with applicable
Requirements. Owner shall not be responsible for any loss or damage occurring to any
such property owned by Tenant or any Subtenant.
Agreement of Lease
Page 85 of 94
,1-•,
SECTION 23.7 Survival Clause The provisions of this Article shall survive the
Expiration of the Term.
ARTICLE 24.
QUIET ENJOYMENT
SECTION 24.1 Quiet Enjoyment Owner covenants that, as long as this Lease
is in full force and effect without an Event of Default existing hereunder, Tenant shall and
may (subject to the exceptions, reservations, terms and conditions of this Lease)
peaceably and quietly have, hold and enjoy Tenant's Interest in the Premises for the Term
without molestation or disturbance by or from Owner (solely in its proprietary capacity) or
any Person claiming by, under or through Owner (solely in its proprietary capacity).
ARTICLE 25.
HAZARDOUS MATERIALS
SECTION 25.1 Use Of Hazardous Materials Tenant shall not cause or permit
any Hazardous Material to be brought on, kept or used in or about the Premises except
as necessary or useful to Tenant's business and in compliance with all Requirements.
SECTION 25.2 Indemnification Tenant hereby indemnifies and holds
harmless the Owner Indemnified Parties from and against any and all Environmental
Damages. Such obligation of Tenant shall include, without limitation, the burden and
expense of defending all claims, suits and administrative proceedings (with counsel
reasonably satisfactory to Owner), even if such claims, suits or proceedings are
groundless, false or fraudulent, and conducting all negotiations of any description, and
paying and discharging, when and as the same become due, any and all judgments,
penalties or other sums due against any of the Owner Indemnified Parties. Without
limiting the foregoing, if the presence or release of any Hazardous Material on or from the
Premises caused or permitted by Tenant results in any contamination of the Premises.
Tenant shall promptly take all actions at its sole cost and expense as are necessary to
return the Premises to the condition existing prior to the introduction of such Hazardous
Material; provided that Owner's approval of such actions shall first be obtained, which
approval shall not be unreasonably withheld. Notwithstanding the foregoing provisions of
this Section, Tenant shall have no liability with respect to the presence or release of any
Hazardous Material on or from the Premises if such presence or release is caused by
Owner during the Term.
SECTION 25.3 Compliance Tenant, at its sole cost and expense, shall
comply and cause the Franchisor and all subtenants to comply with all environmental laws
with respect to the use and operation of the Premises.
Agreement of Lease
Page 86 of 94
SECTION 25.4 Notices If Tenant or Owner receives any notice of a release,
threat or release or environmental condition with regard to air emissions, water discharges,
noise emissions, recycling, violation of any environmental law or any other environmental,
health or safety matter affecting Tenant or the Premises independently or by notice from
any Governmental Authority having jurisdiction over the Premises, including the EPA or
DEP, or with respect to any litigation regarding environmental conditions at or about the
Premises, then such party shall give prompt oral and written notice of same to the other
party detailing all relevant facts and circumstances.
SECTION 25.5 Owner's Remedies Provided Tenant does not diligently
commence to remediate the applicable Environmental Conditions promptly after becoming
aware of the same and thereafter diligently pursue the completion thereof in a reasonably
time (and in any event in accordance with Requirements), Owner shall have the right, but
not the obligation, to enter onto the Premises or to take such actions as it deems
necessary to advisable to cleanup, remove, resolve or minimize the impact of or otherwise
deal with any Hazardous Materials, release, threatened release or environmental
complaint upon its obtaining knowledge of such matters independently or by receipt of any
notice from any Person, including the EPA or DEP, or Governmental Authority.
SECTION 25.6 Defaults The occurrence of any of the following events shall
constitute an Event of Default under this Lease, except to the extent caused by Owner or
by any environmental condition of a release that is caused by Owner;
(a) if the EPA, DEP or any other federal, state or local body or agency creates
a lien upon the Premises which is not discharged by payment of bonding within ninety (90)
calendar days; or
(b) if the EPA, DEP or any other federal, state or local body or agency makes
a claim against Tenant (or any subtenant, licensee or other occupant of the Premises), the
Premises or Owner, for damages or cleanup costs related to a release or an environmental
complaint on or pertaining to the Premises; provided however, such claim shall not
constitute an Event of Default if, within thirty (30) calendar days of the occurrence giving
rise to the lien or claim:
(i) Tenant has commenced and is diligently pursuing either (1) cure or
correction of the event which constitutes the basis for the lien or claim
and continues diligently to pursue the cure or correction to completion
and obtains the discharge of any lien, or (2) proceedings for an
injunction, restraining order or other appropriate emergent relief
preventing the body or agency from asserting the claim and, if such
relief is granted, the emergent relief is not thereafter dissolved or
reversed on appeal; and
Agreement of Lease
Page 87 of 94
(ii) Tenant has posed a bond, letter of credit or other security satisfactory
in form, substance and amount to the agency or body asserting the
claim to secure the proper and complete cure or remediation of the
event which constitutes the basis for the claim.
SECTION 25.7 Environmental Audits During the Term of this Lease, Owner
shall have the right to have environmental audits and other tests and studies performed
at the Premises at Owner's sole cost and expense. Without in any way limiting any other
provision of this Lease, Tenant shall be responsible for remediating or curing each
environmental condition, Environmental Damage, release or threat of release of
Hazardous Materials caused by Tenant or Tenant's Officers, directors, employees,
contractors, licensees, invitees, guests, franchisees or agents. Tenant shall, within ten
(10) calendar days after Owner's demand, reimburse Owner for the costs and expenses
incurred by Owner in connection with any such audit, testing and study if such audit,
testing or study indicates the existence of any environmental condition, Environmental
Damage, release or threat of release of Hazardous Materials caused by Tenant or
Tenant's Officers, directors, employees, contractors, licensees, invitees, guests,
franchisees or agents. The performance of any such audit, testing and study shall not
unreasonably interfere with the operation of the Hotel.
SECTION 25.8 Survival The provisions of this Article shall survive the
Expiration of the Term.
ARTICLE 26.
MISCELLANEOUS
SECTION 26.1 Governing Law: Waiver Of Jury Trial: Venue Situs This Lease
shall be governed by and construed in accordance with the laws of the State of Florida,
without regard to principles of conflict of laws. Any controversies or legal problems arising
out of this Lease and any action involving the enforcement or interpretation of any rights
hereunder shall be prosecuted in the State courts of Seminole County, Florida, the venue
situs. To encourage prompt and equitable resolution of any litigation that may arise
hereunder, each party hereby waives any rights it may have to a trial by jury of any such
litigation.
SECTION 26.2 References
(a) Captions The captions of this Lease are for the purpose of convenience
of reference only, and in no way define, limit or describe the scope or intent of this Lease
or in any way affect this Lease.
(b) Table of Contents The Table of Contents is for the purpose of convenience
Agreement of Lease
Page 88 of 94
A^., /^e
of reference only, and is not to be deemed or construed in any way as part of this Lease.
(c) Reference to Owner and Tenant The use herein of the neuter pronoun in
any reference to Owner or Tenant shall be deemed to include any individual Owner or
Tenant.
(d) City's Governmental Capacity Nothing in this Lease or in the parties' acts
or omissions in connection herewith shall be deemed in any manner to waive, impair, limit
or otherwise affect the authority of the Owner in the discharge of its police, legislative,
quasi - judicial or governmental power. Nothing in this Lease or in connection herewith
shall be deemed in any manner to waive or impair the City's sovereign immunity conferred
by statute, common law or otherwise.
(e) Reference to "herein" or "hereunder " . All references in this Lease to the
terms "herein ", "hereunder" and words of similar import shall refer to this Lease, as
distinguished from the paragraph, Section or Article within which such term is located.
(f) Gender All personal pronouns used in this Lease shall include the other
gender, and the singular shall include the plural and vice versa, unless the context
otherwise requires.
SECTION 26.3 Entire Agreement, etc
(a) Entire Agreement This Lease, together with the attachments hereto,
contains all of the promise, agreements, conditions, inducements and understandings
between Owner and Tenant concerning the Premises and there are no promises,
agreements, conditions, understandings, inducements, warranties or representations, oral
or written, express or implied, between them other than as expressly set forth herein and
in such attachments hereto or as may be expressly contained in any enforceable written
agreements or instruments executed simultaneously herewith by the parties hereto.
Notwithstanding anything to the contrary set forth in this Lease, the terms of this Lease
shall supersede the terms of the Memorandum Agreement dated November 21, 1997,
between the City of Sanford and PRA Development and Management, Inc., the First
Addendum thereto and the Second Addendum thereto. This Lease may be executed in
counterparts, each of which shall be deemed an original but all of which together shall
represent one instrument.
(b) Waiver Modification etc No covenant, agreement, term or condition of this
Lease shall be changed, modified, altered, waived or terminated except by a written
instrument of change, modification, alteration, waiver or termination executed by Owner
and Tenant. No waiver of any Default or default shall affect or alter this Lease, but each
and every covenant, agreement, term and condition of this Lease shall continue in full
Agreement of Lease
Page 89 of 94
force and effect with respect to any other then existing or subsequent Default or default
thereof.
(c) Effect of Other Transactions No sublease, mortgage or other transaction,
whether executed simultaneously with this Lease or otherwise, and whether or not
consented to by owner, shall be deemed to modify this Lease in any respect, and in the
event of any inconsistency or conflict between this Lease and any such instrument, this
Lease shall control.
SECTION 26.4 Invalidity Of Certain Provisions If any provision of this Lease
or the application thereof to any Person or circumstances is, to any extent, finally
determined by a court of competent jurisdiction to be invalid and unenforceable, the
remainder of this Lease, and the application of such provision to Persons or circumstances
other than those as to which it is held invalid and unenforceable, shall not be affect
thereby and each term and provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.
SECTION 26.5 Mercier Unless Owner, Tenant and the then existing
Recognized Mortgagee, if any, execute and record an agreement to the contrary, or if
Tenant purchases Owner's Interest in the Premises and elects to merge this Lease or the
Leasehold estate created hereby with the fee estate in the Premises, there shall be no
merger of this Lease or the leasehold estate created hereby with the fee estate in the
Premises or any part thereof by reason of the same Person acquiring or holding, directly
or indirectly, this Lease and the leasehold created hereby or any interest in this Lease or
in such leasehold estate as well as the fee estate in the Premises.
SECTION 26.6 Remedies Cumulative Each right and remedy of either party
provided for in this Lease shall be cumulative and shall be in addition to every other right
or remedy provided for in this Lease, or now or hereafter existing at law or in equity or by
statute or otherwise (except as otherwise expressly limited by the terms of this Lease), and
the exercise or beginning of the exercise by a party of any one or more of the rights or
remedies provided for in this Lease, or now or hereafter existing at law or in equity or by
statute or otherwise, except as otherwise expressly limited by the terms of this Lease, shall
not preclude the simultaneous or later exercise by such party of any or all other rights or
remedies provided for in this Lease or now or hereafter existing at law or in equity or by
statute or otherwise except as otherwise expressly limited by the terms of this Lease.
SECTION 26.7 Performance At Each Party's Sole Cost And Expense Unless
otherwise expressly provided in this Lease, when either party exercises any of its rights
or renders or performs any of its obligations hereunder, such party shall do so at its sole
cost and expense.
Agreement of Lease
Page 90 of 94
SECTION 26.8 Successors And Assigns The agreements, terms, covenants
and conditions of this Lease shall be binding upon and inure to the benefit of Owner and
Tenant and, except as otherwise provided herein, their respective permitted successors
and permitted assigns and shall be construed as covenants running with the Land.
SECTION 26.9 Recording The Lease Owner shall cause this Lease and any
amendments hereto to be recorded in the Public Records of Seminole County, Florida
promptly after the execution and delivery of this Lease or any such amendments.
SECTION 26.10 Notice Of Defaults Notwithstanding anything to the contrary
set forth in this Lease, under no circumstances shall any party to this Lease lose any right
or benefit granted under this Lease or suffer any harm as a result of the occurrence of any
Default or default of such party as to which Default or default such party has not received
notice thereof from the other party.
SECTION 26.11 Nonliability Of Officials And Employees No public officer,
Charter officer, official, City Manager, Director or employee of Owner shall have his, her
or its property or assets at risk in respect of any liability to Tenant, or any successor in
interest, in the event of any default or breach by Owner or for any amount or obligation
which may become due to Tenant or any successor under the terms of this Lease; and any
and all such liability, either at common law or in equity or by constitution or statute, of, and
any and all such rights and claims against, every such Person, or under or by reason of
the obligations, covenants or agreements contained in this Lease or implied therefrom, are
expressly waived and released by Tenant as a condition of, and as a consideration for, the
execution of this Lease.
SECTION 26.12 Conflict Of Interest Tenant represents and warrants that, to
the best of its actual knowledge, no member, official or employee of Owner has any direct
or indirect financial interest in this Lease, nor has participated in any decision relating to
this Lease that is prohibited by law. Tenant represents and warrants that to the best of its
knowledge, no public officer, agent, employee or representative of Owner has received
any payment or other consideration for the making of this Lease, directly or indirectly from
Tenant. Tenant represents and warrants that it has not been paid or given, and will not
pay or give, any third person any money or other consideration for obtaining this Lease,
other than normal costs of conducting business and costs of professional services such
as architects, engineer and attorneys. Tenant acknowledges that Owner is relying upon
the foregoing representations and warranties in entering into this Lease and would not
enter into this Lease absent the same.
SECTION 26.13 No Partnership The parties hereby acknowledge that it is not
their intention under this Lease to create between themselves a partnership, joint venture,
tenancy -in- common, joint tenancy, co- ownership or agency relationship for the purpose
Agreement of Lease
Page 91 of 94
eo�
of developing the Hotel. Accordingly, notwithstanding any expressions or provisions
contained herein, nothing in this Lease or the other documents executed by the parties
with respect to the Hotel, whether based on the calculation of Rental or otherwise, shall
be construed or deemed to create, or to express an intent to create, a partnership, joint
venture, tenancy -in- common, joint tenancy, co- ownership or agency relationship of any
kind or nature whatsoever between the parties hereto. The provisions of this Section shall
survive Expiration of the Term.
SECTION 26.14 Public Entity Crimes Tenant has executed and delivered to
Owner a sworn statement (a "Sworn Statement ") pursuant to Section 287.133, Florida
Statutes, on public entity crimes which verifies that Tenant is not listed on the convicted
vendors list maintained by the State of Florida Department of General Services. Tenant
shall deliver an additional Sworn Statement to Owner on each calendar year during the
Term in the form required by such statute or any successor thereto.
SECTION 26.15 No Third Party Beneficiaries Nothing in this Lease shall
confer upon any Person, other than the parties hereto and their respective successors and
permitted assigns, any rights or remedies under or by reason of this Lease; provided,
however, that a Recognized Mortgagee or its Designee shall be a third party beneficiary
hereunder to the extent such Recognized Mortgagee or such Designee is granted rights
hereunder.
SECTION 26.16 Joint Preparation Each of Tenant and Owner acknowledge
that it has thoroughly read and reviewed this Lease and have sought and received
whatever competent advise and counsel as was necessary for it to form a full and
complete understanding of all rights and obligations herein. The language of this Lease
has been agreed to by both parties to express their mutual intent and no rule of strict
construction shall be applied against either party hereto.
SECTION 26.17 Tenant's Waiver of Claims Tenant hereby waives any claim
against Owner and the other Owner Indemnified Parties for loss of anticipated profits
caused by any suit or proceedings directly or indirectly attacking the validity of this Lease
or any part thereof, or by any judgment or award in any suit or proceeding declaring this
Lease null, void or voidable, or delaying the same or any part thereof, from being carried
out.
SECTION 26.18 Tenant's Right To Contest Tenant may contest the validity or
amount of any Impositions, assessments, or charges, including Percentage Rent
calculations of Owner's auditor's, for which it is responsible and may institute such
proceedings at Tenant's sole and exclusive cost as Tenant considers necessary. If Tenant
contests any such Imposition, assessment, or charge, Tenant may withhold or defer
payment or pay under protest but shall protect Owner and the Premises from any lien by
Agreement of Lease
Page 92 of 94
surety bond or other security.
SECTION 26.19 Attorney Fees: Costs In any litigation or appeal, including
breach, enforcement or interpretation, arising out of this Lease, the prevailing party in such
litigation or appeal, which, for purposes of this Lease shall include only the Owner or
Tenant, shall be entitled to recover from the non - prevailing party reasonable attorney's
fees and costs.
SECTION 26.20 Recording Of Memorandum Owner and Tenant, upon written
request of the other, shall join in the execution of a short form of this Lease in a form
reasonably satisfactory to Owner and Tenant and in proper form for recordation in the
public records of Seminole County, Florida. This Lease shall not be recorded by Tenant
without the prior written consent of the Owner.
SECTION 26.21 Execution Authority The individuals executing this Lease on
behalf of Tenant personally warrant that they have full authority to execute this Lease on
behalf of Tenant for whom they are acting herein.
EXECUTION
IN WITNESS WHEREOF, Owner and Tenant, intending to be legally bound, have
executed this Lease as of the day and year first above written.
ATTEST: CITY OF NFORD, FLORIDA
anet R. Dougherty, City CI &k LqfKy A. Dale, Mayor
STATE OF FLORIDA )
COUNTY OF SEMINOLE )
The foregoing instrument was acknowledged before me this 1 +b+
May , 1999, by Larry A. Dale as Mayor for the City of Sanford
_ day of
who is
personally known to me or ❑ who produced his Florida Driver's License as identification.
41�
i pA .. YPG B DIANE CREWS Notary Public
s�l5 COMMISSION M CC 655670 /�
vy� EXPIRES JUN 15, 2001 Print Name: Diane. G ewS
OF ATLANTIC BONDING CO., My Commission Expires: Jw,c I5, zo6l
Agreement of Lease
Page 93 of 94
la
/ATTEST
- .�- rrr� - .r. Vin/ 1 i N kF S 5
Print Name: TZic HAAa Aj 2k� l LA
Print Name:
(20111 /1f D/114) Eft L Z"C{ OF PEit�/L
STATE )
COUNTY OF
50
The foregoing instrument was acknowledged before me this 10 Zf/ day of
1999, by ...TcZ3'6'JW P46tTTt as NE111
for PRA of Sanford, L.L.C. t ho is personally known to me or O who produced their
Florida Driver's License as identification.
z (2
Notary Public
PrintName: ,0,%1 L k CEY
My Commission Expires:
NOTARIAL
CS, Notary PubNc
SEAL
LGRRAINE R. GRICEVI
CKY d Philadelphia, Phila. County
Commissbn Expires Feb. 22, 2000
i: W rl\dlm\cities %anfordUakefront- lease.cln:dd
Agreement of Lease
Page 94 of 94
10•
Blocks 13,14,22, and unlotted Block east of Block 13 and North of block 22,and the vacated
Right of Way of Cypress Avenue North of First Street, including all vacated Rights of Ways
thereof, all lying North of First Street and as Recorded in Plat Book 1, Page 24 of Section 30 of
Chapman and Tucker's Addition, Sanford Florida, of the Public Records of Seminole County,
Florida,
and;
Block A,and Lots 1,2,3,4,5,16,17,18,19,20 of Block B, including all vacated Rights of Ways
thereof, all lying North of First Street and as Recorded in Plat Book 3, Page 76 of Section 30 of
First Street Extension, Sanford Florida, of the Public Records of Seminole County.
Less;
Beginning at the North West Comer of Block 13, of Section 30,Township 19 South, Range 31
East, Seminole County Florida. Thence run South along the Westerly line of the vacated Right
of Way of Cypress Avenue a distance of 140', Thence Run N 40° 0' 0" E a distance of 145'* to
the Southerly Right of Way of Seminole Boulevard, Thence Run North Westerly along said
Right of Way to the Point of Beginning,
Less; (Portion for Sanford Museum)
Begin at the East Right of Way line of Sanford Avenue and the North line of First Street of
Block 2, of Section 30,Township 19 South, Range 31 East, Seminole County Florida. Thence
Run East along the Northerly Right of Way of First Street a distance of 480' to a Point of
Beginning, Thence Run North 150', Thence Run East 150', Thence Run South 150' to to the
Northerly Right of Way line of First Street, Thence Run West along the Northerly Right of Way
of First Street a distance of 150' to the Point of Beginning.
Containing more or less 7.15 acres.
EXHIBIT "A"