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058-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 viii 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 Agreement of Lease Page 8 of 94 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 Agreement of Lease Page 9 of 94 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 Page 10 of 94 (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; Agreement of Lease Page 11 of 94 (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 Page 12 of 94 ?^-, (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 Page 13 of 94 (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 Agreement of Lease Page 14 of 94 (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 Agreement of Lease Page 15 of 94 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 Page 16 of 94 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 Page 17 of 94 /Ift, r^, 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 Page 18 of 94 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 Page 19 of 94 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. Agreement of Lease Page 20 of 94 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 Agreement of Lease Page 21 of 94 (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 .", 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 ^N !°*, 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 Page 36 of 94 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 rte, (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 Agreement of Lease Page 48 of 94 ! e- 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 Agreement of Lease Page 49 of 94 r 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 Agreement of Lease Page 50 of 94 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 Agreement of Lease Page 51 of 94 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 Page 52 of 94 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 Agreement of Lease Page 53 of 94 r•-, 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 Agreement of Lease 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 Page 55 of 94 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 Page 56 of 94 ra 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 Page 57 of 94 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 Page 58 of 94 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 Page 59 of 94 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 Page 61 of 94 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 Page 62 of 94 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 Page 63 of 94 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 Page 64 of 94 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 Page 66 of 94 ,*->, 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 Page 67 of 94 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 Page 68 of 94 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 Page 70 of 94 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 r"'-1 /�1 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 Page 72 of 94 ,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 b6 ; 6L 96ed asee ;0 Juawaaj6y uo 'Aue ;i `aJep ay} Je4e pue woad 'Jueual A9 PIGH spund 9 *0Z N011036 , sapoo saims pa }iun ay} ;o 6 L ami 'apoo Ao}dnj){ueq ay} ;o (Z)(q)ZOq uoiJoaS ;o esodind ay} jo; sleJuab aseal 9JnJ!Jsuoo Ile4s 'sIBW 9 se 9- 1 se p91eu1wou9p Alssejdxe Jou jo j94}9yM `asea sly} japun jeuMO o} Jueual Aq elgeAed s}unowe Ile 'Ajej}uoo ay} o} aseal si4} ui 6uit4jAue 6ulpueJs4JiMJON esee siyJ jo Mel jo aJnJeJs 'apoo Aouaniosul jo Ao}dnj)lueq 4ons japun JI o} algellene salpeweJ pue sJy61J Ile pue AU2 ailonul o} P9114ua aq llegs jeuMO `Mel jo aJnJeJs Aouanlosui jo Ao}dnj�ueq j94Jo jo a}eJs 'Iejepa; algeolldde a.inJn; jo Juasald a94Jo Cue lapun 191191 jelpis jo uoi }nlossip `uoi }epmbil 'JuawJsnfpeaj 'uoglsodwoo 'Ju9wa6uejje 'uogeziue61oa1 e bui�ees Jueual Jsuiebe jo bq paouawwoo si 4o14M 6ulpaeoojd a ui jo apoo (o}dru�ueg lejapad ejnJn; Cue jo Juasald ay} japun 'Jueual Jsule6e jo Aq paouawwoo si yo14M 6uipaaoad Aue ui `sasiwajd 941 ui }sagaJui s,Jueual 10 Jueual Jsulebe ani}09,49 sawooeq Joe jayJo jo 6ulpaeoold ;o AeJs Aue ;i jo pal9Jue si ;anal jo; lapjo ue ;1 'sapoo 7r3U9AIOSul puy 7 japun selpeweH f0Z N01103S asiMl94 }o jo aJn}eJs Aq jo 'AJinbe ui 'Mel le 6ui }sixe 194e919410 Mou 10 asea sly} ul 10; papnold saipawal jo sJ46u jayJo 1le jo Aue ;o Jueual jo jeuMO Aq eslojexe ja }el jo snoeueJlnwls ay} apnioald Jou Ile4s asimiayJo jo aJnJeJs Aq jo 'Al!nbe ui `Mel Je 6ugsixa 19} ;e9l9y jo Mou jo 9se9 s141 w 10; papinold seipawaj jo s }y6u ay} ;o aloes 10 9uo Aue ;o Jueual jo jeuMo Aq (asiojexe 9L41 jo buiuui6eq) jo asiolaxe 941 - ;oa1a4 sw1aJ ay} Aq pa }iwii Alssaldxe eje saipawaj s,Jueual pue saipewei s,jeuMO Jua}xe ay} of }daoxa eslMiay }o jo ejnJeJs Aq jo 'i(}inbe ui 'Mel le bugslxe je4aaja4 jo Mou jo aseaq s141 ul 10; p9pinold Apawal jo }y6p je4 10 Ajana o} uoi}ippe ui eq Ileys pue ani }elnwno aq Ilegs asea s141 ul jo; papinojd Jueu91 pue jauMO ;o Apawaj pue }46u yoe3 - ;oaja4 sw1aJ a41 Aq paJiwg Alssajdxe aje saipawal s,Jueu91 Jua}xe ay} o} }daoxa 'as1Mja4 }o jo aJnJeJs Aq jo AJmba ui jo Mel }e paMolie saipawal pue s }4bij Cue aMonul o} }45IJ ay} aney Heys pue }Ine;ap ay} ulofua o} Baas o} pelplue eq IIe4s Jueual 'esee sly} japun uogipuoo 10 Jueuanoo `w1a} Aue ;o jeuMO Aq 11ne ;ap Aue ;o Juana ay} u1 - 109ja4 SLw91 941 Aq pelpil Alssejdxe aje saipawal s,jeuMO }uaJxs a41 o} Jdeoxe 'esiMaa4Jo jo aJnJe }s Aq jo CJmba ui 10 Mel le paMo11e salpawal pue sJ461J Cue ai{onul o} Jy61J 94J aney Ile4s pue }1ne ;ad ;o Juan3 jo Jine ;aa 94} ulofua o} �aas o} paIlque eq 11e4s jauMo ' }lne ;aQ ;o Juan3 jo Jlne ;aa s,Jueual ;o Juana 941 ul - sJlne ;9Q ulo 0l J4 !2J 9'OZ N01103S - puewep jo Jsenbal 4ons ;o AJipilen o} JsaJuoo of }46IJ s,Jueual ;o janieM a powaap aq Jou Ile4s jeuMO Aq apew puewep jo }senbal tue yJiM soue1ldwoo s, Jueual - b}mbe ui jo Mel le jo eseel s14J japun 10; papinad jeuMO }sule6e Jueual ;o sJ461j Aue ' 10 lanieM a 9jnJlJsuoo Jou Ile4s pue `oJ eoipnfald }noyJiM eq Heys le }ua�j Aue ;o jeuMo o} Jueual bq JuawAed 'Jlne;aa Juenbesgns jo builsixe uayJ jayJo Aue o} }oadsal 4JIM Joage pue eojo; 11n; ui enuiluoo Ile4s asee spi p uogipuoo PUB w191 '4u9w99l6e 'Jueuanoo AJ9AE) pue 4oea Jnq 'esee s141 ja }le jo Joege IIe4s JinejeU 10 Juana jo Jine ;aa Aue ;o 191neM ON - AJ1ed j94Jo 94} Aq pa}noaxe Juewnilsul u9 e 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"