CITY OF MIAMI BEACH

Office of the City Manager

Letter to Commission No. c27"' o .i7co3From:
9,

David

Dermer and Members

Commission Jorge

Date: October

of the City
Mayor

Gonzalez \",. r-~

M.
City
U
Manager

2003

ROYAL PALM

the latest correspondence between

the City regarding our ongoing negotiations. A report will be provided
15,2003

To:Subject: Attached please find

Don Peebles and

on October

City Commission. I am also attaching an updated Net Present Value calculation

Terms and
reflecting the new negotiated terms in comparison to the Existing Lease
to

the

the
30, 2003

April
LOITerms.

cmgr\$ALL\ lTC-03\RDP Royal

JMG\~\
rar F:\

Palm
LOI

and NPV. CMC. rar.

doc attachments
Cuervo, Assistant
Christina M.
c:
City Manager Patricia Walker,Chief Financial

P ADC

Hospitality Corporation

550
BiltmorcVa\'.
\
Suite 550 Coral

Gahles. Flnrida

33134

Tcl: i05
(.
)

4424342

Fax:305)( 442-

4345 Via

Courier October

2,
2003

Mr.
Jorge

M.
Gonzalez Executive
Beach

Director Miami
Redevelopment

Agency

Executive Director 1700 Convention

Center Drive Miami

Beach, Florida 33130

Re: Royal Palm Crowne Plaza Resort Letter of Intent Dear Mr. Gonzalez:
I am in
receipt of and have reviewed your letter of September 30,2003 and understand and appreciate the spirit in which
it was sent. We have all been involved in this process for a long time. some far longer than
are all frustrated with the time it has taken to conclude an acceptable agreement.
others, and we
It

seems

that

every

close. a new issue always seems to throw us off course. I have twice,
a letter of intent, after much negotiation, whic I thought and assumed would be acceptable to the
City.In each instance. I have been told that what I signed was not

time we get

now, signed

acceptable

because

of

new conditions that had not previously

been

agreed

to

by me.With

respct, some of the statements contained in your September 30 letter are

not accurate, and

feel that I need to

call

those

inaccuracies to your attention.

You first

deleted the requi"rement" to provide the letter of consent from Union

Planters Bank. I must, again,remind you that while many other issues and concepts
as acknowledged by all concerned,
agreed to,
were discussed during our many negotiation sessions, what was finally
make a statement

tha I

set forth in the September 10 Term Sheet that was submitted to

what was
the extent not inconsistent,
the April
on September 10, a copy of which is enclosed, and, to
30 draft of the Letter of Intent that I signed ( see Item 9 of the Term
of a consent letter from Union
requirement"
Sheet).Nowhere in either of those document is there a
"
with
y
o
u
r
September
letter.
I realize that the problem
B
i
n
cl
u
ded
Planters Bank. After looking at the Exhibit
30

was

the

Commission

counsel have been relying on is

to different Exhibit Bs. What I and my
Letter
at
t
a
ched
to
April 30
agreed
to
Exhibit
B
that
was
form
of
the
the
and
meting.
of Intent that I siqned and had available for execution on behalf of the City at the April 30 Commis ion
the
exhibit
version.
but
on
a
different
Joel
to
be
relying
and
it
not
is
You
appear
Commission for the April
I suspect that if you reviw the submittal to the
that we agreed to.

is that we are each referring

30

meeting,

you will find

an Exhibit B

consistent

with the Exhibit B that

have

been

relying

on.The
arose at the Commission meeting and, therefore, was not included in what
that
I agreed to prior to that meeting. The second numbered paragraph of your letter states
y
o
u
Union
Planters
Bank
and
referred
letter
from
p
r
o
m
i
s
e
"
to
obtain
a
retreating"
my
"
to
from
I was "

Bank consent issue

my
and
we

first

email of

nowhere

September

do I see

which you enclosed with your letter. I have read

anything that remotly resembles a promis"
e". What I stated

16,

were "in the process of getting the loan

and

in

reread that email

is that

that email

Mr.

Jorge M. Gonzalez

October

2,

20 3 Page

2 I

have already addressed

the

third numbered paragraph

of

your letter relating

to the confusion between the form

of Exhibit B.I apologize that I did not include a blackline revision of the LOI.As my
counsel has previously advised Joel Minsker. this was an oversight on the part of my staff and I fully
intended to provide the blackline to you. It is my understanding that a blackline has now been

provided to Joel. As to your request relative to the

available for review by your counsel at

Town Park

documents, we can make them

all these weeks, months and years. we have finally reached an agreement
of a settlement, and it would be most unfortunate for all concerned to
matter to conclusion. In the spirit of compromise, therefore, I am
lose this opportunity to bring this
prepared to include in a revised Letter of Intent my agre ment to obtain a letter from Union Planters
Bank within thirty days after the execution of the LOI by all parties. The letter will state that the
Hunton &Wil iams' offices. After
on the

business

terms

tothe

subject to its receipt. review and approval

of the definitive documents. We cannot, however, commit to obtain a specific form of letter, but
we believe that we can obtain a letter that will be reasonably satisfactory

Bank

agrees in principle with the terms

of

the LOI

to provide the letter from Union

A condition of our agreement
City. 1 1)I,
t.
.
be

that

the

LOI

this

Planters

must

agree that drafting will commence immediately after the execution and approval of
days our concluding
parties since we do not wish to delay for another thirty
you are unwil ing to have your counsel do the drafting, than I will, at

the City

by all
matter. If

my expense, have my counsel prepare the drafts. If your counsel is to do the drafting, I would also
want a commitment that first drafts of all documents be published for review within two weeks after execution
of the LOI. If my counsel is to do the drafting, I

commitment. In addition to our agreement to provide the letter from the Bank, in an effort
to finaly bring this to conclusion, I will also agree to proVide the affidavit you have
requested regarding our prior loan modifications despite that , tact that we do not believe that such
affidavit is required under these circumstances by the terms of the Lease. I have revised Exhibit
will make the

same

I trust that you will see that there has been. to some
that agreement. WI1 A.I'~~
Term Shet
an
extent, innocent miscommunication or misunderstanding as to what had been agreed to in the
I suggest we put those misunderstandings aside and move
the April 30 LOI.

and

forward with this negotiation,

in

good

faith,such

that it

can

be

approved by the Commission on October 15. In view of the fact that I have conceded to your
that I agreed to in the
requests as described above and have not changed my position on anything
cannot
be
no
reason
why this matter
should
Term
Sheet,
there
and
April 30 LOI
be
the
Commission on the 15' h for final approval. Although Stuart Hoffman will be out of town
brought

before the

next
you

week, I am sure that you

think

and

I can find a time to

meet

to

bring

this

to conclusion

if

B
to

reflect

Mr.

Jorge

M. Gonzalez

October

2,

and
In the meantime, I have revised the LOI consistent with this letter
together
review
for
your
originals, which have been executed
enclosed four (4)

2003 Page 3

have

with
a blacklined version. Sincerely, RDP ROYAL

PALM

HOTEL

LIMITED PARTNERSHIP

By: PADe Hospitality

Corporation I,
General Partner t

Pov-~~

R.
Donahue

President Enclosures cc: Chairman and

Peebles ~
of the Redevelopment Agency Murray
Joel N. Minsker,
H.Dubbin, City Attorney

Bloom &Minsker,

A.
P.
City

Members

of
Manager Miami Beach

Miami Beach City

Redevelopment Agency General Counsel

This communication is

any purpose llUrsuant to

privileged
Section

setllement conullunicalion and stricti)'

inadmissihle for
90. 408, Fla. Stat.
and Rule 408,

Fed.R.Evid.
LETTER OF INTENT TO
AMEND ROYAL PALM C/{
OWNE

PLAZA

AGlmEMENTS

RESORT

Crowne

Limited

Subjcct: Parties: Royal Palm

Plaza Hotcl RDP Royal

Partnership (" RDP")

City

of

Palm

Hotel

Miami

Beach (the "

City")

Miami

Beach

Redevelopment

Agency (

the
Agency")

an

Date:

2003

RECITATIONS:

On
A.

of

Lease regarding the land

made a part hereof as if fully set forth
1998 in Official Records Book 18170, at
Agreement

1998,the parties entered into

fully described on Exhibit "A" ("
Land")attached hereto and
herein, as recorded on
July I,
0893, in

the

of

Public

Records of

of

28.

more

Page

Miami-Dade

the Lease,RDP began the

May

"

County, Florida (" Lease").

B.Subsequent to the recording

construction

the

Royal Palm/Shorecrcst Crowne Plaza Hotel ('"

Hotel").
C.
During the
of the Hotel, RDP encountered structural problems with
original
Royal
Palm Hotel
the
and soil contamination problems regarding the Land
which alleg- edly resulted in ccrtain construction
delays. A dispute
arose amongst the parties regarding the aforesaid problems and delays resulting in RDP'
s refusal to pay certain Rental due
under the Lease and the Agency' s
refusal to
pay claims
construction

related
to said
contamination
deny and dispute al/ such

and

alleged

construc- tion

delays. D.
The

parties respcctively

claims
and allegations against them. whether
asserted or unasserted. E.
The parties,
wishing
to avoid litigation and
amicably resolve all matters existing between them, entered into negoti
ations regarding the aforesaid disputes. This lettcr
sets

forth

the

understanding reached

as

result of such negotiations. Capitalized terms which are

not defined in this Letter of Intent
to
Amend Royal Palm Crowne Plaza Resort Agre ments (" La!")
sh.111 have the
meanings
ascribed to
them in the existing, applic. lble documents. " Agency" means, as appropriate, the Agency
or

the City or both, as the case may be. F.

Agencv and Owner in
their desire to maintain
andfulfil
their commitmcnt to provide the African American
coml1lunity with opportunities
in the hospitality industry, are willing to amend the Royal
Palm Crowne
Plaza agrecments subject to
the Hotel' s continuing compliance with the Convention Center

owner

and its

slIccessors

the Convention Center

and

make available Hotel facilities and services for support of

undertake joint marketi ng efforts.

assigns
and to

events

1.
BACK RENT AND REAL ESTATE
TAXES: 1.
1 Back Rent Prior

and the Agency

environmental and reconstruction

agree

occulTed prior

delays

has previously paid

Opening

Hotel

14,
2002, and

that

the

unavoidable

The Hotel Opening Date.

To

RDP

delays allributed to the

to

the

Holel Opening

Date.RDP
in Back Rent prior to the
Date; i.
from October 31, 2000 to May
e.,
Agency shall retain said amount in full settlement of all
128,

37:

1.38

amounts due for Back Rent for

the period prior to May
15, 2002. Additionally, RDP shall pay within five (5)clays from the last execution of thIS
LOI any ancl all applicable sales tax clue and owing on said amount plus any
interest

and penalty assessed

Agency for failure

by

the

State

of

Florida

to pay
Hotel Opening Date. 1.2
in this Section

applicable sales tax on

Clark Credit. Subject to the
1.2,RDP

shall

the City

against

said

Group styled

RDP

settles

Royal

Clark

its

conditions

pay to the Agency

Palm

Construction

litigation

present

Inc. vs. Arquitectonica

Group,

set

forth

amount up

an
applicable

sales tax

with

Hotel, LP, Et

The

when,

Et

and

Clark Construction

AI. YS.

International

the

amount prior to the

to 140,
$
"Clark Credit"')plus
000.00 the
(
if,
it

and/ or

The

U.
District
Clark Litigation"')
or if it obtains
RDP shall pay this amount to the Agency within ten (10) days
of its receipt of funds from, and
to
the extent, either the settlement
the
judgment
excess
funds
RDP
pays
its
attorneys' fees and costs
or provides
after
for the Clark Litigation. Article 4 of the Leaseentitled "
Late Charges"' shall not apply
asadditional
to the payment of the Clark Credit. The application of the Clark Credit shall be treated
IRent
shall
be
only
if
the
conditions set forth in this
Bttni\
which
due
met
and
only
then
that
extent. t2qcJ..
Any amounts
are
Section
to
paid to the
Agency under this Section 1.2 shall not
apply to the

District Court, Southem

S.

Corp.,

AI.,

of Florida, Case No. 013130- CIV- Middlebrooks ("

a final non- appealable judgment in the Clark Litigation.

eight percent ( 8%)

return calculation as a
component

of

the

Purchase

Price

as

defined

in

Section

36.

d)(
iii)of
I(
the

payment

Hotel Opening

the Lease (the " Retum").This provision shall survive

3 Back Rent After The
the Purchase Price. 1.
elue, plus applicable sales tax,
Date. Base Rent and Additional Rent
of

from the period

of

May
2002 to
May 15,
be
deferred
and
payable
over
Back
shall
the
10) year period commencing in Lease Year 5 and ending in Lease
ten (
Year 14. 1. 4 Real Estate Taxes. The parties acknowledge that the 2002 real

15, 2003 {'"

Post

estate

taxes

Opening

on the Improvements

Rent")

are

unpaid and

that

said

taxes

are

being appealed.

taxes are due on real estate t,

lxes which were the
responsibility of RDP prior to
the date of the execution of
this LOl, RDP shall
pay such taxes, penalties anel
penalty interest prior to the cxccution Oflhc

Closing Documents.

2.
FUTUIU:
RENTAL: Additional Rcnt and Incentivc
Rent. plus applicablc
2 through 5 shall
Years
he dcferred and payable

Lease

sales

lax. clue in

over the
year penoel
ten 10)(
commencing in Lease Ycar 6
and
ending
in Lease
Year 15.
Other than as stated in the
sentence.
RDP shall continue
preceding
to pay Base
Rent, Additional Rent,and Incentive Rent ( plus all applicable

sales
of same) as well as
all other Rental from the
date of execution of thiS LOr pursuant to
the
taxes

on

such

non-

payments

deferred

terms and
conclilions of the Lease.
3.
PURCHASE PRICE: 3.
1 Declaration of Covenants and
Restrictions. The Declaration of
Covenants and Restrictions
shall be amended to provide that
upon payment of the Purchase Price in full.
the following changes shall be
effective, but that

shall
with

or changed:

respect to
the Shorecrest

then

applicable

Beach Code,

Land

no

zoni ng

require a

apply

longer

in

unity of
to be recorded
Convention
Center

as

Agree-

payment of the

Purchase Price

and

ordinances, such as

covenant

I)

only, Section 2.2 shall no

longer apply.
the RP Land and the Shorecrest
Land,

to both

respect

2.
3 shall

The

Declaration

not otherwise be amended, modi

fied

2) with

covenant

said

if,

the

current section

Section

as a result thereof,
118-5 of the Miami

lieu of

shall cause such

a
2 Convention Center A!!
parcels. 3.
reement.
shall be amended to provide that,
title,RDP

to said

ment

in

upon

full, the

"

350

rooms

per

day" requirement stated

in the Room Block definition shall be reduced

to two hundred fifty
seven (257)rooms per
day.In all other respects, the
definition of Room
Block and the remainder of the
Convention Center Agreement shall
remain unchanged except
as provided in paragraph 18. 17
of this LOt. 3.

Pavment in

Full. The outside date

shall be the

Fixed

provided for in the

10 Rental

inflation

3 Time

for full payment

Date
Expiration
rather than

of
Lease

by

Purchase

Year

Lease. All Lease terms ( such

increases,

the

as

for

Price
25as

those

presently
relating

4.
REFINANCING:

The

11I

be changed to

after

the

years after the

Refinancing Times stated in Section J

on

prior

or

Hotel Opening

to

First Refin,
Date
(" lllcing"');
on

closing

of

then

I.

the beginning of

the

13( a)of the Lease sh~

the fifth (51")year

or

prior to ten (10)

First Refinancing ("
Second Refinancing") and

every tenth ( lOth) anniversary

of the Second Refin, lllcing thereafter;
however,
that the
provided
date
of any refinancing that
maturity
extends beyond
the next required refinancing will
not have to be repaid prior to
its maturity provided said
maturity date
is
no later than twenty ( 20)
years from the last
rcfin, lllcing; provided further
however, that when Tenant refinances
the Balance
its Debt, the Net Refinancing
of
Proceds, as
defined in Section 1 I.
J 3(
b) of
the Lease, shall be
applied to
the

extent available
the deferred Rental

pay

in

the following order: A.

To Owner

to

described
in paragnlphs
1. 3 and
2 of this LOI;B. Fifty
percent ( 50%)
to Owner to pay
the Retull applicable as part of
the Purchasc Price
accrued and unpaid to date; and
fifty percent
50%)
to
Tenant
repay Town Park Hotel Corporation,
as Hotel
Manager

to

Town

Park"),for Costf
OVelTl l s* paid by Town Park ( estimated
Owner to pay the
balance of the

at

$
million). C.
~ To

Return

applicable as
part of the
Purchase Price accrued and unpaid
to date; D.Fifty percent (50%) to
Owner to pay the
Purchase Price (
which includes the Retum) for Owner' s
Interest in the Premises; and fifty
percent 50%
first to any amounts then still
due Town
Park as described
in Section
4B,

above,

and then to Tenant for Tenant Cost

OvelTuns* paid by
at $
2 million); E.
To Owner to pay
the balance

Tenant estimated

of

the Purchase Price (

which includes the Retum) for Owner' s Interest
in the
and
F.
To
Premises;

Tenant if any funds remain after paying in

full the amounts in
paragraphs 4A-4E above. Any Cost
wIll be calculated net
Overruns
of l)
(
any Clark settlement proceeds paid
to Tenant, directly or
netof

Tenant'

attorneys and
Cost OVelTl1ll

the Clark Credit

calculation

to

review

Tenant.

Cost

and

to

any prior overrun or

paid

other

indirectly but ( a)
professional fees and court costs not reflected
in
not advanced
Park
by
and (

Town

the extent paid to

equity repayments

from

OVelTllllS

the
will be

b)

and (2)
two (2) future advances
prior
subject

Owner,

to a full

accounting

and

S.

TENANT'S IU~PA

Y!\
lENT

OF TI-IE RETliRN:

25, and every

Beginning in Lease Year
10)
ten (
years
thereafter. Tenant shall pay Owner any
unpai
d
portion
of the Return
accrued alld
as

follows:

A.Any

and all

Lease Years 125 will

10)

years

unpaid portions of the Return accrued in

and paid over ten (

be amortized

in Lease

Years 26-35. B.Any and all unpaid

of the Return accrued in subsequent ten (
10)
Lease Year increments ( i.
e.,
Lease

portions

Years

26- 35, 3645, 46- 55, 5666- 75, 7665,

85,86-95,and 95- Fixed Expiration
Date)
will be amortized
years
and paid over ten ( 10)
the

in

respective succeeding

tell(

JO) year

Lease
Term periods ( i.
e.,
Lease Years
65, 66- 75,
76-85, 86- 95,
Expiration Date, respectively) and will be refelTed to

36- 45, 46-55, 56-

and

95- Fixed
mortized Retum". C. Commencing
the A"
011
each Lease Year thereafter, to the
as

Lease Year 35 and for

extent
that the
Base Rent,

Additional Rent and the "Amortized Retum", in aggregate, payable in each

Lease Year is less
000, as
than 800,
$
adjusted for
inflation (
the " Rental Cap"),then in such Lease Year, Tenant shall
pay
the
difference between the "
Rental Cap"less the aggregate of Base
Additional
Rent and
Rent,

Retum" for said Lease Year, as mandatory incentive rent (the "
the Amortized
"
Mandatory Incentive
Rent").
in
any such Lease
If
Year,on or after Lease
Year

35,

Incentive

Rent is payable,

such Incentive

Rent

shall

be

and payable even if such payment

results in a payment that
Year in excess of the Rental
Rental

due

Lease

Cap.

Cap"is defined as
the $ 800,000 amount which

shall be increased at the beginning of the tenth (

10' 11)Lease Year, and ever five (
5)years thereafter, in
the
from

proportion as the

the

percentage

increase in

the GDP

Implicit Price Deflator Index

Hotel Opening Date.

6.
SALE OF THE
HOTEL: In addition to the other provisions
in the Lease regarding the Sale of the Hotel. upon the
Sale
of the Hotel the following shall
occur: A. All deferred and/
or accrued and unpaid Rental and the Return

shall be paid in full; and B.

7.
J Recitals B- E
and
proposed by Tenant in the Amendment
Re Town
lched

paragraph 1 of

Park

hereto and incorporated by referencc hercin

included in the
Ground Lease Amendment;
terminate upon the Sale of the
HOlel or the earlier

of the

ii)
fifteen (15)
ycars

however, that
same shall
occur of ( i)
termination
Iotel
/Management Agreement betwecn ROP and Town
Park

from

ofthe

provided

to

or (

Hotel

Lease

Opening Date. 7.2 Section 16.

7(e).
will

he

deleted

in

its

entirety.

7. 3

Any
costs in connection with the "Note"
and/ or Loan",
as defined in
Amendment Re
Town Park to Agrecment of Lease. will not be considered "

payments
the

the amendments

to Agreement of Lease alt.

as Exhibit " 0'"
shall be

or

Operating Expenses"as that term

is defined in the Lease.
7.4 Tenant
waIT<. II1ts and represents to
Owner and the City that Recitals BE of the
amendments proposed by Tenant are
true and COITect and are
a
material inducement
for Owner

and

the

City to

include these amendments in the

Ground Lease Amendment. 8.
RESERVE: 8.
1 Hotel FF&E Reserve. The percentages
stated in Section
16.5(
a)

FF&

Lease with respect to

of the

the Hotel
shall be changed
as follows: Lease Year
J 2 3 4
5 and thereafter Percentages of
Hotel Revenues 0%
2%
3%
1%
9. SHORECREST
4%
RESTAURANT:
9.
1 Changes to Article 33 of the Lease.Article 33
of the Lease shall be amended
to delete therefrom subsections ( a)
and to permit in the area originally
through (I)
contemplated for the Restaurant (
the "
Space") the construction of
a spa, additional meeting space or other
improvements for any reasonable hotel purpose
that will benefit the operation of the
Hotel;
provided, however, that such uses
are permissible under all applicable local laws
and zoning ordinances. The sizes and dimensions of
al/such facilities within the
Space shall be as reasonably determined by
ROP and the
Operators ( defined below)of the
respective facilities. Subsection ( g)
shall be
amended
to relate to <
lny Operator.
The amended Lease shall provide that such facilities shall not be subject
to any

9.
2 Fees
shall

pay, at

other
resultll1g from

its

costs,

the

and Costs. RDP

sole

including

shall be
any parking impact

cost and expense,

but not limited to

new

solely responsible for,

and
fees and any

concurrency rces, permit fees and the like

lacilities. 9.
3 The Space
as a Condominium Unit. If the
located on the Shorecres! Land, and if RDP elects
to

the

Space as permitted under the terms

the Declaration of Condominium to
the Space unit shall be
to

shall be operated in

create a condominium

or the

Space

is

unit

for

RDP shall cause

contai provisions that (i)
the sale or lease or
Agency' s approval
the Space
and (ii)

subject the
accordance with the

Lease.

unit

quality

slandanJs referred

to

in par, lgraph

9 of this
4 Non- Disturbance
LOI. 9.
Agreement.
the Agency shall execute a non- disturbance
agreement
in
favor
of
a
third party Space operator an " Operator'") containing terms generally found
in
such agreements in form and content reasonably
acceptable to the Operator and
the Agency, but the term of which shall be
no longer than
the earlier to occur of (
i)
the expiration of the third
party
Upon

request of RDP,

Space agreement

or ( ii)twenty ( 20)

years. 9. 5 Operator
the Space is managed or operated by
an
Operator pursuant to an agreement between RDP
and Operator, said agreement
shall be
deemed to be Sublease under the Lease requiring Agency approval
under Section 1O.
a)(
of the Lease, the
2(
v)
agreement shall contain quality standards
pertaining to the operation
and physical condition of the Space which shall be
enforced by RDP, which standards and the selection of
Agreement. In

the

event

the Operator shall

be subject to approval by the
Agency. 10. EXISTING
DISPUTED
ITEMS: 10. 1 List Of
Disputed Items. Exhibit "E"
entitled " List of Disputed Items" is
attached hereto and incorporated by reference
herein as a list of the current disputed
items under the Lease and
other related

documents as of the

date of last execution of this LOI ("

RDP Items"). 10.
RDP
Items.
RDP
shall
of
cure all of the
RDP Items on
or before thirty ( 30)days from the date
of execution of

Curing

this LOI except for those items listed in

Exhibit "C"
attached

hereto and

specifically incorporated herein.

11. RELEASES OF ALL CLAIMS

BY
Imp. THE AGENCY AND THE CITY: 1 1.
1 RDP Claims. RDP
shall waive and release any and all
alleged delay claims, environmental damage claims and
any other claims of any
kind whatsoever against the City and/ or the

Agency

1l.

2 Agency and Citv

waive and release their

IIlY kind

whatsoever

Claims. The Agcncy and

the City shall
excess contribution claim and any othcr claims
of .
against RDP upon the cxccution of
Closing
thc
Owner' s

Documents. 11.
3 Acknowledgcment. Provided that all of the
terms and conditions of this LOI
been
have
satisfied by all parties, the amendment to
the Lease shall contain a written ac knowledgment that all
alleged claims
and other alleged defaults have been cured, settled and or waived,
that all
between the parties have been settled and that the
in full

controversies

force
GARAGE
Agreement

shall

be amended

for

andeffect.

Lease is

12.

EASEME:' IIT AGREEMENT: 12.1

as appropriate to provide

and

incorporate

in good standing and

the following

The

Garage

Easement

A.
The parties shall have no further
the payment of Use Fees and Facility Usage Payments and
payments are due either party as of the date
concepts:

obligation for

no

such

of

the execution

of

this LOI. B.The words "

anel

approved by

Grantee"III Section 5(

a)

shall be e1e

to use the
for

its

eteel.C.
RDP shall have no affirmative obligation

Garage
guests and employees. D.Section

Hotel

be deleted and the Garage

default provisions contained

Easement

in

any of

mean

rates charged
(i)

facility

the

Hotel

the

identif ed

and

as the

maximum

related

Agreement

documents.

a)
9(
shall

shall

E. The

term " self

the general

to
daily rate

be removed from any cross

public

park

at the

rate"

shall

Garage

or (ii)
the valet rate charged

by

the
Royal Palm Hotel at

RDP' s election. 12.2

The

remainder of the Garage

Easement

Agreement

shall

In the event that RDP

remain

in
a

full

force

and

effect. 12. 3

on the Shorecrest Land, then, in that

hotel
the
to
this
event,
parties
LOI agree that there are no
rights or agreements under the Garage Easement Agreemcnt
creates

condominium

which will be transfelTed to

the Shorecrest Hotel Condominium unit owners. 13.
CONCESSION AGREEMENT llNDER THE
LEASE: 13. 1 Fee Payment. RDP shall pay the
Concession Fees due and

or

before five (

not now

days after the last

5)
such outstanding

execution of

thisLO!.The

panies

arc

aware of any

the

fees.13. 2 License Fces.RDP shall payor cause to be

paid
com; sponding oc upational license fee in connection with
the

beachfront concession operatIon

for the
that
RDP

RDP

shall

Hotel. 13. 3 Shorecrest Condominium. In

creates a hotel condominium on the

pay ( or

Shorecrest

cause

the

Land, then, in

Shorecrest
to pay)
the cOITesponcling applicable beach concession

association
those fees

charged other upland private

the

event

that event,

hotel

condominium
fees consistent with

owners

of hotel and condominium

properties. 14.
CLARK CONSTIWCTlON LITIGATION LIENS: The existing Clark Litigation liens and
future liens, including liens filed or which may be filed by subcontractors, relating
solely to the Clark Litigation, if any, against the leasehold interest of RDP in the
Lease shall not be considered an Event of Default under any of the Hotel Documents so
long as RDP di ligently and in good faith continues to prosecute its claims to

resolve all issues under the Clark Litigation; provided however, that
contained herein shall relieve RDP of its responsibil ty to remove these liens
to resolve those matters contained in Exhibit " e",
either by resolution

nothing
and

of the
Clark Litigation or otherwise. 15. ATTORNEYS FEES: Each party shall bear its own legal
fees relating to this LOI and the Closing Documents except that RDP shall reimburse
the Agency at the

time

of the
to the

date of the Closing Documents

first $
60, 000 charged by Bloom &

execution

up
its legal fees
P.
based upon an hourly rate of $
Minsker,
L.,
250.00.
shall
provide
RDP
detai
statements
professi
o
nal
services
led
Agency
to
for

showing time

and activity on a daily

basis supporting said reimbursement.

16.
ADDITIONAL TERMS.
of

Because
result of

this LOr,

to raise additional

not

the complex

CONDITIONS

AND

ISSUES NOT COV-ERED IN THIS

nature of the documents involved and

the

changes being

RDP, the Agency and the City

terms

and

inconsistent with the

conditions and issues

terms

not

covered in this

shall
LOI

considered

LOI:

as a

have the right

and which are

of this

LOr as the actual draft-

the documents occurs and continues. 17.SPECIAL INDEl\ INIFICATION BY

indemnify and hold harmless and shall provide defense for the Agency
and the City by counsel reasonably acceptable to the Agency and the City regarding
any
any and all matters arising out of, or relating directly or indirectly to,
ing of

RDP:RDP shall

for those

challenges ansing out of the Clark Credit, the

payment and parti, d
waiver of Back Rent and the
setllement of alleged
claims attributed
delay
10
the environmental damage and
delays rcfelTed to
recol
l
s
tructi
o
n
paragraph
in
1.1
of this
LOI.
City

18.COMPLETION

GUARANTEE:

acknowledge that the Guarantor

and the City shall be terminated

of the certificate

by

the Architect

18. 1 The Agency ancl the

the Completion Guarantee given to the Agency
upon delivery to the Agency
and the City
under

described in Section 2(i) of said

Guarantee
by Section 2(i
of
i)
other respects. Guarantor has
complied with

and Final CO' s are issued

s<.
lid Guarantee. In all

ascontemplated

its obligations uncleI' the Guarantee. The

Completion Deadline is tolled until

said certificate

is

delivered and the Final

CO'
s are

parties acknowledge

that

the

issued.19. DECLARATION

payment

in

full

OF COVENANTS AND
by RDP of

RESTRICTIONS:

19.1 The

the Purchase Price to the

Agency shall not terminate

the Declaration.

20. CLERICAL CHANGES

DOCUMENTS:

TO

Non-substantive clerical

provisions and grammatical

THE

changes such

en'ors

LEASE

AND
RELA TED EXIST. ING
as CUITent mailing addresses in
the notice

in
the Hotel

Documents. 21. GENERAL:

Documents shall be cor- rected in the Closing

Upon execution of this LO!
the terms hereof by
the appropriate Agency and City

21. 1

Definitive

Agreements.

by RDP, the approval of

governing bodies and the execution
of this
City officials, the Closing Documents
shall be drafted.

LOl

by the appropriate Agency and

The Agency shall submit first

drafts
such documents to
Tenant within fi fteen (
15)
days after such approval. The
Closing Documents will contain, among
other things, representations, w,IITanties, conditions, covenants
and indemnities and the like typical
in similar transactions,
subject to the terms hereof. Furthermore, the parties to this LOr
recognize
that due to the complexity of the
structure of these transactions, not
all of
the major legal issues have been covered
by this La!.
consummation
The
of the transactions contemplated
hereby
is conditioned upon the negotiation and execution of
Closing Documents with terms,
the
provisions and
conditions mutually acceptable
to RDP, the Agency
of all

and the

the obtaining

of

all

necessary

City as

lender approvals and

well as

satisfaction of
the parties with all other agreements and matters
necessary or desirable with
respect to the transactions contemplated
The
hereby.
panics shall comply with all
applicable lall' s,
statutes, regulations and requirements and
performance by the Agency,
the
City and RDP under this LOI and
the Closing Documents shall be subject thereto. The fol owing is a
the

not

meant

to

be inclusive of ~t11

shall be executeu

by

the

parties

to

required

agreement) and additional agreements

this LOI

as

rcquireu:

LIST OF AGREEMENTS
A.

GROUND LEASE AMENDMENT

B.

C.

CONVENTION CENTER AGREEMENT A!\

lENDMENT
DECLARATION OF COVENANTS AND RESTRICTIONS

D.

AMENDMENT
GARAGE EASEMENT AMENDMENT

E.

AGENCY' S RELEASE OF CLAIMS

F.

CITY' S RELEASE OF CLAIMS

RDP' S RELEASE OF CLAIMS
SPECIAL INDEMNIFICATION BY RDP
TERMINA TION OF COMPLETION GUARANTY

G.
H.
I.

1.
UCC FINANCING
STATEMENTS amended by Ground Lease

to

renew lease UC -

j' s

as

ccases

to

Amendment. 21.2 Assi

gnment by Agencv. In
the event
exist,the Closing Documents will provide
the rights

the Agency will inure to the

that

of the

benefit

City

and the City

perform the

by

will

the

Agency

granted to
be bound to

ohliga- tions therein. 21. 3 Termination.

This LOI may be terminated
either party if the Closing Documents have
not been executed by

six 6
( )months from

the execution

for the

of

date

this

LOI. 21.4

Non- binding. Except

last

sentence in paragraph I.
I hereinabove and paragraph
21. 11
w
h
i
c
the
to
this
hereinbelow
parties
LOI intend to be binding, ( i)
no
party shall have any legally binding obligation to any other party under this
LOI until
such time as the Closing Documents are executed by
parties thereto; and (ji)

all

will have any liability

to perform in accordance with
no party

LOI
Amendments.

This

LOI

this LOI to any other party

for failure
LOI, if any party decides to terminate this

under

whatsoever
this

or for any other reason

may be amended only by

Agency. 21. 6

Governing

executed by both

Law

and Venue.

their interpretation, v~
didity and performance, shall
of the State of Florida, both substantive
and

RDP and

This LOI, the Closing Documents and

governed by the laws

The venue for any litigation arising out

or

of

be

remedial, without

laws.

this

wri tten agree- ment

the

LOI.21. 5

related to

regard to principles

of

of this

conflict of

LOI

Florida, if in state
if in federal court.

terms " approval"'

court,

and the U. S. District Court,

Southern District of Florida.

21. 7AI)"
or consent" in

O\'
al"or "Consent." The use
of
LOI
shall always be deemed to
this

01"

e approval@
or Areasonable

specifically
executed in

counterparts ~ lIld all

consent@ except

mean

the
Areasonab/

where

provided otherwise. 21. 8 Counterparts.

This
LOI
such counterparts, when t.
lken

may be

together, shall conSlitute this

LOr. 21.
Recognized Mortgagee Consent LeIter. Wilhin thirty (
9
30)days after the last
of
execut
i
o
n
LOI and
this
of II by the
approval
Agency ancl the
City as described in Section 21.I,
Tenant shall provide to the
Agency a
from Union Planters Bank wherein
said Bank will acknowledge that it has nu material letler
objection to
any of the
terms of this LOI, but
which may Contain reasonable reservations and qualifications
to the effect
that the letter is in no way
binding on said
Bank and that the Bank has
the right to approve
or disapprove for any reason
the

proposed agreements and instruments descri bed

in Section 21. 1.
above. 21.
10 Successors and Assigns.
All references to any

of

the
permitted assigns.

parties

to this LOI

21.

shall

include

their

permitted successors and

11 Attorneys' Fees. In the event

litigation arises
solely under the last sentence in
paragraph 1.1 hereinabove, then,
in that
prevailing

event,the

party

shall

be entitled

to recover

its
attorneys' fees and court costs, including
those involving appeals and/
or post- judgment
proceedings, if any. 21.J 2
LOI In Effect. This
LOI shall
remain in
effect as provi ded herein- above provided that
shall maintain the Lease
RDP
and related existing documents in good
standing and free of
any defaults (the parties
agreeing
that
the issues cov-ered elsewhere in this LOI shall not be
deemed
defaults for purposes of this para- graph 21. 12) during
the pendency of this LOI;

the failure

of which

shal automati-

cally

result in this

LOI being terminated

and of no
furtherforce
and effect other than
the specific
binding par< as provided
lgraphs
in paragraph 21.
4 of
this LOr.
21. 13
Privileged Settlement Communic< ltion. This
LOI is a
pri vileged settlement
communication except for
the specific binding paragraphs
as provided in paragraph

21.
4 of this LO!.
The remainder of
this LOI
is strictly inadmissible for any purpose pursuant
to Section
408, Florida Statutes and
90.
Rule
408, Fedenll
Rules of Evidence. 21.14 Statements
AgainstInterest. Any statements made by
any
party to this LOI
contained in this LOI have been made solely
the purpose of
for
al]
matters existing between the parties to this LO!.
resolving
All
parties to this LOI recog-

LOI

recognize and agree

Litigation.

that any sLlch statements may

not

be

correct as

the Clark

15 Recording Fees and

21.

fees and the like for all

contemplated
by

of

the

this La!.21.16

Closing

Documents

shall,

of
The Convention

jury

trial

to

pay all recording

other documents

Documents or any

Waiver of Jury

where applicable, contain a

Center Agreement shall he

shall be a

Closing

the Like. RDP shall

applied

Trial. All

of

the

waiver

provision. 21. 17

amended to provide that a

default in the Convention

default

Cross

Default.

in the Declaration

AGREED AND ACKNOWLEDGED:

nDP ROYAL PALl\I HOTEL LIMITED
PARTNERSHIP, a Florida limited
partnership

By:

PADC HOSPITALITY CORPORATION I,

1 2003
,
a Florida orporation,

Datecl:

2.

as
General Partner By: Name: Richard
A.Mat of
Title:Vice President

MIAMI

REACH

Dermer

REDEVELOPMENT
Name:

AGENCY By:

David

Title:
Chairman Dated: 2003

Attest:

Name:

Robert
Parcher Title: Secretary APPROVED:

CITY

OF

MIAMI BEACH By:

Dated: 2003
Name:

David Dermer Title:

Mayor

Robert Parcher Title: City Clerk

Attest: Name:

f:/

kcr/ C,
M
Mill~

Crm\' IlL'Pl;lza/ AgrcIlL'

B./

IlI~/

O/

b.\-/'"

EXHIBIT B"
The

is

following
Agreement:
ARTICLE

list

of

outstanding disputes regarding

the Hotel

Development

2.

Completion of Construction
CONSTRUCTION 2.3.
of

Upon Substantial Completion

the Project b)
Owner

of

Construction of

the

Project Developer shall furnish the

the following: vi) evidence

that all FF& E necessary to use and operate

the Hotel in accordance with Ground Lease, Management

with

Agreement,
in

Plans and

the

Specs,and the Development

Hotel

Developer

Budget has been installed

has provided a

letter, dated

March 12,2003

in
this
Owner'

satisfaction of
2.
requirement. ARTICLE 4 OWNER PARTICIPATION 4.
v)the (delivery by
s
Riqht to Notice. Access and Review a)
Developer to the Owner of two ( 2)copies of:
all agreements with contractors (that
1)
will be provided upon

settlement

with

suppliers, vendors and other Persons supplying

connection with

the

in

of

excess

materials

Construction of
Two Hundred Fifty Thousand

Construction), subcontractors,

Clark

or

services

in

the Project

250,
Dollars ($

000),which

shall be aggregated

with

respect to

each

Person supplying materials

or

services; 5)
all
equity and loan

drawdowns of

under the Loan

proceeds
all interior design control books ARTICLE
Docs.7)Updated Development Budget
8)
2 Names of Contractors. Materialmen, etc.
5.MISCEL ANEOUS CONSTRUCTION PROVISIONS 5.
Developer shall furnish to Owner, with a list
of each contractor, subcontractor,

in excess of 500, $
listed in Article
The items
E)...
000 except
( for FF&
4 and
Article 5 above, will be satisfied

vendor and supplier who is

by

the

Developer'

delivery of

labor or supplying material

performing any

an itemized "Project

Investment
Project Capitalization
Summary ("
Recap")
regarding the Project. The

Cost

Summarization" and DebVEquity

Capital

is a list of outstanding disputes regarding the

RefinancinQ Not
13. RefinancinQ of Debt b)
MORTGAGES 11.
11.
Agreement of Lease: ARTICLE
Related to a Default - If Tenant refinances its Debt
in
the ordinary course of business, and not related to any Event of Default,
the

fol owing

to Tenant if any funds remain after

ii)

paying Owner

the full Purchase

Price for Owner' s Interest in the Premises

1)
Owner' s subordination of its right to Rental shall be at
the Subordinated Amount as of the date of such refinancing
by
Tenant. 2)
Net "
Refinancing
Proceeds" means the amount

of the refinancing
before

immediately

on such

transaction

Balance,

of the

less (x)
the Balance
such refinancing of the Debt, (y)
the interest owing
and z)
(
reasonable refinancing
Debt

expenses, brokerage

and

yield maintenance

commissions and prepayment fees

charges relating to the Debt to

be refinanced. RDP

has been requested to submit financial information regarding

any possible refinancing to the Agency. As such, RDP will provide the City/ Agency
with an Affidavit relating to the Union Planters Bank Joan modifications that
have been closed to date summarizing the use and application of the
additional advance proceeds and stating the fact that none of the loan proceeds wer used (
i)
for distributions to any of the Borrower' s partners
or members, ( ii)
to repay any
of the Borrower' s partners or members for prior advances, loans or equity
or

contributions, or (iii)
to repay any

capital

other

person or entity which

loaned money

to

the
all

Borrower. 13.
3 One 1)
( Hotel Manaqer The Developer will affirm that at
times during
the Term and without interruption, both the

Shorecrest
one

letter dated
(

the

RP

Improvements shall

be

operated and

managed

by

Manager. Developer has resent previous

is
2003)
this
condition
affirming
being complied with provision
January 15,

the

and

Improvements and

same Hotel

on the Lease Agreement,

and
is satisfied
to owner

as such, this

ARTICLE

condit on

k)
Tenant will provide notice
Owner 10. 1.(
Transaction not requiring Owner' s consent not later

10.Notice

to

of any Capital

than

two 2)
( business days

after the occurrence of such Capital Transaction..Develo.per

has provided said notice in connection

Certificate of Tenant

further provided

and

a letter dated March 12,2003 in satisfaction

of

with

the

transaction described in

the

EXHIBIT C"

CLARK EXHIBIT)
The

following is a list of outstanding

Development Agreement:

ARTICLE

Clark

issues disputes

regarding

the

Hotel

2.

Completion of Construction
CONSTRUCTION 2.3.
of
Upon Substantial Completion of Construction of the
the Project b)

Project Developer shall furnish the Owner

with
the fol owing: i)
certificate of the Architect
re:
Substantial Completion iii)lien waivers in form
and substance reasonably
satisfactory to Owner, other than Clark Construction lien waivers that
will
be provided upon settlement
Clark Construction v)
Contractor' s Final Affidavit, to be provided upon
settlement

with

with
Clark Construction
ARTICLE 4 OWNER PARTICIPATION 4.
2.
Owner' s
Riqht
to Notice. Access and Review b)
The
final

critical path method ("CPM Schedule") The Developer will provide the last CPM
Schedule provided by Clark in the Developer' s possession. To the extent the Final
CPM Schedule is provided as a result of the settlement of litigation with

Clark,

the Developer will

provide same. ARTICLE
14.

DISCHARGE OF LIENS 14. 2 Discharqe of Liens a)

If any mechanic' s,
laborer'
vendor'
s,
ma
t
e
r
i
a
l
m
a
n
'
s,
similar
tax
liens)
is
s,
or
statutory
including

lien

filed against

Developer shall cause it to be

the Project Site...
discharged. However, Developer shall not be required to discharge any such lien if Developer
has furnished Owner with, at Developer' s option, a cash deposit, bond,
letter
of credit from an

filed by

lit gation with

ClarkConstruction, all

liens

will

Institutional Lender
Clark Construction,

be

discharged. F:\

cmgt\$

or

other security. As to liens

the Developer agrees that upon settlement of

EXHIBIT " D"

AMENDMENT RE TOWN PARK TO AGREEJ\ 1ENT OF LEASE

AMEI'\
DMENT TO
of the

day

AGRE v:'IENT

OF LEASE ( the "

of ,

20m

limited

Florida

AGENCY,a

Amendment"')
is made and entered into as
and between RDP ROYAL PALM HOTEL L1l' vITEPD ARTNERSHIP.

by

partnership ("
public

and
MIAMI
BEACH
Owner"')
politic
("
WITNESSETH
hody corporate and
Tenant").

REDEVELOPMENT

A.
Owner

Property"').

and Tenant entered into an Agreement

of Lease, dated October 21,
the
rel
a
ti
n
g
to
property
Lease"),
real
more particularly described therein (
B.
Town Park

Hotel Corporation. a Tennessee

Manager defined in the Lease) of the Hotel d(efined in the

Lease). C.Town Park and

certain
Town

PADC
Loan Agreement dated
agreed

to

Royal

Holdings,

Palm
April

corporation (' Town

1997, (

the "

Park"), is the

Hotel

LLC ("
BOtTOWer")

30,2001

are parties to that

Agreement"), whereby
( the Loan
"

seven and 66/

to BOlTower a
fortypercent (47. 66%)
Class A limited partnership interest in Tenant in consideration
for Bon' ower'
s execution and deli very of that certain Purchase Money Promissory Note
in favor
of Town Park (the "Note"),
which Note evidences the loan by

Park

convey

100

Town

Park to

percent (

Bon'ower (the " Loan").D.Town

Park

currently

holds a one

%)
partnership
inter st in Tenant. E.Pursuant to Section 4.
0 I f)
(
of the
Loan Agreement, Town Park desires to confirm that the Loan will
treated
as
an equity interest in Tenant
be
for purposes of

the

limited

Lease

of

the

so

premises

long as the
and

for

of
which

is

follows: 1. Recitals.

hereby

Loan is outstanding, NOW, THEREFORE, in consideration

valuable consideration. the receipt and sufficiency

other good and

acknowledged, the

parties

agree

as

The foregoing recitals

are true and COlTect. 2.Equi tv Interest. Owner

the extent that the Lease distinguishes between
Hotel Manager) holding or not holding any equity
secured by the Note shall be treated for purposes

and Tenant hereby agree that

Town Park (in its capacity as
interest in Tenant, the Loan evidenced and

to

of

the Lease as

Park

No Further Modification. Except as

this Amendment, the Lease and all

Town
amended by

provisions shall remain in

holding

full force

an equity

interest in Tenant. 3.

and effect.In the

of its terms and

event

of any

Lease, the

provisions

shall have the

same

of this Amendment shall control. All

meanings

as

they

capitalized

terms

herein

have in the Lease, unless otherwise defined

herein.

Signature

page follows.]

IN WITNESS WHEREOF, this Amendment has becn

duly

executed

by the parties

hereto.

WITNESSES:

O\ VNER":
MIAMI

BEACH

REDEVELOPMENT

AGENCY

By:
Print Name

Print Name:

Title:

Print Name

TENANT":
RDP ROYAL PALM HOTEL LIMITED

PARTNERSHIP,

By:

WITNESSES:

By:
Print Name:

Print Name
Title:

Print Name

17(,

partnership

Hospitality Corporation I,
corporation, as general partner

PADC

Florida

Florida limited

MI A M I

B E A C H REDEVELOPMENT AGENCY

1700 Convention Center Drive, Miami Beach,

FI. 33139 http:\\
www.

miamibeachfl.
gov

Telephone ( 305) 673-7010 Facsimile (

305)
673- 7782 VIA
EMAIL AND COURIER October 9,
2003
R.
Donahue Peebles Presidnt
RDP Royal Palm
Hotel Limited Partnership
PADC

Hospitality Corporation I

550 Biltmore

Way,

Suite 550

Coral

Gables, FL 33134
Re:Royal Palm Letter of
Dear Mr. Peebles:

Intent LOI")
("your
October

2, 2003 correspondence

Thank you for your October 2,

2003 correspondence and your willingness to
bring this matter to
To that end, I have enclosed a clean and a black

conclusion.
lined copy of

our

previous "

September

26,

which I have revised to incorporate certain ( but not

2003 LOI",
all) changes
have requested ("
October 9,
2003 LOI").
you
In particular, please note that
I have not changed our original paragraph 21.9
in the September 26,2003
the
Bank
Consent
Letter,
except
for
LOI"regarding
the deletion of the
sentence regarding no
drafting or other legal work. Additionally, I have agreed to accept
your offer

to draft
all of the Closing Documents within fifteen (15)
days after Agency approval of the LOI
have
incorporated that language
in paragraph
21.1,
and
consistent with your
As
Exhibit
"
B"
,
you
have
made
changes
to indicate satisfaction of
request.
to
certain
elements by way of letters dated January 15,2003 and March 12,
deemed outstanding on April 30, 2003. Therefore,
2003, which the Agency still
have
noted
in
I
Exhibit "

B"
attached to the October 9,
2003 LOI,
the Agency' s need to clarify
these discrepancies within the thiry( 30)
day timeframe allotted in paragraph 10.2
of the LOI and have revised "Article 11 Mortgages" to reflect consistent language. Given
the Default Notice we received,
its significance and our inability to discuss this
I cannot in good conscience recommend the enclosed "
matter with your Lender,

October 9,2003 LOI"

for approval by
letter curing the

the

Agency, without

first receiving a

R. Donahue Peebles

October

9, 2003

Page 2 of 2 Considering all the exchange of correspondence and the

numerous meetings held between the parties and in light of the fact that you have been directly
involved in every negotiation which are of such great importance to both parties, it is imperative
with your signature, acknowledge the terms set forth herein by accepting
that you,
and

an effort to bring this protaced negotiation to

a successful conclusion, I have narrowly focused on the issues of importance to the Agency
2003
indicate your acceptance of the October
" 9,
and the City. Please
unchanqed,
2003
LOI",
O
ctober
attached
"
returning
the
signing
LOI", by
9,
and
9,2003 LOI".In

the "October

executing

the aforesaid
notice curing
Union Planters
2003 at noon,for inclusion
than Friday,October 10,
and

providing

the

default

no

later

in

the
City Commis ion/ Agency
Agenda package
to
be

2003. Sincerely, o 6~
.
considered on October 15,
and
Chairman
Encl
o
sures
M.
Gonzalez
Honorable
c:
Manager
City
Jorge
Agency Murray H.

Members of the Redevelopment

Dubbin, City Attorney and

Redevelopment Agency
Counsel Joel N.

General
MinskerBl, o m &

Minsker,P.

L.

Stuart

-"

This communication ilia

an

ur

ose

privilegedsettlem~ntcomlllunication andstrictIyinadmissible
90. 408,Fla.Stat.

ursuant to Section

for

and Rule 408,

Fed.R.Evid.
LETTER OF INTENT TO
AMEND ROYAL PALM CROWNE

AGREEMENTS Subject: Parties:Royal Palm

Crowne Plaza Hotel RDP Royal Palm

PLAZA
RESORT

Limited

City of
Partnership ("RDP")

Hotel

Miami

Beach (the City")

"
Miami Beach

Redevelopment

Agency (

the
Agency")

an

made

Agreement

RECITATIONS:

Date: 2003

of Lease

a part hereof as

regarding

the

if

fully

May 28, 1998,the parties entered into

attached hereto and
("
fully described on Exhibit "A" Land")
on
recorded
forth herein, as
July

On
A.
land

more

set

1,1998 in Official Records Book 18170, at Page

in

the

Public Records

"

of

recording of the Lease, RDP

0893,

B.Subsequent to the
Miami- Dade County, Florida ("Lease").

began
During

("
C.
construction of the Royal PalmlShorecrest Crowne Plaza Hotel Hotel").
Royal Palm
the
original
structural
the construction of the Hotel, RDP encountered
problems with
edly
which
resulted in certain
allegHotel and soil contamination problems regarding the Land
construction delays. A dispute arose amongst the parties regarding the aforesaid problems and delays resulting in
refusal
RDP' s refusal to pay certain Rental due under the Lease and the Agency' s
to pay
the

claims

related

to said contamination

respectively deny and

dispute

and

alleged

construc- tion delays. D.The

parties

all

and allegations against them, whether asserted or unasserted. E.The parties,

between them, entered
wishing to avoid litigation and amicably resolve all matters existing
forth the understanding reached as
into negotiations regarding the aforesaid disputes. This letter sets
of Intent
this Letter
in
not
defined
a result of such negotiations. Capitalized terms which are
have
the
shall
to Amend Royal Palm Crowne Plaza Resort Agreements (" La I")
means, as appropriate, the Agency
document
s
.
"
Agency"
existing,
the
them
ascri
b
ed
meanings
applicable
in
to
such

claims

Agency and Owner in

City or both, as the case may be.F.
vide the African
their desire to maintain and fulfill their commitment to prothe
amend
to
willing
Palm
Royal
hospitality
American community with opportunities in the
industry,are
the Convention
with
continuing
compliance
Crowne Plaza agreements subject to the Hotel' s
or

the

owner

and its

successors

and

assigns

make available Hotel facilities and services for support of

the Convention Center events and to undertake joint

marketing efforts.

1.
BACK RENT AND REAL ESTATE
TAXES: 1.
1 Back Rent Prior To The Hotel Opening Date. RDP
and the Agency agree that unavoidable delays attributed to the
environmental and reconstruction delays occurred prior to the Hotel Opening Date.RDP

128,373. 38 in Back Rent prior to the Hotel

e.,
i.
from October 31,2000 to May 14,
Date;
2002,and the Agency shall retain said amount in full settlement of all amounts due
prior to May IS,2002.
for Back Rent for the period
days from the last execution of this LOl any
Additionally, RDP shall pay within five (5)
and all applicable sales tax due and owing on said amount plus any interest and
penalty assessed by the State of Florida against the City and/ or the Agency for
failure to pay
has previously paid

Opening

applicable sales

tax on said

Date. 1.
2 Clark Credit. Subject

to

amount prior to the Hotel Opening

the conditions set

forth

in this

$
RDP shall pay to the Agency an amount up to 140,
2,
Section 1.
and
if,
it
applicable
sales
tax
when,
000. 00 the
( C
" lark Credit")plus
settles its present litigation with The Clark Construction Group styled
RDP Royal

Construction
Palm Hotel, LP,Et AI. vs. The Clark
Inc. vs. Arquitectonica International Corp., Et AI., U.S.District

Group,

Florida, Case No. 01-3130- CIV-Middlebrooks (" Clark Litigation")

or if
it obtains a final non- appealable judgment in the Clark Litigation. RDP shall
( 0)days of its
pay this amount to the Agency within ten 1
either the settlement or the
receipt of funds from, and to the extent,
judgment provides excess funds after RDP pays its attorneys' fees and costs for the
Late Charges" shall not apply to the
Clark Litigation. Article 4 of the Lease entitled "
payment of the Clark Credit. The application of the Clark Credit shall be treated as additional
conditions set forth in this
Back Rent which shall be due only if the
then only to that extent. Any amounts paid
and
met
Section are
to the eight
under this Section 1.2 shall not apply
to the Agency

Court,Southern

District of

percent (8%)
return calculation as a component
Section 36. I(
of the Purchase Price as defined in
survi
This
provi
s
i
o
n
R
"
eturn").
of the Lease the
iii)
d)(
shall ve the
(
After The Hotel
Back
Rent
1.
Price.
3
the Purchase
payment of
from
Opening Date.
Base Rent and Additional Rent due, plus applicable sales tax,

15,
15,2002 to May
shall be deferred and payable over the ten (
Post Opening Back Rent")
2003 ("
Lease
Year
in
5 and ending in Lease Year
10)year period commencing
real
14.1. 4 Real Estate Taxes. The parties acknowledge that the 2002
the period of

estate

taxes

on the Improvements

are

May

unpaid

and that

said taxes are being appealed. On

taxes are due

on

real estate taxes which

were

the

responsibility

of RDP

the date of the execution of this LOI, RDP shall pay such taxes,
penalty interest prior to the execution of the Closing Documents.

prior to
penalties and

FUTURE
2.

RENTAL:Additional Rent and Incentive Rent, plus applicable sales tax, due in
Lease
over the
Years 2 through 5 shall be deferred and payable
and ending in Lease
commencing in Lease Year 6
year period
ten 10)(
than as stated in the preceding sentence, RDP shall continue
Year 15.

Other

Rent, Additional Rent,and Incentive Rent (plus all applicable sales

deferred
payments of same) as well as all other Rental from the
nontaxes on
date of execution of this LOI pursuant to the
to pay Base
such

terms and
PURCHASE PRICE: 3.
conditions of the Lease. 3.
1 Declaration of Covenants and Restrictions. The Declaration of Covenants and Restrictions
shall be amended to provide that upon payment of the Purchase Price in full,

the following changes shall be effective, but

that

said

Declaration shall not otherwise be amended,

modified

or

changed:

with respect

1)

2 shall no longer
to the Shorecrest Land only, Section 2.
with respect to both the RP Land and the Shorecrest Land,
2)
apply.
and if,as a
3 shall no longer apply
2.
Section
118-5 of the
current
section
the
ordi
n
ances,
such
then applicable zoning
result
as

thereof,

Miami Beach Code, require

covenant

in

lieu

of unity of title, RDP shall cause

a covenant to be recorded as to said parcels. 3.2 Convention Center
Convention Center Agree- ment shall be amended to provide that,
Agreement. The
the 350
"
upon payment of the Purchase Price in full,
rooms per day" requirement

such

stated in the Room Block definition shall be reduced to two hundred

257) rooms per day. In all other respects,
fifty seven (
the definition

of

Room Block and the remainder of the Convention Center Agreement shall remain unchanged
Time
3
except as provided in paragraph 18.17 of this LO!.3.
the
of
payment
full
Purchase Price
for Pavment in Full. The outside date for
shall be the Fixed Expiration Date rather than Lease Year 25 as
the Lease. All Lease terms ( such as those
for in
presently

relating to

provided
Rental

inflation

4.

The Refinancing Times stated in Section 11. l3(a)of the Lease

shall be changed to on or prior to the beginning of the fifth (Sth) year after
( 0)years
First Refinancing"); on or prior
to ten 1
the Hotel Opening Date ("
then
Refinancing (" Second Refinancing") and
the First
after the closing of
provi
ded
Refinancing
thereafter;
the
10th)
anniversary
tenth
(
Second
of
every
that
extends
of
any
beyond the
refinancing
however, that the maturity date
next required refinancing will not have to be repaid prior to its maturity provided said maturity
date is no
later than twenty ( 20)years from the last
refinancing; provided further however, that when Tenant refinances the Balance of its
of the
as defined in Section 11.13( b)
Debt, the Net Refinancing Proceeds,
Lease, shall be applied to the
REFINANCING:

extent

the

To Owner to
available in the following order: A.
deferred Rental described

pay

and 2 of this LOl; B.

3
Fifty percent ( SO%)
paragraphs 1.
to Owner to pay the Return applicable as part of the Purchase Price
accrued and unpaid to date; and fifty percent (SO%)to Tenant
Town Park Hotel Corporation, as Hotel Manager Town Park"), for
to repay

in

Cost
million).C.
paid by Town Park (estimated at S$
To
balance of the Return applicable as part

Overruns.

Owner

to pay the

Fifty percent (
accrued and unpaid to date; D.
the
Pri
c
e
(
which
includes
Purchase
pay
the
to Owner to
SO%)
Return) for
first to any amounts
s Interest in the Premises; and fifty percent SO%
Owner'
then still due Town Park as described in Section 4B,above, and then
of

the Purchase

to Tenant

Price

for

E.To Owner
$ million);
Cost Overruns. paid by Tenant estimated at 2
includes
which
Pur
c
hase
Price
(
to pay the balance of the
Tenant

Return)for Owner' s Interest in the

any funds remain after
the

paying

Premises; and

F.ToT enant if

in full the amounts in paragraphs 4A- 4E above. Any Cost

any Clark settlement proceeds paid to
will be calculated net of (I)

Overruns
Tenant, directly

net of attorneys and other professional

or indirectly but (a)
not
fees and court costs
reflected in Tenant' s Cost Overrun calculation
and not advanced by Town Park and (b)
the Clark Credit to the
any prior overrun or equity
and (2)
extent paid to Owner,
2)prior future advances paid to Tenant. Cost Overruns
repayments from the

two (

will be subject to

amounts

full accounting

and review by

Owner, with the

exact

TENANT' S REPAYMENT OF THE

5.

RETURN: Beginning

in Lease

years thereafter, Tenant shall pay Owner

Return

as

(
Year 25,and
every ten 10)
of the
and
unpaid
portion
any accrued

follows: A.Any

and

in Lease Years 125

ten (

10)years

unpaid

portions

will

in

Lease Years
of the Return accrued

all unpaid portions of the Return accrued

amortized and paid over

be

Any and
26-35. B.

all

in subsequent

e.,
10)
Lease Year increments ( i.
65, 6645,
465655,
36and 95-

ten (

Lease

Years

26-35,

75,76-85,
86- 95,

Fixed
10) years

Expiration

Date)will be

amortized and paid over ten (

in the

Lease
e.,
Lease Term periods (i.
75, 76-85, 86Years 36- 45,46- 55, 56-65, 66will be referred
respectively)
and
Expi
r
a
t
i
o
n
Date,
95, and 95Fixed
respective

succeeding

year
ten( 10)

on Lease Year 35 and

the Base
extent that
for each Lease Year thereafter, to the
" Return", in aggregate, payable in
Rent,Additional Rent and the Amortized
000, as adjusted
$
each Lease Year is less than 800,
to

as

the "Amortized

Return".

C.
Commencing

then in
inflation ( the " Rental Cap"),

for

such Lease

Year, Tenant shall

pay

Rent
the R
" ental Cap"less the aggregate of Base
"
tized Return" for said Lease Year, as mandatory incentive rent (the Mandatory
and the Amor"
Lease Year, on or after
Incentive Rent"). If in any such
payable,
such Incentive Rent shall be
Incentive Rent is
due
Lease Year
the dif erence

Rent, Additional

between

35,

and payable even if such payment results in a payment that

Year in excess of the Rental Cap.Rental

Lease

Cap"is defined as
the $800,000 amount which shall be increased at the beginning of the tenth (
years thereafter, in the
10th) Lease Year, and ever five (5)

as the percentageincrease in the

proportion

the
SALE

Hotel

GDP

Implicit Price Deflator Index from

Opening Date. 6.

HOTEL: In addition to the other provisions in

regarding the Sale of the Hotel, upon the Sale of

OF THE

the Lease
All deferred
the Hotel the following shall occur: A.
accrued and unpaid Rental and the Return shall

and/or

TOWN PARK HOTEL CORPORATION AS HOTEL

7.

and paragraph 2 of
Re Town Park to Agreement
the amendments proposed by Tenant in the
Exhibit "D" shall
of Lease attached hereto and incorporated by reference herein as
same
be included in the Ground Lease Amendment; provided however, that
occur of (i)
shall terminate upon the Sale of the Hotel or the earlier to
Town
and
RDP
between
Agreement
Management
Park
of the Hotel
MANAGER: 7. 1 Recitals

B-E
Amendment

termination

or ii)
(
fifteen 15)
(
years

from

2 Section 16. 7(e)

Hotel Opening Date.7.

deleted in its entirety. 7.3

and/ or Loan",as defined
"
payments or costs in connection with the Note"
Any
of Lease,will not be
in the Amendment Re Town Park to Agreement

of the

Lease

will be

considered "Operating Expenses" as that term is defined in the Lease.

that Recitals B-E
7. 4 Tenant warrants and represents to Owner and the City
are a
and
of the amendments proposed by Tenant are true and correct

material inducement for

Owner

and the

City to

include these amendments

in the Ground Lease

E Reserve.
1 Hotel FF&
FF&E RESERVE: 8.
in Section

The percentages

Amendment.

8.

stated

of the Lease
a)

16.5(

with respect
follows: Lease Year 1
shall be changed as
to the Hotel
3%
2%
Revenues 0%
1%
2 3 4 5 and thereafter Percentages of Hotel
Article 33 of the
4%
SHORECREST RESTAURANT: 9.1 Changes to
9.
delete
the Lease shall be amended to
Lease. Article 33 of
contemplated
originally
area
through (f)
and to permit in the
therefrom subsections ( a)
meeting
additional
" the construction of a spa,
for the Restaurant (the Space")
purpose that will benefit the operation
space or other improvements for any reasonable hotel
are permissible under all
uses
such
of the Hotel; provided, however, that
all such
sizes
and dimensions of
applicable local laws and zoning ordinances. The
and
the Operators ( defined
facilities within the Space shall be as reasonably determined by RDP

6.
Agency except as provided in paragraphs
facilities
shall
of
said
but the use and operation

and 6.5,below,

be consistent with that of

Fees and Costs. RDP shall be

solely responsible for, and shall pay, at its sole cost and expense, any parking
impact fees and any other costs,including but not limited to concurrency fees,
a first class

permit fees

and

2
hotel.9.

the

like resulting from the new facilities. 9.3 The Space as a Condominium
and if RDP elects to
Unit.If the Space is located on the Shorecrest Land,
create a condominium unit for the Space as permitted under the terms of
i)
the Lease, RDP shall cause the Declaration of Condominium to contain provisions that (

the sale

or

lease

of

the Space
and ( ii)

the

unit

Space

unit

shall be

subject

shall be operated in

standards referred to

to the Agency' s approval

quality
accordance with the

in paragraph

6 of this

LO!.

4 Non- Disturbance Agreement. Upon request of RDP, the Agency shall execute a
9.
non- disturbance
agreement in favor of a third party Space operator an "
general y found in such agreements in form and content reasonably
Operator")

containing terms
Operator and the Agency, but the term
the
the earlier to occur of ( i)
acceptable to the

expiration of

years.
20)

5 Operator

9.

of which shall

the third party Space

Agreement. In

be

agreement

no longer than

twenty (
or ( ii)

the event the Space is

managed or operated by an Operator pursuant to an agreement between RDP and

Operator, said agreement shall be deemed to be Sublease under the Lease requiring
of the Lease, the
a)(
v)
Agency approval under Section 1O. 2(
agreement shall contain quality standards pertaining to the operation and physical condition of

the

Space which

shall

be

enforced by RDP, which

standards and the

selection of the Operator
the
List

shall

be

subject

to approval

EXISTING DISPUTED ITEMS:10. 1 List Of

Agency. 10.
Disputed Items"is attached hereto and incorporated by

of

of the cur-rent disputed

by

Items. Exhibit "B"entitled "

reference herein as a list
Disputed

items under

the Lease and other related documents as of the date of last execution of
all
this LOI ("
RDP Items").10. 2 Curing of RDP Items. RDP shall cure
from
thirty
(
before
days
of the RDP Items on or
30)
the date of execution of this LOI except for those
items

attached hereto and specifically incorporated herein. 11.

Exhibit " c"
AND THE CITY: 11.
RELEASES OF ALL CLAIMS BY RDP, THE AGENCY
claims,
1 RDP Claims. RDP shall waive and release any and all alleged delay
listed in

date of execution of the

Documents upon the execution of the

Closing

Closing

Documents.

11.2 Agency and City Claims. The Agency and the City
shall waive and release their Owner' s excess contribution claim and any other claims
of any kind whatsoever against RDP upon the execution of the

Closing Documents. 11. 3 Acknowledgement. Provided that all of

the terms and conditions of this LOI have been satisfied by all parties, the amendment
to the Lease shall contain a written acknowledgment that all alleged
claims and other alleged defaults have been cured, settled and or waived,that

all

controversies between the parties have been settled and that

the Lease

is in good standing

and in

full force and

EASEMENT AGREEMENT: 12. 1

appropriate to

The

GARAGE
effect. 12.
Easement

Agreement

shall be

amended

as

Garage

The parties shall have no

concepts: A.
further obligation for the payment of Use Fees and Facility Usage Payments
the
no such payments are due either party as of

for

provide

and

incorporate the

following

and

of the

date

execution

of this

B. The
LO!.

words "

and approved

by
a)shall
in Section 5(

Grantee"

affirmative obligation to
Garage

the

for

contained in

rate"shall
the

facility

Garage

deleted. C.RDP

shall have no

use
its Hotel guests and employees.

shall be deleted and

a)
any cross default
provisions

be

any

the

of

the

Garage

Hotel

Section 9(
D.

Easement

related

documents.

Agreement shall be removed from

E.The

term self
"

park

rates charged to the general public at

the valet rate
(
the maximum daily rate or ii)

mean ( i)
the

and identified as

charged
by the Royal Palm

Hotel

at

RDP's election. 12.

2 The remainder of
full force and effect.
Land, then,
3 In the event that RDP creates a hotel condominium on the Shorecrest
12.
there
that
agree
this
LOI
in that event, the parties to
Garage
are no rights or agreements under the
the

Garage Easement Agreement shall

remain

in

CONCESSION AGREEMENT UNDER THE

13.
LEASE: 13.1 Fee Payment. RDP shall pay the Concession Fees
described in Exhibit 14.
due and owing,if any,
under the Concession Agreement
after
the
5)
days
or
before
five
(
on
5 of the
last execution of
Lease

now

The
this LO!.

parties are

shall

any such outstanding fees.13. 2 License Fees. RDP

payor cause to be paid the corresponding occupational license

not

aware of

fee in connection

Shorecrest

with the beachfront concession operation for the Hotel. 13. 3

In the event that RDP creates a hotel condominium on the Shorecrest

Condominium.

pay ( or
event, RDP shaH
pay)
association
to
hotel
condominium
the Shorecrest
the corresponding applicable

Land, then, in

cause
beach concession

that

fees consistent with those

fees

charged other upland private

owners of hotel and condominium properties. 14.CLARK CONSTRUCTION LITIGATION LIENS: The
existing Clark Litigation liens and future liens, including liens filed or which may
any, against the leasehold
be filed by subcontractors, relating solely to the Clark Litigation, if
consi
d
ered
Event
interest of RDP in the Lease shall not be
an of Default under

of the Hotel Documents so long as RDP diligently and in good faith continues
to prosecute its claims to resolve all issues under the Clark
Litigation; provided however, that nothing contained herein shall relieve RDP of its responsibil ty
to remove these liens and to resolve those matters contained in
any

Exhibit C",
"
either by resolution of the Clark Litigation or otherwise. 15. ATTORNEYS FEES: Each party
shall bear its own legal fees relating to this LOI and the Closing Documents
except that RDP shall reimburse the Agency at the time of the execution

Closing Documents its legal fees up to the first $

date of the
L.,
based upon
60,000 charged by Bloom & Minsker, P.
00. Agency shall provide to RDP
an hourly rate of 250.$

detailed statements

for professional services showing time

and activity on a

16.ADDITIONAL TERMS.CONDITIONS AND ISSUES NOT

of the documents involved and the
COV-ERED
changes being considered as a result of this LOI, RDP, the Agency and the
City shall have the right to raise additional terms and conditions and issues not covered in
daily basis supporting
IN THIS

this

LOI and which

said

reimbursement.

LOI:Because of the complex nature

are

not inconsistent

SPECIAL INDEMNIFICATION BY
17.

shall indemnify and hold harmless and shall provide defense for
the Agency and the City by counsel reasonably acceptable to the Agency and the
City regarding any and all matters arising out of, or relating directly or indirectly
to,any challenges by any third parties to this LOl and the Closing Documents
except for those challenges arising out of the Clark Credit, the payment and
partial waiver of Back Rent and the settlement of alleged delay claims attributed to
paragraph
the environmental damage and reconstruction delays referred to in
RDP: RDP

1.1
of this
LOl .18.COMPLETION GUARANTEE:
City

that

acknowledge
the City

and

shall

18.1 The Agency and the

the Completion Guarantee given to the Agency
upon delivery to the Agency and the City

Guarantor under

the
be terminated

i) of said Guarantee
the Architect described in Section 2(
ii)
and Final CO' s are issued as contemplated by Section 2(
of said Guarantee. In all other respects, Guarantor has complied with
its obligations under the Guarantee. The Completion Deadline is tolled until said certificate is

of the certificate

by

delivered and the Final CO'

are issued.19.DECLARATION OF COVENANTS AND RESTRICTIONS:

the payment in full by RDP of

s
parties acknowledge that

19.1 The

the Purchase Price to the Agency shall not

terminate the

CHANGES TO THE LEASE AND RELATED EXIST- ING

clerical changes such as current mailing addresses in the

CLERICAL
Declaration. 20.
DOCUMENTS:

Non-substantive
grammatical errors

notice provisions and

in

Documents.

Documents shall be cor-rected in the Closing

Upon execution of this LOl
hereof by the appropriate Agency and City

the Hotel
21. GENERAL: 21.1 Definitive Agreements.

by RDP, the approval of the terms

governing bodies and the execution of this LOl by the appropriate Agency and City
shall
officials, the Closing Documents shall be drafted. Tenant
submit first drafts

of

all

of

the Closing Documents to the Agency within

after such approval. The Closing Documents will contain,
representa- tions, warranties, conditions, covenants and indemnities and the

days
fifteen ( IS)
among other

things,
typical in similar transactions, subject to the terms hereof.Furthermore, the parties to
ofthese transactions,
this LOl recognize that due to the complexity of the structure
not all of the major legal issues have been covered by
this LO!. The consummation of the transactions contemplated hereby is
conditions
conditioned upon the negotiation and execution of the Closing Documents with terms, provisions and

like

SPECIAL INDEMNIFICATION BY
17.

shall indemnify and hold harmless and shall provide defense for
the Agency and the City by counsel reasonably acceptable to the Agency and the
City regarding any and all matters arising out of, or relating directly or indirectly
LO! and the Closing Documents
to,any challenges by any third parties to this
except for those challenges arising out of the Clark Credit, the payment and
partial waiver of Back Rent and the settlement of alleged delay claims attributed to
paragraph
the environmental damage and reconstruction delays referred to in
RDP: RDP

1
1.

of this
COMPLETION GUARANTEE:
LO! 18.
.

18.1 The Agency and the

the Completion Guarantee given to the Agency
upon delivery to the Agency and the City

Guarantor under

that

the
be terminated
of the certificate
by the Architect described in Section 2(i) of said Guarantee
ii)
and Final CO' s are issued as contemplated by Section 2(
of said Guarantee. In all other respects, Guarantor has complied with
City

acknowledge
the City

and

shall

its obligations under the Guarantee. The Completion Deadline is tolled until

said certificate

is

delivered and the Final CO'

s

are issued.19.DECLARATION OF

parties acknowledge that the

payment

COVENANTS AND

RESTRICTIONS:

19.1 The

in full by RDP of

the Purchase Price to the Agency shall not

terminate the
CLERICAL
Declaration. 20.

CHANGES TO

DOCUMENTS: Non-substantive clerical

notice provisions and grammatical errors

changes

THE

LEASE

AND

RELATED EXIST- ING

such as current mailing addresses in

the

in

Documents.

Documents shall be cor-rected in the Closing

Upon execution of this LO!
hereof by the appropriate Agency and City

the Hotel
21. GENERAL: 21.1 Definitive Agreements.

by RDP, the approval of the terms

governing bodies and the execution of this LO!by the appropriate Agency and City
shall submit first
officials, the Closing Documents shall be drafted. Tenant

of all of the Closing Documents to the Agency

days after such approval. The Closing Documents will
fifteen (15)
contain, among other things, representa- tions, warranties, conditions, covenants and indemnities and
the like typical in similar transactions, subject to the terms hereof. Furthermore, the parties
to this LOI recognize that due to the complexity of the structure of these
major legal issues have been covered
transactions, not all

drafts
within

of the
The consummation
is conditioned upon the negotiation
by this LOI.

and

of the

execution of

the

transactions
Closing

Documents

with

contemplated hereby
provisions and

terms,

all necessary lender approvals and the satisfaction of the parties with all other
agreements and matters necessary or desirable with respect to the transactions
contemplated hereby. The parties shall comply with all applicable laws, statutes,
regulations and requirements and performance by the Agency, the City and RDP
under this LOI and the Closing Documents shall be subject thereto. The following
list of the documents which may need to be amended or created ( said list is
not meant to be inclusive of all required agreement) and additional agreements
shall be executed by the parties to this LOI as required:

is

LIST OF AGREEMENTS
A.

B.

C.

GROUND LEASE AMENDMENT

CONVENTION CENTER AGREEMENT AMENDMENT

OF COVENANTS AND RESTRICTIONS

DECLARATION
AMENDMENT

D.

GARAGE EASEMENT AMENDMENT

E.

AGENCY' S RELEASE OF CLAIMS

F.

CITY' S RELEASE OF CLAIMS

G.

RDP' S RELEASE OF CLAIMS

H.

SPECIAL INDEMNIFlCA TION BY RDP

TERMINATION OF COMPLETION
1.

GUARANTY

UCC FINANCING
J.
as

amended by

to

l' s

the event the Agency

provide that the rights granted to
City and the City will be bound to
Assignment bv Agencv. In

Documents will

exist,the

the Agency will inure to the

renew lease UCC-

Ground Lease

Amendment 21. 2
ceases

STATEMENTS - to

Closing
benefit of the

perform the

by

obliga- tions therein. 21.3 Termination. This LOl may be terminated

not been executed by
either party if the Closing Documents have

six 6)
( months from
the execution

binding.Except
and

paragraph

21. 11

date

for
hereinbelow

of this LOL 21.4

the last sentence

in

Non-

1 hereinabove
paragraph 1.

which the parties to this LOl intend

to be

binding, (

under this
no party shall have any legally binding obligation to any other
i)
thereto;
LOl until such time as the Closing Documents are executed by all parties
and ( ii)
no party will have any liability whatsoever under this LOl to any other party
party

for failure to perform in

accordance

with this LOI,if any party decides to

this LOI or for any

LOl.21.
5 Amendments. This LOI may be

terminate

other reason

related

to this

6 Governing Law and Venue. This LOI,the Closing

21.
and their interpretation, validity and performance, shall be governed by the laws
of the State of Florida, both substantive and remedial, without regard to
principles of conflict of laws. The venue for any litigation arising out of this Lalor

Documents

Clos-ing Documents shall be the Eleventh Judicial Circuit, MiamiS.District Court,Southern District
Dade County, Florida, if in state court, and the U.

the

of Florida, if in
" or "Consent." The use
federal court. 21. 7 Aooroval"
the terms " approval" or consent" in this LOI shall always be deemed
mean reasonable
"
approval" or reasonable consent"except

of
to

where specifically provided otherwise. 21. 8 Counteroarts. This LOI may

be executed in counterparts and all such counterparts, when

taken together, shall constitute this LOI. 21.9

Recognized Mortgagee Consent Letter. Tenant shall cause Union Planters Bank, the
Recognized Mortgagee, to execute and deliver its letter consenting to this LOI as
shown in Exhibit " E" attached hereto and incorporated by reference herein ( the "Consent Letter")
days from
and the City no later than thirty ( 30)
to

Agency
the
of execution of this LOI ("Consent Letter Delivery Date").The parties
the date
1
except for the last sentence in paragraph 1.
agree that,
hereto
this LOI shall not be
and paragraph 21. 11 of this LOI,the remainder of
event the Consent Letter
the
Date.
Letter
Delivery
effect
until
the
in
In
Consent
is not delivered by

the Consent

Letter

Delivery

Date,

then, in that event,

1 and paragraph 21. 11 of

except for the last sentence in paragraph 1.

this

this LOI shall be null and

10 Successors and
no further force or effect.21.
the remainder of

LOI,

void

and

of

Assigns. All references to any of the parties to this LOI

permitted successors and permitted assigns. 21. 11 Attornevs'
shall include their
Fees. In the event litigation arises solely under the last sentence in paragraph
1 hereinabove,then, in that event,the prevailing

1.

party shall be entitled to recover its attorneys' fees and court costs,
including those involving appeals and/or post- judgment proceedings, if any.21.
12 LOI In Effect. This LOI shall remain in effect as provided herein- above provided
that RDP shall maintain the Lease and related existing documents in good standing and free
parties agreeing that the issues cov-ered elsewhere in
defaults (

any

of
this

the

deemed defaults for purposes of this para- graph 21.12)

which shall automatipendency of this LOI; the failure of

LOI shall not be

during the

cally result in this LOI being terminated and

of no further force and effect other than the specific
4 of this LOI. 21.13
as provided in paragraph 21.
binding paragraphs

90.408, Florida Statutes

for any purpose pursuant to Section

and Rule 408,Federal

Rules of Evidence. 21.14 Statements Against Interest. Any statements

made by any party to this LOI contained in this LOI have been made solely
matters existing
betweenthe parties to this LO!.All
of resolving
for the

all

purpose

parties to this LOI recog- nize and agree that any such statements may not be correct
not a party to this LOl and more
as applied to any other person or entities
specifically, all parties to this LO!recognize and agree that any such statements may not
be correct

as
applied to the Clark Litigation. 21.15 Recording Fees

RDP shall pay all recording fees

Documents

and

the

like

and the Like.

the Closing

for all of

or

JUry

16 Waiver of
any other documents contemplated by this LO!.21.
Trial.All of the Closing Documents shall,

where

provision. 21.

17

a waiver of jury trial

The Convention Center Agreement shall be amended to provide that

applicable,
Cross

Default.

contain

a default in

the Declaration shall be

AGREED AND ACKNOWLEDGED:

RDP ROYAL PALM HOTEL LIMITED

PARTNERSHIP,

By:

Florida limited

partnership

PADC HOSPITALITY CORPORATION I,

a

Florida

corporation,

as

Dated:

General Partner

By:
Name: R. Donahue Peebles

Title: President
MIAMI BEACH REDEVELOPMENT

AGENCY
03.

By:
Name: David Dermer
Title: Chairman

Attest:
Name: Robert Parcher

Title:

Secretary

APPROVED:
CITY OF MIAMI BEACH
doe

By:
Name: David Dermer

Title: Mayor
Attest:
Name: Robert Parcher

Title:

F: IMinskerlC.M.

City

B.lCrowne

Clerk

PlazalAgrcementslMinsker New

LOI IO-

9-

EXHIBIT B"
List of

following is

2003 The
9/
the
10/

Disputed

Items

a list of outstanding disputes regarding

Development
CONSTRUCTION 2.3.
Agreement: ARTICLE 2.
the Proiect b)Upon Substantial
Construction
Completion
of
of

Hotel

Completion

of Construction of the Project Developer shall

E necessary to
evidence that all FF&
furnish
the Owner with the fol owing: vi)
the
use and operate
Hotel in accordance
with Ground Lease, Management Agreement, Plans and Specs, and the Development

Budget
has been
Tenant

installed

in the

of

Tenant

will provide evidence to satisfy

dated March
verify compliance within

has provided a letter,

states that it

in satisfaction

Hotel

of

this requirement.

Tenant

to

Owner.
12, 2003
30 days

LOI

as provided
in Section 10.2 of the October 9,
LOI.
ARTICLE 4 OWNER PARTICIPATION 4.2.Owner' s Riqht
2003
to Notice,
del
iv(
ery by Developer
v)
the
Review
a)
Access and
two
of
the
Owner
to
all agreements with contractors (
copies of:1)
2)

approval

that will be provided upon settlement with Clark Construction), subcontractors,

suppliers, vendors and other Persons supplying materials
or services in connection with the Construction of the

Project

of
which shall be
Thousand Dollars ($250, 000),

in

Two Hundred Fifty

excess

aggregated

with respect to
supplying materials or

each Person

all drawdowns
5)
services;
Updated
of equity and loan proceeds
under the Loan Docs. 7)
MISCEL ANEOUS CONSTRUCTION
Development Budget 8)all interior design control books ARTICLE 5.
shall furnish to
etc.
Co
n
t
r
a
c
t
o
r
s
.
Materialmen.
of
2
5.
Developer
Names
PROVISIONS

Article 5 above, will be satisfied by the

4 and
The items listed in Article
Cost Summarization"and Debt/
Project
Tenant' s delivery of an itemized "
Equity Capital
Project Capitalization Recap") regarding
Investment Summary ("

the

Project. The

fol owing

is a

list of outstanding

disputes

regarding the

Agreement

Lease:
of
ARTICLE 11. MORTGAGES
Not Related to a Default -If Tenant
Refinancinq of Debt b) Refinancinq
13.
11.
of business, and not related to
ordinary
course
the
in
Debt
its
refinances
Ref
i
n
anc
i
n
g
Proceeds
the
Default,
any Event of
shall be
Net
to
pay the Purchase Price for
to Owner
aplied
in the fol owing order: i)
Owner'
to Tenant if any funds remain after
Interest in the Premises; ii)
paying Owner the full Purchase Price for Owner'
Owner' s subordination of its right
s Interest in the Premises 1)

to Rental shall be at the Subordinated Amount as of

the
"
by Tenant. 2) Net
date of such refinancing
of
the
refinancing
the
amount
means
of
Refinancing Proceeds"
the Debt less x)
(the Balance im ediately before such refinancing of
( )the interest owing on
the Debt, y
( reasonable refinancing
such Balance, and z)
transaction expenses, brokerage
charges

commissions and

prepayment fees and yield maintenance

Debt to be refinanced. Tenant has been

the Agency. As
requested to submit financial information regarding any possible refinancing to
the Union
to
such,Tenant will provide Owner with an Affidavit relating
Planters Bank loan modifications that have been closed to date summarizing the
none of
fact that
use and application of the additional loan proceeds and stating the
the
of
any
to
for distributions
Borrower' s partners
the loan proceeds were used ( i)

relating

to

the

(
or members,ii)

to

repay

any

of

the Borrower' s partners or

members, (

iii)

to repay any other person or

Hotel Manaqer The

to the Borrower. 13.3 One ( 1)
that at all times during the Term
Developer will affirm
the RP Improvements shall
and without inter uption, both the Shorecrest Improvements and
be
entity

which loaned money

Manager. Tenant states

operated and managed by one and the same Hotel
af
f
i
r
mi
15,
January
sent letter ( dated
2003) ng this condition is
it has re-

and

as

within

Tenant to verify compliance

such, deems this condition is satisfied.
Section 10.2
pr
o
vi
d
ed
in
approval
days
of
as
LOI
30

of

LOI.
October 9,2003
the
ARTICLE 10. Notice to Owner 10.1.Ckl
requiring

of any Capital Transaction not

Tenant will provide notice to owner

Owner' s consent not later than two (

2)
states it
.
business days after the occurrence of such Capital Transaction.. Tenant
descr
i
b
ed
in
the Certificate
with
the
connection
in
notice
has provided said
transaction
letter
a
of Tenant and further provided
dated March 12,
30
verify compliance within
2003 in satisfaction of this requirement. Tenant to

days

LOI approval
of

as provided in Section

10.

EXHIBIT C"
CLARK EXHIBIT)

following is a list of outstanding

Development Agreement:

The

Clark issues

disputes regarding

the

Hotel

2.
ARTICLE
Completion of Construction
CONSTRUCTION 2.3.
Upon Substantial Completion of Construction of
of
the Project b)
the Project Developer shall furnish the Owner
certificate of the Architect
with
the fol owing: i)
Substantial Completion iii) lien waivers in form and substance
re:
reasonably satisfactory to Owner, other than Clark Construction lien waivers
that will be provided upon settlement
with

Clark

Construction

Contractor' s Final
v)

Affidavit,

to be provided

upon settlement

Clark Construction
with
Owner' s
2.
ARTICLE 4 OWNER PARTICIPATION 4.
The
b)
Review
Access
to Notice.
Riqht
and

critical path method ("CPM Schedule") The Developer will provide the last CPM
Schedule provided by Clark in the Developer' s possession. To the extent the Final
CPM Schedule is provided as a result of the settlement of litigation with

final

the Developer will

Clark,
provide same. ARTICLE
If any mechanic' s,
DISCHARGE OF LIENS 14. 2 Discharae of Liens a)
14.
vendor' s,materialman' s,
laborer' s,
or similar statutory lien ( including tax
Developer shall cause it to
Project Site...
liens) is filed against the
be discharged. However, Developer shall not be required to discharge any
Developer
has furnished Owner with, at Developer' s option,
lien if

such

a cash

deposit,

bond,letter

Institutional Lender or other security. As to liens

filed by Clark Construction, the Developer agrees that upon settlement of

of credit from an

litigation

with Clark

Construction,all

liens

will be discharged.

F:\

EXHIBIT " D"

AMENDMENT RE TOWN PARK TO AGREEMENT OF LEASE

AMENDMENT TO AGREEMENT OF LEASE ( the " Amendment") is made and entered into as
of the
2003 by and between RDP ROYAL PALM HOTEL
day of ,
MIAMI
Owner") and
partnership ("
Florida
PARTNERSHIP,
a
LIMITED
limited

BEACH REDEVELOPMENT

AGENCY,

a public body

corporate

and

politic ("

Tenant").
WITNESSETH

therein (

Owner and Tenant entered

A.
21, 1997,the( Lease"),relating
B.
the Property").
"
Town

Park

into

an

to

Agreement of

Lease, dated

real property more

Hotel

Corporation,

a Tennessee

particularly

October

described

corporation (" Town Park"),

is

the Hotel Manager defined in the Lease)ofthe Hotel (defined

Borrower") are parties
Park and PADC Royal Palm Holdings, LLC ("
2001
(the "
Agreement dated April
Loan
30,
to that certain Loan
forty- seven
a
Agreement"), whereby Town Park agreed to convey to
Borrower
Class A limited partnership interest in Tenant in
and 66/100 percent (47. 66%)
Promissory Note
delivery
of that certain Purchase Money
execution
and
consideration for Borrower' s
evidences
Note
" which
in favor of Town Park t(he Note"),

in

the Lease).C.Town

the

loan by

one percent ( I

Town Park

of the Loan Agreement, Town

in Tenant

to Borrower (

Loan").
the "

D.
Town Park currently holds

Pursuant
partnership interest in Tenant. E.
limited%)
Park desires to confirm that the Loan

01(t)
to Section 4.
as an equity interest

will be treated

for

of the Lease so long as the Loan is outstanding. NOW, THEREFORE,

receipt
in consideration of the premises and for other good and valuable consideration, the

purposes

and

sufficiency

of

which

is

hereby acknowledged,

the parties

Recitals. The foregoing recitals are true and correct. 2.Equity

follows: 1.
the Lease
Interest.Owner and Tenant hereby agree that to the extent that
holding
not
holding
Manager)
Hotel
capaci
t
y
as
in
its
or
distinguishes between Town Park (
treated
be
Note
by
secured
and
shall
the
any equity interest in Tenant, the Loan evidenced

agree as

for

purposes of the

Town Park holding an equity interest in

as amended by this Amendment, the Lease and all of its
in full force and effect. In the event

Lease

as

Tenant. 3.No Further Modification. Except

terms and provisions shall remain

Lease, the

provisions of this Amendment shall control. All capitalized terms herein

same meanings as they have in the Lease, unless otherwise defined

shall have the

herein.

Signature

page follows.]

IN WITNESS WHEREOF, this Amendment has been

duly

executed

by

the

parties

hereto.

WITNESSES:

OWNER":

BEACH

MIAMI

REDEVELOPMENT

AGENCY

By:
Print Name:

Print Name
Title:

Print Name

TENANT":
RDP ROYAL PALM HOTEL LIMITED

PARTNERSHIP,

By:

WITNESSES:

By:
Print Name:

Print Name
Title:

Print Name

partnership

Hospitality Corporation I, a
corporation, as general partner

P ADC

Florida

Florida limited

EXHIBIT " E"

RECOGNIZED MORTGAGE CONSENT LETTER

UNION PLANTERS BANK
2800 Ponce de Leon
Blvd.Coral Gables,

Florida 33134 2003 Miami

Beach Redevelopment Agency Jorge

Gonzalez,Executive Director 1700 Convention

Center Drive, Fourth
Floor

Miami Beach, Florida 33139

and-City of Miami
Beach Jorge Gonzalez, City Manager
1700 Convention Center
Fourth Floor Miami Beach, Florida

Drive,

33139 Re:Letter

of Intent

to Amend

Royal
Palm Crowne Plaza
Resort Agreements
of
which is

dated

2003 ("LOI") Dear Mr.Gonzalez:

Weare

in receipt

fully executed LOI.We are the

copy

the

subject of the LOI as these terms

of the

defined in the LOI and the

are

11. 10

of

the

Lease

Lease.

states

Recognized

Mortgagee under the

Section

in part as
or modification

Owner agrees not to accept a voluntary surrender, termination

this Lease at any time while such Recognized Mortgage(

follows:
of

s)shall remain a

Tenant' s leasehold estate.It is further understood and agreed that

shall not be bound by
any such Recognized Mortgagee( s)
any surrender, termination or modif cation of this Lease unless such

lien

on

surrender, termination or

of

modification is

Recognized Mortgagee, and

such
as long

this

Lease

made with the prior written consent

shall not terminate by

merger or

otherwise

Lease

Redevelopment Agency
Jorge Gonzalez, Executive Director

Miami Beach

and-

City of Miami Beach

Jorge Gonzalez, City Manager
2003
the negotiation and
Page 2 Accordingly, we hereby consent to the LOI subject to
terms,
provisions
and
execution of the Closing Documents (as defined in the LOI) with
obtaining of
the
well
as
the
City
Agency
the
as
to
acceptable
mut
u
al
l
y
and
RDP,
conditions

our approval. Very

truly yours, Roy

Tanis Senior
D.

This communication is
an

ur

ose

privileged

unuant to Section

settlement communication and strictly inadmissible for

and Rule408, Fed.
90. 408, Fla.Stat.

Evld. LETTER
R.
OF INTENT TO AMEND
ROYAL PALM CROWNE PLAZA

Subject: Parties: Royal Palm Crowne

Plaza Hotel RDP Royal Palm Hotel

RESORT
AGREEMENTS

Partnership ("RDP")City of

Miami

Limited

Beach (

the City")
"
Miami

Beach Redevelopment Agency (

the "

Agency")
A.On May 28, 1998, the parties entered into an
RECITATIONS:
hereto and made
Land") attached
("
described on Exhibit "A"
more
fully
the land
regarding
Lease
I,
July
as recorded on
1998
a part hereof as if fully set forth her in,
in Official Records Book 18170, at Page 0893, in the
Date:

Agreement

2003

of

Subsequent to the recording

of Miami-Dade County, Florida (" Lease").8.
the Lease,RDP began the construction

Public

of

Records

the

C.
During
the Royal Palm/Shorecrest Crowne Plaza Hotel ("Hotel").
Royal Palm Hotel
construction of the Hotel, RDP encountered structural problems with the original
resulted in certain construction
and soil contamination problems regarding the Land which alleg- edly
delays resulting in RDP'
and
af
o
r
e
sai
d
the
parties
r
e
g
a
r
d
i
n
g
the
dispute
problems
delays.A
arose amongst
s refusal to
s refusal to pay certain Rental due under the Lease and the Agency'
pay claims
of

related

to

said contamination and alleged construc- tion

deny and dispute

The
delays. D.

parties respectively

all such claims

The parties, wishing

against them,whether asserted or un asserted. E.
between them, entered into
matters
all
existing
resolve
amicably
aforesaid disputes. This letter sets forth
the understanding reached as a
Intent
Letter of
this
defined
in
result of such negotiations. Capitalized terms which are not
the
LOI")
meanings
Agr
e
ement
s
(
"
Resort
Plaza
Crowne
shall have
to Amend Royal Palm
Agency" means, as appropriate, the Agency or
ascribed to them in the existing, applicable documents. "
and

allegations

to avoid litigation and

negotiations regarding the

F.Agency and Owner in their

or both,as the case may be.
to
pro- vide the African American community
their
and
commitment
fulfill
desire to maintain
the Royal Palm Crowne Plaza
with opportunities in the hospitality industry, are wil1ing to amend
with the Convention Center Agreement
agreements subject to the Hotel' s continuing compliance
the

City

and its successors and assigns make available Hotel facilities and services for support of
the Convention Center events and to undertake joint marketing efforts.
owner

BACK RENT AND REAL ESTATE

1.

TAXES: 1.
1 Back Rent Prior To The Hotel Ooeninl! Date. RDP
agree that unavoidable delays attributed to the
Hotel Opening Date.RDP
and reconstruction delays occurred prior to the

and the Agency

environmental

128, 373. 38 in Back Rent prior to the Hotel

i.
e.,
from October 31,2000 to May 14,
2002,and the Agency shall retain said amount in full settlement of all amounts due
prior to May IS,2002.
for Back Rent for the period
days from the last execution of this LOI any
Additionally, RDP shall pay within five (5)
and all applicable sales tax due and owing on said amount plus any interest and
penalty assessed by the State of Florida against the City and/ or the Agency for
failure to pay
has previously paid

Opening

Date;

applicable sales

tax

Date. 1.
2 Clark Credit. Subject

to

on

said amount prior to the Hotel Opening

forth in this

the conditions set

$
2,
RDP shall pay to the Agency an amount up to 140,
Section 1.
if, it
sales
tax
when,
and
Credit")
applicable
000. 00 the
( C
plus
"lark
settles its present litigation with The Clark Construction Group styled
Construction
Palm Hotel, LP,Et AI. vs. The Clark
Group, Inc. vs. Arquitectonica International Corp., Et AI., U.S.District
Court,Southern District of Florida, Case No. 01-3130- CIV-Middlebrooks (" Clark Litigation")
or if
it obtains a final non- appealable judgment in the Clark Litigation. RDP shall
RDP Royal

( 0)days of its
pay this amount to the Agency within ten 1
either the settlement or the
extent,
receipt of funds from, and to the
judgment provides excess funds after RDP pays its attorneys' fees and costs for the
Charges"shall not apply to the payment
Lease entitled Late
"
of the
el1t \
Clark Credit. The application of the Clark Credit shall be treated as additional pack R~
forth in this Section are
the conditions set
()~ if
_ .
Vl1ich _shall be dill:. Iy
Clark Litigation. Article 4 of the

then only to

met and
Agency under this

Section 1. 2

that

shall not apply

extent.Any amounts paid to

to

the

eight

the

date

the

Closing

the

percent (8%)

return calculation as a component of the

d)(
iii)
I(
Purchase Price as defined in Section 36.
This provision shall survive the payment of
of the Lease ( the R
" eturn").
Price. 1.
3 Back Rent After The Hotel Ooening Date.
the Purchase
sales tax,from the period
Base Rent
and Additional Rent due, plus applicable

of May 15, 2002

to May 15, 2003 ("

Post

and payable over the ten (10) year

period commencing in Lease Year 5 and ending in Lease Year 14.1.
4 Real Estate Taxes. The parties acknowledge that the 2002 real estate taxes
Opening Back

Rent")

on

the

shall

be

Improvements are unpaid

and

that

deferred

said taxes

are being appealed. On or before

Documents

are

real estate taxes which were the responsibility of RDP prior to

the date of the execution of this Lor, RDP shall pay such taxes, penalties and
interest prior to the execution of the Closing Documents.
taxes

due

are

on

penalty

FUTURE
2.
RENTAL: Additional Rent and Incentive Rent, plus applicable sales tax,due in
2 through 5 shall be deferred and payable
over the
Lease
Years
Lease Year
in
and
ending
6
Lease
Year
commenci
n
g
period
10)
year
in
ten (
IS. Other than as stated in the preceding sentence, RDP shall continue to
pay Base Rent, Additional Rent, and Incentive Rent (plus all applicable sales taxes
from the date
non- deferred pavments Qf.. same) as well as all other Rental
such

on

of

execution

of

this

LOI pursuant to the terms

and conditions
1
PRICE: 3.
of the Lease. 3.PURCHASE
Covenants
Decl
a
r
a
t
i
o
n
and Restrictions shall
of
Declaration of Covenants and Restrictions. The
in full,the
Pur
c
hase
Price
the
upon
be amended to provide that
payment of
said Declaration
that
but
ef
f
e
ct
i
v
e,
be
shall
changes
following

respect

not otherwise
shall
to the

amended, modified or

be

with
changed: I)

Section 2.2 shall no longer apply.2)

with
both the RP Land and the Shorecrest Land, Section 2.
as a result thereof,
longer apply and if,
no
shall
3
Miami Beach Code,
zoning ordinances, such as the current section 118- 5 of the
then
Shorecrest Land

respect

only,

to

applicable

require a covenant in

lieu

of

unity

of

title,RDP sh.all cause such a

2 Convention Center Agreement. The
covenant to be recorded as to said parcels. 3.
that,upon payment
to
provide
amended
Agree- ment shall
Convention Center
be
rooms
350
full,
in
per day" requirement stated in
of the Purchase Price
the "
Room Block definition shall be reduced to two hundred fifty seven (

the

257)rooms per day. In all

of Room

other

respects, the definition

Block

Convention Center Agreement shall remain unchanged except as

Payment
3 Time for
3.
provided in paragraph 18. 17 of this La!.
Price
Purchase
the
of
payment
shall be
in Full.The outside date for full
provided
25
Year
than
presently
as
Lease
the Fixed Expiration Date rather
those relating to
s
uch
as
terms
(
Lease
All
Lease.
the
for
and the remainder of the

Rental inflation

in
increases,by

way

of

4.
of the
I
1.13( a)
The Refinancing Times stated in Section
of
fifth
(
5th)
year
beginning
to
the
on
or
the
prior
to
Lease
to
ten
(
Date ("First Refinancing");on or
Hotel
the
10)
prior
Opening
after
and
First Refinancing (" Second Refinancing")
of the
years after the closing
then every tenth ( 10th) anniversary of the Second Refinancing thereafter;
provided however, that the maturity date of any refinancing that extends beyond
the next required refinancing will not have to be repaid prior to its maturity provided said
maturity date is
years from the
no later than twenty ( 20)
last refinancing; provided further however, that when Tenant refinances the Balance of
REFINANCING:

shall be changed

Proce ds,
the Net Refinancing
Lease, shall be applied to the

its

Debt,

defined in Section

l1.13(

To Owner to
available in the following order: A.

extent
the

as

of the
b)

pay

deferred Rental described

Fifty percent (
3 and 2 of this Lor;B.
part
appl
i
c
abl
e
as
the
to
pay
to Owner
50%)
of the
Return
Purchase Price accrued and unpaid to date; and fifty percent ( 50%)
Owner,
to repay Town Park Hotel Corporation, as Hotel
to Tenant

paragraphs 1.

in

Manager
Town

Park"),for CostOver uns. paid by Town Park (estimated at

to pay the balance

$
5

million).

C.To Owner

of the Return

of the Purchase Price accrued and unpaid to

as part
to Owner to pay the Purchase Price (which
date;D.Fifty percent ( 50%)
includes the Return) for Owner' s Interest in the Premises; and fifty percent

applicable

50% first to any amounts then still due Town Park

Section

4B.

as described

in

above.

then to Tenant for Tenant Cost Overruns. paid by Tenant estimated at

E.To Owner to pay the balance of
million);
2
and

Purchase Price (which includes the Return) for

and F. To Tenant
the

if any funds remain after paying

Owner' s

in full

be

the

Interest in the Premises;

amounts in paragraphs
any
net of I)
(

will
4E above. Any Cost
4AClark settlement proceeds paid to Tenant, directly or indirectly but a)( net
of attorneys and other professional fees and court costs not reflected in
Tenant' s Cost Overrun calculation and not advanced
by Town Park and ( b)
the extent paid to Owner, and (2)
the Clark Credit to
any prior overrun or equity repayments from the two (2)
prior future advances
paid to Tenant. Cost Overruns will be subject to a full accounting and review
by
Overruns

calculated

the

with

exact

TENANT' S REPAYMENT OF THE

5.

RETURN: Beginning

in Lease

Year 25,and every

years
ten l0)
(
the Return

thereafter, Tenant shall pay Owner any accrued and unpaid portion of

follows: A.Any and all unpaid portions

be amortized and

as

Lease Years 125 will

(
paid over ten l0)

years in Lease Years 26-35.8.Any and all unpaid

of the Return accrued in subsequent ten (

portions

10)
Years

35,36-

26-

85,86-95,
and

Date)
in

of the Return accrued in

the

will

95-

Lease

Year

e.,
Lease
increments ( i.

65,
45,46- 55, 56Fixed Expiration

be

amortized

and paid

66-75,

76-

over ten (10)

years

respective succeeding
year Lease
lO)

ten(

Term

e.,
Lease Years 36periods ( i.

85, 86- 95, and

76refer ed to as
will
be
r
e
s
p
ec
t
i
v
e
l
y
)
and
Fi
x
ed
95Expiration Date,
Year 35 and for each
Commencing on Lease
the " Amortized Return". C.

45, 46- 55,56-65, 66-75,

Lease Year thereafter, to the extent that

in aggregate, payable
Rent and the A"mortized Return",

the

Base

Rent, Additional

in each

Lease

Year is less than $ 800,000,as adjusted for inflation (

difference
the " Rental Cap"), then in such Lease Year, Tenant shall pay the
between the "Rental Cap"less the aggregate of Base Rent, Additional Rent and the"
( "Mandatory Incentive Rent").
Amortized Return"for said Lease Year, as mandatory incentive rent the
on or after Lease Year
in any such Lease Year,
payable
Rent is payable, such Incentive Rent shall be due and
even if such payment results in a payment that Lease Year in
is
excess of the Rental Cap. Rental Cap"

If

35, Incentive

$
defined as the 800,

increased at the beginning of

years thereafter, in the proportion
)
ever five 5
(

000 amount which shall be

Year, and

the percentage increase in the GDP

as

Hotel

Opening

Implicit Price

the tenth (lOth) Lease

Deflator Index from the

Date. 6.SALE

THE HOTEL: In addition to the other provisions in the

Lease regarding the Sale of the Hotel, upon the Sale ofthe Hotel
All deferred and/ or accrued and
the following shall occur: A.
unpaid Rental and the Return shall be paid
OF

in

full;

TOWN PARK HOTEL CORPORATION AS HOTEL

7.

MANAGER: 7. 1 Recitals

B-E

the amendments proposed by Tenant in the Amendment

and paragraph

2 of

Re Town Park to Agreement

Lease attached hereto and incorporated by reference herein as Exhibit "D" shall
be included in the Ground Lease Amendment; provided however, that same
shall tenninate upon the Sale of the Hotel or the earlier to occur of (i)
Park
tennination of the Hotel Management Agreement between RDP and Town
of

or ii)
(
fifteen 15)
(
years

2 Section 16. 7(e)

Hotel Opening Date.7.

3
of the Lease will be deleted in its entirety. 7.
and/ or Loan",as defined
"
or costs in connection with the Note"
the Amendment Re Town Park to Agreement of Lease,will not be

Any
in

from

payments

considered "Operating Expenses"

as

that

tenn is defined

in the Lease.

City that Recitals

B-E
7. 4 Tenant warrants and represents to Owner
are
a
correct
and
and
true
by
Tenant
amendment
s
proposed
of the
are
and

the

material inducement for

Owner

and the

City to include these amendments in the Ground Lease Amendment.

E RESERVE: 8.
1 Hotel FF&E Reserve. The percentages stated in

8.

FF&

the Lease with respect

Section l6.
5(

of
a)

to the
Year I 2 3
changed as follows: Lease
Hotel shall be
4%
9.
2%
1%
3%
thereafter Percentages of Hotel Revenues 0%
1 Changes to Article 33 of the Lease. Article
SHORECREST RESTAURANT: 9.
shall be amended to delete therefrom subsections (
33 of the Lease
the area originally contemplated for the Restaurant (
and to pennit
through ( f)

4 5

and

a)

in

construction of a spa, additional meeting space or other

reasonable hotel purpose that wi II benefit the operation of the
any
improvements for
Hotel;provided, however, that such uses are pennissible under all applicable local
laws and zoning ordinances. The sizes and dimensions of all such facilities within
the Space shall be as reasonably detennined by RDP and the Operators (defined below) of

Space")
the "

the

the

3 and 6.5,below,
6.
Agency except as provided in paragraphs
facilities
shall
be
consistent with that of
operation
of
said
use
and
the
but
2 Fees and Costs. RDP shall be
hotel. 9.
shall
solely responsible for,
pay, at its sole cost and expense, any parking
other costs,including but not limited to concurrency fees,
and
any
fees
impact
a first class

and

permit fees

the

and

like resulting from the new facilities. 9.3 The Space as a Condominium
Unit.If the Space is located on the Shorecrest Land,and if RDP elects to
create a condominium unit for the Space as permitted under the terms of
i)
the Lease, RDP shall cause the Declaration of Condominium to contain provisions that (

the sale

or

lease of

the

the Space
and ( ii)

unit

subject to the Agency' s

Space unit shall be
shall be operated in accordance with the

standards referred to

in paragraph

6 of this

approval
quality

LO!.

Agreement. Upon request of RDP, the Agency shall execute a

non- disturbance
agreement in favor of a third party Space operator an "
Operator")containing terms generally found in such agreements in form and content reasonably
acceptable to the Operator and the Agency, but the term of which shall be no longer than
4
9.

Non- Disturbance

the earlier to

occur

of ( i)
the

twenty (
agreement or ( ii)
the
Space
event
is
the
5 Operator
years.
20)
managed or operated by an Operator pursuant to an agreement between RDP and
shall
be
deemed to be Sublease under the Lease
said agreement

expiration of

9.

the third party Space

Agreement. In

Operator,
of the Lease,
v)
2(
a)(
requiring Agency approval under Section 10.
physical condition
operati
o
n
and
the
pertaining
to
the agreement shall contain quality standards
by
shall
Space
RDP,
which be enforced
of the
which standards and

shall be subject to approval

1 List Of Disputed Items. Exhibit " B"
10.
by the Agency. 10.EXISTING DISPUTED ITEMS:
by reference herein as a
incorporated
and
attached
hereto
Items"
is
Disputed
entitled " List of
the selection of the

Operator

list of the cur- rent disputed

items under the Lease and other related documents as of the date of last
RDP Items").10.2 Curing of RDP Items. RDP shall cure
execution ofthis
LOI ("
days
all of the RDP Items on or before thirty 30)
(

from the date of execution of this LOI except for

those
attached hereto and specifically incorporated herein.
in Exhibit " C"
items listed
OF ALL CLAIMS BY RDP. THE AGENCY AND THE QIX.;,
11.
1 RDP Claims. RDP shall waive and release any and all alleged delay

11.RELEASES

claims,

environmental

date of execution of the

Closing

Documents upon the execution of the

Closing

Documents.

11.2 Agency and City Claims. The Agency and the City
shall waive and release their Owner' s excess contribution claim and any other claims
of any kind whatsoever against RDP upon the execution of the
3 Acknow] edgement. Provided that all of
Closing Documents. 11.
the terms and conditions of this LOJ have been satisfied by all parties, the amendment
to the Lease shall contain a written acknowledgment that all alleged
claims and other alleged defaults have been cured, settled and or waived, that
controversies between the parties have been settled and that the Lease is in good standing

all

and in
full force and

Agreement

shall

effect. 12.GARAGE EASEMENT AGREEMENT: 12.]The

as appropriate to provide

Garage

Easement

be amended

and

for

The parties shall have no further

incorporate the following concepts: A.
and Faci] ity Usage Payments and
Fees
payment of Use

obligation for the

no

payments are due either party as of the

such

the execution

of

of

date

this LO!. B.The

words "

and

approved by

Grantee"
a)
shall be
Section 5(

in

obligation to use

deleted.C. RDP

shall

have

no affirmative

the

its Hotel guests and employees. D.Section 9(

for
a)
shall be deleted and the Garage Easement Agreement shall be removed from any
cross default provisions

Garage

of the Hotel related documents. E. The term "self park rate"

i)
the
rates charged to the general public at the
mean
(
shall
the valet rate charged
identified as the maximum daily rate or ii)
Garage facility and
(

in any

contained

by

the Royal Palm Hotel

at

RDP's election. 12.2

The remainder of the

Garage Easement Agreement shall remain in full force and effect. 12.
3 In the event that RDP creates a hotel condominium on the Shorecrest Land, then, in
that there are
that event, the parties to this LOJ agree

no

rights

or agreements under the Garage

Easement

Agremnt

which

CONCESSION AGREEMENT UNDER THE

13.
LEASE: 13.1 Fee Payment. RDP shall pay the Concession Fees
described in Exhibit 14.
due and owing, if any,
under the Conces ion Agreement
the
after
5)
days
five
(
on
or
before
last execution of
5 of the
Lease
now
are
The
La!.
this
not
parties

shall

aware of any such outstanding fees.13. 2 License Fees. RDP

payor cause to be paid the corresponding occupational license

fee in connection

beachfront concession operation for the Hotel. 13. 3

with the
Shorecrest Condominium. In the event that RDP creates a hotel condominium on the Shorecrest
pay ( or
Land, then, in that event, RDP shall
cause the Shorecrest hotel condominium association to pay) the corresponding applicable

beach

concession

fees consistent with those

fees

charged other upland private

owners

existing Clark

of hotel and condominium properties. 14.CLARK CONSTRUCTION LITIGATION LIENS: The

Litigation liens and future liens,including liens filed or which may

if any, against the leasehold

be filed by subcontractors, relating solely to the Clark Litigation,
consi
d
ered
Event of Default under
not
be
Lease
shall
in
RDP
of
an
interest
the
any of the Hotel Documents so long as RDP diligently and in good faith continues
its claims to resolve all issues under the Clark

to prosecute
Litigation; provided however, that nothing contained herein shall relieve RDP of its
to remove these liens and to resolve those matters contained in

responsibil ty

Exhibit C",
"
either by resolution of the Clark Litigation or otherwise. 15. ATTORNEYS FEES: Each party
shall bear its own legal fees relating to this LOI and the Closing Documents
except that RDP shall reimburse the Agency at the time of the execution
Closing Documents its legal fees up to the first $
the

date of
L.,
based upon
60,000 charged by Bloom & Minsker, P.
00. Agency shall provide to RDP
250.
rate
hourly
of
$
an
detailed statements
and activity on a

for professional services showing time

said reimbursement. 16.ADDITIONAL TERMS.CONDITIONS AND ISSUES NOT

LOI:Because of the complex nature of the documents involved and the
changes being considered as a result of this LOI, RDP, the Agency and the
City shan have the right to raise additional terms and conditions and issues not covered in
this LOI and which are not inconsistent
daily basis supporting

COV-ERED

IN THIS

with

the

SPECIAL INDEMNIFICATION BY
17.

shall indemnify and hold harmless and shall provide defense for
the City by counsel reasonably acceptable to the Agency and the
the
any
and all matters arising out of, or relating directly or indirectly
City regarding
to,any challenges by any third parties to this LOI and the Closing Documents
except for those challenges arising out of the Clark Credit, the payment and
partial waiver of Back Rent and the settlement of alleged delay claims attributed to
paragraph
the environmental damage and reconstruction delays referred to in
RDP: RDP

Agency and

1.
1
of this
COMPLETION GUARANTEE:
LOI .18.

18.1

Guarantor under

acknowledge that the

and the City shall be terminated
City

upon

The Agency and the

given to the Agency

the
to
the
Agency
and the City
delivery
Completion Guarantee

i) of said Guarantee
by the Architect described in Section 2(
of the certificate
ii)
and Final CO' s are issued as contemplated by Section 2(
of said Guarantee. In all other respects, Guarantor has complied with
its obligations under the Guarantee. The Completion Deadline is tolled until said certificate is

delivered and the Final CO'

are issued.19.DECLARATION OF

parties acknowledge that the

payment in

full

COVENANTS AND

RESTRICTIONS: 19.1

The

by RDP of

the Purchase Price to the Agency shall not

terminate the

CLERICAL CHANGES TO THE LEASE AND RELATED EXIST- ING

Declaration. 20.
Non-substantive clerical changes such as current mailing addresses in the
notice provisions and grammatical errors

DOCUMENTS:

in

Documents.

Documents shall be cor- rected in the Closing

Upon execution of this LOI
hereof by the appropriate Agency and City

the Hotel
Definitive Agreements.

21. GENERAL: 21.1

by RDP, the approval of the terms

governing bodies and the execution of this LOI by the appropriate Agency and City
shall submit first
officials, the Closing Documents shall be drafted. Tenant

drafts of all of the Closing Documents to the Agcncv

davs after such approval. The Closing Documents will
fifteen (15)
contain, among other things, representa- tions, warranties, conditions, covenants and indemnities and
the like typical in similar transactions, subject to the terms hereof. Furthermore, the
parties to this LOI recognize that due to the complexity ofthe structure of these
transactions, not all of the major legal issues have been covered

within

LOI.

The

consum ation

upon

contemplated

of

this

by

the transactions

hereby

is

conditoned

the

negotia on

and

I:

all necessary lender approvals and the satisfaction of the parties with all other
to the transactions
agreements and matters necessary or desirable with respect
laws, statutes,
with
all
shall
The
applicable
comply
parties
contemplated hereby.
the City and RDP
the
and
and
Agency,
by
performance
requirements
regulations
under this LOI and the Closing Documents shall be subject thereto. The following
is a list of the documents which may need to be amended or created ( said list is
not meant to be inclusive of all

shall be executed

by

the

parties

required agreement) and additional agreements

required:

to this LOI as

LIST OF AGREEMENTS
A.

GROUND LEASE AMENDMENT

B.

D.

CONVENTION CENTER AGREEMENT AMENDMENT

DECLARATION OF COVENANTS AND RESTRICTIONS
AMENDMENT
GARAGE EASEMENT AMENDMENT

E.

AGENCY' S RELEASE OF CLAIMS

F.

CITY' S RELEASE OF CLAIMS

RDP' S RELEASE OF CLAIMS
SPECIAL INDEMNIFICATION BY RDP
TERMINATION OF COMPLETION GUARANTY

C.

G.
H.
I.

UCC FINANCING STATEMENTS 1.

as amended by Ground Lease

to

renew lease UCC-

I 's

z 1.2 Assignment bv Agencv. In the event the Agency

Closing Documents will provide that the rights granted to
the Agency will inure to the benefit of the City and the City will be bound to
ceases

Amendment
to

exist,the

only

by

writ en

perform the

by

obliga- tions therein. 21.3 Termination. This LOI may be terminated

not been executed by
either party if the Closing Documents have

six 6)
( months from
21.4

Nonin paragraph 1.1 hereinabove

binding, (
and paragraph 21. 11 hereinbelow which the parties to this LOI intend to be
other party under this
any
obl
i
g
ati
o
n
legally
binding
any
have
party
shall
no
to
i)
all parties thereto;
LOI until such time as the Closing Documents are executed by
no party will have any liability whatsoever under this LOI to any other party
and ( ii)
the execution

binding.Except

for

failure

date of this LOI.

the last sentence

for

to perform in

accordance

with this LOI,if any party decides to

terminate this LOI or for any

This LOI may be

LOI.21.
5 Amendments.

amended

other reason

related

to this

agre -

ment

6 Governing Law and Venue. This LOI,the Closing

21.
Documents and their interpretation, validity and perfonnance, shall be governed by the laws
of the State of Florida,both substantive and remedial, without regard to
principles of conflict of laws.The venue for any litigation arising out of this LOI or
the Clos-ing Documents shall be the Eleventh Judicia] Circuit, MiamiS.District Court,Southern District
Dade County, Florida, ifin state court, and the U.
ofF] orida, if in

the

va]"
or "Consent." The
Appro
2\. 7
"
federal court.
tenns " approval" or consent" in this LOI shall always be
approva\

use
deemed

to

of

mean Areasonab]

or Areasonab] e consent@ except

where specifically provided otherwise. 21. 8 Counterparts. This LOI may

be executed in counterparts and all such counterparts, when
9
taken together, shall constitute this LOr. 2\.
Recognized Mortgagee Consent Letter. Tenant shall cause Union Planters Bank, the
Recognized Mortgagee, to execute and deliver its letter consenting to this LOI as
shown in Exhibit " E" attached hereto and incorporated by reference herein ( the "Consent Letter")
to the
Agency and the City no later than thirty ( 30) days from
of this LOI ("Consent Letter Delivery Date").The parties
of
date

execution

the

1
except for the last sentence in paragraph 1.
this LOI shall not be
paragraph 21. 11 of this LOI,the remainder of
the event the Consent Letter
)
in effect until the Consent Letter Delivery Date. n
then, in that event,
Delivery
Consent
the
del
i
v
ered
by
Date,
Letter
is not
1 and paragraph 21. 11 of this LOI,
except for the last sentence in paragraph 1.

hereto

agree

that,

and

the remainder of
no further force or

this LOI shall be null and

1
21.

effect.

and

Assigns. All references to

void

and

Privileged Settlement Communication. This LOI is

privileged

specific

of

of

0 Successors

any of the parties to this

11
21.
sentence in

prevailing party shall be entitled to recover its attorneys' fees and court
costs, including those involving appeals and/or post-judgment proceedings, if any.
2\.
]
LOI In Effect. This LOI shall remain in effect as provided herein- above
2
provided that RDP shall maintain the Lease and related existing documents in good standing and
the parties agreeing that the issues cov-ered elsewhere
any

of
defaults (
free
in this LOI shall not be deemed defaults for purposes of this para- graph 21.
of which shall
the failure
12)during the pendency of this LOI;

automati- cally result in this LOI being tenninated

and of no further force and effect other than the
\. of this LOr.21.
paragraphs as provided in paragraph 2 4
specific binding

13

except for the

binding paragraphs as

communication

4
provided in paragraph 21.

their pennitted suc es ors and pennitted assigns.

include
Attomevs' Fees. In the event litigation arises solely under the last
1 hereinabove, then, in that event, the
paragraph 1.
LOI shall

settlement

LOr.

this

for any purpose pursuant to Section

and Rule 408,Federal

90.408, Florida Statutes

Rules of Evidence. 21.14 Statements Against Interest. Any statements

party to this LOI contained in this LOI have been made solely
any
by
made
for the purpose of resolving all matters existing between the parties to this LOI. All
parties to this LOI recog- nize and agree that any such statements may not be correct
a party to this LOI and more
as applied to any other person or entities not
and
recognize
this
parties
specifically, all
agree that any such statements may not
LOI
to
be correct

as
applied to the Clark Litigation. 21.15 Recording Fees and the Like.
and the like for all of the Closing

RDP shall pay all recording fees

Documents or

Jurv

any other documents contemplated by this LOI. 21.16 Waiver of

Trial.All of the Closing Documents shall,

contain a waiver of jury trial

where applicable,
provision. 21. 17 Cross Default. The Convention Center Agreement shall be amended to provide that
a default in
the Declaration shall

be

default inthe

Center

Convention

AGREED AND ACKNOWLEDGED:

RDP ROYAL PALM HOTEL LIMITED
PARTNERSHIP, a Florida limited partnership

By:

Dated:

PADC HOSPITALITY CORPORATION I,

Florida corporation, as General Partner

By:
Name: R. Donahue Peebles

Title: President
MIAMI BEACH REDEVELOPMENT
AGENCY

14-

By:
Name: David Dermer

Title: Chairman
Attest:
Name: Robert Parcher

Title: Secretary
APPROVED:
CITY OF MIAMI BEACH
Dated:

By:
Name: David Dermer

Title: Mayor
Attest:

Name: Robert Parcher

Title:

City Clerk

Dated:2003
F:/ MinskerJC.M.

B./
Crowne

PlazalAgreements/ Minsker

New LOI lO-

9il3~

2003

doc

2003

EXHIBIT sn

Owner.
with

List of Disputed Items

a list

of each contractor,subcontractor, vendor

and

supplier

10/

2003 The
9/

followinq is

list of outstanding disputes reaardina

the

who

is performinQ any

labor or supplyinQ material

in excess

Development
CONSTRUCTION 2.3.
AQreement: ARTICLE 2.
Completion
of Construction of the Proiect b) Upon Substantial Completion
of Construction of the Proiect Developer shall
E necessary to
evidence that all FF&
the Owner with the fol owina: vi)
furnish
accordance
the
in
and
operate
Hotel
use
with Ground Lease, Manaaement AQreement. Plans and Specs, and the Development

Hotel

Budaet
has been installed in the Hotel Tenant will provide evidence to satisfy Owner.
has provided a letter, dated March 12. 2003
Tenant states that it
30 days
this
requirement. Tenant to verify compliance within
satisfaction
of
in

of

LOI

as provided
approval
in Section 10.2 of the October 9,
to Notice.
LOI.
ARTICLE 4 OWNER PARTICIPATION 4.2.Owner' s Riaht
2003
the deliv(
ery by Developer
v)
Access and Review a)
two
(
Owner
of
the
to
all aareements with contractors (
copies of:1)
2)
that will be provided upon settlement with Clark Construction). subcontractors,
vendors and other Persons supplvinQ materials
or services in connection with the Construction of the
Proiect in excess of
which shall be
Two Hundred Fifty Thousand Dollars ($250. 000).
suppliers,

aQareQated

with respect to
each Person supplvinQ materials or

all drawdowns
5)
services:
Updated
proceeds
under the Loan Docs. 7)
loan
of eauitv and
5.
M
I
S
C
E
L
A
N
E
O
U
S
CONSTRUCTION
control
books
ARTICLE
desian
interior
8)
all
Development Budaet
Developer shall furnish to
2 Names of Contractors. Materialmen. etc. PROVISIONS 5.

000 (except for

of 500.
$

EL
FF&
Deleted: Deleted:
::
, DISPUTED

ITEMS'

4 and
Article 5 above, will be satisfied by the
The items listed in Article
Tenant' s delivery of an itemized " Proiect Cost Summarization"and Debt/
Equity Capital
Investment Summarv ("
Proiect Capitalization Recap")reQardiml

the Proiect. The

fol owinq

is a list of outstandinq disputes reqardinq the AQreement

Lease:

of

ARTICLE 11. MORTGAGES

Not Related to a Default - If Tenant
Refinancinq of Debt b) Refinancinq
11.
13.
refinances its Debt in the ordinary course of business. and not related to
any Event of Default. the Net Refinancinq Proceeds shall be
in the fol owinq order: Ii)to Owner to pay the Purchase Price for
ap lied
Owner'

to Tenant if any funds remain after

Interest in the Premises: Iii}
payinq Owner the full Purchase Price for Owner'
Owner' s subordination of its riqht
s Interest in the Premises 1)
to Rental shall be at the Subordinated Amount as of

the
"
by Tenant. 2) Net
refinancinq
date of such
Refinancinq Proceeds" means the amount of the refinancinq of
the Debt less Ix)the Balance immediately before such refinancinq of
the Debt. Iy) the interest owinq on
( reasonable refinancinq
Balance. and z)
such
transaction expenses. brokeraqe commissions and prepayment fees and yield maintenance
charqes
relatinq

to

the

requested

been
Debt to be refinanced. Tenant
has
Agency. As
refinancin!:!
the
possible
regardi
n
!:!
any
to
submit
financial
information
to

to the Union
will provide Owner with an Affidavit relatin!:!
Tenant
summarizing
the
to
date
Planters Bank loan modifications that have been closed
of
fact
that
stating
none
loan
pr
o
ceeds
and
the
additional
the
of
use and application
the Borrower' s partners
for distributions to any of
the loan proceeds were used Ii)
or members. Iii} to repay any of the Borrower' s partners or members, liii}

such,

to repay any other person or

Hotel Manaaer The

which loaned money to the Borrower. 13.3 One (1)
affirm that at all times durina the Term
and without inter uption. both the Shorecrest Improvements and the RP Improvements shall

entity

Developer

will

be
Manaaer. Tenant states
operated and manaqed by one and the same Hotel
sent letter ( dated January 15. 2003)affirminq this condition is
it has re-

and

as

within

Tenant to verify compliance

such, deems this condition is satisfied.
Section 10.2
30 days of LOI approval as provided in

of
Qh
October 9.2003
the
kl Tenant will provide notice to owner
ARTICLE 10. Notice to Owner 10.1.(
reouirino Owner' s consent not later than two (
of any Capital Transaction not
2)
business days after the occurrence of such Capital Transaction...Tenant states it
has provided said notice in connection with the transaction described in the Certificate
of Tenant and further provided a letter dated March 12.
30
verify compliance within
2003 in satisfaction of this reQuirement. Tenant to

days of

LOIapproval

as

providedin

Section

10.2

of the October

9,2003

EXHIBIT C"

CLARK EXHIBIT)
The followina is a list of outstandina
Development Aareement:

Clark

issues disputes reaardina the

Hotel

ARTICLE

2.
Completion of Construction
CONSTRUCTION 2.3.
of
Upon Substantial Completion of Construction of
the Proiect b)
the Proiect Developer shall furnish the Owner
with
the fol owina: i)
certificate of the Architect
re:
Substantial Completion iii) lien waivers in form and substance
reasonably

satisfactory to Owner. other than Clark Construction lien waivers

will be provided upon settlement
Clark Construction v)
Contractor' s Final Affidavit. to be provided

that
with

upon settlement

with

Clark Construction

ARTICLE 4 OWNER PARTICIPATION 4.

2.
Owner' s
Riaht
to Notice, Access and Review b)
The
final critical path method ("
CPM Schedule") The Developer will provide the last CPM
Schedule provided bv Clark in the Developer' s possession. To the extent the Final
CPM Schedule is provided as a result of the settlement of IitiQation with

Clark.

the Developer will

provide same. ARTICLE

14.
DISCHARGE OF LIENS 14. 2 Discharae of Liens a)
If any mechanic' s.
laborer' s,
vendor' s,materialman' s.
or similar statutory
includina tax
lien (
liens) is filed aaainst the
Proiect Site...
Developer shall cause it to
be discharaed. However. Developer shall not be reauired to discharge any
such lien if Developer has furnished Owner with, at Developer' s option,
a cash deposit. bond. letter
of credit from an Institutional lender or other security. As to liens
filed bv Clark Construction. the Developer aQrees that upon settlement of

lit gation

withClark Construction,

allliens

willbe

cmar\ SAL L ICHRISTIN\ RDA\

discharged. F"\

EXHIBIT " D"

AMENDMENT RE TOWN PARK TO AGREEMENT OF LEASE

AMENDMENT TO AGREEMENT OF LEASE ( the " Amendment") is made and entered into as
of the _
2003 by and between RDP ROYAL PALM HOTEL
day of ,
MIAMI
Owner") and
partnership ("
Florida
PARTNERSHIP,
a
LIMITED
limited
politic
("
corporate
AGENCY,
BEACH REDEVELOPMENT
and
a public body
Tenant").
WITNES ETH

Owner and Tenant entered

A.
21, 1997,the( Lease"),relating

into

October

of Lease, dated
property more particularly described

an Agreement

to

real

therein (

B.
the Property").
"
Town Park Hotel Corporation,
the Hotel Manager defined in the Lease) of the Hotel (defined

in

the Lease).C.TownPark

a Tennessee

corporation (" Town Park"),

is

Borrower") are parties

and P ADC Royal Palm Holdings, LLC ("
2001
(the "
dated
Agreement
Loan
30,
to that
April
Loan
a forty- seven
Agreement"), whereby Town Park agreed to convey to
Borrower
Class A limited partnership interest in Tenant in
and 66/100 percent (47. 66%)
Promissory Note
consideration for Borrower' s execution and delivery of that certain Purchase Money
evidences
Note
Note"),
which
in favor of Town Park (the "

certain

the

loan by

one percent ( I

Town

of the Loan Agreement,

in Tenant

Park

to Borrower (

Loan").
the "

D.
Town Park currently holds

(
Pursuant to Section 4.0 I f)
partner%)
ship interest in Tenant. E.
equity
interest
as
will
be
treated
that
the
conf
i
r
m
to
Park desires
an
Loan
limited

Town

for

of the Lease so long as the Loan is outstanding. NOW, THEREFORE,

in consideration of the premises and for other good and valuable consideration, the receipt

purposes

and
suficency

of

which

is hereby

as follows:

acknowledged,

I.
Recitals. The

Owner and Tenant hereby agree

between Town Park (in its capacity

the parties agree

foregoing recitals are true and correct. 2.EQuitv Interest.

that to the extent that the Lease distinguishes
as Hotel Manager) holding or not holding any

equity interest in Tenant, the Loan evidenced and

secured

by the

Note

shall

be treated

for

purposes

Town Park holding an equity interest in Tenant.

by this Amendment, the Lease and all of its terms
amended
as
remain
shall
provisions
in full force and effect. In the event of
and

of the Lease

3.No Further Modification. Except

as

Lease, the

provisions of this Amendment shall control. All capitalized terms herein

same meanings as they have in the Lease, unless otherwise defined

shall have the

herein.

Signature page follows.]

IN WITNESS WHEREOF, this Amendment has been

duly executed by

the

parties

hereto.

WITNESSES:

OWNER":
MIAMI

BEACH

REDEVELOPMENT

AGENCY

By:
Print Name:

Print Name

Title:

Print Name

TENANT":
RDP ROYAL PALM HOTEL LIMITED

PARTNERSHIP,

Florida limited

partnership

By: PADC Hospitality Corporation I,

Florida corporation, as general partner
WITNESSES:

By:
Print Name:

Print Name

Title:

Print Name

EXHIBIT " E"

RECOGNIZED MORTGAGE CONSENT LETTER

UNION PLANTERS BANK
2800 Ponce de Leon

Blvd.Coral Gables,

Florida 33134 2003 Miami

Beach Redevelopment Agency Jorge
Gonzalez, Executive Director 1700 Convention
Center Drive, Fourth
Floor

Miami Beach, Florida 33139

and-City of Miami
Beach Jorge Gonzalez, City Manager
1700 Convention Center
Fourth Floor Miami Beach, Florida

Drive,

33\39 Re:Letter

of

Intent to

Amend

Royal Palm Crowne

Lease

Plaza

Resort

receipt

of

which is

Agreements

dated 2003 ("LOI") Dear

Mr.Gonzalez:

We are

in

a copy of the fully executed LOI. We are

the subject of the LOI as these

are defined in

terms

the LOI

and

the

the

Recognized Mortgagee under

Lease.

part as
11. 10 of the Lease states in
voluntary
surrender,
a
agrees
not
to
Owner
follows:
termination or modifcation
accept
of this Lease at any time while such Recognized Mortgage( s)shall remain
Section

on Tenant' s leasehold estate.It is further understood and agreed

such Recognized Mortgagee( s)shall not be bound
by any surrender, termination or modification of this Lease unless
such surrender, termination
modification is made with the prior written

lien

that any

or

of such Recognized
otherwise as

consent

Mortgagee,

and

this

Lease shall not terminate

by merger

or

the

Miami Beach

Redevelopment Agency
Jorge Gonzalez, Executive Director
and-

City of Miami Beach

Jorge Gonzalez, City Manager
2003

Page 2 Accordingly, we hereby consent to the LO! subject to the negotiation and
of the Closing Documents ( as defined in the LOl) with terms, provisions and
conditions mutually acceptable to RDP,the Agency and the City as well as the obtaining of

execution

our approval. Very

truly

yours, Roy

Tanis Senior
D.

ROYAL PAlM

101t103

y..,..

AddltloMl

R.
of

Ill"

Return

nt Annuli

AnnUllIR.nll

000

10,
000,

Pre- Opening Rent Paid

Seck Rent- Prior

10

Hotel

Exl.

Opening
Rent
0,
May 15,2(
02):
l ng~_

Due

Proposel ~ '-

LO' .~.

Rent

Annual

from Holel

Opening

Date May

15,

2(
02):Sum

Return

oto' .....,

of

....., ....... '

Payments thru Veil 25 Asume

2e.
Auo01 - ~ ~HI
~!

3128,333. 38 $ 128, 333,

~ seD.()
~

38

Total

128.$
333.

38 $

129,
333.

38 $

128,

333.

plus

return&PP,irllny NOTE:

RENTAL

SUBJECT TO
BOP
Palm
AS

Royal

S.
ttlwn.
nt 1/
28103.

NPV eomp81rlson Annual

Owflltf
Rent

Contribution Return

Amortization

P<<
tod

of 1st VA' Unpaid

R.
nt &

38 $

128,

333.

I
749,

583.

29I
$ 490,
$.$

000.
000,(1)
$00 $ $490,

$
$
12
$ 490,
$$

39