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HomeMy WebLinkAboutR-88-0385a a J-88-381 4-26-88 RESOLUTION NO. A RESOLUTION AUTHORIZING THE CITY MANAGER TO CONSENT TO AND APPROVE A RECOGNITION, NON - DISTURBANCE AND REIMBURSEMENT AGREEMENT, IN SUBSTANTIALLY THE FORM ATTACHED HERETO, BETWEEN THE MIAMI SPORTS AND EXHIBITION AUTHORITY AND MIAMI HEAT LIMITED PARTNERSHIP. WHEREAS, on September 7, 1986, the Operator on behalf of the Miami Sports and Exhibition Authority (the "MSEA") and Zev Bufman and Billy Cunningham on behalf of an entity to be formed to own and operate the NBA franchise in Miami (the "TEAM"), entered into a Memorandum of Intent (the "Memorandum"); and WHEREAS, on September 10, 1986, the MSEA through its Chairman and the TEAM, entered into a Memorandum of Intent to enter into a Recognition and Attornment Agreement ("Attornment Memorandum"); and WHEREAS, the purpose of the Attornment Memorandum was to outline certain terms and conditions between MSEA and the TEAM with respect to reimbursement by MSEA to the Team of certain operating expenses payable by the Team to the Operator under the Memorandum; and WHEREAS, the Recognition, Non -Disturbance and Reimbursement Agreement (the "Agreement") incorporates certain terms and conditions of the Attornment Memorandum; and WHEREAS, on March 1, 1988 the MSEA adopted Resolution 88-4, authorizing the Chairman and Executive Director to execute the Agreement, which was subject to approval of the City Commission; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: ��4' t ATTAC11 CITY COMMISSION MEETING OF APR 28 1988 C19--3 RESOLU110N No. AMARKS A A Section 1. The City Manager is authorised to consent to and approve the Recognition, Non -Disturbance and Reimbursement Agreement, in substantially the form attached hereto, between the Miami Sports and Exhibition Authority and Miami Heat Limited Partnership. PASSED AND ADOPTED this 28th day of Xril , 1989. ATTEST: L. T y -Clerk PREPARED AND APPROVED BY: n CHRIS ER G. KOR E, Assis ant City Attorn y AS TO FORM AND CORRECTNESS: City Att (2) DMR/aa*/d60 01*1 U , • yor %V9-3Rrx 9 UNtIlT A RNWGNITION, NON -DISTURBANCE AND REIMBURSEMENT AGREEMENT By and Between THE MIAMI SPORTS AND EXHIBITION AUTHORITY and MIAMI HEAT LIMITED PARTNERSHIP 019-3FZ- Orh •s+r CLR TITLE `AGE ARTICLE I Representations and Warranties..................2 ARTICLE II ............................4 ARTICLE III Nondisturbanoe..................................4 ARTICLEIV Reimbursement...................................8 ARTICLE V Seat Charge.....................................8 ARTICLEVI Suites..........................................9 ARTICLE VII Arena Name......................................9 ARTICLE VIII Non Competition................................11 ARTICLE IX Default and Termination ........................12 ARTICLE X Licensee Financing .............................13 ARTICLE XI Minority Participation .........................14 ARTICLE XII Special Termination ............................15 ARTICLE XIII Miscellaneous..................................18 ARTICLE XIV Conditions Precedent ............................19 "9-385 04 RECOG 1TIM�QN=DI3TUREANCE_.AND REIMBURSEMENT_ AGREEKENT This Recognition, Non -Disturbance and Reimbursement Agreement (this "Agreement") is entered into as of March 1988. by and between THE MIAMI SPORTS AND EXHIBITION AUTHORITY (hereinafter referred to as the "MSEA"), and MIAMI HEAT LIMITED PARTNERSHIP, a Florida limited partnership, whose sole general partner is FLORIDA BASKETBALL ASSOCIATES, INC., a Florida corporation (hereinafter referred to as "LICENSEE"); WITNESSETH WHEREAS, the CITY OF MIAMI (the "CITY") owns fee title to a parcel of land being Tracts "A" and "B" of the Miami Arena Subdivision, according to the Plat thereof, as recorded in Plat Book 129, at Page 55, of the Public Records of Dade County, Florida (the "Project Land") in Miami, Dade County, Florida; and WHEREAS, the CITY has entered into a Land Lease Agreement (the "Land Lease") with the MSEA dated October 10, 1986, which gives the MSEA and DECOMA MIAMI ASSOCIATES, LTD., a Florida limited partnership, (the "OPERATOR") the right to design, construct, develop and operate an arena (the "ARENA") on the Project Land; and WHEREAS, the MSEA and the OPERATOR have entered into the Miami Arena Contract (the "Miami Arena Contract") dated October 10, 1986 pursuant to which the OPERATOR is currently designing, constructing and developing the Arena and once completed will operate the Arena; and WHEREAS, OPERATOR acting through DECOMA, LTD., a Texas limited partnership (the sole general partner of Operator) which in turn acting through its sole general partner DECOMA VENTURE ("Decoma"), a Texas joint venture, has entered into that certain Arena Management Agreement (the "Management Agreement") dated October 10, 1986 between Decoma and FACILITY MANAGEMENT and MARKETING ("FMM"), a Texas joint venture d/b/a Leisure Management International, pursuant to which FMM has the right to operate and manage the Arena; and 'n9-3S WHEREAS, by that certain Assignment and Assumption of Arena Management Agreement, dated effective as of June 18, 1987, FMM assigned its rights under the Management Agreement to Leisure Management Miami, Inc., a Delaware corporation (hereinafter referred to as "Licensor"); and WHEREAS. Licensor and LICENSEE have entered into that certain License Agreement, dated of even date herewith (the "License Agreement"). which License Agreement, and the terms and provisions thereof were consented to by the MSEA; and WHEREAS, unless expressly indicated to the contrary herein, all defined terms when used herein shall have the meaning ascribed to such terms in the License Agreement; and WHEREAS, the MSEA, on the one hand, and Zev Bufman and Billy Cunningham, on the other hand, entered into that certain Memorandum of Intent to Enter Into a Recognition and Attornment Agreement dated September 10, 1986 (the "Prior Agreement"); and WHEREAS, by that certain Assignment and Assumption Agreement dated 1 1987, Zev Bufman and Billy Cunningham assigned all of their rights under the Prior Agreement to LICENSEE and LICENSEE expressly assumed all of the obligations of Messrs. Bufman and Cunningham under the Prior Agreement; and WHEREAS, the MSEA and LICENSEE have, in partial consideration hereof, entered into that certain Mutual Release of even date with this Agreement (the "Mutual Release"); and WHEREAS, the MSEA and LICENSEE desire to enter into this Agreement; NOW, THEREFORE, for and in consideration of the sum of Ten and No/100 Dollars ($10.00) in hand paid, other good and valuable consideration and the mutual benefits to be derived herefrom, the receipt and sufficiency of all of which are hereby expressly acknowledged and expressed, the MSEA and LICENSEE hereby agree as follows: I. Section 1.1. Notwithstanding anything to the contrary set forth in this Agreement or the License Agreement, LICENSEE hereby -2- .7wj l-p covenants, acknowledges and agrees that all of its rights under this Agreement are and shall be and shall at all times remain expressly subject, subordinate and inferior to the Land Lease, the Miami Arena Contract and the License Agreement and each and every term and provision thereof. Section. 1.2. LICENSEE represents and warrants that the License Agreement, which is incorporated herein for all necessary purposes, is in full force and effect and has not been assigned, modified, supplemented or amended in any way. Section 1.3. LICENSEE represents and warrants that the License Agreement represent the entire agreement between Licensor and LICENSEE. Section 1.4. LICENSEE represents and warrants that all conditions, if any, of the License Agreement to be performed prior to or on the date of this Agreement by Licensor and necessary to the enforceability of the License Agreement have been satisfactorily performed. Section 1.5. LICENSEE represents and warrants that there are no defaults by either Licensor or LICENSEE under the License Agreement. Section 1.6. LICENSEE represents and warrants that no Rent, Additional Rent or any other amounts payable or otherwise owing by LICENSEE to Licensor under the License Agreement have been prepaid prior to the date hereof by LICENSEE. Section 1.7. LICENSEE represents and warrants that, as of the date hereof, there are not any existing or known defenses or offsets which LICENSEE has or has claimed or asserted which might otherwise affect the enforcement, validity or binding effect of the License Agreement or any of the obligations of LICENSEE thereunder. Section 1.8. LICENSEE warrants, represents and agrees that no modification. amendment, adjustment or revision of the License Agreement or any termination or cancellation of the License Agreement by LICENSEE shall be effective without the prior written consent of the MSEA. -3- U-3c OWA II. Section 2.1. LICENSEE hereby acknowledges and agrees as follows: (a) From and after the date hereof, in the event of any act or omission by Licensor which would give LICENSEE the right, either immediately or after the lapse of passage of time, to terminate the License Agreement or to claim a partial or total eviction from the Licensed Premises, LICENSEE agrees not to exercise any of such rights unless and until, first, notice thereof has been given to the MSEA, as provided herein below, and further given (but without obligation on the part of the MSEA) the MSEA the same period of time as is given to Licensor under the License Agreement, as the case may be, to cure any such act or omission, and, further, such period shall have elapsed only following such giving of notice to the MSEA, and such act or omission has not been cured by either the MSEA or Licensor. LICENSEE agrees that the MSEA shall have the right to cure any default of Licensor under the License Agreement; provided, however, the MSEA shall not be obligated to cure any default by Licensor under the License Agreement. (b) LICENSEE shall send a copy of any notice or statement under the License Agreement to the MSEA at the same time such notice or statement is sent to Licensor. (o) LICENSEE has no right or option of any nature whatsoever, whether pursuant to the License Agreement, this Agreement or otherwise, to purchase the Licensed Premises or the Project Land or any portion thereof or any interest therein. (d) Other than as therein provided, Licensor has not agreed to any abatement of Rent, Additional Rent or other amounts payable by LICENSEE to Licensor under the License Agreement or agreed to any period of "free rent" for the Licensed Premises and LICENSEE agrees that in the event the MSEA or any Successor Manager (as hereinafter defined) becomes either the owner of the Project Land or the Arena or becomes the OPERATOR of the Arena (of which the Licensed Premises are a part), no agreement or abatement of Rent, Additional Rent or other amounts set forth in the License Agreement as owing from LICENSEE to Licensor shall be binding on the MSEA or such Successor Manager. Section 3.1. In the event of any termination of the Miami Arena Contract by the MSEA or other removal of the Licensor as the OPERATOR of the Arena (of which the Licensed Premises are a part) or the invocation by the MSEA of any other right, remedy or recourse by it as a result of any default or breach by OPERATOR -4- under the Miami Arena Contract, then: (a) (1) notwithstanding any such termination of the Miami Arena Contract or removal of Licensor as manager of the Licensed Premises or the invocation by the MSEA of any other right, remedy or recourse by it as a result of any default or breach by OPERATOR under the Miami Arena Contract, LICENSEE's license under the License Agreement and LICENSEE's rights arising out of the License Agreement shall not be unreasonably disturbed or affected by the MSEA, or anyone claiming by, through or under it, so long as (a) no event of default of LICENSEE exists under the terms of the License Agreement; and (b) no event of default of LICENSEE exists under the terms of this Agreement; and (2) the MSEA or any such successor operator of the Arena ("Successor Manager") shall be deemed to have assumed and agreed to perform the duties of Licensor under the License Agreement during the remainder of the term, so long as (a) the MSEA or Successor Manager is collecting or entitled to collect Rent, Additional Rent and all such other amounts owing from LICENSEE to Licensor under the License Agreement; (b) the MSEA or Successor Manager is in possession of the Licensed Premises; and (e) LICENSEE agrees to attorn to the MSEA and/or Successor Manager; provided. however, in no event shall the MSEA or any Successor Manager be: (i)liable for any act or omission of Licensor or (ii)subject to any offsets or defenses which LICENSEE might have against Licensor; or (III) bound by any Rent, Additional Rent or any other amounts owing under the License Agreement by LICENSEE to Licensor which LICENSEE might have paid in advance of its normal due date to Licensor except if paid with the written consent of MSEA. (b) Upon the written request of the MSEA or any Successor Manager, LICENSEE agrees to promptly execute a license agreement covering the Licensed Premises upon the same terms and conditions as the License Agreement, which license agreement will cover the unexpired Term of the License Agreement existing prior to any termination of the Miami Arena Contract or other removal of Licensor as manager of the Licensed Premises. Upon the execution of a new license agreement, the License Agreement with Licensor will terminate. Section 3.2. Neither the MSEA nor any Successor Manager shall have any obligations, or incur any liability with respect to any warranties or representations of any nature whatsoever, either express or implied, made to LICENSEE by Licensor or any of the other Beneficiaries (except the MSEA). Section 3.3. LICENSEE acknowledges and agrees that a condition precedent to any of the MSEA's or any Successor Manager's obligations under this Agreement is that this Agreement be duly approved by the City Commission of the City of Miami. -5- It9-3.4. ev F• r:• 1 ;: r=, t F4 1 e 1 . _-..- t ►, t•t 11 t r' 1 IV. HEIMDUR"%RMRNT Section 4.1. on A t I ,c.eI-ye••dI •t f I ICAI ycAUp nnn- QuMulative basis dur ing the Terrm, tilt. M.141:A Aelre�erl, to the extent Of Net Revonuen (an dot lned he -low) , It tiny, tere'trivetl by the MWIA with respect to aurh ti:teal year, to reimhur:;v LICrN9RR nuhject to terms or this Aqt trtrmunt as follows: (A) To reimbut Sr tce r.TrP.N.grr Ai, run„unt rg11A1 to the exeeRa, If any, or the ActttAl innurance uxpenne component of t,xcrrsac Sole ct utl Bxpensea ACtually pAtd by I.ICF:N>F:F: to Liuerrt:+ui under the Lteenne Agreement for the, Stt.l5te11 Itivtelvedr And (t)) 'ro reimburse to LICENSEE ati ami-itetlt equAl to the exc•esn, it any, of the- acrutil tttilit.ieeS axpense component of F.xer:s:; S(!)etcte•tl rxpenrlen Actually paid by LICENSr•:E rc, Lic:eenyur antler the hlcentsee Agreement. fur t ht• Str.vioji involved. for the purposen tterpot, "Nc:t keveiim-s* nhali mean, with respect to any f i cca t year, the :►um of (i) the MSEA' x nhat tr or Net Operating income or operating Los:a (aei sti h terms are defined in the Miami Arena Contract) tegardlenn of how MSFA, purnttant to the Miami Arena ront.ract, is teguit't%d to fund nuch lances, As the Case may he and (► i) the MSEA's share of Seat Use Revenuers (an such term is clef ivied in the Miami At t-na Contract) which have been distributed to anal actually reCeived by the MSFA (but not by the operator), pursuant to the M1aml Atona Contrtit't, for ttta fiscal year in which the expenses described In Subsicct Punts 4.1(a And h) were incurred Mid paid by I.ICt•;Nrrr. Fu[ cxtimpl4er, if at the! conclusion of a t IFcal year of the MSF.A, iht- WWA's share of Net Operating Income wars $500,000.00 and c.he MSF.A'ti tshdre of Seat One Revenues were $400,000.00, and bush oC :inch amounts were dint.ributed to and actually received by the M SEA (but nut. by the Operator) pursuant to the Miami Arena Cont►act, then Nat Revenuum would he the sum of Nine Hundred Thoutannd Doll art; ($900,000.00) . As a further example or the toteryainq, but not In limitation thereof, if the Operating 1,08s t,t t r ihut Able to the MOIRA for such -G- fiscal year was instead $300,000.00 and the MSEA's share of Seat Use Revenues distributed to and actually received by the MSEA (but not by the Operator) pursuant to the Miami Arena Contract totalled $500,000.00 for such year, then for the purposes hereof, Net Revenues would be the sum of Two Hundred Thousand and Noi100 Dollars ($200,000.00). As an example of the MSEA's obligation to pay LICENSEE for the insurance and utilities components of Excess Selected Expenses to the extent of Net Revenues as contemplated in this Section 4.1, if, for a given fiscal year during the Term: (i) Net Revenues totalled $40,000.00; (11) the utilities component of the Excess Selected Expenses actually paid by LICENSEE to Licensor under the License Agreement during Pre -Season Home Games and Regular Season Home Games involved was $40,000.000; and (iii) the actual insurance expense component of Excess Selected Expenses actually paid by LICENSEE to Licensor under the License Agreement for the Pre -Season Home Games and Regular Season Home Games involved was $10.000.00. In the preceding example, the MSEA would only be obligated to pay LICENSEE $40,000.00 (notwithstanding the fact that pursuant to item (ii) of this grammatical paragraph, the MSEA potentially could be obligated for $40,000.00 and pursuant to item (iii) of this paragraph, the MSEA potentially could be obligated for $10,000.00) because the MSEA is never obligated, in any circumstance whatsoever, to reimburse LICENSEE for the insurance and utilities components of Excess Selected Expense for any amounts in excess of the Net Revenues. All references in this Agreement to a "fiscal year" refer to the fiscal year of the MSEA. Section 4.2. LICENSEE hereby acknowledges that it does not have any claim, title, interest or right to Convention Development Tax Revenues collected or to be collected pursuant to Section 212.0305 of the Florida Statutes or to any other revenues of the Authority other than Net Revenues in accordance with the provisions of this Agreement. -7- ^'9-3,9 Section 4.3. The amounts reimbursable by the MSEA to LICENSEE, if any, as set forth above in Section 4.1 of this Agreement, shall be paid by the MSEA to LICENSEE within ten (10) days after LICENSEE has provided the MSEA with satisfactory documentary evidence that all Rent, Additional Rent, Quarterly Payment Fees and any and all other amounts owing to Licensor by LICENSEE under the License Agreement have been fully paid to Licensor. Section 4.4. Except as set forth in Section 4.1 of this Agreement, LICENSEE agrees that the MSEA is not obligated in any way to reimburse LICENSEE for any other costs or expenses of whatever kind to LICENSEE under or pursuant to the License Agreement or otherwise. Section 4.5. Notwithstanding the provision of Section 4.1 of this Agreement to the contrary, LICENSEE acknowledges and agrees that the MSEA shall have no obligation of any kind to reimburse any amounts to LICENSEE for the utility and insurance components of Excess Selected Expenses or any other expense incurred or paid by LICENSEE to Licensor under the License Agreement or otherwise for any Home Play -Off Games during the Term. V. Section 5.1. LICENSEE agrees to pay to the MSEA, the MSEA's share of the applicable Seat Use Charge (as defined and determined by the Miami Arena Contract) for all tickets for each of the Suites (other than tickets for NBA Home Games and tickets furnished by Licensor to LICENSEE at the Lowest Established Ticket Price), such payment to be made by LICENSEE to the MSEA, without demand, within ten (10) days of the end of the MSEA fiscal year. LICENSEE may as an alternative to paying MSEA its applicable Seat Use Charge, subject to Licensee's compliance with Section 4.3, offset such amounts due pursuant to this Section 5.1 against those amounts due and payable to LICENSEE from MSEA pursuant to Section 4.1 (a and b) of this Agreement. -8- 99-3,9: VI. SUITES Section 6.1. LICENSEE acknowledges and agrees that the License Agreement allows the MSEA to build and the MSEA and CITY to occupy two (2) suites in the Arena, the location, dimensions and furnishings of which are set forth in Exhibit "A" attached hereto. LICENSEE acknowledges and agrees that CITY and MSEA respectively have the exclusive right, during the term of the License Agreement and any extension or renewal thereafter, to use their respective suites and the use of such suites shall not be subject to any rental or charge by LICENSEE. Section 6.2. MSEA agrees, at the sole expense of LICENSEE, to relocate its suite, which is set forth on Exhibit "A" to an Additional Suite, as such term is defined in the License Agreement provided: (a) The MSEA Additional Suite is located directly next to the City Suite. (b) The MSEA Additional Suite is no smaller in size than the MSEA Suite shown on Exhibit "A". c) The MSEA Additional Suite shall include as a minimum, each and every amenity, furnishings, fixtures and equipment that the MSEA Suite possessed at the time of relocation. Section 6.2. LICENSEE agrees to provide the CITY and MSEA with forty-four (44) tickets (22 for each suite) for all games. VII. Section 7.1. LICENSEE acknowledges and agrees that: (a) MSEA has the right, to designate the Arena Name and place such name on and in the Arena from time to time for whatever purpose MSEA desires with one limitation. If the Arena is named after a Commercial Entity (eg. The Pepsi Miami Arena) then the Commercial Arena Name cannot be placed on the center of the basketball court until after the third Ord) playing season and thereafter, such Commercial Name can only be placed on the Center of the basketball court floor if there is not a conflict with then existing contracted advertising within the Arena and controlled by LICENSEE. For purposes of this Section, "Commercial Entity" shall mean a for profit enterprise in the business of manufacturing, production or provision of product and/or services which product or service is then (1) in a direct competitive product line with LICENSEE's then current advertisers and (2) a substitute for and directly competitive with LICENSEE's then advertised product or service pursuant to a then existing contract for such advertising between LICENSEE and such advertiser. For purposes of this Section, a "conflict with the then existing contracted advertising" shall be deemed to have occurred when the product or service provided by the Commercial Entity to which the Arena Name directly relates is in direct competition with an existing (then current i.e. at the time the Arena Name is chosen by the MSEA), product or service advertised contract between the LICENSEE and such advertiser. As an example of the foregoing, in the fourth NBA Season, MSEA would not be able to place the name Pepsi Miami Arena on the center of the basketball court floor if Coca Cola had, at the time of the selection of such Arena Name by MSEA, an existing arms length and bonafide contract with LICENSEE and Coca Cola had advertising within the Arena. Similarly, MSEA's right to name the Arena Name after a Commercial Entity with or after a non -substitute product could arise if MSEA elected, in the fourth NBA Season, to place the name Pepsi Miami Arena on the center of the basketball court floor where, at the time of the selection of such Arena Name by MSEA, their existed a contract for advertising in the Arena between LICENSEE and Anheuser Busch beer (as opposed to Coca-Cola, 7-Up, atoll �S--3R Dr. Pepper all of which would be excluded). It being acknowledged that while Busch beer is a beverage, it and similar competitive products to it do not and would not directly conflict or compete with Pepsi Cola. (b) LICENSEE has no rights of any kind to the Arena Name or to any rents, royalties, profits, issues or revenues derivable therefrom, all of which shall belong solely and exclusively to the MSEA. Section 7.2. Subject to the provisions of Section 7.1 (a) hereof, LICENSEE acknowledges and agrees that if the Arena Name is named after a Commercial Entity and placed on the center of the basketball court floor, such placement of the Arena Name on the basketball court floor shall not be deemed advertising. Section 7.3. To enable MSEA to determine if any existing advertisements pursuant to arms length and bonafide contracts with an advertiser and LICENSEE are or may be in direct conflict or competition with any Arena Name contemplated by the MSEA named after a Commercial Entity, LICENSEE shall provide on request by MSEA, satisfactory documentation and evidence to MSEA in connection with (i) copies of any such existing advertising contracts, (ii) memoranda or agreements to enter into any such advertising contracts and (iii) any other reasonable documentation and evidence as required by MSEA. Section 7.4. Notwithstanding anything to the contrary herein, MSEA shall not be restricted in any manner whatsoever in naming the Arena and placing such name on the center of the basketball court floor after any entity, person, firm or individual that is not a Commercial Entity. VIII. NON COMPETITION Section 8.1. LICENSEE, for itself and Florida Basketball Associates. Inc. ("FBA"), represents, warrants and agrees that during the Term, that none of such parties shall develop, construct or operate, within the Relevant Area, a facility, which facility (a) is of similar size and quality and provides similar -11- 9g-3- a.i amenities to the Arena and (b) has been designed to accommodate audiences of comparable size to those audiences which can be accommodated in the Arena, and (c) holds events, on a commercial basis, that are similar to the events which would have been held at the Arena. IX. DEMLT AND -TERMINATION Section 9.1. In$he event that before, during or after the Term (i) LICENSEE fails to pay any amounts required to be paid by LICENSEE under this Agreement within ten (10) days after written notice from the MSEA that such amounts are delinquent; (ii) LICENSEE is in default under the License Agreement; (iii) LICENSEE (or FBA breaches) any of the representations or warranties contained in this Agreement; (iv) LICENSEE or FBA fails to perform any of the other covenants, obligations or agreements contained in this Agreement within thirty (30) days after written notice from the MSEA of such failure; provided, that if such performance or observance cannot reasonably be accomplished within such thirty (30) day period, then the failure to commence such performance or observance within such thirty (30) day period and to diligently pursue such performance or Observance to conclusion; (v) LICENSEE or FBA makes a general assignment for the benefit of creditors or takes the benefit of any insolvency act; (vi) a receiver or trustee is appointed for LICENSEE, FHA or LICENSEE's or FBA's property; (vii) execution is issued pursuant to a judgment rendered against LICENSEE or FBA which is not adequately bonded against or otherwise adequately secured in the reasonable judgment of the MSEA; (viii) this Agreement is assigned (other than as expressly permitted in this Agreement), passed to or devolves upon any person, firm or corporation other than LICENSEE or LICENSEE attempts to assign this Agreement except as expressly permitted in this Agreement; or (ix) LICENSEE vacates, deserts, or abandons the Licensed Premises (in which case the surrender of the keys to Licensor shall not be necessary to constitute vacation, desertion or -12- clF4.00 abandonment), then, in any event set forth in (i)-(ix), above, LICENSEE shall be in default hereunder and the MSEA shall have the option to terminate this Agreement by giving written notice to the LICENSEE in the manner provided in Section 12.1 of this Agreement, and upon delivery of such notice, this Agreement shall thereupon be automatically null and void and of no further force or effect, and the MSEA shall have no further obligation or liability hereunder. Section 9.2. In the event that before, during or after the term of this Agreement (i) the MSEA fails to pay any amounts required to be paid by the MSEA under this Agreement to LICENSEE within ten (10) days after written notice from LICENSEE that such amounts are due subject to the limitations set forth in paragraph 4.1; or (11) the MSEA fails to perform or observe any of the other obligations, covenants, agreements or conditions to be performed or observed by the MSEA under this Agreement within thirty (30) days after written notice from LICENSEE of such failure; provided, that if such performance or observance can not reasonably be accomplished within such thirty (30) day period, then the failure to commence such performance or observance within such thirty (30) day period and to diligently pursue such performance or observance to conclusion, then. in any such event set forth in (i) or (11) above, the MSEA shall be in default hereunder and the LICENSEE shall have the option to terminate this Agreement by giving written notice to the MSEA in the manner provided in Section 13.1 of this Agreement, and upon delivery of such notice, this Agreement shall thereupon be automatically null and void and of no further force or effect, and neither party shall have any further obligation or liability hereunder. X. j,TCENSEE FINANCI Q Section 10.1. This Agreement shall not be assigned or otherwise transferred by LICENSEE without the prior written consent of the MSEA. Except with respect to the Barnett Bank Collateral Assignment described in Section 26.05 of the License -13- Agreement, LICENSEE shall not otherwise mortgage, pledge, hypothecate or otherwise encumber its rights and interest in and under this Agreement without the prior written consent of the MSEA. Notwithstanding any permitted assignment or transfer by LICENSEE, LICENSEE shall at all times remain directly, primarily and fully responsible and liable for the payment of all amounts herein specified and for compliance with all of its other obligations under the terms, provisions and covenants of this Agreement. XI. MINORITY PARTICIPATI-ON Section 11.1. LICENSEE represents and agrees to exert diligent, good faith efforts to cause a percentage of its employment positions in Executive Managerial, Team Operations, Sales and Promotion, and Coaching Staff, to be staffed as follows: (a) 17% of all employment positions with Black (as defined in the Miami Arena Contract) employees; (b) 17% of all employment positions with Hispanic (as defined in the Miami Arena Contract) employees; and (c) 17% of all employment positions with Female (as defined in the Miami Arena Contract) employees. Employment positions filled by Black Female employees may be counted toward satisfying either (but not both) of the goals set forth in paragraphs (a) and (c) above, and employment positions filled by Hispanic Female employees may be counted toward satisfying either (but not both) of the goals set forth in paragraphs (b) and (c) above. Section 11.2 LICENSEE represents that it shall exert diligent, good faith efforts to cause a percentage of contracts with third parties (including but not limited to, whether for professional services or supplies, materials, or equipment) as follows: (a) 17% of all contracts with Blacks (as defined in the Miami Arena Contract); (b) 17% of all contracts with Hispanics (as defined in the Miami Arena Contract); and (o) 17% of all contracts with Females (as defined in the Miami Arena Contract). -14- Contracts with Black female companies may be counted toward satisfying either (but not both) of the goals set forth in paragraphs (a) and (c) above, and contracts filled by Hispanic female companies may be counted towards satisfying either (but not both) of the goals set forth in paragraphs (b) and (c) above. Section 11.3. In furtherance of the goals set forth in Section 11.1 above, LICENSEE represents that its diligent, good faith efforts shall include, but shall not necessarily be limited to: (a) advertising in the local Minority (as defined in the Miami Arena Contract) media as well as applicable industry publications; (b) notifying employment agencies throughout Dade County of job opportunities; and (c) notifying the Overtown Jobs Program, the Miami Minority Procurement Office, the Dade County Office of Minority Business Development, or other appropriate agencies, of job opportunities and utilizing the Overtown Jobs Program, the Miami Minority Procurement Office, the Dade County Office of Minority Business Development, industry publications and circulations or other appropriate agencies or entities, as a screening and referral source for Minority personnel for LICENSEE's business operations, and (d) regularly reporting data (including table or organization and ethnic composition of LICENSEE's personnel including reasonable documentation of good faith efforts) to MSEA from time to time as requested by MSEA, by which MSEA may make an objective determination of LICENSEE's compliance with it's minority participation obligations herein. XII. $PVOTAT, TE$MIHAT.IO Section 12.1. In the event that the LICENSEE has not been awarded an NBA franchise by March 15, 1988, to play games during the 1988/1989 Season, both the MSEA and LICENSEE shall have the option to terminate this Agreement by giving written notice to the other party in the manner set forth in Section 13.1 hereof, and upon delivery of such notice, this Agreement shall thereupon be automatically null and void and of no further force or effect, and neither party shall have any further obligation of liability hereunder. mtz Ry--380. . X1It. K=ELLANEQUE Section 13.1. Any notice or statement sent by LICENSEE to the MSEA or to LICENSEE by the MSEA, pursuant to the provisions of this Agreement, shall be in writing and shall be either delivered by hand or sent by United States or certified mail. return receipt requested, adequate postage prepaid. Such notices and statements are to be sent to: If for MSEA: Miami Sports and Exhibition Authority Dupont Plaza Center Suite 1120 300 Biscayne Boulevard Way Miami, Florida 33131 Attention: Eugene Marks Chairman With a copy to: Miami Sports and Exhibition Authority Dupont Plaza Center Suite 1120 300 Biscayne Boulevard Way Miami, Florida 33131 Attention: John A. Blaisdell Executive Director With a oopy to: Miami Sports and Exhibition Authority 1100 AmeriFirst Building 1 Southeast 3rd Avenue Miami. Florida 33131 Attention: Christopher G. Korge General Counsel If for Licensee: Miami Heat Limited Partnership 100 Chopin Plaza Suite 200 Miami, Florida 33131 With a copy to: Miami Heat Limited Partnership 2980 McFarlane Road Miami, Florida 33133 Attention: Joel Arnold General Counsel Any addresses above may be changed from time to time by such party giving notice as provided above to the other party. Notice given or served by United States certified mail, return receipt requested, adequate postage prepaid, shall be deemed to be received three (3) days after mailing and notice by personal delivery shall effeotive when received. -16- �9-3f�: Section 13.2 LICENSEE. FBA and the MSEA hereby agree that the term of this Agreement shall be coterminus with the License Agreement and in the event of any termination of the License Agreement, this Agreement shall automatically terminate unless such termination is the result of MSEA terminating the rights of Licensor, in which event Section 3 of this Agreement shall apply. Section 13.3. If any of the terms or provisions of this Agreement, or the application thereof to any particular party or circumstance, shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to such parties or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be and remain valid and enforced to the fullest extent permitted by law. Section 13.4. Captions under the article numbers of this Agreement are for convenience and reference only and in no way define, limit, amplify or describe the scope or intent of this Agreement, and in no way effect or constitute a part of this Agreement. Section 13.5. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective legal representatives, successors and permitted assigns (as expressly permitted hereunder). Section 13.6. Any agreement to pay an amount and any assumption of liability herein contained, express or implied, shall be only for the benefit of the City, the MSEA and LICENSEE, and their respective successors and permitted assigns (as herein expressly permitted), and such agreements and assumptions shall not inure to the benefit of the obligees or any other party, whomsoever, it being the intention of the undersigned that no one shall be or be deemed to be a third -party beneficiary of this Agreement. Section 13.7. This Agreement constitutes the entire agreement between the parties hereto relating to the subject DIM t"% 00"� matter hereof; no prior written or contemporaneous oral promises, representations or agreements shall be binding, it being intended that this Agreement supercedes and merges all such prior and contemporaneous promises, representations and agreements, including, but not limited to, the Prior Agreement. No modification hereof shall be effective unless made by supplemental agreement in writing executed by the parties hereof and approved by the MSEA and LICENSEE. The MSEA and LICENSEE further agree that this Agreement may not in any way be explained or supplemented by a prior or existing course of dealings between the parties or by any prior performance between the parties pursuant to this Agreement or otherwise. Section 13.8. Notwithstanding Section 13.7 of this Agreement, it is the intention of the parties that this Agreement shall not limit, diminish, or affect, in any manner, the rights, obligations, agreements, covenants, promises, provisions, warranties and representations of LICENSEE contained in this Agreement, and it is agreed that this Agreement shall have no affect on any of such rights, obligations, agreements, covenants, provisions, warranties or representations set forth in the License Agreement or the Supplemental Agreement. Section 13.9. Pronouns used in this Agreement shall be understood and construed to apply whether the party referred to is an individual, partnership, venture, corporation, or an individual doing business under a firm or trade name, and the masculine, feminine and neuter pronouns shall each include the other and may be used interchangeably with the same meaning. Section 13.10. The use of the words "hereof", "herein", "hereunder" and words of similar import shall refer to this entire Agreement and not to any particular paragraph or provision of this Agreement, unless the context clearly indicates otherwise. Section 13.11. LICENSEE agrees, for a period of two (2) years form the official Opening Date (as defined in the Miami Arena Contract) of the Arena, not to employ or engage in any -18- 99-3h" r4 capacity any paid agents, employees or representatives of the MSEA or City employees where such paid agents, employees or representatives of the MSEA or City employees were personally or substantially through decision, approval, rendering advice or otherwise involved in the negotiation of the Miami Arena Contract, the Land Lease, this Agreement, the Memorandum of Intent or any other documents binding the parties thereto, unless waived by a majority vote of the MSEA and the City Commission of the City. Section 13.12. This Agreement has been negotiated and shall be construed and enforced in accordance with the laws of the State of Florida. Section 13.13. The MSEA, LICENSEE and FBA agree that Licensor is not a party to this Agreement and has not been consulted in the preparation of this Agreement. Accordingly, the MSEA, LICENSEE and FBA agree that Licensor, Operator, Decoma, Ltd., Decoma and each of their partners, shareholders. officers, directors, agents, servants and employees shall have no liability whatsoever under this Agreement. XIV. CONDITION PRECEDENT This Recognition, Non -Disturbance and Reimbursement Agreement must be approved by the City of Miami Commission. If the City of Miami Commission fails to approve this Agreement, this Agreement shall be deemed null and void and no further force in effect. IN WITNESS WHEREOF the parties have executed this Agreement in multiple counterparts, each of which shall have the force and effect of an original, effective as of the date indicated above. MIAMI SPORTS AND EXHIBITION AUTHORITY, MIAMI, FLORIDA -19- By: Eugene Marks, Chairman `Zg_38 APPROVED AS TO FORM AND CORRECTNESS: BY: Christopher G. Korge General Counsel MIAMI HEAT LIMITED PARTNERSHIP. a Florida limited partnership. by its sole general partner By: FLORIDA BASKETBALL ASSOCIATES. INC.. a Florida oorporation By: _ Name: Title: Florida Basketball Assooiates. Ina. executes this Agreement in its oorporate oapaoity to acknowledge the representations, warranties and obligations made by it in is corporate oapaoity, as opposed to its oapaoity as sole general partner of Miami Heat Limited Partnership. FLORIDA BASKETBALL ASSOCIATES. INC. a Florida corporation By: _ Name: Title: -20- AON !t At the City Conaission meeting of . 1968, the City COMLBsion approved the Recognition, Non-Disturbanoe and Reimbursement Agreement by and between the Miami Sports and Exhibition Authority and Miami Heat Limited Partnership. M116/00K/rd 3/15/66 CITY OF MIAMI, a Florida municipal corporation by By: Cesar H. Odic City Manager APPROVED AS TO FORM AND CORRECTNESS: By: Lucia A. Dougherty City Attorney -93- 1-7'9-38 ; . STATE OF PL0RIDA ) COUNTY OF ) BEFORE ME, the undersigned authority, personally came and appeared EUGENE D. MARKS, Chairman of the MIAMI SPORTS AND EXHIBITION AUTHORITY who, after being duly sworn by me, stated upon his oath that he read the foregoing Recognition. Non - Disturbance and Reimbursement Agreement and that the terms and conditions therein contained are true and correct. EUGENE D. MARKS Chairman SWORN TO AND SUBSCRIBED TO before me on this the day of , 1988. Notary Public in and for the State of F L 0 R I D A My Commission Expires: STATE OF FLORIDA ) COUNTY OF ) BEFORE ME, the undersigned authority, personally came and appeared 9 of FLORIDA BASKETBALL ASSOCIATES, INC., a Florida corporation. being the sole General Partner of MIAMI HEAT LIMITED PARTNERSHIP. a Florida limited partnership, who. after being duly sworn by me. stated upon his oath that he has read the foregoing Recognition, Non - Disturbance and Reimbursement Agreement and that the terms and conditions therein contained are true and correct, on behalf of said partnership. SWORN TO AND SUBSCRIBED TO before me on this the day of , 1988. My Commission Expires: Notary Public in and for the State of F L 0 R I D A qg-3r�: BTATB OF FLORIDA ) COUNTY OF ) BEFORE ME, the undersigned authority. personally came and appeared of MIAMI HEAT LIMITED PARTNERSHIP, a Florida limited partnership, by its sole partner, who, after being duly sworn by me. stated upon his oath that he has read the foregoing Recognition. Non-Disturbanoe and Reimbursement Agreement and that the terms and conditions therein contained are true and correct. SWORN TO AND SUBSCRIBED TO before me on this the day of , 1988. My Commission Expires: Notary Public in and for the State of P L 0 R I D A -23- COMPARISON OF ORIGINAL REINSURSEIENT STRUCTURE TO NEW PROPOSED STRUCTURE ........................................... ACTUAL EXPENSES BUDGETED EXPENSES RE IMB1MlSEMENT TO TEAM RESPECTIVE ENTITY'S SNARE OF EXCESS EXPENSES ..................... ARENA ............................................ TEAM (2) OLD (3) NEAR PAYS PAYS AGREEMENT AGREEMENT ._.... T" ADMINISTRATIVE ....... m ------------ ------------ PAY TEAM SNARE NONE 76% REPAIRS L MAINTENANCE 24% PAY TEAR SNARE NONE 7" UTILITIES 24% PAY TEAM SNARE PAT TEAM SNAK 76% GROUND LEASE 24% PAY TEAM SHARE NONE 762 1NSURANCE 24% PAY TEAM SNARE PAY TEAM SNARE 7" TELEPHONE 242 PAT TEAM SNARE NOW 0% NBA STAFFING 100% PAT TEAM SHARE NONE (1) MSEA REIMBURSES TEAM ONLY TO EXTENT TEAM PAYS IT'S SNARE OF EXCESS EXPENSES (2) REIMBURSEMENT VARIES DEPENDING ON AVERAGE ATTENDANCE PER GAME FOR ALL CATEGORIES EXCEPT INSURANCE AS FOLLOWS: ATTENDANCE REIMBURSEMENT FACTOR .......... ----------------------- 02,000 1002 03.000 66.67% ' <14,000 SON (� >14,000 402 CJ INSURANCE REIMBURSED AT 100% REGARDLESS OF ATTENDANCE LEVEL ;' (3) REIMBURSEMENT TO TEAM LIMITED ONLY TO INSURANCE AND UTILITIES o W CITY OF MIAMI. FLORIOA 1NTtR4FF10E MEMORANDUM Honorable Mayor and Members of the City Commission P rRoM Cesar H. Odio City Manager 11rr RECOMMENDATION: DATE April 20, 1996 PEE SUsJEC* Recognition Non -Disturbance and Reimbursement Agreement. REFERENCES ENCLOSURES It is respectfully recommended that the City Commission adopt the proposed resolution authorizing the City Manager to consent and approve the execution of a Recognition, Non -Disturbance and Reimbursement Agreement between the Miami Heat Limited Partnership and the Miami Sports and Exhibition Authority. This agreement was approved by the Miami Sports and Exhibition Authority, Resolution 88-4 on March 1, 1988, and is subject to City Commission approval. BACKGROUND: In 1986 the efforts to attract an NBA franchise to Miami resulted in the negotiation of two agreements: 1. A Memorandum of Intent to enter into a License Agreement ("MOI") between Decoma Venture and the Miami Heat (the "Team"); and 2. A Memorandum of Intent to enter into a Recognition and Attornment Agreement by and between the Miami Sports and Exhibition Authority and the Team ("Attornment MOI"). Under the MOI, the Miami Heat is required to pay for a portion of excess expenses (the "Excess Expenses") incurred by the Arena facility in any given budget year. The Team's contribution of Excess Expenses is based on the following: 1. The Team is required to pay to the facility 1004 of any excess NBA staffing expenses (over a base NBA staffing amount provided by the facility) on an annual basis for the basketball season involved; and 98-3-5 Honorable Mayor and Members of the City Commission April 20, 1988 Page 2 2. The Team is required to pay up to 24% (based on a formula of number of NBA events to total number of events) of excess expenses for insurance, utilities, repairs and maintenance, general and administrative, telephone, and ground lease expenses. To consummate the NBA deal, the Chairman of the Authority consented by separate agreement to reimburse the Team for any payments for Excess Expenses they were required to make under the MOI. As a result, the Chairman of the Authority entered into the Attornment MOI which provides for reimbursement to the Team of expenses paid by the Team under the MOI. During the same period of time the Authority and the City of Miami entered into discussions about making available proceeds of the $10 million dollar Subordinate Obligation Debt Issuance of the Authority for the purpose of making improvements to the City of Miami/University of Miami James L. Knight Center and the Coconut Grove Exhibition Center facilities. In order to obtain the use of these funds the City agreed to pledge an additional source of revenue. The City pledged the additional revenues with the understanding that while the Authority had any outstanding debt to the City as a result of this pledge, the Authority would use its best efforts to take any and all available revenues to repay the City as quickly as possible. The terms and conditions of the Attornment MOI, which earmarked certain Authority excess revenues for the Team created an issue of whether the City or the Team had priority over the excess revenues if and when needed. The Miami Sports and Exhibition Authority negotiated a Recognition Non -Disturbance and Reimbursement Agreement, (the "Agreement") attached hereto as Exhibit A which clarifies and limits the terms and conditions of the Attornment MOI. In general, the agreement describes the conditions under which the Authority is responsible for reimbursing to the Team the payments that the Team is required to make to the Arena facility pursuant to the MOI. tA 919-3m; honorable Mayor and Members of the City Commission April 20, 1988 Page 3 The Agreement differs significantly from the Attornment MOI in that the Authority has been able to modify the original terms to limit the cost components it will reimburse to the Team. The attached Exhibit 8 graphically depicts the differences between the reimbursement mechanism under the Attornment MOI vs. the mechanism proposed under the Agreement. While negotiating terms for the Agreement, the objective was to identify an acceptable structure which further minimized the business and monetary risks to the Authority and the City. In analyzing the impact and risk under the proposed Agreement, several factors were considered: . Nature of each individual cost component itself . Dollar amount of each cost component . Arena and MSEA's ability to exercise control over the cost component(s) . Projected profitability of arena operations . Experience of the operator Analyses indicate that the Authority and the City reduce their monetary and business risks under the new Agreement. This is achieved by reimbursing the Team for only two (2) components instead of seven (7). In return for this lower risk reimbursement structure, the Team would have priority over the City to the extent of Excess Insurance and Utility Expenses for reimbursement in the event the Authority had an outstanding debt to the City. CHO/cas/jl36 3 98-3im,'5