HomeMy WebLinkAboutFlagstone Exhibit A1 1:
This Exhibit A is an attachment to City Commission Resolution No. 10- , adopted
, 2010, contains material business terms, and becomes Composite
Attachment 3 to the Amended and Restated Agreement to Enter Into Ground Lease
(hereinafter, the "Agreement to Enter") and to the form of Amended and Restated Ground
Lease(s) (hereinafter the "Ground Lease(s)"). All terms used herein but not defined herein
shall have the definitions given to them in the Agreement to Enter or in the form of Ground
Lease(s).
I. GENERAL CONSTRUCTION SCHEDULE FOR ALL MAJOR PROJECT
COMPONENTS.
Flagstone/Ground Lessee shall have the time periods set forth below to commence and
complete construction of the various Major Project Components; as such Major Project
Components are approved in accordance with the Major Use Special Permit and as such are
defined in Section _ of the form of Ground Lease(s). Throughout this Exhibit A, (a)
"Commence(s) Construction" or "Start(s) Construction" shall mean that all material plans and
permits are approved and issued and the actual act of physical construction has begun; and (b)
"Completion Date" shall mean the date upon which the earlier of the temporary certificate of
occupancy ("TCO") or a certificate of 'occupancy ("CO"), has been issued for the completion of
construction.
Until 9/1/2013 136 months from 9/1/2010 to Start Construction of the Marina Component.
(a) As described in Section VI(c) below, Marina Component
construction may be started earlier and separately from the
Parking/Retail Components once applicable conditions precedent
for Marina Component have been met.
Until 2/28/2015 54 months from 9/1/2010 to the Completion Date of the Marina
Component.
(a) If Marina Component Starts Construction earlier than 9/1/2013,
then Flagstone shall have 18 months from such earlier start date to
the Completion Date of the Marina Component.
Until 9/1/2016 72 months from 9/1/2010 to Start Construction of both the Retail/Parking
Components
Until 8/31/2019 108 months from 9/1/2010 to the Completion Date of Retail/Parking
Components.
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(a) Parking spaces for Hotels may be completed separately with
construction of Hotels Components.
(b) Flagstone agrees to design, construct and provide utility lines
needed for each of the Major Project Components on a component
by component. basis as necessary and as approved by the City and
as required by the Master Declaration as a condition precedent to
executing the first Ground Lease. Flagstone shall design, construct
and provide utility lines needed for both Hotel Components in
connection with the construction of utility lines for the
Parking/Retail Components.
Until 9/1/2018 96 months from 9/1/2010 to Start Construction of _both Hotels
Components, if the two (2) 5 -year Options to extend described below are
not exercised, therefore until 8/31/2020 (being twenty-four (24) months)
to the Completion Date. Flagstone cannot exercise the second Option if no
hotel construction has commenced by 8/31/2023.
Until 9/1/2023 156 months from 9/1/2010 to Start Construction of a Hotel Component, if
only the first 5 -year Option to extend is exercised. Accordingly, the first
Option period ends on 8/31/2023.
(a) During the first Option period, a Hotel Component must be completed within twenty-four
(24) months after Construction Commencement, therefore until 8/31/2025 to the
Completion Date of at least one Hotel Component. Accordingly, both the Rent(s)
payments schedule and the Option payments schedule in this Exhibit A would apply
throughout the entire period of construction, even if the Completion Date of such
construction period runs beyond the Option period.
(b) The first 5 -year Option period runs from 9/01/2018 through 8/31/2023. The first Option
period payment is $250,000 per annum ($125,000 per Hotel Component per annum) with
monthly payments beginning 9/01/2018 for the first Option period ending 8/331/2023.
(c) All Option payments are to be paid monthly in advance beginning on the first day of the
month. The first Option is exercised by Flagstone's giving not less than thirty (30) days
advance written notice prior to 8/31/2018 to the City for the first Option period to begin.
Until 9/l/2028 216 months from 9/1/2010 to Start Construction of the second Hotel
Component if Flagstone exercises the second 5 -year Option to extend;
accordingly, the second Option period ends on 8/31/2028:
(a) The second 5 -year Option .period runs from. 9/01/2023 through
8/31/2028. The second 5 -year Option period payment is $315,000
per annum ($157,500 per Hotel Component per annum) with
monthly payments beginning 9/01/2023 for the second Option
period ending 8/31/2028, but second 5 -year Option is not available
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unless the first Hotel Component Starts Construction before the
end of the first 5 -year Option period on 8/31/2023.
(b) All Option payments are to be paid monthly in advance beginning
on the first day of the month. The second Option is exercised by
Flagstone's giving not less than thirty (30) days advance written
notice prior to 8/31/2023 to the City for the second Option period
to begin.
(c) During the second Option period, the second Hotel Component
must be completed within twenty-four (24) months after Flagstone
Commences Construction, therefore until 8/31/2030 to reach the
Completion Date of the second Hotel Component that commenced
construction during the second Option period. Accordingly, both
the Rent(s) payments schedule and the Section IV Option
payments schedule in this Exhibit A would apply throughout the
entire period of construction, even if such construction period runs
beyond the Option period.
H. GENERAL RENT(S) PAYMENT SCHEDULE FOR ALL MAJOR PROJECT
COMPONENTS.
During the periods outlined below, Flagstone/Ground Lessee shall pay to the City the
amounts outlined below.
i
Beginning
Annual zt
.
_
;
:',
Amount
2/1%2010
Consideration for Extension Period. This amount
through
$200,000
shall not be applied as a credit.
0/30/2010
$300,000 is a Pre -Payment of Construction
10/1/2010
$300,000
Rent/Base Rent to City
$500,000 is a Pre -payment of Construction
10/1/2011
$500,000
Rent/Base Rent to City
10/1/2012
$750,000
$750,000 is a Pre -payment of Construction
Rent/Base Rent to City
$1,000,000 Construction Rent, subject to II(g)
10/1/2013
$1,000,000
below
10/1/2014
$1,000,000
$1,000,000 Construction Rent, subject to II(g)
below
10/1/2015
$1,000,000
$1,000,000 Construction Rent, subject to II(g)
below
$1,500,000 Construction Rent is the amount
actually received by City since $360,000 was pre -
10/1/2016
$1,140,000*
paid for this year per above schedule and Section
II (g) below, unless there is no credit pursuant to
Section VI(a) below.
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Beginning
Annual.
Amount
$1,675,000 Construction Rent is the amount
actually received by City since $360,000 was pre -
10/1/2017
$1,315,000*
paid pursuant to the above schedule and Sections
II (g) below, unless there is no credit pursuant to
Section VI(a) below.
$2,000,000 Base Rent is the amount actually
received by City since $360,000 was pre -paid
10/1/2018
pursuant to the above schedule and Section II(g)
and annually
$1,640,000*
below, unless there is no credit pursuant to
thereafter
Section VI(a) below. Base Rent continues until
termination of Ground Lease(s). Additionally,
Percentage Rent payments begin as described in
(d below.
$2,000,000 Base Rent is the amount actually
received by City since $360,000 was pre -paid
10/1/2019
$1,640,000*
pursuant to the above schedule and Section II (g)
below, unless there is no credit pursuant to
Section VI(a) below. Additionally, Percentage
Rent pa ents continue as described in (d) below.
$2,000,000 Base Rent is the amount actually
received by City since $110,000 was pre -paid
pursuant to the above schedule and Section II(g)
10/1/2020
$1,890,000*
below, unless there is no credit pursuant to
Section VI(a) below. Additionally, Percentage
Rent payments continue as described in (d) below
until the termination of Ground Lease(s).
*Notwithstanding the Annual Amounts set forth above and pursuant to Section
II(g) below, credits of the Pre -Payment of Construction/Base Rent cannot be given
until the Marina Component Starts Construction prior to 9/1/2013 and both of the
Parking/Retail Components Start Construction prior to 9/1/2016 pursuant to the
above General Construction Schedule for All Major Project Components. As
stated in Section H(g) below, when, all (i) of the Marina Component Starts
Construction prior to 9/1/2013 and (ii) the Retail/Parking Components Start
Construction prior to 9/1/2016, then credit of the Pre -Paid Construction/Base Rent
begins the month following the date upon which all of those three (3) specific
Components have started construction.
(a) Once payment of Base Rent begins from Flagstone to the City, the City is
obligated six (6) months thereafter under the State Waiver (as defined in Section
VII below) to pay an annual fee to the State of Florida.
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(b) During the thirty-six (36) months after '9/01/2010 to 8/31/2013, Flagstone has a
10 -day grace period beyond the first of each month to make each "Pre -Paid
Construction Rent" payment, and agrees to not require any notice from the City in
the event of non-payment of any "Pre -Paid Construction Rent" payment. In the
event that Flagstone defaults for non-payment, Flagstone also agrees to waive its
defenses as to non-payment against the City, immediately vacate and turn over to
the City for the City's possession all of Flagstone's rights, and interests in the
Property and the easement areas, remove from such easement areas and from the
Property all of its property of whatever kind as requested in writing by the City
Manager, and immediately (i) return or sign over, as applicable, to the City all of
Flagstone's rights, directly or indirectly, in the permits, plans, specifications, and
all related governmental approvals, documents, instruments, and agreements as
necessary related to the Property, and (ii) deliver to the City all of such permits,
plans, specifications, and all related governmental approvals, documents,
instruments, and agreements which are in Flagstone's possession or in Flagstone's
control.
(c) All payments to the City (for various Rents and for Option payments) are to be
paid monthly in advance beginning on the first day of the month, except for the
lump sum payment Flagstone shall pay to the City upon the date of City
Commission Approval of the Agreement to Enter and the Ground Lease, for the
Consideration of Extension Period amount from February 1, 2010 through
September 30, 2010.
(d) Additionally, if the Agreement to Enter is not signed in the same month of City
Commission Approval, then Flagstone shall also pay a lump sum payment amount
of $25,000 per month for each month from October 1, 2010 until the Agreement
to Enter is executed.
(e) Additional provisions regarding Percentage Rent payments are included, in the
form of each Amended and Restated Ground Lease(s). As stated therein,
Percentage Rent on the Gross Revenues of each Component begins on the third
anniversary after each Major Project Component is Open for Business. "Open for
Business" means the earlier of the date that the applicable Major Project
Component receives either its .TCO or CO. Base Rent may begin sooner than
02/01/2018 (i.e., if both Hotels are Open for Business prior to that time, as set
forth in the Amended and Restated Hotel Ground Lease).
(f) As stated in the applicable Amended and Restated, Ground Leases, once Base
Rent begins, it continues each year for the remaining term of the applicable
Ground Lease(s). On the first anniversary of the commencement of the Base Rent
for each Major Project Component, the Base Rent thereafter becomes subject to
an annual Consumer Price Index ("CPI") adjustment as set forth in the Ground
Lease(s). Percentage Rent on the Gross Revenues of each Major Project
Component begins on the third anniversary after each Major Project Component
is Open for Business.
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(g) If the Marina Component Starts Construction prior, to 9/1/2013 and the
Retail/Parking Component(s) both Start Construction prior to 9/1/2016, then on
the first day of the month following the date when the Marina Component and
the Retail/Parking Component(s) (all 3 such Components) have started.
construction, the Construction Rent payment (subject to credits described in (g)
below) becomes at least $1,000,000 per year, as opposed to the lesser Prepaid
Construction/Base Rent payment amounts shown on the above Section II General
Rents Payment Schedule for All Major Project Components.
(h) If the Marina Component Starts Construction prior to 9/1/2013 and the
Retail/Parking Component(s) (all 3 such Components) Start Construction by
9/1/2016, then as shown on the above Section H General Rent(s) Payment
Schedule for All Major Project Components, Flagstone is entitled to a credit back
of Pre -Paid Construction Rent/Base Rent each year beginning in the month
following the date upon which construction has started on all 3 such Components
in the amount of $30,000 per month for fifty-one (51) months and of $20,000 for
the 52nd month until Flagstone has received a total aggregate credit of $1,550,000.
This monthly credit is a return of Pre -Paid Construction/Base Rent paid by
Flagstone between 9/1/2010 and 8/31/2013. If Flagstone .Starts Construction of
all three (3) of the Marina Component and the Retail/Parking Components prior to
9/1/2013, then the total credit back amount is reduced by 1/361' for each month
prior to 2/1/2013 that all such Components have commenced. Conversely, if
Flagstone does not Commence Construction of all three (3) of the Marina
Component and the Retail/Parking Components by 8/31/2016, then no credit of
Prepaid Construction Rent is allowed and the City keeps all of the Prepaid
Construction Rent amount received.
(i) If no construction begins by 9/1/2013 on any Major Project Component, then the
City keeps all Prepaid Construction/Base Rent, Flagstone, agrees to not require
any notice from the City to terminate for failure to begin construction, and
Flagstone also agrees to waive its defenses against the City, immediately vacate
and turn over to the City for the City's possession all of Flagstone's rights and
interests in the Property and the easement areas, remove from such easement
areas and from the Property all of its property of whatever kind as requested in
writing by the City Manager, and immediately (i) return or sign over, as
applicable, to the City all of Flagstone's rights, directly or indirectly, in the
permits, plans, specifications, and all related governmental approvals, documents,
instruments, and agreements as necessary related to the Property, and (ii) deliver
to the City all of such permits, plans, specifications, and all related governmental
approvals, documents, instruments, and agreements which are in Flagstone's
possession or in Flagstone's control.
III. OPTION PAYMENT SCHEDULE (FIRST OPTION).
Flagstone has two (2) 5 -year Options ("Option(s)") to extend the date to Commence
Construction of the Hotels Components, and Flagstone has the choice to build either one Hotel
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Component or two Hotel Components; that choice triggers Option payments for one Hotel
Component or two Hotels Components accordingly.
If Flagstone exercises the first Hotel Option period for only one Hotel Component,
Flagstone must also pay to the City the following additional Option payment amounts.
Be renin g
Annual Option
a went for
p y (.:
Annual Base
Annual Amounts
Beginning
payments„(for
Rent
to the City
One Hotel
t Rent ° x
r 4 4
z to�the City
9/1/2018
$125,000
$2,000,000
$2,125,000 (Base Rent plus
O tion payment)
9/1/2019
$125,000
$2,000,000
$2,125,000 (Base Rent plus
0 tion payment)
9/1/2020
$125,000
$2,000,000
$2,125,000 (Base Rent plus
9/1/2019
$250,000
$2,000,000
0 tion payment)
9/1/2021
$125,000
$2,000,000
$2,125,000 (Base Rent plus
0 tion payment)
9/1/2022
$125,000
$2,000,000
$2,125,000 (Base Rent plus
Op tion payment)
If Flagstone exercises the first Hotel Option period for two (2) Hotel(s) Components,
Flagstone must also pay to the City the following additional Option payment amounts.
(a) As indicated in Section II(a) above, once payment of Base Rent begins from
Flagstone to the City, the City is obligated six (6) months thereafter under the
State Waiver (as defined in Section VII below) to pay an. annual fee to the State of
Florida.
Annual Option}
h
Beginning
payments„(for
, fi
, Annual Base
f Annual Amounts
,
t Rent ° x
r 4 4
z to�the City
$2,250,000 (Base Rent plus
9/1/2018
$250,000
$2,000,000
Option payments)
$2,250,000 (Base Rent plus
9/1/2019
$250,000
$2,000,000
Option payments)
$2,250,000 (Base Rent plus
9/1/2020
$250,000
$2,000,000
O tion payments)
$2,250,000 (Base Rent plus
9/1/2021
$250,000
$2,000,000
Option payments)
$2,250,000 (Base Rent plus
9/1/2022
$250,000
$2,000,000
Option payments)
(a) As indicated in Section II(a) above, once payment of Base Rent begins from
Flagstone to the City, the City is obligated six (6) months thereafter under the
State Waiver (as defined in Section VII below) to pay an. annual fee to the State of
Florida.
(b) Flagstone can exercise the Option for only one Hotel Component or for . both
Hotel Components, or stop Option payments at any time by giving written notice
to the City at least thirty (30) days before the date that the next Option payment is
due, but if Flagstone elects not to exercise the Option for one or both Hotel
Component(s), or fails to make any Option payment(s), then Flagstone must turn
over to the City immediately any applicable Hotel Ground Lease(s), Flagstone
also agrees to waive its defenses as to failure to pay the required Option
payments, immediately vacate and turn over to the City for the City's possession
all of Flagstone's rights and interests in the Hotel Component(s), any Hotel
Ground Lease, and the applicable easement areas, remove from such easement
areas all of its property of whatever kind as requested in writing by the City
Manager, and immediately (i) return or sign over, as applicable, to the City all of
Flagstone's rights, directly or indirectly, in the permits, plans, specifications, and
all related governmental approvals, documents, instruments, and agreements as
necessary related to the applicable Hotel Component(s), and (ii) deliver to the
City all of such permits, plans, specifications, and all related governmental
approvals, documents, instruments, and agreements relating to the applicable
Hotel Component(s) which are in Flagstone's possession or in Flagstone's
control, and City has the rights to seek a new developer for the applicable Hotel.
Component(s).
(c) For Any Hotel(s) Component(s) that Start(s) Construction during the first Option
period and continue construction into the second Option period, the Option
payments shall increase on 9/01/2023 to the second Option period Option
payment amount(s) set forth below in Section IV, and shall continue at such
second Option payment amount(s) until the Completion Date. Such Option
payments for the Hotel(s) Component(s) are in addition to the required
Construction Rent, Base Rent, Percentage Rent, CPI Adjustments, Marina Rent,
and any other Rents for the Hotels and any other Major Project Components. .
IV. OPTION PAYMENTS SCHEDULE (SECOND OPTION).
If Flagstone exercises its second Hotel Option period for one Hotel Component only,
Flagstone must pay to the City the following additional amounts:
Annual; Option '
Beginning payment (For, ' ;'Annual -Base - AnnualjAmounts f .
_ One Hotel ' Rent to the City
9/1/2023 $157,500 $2,000,000,...x $ 2,157,500
9/1/2024 $157,500 $2,000,000 $ 2,157,500
9/1/2025 $157,500 $2,000,000 $ 2,157,500
9/1/2026 $157,500 $2,000,000 $ 2,157,500
9/1/2027 $157,500 $2,000,000 $ 2,157,500
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If Flagstone exercises its second Hotel Option period for two Hotel Components,
Flagstone must pay to the City the following additional amounts:
Beginning
Annual Option .
` .payments (For
nd
2 Hotel
-Annual B1.ase: •
Rent
AnnualA�mouirts
to the Crt.
9/l/2023
$315,000
$2,000,000
$ 2,315,000
9/1/2024
$315,000
$2,000,000
$ 2,315,000
9/l/2025
$315,000
$2,000,000
$ 2,315,000
9/l/2026
$315,000
$2,000,000
$ 2,3.15.000
9/l/2027
$315,000
$2,000,000
$ 2,315,000
(a) As indicated in Section II(a) above, once payment of Base Rent begins from
Flagstone to the City, the City is obligated six (6) months thereafter under the
State Waiver (as defined in Section VII below) to pay an annual fee to the State of
Florida.
(b) Because Flagstone has twenty-four (24) months to complete construction of any
Hotel(s) Component, Flagstone shall continue to make Option payments to the
City beyond 8/31/2028 until such time that the final Hotel(s) Component(s)
construction has reached the final Completion Date. Flagstone can stop Option
payments at any time by giving written notice to the City at least thirty (30) days
before the date that the next Option payment is due, but if Flagstone elects not to
or fails to make any Option payment(s); then Flagstone must turn over to the City
immediately the Hotel Ground Lease(s) for the. Hotel which is not to be
constructed, Flagstone also agrees to waive its defenses as to failure to pay the
required Option payments, immediately vacate and turn over to the City for the
City's possession all of Flagstone's rights and interests in the Hotel
Component(s), any Hotel Ground Lease, and the applicable easement areas,
remove from such easement areas all of its property of whatever kind as requested
in writing by the City Manager, and immediately (i) return or sign over, as
applicable, to the City all of Flagstone's rights, directly or indirectly, in the
permits, plans, specifications, and all related governmental approvals, documents,
instruments, and agreements as necessary related to the applicable Hotel, and (ii)
deliver to the City all of such permits, plans, specifications, and all related
governmental approvals, documents, instruments, and agreements relating to the
applicable Hotel Component(s) which are in Flagstone's possession or in
Flagstone's control, and City has the rights to seek a new developer for the
applicable Hotel Component(s).
(c) If Flagstone does not Start Construction of the second Hotel Component by
9/1/2028, then both the City and Flagstone have their separate rights to terminate
the Agreement to Enter and Flagstone must immediately vacate and turn over to
the City for the City's possession all of Flagstone's rights and interests in the
Property related to the second Hotel Component and the easement areas, remove
from such easement areas and from the Property related to the second Hotel
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Component all of its property of whatever kind as requested in writing by the City
Manager, and (i) return or sign over, as applicable, to the City all of Flagstone's
rights, directly or indirectly, in the permits, plans, specifications, and all related
governmental approvals, documents, instruments, and agreements as necessary
related to the applicable Hotel, and (ii) deliver to the City all of such permits,
plans, specifications, and all related governmental approvals, documents,
instruments, and agreements relating to the applicable Hotel Component(s) which
are in Flagstone's possession or in Flagstone's control, and City has the rights to
seek a new developer for the applicable Hotel Component(s).
(d) Flagstone has a 10 -day grace period beyond the first of each month to make each
Option payment, and agrees to not require any notice from the City in the event of
non-payment of any Option payment. In the event that Flagstone defaults for non-
payment, Flagstone also agrees to waive its defenses as to non-payment against
the City, immediately vacate and turn over to the City for the City's possession all .
of Flagstone's rights and interests in the Second Hotel Component and the
easement areas, remove from such easement areas and from the Second Hotel
Component all of its property of whatever kind as requested in writing by the City
Manager, and immediately (i) return or sign over, as applicable, to the City all of
Flagstone's rights, directly or indirectly, in the permits, plans, specifications, and
all related governmental approvals, documents, instruments, and agreements as
necessary related to the Second Hotel Component, and (ii) deliver to the City all
of such permits, plans, specifications, and all related governmental approvals,
documents, instruments, and agreements which are in Flagstone's possession or in
Flagstone's control.
V. ADDITIONAL AGREEMENTS CONCERNING HOTEL COMPONENTS.
(a) No Hotel Component can Start Construction until both the Marina Component
and the Parking/Retail Components Start Construction.
(b) Once a Hotel Component .reaches its Completion Date, the Option payments for
that Hotel Component stop. For the portion of any construction period that
extends into the Option period, all applicable Option payment(s) (and all ongoing
Construction Rent payments) shall continue until the Completion Date. (Pursuant
to the applicable Ground Lease(s), the "Percentage Rent Payment Beginning
Anniversary Date" starts running for any Hotel on the date when it is Open for
Business and Percentage Rent payments begin on the third anniversary of the
Percentage Rent Payment Beginning Anniversary Date in order to give that Hotel
a Stabilization Period).
(c) The second Option period cannot be exercised unless one Hotel Component has
started construction before the end of the first Option period. If one Hotel
Component does not Start Construction before the end of the first Option period,
then the Option period .terminates and no second Option exists. If the second
Hotel Starts Construction before the end of the first Option period and continues
construction into the second Option period, then the Option payments applicable
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to the second Option period shall be due upon commencement of the second
Option period until the second Hotel Component reaches its Completion Date.
(d) Upon entering into the Ground Lease for any Hotel Component(s) and prior to
Starting Construction for any such Hotel Component(s), Flagstone shall provide a
Construction Bond to the City for the full amount of the construction cost of any
such Hotel Component(s).
VI. ADDITIONAL AGREEMENTS CONCERNING FLAGSTONE FORFEITURE /
CITY TERMNATION RIGHTS.
(a) If the Marina Component does not Start Construction by 9/01/2013 or both the
Parking/Retail Components do not Start Construction by 9/01/2016, then
Flagstone's rights to build any Components expires and ceases, the Agreement to
Enter is terminated, City retains all Prepaid Construction/Base Rent (as
consideration for the extension of time until 9/1/2013 for the Marina Component
and as consideration for the extension of time until 9/1/2016 for both the
Parking/Retail Components) and Flagstone must turn over to the City
immediately the applicable Ground Lease(s), Flagstone also agrees to waive its
defenses as to failure to begin construction against the City, immediately vacate
and turn over to the City for the City's possession all of Flagstone's rights and
interests in the Property and the easement areas, remove from such easement
areas and from the Property all of its property of whatever kind as requested in
writing by the City Manager, and immediately (i) return or sign over, as
applicable, to the City all of Flagstone's rights, directly or indirectly, in the
permits, plans, specifications, and all related governmental approvals, documents,
instruments, and agreements as necessary related to the Property, and (ii) deliver
to the City, all of such permits, plans, specifications, and all related governmental
approvals, documents, instruments, and agreements which are in Flagstone's
possession or in Flagstone's control.
(b) If any. Hotel Component does not Start Construction according to the applicable
deadline under the construction schedule and the Option schedule(s) (as
applicable), then Flagstone's rights to build the applicable Hotel Component
expires (but Flagstone's obligations under the payment schedule for the Marina
Component, the Parking/Retail Component, and any Hotel Component that is/are
complying continues to the end of the applicable Ground Lease(s)). Any time
Flagstone loses the right to construct a Hotel(s) Component, then Flagstone must
turn over to the City immediately the applicable Ground Lease(s), Flagstone also
agrees to waive its defenses as to failure to begin construction against the City,
immediately vacate and turn over to the City for the City's possession all of
Flagstone's rights and interests in the applicable Hotel Component, any Hotel
Ground Lease, and the related easement areas, remove from such easement areas
and from the Property all of its property of whatever kind as requested in writing
by the City Manager, and immediately (i) return or sign over, as applicable, to the
City all of Flagstone's rights, directly or indirectly, in the permits, plans,
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specifications, and all related governmental approvals, documents, instruments,
and agreements as necessary related to the applicable Hotel Component, and (ii)
deliver to the City all of such permits, plans, specifications, and all related
governmental approvals, documents, instruments, and agreements which are in
Flagstone's possession or in Flagstone's control.
(c) Subject to Section VII(a), Flagstone may separately ground lease and separately
construct the Marina Component prior to 9/1/2013 if the conditions precedent for
the Marina Component are met
(d) If construction is continuing during the Option period(s), then Flagstone shall pay
both, Construction Rent or Base Rent in accordance with the General Rent
Schedule in Section II above, and the applicable Option payments related to its
choice to construct either one or two Hotel Components.
VII. CROSS DEFAULTS, SEPARATE DEFAULTS.
(a) During the period prior to the earlier of 96 months from 9/01/2010 (being
8/31/2018) or the date upon which the first Hotel is Open for Business, Ground
Leases for the separate Major Project Components shall be cross -defaulted for
any Base Rent payment defaults, Prepaid Construction/Base Rent payment
defaults, and any Construction Rent payment defaults.
(b) After the earlier of 96 months from 9/01/2010 (being 8/31/2018) or the date upon
which the first Hotel is Open for Business, (i) the Base Rent, Percentage Rent, .
and all other payments to the City each year thereafter shall be apportioned to
each separate Major Project Component Ground Lease for direct payments to the
City by each separate Ground Lease lessee in an amount reflecting each separate
Major Project Component's respective percentage share of the total Project
Development Costs to that point in time, and (ii) the Ground Leases for the
separate Major Project Components shall not be cross -defaulted for any defaults,
including but not limited to any defaults in payments of Base Rent, Prepaid
Construction Rent/Base Rent, Construction Rent, Percentage Rent, or any other
Rent, with each separate lessee being solely responsible for any payment
default(s) to the City.
(c) Notwithstanding anything to the contrary in this Exhibit A, if the Retail/Parking
Components do not Commence Construction by the 72"d month from 9/01/2010
(being 8/31/2016), then (i) there will be no crediting of Prepaid Construction/Base
Rent, the City shall keep all Prepaid Construction/Base Rent received, (ii) the City
can terminate the Agreement to Enter, all Ground Lease(s), and (iii) the City can
take back the Marina Component, the Retail/Parking Components, any Hotel
Components and the balance of the Project and the Property.,
VIII. STATE WAIVER.
Upon approval of this Exhibit A by City Commission Resolution, the City will have
forty-five (45) days to perform due diligence on the State Partial Waiver of Deed Restriction (the
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"State Waiver"). If the State conditions approval in any manner unacceptable to the City, and
the City advises Flagstone that it intends to terminate due to such unacceptable conditions, then
the City must send notice of such State action to Flagstone within such forty-five (45) days.
Upon receipt of such notice, Flagstone will have thirty (30) days to resolve the dispute
satisfactorily. If the dispute concerning such unacceptable conditions is not resolved, then the
City, may cancel the current Agreement to Enter Into Ground Lease without executing a new
Amended and Restated Agreement to Enter Into Ground Lease. The parties intend to execute the
Agreement to Enter at such time as the State Waiver is executed and delivered and recorded.
IX. INDEMNIFICATION/HOLD HARMLESS FOR CITY; DISCHARGE OF
EXISTING LIENS, JUDGMENTS, AND GARNISHMENTS.
The City Commission in connection with Resolution No. 10-0144 of March 25, 2010
directed, and Flagstone agreed (a) that Flagstone will enter into a Hold Harmless,
Indemnification, and Security Agreement (the "Hold Harmless, Indemnification, and Security
Agreement") within thirty (30) days of the City's determination in Section X below to proceed
under the new State Waiver, protecting the City against any and all lawsuits and related costs, (b)
that Flagstone shall assist the City in defending against any and all lawsuits involving liens,
judgments, garnishments and any other matters against Flagstone related to the Property and the
easement areas, (c) to the extent any lawsuit is pending against the City relating to any lien(s) on
the subject Property, that Flagstone shall provide to the City not less than $200,000 in security
in such form(s) as satisfactory to the City Manager at such time as the parties enter into the Hold
Harmless, Indemnification and Security Agreement, and (d) Flagstone shall provide to the City
Manager audited financial statements as soon as the same are completed, and any other
information needed in connection with the Hold Harmless, Indemnification and. Security
Agreement. Additionally, Flagstone shall have up to one hundred and twenty (120) days from the
date of City Commission approval of the Amended and Restated Agreement to Enter Into
Ground Lease (the "City Commission Approval Date") to clear and discharge as many liens,
garnishments, and judgments as possible, prior to making a deposit with the Miami -Dade County
Clerk of Courts Registry for all remaining outstanding liens, garnishments, and judgments at the
end of that one hundred and twenty (120) day period. Upon the one hundred and twenty first
(121St) day after the City Commission Approval Date, Flagstone shall deliver to the Miami -Dade
County Clerk' of Courts Registry to be held in an escrow account, an amount not less than the
total remaining outstanding balance of all liens, garnishments, and judgments not previously
discharged during the one hundred and twenty (120) day period from the City Commission
Approval Date (and update such deposit amount as and if necessary from time to time and at the
time of execution of the Amended and Restated Agreement to Enter into Ground Lease, (and
update such deposit amount as and if necessary at time of execution of the Amended and
Restated Ground Lease). If Flagstone does not. provide the foregoing, then the City shall
terminate the existing Agreement to Enter with Flagstone, terminate all easements with
Flagstone, and the City shall not enter into the contemplated new Amended and Restated
Agreement to Enter Into Ground Lease and the Amended and Restated Ground Lease, as
applicable at such time.
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X. SECURITY DEPOSITS.
The Amended and Restated Agreement to Enter Into Ground Lease and the form of Ground
Lease(s) provide for security deposits in connection with the easement areas, the Pre -paid
Construction Rent/Base Rent, and the Ground Lease(s).
(a) Security for the Easements. Prior to the execution and delivery of the new
Amended and Restated Agreement to Enter by City to Flagstone, Flagstone shall either (a)
deliver the amount of Thirty -Five Thousand and No/100 Dollars ($35,000.00) (the "Easement
Deposit") to Escrow Agent or (b) provide to City, at Flagstone's sole cost and expense, a Letter
of Credit in the amount of Thirty -Five Thousand and No/I00 ($35,000.00) (the "Easement
Security LOU). Notwithstanding the foregoing, Flagstone shall be permitted to utilize any -
combination .of cash or Letter of Credit so long as the easement deposit equals Thirty -Five
Thousand and No/100 Dollars ($35,000.00) in the aggregate. The Easement Deposit or the
Easement Security LOC, as applicable, shall hereinafter be referred to as the "Easement
Security" and shall provide security for the faithful performance by Flagstone of all of the
provisions of the Easements to be performed or observed by Flagstone.
(b) . Security Deposit for the Construction Rent/Base Rent: Prior to execution of
the new and Amended and Restated Agreement to Enter, Flagstone shall either (a) deliver the
amount equal to one year's Construction Rent/Base Rent to the Escrow Agent, or (b) provide to
City, at Flagstone's sole cost and expense, a Letter of Credit in the amount equal to one year's
Construction Rent/Base Rent as defined herein. Notwithstanding the foregoing, Flagstone shall
be permitted to utilize any combination of cash or Letter of Credit so long as the Security
Deposit for the Pre -Paid Construction Rent/Base Rent equals the amounts defined in the
aggregate. The Security Deposit for the Construction Rent/Base Rent, shall herein after be
referred to as the "Security Rent Deposit" and shall provide security for the faithful
performance by Flagstone of all rent payment provisions of this Agreement to be performed or
observed by Flagstone. During the periods outlined below, Flagstone shall deliver the Security
Rent Deposits as , defined below:
Commencing
Annual Amount Required for Rent
Security Deposit
October 1, 2010
$300,000
Octoberl, 2011
$500,000
October 1, 2012
$750,000
October 1, 2013
$1,000,000
October 1, 2014
$1,000,000
Octoberl, 2015
$1,000,000
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October 1, 2016
$1,500,000
October 1, 2017
$1,675,000
Octoberl, 2018
$25000,000
Any LOC Deposit held by the Lessor or Cash Deposit held by Escrow Agent, as defined in the
Agreement to Enter between the Parties (having an effective date of February 1, 2010) as
security under such Agreement to Enter into Ground Lease to begin being deposited as of
October 1, 2010 may be credited toward the following year's Security Rent Deposit. The annual
amount due on September 1, 2018 of $2,000,000 shall remain in effect for the life of the
Agreement to Enter and of the Ground Lease(s), in accordance with the schedule listed in this
section and in Section 5.2 of the Agreement to Enter. If an Event of Lessee's Default for non-
payment of rent occurs hereunder, Lessor may, at its option and without prejudice to any other
right or remedy that Lessor may have hereunder, apply or require distribution of all or any
portion of the Security Rent Deposit for the payment of any sum to which Lessor may become
entitled by reason of such Event of Lessee's Default, including, without limitation, reasonable
attorneys' fees and costs which Lessor may incur in connection therewith. If Lessor so applies
or requires the distribution to Lessor of all or any portion of the Security Rent Deposit, Lessee
shall, within thirty (30) days after written demand therefor, deposit cash with Lessor in an
amount . sufficient to restore any such deficiency or amend or replace any LOC Deposit,
whichever is applicable, to the full amount thereof, and Lessee's failure to . do so shall, at
Lessor'.s option, constitute an Event of Lessee's Default hereunder. In the event Lessor applies
or requires distribution of all or any portion of an LOC Deposit where no Event of Lessee's
Default then existed, Lessor shall be deemed to have improperly requested and received such
application or distribution, and Lessee shall be entitled to recover from Lessor the amount which
was improperly requested and received, or to reduce the Rent Security Deposit by an equivalent
amount.
XI. LABOR PEACE AGREEMENTS.
The parties acknowledge that the City Commission by Resolution No. 10-0144, adopted on
March 25, 2010, has directed that the Project is subject to the provisions of earlier City
Commission Resolution No. 09-0263, adopted May 28, 2009, regarding the establishment of
labor peace agreements prior to and during the operation of hospitality operations on the
Property.
XII. COVENANT OF GOOD FAITH AND FAIR DEALING.
All matters in this Exhibit A contain a covenant of good faith and fair dealing by Flagstone and
the City in reasonably complying with their respective obligations.
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