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HomeMy WebLinkAboutExhibit-SUBTHIRD AMENDMENT TO AGREEMENT TO ENTER INTO GROUND LEASE THIS THIRD AMENDMENT TO AGREEMENT TO ENTER INTO GROUND LEASE ("Third Amendment to Agreement to Enter'') is bade as of 2008 by and between THE CITY OF MIAMI, a municipal corporation of the State of Florida ("City"). and FLAGSTONE ISLAND GARDENS, LLC, a Delaware limited liability company, f/kia and successor by merger to Flagstone Properties, LLC, a Florida limited liability company ("Flagstone"). RECITALS A. City and Flagstone heretofore entered into that certain Agreement to Enter into Ground Lease dated January I, 2003 (the "Agreement to Enter") attached hereto and made a part hereof as Composite Exhibit "A". I3. City and Flagstone agreed upon and attached a number of exhibits to the Agreement to Enter, including but not limited to, the Ground Lease (the "Ground Lease"). C. City and Flagstone agreed upon and entered into that certain First Amendment to Enter Into Ground Lease And Amendment To Fourn of Ground Lease dated December 2, 2004 (the "First Amendment To Agreement To Enter") attached hereto and made a part hereof as Composite Exhibit "A". D. City and Flagstone agreed upon and entered into that certain Second Amendment to Enter Into Ground Lease dated December 8, 2006 (the "Second Amendment To Agreement To Enter") attached hereto and made a part hereof as Composite Exhibit "A". E. City and Flagstone desire to amend certain provisions of the Agreement to Enter pursuant to this Third Amendment to Agreement to Enter into Ground Lease (the "Third Amendment to Agreement to Enter"). NOW, THEREFORE, in consideration of Ten and No/100 Dollars and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the parties, City and Flagstone agree as follows: AGREEMENTS 1. Recitals. The foregoing recitals and all exhibits and attachments hereto are true and correct and are incorporated herein as if set out in full and incorporated in the body of this Third Amendment to Agreement to Enter. 2. Defined Terms. All capitalized terms used but not defined in this Third Amendment to Agreement to Enter shall have the meanings ascribed to them in the Agreement to Enter or the Ground Lease. 3. Amendments to Agreement to Enter. The Agreement to Enter is hereby amended as follom!s: A. Changes to Dates in Agreement to Enter. The parties hereby acknowledge and agree that the Agreement to Enter is hereby amended so that (i) the Lease Deadline (as defined in Section 6.2.1 of the Agreement to Enter) is hereby extended to February 1, 2010 (without any further extension right under Section 6.2.2 of the Agreement to Enter); a (ii) the Outside Date referred to in Section 6.2.3 of the Agreement to Enter is hereby extended to February 1, 20107: and (iii) in consideration for the extension of the Outside Date and continued encumbrance of the property for the Flagstone development, commencing on August 1. 2008. Flagstone shall pay to the City the amount of Fifty Thousand ($50,000.00) Dollars per month payable in advance on the first day of each month for use of the property with said amount increasing to eighty-three thousand dollars ($83,000.00) per month on August 1, 2009, payable on the first day of each month for each month exercised as part of the extension period granted ("Consideration for Use"). In the event the Possession Date occurs on a day other than the first (1st) day of the month, the Consideration for Use of said partial month shall be prorated from the first of the month through the Possession Date and any overpayment shall be credited against any future rent due from Flagstone. B. Section 2.1. Section 2.1 of the Agreement to Enter is hereby amended and shall now read as follows: "Nature of this Agreement. This Agreement constitutes an agreement to enter into a ground lease upon the terms and conditions set forth herein. This Agreement shall not constitute a lease of any portion of the Property and shall not impose any encumbrance on the Property nor entitle Flagstone or any other Person to file a lis pendens in connection with this Agreement or any alleged breach or default hereunder. The term of this Agreement shall commence upon the Effective Date and extend until: and automatically terminate upon the Lease Delivery Date: and f ii) such time as Flagstone has met anv and all of the conditions precedent for each Major Project Component on a component by component basis but in no case shall this Agreement extend beyond February 1. 2010 unless sooner terminated in accordance with the terms hereof (except for any provisions hereof that expressly survive such termination)." C. Section 6.1. Section 6.1 of the Agreement to Enter is hereby amended and shall now read as follows: "Conditions Precedent to Execution and Delivery of Ground Lease. Within fifteen (15) days after the satisfaction of all of the following conditions precedent (or the written \vaisver or deferral by the Chief Executive Officer in his or her sole and absolute discretion of any such conditions precedent that are not satisfied), the City and flagstone hereby agree to execute four (4) duplicate original counterparts of the Ground Lease, in form and substance attached hereto as Exhibit C for delivery to each parry hereunder (the "Lease Delivery") (it being understood and agreed that: (i) the date of execution and delivery of the Ground Lease by the latter of the parties hereto to so execute shall be referred to herein as the "Lease Deliven, Date": and (ii) the Ground Lease shall become effective and commence on the Lease Delivery Date). Notwithstanding the above, the Chief Executive Officer, in his or her sole and absolute discretion, and limited to Sections 6.1.1, 6.1.2. 6.1.3, 6.1.6. 6.1,7. 6.1.9, and 6.1.11, shall allow Flagstone to meet any or all of the referenced conditions precedent for each Major Project Component on a component by component basis." D. Section 6.1.1. Section 6.1.1 of the Agreement to Enter is hereby amended and shall now read as follows: "Construction Plans and Specifications. The Chief Executive Officer shall have received and approved in his or her good faith, reasonable discretion plans and specifications for the development and construction of the Project (the "Construction Plans and Specifications") which shall be in sufficient detail in order for in order for Flagstone to obtain foundation permits by October 31. 2009 for at least two (2) Major Project Components (other than the Marina), which Construction Plans and Specifications shall be in accordance with the Project Approvals. Flagstone shall submit on a component by component basis, for each Major Project Component Ssuch Construction Plans and Specifications that shall contain sufficient detail in order for the Chief Executive Officer to determine, using the Schedule of Values, the proposed Construction Budget and the GMP Contract(s) described in Section 6.1.6 hereof, that the Project can be cornpleted in accordance with the MUSP Approval and the Hotels can be constructed as four or five star hotels or better, as defined in the American Automobile Association ("AAA") hotel rating standards, within the Construction Budget." E. Section 6.1.2. Section 6.1.2 of the Agreement to Enter is hereby amended and shall now read as follows: "Closing of Construction Loan(s); Other. Flagstone shall have closed its Initial Construction Loan with an Approved Initial Construction Lender (as defined in the Ground Lease), which financing thereunder, together with the amount of Initial Equity Requirement, shall be sufficient to complete the development and construction of the 3 Project and to fund any shortfalls in operations that may exist prior to Project Stabilization. F ' funding the -first draw tie steal-1 sat-i-scied other than Lease Delivery. Flagstone shall also be satisfied, in its sole discretion, with negotiations concerning financial incentives and entitlements available under federal, state, county or local law. Flagstone shall supply the Chief Executive Officer written evidence satisfactory to the Chief Executive Officer in his or her reasonable judgment of the availability of the Construction Loan Closing prior to execution of the Ground Lease." F. Section 6.1.8. Section 6.1.8 of the Agreement to Enter is hereby amended and shall now read as follows: "Construction Schedule. Flagstone shall provide the following: (i) Florida Department of Transportation and City approvals for site utility work by April 30. 2009: (ii) apply to the City for Foundation Permits and commence utility relocation work by July 1, 2009: and (iii) obtain Dade County Class 1 Permit for the Marina no later than November 28. 2008 in order for Pthe Chief Executive Officer to ;hall h.avc received and approved in his or her good faith, reasonable discretion the detailed schedule for development and construction of the Project Components and related infrastructure, including, without limitation, the anticipated commencement and completion of major components of the work. Flagstone may accelerate all or any portions(s) of such schedule without the Chief Executive Officer's approval; provided that Flagstone provide notice to the Chief Executive Officer of such acceleration." 4. Ratification. City and Flagstone hereby ratify and confirm the Agreement to Enter and acknowledge and agree that the Agreement to Enter as previously amended by the First Amendment to Agreement to Enter and the Second Amendment to Agreement to Enter remains in full force and effect without modification, except as specifically set forth in this Third Amendment to Agreement to Enter, and without default by either party. 5. 1leadinas. The captions and headings contained in this Third Amendment to Agreement to Enter are for convenience of reference only and shall not affect the construction of interpretation of this Third Amendment to Agreement to Enter. 6. Amendments. No amendment of any provision of this Third Amendment to Agreement to Enter or the Agreement to Enter shall in any event be effective unless it is in writing and signed by party against whom enforcement is sought. 7. Severability. Any provision of this Third Amendment to Agreement to Enter which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision beyond such extent or in any other jurisdiction. It is the intention of the parties to this Third Amendment 4 to Agreement to Enter that if any provision of this Third Amendment to Agreement to Enter is cpable of two constructions, one of which would render the provision void and the other of which would render the provision valid, the provision shall have the meaning which renders it valid. 8. Binding Effect; Assignments. This Third Amendment to Agreement to Enter shall be binding upon and inure to the benefit of the City and Flagstone and their respective successors and permitted assigns. 9. Governing Law. This Third Amendment to Agreement to Enter shall be governed by, and construed in accordance with, the laws of the State of Florida, without application of its conflict of law principles. 10. Entire Agreement to Enter. The Agreement to Enter, as amended by the First Amendment to Agreement to Enter, the Second Amendment to Agreement to Enter, and this Third Amendment to Agreement to Enter, together with all easement agreements, license agreements and Subordination, Non -Disturbance and Attornnlent Agreements executed in connection therewith or otherwise contemplated thereby, embody and constitute the entire understanding between City and Flagstone, and all prior or contemporaneous agreements, understandings, representations, and statements, oral or written, with respect thereto are merged therein. 11. Counterparts. This Third Amendment to Agreement to Enter may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any party hereto may execute this Third Amendment to Agreement to Enter by signing any such counterpart. IN WITNESS WHEREOF, City and Flagstone have executed this "Third Amendment to Agreement to Enter into Ground Lease as of the date set forth above. ATTEST: By: Priscilla A. Thompson, CMC Pedro G. Hernandez THE CITY OF MIAMI, a municipal corporation of the State of Florida City Clerk By: City Manager APPROVED AS TO INSURANCE APPROVED AS TO FORM AND EQLT1 MENTS: CORRECTNESS: By. By: Lee Ann Brehm Julie O. Bru Risk Management Administrator City Attorney FLAGSTONE ISLAND GARDENS LLC, a Delaware limited liability company By: FLAGSTONE DEVELOPMENT CORPORATION, a Delaware corporation, Its Managing Member By: Mehmet 3ayraktar President STATE OF4644:41-0-- COUNTY OF - 'ck.oCt-- } The foregoing instrument was acknowledged before me this /, day of 2008, by Mehmet Bayraktar, President of Flagstone Development Corporation corporation, as Managing Member of Flagstone liability company, on behalf of the companies. Personally Known l� Produced Identification Type of Identification Produced or 6 Island Garde LLC. a Delaware f f De aware limited VICTORIA BERTRAND MY COMMISSION 0 OD 575600 EXPIRES: July 24, 2010 Bonded Thru Notary P€tk Underwrers THIRD AMENDMENT TO AGREEMENT TO ENTER INTO GROUND LEASE THIS'$THIRD AMENDMENT TO AGREEMENT TO ENTER INTO GROUND LEASE ("Thirc'l4 Amendment to Agreement to Enter") is made as of , 2008 by and between THE CITY OF MIA U, a municipal corporation of the State of Florida ("City"), and FLAGSTONE ISLAND GARDENS, LLC, a Delaware limited liability company, flk/a and s ccessor by merger to Flagstone Properties, LLC, a Florida limited liability company "Fla stone' RECITALS A. City and Flagstone etofore entered into that certain Agreement to Enter into Ground Lease dated January 1, 2 3 (the `.`Agreement to Enter") attached hereto and made a part hereof as Composite Exhibit "A' B. City and Flagstone agreed u on and attached a number of exhibits to the Agreement to Enter, including but not limited to, theround Lease (the "Ground Lease"). C. City and Flagstone agreed upon an entered into that certain First Amendment to Enter Into Ground Lease And Amendment To orm of Ground Lease dated December 2, 2004 (the "First Amendment To Agreement To Enr'" attached hereto and made a part hereof as Composite Exhibit "A". D. City and Flagstone agreed upon and enter .i nto that certain Second Amendment to Enter Into Ground Lease dated December 8, 2006 (the , ,.. end Amendment To Agreement To - Enter") attached hereto and made a part hereof as Campo to Exhibit "A". E. City and Flagstone desire to amend certain pri 'sions of the Agreement to Enter pursuant to this Third Amendment to Agreement to Enter to Ground Lease (the "Third Amendment to Agreement to Enter"). NOW, THEREFORE, in consideration of Ten and No/100 Doll and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the parties, City and Flagstone agree as follows: AGREEMENTS 1. Recitals. The foregoing recitals and all exhibits and attachments hereto are true and correct and are incorporated herein as if set out in full and incorporated in the body this Third Amendment to Agreement to Enter. 2. Defined Terms. All capitalized terms used but not defined in this Third Arnendm to Agreement to Enter shall have the meanings ascribed to them in the Agreement to Enter o he Ground Lease. 3. Amendments to Agreement to Enter. The Agreement to Enter is hereby amended as follows: A. Changes to Dates in Agreement to Enter. The parties hereby acknowledge and agree that the Agreement to Enter is hereby amended so that (i) the Lease Deadline (as defined in Section 6.2.1 of the Agreement to Enter) is hereby extendei to February 1, 2010 (without any further extension right under Section 6.2.2 of the Agreement to Enter); and (ii) the Outside Date referred to in Section 6.2.3 of the Agreement to Enter is hereby extended to February 1, 2010:; and (iii) in consideration for the extension of the Outside Date and continued encumbrance of the property for the Flagstone development., Flagstone shall upon execution of the Third Amendment of Agreement to Enter pay to the City the amount of Two Hundred Thousand ($200,000.00) Dollars payable in advance on the.first day of each month in equal monthly installments of $16,666.66 for use of the property and commencing on the first (1 §`) day of the first full month followingJuly 3'1, 2009 and ending on the day preceding the Possession Date, Flagstone stall pay to the City the amount of Seventy Five Thousand ($75,000) Dollars a month, payable on the first day of each month for each month exercised as part offthe extension period granted ("Consideration for Use"). In the event the Possession Date occurs on a day other than the first (1 S) day of the month the Consideration for Use of said partial month shall be prorated from the first of the mono through the Possession Date and any overpayment shall be credited against any future rent due from Fla stone. B. Section 2.1. Section 2.1 of the Agreement to Enter is hereby amended and shall now read as follows: "Nature of this Agreement. This Agreement d nstitutes an agreement to enter into a ground lease upon the terms and condi yons set forth herein. This Agreement shall not constitute a lease of any ports n of the Property and shall not impose any encumbrance on the Property nor en ' le Flagstone or any other Person to file a lis pendens in connection with this Bement or any alleged breach or default hereunder. The terms of this Agreemen shall commence upon the Effective Date and extend until: Li) the Lease Delivery Date;: and (ii) such time as flagstone has manv and all of the conditions precedent for each Maior Project Component on a component by component basis but in no case shall this Agreement extend bey d February 1, 2010 unless sooner terminated in accordance with the terms .her f (except for any provisions hereof that expressly survive such termination)." C. Section 6.1. Section 6.1 of the Agreement to Enter is hereby at ended and shall now read as follows: "Conditions Precedent to Execution and Delivery of Ground Lease. With't fifteen (15) days after the satisfaction of all of the following conditions. precedent (or the written waiver or deferral by the Chief Executive Officer in his or her sole and absolute discretion of any such conditions precedent that are not satisfied), the City and Flagstone hereby agree to execute four (4) duplicate original counterparts of the Ground Lease, in form and substance attached hereto as Exhibit C for delivery to each party hereunder (the "Lease Delivery") (it being understood and agreed that: (i) the date of execution and delivery of the Ground Lease by the latter of parties hereto to so execute shall be referred to herein as the "Lease naive Date"; and (ii) the Ground Lease shall become effective and commence on the e Delivery Date). Notwithstanding the above, the Chief Executive Officer, in his or her sole and absolute discretion, and limited to Sections 6.1.1 \6.1.2, 6.1.3, 6.1.6 6.1.7, 6.1.9,and 6.1.11, shall allow Flagstone to meet any\or all of the referenced conditions precedent for each Major Project Component on a component by component basis." D. Section 6.1.1. Section 6.1.1 of the Agreement to Enter is hereby amended and shall now read as follows: "Construction Plans and Specifications. The Chief Executive Officer shall have received and approved in his or her good faith, reasonable discretion plans and specifications for the development and cons ction of the Project (the "Construction Plans and Specifications') which shall in sufficient detail in order for Flagstone to obtain foundation penits by October 31, 2009 for at least two (2) Major Project Components (otb r an the Marina), which Construction Plans and Specifications shall be in a rdance with the Project Approvals. Flagstone shall submit on a component by e. mponenit basis, for each Major Project Component Ssuch Construction Plans an Specifications that shall contain sufficient detail in order for the Chief F.,xecut.ve Officer to determine, using the Schedule of Values, the proposed Constructio Budget and the GMP Contract(s) described in Section 6.1.6 hereof, that the Pro" ct can be completed in accordance with the MUST' Approval and the Hate can be constructed as four or five star hotels or better, as defined in the erican Automobile Association ("AAA") hotel rating _ standards, withi the Construction Budget. E. Section 6.1,2: Section 6.1.2 of the Agreement to Enter is hereby amen shall now read as follows: "Ciosintof Construction Loan(s), Other. Flagstone shall have closed its Initial Construction Loan with an Approved Initial Construction Lender (as defined in the Ground Lease), which financing thereunder, together with the amount of Initial Equity Requirement, shall be sufficient to complete the development and construction of the Project and to fund any shortfalls in operations that may exist prior to Project Stabilization: At such Closing, all of Flagstone shall also be satisfied, in its sole discretion, with negotiations concerning financial incentives and entitlements available under federal, state, county or local law. Flagstone shall supply the Chief Executive Officer written evidence satisfactory to the Chief Executive Officer in his or her reasonable dement of the availability of the Construction Loan Closingprior to execution c the Ground Lease." F. Section 6.1.8. Section 6.1.8°of the Agreement to Enter is hereby amended and shall now read as follows: "Construction Schedule. Flagstone shall provide the following: (i) Florida Department of Transportation and City approvals for site utility work by April 30 2009' (ii __apply to the City for Foundation Permits and commence utility relocation work by July 1, 2009; and (iii) obtain Dade County Class I Permit for the Marina no later than November 28, 2008 in Order for Tthe Chief Executive Officer to ^1 11�e received and approved in his`or her good faith, reasonable discretion the detailed schedule for development construction of the Project Components and related infrastructure, including; without limitation, the anticipated commencement and completion of major k.omponents of the work. Flagstone may accelerate all or any portions(s) of sum schedule without the Chief Executive Officer's approval; provided that Fla one provide notice to the Chief Executive Officer of such acceleration." 4. Ratification_ City and Flagstone hereby ratify and confirm the Agreement to Enter and acknowledge and agree that the Agreement to Enter as previously ar ended by the First Amendment to Agreement to Enter and the Second Amendment to Agreem t to Enter remains in full force and effect without modification, except as specifically set rth in this Third Amendment to Agreement to Enter, and without default by either party. 5. Readings. The captions and headings contained in this Third Amendment Agreement to Enter are for convenience of reference only and shall not affect the coction of interpretation of this Third Amendment to Agreement to Enter. 6. Amendments. No amendment of any provision of this Third Amendment to- Agreement to Enter or the Agreement to Enter shall in any event be effective unless i`tis in writing and signed by party against whom enforcement is sought. 7. Severability. Any provision of this Third Amendment to Agreement to Enter which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision beyond such extent or in any other jurisdiction. 1t is the intention of the parties to this Third Amendment to Agreement to Enter that if any provision of this Third Amendment to Agreement to Enter is capable of two constructions, one of which would render the provision void and the other of which would render the provision valid, the provision shall have the meaning which renders it valid. 8. Binding Effect; Assignments. This Third Amendment to Agreement to Enter shall be binding upon and inure to the benefit of the City and Flagstone and their respective successors and per` mitted assigns. 9. Governing Law; This Third Amendment to Agreement to Enter shall be governed by, and cons in accordance with, the laws of the State of Florida, without application of its conflict of la principles. l0. Entire A reement to Enter. The Agreement to Enter, as amended by the First Amendment to Ar eement to Enter, the Second Amendment to Agreement to Enter, and this Third Amendment Agreement to Enter, together with all easement agreements, license agreements and Subo dination, Non -Disturbance and Attornment Agreements executed in connection therewith or\ otherwise contemplated thereby, embody and constitute the entire understanding between Cr and Flagstone, and all prior or contemporaneous agreements, understandings, representatio , and statements, oral or written, with respect thereto are merged therein. I I . Counterparts. This Third Amendment to Agreement to Enter may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any party hereto may execute this Third Amendment to Agreement to Enter by signing any such counterpart. IN WITNESS WHEREOF, City and Flagstone have executed this Second Amendment to Agreement to Enter into Ground Lease as of the date set forth above. Attest: Name: Priscilla A. Thompson Title: City Clerk APPROVED AS TO FORMAND C eizr, ss; By: Name: Julie O. Bru Title: City Attorne STATE OF COUNTY OF ) ) THE CITY OF MIAMI, a municipal corporation of the State of Florida By: Name: _Pedro G. Hernandez Title: Ci Manager Date: tiPPet►`£ 4,s %v Pv5i (2f1%LLie4_1'?'tf'_ltJ .S," 8 12,:s ,e. I l liym t FLAGSTONE ISLAND GARDENS, LLC, a Delawa►limited liability company By: GSTONE DEVELOPMENT CORPORATION, a De ware corporation Its Ma aging Member By: Name: Mhmet Bayraktar Its: Presi The foregoing instrument was acknowledged before me this day of Bayraktar, President of Flagstone Development Corporation, a Delaware corporation, as Flagstone Island Gardens, LLC, a Delaware limited liability company, on behalf of the co Personally Known Produced Identification Type of Identification Produced or , 2(08, by Mehmet aging Member of es.