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HomeMy WebLinkAboutExhibit SUBTHIS DOCUMENT IS A SUBSTITUTION. ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. RECONCILIATION AGREEMENT This agreement to reconcile certain disputed issues and provide mutual releases ("Agreement"), is entered into this day of , 2017, between the City of Miami, a Florida municipal corporation, ("City") and Hyatt Equities, L.L.C., a limited liability company doing business in Florida ("Hyatt") (collectively the "Parties"). WHEREAS, the City is the owner of the James L. Knight Convention Center located at 400 S.E. 2nd Avenue, Miami, Florida 33131 ("Convention Center"); and WHEREAS, per the Lease agreement originally dated September 13, 1979, as supplemented, amended and assigned from time to time (collectively, "Lease Documents"), Hyatt currently leases the property adjacent to the Convention Center from the City, and is the owner of the hotel structure known as the Hyatt Regency Miami and located at 300 SE 2"d Avenue, Miami, Florida 33131 ("Hotel"); and WHEREAS, the Parties agree that an upgrade to the current fire alarm system located on the Convention Center property, which supports the Hotel and the Convention Center and the ancillary systems located within each of the Convention Center property and Hotel property (collectively, the "Fire Alarm Project"), is necessary for the proper operation of the Hotel and Convention Center; and WHEREAS, the Parties agree that the tiles, at the exterior of the Convention Center located on the main level at the plaza entrance of the Convention Center along S.E. 2nd Avenue, as described in the documents attached hereto as Exhibit A and made a part hereof (the "Flooring Repair Area"), are in need of replacement and the water damaged areas to the Hotel and its personal property located on the ground level of the Hotel, resulting from the defective tiles, are in need of repair and/or replacement (the "Tile Project") for the proper operation and maintenance of the Hotel and the Convention Center; and WHEREAS, the Parties agree there is an on -going and present dispute regarding the amount of certain concession fees (the "Concession Fees") and other fees related to increased room rental rates, restroom attendant, overtime rates, dumpster fees and cleaning fees (the "Other Fees") as described in the letter dated November 12, 2012 from Ilyatt to the City attached hereto as Exhibit B and made a part hereof (the "November 12, 2012 Letter") charged by the City to Hyatt for use of facilities at the Convention Center; and WHEREAS, the Parties agree that there is an on -going and present dispute regarding the amounts owed by each Party to maintain the Physical Plant ("Maintenance Costs") from January, 2012 through the present date; and WHEREAS, the Parties agree that there is an on -going and present dispute regarding the amounts owed for the cooling tower and chiller replacement project undertaken by Hyatt ("ChiIler Overpayment") and outstanding credits to Hyatt relating to depreciation payments made by Hyatt pursuant to the Lease Documents ("Depreciation Credit"); and WHEREAS, the Parties agree that there is an on -going and present dispute regarding the amounts owed for certain Phase I design fees for the upgrade of the fire alarm system (the "Phase I Design Fees"); and WHEREAS, the Parties intend to redevelop the Convention Center and, in connection therewith, extend Hyatt's lease with the City for the Hotel and modify the Lease Documents to include, among other things, the Convention Center, as otherwise described in that certain Memorandum of Understanding between Hyatt and the City dated , 2017, and attached as Exhibit C (the "Redevelopment") and WHEREAS, the Parties acknowledge and agree to the resolution, compromise and settlement of all such disputes, claims and controversies among them as provided herein; and NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: 1. Recitals. The Recitals set forth above are incorporated herein. 2. Agreement Terms. A. City's Contribution. The City shall pay Hyatt Two Million One Hundred Forty -Three Thousand Two Hundred Seventy -Nine Dollars ($2,143,279.00) ("City's Contribution"). The City shall use commercially reasonable efforts to pay the City's Contribution to Hyatt following the execution of this Agreement no later than sixty (60) days from the date hereof. The City shall have no liability or obligation to pay any sum or cost whatsoever in excess of the City's Contribution with respect to the Projects described below, except in the event of an increase in costs due to the action or inaction of the City contrary to the terms of this Agreement or the Lease Documents, delays caused by the City or related parties to the City or force maj cure. Hyatt shall have no liability or obligation to refund all or any portion of the City's Contribution even if the costs of the Projects described below are less than anticipated. Except as otherwise expressly provided herein, should the total amount of monies required by Hyatt to complete the Projects be (i) in excess of the City's Contribution, Hyatt shall, at its sole cost and/or expense, complete the Projects using Hyatt's independently acquired funds or (ii) below the City's Contribution, all such excess of the City's Contribution shall belong to Hyatt. If the City fails to make the City Contribution payment in accordance with this subsection A, Hyatt may deduct such amount from the next rent payment under the Lease Documents, and each rent payment thereafter, until the full balance of such amount owed by the City to Hyatt has been paid in full. B. Maintenance and Concession Fees. The City shall also pay Hyatt a total amount equal to Seven Hundred Seventy -Eight Thousand Seven Hundred Twenty -Two Dollars ($778,722.00) to resolve the disputes regarding the Maintenance Costs and Concession Fees. If the City fails to make such payment by the time Hyatt's next rent payment under the Lease Documents is due, Hyatt may deduct such amount from the next rent payment under the Lease Documents, and each rent payment thereafter, until the full balance of such amount owed by the City to Hyatt has been paid in full. C. Other Outstanding City Fees. The City shall also pay Hyatt a total amount equal to Eight Hundred Fifty -Four Thousand Three Hundred Dollars ($854,300.00), to resolve the disputes regarding the Chiller Overpayment, the Depreciation Credit and the Phase I Design Fees (the "Outstanding City Amounts"). The Outstanding City Amounts shall be paid by the City to Hyatt in connection with the Redevelopment and any agreements entered into between Hyatt and the City, with respect to the Redevelopment, shall provide for the payment of the Outstanding City Fees to Hyatt. If the Redevelopment is not approved by City Commission and/or by referendum in calendar year 2017, if the agreements with respect to the Redevelopment are not entered into by the City and Hyatt (following approval by City Commission and referendum) on or before December 31, 2018 or discussions between the City and Hyatt regarding the Redevelopment plans otherwise discontinue for any reason, the Outstanding City Amounts shall become immediately due and payable by the City to Hyatt upon written notice from Hyatt to the City. If the City fails to make such Outstanding City Amounts payment to Hyatt within sixty (60) days of receipt of such written notice, Hyatt may deduct such amount from the next rent payment under the Lease Documents, and each rent payment thereafter, until the full balance of such amount owed by the City to Hyatt has been paid in full. D. Projects. Hyatt-'s shall complete the Fire Alarm Project and the Tile Project (collectively the "Projects") pursuant to a scope of work and plans and specifications ("Specifications"), and further corresponding to the Flooring Repair Area, determined by Hyatt for the Projects. Additionally, if bonds are required for the Projects per section 255.05, Florida Statutes, as this is City -owned property, Hyatt shall obtain such bonds for the Projects. The Specifications, the selected contractors and the contracts with the respective design, consulting, construction contractors shall not be subject to the City's approval (subject to such contracts complying with the requirements of subsection F below). Hyatt shall provide copies of the Specifications and the final, executed contracts with all consultants and contractors for the Projects. The parties acknowledge and agree that Siemans Industries, Inc. as the contractor, and Rolf Jensen & Associates, Inc., for the design and related work, have been preliminarily selected for the Fire Alarm Project and that Complete Property Service, Inc., as the contractor, and Building Consultants, Ltd., for the design and related work, have been preliminarily selected as the contractor for the Tile Project. Hyatt shall use commercially reasonable efforts to cause the Projects to be performed in a good and workmanlike manner in accordance with the Specifications and in compliance with all applicable governmental laws, rules, regulations and industry standards. E. Schedule. Hyatt shall use commercially reasonable efforts to cause the Projects to be performed and completed in accordance with a schedule (the "Schedule") that will minimize disruption of the Hotel and Convention Center operations, provided that commencement of the Projects shall begin within months of the execution and approval of this Agreement (subject to Section 16 below) (the "Commencement Date") and be substantially completed within months of the Commencement Date, subject to extensions due to force majeure, City caused delays, and other events outside of Hyatt's reasonable control. Time is of the essence. In no event shall either Party be liable to the other for consequential, punitive or special damages associated with any delays in the Projects. F. Project Contract Requirements (Including Insurance and Indemnification). Any construction contracts and/or other contracts entered into by the Hyatt to complete the Projects, shall (i) provide that such contract may be assigned to the City, subject to Hyatt approval, which shall not be unreasonably withheld, delayed or conditioned (ii) that the City shall be named as an additional insured on all applicable liability policies along with loss payee or co-insured, as applicable, as to property insurance and dual obligee as to bonds, if applicable on this project (iii) that all contractors must be licensed, certified, and insured, and all insurance carriers must be rated A- or better, and (iv) such contractor shall indemnify, hold harmless and defend the City, in addition to Hyatt, as set forth in such agreement; however, the City shall not be liable for or a guarantor for the Hyatt's obligations under such contract. G. Concession Fees; Maintenance Fees. From and after January 1, 2017, through the remainder of the Term under the Lease Documents, Hyatt shall promptly pay the Concession Fees in connection with its rental of meeting space in the Convention Center and as properly invoiced by the City in accordance with the rates set forth in Chapter 53, Section 181 of the City of Miami Code of Ordinances (which currently provides for $100 for a single portable food/beverage concession and $200 for a single permanent food/beverage concession). From and after January 1, 2017, through the remainder of the Tenn under the Lease Document, the City agrees that it shall promptly pay its portion of the Maintenance Fees in connection with the maintenance of the Physical Plant in accordance with the Lease Documents and as properly invoiced by Hyatt. H. Reasonable Cooperation. Hyatt and the City shall reasonably cooperate with each other in connection with the Projects stated herein, including, , the City providing reasonable access to the Convention Center during the period of construction and installation of the Projects and coordination of the work so as to minimize disruption to the operation of the Hotel and Convention Center, the City providing reasonable and timely approvals of all permits required for the Projects and the City providing reasonable and timely inspections of the Projects, in accordance with the Schedule. Hyatt shall obtain the City's prior approval of shut downs of power, water, and HVAC, use of loading docks, blockage of circulation areas, and within the Convention Center. If the City does not respond to a request for such approval within ten (10) business days of such request, the City's approval shall be deemed to have been obtained. The Director of Real Estate and Asset Management for the City will serve as the City's contact person, and the City Manager, subject to compliance with authorizations, procedures and requirements prescribed by the City Charter, City Code, and the directives of the City Commission, shall act for the City as to all approvals from the City referenced herein. 3. Depreciation Payments under the Lease Documents. The Parties hereby agree to waive the obligations under Section 7.4 of the Lease Documents of Hyatt to pay towards a reserve to make depreciation payments in connection with capital costs associated with the Physical Plant and the City to furnish an analysis of such capital and depreciation costs on an annual basis. 4- Breach of Agreement. In the event that either of the Parties fails to fulfill its obligations (and such failure is not due to force majeure, the action or inaction of the other Party, and other events outside of such Party's reasonable control), and after the expiration of all notice and cure periods as set forth herein, the violating Party shall be deemed to be in default of this Agreement. As a result of a default, the non -violating Party shall be entitled to pursue any and all remedies permitted under law and in equity upon the expiration of a ten (10) business day grace period following written notice to the other Party as set forth below in Section 9; provided, however, with respect to the Projects, so long as Hyatt has commenced to cure any default related thereto following notice from the City and is diligently pursuing to cure such default, Hyatt shall have such additional period of time as reasonably necessary to cure such default. 5. Mutual Releases. Upon execution of this Agreement by the Parties and approval of this Agreement by the Miami City Commission, the following shall be effective: A. City's Release to Hyatt: Except for the rights, duties and obligations of Hyatt created under this Agreement, the City, for itself and its predecessors, agents, directors, officers, members, employees, affiliates, successors, assigns, trustees, bankruptcy trustees, personal representatives, beneficiaries, devisees, and legatees (hereinafter collectively referred to as the "City Releasors"), hereby releases and forever discharges Hyatt and each of its respective subsidiaries, predecessors, agents, managers, attorneys, directors, officers, employees, affiliates, successors, assigns, trustees, bankruptcy trustees, personal representatives, beneficiaries, devisees, and legatees (hereinafter referred to as the "Hyatt Releasees"), whether past, present or future, jointly and severally, of and from any and all debts, claims, demands, actions, causes of action, rights, obligations, damages, and liabilities of any and every kind or nature whatsoever, in law or in equity, past, present, or future, known or unknown, direct or indirect, asserted or unasserted, fixed or contingent, whether contemplated or not, whether based in tort, contract, contribution, or any other type of recovery, and whether for compensatory, consequential, incidental, statutory, punitive, or other damages, which the City Releasors have, may have or had arising out of the following claims: (1) the Fire Alarm Project, (2) Tile Project, (3) Concession Fees, (4) Maintenance Costs, (5) Other Fees, (6) cooling tower and chiller replacement project including, without limitation, the Chiller Overpayment and the Phase I Design Fees, and (7) depreciation payments including without limitation the Depreciation Credit (collectively, the "Released Claims"); provided, however, that this Release by the City Releasors does not release any Claims other than the Released Claims. B. Hyatt's Release to the City: Except for the rights, duties and obligations of City created under this Agreement, the Hyatt, for itself and its predecessors, agents, directors, officers, members, employees, affiliates, successors, assigns, trustees, bankruptcy trustees, personal representatives, beneficiaries, devisees, and legatees (hereinafter collectively referred to as the "Hyatt Releasors"), hereby releases and forever discharges City and each of its respective subsidiaries, predecessors, agents, managers, attorneys, directors, officers, employees, affiliates, successors, assigns, trustees, bankruptcy trustees, personal representatives, beneficiaries, devisees, and legatees (hereinafter referred to as the "City Releasees"), whether past, present or future, jointly and severally, of and from any and all debts, claims, demands, actions, causes of action, rights, obligations, damages, and liabilities of any and every kind or nature whatsoever, in law or in equity, past, present, or future, known or unknown, direct or indirect, asserted or unasserted, fixed or contingent, whether contemplated or not, whether based in tort, contract, contribution, or any other type of recovery, and whether for compensatory, consequential, incidental, statutory, punitive, or other damages, which the Hyatt Releasors have, may have or had arising out of the Released Claims; provided, however, that this Release by the Hyatt Releasors does not release any Claims other than the Released Claims. 6. No Admission of Liability. Each Party expressly recognizes that this Agreement shall not in any way be construed as an admission by any Party hereto of any unlawful or wrongful acts or omissions whatsoever with respect to the Released Claims stated herein. This Agreement shall not be admissible in any proceeding as evidence of any admission by any Party hereto of any violation of any law or regulation or wrongful act or omission. This Agreement may, however, be introduced as evidence in any enforcement proceeding to this Agreement. 7. Non -Assignability of Transferability of Claim. Each Party hereby warrants, declares, and represents that no part of any asserted and/or assertable claims has been assigned or transferred, and that each Party has full, exclusive, and unencumbered right, title, and interest in and to such asserted and/or assertable claims. 8. Governing Law and Venue. This Agreement shall be governed by the laws of the State of Florida. The Parties acknowledge that this Agreement is being entered into in Miami -Dade County, Florida and that the jurisdiction to enforce the terms of this Agreement shall exist in the Eleventh Judicial Circuit, Miami -Dade County. The Parties expressly select, as their venue, any and all action/litigation in Eleventh Judicial Circuit, Miami -Dade County of the State of Florida. It is further acknowledged and agreed that any claim, dispute, action (administrative or otherwise), and/or litigation relating to this Agreement, that the Parties shall bear, at their sole respective expense, their own attorneys' fees and costs. 9. Notices. Except where this Agreement expressly provides otherwise, all notices and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given (a) on the earlier of the date received or three business days after delivery, if sent by registered or certified mail (return receipt requested); (b) when delivered, if delivered personally; (c) on the next business day, if sent by overnight mail or overnight courier. If any Party is represented by counsel (whether or not named in this Agreement), any notice given by such counsel for such Party shall be fully effective as if given by such Party. Any notice shall be given to the recipient at these addresses (or at such other addresses as shall be specified by written notice given in accordance with this provision): CITY OF MIAMI City of Miami Office of the City Manager 444 SW 2 Avenue, 10th Floor Miami, FL 33130 With a copy to: City of Miami Dept. of Real Estate & Asset Management 444 SW 2nd Avenue, Suite 325 Miami, FL 33130 City of Miami Office of the City Attorney 444 SW 2 Avenue, Suite 945 Miami, FL 33130 10. Miscellaneous. The Parties further agree as follows: HYATT Hyatt Equities, L.L.C. Hyatt Center 71 South Wacker Drive 12t1i Floor Chicago, IL 60606 Attention: Megan Schmollinger With a copy to: Hyatt Corporation 71 South Wacker Drive 12th Floor Chicago, IL 60606 Attention: General Counsel A. No waiver of any breach or default hereunder shall be considered valid unless in writing and signed by the Party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature. B. Each Party hereto shall cooperate, shall take such further action and shall execute and deliver such further documents as may be reasonably requested by any other Party in order to cany out the provisions and purposes this Agreement. C. This Agreement may be executed in one or more counterparts, all of which taken together shall be deemed one original. D. In the event any terms or provision of this Agreement be determined by appropriate judicial authority to be illegal or otherwise invalid, such provision shall be given its legal meaning or be construed as deleted as such authority determines, and the remainder of this Agreement shall be construed to be in full force and effect. E. Any approvals required by the Parties under this Agreement shall not be unreasonably withheld, conditioned or delayed. 11. Knowing and Voluntary. The Parties acknowledge and represent that they have carefully read and fully understand of the provisions, terms and conditions of this Agreement and have reviewed this Agreement with their respective counsel. The Parties further acknowledge and represent that they have entered into this Agreement freely, knowingly and without coercion or duress and based on their own judgment. 12. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties, their personal representatives, successors, and assigns. 13. Interpretation. The Parties hereby acknowledge and agree that; (a) in the negotiation and drafting of this Agreement, they have each had the opportunity to consult with counsel of their choice; (b) each of their counsels has had an opportunity to contribute to the negotiation and drafting of this Agreement; and (c) the principle of construing a document most strictly against its drafter shall not apply with respect to the interpretation of this Agreement. 14. Entire Agreement. This Agreement constitutes the complete understanding between the Parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and arrangements, both oral and written, between the Parties with respect to such subject matter. This Agreement may not be modified in any way unless by written instrument signed by each of the Parties. 15. Authority to Execute. The Parties represent and warrant that the individuals executing this Agreement on each Party's behalf have the full authority to do so. 16. City Commission Approval. This Agreement is subject to the review and approval of the Miami City Commission and therefore this Agreement shall be effective as of the date of execution by the City after obtaining such approval. [Signatures on following page] CITY OF MIAMI, a municipal corporation Attest: Daniel J. Alfonso, City Manager Todd B. Hannon, City Clerk APPROVED AS TO LEGAL FORM AND APPROVED AS TO INSURANCE CORRECTNESS: REQUIREMENTS: Victoria Mendez City Attorney HYATT EQUITIES, L.L.C. By: Its: Ann -Marie Sharpe Risk Management Director Attest: Printed Name Printed Name Exhibit A Flowing Repair Area [Attached] TERRACE ATER . .. 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KV P,ANMDF ^TES ?-clift0.G_Fid.N .-i-A, ' HO7OS 547 5 xc - 'JUKE lass e-Ei PLAN refrrere i r { TYPICA17,:rERRACE SECTLora WIC€ NEVit rice (7",,'..TAIL AT PLANTER WALL _ ,TYPICAL EXPANSION 3QINT>WE'p2 ta '�, � 1 � � ! ` -, =ra DETAILsL'4 OINK :vat PLANTER ORA N DETAIL more &t & iY-, t eCJy Pt� CAST PANEL JOINT_ ( BPI LA7CU. 2 T.asn., TYPICAL rE. �raac�e TERRACE SECTIO WITH CONCRETE WEARING SL+4 �.✓ wa'• tur vwarinrrax,�� WATE-e.900F1140 KfArr REGENCY MIAM xuyy �cf4*� dufaA.1 YAN[wi '•7; . r.-1-) 301,..1 cuarAiNwALL TYiAL iSOLATED PLAN7ER. ® Botse OF CUFMN.4.t.rttA4 UG ' . 641.1ANTEris AT S*E (7,, Ty Pi AL PLANTERS AT WET slue •••-11 UP9ACE. WATriaRitorti4 R:C.PALITS PCGM7 ,Ame 133ancling CdaHrtort P 4DS 9'310 JUNE 3 Exhibit 13 November 12, 2012 Letter [Attached} Karnie L. Dowd Senior Counsel 71 South Wacker Drive Chicago, IL60606 USA T: +1 312.780.5467 November 12, 2012 Via E-mail {htorreC rniat igciv.co.rt) Mr. Henry Torre Director City of Miami Public Facilities Division !Asset Management Division 444 SW 2Rd Avenue, 3rd Floor Miami, Fi, 33130 Re: Hyatt Regency Miami (the "Hotel"); Lease and Agreement for Development dated September 13,1979 (the"Lease") between the City of Miami (the "City") and Hyatt Equities, L.L.C. ("Hyatt"), as amended; Operations and Maintenance Agreement between the City and Hyatt ("O&M Agreement") Dear Henry: I am writing to follow-up on the outstanding matters following our conference call on August 29, 2012 (the "August 29 Cali") and to respond to your offer of a one-time waiver of overtime charges of S28,000 in exchange, I believe, for Hyatt's .yrnent of $302,000 in concession fees billed by the City to Hyatt, which fees have been disputed by Hyatt, We assume this offer by the City also includes Hyatt agreeing to pay concession fees in the Arturo. Assuming these are the terns of the offer, Hyatt does not accept the City's offer. First, it is Hyatt's position that the concession fees are not properly due and payable. and have been wrongfully charged to Hyatt by the City. Second, the Clty has not responded to Hyatt's request made during the August 29 Call for a legal analysis as to why the City believes the concession fees are due and payable by Hyatt. Third, the City's offer does not address the other fees which are disputed by Hyatt, and for which the City, during the August 29 Call, agreed to provide a response, and has failed to do so, All capitalized terms used herein, and not otherwise defined, shall have the meanings ascribed to them in the Lease or O&M Agreement. The following items are in dispute by Hyatt and were discussed during the August 29 Call, Many items, as noted below, require a response from the City. Henry Torre November 12, 2012 Page 2 of 5 Concession Fees The City has wrongfully charged, and continues to wrongfully charge, Hyatt a concession fee for events (ticketed and non -ticketed events) at the James L. might Center when Hyatt is the exclusive concessionaire (per the Lease) and not the user of the space and when there is a third party user renting the space. The concession fees charged to Hyatt are not supported by City ordinance, the Lease, the O&M Agreement or custom and practice in the industry. City Code Sec. 53.181(1)(a) created a new category of charges for food/beverage concession with respect to meetings or general .sessions in the Theater/Auditorium. The ordinance shows the concession fees as a charge for gaa of the Theater/auditorium space and ot a r re to c cessionaire. Moreover, per the Ordinance, this charge does not apply to exhibits or ticketed events in the Theater/auditorium. Yet, the City has charged Hyatt as the concessionaire for what is clearly a use fee under the Code and has charged for all events (ticketed and noneickets), in violation of the Code. Section 8.3(a) of the Lease establishes Hyatt as the sole provider of food and beverage services for the Convention Center, without charge or fee for this privilege. Hyatt bargained for the right to be the sole concessionaire and the sole consideration for that right is the Lease itself. The City's charge of concession fees to Hyatt for its concessionaire services is also in violation of this provision of the Lease.. Correspondence from two Assistant City .Attorneys states that these concession charges were established to defray, at least in part, the City's clean-up costs incurred as a result of patrons bringing food and beverages (supplied by Hyatt or its predecessor as concessionaire) into the Auditorium, However, per the O&M Agreement, both the Auditorium and the Exhibit Hall are in the City's areas of responsibility. Accordingly, pursuant to Sec. 1.5 and 4,1 of the O&M Agreement, the City, not Hyatt, is to keep these facilities in "good and clean order and condition." The Lease and the O&M Agreement do not support a clean-up fee to Hyatt in connection with its concession services. If the concession charges in Sec. 53.181(1)(a) of the Code (concession charges for meetings or general sessions in Auditorium) apply to Hyatt at all, they should only apply if ,Hyatt is the lessee of the Auditorium for a non -ticketed meeting or general session. They should not apply to Hyatt when a third party leases the Auditorium and Hyatt acts as caterer. Custom and practice in the industry do not support the charge of the concession fees to Hyatt, as the concessionaire, Auditoriums similar to the James L. Knight Center (Hank United Center, Jackie Gleason Theater on Miami Beach and the Adrienne Arsht Center) do not charge any concession fees or clean-up fees to their concessionaires. Rather, any concession fee or clean-up fee is charged to the third party userlrenter of the space and/or included in the rental fee. Please advise as to the City's basis for charging Hyatt the concession fees pursuant to the Code. Henry Torre November 12, 2012 Page 3 of 5 Meeting Room Rater? The City increased the rates being charged Hyatt for use of meeting space at the Convention Center; however, such increase was not supported by City Code Contrary to the City's assertion that increases to meeting room rates at the Convention Center are not subject to City Commission approval and do not require an amendment to the City Code, the rents, rates, fees and charges for the use or occupancy of and for the services furnished in connection with the Convention Center are clearly established by .City ordinance and presently codified in Section 53.1 8 1 of the City Code. The establishment of such rents, rates, fees and charges for the Convention Center is the province of the City Commission and them is no delegation of that authority to the director of the Convention Center. In fact, Veronica Xiques, Assistant City Attorney, in her letter to me dated .May 10, 2011, clearly advised that "[Tjhe City Commission establishes rental fees for the Knight Center and all entities using the facilities must comply." Moreover, the City's own website for the Convention Center lists a fee schedule for meeting space rentals Less than the amounts charged Hyatt for the same space, in violation of the Lease. Section 8.3(b) of the Lease provides that the rates and charges for use of Convention Center by lessee must be the sate as those charged to third parties. Yet, Hyatt is being charged more than the rates advertised to third parties. At one time, the City asserted that the increased rates were for equipment charges, and cited City Code Section 53-,181(1)(d). Section 1(d) of City Code Section 53-181 provides for charges for certain "ancillary services" with respect to the Theatre/Auditorium. Among the items identified in paragraph 1(d) are "Event personnel," "Equipment rentals," and certain "Other services-- Police and Stagehand?' The increased charges by the City are clearly for meeting space, not equipment or ancillary services. Moreover, Section 1(d) only applies to the "Theater/Auditorinrn rates." Section 1(d) does not apply to "Meeting and seminar space" (Section 2) or "Exhibit Hall" (Section 3). Please advise as to the City's basis for increasing fees for the meeting space without first see.ki.ng City Commission approval and an amendment to Section 53-181 far theater and auditorium rates, and for charging rates for the meeting space to Hyatt in excess of those being charged to third parties. C1eanineyees. The City charges Hyatt a $500 cleaning fee for any concession event held in the Convention Center. Hyatt is the sole concessionaire under the Lease, and there is no charge for this right. Any charges the City wishes to recoup should be charged to the third party user. Moreover, there is no support for this charge in Sec..53-181 of the Code. The City also charges a clean-up fee for damage such as carpet and wall stains. This fee should be governed by the use agreement between the City and the user. Hyatt, in its capacity as concessionaire, should not be charged this fee by the city if it isn't the user. Henry Torre November 12, 2012 Page 4 of 5 During the August 29 Call, the City conceded that these fees should not be charged to Hyatt. Please discontinue the City's charging of these fees to Hyatt immediately, Hyatt reserves all rights and remedies with respect to these charges under the Lease, at law and in. equity. Restrourn Attendant. The City charges a restroom attendant fee when .Hyatt rents certain facilities. There is no support for this fee in Sec, 53-181 of the Code. This service is included in the rent for the facility and should not be additionally charged. During the August 29 Call, the City conceded that these fees should not be charged to Hyatt, Please discontinue the City's charging of these fees to Hyatt immediately. Hyatt reserves ail rights and remedies with respect to these charges under the Lease, at law and in equity. The City recently advised Hyatt that it would increase the charge from $50 per day to $100 per day for any Hyatt function that uses a registration table that is outside of the leased room and on City space. Sec. 53.l81(2) of the Code permits a $50 per day charge. We are not aware of any ordinance increasing the amount of the charge, During our August 29 Call, the City agreed to review and respond to Hyatt. Hyatt has not received a response. Overtime Rates. The City advised that it will charge overtime rates for events that exceed eight hours, occur on weekends, or require special needs. There is no support for this charge in the Code, except to the extent these charges fall within the ancillary services to the Theater/Auditorium that are permitted by Sec, 53-181(1Xd), During our August 29 Call, the City agreed to review and respond to Hyatt. Hyatt has not received a response, other than the offer of a one-time waiver. However, no basis for why these charges are proper has been provided. Set-up and Breakdown—Riiverfront Hall. Section 8.4 of the Lease requires the City to maintain and operate the Convention Center in good clean order and condition as a first-class facility. The City is required to maintain and adequate staff to do so. If the City does not so operate and maintain, the lessee may do so and charge back the City. During our August 29 Cali, the City agreed to review and respond to Hyatt. Hyatt has not received a response. Henry Torre November 12, 2012 Page 5 of 5 Maintenance Fees 4uuHy t* The City currently owes Hyatt approximately $43,318.00 for its share of maintenance costs for the Central Plant. The City originally advised Hyatt that it ceased reimbursing Hyatt for the maintenance costs in an effort to offset these amounts against the amounts the City claims that Hyatt owes for concession fees. However, as noted above, Hyatt does not believe the concession fees are owed and has been disputing these fees. Moreover, the Lease does not provide for a right of offset. Then, during our August 29 Call, it was made dear by the City, that the failure to pay these charges was strictly a matter of budget shortfalls, Yet, the services are still being provided to the City, and Hyatt continues to pay for the City's portion of these fees. Please arrange for the immediate payment of the City's portion of the maintenance costs that are overdue. Nothing contained herein shall be deemed a waiver of any of Hyatt's rights and remedies under the Lease or O&M Agreement. Hyatt would appreciate your response to the items listed above. Please let me know if you have any questions. Sincerely, cum Kerrie Dowd cc (via e-mail): Dave Phillips Luis Aloma Veronica Xiques Daniel Newhoff Exhibit C Memorandum of 'Understanding [Attached] [End ofDocurnent] March 21., 2017- Tiffany Leadbetter Donato Senior Vice President Capital. Strategy, Real Estate Transactions Hyatt Hotels Corporation 71 South Wacker Drive Chicago, IL 6006 Re: Memorandum or Understanding: (1) Amended and Restated Land Lease Dar Mrs. Donato: Hyatt Equities, 111.„ L.C. ("1-1,va tt") and the City of Miami (".0ty,") (collectively, .the 'Parties.") desire to amend and restate. their .exsing land lease relationship, and have Flynn. redevelop the Property (as anticipated and defined in the Term Sheet attached hereto), (Ton which the existing Hyatt Regency Hotel and James L Knight convention center occupy,. The following -paragraphs set forth the basic terms and conditions upon which said relationaltip shall be structured subject to the :negotiation and execution of an amended and restated land lease (the "New tease), and the other terms and conditions contained in the Term Sheet. At the ininimuin, said wreernent is anticipated to incorporate the following: 1) The Parties will. enter into en interim agreement with respect to the '.Existing, Ground Lease (as defined. in the Term Sheet) to address. certain immediate needs of the Hotel between the date of Such agteement until the New Lease is entered into and the redevelopment process continents, inchiding, without limitation, an agreement on the payment of certain shared expenses on a going- tly.wartl basis and an agreement of the Parties to stay current on such obligations during the interim period. 2) The Parties shall intend to modify the Existing Orotmd Lease, including, without limitation, to: a. Extend the land lease tern plus extensions to a total of 99 years; b. Expand the teased !premises to include the hones L Knight convention center/meeting space; c. Arnend and restate the parking. ageement to accommodate a. and b, above; d. In conjunction with thc New Lease and upon termination of the Existing Ground Lease, as agreed by both Parties, resolve and absolve (except to the extent the Parties resolve to have continuing obligations thereafter, such as a payment plan) the Parties from, current disputed financial obligations for capital improvement projects undertaken, revenue and expense sharing agreements and other matters, Any agreed upon payment plan for such outstanding amounts shall be attached to the New Lease and each Party shall comply with such payment plan and other agreements mnde between the Parties in resolution of such outstanding amounts owed between the Parties.' e. Hyatt shall redevelop the Property subject to the following: i. Hyatt shall explore the use or the addi1ional development rights on the Property; Hyatt shall engage directly CB RE, Inc. to seek, qualified development partners to maximize the Property's development potential and density; additional development could include but not be limited to residential, office, retail, and/ar parking: iii, Seek possible development partners, taking into consideration the qualifications and financial capacity of said partners, programmatic arid aesthetic design., and financial benefit anticipated to inure to the benefit of Hyatt and the City. iv. The Parties will mutually agree upon a Master Plan (as defined in the Term Sheet) for the redevelopment of the Property.. When fully executed, this M6moranclum of Understanding (together with the term sheet attached hereto as &ta.chment A" and incorporated herein (the-"Terin Sheet"). the "MOU») shall reflect thc expression of Hyatt's and the City's desire to proceed with the negotiation and possible execution of a New Lease to incl.u.de the redevelopment of -the .Property, New Lease. :Subject to certain conditions as set forth in the MOU being satisfied, the New Lease will he negotiated to reflect the intended deal terms set forth in the MOU. ExclusiVity,„ From the date hereof through March 31, 2017 (the ".Diclusivify F,Ierlocl"), City shall negotiate exclusively with Hyatt for the redevelopment of these parcels; provided, however, that in the event the -Parties mutually agree in writing, or fly:att notifies. City in writing of its intention to cease the negotiations prior to such date., then the Exclusivity Period shall expire .on the date of cessation of negotiations. Confidentiality. The terms of this MOU and the New Lease, as well as any :non-public inforination related to- the transactions shall be maintained. as confidential by the Parties., except for (Fi) disclosures reqiiired by law (specifically 'including .Florida Statute Chapter I 19) or rules. of applicable securities exchanges, (if) disclosures :to the Parties' respective board members, agents, employees, attorneys, accountants, brokers, co-ntractors, lenders, prospective lenders, investors., prospective inv.estors, consultants, advisors or other representatives, and (iii)disclo-sures that the Parties mutually agree in advance are required or desirable .to advance Z.oniag Entitlements (as defined in the Term Sheet) or other public approvals or concessions or infot•maticin that otherwise advances the-. planned development. Tie foregoing notwithstanding, the Parties agree that any public- announcement -of an executed transaction (i.e., executed New Lease) shall be mutually agreed upon by the Parties prior to any public .announcement, Non-Biadinz.. This MOU shall not. create any legally binding obligations on the Parties, other than with regard. to the ExclusiVity and Confidentiality provisions set forth. above, Except for such provisions, -City and Hyatt shall not have any Obligations to each other unless and until full execution orthe .New Lease, ff a New .Lease is not executed by expiration of the Exclusivity Period, unless otherwise agreed to by the Parties in writing, this MOU shall automatically .terminate, other than the above Confidentiality provision, which shall survive termination for one (I) year. In addition,. this .MOU shall terminate in its- entirety upon the full execution of the New Lease, For the purposes of this discussion, this MOU and subsequent contract documents will require approval .of the City Commission. That procOss .may include the item being placed °tithe Commission Agenda, I.' and 2" readings and then final approval. The final New. Lease shall also 'Attire approval by the voters. at. Referendum. Each of the City and Hyatt,. and their respective affiliates. representatives, and associated entities shall use cernincreinily reasonable efforts to. comply, in all, material respects, with all appliCable laws, rules, regulation. disclosures, and.statutes (Whether- local, state, or federal), to include the Miami 21 zoning ordinance, in the performance of this or any agreement, instrument, or action(s) relative to the MOU or New Lease. The City shall cooperate.with Hyatt, its affiliates, representatives and associated entities to fiicilitate and (.-'xpedite :approvals and cOnforinance with local, state, or federal ordinances as may be reasonably required, 2 The Parties understand that this MOU and any subsequent contract documents will require the applicable internal approvals of Hyatt, including the approval of Hyatt's Development COMilliaCC, the Finance Committee of hlyatt's Board or Directors, and Hyatt's Board of Directors. If you are hi agreement with the terms of this MOLT, please indicate some by counter -signing where indicated below, We took forward to moving forward with you on this important project. S ineeroly, CITY OF MIAMI, a municipal corporation of the State of Flolida By: Daniel 3. Alfonso City Nlanager Accepted andAgreed to: HYAT1 EQUITIES, L.L,C. By: Name: Title: ATTACHMENT A TERM SHEET This term sheet ("Term Sheet"). dated this day of , 2016, is a proposal only, and is not contractually ar legally binding. It represents only an expression of the parties' pre -sent desire and intention to enter into negotiations of a possible agreement to false the Property (as defined below) by Hyatt (defined below) front City (chinned below). City and Hyatt are sometimes collectively referred to herein as the "Parties" ar individually as a "Party". The outline of the general terms and conditions are as follows: 1. GENERAL: 1.1. PARTiES TO NEW LEASE: 1.1 .1 . Hyatt Equities, L.L.C„ or an affiriate thereof; as ground lessee and developer, if applicable ("Ilyattpz Hyatt may enter into subsequent agreements, with City of Miami ("City")ap.prova I as may be required under the New Lease or by applicable raw, including, without limitation, joint venture agreements, development agreements or subleases with prospective partners, developers or other third parties in connection with the performance of its dutis under the New Lease; ante 1.1.2, City of IVIiarni, as ground lessor ("City!), I .1. '1HE PROPERTY: City and Hyatt will enter into an amended and restated lease (the "I\kw kale) of the existing Ground Lease pursuant to which Lessee currently leases from Lessor the real property (the "Hotel Land") upon Which the Hyatt Regency Miami (the "Hotel") is located (the "Existing .Ground Leas.g"). Pursuant to the New Lease, (1). the. City will continue to lease to Hyatt, and Hyatt wilI continue to lease frow theCity, all of the City's. right, tit le- and interest in the Hotel Land,. including any City interest in the 'Hotel and dirty other improvements, fitrniture, fixtures, and personal property located on the, Hotel Land and. any additional development, air or other rights appurtenant to. the :Hotel Land not .currently provided in the existing land lea.se, as agreed by the City pursuant to the approved Master Plan, and 0i) the City 'will:agree .to Jea.se to Hyatt, and Hyatt will agree to lease from the City, the real property upon whicit The James L. Knight Miami Convention Center (the "Convention. Center.") is located (the "(onvention centerland"), including, without limitation, the Convention Center and all other itnprevernents located ore the Convention Center Land, any City interest in the furniture, fiNtures, improvements. and personal property located on the Convention Center. Land. and any additional 'development, air or other rights appurtenant to the Convention Center Land. a8 tigNed by the City pursuant to the approved Master Plan (() and (ii.) are collectively referred to herein as the "Property"). L3. .DUE. DILIGENCE: Hyatt shall complete all due diligence work it deems necessary or advisable on the Property prior t-o its. executiOn Of the New Lease, at its sole cost and expense, including without limitation, title, survey, soils, environmental and all feasibility studies and tests. City and Hyatt shall execute a separate commercially reasonable access agreement granting Hyatt and its agents and Consultants access to the Property in order to conduct the requisite testsand studies, Subject to customary release, indemnification., insurance, notice and repair requirements, Upon its completion and receipt thereof, and upon request from the City, Hyatt shall deliver to City copies of all third -party environmental, property Condition and soil reports, surveys and title reports resulting from its due diligence activities related to the Property. Subject to such access agreement, City will grant Hyatt immediate and reasonable access to the Property, the Parking Garage, the Property records, and the Convention Center management team and other employees for the purpose of inspecting the physical. condition of the Property (ineluding for the purpose of soil and other environmental tests and mechanical and other inspections) and evaluating the Convention Center business, in Hyatt's sole discretion. The City shall deliver copies to or provide access to Hyatt of all Property record a within City's possession, or the possession of its Convention Center manager, affiliates, constiltants, agents, representatives or employees, including, without limitation, environmental reports, property reports, title commitments and polic ies, surveys, building plans, correspondence with or notices from any governmental agencies, information pertaining to any lawsuit(s) pending against the Convention iter, the Hotel or the Property, and any other information reasonably requested by Hyatt. 2. REDEVELOPMENT: 2.1 Within [twelve (.12)] months or execution of this Term Sheet, Hyatt shall prepare, and deliver to the City for its review, a master plan (the "M.aster Plan") for the redevelopment of the Property (the "Thnojr). The Master Plan shalt include, among other components:- parcel development plans (for a Hyatt hotel, meeting space and other typical hotel amenities, and. expanded mixed rise .development that may occur on the site), financing/ equity plans for the Project; strategy for the us4.: of public funds., public funding mechanisms or public assets -including use plans, ,desired densities, design criteria for b,a-Se buildings and public .spaces, a. proposed streetscape, a etail merchandising plan to the extent retail is an element of the development, an infrastructure plan and a parking plan_ Tice fvf.aster Plan should include proposed developine.nt that maximizes the site's density and proposed Project: phasing. Ira:greed upon, the Master P lap approved by the City and Hyatt shall be attached to the New Lease and Hyatt shall develop the Property in accordance with the Master Plim agreed to and Approved by the City. 2.1. If Hyatt and the City, in their discretion, determine to :proceed with the Project based upon an agreed upon Master Plan and terms to the New Lease, Hyatt's obligations under the New Lease shall include, among other requirements: (i) to redevelop the Property as contemplated by- the Master Plan; (ii) to obtain Zoning Entitlements (defined below) as necessary, for the Property to permit development of sarne (iii) to secure the requisite equity investment and financing necessary for the Project within the parameters. :set forth in the New Lease; (iv) to adequately address all infrastructure requirements necessary for the timely .development of the Property, (v) to develop a plan to adequately address parking requirements for the Project (vi) to construct the improvements in accordance with thc- Master Plan and plans otherwise approved by the City pursuant to- tlic normal planning and permitting process; and (vit) to operate and maintain thebuildings, grounds, and infrastructure in the manner prescribed by the New Lease throughout the term of the N.ew Lease.. 2.3, IF the Parties elect to procced with the Project, Hyatt shall take the lead, at its. expense, in obtaining all entitlements for the -Property to accommodate the approved Master Plan ("Zoning Entitlementsl. The City shall use. its best efforts to assist reasonably co-operate with Hyatt throughout the Zoning and Entitlement .process. 2.4, In the event that the Parties .clect, er either Party elects, to not proceed with the .Project, the Parties shall have no obligations hereunder other than the confidentiality provisions. 3, NEW LEASE: 3.1. EFFECTIVE DATE OF LEASE: TERM: The New Lease shall be effetive (the "Effective Date") :upon execution by the Parties, and each Party having obtained all necessary approvals as set forth in the MOLT and this Term Sheet and the Parties having agreed upon the Master Plan, which will be attached to the New Lease. The initial term fbr the New Lease shall he front the date of ground lease execution ("Commencement Date") through December 31 of the year that contains the 99'' anniversary ofthe Cornrriencernent Date. 3,GROUND RENT: F1yatt Hotel and Acjninin r James 1, Knioht Convention Center' Oa or before January Is` of each lease year, Hyatt .shall pay to the City base rent ("F arse Rent") for the Property as follows: During the construction period: Base. Rent (to be paid by Hyatt, or the developer of the Project, during the construction period) .for the Properly shall be the follawvio ,: Year one; (1) during the construction period $(} Year two (2) duringthe construction period $500,000 Year three (3) during the construction period $50O,OOO Thereafter ant! ongoing.. Hyatt shall pav to the City not less than,: Two million dollars ($2,000,O00) per year (as may he escalated from year to yettt') or, The mathematical average of two appraisals cor7a€atissio.aed by the City for tlae land under which -the hotel is constructed plus slake occupied by the Jaynes- 1.,, Knight convention center. The formula lbr .the establishment of base rent For the hotel property and James I....Kn:ight center shall be five percent (5%) multiplied by the mathematical average o.fappraised value, Should 5% of the mathematical average of two appraisal exceed two million $(2,000,00O> per year (as may he escala{ed front year to year), Hyatt shall be rxlrtired to pay up to, but not more than iii. Seven percent (7%) of gross room and meeting receipts of -the Property pins 5°r� of gross beverage receipts, plus 3% of food receipts, plus a to be determined percentage °r alter gross income receipts, as agreed upon the parties once such other income sources at the Property are determined.. For the avoidance of doubt, Hyatt shall not pay any other .rent or fees to the C ity for space utilized in the operation of the Hotel and meeting space on the Property.. 3 b. ts ion for anded Dev t en ot the Property Fi addition to Bzis- Rent for the Hotel and meeting space, after the construction period, the owner ofth non -Hotel components of the Project shall pay to the City a profit participation rent (-Participation Ren() with respect to the other income producing arras or the Property, other than the -I -lore' and Hotel Land and meeting space, determined as the greater of: 1) A to be determined percentage of gross profit associated with expanded development on the Property as defined in the agreement for the redevelopment of the Property; and 2) Rent formulaically determined by: A current appraisal of the property occupied by the tiotel and James L. Knight Convention Center as a "going concern" shall be performed, ii. An appraisal of the land area of the Hotel and James L. knight Convention Center land and all appurtenant air rights shall he performed and determined for "highest and best tise' hi. The difference between highest. and best use value of the Hotel and James L. 'Knight Convention Center land and value of going concern or the Hotel and Convention Center shall be the City's Financial contribution to the expanded development. BtFw Examp le it,.hes & Best Use Value X Si 00,000„000 of Hotel and Convention Center Land Less: • Value of Hotel and Y $60„.000„000 Convention Center o.ing Concern. , als:.Cit : Contribution Z S40,000,000 'ity"s Contribution shall be treated as ft Urnkcl partnr equity- investment.. Notwithstanding the foregoing, the City shall not be a joint venturer -or partner with Hyatt:. any references to partner equity investment and similar terms are solely- for purposes of calculating Participation. Rent. Therefore, if the total investment for the expanded development is A .$200,000,000 then City`s profit participation using the example above shall he 20% of Z (U.0,000,000) divided by A (S200,000,000) . The numerator is equal to Z ($40,000,000),pnri the dc.norninator is A ($.200,000„000). which produces the. City's equity contribution of 20%. ionstration Purposes Only: 3.3-. ANNUAL ESCALATOR: On the 5'4 anniversary of the ermunencement of the New Lease, and on each 514 anniversary thereafter during the remaining Term or extensions thereof, the minimum Rase Rent shall be the cumulative compounded increase in the Consumer Price Index for All Urban Consumers (CPI-U) Miami; provided, however, that the incease in Base Rent shall in no event -be less than two percent (2,0%) per year. 4 3.4, NET LEASE: The New Lease shall be absolutely net to City, and Hyatt shall pay all real estate taKes, operating and ether related expenses during the term thereof 3.5 SUBORD [NATION The New Liease, any leasehold interests crente.d thereby and any security interests granted therein (to lenders, equity providers and the like) shall be subordinate to City's fee interest in the subject Property at all times throughout the .New .Lease term nr extensions thereof; -provided. however, that the -Parties shall record a memorandum of lease against the Property, which shall be senior in priority to any encumbrance on City's fee Simple interest in the Hotel Land and Convention Center Land and reversionary interest. in the improvements on such lands. 3,6 PARKING: The New- Lease wit( provide Hyatt with all. the same parking rights currently held by Hyatt with respect to the Hotel under the Existing Ground, Lease. The Parties will cooperate with each other to reasonably apportion parking in the G4. Garageto provide. necessary additional parking tbr the Project. Notwithstanding the foregoing. as part of the .Project, Hyatt may propose that all or some portion. of the parking requirements for the Project- be met..by proposed parking within the Master Plan for the Property (seprare and apart from parking within the .Parking Garage), 3,7 ASSTONNI ENT AND DISPOSITION RIGHTS: With City's prior written approval. Hyatt may assign the New Lease to an assignee that has a net worth Of f$ and either holds a franchise with a First Class Hotel Company or engages n manager Who is a First Class Hotel Company. A "First Class Hotel Company" is company or product type:that enjoys a .reputation in the itotel industry similar to that of Hyatt Corporation and. the Hyatt -Regency product. Uyati's ability to mortgag,. pledge or conditionally assign the New Lease to leasehold mortgages shall -be as provided in the New Lease. 3.g MORTGAGEE PROTECTIONS: The New Lease shall include customary and conimercially reasonable provisions for the benefit or flyates lender, including, without. limitation, the right of lender (i) to receive- notices of any Hyatt defaults or termination by C:ity (I i) to cure any Hyatt defaults -with in a reasonable grace period, and (iii) upon terminatioa of the New Lease, to .enter into a new lease directly with City on the same terms .and conditions as the New Lease upon lender's cure of all of -flyatt's prior defaults, to the extent susceptible .of being Cured, 3.9 OTHER TERMS AND CONDITIONS: The form of Nev Lease shall include other terms and conditions that are normal and customary for similar projects and as agreed to by Hyatt and City,. PUBLIC FUNDING: City shall reasonably cooperate with and assist Hyatt in obtaining available governmental incentives (such as, by way of example, gales tax relief on construction materials, TIF-type incentives, etc.) in connection with the New Lease and the investment by Hyatt in the redevelopment of the Property. 5. COMMUNITY OUTREACH ANI) STAKE1 !OLDER MEETINGS: The Ground Lease :shall set forth the parameters and the Parties' respective roles and obligations related to all community outreach and stakeholder meetings to be conducted in connection with the Zonin Entitlements or otherwise related to the design and devolopment of the Project. 6. REAL ESTATE BROKERS: CBRE was hind by the City through State of Florida Contract DIAS-t?f13-OO7.A. Hyatt intends to engage C.13RE in connection with the Project. Other than CBRE., Inc, whose duties and loyalties are solely to the City, no other real estate broker or consultant to whom a commission or fee shall be due has been engaged by either party. Upon execution of the New Lease by the Parties, City, shall be responsible to pay ro CBRE, inc. as part of its development costs a commission for the New Lease as is set forth in a separate agreement between: CI3F2.E, Inc. and the City. City and Hyatt acknowledge CBRE's representation of ilk: City and agree that t:iie Necv Lease or other agaeement between the Parties to- acquire the Property will inc lade said commission agreement byreference. Hyatt shall be responiblo for costs associated with Hyartt's direct engagement of CBRE for all new development (inelrrding.the construction er recoil strueiion of n hotel and any additional development on the Property pursuant to this Term Street pursuant to a separate agreement between Hyatt and C ER.E, EXISTING LEASE TERMINATION: The Existing Ground [.ease and retorted agreements will beterniinatad effectivea of the Effective Date or the New Lease, with each Party releasing any claims (whether known or unknown) against the other Party. a, CONVENTION CENTER MANAGER; The management a4arecrnent for the Convention Center with the current manager will be terminated as of the Effective Date or the New Lease, with Lessor paying any outstanding lees and any required termination fees. 9, PROR.ATION'S: Real estate taxes, :special asses, meths, utilities, rents and rather amounts will be prorated as of the Effective Date in a usual and customary manner for a transaction of this type. 10. TITLE; As of the Eft ctive Date the New Lease, the Property will be leased free of any liens ancd rrtc>rtgages and any lease, tenancies or occupancies, or any other encumbrances, or any defect in title to the Property that are, not accepted by Hyatt: hi accordance with the terms or the New Lease -and will be subject to receipt oI as satisfactory title insurance policy. 6 11. REPRESENTATIONS AND WARRANTIES; Each Party willmake customary representations and warranties to the other Party for a transaction or this type, as of the date of the execution of the New Lease. 12. COVENANTS, Each Partv will agree to customary covenants for a transaction of this type. 13. PROPERTY CONVEYED "AS Except as specifically set forth in the New Lease, the Property will be conveyed ' "as is" condition. 14. TRANSACTION COSTS: The City shall be responsible for the payment of ail transfer taxes and recordation fees and the title insurance premium. All other transaction- costs wi I.1 be paid in accordance with local custom- for similar large commercial hotel transactions. Each party will pay their own attorneys'fees. 15. DELIVERIES: At or before Effective Date of the N.ew Lease, City will agree to properly execute andi'or deliver (i) the New Lease, (ii) an assignment rind assumption of intangibles, (iii) a bill of sale, (iv).m assignment and assumption of all operating agreements, equipment leases, services contracts and other leases and subleases related to the Property (to the extent accepted by Hyatt in the New Lease) (the "A.greements"), (v) estoppels for the benefit of Flynn as- reasonably requested by Hyatt, (vi) all other customary documents reasonably necessary from City to complete the New Lease. Hyatt will properly execute ancVor deliver (I) an 'assignment and assumption of nil Agreements, (ii) an assignment and assumption .of intangibles., (iii) .a bill of sale, „and (iv) alt other customary documents and fun.ds rmsonably necessary from Hyatt to complete the New Lease. 16. MISCELLANEOUS: 16, I. DEVELOPMENT PR(.) FORM AS: Hyatt provide the City with development pro forms for renovated existing or new hotel and any other mixed 1:15C- development to occur on the site. 16,2. COMMUNICATIONS; The New Lease shall establish as communications protocol reports, meetings, designated representatives) to maintain open and continuous lines of communication between the Parties with respect to all design, entitlement, development and programming activities related to the Property. 16,3. DISPUTES: All disputes under the New Lease sht1i be resolved pursuant to procedures to be set forth in the New Lease. 7 16.4. DEFAULTS AND REMEDIES: The New Lease will set forth provisions governing defaults by the Parties thereunder and will set forth the remedies available to the non;•defaulting Party in the event of a default. 16,5.. NO ASSIGNMENT: Except as set forth in Section 3.7 above, neither party shall be permitted to assign, transfer or otherwise convey its. interests, rights or obligations under the New Lease without written approval of the other Party. This Terin Sheet does not constitute an offer to lease the Property and is not subject to acceptance, nor are any of the terms contained herein binding on either of the Patties. Furthermore, this Term Sheet does not obligate either :Party to proceed with a transaction in any way whatsoever, There shall be agreement only when the. Parties execute. a New Lease. W ithout limitation of the foregoing (A) Hyatt and City spec ifica I ly acknowledge that no .Party shall have any obligation of any kind or nature to the other Party unless and unt such Party actually executes and delivers the New Lease and .(B) Hyatt and the City. reserves tho right at any time to withdraw from further negotiation or consideration of. the rransavtion contemplated hereby for any reason or fi)r no reasonin Hyatt's or theCity's sole and absolute discretion without liability !Dian), kind or nature to the other Party hereto. SUBSTITUTED. RECONCILIATION AGREEMENT This agreement to reconcile certain disputed issues andprovide mutual. releases ("Age anent"), i.s entered. into this day of , 2017, between the City of Miami, a Flo da municipal corporation, ("City") and Hyatt Equities, L.L.C., a limited liability company doing bu, ness in Florida ("'Hyatt") (collectively the "Parties"). WHEREAS,. the City is the owner of the James L. Knight Convention Cet r located. at 400 S.E. 2"d Avenue, Miami, Florida 33131 ("Convention Center"); and WHEREAS, per the Lease agreement originally dated September , , 1979, as supplemented, amended and assigned from time to time (collectively, "Lease Document."), Hyatt currently leases the property adjacent to the Convention Center from the City, and is the owneof the hotel structure known as the Hyatt Regency Miami and located- at 300 SE. 2"d Avenue, Miami, Flicla: 33131 ("Hotel"); and WHEREAS, the Parties agree that an upgrade to the cure fire alarm system located on the Convention Center property, which supports the Hotel and the Con ention Center and the ancillary systems located within each of the Convention Center property and Hotproperty (collectively, the "Fire Alarm Project"), is necessary for the proper operation of the Hotel an.: Convention Center; and WHEREAS, the Parties agree that the tiles, at the : terier of the Convention Center located on the amain level at the plaza entrance of the Convention Cer er along S.E. 2nd. Avenue, as described in the documents attached hereto as Exhibit A and made a p t hereof (the "Flooring Repair Area"),. are in need of replaeement and the water damaged areas to the , otel and its personal property located on the ground level of the Hotel, resulting from the defective til , are in need of repair and/or replacement (the "Tile Project") for the proper operation and maintenan.; of the Hotel and the Convention Center; and WHEREAS, the Parties agree that .' e HVAC on the third floor of the. Convention Center (the "HVAC Project") is in need of repair fo . the proper operation and maintenance of the Hotel. and the Convention. Center; WHEREAS, the Parties agr - there its an on -going and present dispute regarding the amount of certain concession fees..(the vCon "'ssi.on Fees") and other fees related to increased room rental rates, restroom attendant, overtime rate dumpster fees and cleaning fees (the "Other Fees") as described in the letter dated November 12, 2012 "rona.Hyatt to the City attached hereto as Exhibit B and made a part hereof (the "November 12, 2012 Lett r ") charged by -the City to Hyatt forme of facilities at the Convention Center; and WHEREAS, tl ;' .Parties agree that there is an on -going and present dispute -regarding the -amounts owed by each Party t maintain the Physical Plant ("Maintenance Costs") from January, 2012 through the present date; -and WHE " AS, the Parties agree that there is an on -going and present dispute regarding the amounts owed for the . of ng tower and chiller replacement project undertaken by Hyatt ("Chiller Overpayment") and outstatr. trg credits to Hyatt relating to depreciation payments made by Hyatt pairsuant to the Lease Documen ("Depreciation Credit"); and WHEREAS, the Parties agree that there is an on -going and present dispute regarding the amounts o`,vefor certain_ Phase l design fees for the upgrade of the fire alarm system (the "Phase I Design Fees"); a WHEREAS, the Parties intend to redevelop the. Convention Center and, in connection erewith, extend Hyatt's lease with the City for the "Hotel and modify the Lease Documents to include, „ gong other things, the Convention Center, as otherwise described in that certain Memorandum of nderstanding between Hyatt and the City dated , 20.17, and attached as Exhibit C (the "RFdevelopment") and WHEREAS,. the Parties acknowledge and agree to the resolution, compro se and settlement of all such disputes, claims and controversies among them as provided herein, and NOW THEREFORE, in consideration, of the .mutual promises and cov nants set forth herein, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as . Vows: 1, Recitals. The Recitals set forth above are incorporated herein. 2. Agreement Terms. A. City's Contribution. The City shall pay Hyatt. T - o Million Two Hundred Sixty -Eight Thousand Two Hundred Seventy -Nine Dollars ($2, ..8,279.00) ("City's Contribution"). The City shall use conunercially reasonable efforts o pay the City's Contribution to Hyatt following the execyution of this Agreement no la r than sixty (60) days from the date hereof The City shall have no liability or obligation t pay any sum or cost whatsoever in excess of the City's Contribution with respect to the Pr* jects described below, except in. the event of an increase in costs due to the action or in tion of the City contrary to the terms of this Agreement or the Lease Docwneuts, del<. s caused by the City or related parties to the City or farce majeure. Hyatt shall have no li.. iility or obligation to refund all or any portion of the City's Contribution even if the costs n.= the.Projects described below are less than anticipated. Except.as otherwise expressly provi d herein, should thc.total amount ofmonies required.by Hyatt to complete the Projects be 1) in excess of the City's Contribution, Hyatt shall, at .its sole cast and/or expense, compi e the Projects using Hyatt's inciepend.ently acquired funds or (ii) below the City's Conti ition, all such excess of the City's Contribution shall belong to Hyatt. If the City fails t .',make the City Contribution.paytnent in accordance with this subsection A, Hyatt may ci;`duct such amount from the next rent payrne.nt under the Lease Documents, and each ren:.ayment thereafter, until the full balance of such amount owed by the City to Hyatt has be paid in fall. .8. Maintenance and Ponces ion Pecs. The City shall also pay Hyatt a total amount equal to Seven Hundred S . enty-Eight Thousand Seven Hundred Twenty -Two Dollars ($778,722.00) to resolve the dis ., rtes regarding the Maintenance Costs and Concession Fees, If the City fails to make such payment by the time Hyatt's next rent payment under the Lease Documents is due, Hyatt m. deduct such amount from the next rent payment under the Lease Documents, and each re: t payment thereafter, until the full balance of such amount owed by the City to Hyatt has een paid in full, C. Other "Outstanding City Fees, The City shall also pay Hyatt a total amount equal to Eight Huns red Forty -Five Thousand Six Hundred..Sixty"-Seven Dollars ($845,667.00), to resolve the di.'.u.tes regarding the Chiller Overpayment, the .Depreeiation Credit and the Phase 1 Design es (tire "Outstanding City Amounts"). The Outstanding City Amounts shall bepaid by the City to- Hyatt in connection with the Redevelopment and any agreements entered into between Hyatt and the City, with respect to. the Redevelopment, shall provide for the payment of the Outstanding City Fees. to Hyatt, If the Redevelopment is not approved by City Commission andior by referendum in calendar year 2017, if the agreements with resp ct to the Redevelopment are not entered into by the City and Matt (following appr.:' al by City Commission and referendum) on or before December 31, 2018 or discussio between the City .and Hyatt regarding the Redevelopment plans otherwise discontinue fo any reason, the Outstanding City Amounts shall become immediately due and payable b . the City to Hyatt upon written notice from Hyatt to the City. If the City fails to mmake.sOutstanding City. Amounts payment to Hyatt within sixty (60) days of receipt of such wri en notice, Myatt may deduct such amount fro.rn the next rent payment 'under the Lease D uments, and each rent payment thereafter, until the full 'balance of such amount owed by e City to Hyatthas been paid in full. D, Projects. Hyatt's shall complete the Fire Alarm Project, the Til roject and the HVAC Project (collectively -the "Projects") pursuant to a scope of wor and plans and specifications ("Specifications"), and further corresponding to the Flo. 'ng Repair Area, determined. by Hyatt for the Projects. Additionally., if bonds are requires for the Projects per section 255,05, Florida Statutes, as this is City -owned property, Hyatt s . all obtain such bonds for the Projects, The Specifications, the selected contractors and th contracts with the respective design, consulting, construction contractors shall not be sub, et to the City's approval (subject to such contracts complying with the requirements of sub action F below), Hyatt shall provide copies attic Specifications and the final, executed co. acts with all consultants and contractors for the Projects. The parties acknowledge and agr that..Siemans Industries, Inc. as the contractor, and.Rolf Jensen & Associates, Inc., for the . esign and related work, have been preliminarily selected for the Fire Almuan Project and tha onaplete Property Service, Inc., as the contractor, and Building Consultants, Ltd., for th design and related work, have been preliminarily selected as the contractor for the Tile P.:. jest. Hyatt shall use commercially reasonable: efforts to cause the .Projects to be perforrnec in a good and. workmanlike rnanner in accordance with the Specifications and in compiian with all applicable governmental laws, rules, regulations and industry standards. E. Schedule. Hyatt shall use : minercially reasonable efforts to cause the Projects to be performed and completed. i r accordance with a schedule (the "Schedule") that will minimize disruption of the Hotel a t' Convention Center operations, provided that commencement of the Projects shall begin %ithin months of the execution and approval oftli.s Agreement (subject to Section 1 elow) (the "Commencement Date") and be substantially completed within month'' of the Commencement Date, subject to extensions due to force rnajeure, City -caused delay;, and other events outside of Ilyatt's reasonable control. Time is of the essence. In no ent shall either Party be liable to the other for consequential, punitive or special damage associated with any delays in the Projects. F. Project C:utract Requirements (Including Insurance and Indemnification). Any cotastr.°uct,..n contracts and/or other contracts entered into .by the Hyatt to complete the .Project.`; shall (i) provide that such e.ontract may be assigned to the City, subject to Hyatt approval, which shall not. be unreasonably withheld, delayed or conditioned (ii) that the City sha be named as an addi.tio.nal insured on all applicable liability policies along with loss p ee or co-insured, as applicable, as to property insurance and dual obligee as to bonds, if plicable on this project (iii) that all. contractors Must be licensed, certified, and. insured, and all. insurance carriers must be rated A- or better, and (iv) such contractor shall indemnify, :hold harmless and. defend the City, in -addition to Hyatt, as set forth in sueh agreement; however, the City shall not be liab.ie for or a guarantor for the Hyatt's obligations under such contract. 0, Concession Fees; Maintenance Fees. Prom and after January I, 2017, through t F e remainder of the Term under the Lease Documents, Hyatt shall promptly pay the Cones lion fees in connection with its rental of meeting space in the Convention Center and as p s pearly invoiced by the City in accordance with the rates set forth in Chapter 53, Section . , I of the City of Miami Code of Ordinances (which currently provides for $100 fo a single portable food/beverage concession and $200 for a single permanent food/lay ve€°a concession). Prom and after January 1, 2017, through the remainder of the Term, under t Lease Document, the City agrees that it shall promptly pay its portion of the Ivlaintenane 'ees in connection with the maintenance ofthe Physical Plant in accordance with the Lease !documents and as properly invoiced by Hyatt. H. Reasonable Cooperation. Hyatt and the City shall reasona ;: y cooperate with each other in connection with .the Projects stated herein, including, , the .-` ity providing reasonable access to the Convention Center during the period ofconstructior and installation of the Projects and coordination of the work so as to minimize disrupti.o to the operation of the Hotel and Convention Center, the City providing reasonable and .; ntely approvals of all permits required for the Projects and the City providing reasonable a r d timely inspections of the Projects, in accordance with the Schedule. Hyatt shrill obtain :: e City's prior approval of shut downs of power, water, and HVAC, use of loading- docks, .:'ockage of circulation areas, and within the Convention Center, If the City does not respons to a request forsuch approval within ten (10) business days of such request, the City's appr al shall be deemed to have been obtained, The Director of Real Estate and Asset Manager .ent for the City will serve as the City's contact person, and the City Manager, subject t., compliance with authorizations, procedures and requirements .prescribed by the City Carter, City Code, and the directives of the City Cont.rnission, shall act for the City as t. a:ll approvals from the City referenced herein. 3, Depreciation Payments under the Lea 'e Documents. The Panties hereby agree to waive the obligations under Section 7.4 of the .i F se Documents of Hyatt to pay towards a reserve to make depreciation payments .in connection ' th capital costs associated with the Physical Plant and the City to furnish an analysis of such pital and depreciation costs on an animal basis. 4 Breach of Agreement. In the ev nt that either of the Parties fails to fulfill its obligations (and such failure is not. due to force rnaje re, the action or inaction of the other Party, and other events outside of such Party's reasonable c ntrol), and after the expiration of all notice and cure periods as set forth herein, the violating .'r. rty shall be deemed to be in default of this Agreement. As a result of a default, the non--violatit Party shall be entitled to ,pursue any and all. remedies ,permitted under law and in equity upo , he expiration of a ten (10) business day grace period following written notice to the other P .y as set forth below in Section 9; provided, however, with respect to the Projects, so Long as ;yatt has eoniweaced to cure any default related thereto following notice from the City and is di"' ently pursuing to cure such default, Hyatt shall have such additional period of. time [.s reasona b necessary to cure such default. 5. Mutual Role ses, Upon execution of this Agreement by the Parties and approval of this Agreement by the Mill ' City Commission, the following shall be effective: .A. ity's Release to Hyatt: Except for the rights, duties and obligations of Hyatt created under this Agreement, the City, for itself and its predecessors, agents, directors, officers, members, employees, affiliates, successors, assigns, trustees, bankruptcy trustees, personal representatives, beneficiaries, devisees, and legatees (hereinafter collectively referred to as the "City Releasors"), hereby releases and forever discharges. Hyatt and each of its respective subsidiaries, predecessors, agents, managers, attorneys, directors, •.:fficers, employees, affiliates, successors, assigns, trustees, bankruptcy trustees personal representatives, beneficiaries, devisees, and legatees (hereinafter referred to the "Hyatt Releasees"), whether past, present or future, jointly and severally, of and fr ,na any and all debts, claims, demands, actions, causes of action, rights, obligation damages, and liabilities of any and every kind or nature whatsoever, in law or in equi past, present, or future., known or unknown, direct or indirect, asserted or unasserted .fixed or contingent, whether contemplated or not, whether based in tort, contract, co rr •bution, or any other type of recovery, and whether for compensatory; consequentia:'., incidental, statutory, punitive, or other damages, which the City Releasors have, May ave or had at:ising out of the following claims: (I)the Fire. Alar[n Project, (2) Tile Pr ; ect, (3) HVAC Project, (4) Concession Fees, (5) Maintenance Costs, (6) Other Fees, 7) cooling tower and chiller replacement project including, , the Chiller 'Overpayment..=nd. the Phase I Design Fees, (8) depreciation payments including without limitation the epreciation Credit (collectively, the "Released Claims"); provided, however, that this elease.by the City Releasers does not release any Claims other than the Released Clai s. 13. Hyatt's Release to the City: Except For the .ri,s ts, duties and obligations of City created under this .Agreement, the Hyatt, for itself all i.ts predecessors, agents, directors, officers, members, employees, affiliates, successors, , ssigns, trustees„ bankruptcy trustees, personal representatives, beneficiaries., devisees, ai,"4 legatees (hereinafter collectively referred to as the "Hyatt Releasors"), hereby release: and forever discharges City and each of its respective subsidiaries, predecessor agents, managers, attorneys, directors, officers, employees, affiliates, successors assigns, trustees, bankruptcy trustees, personal representatives, beneficiaries, de .-sees, and legatees (hereinafter referred to as the "City Relcasees"), whether past, press t or future, jointly and severally, oaand .from any and all debts, claims,. demands, act;+ns, causes of action, rights, obligations, damages, and liabilities of any and every : aid or nature Whatsoever, in law or in equity, past, present, or future, known or unknow: direct or indirect, asserted or unasserted, fixed or contingent, whether contemplated •,"; not, whether based in tort, contract, contribution, or any other type of recovery, an, w.heth.er for compensatory, consequential, incidental, statutory, punitive, or other d Wages, which the Wyatt Releasors have may have or had arising out of the Released C ims; provided, however, that this Release by the Hyatt Releasors does not release any ,'laims other than the Released Claims, G. No Admission of I bility. Bach Party expressly recognizes that this Agreement shall not in any way be construct:: as an admission by any Party hereto of any unlawful or wrongful acts or ornissio.ns what :a ever with respect to the Released Claims stated herein. This Agreement shall not be admissible: i any proceeding as evidence of any .admission by any Party hereto of any violation of any law o 'regulation or wrongful act or omission. This Agreement may, however, be .introduced as eviden ; in any enforcement proceeding to this Agreement, 7. Non- . ssignability of Transferability of Claim. Bach Party hereby warrants, declares, and rep r sents that no part of any asserted and/or assertable claims has been assigned or transferred, aa, ` that each Party has full, exclusive, and unencumbered right, title, and interest in and to stteh sorted and/or assertable claims. Governing Law and Venue. This Agreement shall be governed by the laws of the State of Florida. The Parties acknowledge that this Agreement is being entered into in Miami -Dade County, Florida and that the jurisdiction to enforce the terms of this Agreement shall exist in the Eleventh Judicial Circuit, Miami -Dade County. The Parties expressly select, as their venue, any a all a''ction/litigation in Eleventh :iudiaia( Circuit, Miami -Dade County of the State of F1ori .. It is further acknowledged and agreed that any claim, dispute, action (administrative or o.: erwise), and/or litigation relating to this Agreement, that the Parties shall bear, at their sol- respective expense, their own attorneys' fees and costs. 9. Notices. Except where this Agreement expressly provides otherwise, all r,+tees and other communications required or permitted under this Agreement shall be in w: ting and shall be deemed to have been duly -given (a) on the earlier of the date received or tiers business days after delivery, if sent by registered or certified mail (return receipt requested); ' b) when delivered, if delivered personally; (o) on the next business- day, if sent by overnight m .' or overnight courier. If any Party is represented by counsel (whether or not named in this Agre-;'gent), any notice given by such counsel for such Party shall be fully effective as if given by su Party. Any notice shall be given to the recipient at these addresses (or at such other addresses shall be specified .by written notice given in accordance with this provision); CITY OF MIAMI City of Miami Office of the City Manager 444 SW 2 Avenue,10t Floor Miami, FL 33130 With a copy to: City of Miami Dept. of Real Estate & Asset :Mc.'atement 444 SW 2nd Avenue, Suite 32 Miami, FL 33130 City of Miami Office of the City Att 444.SW 2 Avenue, Miami, FL 33130 Trey site 945 10. Miscellaneous. The P rties further agree as follows: IYATT Hyatt Equities, L.L.C. Hyatt Center 71 South Wacker Drive 1.2`h Floor Chicago, IL 60606 Attention; Megan S chtnol.li.nge.r With a copy te: Hyatt Corporation 71 South Wacker Drive 12th Floor Chicago, IL 60606 Attention: General Counsel A. No waive. of any breach or default hereunder shall be considered valid unless. in writing and 9sigr ° d by the Party giving such waiver, and no such waiver shall be deemed a waiver of any .subsequent breach or default of the_ same or similar nature. .13._ Ea R` Party hereto shall cooperate, shall take such further action and shill execute and liver such further documents as may be reasonably requested by any other Party in order to carry out the provisions and purposes this Agreement. This Agreement may be executed in one or more counterparts, all of which taken together shall be deemed one original. D, In the event any terms or provision of this Agreement be determined by appropriate jL: i 'ciai authority to be illegal or otherwise invalid, such provision shall be given its -legal eaning or be construed as deleted as such authority determines, and the rrmai.ndF of this Agreement shall be construed to be in full force and effect. E. Any approvals required by the Parties under this Agreement shall not , unreasonably withheld, conditioned or delayed, 1.1..Knowing and Voluntary. The Parties acknowledge and represent that th have carefully read and fully understand of the provisions, terms and, conditions of this Agreeent and have reviewed this Agreement with their respective counsel. The Parties further ackno ledge and represent that they have entered into this Agreement freely, knowingly and without ercion or duress and based on their own judgment. 12. Successors. and Assigns. This Agreement shall be binding up r i and inure to the benefit of the Parties, their personal representatives., successors, and assign 13. Interpretation. The Parties hereby acknowledge and agre. that; (a) in the negotiation and drafting of this .Agreement, they have each had the opportunity tconsult with counsel of their choice; (b) each of their counsels. has had an opportunity to con.te to the negotiation and drafting of. this Agreement; and (c) the principle of construing a doc nent. most strictly against its drafter shall not apply with respect to the interpretation of this Agri ment.. 14. Entire Agreement. This .Agreement constitu s the complete- understanding between the Parties with respect to the subject .matter hereof an supersedes all prior agreements, understandings and arrangements, both oral and written, betwthe Parties with respect to such subject clatter. This Agreer erit may not be modified in any ay unless by written instrument signed by each of the Parties. 15. Authority to .Execute. The Part' ,s represent .and warrant that the individuals executing this .Agreement on each Party's beha ` have the full authority to do so. 16. City Coturnission Approv This Agreement is subject o the review and approval of the Miami City Commission and therefore this Agreemei : shall be effective as of the date of execution by the City after obtaining such approval. [Signatures on following page] CITY OF MIAMI, a municipal corporation Attest: Daniel 1. Alfonso, City Manager Todd B, Hannon, City C erk APPROVED AS TO LEGAL FORM AND APPROVED AS TO SURANCE CORRECTNESS: .REQUIREMENTS: Victoria Mendez City Attorney HYATT EQUITIES, L.L.C. By: Its; Ann -Marie arpe Risk Ma meat Director ttest: Printed Name Printed Name Exhibit A Flooring Repair Area [Attached} NOTES GENEFIAL 4070. +. raeatawarrya�;.I%ef;M 1?t CrW SaC Eree ave.. aarfcr , tt,n,ri.L . a *se wehra.4 fl& as Neer 44.,wM1tdale. CPSagfaeao4anpea aYfrAe )r16 AM•t AVM.LIS V. Nf2faf�SpeNY&pJ'44!RM.Iem qn waa f£•l+»IPge. R. rI4:MTeWAYre0.M4.AM!ie&YVe J.fi 0-I004.Mr.4r WI'!& 0.115.1.111,ZEIVIS c,g7La?C.NrAA.rvniItcranrt cv+rtvwarofarcA :nyr'a+eYnormmagowl'xrlcl.. & TIECMN1RLM121rtb JLRwr 4L WOW. 7mCr'I.7.14.4c tC�tllafilAlCe�.�°yIBRCq�FD16. SXtoi&EX l.a7 i CGxe u.ITAT .& %T.I�D„i uA3N3L±fV1:GI�rD T. IV!•ALs PPCCRIe7an* kwTnw f eI...G& t : .011,1e; KUMi'aCiftBa'a VJ.^eq sar&I.!.17.4. & r,a mMl&Arple ledIK&N.ef61A11CCW71 0. b.Cfi ral viJlFMu16Ii.i UCL.11: Pfdlai'TCM•+UC1.BG CC my; A&+wVf OiZ'Uva Wi41./PAMS 41l. =MET. 91•3BN6 Ta AR riR AN)&YA WRCSR519.e1' 1i1th9011,1 TM =PIM, LLAMA nrEER F�AS.weLw,SPS /xar4'rypRrp44el'M' OM& lftea:�e,c^vx,aAkew,n��a>:Immvae �; .u4 W Realos axee.PA ilperlo R'.E RM.ff4YCN�IAdU 7M"41d4pprfia.4.17, ATTP .G6 xRutivf .wcaWwb e2siwefuhf.lrq &'-!V•!feae. ;crR,cr'ars PS,oa et„pn,xWsbm,raacrJq z m.5,141174. YATT REGE Cr TER. CE WATERPROOFING REPAIRS HYATT REGENCY M IA M I 4Q0 SOUTH EAST SECOND AVENUE MIAMI, FLORIDA 33131 O WA' CoM"R.71CTioNr TES 0 hCY,il lino tivwvanrfi Ara ru.racyo Ao sesrKr:m�u. (:� eSgaPwv 0 !COT t fITEPL 0.0.67LV N-M.,a" ti 71W rixvoc NPowv 0 rs<4nn.A.lc Ems.'} ....OHM. y_s !&-iY rPLMEC&BJCMxtrgvac. O flru&we;.rvTuu. 10.2. &p nICCT+ uMn:� ffrq C'. 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TITLE RAN AM NCTES A.1 TcHF'IAC5 r1A74 Arc F) .51�,6 .n.=_ PHaT'ps mktsf4fu` WATER?540a140 RE tsin fir. gar �I TILE BEET, KEG'- PLAN MW IN STES LEGEND a 'On..E994H • 4Fi4CE PLAN ' s ��. a�uYm TERRACE wATER.R96F540 YR^P 12EGE WA. A€? BuildiTV TERRACE PLAN :USE 195 TYPICAL TERRACE SECT'QN TH NEW TILE CIET fi. AT PLANTER WALL xrmac PiCAL TERRACE DRAIN DETAIL rcwe• TERRACE SECTION Th WITH CONCRETE SLAB TERRACE N,fiERPRCOrima . ',Am , � .7Y7�PICP= LOE.ATc'i? PLANITER . BASE OF GURTRINWAL_ AL LIGHT POSTS !CAL p`cAFiTEAS AT WEST SIDE. CITY BICYCLE $TAT ±J !T TYPICAL PLANTERS AT WE T S10E TERRACE WATER_PROOCIkG gE?Ain F'-"AT GEGiNCY M1f'.RME YnuSrx'r,9K mrear ... 99305 Ui Exhibit B November 12, 2012 Letter [Attached} Kerrie L. e.wd Scnior ►tunsei 71 South Wac. r-r Drive Chicago, IL $606 USA T: + . 12.78O.5467 November 12, 2012 Via Email (htorre@riarnigov.com) Mr. Henry Torre Director City of Miami Public Facilities Division /Asset Management Division 444 SW 2'14 Avenue, 3rd Floor Miami, Fl. 33130 Re: Hyatt Regency Miami (the "Hotel"); Lease an «,.Agreement for Development dated September 13,.1979 (the "Lease") bet F en the City of Miami (the "City") and Hyatt Equities, L.L.C. ("Hyatt"), as a nded; Operations and Maintenance Agreement between the City and Hyatt ``it &M Agreement") Dear Henry; I am writing to follow-up on the ou :; ` .ding matters following out conference call on August 29, 2012 (the "August 29 Car: ) and to respond to your offer of a one-time waiver of overtime charges of $28,000 in change, I believe, for Hyatt's payment of $302,000 in concession fees billed by the Cit to Hyatt, which fees have been disputed by Hyatt. We assume this offer by the City .;'so includes Hyatt agreeing to pay concession fees in the future. Assuming these are a terms of the offer, Hyatt does not accept the City's offer. First, it is Hyatt's position :x at the concession fees are not properly due and payable and have been wrongfully ehs. ged to Hyatt by the City. Second, the City has not responded to Hyatt's request made . A ring the August 29 Call for a legal analysis as to why the City believes the concessi ► fees are due and payable by Hyatt. Third, the City's offer does not address the other f ' s which are disputed by Hyatt, and for which the City, during the August 29 Call, , eed to provide a response, and has failed to do so. All capitalize terms used herein, and not otherwise defined, shall have the meanings ascribed to . ern in the Lease or O&M Agreement. The fol •wing items are in dispute by Hyatt and were discussed during the August 29 Ca11, Man . items, as noted below, require a response from the City. Henry Tonne November 12, 2012 Page 2 of 5 Concession Fees The City has wrongfully charged, and continues to wrongfully charge, Hyatt a cone ' scion fee for events (ticketed and non -ticketed events) at the James L. Knight Center wh Hyatt is the exclusive concessionaire (per the: Lease) and not the user of the space and . en there is a third party user renting the space. The concession fees charged to H; att are not supported by City ordinance, the Lease, the O&M Agreement or custom and .ractice in the industry. City Code Sec. 53-181(1)(a) created a new category of charges . or food/beverage concession with respect to meetings or general sessions in the Th: . r/Auditorium, The ordinance shows the concession fees as a charge for use of the ;°:'ter/auditorium space and not as a char fo (he concessionaire. Moreover, per the O .finance, this charge does not apply to exhibits or ticketed events in the Theater/audi.: rium, Yet, the City has charged Hyatt as the. concessionaire for what is clearly a us•. ee under the Code and has charged for all events (ticketed and non -tickets), in violatio •f the Code. Section 8.3(a) of the Lease establishes Hyatt as the s.. e provider of food and beverage. services for the Convention Center, without charg or fee for this privilege. Hyatt bargained for the right to be the sole concessionaire f d the sole consideration for that right is the Lease itself. The City's charge of conces on fees to Hyatt for its concessionaire services is also in violation of this provision. of Lease. Correspondence from two Assistant Ci.7 Attorneys states that these concession charges were established to defray, at le... in part, the City's clean-up costs incurred as a result of patrons bringing food and be rages (supplied by Hyatt or its predecessor as concessionaire) into the Auditorium, However, per the O&M Agreement, both the Auditorium and the Exhibit Hall . an the City's areas of responsibility. Accordingly, pursuant to Sec. 1.5 and 4.1 of the #&M Agreement, the City, not Hyatt, is to keep these facilities in "good and clean order and condition." The Lease and the O&M Agreement do not support a clean-up fee to H, °..tt in connection with its concession services. If the concession charges in Sec. 53-18 1 (1)(a) of the Code (concession charges for meetings or general sessi•..s in Auditorum) apply to Hyatt at all, they should only apply if Myattis the lessee of :; Auditorium for a non -ticketed meeting or general session. They should not apply to ..Hyatt when a third party leases the Auditorium and Hyatt acts as caterer. Custom and p = Lice inthe industry do not support the charge of the concession fees to Hyatt, as the oncessionaire, Auditoriums similar to the James L, Knight Center (Bank United Cen r r, Jackie Gleason Theater on Miami Beach and the Adrienne Arsht Center) do not charge any concession fees or clean-up fees to their concessionaires, Rather, any concess':gin fee or clean-up fee .is charged to the third party user/renter of the space and/or includ d in the rental fee. advise as to the City's basis for charging Hyatt the concession fees pursuant to the de. Henry Torre Novenaber 12, 2012 Page 3 of Meetine Room Rates The City increased the rates being charged Hyatt for use of meeting spa at the Convention Center; however, such increase was not supported by City Code.contrary to the City's assertion that increases to meeting room rates at the Convention ter are not subject to City Commission approval and do not require an amendment to e City Code, the rents, rates, fees and charges for the use or occupancy of and for the s lces furnished in connection with the Convention Center are clearly established by ty ordinance and presently codified in Section 53-181 of the City Code. The establis ent of such rents, rates, fees and charges for the Convention Center is the province of 1 c City Commission and there is no delegation of that authority to the director of the Co ntion Center. In fact, Veronica Xiques, Assistant City Attorney, in her letter o me dated May 10, 2011, clearly advised that "tTihe City Commission establishes fees for the Knight Center and all entities using the facilities must comply." Moreover, the City's own website for the Conventio.. Center lists a fee schedule for meeting space rentals less than the amounts charged at for the same space, in violation of the Lease. Section 8.3(b) of the Lease provid that the rates and charges for use of Convention Center by lessee must be the same as ose charged to third parties, Yet, Hyatt is being charged more than the rates advertised L. ird parties. At one time, the City asserted that the incrascd rates were for equipment charges, and cited City Code Section 53-181(1)(d). Sec on 1(d) of City Code Section 53-181 provides for charges for certain "anc ary services" with respect to the Theatre/Auditorium. Among the item dentified in paragraph 1(d) are "Event personnel," "Equipment rentals," and certain "O'er services-- Police and Stagehand." The Increased charges by the City are clearly fo meeting space, not equipment or ancillary servkes. Moreover, Section 1(d) only appl' s to the "Theater/Auditorium rates." Section 1(d) does not apply to "Meeting and semi " (Section 2) or "Exhibit Hall" (Section 3). Please advise as to the City' basis for increasing fees for the meeting space without first seeking City Commission ;pproval and an amendment to Section 53-181 for theater and auditorium rates, and eharging rates for the meeting space to Hyatt in excess of those being charged to third es cleaning Fees, The City char:es Hyatt a $500 cleaning fee for any concession event held in the Convention e' nter. Hyatt is the sole concessionaire under the Lease, and there is no charge for right. Any charges the City wishes to recoup should be charged to the third party user Moreover, there is no support for this charge in Sec. 53-181 of the Code. The y also charges a clean-up fee for damage such as carpet and wall stains. This fee sho d be governed by the use agreement between the City and the user. Hyatt, in its en aelty as concessionaire, should not be charged this fee by the City if it isn't the user. Henry Torre November 12, 2012 Pue4 of 5 During the August 29 Call, the City conceded that these fees should of be charged to Hyatt. Please discontinue the City's charging of these fees to Hyatt `_ rriediately. Hyatt reserves all rights and remedies with respect to these charges under t Lease, at law and in equity. Restroom Attendant, The City charges a restroom attendant fee when Hyatt rents certain facilities. There is no support for this fee in Sec. 53-181 of the Code. This sery e is included in the rent for the facility and should not be additionally charged. During the August 29 Call, the City conceded that a :ese fees should not be charged to Hyatt. Please discontinue the City's charging of .. se fees to Hyatt immediately, Hyatt reserves all rights and remedies with respect to th .e charges under the Lease, at law and in equity. Re is ti The City recently advised Hyatt that it we Id increase the charge (roan $50 per day to $100 per day for any Hyatt function that us s a registration table that is outside of the leased room and on City space. Sec. 53-181.'=) of the Code permits a $50 per day charge. We are not aware of any ordinance increasi the amount of the charge. During our August 29 Call, the ! 'ty agreed to review and respond to Hyatt. Hyatt has not received a response. Overtime Rates, The City advised that it : 'll charge overtime rates for events that exceed eight hours, occur en. weekends, or req.:`.re special needs. There is no support for this charge in the Code, except to the a eiit these charges fall within the ancillary services to the Theater/Auditoriu' .that are permitted by Sec, 53-181(1)(d), During our Au. st 29 Call, the City agreeddto review and respond to Hyatt. Hyatt has not received a ;onset other than the offer of a one-time waiver. However, no basis for why these char ° s are proper has been provided. Set- d Bra iverf_ Sec on 8.4 of the Lease requires the City to maintain and operate the Convention Center ood dean order and condition as a first-class facility. The City is required to maintain d adequate staff to do so. If the City does not so operate and maintain, the lessee may do so and charge back the City. During our August 29 Call, the City agreed to review and respond to Hyatt. Hyatt has not received a response, Henry Torre November 12, 2012 Page 5 of 5 Maintenance pees due Watt The City currently owes Hyatt approximately $43,318.00 for its share of m for the Central Plant. The City originally advised Hyatt that it ceased ref for the maintenance costs in an effort to offset these amounts against the claims that Hyatt owes for concession fees, However, as noted abo believe the concession fees are owed and has been disputing these Lease does not provide fora right of offset. Then, during our Au clear by the City, that the failure to pay these charges was s shortfalls. Yet, the services are still being provided to the City for the City's portion of these fees. Please arrange for the im portion of the maintenance costs that are overdue, Nothing contained herein shall be deemed a waiver of under the Lease or .O&M Agreement. Hyatt would appreciate your response to the items :' ted have any questions. Sincerely, Gam cp( eicw-oic Kerrie Dowd cc (via e-mail): Dave Phillip Luis Alom Veronica ; iques Daniel ewhoff ance costs laming Hyatt ounts the City e, Hyatt does not ees. Moreover, the 29 Call, it was made tly a matter of budget nd Hyatt continues to pay diate payment of the City's y of Hyatt's rights and remedies above, Please let me know if you Exhibit C Memorandum of Understanding [Attached] City March 21, 20 7 Tiffany Leadbetter Donato Senior Vice President Capital Strategy, Real Estate Transactioits Hyatt Hotels Corporation 71 South Wack.er Drive Chicago, IL 60606 -/4:0 431 Otttit ''. 4'00-13 • • .i.4**e Re; -Memorandum of Understanding: (I) Amended and Rsta Land Lease Dear Mrs. Donato: Hyatt Equities, L.L.„C.("Hyntt")and the City or (" -") (collectively, the "Parties") desire to amend and restate their existing land lease relationship, and hav I lyntt redevelop the Property (as anticipated and defined in the Term Sheet attached hereto), upon with the existing. Hyatt Regency Hotel and James L Knight convention center occupy. The following graphs set forth the basic terms and conditions upon which said relationship shall be structured subje to the negotiation and execution of an amended and restated land lease (the "Nev Lease"), and the o er terms and conditions contained in the Tenn Sheet. At the tilinimum, said -agreement is anticipated to corporate the following: 1). The Parties will enter into an -agreement with respect to the F:xisting Ground Lease (as defined in the Term Sheet) to asress certain immediate needs of the Hotel between the date of such agreement until the Nevi .ease is entered into and the redevelopment process commences, including, without Jiiuita(ioan age:Imo-it on the payment of certa in shared expenses on a going - forward basis and an age ent of the Parties to stay current on such obligations during the interim period. ) The Parties shall intd to modify the Existing Ground Lean, including, without limitation, to: a. Extend thi and lease term plus extensions to a total of 99 years; h. Expand•te leased premises to include the James L. Knight convention center/meeting space.' c. Arn dand restate the parking agreement to accommodate a. and b. above; d. onjunct ion with the New Lease and upon termination of the Existing Ground Lease, as greed by both Parties, resolve and absolve (except to the extent the Parties resolve to have ntinuing obligations thereafter, such as a payment plan) the Parties from, current disputed financial obligations For capital improvement projects undertaken, revenue and expense sharing agreements and other matters. Any agreed upon payment plan for such outstanding amounts shall be attached to the New Lease and each Party shall comply With such payment planand other agreements made between the Parties in resolution of -such outstanding amounts owed between the Parties.' e. Hyatt shall redevelop the Property subject to the following: i. Hyatt shall explore the use of the additional development rights on the Property; ii. Flyatt shall engage directly CBRE, Inc. to seek qualified development partners to maximize the Property's development .potential and density; additional development could include but not be limited to residential, office, 4aiLaid/or parking; Seek possible development partners, taking into consideratim qua I i fications and financial capacity of said partners, programmatic and a design, and financial benefit anticipated to inure to the benefit of 14yatt the City. iv. The Parties will mutually agree upon a Master Plan (as defii ,c1 in the Term Sheer) for the redevelopment of -the Property. When fully executed, this Memorandum of Understanding (together with thefr sheet attached hereto as "Attachment Aand incorporated herein the "Tenn Sheet"), the "MO(Y) fleet the expression of Hyatt's and the City's desire to proceed with the negotiation and possibl execution of a New Lease to include the redevelopment or the Property. New Lease. Subject to certain conditions as set forth in the MOU bng satisfied, the 'ew Lease will be !Iv:got iated to reflect the intended deal terms set- forth in the MOU. asivity. From the date hereof through March 31, 2017 (the Exclusiyity period"), City shall negotiate exclusively with Hyatt for the redevelopment of these parce ; provided, however, that in the event the Parties mutually agree in writing, or Hyatt notifies City in tng of its intention to cease the negotiations prior to such chte, then the Exclusivity Period shall expire the date of cessation of negotiations, Confidentiality. The terms of this MOU and the New as well as any noir-public information related to the transactions shall be maintained as onflcknti by the Parties, except for (i) disclosures required by law (specifically ne hiding Florida Statute Chapt. 119) or rules of applicable securities exchanges, (ii) disclosures to the Pariiesrespective board rnners, agents, employees, attorneys, accountants, brokers, contractors, lenders, prospective lenders, invc.oi s. prospective investors, consultants, advisors or other representatives, and (iii) disclosures that the arties mutually agree in advance are required or desirable to advance Zoning Entitlements (as defined the Tenn Sheet) or other public approvals or concessions or information that otherwise advances the anned development. The foregoing notwithstanding, the Parties agree that any public aniniuncement of executed transaction (i.e., executed New Lease) shall be mutually agreed upon hy the Parties prior to at public announcement. Non -Binding. This MOU shall t create any legally binding obligations on the Parties, other than with regard to the Exclusivity and C.41fidentiality provisions set forth above, Except for such provisions, City and Hyatt shall not have any tigations to each other unless and until full execution of the New Lease. if a New Lease is not exectit44 by expiration of the Exclusivity Period, unless otherwise agreed to by the Parties in writing, this M shall amoinatic-ally terminate, other than the above Confidentiality provision, which shall survive ter nation for one (1) year, in addition, this tvlOU shall terminate in its entirety upon the full execution oft New Lease, For the purposes oYth.is discussion, this MOH and subsequent contract documents will require approval of the City Comrn ton. That process may include the item being placed on the Commission Agenda:1g and 2"d readings a I then final approval. The filial New Lease shall also require approval by the voters at ReferendumsEach of the City and Hyatt, and their respective affiliates, representatives, and associated entities sir I use commercially reasonable efforts to comply, in all material respects, with all applicable laws, rt s, regulaton. disclosures, and giraffes (whether local, state, or federal), to include the Miami 21 zoniun- inance, in the performance of this or any agreement, instrument, or action(s) relative to the MOU ar N Leae. The City shall enoperate with Hyatt, its affiliates, representatives and associated entities to hate and expedite approvals and conformance with local, state, or federal ordinances as may be onably required, 2 The Parties understand that this MOU and any subsequent contract documents will reguapplicable internal approvals of Hyatt, including the approval of Hyatt`s Development Comtritree, the Finance Committee of F{yatt's Board of Directors, and Hyatt's Board of Directors, If you are in ajreenient with the terns of this MOU, please' indicate same b saunter-si ar.irr where indicated below. We look forward to moving forward with you on this importa project. S iucerely., CITY OF M:IA.ML a municipal perrporatinn of the State of Florida By: Daniel J. Alfonso City Nli►tragcr Accepted and Agreed to: HYATT EQUITIES, L.L.C.. 'Name: Title: 3 ATTACHMENT A TERM SHEET This term sheet (-Term Siteet"). dated this day of , 2016, is a propos, o ily, and is not contractually or logo fly binding. It represents only an expression of the partiespresen sire and intention to enter into negotiations of a possible agreement to lease the Property (as defined bet by Hyatt (defined below) from City (defined below). City and Hyatt are sometimes no Rectively r erred to herein as the "Parties" or individually as a 'Party", The outline of the general terms and condi s are as follows: 1.. GENERAL: I .1. PARTIES TO NEW LEASE: Hyatt Equities, L.L.C„ or an affiliate thereof asground lessee and devetoper, If applicable ("Hvatt2)., 'Hyatt may enter into ubsequent agreements, with City of M iaini ("City") ap.proval as may •be requit tuider the New Lease or by .applieable law, including, 'without limitation, irit venture agreements, development a.greements or subleasesw ith prospect . -par triers, developers or other tit ird parties in connection with the performance- its duties under the New Lease:. and 1,1.2. City of NI iatn i, as ground le.sso 1.2.. THE PROPERTY: City and Hyatt will _ :nev in -to an amended and restated lease (the "New Lease") of the existing Ground Leassuant to which Lessee Qurrently leases froin Lessor the teat property (the 'Floret Land') you which the Hyatt Regency Miami (the "Hotel") is located (the "Existing, (round Leas ), Pursuant to the -New Lease, (i) the City will continue to lease to Hyatt, and Hyatt will cs ninue to lease from the City, all of the City's right, title and interest in the: Hotel Land, incJuiiig any City _interest in the Hotel and any other improvements, furniture, fixtures,. and pers property !located on the /Intel .Land and any additional development. air or other rhts appurtenant to the Hotel Land not currently -provided in the existing land lease, as an **:•d by the City pursuant to •the approved Master Plan, and CO the City- wiU agree to- lease Hyatt, and Hyatt will agree to lease from the •City, the real property upon •wli It The Jam • L. Knight Miami Convention Center (the "Convention Center") is located (the "Con Center Land"), -including, without Ihnitation, the Convention Center and all other impr • vements located on 'tilt:: Convention Center Land, any City interest in the forniture,•fixtur •mprovements and personal property located on theConvontion Center Land and any additi development, air or other rights appurtenant to the Convention Center Land EIS agreed by. :c City pursuant to the approved Master Plan ((i) and (ii) are colketively referred •to herein i the "Property"). 1.3. DUE P LIGENCE: Hyatt shall complete all due diligence work it deems necessary or adviiEe on the Property prior to its exeention of the New Lease,. tit its sole cost and expense, hie iding without limitation, title, survey, •soils, environmental and all feasibility studies and s„ City and Hyatt shall execute a separate commercially reasonable aceess agreement it ging Hyatt and its agents and consultants access to the Property in order to conduct the requisite tests and sttidies, subject to customary release, indemnification, insurance, notice and repair requirements, Upon its completion and receipt thereof, and upon request from the City, Hyatt shall deliver to City copies of all third-pariy environmental, property condition and soil reports, surveys and title reports resulting from its due diligence activities related to the Property. 1 Subject to such access agreement, City will grant Hyatt immediate and reasonable a Property, the Parking Garage, the Property records, and the Convention Center team and other employees for the purpose of inspecting the physical condition a (including for the purpose of soil and other environmental tests and medal inspcetions) and evaluating the Convention Center business, in Hyatt's sol City shall deliver copies to or provide access to Hyatt of nil Property rc possession, or the possession of its Convention Center manager, affiliate representatives or employees, including, without limitation, environ reports, title -commitments and policies, surveys, building plans, corres from any governmental agencies, information pertaining to an mw Convention Center, The Hotel or the Property, and any other infer by Hyatt. 2. REDEVELOPMENT: 2, / , 'Within. twelve (I 2)] months of execution of •this Term S.I the City for its review,. a master plan (the "Mastet Plan" (the "Pto,le.eni The Master Plan. shall include, am. plans (for a Hyatt hotel, meet ingspace and other ty -d•evelopment that may occur on thesite), flnan use of public Rinds, public funding mechanism •densities, design -criteria for base buildings a merchandis Fria, plan ro the extent retail_ is al and a parking:plan. The Master Plan Shot: •site's density and proposed Project phasi and Hyatt. shall be attached to the 'New- -with the Master Plan agreed to. and a o the ment e Property al and other scretion. The ds within City's sultants, agents, al reports, property entree with or notices it(s) pending against the ation reasonably requested r, Hyatt shall prepare, and deliver to r r the redevelopment of the Property her components: parcel development hotel inenities, and expanded mixed use equity plans for the Project; strategy for the r public assets including use plans. desired public spaces, a proposed streetscape, a retail ersitit of the development, an infrastructure plan include proposed development that maximizes the if agreed upon, the Master Plan approved by the City ease and Hyatt shall develop the Property in accordance roved by the City. 2.2. if Hyatt and the City, in their di cretion, determine to proceed with the Project based upon an agreed upon Master Plan and t • shall include, smite other r Master Plan: (ii) to obtain permit de velop ri lent of sa for the: Project within infrastruCture. require plan to adequately hi accordance w normal plann it and in frastrt Lease. °.ins to the New Lease, Hyatt's obligations under the New Lease quirements: (i) to redevelop the Property- as contemplated by the ming Entitlements (cleaned below) as necessary, for the Property to (iii) to secure the requisite equity investment and rmaileing necessary paratheterS• set itarth in the New Lease; '(V) to adequately address all tints necessary for the titnely development of the Property, (v) to develop a dress parking requirements for the Project (vi) to construct the improvements thc• [Master Plan and plans otherwise approved by the City pursuant to the and pert -flitting praeoSs; and (vii) to operate and maintain tbebuildings, grounds, tre in the manner prescribed .by the New Lease throughout the term or the New 2.3, lithe Prties elect to proceed with the Project, Hyatt .shall take the lead, at its expe-nse, in obtaining all titletneots for the Property to aeconunadate the approved Master Plan ("Zoning E tiernents7). The City shall use, its best efforts to assist! and reasonably cooperate with Hyatt oughout the Zoning and Entitlement process. n the event that the Parties elect, or either Party cleets, to not proceed with the Project, the Parties sluill have no obligations hereunder other than the confidentiality provisions. 3. NEW LEASE: 3,1. EFFECTIVE DATE OF LEASE; TERM: The New Lease shall be effective (the "EinTtive Date") upon execution by thePa Party having obtained all necessary approvals as set forth in the MCI) arid this the Parties having agreed upon the Master Plan, which will be attached to th initial term tar the New Lease shall be from the dote aground lease executio Date) through December 31 of the year that contains the 99th anniversary Dote. 3.2. GROUND RENT: a. 11.yatt Hotel and A ininj mes L Knightonvention Ce les, and each m Sheet and ew Lease. The ("Commencement e Commencement On or Were january I of each kase year, Hyatt sh, pay to the City base rent (-Base Rent") for the Property as follows: During the custrue hon. period: Base Rent (to be paid by Hyatt, or the deveFper o the Prujeet, during the construction period) for the. Property shall be the folio Year one (I) daring the C0113111106011 per`nd Year two (2) during the construction riod Year three (3) during the construe period $0 $500,000 $500,00 Therea.fter lAatt Ji pay to the City not less than; Two million d year), ori rs ($2,000,000) per year he escalated from year to The math aticalaverage of two appraisals commissioned bythe City Ihr the land un r which the hotel is constructed plus space occupied by the James L. Knigh convenflon center. The formulafor the establishment abase rent ror the hote property and JamesL Knight- center shall be five percent (5%) Multiplied- hy .. mathematical -average :of appraised value, Should 5% of the mathematical rage two appraisal exceed two million $(2,000,000) per year {as may be escalated from year to year). Hyatt shall he required to pay up to, but not more Thn Seven percent (7.%) of gross room and meeting receipts oi'the Property plus 5% of gross .bevertige reeeipt,s, plus 3% of -food -receipts,. plus a to be determined percentage of .other gross income receipts, as agreed upon the partiesonce such other incomesources at the Property are determined. For the avoidance of doubt, Hyatt shall not pay any other rent or fees to the City for space utilized in the operation of the Hold and meeting space on the Properly. Profits Participation for Expanded Development cm the Property In addition to Base Rent fbr the Hotel anr.E meeting, space, after the construction period, the owner ofthe non -Hotel component.componentS of the Project shall pay to the City a prati participation rent ("Participation Rent") with respect to the other income produci ,areas of the Property. outer than the Hot f and Hotel Land and reefing space, deter 'red as the greater of: I) 2) A to be determined percentage- of gross profit development on the Property as defined in the agree.] arthe Property; and Rent formulaically determined by. i. A current appraisal of the property L. Knight Cooventtoil Center as a" ii. An appraisal. of the land area Convention Center land and performed and determined fo hi, The differencw between James L. Knight Conven of the Hotel and Co contribution to the: e. e I ighest of�HOtet and Con .ration Center Land Less: Value of total artd Y $n0,000,0D( Convention enter as elated with expanded nt for the redevelopment ct copied hy the hotel and James mg concern" shall be performed, the Hotel. and James L, Knight 11 appurtenant air rights sha 11 be ighest and best. use" t and best use valise of the Hotel and on Center Sand and value of going concern nrlotl Center shall be the Citv"s financial nded development. ax l'acasnpj for emonstrtation F ut• }uses On tt X $ l O0.000,000 v' Contribution Z $40,000 ibutian shall be treated as a limited partner equip investment anding the foregoing„ the City shall not be a joint venturer or witlt Hyatt; any references to part er equity investment and similar ms rare. solely for parpdses of calculating Participation Rear. Therefore, if total investment for the expanded development is. A $200,000,000 then C`.ity's profit participation using the example above shall be 20% of Z ($4O,O00 000) divided by A ($2OO,O00,OOO) . The numerator is equal to Z ($ 0,000,:OOO)and the denominator is A ($ 00,000,000) which produces the City's equity contribution of 20%. Csttin} C oft:: rat E.C' City' `+►rttr Ak ; 1AL ESCALATOR: a anniversary -of the comirtcneeinem of the New Lease, and on each 56 anniversary terea ter during-thn remaining Term or extensions thereof, the minimum Base Rent shall be the cumulative compounded increase in the Consumer Price Index for All Urban Consumers (CPI U) Miami; provided, however,.that the increase in Base Rent shall in no event: be less. than two percent (10%) per year. 4 3.4, NET LEASE: The New Lease shall. be -absolutely net to City, and Hyatt shall pay all real efc,perating and other related expenses during the. term. thereof. 3.5 SUBORDINATION: The New Lease, any leasehold interests created thereby and any security inter sts granted therein (to lende.rs, equity providers and the like) shall be subordinate to City's fee nterest in the subject Property at all titneS throughout the Nkw Lea.seterm or extensions tit ..,..provided, however, that the Parties shall record a ineinoranduin of lease against the Propert which shall be senior in priority to any encumbrance on City's fee simple interest in the Hotel lid and Convention Center Land and reversionary interest in the improvements on such lands. 3.6 PARKING: The New Lease will provide Hyatt with all the same parkin respect to the Hotel under the Existing 'Ground Lease, Th to reasonably apportion parking in the Citl Garage to pro Project. Notwithstanding the foregoing, as part or the portion of the. parking requirements for the Project Plan for the Property (separate and apart from par 3.7 A.SSIGNNIENT AND DiSPOSITION RIGHT With City's_ prior written approval, Hyatt worth Or [3 and either engages a. manager who is a Fist C company or product type that enjo Corporation and the Hyatt R.egenc tu its emently held by Hyatt with pales will cooperate with each other ,fde necessary additional parking for the oject, Hyatt may propose that all or some irtet by proposed parking within the Nlaster g within the Parking G-ara-ge), ay assign the New .Lease to an assignee that has a net olds a franchisQ. with a First Class Hotel Company or otel Company. A "First Class Hotel Company" is a a reputation in the hotel industry similar to that of Hyatt product, Hyati's. ability to mortgage,. pl or eonditionally assign .the. ew Lease to leasehold mortgages shall be- as. provided ht. the N Lease. 3,8 MORTGAGEE MOTEL .0-NS: The New Lease shallshail i.ctude customary and commercially reasonable provisions for the benefit or Ilya:ifs lender. inck. in, without Umkation. the right of lender (i) to receive notice.s. of any Hyatt defaults or terrain ion by City, (ii) to cure any Hyatt defaults -within a reasonable grace period, and (iii) upon termii don of the New Leaw, to enter into a new lease directly with City on the same terms and crnhkns as the New Lease upon lenders cure of all of llyatt's prior defaults, .to the extentsuetble of being Cured. 3.9 OTIEE' 'E;11M.S AND CONDITIONS: oral or New Lease shall include other terms and conditions that are norm] and customary similar projects and as agreed to by Hyatt and City. 4. PUBLIC FUNDING: City shall reasonably cooperate with and assist Hyatt in obtaining available .governmel incitvs (such as, by way of example, sales tax relief on- .construction malerials, TIF-type tives, etc..) in connection with the New Lease. and the investment by Hyatt in the -redevelopment of Property, 5. COMMUNITY OUTREACH AND STAKEIIC)LDER MEETINGS: The Ground Lease shall set tbrth the parameters and the Parties' •respective rol and obligations related to all community outreach and stakeholder meetings to be conducted in co section with the Zoning Entitlements or other w i.se related to the design and development of the Pr.dccL ' 6. REAL ESTATE BROKERS: CBRE was hired -by the City through State of Florida Contract Di S-12/13-007A. Hyatt intends to Outage CBRE in connection with the Project. Other than Cl3RI inc.. whose duties and loyalties are solely to the Cityno other real -estate bro.k.tr- or consultant to w -oin a -commission or fee shall be due has been engaged by .either party. Upon execution of the ew Lease by the Parties, City shall be responsible to pay to -CBRE, Inc. as part of its developme osr5 a commission for :the New Lease as et forth in a separate agreement between CBRE, Inc. 4 rid the Ciiy. City and Hyatt acknowledge CBR.E's representation Lithe City and are that the He Lease car other agreem.ent between the Parties to acquire the Property will Mc Jude said ceiin z ioncement by reference, Hyatt shall be responsible for costs .asSociated with hiyairs direct en-gag-erne]CBRE for all new development (including the construction or recOnStruction of a hotel and an dditional development en the Property pursuant to this Tertn -Sheet pursuant to a separate a.greemebetween Flyatt and CBRE, 7. EX.ISTING LEASE TERMINATION The Existing Ground Lease and related a eernents will be terminated effective as of the Effective Date of theNew Lease, With each Party [Tick mg any claims (whether known or unknown) against the other Party. 8., CONVENTION CENTER MAN The managc,vnent agreement of the Effective Date of termination fees. 9 PRORA'r IONS: • EireConvention Center with theturrent manager Witi be terminated as New Lease, with Lessor paying any outstanding fees and any required Real estate tax s ecial assessments, utilities, rents and other -amounts will be prorated as of the Effective Dateusual and en tornary manner for a transaction etha :type. 10. T.Fr LE: As oft :Oective Date of the New Lease, the Property will he leased fmc.of any -liens and mortgages and a y ieases, tenancies or occupancies, or any other encumbrances, or any defect in title to the Pro rty that are not accepted by Hyatt inaccordance with the terms cif the New Lease and will be s ject to receipt of a satisfactory title insurance 6 IL REPRESENTATIONS AND W.ARRANT1ES: Each Party will make customary representations and warranties to the other Pary for transacron or this type,. as of the date of the execution of the New -Lease. 12. COVENANTS, Each Party will agree to customary covenants for a transaction of this type. 13. PROP.:RTY CONVEYED “AS IS": Except as specifically sot forth in the New Lease, the Property will b conveyed in "as. le condition, 14. TRANSACTION COSTS: The City shall be responsible for the payment of all transfe• taxes.and recordation fees and the title insurance premium. All other transaction costs Nyili be paid acednce with local custom. for similar large commercial hotel. transactions. Each party will pay eir own attorneys' fees. 15, DELIVERIES: At or before the Effective Date of the New -Lease. ity will agree to properly execute andier deliver. (i) the New Lease, (ii) an assignment and assumpt n of intangibles, (WO a bill of sale, (iv) an assignment and assumption of all operating agreements, prnent leases, servicescontracts and other leases and subleases related to the Property (to the extei accepted by Hyatt in the New tease) (the "Agents"), (v) estoppels fig the benefit of Hyatt a reasonably requested by Hyatt, (vi) all other customary documents reasonably necessary from ity to complete the New Lease. Hyatt will .properly execute - and/or deliver (i)an assignment and a imptiort 01'411 Agreements, (ii) anassignment and assumption of intangibles, (iii) a bill of sale, and all .other customary documents and funds reasonably necessary from Hyatt to ,complete the New a.... Z. MISCELLANEOUS: 16.1. DEVELOPMENT RO FORM AS: Hyatt provide t any other mi e City with development pro fortnas for renovated existing or new hotel and -d use development to occur on the site. 16.2. COMM.CATIONS; The Nw Lease shall establish a COtrifItunications protocol (e.g., reports, meetings, designated repr entatives) to maintain open and continuous lines of communication between the Parties wili respect to all design. entitlement, development and programming activities related to the lerty. 16.3 DISPUTES: Al tdisputes under New Lease shall herewtvi. New Lease. 7 purstia t be set forth in the 16.4. DEFA ULTS AND REMEDIES: The New Lease will set forth provisions zoverning defaults by the Pa s thereunder and will set forth the remedies available to the non -defaulting Party in the everof a default. 16...5. NO ASSIGNMENT: Except EIS set forth in Section 3.7 above, neither Party she' II be p otherwise convey its interests, rights or obligations under tl approval of the other Party„ This Term Sheet does. not constitute an offer to lease the Property and aiy .of terms cOntaintid herein binding on either of the Parties. obligate ether Party to proceed with .n transaction in any way wb when the:Parties execute a New Lease, Without: limitation of the acknowledge that no Party shall have any obligation ofarty kind such 'Party actually executes and delivers the New Lease a any time to withdraw from further negotiation or consideraC any reason or for no reason in Hyatt's or the City's sole an or nature to the other Party hereto. milled to assign, transfer or New Lease without written ° not subject to acceptance., nor are .1 ermore, this Term Sheet does not oever. There shall be agreement only egoing (A) Hyatt and City speCifica I ly nature tothe other Party unless and until Hyatr and the City reserves the right at the transaction conteinplated hereby for absolute discretion without FiabiFty .of any kind