ASSIGNMENT AND ASSUMPTION OF LEASE AND CONSENT OF LANDLORD
Exhibit
10(u)
AND CONSENT OF
LANDLORD
This Assignment and Assumption of Lease
and Consent of Landlord (this “Assignment”) is made and
entered into as of November [14], 2008 (the “Effective Date”), by and among
Westgroup Grove Isle Associates, Ltd. (“Assignor”), and Grove Hotel
Partners LLC (“Assignee”), and is joined by
Grove Isle Associates, LLLP [f/k/a Grove Isle Associates, Ltd.] (“Landlord”) for the purposes
herein expressed, in reference to the following:
RECITALS
A. Landlord
and Assignor previously entered into that certain Amended and Restated Lease
Agreement dated as of November 19, 1996, between Assignor as Lessee and Grove
Isle Associates, Ltd. as Landlord (the “Base Lease”), which Base Lease
was amended by that certain Amendment to Amended and Restated Lease Agreement
dated December 10, 1999 (the "First Amendment") and that
certain Second Amendment to Amended and Restated Lease Agreement dated September
15, 2004 (the "Second
Amendment," and together with the First Amendment and the Base Lease, the
"Lease"), with respect
to certain real property and improvements located at ▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, as more particularly described in the Lease (the “Leased
Premises”). True and complete copies of the Base Lease and the
First Amendment and the Second Amendment are attached hereto as composite Exhibit “A.”
B. Landlord, Grove
Isle Club, Inc. and Grove Isle Investments, Inc. entered in to that certain
Master Agreement with Assignor dated November 19, 1996 (the “Master Agreement,” and
together with the Lease, the “Lease Documents”), a true and
complete copy of which is attached hereto as Exhibit “B.”
C. Landlord
and Assignee also entered in to that certain Agreement Regarding Deferred
Maintenance dated November 7, 2008 (the “Deferred Maintenance
Agreement”).
D. Assignor
now desires to assign and transfer to Assignee, and Assignee now desires to
assume from Assignor, all of Assignor’s right, title, interest and obligations
in, to and under the Lease Documents.
E. Pursuant
to the terms of the Lease, Assignor and Assignee desire that Landlord consent to
such assignment of the Lease Documents and Landlord is willing to provide its
consent to such assignment, on and subject to the terms and conditions
hereinafter set forth.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows:
1. ASSIGNMENT. Assignor
hereby assigns, transfers, grants and conveys to Assignee all of Assignor’s
right, title and interest in and to the Lease Documents (the “Lease
Assignment”).
2. ASSUMPTION. Assignee
hereby accepts the Lease Assignment, and (i) assumes all of the duties,
obligations and liabilities of Assignor arising under or in connection with the
Lease Documents that first arise on and after the Effective Date; and (ii)
agrees to perform and comply with, as if Assignee were the original lessee
thereunder, all of the terms, provisions, covenants and promises which are to be
performed and complied with by such lessee under the Lease Documents which first
arise on and after the Effective Date.
3. INDEMNITY.
A. Assignor
hereby agrees to indemnify, defend and hold harmless Assignee, its affiliates,
subsidiaries, officers, directors, members, partners, employees, and agents, and
their respective heirs, personal representatives, successors and assigns, from
and against any and all liabilities, losses, damages and claims, and all related
costs and expenses, including without limitation reasonable attorneys’ fees and
disbursements, in connection with the obligations of Assignor or any of its
affiliates under the Lease Documents arising prior to the Effective Date, or
otherwise arising with respect to the Lease Documents prior to the Effective
Date.
B. Assignee
agrees to indemnify, defend and hold harmless Assignor, its affiliates,
subsidiaries, officers, directors, partners, employees, agents, and their
respective heirs, personal representatives, successors and assigns, from and
against any and all liabilities, losses, damages and claims, and all related
costs and expenses, including without limitation reasonable attorneys’ fees and
disbursements, in connection with the obligations of the Assignee or any of its
affiliates under the Lease Documents arising after the Effective Date, or
otherwise arising with respect to Lease Documents on or after the Effective
Date.
4. REPRESENTATIONS AND
WARRANTIES OF ASSIGNOR AND ASSIGNEE.
A. Assignor
hereby represents and warrants to Assignee that (a) the signatory executing on
behalf of Assignor is duly authorized and has the power and authority to bind
Assignor, (b) the Lease attached hereto as Exhibit “A,” the Master
Agreement attached hereto as Exhibit “B,” and the Deferred
Maintenance Agreement) are the entire agreement between Landlord and Assignor
with respect to the Leased Premises, (c) the Lease and Master Agreement are in
full force and effect and have not been modified or amended except as described
and set forth in this Assignment, and (d) Landlord is not in default under the
Lease or Master Agreement, nor has any event occurred or failed to have occurred
which, with the giving of notice or the passage of time, or both, would result
in Landlord being in default.
B. Assignee
hereby represents and warrants to Assignor that the signatory executing on
behalf of Assignee is duly authorized and has the power and authority to bind
the Assignee.
5. COVENANTS AND
ACKNOWLEDGMENTS.
A. Assignee
acknowledges to Assignor and to Landlord that Assignee claims no rights or
interest in the Grove Isle Marina located contiguous to the Leased Premises
owned and operated by an affiliate of Landlord, except for rights specifically
granted under the terms and conditions contained in the Lease
Documents.
B. Contemporaneously
with the execution of this Assignment, Assignee (in its capacity as successor
Lessee) and Landlord are entering into a Third Amendment to Amended and Restated
Lease Agreement (“Third
Amendment”) in the form attached hereto as Exhibit “C,” which shall be
effective on the Effective Date (the execution and delivery of such Third
Amendment being a condition to Landlord’s
consenting
to the Assignment). Such Third Amendment shall, among other things,
amend the Lease to provide that at all times during the term of the Lease, (i)
Lessee shall be required to engage a qualified luxury resort manager to operate
the resort (the “Resort”) constituting the
Leased Premises (including but not limited to the private club operated from the
Leased Premises), (ii) Lessee and its affiliate engaged to manage the Resort
must at all times retain their roles, equity interests in and responsibilities
to Lessee under the Operating Agreement between Grove Hotel Partners, LLC, as
owner and GH-Grove Isle Management LLC, as operator, covering Grove Isle Hotel
and Spa, a Grand Heritage Hotel, Miami, Florida, dated November __, 2008 (the
“Management Agreement”)
and under the Limited Liability Company Agreement of Grove Hotel Partners, LLC
dated as of May 14, 2008 (the “Operating
Agreement”). The Third Amendment shall also provide that the
failure to maintain a qualified manager at all times shall constitute an event
of default under the Lease, and the failure of Resort Manager and Day-to-Day
Manager (as defined in the Management Agreement and Operating Agreement) at all
times to retain their roles, equity interests in and responsibilities to Lessee
under the Management Agreement and Operating Agreement (or being succeeded in
both roles and capacities and responsibilities by a “Qualified Assignee” as
defined in the Lease) shall also constitute an event of default under the
Lease. In the event of any conflict between the provisions of this
Assignment and the provisions of the Third Amendment, the provisions of the
Third Amendment shall prevail.
C. Assignee
acknowledges that Assignor and Landlord have disclosed to Assignee the existence
of a prior threat of litigation by the Grove Isle Condominium Association (the
“Association”) with
respect to noise and parking issues at or about the Leased Premises (the “Threatened
Litigation”). Assignor hereby represents and warrants that it
has disclosed to Assignee the material terms of the Threatened Litigation, as
summarized on Exhibit “D”
attached hereto, and provided to Assignee all correspondence received by
Assignor and/or exchanged by Assignor and Association in connection with the
Threatened Litigation. Assignee further acknowledges that Assignor
advised Assignee that at a meeting held on [June 6, 2008] with representatives
of the
Association, the Association agreed to the terms for remediation of the issues
constituting the Threatened Litigation, under the conditions listed on Exhibit “D.”
D. Assignee
acknowledges that Assignor and Landlord have disclosed to Assignee the
commencement of a bridge repair project to the bridge providing exclusive access
to the Grove Isle Condominium complex, the Grove Isle Marina, and the Leased
Premises, pursuant to the contract for same, a copy of which is attached hereto
as Exhibit “E” (the
“Bridge Repair
Contract”). Landlord (as “Developer,” as defined in the
“Declaration of Condominium Establishing Grove Isle, a Condominium” (as amended,
and recorded in the Public Records of Miami-Dade County, Florida, the “Declaration of Condominium”)
or its affiliate, and the Association are financially responsible for the Bridge
Repair Contract.
E. Assignee
acknowledges that Assignor and Landlord have disclosed to Assignee the intended
commencement dates and performance of select maintenance and repair projects at
the Leased Premises, which are described in the Deferred Maintenance Agreement,
a copy of which is attached hereto as Exhibit “F,” all of which will
occur at no cost or liability to Assignee. The contracted projects
consist of: pool deck paver repair and replacement, bar roof thatch
repair and replacement, hallway carpet replacement, and driveway repairs;
provided, however, that Assignor and Assignee recognize and agree that Landlord
may, in its sole but reasonable discretion, amend or modify the Deferred
Maintenance Agreement and/or the projects being accomplished pursuant to
it. Further provided, that nothing herein or in the Deferred
Maintenance Agreement does or shall absolve Assignee from its maintenance or
other obligations under the Lease Documents after the Effective
Date.
F. Assignee
acknowledges that pursuant to this Assignment, Assignee becomes by operation of
law, the successor holder of Assignor’s “Westgroup Capital Investment”
in the amount of Three Million Dollars ($3,000,000.00); that only the terms of
the Lease and the Master Agreement, and no extrinsic document or understanding,
determine the Lessee’s Capital Investment for purposes of calculating
Participation Rent; that Landlord has not heretofore given its consent to
increase the Lessee’s Capital Investment to an amount greater than
$3,000,000.00; and that any increase
in
Lessee’s Capital Investment for purposes of calculating Participation Rent shall
be subject to the terms and conditions of the Lease and Master
Agreement.
G. Nothing
contained in this Section
5 shall be deemed to limit the indemnification obligations of Assignor
pursuant to Section 3.A
of this Assignment.
6. LANDLORD’S
CONSENT. Subject to the terms and conditions set forth in this
Assignment, the Landlord consents to this Assignment, as more particularly set
forth above Landlord’s signature. Except as expressly set forth
herein and in Landlord’s Estoppel Certificate of even date (the “Estoppel Certificate”),
Landlord makes no covenants, representations or warrantees with respect to any
matter in connection with this Assignment and/or the Lease
Documents.
7. LANDLORD’S
ESTOPPEL. Concurrently with the execution and delivery of this
Assignment, Landlord has delivered to Assignor and Assignee the Estoppel
Certificate, substantially in the form attached hereto as Exhibit “G.”
8. CHOICE OF
LAW. This Assignment, and the interpretation and enforcement
thereof, shall be governed by the laws of the State of Florida (without regard
to conflicts of law). If any party hereto brings any proceeding with
respect to the subject matter or the enforcement of this Assignment, the
prevailing party (as determined by the court or other authority before which
such proceeding is commenced), in addition to such other relief as may be
awarded, shall be entitled to recover reasonable attorneys’ fees, expenses and
costs. Venue for any action arising out of or brought in connection
with this Assignment shall be in Miami-Dade County, Florida. All
parties to this Assignment contributed to its preparation, and it shall not be
construed more strictly against any one party.
9. SUCCESSORS. The
provisions of this Assignment shall be binding upon, and shall inure to the
benefit of, each of the parties hereto, and to their respective successors, and
assigns (although nothing herein shall be deemed to constitute Landlord’s
consent to any further assignment of the Lease Documents).
10. MISCELLANEOUS.
A. This
Assignment may be executed in one or more counterparts (by facsimile or
electronic PDF).
B. Capitalized
terms used but not defined herein shall have the meanings ascribed to them under
the Lease.
C. Assignor
and Assignee (and Landlord) hereby knowingly, voluntarily, and intentionally
waive any right either may have to a trial by jury in respect to any action,
proceeding, or counterclaim based on this Assignment.
SIGNATURE
PAGE FOLLOWS:
IN
WITNESS WHEREOF the parties have executed this Assignment effective on the date
first above written.
ASSIGNOR:
WESTGROUP
GROVE ISLE ASSOCIATES, LTD.,
a Florida
Limited Partnership
By: Westgroup
Partner, Inc. a
California corporation, its sole
general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
President
ASSIGNEE:
Grove
Hotel Partners LLC,
a
Delaware Limited Liability Company, its Manager
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, President
LANDLORD’S
CONSENT FOLLOWS:
LANDLORD’S
CONSENT
Landlord
hereby (i) consents to the foregoing Assignment, (ii) approves Grand Heritage
Hotel Group, LLC, ▇▇▇▇ ▇▇▇▇▇▇ and their affiliates as the Resort Manager and
Day-to-Day Manager (as defined in the Management Agreement and Operating
Agreement), subject to such Resort Manager and Day-to-Day Manager at all times
retaining their roles, equity interests in and responsibilities to Lessee under
the Management Agreement and Operating Agreement (or being succeeded in both
roles and capacities and responsibilities by a “Qualified Assignee” as defined
in the Lease).
LANDLORD:
GROVE
ISLE ASSOCIATES, LLLP, a Delaware limited liability limited partnership, f/k/a
Grove Isle Associates, Ltd.
By: Courtland
Investments, Inc., a
Delaware
corporation,
Its sole
general manager
By: /s/
_____________________________________
Name:
Title: President
EXHIBIT
“A”
THE
LEASE
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Amended
& Restated Lease Agreement dated November 19,
1996
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Amendment
to Amended and Restated Lease Agreement dated December 10,
1999
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Second
Amendment to Amended and Restated Lease Agreement dated September 15,
2004
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