Item C47
BOARD OF COUNTY COMMISSIONERS
AGENDA ITEM SUMMARY
Meeting Date: August 15, 2007
Division: Housing & Community Development
Bulk Item: Yes X No
Department: Housing & Community Development
Staff Contact Person: James R, "Reggie" Paros
AGENDA ITEM WORDING:
Approval of a 99-year Ground Lease Agreement between Monroe County and Sea Grape Apartments,
LTD for a site in Marathon (RE #103560-000200) to be purchased by the Monroe County Land
Authority and conveyed to the County for its Keys-wide affordable housing programs
ITEM BACKGROUND: The Sea Grape Apartments site is located near MM 50,5 on the Oceanside
in Marathon, The Carlisle Group submitted this site in response to the BOCC's request for proposals
for purchase/leaseback of affordable housing sites, Carlisle proposes to develop the site with a total of
56 affordable housing units for rental use, Acquisition of the property will involve the following steps:
1) Land Authority will purchase the site; 2) the Land Authority will transfer title to the BOCC; and 3)
the BOCC will lease the property back to the Sellers for development.
PREVIOUS RELEVANT BOCC ACTION: On March 15, 2006, the Board approved Ordinance
005-2006 establishing the purchase and leaseback program for affordable housing,
CONTRACT/AGREEMENT CHANGES: This is a new agreement.
STAFF RECOMMENDATIONS: Approval
TOTAL COST: N/A
BUDGETED: Yes
No
COST TO COUNTY: N/A
SOURCE OF FUNDS:
REVENUE PRODUCING: Yes
No X
AMOUNT PER MONTH Year
APPROVED BY: County Atty YES OMB/Purchasing YES Risk Management YES
DOCUMENTA TION:
Included X NotRequired_
DISPOSITION:
AGENDA ITEM #
Revised 8/06
" ---:.
MONROE COUNTY BOARD OF COUNTY COMMISSIONERS
CONTRACT SUMMARY
Contract #
Contract with: Sea Grape Apartments, L TD Effective Date: Upon Approval
Expiration Date: 99 years
Contract Purpose/Description: 99 year lease agreement with Sea Grape Apartments, L TD
to develop the site with a total of 56 affordable units for rental use
Contract Manager: James R. "Reggie" Paras X6002
(Name) (Ext.)
HCD - Stop 15
(Department/Stop #)
for BOCC meeting on August 15, 2007
Agenda Deadline: July 31, 2007
CONTRACT COSTS
Total Dollar Value of Contract: $ nJa Current Year Portion: $
Budgeted? YesO No 0 Account Codes: _-_
Grant: $_ _-_-_-_-_
County Match: $_ _-_-_-_-_
- - - -
-------
ADDITIONAL COSTS
Estimated Ongoing Costs: $_/yr' For:
(Not included in dollar value above) (eg. maintenance, utilities, ianitorial, salaries, etc.)
. /' CONTRA<;'T
.../- / I k:. i , ,/
. / !'" L,~. I Changes /
Date In Needed
Division Director YesO No
Risk Managemel)J; l1.i-D I YesD No
fJu. ~\j 4},i:J I
O.M.B./Purchasing '6 -/ -D7 YesO NoD
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County Attorney
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Comments:
OMB Fonn Revised 9/1 1/95 Mep #2
LEASE
BETWEEN
MONROE COUNTY
"LESSOR"
AND
SEA GRAPE APARTMENTS, LTD.
"LESSEE"
DATED
,2007
RE No. 00103560-000200
J:\All practice\AA Legal Matters\M\A Monroe County Workforce Task Force\Leases\Sea Grape\Sea
Grape Apartments, Ltd\Sea Grape Apartments, Ltd - Affordable 99 YEAR LEASEv7 from RD 3-23-07 rlO
CLEAN,doc7/31/2007 2:25 PM
Table of Contents
Article
Title
Page No.
I
Definitions
4
8
II
Demised Premises
III
Term
8
IV
Rent
9
V
Non-Subordination
10
VI
Payment of Taxes and Utilities
10
VII
Mechanics' Liens
13
VIII
Governing Law, Cumulative Remedies
14
IX
Indemnification of Lessor
14
X
Insurance
16
XI
Insurance Premiums
20
XII
Assignment/Transfer
20
XIII
Condemna tion
28
XIV
Construction
29
xv
Mortgage Financing
31
XVI
Default
36
XVII
Repair Obligations
39
XVIII
Additional Covenants of Lessee/Lessor
39
XIX
Representations, Warranties of Title and Quiet Enjoyment
and No Unlawful or Immoral Purpose or Use 41
xx
Miscellaneous 42
Exhibit A
Legal Description 50
Page 2 of 57
Exhibit B Project Depiction 51
Exhibit C Commencement Date Agreement 52
Exhibit D Annual Rent Payment Schedule 53
Exhibit E Letter of Acknowledgment 55
Exhibit F Modified or Additional Conditions 57
Page 3 of 57
GROUND LEASE AGREEMENT
THIS LEASE made and entered into in Key West, Monroe County, Florida, on this
_dayof ,2007, by and between MONROE COUNTY (referred to as
the "Lessor") and SEA GRAPE APARTMENTS, LTD., Florida limited partnership
(referred to as the "Lessee").
RECITALS
WHEREAS, Lessor is the owner in fee simple of the property located at
_ _, City of Marathon, Monroe County, Florida, and more particularly
described on the attached Exhibit A (hereinafter "Property");
WHEREAS, it is Lessor's intent that the Property be developed to provide affordable
housing for Monroe County;
WHEREAS, Lessee desires to develop the Property for rental use fifty six (56)
affordable housing units (provided allowed by County regulations and hereinafter the
"Mfordable Housing Units") for qualified owner or tenant occupants, as the case may be,
using, among other financing sources, those made available through Section 42 Low-Income
Housing Tax Credit program (LlliTC),;
WHEREAS, in order to preserve the affordability of the Units to be developed on the
Property, Lessor desires to lease the Property to Lessee for ninety-nine (99) years, subject
to the Mfordable Restrictions as set forth and further defined herein; and
NOW THEREFORE, in consideration of the mutual covenants and obligations
contained herein, and in any contemporaneous Related Agreements between the parties,
the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
Definitions
"Mfordable Housing Unit" shall mean a residential housing unit that meets the
moderate or lesser income requirements set forth in Chapter 9.5 and any other applicable
sections of the Monroe County Land Development Regulations, as may be amended from
time to time without limitation of Lessor's complete legislative prerogatives, said
restrictions to encumber the Property for the term of the ninety-nine (99) year lease.
However, nothing in this Lease shall (a) permit the Lessor to require a Lessee to comply
with provisions oflocal ordinances that are in conflict with LIHTC requirements applicable
to the financing of the project, or (b) materially and adversely alter the obligations or rights
of Lessee under this Lease.
Page 4 of 57
"Affordable Restrictions" shall mean the affordable or employee housing regulations
as set forth in Chapter 9.5 and any other applicable sections of the Monroe County Land
Development Regulations or County Code, as hereinafter amended, except that in no event
shall the Lessor materially and adversely alter the obligations or rights of Lessee under this
Lease or decrease the lawfully permissible sales price or rental rate for an Mfordable
Housing Unit to less than the specified sales price or rental rates for moderate income
housing as set forth in the Land Development Regulations in effect at the time of execution
ofthis Lease where the effect upon an owner/Sublessee/mortgagee would be to divest such
person or entity of value upon which such person reasonably and fairly relied to their
detriment. The substance of the Mfordable Restrictions may be freely amended in the
Lessor's legislative discretion, particularly with respect to administrative, monitoring and
enforcement mechanisms, but any such amendment shall not materially diminish the
lawfully established and equitably vested resale value or the reasonable alienability of
"home-ownership" Mfordable Housing Units, or in the case of rental-only units or projects,
such as the one contemplated herein, shall not materially and adversely diminish or
interfere with the Lessee's substantive benefits conferred under this Lease or any of its non-
administrative terms. However, Lessor may restrict Mfordable Housing Unit resales and
rentals to use as "Employee Housing" as defined in the Mfordable Restrictions, as amended
from time to time (though not in conflict with LIHTC requirements). Moreover, Lessor may
establish in its Mfordable Restrictions "means" or "assets" criteria that limit potential buyer
or rental pools. Any such amendment shall not increase Initial Lessee's responsibilities as
set forth herein. It is the intent and purpose and shall be the effect of this Lease and any
Mfordable Restrictions to ensure that the affordability of Mfordable Housing Units and
dedicated real property upon which they are located is maintained and enforced such that
any administrative rule, policy or interpretation thereof, made by Lessor or its designees
relating to the maximum total amount of consideration and cost permitted to be in any way
involved in a purchase or rental transaction (including but not limited to purchase price,
lease assignment fees, rents or any other compensation given or received in or "outside" of a
related transaction) shall never exceed the affordability criteria reasonably established by
Monroe County for the dwelling units involved. In every case, the construction and
interpretation of terms, conditions and restrictions imposed by this Lease and the
Mfordability Restrictions shall be made in favor of ensuring that long term affordability
benefits for the respective housing resources inure to the benefit of Monroe County, its
economy and its community character. In all cases of conflict between local and federal
LIHTC rental, tenant eligibility and other guidelines, Lessee shall be entitled to adhere to
governing federal (LIHTC) requirements without being deemed in breach ofthis Lease or
the Mfordable Restrictions.
"Association" shall mean any condominium, homeowners or similar community
association customarily used in planned developments (whether or not expressly
contemplated or authorized herein) to manage certain aspects of community or planned
development living (e.g., infrastructure management, rules and regulations, enforcement
mechanisms and recreational facilities).
"Commencement Date" shall mean the date when Initial Lessee receives a Certificate
of Occupancy for the first Mfordable Housing Unit.
Page 5 of 57
"Demised Premises" shall mean the property leased pursuant to this Lease for
development of the Mfordable Housing Units. The Demised Premises is legally described
on attached Exhibit A and depicted on attached Exhibit B. Demised Premises, where the
context requires and the construction is most appropriate, shall also mean portions of the
Demised Premises and any improvements erected thereon.
"Effective Date" shall mean the date this Lease is fully executed and delivered by all
parties and the date that the Lessee shall be entitled to begin to occupy the Demised
Premises for purposes of development and construction of the Project.
"Initial Lessee" means SEA GRAPE APARTMENTS, LTD., a Florida limited
partnership, developer and future manager of the Mfordable Housing Units.
"Lease" shall mean this lease for the creation of the Mfordable Housing Units on the
Demised Premises, as may be amended from time to time by the parties. It is expressly
contemplated and intended by Lessor, as fee title holder to the Demised Premises, and
agreed to and accepted by Lessees, that any limitations, restrictions and/ or other covenants
of any nature, whether established pursuant to this Lease or by the Mfordable Restrictions,
be given the full force and effect of enforceable covenants running with the land, equitable
servitudes and all other cognizable legal and equitable real property conventions so as to
ensure the overall public affordable housing purposes intended to be served, including
appropriate application of cumulative enforcement theories.
"Lease Year" shall mean the twelve (12) month period beginning on the
Commencement Date and each twelve (12) month period thereafter throughout the Term of
this Lease.
"Lessor" means MONROE COUNTY, or its assigns or designees. Lessor as used
herein and where the context requires, shall mean an agency or party designated by the
Lessor, by written notice to all parties, to administer or enforce some or any portion ofthe
provisions of this Lease or the Mfordable Restrictions.
"Lessee" means the Initial Lessee and its successors and assigns, including the
Association created by Initial Lessee for the Unit owners/tenants, if any, as well as the
individual Unit owners/tenants.
"Limited Partner" for this Lease means Wachovia Mfordable Housing Community
Development Corporation and its successors and assigns, or any other such limited partner
designated by the Lessee.
"Project" shall mean the required development of the Demised Premises, primarily
the required construction of Mfordable Housing Units as set forth in Article XIV, but also
including related infrastructure, securing of required development approvals and permits,
financing for the construction of the Mfordable Housing Units, marketing/renting of the
Mfordable Housing Units and creation of any required governing Association.
Page 6 of 57
"Related Agreements" shall mean any purchase and sale or other agreement entered
into with Monroe County contemporaneously and in conjunction with this Lease and which
is recorded. Related Agreements made to apply to this Lease are set forth in Exhibit F.
"Rent" shall mean any sum of money due to the Lessor under this Lease for any
reason. The term Rent as used herein, should not be misconstrued to preclude definition
and distinguishing of rent, rental rates and other such other terms as may be provided for
in Subleases and/or the Mfordable Restrictions.
"Sale" and "Sell" as used herein shall be broadly and liberally construed so as to
encompass, where contextually appropriate, any ground subleasing, sale, grant, assignment
or other conveyance of an interest in any portion of the Demised Premises authorized
pursuant to this Lease, but excluding any rental of an Mfordable Housing U ni t (which may
be more particularly discussed herein or in the Mfordable Restrictions) and any granting of
any security, mortgage, note or other interest of a form and type customarily used with
purchase money or home equity loans.
"Sublease" shall mean any combination of instruments that grant, conveyor
otherwise transfer a possessory use and/or title interest to any portion of the Demised
Premises, including rental agreements with tenants or renters of an Mfordable Housing
Unit (which may be more particularly discussed herein or in the Mfordable Restrictions)
and any security, mortgage, note or other interest of a form and type customarily used with
purchase money or home equity loans. The title or exact nomenclature used to describe
such instruments may vary to suit particular circumstances and shall lie within Initial
Lessee's reasonable discretion and still remain within the meaning herein intended (e.g., a
"deed of improvements" may in a given context be construed as an effective sublease for
purposes herein). It is intended that the term Sublease encompasses such instruments that
effectuate qualified end-user, title, possession and/or use of Mfordable Housing Units
developed on the Demised Premises. A Sublease, as used herein, regardless of final form
and substance, must be approved by the Lessor, which approval shall not be unreasonably
withheld. However, sublease forms which conform to LIHTC or Florida Housing Finance
Corporation requirements and that otherwise conform to the Mfordable Restrictions need
not be approved by the Lessor.
"Sublessee" or "Owner" shall be broadly and liberally construed so as to mean an
individual Mfordable Housing Unit owner or tenant who, as of the date such person(s)
acquires( ) or renews their interest(s) in the Mfordable Housing Unit, qualifies for
"Mfordable Housing" as defined under Chapter 9.5 of the Monroe County Code and who is
gainfully employed at the time of their rental. Additionally, except as may be otherwise
permitted by this Lease, in order to remain eligible to renew their sublease or rental
agreement and to reside in their Mfordable Housing Unit into retirement, in addition to
complying with any otherwise applicable provisions in the Mfordable Restrictions, renters
or tenants of all Mfordable Housing Units shall be encouraged to be and must remain
gainfully employed. However, no gainful employment aspiration or requirement expressed
herein or expressed in the Mfordable Restrictions shall preclude or inhibit Lessee's
Page 7 of 57
compliance with LIHTC or other state or federal requirements or obligations,
"Term" shall mean the Commencement Date, and continuing for ninety-nine (99)
years thereafter, plus any agreed upon extension of this Lease, and unless otherwise
permitted by Lessor, all Subleases and rights or interests granted thereunder shall
terminate at the end of the Term.
ARTICLE II
Demised Premises
Section 2.01 Lessor's Demise. Upon the terms and conditions hereinafter set forth,
and in consideration of the payment of the Rents and the prompt and full performance by
the Initial Lessee of these covenants and the terms and conditions of any Related
Agreements, to be kept and performed by the Initial Lessee, the Lessor does lease, let, and
demise to the Initial Lessee (and permitted successor Lessees) and the "Initial Lessee"
hereby leases from the Lessor, the following described premises, situate, lying and being in
Monroe County, Florida:
See Attached Exhibits A and B
Section 2.02 Conditions. The demise is likewise made subject to the following:
(a) Conditions, restrictions and limitations, if any, now appearing of
record;
(b) Zoning ordinances of the County of Monroe, State of Florida, and any
other applicable governmental body now existing or which may hereafter exist by reason of
any legal authority during the Term of this Lease; and
(c) The proper performance by the Lessee of all of the terms and
conditions contained in this Lease, the Mfordable Restrictions and Related Agreements, if
any (for applicability see Exhibit F to this Lease).
Section 2.03 Rental-Only Use. Contrary provisions herein notwithstanding the
demised premises shall be used for MfordablejEmployee Housing rental uses throughout
the Term unless the parties to the Lease otherwise agree in a publicly recorded writing. In
all cases of conflict between local and federal LIHTC rental, tenant eligibility and other
guidelines, Lessee shall be entitled to adhere to governing federal LIHTC requirements
without being deemed in breach of this Lease or the Mfordable Restrictions.
ARTICLE III
Term
Section ~.01 Term. To have and to hold the Demised Premises for a term of ninety-
Page 8 of 57
nine (99) years commencing on the Commencement Date, and ending ninety-nine (99)
years thereafter, both dates inclusive, unless sooner terminated, or extended, as hereinafter
provided (the "Termination Date"). Lessee shall be given possession on the Effective Date
and the terms and conditions set forth herein shall be binding on the parties as of the
Effective Date. Lessee shall have the right to occupy the Demised Premises as of the
Effective Date in order to allow Lessee to commence construction, as well as other activities
related to the development and construction of the Project. As herein set forth, the Term
will not commence until the first Mfordable Housing Unit is completed and a certificate of
occupancy has been issued for that Mfordable Housing Unit, said date to be evidenced by
the Commencement Date Agreement that the parties will upon completion of construction
of the first Mfordable Housing Unit execute in substantially the same form as that set forth
in Exhibit C hereto.
ARTICLE IV
Rent
Section 4.01 Annual Base Rent. Lessee covenants and agrees to pay to Lessor
promptly when due, without notice or demand, and without deduction or offset, Annual
Base Rent throughout the Term of this Lease beginning on the Commencement Date, in the
amount ofTen Dollars ($10.00) per Lease Year or partial Lease Year. Lessee shall pay to
Landlord said Annual Base Rent on the first day of the second month of each Lease Year
throughout the term of this Lease, provided that upon transfer of control of an Association
by Initial Lessee as may be authorized under this Lease, Lessor agrees to provide written
notice of the Annual Base Rent to the Association at least ten (10) business days prior to
said Rent being due, which notice may be in the form of a single schedule of all rental due
dates under the Term of the Lease duly recorded in the Public Records of Monroe County,
Florida, with a copy of such schedule provided to the Lessee and Association. The form of
such notice may be similar to that in Exhibit D, hereto. Annual Base Rent may be paid in
advance for the entirety of the term upon which Lessee may record a notice of prepayment
at its expense.
Section 4.02. All amounts payable under Section 4.01 hereof, as well as all other
amounts payable by Lessee to Lessor under the terms of this Lease, shall be payable in
lawful money of the United States which shall be legal tender in payment of all debts and
dues, public and private, at the time of payment, each payment to be paid to Lessor at the
address set forth herein or at such other place within the continental limits of the United
States as Lessor shall from time to time designate by notice to Lessee. Except for any
income tax payable by the Lessor, Lessee shall pay any and all taxes, including any local
surcharge or other tax, on the Rent payable pursuant to this Lease in addition to the sums
otherwise set forth herein.
Section 4.01. It is intended that the Rent shall be absolutely net to Lessor
throughout the Term, free of any taxes, costs, utilities, insurance expenses, liabilities,
charges or other deductions whatsoever, with respect to the Demised Premises and/ or the
Page 9 of 57
ownership, leasing, operation, maintenance, repair, rebuilding, use or occupation thereof.
Section 4.04. All amounts payable by Lessee to Lessor under any of the provisions
of this Lease, if not paid when due as provided for in this Lease, shall bear interest at the
highest rate allowable under Florida law from the time they become due until paid in full by
Lessee. In addition, Lessee shall pay a late fee in the amount of ten (10%) percent of any
amount due from Lessee to Lessor which is not paid within ten (10) days of the payment
due date for any sums due for Rent and within thirty (30) days for any other sums due from
Lessee pursuant to this Lease; provided, however, such payment shall not excuse or cure
any default by Lessee under this Lease. It is agreed by the parties hereto that Lessee shall
reimburse Lessor for collection charges incurred as a result of the overdue Rent which may
include but shall not be limited to related attorneys' fees, regardless of whether suit is
brought. Such late fee shall be in addition to any interest payable by Lessee as set forth
herein from Lessee's failure to pay any Rent due hereunder. In the event that any check,
bank draft, order for payment or negotiable instrument given to Lessor for any payment
under this Lease shall be dishonored for any reason whatsoever not attributable to Lessor,
Lessor shall be entitled to charge Lessee an administrative charge for dishonored checks
pursuant to 125.0105, Florida Statutes, and/or any other applicable law. In addition,
Lessor shall be reimbursed by Lessee for any costs incurred by Lessor as a result of a
payment instrument being dishonored (e.g., legal fees).
ARTICLE V
N on -Subordination
Section S.01 Non-Subordination. Notwithstanding anything to the contrary
contained in this Lease, the fee simple interest in the Demised Premises shall not be
subordinated to any leasehold mortgage, lien or encumbrance of any nature. Furthermore,
the Lessor's right to receive payment or performance under the terms of this Lease or
adherence to any of its conditions or to the Mfordable Restrictions (or performance under
or adherence to the terms of any Sublease or related instrument) shall not be subordinated
to any debt or equity financing, leasehold mortgage, lien, encumbrance or obligation of any
nature whatsoever.
ARTICLE VI
Payment of Taxes and Utilities
Section 6.01 Lessee's Obligations. As additional Rent, the Lessee shall pay and
discharge, as they become due, promptly and before delinquency, all taxes, assessments,
water and sewer rents, rates and charges, transit taxes, charges for public utilities, excises,
levies, licenses and permit fees and other governmental charges, general and special,
ordinary and extraordinary, unforeseen and foreseen, of any kind and nature whatsoever,
which at any time during the Term of this Lease may be assessed, levied, confirmed,
Page 10 of 57
imposed upon, or grow or become due and payable out of or in respect of, or become a lien
on, the Demised Premises, or otherwise arise out of the revenues received by the Lessee
from the sale or rental of the Mfordable Housing Units to Sublessees, or be associated with
any document (to which the Lessee is a party) creating or transferring an interest or estate
in the Demised Premises. With regard to special assessments, if the right is given to pay
either in one sum or in installments, Lessee may elect either mode of payment and Lessee's
election shall be binding on Lessor.
Section 6.02 Sublessee's Obligations. As additional Rent, any Sublessee, unless
Lessee fulfills all such obligations pursuant to Section 6.01, above, shall pay and discharge,
as they become due, promptly and before delinquency, all taxes, assessments, water and
sewer rents, rates and charges, transit taxes, charges for public utilities, excises, levies,
licenses and permit fees and other governmental charges, general and special, ordinary and
extraordinary, unforeseen and foreseen, of any kind and nature whatsoever, which at any
time during the term of this Lease may be assessed, levied, confirmed, imposed upon, or
grow or become due and payable out of or in respect of, or become a lien on, the Sublessee's
interest in the Demised Premises, or otherwise arise out of the revenue received by
Sublessee from the sale of their Mfordable Housing Unit (if contemplated or otherwise
authorized under this Lease or the Mfordable Restrictions), or be associated with any
document (to which the Sublessee is a party) creating or transferring an interest or estate in
the respective portion of the Demised Premises.
Section 6.0~ Obligations Altered. Nothing herein shall require the Lessee to pay
municipal, state, or federal income taxes assessed against the Lessor, municipal, state, or
federal capital levy, estate, gift, succession, inheritance or transfer taxes of the Lessor, or
Lessor's legal representative, corporate franchise taxes imposed upon any corporate owner
of the fee of the Demised Premises; provided, however, that if at any time during the term
of this Lease the methods of taxation prevailing at the commencement of the term hereof
shall be altered so as to cause the whole or any part of the taxes, assessments, levies,
impositions or charges now levied, assessed and imposed, wholly or partially as a capital
levy, or otherwise, on the rents received therefrom, or of any tax, corporation franchise tax,
assessments, levy (including, but not limited to any municipal, state or federal levy),
imposition or charge, or any part thereof, shall be measured by or based in whole or in part
upon the Demised Premises and shall be imposed upon the Lessor, then all such taxes,
assessments, levies, impositions or charges, or the part thereof so measured or based, shall
be paid and discharged by the Lessee. All rebates on account of any taxes, rates, levies,
charges or assessments required to be paid shall belong to Lessee.
Section 6.04 Mode of Payment. The Lessee (and any Sublessee, as to their specific
interests in the Demised Premises) shall pay the taxes and other charges as enumerated in
this Article VI and shall deliver official receipts evidencing such payment to the Lessor
(Sublessees shall only deliver receipts as may be required by the Mfordable Restrictions),
which payment of taxes shall be made and the receipts delivered, at least thirty (30) days
before the tax, itself, would become delinquent in accordance with the law then in force
governing the payment of such tax or taxes. If, however, the Lessee desires to contest the
validity of any tax or tax claim, the Lessee may do so without being in default hereunder,
Page 11 of 57
provided the Lessee gives the Lessor notice of the Lessee's intention to do so and furnishes
the Lessor or the applicable governmental agency with a bond with a surety made by a
surety company qualified to do business in the State of Florida or pays cash to a recognized
escrow agent in Monroe County, one and one half (1112) times the amount of the tax item or
items intended to be contested, conditioned to pay such tax or tax items when the validity
thereof shall have been determined, and which written notice and bond or equivalent cash
shall be given by the Lessee to the Lessor, not later than sixty (60) days before the tax item
or items proposed to be contested would otherwise become delinquent.
Section 6.os Lessee's Default. If the Lessee shall fail, refuse or neglect to make any
of the payments required in this Article, then the Lessor may, but shall not be required to,
pay the same and the amount or amounts of money so paid, including reasonable attorneys'
fees and expenses which might be reasonably incurred because of or in connection with
such payments, together with interest on all such amounts, at the highest rate allowed by
law shall be repaid by the Lessee to the Lessor, upon the demand of the Lessor, and the
payment thereof may be collected or enforced by the Lessor in the same manner as though
such amount were an installment of Rent specifically required by the terms of this Lease to
be paid by the Lessee to the Lessor, upon the day when the Lessor demands repayment
thereof or reimbursement therefor of and from the Lessee; but the election of the Lessor to
pay such taxes shall not waive the default thus committed by the Lessee. Notwithstanding
the foregoing, Lessee shall have the right to contest any taxes and assessments levied
against Lessee in accordance with paragraph 6.04, above; and provided Lessee files the
appropriate documentation to contest said tax or assessment, Lessee shall not be in default
of this Lease or obligated to pay any interest or other penalties to Lessor. Nothing herein
shall be construed to prevent or inhibit the assessment measures and collection remedies
lawfully available to any taxing authority.
Section 6.06 Sublessee's Default. If a Sublessee shall fail, refuse or neglect to make
any of the payments required in this Article, then the Lessor may, but shall not be required
to, pay the same, and the amount or amounts of money so paid, including reasonable
attorneys' fees and expenses which might be reasonably incurred because of or in
connection with such payments, together with interest on all such amounts, at the highest
rate allowed by law shall be repaid by the Sublessee to the Lessor, upon the demand of the
Lessor, and the payment thereof may be collected or enforced by the Lessor in the same
manner as though such amount were an installment of Rent specifically required by the
terms ofthis Lease to be paid by the Sublessee to the Lessor, upon the day when the Lessor
demands repayment thereof or reimbursement therefor of and from the Sublessee; but the
election of the Lessor to pay such taxes shall not waive the default thus committed by the
Sublessee. Notwithstanding the foregoing, Sublessee shall have the right to contest any
taxes and assessments levied against Sublessee; and provided Sublessee files the
appropriate documentation to contest said tax or assessment, Sublessee shall not be in
default of this Lease or obligated to pay any interest or other penalties to Lessor. Nothing
herein shall be construed to prevent or inhibit the assessment measures and collection
remedies lawfully available to any taxing authority.
Section 6.07 Proration. The foregoing notwithstanding, the parties hereto
Page 12 of 57
understand and agree that the taxes for the first year (beginning on the Effective Date) and
the last year of the Term shall be prorated proportionately between the Lessor and the
Lessee.
Section 6.08 Appraiser to Respect Effect of Mfordable Restrictions. It is the intent
of the parties that any appraisal of any portion of the Demised Premises for taxation, public
assessment or utility service purposes fully reflect the effect of this Lease and the Mfordable
Restrictions on the lawfully realizable value of relevant portiones) appraised, or where
permissible by state law, "income approach" or other method of calculation.
ARTICLE VII
Mechanic's Liens
Section 7.01 No Lien. Neither the Lessee nor any Sublessee shall have the power to
subject the interest of the Lessor in the Demised Premises to any mechanic's or
materialmen's lien of any kind whether or not the improvements are made with the consent
of the Lessor.
Section 7.02 Release of Lien. N either the Lessee nor any Sublessee shall permit or
suffer to be filed or claimed against the interest of the Lessor in the Demised Premises
during the continuance of this Lease any lien or claim of any kind, and if such lien be
claimed or filed, it shall be the duty of the Lessee, or the Sublessee, to which the lien or
claim is attributable, or both where the Mfordable Housing Unit is a rental unit, within
thirty (30) days after the Lessee or Sublessee shall have been given written notice of such a
claim having been filed, or within thirty (30) days after the Lessor shall have been given
written notice of such claim and shall have transmitted written notice of the receipt of such
claim unto the Lessee or Sublessee, as the case may be, (whichever thirty (30) day period
expires earlier) to cause the respective portion of the Demised Premises to be released from
such claim, either by payment or by the posting of bond or by the payment to a court of
competent jurisdiction of the amount necessary to relieve and release the relevant portion
of the Demised Premises from such claim, or in any other manner which, as a matter oflaw,
will result, within such period of thirty (30) days, in releasing the Lessor and the title of the
Lessor from such claim; and the Lessee covenants and agrees, with respect to any lien or
claim attributable to it, within such period ofthirty (30) days, so as to cause the affected
portion of the Demised Premises and the Lessor's interest therein to be released from the
legal effect of such claim.
Section 7.0~ Lessee's Default. If the Lessee shall fail, refuse, or neglect to perform
its obligations as required in this Article, then the Lessor may, but shall not be required to,
pay any sums required to cause the Demised Premises and the Lessor's interest therein to
be released from the legal effect of such claim and the amount or amounts of money so
paid, including reasonable attorneys' fees and expenses which might be reasonably incurred
because of or in connection with such payments, together with interest on all such amounts
at the highest rate allowed by law, shall be repaid by the Lessee to the Lessor, upon the
Page 13 of 57
demand of the Lessor, and the payment thereof may be collected or enforced by the Lessor
in the same manner as though such amount were an installment of Rent specifically
required by the terms of this Lease to be paid by the Lessee to the Lessor, upon the day
when the Lessor demands repayment thereof or reimbursement therefor of and from the
Lessee; but the election of the Lessor to pay such amount shall not waive the default thus
committed by the Lessee.
Section 7.04 Sublessee's Default. If the Sublessee shall fail, refuse, or neglect to
perform its obligations as required in this Article, then the Lessor may, but shall not be
required to, pay any sums required to cause the Demised Premises and the Lessor's interest
therein to be released from the legal effect of such claim and the amount or amounts of
money so paid, including reasonable attorneys' fees and expenses which might be
reasonably incurred because of or in connection with such payments, together with interest
on all such amounts at the highest rate allowed by law, shall be repaid by the Sublessee to
the Lessor, upon the demand of the Lessor, and the payment thereof may be collected or
enforced by the Lessor in the same manner as though such amount were an installment of
Rent specifically required by the terms of this Lease to be paid by the Sublessee to the
Lessor, upon the day when the Lessor demands repayment thereof or reimbursement
therefor of and from the Sublessee; but the election of the Lessor to pay such amount shall
not waive the default thus committed by the Sublessee.
ARTICLE VIII
Governing Law. Cumulative Remedies
Section 8.01 Governing Law. All of the rights and remedies of the respective parties
relating to or arising under this instrument and any related documents shall be governed by
and construed under the laws of the State of Florida.
Section 8.02 Cumulative Remedies. All rights and remedies accruing to the Lessor
shall be assignable in whole or in part and be cumulative; that is, the Lessor may pursue
such rights as the law and this Lease afford to it in whatever order the Lessor desires and
the law permits. Lessor's resort to anyone remedy in advance of any other shall not result
in waiver or compromise of any other remedy.
ARTICLE IX
Indemnification of Lessor
Section g.Ol Indemnification by Lessee. During the Term of the Lease and during
the period from the Effective Date to the Commencement Date, during which Lessee shall
be entitled and obligated to maintain site control of and insurance for the Demised
Premises for construction of the Mfordable Housing Units, Lessee will indemnify, defend
and save harmless the Lessor against any and all claims, debts, demands or obligations
Page 14 of 57
which may be made against the Lessor or against the Lessor's title in the Demised Premises,
arising out of, or in connection with, or in any way related to the Demised Premises, except
to the extent such claims may be caused by the gross negligence or intentional misconduct
of the Lessor (or its agents or employees in the conduct of work for or at the direction of the
Lessor) with respect only to any duty or obligation Lessor expressly assumes with respect to
any portion of the Demised Premises, none of which duties and obligations are so assumed
herein. If it becomes necessary for the Lessor to respond to any claim, demand or
unanticipated matter or to defend any action seeking to impose any such liability, the
Lessee will pay the Lessor all costs of court and reasonable attorneys' fees incurred by the
Lessor in effecting and preparing for such response or defense in addition to any other
reasonable sums which the Lessor may be called upon to pay by reason of the entry of a
judgment against the Lessor in any proceeding in which such claim is asserted.
Notwithstanding the foregoing, it is hereby acknowledged that, except as otherwise
provided in Section 12.01, upon completion of the construction and sale or assignment of
any portions of the Project in accordance with this Lease if contemplated and authorized as
a home-ownership project, Initial Lessee shall be released from any and all liability related
to such transferred portions of the Demised Premises and the subsequent use thereof by the
Sublessees, their employees, agents, contractors, guests or invitees, including without
limitation any death, injury or damage to person or property in or about the transferred
portions of the Demised Premises, except as otherwise set forth herein. However, this
release shall not constitute a release or waiver of Lessor's rights, if any, or possible
entitlement to insurance coverages required by this Lease.
Lessor shall not be liable to Lessee, or to Lessee's assignees or Sublessees or their
employees, agents, contractors, guests or invitees for any death, injury or damage to person
or property in, about or relating to the Demised Premises. Lessee, on its and its assignees'
and their successors in interests' behalves, including any future Sublessees, or grantees or
licensees of the Initial Lessee or the Association, or any guests, invitees or tenants of any of
the foregoing, hereby assumes and covenants for its own and their own acceptance of sole
responsibility and liability to all persons for death, injury or damage related to or arising
from the ownership, possession, occupancy and for use of any portion of the Demised
Premises, and also, for all such future occupants, owners, Lessees, Sublessees, tenants,
guests, invitees and licensees, waives and releases forever all claims, demands and causes of
action against Lessor and its officers, employees, agents, successors, assigns, contractors
and representatives for loss of life or injury to person or property, of whatever nature.
Section q.02 Insurance. On the Effective Date the Lessee shall cause to be written
and put in full force and effect a policy or policies of insurance as noted in Article X insuring
the Lessee against any and all claims and demands made by any person or persons
whomsoever for death, injuries or damages received in connection with the possession,
operation and maintenance of the Demised Premises. All such policies shall name the
Lessee and the Lessor (and any lender holding a mortgage on the Demised Premises), as
their respective interests may appear, as the persons insured by such policies. Any loss
adjustment shall require the written consent of both the Lessor and Lessee.
Page 15 of 57
Section q.o~ Policy Limit Changes. The policy limits for the comprehensive liability
insurance may be reviewed by Lessor every five (5) years and adjusted upward, if, in the
reasonable discretion of Lessor such increase in coverage is prudent or if similar projects
have begun to require greater insurance coverage.
ARTICLE X
Insurance
Section 10.01 Property Insurance. From and after the Effective Date, the Lessee
will keep insured any and all buildings and improvements upon the Demised Premises
against all loss or damage by fire, flood and windstorm, together with "all risks" "extended
coverage," which said insurance will be maintained in an amount sufficient to prevent any
party in interest from being or becoming a co-insurer on any part of the risk, which amount
shall not be less than the full Replacement Cost value of the relevant portions of the
Demised Premises, and all of such policies of insurance shall include the name of the Lessor
as an additional insured and shall fully protect both the Lessor and the Lessee as their
respective interests may appear. In the event of destruction of buildings or improvements
by fire, flood, windstorm or other casualty for which insurance shall be payable and as often
as such insurance money shall have been paid to the Lessor and the Lessee, said sums so
paid shall be deposited in a joint account of the Lessor and the Lessee in a bank designated
by the Initial Lessee, Lessee or Lessee's Mortgagee and located in the County in which the
Demised Premises is located, and shall be made available to the Lessee for the construction
or repair (including any modification to the improvements sought by the Lessee and
approved in writing by the Lessor with Lessor's approval not unreasonably withheld), as the
case may be, of any building or buildings damaged or destroyed by fire, flood, windstorm or
other casualty for which insurance money shall be payable and shall be paid out by the
Lessor and the Lessee from said joint account from time to time on the estimate of any
reliable architect licensed in the State of Florida officially overseeing of such reconstruction
and repair, certifying that the amount of such estimate is being applied to the payment of
the reconstruction or repair and at a reasonable cost therefor; provided, however, that the
total amount of money necessary for the reconstruction or repair of any building or
buildings destroyed or damaged has been provided by the Lessee for such purpose and its
application for such purpose assured.
In the event of the destruction or damage of the improvements located on the
Demised Premises, or any part thereof, and as often as any portion of said Demised
Premises shall be destroyed or damaged by fire, flood, windstorm or other casualty, the
Lessee shall, within fifteen (15) months (or twenty-four (24) months for a substantially total
loss) from the date of such damage or destruction, rebuild and repair the same in such
manner that the buildings or improvements so rebuilt and repaired, and the personal
property so replaced or repaired, shall be of the same or of a value higher than were the
buildings or improvements and the personal property prior to such damage or destruction,
and Lessee shall diligently prosecute the reconstruction or repairs without delay and have
Page 16 of 57
the same rebuilt and ready for occupancy as soon as reasonably possible after the time
when the loss or destruction occurred. The 15-month period (or twenty-four (24) month
period for a substantially total loss) for reconstruction shall be enlarged by delays caused
without fault or neglect on the part of the Lessee, by act of God, strikes, lockouts, or other
conditions (other than matters of refinancing the property) beyond the Lessee's control.
Notwithstanding the foregoing, and only with respect to insurance proceeds, the provisions
of any leasehold mortgage substantially comporting with customary institutional lending
industry standards and the foregoing Lessor's interests shall control as to the use and
disbursement of insurance funds for reconstruction of the improvements in the event of any
casualty or damage to such improvements.
While the Project, or any replacement thereof, is in the course of construction, and
whenever appropriate while any alterations are in the course of being made, the aforesaid
fire and extended coverage insurance shall be carried by Lessee in builder's risk form
written on a completed value basis.
Notwithstanding anything to the contrary in the immediately preceding paragraph,
in case of destruction of all of the improvements on the Demised Premises from any cause
so as to make all Mfordable Housing Units untenantable occurring during the last ten (10)
years of the Term of this Lease, Lessee, if not then in default under this Lease and if there is
no leasehold mortgage or other similar encumbrance on the Lessee's interest in the
Demised Premises, may elect to terminate this Lease by written notice to Lessor within
thirty (30) days after the occurrence of the destruction. In the event this Lease has been
assigned to an Association contemplated or authorized under this Lease or the Mfordable
Restrictions, the Association must obtain any necessary vote to terminate. In the event of
termination, there shall be no obligation on the part of Lessee to restore or repair the
improvements on the Demised Premises, nor any right of the Lessee to receive any proceeds
collected under any insurance policies covering the improvements. If Lessee elects not to
terminate this Lease in the event of destruction during the last ten (10) years ofthis Lease,
the proceeds of all insurance covering the improvements shall be made available to Lessee
for repairs, and Lessee shall be obligated to repair as set forth above.
Section 10.02 Commercial General Liability Insurance. The Initial Lessee and the
Association (upon assignment to the Association) shall maintain Commercial General
Liability Insurance beginning on the Effective Date and continuing during the entire Term
of this Lease. The Commercial General Liability Insurance shall cover those sources of
liability which would be covered by the latest edition of the standard Commercial General
Liability Coverage Form [ISO Form CG 00-01] as filed for use in Florida without the
attachment of restrictive endorsements other than the elimination of medical payments and
fire damage legal liability.
General Aggregate $1,000,000
Products/Completed Operations $1,000,000
[coverage for one (1) year after project completion]
Each Occurrence $1,000,000
Contractual Liability $1,000,000
Page 17 of 57
Addi tional Named Insured: Lessor, or its assigns or designees, as from time to time
designated by written notice to Lessee, shall be included as additional insureds for
Commercial General Liability.
Section 10.0~ Environmental Impairment Responsibility. The Lessee and/or its
contractors acknowledge that the performance of this Lease is, or may be, subject to
Federal, State and local laws and regulations enacted for the purpose of protecting,
preserving or restoring the environment. The Lessee shall, at the sole cost of the Lessee or
its contractors, be responsible for full compliance with any such laws or regulations.
Section 10.04 Other Insurance. Lessee shall maintain such other insurance and in
such amounts as may from time to time be reasonably required by the Lessor against other
insurable hazards which at the time are commonly insured against in the case of
construction of buildings and/or in the case of premises similarly situated, due regard being
or to be given to the location, construction, use and occupancy. In the event the Lessee
believes the Lessor's requirement for such additional insurance is unreasonable the
reasonableness of Lessor's request shall be determined in accordance with the rules of the
American Arbitration Association. Such determination as to the requirement of coverage
and the proper and reasonable limits for such insurance then to be carried shall be binding
on the parties and such insurance shall be carried with the limits as thus determined until
such limits shall again be changed pursuant to the provisions of this Section. The expenses
of such determination shall be borne equally by the parties. This procedure may only be
requested on each five (5) year anniversary date of the Lease.
Section 10.0S Proceeds Payable to Mortgagee. If any mortgagee holding a mortgage
created pursuant to the provisions of Article XV elects, in accordance with the terms of such
mortgage, to require that the proceeds of any casualty insurance be held by and paid out by
the mortgagee, then such payment may be made, but in such event, it shall still be
obligatory upon the Lessee to create the complete fund with the leasehold mortgagee in the
manner set forth in this Article to assure complete payment for the work of reconstruction
and repair. Any mortgagee holding insurance proceeds shall require that such proceeds are
properly used to ensure repairs, but any mortgagee shall not be liable for misuse of funds by
Sublessee or Lessee.
Section 10.06 Damages: Insurance Proceeds: Joint Bank Account. Any excess of
money received from insurance remaining in the joint bank account after the
reconstruction or repair of such building or buildings, if the Lessee is not in default, shall be
paid to the Lessee. Absent circumstances reasonably excused under the conditions set forth
in paragraph 14.03, in the case of the Lessee not entering into the reconstruction or repair
ofthe building or buildings within a period of six (6) months from the date of payment of
the loss, after damage or destruction occasioned by fire, windstorm, flood or other cause,
and diligently prosecuting the same with such dispatch as may be necessary to complete the
same in as short a period of time as is reasonable under the circumstances after the
occurrence of such damage or destruction, then the amount so collected, or the balance
thereof remaining in the joint account, as the case may be, shall be paid to the Lessor and it
Page 18 of 57
will be at the Lessor's option to terminate the Lease, unless terminated by Lessee within the
last ten (10) years of the Lease as set forth above, and retain such amount as liquidated and
agreed upon damages resulting from the failure of the Lessee to promptly, within the time
specified, complete such work of reconstruction and repair.
Section 10.07 Direct Repayment. The foregoing notwithstanding, in the event the
insurance proceeds are the sum of One Hundred Thousand and 00/100 Dollars
($100,000.00) or less, then such proceeds shall be paid directly to the Lessee without the
necessity of creating the joint bank account, and Lessee shall use such funds to make the
replacements or repairs. Lessee shall provide proof satisfactory to Lessor that repairs are
completed as required within fifteen (15) months from the date of such damage or
destruction, unless said period is enlarged by delays caused without fault or neglect on the
part of the Lessee.
Section 10.08 General Requirements. All insurance to be provided by Lessee under
this Lease shall be effected under valid and enforceable policies in such forms, issued by
insurers of recognized financial responsibility qualified to do business in Florida which
have been approved by Lessor, which approval shall not be unreasonably withheld. All
policies of insurance provided for in this Article shall, to the extent obtainable, contain
clauses or endorsements to the effect that (i) no act or negligence of Lessee or anyone acting
for Lessee or for any Sublessee or occupant of the Demised Premises which might otherwise
result in a forfeiture of such insurance or any part thereof shall in anyway affect the validity
or enforceability of such insurance insofar as Lessor, and that (ii) such policy of insurance
shall not be changed or cancelled without at least thirty (30) days written notice to the
Lessor, and that (iii) the Lessor shall not be liable for any premiums thereon or subject to
any assessments thereunder.
Section 10.0q Subsequent Lessees. Assignees. Sublessees and Grantees.
Notwithstanding anything contained herein to the contrary, in the event an authorized
Association chooses not to obtain insurance coverage to protect against loss or damage by
fire, flood and windstorm for the individual Mfordable Housing Units and therefore does
not charge the Sublessees for said coverage as part of the Association fees to be paid by the
individual Unit Owners (if this project is expressly authorized as a home-ownership
project); then, in such event Sublessees shall secure the above-described insurance
coverage for their individual Mfordable Housing Units. Therefore, Lessor shall be entitled
to require replacement cost and other customary and reasonable insurance coverage(s) at
least but only to the full replacement value of any Sublessees' and/or any governing
Association's insurable interest in the Demised Premises. Any parties who subsequently
become holders of any title or possessory interest to a portion of the Demised Premises,
shall upon request provide, in a form satisfactory to Lessor, proof of customary and
reasonable insurance adequate and sufficient to cover and protect all interests of the Lessor
as set forth in this Article X, at least to the extent and value of that subsequent interest
holder's insurable interest. The same or similar procedures for the use and application of
insurance proceeds as set forth above may be required for subsequent interest holders and
the same remedies available to Lessor for Initial Lessee's failure to comply with such
insurance requirements shall be available to Lessor with respect to any future interest
Page 19 of 57
holders. Future interest holders (including all Sublessees) shall name Lessor as an
additional insured on any required insurance policies.
ARTICLE XI
Insurance Premiums
Section 11.01 Insurance Premiums. The Lessee shall pay premiums for all of the
insurance policies which the Lessee is obligated to carry under the terms of this Lease. In
the event Lessee fails to obtain and pay for the necessary insurance, Lessor shall have the
right, but not the obligation, without notice to Lessee, to procure such insurance and/ or pay
the premiums of such insurance, in which case Lessee shall repay Lessor immediately upon
demand by Lessor as additional Rent. The Lessor shall have the same rights and remedies
with respect to procurement of such insurance and/or payment of such insurance
premiums in the event a future subsequent partial interest holder (e.g., Sublessee,
Association) fails to obtain and pay for the necessary insurance.
ARTICLE XII
Assignment/Transfer
Section 12.01 Assignment by Initial Lessee. Without the written consent of Lessor,
Initial Lessee shall not assign or sublet any portion of the Demised Premises, or change
management of the Demised Premises, except as otherwise provided herein.
Notwithstanding the foregoing, Lessor acknowledges and agrees that the Mfordable
Housing Units are to be developed as units for rent to moderate or lesser income qualified
third parties, as defined in the Mfordable Restrictions. Therefore, the Mfordable Housing
Units may be rented and occupied without the Initial Lessee obtaining consent from Lessor
for such subletting, provided that Initial Lessee shall follow the guidelines set forth herein.
In the event an Mfordable Housing Unit is to be rented to a qualified third party by Initial
Lessee, said Unit shall only be rented at rates allowable under the Mfordable Restrictions
for moderate or lesser income-qualified third parties. Additionally, in the event Initial
Lessee retains ownership of Mfordable Housing Units for rental purposes, Initial Lessee
shall have the right to assign its duties as property manager for said Units to a third party
without obtaining consent from Lessor, but shall ultimately remain responsible for
performance of such duties by any designated property manager.
[NOTE: Following strike-through to be retained for record purposes.]
Ftlrtnermsre, Le88sr nereby agree8 tnat in tne e';ent Initial Le88ee eleet8 nst ts 8ell
all sf tne ~\ffuraoole IIsu8ing Unit8 1s 8eparate €lualifiea inai'.i.aua18, tnen in 8uen e';ent,
Initial Le88ee 8nall be autnsrizea ts 8ell tne remaining un8sIa Unit8 in bull\: (ns fe'::er tnan
Page 20 of 57
three (3) Unit bl€Jeh:s, nnless €Jther.\-<ise agreed b~,. Less€Jr) at flriees all€J'sed linder the
~\ffurdoole Restrieti€Jns t€J an entity €Jr inahi.dual that may n€Jt c:tualify under the ~\ffufdoole
Restrieti€Jns as €Jf the date here€Jf. Said entity €Jf indi'.i.dual shall ha'.'e the same sale rights
as the De'.'el€Jper/lnitial Lessee and same rights t€J rent its Units at aff€Jrdoole rates as set
furth herein; pr€J'.i.ded that De','el€Jper/lnitial Lessee €J0tains the pri€Jf ','.Titten e€Jnsent €Jf the
Less€Jr, said e€Jnsent n€Jt t€J be unreas€JnoolT,'.i.thheld. De','el€Jper/lnitial Lessee shall n€Jtify
Less€Jr in ','.'l'iting €Jf its intent t€J sell Units in bull\:, speeifying ','.'hieh Units it pr€Jp€Jses t€J sell
in bMllc, the flr€Jfl€Jsed sale flriees and identifying details OO€Jlit the flr€Jfl€Jsed flllfehaser, and
Less€Jr shall ha','e fineen (IS) blisiness aay-s fr€Jm reeeipt €Jf sueh n€Jtiee t€J pr€J'.i.de ','.Titten
e€Jnsent €Jr aenial. In the e'.'ent Less€Jr fails t€J resp€Jnd ','.i.thin fifteen (IS) blisiness day-s €Jf
reeeiflt €JfInitial Lessee's n€Jtiee, said faillire t€J resfl€Jnd shall be deemed e€Jnsent t€J sell the
~\ffuraoole II€Jlising Units in bull\: at pfiees all€J','.'ed lifider the ~\ffurdoole Restrieti€Jns t€J the
identified party. ~\dditi€Jnally, Initial Lessee shall als€J ha'.'0 the right, ','.i.th Less€Jr's e€Jnsent
(',','nieh shall n€Jt be unreas€JnoolT,'.i.thheld) t€J sell in bMll\: the Units that it e1eets initially t€J
retain as rentals (n€J te'ser than three (3) Unit bl€Jeks, lifiless €Jtherwise agreed bj' Less€Jr) at
priees all€J',':ed lillder the ~\ffurdoole Restrieti€Jns t€J an entity €Jf indi'.i.dual that d€Jes n€Jt
€lualify fur affurdable h€Jusing pursuant t€J the fureg€Jing n€Jtiee pr€Jeedures; pr€J'.i.ded that
said entitj' €Jr indi'.i.dlial retains €J'.\'fiershifl €Jf the Units and rents them at affurdoole rates
and in e€Jmplianee ','.i.th the ~\ffurdoole Restrieti€Jns. Initial Lessee shall pf€J'.i.ae Less€Jf
','.i.th ','.Titten n€Jtiee €Jf its intent t€J sell the rental Units in bMlk and Less€Jr snaIl ha','e fifteen
(IS) business daj's t€J re8fl€Jnd as set f€Jrth oo€J'.'e and allj'failure t€J resfl€Jnd shall be deemed
e€Jnsent. It is als€J agreed that any subse€luent bMlk pllfehaser shall ha','e the right t€J sell the
rental Units in bull\: t€J an€Jther entity €Jf inahi.dual pr€J'.i.ded said subse€luent bMlk purehaser
€JDtains the pri€Jf ','.Titten e€Jnsent €Jf the Less€Jr as set f€Jrth oo€J','e and said Units are s€Jld at
flriees all€J'sed linder the ~\ffurdable Restrieti€Jns.
Up€Jn the transter/ sale €Jf eaeh ~\ffurdoole II€Jusing U ni t t€J be s€Jld by Initial Lessee,
€Jr allj' SlieeeSS€Jr Lessee herelifider, Less€Jr €Jr its designee shall att€Jrn t€J the rights €JfInitial
Lessee, €Jf subse€luent Lessee, as the ease may be, ','.i.th respeet t€J eaeh transterred/s€Jld
~\ffuraoole II€Jusing Unit. ~\ny pr€Jeeeds reeei'.'ed by Initial Lessee fr€Jm the sale €Jf the
~\ffuraoole II€Jusing Units shall remain the pr€Jperty €Jf the Initial Lessee unless €Jther,'.1.se
pr€J'.i.ded herein. In e€Jnjuneti€Jn and e€Jntemp€Jrane€Jusly ','.i.th the sale €Jr transter €Jf eaeh
~\ffuraoole II€Jusing Unit, Initial Lessee, €Jr any sueeess€Jr Lessee, shall enSllfe the release €Jf
any and all m€Jrtgage, meehanie'slien €Jf €Jther similar elaims ','.i.th respeet t€J the rele','ant
fl€Jrti€Jn €Jf the Demised Premises €Jther than ne's ~liblessee flllfehase m€Jn0j' m€Jrtgages and
the lilm, as sueh may be permitted by ~\rtiele XV. Up€Jn transter/ sale €Jf se','enty fi','e pereent
()S?~) €Jf the ~\ffuraoole II€Jusing Units t€J be s€Jld by Initial Lessee as auth€Jfized by this
Lease, €Jr as €Jthersise reql::Rred €Jr flermitted bj' Fl€Jfida la's, Initial Lessee may
subsequently be authorized by Lessor to assign its interest in this Lease for any portions of
the Demised Premises to a homeowners', condominium or similar Association to be created
by the Initial Lessee. Any such Association and its related declaration, articles of
incorporation, bylaws and any other governing documents, as may be amended, shall first
be approved by Lessor or its designee for compliance with the goals, purposes and intent of
this Lease and the Mfordable Restrictions, which approval shall not be unreasonably
withheld. Where such documents comply with the foregoing, Lessor shall join in any
community ownership governing documents as may be required by Initial Lessee in order
Page 21 of 57
to conform its planned unit community governance to state law. No governing document
related to such Association shall materially alter or impair the terms and conditions of this
Lease or the applicability of the Mfordable Restrictions. Lessor shall have fifteen (15)
business days from receipt of said documents to review and object to any contents thereof.
In the event Lessor fails to provide written notice of its consent or denial in regard to said
documents, said failure shall be deemed acceptance of the documents.
Up€Hl the :fureg€ling €€lntemplated assignments b:; Initial Lessee, the ~'\f:furdoole
II€Jl1sing Unit €l':.Jfiers (as Sublessees) and the ~\ss€l€iati€ln shall assume and thereby be
assigned Lessee resp€lnsibilities t€l Less€lr :fur their respe€th'e p€lrti€lns €lf the Demised
Premises, releasing Initial Lessee fr€lm same :fur all sMeh p€lrti€lns, e:r€ept :fur design and
e€lnstru€ti€ln defeet liooili ty:fur ':.'meh de~;el€lpers/builders are €lther:.~se resp€lnsible under
Fl€lrida la':;6Sublessees, h€l'::e';er, shaH n€lt be €€lnstrued t€l ha';e assumed €lr ha';e assigned
t€l them by this pr€l';isi€ln any indemnifieati€Jl.'l duty t€l Less€lr relating t€l any p€lrti€lns €lf the
Demised Premises :fur ',"'flieh they h€lld n€l interest. ]>J €lt'.\-1.thstanding the :fureg€ling, Initial
Lessee's right t€l find €lr identify a €Jualified pur€haser, as set :furth bel€l':;, shall att€lrn t€l the
Less€lr (nnless assigned by Less€lr as set :furth bel€l!::) and the Initial Lessee shall be released
fr€lm further dMt:,' €lr resp€lnsIDilit:,' t€l the Less€lr :fur the resale €lf the ~'\f:furdable H€lMsing
Units. It is herebyaelm€l!:;ledged that Lessor shall have the right to assign any of its duties
and rights related to the assignment of Subleases, i.e. finding qualified purehaser :fur
resales, €lr renters in the case of rental units (unless the rental units are owned by Initial
Lessee (or a Lessor-approved subsequent assignee ofInitial Lessee's interests) and Initial
Lessee chooses to manage the retained units, then in such event Initial Lessee shall have the
right to find qualified renters for said rental units where that right is not in conflict with the
Mfordable Restrictions (as they may be automatically subordinated to LIHTC requirements
per other provisions of this Lease), to the Monroe County Housing Authority, or to any
other governmental entity or profit or non-profit organization designated and approved by
Lessor. In the event such duties or rights are assigned, reference to "Lessor" in this Section
12.01 shall also refer to any assignee. Lessee agrees to allow Lessor or its designee to
provide lists of potential qualified renters of the Mfordable Housing Units.
Section 12.02 Initial Sale/Lease of Unit By Developer/lnitial Lessee. Initial
Lessee shall be authorized to sell the Mfordable Housing Units to individuals qualified to
ownjoccupy the Mfordable Housing Units and subject to all other affordable housing
covenants of record only where Lessor subsequently provides authority to do so in writing
or under the Mfordable Restrictions. Notwithstanding anything contained herein to the
contrary, all purchasersjSublessees of such Mfordable Housing Units shall meet Monroe
County's requirements of moderate or lesser income affordable housing, adjusted for family
size, and any other applicable Mfordable Restrictions. In all cases of conflict between local
and federal LIHTC rental, tenant eligibility and other guidelines, Lessee shall be entitled to
adhere to governing federal requirements without being deemed in breach of this Lease or
the Mfordable Restrictions. Initial Lessee shall upon Lessor's request provide verification
in a form and manner reasonably determined by Lessor that purchasersj sublesseesjtenants
for all Mfordable Housing Units meet the requirements herein. If Lessor is entitled to a
reservation for initial purchase or assignment of the rights to purchase all or a portion of
the newly completed Mfordable Housing Units, such right and related procedures may be
Page 22 of 57
set forth or referenced in Exhibit F to this Lease.
Section 12.0~ Assignment/Transfer by Sublessees. Where Lessor subsequently
provides authority in writing or under the Mfordable Restrictions for the Mfordable
Housing Units to be sold as homeownership units, at such time as any individual Unit
Owner or Sublessee desires to sell, assign or otherwise transfer their Mfordable Housing
Units and interests, the Sublessee shall be required to follow the procedures set forth herein
and any procedure that may be set forth in the Mfordable Restrictions, and any conveyance,
transfer or other disposition and the acceptance of such transfers shall be automatically
deemed an agreement to the conditions set forth herein.
Section 12.04 Required Notice of Restrictions. Any conveyance, lease, assignment,
grant or other disposition of any interest made with respect to any portion of the Demised
Premises, including but not limited to any recorded Association governing documents,
other than those mortgage interests provided for in Article XV, shall contain the following
required Notice of Restrictions in a conspicuous location on the upper one-half ofthe first
page of the relevant instrument effectuating the interest in bold capital typed letters greater
than or equal to 14 point font:
NOTICE OF RESTRICTIONS
ANY INSTRUMENT OF CONVEYANCE, LEASE, ASSIGNMENT, GRANT
OR OTHER DISPOSITION OF ANY INTEREST IN OR TO ANY PORTION OF
THE DEMISED PREMISES OR TO ANY IMPROVEMENTS ERECTED
THEREON WILL BE SUBJECT TO CERTAIN RESTRICTIONS INCLUDING BUT
NOT LIMITED TO RIGHTS OF FIRST REFUSAL, USE, OCCUPANCY, INCOME,
MEANS, RESALE PRICE, RENTAL AND MORTGAGE LIMITATIONS,
INCLUDING BUT NOT LIMITED TO THOSE SET FORTH IN OFFICIAL
RECORDS BOOK _, PAGE _ OF THE PUBLIC RECORDS OF MONROE
COUNTY, FLORIDA.
The book and page numbers of the first recorded page of this Lease and the first recorded
page of any recorded Association governing documents affecting the respective portion of
the Demised Premises shall be set forth in the Notice of Restrictions. Any instrument of
conveyance, lease, assignment or other disposition made without following the notice
procedures set forth herein shall be void and confer no rights upon any third person, though
such instruments may in some cases be validated by fully correcting them according to
procedures established by Lessor, as determined in Lessor's sole discretion, so as to ensure
compliance with the public affordability purposes furthered by this Lease and the
Mfordable Restrictions.
Section 12.0;) Follow-on Sales and Assignments of Ground Lease Requirements:
Right of First Refusal. Unless otherwise subsequently authorized in writing or by the
Mfordable Restrictions or unless otherwise as set forth in subsection e., below, or in
another provision herein, only rentals of Mfordable Housing Units are contemplated.
However, where Lessor subsequently provides authority in writing or under the Mfordable
Page 23 of 57
Restrictions for the Mfordable Housing Units to be sold as homeownership units in order
for an owner or subsequent owner to sell their Mfordable Housing Unit and assign their
Sublease they shall be required to comply with the following:
a. Sublessee shall notify the Lessor or its designee in writing of their desire to
sell the Mfordable Housing Unit and assign the sublease, said notice
hereinafter referred to as a "Transfer Notice." The Transfer Notice shall
include the proposed purchase price for the Mfordable Housing Unit, and any
other compensation permitted the Seller relating to the proposed sale, which
shall be in accordance with the Mfordable Restrictions. Undisclosed
compensation to a Seller or to any other party is prohibited and where it is
found to have existed with respect to any transaction, the amount thereof
shall be recoverable in law and equity from any party to or facilitating and
benefiting from such transaction with knowledge thereof.
b. Lessor shall have for thirty (30) days from the date of receipt of the written
Transfer Notice to exercise and/or to assign a right of first refusal granted
hereunder to purchase the Mfordable Housing Unit or to find or identify to
the selling party in writing a qualified purchaser who meets the income and
other requirements for purchasing the Mfordable Housing Unit.
Addi tionally:
1. The total sales price for all interests to be transferred shall be
the purchase price set forth in the Transfer Notice, which shall
not exceed the highest price permitted under the Mfordable
Restrictions. All additional terms of the contract shall be
consistent with the Mfordable Restrictions. Sublessee hereby
agrees to execute a contract with a pre-qualified purchaser
identified by the Lessor (or the Lessor if it exercises its right of
first refusal) and to cooperate with reasonable closing
procedures not in conflict with the Mfordable Restrictions.
2. In the event Lessor finds a qualified purchaser, Lessor will
assist in coordinating the closing on the Mfordable Housing
Unit. The closing shall be scheduled to occur within seventy-
five (75) days from the effective date of the contract for the sale
of the Mfordable Housing Unit, unless extended by the mutual
agreement of the parties and Lessor. Should Lessor exercise its
right of first refusal, it shall close under the same schedule set
forth herein.
c. In the event Lessor elects not to purchase or fails to identify a qualified
purchaser who enters into a purchase contract within thirty (30) days and
who closes as provided above, and provided that Sublessee has fully complied
with all required procedures set forth in the Lease and the Mfordable
Restrictions, Sublessee shall be entitled to sell the property to a qualified
Page 24 of 57
purchaser pursuant to the Mfordable Restrictions and the terms set forth in
the complying Transfer Notice. In this event, Sublessee shall allow Lessor to
review and approve all proposed contract terms to ensure that the terms and
the proposed purchaser meet the requirements for purchasing the Mfordable
Housing Unit, which approval shall not be unreasonably withheld, delayed or
conditioned. Sublessee shall provide Lessor with a full copy of a written
purchase and sale contract (and all addenda) within three (3) business days
of full execution of each contract document, and all contracts shall state that
they and the proposed purchaser are subject to this Lease and the approval of
the Lessor. Lessor shall have fifteen (15) business days from receipt to review
the terms of the contract documents. In the event Lessor fails to provide
Sublessee with written approval or any written objections within fifteen (15)
business days from receipt of a contract document, Lessor shall be deemed to
have not objected to closing of the proposed transaction though not to have
waived enforceability of any applicable provisions of this Lease or the
Mfordable Restrictions, whether or not any non-compliance may have been
apparent from or may have been indicated in documents provided. Sublessee
and the potential buyer shall also provide any other information Lessor
reasonably deems necessary to verify purchaser jSublessee qualifications. All
purchase and sale contracts shall be deemed to be contingent on the buyer
and transaction being qualified under the Mfordable Restrictions. Lessor
and the proposed parties to a transfer transaction may agree to additional
time periods necessary to verify full compliance with all aspects of the
Mfordable Restrictions. In no case shall Lessor, or its designees, be deemed
to waive with respect to any party any requirement applicable to that party
under the Mfordable Restrictions where it turns out that such requirement
was not in fact met, true or complied with. Lessor reserves, to itself and to its
designees, all legal and equitable rights it deems necessary or appropriate to
ensure that all portions of the Demised Premises are used for Mfordable
Housing, the purpose for which they were intended, including but not limited
to termination of the sublease for any portion of the Demised Premises and
forcing sale and reassignment of any improvements thereon.
d. Lessor shall be deemed reasonable in withholding its approval for any
proposed sale if the contract terms and proposed purchaser do not meet
requirements set forth herein or in the Mfordable Restrictions. Mter the
Lessor has reviewed and approved a contract, Sublessee shall not have the
ability to amend the terms of the contract unless Sublessee obtains Lessor's
approval of the amendment as set forth in Paragraph c., above. The
Sublessee shall only transfer their interest to approved persons, as defined by
the Mfordable Restrictions for moderate or lesser income, or to Lessor in the
event Lessor and Sublessee are unable to find a qualified purchaser, so long
as Lessor chooses to purchase the Mfordable Housing Unit, in Lessor's sole
and absolute discretion. Additionally, after the expiration ofthe thirty (30)
day period described in Paragraph b. above, and before Sublessee has found a
qualified purchaser, Lessor may, but is not obligated to, continue the search
Page 25 of 57
for a qualified purchaser. In the event Lessor finds and identifies a qualified
purchaser prior to Sublessee doing so, the procedure set forth in Paragraph
b.2., above, shall be followed.
e. Lessee and Sublessees are deemed to understand and agree that Lessor may,
in its absolute discretion, require that any Mfordable Housing Unit sold as an
affordable "ownership" and "occupancy" Mfordable Housing Unit which is
made the subject of any unauthorized offer to rent, or which is attempted to
be or is actually rented absent specific written Lessor authorization or as
authorized in the Mfordable Restrictions, be deemed to have become the
subject of an irrevocable offer to sell the Mfordable Housing Unit and thus
subject to the right of first refusal provisions of this Article XII and allow
Lessor or its designee to purchase the Mfordable Housing Unit at the lesser of
(i) the purchase price paid by the offeror, or (ii) the highest price permitted
under the Mfordable Restrictions. Lessor may establish rental first right of
refusal procedures similar to those set forth in Paragraphs a. - d., above, for
Mfordable Housing Units to be used for affordable rentals in accordance with
the terms contained herein and in the Mfordable Restrictions (which
procedures shall not, however, conflict with Initial Lessee's intended
management of the Demised Premises as a LIHTC property as contemplated
herein). In such case, a Sublessee may rent their Unit so long as all rental
agreements follow the guidelines and procedures set forth herein and in the
Mfordable Restrictions and any LIHTC requirements, including but not
limited to, providing Monroe County with a copy of the proposed rental
agreement for review and approval, unless this requirement is otherwise
waived or modified in writing by Lessor. Additionally, the rental agreement
must include a copy of any Association rules and regulations, as well as an
acknowledgement by the tenant that they will abide by the rules and
regulations of the Association, and Sublessee shall provide the Association
with a copy of said rental agreement to ensure compliance. Furthermore, no
Sublessee shall be authorized to enter into a rental agreement for an
Mfordable Housing Unit containing a term greater than one (1) year, or
containing an automatic renewal term that would frustrate Lessor's rights or
continued affordability expectations established under this Lease or the
Mfordable Restrictions. Additionally, in the event a tenant has been cited for
a violation of the rules and regulations of the Association more than twice in
any calendar year, Sublessee hereby agrees not to renew said lease without
first obtaining the approval of the Association Board of Directors, and said
approval may be withheld in their sole and absolute discretion. Any rental
agreement shall contain the following warning prominently set forth in
wri ting:
BY SIGNING THIS RENTAL AGREEMENT THE TENANT AGREES THAT
UPON SURRENDER OR ABANDONMENT, AS DEFINED BY CHAPTER 83
FLORIDA STATUTES, THE LESSOR SHALL NOT BE LIABLE OR
RESPONSIBLE FOR STORAGE OR DISPOSITION OF THE LESSEE'S
Page 26 of 57
I PERSONAL PROPERTY.
Section 12.06 Assignment by Lessor. This Lease shall be freely assignable by the
Lessor, and upon such assignment, the Lessor's liability shall cease and Lessor shall be
released from any further liability. In the event the ownership of the land comprising the
Leased Premises is conveyed or transferred (whether voluntarily or involuntarily) by Lessor
to any other person or entity, this Lease shall not cease, but shall remain binding and
unaffected.
Section 12.07 Death of a Unit Owner. In the event the Owner of an Mfordable
Housing Unit dies, Lessor shall, unless for good cause shown, consent to a transfer of the
leasehold interest to the spouse, child(ren) or other heirs, devisees, legatees or beneficiaries
of the Mfordable Housing Unit Owner provided that such persons state, in writing, under
oath that they have reviewed the terms of this Lease and any related documents, and that
they understand and accept the terms of this Lease by signing an acknowledgement, which
is substantially in a form similar to that attached hereto as Exhibit E. All spouses, heirs,
devisees, legatees or other beneficiaries must demonstrate to the Lessor's reasonable
satisfaction that they qualify for ownership and/or occupancy of an affected Mfordable
Housing Unit as provided for under this Lease and in the Mfordable Restrictions. All
estates and leasehold or other interests granted in or conveyed with respect to any of the
Demised Premises do not extend to any degree so as to limit or inhibit the intent and
operation of this Lease and the Mfordable Restrictions, it being expressly and irrevocably
accepted on behalf of all future Sublessees and all those who would or might succeed to
their interests, that these Demised Premises and each and every portion thereof, for the
entire Term of this Lease, are to be used as affordable housing according to the Mfordable
Restrictions. In the event the spouse, heirs, devisees, legatees or beneficiaries of a deceased
Owner do not meet the requirements for affordable housing, such persons shall not occupy
the premises and shall not be entitled to possession, except and only to the extent that the
Lessor permits same, under conditions that it determines furthers the goals and public
purposes of this Lease and the Mfordable Restrictions. Therefore, in such event, the heirs
of the decedent shall, if required by Lessor, transfer their interest in the Mfordable Housing
Unit in accordance with the provisions of this Article XII and cooperate with the Lessor in
accomplishing same. It is the intent of this Lease, to the full extent Florida law permits,
that constitutional homestead rights not be construed to inhibit or limit the intended
operation of this provision.
Section 12.08 Administrative Fees. With the exception of the initial sales by Initial
Lessee, where the Lessor authorizes sales of units for individual home-ownership purposes,
the Lessor or its designee shall be entitled to charge three and one-half percent (3 1/2 %) of
the Purchase Price (gross compensation however described) for any transferred interest
(other than simple security mortgage interests or rental agreements) in which Lessor
identified the purchaser, as an administrative fee for coordinating the closing on any
Mfordable Housing Unit, said fee to be paid by the selling Unit Owner at the time of
closing. This fee does not include other seller and buyer closing related costs such as title
insurance, documentary stamps, intangible taxes, prorated taxes, real estate commissions,
Page 27 of 57
insurance, homeowners' assessments, loan expenses and the like, or rental management or
processing fees for rental units. In the event Lessor was unable to identify a purchaser,
Lessor shall still be entitled to an administrative fee of one and one-half percent (11/2 %) of
the Purchase Price for review of the contract and assistance with coordinating the closing
on the Mfordable Housing Unit. Mter the initial sales by Initial Lessee, the Lessor or its
designee shall be authorized to designate closing, escrow and title agents involved in all
transactions involving interests subject to this Lease. Mter the initial sale of each
Mfordable Housing Unit by Initial Lessee, Lessor or its designee may, initially and from
time to time, establish, promulgate, revise and/or waive all or part of such fees related to
the administration of this Lease and any Subleases, but in no event may Lessor increase the
amount of the administrative fee to an amount in excess of three and one-half percent (3 1/2
%) for an owner who purchased his or her Mfordable Housing Unit without actual,
constructive or regulatory notice of the potential applicability of a greater percentage fee.
ARTICLE XIII
Condemnation
Section 1~.01 Eminent Domain: Cancellation. If, at anytime during the continuance
of this Lease, the Demised Premises or any portion thereof is taken, appropriated or
condemned by reason of eminent domain, there shall be such division of the proceeds and
awards in such condemnation proceedings and such abatement of the Rent and other
adjustments made as shall be just and equitable under the circumstances. If the Lessor and
the Lessee are unable to agree upon what division, annual abatement of Rent or other
adjustments as are just and equitable, within thirty (30) days after such award has been
made, then the matters in dispute shall be determined in accordance with the rules of the
American Arbitration Association. Such determination made by the arbitration shall be
binding on the parties. If the legal title to the entire Demised Premises be wholly taken by
condemnation, the Lease shall be cancelled.
Section 1~.02 Apportionment. Although the title to the building and improvements
placed by the Lessee upon the Demised Premises will on the Termination Date pass to the
Lessor, nevertheless, for purpose of condemnation, the fact that the Lessee placed such
buildings on the Demised Premises shall be taken into account, and the deprivation of the
Lessee's use (and any use of a Sublessee) of such buildings and improvements shall,
together with the Term of the Lease remaining, be an item of damage in determining the
portion of the condemnation award to which the Lessee or Sublessee is entitled. In general,
it is the intent of this Section that, upon condemnation, the parties hereto shall share in
their awards to the extent that their interests, respectively, are depreciated, damaged, or
destroyed by the exercise of the right of eminent domain. In this connection, if the
condemnation is total, the parties agree that the condemnation award shall be allocated so
that the then value of the property, as though it were unimproved property, shall be
allocated to the Lessor, and the then value of the building or buildings thereon shall be
allocated between the Lessor and Lessee after giving due consideration to the number of
years remaining in the Term of this Lease and the condition of the buildings at the time of
Page 28 of 57
condemnation. The Lessee shall not be precluded from any condemnation remedy
otherwise available to it by law.
ARTICLE XIV
Construction
Section 14.01 Requirement to Construct Proiect.
(a) Initial Lessee shall commence construction of the Project by the earlier of one
hundred twenty (120) days after the issuance of the building permits for the construction of
the Project or November 1,2007, and shall substantially complete construction of all fifty
six (56) Mfordable Housing Units within eighteen (18) months thereafter. The foregoing
limitation of time for the completion of the Project may be extended by written agreement
between the parties hereto.
(b) During the course of construction of the Project, Initial Lessee shall provide
to the Lessor quarterly written status reports on the Project. The Lessor and Initial Lessee
shall allow and permit reasonable access to, and inspection of, all documents, papers,
letters or other materials in their possession or under their control where such information
is subject to public disclosure under the provisions of Chapter 119, F.S., or successor or
supplemental statutes. However, nothing contained herein shall be construed to render
documents or records of Initial Lessee or any other persons that would not be deemed
public records under Chapter 119 to be such records only because of this provision. Lessees
(but not individual sublessees occupying an Mfordable Housing Unit as their primary
residence) shall maintain all books, records, and documents directly pertinent to
performance under this Lease in accordance with generally accepted accounting principles
consistently applied. The County Clerk, State Auditor, or a designee of said officials or of
the Lessor, shall, during the term of this Agreement and for a period of five (5) years from
the date of termination of this Agreement, have access to and the right to examine and audit
any Records of the Lessee involving transactions related to this Agreement.
(c) The Project shall be constructed in accordance with the requirements of all
laws, ordinances, codes, orders, rules and regulations of all governmental entities having
jurisdiction over the Project, including, but not limited to, the Lessor.
(d) The Initial Lessee shall apply for and prosecute, with reasonable diligence, all
necessary approvals, permits and licenses required by applicable governmental authorities
for the construction, development, zoning, use and occupation of the Project. Lessor agrees
to cooperate with and publicly support the Initial Lessee's effort to obtain such approvals,
permits and licenses, provided that such approvals, permits and licenses shall be obtained
Page 29 of 57
at Initial Lessee's sole cost and expense. Nothing in this Lease is intended to or shall be
construed to obviate or lessen any requirements for customary development approvals from
any permitting authority, including the Lessor. Nothing in this Lease shall be construed as
the Lessor's delegation or abdication of its zoning authority or powers and no zoning
approval that Initial Lessee may require to complete its performance under this Lease has
been or shall be deemed agreed to, promise or contracted for by this Lease.
(e) Construction ofthe Project on the Demised Premises prior to and during the
Term of this Lease shall be performed in a good and workmanlike manner, pursuant to
written contracts with licensed contractors and in accordance with any and all requirements
of local ordinances and with all rules, regulations and requirements of all departments,
boards, officials and authorities having jurisdiction thereof. It is understood and agreed
that the plans and specifications for all construction shall be prepared by duly qualified
architects/engineers licensed in the State of Florida.
(D At all times and for all purposes hereunder, the Initial Lessee is an
independent contractor/lessee and not an employee of the Board of County Commissioners
of Monroe County or any of its agencies or departments. No statement contained in this
Lease shall be construed as to find the Initial Lessee or any of its employees, contractors,
servants or agents to be employees of the Board of County Commissioners of Monroe
County, and they shall be entitled to none of the rights, privileges or benefits of County
employees. No covenant or agreement contained herein shall be deemed to be a covenant
or agreement of any member, officer, agent or employee of Monroe County or the Initial
Lessee or Lessee in his or her individual capacity, and no member, officer, agent or
employee of Monroe County or the Initial Lessee or Lessee shall be liable personally on this
Lease or be subject to any personal liability or accountability by reason of the execution of
this Lease.
(g) Initial Lessee agrees that it will not discriminate against any employees,
applicants for employment, prospective Sublessees or other prospective future subinterest
holders or against persons for any other benefit or service under this Lease because of their
race, color, religion, sex, sexual orientation, national origin, or physical or mental handicap
where the handicap does not affect the ability of an individual to perform in a position of
employment, and to abide by all federal and state laws regarding non-discrimination.
(h) Lessee shall be entitled during the full term ofthis Lease to make alterations
to the Demised Premises in accordance with the requirements set forth in sub-paragraph
(e), above.
14.02 Access to the Proiect and Inspection. The Lessor or its duly appointed agents
shall have the right, at all reasonable times upon the furnishing of reasonable notice under
the circumstances (except in an emergency, when no notice shall be necessary), to enter
upon the common area of the Leased Premises to examine and inspect said area to the
extent that such access and inspection are reasonably justified to protect and further the
Lessor's continuing interest in the Demised Premises, as determined in Lessor's reasonable
discretion. Lessor's designees, for purposes of this Article 14.02, shall include city, county
Page 30 of 57
or State code or building inspectors, and the like, without limitation. Initial Lessee shall
permit building and code inspectors' access customary to the performance of their duties
related to projects of the nature contemplated herein, said notice requirements
notwi thstanding.
14.0~ Forced Delay in Performance. Notwithstanding any other provisions of this
Lease to the contrary, the Initial Lessee shall not be deemed to be in default under this
Lease where delay in the construction or performance of the obligations imposed by this
Lease are caused by war, revolution, labor strikes, lockouts, riots, floods, earthquakes, fires,
casualties, acts of God, labor disputes, governmental restrictions, embargoes, litigation
(excluding litigation between the Lessor and the Initial Lessee), tornadoes, hurricanes,
tropical storms or other severe weather events, or inability to obtain or secure necessary
labor, materials or tools, delays of any contractor, subcontractor, or supplier, or
unreasonable acts or failures to act by the Lessor, or any other causes beyond the
reasonable control of the Initial Lessee. The time of performance hereunder shall be
extended for the period of any forced delay or delays caused or resulting from any of the
foregoing causes.
14.04 Easements. Lessee shall be authorized to grant reasonable and necessary
easements for access and utilities customary for similar land uses and construction projects
in Monroe County subject to Lessor's attorney's review and approval for substance and
form of easement instruments, which approval shall not be unreasonably withheld, delayed
or conditioned. Lessor shall make objection to any proposed easement instruments within
fifteen (15) business days of receipt of copies thereof, or Lessor's approval shall be deemed
granted.
ARTICLE XV
Mortgage Financing
Section 1S.01 Construction Financing By Initial Lessee. Initial Lessee shall have the
right to mortgage its interests in the Demised Premises.
(a) The Initial Lessee shall have the right to encumber by mortgage or
other proper instrument Initial Lessee's interest under this Lease, together with all
buildings and improvements placed by Initial Lessee on the Demised Premises, to any
investor group or entity formed and lawfully authorized to participate in a LIHTC financing
arrangement, a Federal or State Savings & Loan Association, Bank or Trust Company,
Insurance Company, Pension Fund or Trust (or to another private lender so long as the
terms and conditions of the financing from private lender are on substantially similar terms
to those then existing by the other lenders referred to in this Section), or to similar lending
institutions authorized to make leasehold mortgage loans in the State of Florida, or to any
public or quasi-public lender.
(b) Until the time any leasehold mortgagees) shall be satisfied of record,
when giving notice to the Initial Lessee with respect to any default under the provisions of
this Lease, the Lessor shall also serve a copy of such notice upon the Initial Lessee's
leasehold mortgagee(s) at addresses for notice set forth in the mortgage instrument(s)
Page 31 of 57
(including assignments thereoD as recorded in the Public Records of Monroe County,
Florida. No such notice to the Initial Lessee shall be deemed to have been given unless a
copy of such notice has been mailed to such leasehold mortgagee(s), which notice must
specify the nature of each such default. Initial Lessee shall provide Lessor with written
notice of the book and page number of the Public Records of Monroe County, Florida for
each mortgage by which it encumbers the Demised Premises, including modifications and
assignments thereof.
(c) In case the Initial Lessee shall default under any of the provisions of
this Lease, the Initial Lessee's leasehold mortgagee(s) shall have the right to cure such
default whether the same consists of the failure to pay Rent or the failure to perform any
other matter or thing which the Initial Lessee is required to do or perform and the Lessor
shall accept such performance on the part of the leasehold mortgagee(s) as though the same
had been done or performed by the Initial Lessee. The leasehold mortgagee(s), upon the
date of mailing by Lessor of the notice referred to in subparagraph (b) of this Section 15.01
shall have, in addition to any period of grace extended to the Initial Lessee under the terms
and conditions ofthis Lease for a non-monetary default, a period of sixty (60) days within
which to cure any non-monetary default or cause the same to be cured or to commence to
cure such default with diligence and continuity; provided, however, that as to any default of
the Initial Lessee for failure to pay Rent, or failure to pay any amount otherwise required
under the terms ofthis Lease (e.g., including, but not limited to, taxes or assessments), the
leasehold mortgagee(s) shall have thirty (30) days from the date the notice of default was
mailed to the mortgagee(s) within which to cure such default.
(d) In the event of the termination of this Lease with Initial Lessee for
defaults described in this Article XV, or of any succeeding Lease made pursuant to the
provisions of this Section 15.01(d) prior to the cure provisions set forth in Section 15.01(c)
above, the Lessor will enter into a new Lease of the Demised Premises with the Initial
Lessee's leasehold mortgagee(s), or, at the request of such leasehold mortgagee(s), to a
corporation or other legal entity formed by or on behalf of such leasehold mortgagee(s) or
by or on behalf of the holder of the note secured by the leasehold mortgage, for the
remainder of the term, effective on the date of such termination, at the Rent and upon the
covenants, agreements, terms, provisions and limitations contained in this Lease, provided
that such leasehold mortgagee(s) make written request and execute, acknowledge and
deliver to the Lessor such new Lease within thirty (30) days from the date of such
termination and such written request and such new Lease is accompanied by payment to
the Lessor of all amounts then due to the Lessor, including reasonable counsel fees, court
costs and disbursements incurred by the Lessor in connection with any such default and
termination as well as in connection with the execution, delivery and recordation of such
new Lease, less the net income collected by the Lessor subsequent to the date of
termination of this Lease and prior to the execution and delivery of the new Lease, and any
excess of such net income over the aforesaid sums and expenses to be applied in payment of
the Rent thereafter becoming due under such new Lease.
Any new Lease referred to in this Section 15.01(d) shall not require any
execution, acknowledgement or delivery by the Lessor in order to become effective as
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against the Lessor (or any Sublessees) and the Lessor (and any Sublessees) shall be deemed
to have executed, acknowledged and delivered any such new Lease immediately upon
receipt by the Lessor; and such new Lease shall be accompanied by (i) payment to the
Lessor of all amounts then due to the Lessor of which the leasehold mortgagee(s) shall
theretofore have received written notice; and (ii) an agreement by the leasehold
mortgagee(s) to pay all other amounts then due to the Lessor of which the leasehold
mortgagee(s) shall not theretofore have received written notice. In addition, immediately
upon receipt by the Lessor such new Lease, as provided in this Section 15.01( d), the Lessor,
where appropriate to the circumstances, shall be deemed to have executed, acknowledged
and delivered to the leasehold mortgagee(s) an assignment of all Subleases covering the
Demised Premises which theretofore may have been assigned and transferred to the Lessor
and all Subleases under which Sublessees shall be required to attorn to the Lessor pursuant
to the terms and conditions of such Subleases or this Lease. Such assignment by the Lessor
shall be deemed to be without recourse as against the Lessor. Within ten (10) days after a
written request therefore by the leasehold mortgagee(s), such assignment or assignments
shall be reduced to a writing in recordable form and executed, acknowledged and delivered
by the Lessor to the leasehold mortgagee(s).
(e) The Initial Lessee's leasehold mortgagee(s) may become the legal
owner and holder ofthis Lease by foreclosure of its (their) mortgagees) or as a result ofthe
assignment of this Lease in lieu of foreclosure, which shall not require Lessor's consent,
whereupon such leasehold mortgagee(s) shall immediately become and remain liable under
this Lease as provided in Section 15.01(D below.
(D In the event that a() leasehold mortgagee(s) shall become the owner or
holder ofthe Lessee's interest by foreclosure of its (their) mortgagees) or by assignment of
this Lease in lieu of foreclosure or otherwise, the term "Initial Lessee," as used in this Lease,
means only the owner or holder of the Lessee's interest for the time period that such
leasehold mortgagee(s) is (are) the owner or holder of the Lessee's interest. Accordingly, in
the event of a sale, assignment or other disposition of the Initial Lessee's interest in this
Lease by the leasehold mortgagee(s), where leasehold mortgagee(s) took title or ownership
of or to any or all of the Initial Lessee's interest in the Lease and/or any portion of the
Demised Premises as a result of foreclosure or acceptance of an assignment in lieu thereof,
the leasehold mortgagee(s) shall be entirely freed and relieved of all covenants and
obligations of performance relating to construction, marketing and transfer to Sublessees
and it shall be deemed and construed, without further agreement between the Lessor and
the mortgagee(s), or between the Lessor, the mortgagee(s) and the mortgagees'
purchaser(s) or assignee(s) at any such sale or upon assignment of Initial Lessee's interest
by the leasehold mortgagee(s), that the purchaser(s) or assignee(s) of Initial Lessee's
interest has assumed and agreed to carry out any and all covenants and obligations of
Initial Lessee, including but not limited to the construction, maintenance and management
of the Mfordable Housing Units contemplated herein. In no event shall any protections
afforded a() leasehold mortgagee(s) under this Lease be construed to permit eventual use
of the Demised Premises for purposes inconsistent with this Lease or the Mfordable
Restrictions.
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(g) Within ten (10) days after Lessor's receipt of written request by Initial
Lessee or by Initial Lessee's leasehold mortgagee(s), or after receipt of such written request
in the event that upon any sale, assignment or mortgaging ofInitial Lessee's interest in this
Lease by Initial Lessee or Initial Lessee's leasehold mortgagee(s), an offset statement shall
be required from the Lessor, and the Lessor agrees to deliver in recordable form a
certificate to any proposed leasehold mortgagee(s), purchaser(s), assignee(s) or to Initial
Lessee, certifying (if such be the case) (i) that this Lease is in full force and effect; (ii) that
the Lessor has no knowledge of any default under this Lease, or if any default exists,
specifying the nature of the default; and (iii) that there are no defenses or offsets which are
known and may be asserted by the Lessor against the Lessee with respect to any obligations
pursuant to this Lease.
(h) So long as the Initial Lessee's interest in this Lease shall be mortgaged
to a( ) leasehold mortgagee(s), the parties agree for the benefit of such leasehold
mortgagee(s), that they shall not surrender or accept a surrender of this Lease or any part of
it, nor shall they cancel, abridge or otherwise modify this Lease or accept material
prepayments of installments of Rent to become due without the prior written consent of
such mortgagee(s) in each instance.
(i) Reference in this Lease to acquisition of the Initial Lessee's interests in
this Lease by thee ) leasehold mortgagee(s) shall be deemed to refer, where circumstances
require, to acquisition of the Initial Lessee's interest in this Lease by any purchaser at a sale
of foreclosure by the leasehold mortgagee(s) and provisions applicable to the leasehold
mortgagee(s) in such instance or instances shall also be applicable to any such purchaser(s).
U) So long as the Initial Lessee's interest in this Lease shall be mortgaged
to a( ) leasehold mortgagee(s), the parties agree for the benefit of such leasehold
mortgagee(s) that the Lessor shall not sell, grant or convey to the Initial Lessee all or any
portion of the Lessor's fee simple title to the Demised Premises without the prior written
consent of such leasehold mortgagee(s). In the event of any such sale, grant or conveyance
by the Lessor to the Initial Lessee, the Lessor and the Lessee agree that no such sale, grant
or conveyance shall create a merger of this Lease into a fee simple title to the Demised
Premises. This subparagraph U) shall not be construed to prevent a sale, grant or
conveyance of the Lessor's fee simple title by the Lessor to any person, firm or corporation
other than the Initial Lessee, its successors, legal representatives and assigns, so long as this
Lease is not terminated.
(k) Reference in this Lease to the Initial Lessee's leasehold mortgagee(s)
shall be deemed to refer where circumstances require to the leasehold mortgagee(s)'s
assignee(s); provided that such assignee(s) shall record proper assignment instruments in
the Public Records of Monroe County, Florida, together with written notice setting forth the
name and address of the assignee(s).
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(1) In conjunction and contemporaneously with the sale or transfer of each
Mfordable Housing Unit, leasehold mortgagee(s) shall make arrangement to ensure the
release of any and all applicable portions of its (their) mortgagees) on the entire Demised
Premises so as to grant clear title to the Sublessee. The details and release payment
requirements shall remain within the reasonable business discretion of the Initial Lessee
and the leasehold mortgagee(s).
(m) Lessor shall be entitled, in the event of any of the foregoing
circumstances or events set forth in this Paragraph 15.01, to elect to deal primarily or
exclusively with a mortgagee whose position is primary or in first order of priority with
respect to foreclosable interests or rights according to the laws of the State of Florida or as
contractually agreed by and among multiple mortgagees, where there are such.
Section 1S.02 Permitted Mortgages for Sublessees (Unit Owners). The individual
Mfordable Housing U ni t Owners/ Sublessees shall have the right to encumber by mortgage
their interests in any Sublease, improvements or any associated portions of the Demised
Premises related to their interests in the individual Mfordable Housing Units to a Federal
or State Savings Loan Association, Bank, Trust Company or similar lending institution,
subject to the following requirements:
(a) The mortgagees) encumbering the Mfordable Housing Unit shall not
exceed 100% of the maximum allowable sale price of the Mfordable Housing Unit as set
forth in the Mfordable Restrictions;
(b) Sublessees shall not be entitled to mortgage their respective leasehold
interests in the event the terms of the note, which is secured by the mortgage, may result in
negative amortization, unless otherwise approved by Lessor;
(c) For informational and record keeping purposes, Sublessees shall present
to Lessor (i) a copy of approval(s) for loans encumbering their Mfordable Housing Unit
within five (5) business days after such loans are approved, and (ii) no sooner than five (5)
business days before the scheduled loan closing date, a copy of the owner's and/or any
lender's title insurance commitment. Lessor's failure to approve or object to any of the
foregoing documents prior to the closing of a relevant loan shall not preclude closing of the
relevant loan and shall not constitute an opinion or confirmation by Lessor that the
corresponding loans or title insurance policies comply with or conform to the requirements
of this Lease or the Mfordable Restrictions, nor constitute any waiver or relinquishment of
Lessor's rights to enforce same;
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(d) In the event of foreclosure sale by a Sublessee's mortgagee or the delivery
of an assignment or other conveyance to a Sublessee's mortgagee in lieu of foreclosure with
respect to any real property subject to the provisions of this Lease, said mortgagee, or the
purchaser at foreclosure, shall comply with the provisions of Article XII. No sale of any
Mfordable Housing Unit shall be permitted at an amount in excess of that allowed under
the Mfordable Restrictions and shall otherwise fully comply with all applicable Mfordable
Restrictions. Any Mfordable Housing Unit accepted in lieu offoreclosure or as to which a
mortgagee intends to foreclose shall be subject to the Lessor's right of first refusal as set
forth in Article 12.05. Nothing herein shall preclude potential purchasers approved by
Lessor from bidding at any foreclosure sale and, where successful, purchasing the subject
Mfordable Housing Unit at the foreclosure sale price in accordance with Article XII; and
(e) The parties recognize that it would be contrary to the fundamental
affordable housing concept of this Lease and an incentive to abuse Sublessee's
authorization to encumber its leasehold interest with a mortgage if Sublessee could realize
more in loan or sale proceeds than their permitted purchase or resale price as a result of
any transaction. Accordingly, Sublessee hereby irrevocably assigns to Lessor (or the
Monroe County Housing Authority or other Lessor designee) any and all net proceeds from
the sale of any interest in the Demised Premises remaining after payment of costs of
foreclosure and satisfaction of the lien of any mortgage which would have otherwise been
payable to Sublessee, to the extent such net proceeds exceed the net proceeds that Sublessee
would have received had the interests been sold pursuant to the Mfordable Restrictions.
Sublessee hereby authorizes and instructs the mortgagee or any party conducting the
closing of a sale or through an unauthorized transfer to pay the amount of said excess
directly to Lessor. In the event, for any reason, such excess proceeds are paid to Sublessee,
Sublessee hereby agrees to promptly pay the amount of such excess to Lessor.
ARTICLE XVI
Default
Section 16.01 Notice of Default. Lessee shall not be deemed to be in default under
this Lease in the payment of Rent or the payment of any other monies as herein required
unless Lessor shall first give to Lessee, any mortgagees for which Lessor has previously been
provided requests for such notice and current detailed contact information in the manner
set forth for recording and communicating to Lessor a "Certificate of Notice" as set forth in
Section 20.03, hereof, and up to one specifically designated investment limited partner for
which Lessor has previously been provided a request for such notice and detailed contact
information, ten (10) days written notice of such default and Lessee or any other party on
its behalf fails to cure such default within ten (10) days of verifiable receipt of said notice.
Except as to the provisions or events referred to in the preceding paragraph of this
Section, Lessee, Mortagees and Limited Partners shall not be deemed to be in default
under this Lease unless Lessor shall first give to Lessee, Mortagees and Limited Partners
(who have provided Lessor with current contact information and who are recognized under
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this Lease as being entitled to notice) thirty (30) days written notice of such default, and
Lessee fails to cure such default within the immediate thirty (30) day period thereafter, or,
ifthe default is of such a nature that it cannot be cured within thirty (30) days, Lessee fails
to commence to cure such default within such period of thirty (30) days or fails thereafter to
proceed to the curing of such default with all possible diligence. Mortgagees and investor
general or limited partners shall be entitled to cure Lessee defaults on the same terms and
conditions as the Lessee.
Regardless of the notice and cure periods provided herein, in the event that more
rapid action is required to preserve any right or interest of the Lessor in the Demised
Premises due to any detrimental event or occurrence (such as, but not limited to, payment
of insurance premiums, actions to prevent construction or judgment lien foreclosures or tax
sales), then the Lessor is empowered to take such action and to request reimbursement or
restoration from the Lessee as appropriate.
Section 16.02 Default. In the event of any material breach of this Lease by Lessee,
Lessor, and after the necessary notice and cure opportunity provided to Initial Lessee and
other parties, in addition to the other rights or remedies it may have, shall have the
immediate right to terminate this Lease according to law. However, during the initial
seventeen (17) years of the Term, (i) any determination of "material breach" shall be
judicially made in a court of competent jurisdiction in Monroe County, Florida, and (ii)
Lessor shall have no right to terminate this Lease, but shall have all other rights and
remedies available at law or in equity including, without limitation, specific performance
and injunction. In any action by Lessor asserting a violation of the Mfordable Restrictions,
Lessee shall have the burden of proof with respect to such matter. Termination of the
Lease, under such circumstances, shall constitute effective, full and immediate conveyance
and assignment to Lessor of all of the Demised Premises, improvements and materials and
redevelopment rights to and associated with the Demised Premises and the Project, subject
to mortgagee protection as provided herein. Furthermore, in the event of any breach of this
Lease by Lessee, Lessor, in addition to the other rights or remedies it may have, shall have
the immediate right of re-entry (as may be lawfully conditioned per application of Chapter
83, Florida Statutes, as amended) and may remove all persons and personal property from
the affected portions of the Demised Premises. Such property may be removed and stored
in a public warehouse or elsewhere at the cost of and for the account of Lessee, or where
statutory abandonment or unclaimed property law permits, disposed of in any reasonable
manner by Lessor without liability or any accounting therefore.
Included in this right of reentry, and subject to Initial Lessee's rights, if any, shall be
any instance wherein a Sublessee renounces the Lease or a Sublease or abandons all or any
portion of the Demised Premises, in which case Lessor may, at its option, in an appropriate
case and subject to any rights of a mortgage holder, obtain possession of the abandoned
property in any manner allowed or provided by law, and may, at his option, re-Iet the
repossessed property for the whole or any part of the then unexpired term, receive and
collect all Rent payable by virtue of such reletting, and hold Sublessee liable for any
difference between the Rent that would have been payable under this Lease and the net
Rent for such period realized by Lessor, by means of such reletting. However, such Lessor
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rights shall not abrogate a mortgagee's rights to the extent those rights do not conflict with
or injure Lessor's interests as established under this Lease. Personal property left on the
premises by a Sublessee may be stored, sold, or disposed of by Lessor, and Lessor accepts
no responsibility other than that imposed by law.
Should Lessor elect to re-enter, as herein provided, or should Lessor take possession
pursuant to legal proceedings or pursuant to any notice provided for by law, Lessor may
either terminate this Lease or it may from time to time, without terminating this Lease, re-
let the Demised Premises or any part thereof for such term or terms (which may be for a
term extending beyond the Term of this Lease) and at such Rent or Rents and on such other
terms and conditions as Lessor in its sole reasonable discretion may deem advisable with
the right to make alterations and repairs to the Demised Premises. On each such re-letting
Lessee shall be immediately liable to pay to Lessor, in addition to any indebtedness other
than Rent due under this Lease, the expenses of such re-letting and of such alterations and
repairs, incurred by Lessor, and the amount, if any, by which the Rent reserved in this
Lease for the period of suchre-letting (up to but not beyond the term of this Lease) exceeds
the amount agreed to be paid as Rent for the Demised Premises for such period of such
re-letting.
Notwithstanding any such re-letting without termination, Lessor may at any time
thereafter elect to terminate this Lease for such previous breach. Should Lessor at any time
terminate this Lease for any breach, in addition to any other remedy it may have, Lessor
may recover from Lessee all damages incurred by reason of such breach, including the cost
of recovering the Demised Premises, which amounts shall be immediately due and payable
from Lessee to Lessor.
Section 16.01 Lessor's Right to Perform. In the event that Lessee, by failing or
neglecting to do or perform any act or thing herein provided by it to be done or performed,
shall be in default under this Lease and such failure shall continue for a period of thirty (30)
days after receipt of written notice from Lessor specifying the nature ofthe act or thing to
be done or performed, then Lessor may, but shall not be required to, do or perform or cause
to be done or performed such act or thing (entering on the Demised Premises for such
purposes, with notice, if Lessor shall so elect), and Lessor shall not be or be held liable or in
any way responsible for any loss, inconvenience or annoyance resulting to Lessee on
account thereof, and Lessee shall repay to Lessor on demand the entire expense thereof,
including compensation to the agents and employees of Lessor. Any act or thing done by
Lessor pursuant to the provisions of this section shall not be construed as a waiver of any
such default by Lessee, or as a waiver of any covenant, term or condition herein contained
or the performance thereof, or of any other right or remedy of Lessor, hereunder or
otherwise. All amounts payable by Lessee to Lessor under any of the provisions of this
Lease, if not paid when the amounts become due as provided in this Lease, shall bear
interest from the date they become due until paid at the highest rate allowed by law. Lessor
shall have the same rights set forth in this Section with respect to any future subinterest
holder's respective portion of the Demised Premises.
Section 16.04 Default Period. All default and grace periods shall be deemed to run
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concurrently and not consecutively.
Section 16.0;). Mfordable Restrictions. In the event ten percent (10%) or more of the
apartment units are failing to comply with the Mfordable Restrictions at any given time
any psrtisn sf tne Demisea Premises is usea fur purpsses stner tnan affuraoole nsusing by
an interest nsMer sf suen psrtisn (sr fur Lessee ts be juaieially aeterminea €luring tne
initial fifteen (1S) years sf tne Term sf tne lease) fails ts esmply ':."itn tne ~\ffuraoole
Restrietisns, as tney :pertain ts their res:peetiT/e interests in sr :psrtisns sf tne Demisea
Premises, such an occurrence will be considered a material default by the offending party",
SnsuM tne furegsing type sf use aefault seeur T:.itn respeet ts sru.y sne sr msre subtenants'
:psrtisn€s) sf tne Demisea Premises, then tne default terminatisn :prsr."isisns :prw.1.dea fsr in
tnis subseetisn, snaIl apply sru.y ts tnsse su0tenant(s) ana sublease(s) in aefault. In the
furegsing eT.'ent, Lesssr (sr tne Initial Lessee (sr its assigns) in tne e':ent sf ana ':.itn respeet
sru.y ts a aefault by a partieular Sublessee) may terminate the subleases ana tenaneies
iw/sh'ea, as tne ease ma:,' be, subject to Lessor's compliance with any applicable default
notice provisions provided elsewhere in this Lease and Lessee's, Mortgagees and Limited
Partners applicable cure rights, if any. Lessee hereby agrees that all occupants shall use the
Leased Premises and Improvements for affordable residential purposes only and any
incidental activities related to the residential use as well as any other uses that are
permitted by applicable zoning law and approved by Lessor.
ARTICLE XVII
Repair Obligations
Section 17.01 Repair Obligations. During the continuance of this Lease the Lessee,
and every Sublessee with respect to their leased or purchased portions of the Demised
Premises, shall keep in good state of repair any and all buildings, furnishings, fixtures,
landscaping and equipment which are brought or constructed or placed upon the Demised
Premises by the Lessee, and the Lessee shall not suffer or permit any strip, waste or neglect
of any building or other property to be committed, except for that of normal wear and tear.
The Lessee will repair, replace and renovate such property as often as it may be necessary in
order to keep the buildings and other property which is the subject matter of this Lease in
first class repair and condition. Additionally, Lessor shall not be required to furnish any
services or facilities, including but not limited to heat, electricity, air conditioning or water
or to make any repairs to the premises or to the Mfordable Housing Units.
ARTICLE XVIII
Additional Covenants of Lessee/Lessor
Section 18.01 Legal Use. The Lessee covenants and agrees with the Lessor that the
Demised Premises will be used primarily for the construction and operation of a multi-unit
affordable housing complex and the other matters as may be set forth in this Lease, with
related amenities and facilities, and for no other purposes whatsoever without Lessor's
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written consent.
Section 18.02 Termination. Upon termination of this Lease, the Lessee will
peaceably and quietly deliver possession of the Demised Premises, unless the Lease is
extended as provided herein. Therefore, Lessee shall surrender the improvements together
with the leased premises. Ownership of some or all improvements shall thereupon revert to
Lessor.
Section 18.01 Recovery of Litigation Expense. In the event of any suit, action or
proceeding, at law or in equity, by either of the parties hereto against the other, or any other
person having, claiming or possessing any alleged interest in the Demised Premises, by
reason of any matter or thing arising out of or relating to this Lease, including any eviction
proceeding, the prevailing party shall recover not only its legal costs, but reasonable
attorneys' fees including appellate, bankruptcy and post-judgment collection proceedings
for the maintenance or defense of said action or suit, as the case may be. Any judgment
rendered in connection with any litigation arising out of this Lease shall bear interest at the
highest rate allowed by law. Lessor may recover reasonable legal and professional fees
attributable to administration, enforcement and preparation for litigation relating to this
Lease or to the Mfordable Restrictions from any person or persons from or to whom a
demand or enforcement request is made, regardless of actual initiation of an action or
proceeding.
Section 18.04 Condition of the Demised Premises. Lessee agrees to accept the
Demised Premises in its presently existing condition "as-is". It is understood and agreed
that the Lessee has determined that the Demised Premises are acceptable for its purposes
and hereby certifies same to Lessor. Lessee, at its sole cost and expense, shall bring or
cause to be brought to the Demised Premises adequate connections for water, electrical
power, telephone, stormwater and sewage and shall arrange with the appropriate utility
companies for furnishing such services with no obligation therefore on the part of Lessor.
The Lessor makes no express warranties and disclaims all implied warranties. Lessee
accepts the property in the condition in which it currently is without representation or
warranty, express or implied, in fact or by law, by the Lessor, and without recourse to the
Lessor as to the nature, condition or usability of the Demised Premises, or the uses to which
the Demised Premises may be put. The Lessor shall not be responsible for any latent defect
or change of condition in the improvements and personalty, or of title, and the Rent
hereunder shall not be withheld or diminished on account of any defect in such title or
property, any change in the condition thereof, any damage occurring thereto, or the
existence with respect thereto of any violations of the laws or regulations of any
governmental authority.
Section 18.os Hazardous Materials. Lessee, its Sublessees and assignees shall not
permit the presence, handling, storage or transportation of hazardous or toxic materials or
medical waste ("hazardous waste") in or about the Demised Premises, except in strict
compliance with all laws, ordinances, rules, regulations, orders and guidelines of any
government agency having jurisdiction and the applicable board ofinsurance underwriters.
In no event shall hazardous waste be disposed of in or about the Demised Premises. For
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purposes herein, the term hazardous materials or substances shall mean any hazardous,
toxic or radioactive substance material, matter or waste which is or becomes regulated by
any federal, state or local law, ordinance, order, rule, regulation, code or any other
governmental restriction or requirement and shall include petroleum products and asbestos
as well as improper or excessive storage or use of common household cleaning and
landscaping chemicals, pesticides, batteries and the like, and those materials defined as
hazardous substance or hazardous waste in the Comprehensive Environmental Response
Compensation and Liability Act and/or the Resource Conservation and Recovery Act.
Lessee shall notify Lessor immediately of any known discharge or discovery of any
hazardous waste at, upon, under or within the Demised Premises. Lessee shall, at its sole
cost and expense, comply with all remedial measures required by any governmental agency
having jurisdiction, unless such discharge is caused by Lessor or any of its agents or
employees.
Lessor and Initial Lessee hereby warrant and represent that to the best of their
knowledge, the Demised Premises is free of any hazardous waste. Lessor shall be liable for
environmental damages according to the extent made so by law for periods following its
taking possession of the Demised Premises upon the Effective Date.
Section 18.06 Recordation. Lessee, within five (5) business days after execution of
this Lease, shall record a complete, true and correct copy of the Lease and any addenda or
exhibits thereto and any Related Agreement(s) in the Public Records of Monroe County,
Florida and shall provide Lessor with the written Clerk's receipt of the book and page
number where recorded and the original Lease and Related Agreement(s) after recordation.
ARTICLE XIX
Representations. Warranties of Title and Quiet En;oyment
and No Unlawful or Immoral Purpose or Use
Section 1q.01 Representations. Warranties of Title and Quiet En;oyment. Lessor
represents and warrants that to its knowledge, there are no material claims, causes of action
or other proceedings pending or threatened in respect to the ownership, operation or
environmental condition of the Demised Premises or any part thereof. Additionally, the
Lessor and Lessee covenant and agree that so long as the Lessee keeps and performs all of
the covenants and conditions required by the Lessee to be kept and performed, the Lessee
shall have quiet and undisturbed and continued possession of the Demised Premises from
claims by Lessor.
Section 1q.02 No Unlawful or Immoral Purpose or Use. The Lessee, as long as it
has any interest in or to any portion of the Demised Premises, shall not occupy or use such
portion for any unlawful or immoral purpose and will, at Lessee's sole cost and expense
during such period of interest, conform to and obey any present or future ordinance and/ or
rules, regulations, requirements and orders of governmental authorities or agencies
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respecting the use and occupation of the Demised Premises.
ARTICLE XX
Miscellaneous
Section 20.01 Covenants Running with Land. All covenants, promises, conditions
and obligations contained herein or implied by law are covenants running with the land
and, except as otherwise provided herein, shall attach and bind and inure to the benefit of
the Lessor and Lessee and their respective heirs, legal representatives, successors and
assigns, though this provision shall in no way alter the restrictions on assignment and
subletting applicable to Lessee hereunder. The parties agree that all covenants, promises,
conditions, terms, restrictions and obligations arising from or under this Lease and the
Mfordable Restrictions benefit and enhance the communities and neighborhoods of
Monroe County and the private and public lands thereof, and have been imposed in order to
assure these benefits and enhancements for the full Term of this Lease. It is intended,
where appropriate and to serve the public purposes to be furthered by this Lease, that its
provisions be construed, interpreted, applied and enforced in the manner of what is
commonly referred to as a "deed restriction."
Section 20.02 No Waiver. Time is of the essence in the performance of the
obligations of the parties hereto. No waiver of a breach of any of the covenants in this Lease
shall be construed to be a waiver of any succeeding breach of the same covenant.
Section 20.01 Written Modifications. No modification, release, discharge or waiver
of any provisions hereof shall be of any force, effect or value unless in writing signed by the
Lessor and Lessee, or their duly authorized agents or attorneys, and signed also by any
mortgagee or limited partner of Lessee, or their duly authorized agents or attorneys, as long
as such mortgagee or limited partner has both (i) filed in Public Records of Monroe County,
Florida, a "Certificate of Notice" of their interest in this Lease and or the Demised Premises,
said certificate setting forth complete and current contact information, the real estate parcel
number assigned to the Demised Premises and the O.R. Records Book and Page Number of
the first recorded page of this Lease, and (ii) provided a copy of the recorded certificate to
the Lessor at its notice addressees) via certified mail, return receipt requested, or by
national overnight tracked and delivery-receipt courier service, and unless otherwise
required to be "received", it shall be deemed given when deposited in the United States
mails or with the courier service with postage or courier fees prepaid. .
Section 20.04 Entire Agreement. This Lease, including the Preamble and any
written addenda and all exhibits hereto (all of which are expressly incorporated herein by
this reference) shall constitute the entire agreement between the parties with respect to this
instrument as of this date. No prior written lease or prior or contemporaneous oral
promises or representations shall be binding.
Section 20.0S Notices. If either party desires to give notice to the other in
Page 42 of 57
connection with and/ or according to the terms of this Lease, such notice shall be given by
certified mail return receipt requested or by national overnight tracked and delivery-receipt
courier service, and unless otherwise required to be "received", it shall be deemed given
when deposited in the United States mails or with the courier service with postage or
courier fees prepaid. Nothing herein contained shall be construed as prohibiting the parties
respectively from changing the place at which notice is to be given, or the addition of one
additional person or location for notices to be given, but no such change shall be effective
unless and until it shall have been accomplished by written notice given in the manner set
forth in this Section. Notification of default or requests to modify this Lease shall also be
provided according to the foregoing methods to any mortgagee or limited partner of the
Lessee that has complied with the provisions of Section 20.03, above. Notification to
Lessor and Initial Lessee shall be as set forth herein, to both of the following offices, unless
a different method is later directed as prescribed herein or by the Mfordable Restrictions:
Initial Lessee: SEA GRAPE
APARTMENTS, LTD.
c/o TCG SEA GRAPE LLC
2950 S.W. 27TH AVE. SUITE 200
Miami, Florida 33133
Wachovia Mfordable Housing
Community Development
Corporation, 301 South College
Street, TW-17, Charlotte, NC
28288 (Attn: Asset Management)
Lessor:
DIRECTOR - MONROE COUNTY
DIVISION OF HOUSING & COMMUNITY
DEVELOPMENT
Florida Keys Marathon Airport
9400 Overseas Highway, Suite 200
Marathon, Florida 33050
Tel. 305-289-6002
and
MONROE COUNTY ATTORNEY
PO Box 1026
Key West, Florida 33041
Tel. 305-292-3470
Section 20.06 Joint Liability. If the parties upon either side (Lessor and Lessee)
consist of more than one person, such persons shall be jointly and severally liable on the
covenants of this Lease.
Section 20.07 Liability Continued: Lessor Liability. All references to the Lessor and
Lessee mean the persons who, from time to time, occupy the positions, respectively, of
Lessor and Lessee. In the event of an assignment of this Lease by the Lessor, except for
liabilities that may have been incurred prior to the date of the assignment or as specifically
dealt with differently herein, the Lessor's liability under this Lease shall terminate upon
such assignment. In addition, the Lessor's liability under this Lease, unless specifically
dealt with differently herein, shall be at all times limited to the Lessor's interest in the
Demised Premises.
Section 20.08 Captions. The captions used in this Lease are for convenience of
Page 43 of 57
reference only and in no way define, limit or describe the scope or intent of or in any way
affect this Lease.
Section 20.0q Table of Contents. The index preceding this Lease under the same
cover is for the purpose of the convenience of reference only and is not to be deemed or
construed in any way as part of this Lease, nor as supplemental thereto or amendatory
thereof.
Section 20.10 Governing Law. Venue. This Agreement shall be construed under the
laws of the State of Florida, and the venue for any legal proceeding to enforce or determine
the terms and conditions of this Lease shall be Monroe County, Florida.
Section 20.11 Holding Over. Any holding over after the expiration of the Term of
this Lease, with consent of Lessor, shall be construed to be a tenancy from month to month,
at twice the monthly Rent as required to be paid by Lessee for the period immediately prior
to the expiration of the Term hereof, and shall otherwise be on the terms and conditions
herein specified, so far as applicable.
Section 20.12 Brokers. Lessor and Lessee covenant, warrant and represent that no
broker was instrumental in consummating this Lease, and that no conversations or
negotiations were had with any broker concerning the renting of the Demised Premises.
Lessee and Lessor agree to hold one another harmless from and against, and agree to
defend at its own expense, any and all claims for a brokerage commission by either of them
with any brokers.
Section 20.11 Partial Invalidity. If any provision of this Lease or the application
thereof to any person or circumstance shall at any time or to any extent be held invalid or
unenforceable, the remainder of this Lease or the application of such provision to persons
or circumstances other than those as to which it is held invalid or unenforceable shall not be
affected thereby.
Section 20.14 Force Ma;eure. If either party shall be delayed, hindered or prevented
from the performance of any act required hereunder by reason of strikes, lockouts, labor
trouble, inability to procure material, failure of power, riots, insurrection, severe tropical or
other severe weather events, war or other reasons of like nature not the fault of the party
delayed, in performing work or doing acts required under this Lease, the period for the
performance of any such act shall be extended for a reasonable period.
Section 20.1S Lessor/Lessee Relationship. Non-Reliance by Third Parties. This
Lease creates a lessor/lessee relationship, and no other relationship, between the parties.
This Lease is for the sole benefit of the parties hereto and, except for assignments or
Subleases permitted hereunder and to the limited extent thereof, no other person or entity
shall be a third party beneficiary hereunder. Except as expressly provided under this Lease
or under the Mfordable Restrictions, no person or entity shall be entitled to rely upon the
terms, or any of them, of this Lease to enforce or a ttem pt to enforce any third-party claim or
entitlement to or benefit of any service or program contemplated hereunder, and the Lessor
Page 44 of 57
and the Lessee agree that neither the Lessor nor the Lessee or any agent, officer, or
employee of either shall have the authority to inform, counsel, or otherwise indicate that
any particular individual or group of individuals, entity or entities, have entitlements or
benefits under this Lease separate and apart, inferior to, or superior to the community in
general or for the purposes contemplated in this Lease.
Section 20.16 Contingencies. Initial Lessee's obligations to proceed with and
complete the project under this Lease Agreement is contingent upon Initial Lessee
obtaining construction financing; all necessary permits to build the Mfordable Housing
Units described herein; as well as Initial Lessee obtaining adequate cross access or other
customary easements (e.g., utility) necessary or convenient for a project of this tYfJe. Lessor
shall grant Lessee or its affiliates reasonable and customary easements required for Lessee
or its affiliates to proceed with Phase II, should that phase proceed as contemplated herein.
Lessor's obligation to grant such easements shall subject to Lessor's attorney's review and
approval for substance and form of easement instruments, which approval shall not be
unreasonably withheld, delayed or conditioned. Lessor shall make objection to any
proposed easement instruments within fifteen (15) business days of receipt of copies
thereof, or Lessor's approval shall be deemed granted. Therefore, in the event Initial Lessee
is unable to obtain financing, permits or adequate cross easements so as to permit
beginning of the eighteen (18)-month construction period provided for herein by no later
than November 1,2007, either party may terminate this Lease and/or the associated Sea
Grape II, Ltd. Lease (a similar contemplated lease for the adjoining parcel generally to
encompass the real property depicted and legally described as "Phase II" on Exhibit B
hereto). Termination ofthe Lease under such circumstances shall constitute effective, full
and immediate conveyance and assignment to Lessor of all of the Demised Premises,
improvements, interests in and materials and redevelopment rights to and associated with
the Demised Premises and the Project, subject to mortgagee protection as provided herein,
as well as the immediate turnover by the Initial Lessee (and any person or entity affiliated
with it) to Monroe County and/ or the City of Marathon, Florida (in any manner the Monroe
County Board of County Commissioners and the City of Marathon City Council may jointly
request) any and all allocated or reserved Mfordable Housing Unit allocations (commonly
loosely referred to in Monroe County as "ROGOs" and estimated here to number more or
less twenty eight (28) allocations for the contemplated "Phase II", of the overall "Seagrape"
project). Moreover, upon termination of this Lease at any time during the first fifteen (15)
years of the Term, where due to Initial Lessee's default or inability to perform its
obligations to complete construction or to subsequently maintain and/or manage the
project as contemplated by this Lease (subject to various parties' cure rights), the Initial
Lessee and any successor to its title, rights or interests in or to the aforementioned
adjoining parcel contemplated for the "Phase II" aspect of the "Seagrape" development (as
reflected by among other things, that certain Development Order #2007-01, dated 1/31/07,
as recorded in O.R. Book 2281, Page 1416, of the Public Records of Monroe County,
Florida), shall accede to and grant Lessor or its assigns commercially and customary
reasonable easements and the like with respect to the adjoining parcel in favor of the
Demised Premises that may be necessary for its feasible development. Initial Lessee
represents and warrants that it is affiliated or has substantive relationships with the Carlisle
Group, Inc., and that company's principals and affiliates, and that the Initial Lessee and the
Page 45 of 57
person executing this Lease for the Initial Lessee is authorized to bind any of the foregoing
parties to the potential obligation to return Mfordable Housing Unit
allocations/reservations/ROGOs to Monroe County and/or the City of Marathon as set
forth in this paragraph, or the aforementioned Development Order #2007-01. Initial
Lessee hereby acknowledges that in the event Initial Lessee terminates this Agreement or
the related contemplated "Phase II" development or any Lease related thereto, for failure to
timely begin and proceed with construction under an applicable lease once Lessor or the
Monroe County Land Authority has purchased the Demised Premises, Initial Lessee will not
receive a reimbursement from Lessor for costs incurred by Initial Lessee prior to such
termination and affordable ROGO permit allocations now associated with the "Phase II"
Property shall be deemed surrendered back to and returned to Monroe County and/ or the
City of Marathon. Additionally, Initial Lessee agrees that if LIHTC or other guarantees of
funding for the contemplated "Phase II" follow-on aspect of the overall Seagrape project are
not secured with written notice of same provided to Monroe County and the City of
Marathon by October 30, 2007, or if an agreement/commitment with Initial Lessee or a
party affiliated with Carlisle Group, Inc., or any ofits principals or affiliates, to have permits
for construction received for "Phase II" by no later than June 1, 2008 is not consummated
by November 30,2007, then the allocation or reservation ofthe aforementioned more or
less twenty-eight (28) ROGO allocations shall be returned or otherwise released to Monroe
County and/or the City of Marathon (in any manner the Monroe County Board of County
Commissioners and the City of Marathon City Council may jointly request).
Section 20.17 Radon Gas Notification. Radon is a naturally occurring radioactive
gas that, when it has accumulated in a building in sufficient quantities, may pose health
risks to persons who are exposed to it over time. Levels of radon that exceed federal and
state guidelines have been found in buildings. Additional information regarding radon and
radon testing may be obtained from your county health unit. Lessor shall not be
responsible for radon testing for any persons purchasing, leasing or occupying any portion
of the Demised Premises, and all owners, Lessees and Sublessees shall hold Lessor harmless
and indemnify Lessor for damages or claims reI a ted thereto and release Lessor from same.
Section 20.18 Mold Disclosure. Mold is a naturally occurring phenomenon that,
when it has accumulated in a building in sufficient quantities, may pose health risks to
persons who are exposed to it over time. Mold has been found in buildings in Monroe
County. There are no measures that can guarantee against mold, but additional
information regarding mold and mold prevention and health effects may be obtained from
your county health unit or the EP A or CDC. Lessee and Sublessees accept responsibility to
inspect for mold and take measures to reduce mold. Lessor shall not be responsible for
mold testing for any persons purchasing, leasing or occupying any portion of the Demised
Premises, and all owners, Lessees and Sublessees shall hold Lessor harmless and indemnify
Lessor for damages or claims related thereto and release Lessor from same.
Section 20.1q Subsequent Changes in Law or Regulation. Where a change can
reasonably be applied to benefit, enhance or support Lessor's affordable housing goals,
objectives and policies, Lessor shall have the right to claim the benefit from any subsequent
change to any applicable state or federal law or regulation that might in any way affect this
Page 46 of 57
Lease, the Mfordable Restrictions, any Related Agreements or their respective application
and enforceability, without limitation. In such instance, this Lease shall be construed or,
where necessary, may be reformed to give effect to this provision, but such construction
shall not permit a fundamentally inequitable result for any party or require of any party an
action that would be unauthorized under or that would violate LIHTC or inequitably
precipitate any event of default under any financing under any financing document related
to the funding of the proposed project.
Section 20.20 Government Purpose. Lessor, through this Lease and the Mfordable
Restrictions, furthers a government housing purpose, and, in doing so, expressly reserves
and in no way shall be deemed to have waived, for itself or its assigns, successors,
employees, officers, agents and representatives any sovereign, quasi -governmental and any
other similar defense, immunity, exemption or protection against any suit, cause of action,
demand or liability.
Section 20.21 Breach of Related Agreements/Remedies. To the extent that any
purchase and sale or Related Agreement relating to the Demised Premises incorporates,
relates to and/or is contingent upon the execution of and/or any performance under this
Lease, any material breach under such other agreement shall be a material breach of this
Lease and any material breach under this Lease shall be a material breach of such other
agreement. Moreover, the parties agree that any remedy available for any breach under this
Lease or any Related Agreements shall be cumulatively or selectively available at Lessor's
complete discretion, with any election to avail itself or proceed under any particular
remedial mechanism in no way to be construed as a waiver or relinquishment of Lessor's
right to proceed under any other mechanism at any time or in any particular sequence.
Section 20.22 Supplemental Administrative Enforcement. Lessor, or its
appropriate agency, may establish under the Mfordable Restrictions, as amended from time
to time during the Term of this Lease, such rules, procedures, administrative forms of
proceedings and such evidentiary standards as deemed reasonable within Lessor's
legislative prerogative, to implement enforcement of the terms of this Lease and similar
leases and the Mfordable Restrictions, but such mechanisms and code enforcement
proceedings, if any, shall not conflict with or require Lessee to act contrary to LIHTC
requirements. Such forums may include but in no way be limited to use of Code
Enforcement procedures pursuant to Chapter 162, Florida Statutes, to determine, for and
only by way of one example, and not as any limitation, the facts and legal effect of an
allegedly unauthorized "offer to rent", or, for another example, an unauthorized
"occupancy." However, nothing herein shall be deemed to limit Lessor, Initial Lessee or
any mortgagee or the single allowed designated investor limited partner from access to an
appropriate court of competent jurisdiction where the resolution of any dispute would be
beyond the competence or lawful jurisdiction of any administrative proceeding.
Section 20.21 Exceptions to Lease/Rental Prohibition. Under this Lease rental of
Mfordable Housing Units is not prohibited. In addition to rights recognized herein for
Initial Lessee and certain "bulk" purchasers to rent units to tenants qualified under LIHTC
regulations, which are not hereby restricted, Lessor or its designee, in its sole discretion,
Page 47 of 57
shall have the right to adopt as part of future Mfordable Restrictions provisions to allow
Sublessees the limited privilege to rent or lease their Mfordable Housing Units to qualified
persons, but such provisions shall not conflict with Initial Lessee's management of the
Demised Premises as a LIHTC property. Requests for such approval shall be made in
accordance with such procedures Lessor may in the future choose to adopt. It is
contemplated, though not promised or required, that certain limited rental provisions may
be adopted in the future for circumstances such as, for example, but without limitation:
(a) A Sublessee's required absence from the local area for official military duty.
(b) An illness that legitimately requires a Sublessee to be hospitalized for an
extended period.
(c) A family emergency legitimately requiring a Sublessee to leave the Keys for a
period longer than thirty (30) days.
Lessor, in its discretion, shall have the right to amend, modify, extend, rescind,
decrease or terminate any such exceptions under this Section 20.23 or the Mfordable
Restrictions at any time.
Section 20.24 Drafting of Lease and any Related Agreement. The parties
acknowledge that they jointly participated in the drafting of this Lease and any Related
Agreements with the benefit of counsel, or had the opportunity to receive such benefit of
counsel, and that no term or provision of this Lease or a Related Agreement shall be
construed in favor of or against either party based solely on the drafting of this Lease or the
Related Agreement.
Section 20.2S Lessor's Duty to Cooperate. Where required under this Lease or
Related Agreement, Lessor shall, to ensure the implementation of the public affordability
purpose furthered by this Lease, cooperate with reasonable requests of Initial Lessee,
Sublessees, mortgagees, title insurers, closing agents, government agencies and the like
regarding any relevant terms and conditions contained herein.
Section 20.26 Initial Lessee's Transfer of Partnership Interests. Nothing herein
shall limit or preclude transfers of partnership interests of the Initial Lessee, or
redesignation or substitution of a general partner of the Lessee.
Page 48 of 57
IN WITNESS WHEREOF, the Lessor and the Lessee have hereunto set their hands
and seals, the day and year above written.
Signed, Sealed and Delivered
in the presence of two witnesses:
LESSOR: MONROE COUNTY
By:
Printed N ame_
-,-
Printed Name
(as to Lessor)
LESSEE:
SEA GRAPE APARTMENTS, LTD.
By:
Printed Name
, Manager
For CDG SEA GRAPE II, LLC, General
Partner
Printed Name
(as to Lessee)
Approved as to form:
ik~~! Co!emal(
Housing Consulting Attorney
Page 49 of 57
EXHIBIT A
LEGAL DESCRIPTION
A parcel ofland in Section 11, Township 66 South, Range 32 East, Key Vaca, Monroe County,
Florida, more particularly described as follows:
Begin at the intersection of the East line of said Section 11 and the Southeasterly right of way line of
U.S. Highway 1; thence South along the said East line of Section 11 for 285.00 feet to the Point of
Beginning; thence continue South for 574.00 feet; thence West for 91.55 feet; thence North for 24.61
feet; thence West for 140.00 feet; thence North for 549.39 feet; thence East for 231.55 feet to the
Point of Beginning;
Containing 129463 s.f. for 2.97 acres, more or less.
Page 50 of 57
EXHIBIT B
DEPICTION OF PROJECT LAYOUT
Page 51 of 57
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- IlEVJS10NS ANO OR AOOIJIONs.
Ilase 1 ond 2
FREDERfCK
ENGINEER
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PLANNER SVRVEYOR
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This Instrument Prepared By:
JERRY COLEMAN, P,L.
201 Front Street, Suite 203
Key West, Florida 33040
RE No, 00103560-000200
EXHIBIT C
COMMENCEMENT DATE AGREEMENT
This Agreement IS made as of
("Lessor") and
2007 by and between
("Lessee"),
WHEREAS, Lessor and Lessee have entered into a Lease dated September _, 2007 for
Premises designated on Exhibit A attached to the Lease, which was duly recorded at Book _ Page
_, alsRg 7/ith a R@lat@s Agr@@m@Rt, that @@rtaiR Agf@@m@Rt t€Jr ~al@ aRs PMr@has@, sat@s_,
200_, f@@SfS@S at :RssI=_ Pag@ _ all sfth@ PMllli@ R@@srss sn.1sRrs@ CSMRtJ', FIsFisa,
WHEREAS, the Commencement Date, as further defined in Article III of the Lease, has
occurred; and pursuant to the Lease, Lessor and Lessee desire to confirm various dates relating to
the Lease,
NOW THEREFORE, Lessor and Lessee agree and acknowledge that the information set
forth below is true and accurate,
Commencement Date:
Mav , 2009
Initial Term Expiration Date: May ---' 2109
EXECUTED as a sealed instrument on the date first set forth above,
LESSOR:
LESSEE:
By:
By:
its
its
Witness 1
Witness 1
Witness 2
Witness 2
Page 52 of 57
EXHIBIT D
Term Portion Due Date Rent Term Portion Due Date Rent
Lease Year 1 May 1 2009 $10,00 Lease Year 51 May 1 2058 $10,00
Lease Year 2 May 1 2009 $10,00 Lease Year 52 May 1 2059 $10,00
Lease Year 3 May 12010 $10,00 Lease Year 53 May 1 2060 $10,00
Lease Year 4 May 1 2011 $10,00 Lease Year 54 May 1 2061 $10,00
Lease Year 5 May 12012 $10,00 Lease Year 55 May 1 2062 $10,00
Lease Year 6 May 12013 $10,00 Lease Year 56 May 1 2063 $10,00
Lease Year 7 May 12014 $10,00 Lease Year 57 May 1 2064 $10,00
Lease Year 8 May 12015 $10,00 Lease Year 58 May 1 2065 $10,00
Lease Year 9 May 12016 $10,00 Lease Year 59 May 1 2066 $10,00
Lease Year 10 May 12017 $10,00 Lease Year 60 May 1 2067 $10,00
Lease Year 11 May 12018 $10,00 Lease Year 61 May 1 2068 $10,00
Lease Year 12 May 12019 $10,00 Lease Year 62 May 1 2069 $10,00
Lease Year 13 May 1 2020 $10,00 Lease Year 63 May 1 2070 $10,00
Lease Year 14 May 1 2021 $10,00 Lease Year 64 May 1 2071 $10,00
Lease Year 15 May 1 2022 $10,00 Lease Year 65 May 1 2072 $10,00
Lease Year 16 May 1 2023 $10,00 Lease Year 66 May 1 2073 $10,00
Lease Year 17 May 1 2024 $10,00 Lease Year 67 May 1 2074 $10,00
Lease Year 18 May 1 2025 $10,00 Lease Year 68 May 1 2075 $10,00
Lease Year 19 May 1 2026 $10,00 Lease Year 69 May 1 2076 $10,00
Lease Year 20 May 1 2027 $10,00 Lease Year 70 May 1 2077 $10,00
Lease Year 21 May 1 2028 $10,00 Lease Year 71 May 1 2078 $10,00
Lease Year 22 May 1 2029 $10,00 Lease Year 72 May 1 2079 $10,00
Lease Year 23 May 1 2030 $10,00 Lease Year 73 May 1 2080 $10,00
Lease Year 24 May 1 2031 $10,00 Lease Year 74 May 1 2081 $10,00
Lease Year 25 May 1 2032 $10,00 Lease Year 75 May 1 2082 $10,00
Lease Year 26 May 1 2033 $10,00 Lease Year 76 May 1 2083 $10,00
Lease Year 27 May 1 2034 $10,00 Lease Year 77 May 1 2084 $10,00
Lease Year 28 May 1 2035 $10,00 Lease Year 78 May 1 2085 $10,00
Lease Year 29 May 1 2036 $10,00 Lease Year 79 May 1 2086 $10,00
Lease Year 30 May 1 2037 $10,00 Lease Year 80 May 1 2087 $10,00
Lease Year 31 May 1 2038 $10,00 Lease Year 81 May 1 2088 $10,00
Lease Year 32 May 1 2039 $10,00 Lease Year 82 May 1 2089 $10,00
Lease Year 33 May 1 2040 $10,00 Lease Year 83 May 1 2090 $10,00
Lease Year 34 May 1 2041 $10,00 Lease Year 84 May 1 2091 $10,00
Lease Year 35 May 1 2042 $10,00 Lease Year 85 May 1 2092 $10,00
Lease Year 36 May 1 2043 $10,00 Lease Year 86 May 1 2093 $10,00
Lease Year 37 May 1 2044 $10,00 Lease Year 87 May 1 2094 $10,00
Lease Year 38 May 1 2045 $10,00 Lease Year 88 May 1 2095 $10,00
Lease Year 39 May 1 2046 $10,00 Lease Year 89 May 1 2096 $10,00
Lease Year 40 May 1 2047 $10,00 Lease Year 90 May 1 2097 $10,00
Lease Year 41 May 1 2048 $10,00 Lease Year 91 May 1 2098 $10,00
Lease Year 42 May 1 2049 $10,00 Lease Year 92 May 1 2099 $10,00
Page 53 of 57
Lease Year 43 May 1 2050 $10,00 Lease Year 93 May 1 2100 $10,00
Lease Year 44 May 1 2051 $10,00 Lease Year 94 May 1 2101 $10,00
Lease Year 45 May 1 2052 $10,00 Lease Year 95 May 1 2102 $10,00
Lease Year 46 May 1 2053 $10,00 Lease Year 96 May 1 2103 $10,00
Lease Year 47 May 1 2054 $10,00 Lease Year 97 May 1 2104 $10,00
Lease Year 48 May 1 2055 $10,00 Lease Year 98 May 1 2105 $10,00
Lease Year 49 May 1 2056 $10,00 Lease Year 99 May 1, 2106 $10,00
Lease Year 50 May 1 2057 $10,00
Page 54 of 57
EXHIBIT E
LETTER OF ACKNOWLEDGEMENT
TO: Initial Lessee, or its assigns
Address of Initial Lessee, or its assigns
DATE:
This letter is given to (", ,.Initial Lessee", ,) as an acknowledgement in regard to the
Affordable Housing Unit that I am purchasing, I hereby acknowledge the following:
. That I meet the requirements set forth in the Affordable Restrictions to purchase
an affordable unit. I understand that the unit I am buying is being sold to me at a
price restricted below fair market value for my, future similarly situated persons
and Monroe County's benefits,
. That the Affordable Housing Unit that I am purchasing is subject to a 99-year
ground lease by and between Monroe County, a political subdivision of the State
of Florida, and (hereinafter "Lease") and
therefore I will be subleasing a parcel of land,
. That my legal counsel, , has explained to me the
terms and conditions of the Lease, including without limitation the meaning of the
term "Affordable Restrictions", and other legal documents that are part of this
transaction, If I have not had legal counsel, I state here that I have had an
opportunity to have obtain such counsel, understand its importance, and have
knowingly proceeded to closing without it.
. That I understand the terms of the Lease and how the terms and conditions set
forth therein will affect my rights as an owner of the Affordable Housing Unit,
now and in the future,
. That I agree to abide by the Affordable Restrictions, as defined in the Lease, and I
understand and agree for myself and my successors in interest that Monroe
County may change some of the Affordable Restrictions over the 99-year term of
the Lease and that I will be expected to abide by any such changes,
. That I understand and agree that one of the goals of the Lease is to keep the
Affordable Housing Units affordable from one owner to the next, and I support
this goal.
. That in the event I want to sell my Affordable Housing Unit, I must comply with
the requirements set forth in the Lease, including but not limited to the price at
which I might be allowed to sell it, the persons to whom I might be allowed to sell
it to and that the timing and procedures for sales will be restricted,
. That my lease prohibits me from severing the improvements from the real
property,
. That my family and I must occupy the Affordable Housing Unit and that it cannot
be rented to third parties without the written approval of the Lessor.
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. I understand that in the event that I die, my home may be devised and occupied by
my wife, my children or any other heirs so long as they meet the requirements for
affordable housing as set forth in the Lease,
. That I have reviewed the terms of the Lease and transaction documents and that I
consider said terms fair and necessary to preserve affordable housing and of
special benefit to me,
. I hereby warrant that I have not dealt with any broker other than
in connection with the consummation of the
purchase of the Affordable Housing Unit.
Occupant Signature
Occupant Signature
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This modification or
additional condition
shall:
X NOT APPLY
APPLY
to this Lease,
This modification or
additional condition
shall:
X NOT APPLY
APPLY
to this Lease,
EXHIBIT F
Modified or Additional Conditions
Section 12.02 Initial Sale/Lease of Unit By Developer/Initial Lessee
rADDITIONAL PROVISIONl. Initial Lessee acknowledges that there shall be
reserved by this Lease a right of first refusal in favor of Lessor to purchase or
designate purchasers for any Affordable Housing Units offered for sale or lease.
Initial Lessee shall provide Lessor with written notice of its intent to commence
marketing efforts and Lessor shall have ninety (90) days from the date of
Lessor's receipt ofthe notice to enter into a reservation agreement with Initial
Lessee for the purchase/lease of all or a portion of the Affordable Housing Units,
unless Initial Lessee has been authorized, in writing (which the omission of this
provision may itself constitute), by Lessor to sell the Affordable Housing Units to
individuals otherwise qualified to own/rent the Affordable Housing Units and
subject to all other affordable housing covenants of record. Notwithstanding
anything contained herein to the contrary, all purchasers/lessees of such
Affordable Housing Units shall meet Lessor's requirements of moderate or lesser
income affordable housing, adjusted for family size, and any other applicable
Affordable Restrictions.
Section 20.26 "Related Agreements": Failure of Consideration or Material
Failure in Performance Prior to Proiect Completion. Where prior to completion
of the Project through certification for occupancy of all required units, Initial
Lessee, or any Lessee or any other persons taking or holding any interest in the
Demised Premises under this Lease, or any persons receiving consideration
given to Initial Lessee pursuant to any other Related Agreement (including but
not limited to cases where such consideration includes transfer of building or
development rights or the like from the Demised Premises or recognition of such
rights for use elsewhere by any person), receives the substantial benefit of such
person's bargain or such a transferred development right, while Lessor is at any
time denied the full benefit of any then due material consideration intended to
be provided to Lessor by Initial Lessee under this Lease, or under any Related
Agreement, or while Lessor fails to obtain substantial performance of any
material obligations thereunder, Lessor shall have the right to seek damages and
any appropriate equitable relief from any persons or entities (including third
parties, to whom the recording of this Lease is intended to serve as constructive
notice) to which benefits have flowed or otherwise inured. Related Agreements
for the purposes of this Lease shall be:
1. The l~greemeftts fur Pllrehase amI Sale setv;eeft Sea Crape l~partmeftts,
Lt€l. aft€l Sea Crape II, Lt€l., aft€l the M€lftY€le C€lllftty C€lmpreheftsi','e
Plaft Laft€ll~llth€lrity, €late€l Mayust 1.3, 2616113.
2. Easemeftts ree€lr€le€l at B€l€lk 261'l'l Page 'l48, B€l€lh 261'l'l Page 'l.33 aft€l
B€l€lh 26117 Page 'le8.
3. Lease Betv;eeft Sea Crape II, Lt€l. aft€l M€lftr€le C€lllftty, €late€l
~
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