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Filing # 77747806 E-Filed 09/11/2018 08:36:05 PM

IN THE CIRCUIT COURT OF THE
11TH JUDICIAL CIRCUIT IN AND FOR
MIAMI-DADE COUNTY, FLORIDA

CIRCUIT CIVIL DIVISION

CASE NO. _______________________

CHALKS AIRLINE, INC.,
a Florida corporation,

Plaintiff,

v.

MIAMI SPORTS AND EXHIBITION
AUTHORITY, an independent and
autonomous agency and instrumentality
of the City of Miami, Florida; and
CITY OF MIAMI, FLORIDA,
a municipality of the State of Florida,

Defendants.
________________________________/

COMPLAINT

Chalks Airline, Inc. (“Chalks”) hereby sues the Miami Sports and Exhibition Authority

(“MSEA”) and the City of Miami, Florida (the “City”). In support of this complaint, Chalks

alleges as follows:

The Parties

1. Plaintiff Chalks Airline, Inc. is a Florida corporation authorized to do, and doing,

business in Miami-Dade County, Florida.1

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Chalks is effectively owned by Nautilus Enterprises, LLC, a Florida limited liability
company, also authorized to do, and doing, business in Miami-Dade County, Florida. Nautilus
Enterprises, LLC is also a signatory to Chalks’ Lease and is a beneficiary of certain rights
thereunder.
2. Defendant Miami Sports and Exhibition Authority is an independent and

autonomous agency and instrumentality of the City of Miami, Florida.

3. Defendant City of Miami, Florida is a municipality of the State of Florida. Upon

information and belief, the City intends to abolish MSEA and assume all of MSEA’s obligations

under the terms of the Lease.

Jurisdiction and Venue

4. This is a civil action for damages in excess of $15,000, exclusive of interests and

costs. This Court has jurisdiction of the subject matter of this action pursuant to Florida Statutes

Section 26.012.

5. Venue is proper in this Court pursuant to Florida Statutes Section 47.011 because

Defendant resides in Miami-Dade County, the Lease at issue in this action was entered into in

Miami-Dade County, and the claims asserted herein arose in Miami-Dade County.

Factual Allegations

6. On July 29, 2014, Chalks and MSEA entered into an Amended and Restated Air

Terminal Facility Sublease (the “Lease”). A copy of the Lease is attached hereto as Exhibit A.

7. The real property subject to the Lease consists of approximately 2.9 acres of land

on Watson Island (“Miami Seaplane Base Property”) that comprises the site on which Chalks

established its seaplane base Public-use Airport. See Lease at §§ 1.11.1. The Lease further

provides that Chalks is the owner of the buildings, structures, and installations on the Miami

Seaplane Base Property, including the existing Terminal, the Government Service Building, and

the Storage Building (“Miami Seaplane Base Facilities”). See id.2

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Chalks established and built the Miami Seaplane Base on Watson Island in 1919, and
has been its sole and uninterrupted airport operator since its inception.

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8. The Lease provides Chalks the right to: (1) continue to hold possession of the

Miami Seaplane Base Property, (2) continue to hold possession and ownership of the Miami

Seaplane Base facility, (3) continue to operate its existing seaplane base business as a Public-use

Airport, and (4) refurbish and/or build out a new seaplane base terminal and additional ancillary

commercial space up to approximately 100,000 square feet. See Lease at §§ 1.11.1 and 3.

9. Section 5.3 of the Lease provides that:

Tenant shall submit preliminary plans for any Improvements to be
constructed, refurbished and/or relocated on the Property to
Landlord for written approval (not to be unreasonably withheld,
conditioned, or delayed), within six (6) months from the Execution
Date. Upon receipt of the Landlord’s written approval for the
plans prepared by Tenant, Tenant shall promptly submit such plans
to the appropriate City Departments (City Building Department,
City Public Facilities Dept., Fire/EMS, and Planning and Zoning
Department).

(Emphasis added). Thus, the Lease expressly requires that: (1) MSEA provide written approval

of Chalks’ preliminary plans, (2) that MSEA not unreasonably withhold, condition, or delay

providing Chalks with written approval of its plans, and (3) that Chalks obtain written approval

from MSEA before submitting its plans to the appropriate City departments, expressly including,

but not limited to the Planning and Zoning Department.

10. On August 2, 2016, Chalks submitted plans for the buildout of their entire single-

phased project on the Miami Seaplane Base Property. MSEA did not vote on Chalks’ plans at

that meeting. On September 1, 2016, the MSEA Board denied Chalks’ proposed single-phased

plans as submitted.

11. On May 2, 2017, at the express recommendation of the City Attorney, Chalks

submitted a phased project to the MSEA Board requesting approval of a “Preliminary

Pre-Development Project” for infrastructure, site preparation, and refurbishment of existing

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facilities and a Phase One of a “Preliminary Basic Project” for the construction of a new

Terminal Facility in the amount of approximately 60,000 square feet (the “Phase One Plans”).

This submission was made with the understanding that subsequent Preliminary Basic Project

plans for the rest of the “Commercial Facilities” provided for in the Lease would follow in one or

more phases.

12. On May 24, 2017, the MSEA Board approved the Phase One Plans submitted by

Chalks on May 2, 2017. However, on the motion of Jay Solowsky, MSEA approved the plans

with a permanent prohibition that a hotel could never be included in the project in the future.

Chalks objected to Mr. Solowsky’s motion.

13. The MSEA Board’s approval of the Phase One Plans with the hotel prohibition

was improper for at least two reasons.

14. First, the question of whether the Sublease allows hotel uses was not before the

MSEA Board at the May 24 meeting. Indeed, the Phase One Plans presented by Chalks did not

include any proposed hotel. Moreover, the meeting minutes reflect that City Attorney Victoria

Mendez conceded this point: “The only thing we are doing now is the approval of the plans as

presented, preliminary plans, and a hotel is not an option here.”

15. Second, the hotel prohibition was tacked onto the motion by Mr. Solowsky, even

though his term on the MSEA Board had expired two years before. Thus, Mr. Solowsky could

not vote on the Phase One Plans, nor could he move to condition such approval on a permanent

hotel prohibition.

16. MSEA has never provided Chalks with written approval of the Phase One Plans

(with or without the improper hotel prohibition).

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17. On July 18, 2017, Chalks sent a letter to the MSEA Board requesting that the

Board approve Chalks’ Phase One plans as submitted, in writing, and without the hotel ban. A

copy of the July 18, 2017 Letter is attached hereto as Exhibit B. MSEA never provided a

written response to this letter.

18. At the July 18, 2017 MSEA Board meeting, Board members indicated that they

would consider Chalks’ request to remove the hotel ban and to provide such approval in writing

at the next MSEA Board meeting.

19. On August 22, 2017, a MSEA Board meeting was conducted, however, Chalks’

request of written approval of the Phase One Plans was not addressed.

20. On October 3, 2017, a MSEA Board meeting was conducted, however, Chalks’

request of written approval of the Phase One Plans was not addressed.

21. On October 25, 2017, Chalks sent a letter to the Executive Director of MSEA,

Ms. Lourdes Blanco, once again requesting confirmation in writing of MSEA’s approval of the

Phase One Plans. A copy of the October 25, 2017 Letter is attached hereto as Exhibit C.

22. Ms. Blanco informed Chalks that written certification/approval of the Phase One

Plans must come from the MSEA Board directly.

23. On November 2, 2017, a MSEA Board meeting was conducted, however, Chalks’

request of written approval of the Phase One Plans was not addressed.

24. On January 10, 2018, Chalks once again sent a letter to the MSEA Board

requesting that the Board approve Chalks’ Phase One plans as submitted, in writing, and without

the hotel prohibition. A copy of the January 10, 2018 Letter is attached hereto as Exhibit D.

MSEA never provided a written response to this letter.

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25. On April 20, 2018, Chalks sent MSEA, MSEA’s counsel, Mr. George K.

Wysong, III, and the City of Miami Director of Asset Management, Mr. Daniel Rotenberg, a

letter informing MSEA that they were in violation of the Lease and requesting that MSEA

approve the Phase One Plans in writing without the hotel ban. A copy of the April 20, 2018

Letter is attached hereto as Exhibit E. The letter also expressly requested that MSEA cure its

breach of the Lease within thirty (30) days and that the parties’ disagreement be promptly

submitted to non-binding mediation as provided in Section 27 of the Lease. MSEA never

provided a written response to this letter.

26. On May 31, 2018, a MSEA Board meeting was conducted, however, Chalks’

request of written approval of the Phase One Plans was not addressed.

27. Pursuant to Section 27 of the Lease, on July 12, 2018, the parties participated in

non-binding mediation regarding MSEA’s failure to provide written approval of the Phase One

Plans without the hotel prohibition.

28. On August 7, 2018, Chalks sent MSEA a letter requesting that by Friday,

August 10, 2018, MSEA set a special meeting, to be conducted within 30 days, to vote on

Chalks’ Phase One Plans without the hotel prohibition. A copy of the August 7, 2018 Letter is

attached hereto as Exhibit F. MSEA never responded to this letter and no special meeting was

ever set by MSEA to vote on the Phase One Plans.

29. The City has committed a variety of tortious acts, intended to interfere with the

Lease, including but not limited to:

(a) obstructing Chalks’ ability to obtain permits for the floating docks

provided for in the Lease (see Lease § 1.14);

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(b) interfering with Chalks’ ability to obtain FAA approval for Chalks’ new

terminal facilities provided for in the Lease (see Lease §§ 1.12 & 1.14);

(c) preventing Chalks from obtaining new certificates of use for its facilities;

and

(d) attempting to misuse and misappropriate Chalks’ seaplane base license,

which Chalks has the contractual right to obtain under the terms of the

Lease (see Lease § 32.1).

30. As a result of the City’s tortious conduct, Chalks has not been allowed to initiate

the entitlement process to build the floating docks or the new terminal facility provided for in the

Lease. And, on April 17, 2018, MSEA attempted to unilaterally and unlawfully amend the terms

of the Lease by purportedly “waiving” Chalks’ contractual right under Section 32.1 to obtain

airport licensing from the FDOT and the FAA. A copy of the April 17, 2018 Letter is attached

hereto as Exhibit G. Chalks responded to this unlawful attempt to amend the Lease by letter

dated April 20, 2018. See Exhibit E.

31. Chalks has performed all conditions precedent, as well as any and all statutory

prerequisites to bring suit, or such conditions and prerequisites have been waived and/or

excused.

32. Chalks has retained the undersigned law firm to represent it in this action and are

obligated to pay the undersigned law firm a reasonable fee for its services.

COUNT I

BREACH OF CONTRACT
(against MSEA and the City)

33. Chalks realleges paragraphs 1 through 32, and incorporates the same as if fully set

forth herein.

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34. The Lease is a valid contract between Chalks and MSEA.

35. Section 5.3 of the Lease requires that: (1) MSEA provide written approval of

Chalks’ preliminary plans, (2) that MSEA not unreasonably withhold, condition, or delay

providing Chalks with written approval of its plans, and (3) that Chalks obtain written approval

from MSEA before submitting its plans to the appropriate City departments, expressly including,

but not limited to the Planning and Zoning Department.

36. MSEA has materially breached the Lease by failing to provide Chalks with

written approval of its Phase One Plans.

37. MSEA has also materially breached the Lease by unreasonably withholding,

conditioning, and delaying providing Chalks with written approval its Phase One Plans through

its improper attempt to impose a permanent prohibition against hotel uses on the Miami Seaplane

Base Property in the future.

38. As a direct result of MSEA’s material breaches of the Lease, Chalks has been

unable to initiate the entitlement process before the PZAB and to complete its project because,

without the requisite written approval as stated in the Lease, it has been unable submit its Phase

One Plans to the appropriate City departments, expressly including, but not limited to the

Planning and Zoning Department.

39. MSEA has also materially breached the Lease because Chalks has not been

allowed to initiate the entitlement process and to build the floating docks or construct its terminal

facility provided for in the Lease, and because MSEA has attempted to unilaterally and

unlawfully amend the Lease by purportedly “waiving” Chalks’ contractual right under Section

32.1 to obtain airport licensing from the FDOT and the FAA.

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40. As a direct result of MSEA’s material breaches of the Lease, Chalks has suffered

damages, including, but not limited to financial loss and increased expenses associated with

development and construction delay.

41. Upon information and belief, the City intends to abolish MSEA and assume all of

MSEA’s obligations under the terms of the Lease.

COUNT II

TORTIOUS INTERFERENCE WITH LEASE
(against the City)

42. Chalks realleges paragraphs 1 through 32, and incorporates the same as if fully set

forth herein.

43. At all times relevant hereto, the City was familiar with the existence and terms of

the Lease.

44. Despite its knowledge of the Lease, the City tortiously interfered with the Lease

in the ways set forth in Paragraph 29 above. The City tortiously interfered with the Lease,

knowing that it would seriously harm Chalks.

45. As a result of the foregoing tortious interference by the City, Chalks has suffered

and will continue to suffer serious and irreparable injury to its business.

46. The City has intentionally and unjustifiably interfered with Chalks’ rights and its

Lease with MSEA.

47. The City’s unjust actions have ultimately caused MSEA to breach its Lease with

Chalks.

48. Chalks has suffered damages as a direct consequence of the tortious conduct.

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WHEREFORE, Chalks prays that the Court enter judgment against MSEA and the City,

as follows:

(1) awarding Chalks its actual, compensatory, and consequential damages, plus costs,

pre- and post-judgment interest, and injunctive relief as set forth below;

(2) ordering MSEA not to unreasonably withhold approval of the project it is allowed

to build under the terms of its Lease;

(3) ordering MSEA to provide written approval of Chalks’ preliminary plans as

submitted;

(4) ordering the City to cease interfering with the Lease; and

(5) ordering such other and further relief as the Court may deem just and proper.

Dated: September 11, 2018 Respectfully submitted,

CARLTON FIELDS JORDEN BURT, P.A.
Miami Tower, Suite 4200
100 S.E. Second Street
Miami, Florida 33131
Telephone: (305) 530-0050
Facsimile: (305) 530-0055

By: /s/ Enrique D. Arana
Richard J. Ovelmen (FBN 284904)
rovelmen@carltonfields.com
Enrique D. Arana (FBN 189316)
earana@carltonfields.com
Scott E. Byers (FBN 68372)
sbyers@carltonfields.com
Secondary emails:
makkoyunlu@carltonfields.com
cpratt@carltonfields.com
dkatz@carltonfields.com
miaecf@cfdom.net

Attorneys for Plaintiff Chalks Airline, Inc.

115614477

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Exhibit A to Complaint
Execution Version

AMENDED AND RESTATED
AIR TERMINAL FACILITY SUBLEASE

This Amended and Restated Air Terminal Facility Sublease ("Sublease") is made
and entered into this2f/4day of July, 2014 ("Execution Date"), by and between MIAMI
SPORTS AND EXHIBITION AUTHORITY, an independent and autonomous agency
and instrumentality of the City of Miami, Florida ("Landlord" or "MSEA") and
CHALKS AIRLINES, INC., a Florida corporation d/b/a CHALKS and Nautilus
Enterprises, LLC, a Florida Limited Liability Company ("Tenant").

RECITALS

A. Pursuant to a Settlement Agreement dated March 6, 2002 by and between
Landlord and Flying Boat, Inc., a Florida corporation d/b/a Chalks Ocean Airways
("March 6, 2002 Settlement"), currently in existence, Landlord and Flying Boat, Inc.
("Original Tenant") entered into that certain Air Terminal Facility Sublease, dated March
6, 2002 ("Original Sublease"), which Original Sublease has been assigned to Tenant.

B. Certain disputes arose between Landlord and Tenant with respect to the
Original Sublease, as set foith in the claims and counterclaims and appeal contained in
the 11th Judicial Circuit Case No. 07-30071 CA 25 and the Third District Court of Appeal
Case No. 3D13-594 ("Action"). These disputes have been resolved between Landlord
and Tenant as confirmed by the execution of this Sublease and the execution of a Release
between the Landlord and the Tenant attached as an Exhibit to this Sublease.

C. Landlord and Tenant desire, and have agreed, to enter into this Sublease to
amend and restate in its entirety the Original Sublease, and to settle, waive and release
the claims against each other arising from the Original Sublease and the Action
(collectively "Released Claims").

NOW THEREFORE, in consideration of Ten Dollarn ($10.00) and other good
and valuable consideration, including the mutual releases and waivers of the Released
Claims contained in this Sublease, the parties hereto hereby agree as follows:

1. BASIC SUBLEASE PROVISIONS AND DEFINITIONS.

I. I Property Address: I 000 MacA1thur Causeway, Miami, Florida 33132.

1.2 Tenant's Address (for notices): 601 Brickell Key Avenue, Suite 702,
Miami, Florida, 33131.

1.3 Landlord's Address (for notices): Attn: Executive Director, City£-_"
3500 Pan American Drive, Miami, Flodda 33133.
Execution Version

1.4 Prime Landlord: City of Miami, Florida, a Florida municipal corporation.

1.5 Prime Landlord's Address (for notices): Attn: City Manager, 444 S.W.
2nd Avenue, 3rd Floor, Miami, Florida 33130.

1.6 Prime Lease or Interlocal Agreement: Interlocal Agreement between
Prime Landlord and Landlord with respect to the Property (as defined below) dated
August 14, 1997, as amended by the Amended and Restated Interlocal Agreement dated
October 19, 2013 ("Interlocal Agreement").

1.7 Sublease Term: The Sublease Term shall run concurrently with the te1m
of the Interlocal Agreement, subject to extension as provided in Section 28 below.

1.8 Expiration Date: The Expiration Date shall be October 18, 2043,
unless sooner terminated as provided elsewhere in this Sublease or unless extended or
renewed as provided in Section 28 below.

1.9 Rent: As set forth in Section 7 below.

1.10 Address for Payment of Rent: City Hall, 3500 Pan American Drive,
Miami, Florida 33133 or such other address as Landlord may designate from time to
time.

1.10.1 Air Transportation Facility shall mean all the facilities which are to
be developed, operated and managed at the Property, as provided for in this Agreement
including but not limited to: (i) the airside and landside facilities; (ii) the Tenant's
Te1minal; (iii) the aviation service and supp01t areas; and (iv) the parking facilities, but
shall exclude any retail, civic, and educational, restaurant/bar, or commercial
establishments not required or directly related to the provision of aviation services and
located outside of the Tenant's Terminal (all such excluded areas the "Commercial
Facilities").

1.11 Description of Property: The Prope1ty constituting the object of this
Sublease are:

1.11.1 The Prope1ty shall consist of approximately 2.9 acres of land for
Tenant's use, situated on, and a pait of, the property ("Property") as fully delineated,
depicted and described in Exhibit A attached hereto and incorporated herein. Prior to the
Settlement of March 6, 2002, Tenant has constructed, and owns, within the Property, the
following buildings, structures and installations: (i) Tenant's existing terminal ("Tenant's
Terminal"); (ii) Tenant's U.S. Customs, Immigration, Agriculture or other governmental
services building ("Government Service Building", and the areas used by such
governmental entities, now or in the future, referred to as the "Government Servkes
Areas"); (iii) Tenant's existing storage building ("Tenant's Storage Building"), all of
them comprehensive of a total of approximately 0.2 acres, and (iv) the adjacent seaplane
ramp, taxiways, apron, tie down ai·eas and storage area that, together with vacant land
adds up to the remaining approximately 2.9 acres.
Execution Version

1.12 Tenant's Primary Use: Tenant's primary use ("Primary Use") of the
Property shall be the operation of the Air Transportation Facility for the use and benefit
of the general public, in this case, for general and commercial aviation, at least eight (8)
hours per day, seven (7) days a week, on a first come first serve basis, on fair and
reasonable terms and without discrimination, and the operation of the Commercial
Facilities. The Tenant shall always have first priority in connection with Tenant's airline
operations to use all available seaplane parking, storage and docking spaces within the
Property, as to which spaces no additional rent or other charges will be due from Tenant,
provided no additional revenues are collected in connection with Tenant's use of such
areas. Without prejudice to the forgoing, such operation shall include, within such time
frame, the pennissible use and/or provision, subject to availability, of the following
minimum services: (1) ticketing for seaplane operations; (2) waiting room; (3) vending
machines; (4) a taxi stand; (5) incidental sale of merchandise/memorabilia; (6)
Government Service Areas which the Tenant shall provide within the Property as may be
required or specified by the applicable Federal government inspection service agencies;
(7) freight and baggage area; (8) seaplane aircraft operations; (9) administrative office
space for the operation of Tenant's seaplane airline operation; (IO) restrooms; (11) public
telephone service for car rental and hotel reservation and pickup or taxi telephone service,
provided car rental services shall be limited to a pickup and/or delivery service and the
actual rental cars shall be located off Watson Island; (12) tie-down, mooring and floating
dock services for seaplanes and light aircraft maintenance, as detailed in Section 1.14;
(13) coffee, food and alcohol services within Tenant's Terminal (the "Te1minal Coffee
Shop") (provided that no separate sublease will be required for such food service use, and
provided such food and alcohol service areas shall be subject to the limitations set forth
in Section 3(i) and, notwithstanding anything to the contrary, sales from such area shall
not be included in the calculation of rent pursuant to Section 7.1.2 for food and beverage
sales); (14) hotel courtesy van pickup; and (15) if Tenant constructs the fuel farm (as
defined below), sale of aircraft fuel; provided, subject to the approval of all applicable
governmental authorities (including DRER), the fuel farm may be comprised of trailer
and truck fueling services so long as the other Watson Island tenants' use and enjoyment
of their respective properties is not unreasonably disturbed, whether due to odors or
otherwise. Tenant shall be responsible for obtaining, at no cost to the Prime Landlord or
Landlord, all necessary approvals, licenses, permits, etc., required for its operation and
use of the Property..

1.13 Gambling prohibition. All gambling and other games of chance, as defined
in Section 2-780 of the City of Miami Code, as Amended, shall be expressly prohibited
on the Property.

1.14 Tenant Improvements: Tenant's facility ("Tenant Improvements") shall
include the Air Transportation Facility and the Commercial Facilities, and to the extent
not already included in either of the foregoing: (1) Tenant's existing ramps; taxiways,
apron and tie-down areas; (2) Tenant's Terminal; (3) Tenant's Government Service
Building; (4) Tenant's Storage Building all of which shall be at Tenant's sole expense
totally or partially refurbished, torn down, relocated and/or removed from the Property by
Tenant at any time subject to Landlord's approval as set forth in Article 5 below and to
all applicable construction permits, and (5) any and all new constructions, buildings
Execution Version

and/or structures, including, without limitation, approach areas, runways, ramps,
taxiways, aprons, mooring and floating docking facilities for sea planes (as may allowed
and permitted by applicable laws rules, regulations, restrictions of record, and approvals
all to be sought and secured by Subtenant at its own cost and expense) parking areas,
hangars, automobile parking areas, navigational aids, lighting facilities, control
tower/lighthouse, public terminals, offices related to the air transportation facility and/or
services, offices for the Tenant and administrative offices related thereto, offices for the
Customs Services, and public facilities appurtenant to the airport to be constructed by
Tenant at the Property, up to the maximum size permitted by applicable law, but, in any
event, Tenant Improvements shall contain a minimum of seven thousand square feet
(7,000 sq. ft.) ("Minimum Tenant Facility"). Architectural proprietary rights to the
Tenant Improvements shall vest in and be jointly retained by Landlord and Tenant,
Tenant having the right to use same without the prior approval of Landlord, solely with
respect to reproductions, souvenirs, memorabilia, books, and other commercial uses.
Tenant shall complete construction of the Tenant Improvements and begin Continuous
Operation (as defined below) of the Required Minimum Operations (as defined below) no
later than tlu-ee (3) years from final non-appealable approval of the required rezoning of
the Property (the "Construction Default Date"), subject to any applicable Force Majeure
extensions; provided, Landlord may grant Tenant a six (6) month extension to complete
construction of the Tenant Improvements in Landlord's reasonable discretion, it being
understood and agreed that if an architect engaged by Landlord reviews the progress of
construction and determines that the Tenant Improvements are not reasonably likely to be
completed within a six (6) month period, Landlord's refusal to grant Tenant such an
extension shall be deemed reasonable. Notwithstanding the foregoing and for the
avoidance of doubt, upon termination of this Sublease due to expiration of the Sublease
Term or for any other reason, unless otherwise requested by the Landlord in writing, title
to the Tenant Improvements and Architectural Proprietary Rights shall vest in the Prime
Landlord, and Tenant shall promptly execute all such documents as may be requested by
Prime Landlord to effect, evidence or confirm the vesting of title to the Tenant
Improvements and all construction documents relating to same in the Prime Landlord.
Thereafter Landlord and/or Prime Landlord may maintain the Tenant Improvements
and/or demolish them completely without the need for Tenant's consent.

1.15 Lease Year: Each twelve (12) consecutive month period beginning on the
Execution Date or any anniversary of the Execution Date. A Lease Year Anniversary is
the first day of the second Lease Year and of each Lease Year thereafter.

1.16 Continuous Operation: Tenant covenants that it shall, from and after the
completion of the Tenant Improvements and thereafter throughout the Term,
Continuously Operate: (A) the seaplane operations and ancillary operations (such as fuel
sales), and (B) the primary restaurant at the Property located outside of the Terminal (the
"Required Restaurant") (clauses (A) and (B) collectively the "Required Minimum
Operations"). For purposes of this Agreement, "Continuously Operate" means, with
respect to clause (A) above, at a minimum to keep open to the public for business at least
eight (8) hours per day, seven (7) days a week, it being understood that operations that
are not directly related to seaplane flights and operations are not required to Continuously
Operate; and with respect to clause (B) above, at a minimum to serve meals as pa.it~........_
Execution Version

dinner service at least five (5) days per week, it being understood, however, that the
Required Restaurant may be closed and not in Continuous Operation during any period of
time in which Tenant is renovating, rebuilding, or reconfiguring the Required Restaurant
(not to exceed four (4) months from receipt of applicable permits), including for any
change in restaurant concept or restaurant operator (any such change in restaurant
concept or restaurant operator subject to Landlord's approval not to be umeasonably
conditioned, withheld, or delayed, and in both cases of (A) and (B), subject to Force
Majeure. Tenant has the right, but not the obligation, to freely operate all other areas and
all other operations at the Tenant Improvements beyond these hours as Tenant may deem
fit in its sole discretion.

1.17 Effective Dates: Dates on which various Rents and related duties in this
Sublease take effect as specified herein.

2. PRIME LEASE.

Landlord is the tenant under the Interlocal Agreement, which is sometimes
defined to herein as the "Prime Lease", with the Prime Landlord identified in Section 1.4.
Tenant acknowledges receipt of a full and complete copy of the Prime Lease and all other
agreements between Prime Landlord and Landlord relating to the leasing, use, and
occupancy of the Property, of which the Improvements are a pait. Landlord represents
and wan-ants to Tenant that (a) the Prime Lease is, as of the date hereof, in full force and
effect, and (b) no event of default has occun-ed under the Prime Lease and, to Landlord's
knowledge, no event has occurred and is continuing which would constitute an event of
default but for the requirement of the giving of notice and/or the expiration of the period
of time to cure. In the event of any default by Prime Landlord under the Prime Lease,
Landlord shall notify Tenant of any such default and shall permit Tenant, at Tenant's sole
cost and expense, to pursue enforcement or remedies against the Prime Landlord due to
such default. To the extent permissible by law, Landlord grants to Tenant hereunder for
Tenant's use and enjoyment all easements, if any, granted to Landlord pursuant to the
Prime Lease.

3. SUBLEASE.

Landlord, for and in consideration of the rents herein reserved by Tenant and of
the covenants and agreements herein contained on the pai1: of the Tenant to be perfo1med,
hereby subleases to the Tenant, and the Tenant accepts from the Landlord, the Property
described in Sections 1.11 and 1.12 for Tenants Primary Use and all ancillary, related
and/or incidental uses to an airpo11: facility as well as for all other additional uses as
contemplated and/or permitted by current zoning laws and/or regulations applicable at
any given time during the Te1m of the Sublease and ancillary, related and/or incidental to
a seaplane airp011: facility and/or operation, in the clear understanding that the Required
Minimum Operations shall be subject to the covenant to Continuously Operate. Without
limiting the foregoing, Tenant's initial plans with respect to the Prope11:y contemplate the
refurbishment and/or new construction of the existing Air Transportation Facility and the
new construction of new facilities in one or more phases (not to exceed the lesser of the
maximum size pe1missible by applicable law and governmental authorities or one
Execution Version

hundred thousand square feet (100,000 sq. ft.), and provided, subject to Section 6, the
size of such facilities do not unreasonably interfere with air traffic patterns) initially
estimated to be allocated as follows:

(i) food and alcohol service establislunents, provided that such food and
alcohol service areas shall not exceed eighteen thousand nine hundred forty eight square
feet (18,948 sq. ft.);

(ii) seven thousand square feet (7,000 sq. ft.) dedicated to Historical Center;

(iii) seven thousand square feet (7,000 sq. ft.) dedicated to media room. As a
special consideration towards the City of Miami, the media room shall be available
without charge to the City of Miami at all times, its agencies and instrumentalities,
subject however to availability of time, space and reservation as for any other media
group or third patty.

(iv) twenty one thousand square feet (21,000 sq. ft.) dedicated to general
commercial activities and uses, including commercial recreational indoor and/or open air
retail businesses; provided, however, in the event that any po1tion of such general
commercial uses is used primarily for food and alcohol sales, such areas shall be subject
to the percentage rent calculation set f01th in Section 7 .1.2(ii);

(v) other commercial, educational and civic uses as well as leaining centers;
provided, no such uses shall include any schools or classrooms for other than transient
visits by student excursions; and

(vi) parking facilities.

4. TERM.

The Term of this Sublease ("Tenn") shall commence on the Execution Date. The
Te1m shall expire on the date ("Expiration Date") specified in Section 1.8, unless sooner
te1minated as provided elsewhere in this Sublease or unless extended or renewed as
provided elsewhere in this Sublease.

5. CONSTRUCTION, POSSESSION AND FURTHER DEVELOPMENT.

5.1 Upon execution of this Sublease, at Tenant's sole expense, Tenant may
immediately proceed to ground, move and/or remove all wires and/or wire poles within
and/or from the Property as well as to install, move and/or remove existing and/or new
boundai-y or security fences in and/or from the Property to restrict uncontrolled access
thereto, subject to the receipt of all necessary building, construction, development or
utility approvals and pe1mits relating thereto. Likewise, Tenant may immediately proceed
to demolish any or patt of the existing buildings and replace them with temporary
facilities, including modular units, for use during the construction of Tenant's
Improvements; provided, any such temporai·y facilities shall be removed upon receipt of
o "'"'""'"" m """ certifioo~ of o~"l'""'Y fu«lre To~< lmpro•emfflIB. ~ .
Execution Version

5.2 Tenant shall construct or install the Tenant's Improvements at Tenant's
sole cost and expense. The design of the Tenant's Improvements shall be subject to
Landlord's review and approval, which review and approval will not be unreasonably
withheld, conditioned or delayed. Tenant's Improvements shall comply with all building
code requirements and shall allocate space within the Tenant's Improvements to Tenant's
Primary Use, as elected by Tenant, provided for in and pennitted by this Sublease.
Tenant will install and construct the necessary infrastructure improvements required for
its use of the Tenant's Improvements, such as roads, water, sewer, st01m water drainage
and telephone and electric utilities, and shall be responsible for the payment of any tap-in
or connection fees. Tenant's responsibility for installation and construction of roads is
limited to roads (i) located within the boundaries of the Prope1ty or (ii) necessary to
connect the Propetty to the nearest existing (a) Watson Island internal roadway adequate
to serve the Property or (b) public street, as dete1mined by Tenant's plans for the
Prope1ty.

Subject to FAA and FOOT approval, Tenant may provide and install at its own
expense and Landlord shall have no obligation to install, (a) a wind speed/direction
sensing device and/or other meteorological devices and radio antennas and (b) an above
ground fuel tank with related pump, filter, hose and containment housing (the "Fuel
Fatm") at the Prope1ty. If either of such items is installed, Tenant shall maintain, repair
and replace such item(s), as necessary, at Tenant's sole expense. If Tenant elects to install
the Fuel Fatm, Tenant shall observe and comply with all applicable laws and the
provisions of Section 33 and shall indemnify Landlord and Prime Landlord from any
matters relating to the Fuel Fatm as provided in Section 33.2.

5.3 Tenant shall submit preliminai·y plans for any Improvements to be
constructed, refurbished and/or relocated on the Prope1ty to Landlord for written approval
(not to be unreasonably withheld, conditioned or delayed), within six (6) months from the
Execution Date. Upon receipt of Landlord's written approval for the plans prepai·ed by
Tenant, Tenant shall promptly submit such plans to the appropriate City Depaitments
(City Building Department, City Public Facilities Dept., Fire/ EMS, and Planning and
Zoning Department). Upon approval by the appropriate City Departments of the final
construction documents for pe1mitting, Tenant shall immediately proceed to pull the
co1Tesponding pe1mits and upon the granting of such permits, Tenant shall have a period
of eighteen (18) months to substantially complete the Tenant's Improvements, as
evidenced by a temporary or permanent ce1tificate of occupancy ("Outside Completion
Date"); provided, Tenant shall only be permitted to operate under a temporary ce1tificate
of occupancy for one (1) year. Tenant shall not be prohibited from futther constructing
and developing during the Tenn the Tenant's Improvements to the maximum pe1missible
floor area ratio in the event that the initial Tenant's Improvements and/or construction is
of the Minimum Tenant Facility or less than the fully pe1missible maximum size of the
Tenant's Improvements under applicable law. In addition to the time periods provided for
above, if the development and construction of the Tenant's Improvements requires
approval by Miaini-Dade County Depaitment of Regulatory Economic Resources
("DRER"), U.S. A1my Corps of Engineers ("Corps") or the Federal Aviation
Administration ("FAA"), the time fraine for issuance of the building pennit will be
extended by up to nine (9) months for DRER or Corps permits and up to six (6) months


Execution Version

for FAA approval. All of the time periods described in this paragraph are subject to
extension due to force majeure as defined in this Sublease. Review and approval by
Landlord of the initial architectural design plans and all other plans submitted for review
and approval for Tenant's Improvements shall be completed within twenty (20) business
days of their submission by Tenant, and within ten (10) business days for any changes to
such plans; any additional time required by Landlord for such review shall extend all time
periods set fmth in this paragraph by an equal number of days. Landlord's right to
approve plans as set foith herein, shall not relieve Tenant of the obligation to seek the
appropriate pe1mits from all regulatory agencies, including Prime Landlord's various
pe1mitting depaitments.

5.4 Tenant shall be required to secure and deliver and the Landlord shall have
received and approved in its good faith, with reasonable discretion, a copy of the
Payment and Perfmmance Bond, in substantially the fonn provided by Section 255.05,
Fla. Stat. and/or Irrevocable Letters of Credit (which shall have been issued at Tenant's
sole cost and expense) in an ainount equal Two Million One Hundred Thousand Dollai·s
($2,100,000.00) or one hundred percent (100%) of the constluction costs of the approved
Tenant Improvements whichever is greater, (providing fiuther that the fixed sum of One
Hundred Thousand Dollai·s ( $100,000.00) must be included in this ainount to separately
represent the Liquidated Dainages for failure of the Tenant to substantially complete the
improvements by the Outside Completion Date) which shall naine City as the owner and
obligee. The Payment and Performance Bond or Irrevocable Letter of Credit, as
applicable, will be subject to a claim or to being drawn upon if Tenant fails to
substantially complete the Tenant's Improvements by the Outside Completion Date, or
for other Defaults of the Tenant. The fonns of such Payment and Perfonnance Bond
and/or Irrevocable Letters of Credit and the surety or institution issuing the saine shall be
subject to the prior written approval of the Landlord and Prime Landlord, which shall not
be unreasonably withheld (provided that such bond is in the fo1m prescribed by 255.05,
Fla. Stat. surety or institution has a credit rating of A or higher with a financial strength to
be mutually acceptable to the paities). Any Payment and Pe1fo1mance Bond may be
enforced by Landlord and Prime Landlord in accordance with its te1ms. In lieu of
Payment and Perfo1mance Bonds and/or Irrevocable Letters of Credit, Tenant may
deposit into escrow with Greenberg Traurig, P.A. or any other third paity mutually
acceptable to Landlord and Tenant the ainount of Two Million One Hundred Thousand
Dollars ($2,100,000.00) or that representing one hundred percent (100%) of the costs to
construct the Tenant Improvements, whichever is greater, inclusive of the sepai·ate fixed
sum of One Hundred Thousand Dollai·s ($100,000.00) as specified herein). Tenant may
draw upon such escrowed ainount as construction progresses in accordance with
approved payment applications on proper invoices made by Tenant's general contractor
and reviewed and approved by Tenant's architect. Copies of such applications and
payments shall be given to the Landlord at the address set fotth in Section 1 in the
manner provided by Section 31. Landlord may draw upon such escrowed ainount for the
saine reasons it could make a claim on the Payment and Perfmmance Bond or draw upon
the Irrevocable Letter of Credit. The Two Million One Hundred Thousand Dollai·s
($2,100,000.00) represents the Tenant's anticipated construction costs, inclusive of the
liquidated damages set fotth in the herein and in Section 5 .5.
Execution Version

5.5 If Tenant fails to substantially complete the Tenant's Improvements on or
before the Outside Completion Date, subject to force majeure and other extensions
provided herein, and such failure is not caused by any delay or default on the part of
Landlord or Prime Landlord, then Tenant agrees to pay to Landlord as agreed upon
liquidated damages the sum of One Hundred Thousand Dollars ($100,000.00)
immediately upon Landlord's demand. This One Hundred Thousand Dollars
($100,000.00) must be separately maintained and accessible to Landlord until it is
confirmed Tenant met the Outside Completion Date requirement. Upon receipt of such
payment of liquidated damages, notwithstanding anything to the contrary in this
Sublease, Tenant shall not be deemed in default hereunder.

5.6 Tenant shall construct the Tenant Facility so as to provide a minimum of
one thousand square feet (1000 sq. ft.) of rentable space for the Government Services
Area, or a greater area as required by the Coast Guard or Customs and Border Protection.
Notwithstanding anything to the contrary, Tenant shall not pay or reimburse Landlord for
any Rent, expenses, or PILOT (defined below) fees related to or arising from the
Government Services Area and/or the Air Transportation Facility.

5.7 Landlord shall use reasonable efforts (which may include to assist liaising
and coordinating between Tenant and any such developer party) to cause any fmther
development of the south half of Watson Island undertaken during the Term, to occur in
such a manner so as to minimize any inconvenience to Tenant's operation, construction
and use of the Property.

5.8 Landlord agrees to reasonably cooperate with any requests by Tenant in
connection with the zoning and land use of the Prope1ty in order to pe1mit the uses and
structures contemplated in the Original Sublease and this Sublease. Tenant shall be
solely responsible for obtaining a rezoning and any other required development
approvals. The uses authorized herein shall comply with all applicable laws, including
zoning ordinances, as amended. In the event the City Commission denies any required
rezoning, the PZAB denies an exception, or a warrant is denied for the uses contemplated
herein (a "Zoning Denial"), Tenant may pursue any available appeals of such decisions,
or reapply or repetition for such rezoning. If a Zoning Denial occurs, Tenant may
continue to operate the Prope1ty as had been operated prior to the execution of this
Sublease; and ftnther provided that, notwithstanding anything to the contrary in this
Sublease, Tenant shall not be obligated to submit any preliminary or final plans nor
commence any construction, and any requisite time periods for completion of
construction shall not be triggered absent a rezoning of the Property to permit Tenant's
uses.

6. TENANT'S USE.

The Property shall be used and occupied for the Tenant's Primary Use and the
operation of the Government Services Areas as set f01th in Section 1.12. To ensure safety
of operation and mutual non-interference of the multiple uses in and around the Prope1ty
and such areas of the Prope1ty as are being used for provision of aircraft services,
Landlord shall use reasonable efforts through applicable lease provisions not to permit
Execution Version

helicopter takeoff, landing and parking operations on or above the patt of the Prope1ty
devoted to seaplane parking, taxing and ingress or egress from or to Biscayne Bay. Due
to the volume of Tenant's flight operations, its need to adhere strictly to flight schedules
and to help assure safety of operations: (i) Tenant may require any seaplane owner or
operator to obtain scheduling clearance from Tenant at least two (2) hours in advance of
any anticipated landing (except in case of an emergency landing), takeoff or use of
aircraft parking space (which clearance shall be available by facsimile, telephone or radio
during Tenant's scheduled daylight operating hours) and (ii) if any aircraft, boat or other
vehicle ("Obstructing Vehicle") not operated by Tenant shall obstruct Tenant's or any
other airpmt user's access to and use of the ramp, taxiways, other landside ingress-egress
areas or aircraft parking/storage areas in the Air Transpmtation Facility, Tenant may
remove such Obstructing Vehicle or cause it to be removed forth with upon the failure or
refusal of the owner or operator to move such Obstructing Vehicle after notice by Tenant
(or a bona fide attempt to give notice) to such owner or operator, which may be verbal
and given in person or by electronic means. Tenant shall be entitled to seek payment or
reimbursement from any such owner or operator for the costs of such removal. Landlord
shall in no respect be liable for any costs incmTed by Tenant or any damage to Tenant's
prope1ty or the property of others or any disruption to Tenant's business as a result of an
Obstructing Vehicle. Landlord shall not be responsible for payment of any costs incurred
by Tenant relating to removal of an Obstructing Vehicle that are not reimbursed, nor shall
Tenant be entitled to any set off of Rent as a result of incmTing such cost: Tenant
acknowledges that the Air Transportation Facility is a public facility and undettakes (i) to
exercise the rights granted by this Sublease fairly and in a manner that does not
discriminate against aircraft owners or operators other than Tenant and (ii) subject to the
requirements of its scheduled operations, that its aircraft will not obstruct other aircraft
owners or operators in their use of the Air Transportation Facility so long as such other
aircraft owners or operators have been cleared by Tenant and are complying with
Tenant's promulgated rules and regulations.

Notwithstanding anything to the contrary in this Sublease, Tenant shall have sole
discretion with respect to the use and scheduling of the Air Transpo1tation Facility, for its
own operations and those of third patties (as to which uses and parking/storage spaces no
additional rent or other charges will be due), with the ability to set rates and fees to be
charged to third parties. For the purposes of the Sublease, Tenant's own operations shall
include operations of Chalks and Nautilus, and/or that provided by contractors hired by
any of the above to provide such seaplane operations.

7. RENT AND AUDIT.

7.1 Annual Rent. Commencing on the Effective Date, all rent due hereunder
shall be paid to Landlord or to such other payee or at such other address as may be
designated by notice in writing from Landlord to Tenant, without prior demand therefore
and without any deduction whatsoever. Tenant's Rent will vary as set forth below. Rent
shall be paid in equal monthly installments in advance on the first seven (7) calendar days
of each month, together with applicable sales or use tax, if any. Rent shall be pro-rated
for paitial months at the beginning and end of the Term. Any monthly installment of
Rent not received by Landlord within three (3) business days of its due date w,,_·~""
Execution Version

subject to a four percent (4%) late charge to defray Landlord's administrative costs.
Pursuant to certain Agreements with the Federal Aviation Administration ("FAA") two
Hundred Thousand Dollars ($200,000.00) of the annual rent attributable solely from the
Commercial Facilities will be retained by Miami Spmts and Exhibition Authority
("MSEA").

7.1.1 Commencing on the Effective Date and from that date through the
earlier to occur of (i) the Outside Completion Date, as may be extended for force majeure
as set forth in Article 5; or (ii) the receipt of a temporary or final ce1tificate of occupancy,
whichever is obtained first, for Tenant's Improvements ("Rent Commencement Date"),
Tenant shall pay Rent of Six Thousand Dollars ($6,000.00) per month (the "Initial
Construction Stage Rent"). If Tenant has failed to open the Tenant's Improvements,
including the restaurants (the "Facility Opening"), as of the Rent Commencement Date,
then the Initial Construction Stage Rent will increase to Twenty Thousand Eight Hundred
and Thirty Three Dollars ($20,833) per month until such time as the Facility Opening
occurs.

7.1.2 Commencing with the date the Facility Opening occurs through the
Expiration Date, Tenant shall pay Landlord as an annual rent, the greater of Five Hundred
Thousand Dollars ($500,000) annually (as Base Rent) or a percentage rent ("Percentage
Rent") equal to the sum of (i) five percent (5%) of the pe1tinent annual Gross Revenue
attributable to Tenant's sale of fuel at the Prope1ty; provided, Tenant's own use,
consumption, and internal accounting of fuel used by Tenant's or its affiliates' airplanes
and boat service, including any payments to or from affiliates for accounting purposes,
shall not be deemed sales and shall not be subject to this percentage rent calculation
(where for purposes of this clause (i) "affiliates" shall mean Tropic Ocean Airways and
any entity with at least seventy five percent (75%) commonality of ownership with
Tenant), (ii) Tenant's or its subtenant's Gross Revenue from the sale of food, beverage
and alcohol per establishment at Tenant's Improvements, other than at the Air
Transpmtation Facility, equal to eight percent (8%) of the pe1tinent annual Gross
Revenues from such sale of food, beverage and alcohol over Three Hundred Thousand
Dollars ($300,000) but less than Five Hundred Thousand Dollars ($500,000) and ten
percent (10%) of annual Gross Revenues from such sale of food, beverage and alcohol of
Five Hundred Thousand Dollars ($500,000) or more, (iii) ten percent (10%) of Gross
Revenues from ticket or other sales for access at the Historical Center, media or learning
center, and (iv) one percent (1%) of the pe1tinent annual Gross Revenues (after deducting
out any other amounts of Gross Revenues paid pursuant to clauses (i) - (iii) above, plus
Fifteen Dollars and 86/100 cents ($15.86) per square foot of the establishments at
Tenant's Improvements used as retail pmtions of the Commercial Facilities. For the
avoidance of doubt and notwithstanding anything to the contrary, it is intended that all
restaurant, food, beverage, and alcohol sales at establishments in Tenant's Improvements
where such sales are the primary goods sold are to pay the percentage rent calculated
under clause (ii), and not any of the amounts in clause (iv). Five percent (5%) of Gross
Revenues received by the Landlord shall be set aside to be used for City of Miami
promotional activities.
Execution Version

7 .1.3 Gross Revenues. Gross Revenues shall mean and include the entire
amount of all revenues actually collected and received by the Tenant and its Sub-tenants,
without duplication, and derived from the following sales sources, including without
limitation, and with respect to each of the specific uses and categories set forth in
Section 7 .1.2, limited as to such categories and without duplication in categories or
characterization:

(i) all revenue from the commercial business and services Tenant and
its Sub-tenants conduct on or from the Property;

(ii) all revenue from sale of food, beverage, alcohol, merchandise or
services from the Property, excluding revenue derived from the
rental for any event or revenue earned by a third party caterer
otherwise paying rental to Tenant in connection with any event,
which rental will be included in Gross Revenues pursuant to
subpart (viii), below;

(iii) all revenue derived from advertising and sponsorships conducted
on the Property, including but not limited to, movie, television
commercials, etc;

(iv) all amounts received from any catering food operations in any way
conducted at or from the Prope1ty, excluding revenue earned by
any third party Caterer otherwise paying rental to Tenant in
connection with such special event, which rental will be included
in Gross Revenues pursuant to subpart (viii), below;

(v) all amounts received by Tenant from valet concession sales or
parking valet services;

(vi) delivery charges;

(vii) sales made or performed by means of mechanical or other vending
sales and services devices or machines on the Property, including
without limitation, pay telephones, vending machines, and
entertainment devices both for cash and on credit, rendered in or
upon the Property (none of which sales shall be treated as food and
beverage sales for calculation of rent under Section 7. l .2(ii),
excluding revenue derived from the rental of any portion of the
Property for any event or revenue earned by third party caterer
otherwise paying rent to Tenant in connection with any event,
which rent will be included in Gross Revenues pursuant to subpart
(viii), below;

(viii) all revenue received by Tenant in connection with events at any
facility within the Property, or any portion thereof for any period

~
Execution Version

of time, including without limitation, banquets, patties, receptions
held on or initiated from the Prope1ty;

(ix) internet or telephone food/beverage orders received or filled at the
Prope1ty, or procured from the Prope1ty by house-to-house or other
canvassing, all deposits not refunded to purchasers, and orders
taken, although said orders may be filled elsewhere, including
proceeds of all video games;

(x) all donations and contributions received (but not capital
contributions to Tenant by its owners), the revenues of which are
actually received by Tenant and pursuant to the tenns thereof
constitute unrestricted funds that may be used for general operating
expenses, but excluding any donations or contributions made for
the historical, educational, or other charitable purposes to the
Tenant so long as no in-kind goods or services ai·e provided in
return by Tenant;

(xi) the imputed value of any food or beverage provided from the
Prope1ty, including but not limited to, free of charge, as pa.it of a
package, through barter, or other discount; and

(xii) all other receipts whatsoever derived from other commercial
operations conducted in or from the Prope1ty by the Tenant and its
Sub-tenant (if any).

Gross Revenues shall not include the following:

i. any rents received by Tenant from Subtenants in excess of the
ainounts required to be paid by Tenant to Landlord pursuant to
Section 7.1.2 above;

ii. chai·itable donations so long as no in-kind goods or services ai·e
provided in return by Tenant;

111. receipts, grants, or funds from governmental or municipal
agencies, authorities, or depaitments;

iv. capital contributions from Tenant or Tenant's investors so long as
no in-kind goods or services are provided in return by Tenant;

v. any sums collected and paid out by Tenant or any subtenant for
any sales, use or excise tax, and any airpo1t fees and taxes,
imposed by any federal, state or governmental authority directly on
sales and collected from customers and accounted for by Tenant
~d/0< S•b-t<~IB; ~
Execution Version

vi. the exchange of merchandise between the stores of Tenant, a party
controlled by Tenant, or Sub-tenant, if any, where such exchange
of goods or merchandise is made solely for the convenient
operation of the business of Tenant and not for the purpose of
consummating a sale which has theretofore been made in or from
the Property and/or for the purpose of depriving Landlord of the
benefit of a sale which otherwise would be made in or from the
Property;

vii. the amount of returns to shippers or manufacturers;

viii. proceeds from the sale of trade fixtures, operating equipment or
similar assets after use thereof in the conduct of Tenant's and Sub-
tenants' business on the Property;

ix. all sums and credits received in the settlement of claims for loss or
damage to merchandise;

x. funds collected with regard to the Property which are not actually
related to the day-to-day business of the Property such as, but not
limited to the financing of the Tenant's or a subtenant's interest in
the Property;

xi. collection and receipt of insurance proceeds;

xii. collection and receipt of eminent domain proceeds;

xiii. monies collected for events, to the extent any portion of such
monies collected are paid or delivered to the sponsor, so long as
sponsor is not affiliated with Tenant;

xiv. all gratuities and tips paid to employees or amounts collected by
Tenant on behalf of employees, and the amount of any employee
or Subtenant discounts for persons working at the Tenant
Improvements;

xv. amounts received by Tenant as reimbursements of expenses and
cost sharing (for example, reimbursement of taxes, maintenance,
insurance or utility bills);

xvi. any grants, subsidies, rebates, credits or similar benefits received
by Tenant or Sub-tenant from any federal, state, regional or local
body, '""''" mrthoricy, deportmoo• 0< """'"'tioo~
Execution Version

xvii. interest earned on Tenant's deposit accounts, earnings or profits on
Tenant's investments;

xviii. interest income from loans or credit facilities granted by Tenant
and similar passive or investment income of Tenant related to
Tenant's liquid assets, investments or loans/credit facilities granted
by Tenant;

xix. any restricted donations or contributions whose revenues are
earmarked for capital expenditures, as approved by the Landlord,
to the Property;

xx. Prope1ty and real estate tax refunds;

xxi. Security deposits of Sub-Tenants; and

xxii. Interest and finance charges charged by Tenant.

If a sale is by credit card, no deduction shall be allowed for any commission
associated with such sale. All Gross Revenues shall be calculated based on an actual
receipts basis and not on an accrual basis.

No deduction shall be allowed for direct or indirect discounts, rebates, or other
reductions on sales, unless generally offered to employees or the public on a unifonn
basis. Gross Revenues shall be reduced by the amount of any refund made upon any sale
in or from the Prope1ty, provided said amounts had been previously included in "Gross
Revenues," not to exceed the sum so previously included, where the merchandise sold is
thereafter returned by the purchaser and accepted by the Tenant or Sub-tenant, and if
such refund is in the fo1m of a credit to customer, such credit shall be included in Gross
Revenues when used. Tenant shall be entitled to deduct from any amount originally
included in Gross Revenues any portion thereof which is determined by Tenant to be
uncollectible after ninety (90) days following the date such amount was originally due
and payable to Tenant.

7.1.4 Additional Rent. All sums, charges, or amounts of whatever nature
to be paid by Tenant to Landlord in accordance with the provisions of this Sublease
additional to the Base Rent or Percentage Rent, however denoted, are called "Additional
Rent." Unless this Sublease provides otherwise all Additional Rent shall be paid with the
next installment of the Base Rent unless the particular component of Additional Rent is
typically calculated on other than a monthly basis. The Base Rent or Percentage Rent,
as applicable, and all Additional Rent ar·e collectively refe1Ted to as "Rent".

7.1.5 Tenant's Records. To the extent Gross Revenues generated by
Tenant or any Sub-tenant ("Applicable Sub-Tenant") are applicable to the dete1mination
of any Percentage Rent hereunder ("Applicable Gross Revenues"), Tenant shall prepare
and keep or shall use commercially reasonable eff01ts to cause Applicable Sub-Tenants to
prepare and keep, full, complete and proper books and source documents in acc,.,,o~·,_,""l
Execution Version

with generally accepted accounting principles, of the Applicable Gross Revenues,
whether for cash, credit or otherwise, of each separate depaitment at any time operated in
the Prope1ty. The books and source documents to be kept by Tenant (and Applicable
Sub-Tenants) shall include, without limitation, true copies of all federal, state and local
tax returns and reports, records of inventories and receipts of merchandise, daily receipts
from all sales and other pe1tinent original sales records and records of any other
transactions conducted in or from the Prope1ty by Tenant.

Pe1tinent original sales records may include any of the following,: (i) sales rep01ts
of back office systems fed from point of sale tenninals; (ii) cash register tapes, including
tapes from temporary registers, if any; (iii) serially pre-numbered sales slips; (iv) the
original records of all mail, internet and telephone orders at and to the Prope1ty, if any;
(v) settlement rep01t sheets of transactions with any person conducting business in the
Premise, if any; (vi) original records indicating that merchandise returned by customers
was purchased at the Property by such customers; (vii) memorandum receipts or other
records of merchandise taken out on approval; (viii) detailed original records of any
exclusions or deductions from Gross Revenues; (ix) sales tax records; and (x) such other
sales records, if any, which would normally be exainined by an independent accountant
pursuant to accepted auditing standai·ds in pe1forming an audit of Tenant's sales.
Landlord and Tenant acknowledge and agree that, during the Lease Te1m, and in
connection with certain Sub-leases, not all of the foregoing sales records may be
maintained; however, Tenant hereby agrees to maintain (or to use commercially
reasonable efforts to cause any Applicable Sub-Tenant to maintain) all such sales records
as shall, in accordance with commercially reasonable standai·ds, be required in
connection with the determination of Applicable Gross Revenues, where applicable to the
determination of any Percentage Rent hereunder.

Subject to the preceding paragraph, Tenant shall record (or use commercially
reasonable efforts to cause any Applicable Sub-Tenant to record), at the time of each sale
or other transaction, in the presence of the customer, all receipts from, such sale or other
transaction, whether for cash, credit or otherwise, in a cash register or cash registers
having a cumulative total which shall be sealed in a manner approved by Landlord and
which shall possess such other features as shall be reasonably required by Landlord.
Tenant shall be required to install (and to use commercially reasonable eff01ts to cause
Applicable Sub-Tenants to install) point of sale terminals, point of sales cash register
systems or such other point of sale equipment of a make and model mutually agreed to by
the Paities.

7.1.6 Repo1ts by Tenant. Within ninety (90) days after the end of each
Lease Year, Tenant shall also furnish to Landlord a ce1tified financial rep01t (i.e. a gross
revenue audit) by an independent ce1tified public accountant ("Annual Rep01t"), showing
in all reasonable detail the amount of such Applicable Gross Revenues made by Tenant
from the Prope1ty during the preceding Lease Yeai.. The Annual Rep01t shall not be
required to be ce1tified by the independent ce1tified public accountant with respect to any
Applicable Gross Revenues attributable to Sub-Tenants' operations at the Propeity, and
Tenant's Annual Repo1t may provide for exclusions and limitations by the independent

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Execulion Version

ce1tified public account in this respect. Tenant shall in all events furnish to Landlord
within fo1iy five (45) days after the end of each month of the Lease Tenn a written
statement of Applicable Gross Revenues covering the preceding month, the statement to
be in such fonn and style and contain such details and breakdown as Landlord may
reasonably require. Landlord acknowledges and agrees that, with respect to Applicable
Gross Revenues generated by any Applicable Sub-Tenant, Tenant shall rely on the
repo1iing made by each such Applicable Sub-Tenant with respect to its Applicable Gross
Revenues and shall have no liability whatsoever for repo1iing e1rors made by any such
Applicable Sub-Tenant; provided, however, Tenant shall use commercially reasonable
effo1is to include in each sublease with any Applicable Sub-Tenant reporting
requirements with respect to Applicable Gross Revenues consistent with the reporting
requirements applicable to the operations of Tenant hereunder, and a right for the
Landlord to audit the Sub-Tenant's records with respect to Applicable Gross Revenues.

7.1.7 Right to Examine Books. Notwithstanding the acceptance by
Landlord of payments of Base Rent and Percentage Rent, Landlord shall have the right to
all Rents and other charges actually due hereunder, and the right to examine, make
extracts from and copy, at the Property or Tenant's main accounting office, Tenant's
books, source documents, accounts, records and sales and income tax rep01is filed with
applicable government agencies by Tenant in order to verify the amount of Applicable
Gross Revenues in and from the Property. For a period of five (5) years after the
expiration of each Lease Year, Tenant shall make (or use commercially reasonable efforts
to cause any Applicable Sub-Tenant to make) all such documents and records available at
the Prope1iy or Tenant's main accounting office upon ten (! 0) days' prior written notice
from Landlord. The Tenant will establish one (!)or more bank accounts to deposit all
Gross Revenues recognized from the operations on the Prope1iy, which bank account
deposits will not be comingled with the revenue from any other operations of the Tenant
or any other affiliated companies.

7.1.8 Audit.

(a) At its option, Landlord may at any time but in no event more than
once per year, upon ten (I 0) days' prior written notice to Tenant, an·ange for an auditor
selected by Landlord to conduct a complete audit (including a physical inventory) of the
applicable records and operations of Tenant included in Applicable Gross Revenues from
the Prope1iy during the period covered by any statement issued by Tenant. Tenant shall
make available to the Landlord's auditor at the Prope1iy or Tenant's main accounting
office on the day set f01ih in Landlord's notice, requiring such audit, all of the applicable
books, source documents, accounts and records refe1Ted to in Section 4.6 hereof and any
other materials which such auditor reasonably deems necessary or desirable for the
purpose of making such audit. Tenant shall promptly pay to Landlord the amount of any
deficiency in Percentage Rent payments disclosed by any such audit. If such audit shall
disclose that Tenant's statement of Applicable Gross Revenues is understated to the
extent of five percent (5%) or more (but only with respect to Tenant's own revenues and
not those of any Applicable Sub-Tenants), then, unless Tenant shall dispute the results of
such audit, Landlord may bill to Tenant the cost of such audit, which shall be paid by
Tenant within thhiy (30) days after Tenant's receipt of Landlord's invoice. ~ .

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Execution Version

shall disclose that Tenant's statement of Applicable Gross Revenues is understated to the
extent of five percent (5%) or more (but only with respect to Tenant's own revenues and
not those of any Applicable Sub-Tenants), then, unless Tenant shall dispute the results of
such audit, Landlord, in addition to the foregoing remedy and other remedies available to
Landlord, shall have the option, upon Tenant's failure to pay such additional sums within
thitty (30) days after written notice to the Tenant, to declare Tenant to be in default
hereunder, in which event, Landlord shall be entitled to all of the remedies set fmth in
Article XVI below. In addition to the foregoing, and in addition to all other remedies
available to Landlord, in the event Tenant's auditor and Landlord's auditor shall schedule
a date for an audit of Tenant's records in accordance with this Section 4.8, and Tenant
shall fail to be available or shall otherwise fail to comply with the requirements for such
audit, Tenant shall pay all costs and expenses associated with the canceled audit. Tenant
shall include specific language in any Subleases requiring the Sub-Tenant(s) to comply
with all auditing provisions herein. The audit and inspection provisions set forth in 18-
100 through 18-102, City Code, as amended, are supplemental audit and inspection rights
of the Landlord and are deemed as being incorporated by reference herein.

(b) In addition to all other remedies available to Landlord, in the event
that any such audit shall disclose that Tenant's records and other documents as refen-ed to
in Section 4.4, 4.5 and 4.6 hereof and such other materials provided by Tenant to
Landlord's auditor are inadequate based on industry standards, to disclose accurately
Tenant's Gross Revenues, then Tenant shall have thirty (30) days to cure any deficiencies
raised by Landlord's auditor and shall then notify Landlord so that Landlord's auditor can
continue its audit. Landlord's exercise of the foregoing remedy shall in no way limit or
otherwise affect Landlord's ability to exercise other remedies available to it, nor shall
Tenant's obligations pursuant to the terms, covenants and conditions of this Lease
(including, without limitation, Tenant's obligation with respect to rep01ting Gross
Revenues and payment of Percentage Rent) be in any manner reduced or diminished by
the exercise of such remedy. Notwithstanding anything herein to the contrary, to the
extent that Tenant shall fail to provide to Landlord any required repotting or records with
respect to Applicable Gross Revenues as a consequence of any Applicable Sub-Tenant's
failure to timely furnish to Tenant any required repo1ting or records with respect to the
Applicable Gross Revenues generated by such Applicable Sub-Tenant, then, provided
that Tenant shall take all commercially reasonable measures pursuant to the terms of the
applicable sublease to enforce the requirements of such sublease with respect to
producing such rep01ts or records, Tenant shall have no liability to Landlord in
connection therewith, but shall promptly commence to take all commercially reasonable
effmts to enforce or cause compliance with such sublease, and, in connection there with,
to recover all Applicable Percentage Rent due in connection with the Applicable Gross
Revenues generated by such Applicable Sub-Tenant and to account to Landlord for same.

7.1.9 Lien for Rent. The whole amount of the Rent, and each and every
installment, and the amount of all taxes, assessments, water rates, insurance premiums
and other charges and Impositions paid by the Tenant under the provisions of this Lease,
and all costs, attorneys fees and other expenses which may be incurred by the Landlord in
enforcing the provisions of this Lease, or on account of any delinquency of t / h .

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Execution Version

carrying out any of the prov1s1ons of this Lease, shall be and they are deemed to
constitute a valid lien upon the Tenant's Improvements, and upon the Tenant's leasehold
estate. Landlord hereby agrees that in the event Tenant shall obtain financing in
connection with the Project which may entail granting to any leasehold mortgagee or
other lender providing such financing ("Leasehold Mortgagee") a leasehold mortgage
("Leasehold Mo1tgage") or other encumbrance upon all or any pmtion of the Tenant's
Improvements, the Tenant's leasehold estate, or any personal prope1ty belonging to
Tenant, Landlord shall negotiate in good faith with any such Leasehold Mortgagee with
respect to any requisite documentation for the loan.

7. I. I 0 Independent Auditor General Review. According to the Chaiter
and the Code of the City of Miami, there is established an Office of the Independent
Auditor General ("IAG") which may, on a random basis, perfo1m audits, inspections, and
reviews of contracts of Landlord. This random audit is separate and distinct from any
other audit by Landlord. The IAG is authorized to investigate Landlord affairs and
empowered to review past, present, and proposed Landlord prograins, accounts, records,
contracts, and transactions. The IAG shall have the power to audit, investigate, monitor,
oversee, inspect, and review operations, activities, perfmmance, and procurement
processes including but not limited to project design, proposal specifications, proposal
submittals, activities of Tenant, its officers, agents, and employees, lobbyists, Landlord
staff, and elected officials to ensure compliance with contract specifications and to detect
fraud and corruption.

Upon ten (! 0) days written notice to Tenant, Tenant shall make all requested
records and documents available to the IAG for inspection and copying. The IAG shall
have the right to inspect and copy all documents and records in Tenant's possession,
custody, or control which in the IAG's sole judgment, pe1tain to perfonnance of the
Sublease, including but not limited to, original estimate files, change order estimate files,
worksheets, proposals, and agreements from and with successful subcontractors and
suppliers, all project-related correspondence, memoranda, instructions, financial
documents, construction documents, Sublease documents, back-change documents, all
documents and records which involve case, trade, or volume discounts, insurance
proceeds, rebates, or dividends received, payroll and personnel records, and supporting
documentation for the aforementioned documents and records.

Tenant shall make available at its office at all reasonable times the records,
materials, and other evidence regai·ding the acquisition (proposal prepai·ation) and
pe1formance of this Sublease for exainination, audit, or reproduction until five (5) years
after final payment under this Sublease or for any longer period required by statute or by
other clause of this Sublease. In addition:

(a) If this Sublease is completely or paitially te1minated, Tenant shall
make available records relating to the work te1minated until five (5) yeai·s after any
resulting final termination settlement; and ·~

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Execution Version

(b) Tenant shall make available records relating to appeals or to
litigation or the settlement of claims arising under or relating to this Sublease until such
appeals, litigation, or claims are finally resolved.

The provisions in this Aiticle shall apply to Tenant, its officers, agents,
employees, subcontractors, and suppliers. Tenant shall incorporate the provisions of this
Article in all subcontracts and all other agreements executed by Tenant in connection
with the perfo1mance of this Sublease. Nothing in this section shall impair any
independent right to Landlord to conduct audits or investigative activities. The provisions
of this section are neither intended nor shall they be construed to impose any liability on
Landlord by Tenant or third patties.

7.1.11 Renewal Te1m Rent. The renewal base rent and appropriate
percentage rents shall be established by an appraisal conducted by an independent
appraiser selected by Tenant from Prime Landlord's approved appraiser's list. The
appraisal process shall begin no later than six (6) months prior to the expiration of the
cmTent te1m. The appraiser's decision shall be binding on Tenant if Tenant elects to
renew.

7 .1.12 Security Deposit. In order to secure the payment of Rent and
perfo1mance by Tenant of its obligations under this Sublease, Tenant has deposited with
Landlord, upon the execution of this Sublease, a security deposit in the amount of Two
Hundred Fifty Thousand Dollars ($250,000.00) ("Security Deposit"). Upon expiration of
this Sublease or eru·lier termination by Tenant, the Security Deposit shall be returned to
Tenant within fifteen (15) days. In the event of a default by Tenant in the payment of
Rent or perfmmance by Tenant of its other obligations under this Sublease, which default
remains uncured after applicable notice, grace and cure periods set fmth herein, Landlord
may apply so much of the Security Deposit as may be necessary to cure such default (if
monetru·y in nature).

8. TAXES AND ASSESSMENTS OR PAYMENTS IN LIEU OF TAXES.

Tenant shall be responsible for the following payments or payments in lieu of
taxes ("PILOT") during the Tenn:

8.1 Tenant agrees to pay all governmental assessments, including assessments
imposed by the City in a unifmm manner on all affected prope1ties or taxpayers,
franchise fees, excises, license and permit fees, levies, charges and taxes, including but
not limited to, ad valorem real estate taxes on the Property and improvements thereon,
general and special ordinary and extraordinru·y properly levied against the Prope1ty, the
improvements thereon and/or the Tenant's Leasehold Estate which constitute a lien on
the Prope1ty or the improvements thereon, and similru· gove1mnental levies, impositions
and assessments (hereinafter collectively referred to as "Impositions"), before any fine,
penalty or interest is assessed for nonpayment. In the event the Prope1ty is exempt by
general law from ad valorem real estate taxes, Tenant will pay Landlord an atlllUal
PILOT in an runount initially equal to Twenty Four Thousand Dollars ($24,000). The
PILOT will increase on each anniversru·y of the Effective Date at a rate equal to tluee

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Execution Version

percent (3 %). If real propetty taxes and assessments are imposed or levied on the
Prope1ty, Tenant shall be required to pay the real property taxes and assessments levied
against the Property. Tenant shall be entitled to contest the valuation of the Prope1ty in
administrative or judicial proceedings against Miami-Dade County so long as it has paid
any amounts or provided any security as may be required to be deposited as a condition
of such contest. If Tenant is required to pay real estate taxes on the Prope1ty, it shall not
be required to pay the PILOT. Notwithstanding anything to the contrary, Tenant's
obligations to pay Impositions or PILOT shall exclude in the calculation or payment
thereof any arnas utilized as Government Services Areas and the Air Transportation
Facility if such areas are exempted from taxation by the taxing authorities.

8.2 In addition to the foregoing PILOT payments, Tenant agrees that in the
event any governmental agency or authority (including, without limitation, FDEP, FDOT,
or DRER) in connection with any approvals under this Sublease, requires any additional
fees, taxes, or other payment of any kind which result in additional fees to Tenant in
excess of twelve percent (12%), landlord may elect to pay any fee above the twelve
percent (12%). If Landlord chooses not to pay any amount in excess of twelve percent
(12%), then Tenant may either elect to terminate this Sublease or may pay such
additional amounts, and Landlord shall have no liability for payment of same.

8.3 In the event that the State of Florida determines that all or pait of the
proposed or intended use and/or all or patt of Tenant's use of the Prope1ty violates the
use limitation stipulated under the Interlocal Agreement and/or under the Original Deed
(as defined in the Interlocal Agreement), Tenant shall have the right to cure and
accomplish such cure within six (6) months from the default notice or, at its election,
contest such claim, at its sole cost and expense, from the State of Florida by all available
legal means, and Landlord agrees to cooperate with any request by Tenant in connection
thereof and provide Tenant with access to all such legal means. Either if Tenant accepts
the detennination of the State of Florida in respect of such violations and/or if legally
defeated, Tenant shall have the right to request renegotiation of the related business te1ms
under this Sublease providing; however, that the City is not bound or obliged to accept
the te1ms requested by the Tenant.

9. TENANT'S OBLIGATIONS.

Tenant's obligations shall be as follows:

9.1 Prior to completion of construction of Tenant's Improvements, Tenant
shall be solely responsible for the repair, replacement and maintenance of the Property.
Tenant shall, throughout the Initial Te1m at Tenant's sole cost and expense, maintain in
good, clean and orderly condition and repair the Prope1ty and any of Tenant's
improvements located thereon.

9.2 Upon completion of construction of Tenant's Improvements, Tenant, at its
sole cost shall be solely responsible for the repair, replacement and maintenance of the
Prope1ty and the Tenant's Improvements including all equipment, fixtures and aiticles of
personalty located on the Prope1ty and landscaping. Tenant shall throughout the Term, at

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Execution Version

Tenant's sole cost and expense, maintain in good, clean and orderly condition and repair
the Property, the Tenant's Improvements and improvements thereon. Tenant shall, at
Tenant's sole cost and expense, promptly make to the Tenant's Improvements and
improvements all necessary repairs, renewals and replacements, interior and exterior,
structural and nonstructural, whether made necessary or caused by fire or other casualty,
or by ordinary wear and tear. All repairs, renewals and replacements shall be of good
quality sufficient for the proper maintenance and operation of the Tenant's Improvements
and improvements and shall be constructed and installed in compliance with all legal
requirements of all governmental authorities having jurisdiction. Nothing contained in
this Sublease shall impose on the Landlord the obligation to make any repairs or expend
any monies for the maintenance of the Property or the Tenant's Improvements, or the
renewal, replacement or repair of Tenant's Improvements or any other improvements.
Tenant, at its sole cost and expense, shall (i) safely and efficiently operate the Tenant's
Improvements and the Prope1ty, (ii) provide all equipment required or advisable for its
operations at the Tenant's Improvements and the Prope1ty, (iii) comply with all
applicable Federal, state and local laws and regulations, as the same may be amended
from time to time, including with respect to security or other operational procedures,
required by reason of Tenant's use and operation of the Tenant's Improvements and the
Property, (iv) be responsible for payment of all utilities for the Tenant's Improvements
and the Prope1ty, and (vi) provide such other services at the Tenant's Improvements and
the Property as may hereafter be mutually agreed to by Landlord and Tenant. Tenant
shall employ at all times a sufficient number of persons qualified to perf01m all services
required under this Sublease and shall maintain at all times an authorized representative
whose name and telephone number shall be provided to Landlord in the event that prompt
contact with Tenant is required. Tenant shall give Landlord ten (10) days prior written
notice of any change in the name and telephone number of such authorized
representative.

10. Intentionally omitted.

11. MARKETING ASSOCIATION.

Landlord or Prime Landlord may organize an association (the "Association") for
the promotion and marketing of Watson Island, maintenance and administration of
common areas in Watson Island and enforcement of existing and future rules and
regulations affecting Watson Island, including but not limited to landscaping and
directional signage guidelines. Tenant will pruticipate in, and contribute financially to the
establishment and operation of, the Association, subject to Tenant's review and approval
of the nature and runount of funding required. If Tenant elects not to pruticipate and
contribute financially the required amount to the Association, then Tenant shall be
excluded from all marketing effo1ts, and shall not be entitled to any of the benefits
afforded to other members of the Association. If Tenant elects to pruticipate in, and
contributes financially as required to, the Association, Tenant shall be entitled to obtain
full disclosure of the sources of funding and their anticipated disposition each year prior
to the establishment of an assessment or contribution amount which will affect Tenant.

12. QUIET ENJOYMENT.
Execution Version

Landlord represents that it has full power and authority to enter into this Sublease,
subject to the provisions of Section 32 and so long as Tenant is not in default in the
perfo1mance of its covenants and agreements in this Sublease, Tenant's quiet and
peaceable enjoyment of the Property shall not be disturbed or inte1fered with by
Landlord, or by any person claiming by, through, or under Landlord.

13. INDEMNIFICATION AND INSURANCE.

13 .I Indemnification by Tenant. Tenant shall indemnify, protect, defend and
hold harmless Landlord and Prime Landlord, their officers, employees, and agents, and
assigns from and against any and all claims, suits, actions, damages or causes of action of
whatever nature arising out of Tenants use and operation of the Property, and the
provision of services hereunder, whether such claim shall be made by an employee of
Tenant, an employee of Landlord, an employee of Prime Landlord, or by any third party,
and whether it relates to injury to persons (including death) or damage to property, a third
paity unrelated to Tenant, were grossly negligent or acted through willful misconduct to
cause the injury or damage alleged in such claim, suit or cause of action ("Indemnified
Claim(s)". Tenant shall, at its own cost and expense, pay and satisfy all costs related to
any final non-appealable orders, judgments or decrees which may be entered as to any
Indemnified Claim and all costs, attorneys' fees, expenses and liabilities incmTed in and
about the defense of any such Indemnified Claim and the investigation thereof to the
extent that Tenant, its officers, employees, contractors, or agents ("Tenant Paities") (i)
are found to be negligent by a final order or judgment of a court or other adjudicatory
body of competent jurisdiction after exhaustion or waiver of all appeals, or (ii) admit
their negligence in the settlement of any such matter. Tenant shall fmther indemnify,
defend, protect and hold Landlord and Prime Landlord hai·mless from and against any
and all claims ai·ising from any breach or default in pe1f01mance of any obligation on
Tenant's part to be pe1fo1med under the te1ms of this Sublease, or ai·ising from any act,
neglect, fault or omission of Tenant Pa1ties and against all costs, attorneys' fees, expenses
and liability incun-ed in connection with such claim or any action or proceeding brought
thereon to the extent any such claim does not arise from the gross negligence or willful
misconduct of Landlord, Prime Landlord, or any of their respective officer, agents, or
employees or the breach by any such parties of their obligations under this Sublease or
the Prime Lease, as applicable. In case any action or proceeding shall be brought against
Landlord and/or Prime Landlord by reason of any such claim, Tenant upon notice from
Landlord or Prime Landlord shall defend the sanie at Tenant's expense by counsel
acceptable to and approved in writing by Landlord and Prime Landlord. Landlord and
Prime Landlord reserve their right to defend themselves at Landlord's or Prime
Landlord's own expense.

Tenant shall promptly notify Landlord, in writing, of any claim or action filed, of
whatever nature, adsing out of the use or operation of the Prope1ty by Tenant Parties.
Tenant shall also promptly notify Landlord and Prime Landlord if Tenant knows or has
reason to believe a claim or action will be filed, of whatever nature, ai·ising out of the use
or operation of the Prope1ty by Tenant Paities.
Execution Version

13.2 Tenant, at its sole cost and expense, shall obtain on or before the execution
of this Sublease and submit proof of the required insurance to Landlord for its written
approval and fmther maintain in full force and effect at all times throughout the Te1m of
this Sublease and any extensions, the following insurance.

13.2.1 Upon completion of Tenants Improvements or any part thereof,
Commercial general liability (primary layer) including contingent and contractual
liability, products, and completed operations, premises and operations liability, personal
and adve1tising injury liability, alcohol liability; if applicable, affording coverage against
all claims, demands or actions, bodily injury, personal injury, death or prope1ty damage
occtming in, on or about the Premises with such specific provisions as are usual and
customary for policies insming seaplane airline te1minal/heliport or premises, and with
such limits as may be reasonably requested by the Landlord from time to time but not less
than Three Million Dollars ($3,000,000) per occmTence, Three Million Dollars
($3,000,000) policy aggregate for bodily injury and prope1ty damage, and not greater
than those canied by Fort Lauderdale Executive. Such coverage must be issued on a
primary and non contributory basis, and the Landlord and Prime Landlord shall be named
as additional insureds on all third party liability policy or ce1tificates of insurance,
including alcohol liability. Tenant shall provide, "All Risk" prope1ty insurance coverage
against loss or damage by fire, windstorm and flood with such endorsement for extended
coverage, vandalism, malicious mischief, water damage to contents, sprinkler leakage
and special coverage, insuring one hundred percent (100%) of the replacement cost of
Tenant's alterations, improvements, fixtures, equipment, furniture, personal prope1ty,
trade fixtures and floor coverings in and about the Premises, as well as business
interruption coverage. Landlord and Prime Landlord shall be named as additional
insureds on the policy or policies of insurance to the extent of their interest in any fixtures
or equipment provided by either of them and used by Tenant.

13.2.2 Tenant shall provide, "All Risk" prope1ty insurance coverage
against loss or damage by fire, windstmm and flood with such endorsement for extended
coverage, vandalism, malicious mischief, water damage to contents, sprinkler leakage
and special coverage, insuring one hundred percent (100%) of the replacement cost of
Tenant's existing te1minal or Tenant's Improvements once constructed, Tenant's
improvements, alterations, fixtures, equipment, furniture, personal property, trade fixtures
and floor coverings in and about the Premises, including the expense of the removal of
debris as a result of damage by an insured peril, as well as business inten-uption coverage.
Landlord and Prime Landlord shall be named as additional insureds on the policy or
policies of insurance.

13 .2.3 Aircraft Liability Coverage affording protection against any and all
claims, demands, suits, or actions, as a result of bodily injury, personal injury, death or
prope1ty damage occurring in, on or about the Premises with such specific provisions as
are usual and customary for policies insuring the operator of a seaplane airline with such
limits as may be reasonably requested by the Landlord from time to time but not less than
Three Million Dollars ($3,000,000) each occunence Single Limit bodily injury and
property damage liability including passengers, and Aircraft physical damage subject to
All Risk Basis, and medical payments including crew Five Thousand Dollars ($5,000)


Execution Version

each person. Landlord and Prime Landlord shall be named as additional insureds on the
policy or policies of insurance.

13.2.4 Automobile liability insurance covering all owned, including non-
owned and hired automobile exposures used in conjunction with operations covered by
this Sublease. The policy or certificates of insurance shall contain such limits as may be
reasonably requested by Landlord from time to time but not less than One Million Dollars
($1,000,000) for bodily injury and prope1ty damage per accident. The Landlord and
Prime Landlord shall appear listed as an additional insured on this coverage. The
requirements of this provision may be waived upon submission of a written statement
that no automobiles are used to conduct Tenant's business.

13.2.5 Worker's compensation in the form and amounts required by state
law.

13.2.6 Pollution Liability with limits of Three Million Dollars
($3,000,000). Each Incident Limit Three Million Dollars ($3,000,000) policy aggregate
listing the Landlord and Prime Landlord as additional insured on this coverage. Coverage
A-J should apply with a maximum deductible of Fifty Thousand Dollars ($50,000) which
Tenant agrees to pay in the event of a loss.

13.2.7 Umbrella Liability (excess layer) with limits of One Million
Dollars ($1,000,000) per occtmence, in excess of each one of the previous coverages,
listing the Landlord and Prime Landlord as an additional insured on this coverage.

13.2.8 The policy or policies of insurance required shall be so written that
they may not be altered or canceled without thilty (30) days advance written notice to
Landlord. Said notice should be delivered to the address for notices indicated herein for
Landlord or to such other address as may be designated by Landlord from time to time.

13.2.9 A cun-ent certificate of insurance and policy of insurance
evidencing compliance with the insurance coverage required by this Section 15 .2 shall be
supplied to Landlord on or before the Commencement Date and a new ce1tificate of
insurance and policy of insurance evidencing the renewal or replacement of the insurance
coverage required by this Section 15.2 shall be supplied at least twenty (20) days prior to
the expiration of each such policy. Insurance policies required above shall be issued by
one or more companies authorized to do business under the laws of the State of Florida,
with the following qualifications as to management and financial strength with respect to
each such company: the company should be rated "A", as to management, and no less
than class "X" as to financial strength, in accordance with the latest edition of Best's Key
Rating Guide, or the company should hold a valid Florida Certificate of Authority and be
a member of the Florida Guarantee Fund. Receipt of any documentation of insurance by
Landlord or by any of its representatives which indicates less coverage than required does
not constitute a waiver of the Tenant's obligation to fulfill the insurance requirements
herein. The Landlord reserves the right to reasonably amend the insurance requirements
set fo1th in this Section 15 by the issuance of a notice in writing to Tenant provided that
such amended requirements are usual and customary for similar uses and t~ .

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Tenant 1 s contractor shall maintain in effect the Insurance Execution Version
required by Exhibit A until final completion and acceptance of the
construction.
13.2.10 The Tenant shall provide Landlord and Prime Landlord with any
and all policies of insurance within twenty (20) days of such request.

13.3 Landlord and Prime Landlord shall not be liable for injury or damage
which may be sustained by any person, goods, wares, merchandise or other property of
Tenant or Tenant's employees, invitees, officers, agents, contractors, or customers, or by
any other person on or about the Property (provided, Tenant shall in no event indemnify
or othe1wise be responsible for any injury or damage suffered by Landlord or Prime
Landlord on or about the Government Services Area) caused by or resulting from any
peril which may affect the Property, including, without limitation, fire, steam, electricity,
gas, water or rain, which may leak or flow from or into any part of the Prope1ty, or from
breakage, leakage, obstruction or other defects of the pipes, sprinklers, wires, appliances,
plumbing, air conditioning or lighting fixtures of the Prope1ty, whether such damage or
injury results from conditions arising upon the Prope1ty, or from other sources.

13 .4 Each party hereby waives claims against the other for prope1ty damage
provided such waiver shall not invalidate the waiving paity's property insurance; each
paity shall attempt to obtain from its insurance canier a waiver of the carrier's right of
subrogation.

14. DAMAGE AND DESTRUCTION.

. 14.1 The rights and obligations of each party varies with each of the phases as
follows:

14.1.1 If the Prope1ty shall be damaged by fire or other casualty
("Casualty"), Tenant shall promptly cause such damage to be repaired and, provided such
damage is not caused by the actions or inaction of Tenant, its officers, employees,
contractors, agents, customers or invitees, all Rent (other than any Additional Rent due
Landlord by reason of Tenant's failure to perform any of its obligations hereunder) shall
be abated proportionately as to the portion of the Prope1ty rendered untenantable during
the period of such untenantability. All such repairs shall be made at the expense of the
Tenant, to the extent insurance (including coinsurance) proceeds ai·e available (subject to
the requirement to pay deductibles), subject to Tenant's responsibilities as set fo1th
herein.

14.1.2 If, as the result of Casualty, the Prope1ty shall be rendered wholly
or paitially untenantable, then subject to the provisions of Section 16.1.2(B), Tenant shall
cause such damage to be repaired and, provided such damage is not caused by the
negligence of Tenant, its officers, employees, contractors, agents, customers or invitees,
all Rent (other than any Additional Rent due Landlord by reason of Tenant's failure to
perfo1m any of its obligations hereunder) shall be abated propmtionately as to the portion
of the Property rendered untenantable during the period of such untenantability. All such
repairs shall be made at the expense of the Tenant; to the extent insurance proceeds are
available, subject to Tenant's responsibilities as set fo1th herein. Landlord shall not be
liable for interruption to Tenant's business or for damage to or replacement or repair of
Tenant's personal property (including, without limitation, inventory, trade fixtures,

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Execution Version

furniture and other property removable by Tenant under the provisions of this Sublease)
or to any improvements installed in the Property by Tenant, for all of which inte1Tuption,
damage, replacement or repair Tenant shall be solely liable and which replacement or
repair shall be promptly undertaken and completed by Tenant.

a) Tenant's Option Not to Rebuild. If, as a result of Casualty, (i) the
Tenant's Improvements are (a) rendered wholly untenantable or (b) damaged as a result
of any cause which is not covered by Tenant's insurance or (c) damaged or destroyed in
whole or in part during the last three (3) years of the Term, or (ii) the Tenant's
Improvements are damaged to the extent that fifty percent (50%) or more of (a) the gross
floor ar·ea and/or (b) the Air Transpmtation Facility (as the same existed prior to such
Casualty) is affected, or (iii) insurance proceeds received ar·e insufficient to complete the
repairs, Tenant may elect not to rebuild by giving to Landlord notice of such election
within ninety (90) days after the occurrence of such event. If such notice is given, Tenant
shall elect either to (i) tenninate this Sublease, in which case the rights and obligations of
the parties shall cease as of the date of such notice, except for such rights and obligations
as ar·e expressly intended to survive the te1mination of this Sublease, and provided,
further, that the pa1ties hereto shall remain liable for the perfonnance of their respective
obligations under this Sublease to the extent incurred prior to the date of such
termination, or (ii) continue this Sublease, in which event all of the parties' rights and
obligations under this Sublease shall be governed by the provisions of this Sublease.
During construction of Tenant's Improvements, Tenant can continue its airline operations
at the Prope1ty from such temporary or replacement office and te1minal facilities as
Tenant elects to provide at its own expense.

b) Demolition of Building. If, as a result of Casualty, the Tenant's
Improvements shall be so substantially damaged that it is reasonably necessary in
Tenant's sole judgment to demolish the improvements for the purpose of reconstruction,
Landlord and Tenant may demolish the improvements in which event all Rent shall be
abated to the same extent as ifthe Prope1ty were rendered untenantable by a Casualty.

c) Insurance Proceeds. Unless Tenant elects not to restore and rebuild
the Tenant's Improvements following a Casualty, Tenant apply any insurance proceeds
received by Tenant to the restoration and rebuilding of the improvements. All insmance
proceeds payable with respect to the improvements (excluding proceeds payable to
Tenant pursuant to Section 15) shall belong to and shall be payable as follows:

(i) First, to satisfy the unpaid principal balance, any accrued and
unpaid interest and any and all other obligations secured by a
Leasehold Mmtgage;

(ii) Second, to pay the cost of debris removal from the Prope1ty; and

(iii)The balance of the proceeds, if any, shall be paid to the parties as
their respective interests may then appear·, based on straight line
depreciation of the Tenant's Improvements over the Tenn of this
Sublease, with Tenant to receive first from the balance of t
Execution Version

proceeds the then undepreciated cost of the Tenant's
Improvements and Landlord to receive any remaining balance of
the proceeds.

14.2 Subject to the provisions of Section 16.1.3 above, to the extent Landlord is
an additional insured on any casualty insurance policy in which Tenant is the insured,
Landlord shall promptly pay over to Tenant any insurance proceeds Landlord receives for
Tenant's use, including but not limited to the repair, restoration or reconstruction of the
Property and all related costs, but only to the extent such proceeds are not intended to
compensate Landlord or Prime Landlord for their interests in any fixtures, equipment or
other property on the Property.

14.3 In the event of a conflict with or inconsistency between-the rights and
obligations of the Landlord hereunder and under the Interlocal Agreement, the provisions
of the Interlocal Agreement shall control.

15. ASSIGNMENT OR SUBLETTING.

15.1 Except as specifically contemplated herein and set forth in the last
sentence of this Section 15.1, Tenant shall not (i) assign this Sublease or any interest
under it; (ii) allow any lien upon Tenant's interest by operation of law; (iii) sublet the Air
Transportation Facility or any pait thereof; or (iv) permit the occupancy of the Air
Transpmtation Facility or any pait thereof by anyone other than Tenant without
Landlord's prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed so long as the proposed use of the Property by such assignee or
subtenant is substantially the saine as the use set forth in Section 3, the proposed assignee
or subtenant is (a) experienced in the operation of a seaplane airplane (or hires
management staff or a management service that has such experience) and (b) is no less
creditwmthy than Tenant as of the date hereof. A sublease of all of the Property or a
total and full assignment of this Sublease or its interest thereunder or hereunder by
Tenant (i) to a parent, subsidiary or other affiliate of Tenant or (ii) resulting from (a) a
sale of all or substantially all of Tenant's assets, (b) a sale of a majority of the stock or
control of Tenant or (c) a merger or consolidation with or into another entity which
continues Tenant's business at the Property shall, in each case, be a transaction subject to
Landlord's prior written consent in accordance with the tenns of this Section 17.1. No
sublease of the Property or assignment of this Sublease or any interest hereunder or
thereunder shall deprive Landlord of any Rent to which it is otherwise entitled hereunder.
Landlord is not entitled to paiticipate in any revenue, proceeds or consideration Tenant
receives as a result of any sublease. Notwithstanding anything to the contrary contained
in this Sublease, Tenant may sublet or license to third parties portions of the Property for
permitted uses (such as civic uses, boutique stores, restaurants, food and beverage
outlets); provided, in no event shall Tenant sublease the Air Transpmtation Facility. In
addition to the foregoing, Tenant acknowledges that any sit-down restaurant
establishments at the Property that ai·e subleased shall only be used for upscale and/or
high end fainily restaurants.
Execution Version

16. COMPLIANCE.

Tenant shall, at Tenant's own expense, comply with all laws and ordinances, and
all orders, rules and regulations of all governmental authorities and of all insurance
bodies and their fire prevention engineers at any time in force, applicable to the Prope1ty
or to Tenant's paiticular use or manner of use thereof.

17. ALTERATIONS.

Tenant may make alterations or additions to the Prope1ty, the Commercial
Facilities, and the Air Transportation Facility ("Alterations"), in accordance with
Tenant's development plans approved by Landlord, and otherwise subject to Landlord's
prior written consent thereto, which consent shall not be unreasonably withheld,
conditioned or delayed, and fu1ther subject to Tenant's completion of any Alterations free
of any lien and in accordance with all applicable legal requirements. Tenant shall
indemnify, defend and hold haimless Landlord against liability, loss, cost, dainage, liens
and expense imposed on Landlord arising out of the perfmmance of Alterations by
Tenant.

18. SURRENDER.

Upon the expiration of this Sublease, or upon the tern1ination of this Sublease or
of the Tenant's right to possession of the Property, Tenant will at once surrender and
deliver up the Prope1ty, together with all improvements thereon which are permanently
affixed to the Property, to Landlord in good condition and repair, reasonable wear and
tear excepted and shall, if applicable, comply with its obligations under Section 1.13.
Tenant shall SlllTender to Landlord all keys to the Prope1ty and make known to Landlord
the combinations of all combination locks which Tenant is pe1mitted to leave on the
Prope1ty. All Alterations in or upon the Prope1ty made by Tenant which are not
removable without dainaging the Prope1ty shall become a patt of and shall remain upon
the Prope1ty upon such te1mination without compensation, allowance or credit to Tenant.

19. REMOVAL OF TENANT'S PROPERTY.

Upon the expiration of this Sublease, Tenant shall remove Tenant's articles of
personal propeity, equipment, furniture and furnishings which are removable without
causing damage to the Property ("Tenant's Prope1ty"); if such removal causes any
damage, Tenant shall repair the saine and shall restore the Prope1ty to substantially the
saine condition as prior to the installation thereof. If Tenant does not remove any of
Tenant's Prope1ty from the Property prior to the expiration or eai·iier termination of the
Te1m, Landlord may, at its option, remove the saine (and repair any dainage occasioned
thereby and restore the Property as aforesaid) and dispose thereof or deliver the satne to
any other place of business of Tenant, and Tenant shall pay the cost of such removal,
repair, restoration or delivery to Landlord on demand. Any prope1ty belonging to the
Tenant and not removed by the Tenant at the expiration or earlier tennination of this
Sublease shall be deemed to be abandoned by the Tenant, and the Landlord may keep or
"'""'" of •~h prop<rty '1 ilie T'"wt'• role eo< wd ""P'"~· The~
Execution Version

reimburse the Landlord for any costs associated with such abandoned property within
fifteen (15) days of after receipt of written notice.

20. ENCUMBERING TITLE.

Tenant shall not do any act which shall in any way encumber the title of Prime
Landlord in and to the Property, nor shall the interest or estate of Prime Landlord or
Landlord be in any way subject to any claim by way of lien or encumbrance, whether by
operation of law by virtue of any express or implied contract by Tenant, or by reason of
any other act or omission of Tenant. Any claim to, or lien upon, the Property, the
Building or the Property arising from any act or omission of Tenant shall accrue only
against the subleasehold estate of Tenant and shall be subject and subordinate to the
paramount title and rights of Prime Landlord in and to the Property and the interest of
Landlord in the premises leased pursuant to the Prime Lease. Without limiting the
generality of the foregoing, Tenant shall not pe1mit the Property or the Property to
become subject to any tax, mechanics', laborers' or material men's lien on account of any
reason, including, but not limited to, services, income earned, taxes due, labor or material
furnished to Tenant or claimed to have been furnished to Tenant in connection with work
of any character perfonned or claimed to have been performed on the Prope1ty by, or at
the direction or sufferance of, Tenant, provided, however, that Tenant shall have the right
to contest in good faith and with reasonable diligence, the validity of any such lien or
claimed lien if Tenant shall give to Landlord security to assure payment thereof and to
prevent any sale, foreclosure, or fmfeiture of the Property, the Building or the Property
by reason of nonpayment thereof, provided further, however, that on final dete1mination
of the lien or claim of lien. Tenant shall immediately pay any judgment rendered, with
all proper costs and charges, and shall have the lien released and any judgment satisfied.

21. TENANT FINANCING; MORTGAGING OF LEASEHOLD ESTATE.

21.1 Notwithstanding anything to the contrary in this agreement, Tenant and its
successors, subtenant and assigns shall have the right, from time to time, to mo1tgage,
finance and refinance its interest in this Sublease ("Leasehold Mortgage"), and the right
to assign this Sublease as collateral security for such Leasehold Mortgage, and in
connection therewith, to grant and convey Tenant's interest in the buildings and any
building service equipment in such form as the holder of the Leasehold Mmtgage
determines. All proceeds of any Leasehold Mortgage shall belong to Tenant. For the
purposes of this Article, the te1m "mortgage" shall include mortgages, as well as security
interests, including security interests in personal prope1ty, and pledges and assignments
of the Tenant's interest in this Sublease, and modifications, replacements and
consolidations of any of the foregoing.

21.2 The following shall apply in connection with Leasehold Mortgages:

21.2.1 There shall be no cancellation, smTender or modification of this
Sublease by joint action of Landlord and Tenant, without the prior consent in writing of
the holder of a Leasehold Mmtgage ("Leasehold Mortgagee").
Execution Version

21.2.2 Landlord shall, upon serving Tenant with any notice of default,
simultaneously serve a copy of such notice upon the Leasehold Mortgagee, if Landlord
shall have been apprised in writing of the name and address of such Leasehold
Mo1tgagee. The Leasehold Mmtgagee shall thereupon have the right to remedy or cause
to be remedied the defaults complained of, including reimbursement to Landlord for any
costs or expenses incurred if payable by Tenant under such circumstances, and Landlord
shall accept such performance by or at the instigation of the Leasehold Mo1tgagee as if
the same had been done by Tenant, provided, however, that the Leasehold Mo1tgagee
shall never be obligated so to do.

21.2.3 Landlord shall take no action to effect a termination of this
Sublease by reason of any default, without first giving to the Leasehold Mortgagee
written notice and reasonable time within which either (i) to cure such default, in the case
of a default which can be cured by the Leasehold Mmtgagee without the commencement
of foreclosure proceedings or obtaining possession of the Property; (ii) in the case of a
default which cannot be cured unless and until the Leasehold Mmtgagee has obtained
possession of the Prope1ty, to obtain possession of the Prope1ty (including possession by
a receiver), and thereafter to cure such, default; or (iii) to institute foreclosure
proceedings, as expeditiously as is reasonable and prudent under the circumstances,
subject to such delays as are beyond the Leasehold Mmtgagee's reasonable control, and
thereafter to cure such default; provided, however, that (x) in the case of a default in the
payment of money, a reasonable time to cure the same shall be thirty (30) days following
receipt of notice of the expiration of the grace period for Tenant without cure; (y) the
Leasehold Mortgagee shall not be required to continue such possession or such
foreclosW'e proceedings which may theretofore have been instituted following a curing of
any such default by the Tenant; and (z) nothing herein shall preclude the Landlord from
exercising any rights or remedies under this Sublease, other than the right of te1mination
which is to be govemed by this section with respect to any other default by the Tenant
during any period of such forbearance. So long as any such default is cured within the
time hereinbefore; provided, the Landlord shall not effect a te1mination of this Sublease
by reason of any such default so cured. Notwithstanding anything to the contrary, in the
event of a breach of any "Continuous Operation" covenant of this Sublease, whether with
respect to operations of seaplanes or the Required Restaurant, a Leasehold Mmtgagee or
its assignee shall be granted thhty (30) days from possession of the Property in which to
cure such default prior to Landlord taking any action to tenninate this Sublease.

21.2.4 In the event of the te1mination of this Sublease for any reason
whatsoever, including without limitation default of Tenant, Landlord shall, except as
hereinafter provided, allow Leasehold Mmtgagee or its nominee to reinstate and assume
this Sublease and Tenant's obligations hereunder, or enter into a new lease with the
Leasehold Mortgagee or its nominee, for the remainder of the Tenn effective as of the
date when such termination would otherwise have taken effect at the rent and upon the
covenants, agreements, te1ms, provisions and limitations herein contained, provided (i)
the Leasehold Mo1tgagee makes written request for such assumption or new lease within
thiity (30) days from the date Landlord gives it written notice of such imminent
termination, (ii) the Leasehold Mo1tgagee pays or causes to be paid to Landlord (on the
later to occur of (x) the date when the Leasehold Mo1tgagee makes its written request for


Execution Version

such assumption or new lease, or (y) fifteen (15) days following receipt by the Leasehold
Mo1tgagee of a written statement from Landlord specifying any and all sums then due
under this Sublease and any and all sums which would at the time of the assumption or
new lease be due under this Sublease) all such sums and pays or causes to be paid any
and all reasonable expenses, including reasonable attorney's fees, comt costs and costs
and disbursements incmTed by the Landlord in connection with any such assumption or
new lease, (iii) the Leasehold Mortgagee cures any and all other defaults under this
Sublease reasonably susceptible of being cured by such holder and (iv) the Leasehold
M01tgagee complies with the requirements of Section 17 of this Sublease with respect to
retaining professional seaplane airline management for the Prope1ty. The Leasehold
Mo1tgagee, as tenant under this Sublease, shall have the same rights, title and interest in
and to the buildings and improvements on the Prope1ty as Tenant had under this
Sublease. If the Leasehold Mortgagee becomes the holder of the Tenant's interest, and if
the Leasehold Mo1tgagee shall thereafter assign its interest in this Sublease, then so long
as the assignee shall have a credit rating equal to or better than that of the Tenant on the
date of this Sublease and shall satisfy the requirements of professional management
described above, the Leasehold Mortgagee shall be released from all further liability from
and after the date of any assignment of Tenant's interest.

21.2.5 Landlord agrees that the name of the Leasehold Mo1tgagee may be
added to the "Loss Payable Endorsement" of any and all insurance policies required to be
carried by Tenant hereunder.

21.2.6 The failure by any such Leasehold Mo1tgagee to exercise the right
under any provision of this Sublease shall not be deemed a waiver of its right under any
other provision hereof.

21.2.7 The right of a Leasehold M01tgagee to foreclose a Leasehold
Mortgage and to sell or assign Tenant's interest in this Sublease is expressly recognized
and shall never be deemed a violation of any provision of this Sublease (but shall be
subject to all of the terms and provisions of this Sublease, including compliance with
Section 17 of this Sublease).

21.2.8 Landlord agrees, upon request of Tenant, to execute, acknowledge
and deliver any and all instruments reasonably required by the Leasehold M01tgagee, to
be executed by it, to effectuate the provisions of this Section 22, provided that Tenant
agrees to reimburse Landlord for any reasonable attorneys fees incun-ed by Landlord in
reviewing any such requested instruments, and provided fu1ther that nothing herein
contained shall require Landlord to be or become liable on any promissory note
evidencing the indebtedness secured by any Leasehold Mo1tgage, or decrease the
Landlord's rights, or decrease the Tenant's obligations or increase the Tenant's rights,
under this Sublease.

22. LANDLORD'S RESERVED RIGHTS.

Landlord reserves the right, on reasonable prior written notice, to inspect the
Prope1ty, accompanied by a representative of Tenant (in any p01tion of the Property that


~
Execution Version

is not open to the public), subject to such restrictions on access and inspection as may be
required by law relating to Tenants operations and security considerations and the
proximity of the Government Service Areas.

23. TENANT'S DEFAULTS.

The occw-rence of any one (1) or more of the following events shall be considered
an Event of Default:

23.1 Tenant shall be adjudged an involuntary bankrupt, or a decree or order
approving, as properly filed, a petition or answer filed against Tenant seeking
reorganization of Tenant under the Federal bankruptcy laws as now or hereafter
amended, or under the laws of any State, shall be entered, and any such decree or
judgment or order shall not have been vacated or stayed or set aside within sixty (60)
days from the date of the entry or granting thereof;

23.2 Tenant shall file, or admit the material allegations contained in, any
petition in bankruptcy, or any petition pursuant or pwporting to be pursuant to the
Federal bankruptcy laws as now or hereafter amended, or Tenant shall institute any
proceedings for relief of Tenant under any bankruptcy or insolvency laws or any laws
relating to the relief of debtors, readjustment of indebtedness, reorganization,
a11"angements, composition or extension;

23.3 Tenant shall make any assignment for the benefit of creditors or shall
apply for or consent to the appointment of a receiver or trustee for Tenant or any of the
property of Tenant;

23.4 Tenant shall admit in writing its inability to pay its debts as they become
due;

23.5 The Property are levied on by any revenue officer or similar officer and
such levy is not released or bonded within thirty (30) days of its filing;

23.6 A decree or order appointing a receiver or trustee of the property of
Tenant shall be made and such decree or order shall not have been vacated, stayed or set
aside within sixty (60) days from the date of entry or granting thereof;

23.7 Tenant shall abandon the Air Transportation Facility, or fails to
Continuously Operate the Required Minimum Operations during the Tenn hereof
(provided that closure of the Property or discontinuance of operations on holidays, during
or as a result of natural disasters, riots, labor disputes, governmental order, construction
of the Tenant's Improvements, or other causes beyond Tenant's control shall not
constitute such abandonment or discontinuance of business operations). In addition to the
other covenants set forth herein, Continuous Operation of the seaplane operations shall
require an average of at least five (5) take-offs and landings per week (other than in
instances of force majeure or other reasons beyond the control of Tenant) calculated as of
each prior four week period;
Execution Version

23.8 Tenant shall default in any payment of all forms of Rent and all other
payments and fees due to MSEA required to be made by Tenant hereunder within ten
(10) days after payment is due, including Rents due pursuant to an audit perfonned as
authorized herein;

23.9 Tenant shall default in securing, maintaining or renewing the insurance
required by this Sublease within the time periods provided in and otherwise in conformity
with Section 15 of this Sublease; or

23.10 Tenant shall default in any of the other covenants and agreements of
this Sublease to be kept, observed and performed by Tenant, and such default shall
continue for thirty (30) days after notice thereof in writing to Tenant, unless (i) the nature
of the default is such that it cannot be cured within thirty (30) days and a) Tenant
commences to cure the default within thirty (30) days of its receipt of notice thereof, and
b) diligently continues thereafter its efforts to cure the default, and accomplishes the cure
of the default within six (6) months thereafter (provided, however that where the default
consists of a violation of a law, regulation or order, and curing such violation requires
construction or modification of any improvements to the Property, the six (6) month
maximum cure period shall be extended for the amount oftime required to complete such
construction or modification with due diligence) or (ii) the default arose out of a violation
of any law, regulation or order and Tenant is taking all required steps to appeal such
violation (provided, however, that an Event of Default would be deemed to have occurred
as of the date of an adverse final dete1mination of Tenant's appeal). The provisions of
this Section 23. I 0 shall not apply to the Events of Default described in Sections 23. I
through 23.9 above.

23.11 Estoppel Ce1tificates. From time to time, Tenant, on not less than five
(5) days' prior notice, shall (i) execute and deliver to Landlord an estoppels ce1tificate in
a foim generally consistent with the requirements of institutional lenders and certified to
all or any Landlord, any m01tgagee or prospective m01tgagee, or prospective purchaser of
the Building, and (ii) cause any Guarantor, if applicable, to deliver to Landlord any
estoppels ce1tificate required under the Guaranty. Tenant acknowledges that Landlord
will suffer substantial damages if Tenant does not provide these estoppels ce1tificates
within the time periods provided in this aiticle. Therefore, Tenant shall pay Landlord the
sum of Two Hundred and Fifty dollars ($250.00) per day for each day of delay in
delivering an estoppel ce1tificate. The patties agree that this is a fair and reasonable
estimation of Landlord's actual costs and damages which would be incurred in the event
of a delay in the delivery of the estoppel ce1tificate and does not constitute penalty.

24. LANDLORD'S REMEDIES.

Upon the occurrence of any one (!) or more Events of Default, Landlord may, in
addition to the exercise of all rights available to Landlord by law or in equity, (i) pay or
perf01m any obligation of Tenant on Tenant's behalf and the cost thereof, together with
interest at the rate of fifteen percent (15%) per annum, shall be deemed Additional Rent
and shall be payable to Landlord within ten (10) days of demand or (ii) terminate
Tenant's rights under this Sublease if, within thirty (30) days after giving Tenant written


Execution Version

notice oftennination, Tenant fails to cure the default; provided, however, that such rights
and obligations as are expressly intended to survive the tennination of this Sublease shall
survive any termination under this Section 24, and provided, further, that the parties
hereto shall remain liable for the pe1formance of their respective obligations tmder this
Sublease to the extent incurred prior to the date of such termination. The remedy of a
Receivership set forth below is an additional remedy.

25. RECEIVERSHIP

Landlord and Tenant agree that if Tenant breaches this lease, Landlord may enter
the premises immediately and, after reentry, Landlord may procure from a court of
competent jurisdiction the appointment of a receiver to take possession of and collect
rents and profits from Tenant's business conducted on the premises. If necessary to
collect such rents and profits, the receiver may carry on Tenant's business and take
possession of Tenant's personal property used in the business, including inventory, trade
fixtures and furnishings, and use them in the business without compensating Tenant for
the same. All costs of the receivership shall be borne by Tenant. Proceedings for
appointment of a receiver by Landlord, or the appointment of a receiver and the
conducting by the receiver of Tenant's business, shall not terminate this lease unless
Landlord has given Tenant written notice of such tennination as provided in Section 30
of this Sublease.

26. LANDLORD'S DEFAULTS; TENANTS' REMEDIES.

If Landlord shall fail to pe1f01m any of the covenants or conditions of this
Sublease on its pait to be perfonned and such failure shall continue after thilty (30) days
written notice by Tenant to Landlord of such failure (except in the case of an emergency,
in which case no notice shall be required and no oppo1tunity to cure shall be pe1mitted),
Tenant may exercise all rights available to Tenant hereunder, at law (including the right
to seek an award of Tenant's actual damages, but not consequential or special damages)
or in equity (including the right to seek and obtain injunctive relief or a writ of
mandamus) and, without limiting the foregoing, Tenant may proceed to remedy or
attempt to remedy the default by Landlord and deduct the reasonable direct cost of
remedying the default from the rents next corning due hereunder. If Landlord's default is
not of such nature that Tenant can cure it by Tenant's payment or performance, Tenant
may te1minate this Sublease and all of its obligations hereunder by written notice to
Landlord; provided, however, that such rights and obligations as ai·e expressly intended to
survive the te1mination of this Sublease shall survive any termination under this Section
25, and provided, fmther, that the paities hereto shall remain liable for the performance
of their respective obligations under this Sublease to the extent incurred prior to the date
of such te1mination.

27. MEDIATION.

In an eff01t to engage in a cooperative effort to resolve conflict which may arise
out of this Sublease, including, without limitation, during the course of the construction
of Tenant Improvements, and/or following the completion of the Tenant Improvements

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Execution Version

the parties to this Sublease agree all umesolved disputes between them shall be submitted
to non-binding mediation prior to the initiation of litigation, unless otherwise agreed in
writing by the parties. A ce1tified Mediator, who the parties find mutually acceptable,
will conduct any Mediation Proceedings in Miami-Dade County, State of Florida. The
patties will share the costs of a certified Mediator on a 50/50 basis. The Tenant agrees to
include such similat· contract provisions with all Contractors retained for the Work,
thereby providing for non-binding mediation as the primat·y mechanism for dispute
resolution. In an effort to expedite the conclusion of any litigation the patties voluntarily
waive their right to jury trial or to file permissive counterclaims in any action at·ising
under this Sublease.

28. EXTENSION OF SUBLEASE TERM.

To the extent pe1mitted by law at the time of such action, and provided that (i)
there are no material defaults by Tenant hereunder which remain uncured after any
required notice and the expiration of any applicable cure period and (ii) during any of the
three (3) Lease Years preceding the Lease Y eat· when such right is exercised there have
not been more than two material defaults by Tenant hereunder which remained uncured
after any required notice and the expiration of any applicable cure period (even if
subsequently cured prior to Tenant's exercise of its right to extend), and (iii) the tenn of
the Prime Lease has been extended accordingly, Tenant shall have the right to extend the
Te1m for two successive extension te1ms of ten (10) years each (the "First Extension
Tenn" and the "Second Extension Tenn", respectively, and collectively, the "Extension
Te1ms"). Landlord agrees that it will not oppose, and that it will exercise reasonable
eff01ts to cause Prime Landlord not to oppose, any efforts by Tenant to achieve the
anlendment or repeal of any Jaw, ordinance or regulation which prohibits or inhibits
Tenant's ability to exercise the options provided in this Section 29, provided that any
expense associated with such eff01ts or suppo1t will be borne by Tenant. Tenant
acknowledges that the Prime Lease expires on October 8, 2043, although it may be
extended for up to an additional twenty (20) years from such expiration at Prime
Landlord's sole and exclusive option upon Landlord's request. Accordingly, the
Extension Te1ms may be limited, to fewer than ten (10) years unless Prime Landlord and
Landlord agree to extend the term of the Prime Lease. If such extension does occur, the
First Extension Te1m or, if applicable, the Second Extension Term shall be the lesser of
(a) ten (10) years or (b) the sum of (i) the yeat·s remaining in the original te1m of the
Prime Lease after the expiration of the First Extension Te1m of this Sublease plus (ii) the
number of years for which the Prime Lease is extended. In order to exercise its option to
extend the Te1m, Tenant shall give written notice to Landlord, with respect to the First
Extension Te1m, no eat·lier than nine (9) months no later than six (6) months prior to the
expiration of the original Te1m, or, with respect to the Second Extension Te1m no eat·lier
than nine (9) months no later than six (6) months pdor to the expiration of the First
Extension Term; provided, however, if Tenant has provided written notice of its intention
to exercise its option to extend the Te1m hereunder, Tenant shall have ten (10) business
days after receipt of Landlord's appraiser's calculation of Base Rent pursuant to Section
7.1.9 to advise Landlord in writing whether Tenant intends to proceed with the extension
of the Tenn or pe1mit the Sublease to expire due to the new calculation of Base Rent. The

~
Execution Version

terms and conditions of this Sublease shall continue in effect during the Extension Te1ms.
Rent shall continue to adjust in the same manner as adjusted during the Te1m.

29. PROVISIONS REGARDING SUBLEASE.

This Sublease and all rights of the parties hereunder are subject and subordinate to
the Prime Lease. Each patty agrees that it will not, by its act or omission to act, cause a
default under the Prime Lease. Landlord shall not agree to an amendment to the Prime
Lease which might have an adverse effect on Tenant's occupancy of the Prope1ty or its
use of the Prope1ty for their intended purpose, unless Landlord shall first obtain Tenant' s
prior written approval thereof. Landlord hereby grants to Tenant the right to receive all
of the services and benefits with respect to the Property which at·e to be provided by
Prime Landlord under the Prime Lease. The patties contemplate that Prime Landlord
shall, in fact, perfo1m its obligations under the Prime Lease and in the event of any
default or failure of performance by Prime Landlord under the Prime Lease that adversely
impacts Tenant' s operations, Landlord agrees that it will, upon notice from Tenant, (i)
make demand upon Prime Landlord to perform its obligations under the Prime Lease and
(ii) take appropriate legal action to enforce the Prime Lease.

30. NOTICES.

Any notice or demand, which, under the terms of this Lease or by any statute or
ordinance, must or may be given or made by a Party hereto, shall be in writing and shall
be given by certified or registered U.S. mail sent to the other Party at the address of its
principal office herein mentioned, or to such other address as such Patty may from time
to time designate by notice. Notice to Tenant shall be addressed to:

Nautilus Enterprises, LLC

Attention: Ignacio J. Vega-Penichet Lopez
1000 MacAtthur Causeway
Miami, Florida

1000 MacAtthur Causeway
Miami, Florida

W.i th copy to:

Ignacio J Vega-Penichet Lopez
3220 Chase A venue
Miami Beach, Florida 33140
Email: ivp@mvegapenichet.com
Cell: (786) 417-40 98

Notice to the Landlord shall be addressed to:

Miami, Florida
Execution Version

With a copy to:

Director, Department of Asset Management
City of Miami Governmental Center, 3rd Floor
444 S.W. 2"d Avenue
Miami, Florida 33130

31. HAZARDOUS MATERIALS.

31. l Handling of Hazardous Materials. Tenant shall, at its sole cost and
expense, at all times and in all respects comply with all federal, state and local laws,
statutes, ordinances and regulations, rules, rulings, policies, orders and administrative
actions and orders ("Hazardous Materials Laws"), including, without limitation, any
Hazardous Materials Laws relating to industrial hygiene, environmental protection or the
use, analysis, generation, storage, disposal or transportation of any fuel, oils, flammable
explosives, asbestos, urea fonnaldehyde, radioactive materials or waste, infectious waste,
or other hazardous, toxic, contaminated or polluting materials, substances or wastes,
including, without limitation, any "Hazardous Substances", "Hazardous Wastes",
"Hazardous Materials" or "Toxic Substances", under any such laws, ordinances or
regulations (collectively "Hazardous Materials"). Tenant shall, at its sole cost and
expense, procure, maintain in effect and comply with all conditions of any and all
permits, licenses and other governmental and regulatory approvals relating to the
presence of Hazardous Materials within, on, under or about the Property required for
Tenant's use or placement of any Hazardous Materials on or about the Property in
conformity with all applicable Hazardous Materials Laws and prudent industry practices
regarding management of such Hazardous Materials. Landlord recognizes and agrees that
Tenant may use materials in n01mal quantities that are applicable to the use of the
Property for the purposes stated herein and that such use by Tenant shall not be deemed a
violation of this section, so long as the levels are not in violation of any Hazardous
Materials Laws.

Tenant shall, at its sole cost and expense, be responsible for pe1fo1ming any
removal, remediation, cleanup or restoration required as a result of a release by Tenant or
its employees, officers, agents, contractors or customers of Hazardous Materials on or
about the Property, caused by the use or placement of Hazardous Materials on or about
the Property by Tenant or its employees, officers, agents, contractors or customers or at
any such person's direction or by any such person's failure to comply with any
Hazardous Materials Laws.

Upon te1mination or expiration of this Sublease, Tenant shall, at its sole cost and
expense, cause all Hazardous Materials which are in storage devices placed on or about
the Property by Tenant or its employees, officers, agents, contractors or customers or at
any such person's directions to be removed from the Property and transported for use,
storage or disposal in accordance and compliance with all applicable Hazardous
Materials Laws. Landlord acknowledges that it is not the intent of this Section 30 to
prohibit Tenant from operating the Property for the use described in Section 1.16. Tenant
may operate according to the custom of the industry so long as the use or presence of

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Execution Version

Hazardous Materials is strictly and properly monitored according to all applicable
governmental requirements.

31.2 Indemnification. Tenant shall indemnify, protect, defend and hold Prime
Landlord and Landlord free and harmless from and against any and all claims, liabilities,
penalties, forfeitures, losses and expenses (including attorneys' fees), including for death
of or injury to any person or damage to any property whatsoever, arising from or caused
by or in connection with (i) the presence on or about the Prope1ty of any Hazardous
Materials used or placed by Tenant or its employees, officers, agents, contractors or
customers, or at any such person's direction, on or about the Prope1ty, including the Fuel
Fann; (ii) Tenant's failure to comply with any Hazardous Materials Laws; or (iii) any
removal, remediation, cleanup or restoration of Hazardous Materials placed or deposited
on or about the Property by Tenant, or at Tenant's direction, as may be required
hereunder to comply with applicable law.

31.3 Disclosure, Warning and Notice Obligations. Tenant shall comply with all
applicable laws, ordinances and regulations in the State of Florida regarding the
disclosure of the presence or danger of Hazardous Materials. Tenant acknowledges and
agrees that all rep01ting and warning obligations required under the Hazardous Materials
Laws are the sole responsibility of Tenant, whether or not such Hazardous Materials
Laws permit or require Landlord to provide such repo1ting or warning, and Tenant shall
be solely responsible for its own compliance with Hazardous Materials Laws regarding
the disclosure of the presence or danger of Hazardous Materials on or about the Prope1ty.
Tenant shall immediately notify Landlord, in writing, of any complaints, notices,
warnings, rep01ts or asse1ted violations of which Tenant becomes aware relating to
Hazardous Materials on or about the Prope1ty. Tenant shall also immediately notify
Landlord if Tenant knows or has reason to know a complaint, notice, warning, rep01t or
asse1ted violation will be made or issued relating to Hazardous Substances on or about
the Property.

31.4 Environmental Test and Audits. Tenant shall not perfonn or cause to be
pe1fonned, any Hazardous Materials surveys, studies, rep01ts or inspections relating to
the Prope1ty without obtaining Landlord's advance written consent, which consent will
not be unreasonably denied or delayed. At any time during the Term (including either
Extension Te1m), Landlord and Prime Landlord shall have the right to enter upon the
Prope1ty, with prior notice to Tenant, subject to any legal restrictions relating to Tenant's
airline operations and the adjacent Govermnent Service Areas, and accompanied by a
representative of Tenant, in order to conduct appropriate tests to establish whether the
Prope1ty are in compliance with all applicable Hazardous Materials Laws. Any such
testing shall not inte1fere with Tenant's airline operations.

31.5 Survival of Tenant's Obligations. The respective rights and obligations of
Landlord and Tenant under this Section 33 shall survive the expiration or te1mination of
this Sublease.
Execution Version

32. LICENSES; COMPLIANCE WITH LAWS.

32.1 Licenses and Permits. Tenant shall, at its sole cost and expense, obtain
any and all licenses, approvals, and permits necessary in connection with Tenant's use
and occupancy of the Property.

32.2 Compliance with Laws. Tenant accepts this Sublease and hereby
acknowledges that its compliance with all applicable laws, ordinances and codes of
federal, state and local governments, as they may apply to this Sublease, is a condition of
this Sublease, and Tenant shall comply therewith as the same presently exist and as they
may be amended hereafter, subject to the limitations of Section 18 above.

33. SIGNAGE.

33.l Signage. At all times during the pre-development, development, and
operations of the Property, Tenant shall be permitted such exterior signage as is
permissible under applicable law.

Tenant must obtain approval from all governmental authorities having
jurisdiction, including obtaining all applicable permits, and must comply with applicable
laws and requirements Tenant's exterior signage may include any logotype or trade
name used by Tenant for its seaplane airline business and all such signage may be
changed from time to time by Tenant, at its sole cost and expense, to reflect any change
in its logotype or trade name. Upon the expiration or earlier te1mination of this Sublease,
for any reason, Tenant shall, at its sole cost and expense, remove and dispose of all of its
signs located anywhere on the Property and shall repair any damage caused by such
removal.

33.2 Watson Island Signage System. The Tenant understands that the Prime
Landlord desires to provide a neat and consistent look to all directional signs placed on
the rights-of-way adjacent to Watson Island and on Watson Island through an island-wide
signage system. Accordingly, the Prime Landlord will, at the Prime Landlord's expense,
develop a pathfinder/directional-type signage system, directing visitors to the various
sites on Watson Island, by a graphic design firm selected by the Prime Landlord. The
cost of fabrication and installation of the Prime Landlord's pathfinder/directional-type
signage system for Watson Island (the "Directional Signage Costs") shall be shared by all
of the parties benefiting from the signage based on the number of users thereof, and the
Tenant agrees to pay its pro rata share thereof. The Tenant's obligations hereunder are
purely monetary, and it shall have no responsibility whatsoever for the design, fabrication
or installation of the Prime Landlord's directional signage system.

Notwithstanding the foregoing, until such time as a uniform directional signage
plan is developed, subject to approval of the City Public Works Department (which shall
not be unreasonably withheld, conditioned, or delayed) as to design, location, size and
materials, Tenant, at its sole cost and expense, shall be permitted to install two (2)
directional signs (one (1) on the south side and one (1) on the north side of Watson
Island) which signs may be located on the roadway entrance from MacArthur Causeway


Execution Version

to the Prope1ty, so long as such signage is outside state road rights-of-way and other areas
leased or to be leased to a third paity. Tenant shall, at its sole cost and expense, be
required to maintain such signage in good condition and repair at all times. Upon the
adoption of a unifonn directional signage prograin, Tenant shall, at its sole cost and
expense, remove and dispose of all existing signs and shall repair any damage caused by
such removal.

34. BROKERAGE.

Each paity (i) waiTants to the other that it has had no dealings with any broker or
agent in connection with this Sublease, and (ii) covenants to pay, hold haimless and
indemnify the other paity from and against any and all costs (including reasonable
attorneys' fees), expense or liability for any compensation, commissions and charges
claimed by any broker or agent with respect to this Sublease or the negotiation thereof on
behalf or on account of such indemnifying paity.

35. FORCE MAJEURE.

Notwithstanding anything to the contrai·y contained in this Sublease, neither paity
shall be deemed in default with respect to any of the te1ms, covenants and conditions of
this Sublease on its pait to be perfmmed, except for a default in the payment of money, if
its failure to timely pe1fo1m saine is due in whole or in pait to any cause beyond the
reasonable control of such paity, including, but not limited to, any strike, lockout, or
other similai· labor trouble (whether legal or illegal), civil disorder, failure of power, riots,
insurrections, war, shortages, casualties, acts of God, acts caused directly by the other
paity or such other party's agents, officers, employees, contractors, customers and
invitees, or delays: (i) in taking action, processing of applications or pe1mits by
governmental agencies (provided that nmmal processing times for such applications or
pennits will not be considered a delay), (ii) attributable to scheduling or cancellation of
commission or boai·d meetings, (iii) resulting from failure to complete a governmental
board's or commission's meeting agenda, (iv) due to absence of a quorum of any board
or commission or (v) ai·ising out of administrative or judicial appeals of any decision or
ruling rendered by any comt, governmental body or administrative agency relating to the
Prope1ty, this Sublease or the paities' rights and obligations.

36. ATTORNEYS' FEES.

In the event legal action is brought by either paity to enforce, construe or defend
its rights under this Sublease each paity shall bear its own attorney's and paralegal fees
and court costs, at trial and appellate levels.

37. AWARD OF AGREEMENT.

Tenant wanants that it has not employed or retained any person employed by
Landlord to solicit or secure this Sublease and that it has not offered to pay, paid, or
agreed to pay any person employed by Landlord any fee, commission, percentage,
brokerage fee, or gift of any kind contingent upon or resulting from the awai·d of this
Sublease. ~,

~
Execution Version

38. NONDISCRIMINATION.

Tenant agrees that it will comply with all Federal, State and local laws with
respect to discrimination against any person based upon race, religion, color, sex,
ancestry, age, national origin, marital status, or mental or physical handicap, in the use of
the Prope1ty.

39. GOVERNING LAW.

This Sublease shall be governed by and construed in accordance with the laws of
the State of Florida, with venue in Miami-Dade County, Florida.

40. RADON.

As required by Florida Statutes, Section 404.056(8), the following notice is given
to Tenant:

Radon is a naturally occll!Ting radioactive gas that, when it has accumulated in a
building in sufficient quantities, may present 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 in Florida. Additional infonnation regarding radon and radon testing may be
obtained from your County Public Health Unit.

41. INTERPRETATION.

Definitions are equally applicable both to the singular and plural forms of the
defined tenns. References in this Sublease to Sections and Exhibits, without further
attribution, are intended to refer to Sections of, and Exhibits to this Sublease. Except as
otherwise expressly indicated, all of the agreements or instruments refe1Ted to in this
Sublease shall mean such agreements or instruments as the same may from time to time
be supplemented or amended or the tenns thereof waived or modified to the extent
pe1mitted by, and in accordance with, the te1ms of this Sublease and such agreements or
instruments. "Including" means "including but not limited to" "herein", "hereof and
"hereunder" mean, respectively, in, of, or under this Sublease (and not merely in, of or
under the section or provision where the reference appears).

42. SETTLEMENT PROVISIONS.

As further consideration for the execution and delivery of this Sublease, Landlord
and Tenant agree to execute and deliver, as condition to the effectiveness of this amended
and restated Sublease, the Mutual General Release attached hereto. In connection with
the settlement of the disputes between the paities and the grant of the mutual release,
Landlord and Tenant acknowledge and agree that each shall bear its own legal fees and
costs in connection with the Action and shall not seek recoupment of any of its respective
attorney's fees, costs, or expenses from the other paities to the Action. Additionally, as a
condition to the effectiveness of this Sublease, the paities shall agree to seek a release of
all sums held in the Coll!t Registry in connection with the Action, with a disbursement of
such Coll!t Registry sums to Landlord in full satisfaction of any past due or outstanding


Execution Version

Rent; provided, all paities acknowledge that any prior defaults of the tenant under the
Original Lease ai·e defaults of a different tenant ownership group and are not the acts or
defaults of the Tenant under this Sublease. Landlord and Prime Landlord agree that, upon
execution and effectiveness of this Sublease, Tenant shall not be in default of any
obligations that existed under the Original Sublease, and all such obligations or defaults
shall be waived and released at such time. Prime Landlord, Landlord, and Tenant agree
to file joint notices dismissing all claims, counterclaims, and appeals in the Action, with
each paity to bear its own attorney's fees and costs, within ten (10) days of execution of
this Sublease.

43. ACQUISITION OF TENANT.

Nautilus Enterprises, LLC, a Florida limited liability company ("Nautilus"), itself
or by or together with one (1) or more of its affiliates or sister companies (having the
saine beneficial ownership structure as Nautilus), is hereby required by Landlord to either
hold one hundred percent (100%) of the shares of Chalks Airlines, Inc., or to liquidate the
company, and/or totally or paitially acquire the Sublease by means of an assigmnent
from Chalks Airlines, Inc., to Nautilus Enterprises, LLC. Landlord hereby acknowledges
and consents to such acquisition of Tenant by Nautilus and the assignment of the
Sublease from Chalks Airlines, Inc. to Nautilus Enterprises, LLC. Any other sale,
assigmnent or transfer of this sublease, or any part thereof, shall require the prior written
approval of the Miaini City Commission, which may be granted, conditioned or withheld.
As of the execution of this Sublease, Ignacio J Vega-Penichet Lopez shall own at least
40% of the direct or indirect membership interests in Nautilus and/or at least remain as
Managing Member of Tenant with full and complete management control.

44. PUBLIC RECORDS.

Tenant shall comply with the Public Records Laws of the State of Florida, as
applicable, pursuant to Chapter 119, Florida Statutes, as ainended, including, without
limitation Section 119.0701, Fla. Stat.

[SIGNATURE PAGE FOLLOWS]
Execution Version

The parties have executed this Sublease the day and year first above written.

ATTEST: LANDLORD:

By: 9i:::: ~ MIAMI SPORTS AND EXHIBITION AUTHORITY:
an independent and autonomous agency and

Name: vre I(' ~(A_ ,1"7...---
instrumentality of the City of Miami, Florida

ATTEST:

::-e:~v:=--\=-~~- =- O-
o ~ -/) 0-' -

Title:
Execution Version

TENANT:

FIRST WITNESS :

By:~W~.
_'_ I

By: ~~~~~~-+-~~~
Name: Celiu \Jt;3a-PeiUOAe t- Ignacio Vega, President
Title: f<Vurlder t-.!CM laer

ATTEST:

Corporate Secretary
Affix Corporate Seal
Execution Version

TENANT:

NAUTILUS ENTERPRISES, LLC

By: _ _ /-----~--·
Ignacio Vega, Manager

FIRST WITNESS:

By:-~~~-·--
Name: CeLl.Q V~CL- Peru: CV\et
Title: l=Oul\der N e Mh?r

SECOND WITNESS:

agement Acting Director

SA General Counsel
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SETTLEMENT AGREEMENT/GENERAL MUTUAL RELEASE ("RELEASE")

1. The City of Miami ("City"), the Miami Sports and Exhibition Authority ("MSEA"), as
well as all of their respective officers, officials, employees, agents, representatives,
servants and attorneys (collectively referred to as Prime Landlord/Landlord) and Chalks
Airlines, Inc. as well as its affiliates, subsidiaries, predecessors in interest, holding
companies, parent companies, merged companies, acquired companies, and its officers,
agents, representatives, servants, attorneys and assigns (hereinafter "Tenant") hereby
knowingly, voluntarily and freely execute this Release with the intention of eliminating
all claims, counterclaims, actions, causes of actions, appeals, liabilities, costs, fees, and
obligations (collectively "Claims") as described more fully within Paragraph 3, below.

2. As used herein, the term "Litigation" refers to that certain case styled Chalks Airlines,
Inc. v. Miami Sports and Exhibition Authority, and City of Miami, which includes (i)
Third District Court of Appeal Case No. 3D13-594; and (ii) Miami Dade County Circuit
Comt Case No. 07-30071.

3. The te1m "Claims" as used herein (including within Paragraph 1, above) includes all
claims and/or counterclaims asserted by or against the Tenant, as well as all claims and/or
counterclaims asserted by or against the Prime Landlord/Landlord, within the Litigation.

3. The purpose of this Release is to forever discharge and resolve all Claims between Prime
Landlord/Landlord and Tenant, which have been asse1ted within the Litigation.

4. Nothing contained in this Release shall be construed or interpreted as an admission of any
kind by any party to this Release. This Release is a negotiated settlement of the Claims,
which are disputed.

5. The consideration for this Release is as follows:

a. The Landlord and the Tenant are concurrently entering into an Amended and
Restated Sublease, to which this Release is an attachment, the terms and
conditions of which are as set fo1th within the Amended and Restated Sublease
itself.

b. Concurrent with execution of the Amended and Restated Sublease, and this
Release, the Prime Landlord, Landlord and Tenant will file a joint stipulation
voluntarily dismissing the Litigation with prejudice, with each party bearing its
own attorney's fees and costs, and the Comt reserving jurisdiction to enforce the
terms of this Release
Execution Version

MIAMI SPORTS AND EXHBITION AUTHORITY

.
By
Director
Wl·m
Attest:

Board Secretary

STATE OF FLORIDA )
SS: )
COUNTY OF MIAMI-DADE )

The foregoing instrument was acknowledged before me this ~ day of
Au535 \r , 2014, by Mr. Kirk R. Menendez, whose title is
Director of the Miami Sp01ts
and Exhibition Authority, who is personally known to me or who has produced
~~~~~~~~~~~
as identification.

My commission expires:

,,••w._~'fiJ."··· OFELIA E. PEREZ
/fl:~.%_ MY COMMISSION# EE 109268
~: .~s EXPIRES: August 2, 2015.
~;;, •••.• ~ ion<l9d Thnl Notaiy Public Underwriters
'",flfu~'
Execution Version

ATTEST: CITY OF MIAMI, a Florida municipal
corporation

~~~ ( ,.Mr. ~ fa._
Mr; ;d Hannon,
By:
Daniel J. Alfonso, City Manager
City Clerk

STATE OF FLORIDA )
SS: )
COUNTY OF MIAMI-DADE ) . -
AL-Cf (3.rp.Ju r 4c~ ~ (1._ +J ri1~"'"·_yv--
tl The foregoing ~ument was acknowledged before me this day of _fl__
ntrys \/, 2014, by ~ani~l J. Alfooso, whose title is City Manager of the City of
Miami, who is personally known to me or who has produced
~~~~~~~~~~~
as identification.

My commission expires:

,•"'til--~'r''••.,, OFELIA E. PEREZ
r:·-~":f~ 1JY COMMISSION #EE 109268
k~.~ .:;;.;. EXP1RES: August 2, 2015
~·····~--~ iionded Thru Notary Public Undeiwrileis
''Rfut~'

Approved as to Form and C01Tectness:
Execution Version

CHALKS AIRLINES, INC.

I

By:~~~~~~~~~~~~~~
Ignacio Vega, President

STATE OF FLORIDA )
SS: )
COUNTY OF MIAMI-DADE )

The foregoing 'instrument was acknowledged before me this CJ. rftt day of
JOLY ' 2014, by lt4>-...LACio vEC,A- Pa.J.teHE1 President of Chalks Airlines, Inc.
who is personally known to me or who has produced J)L.:/f VZ.4 f ·A.C0-55 · 053 - 0 as
identification.

My commission expires:
NOTARY~ ,
I;,,5~·!'.~~\
,.-··~·..,_ \ ANDREINA FALENI
\~-~);J MY COMMISSION #FF139229
·-:~· ......
"*...!! <!''.'
..~..... EXPIRES July 7 ' 2018
(407) 396-0153 FlorldaNotaryService.com

END OF DOCUMENT
EXHIBIT A

INSURANCE REQUIREMENTS FOR A CERTIFICATE OF
INSURANCE (CONSTRUCTION REQUIREMENTS CHALKS
AIRLINES, INC. AIRPORT TERMINAL FACILITY) INSURANCE TO
BE FURNISHED BY CONTRACTOR PRIOR TO COMMENCEMENT
OF CONSTRUCTION NAMING THE TENANT, MSEA and THE CITY
AS THEIR INTERESTS IVIAY APPEAR

I. Commercial General Liability

A. Limits of Liability
Bodily Injury and Prope1iy Damage Liability
Each Occunence $1,000,000
General Aggregate Limit $2,000,000
Products/Completed Operations $1,000,000
Personal and Adve1iising Injury $1,000,000

B. Endorsements Required

City of Miami included as an Additional Insured
Tenant & MSEA listed as additional insured
Primary Insurance Clause Endorsement
Contingent and Contractual Liability
Premises/Operations Liability
Explosion, Collapse and Underground Hazard
Loading and Unloading

II. Business Automobile Liability

A. Limits of Liability
Bodily Injury and Prope1iy Damage Liability
Combined Single Limit
Any Auto/Owned/Scheduled
Including Hired, Bon-owed or Non-Owned Autos
Any One Accident $ 1,000,000

B. Endorsements Required

City of Miami included as an additional insured
Tenant and MSEA listed as an additional insured
III. Worker's Compensation

Limits of Liability
Statutory-State of Florida
Waiver of subrogation
USL&H, if applicable

Employer's Liability

A. Limits of Liability
$1,000,000 for bodily injury caused by an accident, each accident.
$1,000,000 for bodily injury caused by disease, each employee
$1,000,000 for bodily injury caused by disease, policy limit

IV. Umbrella Policy (Excess Follow Form)

A. Limits of Liability
Bodily Injury and Property Damage Liability
Each Occurrence $ 4,000,000
Aggregate $ 4,000,000

City of Miami listed as an additional insured
Tenant and MSEA listed as an additional insured

V. Payment and Performance Bond
"As per Section 5.1 of the Air Terminal Facility Sublease Agreement"
City ofJVliami, Tenant and MSEA Listed as Obligees

VI. Owner's & Contractor's Protective Policy

A. Limits of Liability
Each OccmTence $1,000,000
Policy Aggregate $1,000,000

City of Miami, Tenant and MSEA listed as named insured
VIL Builders' Risk

Causes of Loss: All Risk-Specific Coverage Project Location
Valuation: Replacement Cost
Deductible: $10,000 All other Pelils
5% maximum on Wind
Flood Coverage included

City of Miami, Tenant and MSEA listed as an additional insured

A. Limit/Value at Location or Site $ TBD

B. Coverage Extensions as provided by can"ier

VIII. Protection and Indemnity Liability (If Applicable) $1,000,000
Jones Act Included

City of Miami, Tenant and MSEA listed as an additional insured

The above policies shall provide the City of l\'liami with written notice of
cancellation or material change from the insurer in accordance to policy provisions.

Companies autholized to do business in the State of Flolida, with the following
qualifications, shall issue all insurance policies required above:

The company must be rated no less than "A-" as to management, and no less than
"Class V" as to Financial Strength, by the latest edition of Best's Insurance Guide,
published by A.!Vl. Best Company, Oldwick, New Jersey, or its equivalent. All
policies and /or certificates of insurance are subject to review and verification by
Risk J\llanagement prior to insurance approval.
Exhibit B to Complaint
ATTORNEYS AT LAW
Miami Tower
100 S.E. Second Street | Suite 4200
Miami, Florida 33131-2113
P.O. Box 019101 | Miami, Florida 33101-9101
305.530.0050 | fax 305.530.0055
www.carltonfields.com

Richard J. Ovelmen Atlanta
(305) 347-6805 Direct Dial Hartford
rovelmen@carltonfields.com Los Angeles
Miami
New York
Orlando
Tallahassee
July 18, 2017 Tampa
Washington, D.C.
West Palm Beach

Re: Approval of Chalks Phase One Plans

Dear MSEA Board Members:

As you know, this firm represents Chalks Airline, Inc. and Nautilus Enterprises, LLC.

On May 2, 2017, Chalks submitted, at the express recommendation of the City Attorney,
a phased project, requesting this Board first to approve a “Preliminary Pre-Development Project”
for infrastructure and site preparation, as stipulated under Section 5.1 of the Sublease, and
Phase One of a “Preliminary Basic Project,” pursuant to Section 5.8 of the Sublease,
contemplating the construction of the Air Terminal Facility only in the amount of 60,000 square
feet, which included the 18,948.01 square feet of food and liquor services areas as ordered by
Judge Cueto in his attached 2013 summary judgment ruling. This submission was made with
the understanding that a subsequent Preliminary Basic Project for the rest of the “Commercial
Facilities” in one or more phases would follow as set forth by Mr. Ben Fernandez in the letter
attached hereto.

On May 24, 2017, this Board approved both projects as submitted by Chalks. However,
on the motion of Jay Solowsky, and over Chalks’ opposition, the approval of Phase One of the
Preliminary Basic Project was conditioned upon Chalks not including hotel uses for the rest of
the project

Chalks respectfully submits that the question of whether the Sublease allows hotel uses
was not before the MSEA Board at the May 24 meeting. Indeed, the meeting minutes reflect
that City Attorney Victoria Mendez explained: “The only thing we are doing now is the approval
of the plans as presented, preliminary plans, and a hotel is not an option here.” The exclusion
of the hotel was tacked onto the motion by Mr. Solowsky, even though his term on the MSEA
Board apparently expired two years ago.

The conditional approval granted by the MSEA board creates unnecessary confusion
regarding Chalks’ rights under the Sublease, and could unnecessarily delay commencement of
Phase One of the project. Accordingly, we request that the MSEA Board approve Chalks’

1
Calculated as 15% of the leasehold; therefore, once the 0.5 acres referred to in the
summary judgment ruling is added to the 2.4 acres contemplated in the previous lease, the
applicable area is 18,948.0 square feet.

Carlton Fields Jorden Burt, P.A.
Carlton Fields Jorden Burt, P.A. practices law in California through Carlton Fields Jorden Burt, LLP
MSEA Board Members
July 18, 2017
Page 2

Phase One plans as submitted, in writing and without any condition regarding whether hotel
uses are permitted under the Sublease.

Very truly yours,

Richard J. Ovelmen

RJO:cp

Enclosures:
(1) Judge Cueto Summary Judgment Ruling
(2) Ben Fernandez May 2 Submission

112203175
Exhibit C to Complaint
October 25, 2017

VIA E-MAIL (lourdesblanco@miamigov.com)

Ms. Lourdes Blanco
Executive Director
Miami Sports & Exhibition Authority
3500 Pan American Drive
Miami, Florida 33133

Re: Approval of Chalks Phase One Plans

Dear Ms. Blanco:

On May 2, 2017, Chalks submitted, at the express recommendation of the City Attorney, a
phased project, requesting this Board first to approve a “Preliminary Pre-Development Project”
for infrastructure and site preparation, and Phase One of a “Preliminary Basic Project,”
contemplating the construction of the Air Terminal Facility only. This submission was made with
the understanding that proposals for the rest of the “Commercial Facilities” in one or more phases
would follow at a later date.

On May 24, 2017, this Board approved both projects as submitted. However, on the
“amending” motion of Jay Solowsky, and over Chalks’ opposition, the approval of Phase One of
the project was conditioned upon Chalks not including a hotel use for the rest of the project, even
though no proposed hotel use was included in the plans submitted. Moreover, Mr. Solowsky
simply was not a member of the Board, his term had expired two years earlier, and consequently
he had no authority to make the motion or vote on it. Nor did Mr. Solowsky articulate any basis
for imposing the condition regarding any future hotel use. For these reasons along, the prohibition
is a nullity.

At the July 18, 2017 MSEA meeting, Chalks submitted for the Board’s review a request to
remove the condition imposed by the MSEA Board on Phase One of the project,1 which the Board
agreed to consider at the subsequent meeting. Since then, two MSEA meetings have taken place,
on August 22, 2017 and October 3, 2017, and the Board has not addressed our request.

Due to the above, and in order to avoid any further delays in this regard, we have decided
to continue to move forward with our entitlement process in accordance with such building plans
with the understanding that: (1) Jay Solowsky had no standing to make a motion imposing a
condition regarding any future hotel use; (2) no proposed hotel use was contemplated in the plans
before the MSEA Board in our May 2, 2017 submission; (3) any condition regarding future hotel
use is inappropriate, not expressly contemplated in the lease, and, in any case, deemed rescinded

1
A copy of our July 18, 2017 attorney’s letter is attached hereto as Exhibit A.
Ms. Lourdes Blanco
October 25, 2017
Page 2

by the MSEA Board because it has not opposed to our July 12 request; and (4) that if the MSEA
Board opposes such understanding or any proposed hotel use by Chalks in the future based on the
above motion, Chalks reserves the right to challenge any such unlawful restriction in the
appropriate forum and on the appropriate grounds.

We are also hereby requesting from the Executive Director a written certification/
confirmation of MSEA’s approval of such plans as per MSEA’s Board resolution of May 24, 2017.

Sincerely yours,

Ignacio J. Vega-Penichet Lopez
President
Chalks Airline, Inc.
Exhibit D to Complaint
ATTORNEYS AT LAW
Miami Tower
100 S.E. Second Street | Suite 4200
Miami, Florida 33131-2113
P.O. Box 019101 | Miami, Florida 33101-9101
305.530.0050 | fax 305.530.0055
www.carltonfields.com

Enrique D. Arana Atlanta
(305) 347-6876 Direct Dial Hartford
earana@carltonfields.com Los Angeles
Miami
New York
January 10, 2018 Orlando
Tallahassee
Tampa
Washington, D.C.
West Palm Beach
VIA E-MAIL

Board Members
Miami Sports & Exhibition Authority
3500 Pan American Drive
Miami, Florida 33133

Re: Approval of Chalks Phase One Plans

Dear MSEA Board Members:

On May 2, 2017, Chalks Airline, Inc. submitted, at the express recommendation of the
City Attorney, a phased project, requesting this Board first to approve a “Preliminary
Pre-Development Project” for infrastructure and site preparation, and Phase One of a
“Preliminary Basic Project,” contemplating the construction of the Air Terminal Facility only.
This submission was made with the understanding that proposals for the rest of the
“Commercial Facilities” in one or more phases would follow at a later date.

On May 24, 2017, this Board approved both projects as submitted. However, on the
“amending” motion of Jay Solowsky, and over Chalks’ opposition, the approval of Phase One of
the project was conditioned upon Chalks not including a hotel use for the rest of the project,
even though no proposed hotel use was included in the plans submitted. Moreover,
Mr. Solowsky simply was not a member of the Board, his term had expired two years earlier,
and consequently he had no authority to make the motion or vote on it. Nor did Mr. Solowsky
articulate any basis for imposing the condition regarding any future hotel use. For these
reasons alone, the prohibition is a nullity.

At the July 18, 2017 MSEA meeting, Chalks submitted for the Board’s review a request
to remove the condition imposed by the MSEA Board on Phase One of the project,1 which the
Board agreed to consider at the subsequent meeting. Since then, three MSEA meetings have
taken place, on August 22, 2017, October 3, 2017, and November 2, 2017, and the Board has
not addressed our request. Moreover, MSEA has not responded to the July 18, 2017 Letter.

Due to the above, and in order to avoid any further delays in this regard, Chalks has
decided to continue to move forward with its entitlement process in accordance with such
building plans with the understanding that: (1) Jay Solowsky had no standing to make a motion
imposing a condition regarding any future hotel use; (2) no proposed hotel use was
contemplated in the plans before the MSEA Board in our May 2, 2017 submission; (3) any

1
A copy of the July 18, 2017 letter (without attachments) is attached hereto as Exhibit A.

Carlton Fields Jorden Burt, P.A.
Carlton Fields Jorden Burt, P.A. practices law in California through Carlton Fields Jorden Burt, LLP
MSEA Board Members
January 10, 2018
Page 2

condition regarding future hotel use is inappropriate, not expressly contemplated in the lease,
and, in any case, deemed rescinded by the MSEA Board because it has not opposed our
July 12 request; and (4) that if the MSEA Board opposes such understanding or any proposed
hotel use by Chalks in the future based on the above motion, Chalks reserves the right to
challenge any such unlawful restriction in the appropriate forum and on the appropriate grounds.

On October 25, 2017, Chalks so advised MSEA’s Executive Director, Ms. Lourdes
Blanco, and requested a certification/confirmation of MSEA’s approval of such plans. A copy of
the October 25, 2017 letter is attached hereto as Exhibit B. Ms. Blanco informed Chalks that
any such written certification/confirmation must come from the direction of this Board. Thus, we
are hereby asking this Board to direct that the Executive Director issue a written certification/
confirmation of MSEA’s approval of such plans as per MSEA’s Board resolution of May 24,
2017.

Very truly yours,

Enrique D. Arana

EDA:cp
Enclosures

cc (via email):
Francis Suarez, Chair, MSEA (fsuarez@miamigov.com)
Lourdes Blanco, Executive Director, MSEA (lourdesblanco@miamigov.com)
Wilfredo Gort, MSEA Board Member (City Commission) (wgort@miamigov.com)
Keon Hardemon, MSEA Board Member (City Commission) (khardemon@miamigov.com)
Rudolfo Sablon, MSEA Board Member (District 1) (sablonconsulting@gmail.com)
James S. Cassel, MSEA Board Member (District 2) (jcassel@cs-ib.com)
Kathryn Moore, MSEA Board Member (District 2) (kmoore@influencecomm.com)
Frank Veloso, MSEA Board Member (District 3) (boro1954@aol.com)
Nathan R. Kurland, MSEA Board Member (District 3) (nrkpax@aol.com)
Rafael Cabrera, MSEA Board Member (District 4) (rafaelcabrerajr@gmail.com)
Rachel Wagner Furst, MSEA Board Member (District 4) (rwagner@gmail.com)
Davie Madison, MSEA Board Member (District 5) (daviemadison@gmail.com)
George K. Wysong, MSEA Attorney (gkwysong@miamigov.com)

113658151
EXHIBIT A
ATTORNEYS AT LAW
Miami Tower
100 S.E. Second Street | Suite 4200
Miami, Florida 33131-2113
P.O. Box 019101 | Miami, Florida 33101-9101
305.530.0050 | fax 305.530.0055
www.carltonfields.com

Richard J. Ovelmen Atlanta
(305) 347-6805 Direct Dial Hartford
rovelmen@carltonfields.com Los Angeles
Miami
New York
Orlando
Tallahassee
July 18, 2017 Tampa
Washington, D.C.
West Palm Beach

Re: Approval of Chalks Phase One Plans

Dear MSEA Board Members:

As you know, this firm represents Chalks Airline, Inc. and Nautilus Enterprises, LLC.

On May 2, 2017, Chalks submitted, at the express recommendation of the City Attorney,
a phased project, requesting this Board first to approve a “Preliminary Pre-Development Project”
for infrastructure and site preparation, as stipulated under Section 5.1 of the Sublease, and
Phase One of a “Preliminary Basic Project,” pursuant to Section 5.8 of the Sublease,
contemplating the construction of the Air Terminal Facility only in the amount of 60,000 square
feet, which included the 18,948.01 square feet of food and liquor services areas as ordered by
Judge Cueto in his attached 2013 summary judgment ruling. This submission was made with
the understanding that a subsequent Preliminary Basic Project for the rest of the “Commercial
Facilities” in one or more phases would follow as set forth by Mr. Ben Fernandez in the letter
attached hereto.

On May 24, 2017, this Board approved both projects as submitted by Chalks. However,
on the motion of Jay Solowsky, and over Chalks’ opposition, the approval of Phase One of the
Preliminary Basic Project was conditioned upon Chalks not including hotel uses for the rest of
the project

Chalks respectfully submits that the question of whether the Sublease allows hotel uses
was not before the MSEA Board at the May 24 meeting. Indeed, the meeting minutes reflect
that City Attorney Victoria Mendez explained: “The only thing we are doing now is the approval
of the plans as presented, preliminary plans, and a hotel is not an option here.” The exclusion
of the hotel was tacked onto the motion by Mr. Solowsky, even though his term on the MSEA
Board apparently expired two years ago.

The conditional approval granted by the MSEA board creates unnecessary confusion
regarding Chalks’ rights under the Sublease, and could unnecessarily delay commencement of
Phase One of the project. Accordingly, we request that the MSEA Board approve Chalks’

1
Calculated as 15% of the leasehold; therefore, once the 0.5 acres referred to in the
summary judgment ruling is added to the 2.4 acres contemplated in the previous lease, the
applicable area is 18,948.0 square feet.

Carlton Fields Jorden Burt, P.A.
Carlton Fields Jorden Burt, P.A. practices law in California through Carlton Fields Jorden Burt, LLP
MSEA Board Members
July 18, 2017
Page 2

Phase One plans as submitted, in writing and without any condition regarding whether hotel
uses are permitted under the Sublease.

Very truly yours,

Richard J. Ovelmen

RJO:cp

Enclosures:
(1) Judge Cueto Summary Judgment Ruling
(2) Ben Fernandez May 2 Submission

112203175
EXHIBIT B
October 25, 2017

VIA E-MAIL (lourdesblanco@miamigov.com)

Ms. Lourdes Blanco
Executive Director
Miami Sports & Exhibition Authority
3500 Pan American Drive
Miami, Florida 33133

Re: Approval of Chalks Phase One Plans

Dear Ms. Blanco:

On May 2, 2017, Chalks submitted, at the express recommendation of the City Attorney, a
phased project, requesting this Board first to approve a “Preliminary Pre-Development Project”
for infrastructure and site preparation, and Phase One of a “Preliminary Basic Project,”
contemplating the construction of the Air Terminal Facility only. This submission was made with
the understanding that proposals for the rest of the “Commercial Facilities” in one or more phases
would follow at a later date.

On May 24, 2017, this Board approved both projects as submitted. However, on the
“amending” motion of Jay Solowsky, and over Chalks’ opposition, the approval of Phase One of
the project was conditioned upon Chalks not including a hotel use for the rest of the project, even
though no proposed hotel use was included in the plans submitted. Moreover, Mr. Solowsky
simply was not a member of the Board, his term had expired two years earlier, and consequently
he had no authority to make the motion or vote on it. Nor did Mr. Solowsky articulate any basis
for imposing the condition regarding any future hotel use. For these reasons along, the prohibition
is a nullity.

At the July 18, 2017 MSEA meeting, Chalks submitted for the Board’s review a request to
remove the condition imposed by the MSEA Board on Phase One of the project,1 which the Board
agreed to consider at the subsequent meeting. Since then, two MSEA meetings have taken place,
on August 22, 2017 and October 3, 2017, and the Board has not addressed our request.

Due to the above, and in order to avoid any further delays in this regard, we have decided
to continue to move forward with our entitlement process in accordance with such building plans
with the understanding that: (1) Jay Solowsky had no standing to make a motion imposing a
condition regarding any future hotel use; (2) no proposed hotel use was contemplated in the plans
before the MSEA Board in our May 2, 2017 submission; (3) any condition regarding future hotel
use is inappropriate, not expressly contemplated in the lease, and, in any case, deemed rescinded

1
A copy of our July 18, 2017 attorney’s letter is attached hereto as Exhibit A.
Ms. Lourdes Blanco
October 25, 2017
Page 2

by the MSEA Board because it has not opposed to our July 12 request; and (4) that if the MSEA
Board opposes such understanding or any proposed hotel use by Chalks in the future based on the
above motion, Chalks reserves the right to challenge any such unlawful restriction in the
appropriate forum and on the appropriate grounds.

We are also hereby requesting from the Executive Director a written certification/
confirmation of MSEA’s approval of such plans as per MSEA’s Board resolution of May 24, 2017.

Sincerely yours,

Ignacio J. Vega-Penichet Lopez
President
Chalks Airline, Inc.
Exhibit E to Complaint
ATTORNEYS AT LAW
Miami Tower
100 S.E. Second Street | Suite 4200
Miami, Florida 33131-2113
P.O. Box 019101 | Miami, Florida 33101-9101
305.530.0050 | fax 305.530.0055
www.carltonfields.com

Enrique D. Arana Atlanta
(305) 347-6876 Direct Dial Hartford
earana@carltonfields.com Los Angeles
Miami
New York
Orlando
Tallahassee
April 20, 2018 Tampa
Washington, D.C.
West Palm Beach

VIA EMAIL (gkwysong@miamigov.com) VIA EMAIL (drotenberg@miamigov.com)
AND CERTIFIED MAIL RETURN RECEIPT REQUESTED
Miami Sports and Exhibition Authority
c/o George K. Wysong, III, Esq. Mr. Daniel Rotenberg
Division Chief, General Government Division Director, Department of Asset Management
City of Miami City of Miami Government Center
Office of the City Attorney 444 S.W. 2nd Avenue, 3rd Floor
444 S.W. 2nd Avenue, Suite 945 Miami, Florida 33130
Miami, Florida 33130

VIA EMAIL (lourdesblanco@miamigov.com)
AND CERTIFIED MAIL RETURN RECEIPT REQUESTED

Ms. Lourdes Blanco
Executive Director
Miami Sports and Exhibition Authority
City Hall
3500 Pan American Drive
Miami, Florida 33133

Re: Amended and Restated Air Terminal Facility Sublease dated July 29, 2014 by
and between Miami Sports and Exhibition Authority (“Landlord” or “MSEA”) and
Chalks Airlines, Inc. (“Tenant” or “Chalks”) (“Lease”)

Dear Mr. Wysong, Ms. Blanco, and Mr. Rotenberg:

We represent Chalks Airlines, Inc., the Tenant under the above-referenced Lease. We
have been authorized by our client to direct this letter to you concerning the MSEA Board’s
failure to perform the conditions and covenants of the Lease. In particular: (1) the MSEA
Board’s failure to approve Chalks’ Phase One Project without improperly conditioning the
approval upon Chalks not constructing a hotel on the Property in the future; and (2) the MSEA
Board’s improper attempt to unilaterally amend the terms of the Lease by purportedly “waiving”
Chalks’ contractual right under Section 32.1 to obtain airport licenses from the FDOT and the
FAA.

We have also been authorized to request MSEA’s assistance in: (1) obtaining from the
City the duly signed and executed copies of the requisite DERM permit applications for the
floating docks at the Property submitted by Chalks to MSEA for such purposes on March 17,
2015; (2) obtaining approval from the FAA regarding the construction of the new public terminal

Carlton Fields Jorden Burt, P.A.
Carlton Fields Jorden Burt, P.A. practices law in California through Carlton Fields Jorden Burt, LLP
Mr. Wysong, Ms. Blanco, and Mr. Rotenberg
April 20, 2018
Page 2

for the Miami Seaplane Base, as per MSEA’s approval, and notifying the City that it must cease
and desist from interfering with Chalks’ efforts to obtain the No Hazard determination for the
construction of such new Airport Terminal from the FAA; and (3) obtaining the appropriate
Certificates of Use for Chalks’ operation of its Seaplane Base.

Indeed, throughout the duration of the Lease, MSEA and the City have directly interfered
with Chalks’ quiet enjoyment of the Property and have stymied Chalks’ efforts to develop its
seaplane base project, to such extent that Chalks believes it has been fraudulently misled and
deceived by MSEA under such Lease. Pursuant to Paragraph 27 of the Lease, Chalks requests
immediate non-binding mediation regarding these issues.

FAILURE TO PERFORM COVENANTS AND CONDITIONS

1. Unlawful Imposition of Hotel Ban as a Condition for Approval of Phase One of the
Preliminary Basic Project

At the express recommendation of the City Attorney, on May 2, 2017, Chalks submitted
to the MSEA Board a “Preliminary Pre-Development Project” for infrastructure and site
preparation, and Phase One of a “Preliminary Basic Project.” The Preliminary Basic Project
addressed the construction of the Air Terminal Facility only. This submission was made with the
understanding that proposals for the rest of the “Commercial Facilities” in one or more phases
would follow at a later date.

On May 24, 2017, the MSEA Board approved both projects; however, on the purported
“amending” motion of Jay Solowsky, and over Chalks’ opposition, the approval of Phase One of
the project was unlawfully conditioned upon Chalks excluding a hotel use in the future. This
purported prohibition is unlawful because no proposed hotel use had been included in the
Phase One plans, and the Lease does not preclude the hotel use or any “ other additional uses
as contemplated and/or permitted by current zoning laws and or regulations applicable at any
given time during the Term of the Sublease, and ancillary, related and/or incidental to a
seaplane airport facility and/or operation . . . .” (see Section 3 of the Lease). Mr. Solowsky also
was not a member of the Board because his term had expired two years earlier; consequently,
he had no authority to make the motion or vote on it. Neither the MESA Board nor
Mr. Solowsky articulated any basis for imposing the restriction on any future hotel. Therefore,
MSEA’s purported prohibition constitutes a violation of the Lease. Moreover, the City Attorney
correctly advised the Board that the hotel use issue was not before the MSEA Board because
no proposed hotel use was included in the Phase One plans. See May 24, 2017 meeting
minutes where City Attorney Victoria Méndez explained: “The only thing we are doing now is
the approval of the plans as presented, preliminary plans, and a hotel is not an option here.”

At the July 18, 2017 MSEA meeting, Chalks submitted a request to remove the hotel
ban.1 The Board indicated that it would consider the request at the next meeting. However, the
Board failed to do so at any of the three MSEA meetings that have taken place on August 22,

1
A copy of the July 18, 2017 letter (without attachments) is attached hereto as Exhibit A.
Mr. Wysong, Ms. Blanco, and Mr. Rotenberg
April 20, 2018
Page 3

2017, October 3, 2017, and November 2, 2017. Almost nine months later, MSEA has not
responded to the request.

On October 25, 2017 and January 10, 2018, Chalks made written requests to MSEA’s
Executive Director, Ms. Lourdes Blanco, and to the Board to provide a certification/confirmation
of its approval of the plans submitted on May 24, 2017. MSEA has not provided the requested
certification/confirmation. These actions violate Sections 1.14, 3, and 12 of the Lease.2
MSEA’s actions recounted above also clearly violate Section 5.3 of the Lease which requires
that MSEA will not unreasonably withhold, condition, or delay Chalks’ right to construct its
project on the Property.

2. Unlawful Unilateral Attempt to Amend the Lease

We are in receipt of Mr. Wysong’s letter dated April 17, 2018, whereby he states that
MSEA purports to unilaterally amend the terms of the Lease by “waiving” Chalks’ contractual
right under Section 32.1 to obtain airport licensing from the FDOT and the FAA. It is well settled
that a party to a contract may not unilaterally amend it. See, e.g., Dows v. Nike, Inc., 846 So.
2d 595, 602 (4th DCA 2003) (“The unilateral modification of a contract is unenforceable.”).
Accordingly, any attempt by the MSEA Board to unilaterally amend the terms of the Lease is
invalid.

Please be advised that Chalks intends to continue to perform its contractual right under
the contract to obtain, renew, and retain all necessary airport licensing, including but not limited
to, Chalks’ FDOT Miami Seaplane Base License to operate its seaplane base as a public use
airport, as expressly permitted pursuant to such Lease. Moreover, Chalks will take immediate
legal action to the extent MSEA and/or the City of Miami attempts to obstruct or prevent Chalks
from obtaining the necessary licenses, approvals, or permits provided for by the Lease and by
law, which are necessary to operate its seaplane base.3

REQUEST FOR ASSISTANCE UNDER LEASE

1. The City’s Obstruction of Permits for the Floating Docks Provided for in the Lease

The Lease expressly provides Chalks with the right to construct and maintain the use of
floating docks to operate its seaplane base. See Lease at Section 1.14 (“Tenant improvements:

2
Both Section 1.14 and Section 3 of the Lease authorize Chalks to improve the property
(“Property” or “Miami Seaplane Base Property”) by refurbishing the existing terminal and
constructing new buildings and other structures, including new airport terminal and floating dock
facilities. Section 12 of the Lease also guarantees Chalks quiet enjoyment of the property.
3
We are unaware of any meeting at which the MSEA Board voted to attempt to
unilaterally amend the terms of the Lease. Consequently, it appears the City Attorney has
usurped the authority of the MSEA Board, even assuming it could unilaterally amend the Lease,
which it cannot.
Mr. Wysong, Ms. Blanco, and Mr. Rotenberg
April 20, 2018
Page 4

Tenant’s facility . . . shall include the Air Transportation Facility and the Commercial Facilities,
and to the extent not already included in either of the foregoing: . . . (5) . . . mooring and floating
docking facilities for sea planes . . . .”); see also id. at Section 1.12 (“Tenant’s primary use . . . of
the Property shall be the operation of the Air Transportation Facility for the use and benefit of
the general public . . . . such operation shall include . . . the following minimum services. . . .
(12) tie-down, mooring and floating dock services for sea planes and light aircraft maintenance,
as detailed in Section 1.14.”). For several years, dating back to at least March 17, 2015, Chalks
has attempted to obtain permission to construct and maintain the floating docks expressly
provided for in the Lease. As previously explained to MSEA, the construction of floating docks
is essential to the operation of Chalks’ seaplane base business and necessary to provide airport
services to straight-float seaplanes without conventional landing gear, which constitute a vast
majority of all general aviation seaplanes.

The City has stymied Chalks’ efforts to construct the floating docks. It has taken the
position that MSEA was not authorized to allow Chalks to construct floating docks despite the
Lease. Chalks’ initial applications were denied without good reason. The City then required
resubmission of the applications on two separate occasions without approving the drafts, then
promising to “move expeditiously to process the floating dock permits.” Chalks was also
supposed to accept a Development and Access Agreement not provided for in the Lease. After
Chalks agreed to consider entering into such Agreement, as the lesser of two evils, additional
and unnecessary changes were requested. The City still has not provided Chalks with the
requisite floating dock permits and has failed to work with Chalks in good faith. Accordingly,
pursuant to Sections 5.8 and 12 of the Lease, Chalks hereby requests MSEA’s assistance in
obtaining all DERM applications for the floating docks permits duly signed and executed.

2. The City is Preventing Chalks from Obtaining FAA Approval for the New Terminal
Facility

Sections 1.12 and 1.14 of the Lease permit Chalks to improve the existing Air
Transportation Facility, including the construction of a new terminal for Chalks’ seaplane base
operation. On May 24, 2017, the MSEA Board gave its approval.4 On November 21, 2017,
pursuant to 14 C.F.R. § 77.9(d), Chalks submitted a Form 7460-1 Notice of Proposed
Construction or Alteration (the “7460 Notice”) to construct the new Airport Terminal on the Miami
Seaplane Base Property (using “X44” as the Miami Seaplane Base FAA Location Identifier).
The sole purpose was to have the FAA conduct an aeronautical study to determine that the new
Airport Terminal would not constitute an obstruction to air navigation, navigational aids or
navigational facilities and to issue a determination of No Hazard. The 7460 Notice did not seek
the establishment of any landing area or landing area determination regulated under 14 C.F.R.
Part 157, and Chalks did not file a Form 7480.

4
Despite repeated requests, the MSEA Board has not reduced the approval to a written
certification or eliminated the invalid purported condition that Chalks not include a hotel use for
the rest of the project.
Mr. Wysong, Ms. Blanco, and Mr. Rotenberg
April 20, 2018
Page 5

On or about March 16 and March 19, 2018, the FAA notified Chalks that the requested
aeronautical studies were being terminated without making any determination whether the new
Airport Terminal constitutes a hazard. The letters, which are nearly identical, state in pertinent
part:

Our office has given the City of Miami (Airport Owner) guidance in how to
move forward in establishing new landing areas within their property
boundary as depicted on their FAA approved Airport Layout Plan (ALP)
Set. As you may know, the Miami Seaplane Base (X44) is a public-use
General Aviation Airport within the National Plan of Integrated Airports
System (NPIAS). As a public-use facility within the NPIAS, X44 has other
stringent federal rules concerning the coordination of changes within their
airport property boundary with our office. As a leaseholder to X44, we
encourage your coordination of the 7480 with the airport owner who is
responsible for submitting an update to their ALP depicting any changes
to include a submittal for establishing new landing areas.

* * *

If you desire to reactivate the study, it will be necessary for you to re-file
notice using the enclosed FAA Form 7460 1, Notice of Proposed
Construction or Alteration.

Thus, while the FAA’s response letters are not entirely clear, it appears that the City’s
attempts to obtain new landing areas has caused confusion with the FAA as to Chalks’ right to
seek and obtain a determination of No Hazard for its new Airport Terminal and has directly
interfered with Chalks’ ability to advance its project. Chalks has been concerned for some time
that the City’s actions and communication with the FAA seeking to obtain a heliport, on the
property abutting the Property leased by Chalks and under the auspices of the Miami Seaplane
Base FDOT licensed airport, without Chalks’ knowledge and/or consent, would have a direct
and negative impact on Chalks’ completion of its project. Chalks believes that the FAA erred for
several reasons when it terminated the requested aeronautical studies. Accordingly, on
April 11, 2018, pursuant to Subpart E of 14 C.F.R. § 77, Chalks timely filed a Petition for Review
of the terminations with the FAA. This petition remains pending.5

Pursuant to Sections 5.8 and 12 of the Lease, Chalks hereby provides notice and
requests MSEA’s assistance with obtaining a determination of No Hazard from the FAA,
informing the FAA that MSEA has already approved the proposed public terminal, that Chalks
has the right to file a Form 7460-1, and notifying the City that it must cease and desist from
interfering with Chalks’ efforts to obtain a No Hazard determination from the FAA.

5
While the FAA has not formally addressed the Petition, yesterday, April 19, 2018, the
FAA reactivated the aeronautical study. Notwithstanding, Chalks requests MSEA’s assistance
in obtaining a No Hazard determination by the FAA as set forth herein.
Mr. Wysong, Ms. Blanco, and Mr. Rotenberg
April 20, 2018
Page 6

3. The City is Preventing Chalks from Obtaining Certificates of Use

On March 12, 2015, Chalks learned that the certificates of use for Chalks’ property had
been changed to Flagstone’s address. As a result of this administrative mistake, no certificates
of use were listed for Chalks and, therefore, Chalks’ right to operate the Seaplane Base was in
jeopardy. Not only did the City’s records suggest that Chalks was operating without certificates
of use, but the enaction of Miami 21 had inadvertently designated the Chalks Property as “Civic
Use.” Chalks brought these issues to the City’s attention. At the rezoning of the Miami
Seaplane Base Property, both the City and the City Commission acknowledged that the
Seaplane Base was a pre-existing grandfathered-in and permissible non-conforming facility on
Watson Island with vested rights under Florida Statutes Section 380.06(2) that should be
accommodated within the appropriate FLUM designation. On September 2, 2015, the City
Commission approved the use and Planning Director Francisco Garcia stated that he would get
the certificate of use grandfathered-in. Notwithstanding, Zoning Administrator Devin Cejas
failed to issue the corresponding certificates of use for the Seaplane Base’s pre-existing
buildings, structures, uses, operations, and activities.

Recently, in January 2018, years after the City was informed of the mistake, the
“administrative error” was remedied on paper. However, the Zoning Department still continues
to withhold the issuance of appropriate documentation (i.e., a verification letter or corresponding
Certificate of Use) recognizing Chalks’ vested rights to operate all aspects of its seaplane base
business (including core aviation activities). Therefore, Chalks’ ability to run its business is still
being impaired by the City. Accordingly, pursuant to Sections 5.8 and 12 of the Lease, Chalks
hereby provides notice and requests MSEA’s assistance to require the City to provide Chalks
with all required certificates of use or verification letters forthwith.

WHEREFORE, Chalks hereby requests MSEA comply with the above-referenced
covenants and conditions of the Lease within thirty (30) days and that it immediately assist
Chalks with obtaining the required permits, certificates of use, and approvals from the City and
the FAA. Specifically, Chalks demands that MSEA:

(1) approve, in writing, the Phase One project submitted by Chalks on May 2, 2017,
without any condition that Chalks cannot seek to build a hotel on the property in
the future;

(2) rescind its improper attempt to unilaterally amend the terms of the Lease;

(3) assist Chalks in obtaining the requisite DERM permit applications for the floating
docks permits duly signed and executed (both temporary and permanent);

(4) assist Chalks in obtaining a No Hazard determination from the FAA regarding the
public terminal, including informing the FAA that MSEA has already approved the
proposed public terminal and notifying the City that it must cease and desist from
interfering with Chalks’ efforts to obtain the No Hazard determination; and

(5) assist Chalks with obtaining all necessary certificates of use from the City.
Mr. Wysong, Ms. Blanco, and Mr. Rotenberg
April 20, 2018
Page 7

Chalks hereby requests that the parties’ disagreements promptly be submitted to
non-binding mediation as provided for in Section 27 of the Lease. MSEA’s prompt attention to
these matters is appreciated.

Very truly yours,

Enrique D. Arana

EDA:cp
Enclosure

114323247
EXHIBIT A
ATTORNEYS AT LAW
Miami Tower
100 S.E. Second Street | Suite 4200
Miami, Florida 33131-2113
P.O. Box 019101 | Miami, Florida 33101-9101
305.530.0050 | fax 305.530.0055
www.carltonfields.com

Richard J. Ovelmen Atlanta
(305) 347-6805 Direct Dial Hartford
rovelmen@carltonfields.com Los Angeles
Miami
New York
Orlando
Tallahassee
July 18, 2017 Tampa
Washington, D.C.
West Palm Beach

Re: Approval of Chalks Phase One Plans

Dear MSEA Board Members:

As you know, this firm represents Chalks Airline, Inc. and Nautilus Enterprises, LLC.

On May 2, 2017, Chalks submitted, at the express recommendation of the City Attorney,
a phased project, requesting this Board first to approve a “Preliminary Pre-Development Project”
for infrastructure and site preparation, as stipulated under Section 5.1 of the Sublease, and
Phase One of a “Preliminary Basic Project,” pursuant to Section 5.8 of the Sublease,
contemplating the construction of the Air Terminal Facility only in the amount of 60,000 square
feet, which included the 18,948.01 square feet of food and liquor services areas as ordered by
Judge Cueto in his attached 2013 summary judgment ruling. This submission was made with
the understanding that a subsequent Preliminary Basic Project for the rest of the “Commercial
Facilities” in one or more phases would follow as set forth by Mr. Ben Fernandez in the letter
attached hereto.

On May 24, 2017, this Board approved both projects as submitted by Chalks. However,
on the motion of Jay Solowsky, and over Chalks’ opposition, the approval of Phase One of the
Preliminary Basic Project was conditioned upon Chalks not including hotel uses for the rest of
the project

Chalks respectfully submits that the question of whether the Sublease allows hotel uses
was not before the MSEA Board at the May 24 meeting. Indeed, the meeting minutes reflect
that City Attorney Victoria Mendez explained: “The only thing we are doing now is the approval
of the plans as presented, preliminary plans, and a hotel is not an option here.” The exclusion
of the hotel was tacked onto the motion by Mr. Solowsky, even though his term on the MSEA
Board apparently expired two years ago.

The conditional approval granted by the MSEA board creates unnecessary confusion
regarding Chalks’ rights under the Sublease, and could unnecessarily delay commencement of
Phase One of the project. Accordingly, we request that the MSEA Board approve Chalks’

1
Calculated as 15% of the leasehold; therefore, once the 0.5 acres referred to in the
summary judgment ruling is added to the 2.4 acres contemplated in the previous lease, the
applicable area is 18,948.0 square feet.

Carlton Fields Jorden Burt, P.A.
Carlton Fields Jorden Burt, P.A. practices law in California through Carlton Fields Jorden Burt, LLP
MSEA Board Members
July 18, 2017
Page 2

Phase One plans as submitted, in writing and without any condition regarding whether hotel
uses are permitted under the Sublease.

Very truly yours,

Richard J. Ovelmen

RJO:cp

Enclosures:
(1) Judge Cueto Summary Judgment Ruling
(2) Ben Fernandez May 2 Submission

112203175
Exhibit F to Complaint
ATTORNEYS AT LAW
Miami Tower
100 S.E. Second Street | Suite 4200
Miami, Florida 33131-2113
P.O. Box 019101 | Miami, Florida 33101-9101
305.530.0050 | fax 305.530.0055
www.carltonfields.com

Scott E. Byers Atlanta
(305) 347-6819 Direct Dial Hartford
sbyers@carltonfields.com Los Angeles
Miami
New York
Orlando
Tallahassee
August 7, 2018 Tampa
Washington, D.C.
West Palm Beach

VIA EMAIL (gkwysong@miamigov.com)

Miami Sports and Exhibition Authority
c/o George K. Wysong, III, Esq.
Division Chief, General Government Division
City of Miami
Office of the City Attorney
444 S.W. 2nd Avenue, Suite 945
Miami, Florida 33130

Re: Mediation Regarding Amended and Restated Air Terminal Facility Sublease
dated July 29, 2014 by and between Miami Sports and Exhibition Authority
(“Landlord” or “MSEA”) and Chalks Airlines, Inc. (“Tenant” or “Chalks”) (“Lease”)

Dear Mr. Wysong:

Thank you for setting up yesterday’s meeting with Zoning Director/Zoning Administrator
Devin Cejas regarding Chalks’ Certificate of Use and the permitting and exception process for
Chalks’ Phase One Plans.

As we discussed yesterday, Chalks needs MSEA to approve in writing its Phase One
Plans which were submitted to the MSEA Board on May 24, 2017, without a condition that a
hotel never be permitted in the future. As you are aware, Chalks has been requesting such
approval for more than a year.1 At the mediation on July 12, 2018, we discussed two options
that would be satisfactory to Chalks to resolve this issue: (1) that MSEA provide in writing that
the Phase One Plans are approved without any condition precluding Chalks from seeking
approval of a hotel in the future, or (2) that MSEA hold a meeting as soon as possible to
approve the Phase One Plans without any hotel condition. Yesterday, you stated that MSEA
could not fulfill option number one and that a MSEA meeting would have to be scheduled.
Since it has been almost a month since the mediation was conducted and more than a year
since Chalks requested that the hotel ban be removed, Chalks requests that by this Friday,
August 10, 2018, MSEA schedule a special meeting, to be conducted within 30 days, to vote on
Chalks’ Phase One Plans.

1
At the July 18, 2017 MSEA meeting, Chalks submitted a request to remove the hotel
ban. The Board indicated that it would consider the request at the next meeting. However, the
Board failed to do so at any subsequent MSEA meeting.

Carlton Fields Jorden Burt, P.A.
Carlton Fields Jorden Burt, P.A. practices law in California through Carlton Fields Jorden Burt, LLP
George K. Wysong, Ill, Esq.
August 7, 2018
Page 2

Very truly yours,

AJ~g43~
Scott E. Byers

SEB:cp

cc: Kerri L. McNulty, Esq . (klm cnulty@miamigov.com)
John Freud, Esq. Ufreud@msolinc.net)

115458613
Exhibit G to Complaint
Qlitllnf ~ianti
Victoria Mendez Telep hone: (305) 416-1800
City Attorney Telecop ier: (305) 416-1801
E-MAIL: Law@miamigov.com

April 17, 2018

VIA email (ivp@nautilusenterprises.net & EArana@carltonfields.com)

Ignacio Vega-Penichet
Chalks Airlines, Inc. d/b/a Chalks and Nautilus Enterprises, LLC
601 Brickell Key Avenue, Suite 702
Miami, Florida 33131

Enrique D. Arana
Carlton Fields
Miami Tower
100 S .E. Second Street, Suite 4200
Miami, Florida 3 3131

RE: Section 32.1 of Amended and Restated Air Terminal Facility Sublease between
Chalks Airlines, Inc. and Miami Sports and Exhibition Authority

Dear Messrs. Vega-Penichet & Arana:

Please be advised that the Miami Sports and Exhibition Authority ("MSEA"), as the beneficiary
of the clause at issue, hereby waives the obligation of Chalks Airlines, Inc. d/b/a Chalks and
Nautilus Enterprises, LLC (collectively, "Chalks") under Section 32.1 of the July 29, 2014
Amended and Restated Air Terminal Facility Sublease ("the Sublease") between Chalks and
MSEA, insofar as that section of the Sublease had obligated Chalks to obtain airport licensing
from the Florida Department of Transportation and/or any required approvals from the Federal
Aviation Administration in connection with Chalks' use and occupancy of the Property. This
waiver pertains only to airport licensing from the Florida Department of Transportation and/or
approvals from the Federal Aviation Administration. Any other duties and/or obligations with
respect to licenses, approvals, and permits required from any other agencies arising under Section
32.1 ofthe Sublease shall remain in full force and effect.

Sincerely,

f!~-~1!~
~ Wyson~ ni -
Division Chief- General Government Division
GWysong@miamigov.com

On behalf of the Miami Sports and Exhibition Authority
GKW/KLM/yei
cc: Richard J. Ovelmen, Esquire (by email); Scott E. Byers, Esquire (by email)
949014

OFFICE OF THE CITY A DORNEY I 444 S.W. 2nd Avenue, Suite 945 I Miam i, Florida 33 130-1910