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EXHIBIT 10.3 (k)
LEASE AGREEMENT
DATED AS OF JANUARY 8, 1997
BY AND BETWEEN
HPTSLC CORPORATION,
AS LANDLORD
AND
WHC SALT LAKE CITY CORPORATION,
AS TENANT
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TABLE OF CONTENTS
ARTICLE 1: DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Additional Rent . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Additional Charges . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Affiliated Person . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Base Total Hotel Sales . . . . . . . . . . . . . . . . . . . . 3
1.8 Base Year . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 Business Day . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.10 Capital Addition . . . . . . . . . . . . . . . . . . . . . . . 3
1.11 Capital Expenditure . . . . . . . . . . . . . . . . . . . . . 4
1.12 Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.13 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.14 Commencement Date . . . . . . . . . . . . . . . . . . . . . . 4
1.15 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.16 Condemnor . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.17 Consolidated Financials . . . . . . . . . . . . . . . . . . . 4
1.18 Date of Taking . . . . . . . . . . . . . . . . . . . . . . . . 4
1.19 Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.20 Disbursement Rate . . . . . . . . . . . . . . . . . . . . . . 4
1.21 Distribution . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.22 Encumbrance . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.23 Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.24 Environment . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.25 Environmental Obligation . . . . . . . . . . . . . . . . . . . 5
1.26 Environmental Notice . . . . . . . . . . . . . . . . . . . . . 5
1.27 Event of Default . . . . . . . . . . . . . . . . . . . . . . . 5
1.28 Excess Total Hotel Sales . . . . . . . . . . . . . . . . . . . 5
1.29 Extended Terms . . . . . . . . . . . . . . . . . . . . . . . . 5
1.30 FF&E Estimate . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.31 FF&E Reserve . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.32 Financial Officer's Certificate . . . . . . . . . . . . . . . 5
1.33 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.34 Fixed Term . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.35 Fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.36 GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.37 Government Agencies . . . . . . . . . . . . . . . . . . . . . . 6
1.38 Hazardous Substances . . . . . . . . . . . . . . . . . . . . . 6
1.39 Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.40 Hotel Mortgage . . . . . . . . . . . . . . . . . . . . . . . . 7
1.41 Hotel Mortgagee . . . . . . . . . . . . . . . . . . . . . . . 7
1.42 Immediate Family . . . . . . . . . . . . . . . . . . . . . . . 7
1.43 Impositions . . . . . . . . . . . . . . . . . . . . . . . . . 7
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1.44 Incidental Documents . . . . . . . . . . . . . . . . . . . . . 8
1.45 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.46 Insurance Requirements . . . . . . . . . . . . . . . . . . . . 9
1.47 Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.48 Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.49 Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.50 Landlord Liens . . . . . . . . . . . . . . . . . . . . . . . . 9
1.51 Lease Year . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.52 Leased Improvements . . . . . . . . . . . . . . . . . . . . . 9
1.53 Leased Intangible Property . . . . . . . . . . . . . . . . . . 9
1.54 Leased Personal Property . . . . . . . . . . . . . . . . . . . 10
1.55 Leased Property . . . . . . . . . . . . . . . . . . . . . . . 10
1.56 Leasehold Mortgage . . . . . . . . . . . . . . . . . . . . . . 10
1.57 Leasehold Mortgagee . . . . . . . . . . . . . . . . . . . . . . 10
1.58 Legal Requirements . . . . . . . . . . . . . . . . . . . . . . 10
1.59 Lending Institution . . . . . . . . . . . . . . . . . . . . . 10
1.60 Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.61 Limited Guaranty . . . . . . . . . . . . . . . . . . . . . . . 11
1.63 Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.64 Minimum Rent . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.65 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.66 Officer's Certificate . . . . . . . . . . . . . . . . . . . . 11
1.67 Overdue Rate . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.68 Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.69 Permitted Encumbrances . . . . . . . . . . . . . . . . . . . . 11
1.70 Permitted Liens . . . . . . . . . . . . . . . . . . . . . . . 11
1.71 Permitted Use . . . . . . . . . . . . . . . . . . . . . . . . 11
1.72 Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.73 Pledge and Security Agreement . . . . . . . . . . . . . . . . . 12
1.74 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.75 Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.76 SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.77 Security Deposit . . . . . . . . . . . . . . . . . . . . . . . 12
1.78 State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.79 Stock Pledge Agreement . . . . . . . . . . . . . . . . . . . . 12
1.80 Subordinated Creditor . . . . . . . . . . . . . . . . . . . . 12
1.81 Subordination Agreement . . . . . . . . . . . . . . . . . . . 12
1.82 Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.83 Successor Landlord . . . . . . . . . . . . . . . . . . . . . . 12
1.84 Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . 12
1.85 Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.86 Tenant's Personal Property . . . . . . . . . . . . . . . . . . 13
1.87 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.88 Total Hotel Sales . . . . . . . . . . . . . . . . . . . . . . . 13
1.89 Uniform System of Accounts . . . . . . . . . . . . . . . . . . 14
1.90 Unsuitable for Its Permitted Use . . . . . . . . . . . . . . . 14
1.91 Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.92 Wyndham . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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ARTICLE 2: LEASED PROPERTY AND TERM . . . . . . . . . . . . . . . . . . . . 14
2.1 Leased Property . . . . . . . . . . . . . . . . . . . . . . . 14
2.2 Condition of Leased Property . . . . . . . . . . . . . . . . . 16
2.3 Fixed Term . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.4 Extended Term . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 3: RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.1 Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.1.1 Minimum Rent . . . . . . . . . . . . . . . . . . . . . 17
3.1.2 Additional Rent . . . . . . . . . . . . . . . . . . . . 18
3.1.3 Additional Charges . . . . . . . . . . . . . . . . . . 20
3.2 Late Payment of Rent, Etc. . . . . . . . . . . . . . . . . . . 22
3.3 Net Lease . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.4 No Termination, Abatement, Etc. . . . . . . . . . . . . . . . . 23
3.5 Security Deposit . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 4: USE OF THE LEASED PROPERTY . . . . . . . . . . . . . . . . . . . 25
4.1 Permitted Use . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.1.1 Permitted Use . . . . . . . . . . . . . . . . . . . . . 25
4.1.2 Necessary Approvals . . . . . . . . . . . . . . . . . . 26
4.1.3 Lawful Use, Etc. . . . . . . . . . . . . . . . . . . . 26
4.2 Compliance with Legal/Insurance Requirements, Etc . . . . . . . 26
4.3 Environmental Matters . . . . . . . . . . . . . . . . . . . . 26
4.3.1 Restriction on Use, Etc. . . . . . . . . . . . . . . . 26
4.3.2 Indemnification of Landlord . . . . . . . . . . . . . . 27
4.3.3 Survival . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 5: MAINTENANCE AND REPAIRS . . . . . . . . . . . . . . . . . . . . . 28
5.1 Maintenance and Repair . . . . . . . . . . . . . . . . . . . . 28
5.1.1 Tenant's General Obligations . . . . . . . . . . . . . 29
5.1.2 FF&E Reserve . . . . . . . . . . . . . . . . . . . . . 29
5.1.3 Landlord's Obligations . . . . . . . . . . . . . . . . 31
5.1.4 Nonresponsibility of Landlord, Etc. . . . . . . . . . . 32
5.2 Tenant's Personal Property . . . . . . . . . . . . . . . . . . 32
5.3 Yield Up . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.4 Management Agreement . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE 6: IMPROVEMENTS, ETC. . . . . . . . . . . . . . . . . . . . . . . . 34
6.1 Improvements to the Leased Property. . . . . . . . . . . . . . 34
6.2 Improvement Advances . . . . . . . . . . . . . . . . . . . . . 35
6.3 Improvements Financed by Landlord . . . . . . . . . . . . . . 36
6.4 Salvage . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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ARTICLE 7: LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.1 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.2 Landlord's Lien . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 8: PERMITTED CONTESTS . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 9: INSURANCE AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . 38
9.1 General Insurance Requirements . . . . . . . . . . . . . . . . . 38
9.2 Replacement Cost . . . . . . . . . . . . . . . . . . . . . . . . 39
9.3 Waiver of Subrogation . . . . . . . . . . . . . . . . . . . . . 40
9.4 Form Satisfactory, Etc . . . . . . . . . . . . . . . . . . . . . 40
9.5 Blanket Policy . . . . . . . . . . . . . . . . . . . . . . . . . 41
9.6 No Separate Insurance . . . . . . . . . . . . . . . . . . . . . 41
9.7 Indemnification of Landlord . . . . . . . . . . . . . . . . . . 41
ARTICLE 10: CASUALTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.1 Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . 42
10.2 Damage or Destruction . . . . . . . . . . . . . . . . . . . . . 42
10.2.1 Damage or Destruction of Leased Property . . . . . . . . 42
10.2.2 Partial Damage or Destruction . . . . . . . . . . . . . 43
10.2.3 Insufficient Insurance Proceeds . . . . . . . . . . . . 43
10.2.4 Disbursement of Proceeds . . . . . . . . . . . . . . . 43
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10.3 Damage Near End of Term . . . . . . . . . . . . . . . . . . . . 44
10.4 Tenant's Property . . . . . . . . . . . . . . . . . . . . . . . 45
10.5 Restoration of Tenant's Property . . . . . . . . . . . . . . . 45
10.6 No Abatement of Rent . . . . . . . . . . . . . . . . . . . . . 45
10.7 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 11: CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.1 Total Condemnation, Etc. . . . . . . . . . . . . . . . . . . . 45
11.2 Partial Condemnation . . . . . . . . . . . . . . . . . . . . . 46
11.3 Abatement of Rent . . . . . . . . . . . . . . . . . . . . . . . 47
11.4 Temporary Condemnation . . . . . . . . . . . . . . . . . . . . 47
11.5 Allocation of Award . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 12: DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . 48
12.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . 48
12.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.3 Tenant's Waiver . . . . . . . . . . . . . . . . . . . . . . . . 52
12.4 Application of Funds . . . . . . . . . . . . . . . . . . . . . 52
12.5 Landlord's Right to Cure Tenant's Default . . . . . . . . . . . 52
ARTICLE 13: HOLDING OVER . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE 14: LANDLORD'S NOTICE OBLIGATIONS; LANDLORD DEFAULT . . . . . . . . 53
14.1 Landlord Notice Obligation . . . . . . . . . . . . . . . . . . 53
14.2 Landlord's Default . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE 15: PURCHASE RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . 54
15.1 First Refusal to Purchase . . . . . . . . . . . . . . . . . . . 54
15.2 Landlord's Option to Purchase the Tenant's
Personal Property; Transfer of Licenses . . . . . . . . 55
ARTICLE 16: SUBLETTING AND ASSIGNMENT . . . . . . . . . . . . . . . . . . . 56
16.1 Subletting and Assignment . . . . . . . . . . . . . . . . . . . 56
16.2 Required Sublease Provisions . . . . . . . . . . . . . . . . . 57
16.3 Permitted Sublease . . . . . . . . . . . . . . . . . . . . . . 58
16.4 Sublease Limitation . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE 17: ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS . . . . . . . . . 58
17.1 Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . 58
17.2 Financial Statements . . . . . . . . . . . . . . . . . . . . . 59
17.3 General Operations . . . . . . . . . . . . . . . . . . . . . . 60
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ARTICLE 18: LANDLORD'S RIGHT TO INSPECT . . . . . . . . . . . . . . . . . . 60
ARTICLE 19: LEASEHOLD MORTGAGES . . . . . . . . . . . . . . . . . . . . . . 61
19.1 Leasehold Mortgages Authorized . . . . . . . . . . . . . . . . 61
19.2 Notices to Landlord . . . . . . . . . . . . . . . . . . . . . . 61
19.3 Cure by Leasehold Mortgagee . . . . . . . . . . . . . . . . . . 61
19.4 Landlord Estoppel Certificates. . . . . . . . . . . . . . . . 62
ARTICLE 20: HOTEL MORTGAGES . . . . . . . . . . . . . . . . . . . . . . . . 62
20.1 Landlord May Grant Liens . . . . . . . . . . . . . . . . . . . 62
20.2 Subordination of Lease . . . . . . . . . . . . . . . . . . . . 62
20.3 Notice to Mortgagee and Superior Landlord . . . . . . . . . . . 64
ARTICLE 21: ADDITIONAL COVENANTS OF TENANT . . . . . . . . . . . . . . . . . 64
21.1 Prompt Payment of Indebtedness . . . . . . . . . . . . . . . . 64
21.2 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . 65
21.3 Maintenance of Accounts and Records . . . . . . . . . . . . . . 65
21.4 Notice of Litigation, Etc. . . . . . . . . . . . . . . . . . . 65
21.5 Indebtedness of Tenant . . . . . . . . . . . . . . . . . . . . 65
21.6 Financial Condition of Tenant . . . . . . . . . . . . . . . . . 66
21.7 Distributions, Payments to Affiliated
Persons, Etc . . . . . . . . . . . . . . . . . . . . . 66
21.8 Prohibited Transactions . . . . . . . . . . . . . . . . . . . . 67
21.9 Liens and Encumbrances . . . . . . . . . . . . . . . . . . . . 67
21.10 Merger; Sale of Assets; Etc . . . . . . . . . . . . . . . . . 67
ARTICLE 22: REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 68
22.1 Representations of Tenant . . . . . . . . . . . . . . . . . . . 68
22.1.1 Status and Authority of Tenant . . . . . . . . . . . 68
22.1.2 Action of Tenant . . . . . . . . . . . . . . . . . . 68
22.1.3 No Violations of Agreements . . . . . . . . . . . . . 68
22.1.4 Litigation . . . . . . . . . . . . . . . . . . . . . 68
22.1.5 Existing Leases, Agreements, Etc. . . . . . . . . . . 69
22.1.6 Disclosure . . . . . . . . . . . . . . . . . . . . . 69
22.1.7 Utilities, Etc. . . . . . . . . . . . . . . . . . . . 69
22.1.8 Compliance With Law . . . . . . . . . . . . . . . . . 69
22.1.9 Hazardous Substances . . . . . . . . . . . . . . . . 69
22.2 Representations of Landlord . . . . . . . . . . . . . . . . . . 70
22.2.1 Status and Authority of Landlord . . . . . . . . . . 70
22.2.2 Action of Landlord . . . . . . . . . . . . . . . . . 70
22.2.3 No Violations of Agreements . . . . . . . . . . . . . 70
22.2.4 Litigation . . . . . . . . . . . . . . . . . . . . . 70
22.3 Survival, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 70
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ARTICLE 23: MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 71
23.1 Limitation on Payment of Rent . . . . . . . . . . . . . . . . . 71
23.2 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
23.3 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . 72
23.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 72
23.5 Acceptance of Surrender . . . . . . . . . . . . . . . . . . . . 72
23.6 No Merger of Title . . . . . . . . . . . . . . . . . . . . . . 72
23.7 Conveyance by Landlord . . . . . . . . . . . . . . . . . . . . 72
23.8 Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . 73
23.9 Memorandum of Lease . . . . . . . . . . . . . . . . . . . . . . 73
23.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
23.11 Trade Area Restriction . . . . . . . . . . . . . . . . . . . . 75
23.12 Construction . . . . . . . . . . . . . . . . . . . . . . . . . 75
23.13 Counterparts; Headings . . . . . . . . . . . . . . . . . . . . 75
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23.14 Applicable Law, Etc. . . . . . . . . . . . . . . . . . . . . . 75
23.15 Special Landlord Option . . . . . . . . . . . . . . . . . . . . 76
23.16 Nonrecourse. . . . . . . . . . . . . . . . . . . . . . . . . 77
23.17 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . 77
EXHIBITS
A - The Land
B - Approved Budget and Improvements
C - Form of Landlord Estoppel
D - Restricted Trade Area
E - Rent Allocation
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LEASE AGREEMENT
THIS LEASE AGREEMENT is entered into as of this ___ day of January,
1997, by and between HPTSLC CORPORATION, a Delaware corporation, as landlord
("Landlord"), and WHC SALT LAKE CITY CORPORATION, a Delaware corporation, as
tenant ("Tenant").
W I T N E S S E T H :
WHEREAS, Landlord owns fee simple title to the Leased Property (this and
other capitalized terms used and not otherwise defined herein having the
meanings ascribed to such terms in Article 1); and
WHEREAS, Landlord wishes to lease the Leased Property to Tenant and
Tenant wishes to lease the Leased Property from Landlord, all subject to and
upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the mutual receipt and
legal sufficiency of which are hereby acknowledged, Landlord and Tenant hereby
agree as follows:
ARTICLE 1
DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) the terms defined in
this Article shall have the meanings assigned to them in this Article and
include the plural as well as the singular, (ii) all accounting terms not
otherwise defined herein shall have the meanings assigned to them in accordance
with GAAP, (iii) all references in this Agreement to designated "Articles,"
"Sections" and other subdivisions are to the designated Articles, Sections and
other subdivisions of this Agreement, and (iv) the words "herein," "hereof,"
"hereunder" and
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other words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
1.1 "Additional Rent" shall have the meaning given such term
in Section 3.1.2(a).
1.2 "Additional Charges" shall have the meaning given such
term in Section 3.1.3.
1.3 "Affiliated Person" shall mean, with respect to any
Person, (a) in the case of any such Person which is a partnership, any partner
in such partnership, (b) in the case of any such Person which is a limited
liability company, any member of such company, (c) any other Person which is a
Parent, a Subsidiary, or a Subsidiary of a Parent with respect to such Person
or to one or more of the Persons referred to in the preceding clauses (a) and
(b), (d) any other Person who is an officer, director, trustee or employee of,
or partner in or member of, such Person or any Person referred to in the
preceding clauses (a), (b) and (c), and (e) any other Person who is a member of
the Immediate Family of such Person or of any Person referred to in the
preceding clauses (a) through (d).
1.4 "Agreement" shall mean this Lease Agreement, including
Exhibits A to D hereto, as it and they may be amended from time to time as
herein provided.
1.5 "Applicable Laws" shall mean all applicable laws,
statutes, regulations, rules, ordinances, codes, licenses, permits and orders,
from time to time in existence, of all courts of competent jurisdiction and
Government Agencies, and all applicable judicial and administrative and
regulatory decrees, judgments and orders, including common law rulings and
determinations, relating to injury to, or the protection of, real or personal
property or human health (except those requirements which, by definition, are
solely the responsibility of employers) or the Environment, including, without
limitation, all valid and lawful requirements of courts and other Government
Agencies pertaining to reporting, licensing, permitting, investigation,
remediation and removal of underground improvements (including, without
limitation, treatment or storage tanks, or water, gas or oil ▇▇▇▇▇), or
emissions, discharges, releases or threatened releases of Hazardous Substances,
chemical substances, pesti-
12
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cides, petroleum or petroleum products, pollutants, contaminants or hazardous
or toxic substances, materials or wastes whether solid, liquid or gaseous in
nature, into the Environment, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances, underground improvements (including, without limitation,
treatment or storage tanks, or water, gas or oil ▇▇▇▇▇), or pollutants,
contaminants or hazardous or toxic substances, materials or wastes, whether
solid, liquid or gaseous in nature.
1.6 "Award" shall mean all compensation, sums or other value
awarded, paid or received by virtue of a total or partial Condemnation of the
Leased Property (after deduction of all reasonable legal fees and other
reasonable costs and expenses, including, without limitation, expert witness
fees, incurred by Landlord, in connection with obtaining any such award).
1.7 "Base Total Hotel Sales" shall mean Total Hotel Sales for
the Base Year; provided, however, that in the event that, with respect to any
Lease Year, or portion thereof, for any reason (including, without limitation,
a casualty or Condemnation) there shall be, for two hundred seventy (270) days
or more in any Lease Year, a reduction in the number of rooms at the Hotel or a
change in the services provided at the Hotel (including, without limitation,
closing of restaurants or the discontinuation of food or beverage services)
from the number of rooms or the services provided during the Base Year, in
determining Additional Rent payable with respect to such Lease Year, Base Total
Hotel Sales shall be reduced as follows: (a) in the event of and for the
duration of a complete closing of the Hotel following application of any
business interruption or Award proceeds collected with respect thereto, Total
Hotel Sales during the applicable period of the Base Year throughout the period
of such closing shall be subtracted from Base Total Hotel Sales; (b) in the
event of a partial closing of the Hotel affecting any number of guest rooms in
the Hotel and following application of any business interruption or Award
proceeds collected with respect thereto, Total Hotel Sales attributable to
guest room occupancy or guest room services at the Hotel during the Base Year
shall be ratably allocated among all guest rooms in service at the Hotel during
the Base Year and all such Total Hotel Sales attributable to rooms no longer in
service shall be subtracted
13
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from Base Total Hotel Sales throughout the period of such closing; (c) in the
event of a closing of a restaurant not, simultaneously with such closing,
replaced by reasonably equivalent dining facilities and following application
of any business interruption or Award proceeds collected with respect thereto,
all Total Hotel Sales attributable to such restaurant during the Base Year
shall be subtracted from Base Total Hotel Sales throughout the period of such
closing; and (d) in the event of any other change in circumstances affecting
the Hotel, Base Total Hotel Sales shall be equitably adjusted in such manner as
Landlord and Tenant shall reasonably agree.
1.8 "Base Year" shall mean, with respect to the 1998 Fiscal
Year, the 1997 calendar year and, with respect to all subsequent years, the
1998 calendar year.
1.9 "Business Day" shall mean any day other than Saturday,
Sunday, or any other day on which banking institutions in The Commonwealth of
Massachusetts or the State of Texas are authorized by law or executive action
to close.
1.10 "Capital Addition" shall mean any renovation, repair or
improvement to the Leased Property (or portion thereof), the cost of which
constitutes a Capital Expenditure.
1.11 "Capital Expenditure" shall mean any expenditure treated
as capital in nature in accordance with GAAP.
1.12 "Claim" shall have the meaning given such term in Article
8.
1.13 "Code" shall mean the Internal Revenue Code of 1986 and,
to the extent applicable, the Treasury Regulations promulgated thereunder, each
as from time to time amended.
1.14 "Commencement Date" shall mean the date of this
Agreement.
1.15 "Condemnation" shall mean (a) the exercise of any
governmental power with respect to the Leased Property, whether by legal
proceedings or otherwise, by a Condemnor of its power of condemnation, (b) a
voluntary sale or transfer of the Leased Property by Landlord to any Condemnor,
either under threat of
14
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condemnation or while legal proceedings for condemnation are pending, or (c) a
taking or voluntary conveyance of all or part of the Leased Property, or any
interest therein, or right accruing thereto or use thereof, as the result or in
settlement of any Condemnation or other eminent domain proceeding affecting the
Leased Property, whether or not the same shall have actually been commenced.
1.16 "Condemnor" shall mean any public or quasi-public
authority, or private corporation or Person, having the power of Condemnation.
1.17 "Consolidated Financials" shall mean, for any Fiscal Year
or other accounting period of Tenant, annual audited and quarterly unaudited
financial statements of Wyndham prepared on a consolidated basis, including
Wyndham's consolidated balance sheet and the related statements of income and
cash flows, all in reasonable detail, and setting forth in comparative form the
corresponding figures for the corresponding period in the preceding Fiscal
Year, and prepared in accordance with GAAP throughout the periods reflected.
1.18 "Date of Taking" shall mean the date the Condemnor has
the right to possession of the Leased Property, or any portion thereof, in
connection with a Condemnation.
1.19 "Default" shall mean any event or condition which with
the giving of notice and/or lapse of time may ripen into an Event of Default.
1.20 "Disbursement Rate" shall mean an annual rate of interest
equal to the greater of, as of the date of determination, (i) the Interest Rate
and (ii) the per annum rate for ten (10) year U.S. Treasury Obligations as
published in The Wall Street Journal plus three hundred fifty (350) basis
points.
1.21 "Distribution" shall mean (a) any declaration or payment
of any dividend (except dividends payable in common stock of Tenant) on or in
respect of any shares of any class of capital stock of Tenant, (b) any
purchase, redemption, retirement or other acquisition of any shares of any
class of capital stock of a corporation, (c) any other distribution on or in
respect of any
15
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shares of any class of capital stock of a corporation, or (d) any return of
capital to shareholders.
1.22 "Encumbrance" shall have the meaning given such term in
Section 20.1.
1.23 "Entity" shall mean any corporation, general or limited
partnership, limited liability company or partnership, stock company or
association, joint venture, association, company, trust, bank, trust company,
land trust, business trust, cooperative, any government or agency or political
subdivision thereof or any other entity.
1.24 "Environment" shall mean soil, surface waters, ground
waters, land, stream, sediments, surface or subsurface strata and ambient air.
1.25 "Environmental Obligation" shall have the meaning given
such term in Section 4.3.1.
1.26 "Environmental Notice" shall have the meaning given such
term in Section 4.3.1.
1.27 "Event of Default" shall have the meaning given such term
in Section 12.1.
1.28 "Excess Total Hotel Sales" shall mean, with respect to
any Lease Year, or portion thereof, the amount of Total Hotel Sales for such
Lease Year, or portion thereof, in excess of Base Total Hotel Sales for the
equivalent period.
1.29 "Extended Terms" shall have the meaning given such term
in Section 2.4.
1.30 "FF&E Estimate" shall have the meaning given such term in
Section 5.1.2(c).
1.31 "FF&E Reserve" shall have the meaning given such term in
Section 5.1.2(a).
1.32 "Financial Officer's Certificate" shall mean, as to any
Person, a certificate of the chief financial officer or chief accounting
officer (or such officers' authorized designee) of
16
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such Person, duly authorized, accompanying the financial statements required to
be delivered by such Person pursuant to Section 17.2, in which such officer
shall certify (a) that such statements have been properly prepared in
accordance with GAAP and are true, correct and complete in all material
respects and fairly present the consolidated financial condition of such Person
at and as of the dates thereof and the results of its and their operations for
the periods covered thereby, and (b) certify that no Event of Default has
occurred and is continuing hereunder.
1.33 "Fiscal Year" shall mean the calendar year.
1.34 "Fixed Term" shall have the meaning given such term in
Section 2.3.
1.35 "Fixtures" shall have the meaning given such term in
Section 2.1(d).
1.36 "GAAP" shall mean generally accepted accounting
principles consistently applied.
1.37 "Government Agencies" shall mean any court, agency,
authority, board (including, without limitation, environmental protection,
planning and zoning), bureau, commission, department, office or instrumentality
of any nature whatsoever of any governmental or quasi-governmental unit of the
United States or the State or any county or any political subdivision of any of
the foregoing, whether now or hereafter in existence, having jurisdiction over
Tenant or the Leased Property or any portion thereof or the Hotel operated
thereon.
1.38 "Hazardous Substances" shall mean any substance:
(a) the presence of which requires or may hereafter
require notification, investigation or remediation under any
federal, state or local statute, regulation, rule, ordinance,
order, action or policy; or
(b) which is or becomes defined as a "hazardous waste",
"hazardous material" or "hazardous substance" or "pollutant" or
"contaminant" under any present or future federal, state or local
statute, regulation, rule or ordi-
17
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▇▇▇▇▇ or amendments thereto including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. et seq.) and the Resource Conservation and
Recovery Act (42 U.S.C. section 6901 et seq.) and the regulations
promulgated thereunder; or
(c) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise
hazardous and is or becomes regulated by any governmental
authority, agency, department, commission, board, agency or
instrumentality of the United States, any state of the United
States, or any political subdivision thereof; or
(d) the presence of which on the Leased Property causes
or materially threatens to cause an unlawful nuisance upon the
Leased Property or to adjacent properties or poses or materially
threatens to pose a hazard to the Leased Property or to the
health or safety of persons on or about the Leased Property; or
(e) without limitation, which contains gasoline, diesel
fuel or other petroleum hydrocarbons or volatile organic
compounds; or
(f) without limitation, which contains polychlorinated
biphenyls (PCBs) or asbestos or urea formaldehyde foam
insulation; or
(g) without limitation, which contains or emits
radioactive particles, waves or material; or
(h) without limitation, constitutes materials which are
now or may hereafter be subject to regulation pursuant to the
Material Waste Tracking Act of 1988, or any Applicable Laws
promulgated by any Government Agencies.
1.39 "Hotel" shall mean the hotel to be operated on the Leased
Property as a full-service Wyndham Hotel as of the Commencement Date.
1.40 "Hotel Mortgage" shall mean any Encumbrance placed upon
the Leased Property in accordance with Article 20.
18
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1.41 "Hotel Mortgagee" shall mean the holder of any Hotel
Mortgage.
1.42 "Immediate Family" shall mean, with respect to any
individual, such individual's spouse, parents, brothers, sisters, children
(natural or adopted), stepchildren, grandchildren, grandparents, parents-in-
law, brothers-in-law, sisters-in-law, nephews and nieces.
1.43 "Impositions" shall mean collectively, all taxes
(including, without limitation, all taxes imposed under the laws of the State,
as such laws may be amended from time to time, and all ad valorem, sales and
use, or similar taxes as the same relate to or are imposed upon Landlord,
Tenant or the business conducted upon the Leased Property), assessments
(including, without limitation, all assessments for public improvements or
benefit, whether or not commenced or completed prior to the date hereof),
water, sewer or other rents and charges, excises, tax levies, fees (including,
without limitation, license, permit, inspection, authorization and similar
fees), and all other governmental charges, in each case whether general or
special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the Leased Property or the business conducted thereon
by Tenant (including all interest and penalties thereon due to any failure in
payment by Tenant), which at any time prior to, during or in respect of the
Term hereof may be assessed or imposed on or in respect of or be a lien upon
(a) Landlord's interest in the Leased Property, (b) the Leased Property or any
part thereof or any rent therefrom or any estate, right, title or interest
therein, or (c) any occupancy, operation, use or possession of, or sales from,
or activity conducted on, or in connection with the Leased Property or the
leasing or use of the Leased Property or any part thereof by Tenant; provided,
however, that nothing contained herein shall be construed to require Tenant to
pay (i) any tax based on net income imposed on Landlord, (ii) any net revenue
tax of Landlord, (iii) any transfer fee or other tax imposed with respect to
the sale, exchange or other disposition by Landlord of the Leased Property or
the proceeds thereof, (iv) any single business, gross receipts tax, transaction
privilege, rent or similar taxes as the same relate to or are imposed upon
Landlord, (v) any interest or penalties imposed on Landlord as a result of the
failure of
19
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Landlord to file any return or report timely and in the form prescribed by law
or to pay any tax or imposition, except to the extent such failure is a result
of a breach by Tenant of its obligations pursuant to Section 3.1.3, (vi) any
Impositions imposed on Landlord that are a result of Landlord not being
considered a "United States person" as defined in Section 7701(a)(30) of the
Code, (vii) any Impositions that are enacted or adopted by their express terms
as a substitute for any tax that would not have been payable by Tenant pursuant
to the terms of this Agreement or (viii) any Impositions imposed as a result of
a breach of covenant or representation by Landlord in any agreement governing
Landlord's conduct or operation or as a result of the gross negligence or
willful misconduct of Landlord.
1.44 "Incidental Documents" shall mean the Pledge and Security
Agreement, the Stock Pledge Agreement and the Limited Guaranty.
1.45 "Indebtedness" shall mean all obligations, contingent or
otherwise, which in accordance with GAAP should be reflected on the obligor's
balance sheet as liabilities.
1.46 "Insurance Requirements" shall mean all terms of any
insurance policy required by this Agreement and all requirements of the issuer
of any such policy and all orders, rules and regulations and any other
requirements of the National Board of Fire Underwriters (or any other body
exercising similar functions) binding upon Landlord, Tenant or the Leased
Property.
1.47 "Interest Rate" shall mean ten percent (10%) per annum.
1.48 "Land" shall have the meaning given such term in Section
2.1(a).
1.49 "Landlord" shall have the meaning given such term in the
preambles to this Agreement and shall also include its permitted successors and
assigns.
1.50 "Landlord Liens" shall mean liens on or against the
Leased Property or any payment of Rent (a) which result from any act of, or any
claim against, Landlord or any owner of a direct or indirect interest in the
Leased Property, or which result from
20
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any violation by Landlord of any terms of this Agreement or the Purchase
Agreement, or (b) which result from liens in favor of any taxing authority by
reason of any tax owed by Landlord or any fee owner of a direct or indirect
interest in the Leased Property; provided, however, that "Landlord Lien" shall
not include any lien resulting from any tax for which Tenant is obligated to
pay or indemnify Landlord against until such time as Tenant shall have already
paid to or on behalf of Landlord the tax or the required indemnity with respect
to the same.
1.51 "Lease Year" shall mean any Fiscal Year or portion
thereof, commencing with the 1997 Fiscal Year, during the Term.
1.52 "Leased Improvements" shall have the meaning given such
term in Section 2.1(b).
1.53 "Leased Intangible Property" shall mean all hotel
licensing agreements and other service contracts, equipment leases, booking
agreements and other arrangements or agreements affecting the ownership,
repair, maintenance, management, leasing or operation of the Leased Property to
which Landlord is a party; all books, records and files relating to the
leasing, maintenance, management or operation of the Leased Property belonging
to Landlord; all transferable or assignable permits, certificates of occupancy,
operating permits, sign permits, development rights and approvals,
certificates, licenses, warranties and guarantees, rights to deposits, trade
names, service marks, telephone exchange numbers identified with the Leased
Property, and all other transferable intangible property, miscellaneous rights,
benefits and privileges of any kind or character belonging to Landlord with
respect to the Leased Property.
1.54 "Leased Personal Property" shall have the meaning given
such term in Section 2.1(e).
1.55 "Leased Property" shall have the meaning given such term
in Section 2.1.
1.56 "Leasehold Mortgage" shall mean a mortgage, a deed to
secure debt, or other security instrument by which the leasehold estate or any
other rights of Tenant (including, without limitation, rights created by this
Agreement) is mortgaged,
21
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conveyed, assigned, or otherwise transferred by Tenant, to secure a loan or
loans obtained, or obligations incurred or guaranteed, by Tenant to a Lending
Institution.
1.57 "Leasehold Mortgagee" shall mean the holder of any
Leasehold Mortgage.
1.58 "Legal Requirements" shall mean all federal, state,
county, municipal and other governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions affecting the
Leased Property or the maintenance, construction, alteration or operation
thereof, whether now or hereafter enacted or in existence, including, without
limitation, (a) all permits, licenses, authorizations, certificates and
regulations necessary to operate the Leased Property for its Permitted Use, and
(b) all covenants, agreements, restrictions and encumbrances contained in any
instruments at any time in force affecting the Leased Property, including those
which may (i) require material repairs, modifications or alterations in or to
the Leased Property or (ii) in any way materially and adversely affect the use
and enjoyment thereof, but excluding any requirements arising as a result of
Landlord's status as a real estate investment trust.
1.59 "Lending Institution" shall mean any United States
insurance company, banking corporation, federally insured commercial or savings
bank, national banking association, United States savings and loan association,
employees' welfare, pension or retirement fund or system, corporate profit
sharing or pension trust, college or university, or real estate investment
trust, including any corporation qualified to be treated for federal tax
purposes as a real estate investment trust, such trust having a net worth of at
least $100,000,000 and shall also mean and include Bankers Trust Company and
any Person participating in a loan syndicate with Bankers Trust Company.
1.60 "Lien" shall mean any mortgage, security interest,
pledge, collateral assignment, or other encumbrance, lien or charge of any
kind, or any transfer of property or assets for the purpose of subjecting the
same to the payment of Indebtedness or performance of any other obligation in
priority to payment of its general creditors.
22
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1.61 "Limited Guaranty" shall mean the Limited Guaranty
Agreement, dated as of the date hereof, made by Wyndham for the benefit of
Landlord.
1.62 "Management Agreement" shall mean the Management
Agreement, dated the date hereof, between Tenant and Wyndham, together with all
amendments, modifications and supplements thereto.
1.63 "Manager" shall mean Wyndham Management Corporation, a
Delaware corporation, and its permitted successors and assigns.
1.64 "Minimum Rent" shall mean, with respect to each calendar
year, the sum of Four Million Four Hundred Thousand and Four Dollars
($4,400,004), allocated as set forth in Exhibit E.
1.65 "Notice" shall mean a notice given in accordance with
Section 22.10.
1.66 "Officer's Certificate" shall mean a certificate signed
by an officer of the certifying Entity duly authorized by the board of
directors of the certifying Entity.
1.67 "Overdue Rate" shall mean, on any date, a per annum rate
of interest equal to the lesser of fifteen percent (15%) and the maximum rate
then permitted under applicable law.
1.68 "Parent" shall mean, with respect to any Person, any
Person which owns directly, or indirectly through one or more Subsidiaries or
Affiliated Persons, five percent (5%) or more of the voting or beneficial
interest in, or otherwise has the right or power (whether by contract, through
ownership of securities or otherwise) to control, such Person.
1.69 "Permitted Encumbrances" shall mean all rights,
restrictions, and easements of record set forth on Schedule B to the owner's
title insurance policy issued to Landlord on the date hereof, plus any other
such encumbrances as may have been consented to in writing by Landlord from
time to time.
1.70 "Permitted Liens" shall mean any Liens granted in
accordance with Section 21.9(a).
23
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1.71 "Permitted Use" shall mean any use of the Leased Property
permitted pursuant to Section 4.1.1.
1.72 "Person" shall mean any individual or Entity, and the
heirs, executors, administrators, legal representatives, successors and assigns
of such Person where the context so admits.
1.73 "Pledge and Security Agreement" shall mean the Pledge and
Security Agreement, dated as of the date hereof, made by Tenant for the benefit
of Landlord.
1.74 "Records" shall have the meaning given such term in
Section 7.2.
1.75 "Rent" shall mean, collectively, the Minimum Rent,
Additional Rent and Additional Charges.
1.76 "SEC" shall mean the Securities and Exchange Commission.
1.77 "Security Deposit" shall mean a cash amount equal to Four
Million Seven Hundred Twenty-Five Thousand Dollars ($4,725,000).
1.78 "State" shall mean the State of Utah.
1.79 "Stock Pledge Agreement" shall mean the Stock Pledge
Agreement, dated as of the date hereof, made by Wyndham to Landlord with
respect to the stock of Tenant.
1.80 "Subordinated Creditor" shall mean any creditor of Tenant
which is a party to a Subordination Agreement in favor of Landlord.
1.81 "Subordination Agreement" shall mean any agreement
executed by a Subordinated Creditor pursuant to which the payment and
performance of Tenant's obligations to such Subordinated Creditor are
subordinated to the payment and performance of Tenant's obligations to Landlord
under this Agreement.
1.82 "Subsidiary" shall mean, with respect to any Person, any
Entity (a) in which such Person owns directly, or indirectly through one or
more Subsidiaries, forty-nine percent (49%) or more of the voting or beneficial
interest or (b) which such
24
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Person otherwise has the right or power to control (whether by contract,
through ownership of securities or otherwise).
1.83 "Successor Landlord" shall have the meaning given such
term in Section 20.2.
1.84 "Tangible Net Worth" shall mean the excess of total
assets over total liabilities, total assets and total liabilities each to be
determined in accordance with GAAP, excluding, however, from the determination
of total assets: (a) goodwill, organizational expenses, research and
development expenses, trademarks, trade names, copyrights, patents, patent
applications, licenses and rights in any thereof, and other similar
intangibles; (b) all deferred charges or unamortized debt discount and expense;
(c) all reserves carried and not deducted from assets; (d) treasury stock and
capital stock, obligations or other securities of, or capital contributions to,
or investments in, any Subsidiary; (e) securities which are not readily
marketable; (f) any write-up in the book value of any asset resulting from a
revaluation thereof subsequent to the Commencement Date; (g) deferred gain; and
(h) any items not included in clauses (a) through (g) above that are treated as
intangibles in conformity with GAAP; and excluding, however, from the
determination of total liabilities deferred fees payable to the Manager in
accordance with the Management Agreement.
1.85 "Tenant" shall have the meaning given such term in the
preambles to this Agreement and shall also include its permitted successors and
assigns.
1.86 "Tenant's Personal Property" shall mean all motor
vehicles and consumable inventory and supplies, furniture, furnishings, movable
walls and partitions, equipment and machinery and all other tangible personal
property of Tenant, if any, acquired by Tenant on and after the date hereof and
located at the Leased Property or used in Tenant's business at the Leased
Property and all modifications, replacements, alterations and additions to such
personal property installed at the expense of Tenant, other than any items
included within the definition of Fixtures or Leased Personal Property.
1.87 "Term" shall mean, collectively, the Fixed Term and the
Extended Terms, to the extent properly exercised pursuant to
25
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the provisions of Section 2.4, unless sooner terminated pursuant to the
provisions of this Agreement.
1.88 "Total Hotel Sales" shall mean, for each Fiscal Year
during the Term, all revenues and receipts of every kind derived by Tenant from
operating the Leased Property and parts thereof, including, but not limited to:
income (from both cash and credit transactions), after deductions for bad
debts, and discounts for prompt or cash payments and refunds, from rental of
rooms, stores, offices, meeting, exhibit or sales space of every kind; license,
lease and concession fees and rentals (not including gross receipts of
licensees, lessees and concessionaires); income from vending machines; health
club membership fees; food and beverage sales; wholesale and retail sales of
merchandise (other than proceeds from the sale of furnishings, fixture and
equipment no longer necessary to the operation of the Hotel, which shall be
deposited in the FF&E Reserve); service charges, to the extent not distributed
to the employees at the Hotel as gratuities; and proceeds, if any, from
business interruption or other loss of income insurance; provided, however,
that Total Hotel Sales shall not include the following: gratuities to Hotel
employees; federal, state or municipal excise, sales, use or similar taxes
collected directly from patrons or guests or included as part of the sales
price of any goods or services; insurance proceeds (other than proceeds from
business interruption or other loss of income insurance); Award proceeds (other
than for a temporary Condemnation); any proceeds from any sale of the Leased
Property or from the refinancing of any debt encumbering the Leased Property;
proceeds from the disposition of furnishings, fixture and equipment no longer
necessary for the operation of the Hotel; interest which accrues on amounts
deposited in the FF&E Reserve; and recoveries against predecessors in title to
the extent such recoveries are compensation attributable to items not otherwise
includable in the calculation of Total Hotel Sales.
1.89 "Uniform System of Accounts" shall mean A Uniform System
of Accounts for Hotels, Eighth Revised Edition, 1986, as published by the Hotel
Association of New York City, as the same may be further revised from time to
time.
1.90 "Unsuitable for Its Permitted Use" shall mean a state or
condition of the Hotel such that (a) following any damage or destruction
involving the Hotel, the Hotel cannot be operated in
26
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the good faith judgment of Tenant on a commercially practicable basis for its
Permitted Use and it cannot reasonably be expected to be restored to
substantially the same condition as existed immediately before such damage or
destruction, and as otherwise required by Section 10.2.4, within twelve (12)
months following such damage or destruction or such shorter period of time as
to which business interruption insurance is available to cover Rent and other
costs related to the Leased Property following such damage or destruction, or
(b) as the result of a partial taking by Condemnation, the Hotel cannot be
operated, in the good faith judgment of Tenant or the Manager on a commercially
practicable basis for its Permitted Use.
1.91 "Work" shall have the meaning given such term in Section
10.2.4.
1.92 "Wyndham" shall mean Wyndham Hotel Corporation, a
Delaware corporation.
ARTICLE 2
LEASED PROPERTY AND TERM
2.1 Leased Property. Upon and subject to the terms and
conditions hereinafter set forth, Landlord leases to Tenant and Tenant leases
from Landlord all of Landlord's right, title and interest in and to all of the
following (collectively, the "Leased Property"):
(a) those certain tracts, pieces and parcels of land, as
more particularly described in Exhibit A, attached hereto and
made a part hereof (the "Land");
(b) all buildings, structures and other improvements of
every kind including, but not limited to, alleyways and
connecting tunnels, sidewalks, utility pipes, conduits and lines
(on-site and off-site), parking areas and roadways appurtenant to
such buildings and structures presently situated upon the Land
(collectively, the "Leased Improvements");
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(c) all easements, rights and appurtenances relating to
the Land and the Leased Improvements;
(d) all equipment, machinery, fixtures, and other items
of property, now or hereafter permanently affixed to or
incorporated into the Leased Improvements, including, without
limitation, all furnaces, boilers, heaters, electrical equipment,
heating, plumbing, lighting, ventilating, refrigerating,
incineration, air and water pollution control, waste disposal,
air-cooling and air-conditioning systems and apparatus, sprinkler
systems and fire and theft protection equipment, all of which, to
the maximum extent permitted by law, are hereby deemed by the
parties hereto to constitute real estate, together with all
replacements, modifications, alterations and additions thereto,
but specifically excluding all items included within the category
of Tenant's Personal Property (collectively, the "Fixtures");
(e) all machinery, equipment, furniture, furnishings,
moveable walls or partitions, computers or trade fixtures or
other personal property of any kind or description used or useful
in Tenant's business on or in the Leased Improvements, and
located on or in the Leased Improvements, and all modifications,
replacements, alterations and additions to such personal
property, except items, if any, included within the category of
Fixtures, but specifically excluding all items included within
the category of Tenant's Personal Property (collectively, the
"Leased Personal Property");
(f) all of the Leased Intangible Property; and
(g) any and all leases of space (including any security
deposits held by Tenant or the Manager pursuant thereto) in the
Leased Improvements to tenants thereof.
2.2 Condition of Leased Property. Tenant acknowledges receipt
and delivery of possession of the Leased Property and Tenant accepts the Leased
Property in its "as is" condition, subject to the rights of parties in
possession, the existing state of title, including all covenants, conditions,
restrictions, reservations, mineral leases, easements and other
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matters of record or that are visible or apparent on the Leased Property, all
applicable Legal Requirements, the lien of any financing instruments, mortgages
and deeds of trust existing prior to the Commencement Date or permitted by the
terms of this Agreement, and such other matters which would be disclosed by an
inspection of the Leased Property and the record title thereto or by an
accurate survey thereof. TENANT REPRESENTS THAT IT HAS INSPECTED THE LEASED
PROPERTY AND ALL OF THE FOREGOING AND HAS FOUND THE CONDITION THEREOF
SATISFACTORY AND IS NOT RELYING ON ANY REPRESENTATION OR WARRANTY OF LANDLORD
OR LANDLORD'S AGENTS OR EMPLOYEES WITH RESPECT THERETO AND TENANT WAIVES ANY
CLAIM OR ACTION AGAINST LANDLORD IN RESPECT OF THE CONDITION OF THE LEASED
PROPERTY. LANDLORD MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN
RESPECT OF THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS
FOR USE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS
TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT
BEING AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT. To the maximum
extent permitted by law, however, Landlord hereby assigns to Tenant all of
Landlord's rights to proceed against any predecessor in title for breaches of
warranties or representations or for latent defects in the Leased Property.
Landlord shall fully cooperate with Tenant in the prosecution of any such
claims, in Landlord's or Tenant's name, all at Tenant's sole cost and expense.
Tenant shall indemnify, defend, and hold harmless Landlord from and against any
loss, cost, damage or liability (including reasonable attorneys' fees) incurred
by Landlord in connection with such cooperation.
2.3 Fixed Term. The initial term of this Agreement (the "Fixed
Term ") shall commence on the Commencement Date and shall expire December 31,
2012.
2.4 Extended Term. Provided that no Event of Default shall have
occurred and be continuing, this Agreement shall be in full force and effect,
the Term shall be automatically extended for four (4) consecutive renewal terms
of twelve (12) years each (collectively, the "Extended Terms"), unless Tenant
shall give Landlord Notice, not later than two (2) years prior to the scheduled
expiration of the then current Term of this Agreement (Fixed or Extended, as
the case may be), that Tenant elects not so to extend the term of this
Agreement (and time shall be of the essence with respect to the giving of such
Notice).
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Each Extended Term shall commence on the day succeeding the expiration
of the Fixed Term or the preceding Extended Term, as the case may be. All of
the terms, covenants and provisions of this Agreement shall apply to each such
Extended Term, except that Tenant shall have no right to extend the Term beyond
the expiration of the Extended Terms. If Tenant shall give Notice that it
elects not to extend the Term in accordance with this Section 2.4, this
Agreement shall automatically terminate at the end of the Term then in effect
and Tenant shall have no further option to extend the Term of this Agreement.
Otherwise, the extension of this Agreement shall be automatically effected
without the execution of any additional documents; it being understood and
agreed, however, that Tenant and Landlord shall execute such documents and
agreements as either party shall reasonably require to evidence the same.
ARTICLE 3
RENT
3.1 Rent. Tenant shall pay, in lawful money of the United
States of America which shall be legal tender for the payment of public and
private debts, without offset, abatement, demand or deduction (unless otherwise
expressly provided in this Agreement), Minimum Rent and Additional Rent to
Landlord and Additional Charges to the party to whom such Additional Charges
are payable, during the Term. All payments to Landlord shall be made by wire
transfer of immediately available federal funds or by other means acceptable to
Landlord in its sole discretion. Rent for any partial Accounting Period shall
be prorated on a per diem basis.
3.1.1 Minimum Rent.
(a) Minimum Rent shall be paid in advance on the first
Business Day of each month; provided, however, that the first
payment of Minimum Rent shall be payable on the Commencement
Date (and, if applicable, such payment shall be prorated as
provided in the last sentence of the first paragraph of
Section 3.1).
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(b) Adjustments of Minimum Rent Following
Disbursements Under Sections 5.1.3(b), 10.2.4 or 11.2.
Effective on the date of each disbursement to pay for the
cost of any repairs, maintenance, renovations or
replacements pursuant to Sections 5.1.3(b), 10.2.4 or
11.2, the Minimum Rent shall be increased by a per annum
amount equal to the Disbursement Rate times the amount so
disbursed. If any such disbursement is made during any
month on a day other than the first day of a month, Tenant
shall pay to Landlord on the first day of the immediately
following month (in addition to the amount of Minimum Rent
payable with respect to such month, as adjusted pursuant
to this paragraph (b)) the amount by which Minimum Rent
for the preceding month, as adjusted for such disbursement
on a per diem basis, exceeded the amount of Minimum Rent
paid by Tenant for such preceding month.
(c) Adjustments of Minimum Rent Following
Disbursements Under Section 6.2. Effective on the date of
each disbursement to pay for the cost of any repairs,
maintenance, renovations or replacements pursuant to
Section 6.2, the Minimum Rent shall be increased by a per
annum amount equal to the Interest Rate times the amount
so disbursed. If any such disbursement is made during any
month on a day other than the first day of a month, Tenant
shall pay to Landlord on the first day of the immediately
following month (in addition to the amount of Minimum Rent
payable with respect to such month, as adjusted pursuant
to this paragraph (c)) the amount by which Minimum Rent
for the preceding month, as adjusted for such
disbursement on a per diem basis, exceeded the amount of
Minimum Rent paid by Tenant for such preceding month.
(d) Credits Against Minimum Rent. On the date
on which Minimum Rent is payable pursuant to this
Agreement, Landlord shall credit against the Minimum Rent
then due accrued interest on the Guaranty Deposit (as
defined therein) pursuant to the Guaranty.
3.1.2 Additional Rent.
(a) Amount. Commencing with the Second Lease
Year, for each Lease Year or portion thereof, Tenant shall
pay an
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aggregate amount of additional rent ("Additional Rent")
with respect to such Lease Year, pursuant to this
Agreement, in an amount, not less than zero, equal to five
percent (5%) of Excess Total Hotel Sales for the second
Lease Year and (y) eight percent (8%) of Excess Total
Hotel Sales for the third Lease Year and each Lease Year
thereafter.
(b) Monthly Installments. Commencing with the
Second Lease Year, installments of Additional Rent for
each Lease Year or portion thereof shall be calculated and
paid monthly in arrears, together with an Officer's
Certificate setting forth the calculation of Additional
Rent due and payable for such month.
(c) Reconciliation of Additional Rent. In addition,
on or before April 30, of each year, commencing April 30,
1998, Tenant shall deliver to Landlord an Officer's
Certificate setting forth the Total Hotel Sales for the
Leased Property for such preceding Lease Year, together
with an audit of Tenant's revenues for the preceding Lease
Year, conducted by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Co., or another
"Big Six", so-called, firm of independent certified public
accountants proposed by Tenant and approved by Landlord
(which approval shall not be unreasonably withheld or
delayed).
If the annual Additional Rent for such preceding Lease
Year as shown in the Officer's Certificate exceeds the amount
previously paid with respect thereto by Tenant, Tenant shall pay
such excess to Landlord at such time as the Officer's Certificate
is delivered, together with interest at the Interest Rate, which
interest shall accrue from the close of such preceding Lease Year
until the date that such certificate is required to be delivered
and, thereafter, such interest shall accrue at the Overdue Rate,
until the amount of such difference shall be paid or otherwise
discharged. If the annual Additional Rent for such preceding
Lease Year as shown in the Officer's Certificate is less than the
amount previously paid with respect thereto by Tenant, provided
that no Event of Default shall have occurred and be continuing,
Landlord shall grant Tenant a credit against the Rent next coming
due in the amount of such difference, together with interest at
the Interest Rate, which interest shall accrue from the date of
payment by Tenant until the date such credit is applied or paid,
as the case may be. If such credit cannot be made because the
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Term has expired prior to application in full thereof, provided no Event
of Default has occurred and is continuing, Landlord shall pay the
unapplied balance of such credit to Tenant, together with interest at
the Interest Rate, which interest shall accrue from the date of payment
by Tenant until the date of payment by Landlord.
(d) Confirmation of Additional Rent.
Tenant shall utilize, or cause to be utilized, an
accounting system for the Leased Property in accordance
with its usual and customary practices and in accordance
with GAAP, which will accurately record all Total Hotel
Sales and Tenant shall retain, for at least three (3)
years after the expiration of each Lease Year, reasonably
adequate records conforming to such accounting system
showing all Total Hotel Sales for such Lease Year.
Landlord, at its own expense, except as provided
hereinbelow, shall have the right, exercisable by Notice
to Tenant within one (1) year after receipt of the
applicable Officer's Certificate, by its accountants or
representatives to audit the information set forth in the
Officer's Certificate referred to in subparagraph (c)
above and, in connection with such audits, to examine
Tenant's and the Manager's books and records with respect
thereto (including supporting data and sales and excise
tax returns). If any such audit discloses a deficiency in
the payment of Additional Rent and, either Tenant agrees
with the result of such audit or the matter is otherwise
compromised with Landlord, Tenant shall forthwith pay to
Landlord the amount of the deficiency, as finally agreed
or determined, together with interest at the Interest
Rate, from the date such payment should have been made to
the date of payment thereof. If such deficiency, as
agreed upon or compromised as aforesaid, is more than four
percent (4%) of the Total Hotel Sales reported by Tenant
for such Lease Year and, as a result, Landlord did not
receive at least ninety-five percent (95%) of the
Additional Rent payable with respect to such Lease Year,
Tenant shall pay the reasonable cost of such audit and
examination. If any such audit discloses that Tenant paid
more Additional Rent for any Lease Year than was due
hereunder, and either Landlord agrees with the result of
such audit or the matter is otherwise determined, provided
no Event of Default has occurred and is continuing,
Landlord shall grant Tenant a
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credit equal to the amount of such overpayment against the Rent next
coming due in the amount of such difference, as finally agreed or
determined, together with interest at the Interest Rate, which interest
shall accrue from the time of payment by Tenant until the date such
credit is applied or paid, as the case may be. If such a credit cannot
be made because the Term has expired before the credit can be applied in
full, provided no Event of Default has occurred and is continuing,
Landlord shall pay the unapplied balance of such credit to Tenant,
together with interest at the Interest Rate, which interest shall accrue
from the date of payment by Tenant until the date of payment from
Landlord.
Any proprietary information obtained by Landlord with respect to Tenant
pursuant to the provisions of this Agreement shall be treated as confidential,
except that such information may be used, subject to appropriate
confidentiality safeguards, in any litigation between the parties and except
further that Landlord may disclose such information to its prospective lenders,
provided that Landlord shall direct and obtain the agreement of such lenders to
maintain such information as confidential. The obligations of Tenant and
Landlord contained in this Section 3.1.2 shall survive the expiration or
earlier termination of this Agreement.
3.1.3 Additional Charges. In addition to the Minimum Rent and
Additional Rent payable hereunder, Tenant shall pay to the appropriate parties
and discharge as and when due and payable the following (collectively,
"Additional Charges"):
(a) Impositions. Subject to Article 8 relating to permitted
contests, Tenant shall pay, or cause to be paid, all Impositions before
any fine, penalty, interest or cost (other than any opportunity cost as
a result of a failure to take advantage of any discount for early
payment) may be added for non-payment, such payments to be made directly
to the taxing authorities where feasible, and shall promptly, upon
request, furnish to Landlord copies of official receipts or other
reasonably satisfactory proof evidencing such payments. If any such
Imposition may, at the option of the taxpayer, lawfully be paid in
installments (whether or not interest shall accrue on the unpaid balance
of such Imposition), Tenant may exercise the option to pay the same
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(and any accrued interest on the unpaid balance of such Imposition) in
installments and, in such event, shall pay such installments during the
Term as the same become due and before any fine, penalty, premium,
further interest or cost may be added thereto. Landlord, at its
expense, shall, to the extent required or permitted by Applicable Law,
prepare and file all tax returns and pay all taxes due in respect of
Landlord's net income, gross receipts, sales and use, single business,
transaction privilege, rent, ad valorem, franchise taxes and taxes on
its capital stock, and Tenant, at its expense, shall, to the extent
required or permitted by Applicable Laws and regulations, prepare and
file all other tax returns and reports in respect of any Imposition as
may be required by Government Agencies. Provided no Event of Default
shall have occurred and be continuing, if any refund shall be due from
any taxing authority in respect of any Imposition paid by Tenant, the
same shall be paid over to or retained by Tenant. Landlord and Tenant
shall, upon request of the other, provide such data as is maintained by
the party to whom the request is made with respect to the Leased
Property as may be necessary to prepare any required returns and
reports. In the event Government Agencies classify any property covered
by this Agreement as personal property, Tenant shall file all personal
property tax returns in such jurisdictions where it may legally so file.
Each party shall, to the extent it possesses the same, provide the
other, upon request, with cost and depreciation records necessary for
filing returns for any property so classified as personal property.
Where Landlord is legally required to file personal property tax returns
for property covered by this Agreement, Landlord shall provide Tenant
with copies of assessment notices in sufficient time for Tenant to file
a protest. All Impositions assessed against such personal property
shall be (irrespective of whether Landlord or Tenant shall file the
relevant return) paid by Tenant not later than the last date on which
the same may be made without interest or penalty.
Landlord shall give prompt Notice to Tenant of all Impositions
payable by Tenant hereunder of which Landlord at any time has knowledge;
provided, however, that Landlord's failure to give any such notice shall
in no way diminish Tenant's obligation hereunder to pay such
Impositions,
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unless such failure continues for more than twelve (12)
months after the date Landlord learned of such Imposition.
(b) Utility Charges. Tenant shall pay
or cause to be paid all charges for electricity, power,
gas, oil, water and other utilities used in connection
with the Leased Property.
(c) Insurance Premiums. Tenant shall
pay or cause to be paid all premiums for the insurance
coverage required to be maintained pursuant to Article 9.
(d) Other Charges. Tenant shall pay or
cause to be paid all other amounts, liabilities and
obligations with respect to the Leased Property and this
Agreement, including, without limitation, all amounts
payable under any equipment leases and all agreements to
indemnify Landlord under Sections 4.3.2 and 9.7.
(e) Reimbursement for Additional
Charges. If Tenant pays or causes to be paid property
taxes or similar or other Additional Charges attributable
to periods after the end of the Term, whether upon
expiration or sooner termination of this Agreement (other
than termination by reason of an Event of Default), Tenant
may, within a reasonable time after the end of the Term,
provide Notice to Landlord of its estimate of such
amounts. Landlord shall promptly reimburse Tenant for all
payments of such taxes and other similar Additional
Charges that are attributable to any period after the Term
of this Agreement.
3.2 Late Payment of Rent, Etc. If any installment of
Minimum Rent, Additional Rent or Additional Charges (but only as
to those Additional Charges which are payable directly to
Landlord) shall not be paid within ten (10) days after its due
date, Tenant shall pay Landlord, on demand, as Additional
Charges, a late charge (to the extent permitted by law) computed
at the Overdue Rate on the amount of such installment, from the
due date of such installment to the date of payment thereof. To
the extent that Tenant pays any Additional Charges directly to
Landlord or any Hotel Mortgagee pursuant to any requirement of
this Agreement, Tenant shall be relieved of its obligation to pay
such Additional Charges to the Entity to which they would
otherwise be due. If any payments due from Landlord to Tenant
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shall not be paid within ten (10) days after its due date, Landlord shall pay
to Tenant, on demand, a late charge (to the extent permitted by law) computed
at the Overdue Rate on the amount of such installment from the due date of such
installment to the date of payment thereof.
In the event of any failure by Tenant to pay any Additional Charges when
due, Tenant shall promptly pay and discharge, as Additional Charges, every
fine, penalty, interest and cost which is added for non-payment or late payment
of such items. Landlord shall have all legal, equitable and contractual
rights, powers and remedies provided either in this Agreement or by statute or
otherwise in the case of non-payment of the Additional Charges as in the case
of non-payment of the Minimum Rent and Additional Rent.
3.3 Net Lease. The Rent shall be absolutely net to Landlord
so that this Agreement shall yield to Landlord the full amount of the
installments or amounts of the Rent throughout the Term, subject to any other
provisions of this Agreement which expressly provide otherwise, including those
provisions for adjustment or abatement of such Rent.
3.4 No Termination, Abatement, Etc. Except as otherwise
specifically provided in this Agreement, each of Landlord and Tenant, to the
maximum extent permitted by law, shall remain bound by this Agreement in
accordance with its terms and shall not take any action without the consent of
the other to modify, surrender or terminate this Agreement. In addition,
except as otherwise expressly provided in this Agreement, Tenant shall not
seek, or be entitled to, any abatement, deduction, deferment or reduction of
the Rent, or set-off against the Rent, nor shall the respective obligations of
Landlord and Tenant be otherwise affected by reason of (a) any damage to or
destruction of the Leased Property or any portion thereof from whatever cause
or any Condemnation, (b) the lawful or unlawful prohibition of, or restriction
upon, Tenant's use of the Leased Property, or any portion thereof, or the
interference with such use by any Person or by reason of eviction by paramount
title; (c) any claim which Tenant may have against Landlord by reason of any
default (other than a monetary default) or breach of any warranty by Landlord
under this Agreement or any other agreement between Landlord and Tenant, or to
which Landlord and Tenant are parties; (d) any
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bankruptcy, insolvency, reorganization, composition, readjustment, liquidation,
dissolution, winding up or other proceedings affecting Landlord or any assignee
or transferee of Landlord; or (e) for any other cause whether similar or
dissimilar to any of the foregoing (other than a monetary default by Landlord);
provided, however, that the foregoing shall not apply or be construed to
restrict Tenant's rights in the event of any act or omission by Landlord
constituting gross negligence or willful misconduct. Except as otherwise
specifically provided in this Agreement, Tenant hereby waives all rights
arising from any occurrence whatsoever, which may now or hereafter be conferred
upon it by law (a) to modify, surrender or terminate this Agreement or quit or
surrender the Leased Property or any portion thereof, or (b) which would
entitle Tenant to any abatement, reduction, suspension or deferment of the Rent
or other sums payable or other obligations to be performed by Tenant hereunder.
The obligations of each party hereunder shall be separate and independent
covenants and agreements, and the Rent and all other sums payable by Tenant
hereunder shall continue to be payable in all events unless the obligations to
pay the same shall be terminated pursuant to the express provisions of this
Agreement. In any instance where, after the occurrence of an Event of Default,
Landlord retains funds which, but for the occurrence of such Event of Default,
would be payable to Tenant, Landlord shall refund such funds to Tenant to the
extent the amount thereof exceeds the amount necessary to compensate Landlord
for any cost, loss or damage incurred in connection with such Event of Default.
3.5 Security Deposit. Upon execution of this Agreement,
Tenant shall deposit with Landlord the Security Deposit. The Security Deposit
shall be held by Landlord as security for the faithful observance and
performance by Tenant of all the terms, covenants and conditions of this
Agreement by Tenant to be observed and performed. The Security Deposit shall
not be mortgaged, assigned, transferred or otherwise encumbered by Tenant
without the prior written consent of Landlord and any such act on the part of
Tenant without first having obtained Landlord's consent (which consent may be
given or withheld by Landlord in Landlord's sole and absolute discretion) shall
be without force and effect and shall not be binding upon Landlord; provided,
however, that such consent shall not be required to the extent permitted by
Article 19.
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If any Event of Default shall occur and be continuing, Landlord may, at
its option and without prejudice to any other remedy which Landlord may have on
account thereof, appropriate and apply the entire Security Deposit or so much
thereof as may be necessary to compensate Landlord toward the payment of the
Rent or other sums or loss or damage sustained by Landlord due to such breach
by Tenant and Tenant shall, upon demand, restore the Security Deposit to the
original sum deposited. It is understood and agreed that the Security Deposit
is not to be considered as prepaid rent, nor shall damages be limited to the
amount of the Security Deposit. Should Tenant comply with all the terms,
covenants and conditions of this Agreement, the Security Deposit shall be
returned in full to Tenant at the end of the Term. Landlord shall have no
obligation to pay interest on the Security Deposit and shall have the right to
commingle the same with Landlord's other funds. If Landlord conveys Landlord's
interest under this Agreement, the Security Deposit, or any part thereof not
previously applied, may be turned over by Landlord to Landlord's grantee, and,
if so turned over, Tenant shall look solely to such grantee for proper
application of the Security Deposit in accordance with the terms of this
Section 3.5 and the return thereof in accordance herewith. No Hotel Mortgagee
shall be responsible to Tenant for the return or application of the Security
Deposit, whether or not it succeeds to the position of Landlord hereunder,
unless the Security Deposit shall have been received in hand by such holder.
In the event of bankruptcy or other creditor-debtor proceedings against
Tenant, the Security Deposit shall be deemed to be applied first to the payment
of the Rent and other charges due Landlord for all periods prior to the filing
of such proceedings.
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ARTICLE 4
USE OF THE LEASED PROPERTY
4.1 Permitted Use.
4.1.1 Permitted Use.
(a) Tenant shall, at all times during
the Term and at any other time that Tenant shall be in
possession of the Leased Property, continuously use and
operate, and cause the Manager to use and operate, the
Leased Property as a Wyndham Hotel and any uses incidental
thereto. Tenant shall not use (and shall direct the
Manager not to use) the Leased Property or any portion
thereof for any other use without the prior written
consent of Landlord. No use shall be made or permitted to
be made of the Leased Property and no acts shall be done
thereon which will cause the cancellation of any insurance
policy covering the Leased Property or any part thereof
(unless another adequate policy is available), nor shall
Tenant sell or otherwise provide or permit to be kept,
used or sold in or about the Leased Property any article
which may be prohibited by law or by the standard form of
fire insurance policies, or any other insurance policies
required to be carried hereunder, or fire underwriter's
regulations. Tenant shall, at its sole cost (except as
expressly provided in Section 5.1.3(b)), comply (or direct
the Manager to comply) with all Insurance Requirements.
Tenant shall not take or omit to take (and Tenant shall
direct the Manager not to take or omit to take) any
action, the taking or omission of which materially impairs
the value or the usefulness of the Leased Property or any
part thereof for its Permitted Use.
(b) In the event that, in the reasonable
determination of Tenant, it shall no longer be
economically practical to operate the Leased Property as a
Wyndham Hotel, Tenant shall give Landlord Notice thereof,
which Notice shall set forth in reasonable detail the
reasons therefor. Thereafter, Landlord and Tenant shall
negotiate in good faith to agree on an alternative use for
the Leased Property or substitution of one or more other
properties for the Leased Property, appropriate
adjustments to the Additional Rent and other related
matters; provided, however, in no such event shall the
Minimum Rent be reduced or abated.
4.1.2 Necessary Approvals. Tenant shall proceed
with all due diligence and exercise best efforts to obtain and
maintain, and shall direct the Manager to obtain and maintain,
all approvals necessary to use and operate, for its Permitted
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Use, the Leased Property and the Hotel located thereon under applicable law.
4.1.3 Lawful Use, Etc. Tenant shall not, and shall
direct the Manager not to, use or suffer or permit the use of the Leased
Property or Tenant's Personal Property, if any, for any unlawful purpose.
Tenant shall not, and shall direct the Manager not to, commit or suffer to be
committed any waste on the Leased Property, or in the Hotel, nor shall Tenant
cause or permit any unlawful nuisance thereon or therein. Tenant shall not,
and shall direct the Manager not to, suffer nor permit the Leased Property, or
any portion thereof, to be used in such a manner as (i) might reasonably impair
Landlord's title thereto or to any portion thereof, or (ii) may reasonably
allow a claim or claims for adverse usage or adverse possession by the public,
as such, or of implied dedication of the Leased Property or any portion
thereof.
4.2 Compliance with Legal/Insurance Requirements, Etc.
Subject to the provisions of Article 8 and Section 5.1.3(b), Tenant, at its
sole expense, shall (or shall direct the Manager to) (i) comply with all
material Legal Requirements and Insurance Requirements in respect of the use,
operation, maintenance, repair, alteration and restoration of the Leased
Property and with the terms and conditions of any ground lease affecting the
Leased Property and (ii) procure, maintain and comply with all appropriate
licenses, and other authorizations and agreements required for any use of the
Leased Property and Tenant's Personal Property, if any, then being made, and
for the proper erection, installation, operation and maintenance of the Leased
Property or any part thereof.
4.3 Environmental Matters.
4.3.1 Restriction on Use, Etc. During the Term
and any other time that Tenant shall be in possession of the Leased Property,
Tenant shall not (and shall direct the Manager not to) store, spill upon,
dispose of or transfer to or from the Leased Property any Hazardous Substance,
except in compliance with all Applicable Laws. During the Term and any other
time that Tenant shall be in possession of the Leased Property, Tenant shall
maintain (and shall direct the Manager to maintain) the Leased Property at all
times free of any Hazardous Substance (except in
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compliance with all Applicable Laws). Tenant shall promptly: (a) upon receipt
of notice or knowledge and shall direct the Manager upon receipt of notice or
knowledge promptly to, notify Landlord in writing of any material change in the
nature or extent of Hazardous Substances at the Leased Property, (b) transmit
to Landlord a copy of any Community Right to Know report which is required to
be filed by Tenant or the Manager with respect to the Leased Property pursuant
to ▇▇▇▇ Title III or any other Applicable Law, (c) transmit to Landlord copies
of any citations, orders, notices or other governmental communications received
by Tenant or the Manager or their respective agents or representatives with
respect thereto (collectively, "Environmental Notice"), which Environmental
Notice requires a written response or any action to be taken and/or if such
Environmental Notice gives notice of and/or presents a material risk of any
material violation of any Applicable Law and/or presents a material risk of any
material cost, expense, loss or damage (an "Environmental Obligation"), (d)
observe and comply (and direct the Manager to observe and comply) with all
Applicable Laws relating to the use, maintenance and disposal of Hazardous
Substances and all orders or directives from any official, court or agency of
competent jurisdiction relating to the use or maintenance or requiring the
removal, treatment, containment or other disposition thereof, and (e) pay or
otherwise dispose of any fine, charge or Imposition related thereto, unless
Tenant or the Manager shall contest the same in good faith and by appropriate
proceedings and the right to use and the value of the Leased Property is not
materially and adversely affected thereby.
If, at any time prior to the termination of this Agreement, Hazardous
Substances (other than those maintained in accordance with Applicable Laws) are
discovered on the Leased Property, subject to Tenant's and the Manager's right
to contest the same in accordance with Article 8, Tenant shall take (and shall
direct the Manager to take) all actions and incur any and all expenses, as are
required by any Government Agency and by Applicable Law, (i) to clean up and
remove from and about the Leased Property all Hazardous Substances thereon,
(ii) to contain and prevent any further release or threat of release of
Hazardous Substances on or about the Leased Property and (iii) to use good
faith efforts to eliminate any further release or threat of release of
Hazardous Substances on or about the Leased Property.
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4.3.2 Indemnification of Landlord. Tenant shall
protect, indemnify and hold harmless Landlord and each Hotel Mortgagee, their
trustees, officers, agents, employees and beneficiaries, and any of their
respective successors or assigns with respect to this Agreement (collectively,
the "Indemnitees" and, individually, an "Indemnitee") for, from and against any
and all debts, liens, claims, causes of action, administrative orders or
notices, costs, fines, penalties or expenses (including, without limitation,
reasonable attorney's fees and expenses) imposed upon, incurred by or asserted
against any Indemnitee resulting from, either directly or indirectly, the
presence during the Term (or any other time Tenant shall be in possession of
the Leased Property) in, upon or under the soil or ground water of the Leased
Property or any properties surrounding the Leased Property of any Hazardous
Substances in violation of any Applicable Law or otherwise, provided that any
of the foregoing arises by reason of any failure by Tenant, the Manager or any
Person claiming by, through or under Tenant or the Manager to perform or comply
with any of the terms of this Section 4.3, except to the extent the same arise
from the acts or omissions of Landlord or any other Indemnitee or during any
period that Landlord or a Person designated by Landlord (other than Tenant) is
in possession of the Leased Property. Tenant's duty herein includes, but is
not limited to, costs associated with personal injury or property damage claims
as a result of the presence prior to the expiration or sooner termination of
the Term and the surrender of the Leased Property to Landlord in accordance
with the terms of this Agreement of Hazardous Substances in, upon or under the
soil or ground water of the Leased Property in violation of any Applicable Law.
Upon Notice from Landlord and any other of the Indemnitees, Tenant shall
undertake the defense, at Tenant's sole cost and expense, of any
indemnification duties set forth herein, in which event, Tenant shall not be
liable for payment of any duplicative attorneys' fees incurred by any
Indemnitee.
Tenant shall, upon demand, pay to Landlord, as an Additional Charge, any
cost, expense, loss or damage (including, without limitation, reasonable
attorneys' fees) reasonably incurred by Landlord and arising from a failure of
Tenant to observe and
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perform the requirements of this Section 4.3, which amounts shall bear interest
from the date ten (10) days after written demand therefor is given to Tenant
until paid by Tenant to Landlord at the Overdue Rate.
4.3.3 Survival. The provisions of this Section
4.3 shall survive the expiration or sooner termination of this Agreement.
ARTICLE 5
MAINTENANCE AND REPAIRS
5.1 Maintenance and Repair.
5.1.1 Tenant's General Obligations. Tenant shall, at
its sole cost and expense (except as expressly provided in Sections 5.1.3(b),
10.2.3 or 11.2), or shall direct the Manager to, keep the Leased Property and
all private roadways, sidewalks and curbs appurtenant thereto (and Tenant's
Personal Property) in good order and repair, reasonable wear and tear excepted
(whether or not the need for such repairs occurs as a result of Tenant's or the
Manager's use, any prior use, the elements or the age of the Leased Property or
Tenant's Personal Property or any portion thereof), and shall promptly make (or
cause the Manager to make) all necessary and appropriate repairs and
replacements thereto of every kind and nature, whether interior or exterior,
structural or nonstructural, ordinary or extraordinary, foreseen or unforeseen
or arising by reason of a condition existing prior to the commencement of the
Term (concealed or otherwise). All repairs shall be made in a good,
workmanlike manner, consistent with the Manager's and industry standards for
like hotels in like locales, in accordance with all applicable federal, state
and local statutes, ordinances, by-laws, codes, rules and regulations relating
to any such work. Tenant shall not take or omit to take (and shall direct the
Manager not to take or omit to take) any action, the taking or omission of
which would materially and adversely impair the value or the usefulness of the
Leased Property or any part thereof for its Permitted Use. Tenant's
obligations under this Section 5.1.1(a) shall be limited in the event of any
casualty or Condemnation as set forth in Sections 10.2 and 11.2 and also as set
forth in Section 5.1.3(b) and
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Tenant's obligations with respect to Hazardous Substances are as set forth in
Section 4.3.
5.1.2 FF&E Reserve.
(a) Upon execution of this Agreement, Tenant
shall establish a reserve account (the "FF&E Reserve") in a bank
designated by Tenant and approved by Landlord. The purpose of
the FF&E Reserve is to cover the cost of:
(i) Replacements and renewals to the Hotel's
furnishings, fixtures and equipment;
(ii) Certain routine repairs and maintenance to the
Hotel building which are normally capitalized under
GAAP such as exterior and interior repainting,
resurfacing building walls, floors, roofs and
parking areas, and replacing folding walls and the
like; and
(iii) Major repairs, alterations, improvements, renewals
or replacements to the Hotel's buildings'
structure, roof, or exterior facade, or to its
mechanical, electrical, heating, ventilating, air
conditioning, plumbing or vertical transportation
systems.
Tenant agrees that it will, from time to time,
execute such reasonable documentation as may be requested by
Landlord and any Hotel Mortgagee to assist Landlord and such
Hotel Mortgagee in establishing or perfecting its security
interest in Landlord's residual interest in the funds which are
in the FF&E Reserve, it being acknowledged and agreed that the
funds in the FF&E Reserve are the property of Tenant; provided,
however, that no such documentation shall contain any amendment
or modification of any of the provisions of this Agreement. It
is understood and agreed that, during the Term, the FF&E Reserve
may not be applied against debts secured by a Hotel Mortgage nor
shall any Hotel Mortgagee have the right to approve the release
of such funds pursuant to the terms of this Agreement unless and
until Landlord shall default in its obligations to such Hotel
Mortgagee.
(b) Throughout the Term, Tenant shall transfer
(as of the end of each month of the Term) into the FF&E Reserve an
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amount equal to five percent (5%) of Total Hotel Sales for
such month. Together with the documentation provided to
Landlord pursuant to Section 3.1.2(c), Tenant shall
deliver to Landlord an Officer's Certificate setting forth
the total amount of deposits made to and expenditures from
the FF&E Reserve for the preceding Fiscal Year, together
with a reconciliation of such expenditures with the
applicable FF&E Estimate.
(c) Prior to execution of this Agreement
with respect to the 1997 calendar year and, thereafter,
each year, on or before December 1 of the preceding year,
Tenant shall prepare an estimate (the "FF&E Estimate") of
FF&E Reserve expenditures necessary during the ensuing
Fiscal Year, and shall submit such FF&E Estimate to
Landlord for its review and approval, which approval shall
not be unreasonably withheld or delayed. In the event
Landlord shall fail to respond within thirty (30) days
after receipt of the FF&E Estimate, such FF&E Estimate
shall be deemed approved by Landlord. All expenditures
from the FF&E Reserve shall be (as to both the amount of
each such expenditure and the timing thereof) both
reasonable and necessary, given the objective that the
Hotel will be maintained and operated to a standard
comparable to competitive hotels.
(d) Tenant shall, consistent with the
FF&E Estimate approved by Landlord, from time to time make
expenditures from the FF&E Reserve as it deems necessary
provided that Tenant shall not materially deviate from the
FF&E Estimate approved by Landlord without the prior
approval of Landlord, except in the case of emergency
where immediate action is necessary to prevent imminent
danger to person or property.
(e) Upon the expiration or sooner
termination of this Agreement, funds in the FF&E Reserve
and all property purchased with funds from the FF&E
Reserve during the Term shall be paid, granted and
assigned to Landlord as Additional Charges.
5.1.3 Landlord's Obligations.
(a) Except as otherwise expressly
provided in this Agreement, Landlord shall not, under any
circumstances, be required to build or rebuild any
improvement on the Leased
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Property, or to make any repairs, replacements, alterations,
restorations or renewals of any nature or description to the
Leased Property, whether ordinary or extraordinary, structural or
nonstructural, foreseen or unforeseen, or, except as provided in
Sections 5.1.3(b), 6,2, 10.2 and 11.2, to make any expenditure
whatsoever with respect thereto, or to maintain the Leased
Property in any way. Except as otherwise expressly provided in
this Agreement, Tenant hereby waives, to the maximum extent
permitted by law, the right to make repairs at the expense of
Landlord pursuant to any law in effect on the date hereof or
hereafter enacted. Landlord shall have the right to give, record
and post, as appropriate, notices of nonresponsibility under any
mechanic's lien laws now or hereafter existing.
(b) If, at any time, funds in the FF&E Reserve
shall be insufficient for necessary and permitted expenditures
thereof or, pursuant to the terms of this Agreement, Tenant is
required to make any expenditures in connection with any repair,
maintenance or renovation with respect to the Leased Property and
the amount of such disbursements or expenditures exceeds the
amount on deposit in the FF&E Reserve or such repair, maintenance
or renovation is not a permitted expenditure from the FF&E
Reserve as described in Section 5.1.2(a)(i), (ii) and (iii),
Tenant may, at its election, give Landlord Notice thereof, which
Notice shall set forth, in reasonable detail, the nature of the
required repair, renovation or replacement, the estimated cost
thereof and such other information with respect thereto as
Landlord may reasonably require. Provided that no Event of
Default shall have occurred and be continuing and Tenant shall
otherwise comply with the applicable provisions of Article 6,
Landlord shall, within ten (10) Business Days after such Notice,
subject to and in accordance with the applicable provisions of
Article 6, disburse such required funds to Tenant (or, if Tenant
shall so elect, directly to the Manager or any other Person
performing the required work) and, upon such disbursement, the
Minimum Rent shall be adjusted as provided in Section 3.1.1(b);
provided, however, that, in the event that Landlord shall elect
not to disburse any funds pursuant to this Section 5.1.3(b),
Tenant's sole recourse shall be to elect not to make the
applicable repair, maintenance or renovation.
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5.1.4 Nonresponsibility of Landlord, Etc. All materialmen,
contractors, artisans, mechanics and laborers and other persons contracting
with Tenant with respect to the Leased Property, or any part thereof, are
hereby charged with notice that liens on the Leased Property or on Landlord's
interest therein are expressly prohibited and that they must look solely to
Tenant to secure payment for any work done or material furnished by Tenant, the
Manager or for any other purpose during the term of this Agreement.
Nothing contained in this Agreement shall be deemed or construed in any
way as constituting the consent or request of Landlord, express or implied, by
inference or otherwise, to any contractor, subcontractor, laborer or
materialmen for the performance of any labor or the furnishing of any materials
for any alteration, addition, improvement or repair to the Leased Property or
any part thereof or as giving Tenant any right, power or authority to contract
for or permit the rendering of any services or the furnishing of any materials
that would give rise to the filing of any lien against the Leased Property or
any part thereof nor to subject Landlord's estate in the Leased Property or any
part thereof to liability under any Mechanic's Lien Law of the State in any
way, it being expressly understood Landlord's estate shall not be subject to
any such liability.
5.2 Tenant's Personal Property. Tenant shall provide and maintain
throughout the Term all such Tenant's Personal Property as shall be necessary
in order to operate in compliance with applicable Legal Requirements and
Insurance Requirements and otherwise in accordance with customary practice in
the industry for the Permitted Use and all of such Personal Property shall,
upon the expiration or earlier termination of this Agreement, become the
property of Landlord. If, from and after the Commencement Date, Tenant
acquires an interest in any item of tangible personal property (other than
motor vehicles) on, or in connection with, the Leased Property which belongs to
anyone other than Tenant, Tenant shall require the agreements permitting such
use to provide that Landlord or its designee may assume Tenant's rights and
obligations under such agreement upon the termination of this Agreement and the
assumption of management or operation of the Hotel by Landlord or its designee.
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5.3 Yield Up. Upon the expiration or sooner termination of this
Agreement, Tenant shall vacate and surrender the Leased Property to Landlord in
substantially the same condition in which the Leased Property was in on the
Commencement Date, except as repaired, rebuilt, restored, altered or added to
as permitted or required by the provisions of this Agreement, reasonable wear
and tear excepted (and casualty damage and Condemnation, in the event that this
Agreement is terminated following a casualty or total Condemnation in
accordance with Article 10 or Article 11 excepted).
In addition, upon the expiration or earlier termination of this
Agreement, Tenant shall, at Landlord's sole cost and expense, use its good
faith efforts to transfer to and cooperate with Landlord or Landlord's nominee
in connection with the processing of all applications for licenses, operating
permits and other governmental authorizations and all contracts, including
contracts with governmental or quasi-governmental Entities which may be
necessary for the use and operation of the Hotel as then operated. If
requested by Landlord, Tenant will direct the Manager to continue to manage the
Hotel after the expiration of the Term and for up to one hundred twenty (120)
days, on such reasonable terms (which shall include a market rate management
fee and an agreement to reimburse the Manager for its reasonable out-of-pocket
costs and expenses, and reasonable administrative costs), as Landlord shall
reasonably request.
5.4 Management Agreement. Tenant shall not, without Landlord's prior
written consent, amend or modify the provisions of the Management Agreement
which provide (i) that, from and after the occurrence of any Default or Event
of Default, all amounts due from Tenant to the Manager shall be subordinate to
all amounts due from Tenant to Landlord, (ii) for operation of the Leased
Property under the "Wyndham" name, (iii) that Wyndham, the Manager and their
Affiliated Persons are prohibited from operating, managing or franchising
another full-service Wyndham Hotel (as opposed to Wyndham Garden or resort
hotels) within the designated area on Exhibit D and (iv) for termination
thereof, at Landlord's option, upon the termination of this Agreement. Tenant
shall not take any action, grant any consent or permit any action under the
Management Agreement which might have a material adverse effect on Landlord,
without the prior written consent of Landlord; provided, however, that
Landlord's consent shall not be
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required in connection with any assignment of the Manager's rights under the
Management Agreement to (x) any Affiliated Person of the Manager having the
full power, right and authority to provide all services and organizational
expertise as contemplated and required by the Management Agreement or (y) any
Person (including, but not limited to, any Lending Institution) who acquires
all or substantially all of the management contracts of the Manager, provided
that, in either such case, the Leased Property will retain the right to use the
"Wyndham" name. In the event of an assignment pursuant to clause (y)
preceding, provided that the successor Manager (i) assumes, in writing all
obligations of the Manager under the Management Agreement, and (ii) has a
Tangible Net Worth, as of the date of assignment, equal to the greater of the
Tangible Net Worth of the Manager as of the date of this Agreement, and the
Tangible Net Worth of the Manager as of the date of such assignment, the
Manager shall be released from all liabilities arising under the Management
Agreement from and after the effective date of such assignment. Tenant shall
not agree to any change in the Manager (except as provided in the preceding
sentences), to any change in the Management Agreement (except as provided in
the preceding sentences), terminate the Management Agreement or permit the
Manager to assign the Management Agreement (except as provided in the preceding
sentences) without the prior written approval of Landlord in each instance;
provided, however, that the Manager may grant a security interest in its right
to receive payments under the Management Agreement without Landlord's prior
written approval.
ARTICLE 6
IMPROVEMENTS, ETC.
6.1 Improvements to the Leased Property. Tenant shall not make,
construct or install (and shall direct the Manager not to construct or install)
any Capital Additions (other than Capital Additions of the type described in
Section 5.1.2(a)(ii) and approved pursuant to Section 5.1.2(c) or which are
described in Exhibit B, attached hereto and made a part hereof, without, in
each instance, obtaining Landlord's prior written consent, which consent shall
not be unreasonably withheld, delayed or conditioned provided that (a)
construction or installation of the
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same would not adversely affect or violate any Legal Requirement or Insurance
Requirement applicable to the Leased Property and (b) Landlord shall have
received an Officer's Certificate certifying as to the satisfaction of the
conditions set out in clause (a) above; provided, however, that no such consent
shall be required in the event immediate action is required to prevent imminent
danger to person or property. Prior to commencing construction of any Capital
Addition, Tenant shall submit, or shall direct the Manager to submit, to
Landlord, in writing, a proposal setting forth, in reasonable detail, any such
proposed improvement and shall provide to Landlord such plans and
specifications, and such permits, licenses, contracts and such other
information concerning the same as Landlord may reasonably request. Landlord
shall have thirty (30) days to review all materials submitted to Landlord in
connection with any such proposal. Failure of Landlord to respond to Tenant's
or the Manager's proposal within thirty (30) days after receipt of all
information and materials requested by Landlord in connection with the proposed
improvement shall be deemed to constitute approval of the same. Without
limiting the generality of the foregoing, such proposal shall indicate the
approximate projected cost of constructing such proposed improvement and the
use or uses to which it will be put. No Capital Addition shall be made which
would tie in or connect any Leased Improvement with any other improvements on
property adjacent to the Leased Property (and not part of the Land) including,
without limitation, tie-ins of buildings or other structures or utilities.
Tenant shall not finance, and shall direct the Manager not to finance, the cost
of any construction of such improvement by the granting of a lien on or
security interest in the Leased Property or such improvement, or Tenant's
interest therein, without the prior written consent of Landlord, which consent
may be withheld by Landlord in Landlord's sole discretion. Any such
improvements shall, upon the expiration or sooner termination of this
Agreement, remain or pass to and become the property of Landlord, free and
clear of all encumbrances other than Permitted Encumbrances.
6.2 Improvement Advances. At any time during that portion of the
Term commencing on the Commencement Date and expiring one year thereafter,
Landlord agrees to advance to Tenant, from time to time, as hereinafter
provided, an aggregate amount of up to Three Million Two Hundred Fifty Thousand
Dollars ($3,250,000) for the purpose of making improvements to the Leased
Property in
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accordance with Exhibit B. The obligation of Landlord to make each advance
pursuant to this Section 6.2 shall be subject to the prior or simultaneous
satisfaction of the following conditions:
(a) At the time of each disbursement, no Default or
Event of Default shall have occurred and be continuing;
(b) At least fifteen (15) Business Days before the date
on which Tenant desires a disbursement to be made hereunder (but
in no event subsequent to the first anniversary of the
Commencement Date), Tenant shall submit to Landlord a written
requisition and the substantiation therefor which shall include
bills and invoices with respect to the work for which payment or
reimbursement is sought, together with such other information
with respect thereto as Landlord may reasonably require,
including, without limitation, the items identified in Section
6.3, if applicable. Any such requisition shall be for not less
than $250,000 (or such lesser amount as shall constitute the
difference between $3,250,000 and the aggregate of all prior
disbursements). Such requisitions shall be made not more
frequently than monthly; and
(c) The aggregate amount paid or payable to Tenant and
its Affiliated Persons shall not exceed One Hundred Three
Thousand Dollars ($103,000).
6.3 Improvements Financed by Landlord. In connection with the
Landlord's funding of any improvements pursuant to Section 6.2), Tenant shall
provide Landlord with such information as Landlord may from time to time
reasonably request, including, without limitation, the following:
(a) Evidence that such improvement will be, and, upon
completion, has been, completed in compliance with all Applicable
Laws;
(b) Copies of all building, zoning and land use permits
and approvals and upon completion of such improvement, a copy of
the certificate of occupancy for such improvement, if required;
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(c) Such information, certificates, licenses, permits
or other documents necessary to confirm that Tenant will be able
to use the improvement upon completion thereof in accordance with
the Permitted Use, including all required federal, State or local
government licenses and approvals;
(d) An Officer's Certificate and a certificate from
Tenant's architect setting forth, in reasonable detail, the
projected (or actual, if available) improvement cost and invoices
and lien waivers from Tenant's contractors for such work as is
completed and paid for through the last advance date; and
(e) Prints of architectural and engineering drawings
relating to such improvement and such other certificates,
documents and surveys as Landlord may reasonably require.
6.4 Salvage. All materials which are scrapped or removed in
connection with the making of either Capital Additions or non-Capital Additions
or repairs required by Article 5 shall be or become the property of the party
that paid for such work.
ARTICLE 7
LIENS
7.1 Liens. Subject to Article 8, Tenant shall not, directly
or indirectly, create or allow to remain and shall promptly discharge, at its
expense, any lien, encumbrance, attachment, title retention agreement or claim
upon the Leased Property or Tenant's leasehold interest therein or any
attachment, levy, claim or encumbrance in respect of the Rent, other than (a)
Permitted Encumbrances, (b) restrictions, liens and other encumbrances which
are consented to in writing by Landlord, (c) liens for those taxes of Landlord
which Tenant is not required to pay hereunder, (d) subleases permitted by
Article 17, (e) liens for Impositions or for sums resulting from noncompliance
with Legal Requirements so long as (i) the same are not yet due and payable, or
(ii) are being contested in accordance with Article 8, (f) liens of mechanics,
laborers, materialmen, suppliers or vendors incurred in the ordinary course of
business that are not yet due and payable or are for sums that
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are being contested in accordance with Article 8, (g) any Hotel Mortgages or
other liens which are the responsibility of Landlord pursuant to the provisions
of Article 21, (h) Landlord Liens and any other voluntary liens created by
Landlord and (i) Leasehold Mortgages.
7.2 Landlord's Lien. In addition to any statutory landlord's lien
and in order to secure payment of the Rent and all other sums payable hereunder
by Tenant, and to secure payment of any loss, cost or damage which Landlord may
suffer by reason of Tenant's breach of this Agreement, Tenant hereby grants
unto Landlord a security interest in and an express contractual lien upon
Tenant's Personal Property (except motor vehicles and liquor licenses and
permits), and Tenant's interest in all ledger sheets, files, records, documents
and instruments (including, without limitation, computer programs, tapes and
related electronic data processing) relating to the operation of the Hotels
(the "Records") and all proceeds therefrom, subject to any Permitted
Encumbrances; and such Tenant's Personal Property shall not be removed from the
Leased Property at any time when a Default or an Event of Default has occurred
and is continuing.
Upon Landlord's request, Tenant shall execute and deliver to Landlord
financing statements in form sufficient to perfect the security interest of
Landlord in Tenant's Personal Property and the proceeds thereof in accordance
with the provisions of the applicable laws of the State. Tenant hereby grants
Landlord an irrevocable limited power of attorney, coupled with an interest, to
execute all such financing statements in Tenant's name, place and stead. The
security interest herein granted is in addition to any statutory lien for the
Rent.
ARTICLE 8
PERMITTED CONTESTS
Tenant shall have the right to contest the amount or validity of any
Imposition, Legal Requirement, Insurance Requirement, Environmental Obligation,
lien, attachment, levy, encumbrance, charge or claim (collectively, "Claims")
as to the Leased Property, by appropriate legal proceedings, conducted in good
faith and with due diligence, provided that (a) the
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foregoing shall in no way be construed as relieving, modifying or extending
Tenant's obligation to pay any Claims as finally determined, (b) such contest
shall not cause Landlord or Tenant to be in default under any mortgage or deed
of trust encumbering the Leased Property (Landlord agreeing that any such
mortgage or deed of trust shall permit Tenant to exercise the rights granted
pursuant to this Article 8) or any interest therein or result in or reasonably
be expected to result in a lien attaching to the Leased Property, (c) no part
of the Leased Property nor any Rent therefrom shall be in any immediate danger
of sale, forfeiture, attachment or loss, and (d) Tenant shall indemnify and
hold harmless Landlord from and against any cost, claim, damage, penalty or
reasonable expense, including reasonable attorneys' fees, incurred by Landlord
in connection therewith or as a result thereof. Landlord agrees to join in any
such proceedings if required legally to prosecute such contest, provided that
Landlord shall not thereby be subjected to any liability therefor (including,
without limitation, for the payment of any costs or expenses in connection
therewith) unless Tenant agrees by agreement in form and substance reasonably
satisfactory to Landlord, to assume and indemnify Landlord with respect to the
same. Tenant shall be entitled to any refund of any Claims and such charges
and penalties or interest thereon which have been paid by Tenant or paid by
Landlord to the extent that Landlord has been fully reimbursed by Tenant. If
Tenant shall fail (x) to pay or cause to be paid any Claims when finally
determined, (y) to provide reasonable security therefor, or (z) to prosecute or
cause to be prosecuted any such contest diligently and in good faith, Landlord
may, upon reasonable notice to Tenant (which notice shall not be required if
Landlord shall reasonably determine that the same is not practicable), pay such
charges, together with interest and penalties due with respect thereto, and
Tenant shall reimburse Landlord therefor, upon demand, as Additional Charges.
ARTICLE 9
INSURANCE AND INDEMNIFICATION
9.1 General Insurance Requirements. Tenant shall, at all times
during the Term and at any other time Tenant shall be in possession of the
Leased Property, keep the Leased Property and
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all property located therein or thereon, insured against the risks and in the
amounts as follows and shall maintain the following insurance:
(a) "All-risk" property insurance, including insurance
against loss or damage by fire, vandalism and malicious mischief,
earthquake, explosion of steam boilers, pressure vessels or other
similar apparatus, now or hereafter installed in the Hotel
located at the Leased Property, with the usual extended coverage
endorsements, in an amount equal to one hundred percent (100%) of
the then full Replacement Cost thereof (as defined in Section
9.2);
(b) Business interruption insurance covering risk of
loss during the lesser of the first twelve (12) months of
reconstruction or the actual reconstruction period necessitated
by the occurrence of any of the hazards described in subparagraph
(a) above, in such amounts as may be customary for comparable
properties in the area and in an amount sufficient to prevent
Landlord or Tenant from becoming a co-insurer;
(c) Comprehensive general liability insurance, including
bodily injury and property damage in a form reasonably
satisfactory to Landlord (and including, without limitation,
broad form contractual liability, independent contractor's hazard
and completed operations coverage) in an amount not less than One
Million Dollars ($1,000,000) per occurrence, Three Million
Dollars ($3,000,000) in the aggregate and umbrella coverage of
all such claims in an amount not less than Fifty Million Dollars
($50,000,000);
(d) Flood (if the Leased Property is located in whole
or in part within an area identified as an area having special
flood hazards and in which flood insurance has been made
available under the National Flood Insurance Act of 1968, as
amended, or the Flood Disaster Protection Act of 1973, as amended
(or any successor acts thereto)) and such other hazards and in
such amounts as may be customary for comparable properties in the
area;
(e) Worker's compensation insurance coverage if required
by applicable law for all persons employed by
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Tenant on the Leased Property with statutory limits and otherwise
with limits of and provisions in accordance with the requirements
of applicable local, State and federal law, and employer's
liability insurance as is customarily carried by similar
employers; and
(f) Such additional insurance as may be reasonably
required, from time to time, by Landlord or any Hotel Mortgagee
and which is customarily carried by comparable lodging properties
in the area.
9.2 Replacement Cost. "Replacement Cost" as used herein shall
mean the actual replacement cost of the property requiring replacement from
time to time, including an increased cost of construction endorsement, less
exclusions provided in the standard form of fire insurance policy. In the
event either party believes that the then full Replacement Cost has increased
or decreased at any time during the Term, such party, at its own cost, shall
have the right to have such full Replacement Cost redetermined by an
independent accredited appraiser approved by the other, which approval shall
not be unreasonably withheld or delayed. The party desiring to have the full
Replacement Cost so redetermined shall forthwith, on receipt of such
determination by such appraiser, give Notice thereof to the other. The
determination of such appraiser shall be final and binding on the parties
hereto until any subsequent determination under this Section 9.2, and Tenant
shall forthwith conform the amount of the insurance carried to the amount so
determined by the appraiser.
9.3 Waiver of Subrogation. Landlord and Tenant agree that
(insofar as and to the extent that such agreement may be effective without
invalidating or making it impossible to secure insurance coverage from
responsible insurance companies doing business in the State) with respect to
any property loss which is covered by insurance then being carried by Landlord
or Tenant, respectively, the party carrying such insurance and suffering said
loss releases the other of and from any and all claims with respect to such
loss; and they further agree that their respective insurance companies shall
have no right of subrogation against the other on account thereof, even though
extra premium may result therefrom. In the event that any extra premium is
payable by Tenant as a result of this provision, Landlord shall not be liable
for reimbursement to Tenant for such extra premium.
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9.4 Form Satisfactory, Etc. All insurance policies and
endorsements required pursuant to this Article 9 shall be fully paid for,
nonassessable and be issued by insurance carriers authorized to do business in
the State, having a general policy holder's rating of no less than B++ in
Best's latest rating guide. All such policies described in Sections 9.1(a)
through (d) shall include no deductible in excess of Two Hundred Fifty Thousand
Dollars ($250,000) and, with the exception of the insurance described in
Sections 9.1(e), shall name Landlord and any Hotel Mortgagee as additional
insureds, as their interests may appear. All loss adjustments shall be payable
as provided in Article 10. Tenant shall cause all insurance premiums to be
paid and shall deliver certificates of insurance to Landlord prior to their
effective date (and, with respect to any renewal policy, prior to the
expiration of the existing policy). All such policies shall provide Landlord
(and any Hotel Mortgagee if required by the same) thirty (30) days prior
written notice of any material change or cancellation of such policy. In the
event Tenant shall fail to effect such insurance as herein required, to pay the
premiums therefor or to deliver such certificates to Landlord or any Hotel
Mortgagee at the times required, Landlord shall have the right, but not the
obligation, subject to the provisions of Section 12.5, to acquire such
insurance and pay the premiums therefor, which amounts shall be payable to
Landlord, upon demand, as Additional Charges, together with interest accrued
thereon at the Overdue Rate from the date such payment is made until (but
excluding) the date repaid.
9.5 Blanket Policy. Notwithstanding anything to the contrary
contained in this Article 9, Tenant's obligation to maintain the insurance
herein required may be brought within the coverage of a so-called blanket
policy or policies of insurance carried and maintained by Tenant, provided,
that (a) the coverage thereby afforded will not be reduced or diminished from
that which would exist under a separate policy meeting all other requirements
of this Agreement, and (b) the requirements of this Article 9 are otherwise
satisfied.
9.6 No Separate Insurance. Tenant shall not take out separate
insurance, concurrent in form or contributing in the event of loss with that
required by this Article 9, or increase the amount of any existing insurance by
securing an additional
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policy or additional policies, unless all parties having an insurable interest
in the subject matter of such insurance, including Landlord and all Hotel
Mortgagees, are included therein as additional insureds and the loss is payable
under such insurance in the same manner as losses are payable under this
Agreement. In the event Tenant shall take out any such separate insurance or
increase any of the amounts of the then existing insurance, Tenant shall give
Landlord prompt Notice thereof.
9.7 Indemnification of Landlord. Notwithstanding the
existence of any insurance provided for herein and without regard to the policy
limits of any such insurance, Tenant shall protect, indemnify and hold harmless
Landlord for, from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and reasonable expenses (including, without
limitation, reasonable attorneys' fees), to the maximum extent permitted by
law, imposed upon or incurred by or asserted against Landlord by reason of: (a)
any accident, injury to or death of persons or loss of or damage to property
occurring on or about the Leased Property or adjoining sidewalks or rights of
way, (b) any past, present or future use, misuse, non-use, condition,
management, maintenance or repair by Tenant or anyone claiming under Tenant of
the Leased Property or Tenant's Personal Property or any litigation, proceeding
or claim by governmental entities or other third parties to which Landlord is
made a party or participant relating to the Leased Property or Tenant's
Personal Property or such use, misuse, non-use, condition, management,
maintenance, or repair thereof including, failure to perform obligations (other
than Condemnation proceedings) to which Landlord is made a party, (c) any
Impositions that are the obligations of Tenant to pay pursuant to the
applicable provisions of this Agreement, and (d) any failure on the part of
Tenant or anyone claiming under Tenant to perform or comply with any of the
terms of this Agreement. Tenant, at its expense, shall contest, resist and
defend any such claim, action or proceeding asserted or instituted against
Landlord (and shall not be responsible for any duplicative attorneys' fees
incurred by Landlord) or may compromise or otherwise dispose of the same, with
Landlord's prior written consent (which consent may not be unreasonably
withheld or delayed). In the event Landlord shall unreasonably withhold or
delay its consent, Tenant shall not be liable pursuant to this Section 9.7 for
any incremental increase in costs or expenses resulting therefrom. The
obligations of
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Tenant under this Section 9.7 are in addition to the obligations set forth in
Section 4.3 and shall survive the termination of this Agreement.
ARTICLE 10
CASUALTY
10.1 Insurance Proceeds. Except as provided in the last
clause of this sentence, all proceeds payable by reason of any loss or damage
to the Leased Property, or any portion thereof, and insured under any policy of
insurance required by Article 9 (other than the proceeds of any business
interruption insurance) shall be paid directly to Landlord (subject to the
provisions of Section 10.2) and all loss adjustments with respect to losses
payable to Landlord shall require the prior written consent of Landlord;
provided, however, that, so long as no Event of Default shall have occurred and
be continuing, all such proceeds less than or equal to Two Hundred Fifty
Thousand Dollars ($250,000) shall be paid directly to Tenant and such losses
may be adjusted without Landlord's consent. If Tenant is required to
reconstruct or repair the Leased Property as provided herein, such proceeds
shall be paid out by Landlord from time to time for the reasonable costs of
reconstruction or repair of the Leased Property necessitated by such damage or
destruction, subject to and in accordance with the provisions of Section
10.2.4. Provided no Default or Event of Default has occurred and is
continuing, any excess proceeds of insurance remaining after the completion of
the restoration shall be paid to Tenant. In the event that the provisions of
Section 10.2.1 are applicable, the insurance proceeds shall be retained by the
party entitled thereto pursuant to Section 10.2.1. All salvage resulting from
any risk covered by insurance shall belong to Landlord, provided any rights to
the same have been waived by the insurer.
10.2 Damage or Destruction.
10.2.1 Damage or Destruction of Leased Property.
If, during the Term, the Leased Property shall be totally or partially
destroyed and the Hotel located thereon is thereby rendered Unsuitable for Its
Permitted Use, either Landlord or Tenant may, by the giving of Notice thereof
to the other,
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terminate this Agreement, whereupon, this Agreement shall terminate, Landlord
shall be entitled to retain the insurance proceeds payable on account of such
damage and Tenant shall thereafter have no obligation to pay Rent for periods
arising after the effective date of termination.
10.2.2 Partial Damage or Destruction. If, during the
Term, the Leased Property shall be totally or partially destroyed but the Hotel
is not rendered Unsuitable for Its Permitted Use, Tenant shall, subject to
Section 10.2.3, promptly restore the Hotel as provided in Section 10.2.4.
10.2.3 Insufficient Insurance Proceeds. If this
Agreement is not otherwise terminated pursuant to this Article 10 and the cost
of the repair or restoration of the Leased Property exceeds the amount of
insurance proceeds received by Landlord and Tenant pursuant to Article 9(a),
(c), (d) or, if applicable, (e), Tenant shall give Landlord Notice thereof
which notice shall set forth in reasonable detail the nature of such deficiency
and whether Tenant shall pay and assume the amount of such deficiency (Tenant
having no obligation to do so, except that, if Tenant shall elect to make such
funds available, the same shall become an irrevocable obligation of Tenant
pursuant to this Agreement). In the event Tenant shall elect not to pay and
assume the amount of such deficiency, Landlord shall have the right (but not
the obligation), exercisable at Landlord's sole election by Notice to Tenant,
given within sixty (60) days after Tenant's notice of the deficiency, to elect
to make available for application to the cost of repair or restoration the
amount of such deficiency; provided, however, in such event, upon any
disbursement by Landlord thereof, the Minimum Rent shall be adjusted as
provided in Section 3.1.1(b). In the event that neither Landlord nor Tenant
shall elect to make such deficiency available for restoration, either Landlord
or Tenant may terminate this Agreement by Notice to the other, whereupon, this
Agreement shall terminate as provided in Section 10.2.1. It is expressly
understood and agreed, however, that, notwithstanding anything in this
Agreement to the contrary, Tenant shall be strictly liable and solely
responsible for the amount of any deductible and shall, upon any insurable
loss, pay over the amount of such deductible to Landlord at the time and in the
manner herein provided for payment of the applicable proceeds to Landlord.
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10.2.4 Disbursement of Proceeds. In the event Tenant is
required to restore the Leased Property pursuant to Section 10.2, Tenant shall
(or shall direct the Manager to) commence promptly and continue diligently to
perform the repair and restoration of the Leased Property (hereinafter called
the "Work"), so as to restore the Leased Property in compliance with all Legal
Requirements and so that the Leased Property shall be, to the extent
practicable, substantially equivalent in value and general utility to its
general utility and value immediately prior to such damage or destruction.
Subject to the terms hereof, Landlord shall advance the insurance proceeds and
any additional amounts payable by Landlord pursuant to Section 10.2.3 to Tenant
regularly during the repair and restoration period so as to permit payment for
the cost of any such restoration and repair. Any such advances shall be made
not more than monthly within ten (10) Business Days after Tenant submits to
Landlord a written requisition and substantiation therefor on AIA Forms G702
and G703 (or on such other form or forms as may be reasonably acceptable to
Landlord). Landlord may, at its option, condition advancement of said
insurance proceeds and other amounts on (i) the absence of any Event of
Default, (ii) its approval of plans and specifications of an architect
satisfactory to Landlord (which approval shall not be unreasonably withheld,
delayed or conditioned), (iii) general contractors' estimates, (iv) architect's
certificates, (v) unconditional lien waivers of general contractors, if
available, (vi) evidence of approval by all governmental authorities and other
regulatory bodies whose approval is required and (vii) such other certificates
as Landlord may, from time to time, reasonably require.
Landlord's obligation to disburse insurance proceeds under this Article
10 during the last two (2) years of the Term shall be subject to the release of
such proceeds by any Hotel Mortgagee to Landlord; otherwise each such Hotel
Mortgagee shall be obligated to make such funds available for Landlord's use in
accordance with the terms of this Agreement. If any Hotel Mortgagee shall be
unwilling to disburse insurance proceeds in accordance with this Agreement,
Tenant shall have the right to terminate this Agreement and Tenant shall
thereafter have no obligation to pay Rent for periods arising after the
effective date of termination.
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Tenant's obligation to restore the Leased Property pursuant to
this Article 10 shall be subject to the release of available insurance proceeds
by the applicable Hotel Mortgagee to Landlord or directly to Tenant and, in the
event such proceeds are insufficient, Landlord electing to make such deficiency
available therefor (and disbursement of such deficiency).
10.3 Damage Near End of Term. Notwithstanding any provisions
of Section 10.1 or 10.2 to the contrary, if damage to or destruction of the
Leased Property occurs during the last twelve (12) months of the Term
(including any exercised Extended Terms) and if such damage or destruction
cannot reasonably be expected to be fully repaired and restored prior to the
date that is six (6) months prior to the end of such Term, the provisions of
Section 10.2.1 shall apply as if the Leased Property had been totally or
partially destroyed and the Hotel rendered Unsuitable for its Permitted Use.
10.4 Tenant's Property. All insurance proceeds payable by
reason of any loss of or damage to any of Tenant's Personal Property shall be
paid to Tenant and, to the extent necessary to repair or replace Tenant's
Personal Property in accordance with Section 10.5, Tenant shall hold such
proceeds in trust to pay the cost of repairing or replacing damaged Tenant's
Personal Property.
10.5 Restoration of Tenant's Property. If Tenant is required
to restore the Leased Property as hereinabove provided, Tenant shall either (a)
restore all alterations and improvements made by Tenant and Tenant's Personal
Property, or (b) replace such alterations and improvements and Tenant's
Personal Property with improvements or items of the same or better quality and
utility in the operation of the Leased Property.
10.6 No Abatement of Rent. This Agreement shall remain in
full force and effect and Tenant's obligation to make all payments of Rent and
to pay all other charges as and when required under this Agreement shall remain
unabated during the Term notwithstanding any damage involving the Leased
Property (provided that Landlord shall credit against such payments any amounts
paid to Landlord as a consequence of such damage under any business
interruption insurance obtained by Tenant hereunder). The provisions of this
Article 10 shall be
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considered an express agreement governing any cause of damage or destruction to
the Leased Property and, to the maximum extent permitted by law, no local or
State statute, laws, rules, regulation or ordinance in effect during the Term
which provide for such a contingency shall have any application in such case.
10.7 Waiver. Tenant hereby waives any statutory rights of
termination which may arise by reason of any damage or destruction of the
Leased Property.
ARTICLE 11
CONDEMNATION
11.1 Total Condemnation, Etc. If either (i) the whole of the
Leased Property shall be taken by Condemnation or (ii) a Condemnation of less
than the whole of the Leased Property renders the Leased Property Unsuitable
for Its Permitted Use, this Agreement shall terminate, Tenant and Landlord
shall seek the Award for their interests in the Leased Property as provided in
Section 11.5 and Tenant shall thereafter have no obligation to pay Rent for
periods arising after the effective date of termination.
11.2 Partial Condemnation. In the event of a Condemnation of
less than the whole of the Leased Property such that the Leased Property is
still suitable for its Permitted Use, Tenant shall, to the extent of the Award
actually received by Tenant and any additional amounts disbursed by Landlord as
hereinafter provided, commence promptly and continue diligently to restore the
untaken portion of the Leased Improvements so that such Leased Improvements
shall constitute a complete architectural unit of the same general character
and condition (as nearly as may be possible under the circumstances) as the
Leased Improvements existing immediately prior to such Condemnation, in full
compliance with all Legal Requirements, subject to the provisions of this
Section 11.2. If the cost of the repair or restoration of the Leased Property
exceeds the amount of the Award, Tenant shall give Landlord Notice thereof
which notice shall set forth in reasonable detail the nature of such deficiency
and whether Tenant shall pay and assume the amount of such deficiency (Tenant
having no obligation to do so, except
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that if Tenant shall elect to make such funds available, the same shall become
an irrevocable obligation of Tenant pursuant to this Agreement). In the event
Tenant shall elect not to pay and assume the amount of such deficiency,
Landlord shall have the right (but not the obligation), exercisable at
Landlord's sole election by Notice to Tenant given within sixty (60) days after
Tenant's Notice of the deficiency, to elect to make available for application
to the cost of repair or restoration the amount of such deficiency; provided,
however, in such event, upon any disbursement by Landlord thereof, the Minimum
Rent shall be adjusted as provided in Section 3.1.1(b). In the event that
neither Landlord nor Tenant shall elect to make such deficiency available for
restoration, either Landlord or Tenant may terminate this Agreement, whereupon,
the entire Award shall be retained by Landlord and Tenant shall thereafter have
no obligation to pay Rent for periods arising after the effective date of
termination.
Subject to the terms hereof, Landlord shall contribute to the cost of
restoration that part of the Award necessary to complete such repair or
restoration, together with severance and other damages awarded for the taken
Leased Improvements and any deficiency Landlord has agreed to disburse, to
Tenant regularly during the restoration period so as to permit payment for the
cost of such repair or restoration. Landlord may, at its option, condition
advancement of such Award and other amounts on (i) the absence of any Event of
Default, (ii) its approval of plans and specifications of an architect
satisfactory to Landlord (which approval shall not be unreasonably withheld or
delayed), (iii) general contractors' estimates, (iv) architect's certificates,
(v) unconditional lien waivers of general contractors, if available, (vi)
evidence of approval by all governmental authorities and other regulatory
bodies whose approval is required and (vii) such other certificates as Landlord
may, from time to time, reasonably require. Landlord's obligation under this
Section 11.2 to disburse the Award and such other amounts shall be subject to
(x) the collection thereof by Landlord and (y) during the last two (2) years of
the Term, the release of such Award by the applicable Hotel Mortgagee;
otherwise each such Hotel Mortgagee shall be obligated to make such funds
available for Landlord's use in accordance with the terms of this Agreement.
Tenant's obligation to restore the Leased Property shall be subject to the
release of the Award by the applicable
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Hotel Mortgagee to Landlord. If any Hotel Mortgagee shall be unwilling to
release such Award in accordance with this Agreement, Tenant shall have the
right to terminate this Agreement.
11.3 Abatement of Rent. Other than as specifically provided
in this Agreement, this Agreement shall remain in full force and effect and
Tenant's obligation to make all payments of Rent and to pay all other charges
as and when required under this Agreement shall remain unabated during the Term
notwithstanding any Condemnation involving the Leased Property. The provisions
of this Article 11 shall be considered an express agreement governing any
Condemnation involving the Leased Property and, to the maximum extent permitted
by law, no local or State statute, law, rule, regulation or ordinance in effect
during the Term which provides for such a contingency shall have any
application in such case.
11.4 Temporary Condemnation. In the event of any temporary
Condemnation of the Leased Property or Tenant's interest therein, this
Agreement shall continue in full force and effect and Tenant shall continue to
pay, in the manner and on the terms herein specified, the full amount of the
Rent. Tenant shall continue to perform and observe all of the other terms and
conditions of this Agreement on the part of the Tenant to be performed and
observed. Provided no Event of Default has occurred and is continuing, the
entire amount of any Award made for such temporary Condemnation allocable to
the Term, whether paid by way of damages, rent or otherwise, shall be paid to
Tenant. Tenant shall, promptly upon the termination of any such period of
temporary Condemnation, at its sole cost and expense, restore the Leased
Property to the condition that existed immediately prior to such Condemnation,
in full compliance with all Legal Requirements, unless such period of temporary
Condemnation shall extend beyond the expiration of the Term, in which event
Tenant shall not be required to make such restoration. For purposes of this
Section 11.4, a Condemnation shall be deemed to be temporary if the period of
such Condemnation is not expected to, and does not, exceed twelve (12) months.
11.5 Allocation of Award. Except as provided in Section 11.4
and the second sentence of this Section 11.5, the total Award shall be solely
the property of and payable to Landlord.
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Any portion of the Award made for the taking of Tenant's leasehold interest in
the Leased Property, loss of business during the remainder of the Term, the
taking of Tenant's Personal Property, or Tenant's removal and relocation
expenses shall be the sole property of and payable to Tenant (subject to the
provisions of Section 11.2). In any Condemnation proceedings, Landlord and
Tenant shall each seek its own Award in conformity herewith, at its own
expense.
ARTICLE 12
DEFAULTS AND REMEDIES
12.1 Events of Default. The occurrence of any one or more of
the following events shall constitute an "Event of Default" hereunder:
(a) should Tenant fail to make any payment of the Rent
or any other sum (including, but not limited to, funding of the
FF&E Reserve) payable hereunder when due; or
(b) should Tenant fail to maintain the insurance
coverages required under Article 9 and such failure shall
continue for ten (10) Business Days after Notice thereof (except
that no Notice shall be required if any such insurance
coverages shall have lapsed); or
(c) should Tenant default in the due observance or
performance of any of the terms, covenants or agreements
contained herein to be performed or observed by it (other than as
specified in clauses (a) and (b) above) and such default shall
continue for a period of fifteen (15) Business Days after Notice
thereof from Landlord to Tenant; provided, however, that if such
default is susceptible of cure but such cure cannot be
accomplished with due diligence within such period of time and
if, in addition, Tenant commences to cure or cause to be cured
such default within fifteen (15) Business Days after Notice
thereof from Landlord and thereafter prosecutes the curing of
such default with all due diligence, such period of time shall
be extended to such period of time (not to exceed an additional
one hundred
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eighty (180) days in the aggregate) as may be necessary to cure
such default with all due diligence; or
(d) should an event of default by Tenant or any
Affiliated Person as to Tenant occur and be continuing beyond the
expiration of any applicable cure period under any of the
Incidental Documents, the Other Leases or the Management
Agreement; or
(e) should there occur a final unappealable
determination by applicable state authorities of the revocation
or limitation of any material license, permit, certification or
approval required for the lawful operation of the Hotel in
accordance with its Permitted Use or the loss or material
limitation of any material license, permit, certification or
approval under any other circumstances under which Tenant is
required to cease its operation of the Hotel in accordance
with its Permitted Use at the time of such loss or limitation; or
(f) should any material representation or warranty made
by Tenant or any Affiliated Person as to Tenant under or in
connection with this Agreement or any Incidental Document or in
any document, certificate or agreement delivered in connection
herewith or therewith prove to have been false or misleading in
any material respect on the date when made or deemed made and the
same shall continue for five (5) Business Days after Notice
thereof from Landlord; or
(g) should Tenant generally not be paying its debts as
they become due or should Tenant make a general assignment for
the benefit of creditors; or
(h) should any petition be filed by or against Tenant
under the Federal bankruptcy laws, or should any other proceeding
be instituted by or against Tenant seeking to adjudicate Tenant a
bankrupt or insolvent, or seeking liquidation, reorganization,
arrangement, adjustment or composition of Tenant's debts under
any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, custodian or other
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similar official for Tenant or for any substantial part of the
property of Tenant and such proceeding is not dismissed within
ninety (90) days after institution thereof, or should Tenant take
any action to authorize or effect any of the actions set forth
above in this paragraph; or
(i) should Tenant cause or institute any proceeding for
its dissolution or termination, except as contemplated by or in
connection with the assignment contemplated by Section 16.5; or
(j) should the estate or interest of Tenant in the Leased
Property or any part thereof be levied upon or attached in any
proceeding and the same shall not be vacated or discharged within
the later of (x) one hundred and twenty (120) days after
commencement thereof, unless the amount in dispute is less than
$250,000, in which case Tenant shall give notice to Landlord of
the dispute but Tenant may defend in any suitable way, and (y)
thirty (30) days after receipt by Tenant of Notice thereof from
Landlord (unless Tenant shall be contesting such lien or
attachment in good faith in accordance with Article 8); or
(k) should Tenant at any time cease to be a wholly owned
direct or indirect Subsidiary of Wyndham; or
(l) should the Limited Guaranty be disaffirmed, disavowed
or challenged by Wyndham;
then, and in any such event, Landlord, in addition to all other remedies
available to it, may terminate this Agreement by giving Notice thereof to
Tenant and upon the expiration of the time, if any, fixed in such Notice, this
Agreement shall terminate and all rights of Tenant under this Agreement shall
cease. Landlord shall have and may exercise all rights and remedies available
at law and in equity to Landlord as a result of Tenant's breach of this
Agreement.
Upon the occurrence of an Event of Default, Landlord may, in
addition to any other remedies provided herein, enter upon the Leased Property
or any portion thereof and take possession of any and all of Tenant's Personal
Property, if any, and the Records, without liability for trespass or conversion
(Tenant hereby waiv-
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ing any right to notice or hearing prior to such taking of possession by
Landlord) and sell the same at public or private sale, after giving Tenant
reasonable Notice of the time and place of any public or private sale, at which
sale Landlord or its assigns may purchase all or any portion of Tenant's
Personal Property, if any, unless otherwise prohibited by law. Unless
otherwise provided by law and without intending to exclude any other manner of
giving Tenant reasonable notice, the requirement of reasonable Notice shall be
met if such Notice is given at least ten (10) days before the date of sale.
The proceeds from any such disposition, less all expenses incurred in
connection with the taking of possession, holding and selling of such property
(including, reasonable attorneys' fees) shall be applied as a credit against
the indebtedness which is secured by the security interest granted in Section
7.2. Any surplus shall be paid to Tenant or as otherwise required by law and
Tenant shall pay any deficiency to Landlord, as Additional Charges, upon
demand.
12.2 Remedies. None of (a) the termination of this Agreement
pursuant to Section 12.1, (b) the repossession of the Leased Property or any
portion thereof, (c) the failure of Landlord to re-let the Leased Property or
any portion thereof, nor (d) the reletting of all or any of portion of the
Leased Property, shall relieve Tenant of its liability and obligations
hereunder, all of which shall survive any such termination, repossession or re-
letting. In the event of any such termination, Tenant shall forthwith pay to
Landlord all Rent due and payable with respect to the Leased Property through
and including the date of such termination. Thereafter, Tenant, until the end
of what would have been the Term of this Agreement in the absence of such
termination, and whether or not the Leased Property or any portion thereof
shall have been re-let, shall be liable to Landlord for, and shall pay to
Landlord, as current damages, the Rent and other charges which would be payable
hereunder for the remainder of the Term had such termination not occurred, less
the net proceeds, if any, of any re-letting of the Leased Property, after
deducting all reasonable expenses in connection with such reletting, including,
without limitation, all repossession costs, brokerage commissions, legal
expenses, attorneys' fees, advertising, expenses of employees, alteration costs
and expenses of preparation for such reletting. Tenant shall pay such current
damages to Landlord monthly on the days on
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which the Minimum Rent would have been payable hereunder if this Agreement had
not been so terminated with respect to such of the Leased Property.
At any time after such termination, whether or not Landlord shall have
collected any such current damages, as liquidated final damages beyond the date
of such termination, at Landlord's election, Tenant shall pay to Landlord an
amount equal to the present value (discounted at the Interest Rate) of the
excess, if any, of the Rent and other charges which would be payable hereunder
from the date of such termination (assuming that, for the purposes of this
paragraph, annual payments by Tenant on account of Impositions and Additional
Rent would be the same as payments required for the immediately preceding
twelve calendar months, or if less than twelve calendar months have expired
since the Commencement Date, the payments required for such lesser period
projected to an annual amount) for what would be the then unexpired term of
this Agreement if the same remained in effect, over the fair market rental for
the same period. Nothing contained in this Agreement shall, however, limit or
prejudice the right of Landlord to prove and obtain in proceedings for
bankruptcy or insolvency an amount equal to the maximum allowed by any statute
or rule of law in effect at the time when, and governing the proceedings in
which, the damages are to be proved, whether or not the amount be greater than,
equal to, or less than the amount of the loss or damages referred to above.
In case of any Event of Default, re-entry, expiration and dispossession
by summary proceedings or otherwise, Landlord may (a) relet the Leased Property
or any part or parts thereof, either in the name of Landlord or otherwise, for
a term or terms which may at Landlord's option, be equal to, less than or
exceed the period which would otherwise have constituted the balance of the
Term and may grant concessions or free rent to the extent that Landlord
considers advisable and necessary to relet the same, and (b) may make such
reasonable alterations, repairs and decorations in the Leased Property or any
portion thereof as Landlord, in its sole and absolute discretion, considers
advisable and necessary for the purpose of reletting the Leased Property; and
the making of such alterations, repairs and decorations shall not operate or be
construed to release Tenant from liability hereunder as aforesaid. Subject to
the last sentence of this paragraph, Landlord shall in no event be liable
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in any way whatsoever for any failure to relet all or any portion of the Leased
Property, or, in the event that the Leased Property is relet, for failure to
collect the rent under such reletting. To the maximum extent permitted by law,
Tenant hereby expressly waives any and all rights of redemption granted under
any present or future laws in the event of Tenant being evicted or
dispossessed, or in the event of Landlord obtaining possession of the Leased
Property, by reason of the occurrence and continuation of an Event of Default
hereunder. Landlord covenants and agrees, in the event of any termination of
this Agreement as a result of an Event of Default, to use reasonable efforts to
mitigate its damages.
12.3 Tenant's Waiver. IF THIS AGREEMENT IS TERMINATED
PURSUANT TO SECTION 12.1 OR 12.2, TENANT WAIVES, TO THE EXTENT PERMITTED BY
LAW, ANY RIGHT TO A TRIAL BY JURY IN THE EVENT OF SUMMARY PROCEEDINGS TO
ENFORCE THE REMEDIES SET FORTH IN THIS ARTICLE 12, AND THE BENEFIT OF ANY LAWS
NOW OR HEREAFTER IN FORCE EXEMPTING PROPERTY FROM LIABILITY FOR RENT OR FOR
DEBT.
12.4 Application of Funds. Any payments received by Landlord
under any of the provisions of this Agreement during the existence or
continuance of any Event of Default (and any payment made to Landlord rather
than Tenant due to the existence of any Event of Default) shall be applied to
Tenant's current and past due obligations under this Agreement in such order as
Landlord may determine or as may be prescribed by the laws of the State.
12.5 Landlord's Right to Cure Tenant's Default. If an Event
of Default shall have occurred and be continuing, Landlord, after Notice to
Tenant (which Notice shall not be required if Landlord shall reasonably
determine immediate action is necessary to protect person or property), without
waiving or releasing any obligation of Tenant and without waiving or releasing
any Event of Default, may (but shall not be obligated to), at any time
thereafter, make such payment or perform such act for the account and at the
expense of Tenant, and may, to the maximum extent permitted by law, enter upon
the Leased Property or any portion thereof for such purpose and take all such
action thereon as, in Landlord's sole and absolute discretion, may be necessary
or appropriate therefor. No such entry shall be deemed an eviction of Tenant.
All reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees) incurred by Landlord in
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connection therewith, together with interest thereon (to the extent permitted
by law) at the Overdue Rate from the date such sums are paid by Landlord until
repaid, shall be paid by Tenant to Landlord, on demand.
ARTICLE 13
HOLDING OVER
Any holding over by Tenant after the expiration or sooner termination of
this Agreement shall be treated as a daily tenancy at sufferance at a rate
equal to two (2) times the Minimum Rent and other charges herein provided
(prorated on a daily basis). Tenant shall also pay to Landlord all damages
(direct or indirect) sustained by reason of any such holding over. Otherwise,
such holding over shall be on the terms and conditions set forth in this
Agreement, to the extent applicable. Nothing contained herein shall constitute
the consent, express or implied, of Landlord to the holding over of Tenant
after the expiration or earlier termination of this Agreement.
ARTICLE 14
LANDLORD'S NOTICE OBLIGATIONS; LANDLORD DEFAULT
14.1 Landlord Notice Obligation. Landlord shall give prompt
Notice to Tenant of any matters affecting the Leased Property of which Landlord
receives written notice or actual knowledge and, to the extent Tenant otherwise
has no notice or actual knowledge thereof, Landlord shall be liable for any
liabilities arising from the failure to deliver such Notice to Tenant.
14.2 Landlord's Default. If Landlord shall default in the
performance or observance of any of its covenants or obligations set forth in
this Agreement or any obligation of Landlord, if any, under any agreement
affecting the Leased Property, the performance of which is not Tenant's
obligation pursuant to this Agreement, and any such default shall continue for
a period of ten (10) days after Notice thereof with respect to monetary
defaults and thirty (30) days after Notice thereof with respect
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to non-monetary defaults from Tenant to Landlord and any applicable Hotel
Mortgagee, or such additional period as may be reasonably required to correct
the same, Tenant may declare the occurrence of a "Landlord Default" by a second
Notice to Landlord and to such Hotel Mortgagee. Thereafter, Tenant may
forthwith cure the same and, subject to the provisions of the following
paragraph, invoice Landlord for costs and expenses (including reasonable
attorneys' fees and court costs) incurred by Tenant in curing the same,
together with interest thereon (to the extent permitted by law) from the date
Landlord receives Tenant's invoice, at the Overdue Rate. Tenant shall have no
right to terminate this Agreement for any default by Landlord hereunder and no
right, for any such default, to offset or counterclaim against any Rent or
other charges due hereunder.
If Landlord shall in good faith dispute the occurrence of any Landlord
Default and Landlord, before the expiration of the applicable cure period,
shall give Notice thereof to Tenant, setting forth, in reasonable detail, the
basis therefor, no Landlord Default shall be deemed to have occurred and
Landlord shall have no obligation with respect thereto until final adverse
determination thereof; provided, however, that in the event of any such adverse
determination, Landlord shall pay to Tenant interest on any disputed funds at
the Interest Rate, from the date demand for such funds was made by Tenant until
the date of final adverse determination and, thereafter, at the Overdue Rate
until paid. If Tenant and Landlord shall fail, in good faith, to resolve any
such dispute within ten (10) days after Landlord's Notice of dispute, either
may submit the matter for resolution to a court of competent jurisdiction.
ARTICLE 15
PURCHASE RIGHTS
15.1 First Refusal to Purchase. Provided, (a) no Default or
Event of Default shall have occurred and be continuing, (b) this Agreement
shall be of full force and effect, and (c) other than as expressly permitted or
required by Section 16, Tenant shall not have assigned this Agreement (other
than a collateral assignment to or from a Leasehold Mortgagee or as
contemplated by Section 16.5) or subleased all or any portion of the Leased
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Property, Tenant shall have a first refusal option to purchase the Leased
Property upon the same price, terms and conditions as Landlord shall propose to
sell the Leased Property, or upon the same price, terms and conditions of any
offer from a third party to purchase the Leased Property which Landlord intends
to accept (or has accepted subject to Tenant's right of first refusal herein
provided); provided, however, that, if the proposed purchase price is for other
than cash, Tenant shall have the right to purchase the Leased Property on cash
equivalent terms determined by the agreement of the parties or, if they cannot
agree within ten (10) Business Days, by arbitration in accordance with the
rules of the American Arbitration Association then in effect. If, during the
Term, Landlord reaches such agreement with a third party or proposes to offer
the Leased Property for sale, Landlord shall promptly give written notice to
Tenant of the purchase price and all other material terms and conditions of
such agreement or proposed sale and Tenant shall have sixty (60) days
thereafter to exercise Tenant's option to purchase by written notice to
Landlord thereof. Failure of Tenant to respond within such 60-day period shall
be deemed a waiver of Tenant's right to purchase the Leased Property with
respect to such offer pursuant to this Section 15.1. If Tenant exercises its
option, the sale to Tenant shall be consummated upon the same terms and
conditions as contained in such agreement or Landlord's notice of the proposed
sale. If Tenant shall not exercise its option to purchase within the time
period and in the manner above provided, Landlord shall be free to sell the
Leased Property to such third party at the price and upon terms substantially
similar to those offered to Tenant. The rights granted to Tenant pursuant to
this Section 15.1 shall not apply to any financing or sale-leaseback
transaction or any transaction pursuant to which Landlord is merged or
consolidated with another Person; provided, however, that any Person who shall
acquire the Leased Premises shall acquire them subject to, and shall be bound
by, the provisions of this Section 15.1. The provisions of this Section 15.1
shall inure to the benefit of Tenant and any permitted successors and assigns
of Tenant pursuant to this Agreement.
15.2 Landlord's Option to Purchase the Tenant's Personal
Property; Transfer of Licenses. Landlord shall have the option to purchase
Tenant's Personal Property, at the expiration or termination of this Agreement,
for an amount equal to the then net market value thereof (current replacement
cost as determined
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by appraisal less accumulated depreciation on Tenant's books pertaining
thereto), subject to, and with appropriate price adjustments for, all equipment
leases, conditional sale contracts, UCC-1 financing statements and other
encumbrances to which such Personal Property is subject. Upon the expiration
or sooner termination of this Agreement, Tenant shall use its best efforts to
transfer and assign to Landlord or its designee, or assist Landlord or its
designee in obtaining, any contracts, licenses, and certificates required for
the then operation of the Leased Property.
ARTICLE 16
SUBLETTING AND ASSIGNMENT
16.1 Subletting and Assignment. Except as provided in Section
16.3 and Article 19, Tenant shall not, without Landlord's prior written consent
(which consent may be given or withheld in Landlord's sole and absolute
discretion), assign, mortgage, pledge, hypothecate, encumber or otherwise
transfer this Agreement or sublease (which term shall be deemed to include the
granting of concessions, licenses and the like), all or any part of the Leased
Property or suffer or permit this Agreement or the leasehold estate created
hereby or any other rights arising under this Agreement to be assigned,
transferred, mortgaged, pledged, hypothecated or encumbered, in whole or in
part, whether voluntarily, involuntarily or by operation of law, or permit the
use or operation of the Leased Property by anyone other than Tenant and the
Manager, or the Leased Property to be offered or advertised for assignment or
subletting. For purposes of this Section 16.1, an assignment of this Agreement
shall be deemed to include any direct or indirect transfer of any interest in
Tenant such that Tenant shall cease to be a wholly owned direct or indirect
Subsidiary of Wyndham or any transaction pursuant to which Tenant is merged or
consolidated with another Entity or pursuant to which all or substantially all
of Tenant's assets are transferred to any other Entity, as if such change in
control or transaction were an assignment of this Agreement; provided, however,
that the foregoing shall not be construed to prohibit collateral assignments or
pledges of the capital stock of Tenant to Lending Institutions otherwise
permitted by this Agreement.
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If this Agreement is assigned or if the Leased Property or any part
thereof are sublet (or occupied by anybody other than Tenant, the Manager and
their respective employees or hotel guests) Landlord may collect the rents from
such assignee, subtenant or occupant, as the case may be, and apply the net
amount collected to the Rent herein reserved, but no such collection shall be
deemed a waiver of the provisions set forth in the first paragraph of this
Section 16.1, the acceptance by Landlord of such assignee, subtenant or
occupant, as the case may be, as a tenant, or a release of Tenant from the
future performance by Tenant of its covenants, agreements or obligations
contained in this Agreement.
No subletting or assignment shall in any way impair the continuing
primary liability of Tenant hereunder (unless Landlord and Tenant expressly
otherwise agree that Tenant shall be released from all obligations hereunder),
and no consent to any subletting or assignment in a particular instance shall
be deemed to be a waiver of the prohibition set forth in this Section 16.1. No
assignment, subletting or occupancy shall affect any Permitted Use. Any
subletting, assignment or other transfer of Tenant's interest under this
Agreement in contravention of this Section 16.1 shall be voidable at Landlord's
option.
16.2 Required Sublease Provisions. Any sublease of all or any
portion of the Leased Property entered into on or after the date hereof shall
provide (a) that it is subject and subordinate to this Agreement and to the
matters to which this Agreement is or shall be subject or subordinate; (b) that
in the event of termination of this Agreement or reentry or dispossession of
Tenant by Landlord under this Agreement, Landlord may, at its option, terminate
such sublease or take over all of the right, title and interest of Tenant, as
sublessor under such sublease, and such subtenant shall, at Landlord's option,
attorn to Landlord pursuant to the then executory provisions of such sublease,
except that neither Landlord nor any Hotel Mortgagee, as holder of a mortgage
or as Landlord under this Agreement, if such mortgagee succeeds to that
position, shall (i) be liable for any act or omission of Tenant under such
sublease, (ii) be subject to any credit, counterclaim, offset or defense which
theretofore accrued to such subtenant against Tenant, (iii) be bound by any
previous modification of such sublease not consented to in writing by Landlord
or by any previous prepayment of more
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than one (1) month's Rent, (iv) be bound by any covenant of Tenant to undertake
or complete any construction of the Leased Property or any portion thereof, (v)
be required to account for any security deposit of the subtenant other than any
security deposit actually delivered to Landlord by Tenant, (vi) be bound by any
obligation to make any payment to such subtenant or grant any credits, except
for services, repairs, maintenance and restoration provided for under the
sublease that are performed after the date of such attornment, (vii) be
responsible for any monies owing by Tenant to the credit of such subtenant, or
(viii) be required to remove any Person occupying any portion of the Leased
Property; and (c), in the event that such subtenant receives a written Notice
from Landlord or any Hotel Mortgagee stating that an Event of Default has
occurred and is continuing, such subtenant shall thereafter be obligated to pay
all rentals accruing under such sublease directly to the party giving such
Notice or as such party may direct. All rentals received from such subtenant
by Landlord or the Hotel Mortgagee, as the case may be, shall be credited
against the amounts owing by Tenant under this Agreement and such sublease
shall provide that the subtenant thereunder shall, at the request of Landlord,
execute a suitable instrument in confirmation of such agreement to attorn. An
original counterpart of each such sublease and assignment and assumption, duly
executed by Tenant and such subtenant or assignee, as the case may be, in form
and substance reasonably satisfactory to Landlord, shall be delivered promptly
to Landlord and (a) in the case of an assignment, the assignee shall assume in
writing and agree to keep and perform all of the terms of this Agreement on the
part of Tenant to be kept and performed and shall be, and become, jointly and
severally liable with Tenant for the performance thereof and (b) in case of
either an assignment or subletting, Tenant shall remain primarily liable, as
principal rather than as surety, for the prompt payment of the Rent and for the
performance and observance of all of the covenants and conditions to be
performed by Tenant hereunder.
The provisions of this Section 16.2 shall not be deemed a waiver of the
provisions set forth in the first paragraph of Section 16.1.
16.3 Permitted Sublease. Notwithstanding the foregoing, including,
without limitation, Section 16.2, but subject to the provisions of Section 16.4
and any other express conditions or
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limitations set forth herein, Tenant may, in each instance after Notice to
Landlord, sublease space at the Leased Property for newsstand, gift shop,
parking garage, health club, restaurant, bar or commissary purposes or similar
concessions in furtherance of the Permitted Use, so long as such subleases do
not demise, in the aggregate, in excess of two thousand (2,000) square feet,
will not violate or affect any Legal Requirement or Insurance Requirement, and
Tenant shall provide such additional insurance coverage applicable to the
activities to be conducted in such subleased space as Landlord and any Hotel
Mortgagee may reasonably require.
16.4 Sublease Limitation. For so long as Landlord or any Affiliated
Person as to Landlord shall seek to qualify as a real estate investment trust,
anything contained in this Agreement to the contrary notwithstanding, Tenant
shall not sublet the Leased Property on any basis such that the rental to be
paid by any sublessee thereunder would be based, in whole or in part, on the
income or profits derived by the business activities of such sublessee, any
other formula such that any portion of such sublease rental would fail to
qualify as "rents from real property" within the meaning of Section 856(d) of
the Code, or any similar or successor provision thereto or would otherwise
disqualify Landlord for treatment as a real estate investment trust.
ARTICLE 17
ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS
17.1 Estoppel Certificates. At any time and from time to time, upon
not less than ten (10) Business Days prior Notice by either party, the party
receiving such Notice shall furnish to the other an Officer's Certificate
certifying that this Agreement is unmodified and in full force and effect (or
that this Agreement is in full force and effect as modified and setting forth
the modifications), the date to which the Rent has been paid, that no Default
or an Event of Default has occurred and is continuing or, if a Default or an
Event of Default shall exist, specifying in reasonable detail the nature
thereof, and the steps being taken to remedy the same, and such additional
information as the requesting party may reasonably request. Any such
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certificate furnished pursuant to this Section 17.1 may be relied
upon by the requesting party, its lenders and any prospective
purchaser or mortgagee of the Leased Property or the leasehold
estate created hereby.
17.2 Financial Statements.
(a) within forty-five (45) days after each of the
first three quarters of any Fiscal Year, the most recent
Consolidated Financials, accompanied by the Financial
Officer's Certificate;
(b) within ninety (90) days after the end of each
Fiscal Year, the most recent Consolidated Financials for
such year, certified by an independent certified public
accountant reasonably satisfactory to Landlord and
accompanied by a Financial Officer's Certificate;
(c) within thirty (30) days after the end of each
month, an unaudited operating statement, including
occupancy percentages and average rate, accompanied by
a Financial Officer's Certificate;
(d) promptly after the sending or filing thereof,
copies of all reports which Tenant or Wyndham sends to its
security holders generally, and copies of all periodic
reports which Tenant or Wyndham files with the SEC or any
stock exchange on which its shares are listed or traded;
(e) at any time and from time to time upon not
less than twenty (20) days Notice from Landlord, any
Consolidated Financials or any other financial reporting
information required to be filed by Landlord with any
securities and exchange commission, the SEC or any
successor agency, or any other governmental authority, or
required pursuant to any order issued by any court,
governmental authority or arbitrator in any litigation to
which Landlord is a party, for purposes of compliance
therewith; and
(f) promptly, upon Notice from Landlord, such
other information concerning the business, financial
condition and affairs of Tenant and Wyndham as Landlord
reasonably may request from time to time.
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Landlord may at any time, and from time to time, provide any Hotel Mortgagee
with copies of any of the foregoing statements.
In addition, Landlord shall have the right, from time to time at
Landlord's sole cost and expense, upon reasonable Notice, during Tenant's
customary business hours, to cause Tenant's books and records with respect to
the Leased Property to be audited by auditors selected by Landlord at the place
where such books and records are customarily kept.
17.3 General Operations. Tenant shall furnish to Landlord:
(a) Within thirty (30) days after receipt or modification
thereof, copies of all licenses authorizing Tenant and/or the Manager
to operate the Hotel for its Permitted Use;
(b) Not less than thirty (30) days after the commencement of
any Fiscal Year, proposed annual income and ordinary expense and capital
improvement budgets setting forth projected income and costs and
expenses projected to be incurred by Tenant in managing, owning,
maintaining and operating the Hotel during the next succeeding Fiscal
Year; and
(c) Promptly after receipt or sending thereof, copies of all
notices given or received by Tenant under the Management Agreement.
ARTICLE 18
LANDLORD'S RIGHT TO INSPECT
Tenant shall permit, and shall direct the Manager to permit, Landlord
and its authorized representatives to inspect the Leased Property during usual
business hours upon not less than twenty-four (24) hours' notice and to make
such repairs as Landlord is permitted or required to make pursuant to the terms
of this Agreement, provided that any inspection or repair by Landlord or its
representatives will not unreasonably interfere with Tenant's use and operation
of the Leased Property and further provided
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that in the event of an emergency, as determined by Landlord in its reasonable
discretion, prior Notice shall not be necessary.
ARTICLE 19
LEASEHOLD MORTGAGES
19.1 Leasehold Mortgages Authorized. Notwithstanding anything to the
contrary contained herein, on one or more occasions, without Landlord's prior
consent, Tenant may grant one or more Leasehold Mortgages on its leasehold
interest in the Security Deposit, the Leased Property and security interests in
Tenant's rights to the FF&E Reserve and Tenant's Personal Property
(collectively, the "Leasehold Estate") to one or more Lending Institutions to
secure Indebtedness permitted hereunder.
19.2 Notices to Landlord. Promptly upon the granting of any
Leasehold Mortgage, Tenant or the applicable Leasehold Mortgagee shall give
Notice thereof to Landlord, such notice to identify the name and address of the
Leasehold Mortgagee and to be accompanied by a copy of the applicable Leasehold
Mortgage, as recorded. In the event of a change of address of a Leasehold
Mortgagee or of any amendment to or assignment of a Leasehold Mortgage, Tenant
or the applicable Leasehold Mortgagee shall promptly provide notice of such new
address, amendment or assignment to Landlord, together with a copy of each such
amendment or assignment.
19.3 Cure by Leasehold Mortgagee. Any Leasehold Mortgagee shall have
the right, at any time during the Term hereof, while this Agreement is in full
force and effect:
(a) To do any act required by Tenant hereunder, and all such
acts done or performed shall be effective as to prevent a forfeiture of
Tenant's rights hereunder as if the same had been done or performed by
Tenant; and
(b) To rely on the security afforded by the Leasehold Estate,
and to acquire and to succeed to the interest of Tenant hereunder by
foreclosure, whether by judicial sale, by power of sale contained in any
security instrument, or by assignment of leasehold interest given in
lieu of
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foreclosure, and thereafter convey or assign title to the Leasehold
Estate so required to any other person, firm or corporation.
If the Leasehold Mortgagee or Tenant shall have furnished, in writing,
to Landlord a request for Notice of any Event of Default, in the event of any
Event of Default by Tenant, Landlord will not terminate this Lease by reason of
such Event of Default if the Leasehold Mortgagee shall, prior to the expiration
of the applicable cure period, cure any monetary Event of Default or, if such
Event of Default cannot be cured by the payment of money, provide Landlord with
a written undertaking, in form and substance satisfactory to Landlord, to
perform all covenants and obligations of Tenant under this Agreement upon
foreclosure and, thereafter, such Leasehold Mortgagee shall proceed in a timely
and diligent manner to accomplish the foreclosure of the Leasehold Estate.
19.4 Landlord Estoppel Certificates. Landlord agrees, from time to
time, to provide to any Leasehold Mortgagee, promptly after written request
therefor, an estoppel certificate substantially in the form of Exhibit C or
otherwise in such form as any Leasehold Mortgagee may reasonably request.
ARTICLE 20
HOTEL MORTGAGES
20.1 Landlord May Grant Liens. Without the consent of Tenant,
Landlord may, subject to the terms and conditions set forth in this Section
20.1, from time to time, directly or indirectly, create or otherwise cause to
exist any lien, encumbrance or title retention agreement ("Encumbrance") upon
the Leased Property, or any portion thereof or interest therein, whether to
secure any borrowing or other means of financing or refinancing.
Notwithstanding anything to the contrary set forth in Section 20.2, any such
Encumbrance shall include the right to prepay (whether or not subject to a
prepayment penalty) and shall provide (subject to Section 20.2) that it is
subject to the rights of Tenant under this Agreement.
20.2 Subordination of Lease. Subject to Section 20.1 and this
Section 20.2, this Agreement, any and all rights of Tenant
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hereunder, are and shall be subject and subordinate to any ground or master
lease, and all renewals, extensions, modifications and replacements thereof,
and to all mortgages and deeds of trust, which may now or hereafter affect the
Leased Property or any improvements thereon and/or any of such leases, whether
or not such mortgages or deeds of trust shall also cover other lands and/or
buildings and/or leases, to each and every advance made or hereafter to be made
under such mortgages and deeds of trust, and to all renewals, modifications,
replacements and extensions of such leases and such mortgages and deeds of
trust and all consolidations of such mortgages and deeds of trust. This
section shall be self-operative and no further instrument of subordination
shall be required provided that Tenant has received a nondisturbance and
attornment agreement from each Superior Mortgagee and/or Superior Landlord,
consistent with the provisions of this Section 20.2 and otherwise in form and
substance reasonably satisfactory to Tenant, the benefits of which agreement
shall also extend to any Leasehold Mortgagee. In confirmation of such
subordination, Tenant shall promptly execute, acknowledge and deliver any
instrument that Landlord, the lessor under any such lease or the holder of any
such mortgage or the trustee or beneficiary of any deed of trust or any of
their respective successors in interest may reasonably request to evidence such
subordination. Any lease to which this Agreement is, at the time referred to,
subject and subordinate is herein called "Superior Lease" and the lessor of a
Superior Lease or its successor in interest at the time referred to, is herein
called "Superior Landlord" and any mortgage or deed of trust to which this
Agreement is, at the time referred to, subject and subordinate, is herein
called "Superior Mortgage" and the holder, trustee or beneficiary of a Superior
Mortgage is herein called "Superior Mortgagee". Tenant shall have no
obligations under any Superior Lease or Superior Mortgage other than those
expressly set forth in this Section 20.2.
If any Superior Landlord or Superior Mortgagee or the nominee or
designee of any Superior Landlord or Superior Mortgagee shall succeed to the
rights of Landlord under this Agreement (any such person, "Successor
Landlord"), whether through possession or foreclosure action or delivery of a
new lease or deed, or otherwise, such Successor Landlord shall recognize
Tenant's rights under this Agreement as herein provided and Tenant shall attorn
to and recognize the Successor Landlord
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as Tenant's landlord under this Agreement and Tenant shall promptly execute and
deliver any instrument that such Successor Landlord may reasonably request to
evidence such attornment (provided that such instrument does not alter the
terms of this Agreement), whereupon, this Agreement shall continue in full
force and effect as a direct lease between the Successor Landlord and Tenant
upon all of the terms, conditions and covenants as are set forth in this
Agreement, except that the Successor Landlord (unless formerly the landlord
under this Agreement or its nominee or designee) shall not be (a) liable in any
way to Tenant for any act or omission, neglect or default on the part of any
prior Landlord under this Agreement, (b) responsible for any monies owing by or
on deposit with any prior Landlord to the credit of Tenant (except to the
extent actually paid or delivered to the Successor Landlord), (c) subject to
any counterclaim or setoff which theretofore accrued to Tenant against any
prior Landlord, (d) bound by any modification of this Agreement subsequent to
such Superior Lease or Mortgage, or by any previous prepayment of Minimum Rent
or Additional Rent for more than one (1) month in advance of the date due
hereunder, which was not approved in writing by the Superior Landlord or the
Superior Mortgagee thereto, (e) liable to Tenant beyond the Successor
Landlord's interest in the Leased Property and the rents, income, receipts,
revenues, issues and profits issuing from the Leased Property, (f) responsible
for the performance of any work to be done by the Landlord under this Agreement
to render the Leased Property ready for occupancy by Tenant (subject to
Landlord's obligations under Section 5.1.2(b) or with respect to any insurance
or Condemnation proceeds), or (g) required to remove any Person occupying the
Leased Property or any part thereof, except if such person claims by, through
or under the Successor Landlord. Tenant agrees at any time and from time to
time to execute a suitable instrument in confirmation of Tenant's agreement to
attorn, as aforesaid and Landlord agrees to provide Tenant with an instrument
of nondisturbance and attornment from each such Superior Mortgagee and Superior
Landlord in form and substance reasonably satisfactory to Tenant. Nothing
contained in this Section 20.2 shall relieve Landlord from any liability to
Tenant under this Agreement following the exercise of remedies by a Superior
Mortgagee.
20.3 Notice to Mortgagee and Superior Landlord. Subsequent to the
receipt by Tenant of Notice from Landlord as to the
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identity of any Hotel Mortgagee or Superior Landlord under a lease with
Landlord, as ground lessee, which includes the Leased Property as part of the
demised premises and which complies with Section 20.1 and 20.2 (which Notice
shall be accompanied by a copy of the applicable mortgage or lease), no notice
from Tenant to Landlord as to the Leased Property shall be effective unless and
until a copy of the same is given to such Hotel Mortgagee or Superior Landlord
at the address set forth in the above described Notice, and the curing of any
of Landlord's defaults by such Hotel Mortgagee or Superior Landlord shall be
treated as performance by Landlord.
ARTICLE 21
ADDITIONAL COVENANTS OF TENANT
21.1 Prompt Payment of Indebtedness. Tenant shall (a) pay or cause
to be paid when due all payments of principal of and premium and interest on
Tenant's Indebtedness for money borrowed and shall not permit or suffer any
such Indebtedness to become or remain in default beyond any applicable grace or
cure period, (b) pay or cause to be paid when due all lawful claims for labor
and rents with respect to the Leased Property, (c) pay or cause to be paid when
due all trade payables and (d) pay or cause to be paid when due all other of
Tenant's Indebtedness upon which it is or becomes obligated, except, in each
case, other than that referred to in clause (a), to the extent payment is being
contested in good faith by appropriate proceedings in accordance with Article 8
and if Tenant shall have set aside on its books adequate reserves with respect
thereto in accordance with GAAP, if appropriate, or unless and until
foreclosure, distraint sale or other similar proceedings shall have been
commenced.
21.2 Conduct of Business. Tenant shall not engage in any business
other than the leasing and operation of the Leased Property and shall do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect and in good standing its corporate or partnership existence, as
applicable, and its rights and licenses necessary to conduct such business.
21.3 Maintenance of Accounts and Records. Tenant shall keep true
records and books of account of Tenant in which full,
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true and correct entries will be made of dealings and transactions in relation
to the business and affairs of Tenant in accordance with GAAP, where
applicable, Tenant shall apply accounting principles in the preparation of the
financial statements of Tenant which, in the judgment of and the opinion of its
independent public accountants, are in accordance with GAAP, where applicable,
except for changes approved by such independent public accountants. Tenant
shall provide to Landlord either in a footnote to the financial statements
delivered under Section 17.2 which relate to the period in which such change
occurs, or in separate schedules to such financial statements, information
sufficient to show the effect of any such changes on such financial statements.
21.4 Notice of Litigation, Etc. Tenant shall give prompt Notice to
Landlord of any litigation or any administrative proceeding to which it may
hereafter become a party of which Tenant has notice or actual knowledge which
involves a potential uninsured liability equal to or greater than Two Hundred
Fifty Thousand Dollars ($250,000) or which, in Tenant's reasonable opinion, may
otherwise result in any material adverse change in the business, operations,
property, prospects, results of operation or condition, financial or other, of
Tenant. Forthwith upon Tenant obtaining knowledge of any Default, Event of
Default or any default or event of default under any agreement relating to
Indebtedness for money borrowed in an aggregate amount exceeding, at any one
time, Two Hundred Fifty Thousand Dollars ($250,000), or any event or condition
that would be required to be disclosed in a current report filed by Tenant on
Form 8-K or in Part II of a quarterly report on Form 10-Q if Tenant were
required to file such reports under the Securities Exchange Act of 1934, as
amended, Tenant shall furnish Notice thereof to Landlord specifying the nature
and period of existence thereof and what action Tenant has taken or is taking
or proposes to take with respect thereto.
21.5 Indebtedness of Tenant. Tenant shall not create, incur, assume
or guarantee, or permit to exist, or become or remain liable directly or
indirectly upon, any Indebtedness except the following:
(a) Indebtedness of Tenant to Landlord;
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(b) Indebtedness of Tenant for Impositions, to the extent that
payment thereof shall not at the time be required to be made in
accordance with the provisions of Article 8;
(c) Indebtedness of Tenant in respect of judgments or awards
(i) which have been in force for less than the applicable appeal period
and in respect of which execution thereof shall have been stayed pending
such appeal or review, or (ii) which are fully covered by insurance
payable to Tenant, or (iii) which are for an amount not in excess of
$250,000 in the aggregate at any one time outstanding and (x) which have
been in force for not longer than the applicable appeal period, so long
as execution is not levied thereunder or (y) in respect of which an
appeal or proceedings for review shall at the time be prosecuted in good
faith in accordance with the provisions of Article 8, and in respect of
which execution thereof shall have been stayed pending such appeal or
review;
(d) unsecured borrowings of Tenant from its Affiliated Persons
which are by their terms expressly subordinate pursuant to a
Subordination Agreement to the payment and performance of Tenant's
obligations under this Agreement;
(e) Indebtedness for purchase money financing in accordance
with Section 21.9(a) and other operating liabilities incurred in the
ordinary course of Tenant's business;
(f) Deferred fees to the Manager as provided in the Management
Agreement, provided that such fees shall be, from and after the
occurrence of a Default or Event of Default, subordinate to all amounts
owing to Landlord; or
(g) Indebtedness of Wyndham secured by a Leasehold Mortgage or
otherwise guaranteed by Tenant.
21.6 Financial Condition of Tenant. Tenant shall at all times
maintain Tangible Net Worth (except as provided in the last clause of this
sentence) in an amount at least equal to the aggregate of one year's Minimum
Rent payable pursuant to this Agreement; it being expressly understood and
agreed that the
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amount of the Security Deposit may for such purpose be counted as equity at the
full amount thereof.
21.7 Distributions, Payments to Affiliated Persons, Etc. Tenant shall
not declare, order, pay or make, directly or indirectly, any Distributions or
any payment to any Affiliated Person of Tenant (including payments in the
ordinary course of business and payments pursuant to management agreements with
any such Affiliated Person) or set apart any sum or property therefor, or agree
to do so, if, at the time of such proposed action, or immediately after giving
effect thereto, any Event of Default shall exist.
21.8 Prohibited Transactions. Tenant shall not permit to exist or
enter into any agreement or arrangement whereby it engages in a transaction of
any kind with any Affiliated Person as to Tenant, except on terms and
conditions which are commercially reasonable or as otherwise provided in
Section 21.5.
21.9 Liens and Encumbrances. Except as permitted by Section 7.1,
Article 19 and Section 21.5, Tenant shall not create or incur or suffer to be
created or incurred or to exist any Lien on this Agreement or any of Tenant's
assets, properties, rights or income, or any of its interest therein, now or at
any time hereafter owned, other than:
(a) Security interests securing the purchase price of
equipment or personal property whether acquired before or after the
Commencement Date; provided, however, that (i) such Lien shall at all
times be confined solely to the asset in question and (ii) the aggregate
principal amount of Indebtedness secured by any such Lien shall not
exceed the cost of acquisition or construction of the property subject
thereto;
(b) Permitted Encumbrances; and
(c) As permitted pursuant to Article 19 and Section 21.5.
21.10 Merger; Sale of Assets; Etc. Except as otherwise permitted by
this Agreement, Tenant shall not (i) sell, lease (as lessor or sublessor),
transfer or otherwise dispose of, or
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abandon, all or any material portion of its assets (including capital stock) or
business to any Person, (ii) merge into or with or consolidate with any other
Entity, or (iii) sell, lease (as lessor or sublessor), transfer or otherwise
dispose of, or abandon, any personal property or fixtures or any real property;
provided, however, that, notwithstanding the provisions of clause (iii)
preceding, Tenant may dispose of equipment or fixtures which have become
inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary,
provided substitute equipment or fixtures having equal or greater value and
utility (but not necessarily having the same function) have been provided.
ARTICLE 22
REPRESENTATIONS AND WARRANTIES
22.1 Representations of Tenant. To induce Landlord to enter into
this Agreement, Tenant represents and warrants to Landlord as follows:
22.1.1 Status and Authority of Tenant. Tenant is a
corporation duly organized, validly existing and in corporate good standing
under the laws of its state of incorporation. Tenant has all requisite power
and authority under the laws of its state of formation and its respective
charter documents to enter into and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. Tenant has
duly qualified to transact business in each jurisdiction in which the nature of
the business conducted by it requires such qualification.
22.1.2 Action of Tenant. Tenant has taken all necessary
action to authorize the execution, delivery and performance of this Agreement;
this Agreement constitutes the valid and binding obligation and agreement of
Tenant, enforceable against Tenant in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application affecting the rights and
remedies of creditors.
22.1.3 No Violations of Agreements. Neither the execution,
delivery or performance of this Agreement by Tenant,
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nor compliance with the terms and provisions hereof, will result in any breach
of the terms, conditions or provisions of, or conflict with or constitute a
default under, or result in the creation of any lien, charge or encumbrance
upon Tenant or the Leased Property pursuant to the terms of any indenture,
mortgage, deed of trust, note, evidence of indebtedness or any other material
agreement or instrument by which Tenant or, to Tenant's knowledge, the Leased
Property is bound, other than a Leasehold Mortgage.
22.1.4 Litigation. To Tenant's knowledge, no action or
proceeding is pending or threatened and no investigation looking toward such an
action or proceeding has begun, which questions the validity of this Agreement
or any action taken or to be taken pursuant hereto, will result in any
material adverse change in the business, operation, affairs or condition of the
Leased Property or Tenant, result in or subject the Leased Property or Tenant
to a material liability, or involves condemnation or eminent domain proceedings
against any part of the Leased Property.
22.1.5 Existing Leases, Agreements, Etc. To Tenant's
knowledge, other than any agreements provided to Landlord prior to the date
hereof, there are no material agreements affecting the Leased Property which
will be binding on Landlord subsequent to the Commencement Date.
22.1.6 Disclosure. To Tenant's knowledge, there is no fact
or condition which materially and adversely affects the business or condition
of the Leased Property which has not been set forth in this Agreement or in the
other documents, certificates or statements furnished to Landlord in connection
with the transactions contemplated hereby.
22.1.7 Utilities, Etc. To Tenant's knowledge, all utilities
and services necessary for the use and operation of the Leased Property
(including, without limitation, road access, gas, water, electricity and
telephone) are available thereto, are of sufficient capacity to meet adequately
all needs and requirements necessary for the current use and operation of the
Leased Property and for its intended purposes. To Tenant's knowledge, no fact,
condition or proceeding exists which would result in the
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termination or material impairment of the furnishing of such utilities to the
Leased Property.
22.1.8 Compliance With Law. To Tenant's knowledge, the
Leased Property and the use and operation thereof do not violate any material
federal, state, municipal and other governmental statutes, ordinances, by-laws,
rules, regulations or any other legal requirements, including, without
limitation, those relating to construction, occupancy, zoning, adequacy of
parking, environmental protection, occupational health and safety and fire
safety applicable thereto; and there are presently in effect all material
licenses, permits and other authorizations necessary for the current use,
occupancy and operation thereof. To Tenant's knowledge, there is no threatened
request, application, proceeding, plan, study or effort which would materially
adversely affect the present use or zoning of the Leased Property or which
would modify or realign any adjacent street or highway in a manner which would
materially adversely affect the use and operation of the Leased Property.
22.1.9 Hazardous Substances. Except as disclosed to
Landlord in writing or as described in any environmental report delivered to
Landlord, to Tenant's knowledge, no tenant or other occupant or user of the
Leased Property, or any portion thereof, has stored or disposed of (or engaged
in the business of storing or disposing of) or has released or caused the
release of any Hazardous Substances, and, to Tenant's knowledge, except as
disclosed to Landlord in writing or as described in any environmental report
delivered to Landlord, the Leased Property is free from any such Hazardous
Substances, except any such materials maintained in accordance with Applicable
Law.
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22.2 Representations of Landlord. To induce Tenant to enter
in this Agreement, Landlord represents and warrants to Tenant as follows:
22.2.1 Status and Authority of Landlord. Landlord is
a corporation duly organized, validly existing and in corporate good standing
under the laws of its state of incorporation. Landlord has all requisite power
and authority under the laws of its state of formation and its respective
charter documents to enter into and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. Landlord has
duly qualified to transact business in each jurisdiction in which the nature of
the business conducted by it requires such qualification.
22.2.2 Action of Landlord. Landlord has taken all
necessary action to authorize the execution, delivery and performance of this
Agreement; this Agreement constitutes the valid and binding obligation and
agreement of Landlord, enforceable against Landlord in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application affecting the
rights and remedies of creditors.
22.2.3 No Violations of Agreements. Neither the
execution, delivery or performance of this Agreement by Landlord, nor
compliance with the terms and provisions hereof, will result in any material
breach of the terms, conditions or provisions of, or conflict with or
constitute a default under, or result in the creation of any lien, charge or
encumbrance upon any material property or assets of Landlord pursuant to the
terms of any material indenture, mortgage, deed of trust, note, evidence of
indebtedness or any other agreement or instrument by which Landlord is bound.
22.2.4 Litigation. No investigation, action or
proceeding is pending and, to Landlord's knowledge, no action or proceeding is
threatened and no investigation looking toward such an action or proceeding has
begun, which questions the validity of this Agreement or any action taken or to
be taken pursuant hereto.
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22.3 Survival, Etc. The representations and warranties set
forth in Sections 22.1.5 shall remain in effect only for a one-year period
after the date hereof. Except as otherwise expressly provided in this
Agreement, Tenant disclaims the making of any representations or warranties,
express or implied, regarding the Leased Property or matters affecting the
Leased Property, whether made by Tenant, on Tenant's behalf or otherwise,
including, without limitation, the physical condition of the Leased Property,
title to or the boundaries of the Land, pest control matters, soil conditions,
the presence, existence or absence of hazardous wastes, toxic substances or
other environmental matters, compliance with building, health, safety, land use
and zoning laws, regulations and orders, structural and other engineering
characteristics, traffic patterns, market data, economic conditions or
projections, and any other information pertaining to the Leased Property or the
market and physical environments in which it is located. Landlord acknowledges
(i) that Landlord has entered into this Agreement with the intention of making
and relying upon its own investigation or that of third parties with respect to
the physical, environmental, economic and legal condition of the Leased
Property and (ii) that Landlord is not relying upon any statements,
representations or warranties of any kind, other than those specifically set
forth in this Agreement or in any document to be delivered to Landlord by
Tenant. Landlord further acknowledges that it has not received from or on
behalf of Tenant any accounting, tax, legal, architectural, engineering,
property management or other advice with respect to this transaction and is
relying solely upon the advice of third party accounting, tax, legal,
architectural, engineering, property management and other advisors. Subject to
the provisions of this Agreement, Landlord shall purchase the Leased Property
in its "as is" condition on the date hereof.
ARTICLE 23
MISCELLANEOUS
23.1 Limitation on Payment of Rent. All agreements between
Landlord and Tenant herein are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of acceleration of Rent, or
otherwise, shall the Rent or any other amounts payable to Landlord under this
Agreement exceed the
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maximum permissible under applicable law, the benefit of which may be asserted
by Tenant as a defense, and if, from any circumstance whatsoever, fulfillment
of any provision of this Agreement, at the time performance of such provision
shall be due, shall involve transcending the limit of validity prescribed by
law, or if from any circumstances Landlord should ever receive as fulfillment
of such provision such an excessive amount, then, ipso facto, the amount which
would be excessive shall be applied to the reduction of the installment(s) of
Minimum Rent next due and not to the payment of such excessive amount. This
provision shall control every other provision of this Agreement and any other
agreements between Landlord and Tenant.
23.2 No Waiver. No failure by Landlord or Tenant to insist
upon the strict performance of any term hereof or to exercise any right, power
or remedy consequent upon a breach thereof, and no acceptance of full or
partial payment of Rent during the continuance of any such breach, shall
constitute a waiver of any such breach or of any such term. To the maximum
extent permitted by law, no waiver of any breach shall affect or alter this
Agreement, which shall continue in full force and effect with respect to any
other then existing or subsequent breach.
23.3 Remedies Cumulative. To the maximum extent permitted by
law, each legal, equitable or contractual right, power and remedy of Landlord
or Tenant, now or hereafter provided either in this Agreement or by statute or
otherwise, shall be cumulative and concurrent and shall be in addition to every
other right, power and remedy and the exercise or beginning of the exercise by
Landlord or Tenant (as applicable) of any one or more of such rights, powers
and remedies shall not preclude the simultaneous or subsequent exercise by
Landlord of any or all of such other rights, powers and remedies.
23.4 Severability. Any clause, sentence, paragraph, section
or provision of this Agreement held by a court of competent jurisdiction to be
invalid, illegal or ineffective shall not impair, invalidate or nullify the
remainder of this Agreement, but rather the effect thereof shall be confined to
the clause, sentence, paragraph, section or provision so held to be invalid,
illegal or ineffective, and this Agreement shall be construed as if such
invalid, illegal or ineffective provisions had never been contained therein.
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23.5 Acceptance of Surrender. No surrender to Landlord of
this Agreement or of the Leased Property or any part thereof, or of any
interest therein, shall be valid or effective unless agreed to and accepted in
writing by Landlord and no act by Landlord or any representative or agent of
Landlord, other than such a written acceptance by Landlord, shall constitute an
acceptance of any such surrender.
23.6 No Merger of Title. It is expressly acknowledged and
agreed that it is the intent of the parties that there shall be no merger of
this Agreement or of the leasehold estate created hereby by reason of the fact
that the same Person may acquire, own or hold, directly or indirectly this
Agreement or the leasehold estate created hereby and the fee estate or ground
landlord's interest in the Leased Property.
23.7 Conveyance by Landlord. If Landlord or any successor
owner of all or any portion of the Leased Property shall convey all or any
portion of the Leased Property in accordance with the terms hereof other than
as security for a debt, and the grantee or transferee of such of the Leased
Property shall expressly assume all obligations of Landlord hereunder arising
or accruing from and after the date of such conveyance or transfer, Landlord or
such successor owner, as the case may be, shall, provided such successor owner
shall have a Tangible Net Worth of not less than Five Million Dollars
($5,000,000), (y) such conveyance shall occur subsequent to the first
anniversary of the Commencement Date and (z) Landlord shall transfer in cash
any unapplied balance of the Security Deposit to such successor owner,
thereupon be released from all future liabilities and obligations of Landlord
under this Agreement with respect to such of the Leased Property arising or
accruing from and after the date of such conveyance or other transfer and all
such future liabilities and obligations shall thereupon be binding upon the new
owner.
23.8 Quiet Enjoyment. Provided that no Event of Default shall
have occurred and be continuing, Tenant shall peaceably and quietly have, hold
and enjoy the Leased Property for the Term, free of hindrance or molestation by
Landlord or anyone claiming by, through or under Landlord, but subject to (a)
any Encumbrance permitted under Article 20 or otherwise permitted to be created
by Landlord hereunder provided that the holder of such
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Encumbrance has, to the extent appropriate, executed a nondisturbance agreement
pursuant to Section 20.2 or a subordination agreement in form and substance
reasonably acceptable to Tenant, (b) all Permitted Encumbrances, (c) liens as
to obligations of Landlord that are either not yet due or which are being
contested in good faith and by proper proceedings, provided the same do not
materially interfere with Tenant's ability to operate the Hotel and (d) liens
that have been consented to in writing by Tenant. Except as otherwise provided
in this Agreement, no failure by Landlord to comply with the foregoing covenant
shall give Tenant any right to cancel or terminate this Agreement or ▇▇▇▇▇,
reduce or make a deduction from or offset against the Rent or any other sum
payable under this Agreement, or to fail to perform any other obligation of
Tenant hereunder.
23.9 Memorandum of Lease. Neither Landlord nor Tenant shall
record this Agreement. However, Landlord and Tenant shall promptly, upon the
request of the other, enter into a short form memorandum of this Agreement, in
form suitable for recording under the laws of the State in which reference to
this Agreement, and all options contained herein, shall be made. The parties
shall share equally all costs and expenses of recording such memorandum.
23.10 Notices.
(a) Any and all notices, demands, consents, approvals,
offers, elections and other communications required or permitted
under this Agreement shall be deemed adequately given if in
writing and the same shall be delivered either in hand, by
telecopier with written acknowledgment of receipt, or by mail or
Federal Express or similar expedited commercial carrier,
addressed to the recipient of the notice, postpaid and registered
or certified with return receipt requested (if by mail), or with
all freight charges prepaid (if by Federal Express or similar
carrier).
(b) All notices required or permitted to be sent
hereunder shall be deemed to have been given for all purposes of
this Agreement upon the date of acknowledged receipt, in the case
of a notice by telecopier, and, in all other cases, upon the date
of receipt or refusal, except
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that whenever under this Agreement a notice is either received on a day
which is not a Business Day or is required to be delivered on or before
a specific day which is not a Business Day, the day of receipt or
required delivery shall automatically be extended to the next Business
Day.
(c) All such notices shall be addressed,
if to Landlord to:
c/o Hospitality Properties Trust
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
with a copy to:
▇▇▇▇▇▇▇▇ & Worcester LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
if to Tenant to:
c/o Wyndham Hotel Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
with a copy to:
Locke, Purnell, Rain, ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: J. ▇▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
[Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇]
(d) By notice given as herein provided, the parties hereto and
their respective successor and assigns shall have the right from time to
time and at any time during the term
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of this Agreement to change their respective addresses effective upon
receipt by the other parties of such notice and each shall have the
right to specify as its address any other address within the United
States of America.
23.11 Trade Area Restriction. Neither Tenant nor any of its
Affiliated Persons shall own, build, franchise, manage or operate any full-
service Wyndham Hotel within the designated area on Exhibit D, at any time
during the Term; it being expressly understood and agreed that hotels other
than Wyndham Hotels (e.g. garden hotels or resort hotels) are not subject to
the foregoing restriction.
23.12 Construction. Anything contained in this Agreement to the
contrary notwithstanding, all claims against, and liabilities of, Tenant or
Landlord arising prior to any date of termination or expiration of this
Agreement with respect to the Leased Property shall survive such termination or
expiration. In no event shall Landlord be liable for any consequential damages
suffered by Tenant as the result of a breach of this Agreement by Landlord.
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
to be charged. All the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Each term or provision of this Agreement to be
performed by Tenant shall be construed as an independent covenant and
condition. Time is of the essence with respect to the provisions of this
Agreement. Except as otherwise set forth in this Agreement, any obligations of
Tenant (including without limitation, any monetary, repair and indemnification
obligations) and Landlord shall survive the expiration or sooner termination of
this Agreement.
23.13 Counterparts; Headings. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but which,
when taken together, shall constitute but one instrument and shall become
effective as of the date hereof when copies hereof, which, when taken together,
bear the signatures of each of the parties hereto shall have been signed.
Headings in this Agreement are for purposes of reference only and shall not
limit or affect the meaning of the provisions hereof.
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23.14 Applicable Law, Etc. This Agreement shall be interpreted,
construed, applied and enforced in accordance with the laws of the State
applicable to contracts between residents of the State which are to be
performed entirely within the State, regardless of (i) where this Agreement is
executed or delivered; or (ii) where any payment or other performance required
by this Agreement is made or required to be made; or (iii) where any breach of
any provision of this Agreement occurs, or any cause of action otherwise
accrues; or (iv) where any action or other proceeding is instituted or pending;
or (v) the nationality, citizenship, domicile, principal place of business, or
jurisdiction of organization or domestication of any party; or (vi) whether the
laws of the forum jurisdiction otherwise would apply the laws of a jurisdiction
other than the State; or (vii) any combination of the foregoing.
To the maximum extent permitted by applicable law, any action to
enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement may be brought and prosecuted in such court or courts located in
the State as is provided by law; and the parties consent to the jurisdiction of
said court or courts located in the State and to service of process by
registered mail, return receipt requested, or by any other manner provided by
law.
23.15 Special Landlord Option. GHALP Corporation, a Subsidiary of
Wyndham, currently leases eleven Wyndham Garden Hotel properties from HPTWN
Corporation, an Affiliated Person as to Landlord. Landlord shall have the
right, exercisable by notice given at any time on or before the fifth
anniversary of the Commencement Date, at Landlord's sole cost and expense, to
require (a) that Tenant enter into an amendment to this Agreement and cause
GHALP Corporation to enter into an amendment to its leases (collectively, the
"GHALP Leases"), providing (i) that any Event of Default under any GHALP Lease
is an Event of Default under this Agreement and that any Event of Default under
this Agreement is an Event of Default under the GHALP Leases; (ii) that GHALP
Corporation may not elect not to extend the term of the GHALP Leases for the
Extended Terms (as defined therein) unless Tenant elects not to extend the Term
of this Agreement for the Extended Terms and that Tenant may not elect not to
extend the Term of this Agreement for the Extended Terms unless GHALP
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Corporation elects not to extend the term of its the GHALP Leases for the
Extended Terms; and (iii) that amounts (as defined therein) in the FF&E Reserve
under this Agreement be pooled and consolidated with amounts in the FF&E
Reserve under the GHALP Leases; or (b) that Tenant be merged into GHALP
Corporation and that the GHALP Leases be amended to designate this Agreement an
"Other Lease" (as defined therein) under the GHALP Leases and that this
Agreement be amended accordingly. In the event Landlord shall exercise either
of the aforesaid options, Landlord and Tenant shall enter into an amendment to
this Agreement (and shall cause their respective Affiliated Persons to enter
into amendments to the GHALP Leases) within thirty (30) days after Landlord's
Notice to Tenant. The form and substance of any such amendments shall be
reasonably satisfactory to Landlord and Tenant.
23.16 Nonrecourse. Nothing contained in this Agreement shall be
construed to impose any liabilities or obligations on Wyndham or any of its
shareholders for the payment or performance of the obligations or liabilities
of Tenant under this Agreement.
23.17 Confidentiality. Except to prospective lenders and purchasers
or as may be required by law, the SEC or any securities and exchange
commission, Landlord shall not disclose any of Tenant's confidential or
proprietary information to any Person.
IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument as of the date above first written.
LANDLORD:
HPTSLC CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its President
TENANT:
WHC SALT LAKE CITY CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Authorized Signatory
101
EXHIBIT A
The Land
[See attached copy.]
102
EXHIBIT B
Approved Budget and Improvements
[See attached copy.]
103
EXHIBIT C
Form of Landlord Estoppel Certificate
[See attached copy.]
104
EXHIBIT D
Restricted Trade Area
[See attached copy.]
105
EXHIBIT E
Annual Minimum Rent
Minimum Rent is allocated as follows:
Portion of Annual Minimum Portion of Annual
Rent Allocated to Leased Minimum Rent
Real Property and Leased Allocated to Leased
Year Intangible Property Personal Property
---- ------------------------- -------------------
1997 94.0% 6.0%
1998 95.5% 4.5%
1999 97.0% 3.0%
2000 98.5% 1.5%
2001 and beyond 100.0% 0%