EXHIBIT 10.57
Form of Lease Agreement
LEASE AGREEMENT
DATED AS OF ______________________
BY AND BETWEEN
------------------------------
AS LANDLORD,
AND
--------------------------------------,
AS TENANT
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS.............................................................................................1
ARTICLE 2 LEASED PROPERTY AND TERM...............................................................................15
2.1 Leased Property.........................................................................................15
2.2 Condition of Leased Property............................................................................16
2.3 Fixed Term..............................................................................................17
2.4 Renewal Term............................................................................................17
ARTICLE 3 RENT...................................................................................................17
3.1 Rent....................................................................................................17
3.2 Confirmation of Percentage Rent.........................................................................19
3.3 Additional Charges......................................................................................20
3.4 Payment of Impositions..................................................................................20
3.5 Late Payment of Rent, Etc...............................................................................22
3.6 Net Lease...............................................................................................22
ARTICLE 4 USE OF THE LEASED PROPERTY.............................................................................23
4.1 Permitted Use...........................................................................................23
4.2 Compliance with Legal/Insurance Requirements, Etc.......................................................24
4.3 Environmental Matters...................................................................................25
ARTICLE 5 REPAIRS, MAINTENANCE AND REPLACEMENTS..................................................................26
5.1 Repairs and Maintenance Costs Which Are Expensed........................................................26
5.2 FF&E Reserve............................................................................................26
5.3 Capital Expenditures....................................................................................29
5.4 Ownership of Replacements...............................................................................30
5.5 Tenant's Personal Property..............................................................................30
5.6 Yield Up................................................................................................30
5.7 Management Agreement....................................................................................31
ARTICLE 6 IMPROVEMENTS, ETC......................................................................................31
6.1 Improvements to the Leased Property.....................................................................31
6.2 Salvage.................................................................................................31
6.3 Equipment Leases........................................................................................31
ARTICLE 7 LIENS..................................................................................................32
ARTICLE 8 PERMITTED CONTESTS.....................................................................................32
ARTICLE 9 INSURANCE..............................................................................................33
9.1 Property Insurance......................................................................................33
9.2 Operational Insurance...................................................................................33
9.3 General Insurance Provisions............................................................................34
9.4 Costs and Expenses......................................................................................35
9.5 Waiver of Subrogation...................................................................................36
9.6 Indemnification of Landlord.............................................................................36
ARTICLE 10 DAMAGE, REPAIR AND CONDEMNATION.......................................................................36
10.1 Damage and Repair.......................................................................................36
10.2 Condemnation............................................................................................37
ARTICLE 11 MORTGAGES, ETC........................................................................................38
11.1 Mortgages...............................................................................................38
11.2 Subordination, Non-Disturbance and Attornment...........................................................39
11.3 Disbursement of Award...................................................................................40
11.4 No Covenants, Conditions or Restrictions................................................................40
11.5 Liens; Credit...........................................................................................40
11.6 Amendments Requested by Mortgagee.......................................................................40
11.7 Ground Leases...........................................................................................41
ARTICLE 12 DEFAULTS AND REMEDIES.................................................................................42
12.1 Events of Default.......................................................................................42
12.2 Remedies................................................................................................43
12.3 Waiver of Jury Trial....................................................................................44
12.4 Application of Funds....................................................................................44
12.5 Landlord's Right to Cure Tenant's Default...............................................................44
12.6 Good Faith Dispute......................................................................................45
ARTICLE 13 HOLDING OVER..........................................................................................45
ARTICLE 14 LANDLORD'S NOTICE OBLIGATIONS; LANDLORD DEFAULT.......................................................45
14.1 Landlord Notice Obligation..............................................................................45
14.2 Landlord's Default......................................................................................45
14.3 Tenant's Right to Cure..................................................................................46
ARTICLE 15 TRANSFERS BY LANDLORD.................................................................................46
15.1 Transfer of Leased Property.............................................................................46
ARTICLE 16 SUBLETTING AND ASSIGNMENT.............................................................................47
16.1 Subletting and Assignment...............................................................................47
16.2 Required Sublease Provisions............................................................................47
16.3 Permitted Sublease and Assignment.......................................................................48
16.4 Sublease Limitation.....................................................................................48
ARTICLE 17 ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS........................................................49
17.1 Estoppel Certificates...................................................................................49
17.2 Accounting, Distributions and Annual Reconciliation.....................................................49
17.3 Books and Records.......................................................................................50
17.4 Accounts, Expenditures..................................................................................50
17.5 Business Plan...........................................................................................50
ARTICLE 18 LANDLORD'S RIGHT TO INSPECT...........................................................................52
ARTICLE 19 EXPERT DECISIONS......................................................................................52
ARTICLE 20 MISCELLANEOUS.........................................................................................53
20.1 Limitation on Payment of Rent...........................................................................53
20.2 No Waiver...............................................................................................53
20.3 Remedies Cumulative.....................................................................................53
20.4 Severability............................................................................................53
20.5 Acceptance of Surrender.................................................................................53
20.6 No Merger of Title......................................................................................54
20.7 Conveyance by Landlord..................................................................................54
20.8 Quiet Enjoyment.........................................................................................54
20.9 Memorandum of Lease.....................................................................................54
20.10 Notices.................................................................................................54
20.11 Construction; Nonrecourse...............................................................................55
20.12 Counterparts; Headings..................................................................................56
20.13 Applicable Law, Etc.....................................................................................56
20.14 Right to Make Agreement.................................................................................56
20.15 Disclosure of Information...............................................................................57
EXHIBITS
Exhibit A - Minimum Rent
Exhibit B - The Ground Leasehold Estates
Exhibit C - The Ground Leases
Exhibit D - Percentage Rent Provisions
LEASE AGREEMENT
THIS LEASE AGREEMENT is entered into as of this _______ day of ___,
_____, by and between ___________________________, as landlord ("Landlord"), and
________________________________, as tenant ("Tenant").
W I T N E S S E T H :
WHEREAS, Landlord is the owner of the Ground Leasehold Interests (the
"Ground Leasehold Estates") in the real property lying and being situate in
_____________, State of __________ described on Exhibit B hereof (the "Leasehold
Land") pursuant to the ground leases and sublease ("the Ground Leases")
described on Exhibit C hereof and the buildings, structures, fixtures,
additions, enlargements, extensions, modifications, repairs, replacements and
other improvements now or hereafter located thereon (the "Leasehold
Improvements"), which Ground Leasehold Estates, Leasehold Land and Leasehold
Improvements are part of the Leased Property (this and other capitalized terms
used and not otherwise defined herein having the meaning described as such
terms);
WHEREAS, Landlord has agreed to lease the Leased Property to Tenant and
Tenant has agreed 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, (a) 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, (b) all accounting terms not otherwise defined
herein shall have the meanings assigned to them in accordance with GAAP, (c) 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 other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Accounting Period" shall mean each calendar month.
"Accounting Period Statement" shall have the meaning given such term in
Section 17.2
"Additional Charges" shall have the meaning given such term in Section
3.3.
"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, 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).
"Agreement" shall mean this Lease Agreement, including all Exhibits
hereto, as it and they may be amended from time to time as herein provided.
"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, pesticides,
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.
"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).
"Business Day" shall mean any day other than Saturday, Sunday, or any
other day on which banking institutions in the State of Florida or the State of
Maryland are authorized by law or executive action to close.
"Building Estimate" shall have the meaning given such term in Section
5.3.
"Business Plan" shall have the meaning given such term in Section 17.5.
"Capital Expenditure" shall mean the expenses necessary for
non-routine, major repairs, alterations, improvements, renewals, replacements,
and additions to the Hotel including, without limitation, to the structure, the
exterior facade (excluding painting) and all of the mechanical, electrical,
heating, ventilating, air conditioning, plumbing or vertical transportation
elements of the Hotel building, together with all other expenditures which are
classified as "capital expenditures" under generally-accepted accounting
principles. Capital Expenditures shall not include Routine Capital Expenditures.
"Chain Services" shall mean certain services that are furnished
generally on a central or system-wide basis to other hotels in the ____________
System.
"Claim" shall have the meaning given such term in Article 8.
"Code" shall mean the Internal Revenue Code of 1986 and, to the extent
applicable, the Treasury Regulations promulgated thereunder, each as amended
from time to time.
"Commencement Date" shall mean the date of this Agreement.
"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
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.
"Condemnor" shall mean any public or quasi-public authority, or Person
having the power of Condemnation.
"Controlling Interest" shall mean (a) as to a corporation the right to
exercise, directly or indirectly, more than fifty percent (50%) of the voting
rights attributable to the shares of the Entity (through ownership of such
shares or by contract), and (b) as to an Entity not a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the Entity.
"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.
"Deduction" shall mean the following expenses incurred by Manager in
operating the Hotel:
(a) the cost of sales, including, without limitation, compensation,
benefits and related administration costs, payroll taxes, ERISA-related
liabilities and other costs related to employees of Manager (or one of
its Affiliates) who are working for the benefit of the Hotel; provided
that the foregoing costs shall not include the salary and other
employee costs of Manager's corporate executive staff who are located
at Manager's corporate headquarters;
(b) departmental expenses incurred at departments within the Hotel;
administrative and general expenses; the cost of marketing incurred by
the Hotel; advertising and business promotion incurred by the Hotel;
heat, light, and power; computer line charges; and routine repairs,
maintenance and minor alterations treated as Deductions under Section
5.1;
(c) the cost of Inventories and Fixed Asset Supplies consumed in the
operation of the Hotel;
(d) a reasonable reserve for uncollectible accounts receivable as
determined by Manager;
(e) all costs and fees of independent professionals or other third parties
who are retained by Manager to perform services required or permitted
hereunder;
(f) all costs and fees of technical consultants, professionals and
operational experts (but not including the costs of the Expert, which
will be assessed in accordance with Section 19.2) who are retained or
employed by Manager, ___________, and their Affiliates for specialized
services (including, without limitation, quality assurance inspectors,
personnel providing architectural, technical or procurement services
for the Hotel, tax consultants, and personnel providing legal services
in connection with matters directly involving the Hotel) and the cost
of attendance by employees of the Hotel at training and manpower
development programs designated by Manager;
(g) the Base Management Fee;
(h) insurance costs and expenses as provided in Section 9.1;
(i) taxes, if any, payable by or assessed against Manager related to this
Agreement or to Manager's operation of the Hotel (exclusive of
Manager's income taxes or franchise taxes);
(j) all Impositions;
(k) the amount of any transfers into the FF&E Reserve required pursuant to
Section 5.2;
(l) the Hotel's share of costs and expenses incurred in connection with
sales, advertising, promotion and marketing programs developed for the
_______________ System, including guest loyalty and recognition
programs and the _______________ Program, where such expenses are not
deducted as departmental expenses under paragraph 2 above or as Chain
Services pursuant to paragraph 13 below, provided that such costs and
expenses are allocated in a fair and reasonable basis among all hotels
benefiting from such activities;
(m) the Hotel's share of the charges for Chain Services;
(n) all costs and expenses of compliance by Manager with applicable Legal
Requirements pertaining to the operation of the Hotel;
(o) the Hotel's pro rata share of costs and expenses (including those
relating to development and implementation) incurred in connection with
providing services to multiple hotels and/or other facilities in
substitution for or in association with services that are or would have
been performed or procured by individual hotels, which may be more
effectively performed on a shared or group basis;
(p) rent and other payments under the Ground Leases.
(q) such other costs and expenses incurred by Manager (either at the Hotel
or elsewhere) as are specifically provided for elsewhere in this
Agreement or are otherwise reasonably necessary for the proper and
efficient operation of the Hotel.
The term "Deductions" shall not include: (a) debt service
payments pursuant to any Mortgage on the Hotel; (b) payments pursuant to
equipment leases or other forms of financing obtained for the FF&E located in or
connected with the Hotel, unless Manager and Owner have previously given their
respective written consent to such equipment lease and/or financing; (c) rental
payments pursuant to any ground lease affecting the Leased Property, other than
the Ground Leases; or (d) depreciation on the Hotel or any of its contents. All
of the foregoing items listed in this paragraph shall be paid by Tenant from its
own funds.
"Default" shall mean any event or condition existing which with the
giving of notice and/or lapse of time would ripen into an Event of Default.
"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, if Tenant is a
corporation, or any cash distributions in respect of any partnership or
membership interests in Tenant, if Tenant is a partnership or limited liability
company, (b) any purchase, redemption retirement or other acquisition of any
shares of any class of capital stock of Tenant, if Tenant is a corporation, or
any purchase, redemption, retirement or other acquisition of any partnership or
membership interests in Tenant, if Tenant is a partnership or limited liability
company, (c) any other distribution on or in respect of any shares of any class
of capital stock of Tenant, if Tenant is a corporation, or any other
distribution in respect of any partnership or membership interests in Tenant, if
Tenant is a partnership or a limited liability company, or (d) any return of
capital to shareholders of Tenant, if Tenant is a corporation, or any return of
capital to partners or members in Tenant, if Tenant is a partnership or limited
liability company.
"Emergency Requirements" shall mean any of the following events or
circumstances: (a) an emergency threatening the Hotel, or the life or property
of its guests, invitees or employees; (b) a Legal Requirement; (c) a condition,
the continuation of which would subject Tenant, Manager and/or Owner to civil or
criminal liability; or (d) a Force Majeure event that prevents Tenant from
leasing, or Manager from managing or operating the Hotel pursuant to System
Standards.
"Encumbrance" shall have the meaning given such term in Section 20.1.
"Entity" shall mean any corporation, general or limited partnership,
limited liability company, limited liability 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 association or entity.
"Environment" shall mean soil, surface waters, ground waters, land,
streams, sediments, surface or subsurface strata and ambient air.
"Environmental Laws" shall have the meaning given such term in Section
4.3
"Environmental Obligation" shall have the meaning given such term in
Section 4.3.1.
"Event of Default" shall have the meaning given such term in Section
12.1.
"Existing CC&R's" shall have the meaning given such term in Section
11.4.
"Expert" shall mean an independent, nationally recognized hotel
consulting firm or individual who is qualified to resolve the issue in question,
and who is appointed in each instance by agreement of the parties or, failing
agreement, each party shall select one (1) such nationally recognized consulting
firm or individual and the two (2) respective firms and/or individuals so
selected shall select another such nationally recognized consulting firm or
individual to be the Expert. Each party agrees that it shall not appoint an
individual as an Expert hereunder if the individual is, as of the date of
appointment or within six (6) months prior to such date, employed by such party,
either directly or as a consultant, in connection with any other matter. In the
event that either party calls for an Expert determination pursuant to the terms
hereof, the parties shall have ten (10) days from the date of such request to
agree upon an Expert and, if they fail to agree, each party shall have an
additional ten (10) days to make its respective selection of a firm or
individual, and within ten (10) days of such respective selections, the two (2)
respective firms and/or individuals so selected shall select another such
nationally recognized consulting firm or individual to be the Expert. If either
party fails to make its respective selection of a firm or individual within the
ten (10) day period provided for above, then the other party's selection shall
be the Expert. Also, if the two (2) respective firms and/or individuals so
selected shall fail to select a third nationally recognized consulting firm or
individual to be the Expert, then such Expert shall be appointed by the American
Arbitration Association and shall be a qualified person having at least ten (10)
years recent professional experience as to the subject matter in question. Prior
to the actual occurrence of a dispute hereunder, upon request by either party,
the parties shall in good faith select and agree upon the firm or individual who
will perform the duties of the Expert hereunder with respect to one, some or all
of the issues that may be referred to an Expert pursuant to the provisions of
this Agreement; provided that at any time after such pre-approval of an Expert,
upon the request of either party based upon a reasonable objection to such
Expert, the parties shall in good faith discuss the replacement of such Expert
with respect to one, some or all of the issues that may be referred to such
Expert hereunder.
"FAS" shall mean all items included within "Property and Equipment"
under the Uniform System of Accounts, including, but not limited to, linen,
china, glassware, tableware, uniforms and similar items, whether used in
connection with public space or guest rooms.
"FF&E Reserve" shall have the meaning given such term in Section 5.2.
"FF&E Estimate" shall have the meaning given such term in Section 5.2.
"First Tier Gross Revenues Break Point" shall mean the amount of Gross
Revenues for the applicable Lease Year corresponding to such term as set forth
on Exhibit D.
"First Tier Gross Revenue Percentage" shall mean the percentage
corresponding to such term as set forth on Exhibit D.
"Fiscal Quarter" shall mean, with respect to the first, second and
third quarter of any Fiscal Year, Accounting Periods one (1) through three (3),
four (4) through six (6) and seven (7) through nine (9), respectively, of such
Fiscal Year and, with respect to the fourth quarter of any Fiscal Year,
Accounting Periods ten (10) through twelve (12) of such Fiscal Year.
"Fiscal Year" shall mean each fiscal year of Manager, each such fiscal
year to consist of twelve Accounting Periods and which, as of the Commencement
Date, commences at midnight on January 1 and ends on December 31 of each
calendar year. Any partial Fiscal Year between the Commencement Date and the
commencement of the first full Fiscal Year shall constitute a separate Fiscal
Year. If Manager shall, for a bona fide business reason, change its Fiscal Year
during the Term, appropriate adjustments, if any, shall be made with respect to
the timing of certain accounting and reporting requirements of this Agreement;
provided, however, that, in no event shall any such change or adjustment
increase or reduce any monetary obligation under this Agreement.
"Fixed Term" shall have the meaning given such term in Section 2.3.
"Fixtures" shall have the meaning given such term in Section 2.1(e).
"Force Majeure Event" means any circumstance caused by any of the
following: strikes, lockouts; acts of God; civil commotion; fire or any other
casualty; governmental action (including revocation or refusal to grant any
required license or permit where such revocation or refusal is not due to the
fault of the party affected thereby); or other similar cause or circumstance
which is not in the reasonable control of either party hereto. Neither lack of
financing nor general economic and/or market factors is a Force Majeure Event.
"GAAP" shall mean generally accepted accounting principles consistently
applied.
"GDP Deflator" shall mean the "Gross Domestic Product Implicit Price
Deflator" issued from time to time by the United States Bureau of Economic
Analysis of the Department of Commerce, or if the aforesaid GDP Deflator is not
at such time so prepared and published, any comparable index selected by Tenant
and reasonably satisfactory to Tenant (a "Substitute Index") then prepared and
published by an agency of the Government of the United States, appropriately
adjusted for changes in the manner in which such index is prepared and/or year
upon which such index is based. Any dispute regarding the selection of the
Substitute Index or the adjustments to be made thereto shall be settled by the
Expert in accordance with Article 19. Except as otherwise expressly stated
herein, whenever a number or amount is required to be "adjusted by the GDP
Deflator," or similar terminology, such adjustment shall be equal to the
percentage increase or decrease in the GDP Deflator which is issued for the
month in which such adjustment is to be made (or, if the GDP Deflator for such
month is not yet publicly available, the GDP Deflator for the most recent month
for which the GDP Deflator is publicly available) as compared to the GDP
Deflator which was issued for the month in which the Effective Date occurred.
"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.
"Gross Revenues" shall mean all revenues and receipts of every kind
derived from operating the Hotel and all departments and parts thereof,
including, but not limited to: income (from both cash and credit transactions)
from rental of guest rooms, telephone charges, stores, offices, 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; income from parking; health club membership fees; food and
beverage sales; wholesale and retail sales of merchandise; service charges; and
proceeds, if any, from business interruption or other loss of income insurance;
provided, however, that Gross Revenues shall not include the following: any rent
received by the Hotel pursuant to the provisions of the Office Space Lease and
Sales and Marketing Agreement gratuities to employees of the Hotel; federal,
state or municipal excise, sales or use taxes or any other taxes collected
directly from patrons or guests or included as part of the sales price of any
goods or services; proceeds from the sale of FF&E; interest received or accrued
with respect to the funds in the FF&E Reserve or the other operating accounts of
the Hotel; any refunds, rebates, discounts and credits of a similar nature,
given, paid or returned in the course of obtaining Gross Revenues or components
thereof; insurance proceeds (other than proceeds from business interruption or
other loss of income insurance); condemnation proceeds (other than for a
temporary taking); or any proceeds from any sale of the Hotel or from the
refinancing of any debt encumbering the Hotel.
"Ground Leasehold Estates" shall have the meaning given such term in
the preambles to this Agreement.
"Ground Leases" shall have the meaning given such term in the preambles
to this Agreement.
"Hazardous Materials" shall have the meaning given such term in Section
4.3.
"Hotel" shall mean the hotel being operated on the Leased Property.
"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.
"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, single business,
gross receipts, transaction privilege, rent 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, net worth or capital 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 (from any source other than the rent received by Landlord from
Tenant), or similar taxes as the same relate to or are imposed upon Landlord,
except to the extent that any tax, assessment, tax levy or charge that would
otherwise be an Imposition under this definition which is in effect at any time
during the Term hereof is totally or partially repealed, and a tax, assessment,
tax levy or charge set forth in clause (i) or (ii) preceding is levied, assessed
or imposed expressly in lieu thereof, (v) any interest or penalties imposed on
Landlord as a result of the failure of 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 3.4, (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 entered into by Landlord governing Landlord's conduct
or operation or as a result of the negligence or willful misconduct of Landlord.
"Indebtedness" shall mean all obligations, contingent or otherwise,
which in accordance with GAAP should be reflected on the obligor's balance sheet
as liabilities.
"Index" shall mean the Consumer Price Index for Urban Wage Earners and
Clerical Workers, All-Cities, All Items (November 1996 = 100), as published by
the Bureau of Labor Statistics or, in the event publication thereof ceases, by
reference to whatever index then published by the United States Department of
Labor at that time is most nearly comparable as a measure of general changes in
price levels for urban areas, as reasonably determined by Landlord and Tenant.
"Institutional Lender" shall mean a foreign or domestic commercial
bank, trust company, savings bank, savings and loan association, life insurance
company, real estate investment trust, pension trust, pension plan or pension
fund, a public or privately-held fund engaged in real estate and/or corporate
lending, or any other financial institution commonly known as an institutional
lender (or any Affiliate thereof) having a minimum paid up capital (or net
assets in the case of a pension fund) of ____________________ Million Dollars
($_________________).
"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.
"Insurance Retention" shall have the meaning given such term in Section
9.4(c).
"Interest Rate" shall mean an annual rate of interest equal to, as of
the date of determination, the per annum rate for ten (10) year U.S. Treasury
Obligations as published in the Wall Street Journal, plus two hundred (200)
basis points.
"Inventories" shall mean "Inventories" as defined in the Uniform System
of Accounts, including, but not limited to, provisions in storerooms,
refrigerators, pantries and kitchens; beverages in wine cellars and bars; other
merchandise intended for sale; fuel; mechanical supplies; stationery; and other
expenses, supplies and similar items.
"Landlord" shall mean ________________ and shall include its permitted
successors and assigns.
"Landlord Default" shall have the meaning given such term in Section
14.2.
"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 (other than Tenant) of a direct or indirect interest in
the Leased Property, or which result from any violation by Landlord of any terms
of this 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.
"Lease Year" shall mean any Fiscal Year during the Term and any partial
Fiscal Year at the beginning or end of the Term.
"Leased Improvements" shall have the meaning given such term in Section
2.1(b).
"Leased Intangible Property" shall mean all intangible property (as
defined herein) acquired by Landlord with respect to the Leased Property.
"Leased Personal Property" shall mean all machinery, equipment,
furniture, furnishings, moveable walls or partitions, computers or trade
fixtures located on or in the Leased Improvements, and all modifications,
replacements, alterations and additions to such 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.
"Leased Property" shall have the meaning given such term in Section
2.1.
"Leasehold Improvements" shall have the meaning given such term in the
Preambles of this Agreement.
"Leasehold Land" shall have the meaning given such term in the
Preambles of this Agreement.
"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, declarations, restrictions and encumbrances contained in any
instruments at any time in force affecting the Leased Property as of the date
hereof, or to which Tenant has consented or required to be granted pursuant to
Applicable Laws, 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 or any Affiliated Person of
Landlord's status as a real estate investment trust.
"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.
"Loan Agreement" shall mean that certain Loan Agreement by and between
____________________, Landlord's sole Limited Partner, and _____ dated as of
______________.
"Management Agreement" shall mean any agreement entered into by Tenant
and Manager with respect to the management and operation of the Leased Property,
as the same may be amended from time to time.
"Manager" shall mean ________________________________.
"Major Capital Expenditures" shall have the meaning given such term in
Section 5.1.3(a).
"Mezzanine Loans" shall mean the loans from __________ to
___________________ Landlord's sole Limited Partner, as contemplated by and made
pursuant to the Loan Agreement.
"Minimum Rent" shall mean, with respect to each Accounting Period, the
sum set forth on Exhibit A, subject to adjustment pursuant to the terms of this
Agreement.
"Minor Casualty" shall mean any fire or other casualty which results in
damage to the Hotel and/or its contents, to the extent that the total cost (in
Tenant's reasonable judgment) of repairing and/or replacing of the damaged
portion of the Hotel to the same condition as existed previously does not exceed
the dollar amount of ____________________, said dollar amount to be adjusted by
the GDP Deflator.
"Mortgage" shall mean any mortgage, deed of trust, or security document
encumbering the Hotel and/or the Site or related to the ownership or operation
of the Hotel.
"Mortgagee" shall mean the holder of any Mortgage.
"Notice" shall mean a notice given in accordance with Section 22.10.
"Operating Loss" shall mean a negative Operating Profit.
"Operating Profit" shall mean, with respect to any given period of
time, the excess of Gross Revenues over Deductions (each calculated in
accordance with this Agreement and the Uniform System of Accounts).
"Owner Agreement" shall mean the Owner Agreement pertaining to the
Leased Property, dated as of the date hereof, among Landlord, Manager and
Tenant, as the same may be amended from time to time.
"Parent" shall mean, with respect to any Person, any Person which
directly, or indirectly through one or more Subsidiaries or Affiliated Persons,
(a) owns fifty-one percent (51%) or more of the voting or beneficial interest
in, or (b) otherwise has the right or power (whether by contract, through
ownership of securities or otherwise) to control, such Person.
"Partnership Agreement" shall mean the Limited Partnership Agreement of
________________.
"Percentage Rent" shall have the meaning given such term in Section
3.1(b).
"Period Revenues Computation" shall have the meaning given such term in
Section 3.1(b).
"Permitted Encumbrances" shall mean all rights, restrictions, and
easements of record set forth on Schedule B to the applicable leasehold 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.
"Permitted Use" shall mean any use of the Leased Property permitted
pursuant to Section 4.1.1(a) or (b).
"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.
"Proprietary Information" shall mean (a) all computer software and
accompanying documentation (including all future upgrades, enhancements,
additions, substitutions and modifications thereof), other than that which is
commercially available, which are used by Tenant and Manager in connection with
the property management system, the reservation system and all future electronic
systems developed by Tenant or Manager or any Affiliated Person of Tenant or
Manager for use in the Hotel, (b) all manuals, brochures and directives used by
Tenant or Manager at the Hotel regarding the procedures and techniques to be
used in operating the Hotel, (c) customer lists, and (d) employee records which
must remain confidential either under Legal Requirements or under reasonable
corporate policies of Tenant, Manager or any Affiliated Person as to Tenant.
"Qualified Mortgage" shall have the meaning given such term in Section
11.1.
"Re-letting Expenses" shall have the meaning given such term in Section
12.2.
"Rent" shall mean, collectively, the Minimum Rent, Percentage Rent and
Additional Charges.
"Renewal Terms" shall have the meaning given such term in Section 2.4.
"Room Revenues" shall mean gross revenue from the rental of guest rooms
at the Leased Property, whether to individuals, groups or transients, determined
in a manner consistent with the Uniform System of Accounts and excluding the
following:
(a) The amount of all credits, bad debt written off, rebates
or refunds to customers, guest or patrons; and
(b) All sales taxes or any other taxes imposed on the rental
of such guest rooms; and
(c) Any fees collected for amenities including, but not
limited to telephone, laundry, movies or concessions.
"Routine Capital Expenditures" shall mean certain routine, non-major
expenditures which are classified as "capital expenditures" under
generally-accepted accounting principles, but which will be funded from the FF&E
Reserve (pursuant to Section 5.2), rather than pursuant to the provisions of
Section 5.3. Routine Capital Expenditures consist of the following types of
expenditures: exterior and interior repainting; resurfacing building walls and
floors; resurfacing parking areas; replacing folding walls; and miscellaneous
similar expenditures (all such types of expenditures to be in accordance with
Manager's policies as then generally implemented throughout the ____________
System).
"SEC" shall mean the Securities and Exchange Commission.
"Second Tier Gross Revenues Break Point" shall mean the amount of Gross
Revenues for the applicable Lease Year corresponding to such term as set forth
on Exhibit D.
"Second Tier Gross Revenue Percentage" shall mean the percentage
corresponding to such term as set forth on Exhibit D.
"Senior Lender" shall mean __________________________.
"Senior Loan" shall mean that certain loan in the amount of
$________________________ from Senior Lender to Landlord.
"Senior Loan Documents" shall mean those documents from Landlord and/or
Tenant in favor of Senior Lender to evidence and secure the Senior Loan,
including but not limited to: that certain Leasehold Deed of Trust, Security
Agreement, Financing Statements, Fixture Filing and Assignments of Leases and
Rents; Assignment of Leases and Rents, and the Promissory Note evidenced and
secured by the foregoing.
"State" shall mean the State of _________.
"Subsidiary" shall mean, with respect to any Person, any Entity in
which such Person directly, or indirectly through one or more Subsidiaries or
Affiliated Persons, (a) owns fifty-one percent (51%) or more of the voting or
beneficial interest or (b) which such Person otherwise has the right or power to
control (whether by contract, through ownership of securities or otherwise).
"System Standards" shall mean any one or more (as the context requires)
of the following three (3) categories of standards: (a) operational standards
(for example, services offered to guests, quality of food and beverages,
cleanliness, staffing and employee compensation and benefits, Chain Services,
frequent traveler programs such as the _______________ Program and other similar
programs, etc.); (b) physical standards (for example, quality of the Hotel,
FF&E, and Fixed Asset Supplies, frequency of FF&E replacements, etc.); and (c)
technology standards (for example, those relating to software, hardware,
telecommunications, systems security and information technology); each of such
standards shall be the standard which is generally prevailing or in the process
of being implemented at other resort hotels in the ______________ System, and
shall include all services and facilities in connection therewith that are
customary and usual at comparable hotels in the ____________ System.
"Tenant" shall mean ______________________________, and shall include
its permitted successors and assigns.
"Tenant's Personal Property" shall mean all machinery, equipment,
furniture, furnishings, moveable walls or partitions, computers or trade
fixtures located on or in the Leased Improvements, and all modifications,
replacements, alterations and additions to such property, except items, if any,
included within the category of Fixtures, and also including all motor vehicles,
Inventories, FAS and any other tangible personal property of Tenant acquired by
Tenant at its election and with its own funds 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 Proprietary Information.
"Term" shall mean, collectively, the Fixed Term and the Renewal Terms,
to the extent properly exercised pursuant to the provisions of Section 2.4,
unless sooner terminated pursuant to the provisions of this Agreement.
"Third Tier Gross Revenue Break Point" shall mean the amount of Gross
Revenues for the applicable Lease Year corresponding to such term as set forth
on Exhibit D.
"Third Tier Gross Revenue Percentage" shall mean the percentage
corresponding to such term as set forth on Exhibit "D".
"Total Casualty" shall mean any fire or other casualty which results in
damage to the Hotel and its contents to the extent that the total cost of
repairing and/or replacing the damaged portion of the Hotel to the same
condition as existed previously would be thirty percent (30%) or more of the
then total replacement cost of the Hotel.
"Uniform System of Accounts" shall mean Uniform System of Accounts for
the Lodging Industry, Ninth Revised Edition, 1996, as published by the Hotel
Association of New York City, as the same may be further revised from time to
time.
"Working Capital" shall mean funds that are used in the day-to-day
operation of the business of the Hotel, including, without limitation, amounts
sufficient for the maintenance of change and ▇▇▇▇▇ cash funds, amounts deposited
in operating bank accounts, receivables, amounts deposited in payroll accounts,
prepaid expenses and funds required to maintain Inventories, less accounts
payable and accrued current liabilities.
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) the Leasehold Land and Leasehold Improvements;
(b) the Ground Leasehold Estates;
(c) all buildings, structures, other improvements and
appurtenances of every kind including, but not limited to, the Hotel,
the alleyways and connecting tunnels, sidewalks, utility pipes,
conduits and lines (on-site and off-site), parking garage and parking
areas and roadways appurtenant to such buildings and structures
presently situated upon the Leasehold Land (collectively, the "Leased
Improvements");
(d) all easements, rights and appurtenances relating to the
Land and the Leased Improvements;
(e) 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");
(f) all of the Leased Intangible Property; and
(g) any and all leases of space (including any security
deposits held by Tenant 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 and will accept 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 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 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, EXCEPT AS EXPRESSLY SET FORTH HEREIN, 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, contractors
and materialmen 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 on the fifth anniversary of the last day
of the month in which the Commencement Date occurs unless sooner terminated in
accordance with the provisions hereof.
2.4 Renewal Term.
Provided that no Event of Default shall have occurred and be
continuing, this Agreement shall automatically extend for five (5) renewal terms
of five (5) years each (each such renewal a "Renewal Term") unless Tenant
elects, by providing Notice to Landlord not sooner than 30 months and no later
than 9 months prior to the scheduled expiration of the Term of this Agreement or
the previous Renewal Term, as applicable, to terminate this Agreement upon the
expiration of the then current Term. Any such Notice to terminate shall, if
given, be irrevocable, but Tenant's failure to terminate shall not preclude
Landlord from exercising any of its rights to terminate this Agreement in
accordance with the terms hereof.
Each Renewal Term shall commence on the day succeeding the expiration
of the Fixed Term or the preceding Renewal Term, as the case may be. All of the
terms, covenants and provisions of this Agreement shall apply to each such
Renewal Term. Tenant shall have no right to extend the Term beyond the
expiration of the Renewal Term. If Tenant does not give Notice that it elects 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.
ARTICLE 3
RENT
3.1 Rent.
Tenant shall pay or cause Manager to pay to Landlord, by wire transfer
of immediately available federal funds or by other means acceptable to Landlord
in its sole discretion, 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), Rent during the Term as follows:
(a) For the first Fiscal Year of the Term (i.e., the period
from the Commencement Date through December 31, 2001), Tenant shall pay
as and for Rent, percentage rent ("Percentage Rent") calculated for
each calendar quarter, equal to _________ of Gross Revenues through the
end of such calendar quarter, which amount shall be payable quarterly
in arrears, on or before the twentieth (20th) day of the subsequent
calendar quarter.
(b) For the second Fiscal Year of the Term (i.e., 2002),
Tenant shall pay as and for Rent, Percentage Rent calculated for each
calendar quarter, equal to _________ of Gross Revenues through the end
of such calendar quarter, which amount shall be payable quarterly in
arrears, on or before the twentieth (20th) day of the subsequent
calendar quarter.
(c) Commencing with the Third Fiscal Year, the Rent payable in
each calendar quarter shall equal the greater of:
(i) the amount of Minimum Rent set forth on Exhibit A
("Minimum Rent") which shall be payable quarterly in arrears
on or before the twentieth (20th) business day of the
subsequent calendar quarter; provided, however, that Minimum
Rent shall be prorated as to any Lease Year which is less than
four quarters and as to any partial calendar quarters, or
months and as to any partial calendar months; or
(ii) an amount of Percentage Rent, calculated for
each calendar quarter, equal to the aggregate of the Period
Revenues Computation, through the end of such calendar
quarter, which amount shall be payable quarterly in arrears,
on or before the twentieth (20th ) day of the subsequent
calendar quarter.
The Period Revenues Computation shall be an amount equal to the sum of,
for the applicable Lease Year, (1) an amount equal to the First Tier Gross
Revenue Percentage of all Lease Year to date Gross Revenues up to (but not
exceeding) the First Tier Gross Revenues Break Point, (2) an amount equal to the
Second Tier Gross Revenue Percentage of all Lease Year to date Gross Revenues in
excess of the First Tier Gross Revenues Break Point not exceeding the Second
Tier Gross Revenues Break Point, (3) an amount equal to the Third Tier Gross
Revenue Percentage of all Lease Year to date Gross Revenues in excess of the
Second Tier Gross Revenues Break Point, (4) an amount equal to the Fourth Tier
Gross Revenue Percentage of all Lease Year to date Gross Revenues in excess of
the Third Tier Gross Revenues Break Point, minus, in each case, the aggregate of
Period Revenues Computations for each previous calendar quarter in such Lease
Year (if any).
Landlord and Tenant expressly acknowledge and agree that (1) the
threshold and percentages for establishing Percentage Rent, including those with
respect to Period Revenues Computation, are set out on Exhibit "D" to this
Agreement (2) the determination of Percentage Rent shall be made with respect to
the Fixed Term and separately with respect to the Extended Terms.
The amount of Minimum Rent payable for the each calendar quarter of a
Lease Year shall equal the annual amount of Minimum Rent multiplied by a
fraction, the numerator of which is the amount of the Tenant's budgeted Gross
Revenues for such calendar quarter and the denominator of which is the amount of
the Tenant's budgeted Gross Revenues for such Lease Year. There shall be no
reduction in Minimum Rent regardless of the result of the Period Revenues
Computation. Provided, however, Rent shall be "trued up" for each quarter during
the Term, such that Rent payable hereunder shall in each Lease Year equal the
greater of Minimum Rent or Percentage Rent, as the same is aggregated from
quarter to quarter within each such Lease Year.
If the Term begins or ends in the middle of a calendar year, then the
number of calendar quarters falling within the Term during such calendar year
shall constitute a separate Lease Year. In that event, the First Tier Gross
Revenues Break Point and the Second Tier Gross Revenues Break Point shall be
multiplied by a fraction equal to (x) the number of calendar quarters (including
partial calendar quarters) in the Lease Year divided by (y) four.
(d) Tenant shall deliver to Landlord a Certificate from an
Officer of Tenant or Manager (an "Officer's Certificate") with each
Percentage Rent payment setting forth the calculation of the Percentage
Rent payment for the most recently completed calendar quarter of each
Lease Year in the Term and Percentage Rent year to date through such
recently completed calendar quarter. Percentage Rent shall be subject
to confirmation and adjustment, if applicable, as set forth in Section
3.2.
The obligation to pay Percentage Rent shall survive the expiration or
earlier termination of the Term, and a final reconciliation, taking into
account, among other relevant adjustments, any adjustments which are accrued
after such expiration or termination date but which related to Percentage Rent
accrued prior to such termination date, shall be made not later than 60 days
after such expiration or termination date.
3.2 Confirmation of Percentage 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 and the Uniform System of Accounts, that will accurately
record all data necessary to compute Percentage Rent, and Tenant shall retain,
for at least five (5) years after the expiration of each Lease Year, reasonably
adequate records conforming to such accounting system showing all data necessary
to conduct Landlord's Audit and to compute Percentage Rent for the applicable
Lease Year. Landlord shall have the right, for a period of two (2) years
following each Lease Year, from time to time, by its accountants or
representatives, to audit such information in connection with Landlord's Audit,
and to examine all Tenant's records (including supporting data and sales and
excise tax returns) reasonably required to complete Landlord's Audit and to
verify Percentage Rent, subject to any prohibitions or limitations on disclosure
of any such data under Legal Requirements. If any Landlord's Audit discloses a
deficiency in the payment of Percentage Rent, and either Tenant agrees with the
results of Landlord's Audit or the matter is otherwise determined or
compromised, 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 when said payment should have been made to the date
of payment thereof. If any Landlord's Audit discloses a deficiency in the
determination or reporting of Gross Revenue, which, as finally agreed or
determined, exceeds three percent (3%), Tenant shall pay the costs of the
portion of Landlord's Audit allocable to the determination of such Revenues (the
"Revenue Audit"). Any proprietary information obtained by Landlord pursuant to
the provisions of this Section shall be treated as confidential, except that
such information may be used, subject to appropriate confidentiality safeguards,
in any litigation or arbitration between the parties and except further that
Landlord may disclose such information to prospective lenders, investors and
underwriters and to any other persons to whom disclosure is necessary to comply
with applicable laws, regulations and government requirements. The obligations
of Tenant contained in this Section shall survive the expiration or earlier
termination of this Lease. Any dispute as to the existence or amount of any
deficiency in the payment of Percentage Rent as disclosed by Landlord's Audit
shall, if not otherwise settled by the parties, be submitted to arbitration
pursuant to the provisions of Article 19.
3.3 Additional Charges.
In addition to the Minimum Rent and Percentage Rent, (a) Tenant also
will pay and discharge as and when due and payable all other amounts,
liabilities, obligations and Impositions that Tenant assumes or agrees to pay
under this Lease, and (b) in the event of any failure on the part of Tenant to
pay any of those items referred to in clause (a) of this Section 3.3, Tenant
also will promptly pay and discharge every fine, penalty, interest and cost that
may be added for non-payment or late payment of such items (the items referred
to in clauses (a) and (b) of this Section 3.3 being additional rent hereunder
and being referred to herein collectively as the "Additional Charge(s)"), and
Landlord shall have all legal, equitable and contractual rights, powers and
remedies provided either in this Lease 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. If any installment of Minimum Rent, Percentage Rent or Additional
Charges (but only as to those Additional Charges that are payable directly to
Landlord) shall not be paid on its due date, Tenant will pay Landlord within ten
(10) days of demand, as Additional Charges, an amount equal to the interest
computed at the Interest 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 to Landlord pursuant to the requirements of
this Lease, Tenant shall be relieved of its obligation to pay such Additional
Charges to the entity to which they would otherwise be due and Landlord shall
pay the same from monies received from Tenant.
3.4 Payment of 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 (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 (from any source other than the Rent received by
Landlord from Tenant), sales and use, single business, 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, prepare and file all other tax
returns and reports in respect of any Imposition as may be required by
Government Agencies. 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 if no Event of Default shall have occurred hereunder and be
continuing. If an Event of Default shall have been declared by Landlord and be
continuing, any such refund shall be paid over to or retained by Landlord.
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 or cause to be filed by Manager, 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 and/or gross receipts tax returns for Rent received by Landlord from
Tenant, Landlord shall file the same with reasonable cooperation from Tenant.
Landlord shall provide Tenant with copies of assessment notices in sufficient
time for Tenant to prepare a protest which Landlord shall file. Landlord may,
upon notice to Tenant, at Landlord's option and at Landlord's sole expense,
appeal, protest, or institute such other proceedings (in its or Tenant's name)
as Landlord may deem appropriate to effect a reduction of real estate
assessments and Tenant shall fully cooperate with Landlord in such protest,
appeal or other action.
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 (except that
Landlord shall be responsible for any interest or penalties incurred as a result
of Landlord's failure promptly to forward the same).
In addition, Tenant shall pay the following:
(a) 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.
(b) Insurance Premiums. Tenant shall pay or cause to be paid
all premiums for the insurance coverage required to be maintained
pursuant to Article 9.
(c) Other Charges. Tenant shall pay or cause to be paid all
other amounts, liabilities and obligations arising in connection with
the Leased Property except those obligations expressly assumed by
Landlord pursuant to the provisions of this Agreement or expressly
stated not to be an obligation of Tenant pursuant to this Agreement.
(d) 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, 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.
3.5 Late Payment of Rent, Etc.
If any installment of Minimum Rent, Percentage Rent or Additional
Charges shall not be paid within ten (10) days after its due date, Tenant shall
pay Landlord, within five (5) days after Landlord's written demand therefor, as
Additional Charges, a late charge (to the extent permitted by law) computed at
the Interest 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 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 and
Landlord shall pay when due, or cause the applicable Mortgagee to pay when due,
such Additional Charges to the Entity to which they are due. If any payment due
from Landlord to Tenant 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 Interest 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, except as expressly provided in Section 3.3 with respect to permitted
contests pursuant to Article 8, Tenant shall promptly pay (unless payment
thereof is in good faith being contested and enforcement thereof is stayed) and
discharge, as Additional Charges, every fine, penalty, interest and cost which
may be 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
Percentage Rent.
3.6 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, without limitation, those
provisions for adjustment, refunding or abatement of such Rent and for the
funding of Landlord's obligations pursuant to Section 14.3. This Agreement is a
net lease and, except to the extent otherwise expressly specified in this
Agreement, it is agreed and intended that Rent payable hereunder by Tenant shall
be paid without notice, demand, counterclaim, setoff, deduction or defense and
without abatement, suspension, deferment, diminution or reduction and that
Tenant's obligation to pay all such amounts, throughout the Term and all
applicable Renewal Terms is absolute and unconditional and except to the extent
otherwise expressly specified in this Agreement, the respective obligations and
liabilities of Tenant and Landlord hereunder shall in no way be released,
discharged or otherwise affected for any reason, including without limitation:
(a) any defect in the condition, merchantability, design, quality or fitness for
use of the Leased Property or any part thereof, or the failure of the Leased
Property to comply with all Applicable Laws, including any inability to occupy
or use the Leased Property by reason of such noncompliance; (b) any damage to,
removal, abandonment, salvage, loss, condemnation, theft, scrapping or
destruction of or any requisition or taking of the Leased Property or any part
thereof, or any environmental conditions on the Leased Property or any property
in the vicinity of the Leased Property; (c) any restriction, prevention or
curtailment of or interference with any use of the Leased Property or any part
thereof including eviction; (d) any defect in title to or rights to the Leased
Property or any lien on such title or rights to the Leased Property; (e) any
change, waiver, extension, indulgence or other action or omission or breach in
respect of any obligation or liability of or by any Person; (f) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or
other like proceedings relating to Tenant or any other Person, or any action
taken with respect to this Agreement by any trustee or receiver of Tenant or any
other Person, or by any court, in any such proceeding; (g) any right or claim
that Tenant has or might have against any Person, including without limitation
Landlord (other than a monetary default) or any vendor, manufacturer, contractor
of or for the Leased Property; (h) any failure on the part of Landlord or any
other Person to perform or comply with any of the terms of this Agreement, or of
any other agreement; (i) any invalidity, unenforceability, rejection or
disaffirmance of this Agreement by operation of law or otherwise against or by
Tenant or any provision hereof; (j) the impossibility of performance by Tenant
or Landlord, or both; (k) any action by any court, administrative agency or
other Government Agencies; (l) any interference, interruption or cessation in
the use, possession or quiet enjoyment of the Leased Property or otherwise; or
(m) any other occurrence whatsoever, whether similar or dissimilar to the
foregoing, whether foreseeable or unforeseeable, and whether or not Tenant shall
have notice or knowledge of any of the foregoing; 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 specifically set forth in this Agreement, this
Agreement shall be noncancellable by Tenant for any reason whatsoever and,
except as expressly provided in this Agreement, Tenant, to the extent now or
hereafter permitted by Applicable Laws, waives all rights now or hereafter
conferred by statute or otherwise to quit, terminate or surrender this Agreement
or to any diminution, abatement or reduction of Rent payable hereunder. Except
as specifically set forth in this Agreement, under no circumstances or
conditions shall Landlord be expected or required to make any payment of any
kind hereunder or have any obligations with respect to the use, possession,
control, maintenance, alteration, rebuilding, replacing, repair, restoration or
operation of all or any part of the Leased Property, so long as the Leased
Property or any part thereof is subject to this Agreement, and Tenant expressly
waives the right to perform any such action at the expense of Landlord pursuant
to any law.
ARTICLE 4
USE OF THE LEASED PROPERTY
4.1 Permitted Use.
4.1.1 Permitted Use.
(a) Tenant shall, and shall cause Manager to, at all times
during the Term and at any other time that Tenant and Manager shall be
in possession of the Leased Property, continuously use and operate, the
Leased Property as a _____________ resort hotel (or as a hotel under
any successor brand name). Subject to Section 16.3, Tenant shall not,
and Tenant shall ensure that Manager shall not, 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), and
Tenant shall not, and shall ensure that Manager shall not, 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, comply with all Insurance
Requirements. Further, Tenant shall not, and Tenant shall ensure that
Manager shall not, 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) Notwithstanding the foregoing, in the event that, in the
reasonable determination of Landlord and Tenant, it shall no longer be
economically practical to operate the Leased Property as a ___________
resort hotel, Landlord may elect to terminate this Agreement by
providing to Tenant Notice thereof, which Notice shall set forth in
reasonable detail the reasons therefor.
4.1.2 Necessary Approvals.
Tenant shall proceed with all due diligence and exercise
commercially reasonable efforts to obtain and maintain all approvals
necessary to, or to cause Manager to, use and operate, for its
Permitted Use, the Leased Property and the Hotel located thereon under
applicable law. Landlord shall cooperate with Tenant in this regard,
including executing all applications and consents required to be signed
by Landlord in order for Tenant to obtain and maintain such approvals.
4.1.3 Lawful Use, Etc.
Tenant shall not, and Tenant shall ensure that Manager shall
not, 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 Tenant shall ensure that Manager shall not, (a) commit or suffer to
be committed any waste on the Leased Property, or in the Hotel, or
cause or permit any unlawful nuisance thereon or therein, or (b) 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, Tenant, at its sole expense,
shall, or shall cause Manager to, (i) comply with Legal Requirements and
Insurance Requirements in respect of the use, operation, maintenance, repair,
alteration and restoration of the Leased Property, and (ii) 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 which are material to the operation of the Leased Property as a hotel,
and for the proper operation and maintenance of the Leased Property or any part
thereof.
4.3 Environmental Matters.
(a) Tenant hereby represents and warrants to Landlord that, as
of the Effective Date, there are no Hazardous Materials on any portion
of the Leased Property or the Hotel, nor have any Hazardous Materials
been released or discharged on any portion of the Leased Property or
the Hotel. In addition, Tenant hereby represents and warrants that it
has previously delivered to Landlord copies of all reports concerning
environmental conditions which have been received by Tenant or any of
its Affiliates. In the event of the discovery of Hazardous Materials on
any portion of the Leased Property or in the Hotel during the Term, and
subject to the provisions of Section 4.3(c), Tenant shall promptly
remove such Hazardous Materials, together with all contaminated soil
and containers, and shall otherwise remedy the problem in accordance
with (i) the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq., as amended; (ii) the
regulations promulgated thereunder, from time to time; (iii) all
federal, state and local laws, rules and regulations (now or hereafter
in effect) dealing with the use, generation, treatment, storage,
disposal or abatement of Hazardous Materials; and (iv) the regulations
promulgated thereunder, from time to time (collectively referred to as
"Environmental Laws"). Tenant shall indemnify, defend and hold Landlord
harmless from and against all loss, costs, liability and damage
(including, without limitation, engineers' and attorneys' fees and
expenses, and the cost of litigation) arising from the presence of
Hazardous Materials on the Leased Property or in the Hotel; and this
obligation of Tenant shall survive termination. "Hazardous Materials"
shall mean and include any substance or material containing one or more
of any of the following: "hazardous material," "hazardous waste,"
"hazardous substance," "regulated substance," "petroleum," "pollutant,"
"contaminant," "polychlorinated biphenyls," "lead or lead-based paint"
or "asbestos" as such terms are defined in any applicable Environmental
Law in such concentration(s) or amount(s) as may impose clean-up,
removal, monitoring or other responsibility under the Environmental
Laws, as the same may be amended from time to time, or which may
present a significant risk of harm to guests, invitees or employees of
the Hotel.
(b) Subject to the provisions of Section 4.3(a), all costs and
expenses of the aforesaid removal of Hazardous Materials from the
Leased Property or the Hotel, and of the aforesaid compliance with all
Environmental Laws, and any amounts paid to Landlord pursuant to the
indemnity set forth in Section 4.3(a), shall be paid by Tenant from its
own funds, and not from Gross Revenues or from the FF&E Reserve.
(c) To the extent not otherwise covered by insurance
maintained by either Tenant or Manager (including any deductible or
self-insured retention, if any, related thereto), the amount of any
loss, cost, liability or damage (including without limitation,
engineers' and attorneys' fees and expenses, and the cost of
litigation) arising from the presence of Hazardous Materials on or
under the Leased Property or in the Hotel as a direct result of the
gross negligence of Tenant's or Manager's employees at the Hotel (but
not any third parties, including any independent contractors retained
to provide goods or services to the Hotel) shall be paid from Gross
Revenues as a Deduction.
(d) Each party shall undertake reasonable efforts to notify
the other party concerning the presence of any Hazardous Materials on
or under the Leased Property or in the Hotel of which the notifying
party has knowledge; provided, however, that unless required by Legal
Requirements, the parties shall otherwise maintain such information
confidential.
ARTICLE 5
REPAIRS, MAINTENANCE AND REPLACEMENTS
5.1 Repairs and Maintenance Costs Which Are Expensed.
Tenant shall, and shall cause Manager to, maintain the Hotel
in good repair and condition, and shall make or cause to be made such routine
maintenance, repairs and minor alterations as it determines are necessary for
such purposes. The phrase "routine maintenance, repairs, and minor alterations"
as used in this Section 5.1 shall include only those which are normally expensed
under generally accepted accounting principles. The cost of such maintenance,
repairs and alterations shall be paid from Gross Revenues (and not from the FF&E
Reserve) and shall be treated as a Deduction.
5.2 FF&E Reserve.
(a) Tenant shall, or Tenant shall cause Manager to, establish
a reserve account (the "FF&E Reserve"), in a bank or similar
institution approved by Landlord and reasonably acceptable to Tenant
and Manager, to cover the cost of:
(i) Replacements, renewals and additions to the FF&E
at the Hotel; and
(ii) Routine Capital Expenditures.
(b) For each Accounting Period during the period from the
Commencement Date to _________________, Tenant shall cause Manager to
transfer into the FF&E Reserve an amount equal to _____________ of
Gross Revenues; for each Accounting Period during the period from
_______________ through _______________, Tenant shall cause Manager to
transfer into the FF&E Reserve an amount equal to ______________ of
Gross Revenues; for each Accounting Period within the period commencing
_________________ through the end of the Term, subject to the
provisions of Section 5.2(e), below, Tenant shall cause Manager to
transfer into the FF&E Reserve an amount equal to ____________ of Gross
Revenues for each such Accounting Period. Transfers into the FF&E
Reserve shall be made at the time of each interim accounting described
in Section 17.2 hereof. All amounts transferred into the FF&E Reserve
pursuant to this Section 5.2(b) shall be paid from Gross Revenues as
Deductions.
(c) Tenant shall, or Tenant shall cause Manager to, prepare an
annual estimate (the "FF&E Estimate") of the expenditures necessary for
(i) replacements, renewals and additions to the FF&E of the Hotel, and
(ii) Routine Capital Expenditures, during the ensuing Fiscal Year and
shall deliver the FF&E Estimate to Landlord for its review and comment,
at the same time as Manager submits the preliminary business plan
described in Section 17.5. The FF&E Estimate shall also indicate the
estimated time schedule for making such replacements, renewals, and
additions, a reasonable description of items required to be replaced,
the number of units to be replaced, unit costs and costs in the
aggregate, together with such additional information as Landlord shall
reasonably request, to the extent then known by Manager. Tenant shall
use good faith efforts to ensure that Manager shall consider in good
faith Landlord's comments regarding the FF&E Estimate, provided that
Landlord's comments are consistent with maintaining System Standards
and acknowledging that FF&E replacements occur at regular cycles for
soft goods and case goods, which cycles are incorporated in System
Standards.
(d) Tenant shall, or Tenant shall cause Manager to,
(endeavoring in good faith to comply with the applicable FF&E Estimate,
unless there has been a change in circumstances) from time to time make
such (i) replacements, renewals and additions to the FF&E of the Hotel,
and (ii) Routine Capital Expenditures, as Tenant deems necessary, up to
the balance in the FF&E Reserve. No expenditures will be made in excess
of said balance without the approval of Landlord. In addition, Tenant
shall not, and Tenant shall ensure that Manager shall not, without
Landlord's approval, make any expenditures from the FF&E Reserve that,
in the aggregate, exceed the total aggregate amount of expenditures set
forth in the then-applicable FF&E Estimate; provided, however, that
Tenant or Manager shall be authorized to take appropriate remedial
action (including making any necessary expenditures from the FF&E
Reserve above the total aggregate amount set forth in the
then-applicable FF&E Estimate), without receiving Landlord's prior
approval, to remedy or respond to any of the Emergency Requirements
(provided further that Tenant shall notify Landlord of any such
remedial action that requires more than a de minimus expenditure of
funds from the FF&E Reserve). At the end of each Fiscal Year, any
amounts remaining in the FF&E Reserve shall be carried forward to the
next Fiscal Year. Proceeds from the sale of FF&E no longer necessary to
the operation of the Hotel shall be added to the FF&E Reserve. The FF&E
Reserve will be kept in an interest-bearing account, and any interest
which accrues thereon shall be retained in the FF&E Reserve. Neither
(iii) proceeds from the disposition of FF&E, nor (iv) interest which
accrues on amounts held in the FF&E Reserve, shall (1) result in any
reduction in the required transfers to the FF&E Reserve set forth in
Section 5.2(b) above, or (2) be included in Gross Revenues.
(e) As the Hotel ages, the percentages of Gross Revenues that
are set forth in Section 5.2(b) may not be sufficient to keep the FF&E
Reserve at the levels necessary to make the alterations, improvements,
replacements, renewals, and additions to the FF&E of the Hotel, or to
make the Routine Capital Expenditures, that are required to maintain
the Hotel in accordance with the System Standards. If Tenant reasonably
believes that the funding of the FF&E Reserve with respect to the
following two (2) Fiscal Years will not be adequate to maintain the
Hotel in accordance with System Standards, Tenant shall so notify
Landlord. Tenant may only request additional funding into the FF&E
Reserve for a period not to exceed two (2) Fiscal Years; provided,
further, however, that Tenant may submit such notices, pursuant to the
procedures set forth herein, for subsequent periods (including
consecutive periods) of two (2) Fiscal Years. Landlord shall have
thirty (30) days after receipt of such notification to review and
approve Tenant's, or Manager's (on behalf of Tenant) assessment and
recommendations concerning the funding of the FF&E Reserve and, in the
event Landlord disapproves any portion of Tenant's or Manager's
recommendations, Landlord will provide Tenant and Manager in writing
with the specific reasons for its disapproval within such thirty (30)
day period. Thereafter, in the twenty-five (25) day period following
Tenant's receipt of Landlord's disapproval, the parties will attempt to
resolve in good faith the objections so specified by Landlord. In the
event that one or more of such objections have not been resolved as of
the end of such twenty-five (25) day period, any such matter may be
referred by either party to the Expert for resolution in accordance
with the provisions of Article 19. Pending a decision by the Expert,
Tenant may proceed with the implementation of any portion of its
assessment and recommendations that is not subject to dispute.
With respect to increased fundings to which Landlord does not object,
or increased fundings to which it objected but the Expert determined were
necessary, Tenant shall elect in writing one of the following three (3)
alternatives within thirty (30) days after receipt of Tenant's notice or the
Expert's decision, as appropriate:
(i) to increase the annual percentage of FF&E Reserve
fundings under Section 5.2(b) to provide the additional funds
required for the specified Fiscal Year(s), which additional
FF&E Reserve fundings shall be treated as Deductions; or
(ii) to make a lump sum contribution to the FF&E
Reserve in an amount necessary to increase the FF&E Reserve to
a level sufficient to fund the items which necessitated
Tenant's request for additional FF&E Reserve fundings; such
amount shall be fully repaid (without interest) to Tenant from
Gross Revenues in equal installments over the period of the
next sixty-five (65) Accounting Periods, which installment
payments shall be treated as Deductions; or
(iii) to make a lump sum contribution to the FF&E
Reserve in an amount necessary to increase the FF&E Reserve to
a level sufficient to fund the items which necessitated
Tenant's request for additional FF&E Reserve; such amount to
be fully repaid (without interest) to Tenant from Gross
Revenues in equal installments over the period of the next
thirty nine (39) Accounting Periods, which installment
payments shall be treated as Deductions (but which installment
payments shall not be treated as Deductions for purposes of
calculating Operating Profit pursuant to Section 2.02.A.1 of
the Management Agreement).
If Tenant fails to elect one of the above alternatives within such
thirty (30) day period, Tenant shall be deemed to have elected the alternative
set forth in Section 5.2(e)1. above. If Tenant elects the alternative set forth
in Section 5.2(e)2. above and fails to provide the additional funds required
thereunder within (1) thirty (30) days after making such election where such
election follows a determination by the Expert pursuant to the foregoing
provisions, or (2) sixty (60) days after Landlord's receipt of Tenant's request
for such additional funding where such election does not follow a determination
by the Expert, such failure shall constitute an Event of Default by Tenant. In
addition, the placing of any restrictions on the expenditure by Tenant or
Manager of funds from the FF&E Reserve other than as set forth in this Section
5.2 (including, without limitation, restrictions resulting from (x) any
Litigation involving the Landlord or the Hotel, or (y) a Foreclosure) shall
constitute an Event of Default by Landlord under Section 14.2.
5.3 Capital Expenditures
(a) Tenant, or Manager on behalf of Tenant, shall prepare an
annual estimate (the "Building Estimate") of all Capital Expenditures,
which Building Estimate shall include such detail as is reasonably
required to allow Landlord to review and analyze the Capital
Expenditures described therein. Tenant shall, or Tenant shall cause
Manager to, submit the Building Estimate to Landlord for its approval
at the same time as Manager submits the preliminary business plan
described in Section 17.5. Tenant shall not, and Tenant shall ensure
that Manager shall not, make any Capital Expenditures without the prior
written approval of Landlord, except as otherwise permitted herein.
Landlord shall have thirty (30) days after receipt of such Building
Estimate to review and approve such Building Estimate, it being agreed
that Landlord shall not withhold its approval with respect to Capital
Expenditures as are required, in Tenant's reasonable judgment, to keep
the Hotel in a first-class, competitive, efficient and economical
operating condition in accordance with any physical or technological
System Standards, or otherwise required for the continued safe and
orderly operation of the Hotel. In the event Landlord disapproves any
portion of such Building Estimate, Landlord will provide Tenant and
Manager in writing with the specific reasons for its disapproval within
such thirty (30) day period. Thereafter, in the twenty-five (25) day
period following Tenant's receipt of Landlord's disapproval, the
parties will attempt to resolve in good faith any objections so
specified by Landlord. In the event that one or more of such objections
have not been resolved as of the end of such twenty-five (25) day
period, any such matter may be referred by either party for resolution
by the Expert in accordance with the provisions of Article 19. Pending
a decision by the Expert, Tenant may, or Manager on behalf of Tenant
may, proceed with the implementation of any portion of such Building
Estimate that is not subject to dispute. It shall be an Event of
Default by Landlord if Landlord (i) fails to provide funding for any
Capital Expenditure which Landlord has approved pursuant to the payment
schedule set forth in the applicable Building Estimate with respect to
such Capital Expenditure, or (ii) fails to provide funding for any
Capital Expenditure determined necessary by an Expert within sixty (60)
days after the Expert's determination.
(b) Notwithstanding the provisions of Section 5.3(a), Tenant
shall be authorized to take appropriate remedial action (including
making any necessary Capital Expenditures) without receiving Landlord's
prior approval, to remedy or respond to any of the Emergency
Requirements; provided that Tenant shall notify Landlord of any such
remedial action that requires a Capital Expenditure that is not de
minimus. Tenant and Manager shall cooperate with Landlord in the
pursuit of any such action and shall have the right to participate
therein. Landlord shall, upon written request by Tenant, or Manager on
behalf of Tenant, promptly reimburse all expenditures made by Tenant or
Manager pursuant to this Section 5.3(b).
(c) The cost of all Capital Expenditures (including the
expenses incurred by Landlord or Tenant or Manager in connection with
any civil or criminal proceeding described above) shall be borne solely
by Landlord, and shall not be paid from Gross Revenues or from the FF&E
Reserve. The amount of Capital Expenditures funded by Landlord pursuant
to this Section 5.3 shall increase the Owner's First Priority and
Performance Termination Threshold, as defined in the Management
Agreement.
5.4 Ownership of Replacements
All repairs, alterations, improvements, renewals or
replacements made pursuant to this Article 5, and all amounts kept in the FF&E
Reserve, and interest thereon shall, subject to the rights of Manager under the
Management Agreement, be the property of Tenant; provided, however, that all
Capital Expenditures shall be the property of Landlord.
5.5 Tenant's Personal Property. At the expiration or sooner termination
of the Term, Landlord may, in its sole and absolute discretion, elect either (a)
to give Tenant Notice that Tenant shall be required, within ten (10) Business
Days after such expiration or termination, to remove all FAS, Tenant's Personal
Property and Inventories from the Leased Property or (b) to buy such FAS,
Tenant's Personal Property and Inventories by paying Tenant the book value of
such property. Failure of Landlord to make such election shall be deemed an
election to proceed in accordance with clause (c) preceding.
5.6 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, replaced, rebuilt, restored, altered or
added to as permitted or required by the provisions of this Agreement,
reasonable wear and tear and Condemnation (and casualty damage, in the event
that this Agreement is terminated following a casualty in accordance with
Article 10) excepted.
In addition, as of the expiration or earlier termination of this
Agreement, Tenant shall, at Landlord's sole cost and expense, use its good
faith, commercially reasonable 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 entered into by Tenant, including contracts
with governmental or quasi-governmental Entities which may be necessary for the
use and operation of the Hotel as then operated, but excluding (a) utility
deposits and (b) telephone numbers. Landlord shall indemnify and hold Tenant
harmless for all claims, costs and expenses (including reasonable attorneys'
fees) arising from acts or omissions by Landlord under such contracts subsequent
to the date of transfer thereof to Landlord; and Tenant shall indemnify and hold
Landlord harmless for all claims, costs and expenses (including reasonable
attorney's fees) arising from acts or omission by Tenant under such contracts
prior to the date of transfer thereof to Landlord.
5.7 Management Agreement. Except as otherwise provided below, Tenant
shall not amend or modify the Management Agreement without Landlord's prior
written consent, which consent may be given or withheld by Landlord in its sole
and absolute discretion. The Management Agreement shall expressly provide that,
Manager shall at all times be an "eligible independent contractor" as defined in
Section 856(d) of the Code. The terms of the Management Agreement shall not, in
Landlord's and its counsel's reasonable opinion, cause the Rent to fail to
qualify as "rents from real property" within the meaning of Section 856(d) of
the Code, it being agreed by Tenant that if Landlord and its counsel reasonably
conclude that the terms of the Management Agreement will have such an effect,
then Tenant will modify the terms of the Management Agreement so that the
Management Agreement, in the reasonable opinion of Landlord and its counsel,
does not cause the Rent to be so characterized under the Code.
ARTICLE 6
IMPROVEMENTS, ETC.
6.1 Improvements to the Leased Property. Tenant shall not finance the
cost of any construction by the granting of a lien on or security interest in
the Leased Property, 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 Salvage. Other than Tenant's Personal Property, all materials which
are scrapped or removed in connection with the making of repairs, alterations,
improvements, renewals, replacements and additions pursuant to Article 5 shall
be disposed of by Tenant and the net proceeds thereof, if any, shall be
deposited in the Reserve.
6.3 Equipment Leases. Landlord shall enter into such leases of
equipment and personal property as Tenant may reasonably request from time to
time, provided that the form and substance thereof shall be reasonably
satisfactory to Landlord. Tenant shall prepare and deliver to Landlord all such
lease documents for which Landlord's execution is necessary and Landlord shall
promptly, upon approval thereof, execute and deliver such documents to Tenant.
Tenant shall, throughout the Term, be responsible for performing all of
Landlord's obligations under all such documents and agreements.
ARTICLE 7
LIENS
Subject to Article 8, Tenant shall not, and Tenant shall ensure that
Manager does not, directly or indirectly, create or allow to remain, and each
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 16, (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 (but will be
paid in full by Tenant or Manager) or are for sums that are being contested in
accordance with Article 8, (g) any Mortgage or other liens which are the
responsibility of Landlord pursuant to the provisions of Article 11, and (h)
Landlord's Liens.
ARTICLE 8
PERMITTED CONTESTS
Tenant, or Manager at Tenant's direction, 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 foregoing shall in no way be construed as relieving,
modifying or extending Tenant's obligation to pay any Claims required hereunder
to be paid by Tenant as finally determined, (b) such contest shall not cause
Landlord or Tenant to be in default under any mortgage, deed of trust or other
agreement encumbering the Leased Property or any part thereof (Landlord agreeing
that any such mortgage, deed of trust or other agreement shall permit Tenant to
exercise the rights granted pursuant to this Article 8) or any interest therein
or result in a lien attaching to the Leased Property, unless such lien is fully
bonded or is otherwise secured to the reasonable satisfaction of Landlord, (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 hereby
indemnifies and holds 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 to assume and indemnify
Landlord with respect to the same. Tenant or Manager, as applicable, 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 reimbursed by Tenant. If Tenant shall fail (e) to pay or cause
to be paid any Claims when finally determined, (f) to provide reasonable
security therefor, or (g) to prosecute or cause to be prosecuted any such
contest diligently and in good faith, Landlord may, upon Notice to Tenant, 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
9.1 Property Insurance
Commencing with the Commencement Date, Tenant shall, or Tenant
shall cause Manager to, procure and maintain the following:
(a) Property insurance (and to the extent applicable builders
risk insurance), including boiler and machinery coverage, on the Hotel
building(s) and contents against loss or damage by fire, lightning and
all other risks as commonly covered by an "all-risk of physical loss"
special form or equivalent policy of insurance, including, but not
limited to fire, windstorm, sprinkler leakage, vandalism, explosion of
steam boilers, pressure vessels, and other similar apparatus, and other
hazards generally extended coverage, in an amount not less than the
full replacement cost (less excavation and foundation costs) of the
Hotel Improvements, contents, signs awnings, canopies, gazebos, fences
and retaining walls. Such coverage shall include an agreed value
provision, waiver of co-insurance and law and ordinance coverage in an
amount equal to ___% of the replacement value or _______________
Dollars ($___________________) whichever is greater;
(b) Business interruption insurance including extra expense
covering at least two (2) years' loss of profits, necessary continuing
expenses, and if applicable, rent, for interruptions at the Hotel
caused by any occurrence covered by the insurance referred to in
Section 9.1(a) above;
(c) Flood insurance, if the Hotel is located in whole or in
part within an area identified as having a special flood hazard, under
the National Flood Insurance Program;
(d) Such other property insurance as is customarily maintained
by Manager at similar hotels;
(e) Such additional insurance as may be reasonably required
from time to time, by (i) Existing CC&R's in effect on the date hereof
and any Future CC&R's approved in writing by Manager, or (ii) a
Mortgagee under any Qualifying Mortgage, provided the same is
customarily carried by a majority of comparable high quality lodging
properties in the geographic area of the Hotel.
9.2 Operational Insurance
Commencing with the Commencement Date and thereafter during
the Term, Tenant shall, or Tenant shall cause Manager to, procure and maintain
the following:
(a) Commercial general liability insurance on an occurrence
form against claims for bodily injury, death or property damage
occurring on, in or in conjunction with the operations of the Hotel,
and automobile liability insurance on owned, non-owned and hired
vehicles operated in conjunction with the Hotel, and liquor liability
to the extent applicable, with a combined single limit for each
occurrence of not less than ________________________ ($___________) per
occurrence, ____________ Dollars ($______________) per location
aggregate;
(b) Umbrella/Excess Liability, which shall e on a following
form for the General Liability, Automobile Liability, Employer's
Liability and Liquor Liability, with limits of not less than
__________________ Dollars ($_______________) per occurrence;
(c) Workers' compensation coverage as may be required under
applicable laws covering all of Manager's employees at the Hotel, and
employer's liability insurance of not less than _______________ Dollars
($_______________) per accident/disease;
(d) Fidelity bond coverage in an amount not less than
_________________ Dollars ($___________________) covering Manager's
employees at the Hotel;
(e) Employment practices liability insurance covering all of
Manager's employees at the Hotel, to the extent available at
commercially reasonable rates and terms, in an amount not less than
____________________ Dollars ($______________);
(f) To the extent applicable, garage keepers legal liability
covering both comprehensive and collision-type losses with a limit of
liability of not less than ____________ Dollars ($______________) per
occurrence;
(g) Such other insurance in amounts as Tenant and Manager, in
their reasonable judgment, deem advisable for protection against
claims, liabilities and losses arising out of or connected with the
operation of the Hotel.
9.3 General Insurance Provisions
(a) All insurance described in Section 9.1 and Section 9.2 may
be obtained through blanket insurance programs, provided that such
blanket programs substantially fulfill the requirements specified
herein. The blanket insurance programs may include deductibles or risk
retention levels; however, the Hotel's responsibility for such
deductibles or risk retention levels shall be limited to the Insurance
Retention as defined in Section 9.4. The Hotel's allocated
charge-back/deductible for general liability insurance and workers'
compensation insurance shall not exceed ______________________ Dollars
($_____________) unless such greater amount is agreeable to both
Landlord and Tenant. The Hotel's property insurance deductible shall
not exceed _____________________ Dollars ($________________) unless
such greater amount is agreeable to both Landlord and Tenant, or if a
higher deductible for high hazard risks (i.e., wind or flood) is
mandated by the insurance carrier.
(b) All insurance required under Section 9.1 and Section 9.2
may be carried in the name of Manager. The insurance required under
Section 9.1 and Section 9.2(a). shall include Landlord, Tenant, and any
Mortgagee specified by Landlord, in writing, as an additional insured,
mortgagee or loss payee as their interest may appear, as applicable.
Any property losses covered by insurance obtained pursuant to Section
9.1 shall be payable to the respective parties as their interests may
appear. Any Mortgage shall contain provisions to the effect that
proceeds of the Section 9.1(a). insurance shall be available for repair
and restoration of the Hotel.
(c) Tenant or Manager on behalf and at the direction of
Tenant, upon request, shall deliver to Landlord certificates of
insurance evidencing the insurance coverages required under Section 9.1
and Section 9.2 and any renewals thereof. All such certificates of
insurance shall, to the extent obtainable, state that the insurance
shall not be canceled or materially reduced without at least thirty
(30) days' prior written notice to the certificate holder. Excluding
workers' compensation coverage, all insurance policies pursuant to this
Section, shall be issued by insurance carrier having an AM Best rating
of at least A-, VII and all excess insurance policies above
______________ Dollars ($______________) shall be issued by insurance
carriers having an AM Best rating of at least B+, VII. All such
insurance shall be evaluated by Landlord, Tenant or Manager from time
to time to ensure that the limits and coverages are adequate.
(d) The parties agree that, provided Manager provides on
behalf of Tenant the insurance herein contemplated, the insurance
coverages and deductibles maintained pursuant to this Section 9, may be
adjusted throughout the Term in accordance with Manager's standard
insurance policies, which shall be consistent with industry standards
for similar facilities.
9.4 Costs and Expenses
(a) With respect to Section 9.1 and Section 9.2, all insurance
premiums, costs and other expenses, including any Insurance Retention,
shall be treated as Deductions. All charges under the blanket programs
shall be allocated to the Hotel and other similar participating hotels
on a reasonable basis. Any losses and associated costs and expenses,
that are uninsured shall be treated as a cost of insurance and shall
also be treated as Deductions.
(b) Upon Termination, a reserve in an amount determined by
Tenant, or Manager on behalf of Tenant, based on loss projections,
shall be established from Gross Revenues to cover the amount of any
Insurance Retention and all other costs and expenses that will
eventually have to be paid by either Tenant or Manager with respect to
pending or contingent claims, including those that arise after
Termination for causes arising during the Term.
(c) "Insurance Retention" shall mean the insurance policy
deductible; however for any insurance obtained through the blanket
insurance programs, "Insurance Retention" shall mean the Hotel's per
occurrence limit for any loss or reserve as established for the Hotel,
which limit shall be the same as is applied to other similar hotels
participating in the blanket insurance programs, or such higher amount
if mandated by the insurer for high hazard risks such as earthquake,
flood and wind.
9.5 Waiver of Subrogation. Landlord and Tenant agree that 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.
9.6 Indemnification of Landlord. Except as expressly provided herein,
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 of third parties
occurring during the Term on or about the Leased Property or adjoining sidewalks
or rights of way under Tenant's control, and (b) any use, misuse, condition,
management, maintenance or repair by Tenant or anyone claiming under Tenant of
the Leased Property or Tenant's Personal Property during the Term or any
litigation, proceeding or claim by governmental entities to which Landlord is
made a party or participant relating to such use, misuse, condition, management,
maintenance, or repair thereof to which Landlord is made a party; provided,
however, that Tenant's obligations hereunder shall not apply to any liability,
obligation, claim, damage, penalty, cause of action, cost or expense arising
from any gross negligence or willful misconduct of Landlord, its employees,
agents, contractors or invitees. Tenant, at its expense, shall defend any such
claim, action or proceeding asserted or instituted against Landlord covered
under this indemnity (and shall not be responsible for any duplicative
attorneys' fees incurred by Landlord) or may compromise or otherwise dispose of
the same. The obligations of Tenant under this Section 9.5 shall survive the
termination of this Agreement for a period of three (3) years.
ARTICLE 10
DAMAGE, REPAIR AND CONDEMNATION
10.1 Damage and Repair
(a) If, during the Term, the Hotel is damaged by a Minor
Casualty, Tenant shall, or Tenant shall cause Manager to, with all
reasonable diligence, proceed to process the claim with the applicable
insurance carriers, including settling such claim, and to make the
necessary arrangements with appropriate contractors and suppliers to
repair and/or replace the damaged portion of the Hotel. Landlord's
consent shall not be needed for Tenant or Manager to perform any of the
foregoing, all of which shall be performed in accordance with Tenant's
reasonable judgment; provided, however, that all such work shall be
undertaken (i) in a workmanlike manner, (ii) in accordance with the
provisions of Section 11.5 and (iii) in accordance with plans and
specifications approved by Landlord (which approval or disapproval
shall be made within fifteen (15) Business Days after Landlord receives
the applicable plans or specifications and, if applicable, within five
(5) Business Days after Landlord receives any modifications of said
plans or specifications to accommodate Landlord's comments), provided
that the parties agree that the standard for such repair and/or
replacement shall be to repair and/or replace the damaged portion of
the Hotel to levels of quality and quantity that are equal to those
that existed with respect to such portion of the Hotel prior to the
occurrence of the damage at issue. Landlord agrees to sign promptly any
documents which are necessary to process and/or adjust the claim with
the insurance carriers, as well as any contracts with such contractors
and/or suppliers.
(b) If, during the Term, the Hotel suffers a Total Casualty,
this Agreement shall be terminable at the option of either party upon
ninety (90) days' written notice to the other party. Such notice must
be sent within thirty (30) days after the date of the Total Casualty.
(c) If, during the Term, the Hotel is damaged by fire,
casualty or other cause to a greater extent than a Minor Casualty, but
not to the extent of a Total Casualty, or if the Hotel suffers a Total
Casualty but neither party elects to terminate under Section 10.1(b),
Landlord shall, at its cost and expense and with all reasonable
diligence, repair and/or replace the damaged portion of the Hotel to
the same condition as existed previously. Tenant shall have the right
to discontinue operating the Hotel to the extent Tenant deems necessary
to comply with applicable Legal Requirements or as necessary for the
safe and orderly operation of the Hotel. To the extent available,
proceeds from the insurance described in Section 9.1 of this Agreement
shall be applied to such repairs and/or replacements. The parties agree
that Landlord's obligations to repair and/or replace pursuant to the
provisions of this Section 10.1(c) shall be limited to the extent of
available insurance proceeds (plus the amount of any applicable
deductibles). The parties further agree that if Landlord is obligated
to utilize such available insurance proceeds to repay any obligations
pursuant to any Mortgage, then Landlord shall be entitled to an
equitable extension of time (in which Landlord has to fulfill its
obligations pursuant to the provisions of this Section 10.1(c)) that is
sufficient to allow Landlord to obtain the necessary funding to replace
such spent insurance proceeds and to make the repairs and/or
replacements required hereunder. The parties further agree that
Landlord's obligations to repair and/or replace pursuant to the
provisions of this Section 10.1(c) shall be subject to Landlord's
ability to obtain such entitlements and/or other governmental approvals
as may be necessary to undertake such repair and/or replacement;
provided that Landlord shall undertake good faith efforts to obtain
such entitlements and/or approvals.
10.2 Condemnation
(a) In the event all or substantially all of the Hotel shall
be taken in any eminent domain, condemnation, compulsory acquisition,
or similar proceeding by any competent authority for any public or
quasi-public use or purpose, or in the event a portion of the Hotel
shall be so taken, but the result is that it is unreasonable to
continue to operate the Hotel in accordance with the standards required
by this Agreement, this Agreement shall terminate. Landlord and Tenant
shall each have the right to initiate such proceedings as they deem
advisable to recover any compensation to which they may be entitled.
(b) In the event a portion of the Hotel shall be taken by the
events described in Section 10.2(a), or the entire Hotel is affected
but on a temporary basis, and the result is not to make it unreasonable
to continue to operate the Hotel, this Agreement shall not terminate.
However, so much of any award for any such partial taking or
condemnation as shall be necessary to render the Hotel equivalent to
its condition prior to such event shall be used for such purpose; and
Tenant shall have the right to discontinue operating the Hotel or
portion of the Hotel to the extent it deems necessary for the safe and
orderly operation of the Hotel.
ARTICLE 11
MORTGAGES, ETC.
11.1 Mortgages
(a) Neither Landlord nor any of its Affiliates shall be
permitted to encumber the Hotel and/or the Leased Property with any
Mortgage, except for such Mortgage or Mortgages which meet all of the
following requirements:
(i) The proposed Mortgage is from an Institutional
Lender and is on commercially reasonable terms and conditions;
(ii) As of the date of the proposed financing, the
aggregate principal balance of all Mortgages encumbering the
Hotel, including the proposed Mortgage, shall be no greater
than seventy five percent (75%) of the fair market value of
the Hotel; and
(iii) Landlord, and Tenant and the holder of such
Mortgage shall have entered into a Subordination Agreement (to
be recorded in the real property records in the jurisdiction
where the Leased Property is located) as further described in
Section 11.2 below.
(b) For purposes of this Section 11.1, the fair market value
of the Hotel shall be reasonably determined by Landlord and Tenant. If
such parties do not agree on such fair market value, any party may
request that a licensed appraiser (reasonably acceptable to both
parties) shall determine the fair market value of the Hotel. If the
parties cannot agree on an appraiser within thirty (30) days after the
date on which either party notifies the other that it wishes to have
the fair market value of the Hotel be determined by an appraisal,
either party may elect to have such fair market value determined by
either (i) the Expert pursuant to Article 19 or (ii) the appraiser used
by the Institutional Lender with respect to the applicable Mortgage.
Any Mortgage which meets all of the requirements set forth in this
Section 11.1 shall be referred to in this Agreement as a "Qualified
Mortgage."
(c) In the event Manager receives any reasonable request for
information on the Hotel from the holder of any Qualified Mortgage (and
including any Affiliate of Manager providing any financing in
connection with the Hotel), Landlord agrees that Manager is hereby
authorized to provide or distribute such information directly to such
lender.
11.2 Subordination, Non-Disturbance and Attornment
(a) Landlord will obtain from any Mortgagee which holds a
Mortgage as of the Commencement Date (or thereafter) an instrument (the
"Subordination Agreement"), in form and content acceptable to Landlord
and Tenant, which shall be recordable in the jurisdiction where the
Hotel is located, pursuant to which:
(i) this Agreement and any extensions, renewals,
replacements or modifications thereto, and all right and
interest of Tenant in and to the Hotel, shall be subject and
subordinate to such Mortgage;
(ii) Tenant shall be obligated to each of the
Subsequent Owners (as defined below) to perform all of the
terms and conditions of this Agreement for the balance of the
remaining Term hereof, with the same force and effect as if
such Subsequent Owner were the Landlord; and
(iii) in the event that there is a foreclosure of
such Mortgage (or a deed in lieu of foreclosure), or other
exercise by such Mortgagee (or its successor) of its remedies
in the event of default, in connection with which title or
possession of the Hotel is transferred to the Mortgagee (or
its designee) or to a purchaser at foreclosure or to a
subsequent purchaser from the Mortgagee (or from its designee)
(all of the foregoing shall collectively be referred to as
"Subsequent Owners"), and provided Tenant is not otherwise in
default hereunder, this Agreement shall not be terminated and
Tenant shall not be disturbed in its rights under this
Agreement.
(b) Prior to encumbering the Leased Property with any
Mortgage, Landlord shall be obligated to obtain from the proposed
Mortgagee an executed, recordable Subordination Agreement. Tenant
agrees to execute such Subordination Agreement for the benefit of such
proposed Mortgagee. If Landlord encumbers the Hotel or the Leased
Property with a Mortgage without first obtaining such a Subordination
Agreement from the Mortgagee, Tenant shall thereafter have a continuing
right to terminate this Agreement upon sixty (60) days' prior written
notice to Landlord. In addition, any Mortgage described in the
preceding sentence shall be subject and subordinate to Tenant's rights
under this Agreement.
11.3 Disbursement of Award. Subject to the terms hereof and of the
Senior Loan Documents, Landlord, Tenant and any Mortgagee shall transfer any
part of the Award received by them, respectively, together with severance and
other damages awarded for the taken Leased Improvements and any deficiency
Landlord or Tenant has agreed to pay, to an escrow agent ("Escrow Agent")
reasonably satisfactory to all parties pursuant to an escrow agreement that is
reasonably satisfactory to all parties, for the purpose of funding the cost of
the repair or restoration. Such amounts shall be advanced by Escrow Agent so as
to permit payment for the cost of any restoration and repair, pursuant to the
same terms and conditions as are set forth in Section 10.2.4. The obligations
under this Section 11.3 to disburse the Award and such other amounts shall be
subject to (a) the collection thereof and (b) the release of such Award by the
applicable Mortgagee. Tenant's obligation to restore the Leased Property shall
be subject to the availability of the Award to fund the cost of such repair or
restoration upon its compliance with this Section 11.3.
11.4 No Covenants, Conditions or Restrictions
(a) Landlord covenants that after the Commencement Date and
during the Term, there will not be (unless Tenant and Manager have
given their prior consent thereto) any covenants, conditions or
restrictions, including reciprocal easement agreements or cost-sharing
arrangements (individually or collectively referred to as "Future
CC&R(s)") affecting the Leased Property (i) which would prohibit or
materially limit Manager from operating the Hotel in accordance with
the System Standards, including related amenities proposed for the
Hotel; (ii) which would allow the Hotel facilities (for example,
parking spaces) to be used by persons other than guests, invitees or
employees of the Hotel; (iii) which would allow the Hotel facilities to
be used for specified charges or rates which have not been approved by
Manager; or (iv) which would subject the Hotel to exclusive
arrangements regarding food and beverage operation or retail
merchandise.
(b) Tenant shall cause Manager to manage and operate the Hotel
in compliance with all obligations imposed on Landlord or the Hotel
pursuant to any Existing CC&Rs or Future CC&Rs to the extent such
obligations are known to Manager and to the extent such Existing CC&Rs
and future CC&Rs relate to the management and operation of the Hotel.
11.5 Liens; Credit
Tenant shall use commercially reasonable efforts to prevent
any liens from being filed against the Hotel which arise from any maintenance,
repairs, alterations, improvements, renewals or replacements in or to the Hotel,
and shall cooperate fully in obtaining the release of any such liens.
11.6 Amendments Requested by Mortgagee
(a) If requested by any Mortgagee or prospective Mortgagee,
Tenant agrees to execute and deliver any amendment of this Agreement
that is reasonably required by such Mortgagee or prospective Mortgagee,
provided that Tenant shall be under no obligation to amend this
Agreement if the result of such amendment would be to materially and
adversely increase Tenant's obligations or to materially and adversely
affect Tenant's rights under this Agreement or to amend Section 5. Any
such amendment shall be in effect only for the period of time in which
such Mortgage is outstanding.
11.7 Ground Leases
(a) Tenant acknowledges that Landlord holds leasehold and
subleasehold title to the Leased Property pursuant to the Ground
Leases. Tenant is subleasing such parcels pursuant to this Agreement.
Tenant shall, throughout the Term, comply with all of the terms and
provisions of the Ground Leases and this Agreement and shall ensure
that the terms and provisions of the Ground Leases and this Agreement
remain in full force and effect. Tenant shall promptly notify Landlord
of any breach or default by either party under either the Ground Leases
or this Agreement and shall promptly provide Landlord with copies of
all notices sent or received by Tenant or Landlord under either the
Ground Leases or this Agreement that may affect the Hotel or Manager's
management or operation of the Hotel. Tenant shall cause Manager to
promptly notify Landlord of any breach or default under either the
Ground Leases or this Agreement of which Manager has actual knowledge.
(b) Tenant shall direct Manager to pay (on behalf of Landlord
or Tenant, out of Gross Revenues and to the extent of available Gross
Revenues) amounts that are then due and payable under this Agreement
and the Ground Leases. Such payments shall be made in compliance with
the payment provisions of the Ground Leases and this Agreement, as the
case may be, provided further that if Gross Revenues are insufficient
to make such payments, Tenant shall notify Landlord of such shortfall
promptly and as soon as practicable before such payments are due.
Tenant shall be responsible for the payment of any late fees, costs and
expenses (including, without limitation, reasonable attorneys' fees
and, if applicable, additional interest and rent) that are imposed on
Landlord solely due to, and as a direct result of, Manager's failure to
make payment pursuant to the provisions of this Section 11.7(b).
(c) The parties agree that this Agreement is subordinate in
all respects to the provisions of the Ground Leases and, if requested
by the ground lessor(s) under the Ground Leases, shall execute such
documents as are reasonably requested by the ground lessor(s) to
confirm the same. In performing its obligations pursuant to this
Agreement, Tenant shall cause Manager to undertake reasonable efforts
to manage and operate the Hotel in compliance with those provisions of
the Ground Lease that relate to the management and operation of the
Hotel. In addition, Tenant shall cause to use reasonable efforts to
avoid taking any action that would cause a default by Landlord under
the Ground Leases.
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 Minimum Rent or
Percentage Rent within five (5) Business Days after Notice thereof, or
fail to make payment of any other Rent or any other sum (including, but
not limited to, funding of the Reserve), payable hereunder when due and
such failure shall continue for a period of ten (10) days after Notice
thereof; or
(b) should Tenant fail to maintain the insurance coverages
required under Article 9 and such failure shall continue for five (5)
Business Days after Notice thereof; or
(c) subject to Article 8 relating to permitted contests,
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 thirty (30) 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) 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
one hundred eighty (180) days) as may be necessary to cure such default
with all due diligence; or
(d) 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
(e) 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 it a bankrupt or
insolvent, or seeking liquidation, reorganization, arrangement,
adjustment or composition of it or its 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 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 any of the actions set forth
above in this paragraph; or
(f) should Tenant cause or institute any proceeding for its
dissolution or termination; or
(g) unless Tenant shall be contesting such lien or attachment
in good faith in accordance with Article 8, 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,
discharged or fully bonded or otherwise secured to the reasonable
satisfaction of Landlord within the later of (i) one hundred and twenty
(120) days after such attachment or levy, unless the amount in dispute
is less than $_________ (as adjusted each year by increases in the
Index), in which case Tenant shall give notice to Landlord of the
dispute but Tenant may defend in any suitable way, and (ii) thirty (30)
days after receipt by Tenant of Notice thereof from Landlord; it being
understood and agreed that Tenant may commence a contest of such matter
pursuant to Article 8 above following such Notice from Landlord;
(h) should Tenant be in default under the Owner Agreement or
Management Agreement beyond any applicable cure period.
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 fixed in such Notice but in any
event not less than thirty (30) days, 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, including without limitation the
right of re-entry upon the Leased Property upon and at any time after the
occurrence of an Event of Default.
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 re-letting of all or any 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, repossession or re-letting, 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, repossession or
re-letting. Thereafter, Tenant, until the end of what would have been the Term
of this Agreement (assuming no extension beyond the then-current Term) in the
absence of such termination, repossession or re-letting, and whether or not the
Leased Property or any portion thereof shall have been re-let, shall, at
Landlord's option, 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, repossession or re-letting not
occurred, less the net proceeds, if any, of any re-letting of the Leased
Property or any other operation of the Leased Property by Landlord (if Landlord
repossesses the Leased Property), after deducting all reasonable expenses in
connection with such re-letting, or operation, as applicable, including, without
limitation, all repossession costs, brokerage commissions, legal expenses,
attorneys' fees, advertising, expenses of employees, alteration costs and
expenses of preparation for such re-letting (such expenses being hereinafter
referred to as the "Re-letting Expenses"). Tenant shall pay such current damages
to Landlord quarterly on the days on 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.
In case of any Event of Default, re-entry, expiration or dispossession
by summary proceedings or otherwise, Landlord may (a) re-let 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 re-let 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 re-letting 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 in any way
whatsoever for any failure to re-let all or any portion of the Leased Property,
or, in the event that the Leased Property is re-let, for failure to collect the
rent under such re-letting. 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 such termination, repossession or
re-letting as a result of an Event of Default, to use reasonable efforts to
mitigate its damages.
12.3 Waiver of Jury Trial. Landlord and Tenant hereby waive, to the
maximum extent permitted by Applicable Laws, trial by jury in any action,
proceeding or counterclaim brought by either of the parties hereto against the
other or in respect of any matter whatsoever arising out of or in any way
connected with this Agreement, the relationship of Landlord and Tenant
hereunder, Tenant's occupancy of the Leased Property, and/or any claim for
injury or damage.
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 with a
courtesy copy to Manager, (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 connection therewith,
together with interest thereon (to the extent permitted by law) at the Interest
Rate from the date such sums are paid by Landlord until repaid, shall be paid by
Tenant to Landlord, on demand.
12.6 Good Faith Dispute. If Tenant shall in good faith dispute the
occurrence of any Default and Tenant, before the expiration of the applicable
cure period, shall give Notice thereof to Landlord, setting forth, in reasonable
detail, the basis therefor and, provided Tenant shall escrow disputed amounts,
if any, pursuant to an escrow arrangement reasonably acceptable to Landlord and
Tenant, no Event of Default shall be deemed to have occurred; provided, however,
that in the event of any eventual adverse determination, Tenant shall pay to
Landlord interest on any disputed funds at the Interest Rate, from the date
demand for such funds was made by Landlord until the date of final adverse
determination and, thereafter, at the Interest Rate until paid.
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 one and one-half (1.50) times the 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 and the Manager of any materially adverse matters affecting the Leased
Property of which Landlord receives written notice or actual, conscious, present
knowledge and, to the extent Tenant and/or Manager otherwise has no notice or
actual knowledge thereof, Landlord shall be liable for any liabilities, costs,
damages or claims (including reasonable attorneys' fees) arising from the
failure to deliver such Notice to Tenant. As used in this Agreement, "Landlord's
knowledge" or words of similar import shall mean the actual (and not
constructive or imputed), conscious, present knowledge, without independent
investigation or inquiry of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ or any subsequent officer or employee of Landlord, having
direct oversight responsibility for the transactions contemplated in this
Agreement.
14.2 Landlord's Default. It shall be a breach of this Lease if Landlord
fails to observe or perform any term, covenant or condition of this Lease on its
part to be performed and such failure continues for a period of thirty (30) days
after Notice thereof from Tenant, unless such failure cannot with due diligence
be cured within a period of thirty (30) days, in which case such failure shall
not be deemed a breach if Landlord proceeds within such thirty (30) day period,
with due diligence, to commence to cure the failure and thereafter diligently
completes the curing thereof. The time within which Landlord shall be obligated
to cure any such failure also shall be subject to extension of time due to the
occurrence of any Unavoidable Delay. If Landlord does not cure any such failure
within the applicable time period as aforesaid, Tenant may declare the existence
of a "Landlord Default" by a second Notice to Landlord. Thereafter, Tenant may
forthwith cure the same. Tenant shall have no right to terminate this Lease for
any Landlord Default and no right, for any such Landlord Default, to offset or
counterclaim against any Rent or other charges due hereunder.
If Landlord shall in good faith dispute the occurrence of a 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, whether through arbitration or otherwise; 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 of
such funds was made by Tenant until the date of final adverse determination and,
thereafter, at the Interest 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 determination by
arbitration, but only if such matter is required to be submitted to arbitration
pursuant to any provision of this Lease, or otherwise by a court of competent
jurisdiction.
14.3 Tenant's Right to Cure. Subject to the provisions of Section 14.2,
if Landlord breaches any covenant to be performed by it under this Lease, Tenant
after Notice to and demand upon Landlord as provided in Section 14.2, without
waiving or releasing any obligation hereunder, may (but shall be under no
obligation at any time thereafter to) make such payment or perform such act for
the account and at the expense of Landlord. All sums so paid by Tenant and all
costs and expenses (including, without limitation, reasonable attorneys' fees)
so incurred, together with interest thereon at the Interest Rate from the date
on which such sums or expenses are paid or incurred by Tenant, shall be paid by
Landlord to Tenant on demand. The rights of Tenant hereunder to cure and to
secure payment from Landlord in accordance with this Section 14.3 shall survive
the termination of this Lease with respect to the Leased Property.
ARTICLE 15
TRANSFERS BY LANDLORD
15.1 Transfer of Leased Property. Landlord shall have the unrestricted
right to convey the Leased Property to a Qualified Mortgagee. If Landlord
conveys the Leased Property in accordance with the terms hereof to a Qualified
Mortgagee, or to a grantee or transferee that expressly assumes in writing all
obligations of Landlord hereunder arising or accruing from and after the date of
such conveyance or transfer, Landlord shall thereupon be released from all
future liabilities and obligations of Landlord under this Agreement arising or
accruing from and after the date of such conveyance or other transfer as to the
Leased Property and all such future liabilities and obligations shall thereupon
be binding upon the new owner.
ARTICLE 16
SUBLETTING AND ASSIGNMENT
16.1 Subletting and Assignment.
(a) Except as provided in Section 16.3 and in this Section
16.1, Tenant shall not, without Landlord's prior written consent,
(which may be given or withheld by Landlord in its sole 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, 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 the following: without Landlord's consent, any direct or
indirect transfer of any interest in Tenant 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 but shall not include
any involuntary liens or attachments contested by Tenant in good faith
in accordance with Article 8.
(b) If this Agreement is assigned or if the Leased Property or
any part thereof is sublet (or occupied by anybody other than Tenant
hereunder) 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.
(c) 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 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, except as provided below, 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 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 prepayment of more than one (1) Accounting Period, (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 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 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 duly executed by Tenant and such subtenant
shall be delivered promptly to Landlord and Tenant shall remain liable for the
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
Section 16.1(a). No subtenant that is an Affiliated Person of Tenant shall be
required to attorn to Landlord as set forth above in this Section 16.2.
16.3 Permitted Sublease and Assignment. Notwithstanding the foregoing,
but subject to the provisions of Section 16.4 and any other express conditions
or limitations set forth herein, Tenant may, without Landlord's consent, (a)
sublease space at the Leased Property for newsstand, gift shop, parking garage,
health club, restaurant, bar, retail, food concession, arcades, game rooms,
rental car desk, travel office or commissary purposes or similar concessions in
furtherance of the Permitted Use; (b) sublease additional space at the Leased
Property for any such ancillary uses, so long as such additional subleases do
not demise, in the aggregate, in excess of 2000 square feet (exclusive of any
parking garage subleases), and will not violate or affect any Legal Requirement
or Insurance Requirement.
16.4 Sublease Limitation. For so long as Landlord or any Affiliated
Person as to Landlord or any Member of Landlord or any Member thereof, 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 either (a) the income or
profits derived by the business activities of such sublessee, or (b) 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.
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 a 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 to its knowledge
no Default or an Event of Default by the other party 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. If such additional information reasonably requires more than ten (10)
Business Days to provide, the party furnishing such information shall be
entitled to such additional period to respond to such request as may be
reasonably required under the circumstances. Any such 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 Accounting, Distributions and Annual Reconciliation
(a) Within twenty (20) days after the close of each Accounting
Period, Tenant shall cause Manager to deliver an interim accounting
(the "Accounting Period Statement") to Landlord showing Gross Revenues,
Deductions, Operating Profit, and applications and distributions
thereof for the preceding Accounting Period. Tenant shall cause Manager
to transfer to Tenant, with each Accounting Period Statement, any
interim amounts due Tenant, subject to Working Capital needs, and shall
retain any interim amounts due Manager.
(b) Calculations and payments of the Management Fees due
Manager, and distributions of Operating Profit to Tenant made with
respect to each Accounting Period within a Fiscal Year shall be
accounted for cumulatively. Within sixty (60) days after the end of
each Fiscal Year, Tenant shall cause Manager to deliver to Tenant and
Landlord a statement (the "Annual Operating Statement") in reasonable
detail summarizing the operations of the Hotel for the immediately
preceding Fiscal Year and a certificate of Manager's chief accounting
officer certifying that, to the best of his or her knowledge, such
Annual Operating Statement is true and correct. The parties shall,
within ten (10) Business Days after Landlord's receipt of such Annual
Operating Statement, make any adjustments, by cash payment, in the
amounts paid or retained for such Fiscal Year as are needed because of
the final figures set forth in such Annual Operating Statement. Such
Annual Operating Statement shall be controlling over the preceding
Accounting Period Statements. No adjustments shall be made for any
Operating Loss or Operating Profit in any preceding Fiscal Year.
17.3 Books and Records
Books of control and account pertaining to operations at the
Hotel shall be kept on the accrual basis and in all material respects in
accordance with the Uniform System of Accounts and generally accepted accounting
principles consistently applied. Tenant, upon Landlord's reasonable request and
at reasonable intervals during Manager's normal business hours shall examine
such records. If Landlord desires Tenant to audit, examine, or review the Annual
Operating Statement, Landlord shall notify Tenant and Manager in writing within
sixty (60) days after receipt of such Annual Operating Statement of its desire
for Tenant to audit and Tenant shall begin such audit no sooner than thirty (30)
days and no later than sixty (60) days after Manager's receipt of such notice.
Tenant shall complete such audit within ninety (90) days after commencement
thereof. The terms of the Management Agreement concerning such audit shall
govern the same.
17.4 Accounts, Expenditures
(a) Tenant shall cause all funds derived from operation of the
Hotel to be deposited by Manager in bank accounts (the "Operating
Accounts") established by Manager and Tenant in a bank or banks
designated by Manager, subject to Landlord's reasonable approval.
Withdrawals from said Operating Accounts shall be made solely by
representatives whose signatures have been authorized by Tenant.
Reasonable ▇▇▇▇▇ cash funds shall be maintained at the Hotel.
(b) Tenant shall cause all payments to be made by Manager
under the Management Agreement to be made from the Operating Accounts,
▇▇▇▇▇ cash funds, or from the FF&E Reserve (in accordance with the
terms of the Management Agreement).
(c) Tenant shall further cause Manager to pay any payments
required to be paid by Landlord to the Senior Lender and _____ in
accordance with the Senior Loan Documents and the Loan Documents,
respectively, and any such sums so paid by Manager to Senior Lender and
_______ on behalf of Landlord shall be credited against Rent payments
due hereunder from Tenant to Landlord. Notwithstanding the foregoing,
the payments made to Senior Lender and __________ on behalf of Landlord
shall not exceed the Rent payments hereunder.
17.5 Business Plan
(a) Tenant shall cause Manager to deliver to Landlord and
Tenant for their review and approval, at least thirty (30) days prior
to the beginning of each Fiscal Year which begins after the
Commencement Date, a preliminary draft of a business plan showing the
estimated Gross Revenues, departmental profits, Deductions and
Operating Profit for the forthcoming Fiscal Year, in comparison to the
forecasted Gross Revenues, departmental profits, Deductions and
Operating Profit for the current Fiscal Year, each in a reasonably
itemized and detailed as well as summary form. Such comparison shall
include the estimated percentage changes in such items for the
forthcoming Fiscal Year compared to the current Fiscal Year. Tenant
shall also cause Manager to submit the FF&E Estimate described in
Section 5.2(c) and the Building Estimate described in Section 5.3 at
the same time that it submits the preliminary business plan. Tenant
shall cause Manager to prepare the business plan in accordance with the
System Standards. Landlord shall have thirty (30) days after receipt of
the business plan to review and approve such business plan and, in the
event that Landlord disapproves any category in the business plan,
Landlord shall notify Tenant, and Tenant shall, in turn provide Manager
in writing, with the specific reasons for Landlord's disapproval, by
category, within such thirty (30) day period. The parties will attempt
to resolve in good faith any objections by Landlord within twenty-five
(25) days following Manager's receipt of Tenant's notice of Landlord's
disapproval. Notwithstanding the foregoing, Landlord shall not be
entitled to withhold its approval based on its objection to: (i)
Manager's reasonable projections of either Gross Revenues or the
components thereof; (ii) projected costs and expenses that are "system
charges" (that is, costs and expenses that are generally uniform
throughout the ______________ System, such as the costs of
_______________ Program, other chain-wide marketing programs, employee
wages, benefits and other compensation programs); (iii) costs and
expenses that are not within the control of Tenant and/or Manager, such
as Impositions and the costs of utilities; and (iv) increases in
projected costs and expenses of operating the Hotel, which increases
are primarily caused by projected increases in Gross Revenues. In the
event that the parties are unable to resolve all or some of Landlord's
objections, such disputed objections shall be resolved by the Expert in
accordance with the provisions of Article 19. Pending such Expert
determination, Tenant shall, or shall cause Manager to operate the
Hotel with respect to those categories that are in dispute based on the
previous Fiscal Year's approved Business Plan, adjusted in accordance
with changes in the GDP Deflator over the Fiscal Year just ended and
anticipated changes in Gross Revenues. If Landlord fails to provide any
objection within the thirty (30) day period set forth above, the
business plan as submitted by Manager shall be deemed approved. As of
approximately forty-five (45) days after the commencement of each
Fiscal Year which begins after the Commencement Date, Tenant shall also
cause Manager to deliver to Landlord the final business plan, in which
the above-mentioned percentage changes are applied to the actual Annual
Operating Statement for the preceding Fiscal Year. Such business plan,
as delivered to Landlord, is herein referred to as the "Business Plan."
(b) Tenant shall cause Manager to diligently operate the Hotel
in accordance with the Business Plan subject to the terms of Section
4.4(b) of the Management Agreement.
(c) In addition to the information described in the first
sentence of Section 17.5(a), Tenant shall cause Manager to include (to
the extent reasonably available to Manager) the following information
along with each preliminary business plan submitted to Landlord
pursuant to the provisions of Section 17.5(a): (i) general information
concerning pay scales and benefits programs applicable to employees of
the Hotel, Manager's general staffing policies and Manager's plans for
staffing levels at the Hotel for the forthcoming Fiscal Year; (ii)
Manager's marketing plan for the forthcoming Fiscal Year; (iii)
estimates of FF&E and Capital Expenditure requirements and expenditures
for the forthcoming three (3) Fiscal years; and (iv) estimates of the
Hotel's Working Capital and Fixed Asset Supply needs for the
forthcoming Fiscal Year.
ARTICLE 18
LANDLORD'S RIGHT TO INSPECT
Tenant shall permit Landlord and its authorized representatives to
inspect the Leased Property at reasonable times of the day 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 that in the event of an emergency, as determined by
Landlord in its reasonable discretion, prior Notice shall not be necessary.
ARTICLE 19
EXPERT DECISIONS
Where this Agreement calls for a matter to be referred to an
Expert for determination, the following provisions shall apply:
19.1 The use of the Expert shall be the exclusive remedy of the parties
and neither party shall attempt to adjudicate any dispute in any other forum.
The decision of the Expert shall be final and binding on the parties and shall
not be capable of challenge, whether by arbitration, in court or otherwise;
19.2 Each party shall be entitled to make written submissions to the
Expert, and if a party makes any submission it shall also provide a copy to the
other party and the other party shall have the right to comment on such
submission. The parties shall make available to the Expert all books and records
relating to the issue in dispute and shall render to the Expert any assistance
requested of the parties. The costs of the Expert and the proceedings shall be
borne as directed by the Expert unless otherwise provided for herein. The Expert
may direct that such costs be treated as Deductions;
19.3 The Expert shall make its decision with respect to the matter
referred for determination by applying the standards applicable to first-class
hotels in accordance with the System Standards (including compliance with the
requirements of any quality assurance program) and determining whether the
matter at issue is necessary to satisfy such standards; and
19.4 The terms of engagement of the Expert shall include an obligation
on the part of the Expert to: (a) notify the parties in writing of his decision
within forty-five (45) days from the date on which the Expert has been selected
(or such other period as the parties may agree or as set forth herein); and (b)
establish a timetable for the making of submissions and replies.
ARTICLE 20
MISCELLANEOUS
20.1 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
maximum permissible under Applicable Laws, 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.
20.2 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.
20.3 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.
20.4 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.
20.5 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.
20.6 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.
20.7 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 of this Agreement 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 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.
20.8 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 to be created by Landlord hereunder, (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 the 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.
20.9 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.
20.10 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, 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 receipt or refusal, except 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:
with a copy to:
with a copy to:
if to Tenant to:
with a copy to:
with a copy to:
(d) By notice given as herein provided, the parties hereto and
their respective successors and assigns shall have the right from time
to time and at any time during the term 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.
20.11 Construction; Nonrecourse. 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. Neither this Agreement nor any provision hereof may be changed,
waived, discharged or terminated except by an instrument in writing signed by
all the parties thereto. All the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
permitted 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 exercise of any rights of Tenant or
Landlord under this Agreement. Except as otherwise set forth in this Agreement,
any obligations arising prior to the expiration or sooner termination of this
Agreement of Tenant (including without limitation, any monetary, repair and
indemnification obligations) and Landlord shall survive the expiration or sooner
termination of this Agreement; provided, however, that each party shall be
required to give the other Notice of any such surviving and unsatisfied
obligations within one year after the expiration or sooner termination of this
Agreement. Nothing contained in this Agreement shall be construed to create or
impose any liabilities or obligations and no such liabilities or obligations
shall be imposed on any of the shareholders, beneficial owners, direct or
indirect, officers, directors, trustees, employees or agents of Landlord or
Tenant for the payment or performance of the obligations or liabilities of
Landlord or Tenant hereunder. Further, in the event Landlord shall be in default
under this Agreement, and if as a consequence of such default, Tenant shall
recover a money judgment against Landlord, such judgment shall be satisfied only
out of the proceeds of sale received upon execution of such judgment against the
right, title and interest of Landlord in the Leased Property.
20.12 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.
20.13 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 (a) where this Agreement is executed or
delivered; or (b) where any payment or other performance required by this
Agreement is made or required to be made; or (c) where any breach of any
provision of this Agreement occurs, or any cause of action otherwise accrues; or
(d) where any action or other proceeding is instituted or pending; or (e) the
nationality, citizenship, domicile, principal place of business, or jurisdiction
of organization or domestication of any party; or (f) whether the laws of the
forum jurisdiction otherwise would apply the laws of a jurisdiction other than
the State; or (g) 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.
20.14 Right to Make Agreement. Each party warrants, with respect to
itself, that neither the execution of this Agreement, nor the consummation of
any transaction contemplated hereby, shall violate any provision of any law, or
any judgment, writ, injunction, order or decree of any court or governmental
authority having jurisdiction over it; nor result in or constitute a breach or
default under any indenture, contract, other commitment or restriction to which
it is a party or by which it is bound; nor require any consent, vote or approval
which has not been given or taken, or at the time of the transaction involved
shall not have been given or taken. Each party covenants that it has and will
continue to have throughout the term of this Agreement and any extensions
thereof, the full right to enter into this Agreement and perform its obligations
hereunder.
20.15 Disclosure of Information.
(a) The parties hereto agree that the matters set forth in
this Agreement and any revenue, expense, net profit, room rate and
occupancy information provided on a hotel by hotel basis are strictly
confidential and each party will make every effort to ensure that the
information is not disclosed to any Person that is not an Affiliated
Person as to any party (including the press) without the prior written
consent of the other party, except as may be required by law and as may
be reasonably necessary to obtain licenses, permits and other public
approvals necessary for the refurbishment or operation of the Hotel,
or, subject to the restrictions of Section 22.15(c) relative to the
contents of any Prospectus, in connection with a Landlord financing, a
sale of the Hotel, or a sale of a Controlling Interest in Landlord, or
Tenant.
(b) The obligations of Tenant and Landlord contained in this
Section 22.15 shall survive the expiration or earlier termination of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as a
sealed instrument as of the date above first written.
"LANDLORD"
By:
By:____________________________
"TENANT"
By:________________________________